Local Funds too will Give a Leg-up
Monetisation of government assets to supplement revenue Path-breaking infrastructure projects like GQ, with efficient execution. The government can also focus on optimisation of natural resources, especially coal and iron ore; fast-tracking of approvalsrelatingtolandacquisitionandenvironmentalnorms; reduction of cost of capital for small entrepreneurs; removal of the inverted duty structure toencouragelocalmanufacturing; improving the performance of PSUs through more administrative freedom; kickstarting the capex cycle; and encouraging infrastructure creation through innovation like reverse BOT. Equity markets are now pricing in a revival of investment, rupee’s gains, falling interest rates and faster growth. In this scenario, consumer staples, IT and pharma sectors are likely to underperform the market in the near term. Small and mid-cap stocks may outperform large caps as they had suffered the most from the slump. ‘Value style’ is likely to outperform ‘growth style’ due to mean reversion of valuation. PSUs with limited competition from the private sector are likely to outperform due to cheap valuations. PSU banks will be the biggest beneficiary of growth revival while cyclical, engineering and infrastructure sectors should outperform the market in the medium term. A miracle may not happen overnight, but well begun is half done. Importantly, the reader has to introspect how they are going to participate in the bull run which has begun.