12% Gilt Traded For Rs 45 Crore

NSE REPORT

Trading in the wholesale debt market on the NSE was generally subdued yesterday. While the overall trading volume was Rs 298.75 crore totaling 37 trades, it was much higher than yesterday as a significant portion comprised of the 9 per cent inter-bank repos deals for the fortnight starting next Monday.

In the securities and SLR papers, the total volume was only Rs 125 crore. Dealers say that the market was pretty dull yesterday. "However, with the following auction on September 28 of the GoI 2000 which is likely to see more bids, this will reflect in improving volumes this week," says a dealer. There were several deals done for the 2001 which traded at par. There were also some interest in the long end, 14 per cent 2005 paper which were transacted at Rs 108.28-29. The 12 per cent 1999 paper saw four trades worth Rs 45 crore at a weighted yield of 10.5 per cent.

There were sporadic trading in the t-bills section for October t-bills which traded at an effective closing yield of 8.45 per cent. Dealers say that most securities traded in a narrow range of 5-7 paise. Trading in 14 per cent 2005 counter was primarily due to desperate selling by Vijaya Bank which offloaded Rs 15-20 crore of its stock at Rs 108.28-29 giving an effective yield of around 12.20 per cent. Market players feel that this is on the higher side as market expectation for a seven year paper should be around 12.12-13 per cent. A day before, Vijaya Bank had offloaded Rs 40 crore at an yield of 12.18 per cent.

Traders feel that the 2005 paper has jumped out of the secondary yield curve with the yield differential of 6 bps compared to 2008 paper falling much lower than a normal 10-15 bps between the two papers.