The GDP numbers present a picture of revival in economic activity from the depths to which it had fallen during the first wave of the pandemic. GDP growth Q4 FY 21 is at 1.60%, compared to just 0.50% in Q3. For the whole year the GDP growth is at -7.3%, which amply reflects the stress […]
The fixed income markets continue to remain more or less range-bound, eagerly waiting to factor in the probability of any future rise in interest rates. There is more or less agreement among the market participants that rates should rise at some point in time during the course of this year, but the question is when? […]
The GDP growth number for Q4FY21 was reported at 1.6% as compared to 0.5% in the preceding quarter. The GDP for FY21 was reported at -7.3%, largely reflecting the pandemic driven impact to the economy. The GVA number for Q4FY21 came in at 3.7% as compared to 1% in the preceding quarter. The yearly growth […]
The policy announcement from the RBI, after the MPC meeting, has left all the key policy rates unchanged. It has reaffirmed the commitment to continue with the accommodative stance. It was expected that the RBI may not bring about any changes in the policy as such due to two factors, (i) there was an interim […]
Succession planning for minor children is a must. In an unfortunate event of demise of both the parents, a properly drafted Will would ensure that the parents appoint a guardian of their choice for the minor children. In absence of a will or if the will is silent with respect to guardianship, the court will […]
The equity markets have been volatile with movements on both sides, mainly occasioned by developments abroad. The prospects of the US recovery, the rise in inflationary expectations, the rise in bond yields, have all been factors that influenced the markets in the last two months. One factor which has attracted attention of the markets has […]
Brent is perched on the US$ 68 level per barrel for a long time now, and it has been unusually range-bound. But its ability to rise cannot be easily ignored. This is because, if you go by the indications from the market, buying of petroleum futures contracts has accelerated in the last three weeks, and […]
The US Dollar has given up much of the gains after it rose against all the majors in the last three months. The rise in the Dollar was facilitated to a large extent by the expectations of high inflation and the consequent rise in interest rates especially the bond yields. The bond yields shot up […]
Consumer Price Index for the month of April, came at 4.29 % quite on the lines expected by many market participants mainly due to the fall in the food inflation and the favourable base effect. This is quite a bit of a pull back from the 5.52% level seen in March. Last year, for the […]
Apart from all the other factors that affect gold price movements in international markets, there is one factor that has a certain impact, and it is the weakness or strength of the US Dollar. The US Dollar after a bout of strengthening against currency majors is now gradually giving up the ground that it gained […]
The US first quarter GDP growth was at 6.40 % as against the expectations of 6.50 %, but a major surge in the economic activity after the pandemic battered the economy. It was Q2 of 2020 which saw the biggest fall in US growth, as it plunged by 31.40%, and it left 22 million Americans […]
The fixed income market remained calm with a stable profile for most part of the last one month. The accommodative policy of the RBI has been instrumental in keeping the yields stable to lower. Yet another reason is the interbank liquidity which has been on an average upwards of Rs.5 Lakh Crs. The G-SAP 1 […]
Oil prices too have been range-bound without any major surge in prices as expected earlier. This is due to the fact that the OPEC + had decided that they may increase production gradually by about 2 million barrels per day. The prices have found a base at the US$ 60-63 levels. What is likely to […]
The US Dollar has risen against all currency majors except the GBP, thus consolidating its position of power in the recent past. This has been the result of robust economic and employment numbers in the US promoting the belief in a speedy revival of the economy. That there is bound to be revival in Europe […]
There are five major influences on the fixed income market, which are marked clearly as of now. These are the liquidity conditions, the government borrowing program, the trajectory of bond yields in the developed markets, the inflationary expectations and finally, the RBI policy. In the last one year the RBI has been extremely supportive of […]
The surge in the pandemic and the rise in the number of cases is not a good signal for the equity markets. This has resulted in limited lockdowns in many parts of the country, and some are more stringent than the rest. If such conditions persist it is bound to impact growth adversely and we […]
