Weekly Market Review | srei
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Weekly Market Review

May 30, 2014

Money Market 30-May-14 23-May-14
Call

8.40%

8.40%

CBLO 8.01% 8.01%
Mibor 7.95% 7.95%
LAF o/s Repo (Rs Cr) 11,701 11,701
Benchmark Securities 21-May-14
Security Closing price Previous price Closing yield (%) Previous yield (%)
91 DTB 97.91 97.91 8.58 8.57
364 DTB 92.05 92.13 8.66 8.73
07.28%  2019 94.75 94.35 8.59 8.69
08.19%  2020 97.60 97.13 8.73 8.84
08.12%   2020 95.80 95.33 8.72 8.82
08.79%   2021 97.88 97.32 8.72 8.82
07.16%   2023 89.65 89.05 8.85 8.96
08.83%   2023 100.81 100.39 8.70 8.77
09.15%  2024 101.90 101.20 8.87 8.97
08.20%   2025 95.25 94.40 8.87 9.00
08.24%   2027 94.95 94.35 8.91 8.99
08.28%   2027 95.19 94.62 8.90 8.98
09.20%   2030 103.05 102.25 8.84 8.93
08.32%   2032 95.10 94.15 8.87 8.98
08.33%  2036 94.78 93.88 8.87 8.97
08.30%   2042 103.75 102.55 8.87 8.98

Data with two day lag

Call money rate fell on comfortable liquidity situation

The interbank call money rate remained below the RBI’s repo rate of 8% for most of the week as liquidity conditions remained comfortable. The call rate ended at 7.30% in the last trading session of the week on May 30 compared with 8.30-8.40% on May 23. Demand for funds has been low due to the government’s oil subsidy payments to oil marketing companies in the month.

Gilt prices range-bound amid caution ahead of release of the key economic data

Government bond prices were range-bound during the week with the 10-year benchmark 8.83% 2023 bond ending flat at 8.64% yield on May 30 as compared with the previous week’s close. Gilt prices were put under pressure at the start of the week by the unexpected announcement of the weekly gilt auction during market hours. Some gains were also cut on caution ahead of key announcements, including India’s fiscal deficit figures for the previous fiscal year and the RBI’s monetary policy review next week. However, further fall was capped by Finance Minister Arun Jaitley’s encouraging comments. The finance minister assured investors that he would focus on bringing down fiscal deficit and inflation. Prices also received some support after RBI Governor Raghuram Rajan said public expectations on inflation have come down. Short covering, strong demand at weekly debt auction and anticipation of sustained FII inflows also induced some gains into bond prices.

Top 5 Traded Securities

ZCYC curve was flatter

ZCYC curve was flatter compared to last week; yields for short maturity papers rose while yields for longer maturity papers dipped slightly.

ZCYC Curve

Source: NSE

AAA Corporate Bond Yields and Spread
  Yield Spread
  28-May 21-May 28-May 21-May
1 year 8.77 8.96 0.21 0.31
3 year 9.12 9.16 0.47 0.31
5 year 9.28 9.39 0.52 0.50
10 year 9.30 9.39 0.25 0.18

Data with one day lag

Government Borrowing Programme (Rs. Cr.)
Budgeted G-Sec Gross Borrowings for 2013-14 597000
Budgeted G-Sec Net Borrowings for 2012-13 457000
Budgeted Redemptions 140000
G-Sec Gross Borrowings till Date 152000
G-Sec Gross Borrowing Completed (%) 25.46%
Maturities till date 75113
Net G-Sec Borrowings till date 76887
364 Day T-Bill Gross Borrowings till date 30000
OMO Purchases till date 0
SDL auction till date 33286

Term of the week

Bond Indenture It is a written document that provides vital information to bondholders regarding the terms of the loan. This includes interest rate receivable and maturity date of the bond for example. It also specifies terms that the issuer must uphold to avoid penalties such as maintenance of certain financial ratios.

Saturday, May 31, 2014