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Bond yields slip after CSO estimates GDP growth of 5% for 2012/13

07 Feb 2013 Evaluate

Bond yields slipped after Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, estimated India's gross domestic product (GDP) to grow at an annual 5 percent in the 2012/13 fiscal year- the worst of all growth projections issued by the government and the RBI so far. Last month, Reserve bank of India had trimmed its GDP growth estimate for the fiscal year ending in March to 5.5 percent, the worst since 2002/03.

On the global front, US Treasuries stabilized in Asian trade on Thursday, and the rally in global shares paused as the market awaited European Central Bank's policy meeting later in the day. Meanwhile, brent crude was trading steady in a tight range, sub  $117 per barrel on Thursday as traders waited for the outcome of a European Central Bank (ECB) meeting and China trade data for more evidence that the global oil demand outlook was improving.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 3 basis points lower at 7.88% from its previous close of 7.91% on Wednesday.

The benchmark five-year interest rate swaps were trading 2 basis points higher to 7.26% against its previous close of 7.28% on Wednesday.

The Government of India have announced the sale (re-issue) of three dated securities for Rs 12,000 crore on February 8, 2013, which includes (i) ‘8.07 percent Government Stock 2017-JUL’ for a notified amount of  Rs 3,000 crore (nominal) through price based auction; (ii) ‘8.15 percent Government Stock 2022’ for a notified amount of  Rs 6,000 crore (nominal) through price based auction; and (iii) ‘8.97 percent Government Stock 2030’ for a notified amount of Rs 3,000 crore (nominal) through price based auction. The auctions will be conducted using multiple price method.

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