Informist, Friday, Nov 3, 2023

By Abhinaba Saha

MUMBAI – Yields on corporate bonds traded flat today in the secondary market as most participants stayed away from placing large bets before the release of non-farm payroll data from the US, dealers said. 

Data released after market hours showed that the US economy added 150,000 jobs in October against 336,000 in September. Economists polled by Reuters had expected an addition of 180,000 jobs. 

A lower-than-expected non-farm payroll data led to a fall in yields on the 10-year benchmark US Treasury notes to 4.52% as of 1840 IST, against 4.67% on Thursday.  

"If (a fall in) US Treasury yields sustain today, we will see further rally in corporate bonds," said a fixed-income dealer at a large mutual fund house. 

Yields on the benchmark 10-year US Treasury notes have fallen from the highs of 5% it reached last month. However, the domestic bond market has seen a limited impact of the fall due to fear of open market operation sales. 

"In the second week (of November), the market will be very, very cautious of OMO. If the RBI (Reserve Bank of India) comes up with a calender, the market will panic," said the dealer. "If he (RBI) continues with the on-screen sales market will continue to hold." 

The liquidity deficit in the banking system narrowed to 169.51 bln rupees from 545.34 bln rupees on Thursday, on account of the government's month-end spending of around 1.2 tln rupees and redemption of 4.48% 2023 government bonds that added 550 bln rupees to the banking system liquidity. 

In the secondary market, mutual funds and a few private banks were active on both the buying and selling sides, dealers said. 

Trade volume inched down in the secondary market today, with deals aggregating 63.5 bln rupees on the National Stock Exchange and BSE combined, against 78.92 bln rupees on Thursday. 

Papers issued by the National Bank for Agriculture and Rural Development, REC, Andhra Pradesh State, Beverages Corp, Anand Rathi Global Finance, Power Finance Corp, Uttar Pradesh Power Corp, and Spandana Sphoorty Financial changed hands on the bourses today.

In the primary market, Adani Capital raised 1 bln rupees through bonds maturing in three years at an annual coupon of 9.65%, payable quarterly.  

On Monday, Mahanagar Telephone Nigam will tap the primary market to raise up to 31.26 bln rupees through government-guaranteed bonds maturing in 10 years. The market expects the coupon on the bonds to be in the range of 7.75-7.80%, payable semi-annually.

UDAY BONDS

In the secondary market, Rajasthan's Ujwal DISCOM Assurance Yojana 2024 bonds worth 50 mln rupees were traded at a weighted average yield of 7.4537%, according to data from the Reserve Bank of India's Negotiated Dealing System-Order Matching System.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Akul Nishant Akhoury

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