Since trading of SGB in the secondary market is now available on Zerodha, I was trying to understand the meaning of the symbols.
With little research, on the NSE website I understood that SGBOCT25 means it will mature on Oct 2025. NSE website But that’s all. Where can I find more details of the bonds:-
When was the SGB launched? When does it complete 5 years and 8 years tenor?
The historical movement of the price as a chart. To draw a comparison between SGBs.
Interest credited in the past. Or the upcoming interest credit dates. Rate of interest.
The above information is missing in the Fundamentals section which is important to trade SGB in the secondary market.
Is there any other place on the web where I can do this homework?
Oct 2025 expiry means it should have launched 8 years prior to expiry which will be 2018. As SGBs will expire in 8 years.
These are very illiquid and for days there may not have a single trade, comparing two is not recommended.
These bond bears an interest at the rate of 2.50% (fixed rate) per annum on the nominal value (launching price). Interest will be credited semi-annually to the investor’s account and the last interest will be payable on maturity along with the principal.
I know the current ones have 2.5%. Some earlier ones had 2.75% also. If the rate reduces further, then it would be good for the investor to know before buying from the secondary market.
Also, total interest being credited in the past and upcoming interest credit dates would be helpful, say, you want to buy an SGB where you see the next interest credit date is around the corner, you won’t miss that. You know some sort of background homework before buying/ selling.
I don’t think you understood what I meant. Let me articulate it in a different way. The current series of SGB has 2.5% interest rate. Let say in March 2020 RBI comes up with another SGB series with 2% interest. Later in secondary market, how would you determine in such close difference (Jan to March) these two series have a 0.5% rate difference.
A request, why can’t the Fundamentals section display these basic information?
Regarding the historical interest payment dates, so as I mentioned earlier, if say I buy a SGB today while it has already credited interest amount last week, I already lost that opportunity. Or if I think of selling a SGB and I see interest would be credited 3 days from now, I would refrain from doing so. You know in such cases historical interest payment dates and upcoming interest credit dates would be helpful in decision making.
Just a thought Kite already has Event tag whenever there is any financial event around the corner for that stock. Can’t SGB also display this information?
Hope I have expressed myself better this time. Over to you.
They may reduce or they may not, anyhow that will be discounted in the price, price traded will be dirty price that is inclusive of accrued interest.
As mentioned price is inclusive of accrued interest, but as there will be less liquidity trades can happen at far away to theoretical price. Users should be proactive when trading in sgbs.
What happens if the government decides to revoke the 10% import duty on Gold? As of now SGB includes that 10% import duty. Is their any provision for that for those buying SGB now?
