NCDs offer 4-6% more than bank FDs, but limit your exposures
Typically, a AAA rated paper trades 100 basis points over the 10-year GSec, while a AA rated paper commands a 200 basis points premium. Currently, the 10-year benchmark trades at 6.4 per cent, which means a AAA rated NCD should trade at 7.4-7.5 per cent and a AA rated NCD at 8.5-9 per cent.
Investors move away from preference shares to NCDs
Investors are looking to exit from preference shares. Investors primarily used to invest in preference shares as dividend income was tax-free up to Rs 10 lakh, and thereafter, it was to be taxed at 10 per cent. Technically, post budget, there is parity between interest and dividend income.
Investors in higher tax bracket find solace in tax-free bonds post Budget
Tax-free bonds are the only instruments which are truly tax free and will carry that status till maturity as it was approved by parliament. There is interest amongst investors in these bonds especially after the budget, when dividend from preference shares started getting taxed, as per tax slab.
Gold, fixed-income wrap 2019: Yellow metal’s prices zoom, long-term bonds deliver
After the debacle of Infrastructure Leasing & Financial Services (IL&FS) in 2018, the magnitude of defaults increased as names with good credit ratings joined the list of defaulters. This spooked bond investors’ sentiment further.
SIB TIER 1 BOND COUPON RATE TRIGGERS DEBATE ON PRICING
Investing in SIB Tier 1 bond that yields 13.75 per cent could be a good investment now given the fact that SIB has a good track record and has been reporting profit quarter after quarter.
Five tax-free bonds for capital safety and tax-free interest income
Post IL&FS default, it is prudent to invest in securities that are issued by central government or public sector enterprises. We suggest short maturity tax-free bonds. The bonds are listed on the stock exchanges and are available in secondary market as well.
Fixed income investors can take small exposure to IFCI’s NCDs: Analysts
The government has a 56 per cent holding in the company and has been giving timely support that is comforting for investors despite the weak rating of BBB-
Bharat Bond ETF finds many takers among NRIs
A basket of AAA rated government companies, target maturity date and extremely low cost are driving NRIs to this bond. There is seeing substantial interest from NRI families visiting India from London, Singapore and Dubai.
Bharat Bond ETF may fetch up to Rs 15,000 cr, launch likely in two series
It is important that investors are clearly informed about the risk-return profile of the product so that there are not many negative surprises. Industry experts say the product will give the option to investors to match their goals with maturities of the underlying bonds.
Investors flocking to tax-free, government bonds
There is safety and no credit risk in both GOI bonds. In addition, investors earn a good 100-125 basis points higher than bank deposits.