Bonds Overprice India Inflation Risk, Top Fund Manager Says

For one of India’s biggest bond fund managers, markets are overpricing the inflation risk from the Iran war and that is creating a buying opportunity.

The surge in energy prices is a temporary shock and is unlikely to feed into inflation expectations, according to Manish Banthia, chief investment officer for fixed income at ICICI Prudential Asset Management Co. While interest-rate swaps are pricing in aggressive interest-rate increases, the central bank is unlikely to tighten policy even after the spike in oil, he said.