GENERATING ALPHA DEPENDS ON RIGHT SECTORS , RIGHT STOCKS

Elections and market upheaval are almost always intertwined. Therefore, the outcome of the upcoming polls could impact markets but only for the short term, as it will not affect India’s long-term structural reforms or growth agenda, A. Balasubramanian, CEO of Aditya Birla Sun Life AMC, says in a conversation with Money Today’s Renu Yadav. Edited excerpts:

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How will equity markets perform in CY2019?

It looks better than 2018 given the improving macro picture such as easing of oil prices and stable inflation. With oil prices slipping and the rupee firming up, the Indian economy stands to benefit by managing its twin deficits – budget deficit and current account deficit. The IMF also maintains its positive outlook on India on the back of stable macroeconomic policies and various structural reforms bearing fruits. Earnings will recover as well. One also expects the Goods and Services Tax (GST) to stabilise and a further reduction in tax rates. This will boost consumption and increase the overall tax base. There will be some volatility going ahead, but the broader macro picture and domestic growth prospects are strong, and that augurs well for equity markets.

SEBI has approved side-pocketing. How will it benefit investors?