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Wednesday, December 6, 2023

India Corporate Bonds: Yields steady amid lack of firm domestic cues

Informist, Tuesday, May 9, 2023


By Asmita Patil


MUMBAI – Yields on the corporate bonds ended steady in the secondary market today as investors avoided placing large bets amid lack of domestic cues, dealers said. 


“There were some trades in long term papers today as some investors bought at finer levels, but yield are flat,” a dealer with a mid-sized brokerage firm said. 


In the secondary market, insurance companies, pension funds, and some banks were majorly active on buying side, whereas primary dealerships were active on selling side, dealers said. Mutual fund houses were active on both the sides. 


Subdued activity affected trade volumes today. Today, deals worth 55 bln rupees were recorded on the National Stock Exchange and BSE combined as against 153 bln rupees on Monday. 


Bonds issued by Housing Development Finance Corp, REC, Housing and Urban Development Corp, Indian Railway Finance Corp, Power Finance Corp, and National Bank for Agriculture and Rural Development were traded the most across tenures today.


Meanwhile, pipeline of issuances has been building in the primary market. On Wednesday, HDB Financial Services has invited bids to raise up to 12 bln rupees through re-issuance of its bonds maturing on Aug 11, 2025. 


According to merchant bankers, several companies including ICICI Home Finance Co and Hero Fincorp are charting out plans to tap corporate bond market this week.


“Overall there is no scope for yields to harden much from here, however, the current spread between Gsec (government securities) and NBFCs papers might stay intact,” a debt-fund manager with a big mutual fund house said.


After the Reserve Bank of India’s unexpected decision to retain the repo rate at 6.50% in its April policy, yields on the corporate bonds have eased in the secondary market. 


Market participants are now looking forward to US and domestic inflation data, which can throw some light on the RBI’s future policy rate decision trajectory, dealers said.  


US CPI data for April is due for release on Wednesday, whereas, domestic CPI data will be released on Friday.



In the secondary market, no Ujwal DISCOM Assurance Yojana bonds were traded, according to data from the RBI’s Negotiated Dealing System-Order Matching System.













Edited by Maheswaran Parameswaran



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Source: Cogencis

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