ET NEWS

The yen edged lower on Friday, trimming its sharpest weekly gain in more than four months, as traders considered the impact of potential rate increases by the Bank of Japan and a leadership election this weekend. BOJ Governor Kazuo Ueda reiterated that the central bank would continue raising interest rates if the economy and prices move in line with its forecast. Markets are also focused on a Liberal Democratic Party election on Saturday that will determine Japan's next prime minister. The dollar rebounded overnight despite a closure of the U.S. government that has halted the publication of key economic data, including the closely watched monthly jobs report for September that was due to be released on Friday. Canada's currency held near a four-month low on a slide in oil prices. "The government shutdown has not had a major short-term impact, but if anything, underlying pressure remains toward a weaker dollar," said Hirofumi Suzuki, the chief currency strategist at SMBC. "That said, with yen-depreciation pressure likely to linger ahead of this weekend's LDP leadership election, the pair is likely to hover around current levels," he added. The yen slid 0.2% to 147.52 per dollar, still on track for a 1.3% advance this week that would be the biggest since mid-May. The dollar index, which measures the greenback against a basket of key currencies, tacked on 0.1% to 97.895. The euro was little changed at $1.1721. Markets were keeping a close eye on speeches by BOJ officials this week after the central bank's tankan survey on Wednesday showed confidence among big manufacturers improved for the second straight quarter. Governor Ueda said the central bank expects the global economy to resume a moderate recovery path but much will depend on the U.S. economic outlook. Deputy governor Shinichi Uchida said on Thursday that the business mood is improving and corporate profits remain high even as U.S. tariffs weigh on exports. Ueda's comments "could be used to guide the market further towards a rate hike at the BOJ's next meeting on October 30th," IG Markets analyst Tony Sycamore wrote in a note. In the U.S. overnight, a Chicago Fed report that combines private and available public data estimated the September jobless rate was 4.3%, the same as in August and evidence that a feared rapid rise in unemployment had not yet begun. But details of the report, along with other data, pointed to sluggishness in the labor market. The ADP National Employment report on Wednesday showed private payrolls decreased by 32,000 in September, boosting expectations that the Federal Reserve will cut interest rates two more times this year. Traders see a 25-basis-point cut at the Fed's October meeting as almost certain and are pricing in a 90% probability of an additional cut in December, according to the CME Group's FedWatch Tool. Dallas Fed President Lorie Logan on Thursday said the central bank appropriately cut rates last month to guard against the risk of a sharp deterioration in the job market, but said that so far the cooling has been gradual and signalled she is not eager to cut rates further. The Canadian dollar weakened to a four-month low against its U.S. counterpart on Thursday as the price of oil fell more than 2% and investors worried about negotiations to renew a U.S.-Mexico-Canada trade agreement. The Canadian currency traded little changed at 1.3962 per U.S. dollar after touching 1.3986 on Thursday, its weakest intraday level since May 16.

ET Intelligence Group: WeWork India, a flexible workplace operator, plans to raise ₹3,000 crore through an offer for sale. The promoter stake will fall to 48.1% after the IPO from 73.6%. The company's revenue and Earnings before interest, taxes, depreciation and amortisation (Ebitda) are higher than its peers. However, it has just started recording profit in FY25, due to deferred tax credit. About 47% of its revenue comes from Bengaluru and 24% comes from Mumbai, reflecting geographic concentration. Occupancy rate in mature centres is less than peers. Given these factors, investors may wait to see clarity in financials after the listing.BusinessIncorporated in 2016, Bengaluru headquartered WeWork India provides flexible workspace solutions, custom-designed buildings, floors and offices, and hybrid digital solutions. The company has an exclusive license of the WeWork Brand in India. As of June 2025, it operated 68 centres across eight cities including Bengaluru, Mumbai, Pune, Hyderabad, Gurugram, Noida, Delhi, and Chennai, with a total capacity of 114,077 desks spanning 7.7 million square feet. Occupancy rate in mature centres is 80.7% compared with 84-89% for its peers.124280697FinancialsThe company's revenue and operating profit before depreciation and amortisation after adjusting for lease rental payments grew 22% and 48% annually between F23 and FY25 to ₹1949.2 crore and ₹1,235.9 crore respectively. The company reported a profit of ₹128 crore in FY25, due to a deferred tax credit of ₹286 crore. Adjusted Ebitda margin expanded to 21.6% in FY25 from 14.6% in FY23. Net debt declined to ₹215.3 crore from ₹339.1 crore during the period.ValuationPrice-to-earnings multiple will be an inappropriate tool to ascertain the valuation since the company has just started recording profits while most of the peers are yet to be profitable. The price-to-sales (P/S) multiple for WeWorks is 4.6 compared with that of 3.4-4.7 for peers, which includes Smartworks Coworking Spaces, IndiQube Spaces and Awfis Space Solutions.