The curiosity about the government borrowing program is much less compared to the other developments around the fisc. This is because the quantum of borrowing is clearly laid down in the budget a couple of months ahead of the new financial year. But things like the maturity profile of the borrowing, the composition in terms […]
One way of looking at the major economies and the progress they have made towards normalization is to look at three things. One, the quality of the economic recovery in these territories, two, the persistence or otherwise of the expansionary policies, and three, the current efforts at containing the recent wave of infections The first […]
1. POLICY RATES UNCHANGED On expected lines, the RBI has kept the policy rates unchanged, the repo rate stays at 4%. The accommodative stance has been reaffirmed. The soft stance with adequate liquidity support will continue till sustainable growth emerges, and more so in the light of the resurgence in the second wave of the […]
The US Dollar continued to maintain a stronger undertone against all the currency majors as is evident from the currency movements for more than a month now. One of the major factors that contributed to the Dollar strength is the sell off in the bond markets across many developed markets. The rise in bond yields […]
Brent has shot up, through the US$ 70 per barrel, and it looks set to rise more. The recent rise in the prices, in the last few days, has more to do with the attack on the oil facilities of Saudi Arabia by some terrorist groups. The damages caused to the Saudi facilities is quite […]
Gold prices moved up from mid-2019 onwards to 2020 end, mainly due to two or three crucial factors. Broadly the range was from 1430 to 2067. The first and most important, fundamental, cause was purchases by central banks and the large inflows into gold exchange traded funds. The lower interest rates in many of the […]
The domestic equity markets have been hovering around the peaks, which the indexes have formed in the last couple of months. The domestic macro numbers have been on expected lines, and it gave comfort to the markets about the sustainability of the rebound in economic activity. But it is mostly the events from overseas markets […]
Yields or interest rates have been edging higher during the course of the last three months and it will continue to be so for some time. The immediate reasons are – RBI hiked the CRR which was going to increase the borrowing and lending costs for banks, there has been some pick up in credit […]
The GDP growth number for the last quarter, Q3FY21, at 0.40% corresponds to more or less what most of the market participants and analysts had expected. The GDP has reported positive growth after two consecutive quarters of contraction (-24.4% for Q1FY21 and -7.3% for Q2FY21). That should bring in some amount of relief. The reason […]
One of the most impressive fiscal exercises in the recent past was the UK budget, presented on March 3, 2021. This is the first budget post the Brexit departure event, which was marked by lot many uncertainties. The corporate tax rate has been hiked to 25 % from the current 19 % while leaving majority […]
Brent has moved up quite in line with expectations towards US$ 60 from a level US$ 53 about a month back. The rise in oil prices has been supported by several factors in the last three months. The most prominent factor is the output restrictions by OPEC + and more conspicuously by Saudi Arabia. The […]
The currency markets, which witnessed a fall in the US Dollar, against the currency majors has reversed the trend for the time being. The gains made by the US Dollar is more pronounced against the Euro and Japanese Yen. Against Yuan, it has held its position well at stable levels, whereas against the Pound Sterling […]
Gold after making an all-time high of US$ 2067 in August 2020, corrected down to the 1890 and 1860 levels. Currently, gold is trading at around the 1840 level. The pull back in gold prices is probably a prelude to testing lower levels, and as indicated in our last update, technically, the resistance levels will […]
The two recent events of consequence to fixed income have been the budget and the monetary policy announcement. The budget has announced an additional borrowing of Rs.80,000 Crs for Feb and March, the original borrowing plan was getting over by Jan 21, end. While this additional borrowing is not that much unexpected, that there is […]
The equity markets started the rise with the accommodative policy of the central bank which provided ample liquidity as well as targeted support for select sectors. The expansionary fiscal policy also provided the much-needed support at a time when economic growth was not happening and there was general economic distress. This paved the way for […]
The RBI released its own budget-like document, wherein it reiterated its commitment towards an accommodative policy to support growth and also came out with supportive measures to ensure flow of liquidity to segments of the economy immediately in need of it. In this context, while on the one hand RBI announced phased restoration of CRR […]
