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Our Bureau

Mumbai, Aug. 31

Bond prices rallied following statements made by the Finance Minister about oil bonds not being accorded SLR (Statutory Liquidity Ratio) status. The traded volume was high at Rs 7,125 crore on the order-matching system. Dealers said that there was good buying interest in the market after the Finance Minister made the statements. "If oil bonds are not given SLR status, it implies that banks will have more cash to invest in Government securities. This caused the ten-year paper to gain by around 20 paise," said a dealer at a private bank. Market participants said the bond market was also tracking the US treasury yields, where the ten-year paper eased further to 4.75 per cent (4.79 per cent). "There is a feel-good sentiment in the market. The substantial liquidity in the system and the easing of global crude prices have also added to this," said a dealer. The 7.59-10 year-2016 paper opened at Rs 97.90 (7.90 per cent YTM) and closed at Rs 98 (7.89 per cent YTM), up from Wednesday's Rs 97.81 (7.92 per cent YTM). The 8.07-11 year-2017 paper opened at Rs 100.85 (7.95 per cent YTM) and ended at Rs 100.98 (7.93 per cent YTM), against Rs 100.68 (7.97 per cent YTM) on Monday.

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