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Bond yields halt 3-day’s long losing streak; debt auction eyed

20 Apr 2012 Evaluate

After easing for three straight sessions, bond yields edged higher on Friday as traders created room for Rs 16,000 crore debt sale auction, later in the day, which would also be the first sale of longer dated paper after the Reserve Bank of India (RBI) cut interest rates aggressively this week.

On the global front, US Treasuries stayed firm in Asia on Friday after downbeat U.S. economic data, as investors looked ahead to weekend meetings of the World Bank and International Monetary Fund for the latest developments on containing Europe's debt crisis.

Meanwhile, Brent crude held above $118 a barrel on Friday, but prices were headed for their steepest weekly drop in more than three months as Spain's high borrowing cost kept intact fears that the euro zone debt crisis could flare up again.

Back home, the yields on 10-year benchmark 8.79% - 2021 bonds were up 2 basis points to 8.43% from its previous close of 8.8.41% on Thursday.

The benchmark five-year interest rate swaps were down by 1 basis point at 7.49% from its previous close of 7.50% on Thursday.

The Government of India have announced the sale (re-issue) of four dated securities for Rs 16,000 crore on April 20, 2012, which include (i) “8.19% Government Stock 2020” for a notified amount of  Rs 4,000 crore (nominal) through price based auction, (ii) “9.15% Government Stock 2024” for a notified amount of  Rs 7,000 crore (nominal) through price based auction (iii) “8.97% Government Stock 2030” for a notified amount of  Rs 2,000 crore (nominal) through price based auction and (iv) “8.83% Government Stock 2041” for a notified amount of  Rs 3,000 crore (nominal) through price based auction.

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