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Informist, Friday, Oct. 25, 2024

By Vaishali Tyagi 

MUMBAI – The dull activity in the secondary market of the corporate bond market kept yields steady Friday, as investors avoided major bets due to lack of significant domestic and global triggers, dealers said.

The market witnessed minor portfolio churning Friday, however, it was very insignificant to move 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....were majorly requirement-driven trades," a dealer at a mid-sized brokerage firm said. "Right now, market is in wait-and-watch mode, as investors are monitoring global cues and domestic economic indicators."

Buying and selling activity was observed by both mutual funds and banks, albeit in small amounts, without a significant effect on yields. Most of the deals took place at the shorter end of the curve. "Whatever little deals happened today, were between one-to-five-year segments," a dealer at a mid-sized brokerage firm said. A handful of insurance companies were also active on both the buying and selling sides. 

Also, the corporate bond market is expected to remain dull for almost a week ahead, with volumes expected to be down due to the holiday season and reduced market participation. "Trading activity is expected to slow down as the holiday season commences, which I think will lead to reduced volumes," the dealer said.

Trade volume remained subdued in the secondary market on Friday. Deals worth INR 59.02 billion were recorded on the National Stock Exchange and BSE combined, against INR 81.13 billion Thursday.

Papers issued by the National Bank For Agriculture And Rural Development, REC, Small Industries Development Bank of India, Sikka Ports & Terminals, and HDB Financial Services, were traded the most on the exchanges.

In the primary market Friday, frequent issuer NABARD raised INR 70 billion through reissuance of its bonds maturing on Feb. 24, 2028, at a yield of 7.44%. L&T Finance also tapped the market Friday to raise INR 3 billion through bonds maturing on Dec. 28, 2029, at a fixed coupon of 7.798%.

UDAY BONDS

In the secondary market, Telangana's Ujwal DISCOM Assurance Yojana bonds worth INR 20.14 million, maturing on Mar. 22, 2029, were traded at a weighted average yield of 7.1425%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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