THE G-SEC IN 2008 WAS 9.15...THEN WENT DOWN TO 5.25
THE G-SEC IN 2013 WAS 9.10...RIGHT NOW IT IS @ 7.10
MY PREDICTION IS BY 2018 THIS G-SEC HAS TO GO BELOW 6%..AND THEREAFTER THE ECONOMY ON THE GROUND LEVEL WILL START ZOOMING....MONEY...MONEY...BUT BEFORE THAT STOCK MARKETS WILL BE CLIMBING NEW DIZZY LIFETIME HIGHS....
Mumbai: India's benchmark bond yields are set to breach the 7 per cent mark for the first time since 2009 when the government sells 10-year bonds which would become the new benchmark for traders.
With the demand for Indian fixed income papers soaring due to high yield differential with the developed world, or even with other developing markets, prices could rise further, said traders. Bond prices and yields move in opposite direction
"The new benchmark paper is expected to yield at sub-7 per cent level," said Piyush Wadhwa, head of trading, financial markets group, at IDFC Bank."Traders will be interested to buy those while investors will be more inclined to the existing benchmark that offers higher rates."
The government is scheduled to sell Rs 8,000 crore worth of bonds that would mature in 2026 as part of its sale of Rs 14,000 crore of bond sale slated for September 2. In Indian bond market, government bonds that mature in 10-years are the most traded. Although many bonds would be maturing, in cluding the one that is currently traded as benchmark, traders take a fancy for the one that is newly sold for reasons that few are able to explain. The latest 10-year bonds are termed Rs on the run' and those which have been benchmark but would fade away once the new one comes in, are known as Rs off the run.' Although both sets of bonds would ma ture in the same year, they tend to trade at different yields.
The benchmark yield on Tuesday fell two basis points to close 7.11 per cent, six basis points lower than the level seen last week when some jittery inves tors rushed to exit position after the government appointed Urjit Patel as the new RBI governor.
"Long-term in vestors are expected to build up G-sec positions as the net supply in the second half of the year may be constrained due to purchases by the RBI from open market," said Badrish Kulhalli, fund manager, fixed income, at HDFC Life Insurance. "As per current expectations, the new 10 year bond is likely to set a coupon be tween 6.95 and 7 per cent."
THE G-SEC IN 2013 WAS 9.10...RIGHT NOW IT IS @ 7.10
MY PREDICTION IS BY 2018 THIS G-SEC HAS TO GO BELOW 6%..AND THEREAFTER THE ECONOMY ON THE GROUND LEVEL WILL START ZOOMING....MONEY...MONEY...BUT BEFORE THAT STOCK MARKETS WILL BE CLIMBING NEW DIZZY LIFETIME HIGHS....
Mumbai: India's benchmark bond yields are set to breach the 7 per cent mark for the first time since 2009 when the government sells 10-year bonds which would become the new benchmark for traders.
With the demand for Indian fixed income papers soaring due to high yield differential with the developed world, or even with other developing markets, prices could rise further, said traders. Bond prices and yields move in opposite direction
"The new benchmark paper is expected to yield at sub-7 per cent level," said Piyush Wadhwa, head of trading, financial markets group, at IDFC Bank."Traders will be interested to buy those while investors will be more inclined to the existing benchmark that offers higher rates."
The government is scheduled to sell Rs 8,000 crore worth of bonds that would mature in 2026 as part of its sale of Rs 14,000 crore of bond sale slated for September 2. In Indian bond market, government bonds that mature in 10-years are the most traded. Although many bonds would be maturing, in cluding the one that is currently traded as benchmark, traders take a fancy for the one that is newly sold for reasons that few are able to explain. The latest 10-year bonds are termed Rs on the run' and those which have been benchmark but would fade away once the new one comes in, are known as Rs off the run.' Although both sets of bonds would ma ture in the same year, they tend to trade at different yields.
The benchmark yield on Tuesday fell two basis points to close 7.11 per cent, six basis points lower than the level seen last week when some jittery inves tors rushed to exit position after the government appointed Urjit Patel as the new RBI governor.
"Long-term in vestors are expected to build up G-sec positions as the net supply in the second half of the year may be constrained due to purchases by the RBI from open market," said Badrish Kulhalli, fund manager, fixed income, at HDFC Life Insurance. "As per current expectations, the new 10 year bond is likely to set a coupon be tween 6.95 and 7 per cent."
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