?With falling rupee narrowing the spreads between US yields and Indian yields (adjusted for cost of hedging), it is clear that foreighn funds won’t find logic in investing in Indian debts, says Dipen Sheth of HDFC Securities in an interview to CNBC TV18. In addition, the current account deficit makes the situation worse for rupee.
He calls the policy measures to rein in imports as "temporary fixes,
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For market players,
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Sheth is vociferously against gold NBFCs getting into banking space. "Many of these gold loan companies hardly gives you the kind of inspiration to believe that they would be better off applying for a bank license,
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Edited excerpts of the interview with Dipen Sheth
Q: What do you do with the rupee now, the same problem that affects the stock market also affects the rupee. Are we going to see much deeper cuts in times to come you fear?
A: It is difficult to say whether the rupee will go to 60 or worse, but we have a structural problem with our current account deficit (CAD) and we have been persisting with this problem for a while. It wasn’t so visible or didn’t matter so much to the market so long as capital flows were holding up. And every time there is a little bit of worry on the capital flows,
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At the margin what is also happening is that the spreads between the US yields and Indian yields adjusted for cost of hedging have also narrowed to point where debt inflows will not look meaningful. And of course the state of policy evolution ,
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Q: Today Non bank financial company (NBFC) stocks are doing quite well in the hope that some of them will apply for and manage to get a banking license,
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A: I think some of the NBFCs have chosen to specialize in business models which have given them returns which are reasonably insulated from the steadily worsening macros that we have seen play out over the last few years,
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Find Great Deals Here Nike Air Yeezy 2 2015 New Arrival Free Shipping. Both of these companies are instances where we would be delighted if they were to make progress in terms of applying and getting a bank license. Both of them would be structural beneficiaries of such a move if indeed it was to fructify,
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Q: Are you optimistic about any of the gold Non Banking Financial Banking Companies (NBFCs) or do you think that space is headed for further weakness,
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A: Not at all,
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Latest And Largest Collection Of Nike Air Yeezy 2 With Big Discount. This is not to say that I want to tie them all together but what has happened in the gold loan specialists which puts them apart from the other specialists among the NBFCs is that they were at a stage where they had clearly gone overboard in terms of loan to values,
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Now if you analyse what is going wrong in many of these gold loan companies then it hardly gives you the kind of inspiration to believe that they would be better off applying for a bank license. They should stick to the knitting and mend their ways first before they aspire to become banks.
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