Illiquidity in the benchmark 10 Yr bond post Friday 12th Nov auction: Edelweiss

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Illiquidity in the benchmark 10 Yr bond post Friday 12th Nov auction.
Government securities
 Sovereign bonds traded in a narrow range, with a downward bias, on account of
the tight liquidity and concerns over the auction announcement for the week. The
benchmark bond closed unchanged at 7.99%, after touching an intraday low of
8.02%.
 At the auction on 12th Nov, GoI will auction bonds amounting to INR 110bn
consisting of INR 40 bn each of the 7.80% 2020 bond & 7.99% 2017 bond and
INR 30 bn of the 8.30% 2040 bond.



Non-SLR market
 Non SLR volumes continued to be muted on account of fresh issues in the coming
weeks. Power Finance Corp will raise INR 1.50 bn through 10 Yr bond issue at
8.78%, which opened today and is expected to close on Wednesday. Andhra Bank
& IDBI Bank placed INR 9.25 bn and INR 2.50 bn respectively through three
month CD at 7.95%.
Money markets
 Call rates ended firm above the 7% mark because of the rush for funds at the
beginning of the new reporting fortnight and the persistently tight liquidity.
Liquidity in the banking system continues to be in the deficit mode and bids
received at the repo window was INR 1.18 trn as banks preferred to borrow at the
LAF window with call rates hovering around the 7.10% mark while the CBLO rates
at 6.70%.