Bond Turmoil on India's Cash Drain Shows Market Fragility bnnbloomberg.ca - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bnnbloomberg.ca Daily Mail and Mail on Sunday newspapers.
By Subhadip Sircar
India’s sovereign bond investors are converging on a trade idea for 2021. They’re betting that short-term yields would rebound as the central bank soaks up excess cash on signs of an economic recovery.
RBL Bank Ltd. and Quantum Asset Management Ltd. are among those forecasting that liquidity tightening by the Reserve Bank of India will lead short-end rates to rise faster than the long-end bear-flattening the yield curve.
“Short-end rates, of up to three years maturity, are currently priced aggressively due to excess liquidity and thus carry maximum risk of a reversal,” said Pankaj Pathak, fixed-income fund manager at Quantum Asset Management Ltd. in Mumbai. “The longer segment may continue to get RBI’s support from open market operation purchases and operation twists.”
Traders see cash tightening in India to drive bond playbook
Photo: Bloomberg
Subhadip Sircar
, Bloomberg
India’s sovereign bond investors are converging on a trade idea for 2021. They’re betting that short-term yields would rebound as the central bank soaks up excess cash on signs of an economic recovery
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India’s sovereign bond investors are converging on a trade idea for 2021. They’re betting that short-term yields would rebound as the central bank soaks up excess cash on signs of an economic recovery.
RBL Bank Ltd. and Quantum Asset Management Ltd. are among those forecasting that liquidity tightening by the Reserve Bank of India will lead short-end rates to rise faster than the long-end bear-flattening the yield curve.
Synopsis
It is likely that past performance of debt mutual funds will not be repeated in the coming year. What the smart moves that an investor should make to earn good returns from fixed income products.
Existing investors with accumulated gains may be tempted to lock in these gains now.
Related
ET Wealth reached out to experts to know how investors can safeguard their finances from the volatility that raged in 2020 and the uncertainty that looms in the horizon. This week’s cover story explains 11 steps that one should take now to improve one’s finances in the New Year.
Synopsis
Existing investors with accumulated gains may be tempted to lock in these gains now. However, with other fixed income avenues also yielding low returns, investors must consider how they will deploy the proceeds.
Existing investors with accumulated gains may be tempted to lock in these gains now.
Related
ET Wealth reached out to experts to know how investors can safeguard their finances from the volatility that raged in 2020 and the uncertainty that looms in the horizon. This week’s cover story explains 11 steps that one should take now to improve one’s finances in the New Year.
Here are the smart money moves debt mutual fund investors should make.