Prime Minister Narendra
Modi last month declared a $265-billion rescue package - equivalent to 10 per
cent of the gross domestic product.
Aberdeen Standard Investments has adopted a “defensive stance” towards India in the short term, as government measures to support the economy have fallen short of reviving demand with lacking key reforms.
Prime Minister Narendra
Modi last month declared a $265-billion rescue package — equivalent to 10 per
cent of the gross domestic product — to help support businesses hit by one of
the world’s strictest stay-at-home order as the nation grapples with an
increase in coronavirus infections. Yet, almost half of the stimulus comprised
monetary measures announced since February.
“We view the package as a
tad underwhelming, given that it does little to boost demand or relieve stress
for companies and sectors that have effectively come to a standstill during the
lockdown,” Kristy Fong, senior investment director for Asian Equities, said in
an email. It also lacked tax breaks or a plan for infrastructure spending and
reforms to support the manufacturing sector.
The money manager, which
oversees over $644 billion of assets globally, now has “heaviest exposure”
relative to the benchmark in software exporters, materials, especially cement,
and consumer staples. It expects stocks to remain volatile while the outbreak
likely to be a hindrance to global economic recovery.
“State coffers have been
hurt by the coronavirus
relief measures, further limiting fiscal levers,” Fong said.
No comments:
Post a Comment