India’s Financial Market under the New Modi Govt
By Didhiti Ghosh, Bureau Chief (Kolkata), Indian Observer Post
Kolkata, May 27, 2019: Kredent Academy & StockEdge in association with Motilal Oswal recently organized a Seminar in Kolkata on “Markets now with the New Government”. Conducted by renowned Investment Analyst Siddhartha Chatterjee & Vivek Bajaj, Managing Director, Kredent Academy & StockEdge, the Seminar discussed topics such as the impact of the new Government on financial markets, the existing status of the markets in the election buzz, the viable niches for investors post elections.
Vivek Bajaj, Managing Director, Kredent Academy & StockEdge, stated that the Indian economy is poised to prosper primarily due to the strong demographic structure. “Almost 50% of our population is below the age range of 35 years. Under these circumstances, poor policy framework and slow implementations of the same can result in wrong decision-making in the investment foray. The new Government must meet up to the expectations of various stakeholders and make the economic engine function prudently.”
Commenting further, Investment Analyst & Country Head of Trustline Securities Ltd Siddhartha Chatterjee remarked, “An election is a temporary phenomenon and policies are the permanent solutions. Stock markets replicate economy and thus we expect major thrust on economic policies put forward by the new Government. With the latter’s promise to make India a trillion dollar economy, the potential investor has a huge opportunity to create wealth by investing wisely.”
Prime Minister Modi's five-year rule has been marked by a focused and determined work towards improving governance and making social benefits like access to toilets, electricity, bank accounts, cooking gas and direct transfer of subsidy to the bank accounts of the poor and needy in this country.
“Forward multiples are demanding and when viewed against the backdrop of a slowing economy and earnings undershoot, they limit upside,” said Sriyan Pietersz, an investment strategist at Matthews Asia in Singapore. A strong mandate from the rural sector may prompt Modi to deliver on promises of cash income transfers to poor, which may widen the fiscal deficit, he said.
Nomura says Modi’s win assures policy continuity and stability craved by investors, which in turn will lead to increased capital inflows. Overseas funds have bought $9.4 billion of local shares this year, the most after China, as they positioned for Modi getting a second term, in a statement made to Bloomberg.
However, some loops remain to be worked on, as figured out by Nilesh Shah, MD & CEO, Kotak Mutual Fund. "Changing the orbit of Indian GDP growth from current 7 per cent level to higher level (eventually to an aspirational double-digit growth) is what markets are expecting from the second term of the government," Shah notes for MSN.