Corporate bonds trading spurts to 10-month high in May

MUMBAI: Trading in corporate bonds stood at ten-month high level of Rs 93,945.86 crore at leading stock exchanges BSE and National Stock Exchange in May. Earlier, Rs 1.10-lakh-crore worth of corporate bond trading was reported by NSE and BSE in July 2013.

According to the Sebi data, corporate bonds trading in May this year was 25.2 per cent higher than Rs 75,040.23 crore reported in April 2014. At NSE, bonds worth Rs 79,106 crore were traded in May, accounting for 84.2 per cent of the total corporate bond trading in the month. BSE witnessed bonds trading worth Rs 14,839.85 crore in the month.

During May, no trades in corporate bonds were reported by Fixed Income Money Market and Derivatives Association of India (FIMMDA), an association of scheduled commercial banks, public financial institutions, primary dealers and insurance companies. The reporting platform at FIMMDA began on September 1, 2007 and allows entities to report their deals in bonds in one platform.

Corporate bonds or debt securities are issued by private and public firms to raise money for a various purposes like building a new plant, purchasing equipment or business growth. When an entity buys a corporate bond, one lends money to the firm that issued the security and in exchange the company promises to return the money on a specified maturity date.