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Sovereign yields steady on lack of supply; SBI’s retail bond closes at 9.51%
Government securities
Sovereign bond traded in a narrow with muted volumes for the second consecutive
day due to lack of any fresh triggers. The most liquid 8.13% 2022 bond saw some
buying interest as bank bought in order to meet their SLR requirements for the
financial year. The 11 Yr bond closed 2bps lower at 8.08% while the benchmark 10
Yr bond closed unchanged at 8.01%. With no fresh supply until April-11, sovereign
yields are likely to trade in a narrow range taking some cues from the weekly
inflation data.
Non-SLR market
Retail investors participated in the Non-SLR market with the listing of SBI’s retail
bond today. SBI offered a high premium to retail investors as an incentive to
develop retail interest in the bond market. The 9.95% SBIN 2026 bond listed at a
premium 3% with total volume of INR 29bn.
Short term rates rose marginally due to the persistently strong demand from
banks. Three month CDs were dealt at 10.20% while one year CDs were dealt at
10.18%. IDBI Bank placed INR 5.50bn of one year CD at 10.20% while Syndicate
Bank placed INR 3.85bn of one year CD at 10.18%. Vijaya Bank placed INR 3bn of
three month CD at 10.19% and INR 3.25bn of one year CD at the same level.
Money markets
GoI short term borrowing cost rose marginally due to the strained liquidity
situation. At the weekly T-bill auction central bank set a cut off yield for the 91 day
T-bill at 7.31% compared to 7.23% a week ago, while the cut off yield for the 364
day T-bill was set 6bps higher at 7.64%. Call rates are likely to remain in the
7.55%-7.65% range until the end of the financial year due to the strong demand
from bank to meet their balance sheet targets.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sovereign yields steady on lack of supply; SBI’s retail bond closes at 9.51%
Government securities
Sovereign bond traded in a narrow with muted volumes for the second consecutive
day due to lack of any fresh triggers. The most liquid 8.13% 2022 bond saw some
buying interest as bank bought in order to meet their SLR requirements for the
financial year. The 11 Yr bond closed 2bps lower at 8.08% while the benchmark 10
Yr bond closed unchanged at 8.01%. With no fresh supply until April-11, sovereign
yields are likely to trade in a narrow range taking some cues from the weekly
inflation data.
Non-SLR market
Retail investors participated in the Non-SLR market with the listing of SBI’s retail
bond today. SBI offered a high premium to retail investors as an incentive to
develop retail interest in the bond market. The 9.95% SBIN 2026 bond listed at a
premium 3% with total volume of INR 29bn.
Short term rates rose marginally due to the persistently strong demand from
banks. Three month CDs were dealt at 10.20% while one year CDs were dealt at
10.18%. IDBI Bank placed INR 5.50bn of one year CD at 10.20% while Syndicate
Bank placed INR 3.85bn of one year CD at 10.18%. Vijaya Bank placed INR 3bn of
three month CD at 10.19% and INR 3.25bn of one year CD at the same level.
Money markets
GoI short term borrowing cost rose marginally due to the strained liquidity
situation. At the weekly T-bill auction central bank set a cut off yield for the 91 day
T-bill at 7.31% compared to 7.23% a week ago, while the cut off yield for the 364
day T-bill was set 6bps higher at 7.64%. Call rates are likely to remain in the
7.55%-7.65% range until the end of the financial year due to the strong demand
from bank to meet their balance sheet targets.