The US economy is going to benefit from the fiscal spending that the government has already initiated, and more is expected from the new dispensation which assumed power last month. The tough line against China, Russia and Iran is going to be in place but the approach to the specific issues may be different from […]
The budget announcement for FY22 was keenly awaited as it was declared against the backdrop of a global pandemic. The economic activity across the globe came to a virtual standstill owing to the lockdowns imposed to control its spread. On the one hand budget was expected to be growth supportive, but there were cautions being […]
The slide of the US Dollar against all the currency majors continued to be the event that is most talked about in currency markets. There is no single major currency against which the Dollar has held well. This is despite any number of regional issues which have been there. This gives rise to the inference […]
Oil prices continue to stay above the US$ 50 level, and it seems to be wanting to base itself at these levels for a potential upward movement. This trend in prices is despite the fact that the economic realities prevailing globally do not permit any surge in oil prices. The Asia-Pacific Region is dominated by […]
Gold-backed ETFs have seen major outflows in Nov 20., the first outflow in the last one year. This is also the second largest outflow ever since ETFs came into existence. Gold ETF holdings came down by 107 tons or US$ 6.80 billion, equivalent to about 3% of the assets under management. This movement happened at […]
All the indexes have moved up, benefitting mainly from the accommodative fiscal and monetary policy, which facilitated an unprecedented liquidity expansion. It is the low interest rates and the ample liquidity that have helped rebound in the economy to some extent and spurred the markets to move up. These favourable conditions also helped the overall […]
The yields at the short end as well as the long end remained more or less stable in the last two months. The market has been supported by the surplus liquidity conditions all this while and this may continue to be the singular factor deciding the course of the markets in the future too. While […]
There are sure signs of economic recovery in the US, EU, China, and India as well. But it may be too early to call it a full-fledged recovery. The macro variables reflect a rebound in economic activity, but the level of economic activity is still not at the pre-pandemic levels as yet. This is mainly […]
The economy and the markets have gone through conditions that we have not witnessed in a lifetime. But things have started improving gradually. The markets have moved up. The economy is rebounding. But the experiences during the year that has just gone by leaves us with a lot of lessons as far as our financial […]
India enters a technical recession with two consecutive quarters of economic growth contraction. The GDP contracted by 7.50% in Q2FY21, as against the 23.90% contraction seen in Q1. It is pertinent to note that the rate of GDP growth is at an 11-year low, as compared to 4.20% in 2019-20, and an expansion of 6.10% […]
Oil prices have moved up from its US$40-45 range to US$ 45-50 range. The uptick in prices has been caused by several factors. In the initial days after the US elections the news was that the new President was against fracking and that may affect oil supplies. But a study of the last three or […]
Gold- backed ETFs have seen major outflows in Nov 20., the first outflow in the last one year. This is also the second largest outflow ever since ETFs came into existence. Gold ETF holdings came down by 107 tons or US$ 6.80 billion, equivalent to about 3% of the assets under management. This movement happened […]
Like it has been in the last three months, the indexes have risen to the highest levels in the lifetime of the markets. This rise has been facilitated by ample liquidity, hope in a faster recovery from the pandemic related setbacks, and economic numbers which instilled greater hope for the future. Corporate profitability in India […]
The fixed income market has been extremely calm and traded within narrow ranges for more than two months now. This is the result of an accommodative policy and a liquidity glut occasioned by the expansionary policy. The rates on commercial papers and certificate of deposit has come down to low single digit levels, to levels […]
The currency markets witnessed a fall in the US Dollars against all the currency majors. This has happened mainly after the US presidential elections, and it is perceived as a trend that may endure for some more time. In terms of investments there has been a gradual rising preference for emerging markets assets as evidenced […]
Oil prices are hovering around the US$ 38-42 levels with an obvious downward bias, at present. This downward bias is the result of the rising COVID-19 infections throughout the US and the major countries of Europe. Except for China, the prospects of any rise in oil demand is more or less ruled out due to […]
