Posted at 4:44 PM , on October 14, 2016
Since the beginning of the calendar year the yield on 10-year G-Sec bonds has fallen from a high of 7.87% to the current level of 6.6%. The last time the 10-year G-Sec touched such a low level was back at the peak of the financial crisis in 2009 when central banks across the world were on a rate cutting spree to make adequate liquidity available at cheap rates. But, scratch the surface and the difference becomes a little more surprising. During the 2009 crisis, the repo rates were at a level of 4.75%. So the 10-year G-Sec yield at around the 6.5% level was perfectly understandable. But currently, the repo rates are at 6.25% (after the October monetary policy) but yields are already at the same level as 2009 when the repo rates were at 4.75%. So what exactly has driven this sharp fall in yields? Continue reading
Posted at 4:52 PM , on November 30, 2015
How mutual funds have fared in 2015…
The year 2015 has not been too charitable to the equity markets. The Nifty did rally in the early part of the year and crossed the 9000 mark. Post-March, the markets have lost close to 15% and have suffered repeated bouts of volatility. In this entire melee, Indian mutual funds have come out trumps.
Posted at 6:34 PM , on October 16, 2015
The September Consumer Price Index (CPI) numbers were the first indication of the waning of the base effect. In the previous policy, the RBI governor had spoken about the base effect problem with respect to inflation. The corresponding period to July and August last year were high inflation months and hence this year was likely to appear lower due to the base effect. Since inflation is a point-to-point number it tends to get influenced by base effect quite drastically. In fact, this base effect was the key reason why the RBI governor had expressed concerns about a rate cut.