Monetary policy

A higher inflation might actually be good for the overall sustenance of wages and incomes and also of employment in this country, says Suresh Narayanan, Chairman & MD, Nestle India. What is your view on the monetary policy and how the global policy on inflation is going to move because higher inflation means higher raw material prices which could be bad for your margins in this kind of an environment? Given that there is a lot of liquidity in the world and central banks are likely to follow a loose monetary policy, as a commodity consumer are you worried about hyperinflation coming back in the second half of this year and are you preparing for it?Once the panic of the pandemic settles down, most certainly, some amount of inflation would come in. It would also come in because some of the demand outlets are unfortunately stunted now because of the pandemic and these would also start to open up. I do not profess to be a great economist, but I think a certain level of healthy … [Read more...] about Even during Covid times, Nestle innovated and launched products: Suresh Narayanan

Investors put money in debt mutual funds to get stable returns. The return on a debt portfolio is broken into two parts: the income which is the coupon/yield to maturity (YTM) of the underlying securities in the portfolio, and the price appreciation of securities in the portfolio. Analysing the total returns over a longer time frame, 80-85 per cent of returns is generated by YTM of the portfolio and the balance 15-20 per cent by capital appreciation. In the past, retail and HNI investors have always been inclined towards schemes that offered higher YTM. YTM is the stable part of the returns of the portfolio. The risk of a high-quality portfolio is volatility, as the underlying securities are traded frequently. However, we are seeing a shift of retail and HNI investors from credit funds to good quality portfolios this financial year. Lower GDP growth and high leverage of Indian companies have led to credit quality deterioration and security prices moving down/marked down in a … [Read more...] about Debt market’s love for G-Secs & PSU papers is here to stay

A senior trader with a primary dealership said: "It looks like he is saying don`t expect more than a 25 bps cut", adding that Das seemed more concerned about a lack of transmission of the RBI`s rate cuts so far. … [Read more...] about RBI’s change in stance as good as additional 25 bps rate cut: Shaktikanta Das

India's economy expanded by 3.1 per cent in the January-March quarter the full year FY20 GDP growth to 4.2 per cent, its weakest in eight years so far in the current series. The economy had grown at 6.1 per cent in 2018-19 (FY19). The government has revised the growth for the first three quarters of FY20 to 5.2% in Q1, 4.4% in Q2 and 4.1% in Q3. The first seven days of the lockdown had coincided with the last seven days of March making the Q4 numbers important for getting a sense of whaté expecting to come in subsequent quarters. The fourth quarter (FY20) numbers offer a glimpse into what lies ahead for the economy in the first quarter of the current fiscal (FY21) when the full impact of the lockdown is sure to drag the economy deeper into the negative territory. Economists have projected a contraction of as much as 45 per cent in Q1FY21. The second advanced estimates had put the economic growth at 5 per cent for FY20. The services sector bore the brunt of lockdown as … [Read more...] about GDP growth at 3.1% in Q4 drags full year FY20 growth to 4.2 per cent

“It leaves quarterly growth in Q2 tracking at the high end of the scenarios that (the Bank of Canada) laid out in their last Monetary Policy Report. But the big question is how fast can the recovery be and there are wide uncertainty bands around how fast that can be, and that depends not just on economics but also on the spread of the virus and whether and how long containment measures need to remain in place... The Bank of Canada is going to keep piling liquidity into the system as much as necessary to make sure you’re not adding financial credit shock on top of what’s already a really severe economic shock. … [Read more...] about Instant View: Canada’s GDP growth in April plunged by a record 11% from March