What will Narendra Modi have for markets on Independence Day? Here's what experts say
August, 16th 2014
August 15 is here, and there is enough speculation in the market that Prime Minister Narendra Modi will make some big announcements in his maiden Independence Day speech. Is it reasonable to expect something big on Friday? Here's what experts say:
Rashesh Shah, Chairman & CEO, Edelweiss Group
There has been a lot of expectation largely built up by the media around everything and obviously, the Prime Minister has been fairly quiet on any announcement for some time. Over the years, I have not seen any PM making big economic announcements on August 15th because it is not the platform for economic policy announcements.
So, I would expect a lot of announcements around India and social issues and foreign affairs and all but it is unlikely that we get lot of economic led announcements tomorrow. Currently, the government is trying to go after the low hanging fruit. A lot of incremental improvement is where the focus is and there is a school of thought amongst investors that maybe the big bang announcements will come after the state elections are over. Until the state elections are done, the government may not want to take risk of alienating anybody. So, if you want to see structural reforms, some of them maybe unpopular, you should think that they will come after the state elections.
To my mind, from a market men's perspective, that could be a little disappointing. Let us understand that governments do not exist to please markets or market men. After all, there is a country to run which is a big messy elephant of a country. It is going to take a while to get things under a fix. We can do a little of nitpicking and say this could have been done better, that could have been done better but it is not that nothing has happened. It is just that you and I might have aspired for a little more so maybe this will change a little bit. We have an event coming up over the weekend which is the 15th of August and that offers an opportunity to make interesting noises and change gears as it were. Will it happen or not, is what we shall see on that day.
Dhiraj Sachdev: Dhiraj Sachdev, Senior VP & Fund Manager-Equities, HSBC AM India
Market has been running on high hopes and high expectations already. It is unreasonable to expect big bang announcements on specific dates. It can be done over a period of time as things progress. Our sense is that there is expectation from the government's side on pursuing the economic reforms taking important policy decisions overtime and that is why the markets will see corrections but they will be short term in nature.