Irrespective of a slow moving day, bond yields have moved up to 8.1% because of thin trading / under supply of the new 10 year benchmark. RBI will be holding a Inr 150 B auction on 29th to introduce a new 5 year bond (40 B) which will ease trading in Indian FI markets. The supply of the 10 year benchmark is less than INR 10 B apparently. The benchmark released in November traded upto a stock of INR 900 B before the new benchmark was released.
India has added $5B to the Gilts limit with a lower residual maturity apart from $25 B for Infrabonds, permissions for QFIs to invest in Indian Mfs and another $10B in ECB limits which are unlikely to be taken up as only high quality companies can operate under the limits on cost spreads on such debt
- India Morning Report (June 25, 2012) – Managing expectations without exiting the rally (awardz.wordpress.com)
- India raises overseas investment limit in government bonds (Roundup) (news.in.msn.com)
- India Morning Report (June 13, 2012 – Pre market Open) Already discounting the rate cut (Incl. Fixed Income Report) (awardz.wordpress.com)
- India Morning Report (June 17, 2012) – Greece reeled in, Dollar runs down before RBI policy hour (awardz.wordpress.com)
- India Morning report (June 19, 2012) – Equities finally shrug off the blues (awardz.wordpress.com)