UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
China's Refining Industry Faces Major Shakeup Amid Challenges 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
Urban studies: Doing research when every city is different 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
US Gas Market Poised for Supercycle: Bernstein Analysts 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
Moody's Investors Service says that India's 2016-2017 budget is moderately credit positive for most sectors, but credit negative for public sector banks because of the insufficient allocation of capital for the segment.
"The budget is credit negative for public sector banks because the government has stuck to its capital infusion roadmap announced in 2015, budgeting INR250 billion in injections," says Srikanth Vadlamani, a Moody's Vice President and Senior Credit Officer.
"By contrast, we believe that unless the banks receive trillion for the four fiscal years ending 31 March 2016 to 31 March 2019, their credit profiles will worsen," adds Vadlamani.
Moody's points out that public sector banks are unlikely to gain access to the capital markets for equity capital in the near term, given their low valuations. The banks will therefore have to turn to the government for capital injections at least over the next 18 months.
As for the Indian sovereign (Baa3 positive), the budget indicates a continued commitment to gradual fiscal consolidation by bringing down fiscal deficits to 3% over the next two years. However, the proposals do not contain significant measures to address structural fiscal challenges.
Moody's analysis is contained in its latest edition of Inside India, a quarterly publication that looks at major credit trends in India.
On the issue of securitization, Moody's says that the development of securitization markets in India and China will help the two countries achieve their common goal of building inclusive financial systems that will ultimately bring affordable credit to the underprivileged segments of their societies.
Moody's explains that in both countries, non-bank finance companies (NBFCs) are key providers of credit to individuals and small businesses that would otherwise have limited access to bank loans or would incur high interest costs for such loans. While there are various funding avenues open to NBFCs in India and China, securitization has proven to be reliable and competitively priced, and is therefore an important source of the funds the NBFCs use for lending.
