Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Easing food articles inflation; lack of more sovereign supply boost sentiment
Government securities
Sovereign bonds witnessed a sharp rally today on anticipation that GoI may not
raise more funds for the rest of the financial year. As per the revised estimate, GoI
was scheduled to borrow INR 4.47trn in FY11. But considering the auction size
cuts implemented in December, the government has borrowed INR 4.37trn so far.
Due the healthy cash balance of GoI it is unlikely that it will borrow the truncated
INR 100bn. The sentiment also got a boost from a moderate fall in the food
articles inflation. In the week ended Feb-19, food inflation slipped to 10.39% from
11.49% a week ago. Primary articles inflation also eased to 14.85% from 15.77%
a week ago.
Post budget the bond yield have eased 9-14bps across maturities comforted from
the lower net borrowing from GoI and the easing food articles inflation. In today’s
trade, the most liquid 8.13% 2022 bond close 5bps lower at 8.03% while the ten
year benchmark bond closed 7bps lower at 7.93%.
Non-SLR market
CD issuances remained strong with bank’s preferring to refinance their maturing
CDs at current rates, as there is an expectation of short term rates to rise further
on account of the outflow of advance taxes in mid March. Bank of India raised INR
2bn of one year CD at 10.1850% while OBC raised INR 1bn of same maturity CD
at 10.18%. Canara Bank placed INR 10bn of three month CD at 10.12% and INR
2.50bn of one year CD at 10.17%. IDBI Bank placed INR 2.50bn of Sep maturity
CD at 10.15%.
Money markets
Net LAF injection remained stable around the INR 775bn mark so far in the week.
Banks borrowed heavily at the CBLO window as well due to the lower rates
compared to the central bank’s lending rate
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Easing food articles inflation; lack of more sovereign supply boost sentiment
Government securities
Sovereign bonds witnessed a sharp rally today on anticipation that GoI may not
raise more funds for the rest of the financial year. As per the revised estimate, GoI
was scheduled to borrow INR 4.47trn in FY11. But considering the auction size
cuts implemented in December, the government has borrowed INR 4.37trn so far.
Due the healthy cash balance of GoI it is unlikely that it will borrow the truncated
INR 100bn. The sentiment also got a boost from a moderate fall in the food
articles inflation. In the week ended Feb-19, food inflation slipped to 10.39% from
11.49% a week ago. Primary articles inflation also eased to 14.85% from 15.77%
a week ago.
Post budget the bond yield have eased 9-14bps across maturities comforted from
the lower net borrowing from GoI and the easing food articles inflation. In today’s
trade, the most liquid 8.13% 2022 bond close 5bps lower at 8.03% while the ten
year benchmark bond closed 7bps lower at 7.93%.
Non-SLR market
CD issuances remained strong with bank’s preferring to refinance their maturing
CDs at current rates, as there is an expectation of short term rates to rise further
on account of the outflow of advance taxes in mid March. Bank of India raised INR
2bn of one year CD at 10.1850% while OBC raised INR 1bn of same maturity CD
at 10.18%. Canara Bank placed INR 10bn of three month CD at 10.12% and INR
2.50bn of one year CD at 10.17%. IDBI Bank placed INR 2.50bn of Sep maturity
CD at 10.15%.
Money markets
Net LAF injection remained stable around the INR 775bn mark so far in the week.
Banks borrowed heavily at the CBLO window as well due to the lower rates
compared to the central bank’s lending rate
No comments:
Post a Comment