India Corporate Bonds
Yields remain in narrow band in festival week
This story was originally published at 21:11 IST on 30 October 2024
Register to read our real-time news.Informist, Wednesday, Oct. 30, 2024
By Vaishali Tyagi
MUMBAI – Yields on corporate bonds in the secondary market were confined to a narrow range across tenures Wednesday as investors engaged in only requirement-based trading in the festival week, dealers said. Some market participants also kept to the sidelines as money markets are shut Friday on account of Diwali, dealers said.
"There's not much happening in the market today as most people are engaging in deals for their portfolio needs and most traders are in holiday mode already," a dealer at a mid-sized brokerage firm said. "We are seeing some activity. In fact, it was better than yesterday as volumes improved. But if you see, nothing significant has happened."
The market witnessed some selling pressure across tenures. In the secondary market for corporate bonds, mutual funds, and banks were mainly active on the selling side, and traded in paper across tenures, dealers said. However, a few banks were present on the buying side as well. A handful of insurance companies were also active in the longer-tenure paper but with limited activity, they said. "See, there was diversity in participants, but they were less in number and no one bid aggressively," a fund manager at a mid-sized mutual fund said. "Numerous deals took place today which barely moved yields by 1-2 basis points."
On Wednesday, trade volume improved in the secondary market, with deals worth INR 109.67 billion being recorded on the National Stock Exchange and BSE combined, against INR 90.05 billion on Tuesday.
Papers issued by the National Bank For Agriculture and Rural Development, REC, Small Industries Development Bank of India, Maharashtra State Road Development Corp. Sea Link, State Bank of India, HDFC Bank, LIC Housing Finance, Sammaan Capital, Bharti Telecom, and Shriram Finance were traded the most on the exchanges.
In the primary market on Wednesday, the Indian Renewable Energy Development Agency raised INR 15 billion through bonds maturing on Nov. 4, 2029, at a coupon of 7.32%. "Response to IREDA's (Indian Renewable Energy Development Agency) was slightly better, we expected it to be around 7.34-7.35%," a dealer at a mid-sized brokerage firm said.
According to the bid book accessed by Informist, Indian Renewable Energy Development Agency's November 2029 bonds garnered 66 bids worth INR 38.94 billion at 7.15-8.24% coupon.
Dealers said trading volumes are expected to be thin on Thursday, with many traders on leave due to the festival of Diwali. Money markets are shut on Friday for Diwali.
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 | WEDNESDAY | TUESDAY |
Three-year | 7.47-7.49% | 7.45-7.49% |
Five-year | 7.42-7.44% | 7.43-7.45% |
10-year | 7.23-7.26% | 7.22-7.24% |
End
Edited by Vidhi Verma and Deepshikha Bhardwaj
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