Latest news with #TanviKanchan
Time of India
15-07-2025
- Business
- Time of India
Japan's 30-year bond yield hits record high ahead of key election
Japan's 30-year government bond fell on Tuesday, with the yield hitting a record high, on concerns about the nation's fiscal health ahead of a closely monitored national election at the end of this week. The 30-year JGB yield touched an all-time high of 3.195%, before easing to 3.18%, up 2.5 basis points (bps) from the previous session. Yields move inversely to prices. Bonds Corner Powered By Japan's 30-year bond yield hits record high ahead of key election Japanese government bond yields surged, with the 30-year yield hitting a record high amid fiscal health concerns ahead of national elections. The potential defeat of the ruling coalition, which could lead to sales tax cuts, fueled market anxieties. Rising living costs and sliding approval ratings for Prime Minister Ishiba further contributed to the bond market's unease. Investors brace for Japan bond market blowout as election nears Satin Creditcare plans Rs 50-crore NCD issue ETMarkets Smart Talk: Fixed income attractive with rate cuts ahead; 20–40% allocation advisable for risk hedge, says Tanvi Kanchan India bonds flat ahead of India, US inflation prints Browse all Bonds News with The market weighed the risk of the defeat of the Liberal Democratic Party and its coalition partner Komeito at the upcoming upper house election on July 20. A potential defeat could empower opposition parties that have pledged in their campaign platforms to cut or abolish the sales tax. Live Events The 20-year JGB yield rose to as high as 2.64%, its highest since November 1999, the 10-year JGB yield rose to as high as 1.595%, its highest level since October 2008. If the LDP-led coalition loses the majority, the 10-year bond yield could rise to as high as 1.8%, the highest level since mid-2008, said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management. "This indicates how the fiscal health has worsened and prices have risen since then," Inadome said. "Now the Bank of Japan owns about half of the JGBs and that has capped the yields from rising further. Back then, the BOJ's ownership was much smaller." Local media reported that Japan's ruling coalition was struggling in the election campaign and could lose its majority. Prime Minister Shigeru Ishiba 's administration has seen approval ratings slide as the rising cost of living, including the soaring price of Japan's staple rice, hit households. Yields on shorter-dated bonds rose to their highest levels since early April, with the two-year JGB yield rising 1 bp to 0.785% and the five-year yield climbing 1 bp to 1.080%.
Economic Times
15-07-2025
- Business
- Economic Times
ETMarkets Smart Talk: Fixed income attractive with rate cuts ahead; 20–40% allocation advisable for risk hedge, says Tanvi Kanchan
Agencies This outpaces the earnings growth of Nifty 50, which is expected to grow from ₹436 in FY21 to ₹1,113 in FY25—an impressive but relatively modest 2.5x growth. In an exclusive conversation with ETMarkets Smart Talk, Tanvi Kanchan, Head – Strategy & NRI Business at Anand Rathi Shares and Stock Brokers, highlighted the growing appeal of fixed income as an asset class amidst the current market rate cuts on the horizon and yields remaining attractive, she believes debt investments now offer both stability and potential returns. Kanchan advises investors to allocate 20% to 40% of their portfolios to fixed income instruments as a prudent hedge against market uncertainty, especially given the recent equity market consolidation. Edited Excerpts – Q) Thanks for taking the time out. Nifty closed with marginal gains in June, but for the first six months of 2025 – it is up over 7%. How do you see markets for the rest of FY26? Any big events to watch out for? A) June was a month of remarkable resilience for Indian markets despite significant global uncertainties. The escalation of the Israel-Iran conflict mid-month, with US participation and crude oil spiking to nearly $80 per barrel, initially rattled markets. However, the subsequent ceasefire announcement triggered a sharp rally in global equities and a corresponding decline in crude prices. Indian markets capitalized on this positive momentum, with the RBI's decisive 50 basis point rate cut and 100 basis point CRR reduction providing additional liquidity support. The Nifty delivered its fourth consecutive monthly gain, rising 2.9% in June, while broader markets outperformed with midcap and small cap indices up 3.7% and 5.1% respectively. Looking ahead to the remainder of FY26, markets face a critical juncture. The most significant event to monitor is the resolution of Trump's tariff proposals, with the extended deadline now pushed to August 1st. This clarity will be crucial