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New Delhi, Dec 3 () Indian banks need an additional USD 7 billion (Rs 50,000 crore) equity by 2020-21 to support loan growth and cover for bad loans, Fitch Ratings said on Tuesday adding a slowing economy could exacerbate asset-quality tension for a sector grappling with weak recoveries and ageing provisions.
 In its 2020 Outlook for 'Asia-Pacific Emerging Market Banks', the rating agency maintained a negative outlook on Indian banks, based on its expectations of continued weak performance despite trends showing this could be past the trough, and ongoing capital requirements.
 "Non-bank stress coupled with rising macro headwinds pose further challenges for asset quality, particularly at state banks which continue to experience capital constraints, delays in bad-loan recoveries, and poor earnings. More capital is needed to insulate the banks' weak balance sheets and to sustain loan growth," it said.
 Fitch said the rating outlook for most Indian banks mirrors the stable outlook on India's sovereign rating.
 It estimated that "Indian banks will require an additional USD 7 billion of equity by FY'21 (2020-21) to support loan growth, achieve 75 per cent NPL (non performing loan) cover, and build a buffer over the minimum Basel III capital standards."
 Public sector banks will require most of this capital as the USD 10 billion being injected into banks in 2019-20 will go mainly towards bridging regulatory capital gaps, providing for ageing impaired loans, and absorbing the costs of merging 10 state banks into four by April 2020.
 "A slowing economy could exacerbate asset-quality tensions for a sector which is already grappling with weak recoveries and ageing provisions," it said. "The improvement in the impaired-loans ratio in 2018-19 is unlikely to be sustained if stresses on non-banks, real estate and SMEs remain unresolved, due to both tight liquidity and the macroeconomic slowdown."
 Net interest margins (NIMs) are likely to face pressure as floating-rate loans have to be linked to external benchmarks in a bid to ensure effective monetary transmission, it said.
 "This will cause a further narrowing in state banks' income buffers which have declined in recent years due to poor asset quality and lower growth, leaving both earnings and equity vulnerable to higher-than-expected credit costs."
 Fitch said the systemic stress across non-banks would deal a significant setback to recovery in the banking sector, reversing recent improvements in performance, and posing solvency risks to banks with the thinnest buffers.
 Fitch conducted a stress test to examine the potential impact on banks of pressures on NBFCs developing into a broad crisis.
 "We estimate that the scenario would leave banks with an aggregate shortfall of USD 10 billion to meet regulatory minimums, and USD 50 billion below the level that we believe would provide an adequate buffer," it said. ANZ ANU

Indian banks need USD 7 bn additional capital :Fitch

New Delhi, Nov 20 () Moody's Investors Service on Wednesday said it has assigned a 'Baa1' rating to the proposed senior unsecured notes to be issued by Oil and Natural Gas Corp under its USD 2 billion medium-term note program.
 The outlook on the rating is negative, Moody's said in a statement.
 "The notes' rating is in line with ONGC's Baa1 issuer rating, which is in turn primarily driven by its standalone credit profile as captured by the company's baa1 Baseline Credit Assessment (BCA)," says Vikas Halan, a Moody's Senior Vice President.
 The rating reflects ONGC's position as the largest integrated oil and gas company in India with significant reserves, production and crude distillation capacity as also its substantial operating cash flow generation capacity.
 It also factors the firm's solid credit metrics that have improved but remain constrained by volatile - although range-bound - oil prices and high shareholder returns.
 At the same time, Moody's expected that ONGC will not be asked to share fuel subsidies, as long as oil prices stay below USD 70 per barrel.
 "ONGC's issuer rating also incorporates the company's high likelihood of extraordinary support from and very high dependence on the Government of India, in times of need. However, this assumption of government support has not resulted in any rating uplift, as the sovereign's rating is below ONGC's BCA," it said.
 Given ONGC's strong credit metrics and status as a government-owned company, it enjoys strong access to debt capital markets and has substantial financial flexibility through equity stakes in Indian Oil Corp and GAIL India, which together were valued at about Rs 21,000 crore as on November 14, 2019.
 Moody's ratings for ONGC are based on the full consolidation of Hindustan Petroleum Corp Ltd (HPCL) which includes the full consolidation of HPCL's 49 per cent-owned joint venture, HPCL-Mittal Energy.
 The government owns 62.98 per cent of ONGC's equity and has the ability to appoint all of its board of directors.
 "The negative outlook on ONGC is in line with the negative outlook on the Government of India's rating and reflects Moody's view that ONGC's ratings will be downgraded if India's sovereign rating is downgraded to Baa3 from Baa2," Moody's said.
 "Given the negative outlook, an upgrade is unlikely. The outlook will return to stable if the outlook on the sovereign rating moves to stable."
 ONGC's ratings may experience downward pressure if the sovereign rating is downgraded, ONGC increases its pace of acquisitions such that it results in higher business risk and a deterioration in its credit metrics, or oil prices decline on a sustained basis resulting in weak cash flow generation and a deterioration in ONGC's credit metrics, it added. ANZ ANU

