Latest news with #MataprasadPandey
Economic Times
27-05-2025
- Business
- Economic Times
How will RBI's Rs 2.69 lakh crore dividend impact bond yields?
Indian benchmark yields saw minimal movement as the RBI's ₹2.69 lakh crore dividend payout, though substantial, underwhelmed market expectations. Short-term yields are anticipated to decrease due to ample liquidity, potentially steepening the yield curve. An influx of over ₹70,000 crore in extra liquidity, coupled with the dividend transfer, is expected to further soften T-bill yields. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Benchmark yields barely budged on Monday as the record ₹2.69 lakh crore dividend payout declared by the Reserve Bank of India (RBI) on Friday fell short of market expectations of ₹3 lakh crore. The RBI had paid ₹2.1 lakh crore dividend to the Centre last fiscal. The benchmark 10-year bonds closed at 6.25%, down by one basis point from the previous yields are, however, expected to trend lower going ahead given the comfortable liquidity, steepening the yield on all three tenures of treasury bills-91-day, 182-day, and 364-day-have largely been the same over the past three auctions, reflecting easy banking system liquidity . Short tenured treasury bills with maturity between 91 days and 364 days are likely to yield around 6.65% in the upcoming auction on Wednesday, nearly six basis points lower than the previous one. These yields are expected to be flat across the three tenures, similar to auctions in the previous weeks."We have over ₹70,000 crore of extra liquidity this week which was not factored in because of some maturity payouts of government bonds , in addition to the dividend. This can likely lead to softer yields of T-bills in upcoming auctions, as short-tenured assets would benefit the most," said Mataprasad Pandey, vice-president at Arete Capital Services."The extra liquidity can also lead to some cut in borrowings of T-bills like last year," Pandey system liquidity jumped from ₹99,123 crore as on May 22, to ₹1.71 lakh crore as of May 23, latest RBI data showed."Sustained surplus liquidity of 1% of NDTL or higher will likely lead to a rally in the shorter end of fixed income assets . The dividend transfer is expected to boost banking and durable liquidity above ₹6 lakh crore in the near term" said Devang Shah, head of fixed income at Axis Mutual Fund.
Time of India
13-05-2025
- Business
- Time of India
Foreign banks dump $3 billion worth g-secs amid India-Pak tensions
Mumbai: Foreign banks and primary dealers dumped nearly $3 billion worth of Indian government securities over Thursday and Friday amid escalating India-Pakistan tensions . But traders expect them to return as geopolitical risks showed signs of cooling over the weekend, likely lowering yields by 4-5 basis points Tuesday. Traders believe the 10-year benchmark is likely to settle near 6.32-6.34%, following the recent border de-escalation and ceasefire announcement. They said the sudden selling last week was driven by concerns of a wider military conflict after cross-border strikes intensified, triggering a rush to pare exposure to risk assets. The 10-year benchmark yield had spiked nearly 10-12 basis points recently. Bonds Corner Powered By Foreign banks dump $3 billion worth g-secs amid India-Pak tensions Traders believe the 10-year benchmark is likely to settle near 6.32-6.34%, following the recent border de-escalation and ceasefire announcement. Is a US recession imminent and what would be the impact on India? How should we manage a robust portfolio in this scenario? Will NaBFID successfully navigate offshore bond market? Indian bond yields snap 7-week falling streak due to border conflict Indian bond yields climb as traders panic sell on widening border conflict Browse all Bonds News with While there was sharp movement in G-sec yield last week, it was not primarily due to foreign investors pulling out and trader positioning in response to geopolitical uncertainty only but also responding to the US yield movement. This has caused a pullback in yields from the recent highs around 6.44% toward the previous consolidation zone 6.32-6.34%. Live Events Global cues, especially US Treasury yields rising 70-80 basis points over a few days, are also influencing India's fixed income market. "The 10-year yield may cool off temporarily to the 6.32-6.34% levels due to the ceasefire and position unwinding, but that's just a knee-jerk move," said Ashhish Vaidya, managing director & head - Treasury & Markets, DBS Bank India. "The broader short term tone remains cautious, with upward pressure persisting unless global yields, especially in the US, begin to ease meaningfully, which will likely set the trend for making the Em debt more attractive." Yields on 10-year G-sec, which was at 6.3% on 23 April has risen 6.44% at the end of last week. In the longer term, if RBI cuts the repo rate to 5.50%, experts say, yields could fall to 6%, offering investors who entered at 6.40%-6.44% a potential gain and additional returns, higher than earlier estimates. "There have been de-escalations on the border and a cease fire, so I do expect bond yields to soften by about 4 basis points on Tuesday and I am expecting yields to close at about 6.33%," said Mataprasad Pandey, vice president, Arete Capital Services. "I had given an investment call on Thursday when yields went up to 6.44% to 'buy.' In the longer term, Pandey said that assuming RBI cuts rates to a terminal repo of 5.50%, yields will likely fall to 6%. In such a scenario, investors who bought when yields were at 6.40-6.44% would see more capital appreciation.
