| Last week, the market lost volume, in line with the trend in the government securities market. The spread between the triple-A five-year paper and the corresponding gilt rose to 70 basis points, up from 60 basis points earlier. |
| The average daily turnover fell to Rs 100-150 crore as against Rs 600-700 crore a few weeks back. |
| The primary market is quite dull as anticipated issues have been postponed with corporates finding greener pastures abroad. Most of the domestic market borrowings are substituted with external commercial borrowing. |
| Dealers are optimistic that there are a host of public sector undertakings waiting to tap the bonds market. However, most of them have to vet their balance sheets before chalking out plans to tap the market. |
| Some finance companies including HDFC tapped the market last week. However, trading in deep-discount bonds saw a knee-jerk reaction with the management of the Sardar Sarovar Nigam proposing to insert a call option clause in its deep-discount bonds. However, the management has been asked to postpone the bondholders' meeting to insert the clause. |
| Commercial paper |
| The commercial paper market continued to remain lacklustre last week. Most of the corporates had stopped short issues towards the financial year-end. |
| However, dealers expect that some issues might come up as most of the corporates are preparing their new borrowing programme. |
| Last week, most of the corporates whose commercial papers matured, rolled over the existing contracts at 4.8/4.9 per cent for a 90-day period. |
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