ETMarkets Smart Talk: 2024-25 will be year where we see a structural shift in demand supply for Government bonds: Devang Shah
“We believe that 2024-25 will be the year where we see a structural shift in demand-supply dynamics for Government bonds,” says Devang Shah, Co-Head, Fixed Income, Axis Mutual Fund.
In an interview with ETMarkets, Shah said: “We expect RBI to ease its liquidity stance from April 2024 and expect RBI to cut rates in H2 on account of lower inflation and benign global interest rate cycle,” Edited excerpts:
How do you rate the Interim Budget on a scale of 1-10 (10 being the best) and why?
Devang Shah: We will rate the budget as good -10 out of 10 from a fixed income markets perspective. We were looking at the fiscal consolidation and gross and net borrowing numbers, and the budget has delivered a path for fiscal consolidation.
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Offering CollegeCourseWebsiteIIM KozhikodeIIMK Chief Product Officer ProgrammeVisitIIM LucknowIIML Chief Operations Officer ProgrammeVisitIndian School of BusinessISB Chief Digital OfficerVisitThe fiscal deficit of 5.1% is a positive surprise and the gross borrowing number lower by INR 1 trillion is positively taken across by markets.
What is your call on fixed income space? Yield dropped post Budget – does that hint something?
Devang Shah: We believe that 2024-25 will be the year when we see a structural shift in demand-supply dynamics for Government bonds, lower Gross borrowing, and FPI buying in Government bonds on account of Index inclusion have changed the demand-supply dynamics for the year.
FPI buying accounts for 25% of net
