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Informist, Friday, Nov. 29, 2024

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds in the secondary market remained in a narrow range Friday, as market participants limited their activity to basic portfolio requirements, dealers said. A lower-than-expected GDP data Jul-Sept quarter released Friday also failed to lend cues to the corporate bond market and yields remained unaffected, they added. 

"Most traders seemed to be involved only in need-based trading which kept the volumes slightly lower," a dealer at a mid-sized brokerage firm said. "Also, GDP data has not impacted the debt market and yields are still in a narrow range, across tenures."

India's GDP growth fell sharply to a seven-quarter low of 5.4% in the quarter ended September due to a slump in the growth of industrial activity, data released by the National Statistical Office on Friday showed. The Indian economy had grown 8.1% a year ago and 6.7% a quarter ago. 

The GDP print was sharply below expectations. According to an Informist poll, GDP growth was seen slowing to 6.5% in Jul-Sept. GDP growth in Jul-Sept was also much lower than the Reserve Bank of India's projection of 7.0%. 

Market participants said the current yields in the secondary market will remain largely the same unless some significant event takes place. "The current market dynamics are stable, with balanced demand and supply keeping market surfaced," said the dealer quoted above. "We expect this stability to persist for the near future, at least until a big event happens like a rate cut by the Reserve Bank of India."

Market participants are keeping a close eye on the upcoming monetary policy committee meeting of the Reserve Bank of India. RBI's rate-setting panel will meet from Dec. 4-6. "Everyone is eagerly awaiting the RBI's policy meeting due next week, especially after the recent GDP growth slowdown. Now, we're all in a wait-and-watch mode," a dealer at a mid-sized brokerage firm said.

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. 

On Friday, trade volume fell in the secondary market with deals worth INR 71.53 billion recorded on the National Stock Exchange and BSE combined, against INR 110 billion on Thursday. Papers issued by State Bank of India, LIC Housing Finance, Cholamandalam Investment And Finance Co, Power Finance Corp., Indian Renewable Energy Development Agency, and Small Industries Development Bank of India, were traded the most on the exchanges.

In the primary market on Monday, IIFL Finance has invited bids to raise up to INR 10 billion through bonds maturing in two years. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 38.2 million were traded at a weighted average yield of 7.16-7.17%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* INR 23.70 million of Rajasthan's March 2026 bonds were traded at 7.17%

* INR 5.30 million of Haryana's March 2026 bonds were traded at 7.16%

* INR 5.00 million of Telangana's March 2032 bonds were traded at 7.17%

* INR 4.20 million of Uttar Pradesh's March 2028 bonds were traded at 7.16%

End

Edited by Akul Nishant Akhoury

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