Market looking for government austerity: Shailendra Jhingan
Recent rise in commodity prices, particularly crude oil, has worsened the outlook for inflation
By ET Bureau |
BCCL
Shailendra Jhingan
MD & CEO, ICICI SECURITIES PRIMARY DEALERSHIP
What are your key takeaways from ET Pre-Budget 2018?
In The ET Pre-Budget 2018 event, Mr Gadkari’s speech was extremely informative and laid out the government’s priorities, with its focus on rural employment and environmentally sustainable development.
How do you define the current bond-market volatility?
The recent rise in commodity prices, particularly crude oil, has worsened the outlook for inflation, current account and fiscal deficits. This has resulted in a sharp rise in bond yields since Sept. Also, the excessive supply of bonds through OMOs and talk of extra borrowing by the government have resulted in fatigue in certain investor segments. This has heightened the volatility in the secondary markets, with a drop in volumes. Markets are now waiting for the budget to provide some clarity on the government’s commitment to fiscal austerity. That, along with reducing the duration risk from the government’s borrowing, can help stabilise bond yields.
MD & CEO, ICICI SECURITIES PRIMARY DEALERSHIP
What are your key takeaways from ET Pre-Budget 2018?
In The ET Pre-Budget 2018 event, Mr Gadkari’s speech was extremely informative and laid out the government’s priorities, with its focus on rural employment and environmentally sustainable development.
How do you define the current bond-market volatility?
The recent rise in commodity prices, particularly crude oil, has worsened the outlook for inflation, current account and fiscal deficits. This has resulted in a sharp rise in bond yields since Sept. Also, the excessive supply of bonds through OMOs and talk of extra borrowing by the government have resulted in fatigue in certain investor segments. This has heightened the volatility in the secondary markets, with a drop in volumes. Markets are now waiting for the budget to provide some clarity on the government’s commitment to fiscal austerity. That, along with reducing the duration risk from the government’s borrowing, can help stabilise bond yields.
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