The Hindu Business Line : Clearing Corpn unveils sovereign bond indices

CLEARING Corporation of India (CCIL) has introduced sovereign bond indices for the domestic debt market expected to help money market participants in tracking market movements.

The bond index is expected to track changes in market conditions while serving as a benchmark for market participants and also help the mutual funds industry in facilitating introduction of benchmark bond funds, said a press release.

To begin with, CCIL has introduced two benchmark indices - LIQUID and BROAD indices.

The LIQUID index is estimated using the 5 most liquid bonds while broad index would consist of 20 most liquid securities on daily basis. Top 5 bonds account for more than 70 per cent of the total trading volume while top 20 bonds account for more than 85 per cent.

The indices have been constructed with the observed prices of securities and for that purpose only trades of Rs 5 crore and above have been taken into account to arrive at weighted average price of securities that constitute the indices, the release said.

The indices would help in tracking the market movement and help market participants to compare their performance against the benchmarks. The indices are made available through Web site as well as through info vendors.

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