for market direction. Domestically, we're entering the Q1 FY26 results season, which we expect to be mixed - export-focused companies will face tariff-related headwinds while domestic companies should see gradual recovery. The encouraging early monsoon trends, combined with RBI's rate cuts and liquidity infusion, should support demand current levels, we believe markets will remain highly stock-specific, with earnings surprises being rewarded. The continuous flow of IPOs and secondary offerings will absorb liquidity and limit broad-based these dynamics, we anticipate markets entering a near-term consolidation phase, where fundamentals and company-specific performance will drive returns rather than broad market momentum. Q) How are you managing the volatility in your portfolio? Any key learnings which you would like to share from 1H2025? A) From a portfolio construction standpoint, we've become more selective in our asset allocations, focusing on strategies driven by strong domestic demand drivers to hedge against global experience has taught us that in volatile environments, quality and patience are your best allies. Companies with strong balance sheets, consistent cash flows, and pricing power have not only weathered the storms better but have also positioned themselves to capitalize on the recovery forward, we're maintaining this disciplined approach while keeping adequate liquidity to take advantage of future market dislocations. Q) One of the reports suggested that India Inc.'s profits have grown nearly 3x faster than GDP since FY20. What structural factors are driving this divergence? A) This remarkable divergence reflects a fundamental shift in India's economic structure and corporate efficiency. The primary driver has been the massive private sector capital expenditure surge we've witnessed, with private investment jumping from ₹7.42 lakh crore in FY21 to ₹32.28 lakh crore in capex boom, focused on manufacturing, electronics, chemicals, and green energy, has dramatically improved operational leverage and productivity across Indian corporates. Companies that invested heavily in automation, digitization, and capacity expansion during the pandemic are now reaping the benefits of enhanced efficiency and second critical factor is the structural shift in India's savings pattern and capital allocation. We've seen household savings move decisively from bank deposits - which declined from 57% to 37.2% over the decade - into equity markets through mutual funds, which grew from 0.8% to 6.1% of household has created a virtuous cycle where cheaper equity capital has enabled companies to invest more aggressively in growth initiatives while reducing their cost of capital. The mutual fund AUM reaching ₹72.2 lakh crore with 22-24% annual growth has provided a stable funding base for corporate third structural driver is the formalization and digitization of the economy, which has improved corporate margins and return on initiatives like PLI schemes, GATI Shakti, and tax rationalization have enhanced the ease of doing business, while the demographic dividend - with 65% of the population in the working age bracket - has kept labor costs competitive even as productivity has the shift from government-led to private sector-led capex has ensured that investments are flowing to the most efficient and profitable opportunities rather than policy-driven combination of operational leverage, cheaper capital, structural reforms, and demographic advantages has created an environment where corporate profits can grow sustainably faster than GDP. Q) With the China+1 theme gaining traction, which Indian sectors are best placed to attract global capital and scale? A) Three sectors stand out as clear winners in the China+1 opportunity are Electronics and semiconductor manufacturing which leads the pack, benefiting from PLI scheme incentives and India's young workforce advantage. Followed by Pharmaceuticals and chemicals, which represent the second major opportunity, where India's established API capabilities and regulatory expertise provide natural advantages. This sector has already attracted significant global capital as part of the broader FDI surge we've witnessed - annual inflows doubled from $45-60 billion to over $80 billion recently. The third sector is renewable energy and green technology, perfectly aligned with India's climate commitments and the current private sector capex boom. With private investment jumping to ₹32.28 lakh crore and government infrastructure spending rising to ₹11.1 trillion, these sectors have the policy support and foundational infrastructure needed for rapid scaling. Q) How is fixed income as an asset class looking for long term investment. How much money one should allocate as an hedge to combat volatility? A) Fixed income always provides cushion