| The State Bank of Indore is expected to float a Tier-II bond issue this week. Corporate borrowings have once again has taken the backseat due to the volatility in interest rates.
|
| |
| Secondary market trading in corporate bonds remained lacklustre as mutual funds, one of the major buyers, are having second thoughts about taking exposure due to a fall in subscriptions in their long-term bond schemes.
|
| |
| Meantime, the insipid run continues for the commercial paper market. This is because, short-term loans are available at a cheaper rate which a re-linked to the Mumbai inter-bank bid-offer rate (Mibor).
|
| |
| Mibor, which is a benchmark used for interest rates, is based on the underlying government securities rates.
|
| |
| Another reason for the dullness in the commercial paper market is that banks are unwilling to take exposure by picking up corporate issues due to the volatility in treasury bill rates, which act as the underlying trend determiner for the 90-day commercial paper issues.
|
| |
| Recap: Since the yield on gilts remained rangebound, the spread between a 5-year, AAA-rated paper and an underlying government security continued to remain at 50 basis points last week.
|
| |
| Commercial paper rates for the fortnight ended January 15 hovered in the range of 5.40-6.35 per cent as against 5.10-7.10 per cent in the fortnight preceding last week.
|
| |
| Total commercial paper stood at 1,624 worth Rs 12,215 crore, according to the RBI statistical supplement. |
| |
|
| |
Content Guide
