Lakshmi Iyer, CIO-Debt and Head Product at Kotak Mahindra AMC spoke with CNBC-TV18 on Monday at length about the bond market.
“On Friday the market had a dual set of news – one, rejection of bids worth Rs 22,000 crore and second, devolvement on primary dealers and therefore, despite the cancellation market could not sustain momentum because the fear in the market is that there will be extra supply in the secondary market because the devolvement has been high,” Iyer said.
However, said Iyer, the sentiment is likely to continue to linger around if there is no credible open market operation (OMO) calendar or credible path to OMO which is likely to be announced. So the market will continue to remain anxious, at least for the next few days.
There is a need to see how long the solace in the markets will sustain, said Iyer.
“Nothing seems to be soothing the bond market and what is inexplicable is that the sentiment on the day of the policy (RBI Monetary Policy) guided by the Governor were fairly dovish.”
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