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Informist, Thursday, Oct. 17, 2024

By Ashna Mariam George

MUMBAI – Yields on three-year corporate bonds ended slightly higher in the secondary market as mutual funds sold short-term papers to park their funds, dealers said. However, yields on corporate bonds maturing in five years and 10 years remained steady, they added.

"The market was not very much active, but there was some selling by mutual funds," a dealer at a mid-sized brokerage firm said. "Banks were on the buying side, but both of them were not trading aggressively."

Market participants also said that the trading was on a requirement basis. "The selling was just a trading activity, not due to much pressure, so the yields won't move much," a dealer at a mid-sized mutual fund house said. "Otherwise, the corporate bond market remained purely flat....it was a fairly muted figure."

Trade volume fell in the secondary market Thursday with deals aggregating to INR 72.98 billion recorded on the National Stock Exchange and BSE combined, against INR 100.41 billion Wednesday. Papers issued by the National Bank for Agriculture and Rural Development, REC, Power Finance Corp., Food Corp. of India, Export Import Bank of India, Small Industries Development Bank of India, and Bharti Telecom were traded the most on exchanges.

In the primary market on Thursday, LIC Housing Finance raised INR 13 billion through its bonds maturing in five years. The bonds carry a fixed coupon of 7.57%. The issue saw demand from banks and mutual funds, dealers said.

Market participants said several public sector entities are in line to tap the market in the coming weeks. "Post policy we are seeing the issuances pick up. There are SIDBI, NABARD, PGC (Power Grid Corp), and IOC (Indian Oil Corp.) …and we can expect them in the coming fortnight," the mutual fund house dealer quoted above said.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 81.80 million were traded at a weighted average yield of 7.0679-7.15%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* INR 30.00 million of Jharkhand's 2027 bonds were traded at 7.0783%

* INR 30.00 million of Uttar Pradesh's 2027 bonds were traded at 7.0679%

* INR 19.00 million of Punjab's 2026 bonds were traded at 7.15%

* INR 2.80 million of Tamil Nadu's 2030 bonds were traded at 7.1499%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Tanima Banerjee

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