Volumes Thin In Retail Gilts Market

Retail investors have been singularly unimpressed by the gilts market. The retail debt segment has seen an average daily turnover of around Rs 15 lakh on the Bombay Stock Exchange and the National Stock Exchange. If one excludes the volumes in the first three days, the average daily volume declines to Rs 5 lakh.

The total turnover of Rs 3.14 crore since the launch of the retail debt market on January 16 can be misleading because the enthusiasm lasted for three days.

On the first day, the BSE clocked a turnover of Rs 0.47 crore and the NSE reported a turnover of Rs 1.42 crore. That was highest. From the second day, the volumes started drying up.

 

The lowest daily turnover was recorded on February 4 and 5 when the BSE reported a turnover of Rs 1,000 a day. In 21 trading sessions, the BSE reported a turnover of Rs 0.74 crore in 155 trades while the NSE clocked Rs 2.40 crore in 352 trades.

The 9.39 per cent government paper maturing in 2011 was the most favoured gilt, with the highest combined turnover of Rs 0.74 crore, followed by the 9.85 per cent, 2015 paper (Rs 0.71 crore), the 8.07 per cent, 2017 paper (Rs 0.33 crore) and the 7.40 per cent, 2012 paper (Rs 0.25 crore).

But then this was also the period when gilt prices were falling (yields were rising). The price of the 9.39 per cent, 2011 paper fell 3.34 per cent from Rs 123.35 on January 16 to Rs 119.23 on February 14. Also, the price of the 9.85 per cent, 2015 paper slipped from Rs 136.50 to Rs 125.95 and that of the 8.07 per cent, 2017 paper slumped from Rs 118.70 to Rs 108.55.