Taxed, ultra HNIs turn to tax-free bonds
These bonds currently yield 5.5- 5.9 per cent, compared with 6.1-6.5 per cent a month ago. What makes these attractive to the ultra high-net-worth individuals is that the returns are tax free — that is an enticement for those who are taxed at as high as 42.74 per cent as per the new tax proposals. If the tax benefit is accounted for, the “return for the highest tax-bracket investor will be more than 10 per cent, making for an attractive investment opportunity.
Will gilt funds’ ongoing rally continue? unlikely, say analysts
The regulatory push from Sebi which mandated liquid funds to hold 20% of their assets in safe treasury bills and government bonds is also driving this buying.
Aditya Birla debt mutual funds to gain as IL&FS arm to pay back creditors
It is a positive development. Since October 2018, all the financial and operational creditors are waiting for some concrete resolution plan. And now they see some ray of hope from NCLAT (National Company Law Appellate Tribunal) and from the new management. Potential buyers are showing interest in acquiring productive assets of IL&FS subsidiaries. The mutual funds will get their outstanding dues if they have invested in those specific subsidiaries or SPVs (special purpose vehicles).
Higher yields keep demand strong for perpetual bonds
Investors should prefer nationalised bank perpetual bonds backed by the government. Despite the NPA problems these banks have honoured their commitment in the past. About six state-owned banks, including IDBI Bank, Bank of Maharashtra, Dena Bank, Uco Bank, Corporation Bank and United Bank of India, have bought back ?13,000 crore-14,000 crore worth of perpetual bonds and repaid investors in full.
REC bond yields higher than HDFC’s
The merger between REC and PFC has apparently triggered concerns among a section of investors who believe a rating downgrade is likely. Investor risk perception has changed in the past eight months.
Debt mutual funds losing ground as NBFC stress hits segment
If the matter (of liquidity constraints) is not resolved on an urgent basis, it can lead to trust deficit and will take a very long time to rebuild lost confidence. “Over the past two decades, debt funds were considered a good alternative to fixed deposits of banks/post offices/NBFCs and corporates.
L&T Finance, SCUF, Muthoot Homefin, Magma Fincorp NCDs to open soon; know about them
L&T Finance is a well-managed company with one of the least NPAs in the category. The AAA rating given by the rating agency further enhances confidence, making its NCD a good investment at this juncture.
NBFCs look for retail money as MFs, banks keep a tight rein on funds
Appetite for lower-rated papers would be muted. There is a trust deficit among investors. Branded names with top credit rating grade can only be in a position have investor faith. Investors should be mindful of exit routes instead of being lured by interest rates.
NBFC debentures plummet: Here are a few lessons for investors
Retail investors should invest in the top notch names such as HDFC, LIC Housing Finance or the bonds issued by central government undertakings since there is a little credit risk.
Are days of high credit fund returns over?
High networth individuals normally show interest in credit funds, but this is missing now. Overloading of NBFC papers may have dented returns as the market battled a perceived crisis over the ability of those companies to repay.