India Corporate Bonds
Ylds on short-tenure bonds tad up as banks, MFs sell
This story was originally published at 20:37 IST on 28 October 2024
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By Vaishali Tyagi
MUMBAI – Yields on three-year and five-year corporate bonds rose 2-3 basis points in the secondary market Monday on selling by banks and mutual funds, dealers said. Yields on 10-year paper ended steady.
In the secondary market, a few mutual fund houses and banks sold shorter-tenure papers to book profits during the month end and make space for the upcoming supply in the primary market, dealers said. However, the yield movement was limited to 2-3 bps. Longer-tenure papers were barely in demand, dealers said. While some mutual funds bought papers for their short-term funds, trading activity was mostly restricted to actively-traded bonds issued by public sector entities and AAA-rated housing finance companies, they added.
"Today, there was ample selling by mutual funds and a few banks due to redemption as month-end is approaching, the movement is just due to that nothing else," a dealer at a mid-sized brokerage firm said. "In fact, the market seems to be dull apart from this most of the market participants have gone on long break as festive season is approaching."
On Monday, trade volume improved in the secondary market of corporate bonds, with deals worth INR 74.19 billion being recorded on the National Stock Exchange and BSE combined, against INR 59.02 billion on Friday.
Papers issued by REC, Power Grid Corp of India, Small Industries Development Bank of India, Delhi International Airport, HDFC Bank, State Bank of India, Bajaj Finance, and HDB Financial Services were traded the most on the exchanges.
The primary market of corporate bonds was dull Monday with no major deals being recorded.
UDAY BONDS
No 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:
TENURE | MONDAY | FRIDAY |
Three-year | 7.47-7.49% | 7.45-7.48% |
Five-year | 7.42-7.44% | 7.40-7.42% |
10-year | 7.21-7.24% | 7.20-7.23% |
End
Edited by Manisha Baxla
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