India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Government securities
Reserve Bank of India announced a buyback of INR 120bn, post market hours, to
be held on 29th Dec 2010. Although the securities intended for the buyback were
disclosed; the central bank did not specify the quantum of each security it intends
to buyback. The 7.80% 2020, benchmark ten year bond, was not included in the
buyback since RBI has already bought back INR 148bn in three rounds of OMOs
since November.
The 7.99% 2017 bond and the 8.13% 2022 bond saw buying interest in
anticipation of the buyback announcement. Both these bonds closed 1 basis lower
at 7.81% and 8.00% respectively. Total volumes remained modest at INR 70.65bn
with the 8.13% 2022 bond being the most liquid paper in trade. The 2017 bond
also remained highly liquid on expectation that the bond will see buying interest
from FII in January, when they utilize their allocated limits, post the year-end.
Non-SLR market
State Bank of India placed INR 26bn CD maturing on 25th March 2011 at 9.05%
while Corporation Bank placed INR 3bn of three month CD at 9.12%. Central Bank
of India and Andhra Bank placed INR 3bn and INR 7bn of three month CD at
9.15%. Corporation Bank also placed a one year CD at 9.75% amounting to INR
4.2bn.
Money markets
LAF borrowing continued to be strong at INR 1.33 trn compared to last week’s
average of INR 1.59 trn. For the current reporting cycle, banks have maintained an
excess of 3% CRR until 22nd December. Call rates ended firm at 6.87% while the
CBLO rates closed at 6.26%. The absence of a government auction and a buyback
inflow will help lessen the strain on the liquidity. However the liquidity can be
expected to be in the severe deficit mode, upwards of INR 1trn, until the central
back completes its buyback program.
No comments:
Post a Comment