The Hindu Business Line : Bond prices rise in thin trade

Bond prices rose by around 15 paise as there were no sellers in a thinly traded market. Total traded volumes on the order matching system were at Rs 1,260 crore. Dealers said that there is hardly any supply of government paper as most banks have sold their stocks. “Banks have sold off their stocks to long-term investors like insurance companies and pension funds, which is why there is no supply in the market. Since volumes are low, prices have gone up even with littl e demand,” said a dealer at a private bank. Traders said that the market could find direction after the Rs 10,000 crore government auction scheduled on July 4. “The 10-year paper, which is being reissued in the auction, will now get re- priced. The benchmark paper’s yield may settle at 9 per cent,” said another dealer. The 8.24 per cent-10 year-2018 paper opened at Rs 97.35 (8.64 per cent YTM) and closed at Rs 97.75 (8.58 per cent YTM), against the previous close at Rs 97.59 (8.62 per cent YTM). The 5.48 per cent-1 year-2009 opened at Rs 96.66 (9.23 per cent YTM) and closed also at Rs 96.66 (9.23 per cent YTM).

— Our Bureau

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