India Corporate Bonds
Requirement-based trading keeps yields in range
This story was originally published at 20:22 IST on 29 October 2024
Register to read our real-time news.Informist, Tuesday, Oct. 29, 2024
By Ashna Mariam George
MUMBAI – Yields on corporate bonds in the secondary market remained in a narrow range Tuesday, as market participants limited their activity to basic portfolio requirements, dealers said.
"The market was a little bit on the colder side, it was not much active," a dealer at a mid-sized private sector bank said. "There was some buying and selling in the shorter side, but the yields did not move since there was an ample supply of papers." In the secondary market of corporate bonds, mutual funds and banks were active on the buying and selling sides, dealers said. They traded papers maturing in shorter tenures, dealers added.
The yields on corporate bonds in the secondary market also took cues from the yields on government securities, dealers said. "Today (Tuesday), the yields moved in tandem with the G-sec (government securities) movement, but only by 1-2 basis points, not much," a dealer at a mid-sized mutual fund house said. The yield on the 7.10%, 2034 bond fell marginally due to short covering from traders ahead of multiple events, dealers said. The yield on the 10-year benchmark government bond closed at 6.86% Tuesday, compared with 6.87% on Monday.
Market participants said the current yields in the secondary market will remain largely unchanged in the near term. "The market will remain like this for some time, at least till a rate cut in December or February," the dealer quoted above said. "There is enough demand and supply in the market, and it keeps the market floating."
On Tuesday, trade volume improved in the secondary market, with deals worth INR 90.05 billion being recorded on the National Stock Exchange and BSE combined, against INR 74.19 billion on Monday.
Papers issued by the National Bank For Agriculture and Rural Development, REC, National Bank For Financing Infrastructure and Development, Export Import Bank of India, HDFC Bank, Small Industries Development Bank of India, Maharashtra State Road Development Corp. Sea Link, State Bank of India, Bajaj Finance, Sammaan Capital, Godrej Industries, Bajaj Finance and Sunadaram Finance were traded the most on the exchanges.
The primary market remained dull on Tuesday with no major deals being recorded. On Wednesday, Indian Renewable Energy Development Agency plans to tap the market to raise up to INR 15 billion through bonds maturing on Nov. 4, 2029.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 707.55 million were traded at a weighted average yield of 6.9365-7.1512%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.
* INR 700.00 million of Haryana's June 2026 bonds were traded at 6.9365%
* INR 7.55 million of Tamil Nadu's March 2027 bonds were traded at 7.1512%
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TUESDAY | MONDAY |
Three-year | 7.45-7.49% | 7.47-7.49% |
Five-year | 7.43-7.45% | 7.42-7.44% |
10-year | 7.22-7.24% | 7.21-7.24% |
Edited by Tanima Banerjee
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