As expected, trading in US64 Bonds kicked off on a positive note. The price of the bond surged to Rs 109 before settling down to Rs 106.

With the 6.75% US64 Bond price surging, the current yield has taken a hit, declining to Rs 6.37%. The yield to maturity is 5.39%. The current yield at 6.37% is very unattractive as more rewarding options are available (6.5% GOI Bonds and debt funds for instance).

• Do you want to calculate the yield on the US64 Bond?

  Existing investors can exit at the current rate (Rs 106) or thereabouts to book capital appreciation. For fresh investors, entering the bond at this price (Rs 106) makes little investment sense. They can consider investing in the GOI Bonds and/or debt funds.

  The US64 Bond at the end of the day has more appeal for high networth individuals and corporates than for retail investors. As corporates buy and sell in larger quantities, this could have an significant impact on the price and therefore the yield. Investors who do not want to get affected by large price fluctuations can exit at a sooner date and invest their monies in other investment options.

   

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