India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
2017 & 2020 auction devolved; inflation data weighs on sentiment
Government securities
Sovereign bond yields witnessed a sharp rise as fears of policy rate hike, by RBI at
its 25th Jan policy review, continued to weigh in on sentiment. Post the release of
the food inflation data on Thursday, the sentiment has remained bearish with the
yields on the benchmark securities rising between 15-20 bps in the two days. The
benchmark ten year bond closed 7bps higher 8.20%, with INR 14.86bn being
devolved at the auction. The central bank also devolved INR 7.23bn of the 7.49%
2017 bond at the auction. The 7.99% 2017 bond was the worst hit with yields
rising 20bps as fresh supply in the segment spurred selling.
Swap rates traded in the wide range through the week, initially correcting between
15-18bps due to the improved liquidity situation and then rising sharply, pricing in
the possibility of a rate hike due to the soaring inflation. The one year swap rates
ended the week at 7.20% while the five year swap rates closed at 7.90%.
Non-SLR market
Non SLR yields saw a sharp rise tracking the sovereign yields. The short term
rates, which eased due to the improved liquidity, witnessed a rise of 18-25bps.
Banks CD issuance remained muted at INR 25bn today. OBC and Allahabad Bank
placed three month CD amounting to INR 2bn and 4bn respectively at 8.97%. Axis
Bank mopped up INR 12bn through June maturity CD at 9.40% while Punjab
National Bank placed INR 2.50bn April CD at 8.97%.
Money markets
Call rates ended flat at 6.34% as demand from banks for three day loans was met
with sufficient supply. Banks borrowed INR 843bn at the repo window today
compared to INR 609bn on Thursday. In the current fortnight, banks have
maintained an average excess of 4% over the required CRR until 4th Jan. With
sufficient inflow from the OMOs next week, LAF borrowing can taper towards the
INR 600bn mark. CBLO volumes also continued to be robust at INR 731bn, with
CBLO rates closing below the central bank’s lending rate for the third day in a row.
No comments:
Post a Comment