Trading Volumes Touch Rs 275.64 Crore

NSE REPORT

The wholesale debt market segment of the National Stock Exchange witnessed hectic trading with deals worth Rs 275.64 crore being struck. Dealers attributed this to the easy call rates prevailing in the inter-bank call money market.

Calls opened at around 5 per cent and closed lower at 3.75-4 per cent levels. According to dealers, arbitrage opportunities are prevailing in the debt market. I-Sec says that a strong rally is expected in prices of zero coupon 1999 and the zero coupon 2000 over the next two to three weeks.

With the zero 1999 trading at a yield of 12.52 per cent, it gives a 257 basis point differential over the treasury bill maturing on January 16. This differential is even more glaring at 371 basis points where the yield on the zero 1999 is computed on a money market basis to make it comparable with treasury bill yields. Such a large maturity spread is not warranted by one year difference between the two securities and we should see price of the zero coupon 1999 move up by a rupee or more over the next fortnight.

 

Hence, switching from the treasury bill maturing on January 16 to the zero coupon 1999 is likely to offer excellent holding period returns, I- Sec says in its fortnight report.

The 13.40 per cent gilt maturing in 1999 witnessed trades worth Rs 30 crore at 12.90 per cent.