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Fixed Income Markets - Outlook •

Inflation to moderate December 2011 onwards •

Impact of RBI’s aggressive rate hikes

Base effect impact

Stabilizing commodity prices globally

Moderation in credit and economic growth

10 year G-sec benchmark yield is expected to trend lower on account of; •

Impact of continuous supply nullified by OMO buy-backs

Consolidating growth and inflation numbers to support G-secs

Slowing credit growth and current high yields to attract investors

Additional borrowing announced to be supported by RBI via OMO buybacks

We expect the spread between G-secs and similar maturity AAA PSU corporate bond to narrow going forward on demand supply dynamics

Confidential

Source: RMF Research

Slide 17

india _global market  

macro economic environment

india _global market  

macro economic environment

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