Informist, Monday, Jul 31, 2023
By Parth Singh
NEW DELHI – Yields on corporate bonds in the secondary market ended flat across tenures today as investors refrained from placing aggressive bets due to lack of significant domestic cues, dealers said. Instead, market participants were focused on the primary market, where State Bank of India sought bids for its bonds.
Only mutual fund houses and insurance companies were said to have been active in the secondary market of corporate bonds.
“Till policy, market will closely follow global sentiment and domestic auctions. If not for these, market will mostly be quiet,” a senior debt dealer at a private dealership said.
Participants in the corporate bond market expect the Monetary Policy Committee to not hint at a softer policy, given the fears of rising retail inflation. The upcoming domestic policy review meeting is scheduled for Aug 8-10.
Less participation led to low trade volumes today. Deals aggregating 55 bln rupees were recorded on the National Stock Exchange and BSE combined, as against 89 bln rupees on Friday.
Bonds issued by HDFC Bank, Indian Railway Finance Corp, Andhra Pradesh State Beverages Corp, LIC Housing Finance, Power Finance Corp, National Bank for Agriculture and Rural Development, Trust Investment Advisors, and Aditya Birla Finance were traded across tenures.
In the primary market, SBI raised 100 bln rupees through infrastructure bonds maturing in 15 years at a coupon of 7.54%. The issue was fully subscribed. “Demand for the SBI issue was largely seen from EPFOs (Employees Provident Fund Organisation), insurance companies, and traders,” a merchant banker said.
According to merchant bankers, the coupon on SBI’s 15-year infrastructure bonds was expected to be in the range of 7.40-7.50%.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds worth 102.5 mln rupees were traded at a weighted average yield of 7.1965-7.6081%, according to data from the Reserve Bank of India’s Negotiated Dealing System–Order Matching System.
* 41.07 mln rupees of Haryana’s 2024–26 bonds were traded at 7.3321-7.6081%
* 27.9 mln rupees of Uttar Pradesh’s 2029 bonds were traded at 7.6042%
* 25.03 mln rupees of Rajasthan’s 2024 bonds were traded at 7.1965-7.3351%
* 5 mln rupees of Tamil Nadu’s 2025 bonds were traded at 7.4636%
* 3.5 mln rupees of Telangana’s 2027 bonds were traded at 7.5965%
BENCHMARK LEVELS FOR CORPORATE BONDS:
End
Edited by Avishek Dutta
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