TLTRO 3.0 - Reserve Bank To Bail Out The Coporate Bond Market Yet Again?

Saturday, April 25 2020

The announcement by Franklin Templeton Mutual Fund to suspend 6 debt schemes amounting Rs.25,900 crore with no clarity to the investors as to when they will be receiving the proceeds of their investment has sent shock waves to the investing public at large and to the mutual fund industry. The unusual selling by some of the mutual funds in the WDM segment of the exchanges as an immediate fall out resulted in the medium & short term yields to move up by about 30 bps. These were good enough signals to the market to gauge the liquidity challenges the MFs will face in the near term. Mutual Fund managers were seen conducting webinars & concalls to assuage its investors, distributors & other stakeholders to apprise the developments. Some of them were more than willing to share their current portfolios with the stakeholders to convince them that their holding of ‘risky’ assets was negligible.

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