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Informist, Thursday, Oct. 10, 2024

By Vaishali Tyagi 

MUMBAI – The dull activity in the secondary market of corporate bonds kept the yields steady on Thursday as investors refrained from taking significant bets due to the absence of major domestic cues, dealers said. After yields declined 2-3 basis points due to a change in the Reserve Bank of India's policy stance on Wednesday, bonds kept to a narrow range on Thursday as market participants awaited the next set of interest rate cues.

At the conclusion of its three-day meeting on Wednesday, the MPC unanimously voted to change the policy stance to 'neutral' from 'withdrawal of accommodation'. The repo rate was maintained at 6.50% for the tenth straight policy meeting.

While there was some minor portfolio churning on Thursday, it was very insignificant to move the yields, dealers said. "Traders looked for fresh cues to place their bets which could have driven the market but nothing significant was seen, and whatever happened....was as usual, we see on a daily basis," a dealer at a mid-sized brokerage firm said. "Now, market sits back for new triggers be it global or domestic."

Buying and selling were seen by both mutual funds and banks, dealers said. However, the buying and selling were only in small amounts, without a significant effect on yields. Most of the deals were struck on the shorter end of the curve. "Whatever little deals happened today, were between the one-to-five year segments," a dealer at a mid-sized brokerage firm said. 

Subdued activity kept trade volumes in the secondary market lacklustre, dealers said. Deals aggregating to INR 80.82 billion were recorded on the National Stock Exchange and BSE combined, compared with INR 134.99 billion on Wednesday.

Papers issued by the National Bank for Agriculture and Rural Development, Small Industries Development Bank of India, LIC Housing Finance, PNB Housing Finance, Aditya Birla Finance, Shriram Finance, and Pipeline Infrastructure were traded the most on exchanges.

Activity in the primary market also remained sluggish. This week, several issuers tapped the market, although the pace was uneven throughout, with some days packed with activity and others relatively muted. On Friday, PNB Housing Finance invited bids to raise up to INR 3 billion through bonds maturing on July 2027. Indel Money will also tap the market to raise INR 250 million through January 2026 bond.

UDAY BONDS

In the secondary market, Punjab's Ujwal DISCOM Assurance Yojana bonds worth INR 2.50 million, maturing on Mar. 30, 2028, were traded at a weighted average yield of 6.9206%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

BENCHMARK LEVELS FOR CORPORATE BONDS: 

With inputs from Ashna Mariam George

End

Edited by Akul Nishant Akhoury

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