Naval Bir Kumar, Managing Director, IDFC Asset Management, said a 50 bps cut on both repo and reverse repo is factored in by the markets. "The market is basically forecasting that the interest rate cycle has turned. We see many more rate cuts going ahead."
According to him, gilt or income funds are still good to buy. “As fund managers we would like to play the cycle initially with gilts and not with corporate bonds because of liquidity, even though the spreads are very attractive. Hence, we clearly are advising our customers to take a long bond view and have a number of long bond funds.”
He believes this yield cycle will see new lows being tested. "Last time around the 10-year yield touched 4.95% as the lowest level, this time it will go to 4% levels."
According to him, gilt or income funds are still good to buy. “As fund managers we would like to play the cycle initially with gilts and not with corporate bonds because of liquidity, even though the spreads are very attractive. Hence, we clearly are advising our customers to take a long bond view and have a number of long bond funds.”
He believes this yield cycle will see new lows being tested. "Last time around the 10-year yield touched 4.95% as the lowest level, this time it will go to 4% levels."
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