Investment Insights

Suyash Choudhary

The Monetary Policy Committee (MPC) decided to cut repo rate by 25 bps (4:2 majority) while keeping stance neutral (5:1 majority). The Reserve Bank of India (RBI) has cut both its growth and inflation forecast as well. Prima facie there is nothing to complain in this policy. However, this is somewhat of a disappointment versus […]

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Suyash Choudhary

We had observed in February as to how global policy seemed to be shifting, responding to the synchronized slowdown narrative on global growth (https://www.idfcmf.com/insights/policy-puts-start-re-emerging/). With the European Central Bank (ECB) and US Federal Reserve (Fed) policy meetings since then, these initial ‘put’ options have now been significantly strengthened. Both these central banks ended up sounding […]

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Suyash Choudhary

RBI Expands Liquidity Tools

By: Suyash Choudhary

The RBI has announced a new tool for liquidity creation and decided to inject rupee liquidity for 3 years through long-term foreign exchange Buy/Sell swap. Under this, the RBI will buy up to USD 5 billion from the market via auction on 26th March, and simultaneous sell it back to the same counterparties effective March […]

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Suyash Choudhary

Global Policy Is Shifting, Responding To Slowing Growth   A lot has changed in the world over the past few months. A theme we have focused on is the changing narrative on growth which has gone from a synchronized recovery till late 2017 to significant growth divergences over most of 2018 to a synchronized slowdown […]

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Suyash Choudhary

The recent RBI policy, and more particularly the post policy interactions, distinctly bore the mark of the new Governor. Assessments made were bolder and unequivocally benign. There was much more sympathy for the government including for the recent interim budget which, it may be remembered, wasn’t as well accepted by the market. Indeed, the Governor […]

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Suyash Choudhary

First Principles fixed income

By: Suyash Choudhary

The Importance Of ‘First Principles’ When Investing In Debt Mutual Funds   A. Identifying Risk in Debt Mutual Funds (MFs)   There are two major types of risks associated with a debt MF:   1> Interest rate risk: Risk of loss owing to changes in interest rates. This risk is best captured by the duration […]

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Suyash Choudhary

The RBI cut policy rates by 25 bps to 6.25% (voted 4-2) and changed the monetary policy stance from ‘calibrated tightening’ to ‘neutral’ (unanimous vote).   Some key points: 1. The MPC cut its CPI forecasts, with Q4 FY19 now being forecasted at 2.8% y/y (vs. the lower-than-expected actual print of 2.6% in Q3 FY19 […]

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Sreejith Balasubramanian

Interim Budget FY20 – What Lies Beneath

By: Sreejith Balasubramanian

The debate on whether the interim budget was populist (owing to the direct income support for land-owning farmers and higher income tax exemption threshold of Rs. 5 lakhs) and was akin to a full budget (which set a new precedent for election year budgets) continues. In our budget-day note (Interim Budget FY20: Fixed Income Takeaways), […]

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Equity Investment Team

Key Takeaways from Budget 2019

By: Equity Investment Team

While the budget is an annual exercise of the government’s finances, a holistic way to analyse the budget is to look at the path chosen by the government over its entire term – if it has been consistent with its promises.   In this context, NDA’s governments 5th budget, despite the pressure of impending general […]

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Suyash Choudhary

The Interim Budget largely delivered on the reflationary stimulus that was being anticipated. Key highlights as follows:   • FY19 Revised Estimate (RE) fiscal deficit at 3.4% of Gross Domestic Product (GDP) (vs. FY19 Budget Estimate (BE) of 3.3%) and FY20 BE fiscal deficit also at 3.4% of GDP (vs. previously assumed 3.1% as per […]

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