against volatile periods, allocation to debt as an asset class not only provide good hedge opportunity but now with rate cut- and higher yields, bonds may provide attractive return generation capabilities as well. One can look at allocating 20%-40% in debt depending on their risk portfolio and investment duration. Q) Which sectors are likely to remain in the spotlight in 2H2025? A) Corporate earnings are forecast to rise by 12–15%, particularly driven by sectors like banking, infrastructure, defense, and consumption. Q) Can we say that we are in a "stock picker's market" ahead. If yes, what are the key traits investors should look for in FY26 picks? A) Unlike the last 3 years when the majority of the stocks outperformed, 2025 is likely to be a stock picker's year. This shift reflects a market environment where broad-based rallies are giving way to more selective performance, requiring investors to be more discerning in their stock will have to carefully separate the wheat from the chaff & focus on stocks with earnings visibility & sound fundamental background, companies with predictable earnings growth and strong balance sheets will likely outperform in a more selective at the rate cuts to be expected in the future, one can also look at companies who will benefit from lower cost of key is to move away from broad market beta plays and focus on companies with specific competitive advantages, clear earnings catalysts, and exposure to India's structural growth themes. Quality over quantity will be the mantra for successful stock picking in FY26. Q) Gold has also seen a tremendous run in 2025 – how do you see the yellow metal shining in 2H2025? Time to book profits or add on dips? A) The extraordinary rally in gold this year comes amid growing geopolitical tensions, trade related uncertainties and pressure on both – Equity and Debt as an asset class in the near when you analyse data over a longer period of time, equity has consistently outperformed the precious yellow metal. Q) How should one play the small & midcap theme? Has the profitability improved compared to largecaps – what does the data suggest? A) Over the last few years, small and midcap segments have undergone a structural transformation in profitability, creating a compelling case for selective these segments were associated with high volatility and weaker earnings visibility compared to largecaps. However, recent data points to a significant improvement in earnings quality and growth trajectory. From FY21 onwards, Nifty Midcap 150 and Smallcap 250 earnings have grown sharply, marking a structural shift. Midcaps saw earnings rise from ₹238 in FY21 to an estimated ₹627 in FY25—an increase of over 2.6x in four years. Similarly, smallcap earnings surged from ₹170 in FY21 to ₹526 by FY25E, a 3x jump. This outpaces the earnings growth of Nifty 50, which is expected to grow from ₹436 in FY21 to ₹1,113 in FY25—an impressive but relatively modest 2.5x a valuation perspective, the Nifty Midcap 150 PE at 34.9 is above its 10-year average of 30.2, suggesting midcaps are relatively expensive. On the other hand, Nifty Smallcap 250 PE stands at 33.5, well below its 10-year average of 39.3, implying smallcaps are trading at a discount to their historical multiples.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
15-07-2025
- Business
- Time of India
ETMarkets Smart Talk: Fixed income attractive with rate cuts ahead; 20–40% allocation advisable for risk hedge, says Tanvi Kanchan
In an exclusive conversation with ETMarkets Smart Talk, Tanvi Kanchan, Head – Strategy & NRI Business at Anand Rathi Shares and Stock Brokers, highlighted the growing appeal of fixed income as an asset class amidst the current market volatility. With rate cuts on the horizon and yields remaining attractive, she believes debt investments now offer both stability and potential returns. Kanchan advises investors to allocate 20% to 40% of their portfolios to fixed income instruments as a prudent hedge against market uncertainty, especially given the recent equity market consolidation. Edited Excerpts – Q) Thanks for taking the time out. Nifty closed with marginal gains in June, but for the first six months of 2025 – it is up over 7%. How do you see markets for the rest of FY26? Any big events to watch out for? by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Forget the Gym: The Real Secret to Lose Fat And Build Muscle After 40 Tonic Gym Pro Learn More A) June was a month of remarkable resilience for Indian markets despite significant global uncertainties. The escalation of the Israel-Iran conflict mid-month, with US participation and crude oil spiking to nearly $80 per barrel, initially rattled markets. However, the subsequent ceasefire announcement triggered a sharp rally in global equities and a corresponding decline in