Weekly Market Review | srei
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Weekly Market Review

July 18, 2014

Money Market 18-Jul-14 11-Jul-14
Call

7.25%

8.70%

CBLO 8.14% 8.21%
Mibor 8.15% 8.92%
LAF o/s Repo (Rs Cr) 20,605 18,367
Benchmark Securities 16-Jul-14
Security Closing price Previous price Closing yield (%) Previous yield (%)
91 DTB 97.91 97.92 8.56 8.54
364 DTB 92.22 92.07 8.63 8.64
07.28%  2019 94.80 94.78 8.60 8.61
08.19%  2020 95.72 95.70 8.75 8.76
08.12%   2020 97.16 97.10 8.71 8.72
08.79%   2021 97.68 97.64 8.76 8.77
07.16%   2023 90.00 90.02 8.81 8.80
08.83%   2023 100.65 100.63 8.72 8.73
09.15%  2024 95.80 95.79 8.79 8.80
08.20%   2025 96.45 96.73 8.82 8.78
08.24%   2027 96.30 96.21 8.76 8.77
08.28%   2027 99.85 99.94 8.62 8.61
09.20%   2030 103.85 103.90 8.75 8.74
08.32%   2032 96.22 96.35 8.74 8.72
08.33%  2036 95.95 96.10 8.75 8.73
08.30%   2042 105.00 105.15 8.75 8.74

Data with two day lag

Call money rate eased due to RBI’s fund inflows

Interbank call money rates ended at 7.10-7.25% on July 18 as against 8.50-8.70% on July 11. Call money rates began the week near the RBI’s MSF rate as the liquidity deficit had widened due to outflows towards payment of gilts purchased in last week’s gilt sale. Intermittently, call money rates increased tracking a rise in CBLO rates. Banks’ demand for funds to meet daily and weekend reserve requirements also put upward pressure on overnight borrowing rates. However, the central bank injected Rs 25,000 cr this week through three term repo auctions, improving liquidity.

Gilt send flat as CPI news offset weak overseas cues

Government bond prices gave up earlier gains and ended flat in the wake of overseas developments; the yield of the benchmark 8.83% 2023 paper ended at 8.77% on July 18, unchanged from a week ago. Gilt prices began the week positively following the release of domestic retail inflation figures for June. However, a marginal increase in core-WPI numbers sparked some concern and pulled down prices. Sentiment for gilts was also dented slightly by the release of India’s trade balance figures. Gilt prices also fell after Finance Secretary ArvindMayaram said the government was not too keen on increasing the limit for foreign institutional investors (FIIs). Caution before the weekly gilt auction, and expectation of a new 10 year paper next week also weighed on prices. Escalating tensions in Ukraine and Gaza pushed up global crude oil prices, and also cut some gains for g-secs.

Top 5 Traded Securities

ZCYC curve shifted downwards

ZCYC curve shifted downwards, indicating lower yields for papers across all maturities.

ZCYC Curve

Source: NSE

AAA Corporate Bond Yields and Spread
  Yield Spread
  16-Jul 9-Jul 16-Jul 9-Jul
1 year 9.00 8.96 0.27 0.29
3 year 9.32 9.09 0.75 0.58
5 year 9.35 9.19 0.61 0.45
10 year 9.29 9.13 0.34 0.20

Data with two 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 242000
G-Sec Gross Borrowing Completed (%) 40.54%
Maturities till date 75113
Net G-Sec Borrowings till date 166887
364 Day T-Bill Gross Borrowings till date 48000
OMO Purchases till date 0
SDL auction till date 50146

Term of the week

Interest coverage ratioAn indicator used to determine whether a company can repay its debts. It can be calculated by dividing a company’s earnings before interest and tax payments by the company’s interest payments for a given time period.

Saturday, July 19, 2014