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Yields remains steady; 11 year bond down on some profit booking
Government securities
Yields remained confined to a narrow range in trade today in the absence of any
fresh trigger. However the underlying sentiment continued to be buoyant on the
lower than expected borrowing from the central government in the next fiscal. The
8.13% 2022 bond saw some selling pressure since it is the most probable bond to
be auctioned (if GoI decides to do one in FY11) due to its relatively low
outstanding. The ten year benchmark bond closed at 7.93% while the 8.13% 2022
bond closed at 8.06%, 3bps higher than previous close.
GoI sought approval for its third supplementary demand for grants amounting to a
net INR 690bn. These grants included a payment of INR 210bn as oil subsidies,
INR 80bn as fertilizer subsidies & INR 39.70bn as food subsidies. Inflow of these
subsidies is likely to ease the liquidity strain marginally.
Non-SLR market
Short term rates eased marginally in anticipation of improvement in the liquidity
due to inflow from the subsidies announced. Three month CDs were dealt at
10.09% while the one year CD were dealt at 10.15%. Indian Overseas Bank
placed INR 4bn of one year CD at 10.16% while Punjab & Sind Bank placed INR
1.40bn of same maturity CD at 10.1850%. State Bank of Hyderabad & State Bank
of Patiala placed INR 2bn each of one year CD at 10.14%. Central Bank and
Canara Bank placed three month CD at 10.10% and 10.09% respectively.
Money markets
LAF borrowing declined to INR 685bn compared to INR 775bn on Thursday. GoI
cash balance has declined from INR 472bn to INR 275bn over the week ended 25th
Feb, providing respite to the strained liquidity which hovered around the INR 1trn
mark in the previous fortnight. Call rates hovered around the 6.90% level while
the CBLO rates closed below the central bank’s lending rate.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Yields remains steady; 11 year bond down on some profit booking
Government securities
Yields remained confined to a narrow range in trade today in the absence of any
fresh trigger. However the underlying sentiment continued to be buoyant on the
lower than expected borrowing from the central government in the next fiscal. The
8.13% 2022 bond saw some selling pressure since it is the most probable bond to
be auctioned (if GoI decides to do one in FY11) due to its relatively low
outstanding. The ten year benchmark bond closed at 7.93% while the 8.13% 2022
bond closed at 8.06%, 3bps higher than previous close.
GoI sought approval for its third supplementary demand for grants amounting to a
net INR 690bn. These grants included a payment of INR 210bn as oil subsidies,
INR 80bn as fertilizer subsidies & INR 39.70bn as food subsidies. Inflow of these
subsidies is likely to ease the liquidity strain marginally.
Non-SLR market
Short term rates eased marginally in anticipation of improvement in the liquidity
due to inflow from the subsidies announced. Three month CDs were dealt at
10.09% while the one year CD were dealt at 10.15%. Indian Overseas Bank
placed INR 4bn of one year CD at 10.16% while Punjab & Sind Bank placed INR
1.40bn of same maturity CD at 10.1850%. State Bank of Hyderabad & State Bank
of Patiala placed INR 2bn each of one year CD at 10.14%. Central Bank and
Canara Bank placed three month CD at 10.10% and 10.09% respectively.
Money markets
LAF borrowing declined to INR 685bn compared to INR 775bn on Thursday. GoI
cash balance has declined from INR 472bn to INR 275bn over the week ended 25th
Feb, providing respite to the strained liquidity which hovered around the INR 1trn
mark in the previous fortnight. Call rates hovered around the 6.90% level while
the CBLO rates closed below the central bank’s lending rate.
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