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Bond yield edge higher ahead of auction; LAF borrowing declines to INR 795bn
Government securities
Sovereign yields closed higher ahead of the penultimate sovereign auction for
FY11 on Friday. The securities selected for the auction remained weak in trade as
traders trimmed holdings ahead of the fresh supply. The 7.17% 2015 bond closed
another 2bps higher at 8.15% as it will become illiquid (total o/s of INR 560bn
post Friday’s auction). The 10 Yr benchmark bond and the 12 Yr bond both closed
1 basis higher at 8.15% and 8.18% respectively.
Swap rates edged higher, as a sharp rise in the crude oil prices formed expectation
of further built up of inflationary pressures. Concerns that the unrest in Egypt will
disrupt oil supply, has lead to a sharp rise in oil prices. The longer maturity five
year OIS closed 3 bps higher at 8.01% while the one year OIS closed 1 basis lower
at 7.42% owing to the marginal improvement in the liquidity.
Non-SLR market
Union Bank and Allahabad Bank placed three month CD amounting to INR 5.50bn
and INR 1bn at 9.54% and 9.55% respectively. Punjab National Bank and Bank of
Baroda placed INR 3.55bn and INR 5.95bn of one year CD at 9.95%. Canara Bank
placed INR 3.50bn of five month CD at 9.84%. Aditya Birla Finance raised INR
250mn of three month CP at 10% while M&M Finance raised INR 250mn of one
month CP at 8%.
Money markets
Banks borrowing at the LAF saw a sharp decline to INR 795bn compared to INR
1.15trn on Monday, mainly on account of the coupon payment inflow of INR45bn
and inflow in various government schemes. Central government is expected to
draw down its INR 700bn cash balance with the central bank in a phased manner
in FY11 which will bring the system liquidity in to the comfort zone of -/+1%
NDTL. Call rates closed marginally lower today at 6.90%, owing to the
improvement in the system liquidity.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bond yield edge higher ahead of auction; LAF borrowing declines to INR 795bn
Government securities
Sovereign yields closed higher ahead of the penultimate sovereign auction for
FY11 on Friday. The securities selected for the auction remained weak in trade as
traders trimmed holdings ahead of the fresh supply. The 7.17% 2015 bond closed
another 2bps higher at 8.15% as it will become illiquid (total o/s of INR 560bn
post Friday’s auction). The 10 Yr benchmark bond and the 12 Yr bond both closed
1 basis higher at 8.15% and 8.18% respectively.
Swap rates edged higher, as a sharp rise in the crude oil prices formed expectation
of further built up of inflationary pressures. Concerns that the unrest in Egypt will
disrupt oil supply, has lead to a sharp rise in oil prices. The longer maturity five
year OIS closed 3 bps higher at 8.01% while the one year OIS closed 1 basis lower
at 7.42% owing to the marginal improvement in the liquidity.
Non-SLR market
Union Bank and Allahabad Bank placed three month CD amounting to INR 5.50bn
and INR 1bn at 9.54% and 9.55% respectively. Punjab National Bank and Bank of
Baroda placed INR 3.55bn and INR 5.95bn of one year CD at 9.95%. Canara Bank
placed INR 3.50bn of five month CD at 9.84%. Aditya Birla Finance raised INR
250mn of three month CP at 10% while M&M Finance raised INR 250mn of one
month CP at 8%.
Money markets
Banks borrowing at the LAF saw a sharp decline to INR 795bn compared to INR
1.15trn on Monday, mainly on account of the coupon payment inflow of INR45bn
and inflow in various government schemes. Central government is expected to
draw down its INR 700bn cash balance with the central bank in a phased manner
in FY11 which will bring the system liquidity in to the comfort zone of -/+1%
NDTL. Call rates closed marginally lower today at 6.90%, owing to the
improvement in the system liquidity.
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