Market participants are preparing for domestic borrowing costs to potentially remain higher for longer as global pressures intensify. Siddharth Chaudhary of Bajaj Asset Management Limited projects that the U.S. Federal Reserve could deliver a 25-basis-point rate hike in December and keep borrowing costs on hold through early 2027. This external hawkishness threatens to narrow India's yield advantage, increase currency hedging expenses, and slow foreign portfolio inflows. Consequently, investors must weigh product-specific attributes like sovereign security or fund diversification against their personal liquidity requirements.
Key points
Global monetary tightening and heavy Treasury supply risk narrowing the yield advantage t…: Global monetary tightening and heavy Treasury supply risk narrowing the yield advantage traditionally offered by Indian bonds.
Allocations across fixed deposits, sovereign paper, and debt mutual funds should be deter…: Allocations across fixed deposits, sovereign paper, and debt mutual funds should be determined by individual liquidity needs and investment time horizons.
Pressures on foreign portfolio inflows and the rupee may persist even if the Reserve Bank…: Pressures on foreign portfolio inflows and the rupee may persist even if the Reserve Bank of India refrains from mirroring Federal Reserve rate moves.
Sources checked by our analysis pipeline: 1
While fixed deposits offer predictability, government securities provide sovereign-backed investment options and debt mutual funds offer diversification and market-linked returns, choosing the right instrument requires investors to look beyond headline interest rates.
So, how should investors position their fixed-income portfolios in the current environment? Is this the right time to lock into higher yields through longer-duration funds, or should investors remain cautious and stick to shorter-duration strategies? And what should they make of the recent outflows from debt mutual funds?
In this edition of ETMarkets Smart Talk, we speak with Siddharth Chaudhary, Head – Fixed Income, Bajaj Asset Management Limited, who shares his outlook on interest rates, bond yields and liquidity, and explains how investors can navigate the changing fixed-income landscape while balancing returns, risk and liquidity needs.
In this edition of ETMarkets Smart Talk, we speak with Siddharth Chaudhary, Head – Fixed Income, Bajaj Asset Management Limited, who shares his outlook on interest rates, bond yields and liquidity, and explains how investors can navigate the changing fixed-income landscape while balancing returns, risk and liquidity needs. Edited Excerpts –
Strong investor demand follows the custom polymer compounder's massively oversubscribed public issue, lifting its market capitalization to ₹1,670.52 crore within two trading sessions. The company is directing fresh proceeds toward augmenting manufacturing infrastructure and working capital to capitalize on rapid sector expansion. This ongoing momentum reflects market confidence in its widening domestic reach and global export presence across key industrial sectors.
Strong quarterly earnings across domestic trading platforms are driving increased interest from value-focused market participants. The sector has witnessed notable short-term price momentum, led by double-digit monthly gains in listed shares and strong pricing premiums for unlisted counterparts. Portfolio advisors are now guiding capital allocations based on relative operational strength and long-term earnings potential.
Strong quarterly financial results and corporate restructuring plans have driven investor optimism for the drugmaker, with the stock rebounding 67% from its 52-week low. Operating growth was largely propelled by a significant expansion in overseas markets alongside steady domestic sales. Major brokerages have responded by maintaining bullish recommendations and lifting their price targets, citing upcoming international drug rollouts.