|
| Result is a game-changer: India Inc, market players |
| BS Reporter / Mumbai/New Delhi May 17, 2009, 00:04 IST |
|
As the results started pouring, the mood in business circles turned euphoric. India Inc’s CEOs and leading market players ran out of adjectives to describe their collective sense of relief after the United Progressive Alliance managed a decisive majority in the Lok Sabha elections.
Stock broker Rakesh Jhunjhunwala said: “This is a game-changer for India.” Bharti Airtel Chairman Sunil Bharti Mittal said: “India has much to cheer about finally.” Their optimism was shared by almost everybody, with ITC Chairman Y C Deveshwar expecting the return of double-digit growth in the not-too-distant future.
Market players said they expected bulls to hit the ring with a vengeance when trading resumed on Monday. The biggest relief seems to be the disappearance of the Left shadow. Sameer Arora, the managing director of Helios Capital, said that factor alone was “worth an addition of 500 points to the Sensex”.
The consensus was that the markets will go only one way from now on — north — unless global indicators worsen substantially. Some felt the Sensex could touch 15,000-16,000 and the National Stock Exchange’s Nifty could touch 4,600 in the near future.
ICICI Securities MD & CEO Madhabi Puri Buch said investors had almost pressed the “pause” button on major decisions on account of the uncertainties. “The play button will be on and could even become fast-forward” after the clear mandate to the new government, she said.
Reason: The liquidity in global markets is reasonably strong, local mutual funds have been in cash for some time and risk appetite has increased significantly the world over. The volatility index, commonly seen to be the “fear index” doesn’t look quite as fearful as it used to.
Edelweiss Group Chairman Rashesh Shah said many domestic and overseas investors, who were waiting in the sidelines with cash, would now put money in equities. But after the initial euphoria, the market will watch out for the next Budget. His choice for the finance minister’s post: Pranab Mukherjee or P Chidambaram.
Few were willing to talk about concerns. UB Group Chairman Vijay Mallya said Manmohanomics could be in full play now as the new government would not have to bother about placating “hotch-potch allies” like the Left. Infosys Co-chairman Nandan Nilekani agreed: “This is the first time in many years that a government would not face any ideological barrier.”
Many, however, said that the new government might feel this burden of expectation a bit too heavy. For example, while quite a few leading lights expect Singh to go in for public sector disinvestment, others said this was easier said than done. “Many Congressmen themselves are in the socialist mould and may not be too enthusiastic about disinvestment,” said a stock market intermediary.
The wish list of industry is long: Mega infrastructure spending that will generate large-scale employment, resource-mobilisation measures by the government like disinvestment and spectrum auctions, tax rationalisation — direct as well as indirect — and fast-tracking of the insurance and pension Bills in Parliament. Some like Godrej Chairman and Managing Director Adi Godrej said they wanted introduction of one more stimulus package to get economic growth back to 8-9 per cent.
Future Group Chairman Kishore Biyani said the Congress had promised reduction in interest rates to boost consumption. “I expect that to happen soon. Tax reduction and the introduction of the goods and services tax by 2010 will give a fillip to consumption and revive sentiments,” he said.
TVS Motors Chief Venu Srinivasan said a key area of focus would have to be infrastructure, since it plays a key role in economic revival and sustained growth.
ICICI Prudential Assets Management Company’s Deputy Managing Director Nilesh Shah said looking at the fiscal situation, there were chances of the government crowding out companies in raising money from the market and foreign money will thus be crucial. The gap, he said, was expected to be around Rs 150,000 crore ($30 billion).
Yet others expected the government to focus on sector-specific issues. Satyam Chairman Kiran Karnik said there were a couple of things that the information technology industry would like to hear from the government in the first 100 days – policy commitment to support the industry, adequate funding for the roll-out of broadband and focus on human resources.
Tata Consultancy Services Managing Director and CEO S Ramadorai added one more to the wish-list: Focus on e-governance. Given the proven benefits of technology usage in the government’s employment generation programmes, the new regime should embark on a $5-10 billion investment programme for e-governance initiatives, he said.
Real estate players are equally relieved. “I don’t see any concerns about the economy including real estate now. UPA will take care of the problems,” said Parsvnath Developers Chairman Pradeep Jain
Some, however, warned against such irrational exuberance. For example, Bajaj Auto Chairman Rahul Bajaj said the government shouldn’t go overboard with reforms and opt for “cautious liberalisation.”
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
