All markets have been fearing the impact of likely US Taper, likely announcement to happen over this week with cut backs to start as early as January. Interestingly, Indian bond markets have seen sharp inflows in the last one week, despite the slew of good economic data in US. Tbills and dated securities have been bought by FIIs to the extent of INR 2000 Cr each, intense buying post the CPI data.
Most of the dated securities buying has been by the Longer term investors (like Sovereign wealth funds, Pension funds, Insurance funds etc.). Buying of Tbill at the current USDINR forward levels suggest the FIIs' comfort on USDINR spot as well - as they can't be hedging when the forward levels are so high (8.25%+LIBOR).
Are we closer to bond index inclusion than what the local markets believe?
Source of Data: NSDL
Most of the dated securities buying has been by the Longer term investors (like Sovereign wealth funds, Pension funds, Insurance funds etc.). Buying of Tbill at the current USDINR forward levels suggest the FIIs' comfort on USDINR spot as well - as they can't be hedging when the forward levels are so high (8.25%+LIBOR).
Are we closer to bond index inclusion than what the local markets believe?
Source of Data: NSDL
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