Sudden spike in bond yield amid coronavirus outbreak signals trouble.

by mehekkaoberoi
  • With the lockdown affecting cash flows across sectors, companies are getting downgraded at a rapid pace. Hence, the risk that they may have difficulty in servicing their debt obligations in the future is rising.
  • Retail investors, who invest in non-convertible debentures (NCDs), corporate fixed deposits (FDs), debt mutual funds and hybrid funds need to be cautious in this environment. Credit-quality pressures were building up already, and the pandemic made matters worse.
  • Even in the quarters prior to the lockdown, there were clear signs that growth would slow down.
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