homemarket Newsstocks NewsBudget 2020: Cautious in terms of investment, consumption thrust, says Narain of Edelweiss Securities
Budget 2020: Cautious in terms of investment, consumption thrust, says Narain of Edelweiss Securities
If one is stock-picker then one could use today's market fall to pick stocks for the long-term, said N Jayakumar, MD of Prime Securities.
Decoding the budget 2020, N Jayakumar, MD of Prime Securities said, “The fact that we are not able to take a lot of things which are delivered in the budget at face value is a bigger issue, which is that you talk about a grandstanding about dividend distribution tax (DDT) and the net result is that there is a higher amount of tax being collected in the hands of the investors, so now how is that benefiting anybody.”
He further added, “This entire business about simplifying taxes, in fact it is exactly the opposite. There was a grandstanding made out about how simple it is to now file your returns. However, now both from a corporate and individual perspective we are now given two sets of options. I have no way to determine whether anybody would be able to figure out on their own, without the need for a tax consultant, as to which scheme we should for whether the old or the new.”
According to Jayakumar, the budget lacks details in terms of numbers. " The budget started promisingly with lot of talk on agri but mid-way one realised that all the statements being made were just statement of intent but poorly backed by numbers or details and that has been the failing of this budget. "So, numbers were which we could never take seriously, today even the words are falling short of intent and that is extremely worrisome," he added.
Aditya Narain, Head-Research, Instl Equities, Edelweiss Securities said, “There are two parts to it - one is the reaction to expectations and I think people had build up too much in terms of what they hoped from a budget so that is one element of it. Second bit is that the budget is a little cautious in terms of be it investment thrust or a consumption thrust or an actual spend. To some extent, there is an increasing consensus view in the market that you require a kick start to the economy and that is not there in full force. So, while it could be merited up in terms of being sure that you are actually going to keep your fiscal deficit in check, the bigger expectation is that whatever stabilisation you have seen in the economy would actually want some kind of tailwind to that, which to some extent has not come through explicitly.”
Talking about severe fall in markets Jayakumar said, “Today's fall doesn’t necessarily spook me enough to say that everything is over. What it unfortunately does is it brings everything down at the same time. But if you are a stock picker from a slightly longer term perspective. I think the budget will be forgotten in a day or two and we will need to go back to stock picking at individual level.”
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