Stock experts believe FM's measures will bring investor confidence back in market
Finance minister Nirmala Sitharaman on Friday unveiled a slew of measures to stimulate the economy. Three months after it was announced in the budget, the higher surcharge on foreign portfolio investors (FPIs) has gone. The government stands to lose just Rs 1,400 crore due to this rollback.
In order to boost liquidity for PSU banks, the government will release the entire Rs 70,000 crore to capitalise them at one go. In a bid to boost motown sentiment, the FM has said that the higher vehicle registration fee that was announced will be postponed till June 2020.
In order to ease the liquidity crunch, especially for MSMEs, the government has decided to speed up the GST refund process. All pending GST refunds shall be paid within 30 days and future refunds will be sorted out in 60 days. She added that delayed payments from government and CPSEs will be monitored and released as soon as possible.
Market experts see the measures announced by the FM as positives for the market. According to them, with these steps, the FM has "won the trust of the market".
"These measures are from a long term perspective. More importantly, I think finance minister, in my opinion, has won the trust of the market, that she is concerned about it, she is caring and she will come back with more, that is more important... so, I directionally see this as positive and probably the prices we have seen in Indian market in the recent past won't be seen for a long time," Vikas Khemani, founder of Carnelian Capital, said.
Deven Choksey, managing director at K.R. Choksey, said, "These measures have definitely created a good amount of confidence in the minds of the entrepreneurs as well as in the minds of the investors because some of the impeding factors which were affecting the growth - at least they are taken away. Now it depends on the market dynamics hereafter as to how they catch up on this subject... festive season and government spending starting hereafter, all of them put together have the potential to bring the economy back on the track and maybe we should be seeing better half in the second half of FY19-20."
NischalMaheshwari, CEO, Centrum Broking, said, "Finance minister has addressed three things very categorically. I think that there were three concerns in the market, one was changing the sentiment. So, I think the FPI change which she has done, that will definitely change the sentiment in the market. It will at least not give a reason for FIIs to go out and sell more. Secondly, she has addressed growth through various measures, whether it is putting the Rs 70,000 crore upfront in the PSU banks or the sops which she has given to the auto market. The third one is addressing the liquidity, I think she has done it successively — in the budget she has addressed the liquidity and again she has addressed the liquidity through various measures. So, I think this sort of forms a very good bottom for the market."
The FM also made it clear that this was only the first instalment and more measures are on the anvil starting next week and the week after.
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