GILTS & BONDS Market
Trading in the gilt and bond market is likely to witness hectic activity as call rates are likely to remain on the lower side. Dealers said the short and medium term securities will continue to be picked up by banks, especially the private and the foreign banks.
Last week saw trades to the tune of Rs 2842.12 crore in the wholesale debt market segment of the National Stock Exchange as the banking system was flush with funds.
Banks are putting all their investible surplus into securities, a treasury head said.
This apart the low call rates are also attributed to the high volumes in the debt market.
The demand for securities is likely to witness a rise in prices. Prices will move up due to increased buying interest, a treasury head of a private bank said.
Bankers pointed out that the 13.50 per cent central government security maturing in 1998, the 13.50 per cent gilt maturing in 1997, the 13.40 per cent gilt maturing in 1999 and the zero coupon maturing in 1999 will witness a fair deal of buying activity.
Both the 91-day treasuryand the 364-day treasury bills will also see food activity, according to a dealer.
Provident funds participation will reamin marginal. They will pick up some of the long dated state government securities and the central government securities, a dealer said.
