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Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
Corporate bonds sound dull compared to equity and crypto, but a handful of companies are betting young investors are ready for another asset class.
Editor's note: The past five years have seen an influx of retail investors investing directly in stocks, courtesy discount brokers and apps such as Robinhood in the US and Zerodha and Groww in India. Millions of new investors have poured into equities, driven also by rising stock prices, globally, over the past decade. But some of that exuberance is coming off given the headwinds of global inflation and high commodity prices. This shift in the global macro environment—along with fixed deposit interest rates under 6% a year at major banks—might be making another asset class more appealing: the humble bond or debenture. India’s bond markets have always been shallow, with few retail investors and high barriers for companies to raise debt this way. Both factors restrict the size of bond markets compared to equity and derivative investing. This has often been flagged as a concern by economists and financial experts, with the general refrain being that a healthy bond market would reduce companies’ dependence on bank loans. In November last year, the Reserve Bank of India launched its own platform for retail …
The central bank’s shift to a 100% collateral requirement threatens to erode leverage, reduce volumes and force a consolidation across prop desks.
While the regulator’s interim order alleges massive irregularities, the long arc of unfinished probes, hearings and appeals makes closure distant.
As growth in equities cools, asset managers are looking to embed themselves in payrolls, payments, and credit. This raises their influence, but also the stakes.
