Latest news with #DharamrajDhutia
Mint
17 hours ago
- Business
- Mint
India bond yields end lower in run-up to RBI policy decision
MUMBAI, June 3 (Reuters) - Indian government bond yields declined on Tuesday, as traders added positions especially in the 10-year part of the yield curve, ahead of the central bank's monetary policy decision later this week. The yield on the new benchmark 10-year bond ended at 6.2022%, compared with the previous close of 6.2144%. The liquid five-year bond yield ended at 5.8520%, further steepening the yield curve. The Reserve Bank of India is widely expected to cut interest rates by 25 basis points for the third consecutive time on Friday. The central bank has lowered policy rates by 50 basis points in 2025 and has infused $100 billion into the banking system in the December-May period. The State Bank of India believes that the RBI must cut rates by 50 bps to revive the credit cycle. "The RBI's accommodative stance is likely to continue, with a 25 basis point repo rate cut anticipated at the June policy meeting and expectations for the repo rate to settle at 5.50% for the remainder of the financial year, further supporting growth and investment," Laukik Bagwe, fund manager and head of fixed income at ITI Mutual Fund, said. India's economy surged 7.4% in the January-to-March period, much faster than a forecast of 6.7% in a Reuters poll, and up from the 6.4% expansion in October-December. Meanwhile, retail inflation for April slipped to 3.16% and is projected to stay below 4% for most of 2025. The market anticipates a reduction in inflation forecast for the current year. The overnight index swap (OIS) rates ended a tad lower, but have been failing to break below the key support level since the last few sessions. The one-year OIS rate was nearly 2 basis points lower at 5.55%, while the two-year and the most liquid five-year OIS rates were also down 2 basis points at 5.43% and 5.64%, respectively. (Reporting by Dharamraj Dhutia Editing by Eileen Soreng)
Yahoo
18 hours ago
- Business
- Yahoo
Indian rupee, bonds set to be among top three Asian beneficiaries of foreign inflows, BofA Sec exec says
By Dharamraj Dhutia MUMBAI (Reuters) -Indian markets will likely be among the top three in Asia to attract foreign inflows once tariff-related uncertainties ease, with the rupee and local currency-denominated bonds benefiting the most, an executive from BofA Securities told Reuters. "India within Asia should be one of the best markets for investments as they have a lot of drivers for growth which other markets do not have," David Hauner, head of global emerging markets fixed income strategy at BofA Securities, said on Tuesday. Taiwan and South Korea could also invite investor interest, he said. The rupee was at 85.59 on Tuesday and is nearly flat for the year after easing 2.9% in 2024. Hauner expects the unit to appreciate to 84 against the U.S. dollar by end-2025. While the rupee could rise above 84 next year, aided by a weaker greenback, Hauner said he expects it to stay around that level as the central bank accumulates reserves. A soft dollar and the possibility of rate cuts from emerging market central banks is likely to draw investors, Hauner added. "I would expect that we will receive more inflows from the second half of the year, and we would see more proof that inflation globally is coming down and people will get more comfortable with EM fixed income, leading to more inflows." U.S. bond yields have risen and the dollar has fallen this year on fears that President Donald Trump's policies will be inflationary and lead to a selloff in Treasuries. Despite the upbeat outlook, foreign investors reduced their holdings of Indian government bonds in April and May, offloading over 320 billion rupees ($3.74 billion) on a net basis. Hauner said the selloff was sparked by worries over the impact of trade tensions, but added that a lot of capital is parked in U.S. money market funds, which could start flowing in later this year. BofA Securities expects the Reserve Bank of India to cut the policy repo rate by another 50 basis points over the remainder of this year. The central bank has already delivered 50 bps of reductions in 2025. Hauner prefers India's five-year government bonds and expects yields across the bond curve to decline by 25-50 bps. The five-year bond yield was at 5.85% on Tuesday. ($1 = 85.5270 Indian rupees) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
India's index-linked bonds see record foreign selling in May on profit-booking, currency swings
By Dharamraj Dhutia MUMBAI (Reuters) -Foreign investors sold Indian government bonds included in global indexes for a second straight month in May, driven by profit-taking and currency volatility rather than a change in sentiment towards the country, several investors said. Foreign investors offloaded 123.2 billion rupees ($1.44 billion) of Indian bonds under the Fully Accessible Route in May, the highest since its 2020 launch, after selling 111.4 billion rupees in April. They have invested 1.20 trillion rupees in Indian bonds till March since June 2024, when Indian bonds were included in the JPMorgan emerging debt market index. "The recent outflows are best viewed through the lens of profit-taking after a strong run, rather than a shift in fundamental conviction," said Rong Ren Goh, portfolio manager at Eastspring Investments, which manages $256 billion of assets. Some headwinds, including geopolitical tensions and uncertainty over the new RBI governor's stance on FX policy, may have also led investors to trim exposure and rebalance portfolios, he added. The Indian rupee has grown more volatile over the past six months since new RBI Governor Sanjay Malhotra took charge in December, with implied volatility averaging 4.26%, up from 2.24% during the final six months of former governor Shaktikanta Das's tenure. A rise in U.S. Treasury yields due to fear of a wide budget gap and inflationary impact of President Donald Trump's tariff policies and a drop in Indian rate due to declining inflation have also narrowed the yield differential between the two markets. The spread between Indian and U.S. bond yields have collapsed to 21-year low of around 170 bps now, from 250 bps early November. "This (selling in Indian bonds) was not driven by skepticism towards India, but rather by shifts in global macro sentiment," Jean‑Charles Sambor, head of emerging markets debt at TT International Asset Management said, that manages $3.15 billion of assets across EM. "We do not see this (outflows) as a game changer. Sentiment towards Indian bonds is likely to improve as inflation continues to decline and there is more fiscal space," Sambor said, adding he remains constructive on rupee bonds and believes appetite for local currency bonds is returning. ($1 = 85.3790 Indian rupees)
