BREXIT And India

The impact will be more about sentiments than fundamentals… The RBI and the Finance minister have been categorical that the Indian economy is well prepared to handle the aftermath of the BREXIT vote. Over the longer term, the impact of BREXIT may not be too acute, but in the short term the sentimental impact will…

BREXIT Is The Vote

What it means for the UK and the EU…   Well the verdict has finally been delivered. It is a BREXIT vote; a vote to move away from the European Union. To be fair, Britain was never part of the common currency, especially after the debacle of 1992 when the Pound was ejected from the…

Negative Yields

Why it could be a big bubble for global markets… Recently Allianz of Germany had raised some serious concerns on the negative interest yields in the global markets. Large economies like Germany, Japan Switzerland and Scandinavia pay negative rates on bonds. That means investors are actually paying the government to safeguard their money. Negative rates…

RBI Data Worries

Recent data flows have been worrying for the central bank… In the last one week, there have been 4 sets of data announcements that have been fairly worrying for the RBI and the government. While inflation is rising, growth is failing to pick up. Above all, the momentum of favorable trade could shift much faster…

HDFC Max Merger

It will be a template for insurance consolidation…   When HDFC Life announced its decision to merge with Max Life, there was a lot of excitement that it generated. Apart from the economies of scale, this merger also offers the opportunity to better rationalize their cost and distribution structures. But more importantly, this could become…

Gilt Funds

Why are Indian Gilt Funds seeing consistent outflows?     It’s all about rate expectations…   Gilt funds are funds that invest largely in government securities of a longer term. Apart from being liquid, these Gilt Funds are the most vulnerable to changes in the market interest rates. Gilt funds typically benefit when interest rates…

PSU Share Buyback

Forget about taxes, it can bridge the resource gap this fiscal…   The Finance Minister had recently urged PSUs to adopt the buyback route like their private sector counterparts. Buyback involves the company buying back the shares from existing shareholders at a price that is slightly higher than the market price. Typically, companies that are…

FCNR Redemption

Why it could be a real headache for the RBI?   It is by now well known that the Indian economy has a huge payout of $25 billion in the form of FCNR deposits redemption. These deposits were raised by the banks from their NRI clients at the behest of the RBI at the peak…