Yields seem to have bottomed out
Secondary market yields on corporate bonds could rule flat or creep up a bit this week, because of the perception in the market that the yields have almost bottomed out and look unsustainable at current levels.
Spreads on the recently issued oil company bonds are seen drooping to around 10-15 basis points compared with corresponding seven-year gilts, as against 25-30 basis points logged at their launch.
Last week, the best-rated, five-year Hindalco paper was dealt in the 6.95-7.03 per cent yield range. And yields on the five-year Indian Railway Finance Corpo-ration and Power Finance Corporation bonds touched lifetime lows of 7.03 per cent and 7.04 per cent, respectively.
Yield on AAA-rated papers fell by seven to eight basis points last week. But this decline was
