 "RBI's bond auction devolves partially")
The Reserve Bank of India (RBI)’s bond auction worth Rs 16,000 crore devolved partially on primary dealers to the tune of Rs 889 crore, signalling the central bank continues to be uncomfortable with high bond yields in the market.
“Traders may have quoted higher bids for the auction, due to which there was partial devolvement in the bond,” said S Prabhu, head of fixed income at IDBI Federal Life Insurance. The 8.24 per cent 2033 paper saw partial devolvement and the cut-off yield came at 8.149 per cent.
The other bonds sailed smoothly in the auction. Longer tenure papers like the 8.24 per cent 2033 bonds are typically purchased by insurance companies.
Last month, too, on May 16, in the bond auction worth Rs 16,000 crore, there was partial devolvement to the tune of Rs 2,709 crore, as traders had quoted higher bids.
Meanwhile, in the government bond market, yields fell on Friday. “Yields were attractive for investors to buy. Yields may have dropped due to bond buying by traders,” said Nirakar Pradhan, chief investment officer of Future Generali India Life Insurance.
The yield on the 10-year benchmark bond ended at 7.98 per cent, compared with the previous close of 8.01 per cent. The yield on the new 10-year bond ended at 7.79 per cent compared with the previous close of 7.80 per cent.
“Traders may have quoted higher bids for the auction, due to which there was partial devolvement in the bond,” said S Prabhu, head of fixed income at IDBI Federal Life Insurance. The 8.24 per cent 2033 paper saw partial devolvement and the cut-off yield came at 8.149 per cent.
The other bonds sailed smoothly in the auction. Longer tenure papers like the 8.24 per cent 2033 bonds are typically purchased by insurance companies.
Last month, too, on May 16, in the bond auction worth Rs 16,000 crore, there was partial devolvement to the tune of Rs 2,709 crore, as traders had quoted higher bids.
Meanwhile, in the government bond market, yields fell on Friday. “Yields were attractive for investors to buy. Yields may have dropped due to bond buying by traders,” said Nirakar Pradhan, chief investment officer of Future Generali India Life Insurance.
The yield on the 10-year benchmark bond ended at 7.98 per cent, compared with the previous close of 8.01 per cent. The yield on the new 10-year bond ended at 7.79 per cent compared with the previous close of 7.80 per cent.