Active Trade Ahead

GILTS & BONDS Market

The WDM at the NSE is expected to witness active trading during the coming week as market players expect drop in yields next week. The credit policy, to be announced tomorrow (October 21), is expected to announce measures that will lead to a drop in yield in the secondary debt market.

Hectic trading has already taken off in the secondary debt market in anticipation of either a cut in bank rate which currently stands at 10 per cent or a cut in CRR , which stands at 10 per cent.

Either of the two decisions will lead to drop in yield in the secondary debt market and many banks have already started taking position in the market in anticipation of this, said a broker at NSE. Calls too are expected to rule at a lower level of five to seven per cent during the week, said a broker. The last week saw volumes of Rs 3048.89 crore against Rs 1179.34 crore the previous week with the highest volume of Rs 712.06 crore recorded on Thursday and a low of Rs 164.74 crore on Monday. Average traded volume this week was Rs 508.15 crore. GoI securities were traded actively accounting to a trade volume of Rs 2442 cr contributing to 80.09% of the total trade value and T-bills segment was traded for Rs 537.94 crore.

On Saturday, the WDM segment clocked trade worth Rs 322.46 crore and highest trade was done for 10.85 per cent government loan maturing in 2001. The paper showed a traded volume of Rs 85 crore and was traded at a weighted yield of 10.43 per cent. The 365-day treasury bill July 3, 1998 was traded for Rs 29 crore at the weighted yield of 7.8 per cent.