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Absence of supply push yields lower, 10 year benchmark closes at 8.06%
Government securities
Bonds notched up gain for a third session in a row as no bond auction
announcement for the week prompted investors to stack up holdings. With no
further sovereign auction in FY11; borrowing program for FY12 (announced in the
Union Budget on 28th Feb) will be vital in the direction of yields. Over the fortnight
bond have rallied sharply supported by the truncated borrowing and the slowing
inflation trend. The 8.13% 2022 bond closed at 8.10% compared to 8.23% on 8th
Feb while the benchmark ten year bond closed 12bps lower at 8.06%.
Due to the sharp surge in crude oil prices, swap rates continued to remain firm
despite correction in the yield in the last two trading sessions. Persistently high
crude prices add to the inflation expectation, leading to possibility of aggressive
action from the central bank to control the inflationary pressure. One year swap
closed at 7.47% while the five year swap ended at 8.05%.
Non-SLR market
Short terms rates continued to stay in the double digit range with hefty funding
requirement from banks to expand their deposit base. Three month CDs were dealt
at 10.00% - 10.05% level while CPs were dealt at 10.25% -10.35% level.
Allahabad Bank & Andhra Bank placed INR 9bn & INR 5bn of early June maturity
CD at 10.06% while Punjab & Sind Bank placed INR 2bn of end June CD at
10.0850%. State Bank of Travancore placed one year CD for a quantum of INR
2.10bn at 10.09% while SBBJ placed INR 2.25bn of Sep maturity CD 10.07%.
Money markets
Call rates closed marginally higher at 6.73% as banks covered their reserve
requirements amidst the tight liquidity. Bank borrowed INR 763bn at the repo
window compared to INR 862bn on Monday. CBLO rates closed marginally below
the central bank’s lending rate at 6.49%. Volumes at the CBLO window also
remained robust at INR 500bn compared to an average borrowing of INR 400bn in
the previous week.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Absence of supply push yields lower, 10 year benchmark closes at 8.06%
Government securities
Bonds notched up gain for a third session in a row as no bond auction
announcement for the week prompted investors to stack up holdings. With no
further sovereign auction in FY11; borrowing program for FY12 (announced in the
Union Budget on 28th Feb) will be vital in the direction of yields. Over the fortnight
bond have rallied sharply supported by the truncated borrowing and the slowing
inflation trend. The 8.13% 2022 bond closed at 8.10% compared to 8.23% on 8th
Feb while the benchmark ten year bond closed 12bps lower at 8.06%.
Due to the sharp surge in crude oil prices, swap rates continued to remain firm
despite correction in the yield in the last two trading sessions. Persistently high
crude prices add to the inflation expectation, leading to possibility of aggressive
action from the central bank to control the inflationary pressure. One year swap
closed at 7.47% while the five year swap ended at 8.05%.
Non-SLR market
Short terms rates continued to stay in the double digit range with hefty funding
requirement from banks to expand their deposit base. Three month CDs were dealt
at 10.00% - 10.05% level while CPs were dealt at 10.25% -10.35% level.
Allahabad Bank & Andhra Bank placed INR 9bn & INR 5bn of early June maturity
CD at 10.06% while Punjab & Sind Bank placed INR 2bn of end June CD at
10.0850%. State Bank of Travancore placed one year CD for a quantum of INR
2.10bn at 10.09% while SBBJ placed INR 2.25bn of Sep maturity CD 10.07%.
Money markets
Call rates closed marginally higher at 6.73% as banks covered their reserve
requirements amidst the tight liquidity. Bank borrowed INR 763bn at the repo
window compared to INR 862bn on Monday. CBLO rates closed marginally below
the central bank’s lending rate at 6.49%. Volumes at the CBLO window also
remained robust at INR 500bn compared to an average borrowing of INR 400bn in
the previous week.
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