Sensex 22,876.54 (+118.17)
Nifty 6,840.80 (+25.45)
Compare Performance Equity Sectoral Tax Planning Balanced Gilt Bond Liquid Index Pension
 Home|Contact Us
 Remember my Userid
New User - Register?
Forgot Password?
Latest NAVs
 Funds Reckoner
 Scheme Profile
 Scheme Comparison
 Fund Screener
 Return Calculator
Get Holdings
 Mobilisation Trends
 Trends in Transactions
 Stock Watch
 Top Holdings
 NFO Analysis
 -What's In What's Out
 Fund Managers
 -From the Desk
 Special Feature
 Malegam Committee
 SEBI Investor Education  Programme
From the Fund Managers Desk 1x1pix.gif (807 bytes)
1x1pix.gif (807 bytes)

Tuesday, August 10, 2010 14:17 Hrs IST

Benchmark 10Y Bond to Trade Between 7.60% To 7.90% pa In the Near-Term

DSP BlackRock Mutual Fund's Debt Market Views

We expect government bond yields to remain range-bound with an upward bias in the near-term. Tight liquidity conditions and higher inflationary expectations should exert upward pressure on the government bond yields while improving government finances and uncertainty in the global economy will push them lower in the medium term. Market participants are expecting the RBI to hike both Repo and Reverse Repo Rate by atleast 25 basis points in its upcoming policy review on September 16, 2010. We expect benchmark 10Y bond to trade between 7.60% to 7.90% pa in the near-term. We also expect the RBI to maintain a somewhat tight liquidity environment to keep a check on inflation.

We expect a high amount of primary market supply from the borrowers to keep the money market yields elevated. 3M Bank CD yields can be expected to touch 7.0% pa in the near term while 12M Bank CD yields can touch 7.5% pa.

We believe that the risk-averse investors should remain invested in the short-duration, high quality fixed income funds such as DSP BlackRock Money Manager Fund, DSP BlackRock Floating Rate Fund and DSP BlackRock Liquidity Fund. Investors with some risk appetite for government bonds should consider investing into DSP BlackRock Bond Fund and DSP BlackRock Government Securities Fund with an investment horizon of 6-9 months.

Previous Stories
Other Stories
  Guide to the Markets Asia (21-Mar)
  The front end of the curve looks relatively attractive in the current situation on a risk reward framework-Navneet Munot, CIO, SBI Funds Management (9-Dec)
  Fears of an early taper in light of stronger than anticipated data last week have receded (18-Nov)
  RBI will not hesitate to increase the Repo Rate further, if the inflation remains uncomfortably higher than the RBI's own projections (30-Oct)
  We believe that the 10 year bond yield will range between 8.40%-8.80% levels (30-Oct)
  The policy review will throw light on how RBI weighs the growth-inflation trade-off (28-Oct)
  Investors should take advantage of current pessimism to get exposure to long term stories (28-Oct)
  Monsoons have been good and agricultural growth has picked up which remains a key positive going ahead-Equity Market-Deutsche Mutual Fund (23-Oct)
  The trajectory of inflation, especially the Consumer Price Index may determine further moves in the repo rate (22-Oct)
  We expect bond yields to remain range-bound with the benchmark 10Y G-sec yield trading between 8.5% to 9.0% in the near-term (22-Oct)