crude prices. Indian markets capitalized on this positive momentum, with the RBI 's decisive 50 basis point rate cut and 100 basis point CRR reduction providing additional liquidity support. The Nifty delivered its fourth consecutive monthly gain, rising 2.9% in June, while broader markets outperformed with midcap and small cap indices up 3.7% and 5.1% respectively. Bonds Corner Powered By Satin Creditcare plans Rs 50-crore NCD issue Satin Creditcare Network is set to raise at least ₹50 crore through the issuance of non-convertible bonds, offering an annual interest rate of 11.5%. The allotment to investors is scheduled for July 21, with a greenshoe option of ₹25 crore. These bonds will be privately placed with institutional investors, and the interest will be paid monthly. India bonds flat ahead of India, US inflation prints RBI to hold buyback auction of 3 G-Secs NSE, BSE issue advisory to bond investors. Here are 10 things to know The case for fixed-income investments: What Gen-Z investors should know Browse all Bonds News with Looking ahead to the remainder of FY26, markets face a critical juncture. The most significant event to monitor is the resolution of Trump 's tariff proposals, with the extended deadline now pushed to August 1st. Live Events This clarity will be crucial for market direction. Domestically, we're entering the Q1 FY26 results season, which we expect to be mixed - export-focused companies will face tariff-related headwinds while domestic companies should see gradual recovery. The encouraging early monsoon trends, combined with RBI's rate cuts and liquidity infusion, should support demand revival. At current levels, we believe markets will remain highly stock-specific, with earnings surprises being rewarded. The continuous flow of IPOs and secondary offerings will absorb liquidity and limit broad-based rallies. Given these dynamics, we anticipate markets entering a near-term consolidation phase, where fundamentals and company-specific performance will drive returns rather than broad market momentum. Q) How are you managing the volatility in your portfolio? Any key learnings which you would like to share from 1H2025? A) From a portfolio construction standpoint, we've become more selective in our asset allocations, focusing on strategies driven by strong domestic demand drivers to hedge against global uncertainties. The experience has taught us that in volatile environments, quality and patience are your best allies. Companies with strong balance sheets, consistent cash flows, and pricing power have not only weathered the storms better but have also positioned themselves to capitalize on the recovery phases. Moving forward, we're maintaining this disciplined approach while keeping adequate liquidity to take advantage of future market dislocations. Q) One of the reports suggested that India Inc.'s profits have grown nearly 3x faster than GDP since FY20. What structural factors are driving this divergence? A) This remarkable divergence reflects a fundamental shift in India's economic structure and corporate efficiency. The primary driver has been the massive private sector capital expenditure surge we've witnessed, with private investment jumping from ₹7.42 lakh crore in FY21 to ₹32.28 lakh crore in FY23. This capex boom, focused on manufacturing, electronics, chemicals, and green energy, has dramatically improved operational leverage and productivity across Indian corporates. Companies that invested heavily in automation, digitization, and capacity expansion during the pandemic are now reaping the benefits of enhanced efficiency and scale. The second critical factor is the structural shift in India's savings pattern and capital allocation. We've seen household savings move decisively from bank deposits - which declined from 57% to 37.2% over the decade - into equity markets through mutual funds, which grew from 0.8% to 6.1% of household savings. This has created a virtuous cycle where cheaper equity capital has enabled companies to invest more aggressively in growth initiatives while reducing their cost of capital. The mutual fund AUM reaching ₹72.2 lakh crore with 22-24% annual growth has provided a stable funding base for corporate expansion. The third structural driver is the formalization and digitization of the economy, which has improved corporate margins and return on assets. Government initiatives like PLI schemes, GATI Shakti, and tax rationalization have enhanced the ease of doing business, while the demographic dividend - with 65% of the population in the working age bracket - has kept labor costs competitive even as productivity has surged. Additionally, the shift from government-led to private sector-led capex has ensured that investments are flowing to the most efficient and profitable opportunities rather than policy-driven