The Reserve Bank of India announced that the redemption price for sovereign gold bond scheme SGB 2016 -17 Series I (issue date August 5, 2016) will be ₹6,938 for gold of 999 purity, with the redemption date set for August 5. The price is 4.5% lower than the week before the July 23 Union Budget. Gold prices fell when Customs Duty was cut. Budget 2024 suggested lowering gold and silver Customs Duty to 6%.
Top 3 Leads Today
- Mulling combo rights issue-preferential allotment for cos, says SEBI.
- SEBI to release paper on easing norms for investment advisor registration next week.
- SBI Q1 net profit rises 0.9% to ₹170.35 billion, NII up 5.7% at ₹411.25 billion.
Market Recap: The Week That Was
- Money Markets Minute: The call money market rate closed the week nearly unchanged, below the Reserve Bank of India's standing deposit facility rate of 6.25%, as demand for funds from banks dropped amid ample liquidity. The two-day call rate closed at 5.75%, unchanged from a week ago. On Thursday, the liquidity surplus reached ₹1.97 trillion, its highest level in a year.
- Government Bond Brief: Yields ended the week lower, reflecting the trend in the US market. On Friday, yields fell for the third straight day after US treasury yields dropped to a new six-month low on Thursday due to concerns surrounding the US economy following the release of manufacturing data. The 10-year yield closed at 6.90% versus 6.916%. Last week, it was at 6.93%.
- Corporate Bond Beat: Yields on 5-year fell 3 to 4 basis points last week, in line with the decline in government bond yields. The 10-year paper yield decreased on Friday as insurance companies increased their secondary market investments. On Friday, the 10-year corporate bond yields were traded within a range of 7.41-7.43%, which is slightly lower 7.45-7.47% last week.
- Forex Flash: The rupee closed at a record low of 83.75 against the dollar on Friday, even though the RBI intervened. This was due to ongoing dollar purchases by oil marketing companies. Foreign fund outflows from the domestic stock market also hurt the rupee.
- Stocks Spotlight: Indian equities ended a multi-week-long winning streak on Friday, dragged by information technology and auto firms, after weaker-than-expected US data caused a global sell-off. The S&P BSE Sensex lost 1.08% to 80,981.95, marking the first fall in six sessions, while the NSE Nifty 50 dropped 1.17% to 24,717.7 points. Their winning streak of eight weeks, their longest in fourteen years, also came to an end.
Trading Trends
Most actively traded Corporate bonds in the Standard Lot Market:
| ISIN | Security Name | Volume (Cr) | Avg. Yield(%) |
|---|---|---|---|
| INE261F08EI9 | 7.70 NABARD 30SEP27 | 3820 | 7.61 |
| INE040A08AG0 | 3.00 HDFC BANK 28OCT24 | 1250 | 7.71 |
| INE020B08DU5 | 3.00 REC 31OCT24 | 1140 | 7.38 |
| INE053F08411 | 7.37 IRFC 31JUL29 | 825 | 7.39 |
| INE053F07AA7 | 7.49 IRFC 30MAY27 | 700 | 7.48 |
Most actively traded Corporate bonds in the Odd Lot Market:
| ISIN | Security Name | Volume (Cr) | Avg. Yield(%) |
|---|---|---|---|
| INE261F08EI9 | 7.70 NABARD 30SEP27 | 35.7 | 7.63 |
| INE01YL07284 | 11.00 EARLYSALARY 05DEC25 | 33.11 | 12.95 |
| INE0NES07105 | 11.40 KEERTANA 10MAY26 | 32.2301 | 12.37 |
| INE08XP07233 | 10.01 AKARA 21DEC25 | 21.04 | 13.49 |
| INE146O08274 | 9.50 HINDUJA 10JUL39 | 20 | 9.07 |
Traded volume in corporate bonds by maturity:
| Maturity | Volume(in Cr) |
|---|---|
| 1Y | 6791 |
| 3Y | 9327 |
| 5Y | 3574 |
| 7Y | 338 |
| 10Y | 2850 |
Source: Harmoney data analytics
The Week Ahead
- Money Markets: The one-day call money rate is expected to open around 6.50% on Monday, as there may be an increase in demand for funds from banks in the early trade. Traders anticipate a potential easing of the call thanks to excess of liquidity.
- Government Bonds: On Monday, yields may fall further after US non-farm payrolls were substantially lower than predicted. The US added 114,000 jobs in July, compared to the expected 175,000 jobs, while the unemployment rate increased to 4.3% in July from 4.1% in June. This week, market participants will keep an eye on crude oil prices and the RBI policy for further clues.
- Corporate Bonds: Yields in the secondary market may fall this week, mirroring the broader decline in government bonds and US treasuries. Volumes are likely to remain low as investors seek out primary issuances set to begin this week and the RBI monetary policy decision on Thursday.
- Forex: The rupee is expected to open on a positive note and will be influenced by the dollar index and crude oil prices on Monday. Dollar demand from importers is projected to continue, further weighing on the rupee, which traders expect to reach 83.80 per dollar this week.
- Stocks: Domestic stocks may open lower on Monday after the decline in global stock markets on Friday. Last week, global stocks plummeted as unexpectedly disappointing US job data fuelled worries of a US recession. Investors will take further cues from RBI’s monetary policy decision on Aug 8 this week.
Events This Week
August 5, Monday:
- US Services PMI for July.
- US Employment trends index for July.
- US Global services PMI for July.
- India Services PMI for July.
August 6, Tuesday:
- US International trade in goods & services for June.
August 7, Wednesday:
- US EIA weekly petroleum status report for Aug 2 week.
- India M3 Money Supply.
August 8, Thursday:
- US Unemployment insurance weekly claims report for Aug 3 week.
- US Weekly export sales.
- US Monthly wholesale trade for June.
- India Interest rate decision.
- India Reverse REPO rate.
- India Cash reserve ratio.
For any inquiries or assistance related to market data, please reach out to us at support@harmoney.in