Sample this: on May 8 the 11.99 per cent 2009, which quoted at 100.29-100.30 levels, moved up to Rs 100.74-100.76 by May 17 and still higher to Rs 101.34-101.36 on May 25. Likewise, the 12.40 per cent 2013 from Rs 101.18-101.20 to Rs 101.39-101.40 to Rs 101.94-101.95 levels by May 25. Trades worth Rs 1,282.64 crore were seen in the 12.40 per cent 2013 in fortnight ended May 21 and Rs 938.07 crore in the 12.32 per cent 2011.

"There is more by way of returns in longer-dated GoI-Secs," says Credence's analyst, PunitSrivastava, adding: "The 12.60 per cent 2018, for instance, has moved up to Rs 101.39 on May 25 from Rs 101.10 levels around May 8. It would have gone still higher had the Reserve Bank of India not capped the price movement by putting it on the sale list at Rs 101.40". Srivastava pointed out that even a 5 basis points decline in the yeild-to-maturity (YTM) in long-dated GoI-Secs translated into gains of nearly 36 paise.

Appetite for longer-dated GoI-Secs was evident at the re-issuance (price auction) of the 11.19 per cent 2005 and 12.32 per cent 2011 on May 12. The 11.19 per cent 2005, re-issued at a cut-off price of Rs 99.21 (YTM of 11.36 per cent) received bids worth Rs 5,000 crore against a notified amount of Rs 3,000 crore. Similarly, bids worth Rs 4,000 crore were received against a notified amount of Rs 2,000 crore for the 12.32 per cent 2011, which was re-issued at a cut-off price of Rs 101.65 at a YTM of 12.05 per cent.

"Quite a few players are picking up long-term papers funded out of call marketborrowings. Average call rates during the fortnight ended May 21 was 9.22 per cent with YTM on 2-year stocks at around 10.88 per cent, but YTM on 10-year papers are at 11.85 per cent levels, providing higher returns", SBI Capital Market's manager-debt research, Ashish Agarwal, said.

Call rates are seen holding 8-8.15 levels in the current fortnight. Inflows of Rs 1,730.92 crore are expected on account of dated-stock redemptions, and interest payments. More issuances of longer dated GoI-Secs are seen in the days ahead given the ballooning of redemptions at the shorter end. The Centre has so far completed almost 60 per cent of its market borrowings through securities of over 10 year maturity.