projects. This combination of operational leverage, cheaper capital, structural reforms, and demographic advantages has created an environment where corporate profits can grow sustainably faster than GDP. Q) With the China+1 theme gaining traction, which Indian sectors are best placed to attract global capital and scale? A) Three sectors stand out as clear winners in the China+1 opportunity are Electronics and semiconductor manufacturing which leads the pack, benefiting from PLI scheme incentives and India's young workforce advantage. Followed by Pharmaceuticals and chemicals, which represent the second major opportunity, where India's established API capabilities and regulatory expertise provide natural advantages. This sector has already attracted significant global capital as part of the broader FDI surge we've witnessed - annual inflows doubled from $45-60 billion to over $80 billion recently. The third sector is renewable energy and green technology, perfectly aligned with India's climate commitments and the current private sector capex boom. With private investment jumping to ₹32.28 lakh crore and government infrastructure spending rising to ₹11.1 trillion, these sectors have the policy support and foundational infrastructure needed for rapid scaling. Q) How is fixed income as an asset class looking for long term investment. How much money one should allocate as an hedge to combat volatility? A) Fixed income always provides cushion against volatile periods, allocation to debt as an asset class not only provide good hedge opportunity but now with rate cut- and higher yields, bonds may provide attractive return generation capabilities as well. One can look at allocating 20%-40% in debt depending on their risk portfolio and investment duration. Q) Which sectors are likely to remain in the spotlight in 2H2025? A) Corporate earnings are forecast to rise by 12–15%, particularly driven by sectors like banking, infrastructure, defense, and consumption. Q) Can we say that we are in a "stock picker's market" ahead. If yes, what are the key traits investors should look for in FY26 picks? A) Unlike the last 3 years when the majority of the stocks outperformed, 2025 is likely to be a stock picker's year. This shift reflects a market environment where broad-based rallies are giving way to more selective performance, requiring investors to be more discerning in their stock selection. Investors will have to carefully separate the wheat from the chaff & focus on stocks with earnings visibility & sound fundamental background, companies with predictable earnings growth and strong balance sheets will likely outperform in a more selective market. Looking at the rate cuts to be expected in the future, one can also look at companies who will benefit from lower cost of borrowings. The key is to move away from broad market beta plays and focus on companies with specific competitive advantages, clear earnings catalysts, and exposure to India's structural growth themes. Quality over quantity will be the mantra for successful stock picking in FY26. Q) Gold has also seen a tremendous run in 2025 – how do you see the yellow metal shining in 2H2025? Time to book profits or add on dips? A) The extraordinary rally in gold this year comes amid growing geopolitical tensions, trade related uncertainties and pressure on both – Equity and Debt as an asset class in the near term. But when you analyse data over a longer period of time, equity has consistently outperformed the precious yellow metal. Q) How should one play the small & midcap theme? Has the profitability improved compared to largecaps – what does the data suggest? A) Over the last few years, small and midcap segments have undergone a structural transformation in profitability, creating a compelling case for selective participation. Historically, these segments were associated with high volatility and weaker earnings visibility compared to largecaps. However, recent data points to a significant improvement in earnings quality and growth trajectory. From FY21 onwards, Nifty Midcap 150 and Smallcap 250 earnings have grown sharply, marking a structural shift. Midcaps saw earnings rise from ₹238 in FY21 to an estimated ₹627 in FY25—an increase of over 2.6x in four years. Similarly, smallcap earnings surged from ₹170 in FY21 to ₹526 by FY25E, a 3x jump. This outpaces the earnings growth of Nifty 50, which is expected to grow from ₹436 in FY21 to ₹1,113 in FY25—an impressive but relatively modest 2.5x growth. From a valuation perspective, the Nifty Midcap 150 PE at 34.9 is above its 10-year average of 30.2, suggesting midcaps are relatively expensive. On the other hand, Nifty Smallcap 250 PE stands at 33.5, well below its 10-year average of 39.3, implying smallcaps are trading at a discount to their historical multiples.
