Skip to main content

Debt Market Update - June 2017

 


The yield on new 10-year benchmark (6.79% GoI 2027) ended the month of June at 6.51% down by 15 bps over the previous month end. The yield on 10-year AAA Corporate Bond ended the month at 7.42% as against 7.64% at the end of May 2017. Thus, corporate bond spreads during the month narrowed to 80 bps as against 87 bps in the previous month.

Liquidity conditions continued to remain positive during the month of June 2017. As against ~Rs. 340,058 crs of average liquidity absorbed by RBI during the month of May 2017 through various sources (Liquidity Adjustment Facility, export refinance, marginal standing facility and term repos/reverse repos), ~Rs.309,030 crs of liquidity was absorbed by RBI during the month of June 2017. Cash Management Bills (CMBs) were issued twice during June totaling Rs.60,000 crs. On 30th June, RBI announced an Open Market Operation (OMO) sale of G-secs totaling Rs.10,000 crs. The overnight rate ended at the same level of 6.25% as against previous month.

INR closed at 64.58 versus the USD in June as against 64.51 in May 2017. The net FII investments in equities & debt were ~US$ 4.55 billion in June 2017, up from US$ 4.17 billion in May 2017. FII's have purchased close to US$ 22.65 billion in Indian debt and equity markets between Jan'17 to Jun'17 as compared to ~US$ 1.2 bn during Jan'16 to Jun'16.

The annual rate of retail inflation, CPI fell to 2.2% YoY in May 2017, lower than 3.0% in April 2017. The drop was largely on account of fall in food inflation, which decreased to -0.22% in May 2017 from 1.2% in April 2017. Fuel & light inflation also decreased to 5.46% in May 2017 from 6.13% in April 2017. Core CPI (excl. food & fuel) also declined to 4.14% in May 2017 from 4.4% in April 2017.

On the economic front, Gross Value Added (GVA) grew 6.1% YOY in 4QFY17 partly reflecting impact of demonetization. FY17 GVA growth was at 6.6%, lower than FY16 GVA growth of 7.9%.

In its June meeting, the Monetary Policy Committee (MPC) voted 5-1 in favour of leaving the policy repo rate unchanged at 6.25% in line with consensus expectations. The RBI sharply lowered its inflation projections for first half of FY18 to 2.0%-3.5% (from 4- 4.5% earlier) and for second half of FY18 to 3.5%-4.5% (from 4.5-5% earlier). It also lowered its FY18 GVA growth projection marginally to 7.3% from its 7.4% projection made during the April policy meeting.

Outlook

The MPC in its June'17 credit policy review kept policy repo rate unchanged with a less hawkish tone and sharply lowered inflation projections for the current fiscal year. In case the incoming data reaffirms the moderating path of inflation, it may create some space for easing in our opinion. With a benign inflation outlook, steady INR, implementation of GST and good progress of monsoon, there is room for moderate downside in yields in our view.

Source for various data points: RBI Website, Bloomberg, Reuters and HDFC AMC Research.



Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300




 

Popular posts from this blog

Post Office Deposits Interest Rates

Best SIP Funds to Invest Online   SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact  Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com

LIC Leave Encashment Plan

LIC Leave Encashment Plan       Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual Fund Application Forms fro

What is price deflator?

What is price deflator? A defaltor is used to restate data measured over time to prices prevailing at a particular period or time to make it comparable. Essentially, a deflator removes the effect of inflation from the data. What is the role of price deflator in GDP calculations? Prices are continuously in a state of flux, but generally trend upwards over time. Therefore, even without an increase in the quantity of goods and services produced by an economy, price increase can give the impression of an increase in the gross domestic product, or GDP, the benchmark indicator of economic activity. Therefore, the impact of prices has to be removed at arrive at a true measure of the value of goods and services produced, or real economic growth. A deflator is used to reduce output estimates at current prices to what they would be if calculated with reference to prices in a particular year. Why is GDP deflator considered a good measure of inflation? The ratio between the GDP at current p

Tax Slabs 2012

Slab 1 Upto Rs 1.6 Lacs Tax Rate NIL for Men; Upto Rs 1.9 Lacs Tax Rate NIL for Women; Upto Rs 2.4 Lacs Tax Rate NIL for Senior Citizen; Slab 2 Rs 1.6 Lacs to Rs 5 Lacs Tax Rate 10% Slab 3 Rs 5 Lacs to Rs 8 Lacs Tax Rate 20% Slab 4 Rs 8 Lacs onwards Tax Rate 30%   --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) HDFC TaxSaver ICICI Prudential Tax Plan DSP BlackRock Tax Saver Fund Birla Sun Life Tax Relief '96 R

How Tax Deducted at Source (TDS) works?

    THE tax season is here. And if you are an employee you can't blame your employer for deducting large chunks of money from your salary towards tax deducted at source ( TDS ), which he is legally obliged to do. Your bank will also deduct some percentage from your FD interest of Rs 10,000 or more towards TDS! So what is this TDS all about? How is it computed? Are there any changes this year? Read on... What is TDS? TDS reduces your taxable income and could even provide tax relief! The TDS collections account for 40 percent of the total taxes collected in the country. As the name suggests TDS is the amount of tax that is deducted at source in certain types of income . The TDS thus collected is deposited in the Government treasury within a specified time. How is it computed? Some of the types of income where TDS is applicable include salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and UTI/Mutual Funds, commission and brokerage
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now