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  • R Sreesankar - Head of Institutional Equities, Prabhudas Lilladher

    R Sreesankar

    Head of Institutional Equities, Prabhudas Lilladher

    DATE: December 17, 2015, 12:00 PM

    SUBJECT: US Fed outcome: Implications for the markets




    Hello and welcome to the webchat with R Sreesankar, Head-Institutional Equities, Prabhudas Lilladher on the implication of US Fed outcome on markets

  • S


    What is the likely impact of 0.25% rate hike by US Fed on Indian economy, particularly the oil industry and the Indian rupee?


    Not much, a weak crude does wonders to the fiscal scenario as well as to the profitability of the Oil marketing companies. Not much of an impact on the Rupee unless we see some steep outflows in a short period of time, in which case the Rupee can come under pressure

  • M


    Can you please explain how the hike will impact banks, FIs and MNCs? Will it impact flow of capital as well?


    I do not think that 25 bps increase alone can not affect the flow. But as mentioned earlier, we need to take holistic approach and to me any increase in the risk premia in emerging markets will have a greater bearing on the fund flows.

  • A


    With the Fed finally ending its zero interest policy, what trend do you see for the rupee in the near-to-medium term?


    Falling crude price have kept the CAD under control. This should have some pressure on the Rupee and a weak crude price has saved the Rupee so far.

  • V


    With recent data indicating uptick in the US economy what is your call on export-led sectors such as IT and Pharma? Which would be your top picks in the sector for calendar year 2016?


    I like both these sectors IT as well as Pharma. Our preferred picks are Infosys, Hexaware Technologies and NIIT Technologies in IT while we like Aurobindo, Glenmark and Jubilant Life sciences in pharma.

  • R


    With Fed finally going for an interest rate hike, how do you read the mood of the RBI Governor? Can we expect a rate cut soon?


    I am not expecting any rate cut here soon.

  • P


    What trends do you see in terms of foreign fund inflows into emerging markets, especially for India, post the US Fed interest rate hike?


    The emerging markets funds flow will depend on a lot of factors which include, a) global growth, b) emerging market growth, c) global liquidity etc. With some of the emerging markets facing a recession and with commodity prices looking further down, the growth trajectory looks anemic.This could put pressure on many of these EMs. If corporate defaults and sovereign defaults happen, the risk premia will increase creating further pressure and flows to EMs may dry up and on the contrary outflows may increase.

  • V


    With the US Federal Reserve indicating Federal Funds Rate in a range of 0.25-0.50 per cent, what could possibly RBI's stance on its key policy rates going forward?


    Unless something change dramatically domestically and globally that impacts India, i do not think any change will happen in the near term. As far as i am concerned, i do not expect the fall in domestic interest rates is over.

  • S


    What is the road ahead for future rate hikes by the US Fed? The markets may have discounted this 25 bps hike, but is there more in store?


    If one looks at the FOMC press release it says " the actual path of of the federal funds rate will depend on economic outlook as informed by incoming data"

  • M


    Do you think with this 25 bps rate hike by US Fed financials of some companies with large foreign currency borrowings will get hurt due to any appreciation in the US dollar? What is your call on such companies?


    A weak Rupee or a strong Dollar is not good news for any company who has exposure to overseas borrowings. They will find it tough. In cases of such companies, we need to take a longer term call.

  • S


    Which sectors, in your opinion, would get affected by the rate hike? Do you see more outflow given the 25 bps rate hike now and another 50 bps later, say in the next 6 months?


    The 25 bps hike is fairly priced in and that should not have any major impact now. If any hike happens later, that will depend on the economic realities at that time. which we will need to face.

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