Greater opportunities beckon in new year
Going into 2013, the bond market will find support from falling inflation, moderate growth trends, manageable twin deficits and monetary easing measures. The demand-supply dynamics will remain favorable and RBI might cut repo rate by 50-75 basis points in next 3-6 months. Bond yields are expected to move down meaningfully. We expect the curve to bull steepen over the next 12 months, thus presenting investment opportunities across the yield curve.
The author is head of fixed income, Reliance Capital Asset Management
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