Wekly Market Review
November 21, 2014
Money Market | 21-Nov-14 | 14-Nov-14 |
---|---|---|
Call |
8.00% |
7.75% |
CBLO | 7.85% | 7.86% |
Mibor | 7.83% | 7.92% |
LAF o/s Repo (Rs Cr) | 5,709 | 14,307 |
Benchmark Securities | 19-Nov-14 | |||
---|---|---|---|---|
Security | Closing price | Previous price | Closing yield (%) | Previous yield (%) |
91 DTB | 97.99 | 97.97 | 8.25 | 8.31 |
364 DTB | 92.47 | 92.33 | 8.33 | 8.33 |
07.28% 2019 | 96.63 | 96.67 | 8.18 | 8.17 |
08.27% 2020 | 100.11 | 100.15 | 8.24 | 8.23 |
08.79% 2021 | 102.60 | 102.65 | 8.29 | 8.28 |
08.35% 2022 | 100.33 | 100.39 | 8.29 | 8.28 |
08.83% 2023 | 103.54 | 103.57 | 8.26 | 8.26 |
08.40% 2024 | 101.54 | 101.58 | 8.16 | 8.16 |
08.20% 2025 | 99.40 | 99.47 | 8.28 | 8.27 |
08.33% 2026 | 100.30 | 100.37 | 8.29 | 8.28 |
08.28% 2027 | 99.99 | 100.06 | 8.28 | 8.27 |
08.60% 2028 | 102.91 | 102.92 | 8.24 | 8.24 |
09.20% 2030 | 108.01 | 108.20 | 8.28 | 8.26 |
08.32% 2032 | 100.50 | 100.60 | 8.26 | 8.25 |
08.33% 2036 | 100.70 | 100.70 | 8.26 | 8.26 |
09.23% 2043 | 110.48 | 110.60 | 8.27 | 8.26 |
Data with two day lag
Call rates rise on firm demand for funds
After beginning the week on the higher side, the interbank call money rate reduced as demand for funds subsided, indicating comfortable liquidity in the banking system. The overnight borrowing rate ended at 8% on November 21 as against 7.60-7.75% on November 14. Call rates were slightly elevated at the start of the week as banks borrowed to pay for gilts purchased in the last week’s gilt auction. Banks’ demand for funds rose intermittently to satisfy mandatory reserve needs. Call rates also rose in the last session of the week as banks preferred to lend to the RBI through the reverse repo auction.
Gilt prices strengthen on rate cut hopes
Government bond prices strengthened as sentiment was supported by expectation of a softer policy stance from the RBI, low global crude oil prices and moderation in domestic inflation data. The yield of the benchmark 8.40% 2024 paper ended at 8.17% on November 21 as against 8.22% on November 14. Appetite for bonds improved following Finance Minister ArunJaitley’s comments. The finance minister called for a rate cut by the central bank, saying lower interest rates will help boost the economy. Further, he expressed hope that the Centre could achieve its divestment target set for the fiscal. These remarks were viewed positively as they indicated that the government might meet its fiscal deficit target. However, further gains in bonds were restricted by the rupee’s weakness against the dollar, sporadic profit sales, and trimming of positions before the RBI’s Rs 14,000 cr gilt sale.
ZCYC curve was flatter
ZCYC curve was flatter, with lower yields for papers across almost the entire maturity spectrum, compared to last week.
Source: NSE
AAA Corporate Bond Yields and Spread | ||||
---|---|---|---|---|
Yield | Spread | |||
19-Nov | 12-Nov | 19-Nov | 12-Nov | |
1 year | 8.56 | 8.59 | 0.09 | 0.15 |
3 year | 8.49 | 8.50 | 0.15 | 0.16 |
5 year | 8.64 | 8.62 | 0.29 | 0.25 |
10 year | 8.62 | 8.66 | 0.20 | 0.21 |
Data with two day lag
Government Borrowing Programme (Rs. Cr.) | |
---|---|
Budgeted G-Sec Gross Borrowings for 2013-14 | 592000 |
Budgeted G-Sec Net Borrowings for 2012-13 | 465727 |
Budgeted Redemptions | 126273 |
G-Sec Gross Borrowings till Date | 441000 |
G-Sec Gross Borrowing Completed (%) | 74.49% |
Maturities till date | 84464 |
Net G-Sec Borrowings till date | 356536 |
364 Day T-Bill Gross Borrowings till date | 99000 |
OMO Purchases till date | 10345 |
SDL auction till date | 120301 |
Term of the week
Issue price – Issue Price is the price at which corporate bonds are issued to investors. Issue price is mostly the same as face value in case of coupon bearing bonds. In case of non-coupon bearing bonds (zero coupon bonds),the security is generally issued at a discount.