Informist, Monday, Oct 31, 2022
By Subhana Shaikh
MUMBAI – Yields on corporate bonds kick-started a pivotal week on a steady note in the secondary market today amid lacklustre volumes, as market participants refrained from placing big bets ahead of fresh primary supply and key central bank meetings this week, dealers said.
“People are on a wait-and-watch mode as they are keen to see how the market will perform after these crucial events and that’s why corporate bond yields were largely flat today,” a fund manager with a mid-sized fund house said.
Investors are awaiting the outcome of the US Federal Reserve’s monetary policy meeting on Wednesday. According to the CME Group’s FedWatch tool, Fed funds futures traders see an 87% likelihood of a 75-basis-point rate hike at the upcoming policy review.
Back home, the Monetary Policy Committee of the Reserve Bank of India will also hold an off-cycle meeting on Thursday to discuss drafting of a report to the government on its failure to meet the inflation targeting mandate.
CPI inflation in India has topped the RBI’s medium-term target band of 2-6%, requiring a letter of explanation from the central bank to the government.
While mutual fund houses mainly remained on the selling side, some corporates and insurance companies were said to have been on the buying side of the secondary market, dealers said.
Bonds issued by the National Bank for Agriculture and Rural Development, REC, Small Industries Development Bank of India, Reliance Industries, Tata Capital Housing Finance, Punjab National Bank, Adani Enterprises, Shriram Transport Finance, Hindustan Petroleum Corp and LIC Housing Finance were traded the most across tenures today.
In the primary market, IIFL Finance today raised 5.5 bln rupees through 10-year bonds at a coupon of 9.45%, which was fully subscribed.
While Power Finance Corp plans to raise up to 50 bln rupees through two bonds, one maturing on Nov 3, 2025, and the other on Oct 15, 2032, Summit Digitel Infrastructure Ltd aims to raise 12 bln rupees through 10-year bond sale. Biddings for both the bonds are scheduled on Tuesday.
According to merchant bankers, fresh primary supply has started hitting the market, with many oil and natural gas companies, state-owned entities and other corporates in the pipeline.
Today, deals aggregating 34.14 bln rupees were recorded on the National Stock Exchange, against 22.72 bln rupees on Friday. BSE clocked deals worth 21.79 bln rupees, compared with 19.67 bln rupees on Friday.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 20 mln rupees were traded at a weighted average yield of 7.55-7.83%, data from Reserve Bank of India’s Negotiated Dealing System – Order Matching System showed.
* 12 mln rupees of Haryana’s 2025 bonds were traded at 7.55%
* 8 mln rupees of Uttar Pradesh’s 2028 bonds were traded at 7.83%
BENCHMARK LEVELS FOR CORPORATE BONDS:
End
Edited by Tanima Banerjee
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