Just when I started discussing NBFC credit spreads on Thursday on this Podcast it is news... Have you heard ‘Nifty reacts 5% to the Economic Winter’ by Rohit Srivastava on #SoundCloud? #np https://soundcloud.com/indiacharts/nifty-reacts-5-to-the-economic #nbfc #nifty #debt
I discuss credit spreads of lower rated debt to higher rated debt and what was I asked by the media? Isn't NBFC Debt AAA rated.
This bothers me. The business model of NBFCs in most cases is to go where banks do not tread and by that very nature they lend to lower rated debt for the higher returns and thus borrow at higher interest rates. So in my mind they are lower rated debt. And when the cost for this debt moves up faster than the market [read 10 y gsec], then we have widening of spreads and a risk off environment as we are seeing in equities in India now. This is getting interesting.
24 SEPTEMBER 2018
The weekly Elliott Wave commentary with Targets and levels is published every Sunday to Subscribers, This is only an excerpt of our observations from recent publications.
MEDIUM TERM
NIFTY ELLIOTT WAVE UPDATE
Nifty
carried from the upper end of the channel to the lower end at 11135 as anticipated. Now is the tricky part where short term after breaking 11135 we have to judge if the trend will be a cascading decline or a selling climax? A selling climax is a oversold condition caused by panic. The next trendline from the Demonetisation at 10900 worked off as a support for now and and needs to be watched closely for this. There are many other sentiment indicators we are watching to gauge the selling climax as
the market worries about an NBFC capitulation. READ
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