The 10-year benchmark yield touched a fresh two-year high of 7.71% on Wednesday
While volatility in global markets have put offshore fund raising by Indian companies on pause for the past few weeks, there is another reason no one has hit the market, and that is a delay in obtaining loan registration number (LRN) from the Reserve Bank of India (RBI), investment bankers aware of the matter told FE.
Apart from promising a higher MSP, the Budget also promised that the government will make good any shortfall in the market price over the MSP, and there are no estimates of what this can cost.
After a 20-basis-point spike on Thursday, the yield on the benchmark surged to an intra-day high of 7.88% on Friday before ending the day’s session at 7.76%.The Reserve Bank of India cancelled an auction of government securities for an amount of Rs 11,000 crore.
Budget 2018: Bond markets sold off sharply on Thursday spooked by higher than expected fiscal deficit estimates and fears that food inflation would rise with stronger support for crop prices via minimum support prices (MSP).
Foreign portfolio investors (FPIs), including large sovereign wealth funds, have bought heavily into Indian bonds over the last two weeks, ignoring the sharp decline in bond prices.
NTPC is likely to hit the dollar bond market soon to raise close to $400 million, sources aware of the matter confirmed to FE.
Yes Bank on Monday priced its five-year dollar bonds at 130 basis points over the five-year US Treasury yield, sources aware of the deal confirmed to FE.
Budget 2018: An auction for purchase of limits to buy gilts worth Rs 4,569 crore on Monday attracted bids worth Rs 8,306 crore ($1.31 billion) from foreign portfolio investors (FPIs).
At nearly four downgrades a day, India Inc is far from getting over its poor credit quality problems. Indeed, while it seemed like balance sheets were becoming stronger, the trend worsened in the three months to December 2017 at 351 downgrades compared with 922 in the nine months to September.
Exim Bank of India is likely to price its 10-year dollar bonds at close to 125 basis points over the 10-year US Treasury yield, according to information provided by sources.
Pick up close to $500 million worth of bonds; Monday’s auction saw an over-subscription of 1.5 times
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The yield on the more widely-traded benchmark surged to 7.58% intra-day before ending the session at 7.55%, the highest level since it was introduced in May last year.
An interesting point to note here is the movement in the cost of financing from the time when many of these bonds were issued. For example, State Bank of India’s London branch priced a five-year dollar bond in April 2013 at a spread of 255 basis points over the five-year US Treasury yield.
Exim Bank India is considering tapping the dollar bond market to raise close to a billion dollars by issuing a long tenor paper, sources aware of the matter told FE.
An auction for purchases of limits to buy gilts worth Rs 6,666 crore on Monday attracted nearly twice the subscription from foreign portfolio investors (FPIs). Given the huge appetite that FPIs displayed, market experts expect a big chunk of the bonds to be bought.
An auction for purchases of limits to buy gilts worth Rs 6,666 crore on Monday attracted nearly twice the subscription from foreign portfolio investors (FPIs).
With foreign portfolio investors (FPIs) continuing to buy Indian bonds and stocks, the rupee could strengthen further, hitting levels of 63 to the greenback, say market watchers.
The coupon on the new ten-year benchmark bonds was set at 7.17% in Friday’s weekly auction, led by heavy demand from market participants. The security will mature in 2028.
The yield on the new 10-year benchmark bond, that will be auctioned on Friday, is likely to settle close to 7.16%, if levels reflected in the “When Issued” market on Thursday are an indication.
Against a total of Rs 13,756 crore of investment limits being made available, FPIs put in bids worth Rs 15,961 crore.
Corporate bonds have seen significant interest from general category FPIs, so far, who have already utilised 95% of the permitted limit of Rs 2.25 lakh crore.
Bonds on Friday reversed their losses with the yield on the benchmark dropping to a low of 7.265% in intra-day trades before closing the session at 7.326%.
Bonds sold off sharply on Thursday, sending the yield on the benchmark soaring to 7.396%, an over-18-month high, after the government announced on Wednesday it was borrowing an additional Rs 50,000 crore by way of dated securities.
Despite the rising yield on government securities, market experts believe that due to the restrictions on investments by foreign portfolio investors’ in Indian debt securities, the bonds should draw significant interest.
Overnight indexed swap (OIS) rates have scaled to a seven-month high, as concerns over inflation and fiscal deficit pushed yields higher over the last few weeks.