BANKING
| Bankers eye RBI's policy next week Mon, 25 Apr 2011 06:11:59 GMT |
| MUMBAI: Bankers are awaiting the Reserve Bank of India's annual monetary policy next week to price fresh issues with issuances also seen low as corporates await finalisation of their borrowing requirement by month-end before tapping the market for funds. "I don't think there will be any major issues. Most issuers and investors will wait for the policy on May 3," a senior banker said. "Currently there are expectations for a 25 basis points rate hike with hawkish accompanying statements." India's annual food inflation snapped a three-week easing trend on April 9, while fuel inflation also quickened, raising the odds for an aggressive rate hike by the central bank next month. India's headline inflation in March unexpectedly spurted to 8.98 percent, reinforcing assumptions that inflationary pressures have become entrenched in the economy Persistent inflationary pressures have prompted the market to price in 75 basis points rate increases in the remaining year from an earlier expectation of 50 basis points. Bankers said frequent issuers of bonds from finance companies could trickle in. The benchmark five-year corporate bond was at 9.31 percent on Thursday, up from 9.30 percent, and the 10-year 1 basis point lower at 9.23 percent. The spread between the five-year corporate bond and government bond marginally narrowed to 100.15 basis points on Thursday from 100.41 basis points on Wednesday. The 10-year corporate bond spread narrowed to 87.85 basis points from 90.36 basis point on Wednesday. Total volume reported in the corporate bond market reduced to 16.29 billion rupees from Wednesday's 18.97 billion rupees. Financial markets were shut on Friday on account of Good Friday. Corporate debt data is sourced from the Bombay Stock Exchange , National Stock Exchange and Fixed Income Money Market and Derivatives Association of India. |
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