Corporate bond yields fall 5-7 bps tracking easing G-sec yields

“Hence muted supply has resulted in lower yields,” Pandey said.

Also read: India bond buyback signals RBI’s cash easing stance, Citi says

Easing G-sec yield

In the last few days yield on the government securities fell around 10-11 basis points due to easing global uncertainties. Further, the announcement of the buyback of government securities also helped yields.

On May 3, the RBI announced that the central government will buy back Rs 40,000 crore worth of government securities on May 9, 2024.

The securities offered for buyback are 6.18 percent GS 2024, 9.15 percent GS 2024 and 6.89 percent GS 2025, maturing on November 4, November 14, and January 16, the central bank said.

Also read: JPMorgan inclusion of Indian bonds to aid private credit

The yield movement

The yield on three-year corporate bonds traded in the range of 7.73-7.75 percent on May 8, as compared to 7.78-7.80 percent on April 19.

Similarly, yield on five-year corporate bonds fell to 7.69-7.71 percent range on May 8, as compared to the 7.76-7.78 percent range on April 19.

The yield on 10-year corporate bonds eased to 7.49-7.51 percent on May 8, as compared to 7.57-7.59 percent.

Aggarwal from Grip Invest said yields are generally expected to fall as central banks look to loosen monetary policy. “Timing is still unknown given the recent lower-than-expected new job numbers in the US.”