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Informist, Wednesday, Oct. 16, 2024

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds in the secondary market ended steady Wednesday due to lack of significant domestic triggers, dealers said. Market participants refrained from placing large bets as uncertainty over developments in West Asia still looms over the market, dealers said.

"See the market will not move every day. There should be a major event for the market to rally or get clues or whatever," a dealer at a mid-sized mutual fund house said. "Right now there is no event, until and unless there is a war. Today (Wednesday) the market hardly moved by 1-2 basis point, there was no major change." 

Geopolitical tensions in West Asia have escalated since late September, when Israel launched attacks on Hezbollah, an Iran-backed militant group, by an airstrike in central Beirut's Bachoura. In response, Iran launched around 200 ballistic missiles towards Israel in early October. According to news reports, Iran has warned it is ready for decisive response if Israel attacks the country in retaliation for Tehran's missile attack on Israel on Oct. 1. These developments have led to volatility across financial markets and in crude oil prices, increasing the uncertainty surrounding the interest rate outlook.

In the secondary market, a few mutual funds were active on the selling side, while banks were on the buying side, dealing in papers maturing in shorter-tenures, dealers said. "A major public sector bank bought today, but there was supply and it did not move yields more than 1 or 2 bps," a dealer at a mid-sized brokerage firm said.

Trade volume increased in the secondary market on Wednesday with deals aggregating to INR 100.41 billion recorded on the National Stock Exchange and BSE combined, against INR 71.96 billion Tuesday. Papers issued by the National Bank for Agriculture and Rural Development, Power Finance Corp., REC, Small Industries Development Bank of India, National Housing Bank, LIC Housing Finance, HDFC Bank, Reliance Industries, Larsen And Toubro, Bajaj Finance, and Hinduja Housing Finance were traded the most on exchanges.

In the primary market on Wednesday, Bajaj Housing Finance raised INR 15 billion through its five-year floating rate bond. Rajkot Municipal Corp. also raised INR 1 billion through its staggered redemption bonds. Both the issues were fully subscribed.

On Thursday, LIC Housing Finance plans to raise up to INR 40 billion through bonds maturing in five years. DMI Finance will also tap the market on Thursday to raise up to INR 2 billion through unsecured bonds maturing on Apr. 18, 2027. MAS Financial Services and Lendingkart Finance are also in line to raise funds on Thursday. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 52.80 million were traded at a weighted average yield of 7.1600%-7.1700%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* INR 52.00 million of Haryana's March 2026 bonds were traded at 7.1700%

* INR 0.80 million of Tamil Nadu's February 2030 bonds were traded at 7.1600%

BENCHMARK LEVELS FOR CORPORATE BONDS:

Edited by Vidhi Verma

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