22-July-2018
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Markets and Finance
 
Borrowing plan: States edge out corporates from bond market
16-Apr-2018

Rising state government borrowing has depressed sentiment in the market with investors staying away from investing in central government securities for fear of rising valuation-linked losses. The supply of state paper, considered high-quality because of government backing, is raising yields across bonds. It has pushed up sovereign bond yields and, as a result, threatens corporate bond yields. Incessant supply means the private sector is elbowed out from the market by states. At a time when banks are not lending freely to companies, such crowding out does not augur well for them.

News Source:- http://www.business-standard.com/article/finance/borrowing-plan-states-edge-out-corporates-from-bond-market-118041600045_1.html