Saturday, March 25, 2023
HomeEconomyBudget 2019 expected to spur consumption and infrastructure, Indian fund managers say

Budget 2019 expected to spur consumption and infrastructure, Indian fund managers say

These are the views of wealth and alternative investment managers on opportunities in the Indian market ahead of Friday’s budget.

Text Size:

Mumbai: 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% in the first three months of 2019, amid a liquidity crunch at non-banking financial companies. That’s put pressure on recently reelected 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.

  • 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.

Also read: Fund manager who predicted India’s credit crisis still sees risks

  • 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
  • The deficient monsoon is a concern, as the rural economy and wages were already stressed
  • “We are long vega” going into the budget announcement.
    Umang Papneja, senior managing partner, IIFL Wealth Management Co.
  • The liquidity squeeze due to the credit crisis has created an investment opportunity
  • The “flight to quality” trend since September is likely to continue for some time
  • Spotting some good ideas amid the turmoil in the real estate sector; introduction of a regulator may help drive consolidation; stronger players are likely to get cheaper credit
  • It’s a “divergent time” for equities, as only a few stocks are driving the indexes higher; it’s time to gradually start investing in select mid-caps stocks after a sharp correction

Subscribe to our channels on YouTube & Telegram

Support Our Journalism

India needs fair, non-hyphenated and questioning journalism, packed with on-ground reporting. ThePrint – with exceptional reporters, columnists and editors – is doing just that.

Sustaining this needs support from wonderful readers like you.

Whether you live in India or overseas, you can take a paid subscription by clicking here.

Support Our Journalism

Most Popular