LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » India News

Sell-off over, value emerging in Indian govt bonds

While India's 10-year real yields (3.2 per cent) look high compared to peers across the region and the 2-year/10-year spread (at 71bps) is wide by historical standards, there could be better entry points in the coming months as the market digests increased issuances, DBS observed.

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
Sell-off over, value emerging in Indian govt bonds
Rupee could depreciate towards 67 this year, says DBS. Image source: Reuters
Written By: PTI
Updated: Tue, Mar 20, 2018
03:04 pm
PTI
RELATED NEWS
Gold Price, Rupee and Equity Markets II Technicals explained Gold Price, Rupee and Equity Markets II Technicals explained
Currency Outlook: What all will support the new found strength in Rupee - Analysts' opinions Currency Outlook: What all will support the new found strength in Rupee - Analysts' opinions
This will strengthen the rupee during the upcoming week This will strengthen the rupee during the upcoming week
Gold Price, Currency and Equity Markets: All you need to know about Gold Price, Currency and Equity Markets: All you need to know about
Currency Watch! GDP boost, flow cushion to strengthen rupee Currency Watch! GDP boost, flow cushion to strengthen rupee

The outlook for Indian government bonds remains challenging, but some value may be emerging after the sharp sell-off over the past six months, says Singapore's DBS Banking Group. In addition to renewed supply pressure into fiscal year 2019 domestically, developed market yields are likely to rise further as monetary normalisation continues, it observed in today' daily market report.

"Under these circumstances, INgov yields are still likely to face upward pressure," said DBS.

"However, we think that the bulk of the sell-off may be behind us and yield increases are likely to be more modest going forward.

"Notably, India's CPI has eased somewhat, reducing any urgency to hike rates, allowing our tactical view of favouring shorter-term bonds to play out.
We are neutral-to-negative on longer-term bonds and still see yields heading higher," it said.

While India's 10-year real yields (3.2 per cent) look high compared to peers across the region and the 2-year/10-year spread (at 71bps) is wide by historical standards, there could be better entry points in the coming months as the market digests increased issuances, DBS observed.

As for the Indian rupee, it has been depreciating with the Indian equities since the end of January.

"Coincidentally, both the rupee and the BSE Sensex were the second worst-performers in Asia ex-Japan (or outside Japan)," DBS said.

As of 19 March, the rupee had depreciated -2% year-to-date (YTD) against the US dollar while the Sensex fell more by 3.3% YTD.

The vulnerability of the exchange rate to the weak stock market is understandable, believes DBS.

India needs capital inflows to fund its current account deficit which has more-than-doubled to 1.9 per cent of GDP in April-December versus 0.7 per cent the same period a year earlier.

"We expect the savings-investment gap to widen to 2-2.2 per cent of GDP in FY19 from a projected 1.8 per cent in the current financial year, ending March 2018," said the bank.

As of September 2017, India's short-term external debt totalled 3.8 per cent of GDP.

It did not help that Indian bonds had been under pressure since mid-2017, but this was due mostly to a wider fiscal deficit, felt DBS.

Overall, India's financing requirements will keep the rupee vulnerable to rising US rates this year, especially if they weigh on global equities.

"Our view remains for the rupee to depreciate towards 67 this year," said DBS.

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Rupee
RELATED NEWS
Gold Price, Rupee and Equity Markets II Technicals explained Gold Price, Rupee and Equity Markets II Technicals explained
Currency Outlook: What all will support the new found strength in Rupee - Analysts' opinions Currency Outlook: What all will support the new found strength in Rupee - Analysts' opinions
This will strengthen the rupee during the upcoming week This will strengthen the rupee during the upcoming week
Gold Price, Currency and Equity Markets: All you need to know about Gold Price, Currency and Equity Markets: All you need to know about
Currency Watch! GDP boost, flow cushion to strengthen rupee Currency Watch! GDP boost, flow cushion to strengthen rupee

LATEST NEWS

Airbag for front-seat passenger made mandatory from THIS date

Gold Price Outlook: Yellow metal falls by over Rs 11,500 in last six months; may crash much more

Gold Price Outlook – Gold, Silver prices may see further fall next week; expert tells what to do to maximise gains

ITC Share Price: Experts give 'share to buy' tag; predicts up to 25% profit in three months

India fix Lord's date: Kohli and Co thrash England, to meet New Zealand in WTC final

7th Pay Commission Latest News: Central government employees' alert! one mistake could cost you your LTC claim—check report

PPF Calculator: You can double Public Provident Fund income and save income tax outgo - you will need this help

EaseMyTrip IPO Review: Issue opens on Monday! 'SUBSCRIBE' say experts; check details like important dates, price band, lot size, many more

Delhi to have its own school education board; Arvind Kejriwal says focus will be on providing jobs, proposes this unique exam pattern

Stock Market Outlook: Anil Singhvi reveals Nifty, Bank Nifty support range, says investors should trade keeping volatility in mind

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved