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Gilts unchanged amidst low volumes
The total traded volume in G-Secs today was abysmally low at INR 55bn as position
building was avoided in the run-up to the fiscal year end. As a result, yields were largely
unchanged even though the underlying sentiment is negative with risk of FY13 fiscal
slippage and intense borrowing. This trend could continue till the year end, given that
there is no new paper supply hitting the market in the next 2 weeks and year end position
management might prevent yields from rising significantly.
Though the 10-Y benchmark moved in a range of 5bps, it eventually ended at the
previous day's close of 8.42%. The above mentioned year end support might have helped
the pullback from the day's high of 8.45%. The post-budget expectation of yields heading
above 8.50% is likely to materialize only in April with the onset of the FY13 bond sale
program.
The OIS market also suffered from a lackluster session as the 1Y OIS ended flat at 8.20-
8.26% and the 5-Y swap was also unchanged at 7.59-7.65%.
Non-SLR Market
Andhra Bank placed 1Y CD worth INR 8.65bn @ 10.75%. SBP placed 3M CD worth INR 5bn
@ 11.35%. UCO Bank placed same tenor @ 11.50% for INR 18bn.
Money Market
The liquidity scenario still looks strained as the LAF borrowing continues at high levels of INR
1.6tn. Call rates on the other hand eased to a WAR of 8.95% after Friday’s jump to 9.06%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Gilts unchanged amidst low volumes
The total traded volume in G-Secs today was abysmally low at INR 55bn as position
building was avoided in the run-up to the fiscal year end. As a result, yields were largely
unchanged even though the underlying sentiment is negative with risk of FY13 fiscal
slippage and intense borrowing. This trend could continue till the year end, given that
there is no new paper supply hitting the market in the next 2 weeks and year end position
management might prevent yields from rising significantly.
Though the 10-Y benchmark moved in a range of 5bps, it eventually ended at the
previous day's close of 8.42%. The above mentioned year end support might have helped
the pullback from the day's high of 8.45%. The post-budget expectation of yields heading
above 8.50% is likely to materialize only in April with the onset of the FY13 bond sale
program.
The OIS market also suffered from a lackluster session as the 1Y OIS ended flat at 8.20-
8.26% and the 5-Y swap was also unchanged at 7.59-7.65%.
Non-SLR Market
Andhra Bank placed 1Y CD worth INR 8.65bn @ 10.75%. SBP placed 3M CD worth INR 5bn
@ 11.35%. UCO Bank placed same tenor @ 11.50% for INR 18bn.
Money Market
The liquidity scenario still looks strained as the LAF borrowing continues at high levels of INR
1.6tn. Call rates on the other hand eased to a WAR of 8.95% after Friday’s jump to 9.06%.
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