Daily Debt - New 10-year bond trades for INR 11.70 bn; yield 24bps lower

“Daily Debt Report”

 

New 10-year bond trades for INR 11.70 bn; yield 24bps lower  

n         The new 10-year bond with an outstanding amount of only INR 40 bn traded today with much enthusiasm, trading nearly 51% of the most liquid 8.24% GoI 2018 counter. Participants looked to cash-in gains of 15-20bps spread between the cut-off rate of the bond and its current YTM; the new benchmark ended the day at 5.90%. 

n         The broader sentiment for other bonds remained bearish as yield on the existing most liquid 10-year bond rose 11bps (from open) to the day’s high of 6.23% as it travelled a range of 20bps (trading with an upside bias from days low of 6.02%). Total volumes on the NDS-OM platform stood at INR 87.60 bn (the longer end, 10-year and higher, accounted for 52.7% of the volumes).

n         Liquidity in the system was much in excess despite the INR 100 bn G-Sec auction payout. While only 1 bid worth INR 500 mn was received under repo window, amount parked under the reverse repo was INR 480.20 bn. Overnight call hovered around Friday’s close, ending at 3.95%, while CBLO volumes shot up from previous week’s average by INR 47.22 bn (closing at INR 421.49 bn).    

n         Short-term non-SLR rates softened a bit as the system was replete with cash, and participants identified some buying interest in certificate of deposits; rate on the one-year CD eased 15bps to close at 7.15%. Corporate bonds were broadly unchanged – yield on the 5-year PFC bond eased 10bps on some buying interest by insurance companies.

 

Highlights of the day   

n   The 3-month maturity in the commercial paper segment witnessed some buying enthusiasm on anticipation of a spread compression between the 3-month CD and CP. Mutual funds were amongst the active investors.

n   India’s trade deficit reduced by USD 2.5 bn, to USD 7.57 bn, on account of significantly lower growth in oil imports that contracted 30.9% in December. Exports on the other hand contracted 1.1% as against 10% in Nov. 2008.

 

 

Thanks & Regards

 

Aditya Kachru

Investment Consultant & Associate Finance Broker

ARN-40736 | NCFM-187929

 

 

9818269396  | 9810269396 | 01204105997 | aditya.kachru@gmail.com | www.investorspleaselisten.blogspot.com