Latest news with #SuyashChoudhary
Time of India
16-06-2025
- Business
- Time of India
Rally in Indian bonds loses momentum after RBI changes monetary policy stance to neutral
Academy Empower your mind, elevate your skills A rally in Indian bonds is stalling after the central bank raised the bar for future interest rate cuts and on concerns that it may start curbing excess liquidity in the banking system. The yields on the five-year and 10-year bonds jumped more than 20 basis points and six points respectively this week, reversing some declines in the current quarter. This came after the Reserve Bank of India (RBI) unexpectedly shifted its policy stance to neutral from accommodative last week, warning that it has 'very limited space' left for further central bank has followed up by halting cash infusions through its daily operations. These moves—along with reports suggesting the RBI may act to lift money market rates —have clouded the bond market outlook. Higher yields may raise government's borrowing the backdrop of the aggressive policy easing of the past few months, the shift in stance has led some market participants to question the sustainability of yield levels, said Suyash Choudhary, head of fixed income at Bandhan yield on the 10-year bond may be in a range of 6.25% to 6.45% in the coming weeks, according to Jana Small Finance Bank . ICICI Securities Primary Dealership said there is room for the yields to rise by five to 10 basis 10-year yield had declined by 23 basis points this quarter to 6.35% on 12 June bond yields had initially declined after the RBI's policy statement as investors took relief from the central bank's assurance of comfortable liquidity. It reduced the cash reserve ratio unexpectedly by 100 basis RBI's next move could be a resumption of its variable rate reverse repurchase operations, a tool used to mop up excess money, said VRC Reddy, head of treasury at Karur Vysya Bank . 'The market hopes that the reverse repos start only when the cash-reserve ratio cuts come into effect from September.'
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Business Standard
26-05-2025
- Business
- Business Standard
Shorter Indian bonds set to gain further on RBI's record dividend payout
India's shorter-tenor bonds are set to extend their outperformance as analysts expect the central bank's record dividend payout will further boost the cash surplus in the banking system. The Reserve Bank of India approved a record dividend payout of ₹2.69 trillion ($32 billion) on Friday. This payout is expected to boost liquidity for lenders as the government utilizes the funds for expenditure. Nomura Holdings Inc. anticipates the yield curve to steepen further, with the spread between 5-year and 10-year government bonds likely widening to around 50 basis points from the current 34 basis points. 'We expect this steepening trend to continue, and prefer to be long five-year bonds,' said Nagaraj Kulkarni, co-head of Asia rates (ex-China) at Standard Chartered Plc in Singapore. Indian shorter-maturity bonds have outperformed longer notes on expectations a large dividend payout will likely prompt the RBI to cut down on its open-market debt purchases, which have focused mainly on longer-duration securities. IDFC FIRST Bank Ltd. now expects additional purchases of ₹1.6 trillion to be pushed back to the fiscal second half. The yield on the five-year note has declined more than 50 basis points since April 1, outpacing the 33 basis-point decline on the 10-year note. Still, not all are convinced that the outperformance will extend. Bandhan AMC Ltd.'s head of fixed income Suyash Choudhary predicts the steepening may have run its course and the duration segment may relatively perform better. Banking liquidity swung to a surplus of ₹1.6 trillion as of Friday, from a deficit of as much as ₹3.3 trillion earlier in the year, driven by the RBI's debt purchases that have exceeded its Covid-era levels. The dividend payout will push core liquidity, which includes the government's cash balances, to a Rs five-trillion-surplus, according to Nomura.
Yahoo
29-03-2025
- Business
- Yahoo
Bonds in India Gain as Lower Debt Supply Boosts Sentiment
(Bloomberg) -- India announced a borrowing plan for the first half of the next fiscal year that's lower than market expectations, triggering gains in longer-maturity bonds. Why Did the Government Declare War on My Adorable Tiny Truck? Gold-Rush Fever Returns to Historic New Zealand Mining Town How SUVs Are Making Traffic Worse Trump Slashed International Aid. Geneva Is Feeling the Impact. These US Bridges Face High Risk of Catastrophic Ship Strikes The government plans to sell eight trillion rupees ($93.2 billion) of bonds in the six months to September, the Ministry of Finance said in a statement after trading ended on Thursday. That's lower than the 8.4 trillion rupees estimated in a Bloomberg News survey. Lower borrowings may help bonds extend this year's gains driven by growing bets of a cut in interest rates at the Reserve Bank of India's policy review on April 9. 'The total borrowing is a bit lower than market expectation, and long end as a proportion of overall supply has been adjusted lower,' said Suyash Choudhary, head of fixed income at Bandhan AMC Ltd. 'The market price action is reflecting both these.' The yield on ultra-long 7.34% 2064 bond fell four basis points to 6.95% on Friday, while the yield on the 10-year note was down two basis points. New Delhi plans to sell about 35% of the bonds in the 30-50 year segment of total issuances in the first half starting April 1, as against 38% a year ago, according to the statement. The government aims to sell around 25% of the bonds in the less-than-10-year bucket, while the benchmark 10-year bond will account for 26.2%, the government said. 'We expect bond yields to drift lower, supported by policy rate and stance easing, liquidity-easing measures and foreign inflows through the course of the year,' Upasna Bhardwaj, chief economist at Kotak Mahindra Bank Ltd., wrote in a note. The yield on benchmark 10-year bond is likely to trade in the 6.35%-6.65% range in the fiscal first half, she wrote. The first-half borrowing will account for 54% of the full-year target of 14.8 trillion rupees, according to the statement. That compares with about 60% of total debt the government usually issues for the period. RBI Measures The RBI has injected over $60 billion worth of liquidity over the last two months to curb the cash crunch that widened to a more-than-decade high of 3.3 trillion rupees in January. It was at 200 billion rupees as of March 26, as per a Bloomberg Economics index. Indian bonds have also benefited in recent years from a surge in purchases from insurance and pension funds. Foreigners have also raised holdings of sovereign bonds with JPMorgan Chase & Co. adding India to its emerging market debt indices in June last year. While foreign investor interest may slow with India gaining full weight in the JPMorgan index in March, the central bank is expected to remain a big buyer of local bonds in the coming fiscal year, according to IDFC First Bank Ltd. The government will sell 190 billion rupees of treasury bills for thirteen weeks through April-June, according to the statement. (Updates with market reaction in third paragraph) Business Schools Are Back Google Is Searching for an Answer to ChatGPT Israel Aims to Be the World's Arms Dealer A New 'China Shock' Is Destroying Jobs Around the World The Richest Americans Kept the Economy Booming. What Happens When They Stop Spending? ©2025 Bloomberg L.P. Sign in to access your portfolio