As far as the US dollar is concerned a lot would depend on the US policies in the coming months as we quickly move past the US elections and the installation of a new government. While basic policies may not find any major shifts, there may be some modifications in the details. The approach towards […]
Gold is currently trading at US$ 1880, and the price movements have been with a downward bias in the last one month or so. This fatigue after a move above the US$ 2000 mark is attributed to a number of factors. There has been selling by some central banks over the last two months. Central […]
What is interesting about the fixed income market is that there have not been any major changes as such in the markets in the past one or two months. This means that there is quite a bit of stability in the rates and the market levels, and this position may not change drastically for another […]
China is bouncing back with a vengeance, from the contraction of 6.80% seen in the first quarter of this year, at the peak time of the pandemic. Economic growth has picked up very fast. China reported a GDP growth of 4.90% on a Y-O-Y basis, up from 3.20 % clocked in Q2 of this year. […]
There is a disproportionate spotlight on developments overseas in the recent past, mainly in the light of the US elections. While we acknowledge some linkages, the primacy of local fundamentals in determining the direction of the markets cannot be stated enough. The most reasonable thing for investors to do is to focus on the good […]
The peak in gold prices at US$ 2067 coincided with the weakness in the US Dollar against the currency majors. But there has been some revival, though not significant, in the Dollar exchange rates, in the last one month. The correction in the gold prices to US$ 1850 levels too was in alignment with the […]
The domestic economy has now come to the fag end of the lockdown era with more concessions granted to business entities to open their gates and start work. But the actual implementation of the liberalized scheme of things would depend very much on the state governments, as the intensity of the controls required from state […]
The recent events point towards a gradual build-up of pressure at the long end of the curve. The devolvement at the government securities’ auctions is a clear indication of the markets’ fatigue in absorbing long dated papers at sub-6 % yields. It also means that across investor spectrum the feelings towards auctions is more or […]
The pandemic and the ensuing presidential elections dominate the scene in the US, and Brexit is also gradually coming back as an issue in the UK and Europe. The second wave of the pandemic has hit a number of countries in Europe which is likely to disrupt their economies further whereas there are no signs […]
Focused Equity Fund – An open-ended equity scheme predominantly investing in equity and equity related instruments. These schemes are mandated to invest in maximum 30 stocks and mention where the scheme intends to focus, viz., multi-cap, large-cap, mid-cap, small-cap. Invesco India Focused 20 Equity Fund Fund Details: Fund Manager – Mr Taher Badshah; he has […]
Mirae Asset Equity Allocator Fund of Fund – It is an open-ended fund of fund scheme predominantly investing in units of domestic equity ETFs. It seeks to provide investors with a broad exposure to large and mid cap equity segments by investing in the units of large cap and mid cap equity ETFs. Investment Framework […]
After a prolonged period of strength, the US Dollar lost some ground against all major currencies in the recent weeks, a phenomenon witnessed after a long time. The weakness was more marked against the Euro, Pound Sterling, and the Japanese Yen. While the pandemic worsens in the US with no relief seen in the near […]
Gold price surged past the US$1900 level continuing its trend which has been intact since September 2019. While in the initial phases of the rally it was strengthened by the uncertainties around the global economy mainly emanating from the trade war between the US and China, and the reduction in the base rate in the […]
STATUS QUO ON RATES Monetary Policy Committee of the RBI has left the base rates unchanged in the announcement today. This is on expected lines as the RBI was expected to maintain status quo and stress more on the accommodative stance, liquidity enhancement measures and restructuring of the loan portfolios. The cumulative reduction of policy […]
The equity indexes have reclaimed, in the last two months, most of the losses from the pre-pandemic period. The rally has just happened close on the heels of a drastic fall, and therefore, it is only natural that the question of whether the rally is sustainable or not may come up from time to time. […]
The FOMC meeting which concluded on July 29, kept the Fed Funds Rate, the key policy rate, anchored in the range of 0 to 0.25%. This was on expected lines. The FOMC statement clearly said, “The path of the economy will depend significantly on the course of the virus”. Apart from keeping the rates unchanged, […]
