Demand for corporate bonds is expected to go up this week as players who had offloaded their positions last week will take up new ones, especially since there are quite a few debuts in store.
The Nuclear Power Corporation (NPC) raised 10-year money at 6.15 per cent last week.
There were also issues from GAIL Ltd and the Infrastructure Development Finance Corporation.
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Meanwhile, corporate bonds last did not track gilts last week as fresh buying interest was seen in less liquid papers due to the yield differential they enjoyed over comparable government papers.
And even though long-tenor issues were offloaded, they still witnessed buying interest from the participants who were hunting for spreads.
CPs likely to log greater interest
There were few issues in the primary commercial paper (CP) market last week. Neither did the secondary market witness much trading.
But issuers have started tapping the commercial paper route once again as overseas borrowing opportunities seems curbed.
CPs are also finding favour because disclosures and ratings enable a corporate to get a finer rate for their paper.
The perception on Bond Street is that external commercial borrowings (ECBs) are discouraged by the Centre.
Participants point out to the clutch of ECB proposals that were rejected by the Ministry of Finance.
Along with CPs, Mibor-linked non-convertible debentures are also in vogue owing to the stamp duty exemption that they enjoy.