Trading in corporate bonds falls 27% in June, lowest in FY15

Jul 05 2014, 01:00 IST
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SummaryJune figures were also 21.6% less than R87,226.5 crore recorded in the same month last year.

Dealings in corporate bonds at the country's capital markets dropped by 27% to R68,381 crore in June over the

preceding month — the lowest recorded so far in the current fiscal.

Trading worth about R93,946 crore in corporate bonds was reported by the National Stock Exchange, Bombay Stock Exchange and Fixed Income Money Market and Derivatives Association of India (FIMMDA) during May, the latest data released by market regulator Sebi showed.

June figures were also 21.6% less than R87,226.5 crore recorded in the same month last year.

With this, trades in corporate bonds for the April-June quarter of the current fiscal stood at R2.37 lakh crore, down nearly 26% from the same period a year-ago.

Trading worth R3.19 lakh crore in corporate bonds was reported in the first quarter of financial year 2013-14.

Individually, NSE represented the largest share of trading in corporate bonds (80%), during June this year.

Bonds

Bonds worth nearly R54,783.42 crore were traded on the bourse in the month.

Trades in bonds amounting to R13,597.75 crore were seen on the BSE, while R20 lakh worth of dealings were reported by FIMMDA in the last month.

FIMMDA is an association of scheduled commercial banks, public financial institutions, primary dealers and insurance companies.

The reporting platform at FIMMDA began on September 1, 2007, and enables entities to report deals in bonds on one platform.

For the quarter this year, NSE reported R1.94 lakh crore trades in bonds, while BSE and FIMMDA trading stood at R43,328.81 crore and R31 lakh respectively.

Corporate bonds or debt securities are issued by private and public firms to raise money for various purposes like building a new plant, purchasing equipment or business growth.

When an entity buys a corporate bond, one lends money to the firm that issued the security and in exchange the company promises to return the money on a specified maturity date.

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