India Corporate Bonds
Yields end steady on subdued participation, volume dn
This story was originally published at 20:24 IST on 31 October 2024
Register to read our real-time news.Informist, Thursday, Oct. 31, 2024
By Vaishali Tyagi
NEW DELHI – Yields on corporate bonds ended steady Thursday in the secondary market as investors refrained from placing large bets in a truncated week amid lacklustre trade volumes, dealers said. Diwali is being celebrated in some parts of the country Thursday, while money markets are shut for the occasion Friday.
"See, most participants were not there today (Thursday) due to Diwali, therefore no major trade deals happened in the corporate bond market," a fund manager with a mid-sized fund house said. "If I mention volume, it was just 700 crore rupees (INR 7 billion), it was one-third of what we see routinely."
Mainly, mutual funds were active on both the buying and selling sides Thursday. Mutual fund houses bought and sold papers maturing in three to five years to meet their portfolio requirements, a dealer at a mid-sized brokerage said. Banks and insurance companies barely traded in the market, dealers said.
Investors remained on the sidelines with no major events lined up in the near future, dealers said. "There is no major event lined up and on top of that, the festive season is at a peak, market participants are not that active, be it investors or issuers," a dealer at a mid-sized brokerage firm said.
On Thursday, trade volume fell sharply in the secondary market, with deals worth INR 36.14 billion being recorded on the National Stock Exchange and BSE combined, against INR 109.67 billion on Wednesday.
Papers issued by the National Bank for Agriculture and Rural Development, Small Industries Development Bank of India, REC, State Bank of India, Power Grid Corp. of India, Power Finance Corp., and Jamnagar Utilities and Power were traded the most on the exchanges.
The primary market was also dull, with no major deals being recorded Thursday. However, market participants said they expect more primary issuances in the coming week as non-banking finance companies and state-owned entities may tap the market to raise funds. "Primary supply is expected to pick up pace next week, once people return to office post Diwali break," a dealer at a mid-sized brokerage said.
UDAY BONDS
No Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market on Thursday, according to the Reserve Bank of India's Negotiated Dealing System–Order Matching System.
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | THURSDAY | WEDNESDAY |
Three-year | 7.47-7.49% | 7.47-7.49% |
Five-year | 7.43-7.45% | 7.42-7.44% |
10-year | 7.23-7.27% | 7.23-7.26% |
End
Edited by Tanima Banerjee
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