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Indian corporates in liquidity preservation mode, says Credit Suisse

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Ray Farris of Credit Suisse shared his views and outlook on the domestic markets as well as traced the impacts of the corporate tax cuts.

Corporate tax rate cut is clearly a positive for India which would move the country up the ladder in terms of attractiveness for foreign direct investment, says Ray Farris, Chief Investment Officer, South Asia, of Credit Suisse.
The measure on a one-off basis would boost Indian corporate profits by around 7 percent, he added.
“Indian debt levels are high, they are uncomfortable. The result of the stimulus programme has been that Indian bond yields have gone up a bit but if Indian growth does recover then the country will probably get the inflows of funds to finance that,” he observed.
“I think the key problem in India is this squeeze on credit in the banking system, initially from bad debt problems in state banks and now with the non-banking financial institutions. Corporates right now are just focused on reducing debt and preserving liquidity. So it may take a good two-three quarters of a year before this corporate tax cut begins to affect growth in investment because corporates are still very conservative – sort of liquidity preservation mode,” he added.

Market Movers

CompanyPriceChng%Chng
ICICI Bank676.65 20.70 3.16
ITC212.40 5.40 2.61
Wipro599.15 14.95 2.56
SBI Life Insura1,050.45 24.45 2.38
SBI428.90 6.85 1.62
CompanyPriceChng%Chng
ICICI Bank676.65 20.85 3.18
ITC212.35 5.30 2.56
SBI429.15 7.15 1.69
HCL Tech994.25 15.65 1.60
Axis Bank755.25 8.75 1.17
CompanyPriceChng%Chng
ICICI Bank676.65 20.70 3.16
ITC212.40 5.40 2.61
Wipro599.15 14.95 2.56
SBI Life Insura1,050.45 24.45 2.38
SBI428.90 6.85 1.62
CompanyPriceChng%Chng
ICICI Bank676.65 20.85 3.18
ITC212.35 5.30 2.56
SBI429.15 7.15 1.69
HCL Tech994.25 15.65 1.60
Axis Bank755.25 8.75 1.17

Currency

CompanyPriceChng%Chng
Dollar-Rupee74.4000-0.0600-0.08
Euro-Rupee87.5450-0.0830-0.09
Pound-Rupee102.3880-0.0780-0.08
Rupee-100 Yen0.6730-0.0030-0.44