Fixed Income Report: India back as flavor of the year

Global sentiment has again turned in favor of India as a leader of the trend of survival led growth, thaat is bleeding the best of developed world markets dry with expectations of QE fuelled growth that are increasinglytemporary growth humps on the chart and trending down like a dampening whale’s breath on each injection of liquiidity.

हिन्दी: ताजमहल English: Taj Mahal, Agra, India...
हिन्दी: ताजमहल English: Taj Mahal, Agra, India. Deutsch: Taj Mahal im indischen Agra. Español: Vista del Taj Mahal, Agra, India. Français : Le Taj Mahal, à Âgrâ, en Inde. Русский: Мавзолей Тадж-Махал, Агра, Индия. (Photo credit: Wikipedia)

Put in simpler terms the yields from $100 in first round of QE is probably as much from $230 in the second round and now that most have more than $1000 invested and are getting half the strength expected to continues in housing and treasury markets, the Indian yields are good to be shopped leading a trend down, though RBI was also mopping extra liquidity out from the markets in today’s run

Indian spices
Indian spices (Photo credit: Wikipedia)

6 thoughts on “Fixed Income Report: India back as flavor of the year

  1. Indian yields are good but the fear is the exchange rate. Our fiscal and policy situation is deteriorating and we should expect the Rupee should touch 60 to the dollar. If you think the US has great debt, the US Reserve Grade Debt to GDP is 58% and India’s is 55%! The exchange rate will wipe off the yield. Furthermore nobody will touch sovereign debt for long term and will instead move capital to shorter maturity T bills since the exchange rate horizon is predictable for the FII. Indian equities look better than before if you look at it in dollar terms. Wonder when will capital move into high dividend yield Indian shares.

    1. ok, got most of what you said, but the rupee is hardly going to stop at 60 too. The exchange rate is going to keep plunging everytime we recalculate our import bill for the next 12 months, in one go wiping out the advantages of the currency movements in the other 11.5 months!

      1. which inherently means the Fx trade makes big money both ways to the trained eye. The sovereign bond play would thus be your safety imperative of bonds and just shopping yields, currency in this trade can be hedged with your profitmaking fx positions. i guess stanchart again!

      2. Maybe you could do a report on India’s imports, if you have the data with you. How much is energy, and what are the rest of the imports in %age terms. The oil imports are politically sensitive with the Government so called ‘subsidising’ some oil byproducts like kerosene, cooking gas, and petrol (in a perverse sense – since petrol prices are at par with the prices in China) which means they are not sub

      3. Maybe you could do a report on India’s imports (especially politically sensitive things like crude oil)

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