Informist, Monday, Nov 28, 2022
By Parth Singh
MUMBAI – Yields on corporate bonds in the secondary market ended steady today as volumes were subdued due to lack of fresh cues, and as investors await the primary issuances lined up this week, dealers said.
While activity was majorly concentrated in the short-term segment, papers maturing in five and 10 years were subdued, dealers said.
In the secondary market of corporate bonds, mutual funds, insurance companies, and provident funds were said to have been on the buying side today, whereas banks remained on the selling side.
“As the corporate bonds market is an under-supplied one, the movement in the long-term paper section is not that sharp,” said a fund-manager with a mid-sized brokerage firm. “While there is still appetite for short-term papers, demand for long-term papers feels truncated.”
Bonds issued by Hindustan Petroleum Corp, Small Industries Development Bank of India, Bajaj Housing Finance, National Bank For Agriculture and Rural Development, Creditaccess Grameen, Tata Capital Financial Services, and Mahanagar Telephone Nigam were traded the most across tenures today.
Overall, sentiment in the bond market remained positive as market participants expect the Reserve Bank of India to scale down its pace of interest rate hikes at its policy meeting next week.
The volume in the secondary market remained subdued. Today, deals aggregating 33.11 bln rupees were recorded on the National Stock Exchange, against 16.14 bln rupees on Friday. BSE clocked deals worth 20.02 bln rupees as against 29.54 bln rupees on Friday.
In the primary market today, Union Bank of India today successfully raised 22 bln rupees through two tier-II bonds, one maturing in 15 years and the other in 10 years. According to merchant bankers, this is the first time when a public sector bank has tapped the bond market with two tranches at the same time.
Following this, IDFC First Bank also plans to raise up to 15 bln rupees through Basel-III compliant tier-II bonds maturing in 10 years and has invited bids for the same on Tuesday.
Last week, Informist exclusively reported that Bank of India plans to tap the debt market to raise funds through tier-I bonds ahead of the RBI’s policy.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 19.10 mln rupees were traded at a weighted average yield of 7.40-7.65%, data from the Reserve Bank of India’s Negotiated Dealing System – Order Matching System showed.
* 19 mln rupees of Telangana’s 2028 bonds were traded at 7.65%
* 0.05 mln rupees of Haryana’s 2025 bonds were traded at 7.45%
* 0.05 mln rupees of Haryana’s 2024 bonds were traded at 7.40%
BENCHMARK LEVELS FOR CORPORATE BONDS:
Edited by Avishek Dutta
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