Informist, Wednesday, May 24, 2023
By Asmita Patil
MUMBAI – Yields on the corporate bonds remained steady in the secondary market today due to lack of firm domestic cues, dealers said.
Earlier in the day, yields fell slightly following the movement in government securities market, dealers said.
Yield on 10-year benchmark government bond ended at 6.9920% as against 7.0144% on Tuesday
Yields on the government bonds had fallen during the day due to the Reserve Bank of India Governor Shaktikanta Das’ comments that the Monetary Policy Committee’s decision to keep the repo rate and policy stance unchanged at the April policy review should be taken as a “pivot, not a pause”. He was speaking at the annual session of the Confederation of Indian Industry.
However, the central bank clarified later on that the Governor misspoke.
“Market will remain range bound from now until there is some indication of a rate cut from RBI,” a dealer with a mid-sized insurance company said.
Activity remained skewed in the secondary market today. Insurance companies were buying, whereas merchant bankers were selling, dealers said. Mutual funds were said to have been active for requirement based trading.
Subdued activity resulted in a further fall in trade volume. Today, deals aggregating 59.67 bln rupees were recorded on the National Stock Exchange and BSE combined as against 60.24 bln rupees on Tuesday.
Bonds issued by Housing Development Finance Corp, REC, State Bank of India, LIC Housing Finance, National Bank for Agriculture and Rural Development, and Power Finance Corp were traded the most across tenures.
In the primary market, Indian Railway Finance Corp raised 25 bln rupees through bonds maturing on Oct 15, 2026, at a coupon of 7.23%. National Housing Bank raised 20 bln rupees through bands maturing on Jul 23, 2026, at a coupon of 7.22%. Both the issuances were fully subscribed.
ONGC Petro Additions also set a coupon of 8.12% on its bonds maturing on Nov 22, 2024, and raised 7 bln rupees.
On Thursday, Fedbank Financial Services Ltd plans to raise up to 2 bln rupees through bonds maturing on Apr 26, 2030. Sundaram Home Finance Ltd also plans to raise up to 2 bln rupees through bonds maturing on May 26, 2025.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds worth 26 mln rupees were traded at a weighted average yield of 7.31-7.49%, according to data from the RBI’s Negotiated Dealing System-Order Matching System.
* 12.70 mln rupees of Uttar Pradesh’s 2027–30 bonds were traded at 7.42-7.47%
* 9.00 mln rupees of Punjab’s 2025–31 bonds were traded at 7.42-7.48%
* 5.30 mln rupees of Telangana’s 2031–32 bonds were traded at 7.31-7.49%
BENCHMARK LEVELS FOR CORPORATE BONDS:
End
Edited by Akul Nishant Akhoury
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