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Daily Newsletter - 28th June 2024

Team Harmoney

Commercial banks' gross non-performing asset share dropped from 3.2% in September 2023 to 2.8% at the end of March 2024, which was the lowest level in 12 years. The RBI’s Financial Stability Report showed that the net NPA ratio also dropped from 0.9% to 0.6% during the same period. The study said that if stress tests are done as they are now, the GNPA ratio of all scheduled commercial banks might go down to 2.5% by March 2025. Additionally, the report said that the banks' credit has been expanding gradually due to robust economic demand and an optimistic outlook. The development is due to more services and personal loans.

Top 3 Leads Today

  • Banks' gross NPA ratio falls below 3%, a first since 2012: RBI report
  • UltraTech to buy around 23% stake in India Cements at 267 rupees a share
  • Motilal Oswal raises FY25 GDP growth forecast by 10 bps to 6.5%

Indian Markets

  • Money Markets Minute: The call money rate fell below the RBI's standing deposit facility rate of 6.25% as the demand for funds from banks eased by the end of the day, despite a liquidity deficit in the banking system. The one-day call money rate closed at 5.75%, compared to 6.55% on Tuesday.
  • Government Bond Brief: Government bonds remained steady after a volatile session, as traders were uncertain about inflows into the domestic bond market. There were concerns that foreign flows might not meet the ₹100 billion expected on India's first day in JP Morgan's Government Bond Index–Emerging Markets. The 10-year benchmark 7.10%, 2034 bond closed at a 7.00% yield, unchanged from Monday.
  • Corporate Bond Beat: Yields on corporate bonds remained flat in the secondary market as most market participants refrained from making significant bets ahead of the inclusion of government bonds in the JP Morgan index on Friday. India's bonds will join the Global Diversified Index with a 1% weight on Friday, gradually increasing to a maximum of 10% by March 2025.
  • Forex Flash: The rupee ended higher against the dollar after banks persistently sold the greenback on behalf of foreign portfolio investors for their investment in the domestic gilts market.  The rupee moved about 9 paise and ended at 83.46 a dollar.
  • Stocks Spotlight: Benchmark indices crossed their psychological resistance levels, led by gains in heavyweight Reliance Industries and IT stocks. The indices continued to rise on optimism about policy continuity and strong earnings growth, sustained since the General Election results. The Nifty 50 reached an intraday lifetime high of 24,087.45 points, while the Sensex hit a record high of 79,396.03 points.

International Markets

  • US Stocks: US stocks finished Thursday with little change as investors eagerly awaited new inflation data scheduled later today. The Nasdaq managed to make a small gain following reports of a continued decline in economic activity, which sparked optimism among investors for potential rate cuts. The Nasdaq index rose by 0.3%, while the S&P and Dow indexes both increased by 0.09%.
  • Treasuries: Treasury yields were marginally down on Thursday following a string of weakening economic indicators from the US. The latest data revealed a surprising decline in new orders for important capital goods manufactured in May, while weekly jobless claims were 233,000, below predictions of 236,000. This led investors to hope that a sluggish economy might compel the Federal Reserve to lower interest rates in September.
  • Currency:   The dollar fell against a major basket of currencies on Thursday as weak economic statistics from the world's largest economy lent credence to market speculation that the Federal Reserve may begin reducing interest rates this year. Additionally, US GDP data indicated that the first quarter saw a significant slowdown in economic growth.

Traded volume(in Cr) in corporate bonds by sector and maturity:

Macro Sectors 0-1y 1-3y 3-5y 5-10y >10y
NBFC 418 1312 308 685 6
Financial Institution - 338 1419 40 75
Housing Finance Company - 16 991 25 -
Private Sector Bank 110 100 - 409 -
Public Sector Bank - - - - 177
Diversified 355 - - - -

Secondary trade details for recently issued primary corporate bonds:

Security Name

LTY (%)
11.00 GMR INFRAPROJECTS 26JUN27 2024-06-26 600.00 15.67 15.71
7.44 IREDALTD 25AUG34 2024-06-25 75.00 7.44 7.44
8.35 AXISFIN 23JUN34 2024-06-24 180.00 8.36 8.35
8.07 NIIF 23AUG29 2024-06-21 430.00 8.07 8.07
10.25 AYEFINANCE 20MAR26 2024-06-20 205.04 11.43 10.63
9.10 SHRIRAMFIN 20JUN34 2024-06-20 129.00 9.09 9.09
9.25 SKFL - C 19SEP27 M 2024-06-19 100.00 9.75 9.75
10.20 KRAZYBEESERVICES 19DEC25 2024-06-19 87.60 11.24 12.60
8.05 TATA CAPITAL HFL 18JUN29 2024-06-18 285.00 8.05 8.04
7.9265 LICHSGFIN 14JUL27 2024-06-14 1060.00 7.93 7.93
7.44 IRFC 13JUN34 2024-06-13 1530.00 7.45 7.40
8.55 HDB PERP - C 2024-06-13 259.00 8.54 8.54
11.40 KEERTANA 13JUN27 2024-06-13 62.05 13.00 13.53
9.95 ADANIAIRPORT 12JUN28 2024-06-12 96.51 9.93 9.78
9.16 360ONEPRIME 12JUN27 2024-06-12 75.00 9.67 9.90

‌Source: Harmoney data analytics

Events This Week

June 28, Friday:

  • India Government finances for May, by CGA
  • India Core sector output for May, by Commerce Ministry
  • US State Quarterly Personal Income for Q1
  • US GDP by State for Q1

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