Buyers May Return
GILTS & BONDS Market
Security prices could see some buying interest in the short- to medium-term papers, while prices in the long-end are likely to remain range-bound, with little amounts of trading seen.
Towards the end of last week, prices of short-term gilts fell due to selling by a large institutional investor, believed to be Life Insurance Corporation (LIC), to make way for purchase of 15-year paper placed on-tap by the Reserve Bank of India last week. This has depressed the short term market for government securities, which had been seeing a price rally over the past few weeks.
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However, prices could see a rally again as buyers are expected to come into the market at the current levels of prices. "We could see a rally to extent of at least 10 paise," said a dealer at a private bank.
The recent on-tap issue of 15-year paper has confused the market say some dealers. "This issue so soon after an auction has confused the market," said a market participant.
Most the buying in the on-tap issue has been done by LIC, which has been unloading short-term papers to make way for it.