Somber mood in Dalal Street
Yesterday, there was a somber mood in Dalal Street.
Pundits and novices were shuffling their feet, their eyes downcast, shoulders slumped.
The new tax on buybacks shocked everyone.
This is why IT and cash rich cos are down pic.twitter.com/sNz4Bs9Ddd
— Darshan Mehta (@darshanvmehta1) July 5, 2019
There is also an increase in tax rates for HNIs.
Super rich HIT hard!
*3% Increase in surcharge for income betwn 2-5cr
*7% increase in surcharge for income at 5cr+Earnings=5cr
Income tax frm 1.79cr to 2.13cr
34 lkhs extra outgoEarnings=3cr
Income tax frm 1.08cr to 1.17cr
9.4 lkhs extra outgo#Budget2019#BudgetWithCNBCTV18— Nigel D'Souza (@Nigel__DSouza) July 5, 2019
The mammoth Rs. 70,000 crore bail-out package for PSU Banks also did not go down well with the punters.
They described it as “throwing good money after bad“.
Rs 70000 crore for recapitalisation of PSU banks #BudgetwithZeehttps://t.co/T9H8o8cmXr
— Zee News (@ZeeNews) July 5, 2019
Porinju Veliyath, the head spokesman of Dalal Street, eloquently echoed the sentiments of the inhabitants.
He condemned the Budget for having “market unfriendly provisions and negative tax surprises“.
He also slammed NAMO and Nirmala Sitharaman for not appreciating that higher tax rates is counter-productive because it leads to lower incentives, more crowding out and lower GDP.
Market unfriendly provisions & negative tax surprises! Intentions aside, in a market economy higher tax rates mean lower incentives, more crowding out and lower GDP & tax collection. Policymakers need to appreciate this sooner than later!
— Porinju Veliyath (@porinju) July 5, 2019
However, he later softened his criticism by complimenting the Budget for maintaining “fiscal discipline“.
Fiscal discipline maintained. More money in the hands of the common man. Targeted welfare schemes. Focus on Infra, Agri, Water & Housing. Better Governance & Tax compliance. #Budget2019 – No big bangs, neutral for investors in near-term, good for the Nation in the long-term!
— Porinju Veliyath (@porinju) July 5, 2019
Basant Maheshwari was also not impressed by the Budget though he was somewhat cryptic in his comment.
The market was already narrow it will get more narrow !! #TheThoughtfulInvestor
— Basant Maheshwari (@BMTheEquityDesk) July 5, 2019
This govt will destroy the markets
— Vineet Burman (@vineetburman) July 5, 2019
Vijay Kedia was at a loss for words. He invoked the divinity, implying that the markets are now in the hands of ‘Bhagwan Bharose‘.
Jay Maa Narayani ? pic.twitter.com/svGKwHxUg0
— Vijay Kedia (@VijayKedia1) July 6, 2019
Some junk politicians like Randeep Singh Surjewala claimed that the Sensex had given a “thumbs down” to the Budget.
BJP has been tom-tomming Sensex as a barometer of economic growth.
Today, Sensex lost 395 points post budget, giving a thumbs down to the maiden budget of Modi 2.0!https://t.co/YubPCJO6N5
— Randeep Singh Surjewala (@rssurjewala) July 5, 2019
Is Nirmala Sitharaman doing what George Fernandes did?
Super-old-timers may recollect that when George Fernandes, the firebrand communist/ socialist leader, was the Finance Minister during the regime of the Janata Party, he had issued the Fatwa that all MNC companies had to offer their shares to the public if they wanted to do business in India.
This move had led to an uproar at that time.
Several marquee companies like Coca-Cola and IBM chose to exit India.
However, several others like Colgate-Palmolive, Hindustan Unilever, Proctor & Gamble etc complied with the rule and offered their stock to the Indian public.
The valuations were fixed by the CCI and were at throwaway prices.
