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Topic : Post Budget investment strategy
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Should investors put off fresh investments till the budget?

Created by : Jyoti Rath, Sr. Associate, Barclays  | 02 16 2010 07:24:47 +0000
Industry : Equity Research/AnalyticsFunctional Area : India(Markets)
Keywords : investment investors budget share market
Activity:  240 views;  last activity : 07 06 2010 20:18:09 +0000

Most Asian markets, which open for trading before India’s, closed on Monday for the Lunar New Year, domestic investors are uncertain about how would the dominant foreign institutions interpret the events late last week till the opening of trade on Monday. India’s industrial production exceeded expectations, growing 16.8% in December against Street estimates of 13.5-14%.

Though the IIP figures are something to cheer about, nobody has a clue of the direction of the market in the short-term, because of the external factors. Emerging markets (EMs) have moved in line with global risks. However, the strength of fundamentals and the technical outlook argues for an EM performance that, while volatile, should outdo that of developed markets.

So users, according to you, should investors put off fresh investments till the budget?

  
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Selective investing based on budget forecast can be rewarding from the technical view point.

But from what I know I think considering generally, the fundamentals are not attractive. the market is overvalued right now and future returns in the form of capital gains will suffer .  The  number of stocks trading at a very high price earning ratio is higher, even when compared to 2007.

 
By Padmanabhan R, Articled / Audit assistant, Finance student  02 17 2010 13:02:16 +0000
 
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As we all know, this 26th (Feb) budget is going to happen, so market is expected to boom high after that. So, I think, investors should invest within these 10 days ( till 26th Feb ). So if there is anyone who is wanting to do bulk ( one time ) investments, it’s a good time and they can hurry up to do it before 26th.
By Jyoti Rath, Sr. Associate, Barclays  02 16 2010 07:58:38 +0000
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Investors should wait. they should invest after the budget as there may be some surprises in budget. Also, the govt should give direction to middle class, people above poverty line marginally, to sustain the little wealth they have created over 30 years. It should put an end to subsidising rich, very rich people for purchase of petrol and LPG BY GRADUAL INCREASE OF PRICE OF PETROL. LPG PRICE SHOULD BE RAISED BY Rs.10 every 2 months. Sr.citizens should get tax-free bonds upto 10 lacs principal payable on death. It should ensure better PDS, and hoarders who are enemies of society should be severely punished in 90 days, with accumulated wealth confiscated. FARMERS SHOULD GET BENEFIT, NOT THE MIDDLEMAN. We are moving in the right direction and benefits should be consolidated without loss of time. It is absurd governance to give TAX-FREE DIVIDEND FROM 100 to 500 crores endlessly. These were the limitations in the last budget. Government knows this very well. If these things are implemented this time, common man will benefit a lot. So, I think we should wait till the budget is being declared.
By Archana Singh, Relationship Executive, ICICI Bank  | 02 17 2010 05:20:54 +0000
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Advicing someone to invest is s risky proposition. If some one feels it is right to invest then we can probably say which companies on what criterion. The problem with our present times is Mr. Chidambaram used to be working with the neo liberal economic philosophy of the rest of the world though he used to be high on taxes. When Pranab Mukergee came things turned towards socilistic flavored environment since he is used to only such type of administration. Now whatever happens I feel the environment is too confused to make big investments. Everyone knows the philosophies of yesteryears and why we had to globalize. Considering this impasse it is difficult and risk to give advice. Rather those who invest for long probably can purchase and sit for some time to come. Indian markets had been good to investors in the past except for the recent past when the market killed due to forces imported due to Lehmann collapse. As long as this is in memomry I feel when the International market is not upbeat, Indians might follow the same trajectory.
By Mathew Cherian, Research Associate/Analyst, Western Michigan University  | 02 16 2010 18:06:15 +0000
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