Moody's assigns Baa1 rating to ONGC's proposed senior unsecured notes

<keyword id="19895437" type="General" weightage="20" keywordseo="investment" source="keywords">Investment</keyword> in <keyword id="20300870" type="General" weightage="100" keywordseo="equity-mutual-funds" source="keywords">equity mutual funds</keyword> surged over five-fold to Rs 94,151 crore in the June 2024 quarter against Rs 18,358 crore a year ago, driven by a strong <keyword id="21477327" type="General" weightage="20" keywordseo="economic-environment" source="keywords">economic environment</keyword>, supportive <keyword id="22575274" type="General" weightage="20" keywordseo="government-fiscal-policies" source="keywords">government fiscal policies</keyword>, <keyword id="19900618" type="General" weightage="20" keywordseo="investors" source="keywords">investors</keyword> confidence and robust <keyword id="21990858" type="General" weightage="20" keywordseo="stock-return" source="keywords">stock return</keyword>. This has also pushed the industry's assets under management (<keyword id="20019621" type="General" weightage="20" keywordseo="AUM" source="keywords">AUM</keyword>) by 59 per cent to Rs 27.68 lakh crore in June from Rs 17.43 lakh crore a year ago, data from the Association of Mutual Funds in India (<keyword id="20090036" type="General" weightage="20" keywordseo="AMFI" source="keywords">AMFI</keyword>) showed. The robust gain in the asset base was also replicated in the growth of investors in equity mutual funds, with the number of folios closing at 13.3 crore, adding an investor base of over 3 crore. The significant gain in equity folios indicates broader participation across investor segments, driven by improved <keyword id="19929245" type="General" weightage="20" keywordseo="financial-literacy" source="keywords">financial literacy</keyword> and accessible investment platforms, Trivesh D, COO of stock trading platform Tradejini, told PTI. According to the AMFI data, equity-oriented mutual fund schemes invested Rs 94,151 crore in the quarter ended June 2024. This comprises Rs 18,917 crore in April, Rs 34,697 crore in May and Rs 40,537 crore in June. The investment in equity-oriented mutual funds jumped five-fold to Rs 94,151 crore in the June quarter from Rs 18,358 crore in the quarter ended June 2023 and increased 32 per cent Rs 71,280 crore witnessed in the preceding March 2024 quarter. "The confluence of political stability, supportive government policies, and a favourable economic environment has significantly contributed to the impressive inflows into equity mutual funds, signalling a positive outlook for the sector," Trivesh said. Strong macroeconomic fundamentals, bolstered by supportive government fiscal policies like higher-than-budgeted tax collection growth, reduced revenue expenditures, and increased capital spending have helped in increasing the allocation to equity mutual funds, Feroze Azeez, Deputy CEO, Anand Rathi Wealth, told PTI. He further said that investors' confidence in the markets and historically strong returns given by Indian equities with relatively low risk also helped investors to move towards equity mutual funds. Additionally, the shift was further fuelled by a transition from traditional investments like deposits to mutual funds in pursuit of higher returns. "The long-term outlook remains positive, with expectations of 11-13 per cent annual returns for Indian equities, and equity mutual funds potentially delivering even higher returns," Azeez said. Within the equity segment, sectoral or thematic category attracted Rs 46,731 crore during the quarter under review, followed by Multi-cap (Rs 10,077 crore), Flexicap (Rs 8,387 crore), Large &amp; Midcaps (Rs 7,948 crore), Smallcap (Rs 7,197 crore) and Midcap (Rs 6,927 crore). Large-cap funds witnessed an infusion of Rs 1,991 crore during the April-June quarter of the current financial year (FY25). Moreover, inflows into the systematic investment plan (<keyword id="19956399" type="General" weightage="20" keywordseo="SIP" source="keywords">SIP</keyword>) have been rising continuously for the past several months. The monthly SIP contributions crossed the Rs 21,000 crore mark in June, with the total inflow reaching an all-time high of Rs 21,262 crore. This shows investors' commitment to disciplined and long-term investing. The fund infusion through the SIP route was Rs 62,537 crore in the April-June quarter of FY25, a remarkable surge from Rs 43,211 crore in the same quarter preceding the fiscal.