Perhaps unwittingly, George Fernandes’ communist/ socialist ideology created the biggest capitalist Bull run in the stock market.
(George Fernandes, father of the Bull market)
Some punters at MMB pointed out that Nirmala Sitharaman is walking in the illustrious footsteps of George Fernandes by compelling promoters to dilute their holding to 65%.
This will lead to a deluge of stock issue by blue-chip and MNC companies, which we can scoop up at throwaway valuations.
Govt to consider realising public holding in listed companies to 35% from the current 25% — BIG if it happens
— sukumar ranganathan (@HT_Ed) July 5, 2019
GSK 75%
Novartis 70.68%
Cadila 74.79%
Ajanta 70.52%
AstraZeneca75%
Alembic 72.97%
Alkem 66.02%
Panacea 73.59%
**Some pharma cos with over 65% promoter holding— Ekta Batra (@ekta_batra) July 5, 2019
Not only Pharma but other Cos. Xchanging 90.80 ( Now 80 ) , Schneider Electric 75, HDFC LIFE 76.14, ICICI Prudential 74.98, ABB 75, Honeywell Automation 75, 3M India 75…..
,
— Kaushik A.Sejpal (@kaushiksejpal1) July 5, 2019
Promoter shareholding above 65% for big cos. pic.twitter.com/dDij6sqIyd
— Varinder Bansal ?? (@varinder_bansal) July 5, 2019
Some FMCG Stocks with MPS <35%
AVENUE SUPERMARTS
3M INDIA
BLUE DART
BERGER PAINTS
AKZO NOBEL
HUL
PIDILITE
DABUR https://t.co/OWsVmQxo0L— Mangalam Maloo (@blitzkreigm) July 5, 2019
Saurabh Mukherjee gave the proposal a clean chit.
He explained that the increase in minimum public shareholding to 35 percent from 25 percent will increase liquidity in blue-chip MNC stocks and lead to prosperity for investors.
OFSS up 4%….market anticipates delisting rather than lowering shareholding by another 10%
— Darshan Mehta (@darshanvmehta1) July 5, 2019
“Clear Winner” stocks to buy now
Dharmesh Kant of IndiaNivesh Securities is known for his astute reading of the markets.
He has opined that the Budget has ushered in “big bang structural reforms at the macro level” which will catapult the economy to the $5 trillion range.
These reforms include the opening of the financial sector, aviation, FDI in retail, raising of debt money by non-banking financial companies (NBFC) through the foreign direct investment (FDI) route.
He has also pointed out that power reforms will continue and that the push on infrastructure will be dedicated to the freight corridor and waterways.
In these circumstances, the “clear winners” from the Budget are NBCC, L&T and cement manufacturers such as UltraTech Cement and ACC, he stated.
Dharmesh Kant also recommended three companies from different businesses which fit the bill of reforms/policies favouring doubling of farmers income, developing infrastructure, railways & roads, health care, education, defence, DBT, up-trending paychecks of government employees to name a few.
These are Canara Bank, Bajaj Electricals and Fiem Industries.
LED Stocks in focus: Crompton Consumer, Havells, Bajaj LEectricals
35 cr LED bulbs distributed under the UJALA scheme leading to a cost saving of Rs 18341 cr pa https://t.co/APbXE9BFUR— Anisha Jain (@_anishaj) July 5, 2019
Modi is election winning machine ,who has got the magic formula of winning elections..Formula is ,Tax those heavily who work hard for their living but are in minority and distribute that money as free doles or subsidies to those who don’t want to work ( except producing more babies as future voters) .This is nothing but to buy votes legally directly from budget and exploit democracy.Economy and Democracy both will be in more bad shape on every new coming day..Hard working persons will be taxed to their nose till they are forced to flee from country.leaving only parasites in India.I understood Modi just after 2014,but surprised to see many Andh bhakts like Porinjue, who are now indicating that they had started understanding Modi.I Woukd also like to listen Rakeshjhunjhunwala ,who like wine ,does he like Modi wine of Super rich tax and buy back tax .From every next budget ,we shall find increasing limit of super rich to lower level ,which may go down to 10 lakes ultimately.and upper limit of taxes going to 99%..Otherwise how parasites will vote in every next election without new free doles.I am not against poor.Stop all free doles and subsidies, spend all this on infrastructure and offer jobs there to only those who are getting subsidies. I am sure neither these parasites will work ,nor give votes to govt which will do it..Industry is facing worker shortage as people are getting almost same money as free or subsidies at their homes,which they will save after working in factories.
