High Volumes On Cards

GILTS & BONDS MARKET

The gilts and the bond market is set to witness hectic trading this week as the 0.5 percentage point cut was effected from January 4.

With the call rates expected to ease as a result of the two-phased cuts in the CRR during this month, the nationalised, foreign and private sector banks are making a beeline to buy securities.

Treasury heads of banks said the short and the medium term securities may be most actively traded papers this week. The securities that are likely to be in the spotlight are the 13.50-per cent central government gilt maturing in 1998, the 13.50-per cent paper maturing in 1997, the 13.40-per cent central government security maturing in 1999, the 91-day and the 364-day treasury bills.

On Saturday last, the day the reserve ratio was pared, the wholesale debt market segment of the National Stock Exchange and the SGL account of the RBI recorded massive trading in government securities.

Prices of almost of all securities were up as banks rushed to pick up gilts. The widely traded 13.40-per cent central government security saw its price fluctuate to the tune of 35 paise.