Calls Steady, Heavy Trading In Gilts

Rates in the inter-bank call money market hovered between 10.5 per cent and 10.75 per cent yesterday.

There was a bull run witnessed in the securities market trading on account of the news of a cut in cash reserve ratio (CRR) requirements.

Dealers said that the news of a CRR cut should keep the securities market full of active trading till it materialises. With a cut in CRR, prices of the government securities went up. The prices of most of the one, two and three-year securities perked up. The 13.5- per cent 1998 security price moved up by 5 paise, the zero-coupon 1999 price went up by 10 paise and the 12-per cent 1999 paper went up by 15 paise, according to dealers in the money market.

 

Demand in the market was felt mostly for the zero coupon 2000 (III) series. It was reported to be trading at a price of Rs 60.17. The yield to maturity on the paper fell below 14 per cent.

Banks wanted to lock their funds into high yielding assets as they were expecting a cut in reserve ratio requirements. The four-year zero coupon bond worth Rs 2,000 crore which is being put up for sale on Monday, is not expected to get a good subscription in the market.