News reports last week said that high net worth (non-retail) money had flooded into the 7.35% tax-free NHAI (National Highways Authority of India) bonds while the retail portion, with a 25 basis point higher rate of interest, saw tepid demand. This can be interpreted in two ways. One, smart money expects interest rates to fall and is hence locking into a high tax-free return. Two, smart money expects stock returns to be muted and is therefore moving money into debt.
Smoke signals indicate neither doom nor boom
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Monika Halan's blog 