Moody’s slashes India’s growth estimate to 0.2% for 2020 from 2.5%

Moody’s Investors Service has cut India’s growth forecast to 0.2 per cent for 2020 from its earlier projection of 2.5 per cent. The rating agency had earlier slashed growth estimate from 5.2 per cent to 2.5 per cent after the government ordered a nationwide for 21 days to contain the

Moody’s expected India’s economic growth to recover to 6.2 per cent in 2021. Nomura has predicted India’s economy to contract 0.5 per cent, while Confederation of Indian Industry (CII) pegged the economy may contract by 0.9 per cent in the worst-case scenario and India Ratings believed that contraction may be far steeper at 2.1 per cent if persists.

However, India has lost the tag of fastest growing large economy in 2019 when it grew 5.3 per cent against China’s 6.1 per cent.

The trend is expected to continue for both 2020 and 2021. China is projected to grow one per cent in 2020 and 7.1 per cent in 2021.

Only China, India and Indonesia were projected to witness economic growth in 2020 according to Moody’s. The agency sees the G-20 as a bloc will report fall in its GDP by four per cent

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Franklin Templeton’s six wound-up schemes face concentration risks

The six wound-up debt schemes of Mutual Fund (MF) have concentrated exposures to certain companies belonging to sectors such as non-bank financial companies (NBFCs), asset reconstruction companies (ARC) and renewables, closely tying up fortunes of investors with how these companies are able to weather challenges thrown by lockdown and coronavirus (Covid-19) pandemic.

At an individual scheme-level, three of the wound-up schemes — have 9-10 per cent exposure to Shriram Transport Finance (STFC) — which saw its long-term issuer rating downgraded by Fitch Ratings recently, to factor in the asset-quality risks the company faces as the commercial vehicle portfolio is more exposed to business activity, that will be hampered by lockdown measures taken to contain spread of Covid-19.

To be sure, STFC debt papers held by Franklin are graded by domestic rating agency Crisil, which is yet to revise its ratings on these papers. These continue to be graded at AA-plus, re-affirmed by the agency in early March.

Disclosures from March 31 factsheet show 9.8 per cent of assets exposed in Short Term Income Fund to STFC, 8.57 per cent exposure in Dynamic Accrual Fund and 10 per

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