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Lok Sabha Elections 2019: Corporate India, stock market veterans vote in Mumbai

Updated : April 29, 2019 04:58 PM IST

Stock market veterans come out to vote in Mumbai on Monday as the voting in the fourth phase of the 2019 Lok Sabha elections are held in 17 seats in Maharashtra. The Indian stock markets were closed today on account of the general elections.

AM Naik, Chairman, L&T: “Employment for everyone - that is the biggest issue. The security of the country, the way things are... that has become very important.”

Speaking about the investment environment in India, Naik said, “The government has been too busy for the last 1 year competing with each party, with each other in giving everything free and that takes away all the money. Therefore there is not enough for the development.”

Stock market expert SP Tulsian: “The Indian Lok Sabha election has been emerging more or less on the lines of the US Presidential election. People look for the leadership, who will be at the helm of the affair, no political affiliation, no negative feeling against any party. Maybe earlier there was the party concept, but now it is a leadership concept.”

Keki Mistry, VC and CEO, HDFC: “As an individual, security and safety are very critical. As a corporate, one of the things which is very important is growth in the economy; growth means more job creation, growth means more investments. So measures to boost private investments are critical for the economy because if we boost private investments, automatically job creation will happen, job creation will lead to more diversion and more spreading of wealth among people."

Anand Mahindra, chairman and managing director, Mahindra and Mahindra: “You have to vote with gratitude because what we have today is a privilege and I am very lucky that I was born post-independence in a free country and I have now reached my 60s in a free country. I think that is a thing that I have to be grateful for. So my appeal would be, come because it is a right, but also it is an obligation and it is a privilege.”

“The key issue is integrity, the key issue is the economy and jobs. If we can run a clean government that delivers jobs to everybody, then I think this country is going to get moving,” he added.

Ramesh Damani, Member, BSE: "Voting really matters as our founding father Mahatma Gandhi said that we should be the change that we wish to see. Therefore, there is no better way to change our government to have a peaceful transition of power than to come out and record votes,” he said.

“We have had a lot of volatility around the elections but generally India continues at 7 percent growth which is very good by international standards; not good by our own expectations perhaps. So we will continue to grow well and most governments will now lean towards free market operations, inclusive society and there is a reason to be optimistic that the 17th Lok Sabha will deliver stellar returns over the previous Lok Sabha,” Damani further added.

Bharat Iyer of JP Morgan: “The last opinion polls before polling started, seemed to suggest that the NDA coalition would get about 270-280 seats. The UPA was perhaps being tipped to get about 150 seats with other regional parties getting the balance. That is where the market is set at this point in time. I guess anything meaningfully short of what the market is pricing in right now, would constitute a negative surprise, particularly if the verdict is less than 250 seats.”

On markets, Iyer believes that markets will eventually revert to fundamentals. He said, “There could be a bit of volatility for 2-3 days around the results depending on how the verdict goes.”

“We still remain constructive over the medium term. The good part is that corporate earnings seem to be staging a smart recovery. For the first 9 months of the current fiscal year, earnings have grown at 13 percent. The fourth quarter should if anything be better because you have a very favourable base effect. We are looking at about 18 percent for next year as well. So, corporate earnings are the big story as far as we are concerned,” he added.

Deepak Parekh, chairman of HDFC: “In South Mumbai, we look at local issues and in the center, we want a stable government who can give stability for the country for the next 5 years. We want someone who will look after our constituency, improve the infrastructure in Mumbai because this is our constituency, so, we want better infrastructure here, better traffic, better security, safety everything.”

“Growth will come. There has been a little lull because of election campaigning. I am quite confident that the growth will come back,” he added.

Ridham Desai, head of India equity research and India equity strategist at Morgan Stanley: “I think from February 27 to date, there is some expectation in the market that India will deliver near majority or maybe even a majority government. I think that expectation is getting baked in. I do not think this is like 2004; in 2004 the expectations were very different which is why when it did not come through, the markets fell a lot. It is certainly not 2009 when the expectations were so low that when India delivered a better than expected result, we got a big rise. I think this is somewhere in the middle of 2004 and 2009."

