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Informist, Thursday, Oct. 31, 2024

By Richard Fargose

MUMBAI - There were no commercial papers and certificates of deposits issued in the short-term debt market on Thursday because of subdued market participation due to the Diwali festival, dealers said.

The activity in the short-term debt market was dull as banks didn't tap the market amid the prevailing high liquidity surplus, while most corporates are shut today for the Diwali festival. Diwali is being celebrated across some communities on Thursday, while money markets are shut for the occasion on Friday. 

On Wednesday, surplus liquidity in the banking system surged to INR 1.56 trillion, the highest since Oct. 18. On Tuesday, liquidity surplus was INR 1.01 trillion.  Dealers said month-end inflows are front loaded this time as most states have disbursed salaries and staff bonuses before the Diwali festival. State governments mostly pay staff salaries in the first week of the following month. Around INR 1 trillion inflows is estimated to have hit the banking system this week in the form of salary and pension payouts by the central and state governments.  

"Most corporates are closed today and many bank traders are also on leave ahead of the long weekend," said a dealer with a brokerage firm.

The rates on commercial papers and certificates of deposits remained steady as no primary market issuances were there on Thursday, dealers said. The rates on three-month certificates of deposit were at 7.15-7.20%, the same level as Wednesday. The rates on three-month commercial papers issued by non-banking finance companies were 7.45-7.50%, unchanged from the previous day. The rates on CPs of similar maturity issued by manufacturing companies were also unchanged at 7.20-7.25%.

--Primary market

* No CP or CD was issued on Thursday.

--Secondary market

* Axis Bank's CD maturing on Jan. 30 was dealt thrice at a weighted average yield of 7.1700%.
* Sikka Ports and Terminals' CP maturing on Nov. 7 was dealt twice at a weighted average yield of 7.1011%.

At 1700 IST, the following were the volumes, in INR billion, in the secondary market for short-term debt, as detailed by the Clearing Corp of India's F-TRAC platform:

NOTE: Details of the deals have been received from market sources.

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Manisha Baxla

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