In the last financial year 2023-24, debt and corporate bond issuances exceeded $105 billion, while fresh equity issuances were roughly $25 billion. SEBI is aiming to broaden thematic bonds to include social sustainability, sustainability-linked bonds, securitized debt instruments, and municipal bonds.
Top 3 Leads Today
- Domestic food market likely to grow by over 47% to touch $1274 billion: Report.
- NaBFID set to raise at least ₹10 billion via 20-year bond issue.
- Need enabling framework to help cos issue ESG bonds locally: RBI official.
Market Recap: The Week That Was
- Money Markets Minute: The call rate fell on Friday, below the RBI's standing facility rate of 6.25%, and remained flat from the previous week. In July, India's banking system saw a daily average liquidity excess of almost ₹1 trillion due to government spending and central bank interventions in the foreign exchange market.
- Government Bond Brief: Yields rose slightly on Friday after the ₹310 billion weekly bond auction, which met expectations. Yields were somewhat lower on a weekly basis. Yields jumped on Friday, mirroring the rise in the US treasury on Thursday, following the US Jobs data release, which was better than predicted.
- Corporate Bond Beat: Yields for 2-year bonds in the secondary market rose 3 to 4 basis points last week. This was primarily due to mutual funds and banks selling shorter-tenure bonds for profits. The RBI policy review was on the expected lines, resulting in mutual funds booking profits. Yields for 5-year and above remained relatively unchanged throughout the week.
- Forex Flash: The Indian rupee had its sixth consecutive weekly decline but ended the week with minimal change. This was due to a rise in corporate dollar demand. The currency had a 0.2% decline week-on-week, marking its most significant weekly drop in over two months. On Friday, the rupee ended the week at 83.9550 against the US dollar.
- Stocks Spotlight: Indian equities closed higher on Friday, partly recovering from weekly losses triggered by a sharp sell-off earlier. A larger-than-expected drop in US unemployment claims eased recession fears. Nifty 50 and Sensex each fell 1.5% last week, marking their worst weekly decline since May, as concerns over a weak July jobs report and the unwinding of yen carry trades led to global selling and profit-taking.
Trading Trends
Most actively traded Corporate bonds in the Standard Lot Market:
| ISIN | Security Name | Volume (Cr) | Avg. Yield(%) |
|---|---|---|---|
| INE261F08EI9 | 7.70 NABARD 30SEP27 | 2000 | 7.58 |
| INE053F08411 | 7.37 IRFC 31JUL29 | 1875 | 7.37 |
| INE121A08PP7 | 9.10 CHOLAINVFIN 27JUN31 | 1765 | 9.1 |
| INE296A07TC9 | 8.12 BAJAJ FINANCE 10SEP27 | 1195 | 8.01 |
| INE261F08DX0 | 7.58 NABARD 31JUL26 | 770 | 7.65 |
Most actively traded Corporate bonds in the Odd Lot Market:
| ISIN | Security Name | Volume (Cr) | Avg. Yield(%) |
|---|---|---|---|
| INE248U07DR0 | 0% IIFL WEALTH 07MAY25 | 28.2 | 9.95 |
| INE07HK07742 | 10.20 KRAZYBEESERVICES 19DEC25 | 23.3 | 12.04 |
| INE0NES07097 | 11.40 KEERTANA 12APR26 | 19.1 | 13.38 |
| INE540P07400 | 9.70 UPPCL 30MAR29 | 18.6 | 8.98 |
| INE0NES07121 | 11.40 KEERTANA 28JAN27 | 18.1 | 13.46 |
Traded volume in corporate bonds by maturity:
| Maturity | Volume(in Cr) |
|---|---|
| 1Y | 5367 |
| 3Y | 8614 |
| 5Y | 4578 |
| 7Y | 1900 |
| 10Y | 2319 |
Source: Harmoney data analytics
The Week Ahead
- Money Markets: The one-day call money rate is expected to open near the RBI's repo rate of 6.50%, as demand for funds may rise at the start of the week. However, the call rate will likely ease later this week due to sufficient liquidity in the banking sector. On Monday, call rate my move in the 6.00-6.60% range.
- Government Bonds: Yields may open higher on Monday as investors await India's CPI inflation data. This week, domestic bond prices may also be influenced by any significant changes in US treasuries and crude oil prices.
- Corporate Bonds: Secondary market corporate bond yields are expected to remain stable across tenures and mirror changes in domestic government bonds. Investors will closely monitor India's CPI report on Monday for more cues.
- Forex: The rupee is expected to open sluggish versus the dollar on Monday, trading between 83.80 and 84.10. Traders will keep a watch on evolving geopolitical tensions in West Asia, crude oil prices, and US CPI data due this week for cues.
- Stocks: Domestic stocks may see some consolidation on Monday as investors digest recent gains and deal with high pricing. Investors will monitor India's and the United States' CPI data, which will be released this week, and take new clues from FII inflows and outflows in India.
Events This Week
August 12, Monday:
- Monsoon Session of Parliament to end.
- Industrial production for June by NSO.
- CPI (Combined) for July by NSO.
- US monthly treasury statement of receipts and outlays for July.
- MSCI to announce changes to global standard indices as part of its quarterly review
August 13, Tuesday:
- US PPI for July.
- IEA to release monthly oil market report.
August 14, Wednesday:
- India WPI for July
- US Real earnings for July.
- US CPI for July.
August 15, Thursday:
- US Advance monthly sales for retail & food services for July.
- US Unemployment insurance weekly claims Aug 10 week.
- US Import & Export price indexes for July.
- US Weekly export sales.
- US Industrial production and capacity utilization for July.
August 16, Friday:
- India FX reserves for Aug 9 week.
- US New residential construction for July.
- US State employment and unemployment for July.
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