Mutual Funds have welcomed budget 2009-10 saying the proposals were on expected lines. No mutual fund is in any mood to realign investment strategy based on the budget. Not being perturbed by any negative market sentiment, fund houses feel that it is time to look at stocks through its fundamentals. Moreover, fund houses are mostly over-weight on infrastructure sector.The FM has declared that India Infrastructure Finance Corporation is expected to finance Rs 1,00,000 crore infrastructure projects. Fund managers now feel vindicated in view of taking exposure in infrastructure stocks in their equity funds.
Going forward, AMCs to anticipate some policy announcements on disinvestment front, which they think, FM has made enough reference in his budget proposal.
Budget Reactions from fund houses:
“The budget is positive. The market has over-reacted to it. MF strategy does not change on one budget. Those announcements like disinvestments that market expected will come in due course of time. There is nothing to be disappointed,” said Navneet Munot, CIO, SBI MF.
“The budget has kept the continuity of stimulus package through spending in sectors like infrastructure and agricultural sectors. Further, focus on delivery mechanism is also a welcome move. However, market reaction is a result of over expectation,” said A Balasubramanian, CIO, Birla Sunlife Mutual Fund, who feels, budget is good from medium to long term perspective.
“If there is no policy announcement, there are enough references to policy count like on fiscal prudence or disinvestment. In the next few weeks or months we would witness some real policy announcements based on those references. Consequently, we will be tweaking our investment strategy,” said Ved Prakash, Managing Director, TATA Asset Management, who feels, that market reacted emotionally to the budget out of over expectation and the budget truly reflects reality of current environment.
“The budget is very much on the lines of expectations. We are not realigning out investment strategy. The market disappointment basically come from the size of fiscal deficit that is now pegged at 6.8% for FY10 fiscal deficit of GDP as against the target of 5.5%,” said Sanjay Sinha DBS Cholamandalam.
“No policy announcement coupled with the size of fiscal deficit has led to a correction in the market. We have already realigned our investment strategy before budget expecting the possible outcome which is very much on line with the budget,” said Mohit Mirchandani, head-equity, Taurus Mutual Fund.