Time of India
04-07-2025
- Business
- Time of India
Weak Re boosts foreign currency FDs
CHENNAI: A weak rupee was among the reasons that made foreign currency deposits attractive for NRIs. The net inflow under foreign currency non-resident (B) accounts increased by 11% to $7.1 billion in FY25 from $6.4 billion in FY24. It comes after NRIs pulled out their deposits earlier, turning the category negative during 2020-21 and 2021-22. Data available in RBI's annual reports shows that FCNR (B) recorded a net outflow of $3.8 billion and $3.6 billion during two pandemic years of 2020-21 and 2021-22, respectively. However, its net inflow revived during 2022-23 and stood at $2.4 billion. In FY25, the net inflow under non-resident deposits basket comprising non-resident external (rupee) account (NRE), non-resident ordinary (NRO) account and FCNR (B) was at $16.2 billion, the highest in the past 11 years. Of this, FCNR (B) share was 44%. RBI raising the interest rate caps on FCNR (B), allowing banks more freedom to offer better returns also fuelled its growth. FCNR(B) account is a type of fixed deposit account designed specifically for NRIs and persons of Indian origin (PIOs). The money is held in international currencies such as the dollar, British pound, euro, Australian dollar, Canadian dollar, Swiss franc, and Japanese yen, which protects depositors from exchange rate fluctuations. While the duration of term deposits ranges from 1 year to 5 years, interest earned on FCNR(B) accounts is tax-free in India. Private sector South Indian Bank, which has a sizeable NRI customers base particularly in the Gulf countries, says it has experienced a steady growth in NRE, NRO, and FCNR(B) accounts over the last three financial years at 3%, 5% and 6%, respectively. "The relative strength and stability of foreign currencies such as the US dollar further incentivized NRIs to invest in these accounts. Additionally, the depreciation of the rupee enhanced the appeal of foreign currency deposits as a hedge against exchange rate risk," said Biji S S, senior general manager and head of branch banking, South Indian Bank. Tanvi Kanchan, head - NRI business & strategy, Anand Rathi Shares and Stock Brokers said, "Looking ahead to FY26, inflows are expected to rise further. This is because interest rates in India are still relatively high." Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
30-06-2025
- Business
- Time of India
Rupee fall makes diaspora's foreign currency deposits attractive
Chennai: The weakening rupee was among the reasons that made foreign currency deposits attractive for NRIs. The net inflow under Foreign Currency Non-Resident (B) Account (FCNR(B)) increased by 11% YoY from $6.4 billion in FY24 to $7.1 billion in FY25. It comes after NRIs pulled out their deposits earlier, turning the category (FCNR(B)) negative during 2020–21 and 2021–22. Data available in RBI's annual reports shows that FCNR (B) recorded a net outflow of -$3.8 billion and -$3.6 billion during two Covid years of 2020–21 and 2021–22, respectively. However, its net inflow revived during 2022-23 and stood at $2.4 billion. In FY25, the net inflow under non-resident deposits basket comprising Non-Resident External (Rupee) Account (NRE), Non-Resident Ordinary (NRO) Account and FCNR (B) was at $16.2 billion, the highest in the past 11 years. Of this, FCNR (B) share was 44%. RBI raising the interest rate caps on FCNR (B), allowing banks more freedom to offer better returns also fuelled its growth. You Can Also Check: Chennai AQI | Weather in Chennai | Bank Holidays in Chennai | Public Holidays in Chennai FCNR(B) account is a type of fixed deposit account designed specifically for NRIs and Persons of Indian Origin (PIOs). Its unique feature is that money is held in international currencies such as US Dollar (USD), British Pound (GBP), Euro (EUR), Australian Dollar (AUD), Canadian Dollar (CAD), Swiss Franc (CHF), and Japanese Yen (JPY), which protects depositors from exchange rate fluctuations. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Upexi's $100M Solana Investment: What It Means for Shareholders bullseyealerts Read More Undo While the duration of term deposits ranges from 1 year to 5 years, interest earned on FCNR(B) accounts is tax-free in India. Private sector South Indian Bank, which has a sizeable NRI customers base particularly in the Gulf countries, says it has experienced a steady growth in NRE, NRO, and FCNR(B) accounts over the last three financial years at 3%, 5% and 6%, in FY23, FY24, and FY25 respectively. "The relative strength and stability of foreign currencies such as the US dollar further incentivized NRIs to invest in these accounts. Additionally, the depreciation of the Indian Rupee enhanced the appeal of foreign currency deposits as a hedge against exchange rate risk," said Biji S S, senior general manager and head of branch banking, South Indian Bank. Tanvi Kanchan, head - NRI business & strategy, Anand Rathi Shares and Stock Brokers said, "Looking ahead to FY26, inflows are expected to rise further. This is because interest rates in India are still relatively high, and if rates fall in the US or other developed markets, India will become even more attractive for NRIs seeking better returns," Kanchan added.
