Long Gilts Pariahs

GILTS & BONDS Market

Long-dated papers are not likely to undergo a change in perception in the government securities market this week. Dealers are expected to be bearish in this segment during the week.

Short-and- medium-term sectors could witness further interest as market dealers believe there is enough scope for price appreciation in these segments.

"The revival of long-dated gilts would not be taking place in the short run. As the Reserve Bank of India is likely to come out regularly with auctions of long-dated papers, the supply is going to be ample to ensure that prices do not appreciate much," said a market dealer.

 

Dealers have identified securities with 4-10 years maturity receiving buying interest this week. "The gap between gilts in these maturities is sufficient to result in a rise in price," said a satellite dealer. "Rumour of a possible private placement has also raised hopes that prices in the short-dated segment would rise more," he added. According to dealers, the RBI is likely to come out with two more auctions this month, excluding the private float. "The 12.14 per cent paper would be maturing on May 29 and we can expect an auction announcement from RBI just before this inflow," said a debt market dealer.