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Sivakumar Profile picture
Sivakumar
@eyeofsiva
Fund Mgr, Axis Mutual Fund. Views are personal & not those of my employer. No investment advice given. If you act on views expressed you alone are responsible.
Mar 9, 2021 • 32 tweets • 6 min read
A couple of podcasts on economics and finance helped put together some thoughts that were swimming around in my head in regard to monetary policy, macro and bond yields. Try and give a listen to these. A very long thread follows... First on the economics side, Scott Sumner @MoneyIllusion talking to @DavidBeckworth on Macro Musings mercatus.org/bridge/podcast…. This is an accessible intro to what Sumner calls the Princeton School of macro, essentially starting with Paul Krugman's 1998 paper on liquidity traps.
Mar 9, 2021 • 9 tweets • 2 min read
Should I weigh in on the debate on the RBI's inflation mandate? I have seen discussions on whether it has worked and whether to change the mandate, perhaps in favour of a higher target to allow RBI to keep rates lower for longer. To quickly review, the legislative mandate of the MPC is to target inflation at 4%±2%, i.e. a range of 2 to 6%. To target this the MPC decides on the operative rate, the benchmark repo rate. Note that the MPC mandate has been narrowly interpreted to mean only the repo rate.
Mar 9, 2020 • 12 tweets • 2 min read
Round up of thoughts on AT1 bonds
The regulatory landscape has changed for these bonds over the past two years. Back in 2017, the RBI placed a bunch of banks under the PCA framework. based on 3 parameters (capital adequacy, return on assets and non-performing assets). (1/12) Early in 2018, RBI decided that placement in PCA was a regulatory event triggering early redemption of AT1 bonds of these banks. The RBI took the view that in view of the financial deterioration, AT1 bonds would be called and repaid in FULL. (2/12)
Mar 1, 2019 • 8 tweets • 2 min read
SEBI has reduced the amortisation limit for MFs to 30 days from 60 days. Back in 2012 when they dropped it to 60 days, this is what happened to Liquid Funds' average maturity. (1/6) Fund managers don't want volatility, so instead of running mark to market risk, they will reduce maturity profile. This has some implications (2/6)
Dec 27, 2018 • 9 tweets • 2 min read
It has been such a crazy year that writing a normal end-of-year piece seems so boring. So let's do something different, shall we? Banks catch a viral fever
Staring at MTM losses dear
Liquidity tight
Nothing’s right
Not a happy new year

Fiscal slippages at three levels
Taxes on capital at five levels
RBI’s sad
Market’s bad
One day default rule bedevils