Yield to Worst

New Investment Announcements in Q1FY23 up to Rs 4 35 Lakh Cr Report

The State Bank of India said in a report on Wednesday that new investment announcements in the first quarter of FY2023 fell to Rs 4.35 lakh crore from Rs 5.75 lakh crore in Q4FY22.

However, according to provisional figures from T2FY23, the same increased to Rs 7.73 lakh crore with a major contribution from Vedanta for its display unit and semiconductor manufacturing in Gujarat worth more than Rs 1.50 lakh crore.

The bank said the top industries where new announcements were made during Q2FY23 include electronics, roads, marine infrastructure, basic chemicals, metals, real estate, community services and unconventional energy, etc. Thus, growth remained robust.

“Even though the Indian economy has weathered the crisis, global uncertainties are starting to take their toll. Specifically, US credit markets appear increasingly jittery,” the report said.

Bloomberg Yield-to-Worst (YTW) Index trends for US investment grade, high yield (or junk) bonds and long US corporate bonds show similar trends to 2010 levels. This duration of this “new” credit regime is expected to last for some time at least until 2023, when the Fed rate is expected to peak.

The report adds that the current accumulation of risk in U.S. credit markets is a long-standing structural shift that has been tracked since 2018.

Meanwhile, US housing markets show that the four major jurisdictions where home sales data are collated are showing varying trends, with home sales not improving in major geographies.

Sales of existing (formerly owned) homes in the US edged down 0.4% (seasonally adjusted) to 4.8 million in August 2022, the lowest figure since May 2020, continuing the trend after a revised decline down 5.7% in July.

Growth estimates for India have already been revised downwards. As the whole world faces the specter of an unprecedented recession in 2023, India still stands as an oasis in an age of uncertainty.

“However, we need to moderate our growth expectations for FY23 and FY24 from current estimates. A 6% or even below may well become the new norm. Even then, India will still be the economy by far. fastest in the world,” he said.