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Volumes subdued ahead of the borrowing calendar; 10 Yr bond closes flat at 8.01%
Government securities
Bond yields ended steady with subdued volumes as most participants preferred to
remain on the sidelines ahead of the release of the borrowing calendar. GoI has
projected a net borrowing of INR 3.43 trn for the next fiscal year which brings the
gross borrowing to INR 4.17trn in FY12. Official of the RBI & the finance ministry
are likely to meet on Friday to decide the borrowing calendar. The ten year
benchmark bond closed unchanged from yesterday’s level of 8.01% while the most
liquid 8.13% 2022 bond closed at 8.11%, 1 basis higher than Monday’s close.
Non-SLR market
Short term rates continued to edge higher as there is a strong demand for funds
from banks in order to shore up their balance sheet ahead of the end of the
financial year. Of late banks have been raising funds heavily from the CD market
to meet their yearly targets as deposit growth has been dull relative to the robust
credit off take. Three month CDs were dealt at 10.05-10.15% while one year CDs
were dealt at 10.10%-10.20%. Allahabad Bank and Central Bank placed INR 10bn
& INR 2bn of three month CD at 10.08%. State Bank of Patiala placed INR 3bn of
one year CD at 10.05% while IDBI Bank placed INR 6.60bn of same maturity CD
at 10.17%.
Money markets
LAF borrowing continued to hover around the INR 725bn mark compared to an
average borrowing of INR 1.23trn in the previous week mainly on account of the
highly skewed borrowing from banks. As per the RBI data, banks maintained an
average excess of 5% of the required CRR (INR 165bn) until 18th March.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Volumes subdued ahead of the borrowing calendar; 10 Yr bond closes flat at 8.01%
Government securities
Bond yields ended steady with subdued volumes as most participants preferred to
remain on the sidelines ahead of the release of the borrowing calendar. GoI has
projected a net borrowing of INR 3.43 trn for the next fiscal year which brings the
gross borrowing to INR 4.17trn in FY12. Official of the RBI & the finance ministry
are likely to meet on Friday to decide the borrowing calendar. The ten year
benchmark bond closed unchanged from yesterday’s level of 8.01% while the most
liquid 8.13% 2022 bond closed at 8.11%, 1 basis higher than Monday’s close.
Non-SLR market
Short term rates continued to edge higher as there is a strong demand for funds
from banks in order to shore up their balance sheet ahead of the end of the
financial year. Of late banks have been raising funds heavily from the CD market
to meet their yearly targets as deposit growth has been dull relative to the robust
credit off take. Three month CDs were dealt at 10.05-10.15% while one year CDs
were dealt at 10.10%-10.20%. Allahabad Bank and Central Bank placed INR 10bn
& INR 2bn of three month CD at 10.08%. State Bank of Patiala placed INR 3bn of
one year CD at 10.05% while IDBI Bank placed INR 6.60bn of same maturity CD
at 10.17%.
Money markets
LAF borrowing continued to hover around the INR 725bn mark compared to an
average borrowing of INR 1.23trn in the previous week mainly on account of the
highly skewed borrowing from banks. As per the RBI data, banks maintained an
average excess of 5% of the required CRR (INR 165bn) until 18th March.
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