Re closes lower in dull trading
MONEY MARKET ROUND-UP
| The foreign exchange market remained dull. The spot rupee opened at around 40.90, but closed lower at 40.93 to a dollar. The BSE index closed 43 points higher compared with yesterday's close. |
| The trading interest in the market remained thin. Very few traders took positions as inflows and outflows through companies were limited as a result of the Janmastami holiday on Tuesday, said a dealer. The rupee reached an intraday low of 40.89. |
| The annualised premia for six month and one year forward dollars closed at around 1.1 per cent and 1.25 per cent respectively. |
| Money: Flushing around |
| The liquidity position remained comfortable. RBI absorbed around Rs 37,000 crore from the system. |
| Since the advance tax outflows will start next week, most of the market players are preferring to stay liquid. The interest rates in the collateralised borrowing and lending obligation (CBLO) market ruled at around 5.90 per cent. Here, the market players can borrow funds against government securities as collateral, unlike the call market which is non collateralised. |
| G-sec: Restricted activity |
| Though the market was flush with funds, trading interest was highly restricted to a few securities in the benchmark 2-year, 5-year and 10-year maturity bonds. The yield on the benchmark 10-year paper (7.99 per cent bond) closed at 7.88 per cent. |
| The market on RBI's negotiated dealing platform clocked a volume of Rs 2,725 crore. The yield on the 1-year treasury bills came off the highs of 7.24 per cent to a low of 7.20 per cent. |
| OIS and corporate bonds: Muted |
| Trade was muted in corporate bonds as investors focussed on primary issuances as these offer higher yields, dealers said. |
| Currently, the issues of YES Bank, National Bank for Agriculture and Rural Development and Dewan Housing Finance are open in the private placement market. Subscriptions received at the recently concluded bond issues also demonstrate that investors are keen on such issuances instead of secondary market purchases. |
| For instance, Indian Hotels received more than Rs 6 billion at its sale of 3-year bonds, much above the expected Rs 3 billion. Andhra Pradesh State Finance Corporation received Rs 1.25 billion at its 5-year bonds sale, though it was aiming to raise only Rs 500 million. The yields offered by these primary issues are 5-10 basis points above the secondary market levels. |
| NABARD is likely to set the yield on its 5-year bonds at around 9.80% compared with the secondary market levels of 9.65-9.70% for similar bonds. There is a lack of fresh supply as primary issuances have declined in the last two months, with most issuers keeping away on hopes of easing rates. |
| "The floating stock to trade is also less in the secondary market as only a few primary issues have hit the market in the last two months," said a primary dealer. |
| The Bombay Stock Exchange reported a volume of around Rs 0.10 billion in bonds tday, compared with Rs 0.39 billion on Monday. Power Grid Corporation's 10.10%, 2016 bond gave 9.71% compared with 9.66% on Monday. |
| Global market: Subdued |
| The trading in global markets remained low key. GBP and euro declined slightly against the dollar, ruling at around 2.0090 ($2.0170) and $1.3560 ($ 1.3635). Yen remained unchanged at yesterday's $115.80. However, it had ruled at $115.58 last week. |