Latest news with #MarzbanIrani
Economic Times
11 hours ago
- Business
- Economic Times
LIC Mutual Fund trims long-term bond holdings as rate-cut rally ends
LIC Mutual Fund is lowering maturities across debt schemes and investing in up to five-year notes, as India's rate cut-led bond market rally is largely over, chief investment officer at the asset manager said on Thursday. ADVERTISEMENT Earlier this month, India's central bank slashed its key policy rate by a larger-than-expected 50 basis points, but also changed its policy stance to "neutral", leading to expectation that the rate-cutting cycle is coming to a close. "We are trimming duration across schemes. The big part of the rally is over and with the current geopolitical scenario we have to be a bit cautious," Marzban Irani, whose fund house manages debt worth 220 billion rupees ($2.6 billion), said in an interview. Irani, however, does not rule out one more India rate cut as the Federal Reserve should also ease rates later in the year. The fund manager is not very bullish on India's 10-year government bond, which he says should trade in a range of 6.15% to 6.30% over the medium-term against 6.26% on Thursday. The 10-year yield fell nearly 50 basis points after India's first rate cut in February through June 6, when the central bank surprised with the change in stance. Since then, it has risen 4 basis points. ADVERTISEMENT Prateek Shroff, a fund manager at LIC Mutual Fund, said that bank-issued one-year certificates of deposit are trading at 6.40%-6.50%, "a very good accrual" over the policy repo rate of 5.50%. "When the market is in passive mode, the shorter-end will continue to remain in demand," Shroff said. ADVERTISEMENT Shroff also expects one more rate cut this year, probably in October or December. Short-term bond yields should remain contained despite the central bank's announcement of an operation to withdraw cash from the banking system, the fund managers said. ADVERTISEMENT "Yields can harden 5-10 bps on the shorter end because of this but then the market will settle down," Shroff said. LIC Mutual Fund is also comfortable with corporate bonds of two-to-three years due to their attractive returns over overnight funding rates, according to Shroff. ($1 = 85.8070 Indian rupees) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
11 hours ago
- Business
- Time of India
LIC Mutual Fund trims long-term bond holdings as rate-cut rally ends
LIC Mutual Fund is lowering maturities across debt schemes and investing in up to five-year notes, as India's rate cut-led bond market rally is largely over, chief investment officer at the asset manager said on Thursday. Earlier this month, India's central bank slashed its key policy rate by a larger-than-expected 50 basis points, but also changed its policy stance to "neutral", leading to expectation that the rate-cutting cycle is coming to a close. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Mischen Sie das in Ihren Kaffee und lassen Sie überschüssige Kilos purzeln Mehr erfahren Undo "We are trimming duration across schemes. The big part of the rally is over and with the current geopolitical scenario we have to be a bit cautious," Marzban Irani, whose fund house manages debt worth 220 billion rupees ($2.6 billion), said in an interview. Bonds Corner Powered By LIC Mutual Fund trims long-term bond holdings as rate-cut rally ends LIC Mutual Fund is lowering maturities across debt schemes and investing in up to five-year notes, as India's rate cut-led bond market rally is largely over, chief investment officer at the asset manager said on Thursday. BoI to raise Rs 20,000 cr via infra bonds this fiscal Indian bonds flat as sell-off stalls after pricing in RBI liquidity plan T-bill, money market rates rise on VRRR plan Gandhinagar Municipal Corporation's Rs 25 crore bonds list on NSE Browse all Bonds News with Irani, however, does not rule out one more India rate cut as the Federal Reserve should also ease rates later in the year. The fund manager is not very bullish on India's 10-year government bond, which he says should trade in a range of 6.15% to 6.30% over the medium-term against 6.26% on Thursday. Live Events The 10-year yield fell nearly 50 basis points after India's first rate cut in February through June 6, when the central bank surprised with the change in stance. Since then, it has risen 4 basis points. Prateek Shroff, a fund manager at LIC Mutual Fund, said that bank-issued one-year certificates of deposit are trading at 6.40%-6.50%, "a very good accrual" over the policy repo rate of 5.50%. "When the market is in passive mode, the shorter-end will continue to remain in demand," Shroff said. Shroff also expects one more rate cut this year, probably in October or December. Short-term bond yields should remain contained despite the central bank's announcement of an operation to withdraw cash from the banking system, the fund managers said. "Yields can harden 5-10 bps on the shorter end because of this but then the market will settle down," Shroff said. LIC Mutual Fund is also comfortable with corporate bonds of two-to-three years due to their attractive returns over overnight funding rates, according to Shroff. ($1 = 85.8070 Indian rupees)
News18
06-06-2025
- Business
- News18
Last Chance To Lock Your FD At Higher Rates: Here's What Investors Must Know After RBI Rate Cut
Last Updated: RBI cuts the repo rate by 50 bps to 5.5%. This is expected to reduce FD interest rates also. Here's what investors should do now. With the Reserve Bank of India (RBI) on Friday slashing the repo rate for the third time in a row, this time by a huge 50 basis points to 5.5%, this is not good news for FD investors — the interest rates on fixed deposits are likely to fall soon. If you're planning to put your money in fixed deposits for steady income, this could be your last window to lock in a decent FD rate before they fall further. Why This Could Be the Last Chance Banks usually revise their deposit and lending rates after a rate cut by the RBI — but not instantly. This gives investors and borrowers a short window to act. Many top banks are still offering FD rates in the range of 6.5% to 7.25% for longer tenures (5+ years), but this may not last long. In a falling interest rate cycle, new FDs will offer lower returns, and even reinvested FDs might earn less than before. 'So, if you're planning to invest in FDs or have a maturing FD soon, this may be your last opportunity in 2025 to lock your money at a higher rate for the next few years," said a banker, who did not want to be named. What Should You Do Now? Lock in Long-Term FDs If your bank is still offering 7% or more for 3- to 5-year tenures, consider locking a portion of your funds at that rate. Once rates fall further, you won't get such offers easily. Use FD Laddering Smartly Senior citizens still enjoy an extra 0.50% on FDs. Use this to your advantage and secure stable income before returns drop further. The RBI on Friday surprisingly announced a 50-bps cut in cash reserve ratio (CRR). An expert recommends investors to invest in tenure ranging 3-month to 3-year bond schemes to take advantage of CRR cut. Marzban Irani, CIO of fixed income at LIC Mutual Fund, said, 'CRR cut will bring down (bond) yields at shorter end significantly. RBI has reiterated that it is committed to ensure price stability and is focused on supporting growth. Any further policy decisions will continue to remain data dependent. Recommended to invest in tenure ranging 3 month to 3 year schemes to take advantage of CRR cut." In a surprise move, the RBI's Monetary Policy Committee (MPC) has decided to cut the key repo rate by 50 basis points (bps) to 5.5 per cent, RBI Governor Sanjay Malhotra announced on Friday. With this, the repo rate is the lowest level in nearly three years. The RBI also announced a surprise reduction in CRR by a significant 100 bps to 3 per cent, in four tranches of 25 bps each, beginning September 2025. It is expected to infuse Rs 2.5 lakh crore into the banking system in the coming months.
