It will be an understatement to say that oil prices have been volatile over the last two months. The prices have been broadly in between the US$ 40 and US$ 20 levels. The fundamental factors that have been at play for the oil economy has been the slowdown or sluggishness in the economies like China […]
Category: Finsights
RBI Fires its Second Salvo…
The RBI released a statement today wherein it provided its assessment of the current state of the economy and some additional measures to tide over the current situation. The announcements made today are part of the Governor’s statement and not an outcome of MPC meet. Assessment of the Economy: As per the RBI’s assessment, in […]
Equities: Perspectives and a Case for Investing
Macro Variables – Are they relevant now? The major macro variables that we look at to gauge the direction of the economy and the markets are GDP, IIP, CPI etc. But these variables may remain not very relevant in the immediate future as they may not be assessed or estimated properly due to lack of […]
Fixed Income & Bond Market:
Update & Perspectives The four major factors that are of consequence for the fixed income or bond market are the policy of the central bank or the official interest rate policy, the liquidity conditions in the interbank market, the government borrowing program and the inflation trajectory. Each factor is detailed in the following paragraphs, along […]
Easing Inflationary Pressures…
The CPI based inflation numbers eased for the second consecutive month; after touching a high of 7.59% in the month of Jan’20, the headline inflation number for the month of Mar’20 came in at 5.91%. The core inflation numbers too maintained an easing trend. The latest inflation numbers are an estimation, as data collection efforts […]
Government Borrowing Program – H1 of 2020-21
The government borrowing program for the first half of 2020-21 has been announced. It is interesting to look at three features of the borrowing program from an investment perspective, that is the (i) spread of the borrowing program over H1 and H2, (ii) the maturity-wise concentration of the primary issues, and (iii) the month-wise distribution […]
Fully Accessible Route (FAR): The Pros & Cons
In the Union Budget for 20-21, several measures were proposed to enhance the breadth and depth of the markets which included greater access for overseas investors, introduction of ETFs, and access to infrastructure investments with a tax holiday. The RBI has announced enhanced limits for foreign investments in governments securities and corporate bonds, and also […]
RBI Policy: Unprecedented Times, Unprecedented Measures
The RBI had been cognizant of the economic conditions and cut policy rates during the course of 2019, but it maintained a slow and steady approach. Over the last few months, the RBI’s headroom for direct support to growth was restricted owing to spike in inflation numbers, resulting in the central bank focusing rather on […]
Antyodaya: Lifting the Daily Wage Earner and Others
There are some useful social welfare announcements from the Finance Minister this afternoon, focused on taking care of people who may be affected by the lockdown consequent to the pandemic. These measures should be understood in the correct perspective. These are not economic stimulus measures, but social welfare measures aimed at preserving the sustenance of […]
The Short-End Worries: Liquidity May Improve
In the last few weeks, we have witnessed unprecedented volatility across asset classes, resulting from the sharp sell-off amidst flight to safety, generated by the fears around the economic impact of the pandemic. Under normal circumstances, the risk-off sentiment leads to money flowing into avenues traditionally considered as safe haven, such as debt. But in […]
The Fed and the World: Policy Implications in Volatile Markets
THE FED ACTION The Fed has brought down the base rate to a range of 0% to 0.25%, bringing it back to the levels earlier seen during the recession of 2006-07. This coupled with the earlier cut of 0.50% is one of the deepest cuts the Fed has gone-in for in the recent history. The […]