India Fixed Income Report – June 25, 2012

Irrespective of a slow movign day, bond yields have moved up to 8.1% because of thin trading / under supply of the new 10 year benchmark. RBI will be holding a Inr 150 B auction on 29th to introduce a new 5 year bond (40 B) which will ease trading in Indian FI markets. The supply of the 10 year benchmark is less than INR 10 B apparently. The benchmark released in November traded upto a stock of INR 900 B before the new benchmark was released. 

India has added $5B to the Gilts limit with a lower residual maturity apart from $25 B for Infrabonds, permissions for QFIs to invest in Indian Mfs and another $10B in ECB limits which are unlikely to be taken up as only high quality companies can operate under the limits on cost spreads on such debt

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