Debt Volumes Surge On Nse

The bank rate cut has triggered a massive rise in volumes on both the subsidary general ledger (SGL) and the wholesale debt market of the National Stock Exchange (NSE).

SGL trading came down sharply from Rs 651.77 crore on Tuesday to a low of Rs 265.16 crore on Wednesday. However, following the bank rate cut, volumes rose to Rs 502.38 crore on Thursday and touched Rs 689.13 crore yesterday.

The NSE turnover fell from Rs 402.05 crore on Tuesday to Rs 246 crore on Wednesday before recovering to Rs 432.41 crore yesterday.

The secondary market yield curve underwent a realignment during the past two days as prices appreciated sharply on Tuesday with the 12.14 per cent, 13.05 per cent and the 12.59 per cent government stocks leading the market. Dealers who had taken positions were caught on the wrong foot and this was reflected in the substantially lower trading volumes on both the SGL and the NSE on Wednesday.

 

In a couple of days, the yield curve reverted to its form but only after it caused bundles of misery for bank treasurers. Trading in the governmet securities segment see-sawed in the past few days and the deals were concentrated in a few securities such as the 12.14 per cent and the 12.59 per cent stocks maturing in 2000 and 2004, respectively.

However, the paper which has caught the eye of some bankers after the rate cut is the 13.05 per cent, 10-year stock which is trading at an YTM of 12.56 per cent in the secondary market.