Moody boost for Modi: India's sovereign bond rating raised

Moody boost for Modi: India's sovereign bond rating raised

Moody's Investors Service upgraded the Government of India's local and foreign currency issuer ratings to "Baa2" from "Baa3" and changed the outlook on the rating to stable from positive, the statement said. The Nifty crossed the 10,300-mark but ended at 10,283.60, up 68.85 points.

The financial markets reacted positively to the development, with the BSE Sensex rising 236 points and the rupee rising to Rs. 64.62 per dollar before closing at Rs. 65.02 per dollar, up 0.47% from Thursday's level.

On November 13, Moody's Investors Service, the worldwide rating agency, upgraded India's sovereign rating to Baa2 from Baa3 for the first time since 2004. In the latest World Bank's ease of doing business ranking, India moved up 30 places to 100th, while the Moody's upgrade is another validation of the government's reforms.

"After a gap of 13 years, global rating agency Moody's on Friday upgraded India's sovereign credit rating from its lowest investment grade to Baa2 and gave a thumbs up to two big-ticket reforms - demonetisation and GST â€" calling them remarkable.

Moody's ratings and Modi's expectations are finally on the same page
Moody boost for Modi: India's sovereign bond rating raised

"While a number of important reforms remain at the design phase, Moody's believes that those implemented to date will advance the government's objective of improving the business climate, enhancing productivity, stimulating foreign and domestic investment, and ultimately fostering strong and sustainable growth", it noted. Now, all eyes will be on other rating agencies - S&P and Fitch Ratings - will follow Moody's lead. The second quarter's numbers would be out by the end of this month.

Stocks of firms like HPCL, IOC, ONGC, GAIL and NTPC rallied as these firms were amongst those which got an issuers and ratings upgrade.

"However, as disruption fades, assisted by the recent government measures to support SMEs and exporters with GST compliance, real GDP growth will rise to 7.5 per cent in FY18, with similarly robust levels of growth from FY19 onward", it said.

"Longer term, India's growth potential is significantly higher than most other Baa-rated sovereigns", the agency said. "We believe that it is a belated recognition of all the positive steps which have been taken in India in the last few years, which has contributed to strengthening of the Indian economy", said Arun Jaitley on Friday. The upgrade has placed India's rating at par with those of Italy and the Philippines. Earlier, the outlook was positive but on a lower rating, which indicated there were more chances of an upgrade than downgrade.

Top 10 Players Who Scored More Points Than Lonzo Ball
Devin Booker led Phoenix with 33 points on 13-of-26 shooting while rookie Kyle Kuzma led the Lakers with a season-high 30 points. The Suns (6-11) will play host to the Bulls (3-10) in the first of two meetings between the teams in 10 days.

Related Articles