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Bonds yields edge higher on Monday

23 Sep 2013 Evaluate

Bond yields were trading higher on Monday following the central bank's surprise rate hike on Friday with traders also preferring to stay light ahead of the details of the second-half borrowing calendar later in the day. Meanwhile, the government is selling 60 billion rupees of the 2023 bonds and 30 billion rupees each of the 7.28 percent 2019 bonds, 8.32 pct 2032 bonds and 8.30 pct 2042 bonds.

On the global front, U.S. Treasury prices rose on Friday as investors adjusted to the idea that the Federal Reserve was unlikely to tighten monetary policy until the economy looked more robust. Meanwhile, brent crude held above $109 a barrel on Monday, paring earlier losses after an upbeat manufacturing survey from China lifted the outlook for demand from the world's second-biggest oil consumer.

Back home, the yields on 10-year 7.16% - 2023 bonds, were trading at day’s high of 8.66%, 8 basis points higher from its previous close of 8.58% on Friday.

The Government of India have announced the sale (re-issue) of four dated securities for Rs 15,000 crore on September 23, 2013  (i) “7.28 percent Government Stock 2019” for a notified amount of Rs 3,000 crore (nominal) through price based auction; (ii) “7.16 percent Government Stock 2023” for a notified amount of Rs 6,000 crore (nominal) through price based auction;(iii) “8.32 percent Government Stock 2032” for a notified amount of `3,000 crore (nominal) through price based auction, and (iv) “8.30 percent Government Stock 2042” for a notified amount of Rs 3,000 crore (nominal) through price based auction. The auctions will be conducted using uniform price method. In partial deviation from the Issuance Calendar for marketable dated securities for April-Sept 2013 wherein period September 16-20, 2013 was indicated for the auction of dated securities, auctions for the week September 16-20, 2013 will be conducted by the Reserve Bank of India on September 23, 2013 (Monday).

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