GILTS & BONDS Market
The gilts and the bonds market is likely to witness some price correction in the long-term papers this week.
The newly-auctioned 13.65 per cent central government security maturing in 2007, which saw active trading on Friday and Saturday, is likely to continue to see some trades on Monday and Tuesday.
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The debt market has rarely witnessed such large volumes of trading in long-term securities earlier, dealers said.
Before the auction, public sector banks were buying other long-dated securities to take full advantage of arbitrage opportunities that the auction of the ten-year paper was throwing open.
These banks are all booking healthy profits now, a dealer said.
The inter-bank call rates are likely to hover between 5-6 per cent levels this week. So short- and medium-term securities will remain in demand, a treasury head said.
Among the securities that are likely to witness trading this week are the 13.50 per cent gilt maturing in 1998, the 13.50 per cent gilt maturing in 1997, the 13.40 per cent gilt maturing in 1999 and the 13.85 per cent gilt maturing in 2000.