Informist, Tuesday, Aug 29, 2023
By Subhana Shaikh
MUMBAI – Yields on corporate bonds ended on a steady note in the secondary market today as investors engaged in only requirement based trade due to lack of fresh domestic cues, dealers said.
“Overall, it looks like market has taken cues from Jackson Hole Symposium event and is basically going to remain in a range for a while. While US treasury yields are not rallying, there are not many triggers for the Indian bond market,” a dealer with a mid-sized brokerage firm said.
On Friday, US Federal Reserve Chairman Jerome Powell said at the Jackson Hole economic symposium that the US central bank was prepared to raise rates further if appropriate. Comments on the US interest rate trajectory were softer than expected, dealers said.
“There was marginal sentiment change as the speech was less hawkish than expected and that’s why US and Indian bond yields rallied by 3-4 basis points, but beyond that some trigger is awaited which has not yet come,” a fund manager with a mid-sized fund house said.
Market participants will watch out for a slew of economic data in the US that is due this week. Job Openings and Labor Turnover Survey for July will be released after the market hours at 1930 IST, which will provide further cues on interest rate trajectory of the US central bank.
The US economic data scheduled to be released later in the week includes employment report, personal consumption expenditure data, Institute of Supply Management purchasing managers’ index, and the second estimate of GDP for Apr-Jun.
In the secondary market of corporate bonds, pension funds were said to have been buying and brokers were seen selling corporate bonds. Mutual funds were active too, especially changing their duration as part of their portfolio churning exercise, dealers said.
Papers issued by REC, HDFC Bank, Andhra Pradesh State Beverages Corp, Power Finance Corp, Indiabulls Housing Finance, Tata Capital Financial Services, National Bank For Agriculture And Rural Development, Uttar Pradesh Power Corp and Shriram Finance were traded the most across tenures today.
In the primary market today, Central Bank of India raised 15 bln rupees through Basel-III compliant tier-II bonds maturing in 10 years at a coupon of 8.80%, which was fully subscribed.
Today, deals worth 82.63 bln rupees were recorded on the National Stock Exchange and BSE combined as against 55.60 bln rupees on Monday.
In the secondary market, Ujwal DISCOM Assurance Yojana bonds worth 73 mln rupees were traded at a weighted average yield of 7.4943-7.5293%, according to data from the Reserve Bank of India’s Negotiated Dealing System–Order Matching System.
* 7.50 mln rupees of Rajasthan’s 2026 bonds were traded at 7.5171-7.5293%
* 50 mln rupees of Punjab’s 2029 bonds were traded at 7.4943%
* 500,000 rupees of Haryana’s 2025 bonds were traded at 7.5143%
* 15 mln rupees of Tamil Nadu’s 2031 bonds were traded at 7.4953%
BENCHMARK LEVELS FOR CORPORATE BONDS:
Edited by Vidhi Verma
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