US SOVEREIGN CREDIT
Gilts to shine brighter from tomorrow
JP Morgan will include 27 fully accessible Indian government bonds in its GBI-EM global index suite starting June 28, allowing global investors to deploy funds in these bonds.
Debt ceiling standoff could trigger US rating downgrade, TD's Goldberg says
Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, warns of a potential severe debt ceiling standoff in the U.S. in 2025, similar to the 2011 crisis, which could lead to another sovereign credit rating downgrade. Despite Congress suspending the debt ceiling until 2025, concerns over rising U.S. debt persist following forecasts by the Congressional Budget Office of significant deficits for fiscal years 2024 and 2025.
Bond yields jump, rupee weakens as trends fall short of hopes of largest NDA win
Government bonds and the rupee weakened as Lok Sabha election results indicated a lower NDA majority. 10-year bond yield rose 9 bps to 7.03%, rupee fell to 83.42/$1. Yields impact borrowing costs. Market awaits full election outcome.
Stock brokers push lending; InsuranceDekho’s latest acquisition
Happy Tuesday! Tech-first broking companies are looking to diversify into the credit business to build a larger financial services play. This and more in today’s ETtech Morning Dispatch.
S&P downgrades French credit rating in blow to Macron
Ratings agency Standard & Poor's downgraded France's credit score on Friday citing a deterioration in the country's budgetary position, a blow to Emmanuel Macron's government days before EU parliamentary elections. France's general government debt will increase to about 112 percent of GDP by 2027, up from around 109 percent in 2023, "contrary to our previous expectations", the agency added.
Sovereign ratings is for state; at the margins for markets
Sovereign ratings, a product of the pre-depression era when analysts were a rarity and communication was expensive, are turning into dinner-table conversations rather than driving investment decisions.
Traditional financial services catch the super app bug
Financial services companies such as Aditya Birla Capital, Angel One and Muthoot Fincorp are building superapps -- a one-stop applications for all their customers' needs. This development comes as large groups such as Reliance Industries and Tata Group have already rolled out such superapps for everything from shopping to payments and credit under one roof.
Muthoot Finance raises $650 million via offshore dollar bonds
The non-banking financial company raised the funds through bonds maturing in three years and nine months at a coupon rate – or rate of interest – of 7.125%. The funds will be used for onward lending and other activities that are allowed under the Reserve Bank of India’s external commercial borrowing guidelines.
Israel's long-term credit rating is downgraded by S&P, 2nd major US agency to do so, citing conflict
Israel's credit rating downgraded by S&P due to Iran conflict. Drone attack near Isfahan. Moody's also downgraded over Hamas. Hezbollah confrontation ongoing. Gaza Strip tensions remain high. S&P's negative outlook, May 10 review pending."}
MF Query: ‘I have Rs 7-8 lakh surplus funds but don’t want to invest in stock markets’
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts.
Oil prices fall on big build in US crude, fuel inventories
Brent crude futures fell 28 cents, or 0.3%, to $89.14 per barrel. U.S. West Texas Intermediate crude futures fell 35 cents, or 0.4%, to $84.88. U.S. crude stocks climbed by 5.8 million barrels in the week ended April 5
Give up Moody & Poor standards: Nilesh Shah
India's engagement with global rating agencies has not yielded desired results for its sovereign credit rating. However, the country has successfully engaged with agencies managing global bond and equity indices, resulting in increased weight in the indices. India aims to further enhance its position by upgrading South Korea's status and ensuring full inclusion of HDFC Bank in the index.
Abu Dhabi sovereign fund to invest space tech, AI this year
Khaldoon Mubarak, managing director of Abu Dhabi's Mubadala Investment, told an investor conference in Abu Dhabi that sovereign wealth funds had an opportunity and responsibility to transform from asset investors to enablers of global progress.
Today is last day to invest in Sovereign Gold Bonds (SGB) 2023-24 Series-IV: 8 important things to know
SGB Last Date: The Sovereign Gold Bonds (SGB) Series IV 2023-24 is open for subscription with an interest rate of 2.50%. Investors can purchase units of SGB, with tax exemptions and tradability. Investment limits apply, and the last date to invest is February 16, 2024. Eligible investors include individuals, HUFs, trusts, universities, and charitable institutions.
Falling deposit a temporary cause of concern; money stays within economy: Dinesh Kumar Khara, SBI
SBI Chairman Dinesh Kumar Khara discusses the impressive budget numbers and their impact on the growth potential of the economy. He highlights the importance of fiscal consolidation, private sector investment, and global investment in attracting capital and improving sovereign rating. Khara also mentions the positive impact of lower interest rates, government borrowing, and inclusion in the global bond index on the banking sector. He addresses concerns about the drop in savings and the movement of money into financial markets, emphasizing that it ultimately supports economic activity.
Moody's’ Christian de Guzman explains why it is not yet time to give India higher sovereign rating
Christian de Guzman of Moody's Investors Service states that India's fiscal consolidation has progressed since the pandemic, but it has not yet reached the level prior to the downgrade to BAA3. The bond markets are responding positively to the government's efforts, with lower borrowings and increased capital inflows expected. For a ratings upgrade, India's weak points, such as fiscal consolidation and debt reduction, need to show material improvement. India is not alone in the region in terms of gradual fiscal consolidation post-pandemic.
Growth of Asian emerging, developing economies to be credit strengths for many govts in APAC: S&P
S&P Global Ratings predicts that Asian emerging and developing economies will remain a credit strength for many governments in the region, with 19 out of 21 countries receiving a sovereign rating in the Asia-Pacific region having a stable outlook. The agency expects stable outlooks on most long-term foreign-currency sovereign ratings in the region, with few changes expected in the next year or so.
Climate change could reduce India's credit rating, study finds
The study, published on Monday in the journal Management Science, is the first to anchor climate science within "real world" financial indicators. It suggests that 59 nations will experience a drop in sovereign credit rating in the next decade without emissions reduction.
Rating agencies, don’t be such a Fitch
Naturally, questions will arise over the timing of the rating action. Expectations of monetary tightening bringing the US economy to a standstill are receding. Doomsayers are in retreat, and Fitch finds itself under attack — from the administration and from independent observers. Standard & Poor’s, Moody’s and Fitch had warned the US its AAA credit rating was at risk. But only one has acted on it.
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