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Bond yields steady; buyback announcement eyed

17 Jan 2012 Evaluate

Bond yields edged lower from the day's high, as expectations of a bond buyback announcement from the central bank prompted buying.

The yields on 10-year benchmark 8.79% - 2021 bonds were trading steady at 8.22% up from its previous close on Monday.

The benchmark five-year interest rate swaps was up 5 basis points at 7.18% from its previous close.

The Government of India has announced the sale of three dated securities for Rs 14,000 crore (re-issue) of (i) “7.83 percent Government Stock 2018” for a notified amount of Rs 4,000 crore (nominal) through price based auction, (ii) “8.79 percent Government Stock 2021” for a notified amount of Rs 7,000 crore (nominal) through price based auction and (iii) “8.83 percent Government Stock 2041” for a notified amount of Rs 3,000 crore (nominal) through price based auction. The auctions will be conducted using uniform price method. The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai on January 20, 2012 (Friday).

The Reserve Bank of India has announced the auction of 91-day and 182-day Government of India Treasury Bills for notified amount of Rs 6,000 crore and Rs 4,000 crore respectively. The auction will be conducted on January 18, 2012 using 'Multiple Price Auction' method. The allocation to the non-competitive bidders will be outside the notified amount at the discretion of the Bank.

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