Bonds end weak ahead of the Apr-Sep borrowing that begins next week:: Edelweiss

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Bonds end weak ahead of the Apr-Sep borrowing that begins next week
Government securities
 Sovereign bonds ended weak today as most investors preferred to book profits
ahead of the government’s market borrowing for April-September that begins next
week. GoI will start its Apr-Sep borrowing plan next week with INR 120bn auction
of dated securities (total borrowing for April is INR 360bn as per the calendar). The
7.80% 2020 benchmark bond closed 2bps higher at 8.00%. With the bond’s
outstanding reaching its notional ceiling of INR 600bn, the central bank is likely to
issue a new 10 year benchmark during the first auction
Non-SLR market
 Short term rates eased for a second day due to lower supply from banks as most
of the banks have already met their deposit requirements for the financial year
and the deals are now happening with value date in April. Three month CDs were
dealt at 9.65%-9.75% while one year CDs were dealt at 9.75%-9.85%
 Bank of India placed INR 5bn of thee month CD at 9.65% (March value) while L&T
Finance placed INR 1bn of three month CP at 8.36% (Apr value). IDBI placed INR
2.50bn of one year CD between 9.55%-9.65%. PNB also placed INR 6bn of three
month CD at 9.60% (Mar value).
Money markets
 Overnight rates could remain under pressure until next week as the demand from
banks may be strong due to the shortened fortnight due to a holiday on Friday and
Monday. The central bank infused INR 910bn compared to INR 878bn on Monday.
Call rates ended marginally lower at 7.26% while the CBLO rates closed at 6.81%