Mumbai, August 12: The wholesale debt market segment of the National Stock Exchange (NSE) saw a record turnover on Tuesday with deals worth Rs 1,831.27 crore being struck. "The wholesale debt market of the exchange witnessed the highest-ever volume of Rs 1831.27 crore since its inception," an exchange note said.

The newly-issued 11.19 per cent central government security hogged the limelight with fifty deals being struck for Rs 924 crore. The paper, which was issued on Monday at a face value of Rs 100, saw deals being struck at 100.50. As a result, the yield on the security crashed from 11.19 per cent to 11.09 per cent. Dealers said that this was the highest turnover recorded in a single security.

A north-based bank which picked up around Rs 600 crore from the auction booked heavy profits, dealers said, as the price of the security started rising. "This bank and other large nationalised banks, along with a primary dealer, booked heavy profits as demand for the stock rose during the day," a dealer said.

Earlier in the day, activity was dull as call rates shot up to 8.5 per cent. This was due to a outflow from the system on account of the repos auction and the Rs 3,000-crore eight-year paper. "However, with the first signs of call rates easing around afternoon, hectic activity started in gilts," a dealer at a private sector bank said. The other security which saw active dealing was the 12.59 per cent central government security maturing in 2004.

This security saw deals to the tune of Rs 460 crore struck at 11.09 per cent yields. About fiftynine deals were struck in the security. "The price of this security will go up further," one dealer said. The yields of both the seven- and eight-year paper are the same at the moment, giving rise to a skewed yield curve.

Dealers said that foreign and private sector banks also traded actively in the securities market on Tuesday. "All the participants made healthy profits," a dealer with a foreign bank said.

"Prices, especially those of the long-dated securities, will go up further. ``Not only banks, but also corporates are buying securities in a big way," an exchange broker said. Banks have, of late, been shunning the shorter-dated securities in the secondary market and buying long-dated ones. "This will see the price of the long-dated securities going up," the broker said.

The 14 per cent central government security maturing in 2005 saw deals worth Rs 65 crore being struck at 11.08 per cent yields. "The price of this security is not expected to flare up much," a banker said. The 10.85 per cent gilt maturing in 2001 was traded for Rs 95 crore at a weighted yield of 10.62 per cent.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.