Investment in equity mutual funds surge 5-fold to Rs 94,151 cr in June qtr amid robust eco environment

<ul><li>Today, the rupee appreciated by 23 paise to close at 79.02</li><li>The rupee touched a high of 79.00 and a low of 79.22 before ending at 79.02.</li><li>This is leading to the short-term relief in the major and emerging market currencies to recover their previous losses against the USD, said <keyword id="14610883" type="General" weightage="80" keywordseo="amit-pabari" source="Orion">Amit Pabari</keyword>, Managing Director, CR Forex.</li></ul> The rupee appreciated by 23 paise to close at 79.02 (provisional) against US dollars on firm domestic equities, amid foreign investors' inflows. At the interbank foreign exchange market, the Indian currency ended at 79.02, as against 79.25 closed on the previous trading session. The rupee has touched a high of 79.00 and low of 79.22 before ending at 79.02. "USDINR spot closed 23 paise lower at 79.02, thanks to FPI flows turning positive and some carry trade interest. Improvement in forward premium has brought exporters into the market. At the same time, softness in USD overseas, improved growth outlook in India, and uptick in forward premium has attracted carry traders into the market, who go long rupee and short USD," said Anindya Banerjee, VP, Currency Derivatives &amp; Interest Rate Derivatives at Kotak Securities Ltd. The dollar index, which measures the dollar's strength against the basket of 6 currencies, was down 0.52 per cent at 105.34. Inflows of foreign investors in domestic equities also remained major factor in the rise local currency. Foreign investors turned buyers in July nearly after 10 months, with an investment of around Rs 4,980 crore in the Indian equity markets. This comes heavy sell-off by these entities of around Rs 50,203 crore. According to the NSDL data, investment of foreign investors in July month stood at Rs 4,989 crore, as compared to over Rs 50,000 crore outflows in June, Rs 39,993 crore in May, and Rs 17,144 crore in April. "Despite of the no major change in fundamental factors for rupee, there is change in the global sentiments for the demand of US dollar. Post the Federal Reserve policy meeting, we have seen dollar bulls cooled down after the Fed highlighted that it could move a bit slow in hiking interest rates going forward. This is leading to the short term relief in to the major and emerging market currencies to recover their previous losses against USD," said Amit Pabari, Managing Director, CR Forex. Although, the trend in the USD is yet to be determined with the data releases and the risk sentiments improving and the outlook for other currencies such as euro and pound, markets needs a lot more convincing statement to keep demand for US dollar compressed for a longer period of time, he added. "Over the near term, bias remains downward. We expect a broad range of 78.70 and 79.40 on spot," Banerjee said. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/amazon-great-freedom-festival-date-announced-sale-starts-august-6-onwards/articleshow/93268050.cms">Amazon Great Freedom Festival date announced - sale starts August 6 onwards</a> <a href="https://www.businessinsider.in/sports/news/commonwealth-games-medals-tally-at-2022-birmingham-games/slidelist/93274345.cms">Commonwealth Games 2022: India has won 3 gold medals so far, check out all the details here.</a>

You Searched For "indian equity outlook" and got 4 results

Indian banks need USD 7 bn additional capital :Fitch

PTI

Moody's assigns Baa1 rating to ONGC's proposed senior unsecured notes

PTI

Investment in equity mutual funds surge 5-fold to Rs 94,151 cr in June qtr amid robust eco environment

PTI

Indian currency gains 23 paise to end at 79.02 against US dollar

IANS

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