NIFTYBANK:- The 60/40 approach!

27 сент. 2023 г.

60/40 is the popular investment strategy that has gone terribly wrong to the international investors. If any it might turn out to be the third year in row. While the liquidity is pouring in the bonds (safety?), the bets for yields fall is coming down. The recent up-move of USD is anything but a factor of another 25 basis point move higher in terms of cost. Not referring directly to us, but in general. FED's Kashkari comments that there is 40% chance rates to go higher pushes the hawkish tone further. He is voting member. His comments about economy hitting soft landing with 60% chances echos mixed voices. (read our last week comments on economy in the substack). With Crude at elevated levels, next week our MPC, higher US dollar, post the Bond Inclusion, it is interesting to take a look at our own bond yields. The graph PIP shows the price action is held the long supply line, now in the shape of bull flag. So, the corrections to continue but the yields appear based. Note the shape of the correction and continuation needs to be read in different ways based on different asset classes, there are no one fit all scales. What is interesting to note with the recent up and down moves, on a three month scale this index is down 120 points. That is, we are where we were three months back. Completely dominated by the PSU pack. On the Index this is not the story, in otherwards, this looks much more beaten than the main index. 44400-44900 are the range to watch and hold before next meaningful move. The banking stocks elsewhere are not in favourable places, partly due to the market-to-market losses, squeeze in NIMS and the broader economic outlook or is there a credit event in the waiting. Citi Share price down near 50% from 80 to 40, mathematically it needs 100% move to reach where it was. Thankfully we are not in that pack. For the day continue grudging moves down first flat next kind of a day one can expect.