Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Stock-market-news/  Foreigners are buying Indian bonds even as locals remain wary
BackBack

Foreigners are buying Indian bonds even as locals remain wary

Overseas investors kept buying Indian debt even during most of a seven-month rout through February, although they've been restricted by a foreign investor cap of around 5% of outstanding notes

The yield on the benchmark 10-year bonds rose 12 basis points to 7.34% as of 10:39am in Mumbai after peaking at 7.82% in late February. Photo: Hemant Mishra/MintPremium
The yield on the benchmark 10-year bonds rose 12 basis points to 7.34% as of 10:39am in Mumbai after peaking at 7.82% in late February. Photo: Hemant Mishra/Mint

Bangkok: While there’s still scepticism that India’s state-run banks will get back into the nation’s sovereign bond market, overseas investors are keen to buy more of the notes after the central bank granted them greater access.

India’s high yields and relatively stable currency have spurred Mitsubishi UFJ Kokusai Asset Management to buy more rupee securities, said Tatsuya Higuchi, executive chief fund manager of the fixed-income investment division in Tokyo. Standard Chartered Plc. is long on the nation’s 10-year paper due to “cheap valuations," Arup Ghosh, senior Asia rates strategist, wrote in a note on Tuesday.

“Inflation seems to be stabilizing, while foreign-direct investment flows have been coming in," said Higuchi at MUFJ Kokusai, which oversaw the equivalent of $129 billion at the end of last year. “We hold them based on a long-term growth story."

Overseas investors kept buying Indian debt even during most of a seven-month rout through February, although they’ve been restricted by a foreign investor cap of around 5% of outstanding notes. That will be lifted by half a percentage point in each of the next two fiscal years ending March, the Reserve Bank of India (RBI) announced on Friday.

The yield on the benchmark 10-year bonds rose 12 basis points to 7.34% as of 10:39am in Mumbai after peaking at 7.82% in late February. That hasn’t been enough to lure back the state-run lenders, the biggest buyers, who were net sellers in four of the five days through Monday, according to data from the Clearing Corp. of India. Bloomberg

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 10 Apr 2018, 06:09 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App