Not sure why you are blaming Modi for this? This has been the formula in India for ages. In IndiraG’s time, marginal tax rate was 97%. Rahul baba also promised 72,000 per woman in the family every year. Just because Modi is more successful, let’s not be jealous of him. All our politicians are cut from the same cloth and whoever you chose, higher taxes and higher welfare is the way it will be in future.
Kharab: Remember you are living in others sweat. Stock market is only for few people. He has reduced the tax of middle class people last few years and he is going to tax few HNI and that is not big issue for them. why you are crying???… if you have ability to find multi baggers ,make money and offset the tax imposed on you. If you don’t please stop useless comment.
Always remember, Taxes direction is very important, he has raised tax upto 42% ,and it is expected that in every budget ,tax will be raised ,and definition of super rich will reduce to include lower income and ultimately include every one who are in 30% tax bracket now.. Thus is situation like if in any terrorist activity ,if some body else is killed ,can not be taken lightly, as you may be next target.So this tax hungry govt needs to be criticised as this all is being done to buy votes legally by almost free distribution of taxed money ,with nothing left for development or strengthening armed forces with modernisation.
You seem to know the future on taxation. Where is this foresight in picking up winners on the market huh?
Stop making a fool of yourself please.
You expect me to work to find out muktibaggers so that Modi can tax me at 42% rate to feed parasites.mufatkhors of India. All taxes above 10% should go to a separate fund which should be spent on infra and defence ,not on buying votes legally through budgets by feeding parasites mufatkhors ,which Modi is creating.
I found it funny the mention about prospect of LED companies because the Govt HAS ALREADY distributed LED bulbs (which reached none of us, BTW). How will it help these companies in the future if govt claiming they already distributed the same last year?
And people like Porinju, Mohandas Pai etc have been licking the backside of their clueless leaders at center. Feel very happy when they reach this desperate stage of realisation that the govt continues destroying the economy. Benefits of any social schemes will reach only the ones having a saffron towel around their neck, and all others (a majority) will continue their struggles with high GST rates and not-increased income tax exemption limits!
As one intelligent cartoonist showed, the FM is asking the economy (the sleeping tiger) to get up so that she could feed it, but the economy is asking the FM to feed it first, so that it could stand up!
Economy will remain a sleeping tiger with these clueless govts/PMs/FMs.
And dont be under the false impression that merely by increasing public shareholding from 25% to 35% any gains will be had (because it happened in 1977 thanks to a socialist). Only the high, exaggerated P/E ratios will be diluted.
Nirmala shld resign with immediate effect and modi should quit and return to kedarnath for cave meditation.modi 2 worse than modi 1.
Enough with attacking congress. I myself should stop it. Modi has proven to be clueless about the markets. There is a clear lack of knowledge and ability to understand in his part. Very questionable.
Dman181, why are you blaming modi? You know how “excellent” are his academics. All these are too very complicated for him to comprehend. His ministers and bureaucrats too are clueless. These IAS are mainly History honours from St Stephens or MSC in Physics from Bihar and UP universities, what do you expect them to comprehend? Most of their life they did excel sheets reports and meetings and presentations to ministers. Where is the time to study and solve economics issues of the country?
Your sarcasm is well taken. Sadly, Modi is not a smart individual. He relies therefore on falsified intellects such as Jaitley who wear glasses, talk smartly, and look presentable
for economic discussions. He then believes people like Jaitley must be smart because he looks the part. Gross miscalculation.