The equity indexes have moved up, covering a major part of the big fall, and this recovery is mainly facilitated by a sense of optimism about the impending economic recovery. The numbers that we have seen from the last couple of months including the index of industrial production, the purchasing managers index, and the employment […]
Gold at US$1760, is at a striking distance from the crucial US$1800 level. Given the factors that have been driving the prices, the likelihood of gold getting closer to that mark seems to be almost certain. What gives gold strength is the uncertainties in the global economy, the pandemic and the lockdown and the fall […]
One of the unique features of the current order of things is the proactive central bank initiatives to mitigate the financial distress in the economy and the markets. Central banks across the world resorted to use of non-conventional methods to combat this invisible yet powerful enemy. The most common and distinguishable feature of central bank […]
The US Dollar is holding well due to its safe-haven status, and this is mainly occasioned by the spread of the corona infections throughout the world and it does not seem to be abating at this point of time. Therefore, there is a preference for investors to hold on to dollar assets and currency. But […]
GDP AND CORE SECTOR GROWTH NUMBERS The sluggishness in economic growth was a feature of the Q2 and Q3 numbers, and it was accentuated in Q4. So, the number was more or less expected to indicate a decline from 4.00% and 4.50% levels; the GDP growth has been reported at 3.10%. This number fully reflects […]
CHALLENGES REMAIN MORE OR LESS THE SAME The challenges which the global economy has been facing since the outbreak of the pandemic continues to be unchanged and unresolved to a large extent. The pandemic itself has spread to new regions and has spread havoc in the US, and has affected India too, a major contributor […]
The data from the US reveals severe economic stress with 26 million people applying for unemployment benefits. This is about 15% of the US workforce. All the major indicators from retail sales to mortgages and industrial production, all point towards rapidly deteriorating economic conditions. This is the reality for the month of March, and April […]
Gold has benefitted from the uncertainties in the global economy resulting from the spread of the pandemic. Uncertainties always give a push to gold prices as investors who flee excessive volatility take refuge in safe-haven assets like gold and dollar. Even otherwise, gold had a relatively good runduring course of the last one year mainly […]
The economic cycle follows a pattern of boom and bust; every boom period lays the foundation of down cycle and vice versa. A look at the economic history indicates that every single time the trigger points of a down trend have been fairly diverse, whether it be tech bubble, excesses or leverage of the financial […]
The GOI has revised the borrowing program for the current financial year from the original estimated gross market borrowing of Rs.7.80 lakh crore to Rs.12 lakh crore. The press release states that this revision is due to the COVID-19 pandemic. The pandemic has two-pronged impact on government finances. The first is the revenue impact. The […]
In the wake of coronavirus, here’s why succession planning is taking the centre stage As the fear of Coronavirus sweeps the globe there is a rising fear among people to safeguard their family; and with a fierce financial panic, to preserve their wealth. This is a temporary phenomenon, but people have become more wary of […]
Contemporary human being works 24*7*365 days for some or the other activity. The major part of one’s life is spent earning a livelihood and improving one’s lifestyle. The journey of growing old is a process whereby one amasses experience, knowledge and wealth. The sour truth of growing old and dying one day can be made […]
Currently, the markets are going through major issues in the context of liquidity and credit risk. The inter-bank market is experiencing chronic liquidity deficit. The markets and investors would expect the new government to retain and enhance its hallmark – decisiveness in many key issues that came up, during the last term. Decisiveness infuses greater […]
The main concern of parents having wealth in India with their children living abroad is, “How to transfer their wealth to them after their lifetime, especially when they won’t have the time to come to India for taking control over these assets and manage it after the lifetime of their parents.” The children prefer inheriting […]
How does one plan for succession of assets located in different countries? With globalisation, Indians have acquired assets in India and other countries. One can either prepare a single multi-jurisdictional will or separate situs wills for its succession. Both are valid. What is a separate situs Will? It is a Will that covers the assets […]
