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Stock impact report

Analysis-Foreign investors grow more wary of India as FX curbs hit bonds, earnings risks haunt equities [Yahoo! Finance]

Mitsubishi UFJ Financial Group, Inc. (MUFG) 
Company Research Source: Yahoo! Finance
and more complex for overseas investors to hedge against rupee swings, denting the appeal of Indian bonds, while a war-driven hit to earnings prospects is adding ?fresh pressure on equities. Steps taken by the Reserve Bank of India to steady the rupee — including curbs aimed at limiting arbitrage trades — have eased ?pressure on the currency, but at the cost of higher hedging expenses for foreign bond investors in both the onshore over-the-counter and the offshore non-deliverable forward (NDF) markets. One-year hedging costs in the onshore market have ?risen by about 30 basis points since the measures were introduced. The increase has been steeper offshore, with NDF hedging costs climbing nearly 70 basis points. In the immediate aftermath of the RBI's move, NDF hedging costs hit their highest level in more than 12 years. Liquidity in the NDF market, a key channel through which foreign investors manage rupee exposure, has thinned, making hedging both more expensive and harder t Show less Read more
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