SMEST Capital - Democratizing the Fixed Income Market in India
On 26th March, 2022, SMEST held a panel discussion with Mr. Satyakam Gautam and Mr. Niraj Shah, hosted by Ms. Shreya Padhiyar, Research Analyst at SMEST Capital. Mr. Satyakam is an IIM Lucknow graduate and a marketplace fanatic, also has sizable expertise and 18 years of long-time experience in Indian and worldwide markets. Mr. Niraj Shah, VP operations at SMEST Capital, the operations dept. is one of the most infuriating one in a stock broking firm and it is his calm and composure that brings an experience of stability to the insanity that is witnessed during market hours.
The session began with enlightening perspectives on the Indian Debt Market, as Mr. Satyakam felt that the war scenario between Ukraine and Russia would have an impact on Indian and global markets while the world economy was prepared to become fully recovered following the Covid19 turmoil, but he was of the view that keeping the Ukraine-Russia scenario aside, people need to also look at the micro factors. Coming to commodities, as the war began, the crude oil prices were soaring high, the world is in the dilemma that the conflict might lead to a freeze on Russian oil (Brent) in the West. Even before USA and UK banned Russian oil and gas imports, some countries halted purchases while others panic-bought. Prices soared to a 14-year high of $140 a barrel on March 7, they have since fallen, although only little. High oil prices or supply disruptions will not only make petrol and diesel more expensive for private vehicle owners, but will also increase the cost of transporting staple foods. This indicates a rise in inflation. The fact that rates in India remain unchanged, will be a boon for the broader economy as the RBI injects money into the market to support growth though inflation will remain a concern. RBI prioritized growth, as Mr. Satyakam was of the view that the accommodative stance by the MPC was necessary step taken to fuel the economy halted by covid19, moderate inflation may continue till August-September 2022, after that, RBI may intervene and the normalization process will begin.
As for the G-sec, an in-depth conversation took place that shed light on the ongoing technical analysis trends, the G-sec can open further as it is obvious that after any market correction, the G-sec of medium and long-term maturities may rise. There were also discussions about the G-Sec development in India, especially the retail G-sec. Mr. Satyakam is of the view that Indian G-sec segment is not as developed as western segments and also it is a longer road.
With rising inflation, western markets hiking the rates, everyone felt that India could follow suit but Mr. Gautam clarified the emerging market scenarios. He expressed that India is in a very different league, has its own agendas to deal with and was in favor of the RBI Governor’s necessary steps taken. The speed of rate hikes in western countries will surely determine the nature of flow of FPI’s in Indian economy, in equities as well as the debt markets.
As known, slow and steady wins the race, fixed income should be a part of every investor’s portfolio, agreed by Mr. Satyakam too. The global debt market is three times bigger than the equity market, as major investors are QIB’s and Institutions. The primary reasons due to which the retail base hesitate to invest are the lack of awareness about fixed income plus the lack of essential digitalization. The main focus is all about the parting knowledge to the public at large.
Mr. Satyakam Gautam applauded SMEST's efforts to facilitate fixed income investing, where retail investors can buy and sell bonds directly, with same-day settlements, an initiative that adds key digital inclusions to create efficiencies and offer an investor-friendly platform. SMEST’s mission is to strive towards ‘Digital India’, seeking to scale the peak of distinction in the financial ecosystem in India.
Niraj Shah
Smest Capital Private Limited
+91 8879966072
care@smest.in
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On 26th March 2022, SMEST Capital held a panel discussion featuring Satyakam Gautam, From Smest Capital there were Niraj Shah and Shreya Padhiyar
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