Packing batteries with more punch
Indian researchers are working on cells that can store more energy, last longer
The current financial year’s first 10-year Government Security (G-Sec), issued in early May 2020, could lose its shine as the government has decided to issue a new 10 year G-Sec within three months of the first issuance.
Market players are of the view that once the new 10-year G-Sec is issued on Friday (July 31), the trading focus will shift to the new security on expectation of more auctions in the paper and assurance of liquidity.
Usuallythe government issues one or at the most two 10-year G-Secs in a financial year to mop up resources. In case there are two issuances, a fairly large gap is ensured to avoid redemption pressure.
For example, last financial year, only one 10 year G-Sec was issued – the 2029 G-Sec carrying 6.45 per cent coupon rate – in October 2019 and auctions in it were held subsequently.
Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, said: “The 5.79 per cent G-Sec (maturing in 2030) was issued on May 11, 2020.
“Normally, once the outstanding in a paper reaches around ₹1 lakh crore, a new 10 year G-Sec is announced, else there will be redemption pressure on a particular date.”
The outstanding in the 5.79 per cent 2030 G-Sec as on date is ₹1,04,000 crore.
Bond market expert K Boovendran said: “When a new 10 year G-Sec is issued the focus will shift to that new security. Demand will be more for the new security. The old 10 year security no more shines.”
He underscored that at the rate of ₹18,000 crore per auction, the outstanding in the new 10 year G-Sec will reach a level of ₹1,08,000 crore in six auctions or in three months.
Irani observed that earlier there used to be a new 10 year G-Sec issuance every 8 to 9 months. Hence, there was excitement to participate in the auctions.
“Now with a new 10 year being issued every 3 to 4 months that excitement will get reduced,” he said.
Boovendran said barring the 5.79 per cent G-Sec maturing in 2030, other 10-year securities like 7.88 per cent G-Sec 2030 and 7.61 per cent G-Sec 2030are trading at 6.07 to 6.08 per cent yield level.
“Ideally, the yield of the new 10 year G-Sec should also be around 6.07 per cent…I think, the cut-off will be 5.85 to 5.90 per cent,” he added.
Indian researchers are working on cells that can store more energy, last longer
To fix a broken bone, doctors often harvest another bone from the patient’s body or from someone else. It ...
Superconductors from IIScScientists at IISc Bangalore have invented a device with a nanocrystal structure ...
Engineering and construction giant L&T has won a licence from the Council of Scientific & Industrial ...
Option price falls more than it rises for the same change in underlying
A long-term vacation here is worth a check-in
The fund delivered a return of 31.5% in 2020 compared with the category’s 15.5%
Care Health Insurance’s new rider offers no great benefit. We review its pros and cons
In these isolated times when people yearn for a slice of the familiar, amateur and professional chefs are ...
With strokes of quirky humour, Partha Pratim Deb uses pulp, terracotta, glass and discarded cloth to create ...
Given the events in Washington DC on January 6, this week’s quiz is all about buildings that house or housed ...
While good writing wars against the cliché, television gives it a natural home
Digital is becoming dominant media, but are companies and their ad agencies transforming fast enough to make a ...
Slow Network, promoted by journalist-lyricist Neelesh Misra, pushes rural products and experiences
How marketers can use the traditional exchange of festive wishes meaningfully
For Fortune, a brand celebrating its 20th anniversary, it was a rude shock to become the butt of social media ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor