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Business Recorder
05-08-2025
- Business
- Business Recorder
Dovish India RBI tone may aid sustained lower yields more than rate cut, traders say
MUMBAI: A dovish commentary and downward revision to economic forecasts by the Reserve Bank of India could drive a continued fall in government bond yields and overnight index swap rates, even without an actual rate cut, treasury officials said on Tuesday. The RBI is set to announce its policy decision on Wednesday, where most economists expect the central bank to hold rates steady but calls for a cut have grown louder in recent days. 'A dovish pause will be better and more positive for markets in the long term than a hawkish rate cut like the one in June,' PNB Gilts senior executive vice-president Vijay Sharma said. 'The chances of the 10-year bond yield reaching 6.20% are better with a pause than with a cut.' In June, the RBI surprised markets with a 50-basis-point rate cut but shifted its stance to neutral from accommodative, and signalled limited room for further easing. Bond yields and swap rates rose following the decision, as traders interpreted it as the end of the rate-cutting cycle. The 10-year benchmark bond yield rose on June 6 and has climbed nearly 20 bps since, while the five-year OIS rate rose by as much as 16 bps. RBI intervention shields Indian rupee from record low after Trump tariff threat 'The RBI did a lot in the last policy, so it would rather wait to see the impact and another rate cut is unlikely. Also, a cut now may not have the desired impact,' said Alok Singh, group head of treasury at CSB Bank. Barclays expects a dovish pause along with a 30–40 bps reduction in the RBI's inflation forecast of 3.7% for this fiscal year. Still, expectations for easing have strengthened after the U.S. slapped a 25% tariff on goods from India, which could weigh on growth. 'We believe there are enough reasons for the RBI to deviate from its previous guidance, deliver a further 25 bps easing in August, and adopt a more open-ended approach to future rate cuts,' Emkay Global economist Madhavi Arora said.
Business Standard
23-07-2025
- Business
- Business Standard
PNB Gilts standalone net profit rises 199.53% in the June 2025 quarter
Sales rise 27.93% to Rs 563.27 croreNet profit of PNB Gilts rose 199.53% to Rs 160.07 crore in the quarter ended June 2025 as against Rs 53.44 crore during the previous quarter ended June 2024. Sales rose 27.93% to Rs 563.27 crore in the quarter ended June 2025 as against Rs 440.28 crore during the previous quarter ended June EndedJun. 2025Jun. 2024% 28 OPM %95.4796.80 -PBDT213.5371.66 198 PBT212.9870.88 200 NP160.0753.44 200 Powered by Capital Market - Live News
Business Recorder
08-07-2025
- Business
- Business Recorder
India bonds end lower on tepid demand for state debt
MUMBAI: Indian government bonds slipped on Tuesday, after remaining largely range bound through the day, as weaker-than-expected demand for state debt weighed on investor sentiment, while a rise in U.S. Treasury yields also hurt. Bond prices move inversely to yields. The yield on the benchmark 10-year bond ended at 6.3053%, after closing at 6.2933% on Monday. 'There is no positive trigger in the near term, and hence we could see yields slowly drifting higher because of continuous supply from states and the central government,' said Vijay Sharma, senior executive vice president at PNB Gilts. Indian states raised 133 billion rupees ($1.55 billion), at cutoff yields that were largely above estimates. U.S. Treasury yields pushed higher for a second day in Asian hours on Tuesday after President Donald Trump announced tariffs on numerous trading partners, including a 25% levy on imports from Japan and South Korea beginning August 1. India bonds steady as traders await fresh triggers Yields have been on an uptrend as traders pared bets on the quantum of rate cuts by the Federal Reserve this year after jobs data for June showed employers added more jobs than economists had forecast. Traders also continue to eye the next action from the Reserve Bank of India on liquidity management, as banking system liquidity surplus continues to remain elevated, with overnight rates slipping below the floor of the monetary policy corridor. Rates India's overnight index swap rates inched up amid paying pressure on Tuesday. The one-year OIS rate ended 1 basis point higher at 5.51%, while the two-year OIS rate was up 2 basis points at 5.49%. The most liquid five-year OIS rate also rose 2 basis points to 5.70%.
Business Standard
03-05-2025
- Business
- Business Standard
PNB Gilts standalone net profit rises 10.11% in the March 2025 quarter
Sales decline 11.63% to Rs 418.77 crore Net profit of PNB Gilts rose 10.11% to Rs 75.02 crore in the quarter ended March 2025 as against Rs 68.13 crore during the previous quarter ended March 2024. Sales declined 11.63% to Rs 418.77 crore in the quarter ended March 2025 as against Rs 473.88 crore during the previous quarter ended March 2024. For the full year,net profit rose 235.73% to Rs 233.03 crore in the year ended March 2025 as against Rs 69.41 crore during the previous year ended March 2024. Sales rose 6.32% to Rs 1675.98 crore in the year ended March 2025 as against Rs 1576.36 crore during the previous year ended March 2024. Particulars Quarter Ended Year Ended Mar. 2025 Mar. 2024 % Var. Mar. 2025 Mar. 2024 % Var. Sales 418.77473.88 -12 1675.981576.36 6 OPM % 97.1297.24 - 96.9296.52 - PBDT 99.9690.13 11 312.17110.50 183 PBT 99.0286.14 15 308.7595.13 225 NP 75.0268.13 10 233.0369.41 236
Reuters
29-01-2025
- Business
- Reuters
India bond investors eye small rise in government borrowing, expect yields to decline
MUMBAI, Jan 29 (Reuters) - The Indian federal government's market borrowing is seen rising marginally in fiscal year 2025-26, which investors expect will be easily absorbed given the improving banking liquidity and strong inflows into insurance and pension funds. India's budget for the next financial year starting April 1 will be announced on Saturday. A Reuters poll of economists forecasts a fiscal deficit of 4.5% of GDP and a gross borrowing of 14.28 trillion rupees (about $165 billion). For 2024-25, the government budgeted to borrow 14.01 trillion rupees from the bond market. "Over the years the pressure of absorbing government bond supply has abated due to increasing demand from long-term investors," A Prasanna, head of research at ICICI Securities Primary Dealership, said. "Since the last few years, we have seen share of household savings going into insurance and retirement products is rising, which is contributing to demand. So the demand situation should remain strong going ahead," he said. Bond yields have eased over last few days on bets that the central bank will cut rates on Feb. 7 after it announced a host of liquidity measures. Investors expect the rally in bonds to continue after the budget unless borrowings are significantly higher than expected. "I expect the gross borrowing to be largely unchanged from the current year, which will not have any negative impact on the market," Vijay Sharma, senior executive vice president at PNB Gilts, said. The borrowings could be lower if New Delhi chooses to switch bonds with the central bank. ICICI Securities Primary Dealership expects such bond swaps worth 1 trillion rupees, which would lower the borrowing to 13.30 trillion rupees. GREEN BONDS Despite the limited interest, investors expect green bonds will continue to be part of the borrowing, although they hope for an elongation of duration. "Given lack of demand in 10-year green bond, we expect cut in supply of 10-year green bonds and the same portion can be increased for 30-year green bonds," said Rahul Bhuskute, CIO, Bharti AXA Life Insurance Bhuskute expects green bond supply in the range of 350 billion rupees to 400 billion rupees against the 117 billion rupees issued this year. "There is natural demand for long-term green bonds from insurance companies as there is very little issuance from state-run companies and corporates that gets categorised as infrastructure, beyond the 10-year segment," said Ketan Parikh, head-fixed income, ICICI Prudential Life Insurance. ($1 = 86.5170 Indian rupees)
