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Yields remained range bound in trade ahead of auction announcement
Government securities
Sovereign bonds traded in a narrow range today amid thin volumes ahead of the
announcement for the sovereign auction this week. Volumes dropped to INR 45bn
compared to an average of INR 63bn last week. The concerns over the surging
inflationary pressures continue to keep the sentiment jittery. The 7.17% 2015
bond saw a sell off closing 5bps higher, on anticipation of fresh supply of this
security on Friday.
Swap rates saw a sharp rise across maturities as banks preferred to pay fixed on
concerns about the intermittent action the central bank will take to tame prices
increase. The one year swap closed 7bps higher at 7.43% while the five year swap
closed 3bps higher at 7.98%.
Non-SLR market
State Bank of India placed INR 5bn of three month CD at 9.45% while Punjab
National Bank placed INR 1.75bn three month CD at 9.46%. PNB also placed INR
1.05bn of one year CD at 9.90%. IOC raised INR 5bn through 10th March maturity
CP at a cost of 7.80% while Gruh Finance raised INR 750mn of 25th Feb maturity
CP at 7.95%.
Money markets
Overnight rates ended firm above the central bank’s lending rate of 6.50% as
demand was strong owing to bank’s preference to meet their reserve needs in the
first week of the reporting cycle itself. LAF borrowing saw a sharp spike above the
INR 1.10trn mark at the beginning of the reporting cycle. Liquidity will continue to
be strained further with an outflow of INR 140bn through SDL and sovereign
auctions this week. Call rates closed at 6.93% while CBLO rates ended at 6.50%.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Yields remained range bound in trade ahead of auction announcement
Government securities
Sovereign bonds traded in a narrow range today amid thin volumes ahead of the
announcement for the sovereign auction this week. Volumes dropped to INR 45bn
compared to an average of INR 63bn last week. The concerns over the surging
inflationary pressures continue to keep the sentiment jittery. The 7.17% 2015
bond saw a sell off closing 5bps higher, on anticipation of fresh supply of this
security on Friday.
Swap rates saw a sharp rise across maturities as banks preferred to pay fixed on
concerns about the intermittent action the central bank will take to tame prices
increase. The one year swap closed 7bps higher at 7.43% while the five year swap
closed 3bps higher at 7.98%.
Non-SLR market
State Bank of India placed INR 5bn of three month CD at 9.45% while Punjab
National Bank placed INR 1.75bn three month CD at 9.46%. PNB also placed INR
1.05bn of one year CD at 9.90%. IOC raised INR 5bn through 10th March maturity
CP at a cost of 7.80% while Gruh Finance raised INR 750mn of 25th Feb maturity
CP at 7.95%.
Money markets
Overnight rates ended firm above the central bank’s lending rate of 6.50% as
demand was strong owing to bank’s preference to meet their reserve needs in the
first week of the reporting cycle itself. LAF borrowing saw a sharp spike above the
INR 1.10trn mark at the beginning of the reporting cycle. Liquidity will continue to
be strained further with an outflow of INR 140bn through SDL and sovereign
auctions this week. Call rates closed at 6.93% while CBLO rates ended at 6.50%.
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