Budget is behind us, who is selling…..


Businessman against black bear balancing on cliff with sky treesFor those who had expectations that the Budget will bring some respite from the fall in the markets, now, it is a disappointment. Markets are bearish now and the Finance Minister took it to his advantage, realized that any good will not bear a positive impact, markets will only discount it and go down after adjusting the positives. So, better leave it as it is and look at what needs to be done, was the decision of the FM.

There were fears that Long Term Capital Gains will get extended to 3 years which did not happen and the tax on dividends which was another fear, has come through, while in a smaller manner. Only those who have above 10 lakhs as dividend income have to pay a 10% tax.

There was big expectations that the government will bring in a big time support to PSU Banks, which though happened, was at a lower level, market expectation was an above 55K Crore recap, while it came in at 25K crores. In the actual sense, there is no requirement for the government to give this support, because there is no guarantee that these banks will not repeat the same act again. It is best to leave them to tend the issue, which in fact will become a lesson for them and the pain will make them realize and help them become more responsible. Whereas, support will only mean that, “It was not my mistake, what I am doing is right. It is the government which made the mistake and they have taken care off of their mistake.” And he will continue with the same quality of work, may be generating another lakh plus crores in losses.

Actually, it is the government that is making a mistake, even now. They are not realizing that the people whom they have employed to manage this money are the culprits, unless there is a realization and action taken, no amount of recap will help clean the banking system.

So bear market is to continue for some more time. The confusion that budget had created in the markets will take time to resolve and expecting the markets to turn around soon will be defeated.

Last week there was a meeting of all the top fund managers of our country in Mumbai seaside. There, on a discussion between Equity fund managers and the Debt fund managers this was the talk.

Equity Fund manager: People will make money if they invest in our Equity Fund.

Debt Fund Manager: people maybe investing in your Equity Fund, but almost all the equity fund managers are investing their personal money in debt funds.

Equity: Arre boss! What are you saying? All of us are fully invested in Equities. We’re quite bullish.

Debt: Bullish or foolish, only time will tell.

Prashant Jain is bullish, S Naren is not selling, Nilesh Shah is not selling, Neelkanth Mishra is not advising his clients to sell, Ridham Desai is bullish and S Nagnath has a same view.

Toh maal bech kon raha hai? Who is selling?

Good question, but no answer!


For our Equity clients at BTT, we are fully sold off, and have parked funds into debt. So, it clearly shows, smart people follow the market differently.