The government has taken steps to even out the impact of possibly higher gross borrowings through dated securities in FY26 by conducting switches and buybacks
State assets haven’t been disposed like this since then-Chancellor of the Exchequer Gordon Brown liquidated over half of the UK's gold holdings at $275 per troy ounce
The meltdown was an early warning about radical changes in financial markets and suggests pension systems might not be fit for purpose
The BOE said it would buy as many long-dated government bonds as needed between now and Oct. 14 to stabilise financial markets, and added that it would postpone next week's start of its gilt sale programme.
Contrarian investing involves picking sectors, strategies and funds that are out of favour. It works when executed well, but carries risks too.
Even over a five-year timeframe, almost all NPS gilt funds have managed to deliver double-digit returns
The gilt schemes of NPS pension managers deliver more than g-sec mutual funds
On the basis of the current supply dynamic, a sharp and sustainable fall in yields looks unlikely from here
The NPS allows investments in equity, corporate debt, government securities and alternative asset schemes
An unlikely winner over the last one year, despite the massive credit crisis that affected many debt funds
Anand Tandon says, one should look at stocks where there is still value. "If one looks at market as a whole there are still sectors available that are reasonably cheap like IT which has been ignored because growth rate is presumed to be slower than other cyclicals," he adds.
The range for the 10-year yield is seen between 8.15-8.35 percent, says Ajay Manglunia, Edelweiss. "Last week's RBI measures should keep up the positive sentiment but gilt yields will largely continue to track the rupee, "he adds.
In keeping with the guidance and an increasingly benign stance, RBI reduced the repo rate by 25 bps to 7.50% in its monetary policy as of 19th March 2013. Read this space to know its impact on debt market.
Chaitanya Pande, Head-Fixed Income, ICICI Prudential MF expects yields to stabilize at current levels. According to Pande, all eyes will be focused on RBI’s stance on interest rates in the policy.
In the debt market, the bond prices fell to three-week lows on worries over the new borrowing calendar that the government may announce on Monday, reports CNBC-TV18’s Latha Venkatesh.
With the uncertainty surrounding the fiscal deficit, experts say that they best debt investment right now active funds like bond funds or GILT funds.
In the present environment, short term income funds with good underlying credit quality, have the potential to offer the best risk adjusted returns for investors with a 6 months to 1 year investment horizon.
The bond market is likely to remain bearish with yields inching up in near future on the back of oversupply of government securities (Gilt or G-Sec) along with inflation concerns, treasury officials said.
According to Suyash Choudhary, Head of Fixed Income at IDFC Mutual Fund, the 10 year (G-Sec) is very close to its near-term historic high, so investors do perceive value at these levels.
Daiwa Mutual Fund has launched Daiwa Government Securities Fund – Short Term Plan that seeks to generate income and capital appreciation by investing predominantly in sovereign securities issued by the Central Government (including Treasury Bills) and /or by State Governments, with maximum average portfolio maturity of less than three years.