MF CEOs
Ashutosh Bishnoi, MD & CEO, Mahindra Manulife MF
We welcome the extraordinary support this budget provides for the Infra sector with targeted investments through Invits and through streamlining of the management of stressed assets. The introduction of the zero coupon bonds is also a welcome move that will help to support the sector. We look forward to new dispensation for the regulation of gold exchanges. We look forward to investors unlocking their wealth in gold, so that their investments could provide them market related returns. We look forward to the streamlining of the securities market laws. We hope this will result in lowering the burden of compliance for the small investors.
Nilesh Shah, Group President & MD, Kotak MF
Growth oriented budget will support equity market. Asset monetization, strategic divestment, auto scrappage policy are positives for market. Fixed income market will look forward to RBI’s monetary policy as the gross borrowing program was little on the higher side. The budget has laid foundation for growth beyond FY 22 through selective protection to domestic industry and encouragement via PLI scheme.
Prathit Bhobe, CEO&MD, Tata MF
In the run up to the budget, market was bracing for higher taxes on the back of a pandemic year. The fact that there were no changes in taxes coupled with a boost for growth made it double joy for equity markets.
Benefits for MF industry:
DDT on REIT and INVIT is a positive step. This will further increase attractiveness and will also deepen the category. It is a very positive step for MFs.
On equity MFs
Markets usually develop anxiety on tax increase or any double taxation around budget time. No changes in tax is a big relief for equity markets.
On debt MFs:
Total gross borrowing will be nearly Rs.12 lakh crore. It could be a busy year on bond issuances and will put upward pressure on bond yields.
On AIF
Setting up of AIF for disposal of stressed assets is an excellent move. Funds, which are focused in running special situations will benefit from such opportunities.
Vishal Kapoor, CEO, IDFC MF
Individual tax payers would be relieved that there have been no changes in Income tax rates, given the pre-budget concern of a possible Covid cess or higher capital gains or wealth tax imposition. Additionally, tax filing simplification for investors through pre-filled capital gains and interest income, relief for senior citizens in filing taxes and a reduction in the limit for tax assessment reopening from 6 years to 3 years will improve tax-payer confidence. Retail investors will also look forward to the benefit from regulatory consolidation and the investor charter announced.
Waqar Naqvi, CEO, Taurus MF
While one needs to wait for the fine print yet one can say that broadly the markets will be happy with the budget given the overall direction of the budget indicated by the government's decision to:
1. Decision to privatize two PSU banks and one insurance company
2. Create an ARC and AMC to manage stressed assets - this can be built upon in the years to come into a bigger entity
3. No increase in direct and indirect taxes
4. Allowing FDI upto 74% in Insurance companies
Perhaps the high fiscal deficit of FY 21 due to covid19 prevented the government from reducing the personal income tax for individual taxpayers.
MF CIOs and fund managers
Bekxy Kuriakose, Head- Fixed Income, Principal MF
Overall, we expect government bond yields to rise. The ten-year benchmark has reacted to today’s policy announcements and breached the 6% mark. We expect that this current ten-year benchmark may move towards 6.50 in next six months given the global environment may also turn towards higher bond yields.
Mahendra Kumar Jajoo, CIO - Fixed Income, Mirae Asset MF
Structural reforms, focus on healthcare, liberalization in insurance FDI, setting up ARC for bad debts are significant features. Higher borrowings may initially be somewhat concerning for debt markets but with inflation having eased in recent months and with RBI likely to remain supportive, bond markets should stabilize shortly with a minor uptick in market yields.
Rahul Singh, CIO-Equities, Tata MF
Though there is a likelihood of slightly higher interest rates as a result, it can get offset by superior earnings momentum especially if the budget is successful in reviving the investment cycle. Lack of any negatives in terms of persona tax, corporate tax or capital gains is also a sentiment positive.
Rajeev Radhakrishnan - CIO - Fixed Income, SBI MF
This is a market friendly budget with respect to equity markets at first glance. The equity markets have run up on valuations and it is kind of imperative that earnings growth catches up. To that extent, the loosening of purse strings as a counter cyclical measure, increase in planned capex and the neutrality on direct taxes are meaningful positives that provide greater confidence on earnings growth mean reverting back to high double digits.
Sorbh Gupta, Fund Manager- Equity, Quantum MF
Overall, the government’s planned spend on infra, if executed properly, has the potential to increase employment & expedite (though, boost to consumption would have expedited it much faster) the natural business cycle to revive corporate earnings which otherwise shall be a gradual process.
Srinivas Rao Ravuri, CIO-Equities, PGIM India MF
Overall growth-oriented Budget. Key positives are:
1) No major negative – for corporates, capital markets & individuals
2) Higher spend and allocation to capital expenditure
3) Continued reforms as highlighted by plans to privatize PSUs including banks
Distributors
Gaurav Awasthi, Senior Partner, IIFL Wealth
In line with the stated priority of the government, the budget focusses on increased thrust to infrastructure and other supply side measures to accelerate manufacturing in the country. There were no major changes on the direct tax code, which was taken very positively by the market though the lack of any demand side push was a disappointment.
The government has also not been constrained by the fiscal numbers and has focussed on spending to get the economy back to its feet post the devastation of the pandemic.
Harshad Chetanwala, Co-Founder- MyWealthGrowth.com.
An increase in infrastructure spending will drive growth, increase employment and boost consumption. This should benefit a few sectors like banks, consumer discretionary, etc. Also, the firm stand and plans on divestment and monetization of certain PSUs look promising for our economy.
