Investment strategies post budget

Moneylife Digital Team 11 March 2016

Debashis Basu, editor of Moneylife explained implications of changes in Budget proposals on personal finance like EPF, HRA exemptions, dividends, sovereign gold bonds, sector outlook, Indian stock market and global market

Moneylife Smartsavers (MSSN) conducted a seminar “Budget & Your Investments” sponsored by Kotak Securities. The event was conducted by Debashis Basu, editor of Moneylife magazine, who has 30 years of experience as an analyst and journalist. Decoding the implications of the budget on investments, he explained implications of changes in Budget proposals related to personal finance (EPF, HRA exemptions, dividends, and sovereign gold bonds), sector outlook, Indian stock market and global market.

Explaining rural consumption should pick up, for the market to return to a bullish stride, he explained that budget proposals on different sectors such including roads, FMCG, automobiles, cement, fertilizers and airlines. He said that the proposal of additional loan deduction on housing loan interest to first-time buyers with loan amount less than Rs50,000 will greatly benefit Housing Finance Companies (HFC's). “The proposal to open up the transport sector in the passenger segment is an incredibly major step”, remarked Debashis Basu.

On the negative side, Mr Basu explained how the government revenue numbers on disinvestment, spectrum spectrum, direct taxes may not meet the targets. He also pointed out that the even after NPS becoming tax-free to be extent of 40%, it is still not attractive.

He threw light upon the correlation between Sensex and EPS growth, and Sensex and price-to-earnings multiple (PE). The historical returns from the benchmark index are a useful to gauge the future returns. He delved into these historical returns and then went on to explain the outlook towards different sectors ranging from financials capital goods.

In the present inter-connected world with money moving across nations, investment analysis would incomplete unless we analyse the global scenario. With the emergence of China as a financial superpower, he decoded the impact of the slowing down of economic activity in China and the commodities meltdown. Mr Basu answered questions from the audience regarding specific companies and the markets in general in the midst of the session.

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