MUMBAI, March 16: The stock-broking community today welcomed the installation of a government in New Delhi after 18 months of instability and uncertainty in policy-making and implementation. Welcoming the new government, punters and fund managers called for urgent steps to revive the economy which is witnessing a slowdown in almost all sectors.Cheering the coronation of BJP supremo A B Vajpayee as the Prime Minister, the 30-share sensitive index (Sensex) shot up by nearly 116 points to 3,832.15 points in the opening session. However, Sensex fell back later and closed at 3,785.23, with a net gain of 68.73 points.
Welcoming the new government, M G Damani, President of the Bombay Stock Exchange (BSE) said that BJP must retain the key portfolio of finance for the economic reforms to continue. "We firmly believe in the BJP government and are very much hopeful for more market-friendly policies from them," he said. Apart from speedy action to reverse the slowdown in industry, brokers want steps to revive thesagging capital market, banking reforms and further liberalisation.
Damani and BSE vice-president J C Paikh felt that the government should undertake concerted efforts to push all pending bills like Income-tax Act, revised Companies Bill and Insurance Bill. There is a belief among brokers that the BJP government will protect domestic industries from multinational competition and dumping.
``Domestic firms which are thought to be hardest hit by multinational companies are likely to get some sops from the new government,'' said Sanjeev Choithani, chief dealer at Advani Share Brokers Ltd. ``That might help them regain their lost lustre.''
Said Hemendra Seth of BSE: ``The budget will be an important indicator of how the new government tackles key issues of infrastructure, opening up of the insurance sector and fuel demand. We think these issues will decide the ultimate success of the new government and the economy.'' Agreeing with this, an official of a foreign broking firm said the new government shouldremove bottlenecks at all the stages of policy implementation. ``There should be clarity in policies. This should be in line with the global trends. We're not saying India should go at reckless speed towards liberalising the economy.''
When asked about the market's choice for the coveted post of finance minister, Damani said the market would welcome all the present aspirants, Murli Manohar Joshi, Jaswant Singh and Yeshwant Sinha. According to him, all the three are capable of handling the finance portfolio due to their rich experience. ``The party may not be able to initiate its pro-reform economic policies properly if it gives the finance ministry to its allies,'' said Damani. The BSE is finalising its draft proposals to be submitted to the new finance minister. This includes suggestions to lift the languishing markets, he said.
However, in the near future, the stock market would fluctuate in the same level till the new government spells out its national agenda, Damani said. Although, brokers describedit as the beginning of the bull run, the absence of institutional participation has prompted the experts to describe the rally as one driven by local punters.
Parikh said the new government must take steps to bring back retail investors to the bourses. The future trend will depend of the new FM's attitude on FDI. ``Speculation on the key portfolio of finance is still disturbing market players. Setting aside these speculations a section of market men believe that it would be pragmatic decision to depute a bureaucrat to the important position,'' said an NSE broker.
V R Srinivasan of R K Chari Stockbroking said that the government must and should act. "Unlike CPM in the United Front, which derailed all the economic reforms of Chidamabaram, the new government will be able to do a far better job as there would be stability."
"The two Sitarams (of Congress and CPM) have caused enough damage to this country and its economy, now the new government must perform. The forthcoming budget will be an importantindicator of the BJP government's intentions," said Bharat Shah of NSE.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
