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Modi budget seen slipping with India bonds turning Asia's worst | Emerging Markets, Fixed Income | Bloomberg Professional
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Modi budget seen slipping with India bonds turning Asia's worst | Emerging Markets, Fixed Income | Bloomberg Professional
Photographer: Udit
Kulshrestha/Bloomberg
The government may seek to borrow an unprecedented
6.8 trillion rupees
($99 billion) in the financial year starting April 1, according to the median
estimate in a Bloomberg survey of 10 fixed-income strategists and
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Modi budget seen slipping with India bonds turning Asia's worst | Emerging Markets, Fixed Income | Bloomberg Professional
Hong Kong. If that happens, the government will definitely lose credibility,
foreign investors will be disappointed and the central bank wont have
much scope to cut rates further. That will be quite negative for bonds.
Rupee-denominated sovereign debt returned 8.1 percent last year and 16.5
percent in 2014, Bloomberg indexestracking major Asian markets show.
Investors have lost 0.03 percent on the bonds so far this year, compared
with returns of 4.6 percent from Indonesian notes, 3.7 percent from
securities in Thailand and 1 percent on Chinese debt.
Foreign holdings of Indian corporate and government bonds dropped 27.5
billion rupees in the last three days, the most since Dec. 29, data from
National Securities and Depository Ltd. show.
While the budget always garners market attention, this year it is also key to
the path of monetary policy. Sovereign debt could lose favor among
investors if the fiscal-deficit targets are missed, Reserve Bank of India
Governor Raghuram Rajan warned last month. He kept interest rates
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