Mint
2 days ago
- Business
- Mint
India rupee, bonds expected to move higher in run-up to RBI policy decision
By Dharamraj Dhutia and Jaspreet Kalra MUMBAI, June 2 (Reuters) - The Indian rupee is likely to kick off the week on a positive note, boosted by stronger-than-expected economic growth data, and, alongside government bonds, will be influenced by the central bank's monetary policy decision, due on Friday. The rupee closed at 85.5075 against the U.S. dollar last Friday, down 0.4% in a week dominated by choppy price action across forex markets. Data after the market close on Friday showed India's gross domestic product (GDP) grew 7.4% in the January-March quarter, the fastest in a year, and above economists' expectations of 6.7%. The strong growth may lift equities, which should help the rupee both via portfolio inflows and a sentimental boost, a trader at a foreign bank said. Traders expect the rupee to hover in a 84.80-86 range in the near term. Developments surrounding U.S. tariff policies also be in focus this week. U.S. President Donald Trump on Friday accused China of violating a bilateral deal to roll back tariffs and announced a doubling of worldwide steel and aluminum tariffs to 50%. A team of U.S. trade officials, meanwhile, is slated to visit India on June 5-6. The Reserve Bank of India is widely expected to deliver a third straight 25-basis-point rate cut on June 6, lowering the key rate to 5.75%. "The big macro picture for INR and India is that inflation is likely to remain manageable for some time ... with CPI expected to remain below 4% over the next few quarters," MUFG Bank said in a note. India's 10-year benchmark 6.33% 2035 bond yield pared its earlier losses to end flat at 6.2308% on Friday. It fell to 6.1672% in the week. Traders anticipate the yield to move between 6.18% and 6.26% until the RBI decision. The five-year bond yield outperformed the 10-year yield for a third straight month in May. "There has been a bull-steeping in the bond market. The market anticipates the RBI will cut rates and is at extreme bullish positioning," said Vishal Goenka, co-founder of bond trading platform, Capital Economics expects growth to remain strong over the coming quarters and eyes a further 50 bps of interest rate cuts. ** May HSBC manufacturing PMI - June 2, Monday (10:30 a.m.) ** May HSBC services PMI - June 4, Wednesday (10:30 a.m.) ** RBI monetary policy decision - June 6, Friday (10 a.m.) ** May S&P Global Flash manufacturing PMI final - June 2, Monday (7:15 p.m. IST) ** May ISM manufacturing PMI - June 2, Monday (7:30 p.m. IST) ** April factory orders - June 3, Tuesday (7:30 p.m. IST) ** May S&P Global composite PMI final - June 4, Wednesday (7:15 p.m. IST) ** May S&P Global services PMI final - June 4, Wednesday (7:15 p.m. IST) ** May ISM non-manufacturing PMI - June 4, Wednesday (7:30 p.m. IST) ** April international trade - June 5, Thursday (6:00 p.m. IST) ** Initial weekly jobless claims (for week to May 26) - June 5, Thursday (6:00 p.m. IST) ** May non-farm payrolls and unemployment rate - June 6, Friday (6:00 p.m. IST) (Reporting by Dharamraj Dhutia and Jaspreet Kalra; Editing by Savio D'Souza)
Yahoo
6 days ago
- Business
- Yahoo
Adani Ports' bond sale draws LIC interest on India market return, sources say
By Dharamraj Dhutia MUMBAI (Reuters) -Adani Ports and Special Economic Zone, India's largest private port operator, has placed its longest-tenor debt with state-run Life Insurance Corporation of India, two sources familiar with the matter said on Thursday. The company raised 50 billion rupees ($585.33 million) through the sale of bonds maturing in 15 years at 7.75% annual coupon and the debentures were fully bought by LIC, the sources said, declining to be identified as they are not authorised to speak to the media. The bonds were issued at the lowest spread over the corresponding government bond yield in the last seven years. LIC and Adani Ports did not immediately respond to Reuters emails seeking comments. The issue marked Adani Ports' largest rupee-denominated bond and its first market return since January 2024, after Adani group companies pulled back following U.S. short-seller Hindenburg Research's 2023 allegations of governance lapses. Adani Group has denied those allegations. Adani Ports has outstanding bonds worth around 62.50 billion rupees as of end-April, according to notes from rating agencies. Holding around 54 billion rupees of debt, LIC was the largest holder of bonds of the company as of January 2024, according to an information memorandum of its January 2024 debt issue. Adani Ports raised 2.5 billion rupees each via five- and 10-year bonds at coupons of 8.70% and 8.80%, respectively, in January 2024. Last week, its board approved raising up to 60 billion rupees through bond sales, with the notes rated AAA by Crisil and Care. With the Adani Ports issue completed, more group companies are likely to tap local debt market, especially as yields are set to decline further due to policy rate cuts and surplus liquidity, two bankers said, declining to be named since they are not authorised to speak to media. ($1 = 85.4225 Indian rupees)
