Newly appointed Finance Minister Nirmala Sitharaman will present her first budget on Friday.
Indian
wealth and alternative investment managers expect the next federal
budget to propose measures that will improve consumption and bolster
infrastructure to revive economic growth.
Newly
appointed Finance Minister Nirmala
Sitharaman will present her first budget on Friday. Growth slowed
to a five-year low of 5.8 per cent in the first three months of 2019,
amid a liquidity crunch at non-banking financial companies. That’s
put pressure on recently re elected Prime Minister Narendra Modi to
deliver on a stimulus plan.
Here’s
a roundup of views from fund managers on current opportunities in the
market:
Nalin
Moniz, chief investment officer, alternative equity, Edelweiss Asset
Management Ltd. (Budget
2019)
Liquidity
conditions are slowly normalizing; the cash squeeze should normalize
in 1-2 quarters.
Expect
to see a broad-based revival in earnings in the latter half of FY20.
Sees
opportunities in consumption, exports and financial services sectors
on a 5-year horizon.
Over
the longer term, both consumer goods and discretionary consumption
are expected to boom as the Indian economy grows from $2.7 trillion
toward $5 trillion.
Nifty’s
current valuations are incomparable to the past, as index’s
composition has shifted from manufacturing toward financials.
Vijay
Krishna Kumar, head of liquid alternative investment, IDFC Asset
Management Co.
The
budget will be another non-event accounting exercise.
It’s
difficult to get excited without clarity on the Bimal Jalan committee
outcome on transfer of the central bank’s surplus funds to the
government.
Waiting
to see a concerted policy response to arrest the non-bank financial
crisis, which “has all the drama of a slow moving train wreck.”
Without something concrete, it’s hard to build a bull case on the
consumer segment.
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