The Hindu Business Line : Bond prices go up

Bond prices went up by around 35 paise as concerns about the pressure on liquidity were quelled. Renewed buying interest caused the traded volume to surge to Rs 5,600 crore on the order matching system.

Dealers said that fresh liquidity would be infused into the system as two bonds — 13.85 per cent, 2006 paper and the 4.83 per cent, 2006 would mature on Saturday and Monday respectively. "Banks will now buy in the debt market to replace the bonds that mature.

As banks see their deposit base grow, they would have to buy in the market to fulfil their SLR requirement (Statutory Liquidity Ratio)," said a dealer at a private bank.

Statements made by the Finance Minister about the Central Government and the state governments having a surplus of Rs 15,000 crore and Rs 53,000 crore respectively with the RBI also boosted the sentiment since market participants had been concerned about Government expenditure entering the system.

The 7.59 per cent-10 year-2016 paper opened at Rs 97.11 (8.03 per cent YTM) and ended at Rs 97.34 (7.99 per cent YTM), up from Tuesday's close at Rs 97.09 (8.03 per cent YTM). The 8.07 per cent-11 year-2017 paper opened at Rs 99.91 (8.08 per cent YTM) and closed at Rs 100.20 (8.04 per cent YTM), higher than Rs 99.85 (8.09 per cent YTM) on Wednesday.