Active Deals Ahead

Gilts & Bonds Market

The secondary market in the debt segment of the National Stock Exchange (NSE) is expected to witness active trading during the week owing to excess liquidity in the system. Consequently, the security prices are likely to firm up as there is buying interest among traders.

The market is cued to the cut-off that the Reserve Bank of India (RBI) will announce for the auction on August 5. It is expected to revive interest for the four-year paper and also give an indication of interest movement, said dealers. The medium-term papers will continue to be in the limelight.

The week saw a traded volume of Rs 1,970.70 crore (Rs 2,072.45 crore). The average daily volume this week was Rs 322.95 crore as against Rs 345.40 crore in the previous week. Gilts were traded for Rs 1,434.02 crore, contributing 74.01 per cent of the total traded value, while the treasury bill segment witnessed a volume of Rs 215 crore. The weighted average yield of gilts maturing within three years was 10.44 per cent, between 3-7 years was 11.72 per cent and between 7-10 years was 12.16 per cent. The debt segment saw a volume of Rs 181.10 crore on Saturday, maximum trade being concluded for the 11.55 per cent gilt maturing in 2001. The paper saw 12 trades for Rs 70 crore at a weighted average yield of 11.45 per cent. The 11.64 per cent government loan maturing in 2000 was traded for Rs 25 crore at a weighted average yield of 11 per cent.