HOME         WEBSITE         SUBSCRIBE           E-GREETINGS   
                               

Wednesday, May 28, 2014

Gross and Net Market Borrowings are Higher than Previous Year by 1.0 Per Cent and 0.2 Per Cent Respectively

Quarterly Report on Public Debt Management for the Fourth Quarter Of 2013-14 (January-March 2014) 

Since Apr-Jun (Q1) 2010-11, Middle Office (MO) is bringing out a quarterly report on debt management. The current report pertains to the quarter Jan-Mar 2014 (Q4 FY14). 

For fiscal year 2013-14 (FY14), gross and net market borrowings were higher than previous year by 1.0 per cent and 0.2 per cent, respectively. Auctions during Q4 of FY14 were held in accordance with the pre-announced calendar apart from the cancellation of one deferred auction of Rs. 15,000 crore scheduled on January 17, 2013. The weighted average maturity and weighted average yield (cut-off) of dated securities issued during Q4 of FY14 remained stable at 13.77 years (13.91 years in the previous quarter) and 9.07 per cent (8.93 per cent in Q3) respectively. Weighted average yield of issuance during FY14 at 8.41 per cent was marginally higher than 8.36 per cent in the previous fiscal year, while weighted average maturity at 14.23 years was higher than 13.5 years in FY13. The cash position of the Government during Q4 was comfortable and remained in surplus mode during the quarter. 

As budgeted in Union Budget 2013-14, the Government repurchased its Securities through reverse auction for an aggregate amount of Rs. 15,590 crore (face value) during March 2014 to prematurely redeem the Government Stocks by utilizing its surplus cash balances. In addition switching of government securities worth Rs. 31,400 crore from 2014-15 and 2015-16 maturity buckets to longer tenors was also conducted in fourth quarter. 

The total public debt (excluding liabilities under the ‘Public Account') of the Government at end-March 2014 decreased marginally on a quarter-on-quarter (QoQ) basis by 0.1 per cent (provisional) compared with an increase of 3.1 per cent in the previous quarter. Internal debt constituted 91.1 per cent of public debt and marketable securities accounted for 83.3 per cent of total public debt. About 29.8 per cent of outstanding dated securities have a residual maturity of up to 5 years compared with about 30.2 per cent a quarter ago which implies that over the next five years, on an average, less than 6.0 per cent of outstanding stock needs to be rolled over every year. 

In the secondary market, while there was no change in closing levels of 10 year bench mark Government of India security at end-quarter from previous quarter end (8.84 % on March 31, 2014), the yield traded in a range of 8.52% - 8.94% during Q4 of FY 14. Compared to previous quarter, bonds yields marginally moderated over the curve with marginally flattening at the longer end while some steepening in maturities below 10 years. The total volume of Government securities transacted on an outright basis increased by of 18.32 per cent over the preceding quarter, contributed mainly by Central government dated securities. The annualized outright turnover ratio for Central government dated securities for Q4 of FY14 increased to 3.65 from 3.10 during the previous quarter.
Posted by

Blog Archive

____________________________________________________________________________________________

Disclaimer - All investments in Mutual Funds and securities are subject to market risks and uncertainty of dividend distributions and the NAV of schemes may go up or down depending upon factors and forces affecting securities markets generally. The past performance of the schemes is not necessarily indicative of the future performance and may not necessarily provide a basis for comparison with other investments. Investors are advised to go through the respective offer documents before making any investment decisions. Prospective client(s) are advised to go through all comparable products in offer before taking any investment decisions. Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the fund will be achieved. Information gathered & material used in this document is believed to be from reliable sources. Decisions based on the information provided on this newsletter/document are for your own account and risk.


In the preparation of the material contained in this document, Varun Vaid has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the Varun Vaid and which may have been made available to Varun Vaid. Information gathered & material used in this document is believed to be from reliable sources. Varun Vaid however does not warrant the accuracy, reasonableness and/or completeness of any information. For data reference to any third party in this material no such party will assume any liability for the same. Varun Vaid does not in any way through this material solicit any offer for purchase, sale or any financial transaction/commodities/products of any financial instrument dealt in this material. All recipients of this material should before dealing and or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice.


Varun Vaid, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on the basis of this material. All recipients of this material should before dealing and/or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice. The investments discussed in this material may not be suitable for all investors. Any person subscribing to or investigating in any product/financial instruments should do soon the basis of and after verifying the terms attached to such product/financial instrument. Financial products and instruments are subject to market risks and yields may fluctuate depending on various factors affecting capital/debt markets. Please note that past performance of the financial products and instruments does not necessarily indicate the future prospects and performance there of. Such past performance may or may not be sustained in future. Varun Vaid, including persons involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation in the financial instruments/products/commodities discussed here in or act as advisor or lender / borrower in respect of such securities/financial instruments/products/commodities or have other potential conflict of interest with respect to any recommendation and related information and opinions. The said person may have acted upon and/or in a manner contradictory with the information contained here. No part of this material may be duplicated in whole or in part in any form and or redistributed without the prior written consent of Varun Vaid. This material is strictly confidential to the recipient and should not be reproduced or disseminated to anyone else.


Varun Vaid also does not take any responsibility for the contents of the advertisements published. Readers are advised to verify the contents on their own before acting there upon.


Published Credits goes to following sources & all the mentioned sources as footer below the published material- Bloomberg, Valueresearch Online, Capital Market, Navindia, Franklin Templeton, Kitco, SBI AMC, LIC AMC, JM Financial AMC, HDFC AMC, The Hindu, Business Line, Personal FN, Economic Times, Reuters, Outlook Money, Business Standard, Times of India etc.