The record Rs. 45 billion Treasury bond issue attracted investments amounting to Rs. 133.32 billion yesterday (29) with the Central Bank accepting bids amounting to Rs. 45.45 billion, data released by the Public Debt Department of the Central Bank showed. Foreign investor participation was ‘massive’, currency dealers said.
The rupee gained some ground against the US dollar on account of the foreign interest in the bond auction.
The rupee which opened at Rs. 127.05/10 against the greenback strengthened to as much as Rs. 126.50/60 but closed the day Rs. 126.55/65, currency dealers said.
With a coupon rate of 8.5 percent, bonds tenured for five-years-and-four-months sold to a weighted average yield of 10.74 percent. An eight-years-and-three-months bond with a coupon rate of 9 percent went for a weighted average yield of 11.44 percent while a 15-years-and-five-months bond with a coupon rate of 9 percent sold for a weighted average yield of 12.21 percent.
Like the first bond issue, foreign investor appetite was apparent with yields falling in the third bond issue this year, unlike the second issue which saw yields stay flat on limited foreign participation.
Yields stayed flat from the first issue to second issue where bonds tenured for 3 years and five months with an 8 percent coupon rate sold to a weighted average yield of 10.98 percent. An 8 years and 4 months bond with a coupon rate of 9 percent went for a weighted average yield of 11.64 percent while a 15 year and 6 months bond with a coupon rate of 9 percent sold for a weighted average yield of 12.25 percent.
Currency dealers said they usually saw foreign interest building up prior to a bond issue with the rupee showing signs of appreciating.
"We did not see this build up this time, but in turned out that foreign interest was huge on the day of the issue," a currency dealer said.