Issuance Plan Eyed

Yields are mixed across the curve, markets await the announcement of the April – September borrowing plan said to be released today. At the release of the budget on February 1 the government announced pans to issue INR 12.1t on government debt.

• As mentioned yesterday India is under consideration for inclusion in the FTSE Russel EM Bond Index. It is estimated that inclusion in index could draw between $10bn and $45bn of inflows into Indian securities, overseas investors have pulled $2.4bn from Indian debt so far in 2021 after withdrawing almost $14bn in 2020. Sentiment around Indian debt has turned negative as after the announcement of a growth focused budget that necessitates a widening budget deficit and a near record borrowing.
• Indian states sold debt yesterday, the sale saw spreads between benchmark government securities narrow to 65-69bps from 69-78bps in last week's auction.
• There is still some concern over coronavirus cases, but FinMin Sitharaman was quick to reassure markets that the recovery was gathering steam. Speaking at the sixth annual meeting of the Board of Governors of New Development Bank(NDB) through video-conference, Sitharaman highlighted that India's COVID-19 vaccination drive, the largest in the world, is underway and to date, 63.9 million doses of made-in-India COVID vaccine have been supplied to 80 countries including 10.4 million doses of the vaccine as grants.
• Markets look ahead to fiscal deficit figures at 1130BST/1600IST, and eight infrastructure industries at 1300BST/1730IST.