June 2022 Economic Times
“High safety, no put call option and opportunity to earn higher post-tax returns than bank deposits are drawing investors to these bonds,”.
“High safety, no put call option and opportunity to earn higher post-tax returns than bank deposits are drawing investors to these bonds,”.
“Mumbai: Rising inflation is seeing investors ducking from the storm in equities market to safe haven fixed-income investments and they prefer longer-dated perpetual bonds sold by state-owned banks with higher yield than similar maturity government securities and popular mutual funds”.
“Government bonds carry sovereign ratings, there is no credit risk, high liquidity and returns are higher than traditional small-savings products and bank deposits”.
Mumbai: Affluent investors allocating money to fixed income instruments are increasingly buying government securities(Gsecs) over AAA-rated public sector undertaking(PSU) bonds and state development loans(SDL), as the difference in returns has narrowed down and is at a historical low.
“We have never seen such narrow spreads between Gsecs and AAA-rated PSU bonds or SDLs. We are seeing a huge demand for Gsecs from rich investors since they are available in longer tenures, carry the highest safety and are more liquid,” said Vikram Dalal, MD, SynergeeCapital.
“Rich investors are showing interest in government papers maturing in 2045, 2050 and 2060,”. “Many HNIs want a regular income for their next generation with no credit risk or put/call option.
We will have to wait and see if there are any major NPA issues in the books of non-bank financial companies (NBFCs) after the additional six-month window given to NBFCs to comply with asset classification norms, is over.
Mumbai: Investors looking to earn double-digit returns from their fixed income portfolio can consider an investment in the nonconvertible debentures of Piramal Capital and Housing Finance.
“With rising yields, debt funds are at risk of losing value”. Individual investors should not go for long term debt funds especially when the interest rate cycle is turning. Instead, they should opt for shorter duration debt funds or shorter term bank deposits.
We will have to wait and see if there are any major NPA issues in the books of non-bank financial companies (NBFCs) after the additional six-month window given to NBFCs to comply with asset classification norms, is over. So, the picture is not yet fully clear there.
Many platforms have cropped up in the recent past that have made it easier for retail investors to participate in the secondary bond market. There is the Reserve Bank of India’s Retail Direct Scheme, which allows them access to both the primary and secondary market for government securities (G-Secs).