Fixed-income investors have a lot on their plates. In 2020, they’ve dealt with extreme volatility, FII outflows, mutual fund schemes winding down, and modest returns. In this piece, we’ll explore the impact of loan moratoriums, inflation, and monetary transmission on fixed-income investment strategies. Loan Moratoriums & NPA The RBI announced loan moratoriums in March. This temporary measure…
Debt Markets & COVID-19 COVID-19 has new surprises for the financial markets every day. Many of them are rude shocks. Four months into 2020 and we’ve seen negative oil prices, the swiftest bear market, sustained FII outflows, massive quantitative easing measures, and the VIX (Volatility index) crossing a record high…
Covid-19, since it emerged in December 2019 has gone on to ravage the global capital markets. It has rapidly spread across continents, prompting governments around the world to close borders and declare a state of emergency, bringing economic activities to a standstill. In this scenario, the Dow Jones Industrial Average…
Disclaimer: This audio content has been made available for informational and educational purposes only. Nothing contained in this audio shall constitute or be deemed to constitute advice. Always seek the advice of a professional with any questions you may have regarding your financial decisions. Podcast Transcript: Roshan: Hi, this is…
Falling Interest Rates The Repo rate is the rate at which the Reserve bank Of India lends to the banks. Reduction in Repo rate effect reduces the cost of borrowing across the economy and spur credit growth. Over the past four Monetary Policy Committee (MPC) meetings, the repo rate has…
Investment Strategy Credit risk is still present. Post IL&FS and DHFL, the quality of AAA papers have come into question. The appetite for credit risk has disappeared. Most fixed-income investors are flocking to quality. Taking some credit risk can result in higher returns – this must be taken in a…
Investment Strategy: Monetary policy plays an important role in determining investment strategy. At this juncture, high quality short to medium term funds could work well for conservative investors. Contact us to know more about your investment options. Market Outlook: The RBI reduced the repo rate by 0.25% in its…
Investment Strategy: In the current market context, volatility is on the cards. Most bond fund investors are likely to experience short term pain and may not experience a positive rate of return. Some bond fund investors may not even benefit from lower interest rates. However, there is still a window…
Investment Strategy: Based on the outcome of the recent RBI policy, it would make sense to revisit the investment strategy for fixed-income investments. A neutral stance indicates that the behaviour of inflation and growth is uncertain. In such a situation, it would make sense to avoid duration calls and stick…
The week saw increased scrip level volatility and better index level stability. This paradox is increasingly becoming a trend in our markets. Indices are showing lower volatility while more constituent scrips are showing very high volatility. The closer scrutiny in the corporate governance of individual companies is clearly the…
An election year throws up a series of questions on the outcome, approach, and tactics of political parties as they race to the finish line. Uncertainty looms large around these questions. Investors lose their appetite for risk when they are forced to face an ambiguous future. So, the market tends…
A country’s monetary and fiscal policies influence its economic outlook. In India, the Monetary Policy is drafted by the central bank (RBI). Through monetary policy, the RBI controls the cost of borrowing, liquidity conditions, inflation, etc. This has the power to shape the trajectory of the economy and ensure that…
