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NBFCs under IBC: Is it the right solution?
The search for a silver bullet to solve the non-banking finance company (NBFC) crisis continues. Despite adequate liquidity in the banking system, many NBFCs are finding it difficult to raise money because no one trusts their balance sheets. Thus, defaults and downgrades continue. As resolution proves elusive for defaulting NBFCs such as Dewan Housing Finance Ltd (DHFL) the government is considering allowing some financial services providers to undergo resolution under the existing insolvency and bankruptcy code (IBC) framework. That suggestion has some merits although it is not without problems. Read more.
Is investment in high-yielding state-backed bonds worth the risks?
A few state government bonds issued by authorities belonging to two Indian states that are listed in the market are currently trading at yields that are higher than what they ought to be, despite having sovereign backing. Or, put another way, these state-sponsored bonds are being traded at lower prices. Essentially, these bonds aren’t perceived to be of such high quality after all. But why is there a perception of risk in the first place? And how should investors approach such bonds? Read more.
Continuing investment flows into high-value stocks: How long will the party last?
For the last few years, only a handful of stocks in the Indian market have been galloping, giving the false impression that the market is in the grip of a bull-run. In fact, mutual funds and portfolio management schemes (PMS) have been giving lower returns than the benchmark indices for a long time. Mutual funds have a mix of large-cap stocks and smaller stocks, but most PMS schemes invest in small and mid-cap stocks, in search of higher returns. In a narrow market dominated by a few stocks, the frontline indices naturally do better than these broader portfolios. How long can this sustain? Read more.
Ashok Leyland posts weak Q2 results. What should investors do?
Ashok Leyland has posted a weak performance in the September quarter. The economic slowdown and lacklustre demand led to a significant decline in volumes, hurting both sales and profitability. The industry outlook for domestic and export markets remains weak in the short term. However, the long-term outlook is positive due to the government’s focus on infrastructure and mining activities, which in turn augurs well for demand for heavy vehicles. Is that enough reason to invest in the stock? Read more.
Bharat Electronics: Does the recent correction offer an opportunity?
The Bharat Electronics stock corrected recently from about Rs 122 a share to Rs 108, after the company reported poor results for the quarter ended September 2019. The company suffered a setback because of delays in execution and deliveries, which is why it could not book the revenue the Street had expected. There was also the impact of last year’s high base, when it executed a large project for electronic voting machines ahead of the elections. What’s the story after the correction? Read more.
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Updated Date: Nov 13, 2019 12:33:58 IST