Page 4 - Government Securities

States' average borrowing cost continues to remain almost flat at 7.68%

The borrowing cost of states continued to remain low for the second week with the latest auction on Tuesday seeing average yield staying almost flat at 7.68 per cent. Many states stayed away from the market following disbursal of the tax devolution amount by the Centre earlier this month. The weighted average yield/cut-off of State Government Securities (SGS) inched up by 1 basis point to 7.68 per cent at the auction on Tuesday compared to the past week despite a sharp increase in the weighted average tenor to 17 years from 12 years, Icra chief economist Aditi Nayar said in a note. Normally bond prices change according to the tenor of the issue, and the 10-year bonds are considered the benchmark when it comes to pricing and also from a demand perspective. At Tuesday's auction, the states issued bonds of varying tenor, peaking at 25 years (Tamil Nadu issued 25-year paper at 7.63 per cent) pushing up the median average tenor sharply to 17 years from 12 years last week. However, the

AMCs line up differentiated target maturity funds amid stiff competition

Yield-to-maturity between 7.36% and 7.5% for these schemes with fixed tenure makes them attractive bet

Reserve Bank starts pilot digital currency program for select banks

Banks traded Rs 275 crore ($33.3 million) of bonds on the first day using the new form of currency, data showed

States borrowing cost rises for third week, jumps 12 bps to 7.77%

At the latest auction of debt, 10 states raised Rs 19,500 crore on Monday, drawing down the full amount indicated for this week.

Statsguru: Six charts explain India's entry into global bond indices

Foreign investors held a smaller share of government securities as of September than they did in March

SBI sells largest AT-1 tranche at lowest rate for any bank so far this year

The bank had notified an amount of Rs 7,000 crore to be raised through a single tranche of AT-1 bonds in order to augment capital.

'JP Morgan may include G-Secs in global bond index as early as next week'

Even though the government is yet to make up its mind on inclusion of G-Secs (Government Securities) in global bond indices, Wall Street brokerage Morgan Stanley expects indices major JP Morgan to make an announcement in this regard as early as next week. On Monday finance minister Nirmala Sitharaman told an industry gathering that the 2020 budget proposal on allowing bond inclusion in international indices could not move forward as the fund flows did not meet the desired levels, due to many reasons including the Covid pandemic. Without offering any details like a timeline or the tax and stamp duty breaks that investors were demanding, Sitharaman said: "I don't know whether we're holding it back or not. I think global situation changed a lot since I made that statement in the 2020 budget. "Global fund flows have not been as big as we wanted it to be primarily due to other reasons. So it'll come to its natural, logical conclusion soon." According to the RBI data, G-Secs outstanding

Time to diversify debt investment; Rs to stay under pressure: Sandeep Yadav

The higher yields have provided a good entry point for debt investors after years of low yields

Securitisation volumes jump 70% to Rs 35,000 cr in Q1: CRISIL report

The Reserve Bank of India defines securitisation as transactions where credit risks in assets are redistributed by repackaging them into tradable securities

Banks may incur Rs 13,000 cr MTM losses in Q1 on rising bond yields: Icra

State-owned lenders, which hold large quantities if G-Secs, to face brunt of yield spike

Hardening yields to buoy debt MFs, experts recommend short-term maturities

Given the risk of high inflation, bond yields can harden further. However, current rates are attractive and provide good scope to start nibbling, say experts

10-year G-Sec touches 7.5% ahead of RBI's monetary policy review

The yield jumped 4 basis points (bps) on Monday after Saudi Arabia - the world's biggest oil exporter - raised prices for Asian buyers

RBI policy statement: Revisiting the saga of 'The Bold and The Beautiful'

The RBI has also proposed to allow interoperability in cardless cash withdrawal transactions at all banks and ATMs using the UPI facility

Budgetary provisions done, no more G-sec switch in FY22: RBI

Market participants say this means comfortable cash position govt's which is also reflected in cancellation of bond auction twice in this month

Decision on issuance of green bonds next month, says RBI Governor

The Budget had indicated that green bonds are part of the overall borrowing for the next financial year

Pay heed to residual maturity in secondary market bond buys: Experts

Avoid longer-duration bonds; if you buy them, hold till maturity

Govt cancels auction of all securities scheduled for 11 Feb as yields spike

The government said it had decided to cancel the auction post review of cash position

Rising yields boost appeal of low tenure debt funds, say experts

On Wednesday, the yield of 10-year G-Sec was trading at 6.88 per cent

10-year G-Sec, repo spread reaches decadal high; market expects inflation

The current differential or spread is nearly three times the average spread in the last 10 years.

Lock in interest rates for up to 40 years with G-Secs under new RBI scheme

But avoid taking interest-rate risk in these instruments which will now become easily accessible through the RBI's Retail Direct Scheme