Time of India
09-05-2025
- Business
- Time of India
Indian bond yields snap 7-week falling streak due to border conflict
Indian government bond yields rose this week, snapping a seven-week declining streak as the India-Pakistan conflict soured sentiment. The benchmark 10-year yield rose 3 basis points this week, after falling for seven weeks straight. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Nunca use o saca-rolhas para abrir um vinho. O motivo? É surpreendente Vinovation Undo The India-Pakistan conflict took a turn for the worse this week, catching traders off guard and triggering a frenzy across various financial markets. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Bonds Corner Powered By Indian bond yields snap 7-week falling streak due to border conflict Indian government bond yields rose this week, snapping a seven-week declining streak as the India-Pakistan conflict soured sentiment. Indian bond yields climb as traders panic sell on widening border conflict Indian insurers urge regulator's easing of counterparty exposure in new bond forwards market RBI eases FPI rules on corporate bonds to boost foreign inflows Chinese companies line up to sell 'innovation bonds', capitalising on Beijing's technology push Browse all Bonds News with Foreign banks sold a record amount of Indian government bonds on Thursday as well as this week, while primary dealers' sales were the highest in any week since September 2024. The Indian rupee declined 0.9% this week, despite being supported by the Reserve Bank of India, as per traders. The stock market lost $83 billion in two sessions. Live Events "The selling pressure in the government bond market is understandable, as we previously observed profit booking around the 6.29% level (old benchmark). This pressure has intensified further in response to escalating tensions," said Mataprasad Pandey, vice president at financial advisory firm Arete Capital. "However, I do not expect this selloff to persist for long. Once tensions begin to de-escalate, support should return and yields are likely to improve accordingly." The debt market caught a break late on Friday with lower cut-offs in RBI's open market purchase (OMO) and a successful debt sale. That helped the benchmark yield reverse from a high of 6.44% to end lower at 6.3750%, compared with its previous close of 6.3976%. The debt market will remain shut on Monday due to a local holiday. RATES The overnight index swap (OIS) rates recovered after rising sharply on Thursday. Traders began buying government securities by late Friday, which supported a receiving bias, traders said. The one-year rate fell 3 bps to 5.63%, while the two-year dropped 2 bps to 5.53% and the most liquid five-year declined to 5.65%.
Time of India
07-05-2025
- Business
- Time of India
RBI's OMO buys get a strong response amid high prices
Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Live Events Mumbai: The central bank's bond purchases in open market operations (OMO) on Tuesday saw strong demand, with market participants offering bonds worth more than double the notified amount. Prices for the bonds were majorly at a premium from market prices, and in line with expectations, treasury heads offered for this OMO round were worth ₹1.32 lakh crore, against the notified amount of ₹50,000 crore. The Reserve Bank of India (RBI) has scheduled further bond purchases worth ₹75,000 crore for the month of May with an aim to quicken the pace of policy rate transmissions."Prices for most bonds were at a premium, except for the paper maturing in 2031, which was priced at a discount from the markets," said Mataprasad Pandey, vice president at Arete Capital Services. "The auction had good demand and further auctions are expected to see great demand as well because market participants know that they will get a good price."The auction did not have ultra long tenured bonds, and maturities ranged from 3- to 14-year paper. Securities maturing in 2035 - the 7.10% GS 2034 paper - saw the maximum have tried to exit their positions by selling the 7.10 2034 paper to RBI, as they would want to make space for the new 10-year paper, a bond trader from a private sector bank auctioned a new 10 year paper on Friday, May 2, while the 7.10% GS 2034 paper used to be the benchmark security before October next OMO purchase is scheduled for Friday, May 9 for a quantum of ₹25,000 of the 10-year benchmark security closed at 6.35% on Tuesday, up 3 basis points from its previous close.
Time of India
28-04-2025
- Business
- Time of India
Rs 1.25 lakh crore OMO likely to bring down yields ahead of the new 10 year auction
The Reserve Bank of India announced it will purchase Rs 1.25 lakh crore government bonds in open market operations (OMO) in four tranches spread across May, the calendar likely aimed to drive down yields before the new 10-year auction is scheduled on Friday, treasury experts said. These purchases will take place on May 6, May 9, May 15, May 19 The quantum of the OMOs has surprised market participants and is expected to soften government bond yields by at least 4-5 basis points. The 10 year benchmark yield has seen some uptick in the past two trading sessions and closed at 6.39% on Monday, up from 6.36% the previous day. Last week the 10 year yield touched a key level of 6.30%, CCIL data showed. 'There seems to be a tug of war between headwinds and tailwinds for the yield. The border tensions between India and Pakistan have pushed yields up by 7-8 basis points since last week and the recent OMO announcement will now soften yields and we will most likely open lower on Tuesday,' said Mataprasad Pandey, vice president at Arete Capital Services. The RBI had previously announced OMOs in four tranches for a total of Rs 80,000 crore throughout the month of April, of which, the last tranche of bond purchase worth Rs 20,000 crore is scheduled for Tuesday (April 29). "Yields have risen in the past two trading sessions and had a threat of going up even more due to border tenisons. The RBI may not be very happy with higher yields especially since we have a 10 year auction this week, and I think this large quantum of Rs 1.25 lakh crore is due to the looming threat of war,' said a bond trader at a primary dealership. 'With the new 10 year to be auctioned on Friday, the RBI would want yields to reduce to lower the borrowing costs for the government,' Pandey said. The RBI plans to raise Rs 30,000 crore via the new 10 year paper and the new bond will replace the 6.79% 2034 bond as the benchmark government security, which has an outstanding amount of Rs 1.84 lakh crore. The OMOs would also ease banking system liquidity to 1% on NDTL and offset the monthly GST outflows that happen around the 20th of each month, economists said. System liquidity has been in a daily average surplus of Rs 1.5 lakh crore as of April, RBI data showed.
