MUMBAI: Borrowing rates in India may not come down in a hurry. Banks are not buying higher yielding sovereign bonds, parking their surplus funds at the central bank’s repo window instead, causing the gap between the benchmark bond yield and the repo to widen to 163 basis points. “Rising bond yields on top of already elevated term spreads may pose a risk to transmission of policy rates,” said Suyash Choudhary, head of fixed income, IDFC Mutual Fund. Banks earn 5.15 percent via the repo window while four-year government bonds are yielding 6.55 percent. “Apart from general paucity of risk capital in the market, the forward expectations mechanism has also been compromised, with the MPC choosing to focus on near-term supply led inflation,” said Choudhary. The benchmark bond yielded 6.78 percent Thursday compared with 6.47 percent on December 4, a day before the RBI announced its December bi-monthly policy. Moreover, the lack of credit growth leads to lower … [Read more...] about Are Indian bonds defying rate transmission?
Ana levels elevated
Retail inflation jumped to a 40-month high in November on higher food prices, while industrial output contracted 3.8 per cent in October from a year earlier, data showed on Thursday. Higher prices has reduced the likelihood of the Reserve Bank of India cutting interest rates in February. Food inflation rose sharply as unusually heavy rains at the end of the monsoon season hit crop yields and caused a spurt in prices of vegetables such as onions, Reuters reported. This is the second month in a row when the retail inflation has remained above the central bank's medium-term target of 4%. Analysts polled by Reuters had forecast October industrial output to fall 5%. Here are Dalal Street experts and economists’ reactions to the macro numbers released on Thursday: Aditi Nayar, Principal Economist, ICRAWhile the CPI food inflation rose to an uncomfortably high 10% in November 2019, a moderation in vegetable prices should douse food inflation to a large extent in early 2020. The … [Read more...] about IIP-CPI mix shows India entering ‘stagflationary’ phase: Analysts
Domestic flows have tapered down from the levels that we have seen a year back or 18 months back but they still remain reasonably strong in the last three-four months, said V Srivatsa, Fund Manager & Senior Vice-President, UTI MF, in an interview with ETNOW.Edited excerpts: What is your perspective on market up move? Is it a liquidity driven rally? Would you attribute it to FIIs or to DIIs? My view is that the up move that we have seen in the last couple of months is largely driven by liquidity and also the kind of an improvement in the sentiment, hoping that the ruling party will again get re-elected to power and whatever reforms and policies which have been invoked for the last three to five years will continue. Markets have probably priced in some part of the election outcome and this has also been accompanied by a very sharp rise in the FII flows as well as stable domestic flows. Of course, the domestic flows have tapered down from the levels that we have seen a year back or … [Read more...] about Consumption basket most attractively priced in medium to long term: V Srivatsa, UTI MF
As we head into elections, people want to remain a lot more liquid and are moving more into largecap names as it provides them the opportunity to move as and when they would like to, S Krishna Kumar, Sundaram Mutual Fund, tells ET Now.Edited excerpts: Why are midcap stocks under pressure? The midcap index is down for nine days on the trot. What could have triggered this kind of underperformance in mid and smallcap stocks? If you look at the overall market scenario, we are headed into the elections and a lot of uncertainty is expected in the short term. The risk-off trade is playing off and people want to be a lot more liquid, more into largecap names to provide them the opportunity to move as and when they would like to. If you look at some of the broad sectors of the economy, there has been a lot of softness in demand over the last four-five months, particularly across the entire consumer discretionary pack -- be it auto or consumer durables or retail. A lot of the holdings are … [Read more...] about We have taken bets off politically sensitive sectors, bullish on 3 themes: S Krishna Kumar, Sundaram MF
These top level changes have come soon after Flipkart co-founder and Group CEO Binny Bansal resigned over allegations of serious personal misconduct in November. Walmart-backed e-commerce giant Flipkart has made a slew of changes to its top management, including the appointment of a chief operating officer (COO), a position which has been vacant for nearly 18 months. According to an internal communique to employees which has been reviewed by Business Standard, Sriram Venkataraman, who currently serves as Flipkart’s chief financial officer, would take up the additional role of COO and also oversee crucial supply chain unit EKart. The ‘marketplace’ and ‘retail’ teams will report to him.Venkataraman, who joined Flipkart as the chief financial officer (CFO) in 2015, would report to both CEO Kalyan Krishnamurthy and Emily McNeal, the global head of mergers and acquisitions at Walmart and Group CFO at Flipkart. Flipkart also elevated vice president Ranjith … [Read more...] about Flipkart sees a slew of changes in top management