Spark Capital: Banking Weekly – Update for the week ended Mar 15, 2013
Spark Capital Advisors(India) Private Limited
18 Mar 2013
Available for Immediate Download
Banking Weekly – Update for the week ended Mar 15, 2013 What's Inside? BSE Bankex performance Bond market update Key news flow during the week Key trend charts on bond yields, yield curve, CDS trends, AAA spreads, TED spreads, CD rates, money market trends and forex market trends Valuation summary of the bank stocks and NBFCs in our coverage Key Takeaways The 10Y G-Sec yield was up by 3bps wow ending at 7.87% while the 5Y yield was down by 2bps wow ending at 7.88%. Spread between 10Y and 6M G-sec yields was (15)bps compared to (18)bps last week . The change in spread was led by 3bps increase in the 10Y G-Sec yield to 7.87% while 6M bond yield were flat on wow basis. 10Y bond yields moved down in the US and UK while remaining flat in China and Brazil. The US 10Y bond yield moved down by 5bps wow, UK by 13bps while the Chinese and Brazilian 10Y bond yields ended exactly at the same level wow. The 10Y AAA spreads were lower by 5bps while 5Y AAA bond spreads are up by 3bps wow ending at 1.05% and 1.09% respectively. CDS rates moved lower for ICICIBC and SBIN by 2bps wow. CDS spreads for both the banks are at their 52-week lows as on 15th March, 2013. CD rates moved lower in the 3M tenor by 18bps wow, in the 6M tenor by 29bps and in the 12M tenor by 23bps wow. The CD rates for 3M, 6M and 12M tenors currently stand at 9.13%, 9.04% and 8.95% respectively. CD rates have moved up by 20bps, 5bps and are down by 15bps in 3M,6M and 12M tenors respectively in the last four weeks. Liquidity was in deficit during the week with average repo balances averaging Rs. 1.06trn compared to Rs. 0.54trn in the week prior. Spread between overnight rate and 12M OIS rate stood at (34)bps suggesting that market is looking at ~34bps lower rates 12 months from now. The rupee appreciated wow against the dollar by ~0.5% across tenors, closing at 54.9 Gold was up wow in INR terms by 0.5% and 0.8% in USD terms.