More Stories

Informist, Friday, Oct. 4, 2024

By Ashna Mariam George

MUMBAI – Yields on three-year corporate bonds ended slightly higher in the secondary market Friday, tracking a similar movement in Indian government bond yields, dealers said. However, yields on corporate bonds maturing in five years and 10 years remained steady, they added. 

"It was given that the yields will go up because of the movement in g-secs (government securities)," a dealer at a mid-sized brokerage firm said. Yields on three-year corporate bonds rose as most activity was concentrated in the shorter segment of the market, the dealer said. "There is hardly any activity in the longer-tenure papers."

Yields on Indian government bonds have been rising since Thursday after increasing fears of a large-scale war in West Asia and crude oil supply constraints triggered outflows of foreign investment. Yields on Indian government bonds rose 5-6 basis points since Thursday. 

"On Friday, the market was concentrated on g-secs which are affected by geopolitical tensions and an increase in Brent Crude price," a debt fund manager at a small-sized mutual fund house said. "The Brent Crude price went up sharply in a short span of time."

For December delivery, Brent crude oil futures rose to $78.77 a barrel at the time of the Indian market close Friday against $75.14 a barrel on Thursday. Crude prices have surged over 10% from lows hit Tuesday due to escalating tensions in West Asia.

In the secondary market of corporate bonds, both mutual funds and banks were active on the buying and selling sides, dealing in papers maturing in mid-to-short tenures, dealers said. A few insurance companies also traded in long-term papers Friday, they said. 

Despite activity in the market, trade volume in the secondary market was down Friday. Deals aggregating to only INR 99.27 billion were recorded on the National Stock Exchange and BSE combined, compared with INR 174.57 billion on Thursday. 

Papers issued by the National Bank for Agriculture and Rural Development, Power Finance Corp., Indian Railway Finance Corp., Small Industries Development Bank of India, Larsen And Toubro, HDFC Bank, Bajaj Finance, Bajaj Housing Finance, Shriram Finance, and Trent were traded the most on exchanges.

The primary market of corporate bonds also remained dull Friday without any major deals happening, dealers said. On Monday, HDFC Life insurance will tap the market to raise up to INR 15 billion through its bond maturing in 10 years. Kerala Infrastructure Investment Fund Board has also invited bids on Monday to raise up to INR 10 billion through a bond maturing in 4–10 years under seven different sub-series. 

Mahindra and Mahindra Financial Services, and Akara Capital Advisors are also in line to tap the market on Monday to raise funds through their respective bond offerings.

UDAY BONDS

None of the Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market today, according to the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

BENCHMARK LEVELS FOR CORPORATE BONDS: 

End

US$1 = INR 83.9725

Edited by Deepshikha Bhardwaj

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.