Market

Banks and non-banking finance companies have been the primary source of funding for renewable energy. However, banks have limited appetite for a major role as providers of long term debt for renewable energy projects as they are weighed down by the risk of an asset-liability mismatch. The long-term funds available with insurance and pension funds in India are...

The bond market was mired in the longest slump since 1998, one that has stretched for more than six months, according to Bloomberg. That ended on Tuesday, as sentiment took an about-turn to begin an impressive rally. Bond yields dropped 25 basis points, the biggest single-day fall that even the deluge of demonetization in 2016 couldn’t take credit for....

Bond dealers were in for a surprise as the government on Monday moved to ease pressure on the market considerably by reducing the first-half borrowing programme to 47.5 per cent of the total budgeted borrowing, against the normal practice of borrowing 60-65 per cent.The Centre said it would borrow Rs 2.88 trillion in April-September 2018-19, against market expectation...

Treasury portfolio of banks will get a much-required breather in the fourth quarter as bond prices improve following announcement of the borrowing programme by the government. The government surprised the market by reducing its plans to borrow Rs 2.88 lakh crore during April-September, only 47.5 percent of total budgeted gross borrowing as against 60-65 percent share in the...

The government will borrow Rs 2.88 lakh crore or 47 per cent of total budgeted gross borrowing during April-September, the first half of 2018-19. The government and the Reserve Bank of India (RBI) have decided to make the gross borrowing less by Rs 50,000 crore by reducing around Rs 25,000 crore from buyback and the rest from small...

As part of its regular yearly practice, the government met bond houses on Wednesday to discuss its borrowing calendar for 2018-19. The conditions couldn’t be more unfriendly though. Bond yields have surged around 100 basis points in the last six months, essentially conveying that investors don’t like them any more. It is well known that foreign investors have...

Mumbai: Public sector banks, especially those under the Reserve Bank of India’s (RBI’s) prompt corrective action (PCA), are likely to recall their risky additional tier-I (AT-1) bonds, a move that could possibly lead to investors taking a hit on their investments, said analysts and bond dealers. AT-1 bonds worth Rs37,600 crore may be prematurely recalled by banks, including those...

It bears repeating that retail inflation is well above the Reserve Bank of India’s (RBI’s) medium-term target of 4% and there is an outside chance it may breach the upper tolerance level of 6% in the coming months. That would seriously imperil RBI’s and the monetary policy committee’s (MPC’s) credibility. History is witness to what loss of credibility...

In the Union Budget 2018, the finance minister proposed to increase the lock-in period of investments in capital gain tax exemption bonds (under section 54EC of the Income Tax Act, 1961) to 5 years. In the Union Budget 2017, the government had said it would introduce more financial instruments to save tax on capital gains. However, instead of...

The bond markets in India have been witnessing significant volatility l ately. The 10-year Gsec yield has risen from the low of 6.37 percent in the month of Jan 2017 to 7.52 percent as of date. By any count, this is a major bear grip on the market. The bond market has been wary on two counts...