"Suppose the market does not get a majority or a near majority government, and it gets a fractured mandate which basically means that we get a third front government, then I think there could be a correction in equity prices because that is not what is priced in.”

Dipan Mehta, founder and director at Elixir Equities: “Indian elections, especially Lok Sabha has always thrown up many surprises.”

“By and large India has had a lot of policy continuity, but what the market does not like is populist measures. Depending on who comes to power and what kind of populist measures they follow, I think the capital markets will react accordingly. Hopefully, we will have more conservative policies, but one really cannot say, let us just keep our fingers crossed,” he added.

Shobhana Bhartia, chairperson and editorial director, HT Media: “Nationalism and security-related issues have been marketed very effectively by the BJP. They have made a concerted strong pitch.”

“A bulk of the Prime Minister’s speeches is less about what they have done in terms of delivering on the promises or going forward on other developmental initiatives. It’s primarily based around Balakot, nationalism, security-related issues. So the market has succeeded. I do not know whether it is as much of an issue that has resonance everywhere but because of the strong BJP marketing pitch, what I pick up from various people from the field is that people are talking about it, they do feel that they are secure. So to that extent, I would say that the ruling party’s spin on this narrative has succeeded.”

Atul Suri, CEO-PMS at Marathon Trends: “When it comes to these elections, I am voting for the country. I am voting for a Prime Minister, I am voting for the nation. So I would look at the macros and for me connected with the market that I am, I would look at the economy and how the market would pan around and what would be good for the market. Therefore, my look is pretty macro, large, pretty topdown.”

Adi Godrej, chairman of Godrej Group: He expects growth to pick up post elections. He said, “I think generally, by and large growth will revive on fronts. If growth revives, private investment will see an upswing.”

Sunil Singhania, Founder, Abbakkus Asset Management: “We are the largest democracy in the world, 130 crore population and almost 100 crore people voting. I think it’s not just a right but also a duty to cast a vote. You have to choose the right candidate, you have to choose right government because they are going to rule you for the next 5 years.”

Talking about infrastructure, he said, “A lot of projects start in Mumbai but the execution is pathetic. Thankfully the Metro work, so far the execution has been much better. However, having said that there is a 600-meter bridge here (Goregaon) which took 4 years to complete. I personally met the commissioner 2-3 times for this. These small things are irritant. So things have to progress.”

“Mumbai contributes a large chunk as far as taxes are concerned, but it’s not just that, it is basically the barometer of the financial services; almost all investors who come to this country land in Mumbai. So it has to be a city which showcases the nation. Therefore, both the state and central government, as well as local authorities, should ensure that they spend a lot of time, resources and effort in creating good infrastructure,” he added.

Sridhar Sivaram, investment director of Enam Holdings: “It doesn’t matter which party is going to lead it. As long as we get a strong government in the centre that makes a big difference. So this is more a vote for continuity of reforms whichever party comes."

Talking about the market, Sivaram said, “The market currently pricing in a continuity of the National Democratic Party (NDA) government.” According to him, the market can be volatile in near-term given election uncertainty.

Manish Sonthalia of Motilal Oswal AMC: “Nobody has said that the direction of the market and the fundamentals have to move in tandem and that too within the short term. We are in the middle of the Q4 numbers and there is no earnings growth to be reported. Except for the banks, earnings growth is going to be zero.

"However, markets if they are assuming the base case scenario as far as election results are concerned, is looking forward to an NDA government with a plethora of new set of reforms, something like labour reforms, something like land reforms, then markets would tend to extrapolate some of these positive benefits which are about to come in a few years’ time even today.”

Pawan Goenka, managing director at Mahindra and Mahindra, said: “I do not think investments is a function of which government comes in. It is a function of does the demand take off. Right now for many of the industries, the last 4-6 months, the demand has been subdued and that is probably the reason why some of us have put on hold our investment plans. Investment will depend on whether we are able to use the current capacity and that will depend on demand equation.”
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