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India Corporate Bonds: Ylds up tracking gilts; demand for 3-yr papers

Informist, Monday, Aug 8, 2022

 

By Richard Fargose

 

MUMBAI – Yields on corporate bonds maturing in five- and 10-year ended higher today tracking the rise in government bond yields, while three-year bonds fell marginally on buying by mutual funds, dealers said. 

 

Government bond yields rose today following a sharp rise in the US Treasury yields on Friday following stronger-than-expected US jobs data.

 

Most long-term investors such as life insurance companies and pension funds remained on the sidelines as they are waiting for fresh bond issuances in the primary market.

 

Power Finance Corp withdrew its plan to raise up to 15 bln rupees through bonds maturing in 10 years.
    
Trade volumes were muted due to a lack of significant domestic cues, and global triggers remaining steady during the day, dealers said. 

 

Moreover, traders avoided stepping up purchases after the recent volatility due to the policy outcome. 

 

The Reserve Bank of India’s Monetary Policy Committee on Friday raised the repo rate by a more-than-expected 50 basis points to 5.40%, against the market’s hope of a 35-bps rate hike.

 

In the secondary market, yields on three-year bonds fell after strong demand was seen for Power Finance Corp and Export-Import Bank of India’s primary issuances.

 

“Both, PFC and EXIM Bank got better rates than the market had expected and demand was also quite strong,” said a dealer with a brokerage firm.

 

Power Finance Corp raised 24.20 bln rupees through three-year bonds and set a coupon of 7.13% on the bonds. The issue had a base size of 5 bln rupees and a greenshoe option of 20 bln rupees.

 

Export-Import Bank of India set a coupon of 7.10% on its bonds maturing on Mar 18, 2026 and accepted bids aggregating 20.00 bln rupees. The issue had a base size of 5 bln rupees and a greenshoe option of 15 bln rupees.

 

UDAY BONDS

In the secondary market, there was no trading in Ujwal DISCOM Assurance Yojana bonds today, data from the RBI’s Negotiated Dealing System – Order Matching System showed.

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

TENURES

TODAY

FRIDAY

Three-year

7.10-7.15%7.15-7.20%

Five-year

7.40-7.45%7.37-7.40%

10-year

7.65-7.70%7.65-7.67%

 

End

 

Edited by Sushmita Mukherjee

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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Send comments to [email protected]

 

© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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