By -
Aug 1, 2014
India’s 10-year sovereign bonds
capped a weekly loss after underwriters bought unsold debt at an
auction, signaling investors sought higher yields.
Primary dealers picked up 29.64 billion rupees ($485 million), or about a third of the 8.4 percent 2024 notes offered by the government at today’s sale. They purchased 4.82 billion rupees, or about a sixth of the 8.27 percent 2020 securities auctioned. That suggested there’s bidding at high levels and the government isn’t comfortable borrowing at those costs, according to FirstRand Ltd.
The yield on the notes due July 2024 climbed 13 basis points, or 0.13 percentage point, this week and three basis points today to 8.52 percent in Mumbai, according to the central bank’s trading system. The rate on the 8.83 percent bonds due November 2023, the previous 10-year benchmark, jumped eight basis points this week to 8.76 percent.
“The size of the 10-year auction, at 90 billion rupees, was higher than the usual 70 billion rupees we have seen on offer,” Harish Agarwal, a fixed-income trader at FirstRand in Mumbai, said by phone. “Markets are also cautious ahead of the monetary policy.”
This was the second issuance of the 2024 securities by the government. It first sold 70 billion rupees of the notes on July 25 with the coupon set at 8.4 percent. BSE Ltd. will introduce interest-rate futures based on these securities, the stock exchange said in a statement yesterday.
The Reserve Bank of India will probably keep its benchmark repurchase rate unchanged at 8 percent at an Aug. 5 policy meeting, according to 33 of 34 economists surveyed by Bloomberg.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, slid four basis points from July 25 to 8.38 percent, data compiled by Bloomberg show. They were little changed today.
To contact the reporters on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net; Soumya Gupta in Mumbai at sgupta329@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Thomas Kutty Abraham
Primary dealers picked up 29.64 billion rupees ($485 million), or about a third of the 8.4 percent 2024 notes offered by the government at today’s sale. They purchased 4.82 billion rupees, or about a sixth of the 8.27 percent 2020 securities auctioned. That suggested there’s bidding at high levels and the government isn’t comfortable borrowing at those costs, according to FirstRand Ltd.
The yield on the notes due July 2024 climbed 13 basis points, or 0.13 percentage point, this week and three basis points today to 8.52 percent in Mumbai, according to the central bank’s trading system. The rate on the 8.83 percent bonds due November 2023, the previous 10-year benchmark, jumped eight basis points this week to 8.76 percent.
“The size of the 10-year auction, at 90 billion rupees, was higher than the usual 70 billion rupees we have seen on offer,” Harish Agarwal, a fixed-income trader at FirstRand in Mumbai, said by phone. “Markets are also cautious ahead of the monetary policy.”
This was the second issuance of the 2024 securities by the government. It first sold 70 billion rupees of the notes on July 25 with the coupon set at 8.4 percent. BSE Ltd. will introduce interest-rate futures based on these securities, the stock exchange said in a statement yesterday.
The Reserve Bank of India will probably keep its benchmark repurchase rate unchanged at 8 percent at an Aug. 5 policy meeting, according to 33 of 34 economists surveyed by Bloomberg.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, slid four basis points from July 25 to 8.38 percent, data compiled by Bloomberg show. They were little changed today.
To contact the reporters on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net; Soumya Gupta in Mumbai at sgupta329@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Thomas Kutty Abraham
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