Im­prov­ing In­dia’s global im­age

Money Times - - -

The dis­con­nect be­tween polity and econ­omy is a dis­tant hap­pen­ing. Yet, the pro­mo­tion of In­dia by 30 ranks on ease of do­ing busi­ness is a mat­ter not to be over­looked. If we In­di­ans re­main crit­i­cal of the lit­tle pains for big­ger gains, global out­comes like this are there to re­as­sure us.

The con­sol­i­da­tion of the mar­ket even at these lev­els is am­ple proof of the large ap­petite the DIIs and re­tail in­vestors have for shar­ing the cre­ation of wealth. Surely, five years is too short a pe­riod for the PM and his team to bring re­forms like de­mon­eti­sa­tion and GST to their log­i­cal end. Surely, the pain in both shall eas­ily take two more years to sub­side and dur­ing this jour­ney, NaMo may seek a sec­ond term to con­tinue the re­forms and bat­tle cor­rup­tion. Last week, we had raised ques­tions whether the cur­rent rally will last the Gu­jarat/Haryana test. The mar­ket dis­missed this hes­i­tancy in its moves in the last eight ses­sions. The mar­ket moved up se­lec­tively and the de­mand for se­lect stocks was seen. It is this ris­ing flow of re­tail money flow­ing into eq­uity both di­rectly and through mu­tual funds which is de­cid­ing the mar­ket moves.

Apart from pol­i­tics and the bat­tles therein, the gov­ern­ment is pre­par­ing to do its best in the en­su­ing bud­get. The bud­get this Jan­uary may be the last bud­get by this gov­ern­ment. Next year, if the elec­tions are held in May 2019, then only vote on ac­count will fol­low and the new FM shall present the bud­get in his new ‘avatar’. Thus, the BJP’s last full bud­get will see the so­cial sec­tor get­ting 30% higher al­lo­ca­tion. We may also see in­creased al­lot­ment for agri­cul­ture, ru­ral devel­op­ment, ed­u­ca­tion, in­fra­struc­ture, etc.

Of­fi­cial sources say that tra­di­tion­ally, pre-elec­tion Union Bud­gets are pop­ulist where fis­cal pru­dence goes for a toss. But the gov­ern­ment also has to do the bal­anc­ing act to en­sure that the growth mo­men­tum is re­tained in the econ­omy af­ter it fell to 5.7% in the April-June 2017 quar­ter. This has to be done in tan­dem with mo­bil­is­ing ad­e­quate funds to fi­nance schemes that af­fect a large sec­tion of the vote bank and help the gov­ern­ment get a pos­i­tive pro-wel­fare im­age. To bal­ance the ad­di­tional ex­pen­di­tures, the gov­ern­ment is work­ing out ways to raise non-tax rev­enues like div­i­dends, PSU prof­its, rev­enue re­ceipts and spec­trum auc­tion re­ceipts to keep the next year’s fis­cal deficit within the tar­get of 3% even on higher ex­pen­di­ture, sources said. The in­crease in in­fra­struc­ture spend­ing by the gov­ern­ment is an­other vi­tal cog in the next bud­get’s wheel.

The Di­wali lights may have faded by now but some sec­tors like re­alty will en­joy con­tin­ued fes­tiv­ity. The grow­ing con­fi­dence among home buy­ers has made re­alty stocks climb as much as

18% on the first day fol­low­ing Di­wali. This is in­dica­tive as to what could be in store for this sec­tor from hereon to next Di­wali.

Now fol­low us on Instagram, Face­book & Twit­ter at mon­ey­times_1991 on a daily ba­sis to get a view of the stock mar­ket and the hap­pen­ings which many may not be aware of.

Re­alty devel­op­ers with a good track record like Kolte Patil Devel­op­ers, Sun­teck Re­alty, Pur­vankara and Sobha reg­is­tered fresh 52-week highs while stocks like Ari­hant Su­per­struc­tures, An­sal Build­well, DLF, Anant Raj, Go­drej Prop­er­ties and Penin­sula Land also joined in the rally ris­ing 3-8%. Mu­tual Funds and HNIs at Dalal Street see Pharma stocks on the re­cov­ery path. Both cat­e­gories of in­vestors are seen buy­ing Pharma com­pa­nies be­liev­ing that the worst in terms of reg­u­la­tory and com­pe­ti­tion con­cerns have been priced in. Rakesh Jhun­jhun­wala raised his stake in Lupin by 0.13% to 1.89% in the Septem­ber quar­ter. Mu­tual Funds have raised stake in Lupin, Sun Phar­ma­ceu­ti­cal In­dus­tries, Tor­rent Phar­ma­ceu­ti­cals, Cadila Health­care and Natco Pharma. FIIs have played a mix of cut­ting stakes in Lupin, Sun Phar­ma­ceu­ti­cal In­dus­tries, Aurobindo Pharma, Tor­rent Phar­ma­ceu­ti­cals, Cadila Healtchare and Natco Pharma and si­mul­ta­ne­ously raised stakes in Bio­con, Ju­bi­lant Life Sciences, Divi’s Lab­o­ra­to­ries and Glax­osmithk­line Con­sumer Health­care. From the long-term per­spec­tive, pharma looks in­ter­est­ingly at­trac­tive. E-ve­hi­cles have been in the news and strat­egy to iden­tify com­pa­nies which may have a busy sched­ule in this tran­si­tion is on. MOIL is one such stock which comes to the mind given the boom­ing prospects of man­ganese. Mar­ket in­dices may be steading around 33K Sen­sex and 10.3K Nifty but a re-look at the mar­ket cap club makes an in­ter­est­ing study.

If a $2.5 tril­lion GDP is head­ing for $7 tril­lion by 2023, we leave the mar­ket cap and cre­ation of wealth fig­ures to your imag­i­na­tion.

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