Month: June 2020

Gold Rush – Overview of Global Demand and Supply of Gold

JP Morgan once famously said “Gold is money, everything else is credit.” Interestingly, many scientists believe that most of the accessible Gold, on which till few decades back our entire monetary system was based on, is extra-terrestrial in nature and brought to Earth by asteroids from outer space. Ever since then (as per World Gold Council estimates) around 197,576 tonnes of gold has been mined throughout history, of which around two-thirds has been mined since 1950.Further, since gold is virtually […]

Credit Debt Funds get a breather from redemptions

Credit risk category mutual funds saw a steady decline in their assets under management last fiscal as the AUM decreased from INR 81,000 Crs at the beginning of FY 20 to almost INR 55,000 Crs by the end of the fiscal year. The Franklin fiasco exacerbated the trend and the AUM fell sharply to INR 36,000 Cr by end of April and further fell to INR 30,000 Cr by end of May. However, in what would be as a sigh […]

Spread between one year and ten years bond remains at decade high : Operation Twist ?

Past three months have seen the yields on short tenor papers (~ one year) crash by almost 125 bps while the yields for long tenor bonds haven’t seen a commensurate decrease. Yields on these longer tenor 10 year bonds have reduced by ~40 bps only. This has resulted in spreads between one year and ten years paper reaching levels last observed in 2010( as depicted in below chart). The tenor spread has remained over 200 bps consistently for the past […]

High frequency mobility indicators of India

On 24th March, with the announcement of the twenty one day lockdown a large portion of the country came to a standstill. The subsequent lockdowns have allowed for partial movement and in turn economic activity to take place. We have presented below few high frequency mobility indicators to gauge, by what percentage has India come back on tracks… E-Way Bill Generation Data : A GST registered person cannot transport goods in a vehicle whose value exceeds Rs. 50,000 (Single Invoice/bill/delivery […]

Mutual Funds deployed whopping one lakh crore in T-Bills

Mutual fund exposure to Treasury Bills increased to INR 1.82 lakh Cr in May’20 registering month-on-month increase of more than rupees one lakh crore ( the exposure to T-Bills in April was 0.816 lakh cr). Treasury bills or T-bills are short term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day. Treasury bills are zero coupon securities and pay no interest. Instead, they are issued at […]

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