There has always been a connection between politics and the performance of the
equity markets. The connection is strong. For politics decide the economic
policies. This guides the economy. And this in turn drives the performance of
the corporate. The performance of the corporate world decides how their share
prices will move or in short where the stock markets would be headed. This is
why investors, both domestic and foreign, have been keenly eyeing the
developments related to the 2014 general elections in the country.
Interestingly the corporate world and therefore the stock markets appear to be
rooting actively for Gujarat Chief Minister, Narendra Modi.
Mr Modi's nomination by his political party as their Prime Ministerial candidate was well received by India Inc. In corporate polls and surveys, India Inc has been giving their preference for Mr Modi to be the next leader. And there are solid reasons behind this favour.
Let us not forget that the policy paralysis of the ruling government has seriously hurt the business prospects in the country. Therefore Mr Modi's 'pro-business' ideas are being welcomed. A few days back he held a meeting with CEOs where he stated that he plans to bring about flexible labor laws; a clear cut development agenda; governance and empowering the state governments. This would be music to the ears of the CEOs who have seen their business suffer due to the lack of action on all of these fronts. Luckily for Modi he has a track record to back up his claims of being pro-business and pro-growth. Anyone who questions that need only to look at the level of development and growth seen in Gujarat during his tenure as the Chief Minister. This is why investors both domestic as we ll as foreign have been cheering Mr Modi's candidature.
However, there is another side to the story. Modi has been touted by many to be a driver of earnings growth but not inclusive growth. On the social indicators' front, Gujarat has not really fared too well. He is not a major supporter of spending too much towards populist measures. Unfortunately for India, the UPA government has been doing just that. Only concentrating on populist measures and letting the economy take a back seat. The glaring deficit problems are testimony to this.
What we need today is a leadership that can combine both. Economic growth that is brought about by better earnings growth that is also socially inclusive. Who will eventually come into power is a question no one can answer for sure. Will it be the pro-business party or would it be the pro-masses party. The question now is what investors should do in a meantime. There are very few clues available for this. Even our founder, Ajit Dayal, has stated in a recent WebSummit he does not see any significant triggers for stocks till the next general elections. So should investors continue to buy stocks or shoul d they sit on the side and wait for electi ons to get over. We know it is questions like these that concern you these days. And your trusted source for views and opinions, The 5 Minute WrapUp, too has unfortunately not helped by staying silent on such questions. We understand that, in addition to stocks, you might be concerned about other asset classes like fixed deposits, gold and property as well. And that's why we are taking steps to make The 5 Minute WrapUp more relevant to you. Watch this space for more details in the coming weeks!
Mr Modi's nomination by his political party as their Prime Ministerial candidate was well received by India Inc. In corporate polls and surveys, India Inc has been giving their preference for Mr Modi to be the next leader. And there are solid reasons behind this favour.
Let us not forget that the policy paralysis of the ruling government has seriously hurt the business prospects in the country. Therefore Mr Modi's 'pro-business' ideas are being welcomed. A few days back he held a meeting with CEOs where he stated that he plans to bring about flexible labor laws; a clear cut development agenda; governance and empowering the state governments. This would be music to the ears of the CEOs who have seen their business suffer due to the lack of action on all of these fronts. Luckily for Modi he has a track record to back up his claims of being pro-business and pro-growth. Anyone who questions that need only to look at the level of development and growth seen in Gujarat during his tenure as the Chief Minister. This is why investors both domestic as we ll as foreign have been cheering Mr Modi's candidature.
However, there is another side to the story. Modi has been touted by many to be a driver of earnings growth but not inclusive growth. On the social indicators' front, Gujarat has not really fared too well. He is not a major supporter of spending too much towards populist measures. Unfortunately for India, the UPA government has been doing just that. Only concentrating on populist measures and letting the economy take a back seat. The glaring deficit problems are testimony to this.
What we need today is a leadership that can combine both. Economic growth that is brought about by better earnings growth that is also socially inclusive. Who will eventually come into power is a question no one can answer for sure. Will it be the pro-business party or would it be the pro-masses party. The question now is what investors should do in a meantime. There are very few clues available for this. Even our founder, Ajit Dayal, has stated in a recent WebSummit he does not see any significant triggers for stocks till the next general elections. So should investors continue to buy stocks or shoul d they sit on the side and wait for electi ons to get over. We know it is questions like these that concern you these days. And your trusted source for views and opinions, The 5 Minute WrapUp, too has unfortunately not helped by staying silent on such questions. We understand that, in addition to stocks, you might be concerned about other asset classes like fixed deposits, gold and property as well. And that's why we are taking steps to make The 5 Minute WrapUp more relevant to you. Watch this space for more details in the coming weeks!
No comments:
Post a Comment