INSUBCONTINENT EXCLUSIVE:
Markets guru and Founder of Mobius Capital Partners
He said the tax simplifications were in some way confusing
He rates the Budget at six to seven on a scale of 1-10.
Edited excerpts from a telephonic interview:-
Q What are your thoughts on Indian
Budget?A: People are little concerned with the Budget, because it was not bold enough as people would have liked it to see
The tax simplifications in some ways are confusing people
At the same time, it is difficult to gauge what the impact they will have
Some people will ask to opt the five slabs with no exemptions, and that of course would make things easier
But the fact that they have to choose between that and the continuing current exemptions makes it confusing.
I think this disinvestment
But they will do better to specify on which areas they would go forward on disinvestment
they are talking about LIC
I would like to have more specifics on that.
In terms of infrastructure spending, I am wondering why they would specify the tax exemptions
only for only sovereign funds
It would have been better to say that I have tax exemptions for any investment fund or anyone willing to go into infrastructure projects
That would be given a big boost to the whole programme
Probably, the good part in the Budget is that the dividend distribution tax is removed
Another good thing about the Budget is the tax amnesty, which could throw a lot of money into the market.
Q So on a scale of one to 10,
where would you rate the Budget?A: I would say, maybe six or seven.
Q Would you call the Budget disappointing? Indian markets gave it a
What are your thoughts?A: I would not say it is disappointing
But we would have liked to see some bold moves, given the fact that the economy is in trouble
I would have liked to see bold moves on infrastructure and rural employment
One thing very important for the government to do is to ensure that the rural population have more jobs and that should begin with more
infrastructure projects.
Q Do you think the government can achieve this massive disinvestment target?A: I would like to see it speed up on
Of course, as everyone talks about LIC, and that is a very attractive sort of investment for many investors like us
I would like to see them speed up in other areas of the disinvestment programme.
Q The kind of income-tax rules, the tweaks that the FM came
up with, may actually cause a dent on the life insurance companies
These tax exemptions did help
Some of that will be gone now
So, this is something we will have to watch very carefully.
Q As we stand, in your emerging market portfolio, where does India stand in
terms of your preference list in BRICS?A: With the crisis in China, India actually comes up
China, of course, has come down a little bit, but I would like to think of China and India right up there in terms of targets.
Q: Are you
buying into this correction currently?A: Yes, we are looking at a number of opportunities in India now.
Q At this point, where are you
hunting value in India?A: We see good value in India now
We see many opportunities
There are opportunities in the consumer sector, infrastructure and companies that supply infrastructure goods.
Q Talking of global markets,
how serious can be the impact of coronavirus on world equities? Or is it too early to say?A: It is clearly too early to say
I do not think, generally speaking, it is going to be serious long-lasting situation for the simple reason that the Chinese government is
utilising immense resources to find a solution to the problem
Also countries around the world are working very hard to find a remedy
So, I do not think it is going to be a long-lasting situation.