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Swap rates sees a sharp decline due to the weak factory output growth
Government securities
Bond yields closed marginally higher for the first time in the week after the central
bank set a higher than expected cut off at the auction. RBI set a cut off yield of
8.25% for the 8.08% 2022 bond while the cut off yield for the 7.49% 2017 bond
was set at 8.15%. The benchmark ten year bond ended at 8.15% while the most
traded 8.13% 2022 bond closed at 8.21%, up 1 basis from Thursday’s close.
Swap rates saw a sharp decline across maturities due to the weak industrial output
growth for the month of Dec. India’s IIP growth slumped to a 20-month low of
1.60% in Dec from 2.70% a month ago. Weaker IIP data supported the sentiment
that the central bank may not risk hurting economic growth with steep rate hike in
order to tame inflation. The five year swap closed 10bps lower at 8.05% while the
one year swap closed 2bps lower at 7.44%.
Non-SLR market
Non SLR yields remained steady for the week due to lack of new issuances in the
market. PFC’s 10-year bond was dealt at 9.18% - 9.20% level while the 3 year
corporate bonds were traded around the 9.40-9.45% level. IRFC raised INR 5bn
through a 10 year bond at 9.20%. NABARD and NHB placed INR 5bn each of five
year bond at 9.12% and 9.18% respectively. Axis Bank and IDBI Bank placed INR
2.0bn and INR 2.50bn of one year CD at 10% while Canara Bank raised similar
quantum at 9.80%.
Money markets
LAF borrowing for the week averaged INR 767bn compared to INR 1trn in the
previous week owing to the significant draw down of the government cash
balances with the central bank. GoI cash balance reduced by INR 414bn to INR
269bn in the week ending 4th February due to the spending in the major
government schemes. Owing to the sharp improvement in the liquidity overnight
rates remained steady above the repo rates at ~6.60% throughout the week.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� �
Swap rates sees a sharp decline due to the weak factory output growth
Government securities
Bond yields closed marginally higher for the first time in the week after the central
bank set a higher than expected cut off at the auction. RBI set a cut off yield of
8.25% for the 8.08% 2022 bond while the cut off yield for the 7.49% 2017 bond
was set at 8.15%. The benchmark ten year bond ended at 8.15% while the most
traded 8.13% 2022 bond closed at 8.21%, up 1 basis from Thursday’s close.
Swap rates saw a sharp decline across maturities due to the weak industrial output
growth for the month of Dec. India’s IIP growth slumped to a 20-month low of
1.60% in Dec from 2.70% a month ago. Weaker IIP data supported the sentiment
that the central bank may not risk hurting economic growth with steep rate hike in
order to tame inflation. The five year swap closed 10bps lower at 8.05% while the
one year swap closed 2bps lower at 7.44%.
Non-SLR market
Non SLR yields remained steady for the week due to lack of new issuances in the
market. PFC’s 10-year bond was dealt at 9.18% - 9.20% level while the 3 year
corporate bonds were traded around the 9.40-9.45% level. IRFC raised INR 5bn
through a 10 year bond at 9.20%. NABARD and NHB placed INR 5bn each of five
year bond at 9.12% and 9.18% respectively. Axis Bank and IDBI Bank placed INR
2.0bn and INR 2.50bn of one year CD at 10% while Canara Bank raised similar
quantum at 9.80%.
Money markets
LAF borrowing for the week averaged INR 767bn compared to INR 1trn in the
previous week owing to the significant draw down of the government cash
balances with the central bank. GoI cash balance reduced by INR 414bn to INR
269bn in the week ending 4th February due to the spending in the major
government schemes. Owing to the sharp improvement in the liquidity overnight
rates remained steady above the repo rates at ~6.60% throughout the week.
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