Informist, Monday, Sep 11, 2023
By Subhana Shaikh
MUMBAI – Yields on corporate bonds rose around 5 basis points across tenures in the secondary market today, following a similar movement in government securities, dealers said.
Government bond yields rose tracking a rise in US Treasury yields ahead of the US retail inflation data for August, due on Wednesday.
"Corporate bonds rose tracking gilts today. The sentiment is weak in the market right now as investors are cautious ahead of inflation data, both in the US and India. Also, Brent Crude rose, so all these factors affected the market today," a dealer at a mid-sized brokerage firm said.
Market participants are awaiting India's headline inflation rate, which is due to be released after Indian market hours on Tuesday.
According to a poll by Informist, inflation rate is likely to have moderated marginally in August from a 15-month high in July, primarily on account of the statistical effect of a higher base.
Meanwhile, the US CPI print for August is highly anticipated, as it will provide cues on the US Federal Reserve's next monetary policy move.
Today, mainly mutual funds were said to have been active in the secondary market of corporate bonds, with minimal trades, dealers said.
Papers issued by Vivriti Capital, REC, HDFC Bank, Andhra Pradesh State Beverages Corp, Tata Capital Financial Services, Uttar Pradesh Power Corp, Aditya Birla Finance and National Bank For Agriculture And Rural Development were traded the most across tenures today.
Today, trade volume worth 59.77 bln rupees got recorded on the National Stock Exchange and BSE combined, as compared to 38.72 bln rupees on Friday.
In the primary market today, THDC India raised 7.63 bln rupees through 10-year bonds at a coupon of 7.76%.
On Tuesday, LIC Housing Finance has invited bids for the re-issuance of its 6.10%, May 2026 bond. The housing financier aims to raise up to 15 bln rupees through this re-issue.
While L&T Finance plans to raise up to 18 bln rupees through 10-year bonds, Axis Finance intends to borrow up to 4 bln rupees through December 2026 paper. Biddings for these bond offerings are scheduled on Tuesday.
Further, several banks that had kept their fundraising plans on hold in August due to market volatility are lining up their bond issuances this month, according to merchant bankers.
Bank of India is likely to hit the debt market next week with its Basel-III-compliant tier-II bonds. The state-owned bank is looking to raise up to 20 bln rupees through this.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds worth 522 mln rupees were traded at a weighted average yield of 7.4701-7.5094%, according to data from the Reserve Bank of India's Negotiated Dealing System-Order Matching System.
* 500 mln rupees of Haryana's 2026 bonds were traded at 7.5094%
* 20 mln rupees of Telangana's 2028 bonds were traded at 7.4701%
* 2 mln rupees of Tamil Nadu's 2027 bonds were traded at 7.4890%
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURES | TODAY | FRIDAY |
Three-year | 7.68-7.72% | 7.62-7.66% |
Five-year | 7.68-7.72% | 7.63-7.67% |
10-year | 7.60-7.65% | 7.58-7.62% |
End
Edited by Maheswaran Parameswaran
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