This is called a clueless leader.
Disclosure: I am a big supporter of Modi. Much less than before however now. And No Modi, I will not be voting for you next time. You have great ambitions, but lack of logic and brain power will limit how much you can achieve.
Super move to tax the super rich who were the biggest boot lickers of modi. Good to see them getting royally screwed. I wish modi would soon make anyone making more than 10lakhs to pay at least 40% tax. That way all the middle class who voted for him also get a big stick.
Thus is the exact path Modi is likely to take,he will ruin India economicaly permanently like Venezuela, Brazil ,Greece etc.He is so much power hungry ,he will screw every one and tax through every one nose, to buy votes legally by distributing ths tax money through various free schemes in budget to create Mufatkhor parasite vote bank.He has made joke of Democracy.
In a country of 125 crazy, wealth has to be distributed by some way or other. Concentration would lead to anarchy and they (rich) might not left with anything after open public loot . Government always have data not on economic but social front also….
Are you representative of Parasites, who want every thing free from tax payers money.
Shocking taxes in india…from 5.4 percent gdp to negative growth soon india will soon be in shambles. Shocking when we should have no 1.china and america are happy with our fall…from riches to poverty
EARLIER THERE WAS BRAIN DRAIN, NOW THERE WILL BE MONET DRAIN.
INDIAN WILL BE LEFT COOKING PAKODAS.
WE WILL BE BUYING STOCKS OF TEA STALLS AND PAKODA VENDORS 5 YEARS FROM NOW…
While such negative sentiment is expected in a bear market but don’t kill the messenger by these constant attacks on the Author. He has every right to his views. And to all the skeptics of Modi govt, Congress is no saint either. Rahul baba’s 70000 per person dole out idea would have led to instant death of economy.
I was an avid reader of this forum, but seems like without any encouragement the Author is disheartened now. There has hardly been any new post, may be its time to say Good Bye.
Modi has gone far ahead in free distribution to create parasite society as compared to other opposition parties. More over opposition can be blamed for all ills of misgoverness since 2014.Modi has derailed and damaged Indian economy beyond repair with job loss every where and those who are left with jobs or business are taxed heavily to destroy them financially.
Why have you stopped your blogs
Congress should be back in power 3 years from now sans rahul gandhi.rahul gandhi resigns and congress will be ba k.Hoping to see educated economics ruling again.jobless educated youth now have to wait for 3 years….
Everyone will criticize the Modi govt for the next 4 years on economy, budget, tax, and new bills. Modi and Shah goes as usual doing nothing for the next 4 years and general public would wonder whether there is any difference between BJP and Congress. Come fifth year, all the freebies would be doled out and farming /rural community will feel great. Meanwhile, LTCG might be waived off, stock markets gets zoomed and everyone praises the Modi giving full credit for economy take off and back to square one. Indian mindset cares about short term benefits and achievements. Modi perfected the art of winning and better be ready for Modi 3.0.
This time Modi will destroy Economy beyond repair.
Nirmala Sithamaran has carried out a surgical strike on the equity market. It is apparent Modi hates the middle and rich class. Where his hatred stems from is anyone’s guess. Coupled with his brain power, we are in for a turbulent and chaotic 4 years.
When a useless person is able to fool the public,he punish those fools,and these fools deserve this punishment for their foolishness
Market down by just 10% and everyone is talking about catastrophe. We have become so used to bull market in the last 10 years and are unable to digest slightly less growth in economy and market downfall. Seems everyone forgotten economy and business cycles.
Surgical strike by Sitharaman on equity market. I am told Modi and Sitharaman were laughing at taxing the rich and middle class. They hate rich and middle class. Modi hates investors and those who have money.
Yes,Modi is father of Mufatkhors and those who don’t work, and enemy of those who work hard to earn and pay taxes.