Trading volumes in corp bonds drop marginally m-o-m

Issuances will pick up if the RBI cuts rates and that will drive trading volumes

Trading volumes in corporate bonds has dropped marginally due to lack of issuances. As per Securities and Exchange Board of India (Sebi) data, the trading volumes for the first six days in the month of October stood at Rs 21,274.29 crore recording a fall of 1.89% compared with the first six days trading volumes in the previous month.

However, on a year-on-year basis there has been a growth in trading volumes by 52.96% compared with trading volumes worth Rs 13,907.96 crore recorded in the first six trading days in October 2011.

“We are not seeing much of issuances and that is having an impact in the secondary market trading volumes,” said Arvind Konar, head of fixed income, Almondz Global Securities. According to Konar by next week trading volumes should pick up due to expectations of rate cut by the Reserve Bank of India's (RBI) second-quarter monetary policy review to be detailed on October 30.

Issuances will also pick up if the RBI cuts rates and that will drive trading volumes, said Konar.