Fri. Sep 25th, 2020

Fxtriangle | Market analysis | Managed trading

Fxtriangle will make Fx trading look easy.

Bond market warms up to NBFCs but Franklin Templeton’s troubles echo

2 min read

The corporate bond market has been abuzz with issuances in the last two months. Thanks to measures by the Reserve Bank of India (RBI) and the government, companies have raised around 1.4 trillion from the market in the first two months of FY21. Bond traders said that the month of June too looks promising in terms of issuance volume.

Indeed, yields have fallen not just for AAA rated issuers but also those below. Many firms that were absent from the market for the last 6-9 months have come back to raise money.

From regulars such as Indiabulls Housing Finance Ltd to rare ones such as Crompton Greaves Consumer Electricals, issuers have found investors. The policy rate cuts by the RBI and the targeted long-term repos have meant that borrowing costs have reduced.

So have the good days returned for the corporate bond market?

While the issuance volume may suggest so, a broad easing of borrowing conditions is still absent. An issuer with government ownership is best placed to raise cheap money. Power Finance Corporation and Rural Electrification Corporation have seen their cost of borrowings plummet given their quasi-sovereign status. The AAA-rated non-bank lenders too have gotten the benefit of falling yields. But it is still tough for those rated lower. Moreover, investors have become more discerning in their purchases. Credit ratings have become just a single input while other parameters have gained importance in decisions. “Rating is for compliance and there is some guidance too. Now investors are looking more closely at balance sheets than they were before,” said a bond trader requesting anonymity.

 

Leave a Reply

Forex trading and any instruments related to Foreign Exchange Market are Speculative and carry substantial risk of loss of either partial equity or the entire deposit amount. Leverage adds up to the risk, before considering to invest in this venture, you should first consider your financial position and may seek the help of an independent financial advisor. FXtriangle dis-recommends the usage of loan instruments to trade in this market as it can hamper financial position. Please do not invest the money that you cannot afford to lose. FXtriangle provides all its services throughout the Globe Excluding (Nigeria, British Virgin Island & the Islamic Republic of Iran) and also provides limited service in some jurisdictions where investment in Overseas markets / Fx Exchanges are prohibited by Law If you are not sure to contact us before using any of our services. FXtriangle acts as an Independent Corporate Financial Advisor and connects you to various overseas exchanges and cannot be held liable for any financial damage occurring through their side. All of our partnered institutions are regulated in various jurisdictions.FXtriangle conducts an independent background check before partnering with any institutions to fulfill your investment objectives smoothly. The usage of our Business name, Logo or any trademark in any financial forum, website, review website, complaint arena, Billboards without our written permission will attract lawsuits.