Mumbai: The dovish monetary policy stance by the Reserve Bank of India calls for a tweak in the fixed income investment strategy. Fund managers suggest that investors could retain the core of their debt portfolio in accrual mutual funds - which focus on interest income -while putting a small tactical portion into duration funds - which benefits if bond yields fall.The recalibration comes in the wake of renewed expectations that RBI may deliver at least one 25-basis point rate cut in this financial year, which could drive a rally in bond prices. Bond yields and prices move in opposite direction. "Allocate a core portion of 75-85% to accrual strategies, with a small tactical bet on duration to benefit from any rate cuts," says Nirav Karkera, head of research, Fisdom.Duration strategies, which invest in long-tenure government securities, could benefit from potential capital gains as bond prices rise when interest rates fall. Some of the duration scheme categories are 10-year constant maturity gilt funds, gilt funds and dynamic bond funds, which have the option to increase average maturity of schemes.RBI has already cut interest rates by 100 basis points during this calendar year. However, with the GDP growth forecast for 2025-26 revised upwards to 6.8% from an earlier estimate of 6.5%, and CPI inflation lowered to 2.6% from 3.1% for the same period, fund managers expect at least one more rate cut. This changing growth-inflation dynamic may have created room for further policy easing."There is a high probability of a 25-basis point rate cut in the December policy. As rates fall, longer-duration bonds typically gain in value, boosting returns," says Sneha Pandey, fund manager, Quantum Mutual Fund. Pandey expects the benchmark 10-year to move down by 20-30 basis points by the end of the current financial year once the demand supply equation improves. If rates do fall, it could translate into an additional 75-100 basis points returns over the next 6-8 months, taking returns from a 10-year government secrurity to 7.25-7.5% before expense and tax.124280541Risky betSome advisors, however, believe that given the uncertainty around global tariffs, investors should avoid taking excessive risk and stay away from duration strategies, as the risk-reward is unfavourable.Instead, they recommend investing in a mix of short-term bonds maturing in 2-3 years. “Tariffs remain an uncertainty and the rupee depreciation needs to be watched out for. On the domestic front, a cut in GST could increase demand, it could also push up inflation in the coming year,” says Amit Bivalkar, founder, Sapient Finserv. Bivalkar believes investors should adopt a conservative approach and stick to accrual strategies and invest in short-term funds. Dhawal Dalal, CIO — Fixed Income at Edelweiss Mutual Fund believes the spreads of 90 basis points of AAA rated corporate bonds over government securities in the 2-3 year maturity space is attractive and retail investors should stick to accrual strategies and corporate bond funds

Mumbai: Borrowed equity bets are at an all-time high with sharp market swings not deterring investors from taking on risky wagers.Funds lent through brokers' Margin Trading Funding (MTF) facility - a system allowing investors to borrow to buy shares they cannot afford - crossed ₹1 lakh crore for the first time earlier this week.Jio Financial Services has been the most traded stock with borrowed funds from margin trading, with a combined amount financed of about ₹1416.6 crore. Tata Consultancy Services and Tata Motors also have funded bets worth ₹1,365.8 crore and ₹1,388.4 crore, respectively.Hindustan Aeronautics and Reliance Industries have outstanding MTF positions of over ₹1,200 crore each."The surge (in the MTF) can be attributed to discount brokers offering this product which made it discoverable to investors," said Ashish Nanda, president & digital business head, Kotak Securities. The total MTF book across NSE and BSE stood at ₹1,04,308 late in September after being above ₹96,000 crore in early August. In September 2024 - when the bull run was at its peak - the MTF book was at around ₹85,400 crore.In margin funding, investors can purchase stocks by paying only a fraction of the total value, with brokers financing the balance at an interest rate. Brokers usually provide a leverage of 3-4 times the margin amount. Most brokers levy interest in the range of 9-15% annually for such funding. Investors also pledge shares from their demat accounts as collateral to avail margin funding.For instance, if an investor buys a stock worth ₹100 under the MTF facility, she would need to contribute just 20% (₹20), while the broker covers the remaining 80% (₹80).Just like margin trading amplifies gains, it could lead to bigger losses too if bets go awry."The increasing risk appetite and participation is also a function of higher comfort with leverage due to stringent regulation," said Suresh Shukla, chief business officer (CBO) at SBI Securities.Regulatory actions in the past year discouraging retail investors from trading in futures and options may have boosted the demand for the margin funding facility."If investors are buying using leverage in sectors and stocks where valuations are fair then there is no concern, but they are using these funds for opportunities where valuations run high then it can be a cause of worry," said Shukla.124280497Early days for MTFThere is further scope for growth in the MTF facility in the country, said brokers. The MTF facility is still in its early days in India as MTF book is currently 0.1% of the total market cap, said Nanda.The MTF book in the US is about 1.6% of their market cap while China's is around 2.7% according to data from Kotak Securities. Sebi allows MTF in around 1,200 stocks out of the 6,500 stocks available in the marketEarlier this year, the MTF book dipped to almost ₹71,000 crore during the market correction.Shukla said caution is always advised while using leveraged products like MTF as short-term moves in the market can be irrational leading to loss.