Weekly G Sec update May 29, 2010

Benchmark 7.8% 2020 bond lost considerable ground in the week due to tightening liquidity conditions arising from the 3G spectrum payment and direction of US treasuries. Yield for the said bond closed at 7.52% on Friday, up 14 bps from close of 7.38% last week.

Bonds were bearish throughout the week tracking weak US Treasuries as rise in stock markets led to a fall in demand for safe heaven assets. In India, tightening liquidity exerted pressure on bonds along with the bond auction of Rs 12,000 cr lined up for the week.

Amount of funds parked at RBI’s reverse repo window reduced this week to an average of Rs 6,332 cr this week against Rs 42,779 cr last week.

Yields rose to the extent of 7.64% on Friday, but announcements of RBI regarding additional liquidity to be provided through Second LAF facility to the extent of 0.5% of their NDTL and waiver of penalty interest on any shortfall in maintenance of SLR arising out of availment of such facility along with RBI Governor’s comments depicting not so confident recovery induced some buying back in the bonds and led to correction in yields.

Spain rating downgrade again ignited concerns of debt crisis and increased demand for safe heavens. Liquidity conditions are expected to tighten further next week and banks are expected to avail funds from RBI through Repo facility.

Author name:Praveen Bajaj

Popularity: 6% [?]

Related posts:

Tags: LAF, liquidity, rbi, slr, yield

Related Posts
Trackbacks (0)
Comments (0)

No comments yet.

No trackbacks yet.

July Inflation just under double digits @9.97%

August 16, 2010 - 4:04 am

Tags: inflation, monetary policy, rbi
Posted in Business & Economy | No Comments

The WPI for the month of July’10 stood at 9.97% compared to the previous month’s figure of 10.55%. It registered a growth of -0.54% in July’09 on a y-o-y basis . The inflation figures this month is the lowest in the past six months. They just managed to miss the double-digit by few marks. The [...]

First quarterly review of monetary policy 2010-11

July 27, 2010 - 12:12 pm

Tags: LAF, liquidity, monetary policy, rbi, repo, reverse repo
Posted in Business & Economy | No Comments

Highlights of the policy
RBI Governor, Dr D V Subbarao announced the first quarterly review of monetary policy today. The measures taken were quite on the expected lines (Read our article on monetary policy expectations).

Benchmark Repo rates hiked by 25 bps to 5.75% with immediate effect.

Benchmark Reverse Repo rates hiked by 50 bps to 4.50% with [...]

RBI likely to raise rates in todays monetary policy review

July 26, 2010 - 10:41 pm

Tags: inflation, interest rates, monetary policy, rbi, repo rate
Posted in Business & Economy | 4 Comments

RBI is going to announce the First quarterly review of monetary policy in some time and unlike last time, expectations are quite clear this time. Last time, in April, analysts were divided in opinions about a 25 bps hike or a 50 bps hike or no action by RBI. But this time, analysts are almost [...]

Bond market/ G-Sec update

July 11, 2010 - 12:41 pm

Tags: inflation, liquidity, rbi, repo
Posted in Business & Economy | No Comments

Yields on Government securities rose to the highest level in two weeks following the mid-term 25 bps rate hike by RBI on last Friday. Benchmark 10 year bond, 7.80% 2020 security rose 8 bps to 7.64% from 7.56% close of last week.
As expected, yields opened stronger on Monday, but later were dragged down due to [...]

European Central Bank (ECB) in 2008 = RBI in 2010

July 7, 2010 - 10:25 pm

Tags: central banks, ECB, inflation, rbi
Posted in Business & Economy | No Comments

I am sure that the subject of my article would be very confusing for some of you or may be strange for a lot of you. What I am trying to convey with this one is again some graduation level economics which I studied during my Macroeconomics paper in 2005, which I believe the world [...]

Bond market/ G-Sec update

July 3, 2010 - 9:00 am

Tags: 7.80% 2020, benchmark 10 year bond, inflation, rbi, repo, Yields
Posted in Business & Economy | No Comments

After a hefty 8 bps points jump on Friday of last week due to decision to free up fuel price (read MB update here), G-sec markets opened the week on a strong note. Announcement by RBI that the borrowing amount for the week will be at the reduced levels kept the sentiments up. Yields on benchmark [...]

RBI raises rates again

July 2, 2010 - 2:28 pm

Tags: bond market, equity, inflation, LAF, liquidity, monetary policy, repo rate, reverse repo rate, WPI, Yields
Posted in Business & Economy | 2 Comments

As predicted by our analyst Rahul Sonthalia (click here to read) and myself (click here to read) in our earlier articles, RBI has raised the policy rates almost a month before the scheduled 1st quarterly review of monetary policy due at the end of July.
In an after market hour announcement today, RBI raised the repo and [...]

July Could be Jittery For the Markets

June 30, 2010 - 11:52 am

Tags: China AG Bank, CME, EU bank stress test, investing, monetary policy, nifty, rbi
Posted in Stock Tips | 2 Comments

The month of July can cause real jitters for the Indian stock market and the party could end. Most of the top economists and market gurus have started saying that the year 2010 could be a mixture of two halves, the first half ending on a positive note and the second half leading to a [...]

Govt Securities update:June 26, 2010

June 27, 2010 - 3:16 am

Tags: 7.80% 2020, benchmark 10 year bond, inflation, liquidity, Yields
Posted in Business & Economy | No Comments

For the first 4 days of the week, government securities moved in a range. Benchmark 10 year bond, 7.80% 2020 bond moved in between 7.55% and 7.61%.
Results of buyback of securities, in which RBI accepted amount of Rs 806 cr against a notified amount of Rs 10,000 cr. This led to a slight increase in [...]

Weekly G-Sec update:June19, 2010

June 20, 2010 - 1:20 am

Tags: 7.80% 2020, benchmark 10 year bond, inflation, liquidity, rbi, repo, Yields
Posted in Business & Economy | No Comments

High inflation released on Monday set the tone for the week. As expected, with the release of inflation above 10% mark, yields on benchmark 7.80% 2020 bond rose 8 bps to close at 7.69% on Monday under fears that RBI might be forced to raise rates to tame inflation. Rates also rose after comments from [...]