India Insight

India equity funds ride Modi rally in May, post best month in five years

India’s diversified equity funds outperformed the broader markets in May and recorded their best monthly performance in five years, as stocks rallied on hopes of an economic revival after the Narendra Modi-led Bharatiya Janata Party (BJP) won a decisive election mandate.

Equity funds clocked an average return of 11.57 percent in the month, the highest since May 2009 when funds rose 30.2 percent, data from fund tracker Lipper, a Thomson Reuters company, showed. In comparison, the BSE Sensex rose 8 percent.

Though blue-chip stocks gained, high exposure to better performers in the mid- and small-cap segment, and sectors such as financials and infrastructure, helped schemes outperform the broader markets, experts said.

“Exposure to companies in the infrastructure-related areas such as construction, engineering companies and asset owners helped these funds to outperform,” Nobutaka Kitajima, chief investment officer for equity at LIC Nomura Mutual Fund, said via e-mail.

“As the economy gains momentum, it is expected that the mid-small cap companies would benefit more than large-cap counterparts.”

Narendra Modi’s new team of ministers

The Indian government on Tuesday announced its list of cabinet ministers along with their portfolios, a day after Narendra Modi was sworn in as the new prime minister.

Modi’s Bharatiya Janata Party (BJP) and its allies won a landslide victory in a mammoth general election, grabbing 336 of the 543 seats and ending the Congress-led government’s decade-long rule.

Besides Modi, 45 other members were inducted into the new council of ministers, a third smaller than the previous government. Modi himself would look after atomic energy, space, personnel and any ministry not allocated to a cabinet colleague.

Markets this week: Sesa Sterlite, NTPC top Sensex gainers

The benchmark BSE Sensex rose 2.4 percent this week as domestic-oriented stocks surged on hopes the incoming BJP government would keep up its promises to kick start an economy whose growth has dipped to its slowest in a decade.

Shares in companies such as Coal India, that are expected to benefit from an economic revival, and utilities performed well.

Sentiment was also boosted after Reuters reported that the finance ministry was working on a roadmap for cutting welfare spending and reining in deficit.

They say every vote counts, but mine wasn’t

(Any views expressed in this article are those of the author and not necessarily those of Thomson Reuters Corp.)

Fifty-four percent of Bangalore‘s eligible voters showed up at the polls on April 17, a disappointing number considering the high turnout in some states. I was not among them, but it was not for lack of trying. Despite doing everything correctly, my application never went through.

I was 18 the last time India held national elections. Since then, we moved around a lot. I was looking forward to voting this year for the first time. A record number of people are registered to vote in this election, and the country is at a crossroads as it considers whether to kick out the Gandhi-Nehru dynasty and its Congress party in favour of the Bharatiya Janata Party and prime ministerial hopeful Narendra Modi, or perhaps a third front of other parties.

Interview: Nitin Gadkari on the election, BJP’s priorities and Amit Shah

(This article is website-exclusive and cannot be reproduced without permission)


By Shyamantha Asokan

Nitin Gadkari is a top leader of India’s Hindu nationalist opposition party, which is forecast to emerge as the front-runner in the country’s mammoth general election. A series of opinion polls this year say that the Bharatiya Janata Party (BJP), led by prime ministerial candidate Narendra Modi, will win the biggest chunk of the 543 parliamentary seats up for grabs. Results are due on May 16.

Modi and the BJP have been wooing voters with promises to rescue India from its slowest economic growth in a decade, leading to much speculation over the party’s exact plans for economic policy. But critics say the party, and Modi in particular, could be a divisive force along religious lines.

Reuters spoke to Gadkari, a former party president and a member of the BJP’s manifesto committee, at his residence in New Delhi. Here are edited excerpts from the interview. The questions have been paraphrased.

Young professionals in Bangalore favour Modi’s promise, shrug off riots

As far as Vinod Hegde is concerned, Indian prime minister candidate Narendra Modi bears no responsibility for the 2002 Gujarat riots. More to the point, Hegde doesn’t care.

Hegde, a 26-year-old stockbroker in Bangalore, said that for people like him, the Gujarat chief minister is the only choice to lead India after countrywide parliamentary elections that began this week.

Allegations that Modi failed to stop or even allowed deadly riots in 2002 don’t sway his vote, Hegde said. And if the ruling Congress party’s candidate is Rahul Gandhi, the choice becomes even clearer.

Bandhan eyes India’s banking league with RBI licence

Kolkata-based Bandhan Financial was little known in India’s corporate arena. But a new banking licence from the Reserve Bank has given Managing Director Chandra Shekhar Ghosh and his 13,000 employees a reason to cheer.

“This is a different type of win. In the last 13 years they (employees) have been working hard and now they have got the recognition,” said Ghosh. “I hope that this is not a big challenge, the challenge is to develop the skills of the staff, it will take some time.”

The Reserve Bank of India on Wednesday granted provisional bank licences to Bandhan and infrastructure lender IDFC, preferring them over bigger corporate applicants and paving the way for new banks in India after a decade.

Facts and figures for India’s 2014 general election

Voting in the 2014 election begins on April 7. More than 814 million people — a number larger than the population of Europe — will be eligible to vote in the world’s biggest democratic exercise.

Voting will be held in 10 stages, which will be staggered until May 12, and results are due to be announced on May 16. Elections to state assemblies in Andhra Pradesh, Odisha and Sikkim will be held simultaneously.

Around 930,000 polling stations will be set up for the month-long election using electronic voting machines, first introduced in 2004.

Dharavi’s once-booming leather industry losing its edge

A busy street in Asia’s largest slum Dharavi leads to a quiet lane where Anita Leathers operates its colouring unit. As children play near shops that sell everything from mobile phones and garments to raw meat and sweets, the mood at the leather unit is sombre.

The leather business is one of the biggest contributors to the Mumbai slum’s informal economy, estimated to have an annual turnover of more than $500 million. About 15,000 small-scale industries, spread over an area of 500 acres, deal in businesses such as pottery, plastic recycling and garment manufacturing.

But the leather trade has been hit hard by increasing competition, an influx of cheap Chinese goods, rising raw material costs and labour shortages in recent years, leading to a decline in demand and dimming prospects of the once-flourishing business.

Markets this quarter: Sensex gains 5.7 percent, L&T surges 19 percent

By Aditya Kalra and Sankalp Phartiyal

Indian shares posted record highs in March as strong foreign buying sent blue-chip stocks such as Larsen & Toubro higher and boosted overall investor sentiment ahead of a general election.

Provisional data showed foreign investors bought shares worth more than $3 billion in March, pushing the BSE Sensex to a life high of 22,467.21 points on the last trading day of the quarter. While the index rose 6 percent during the month, it rose 5.7 percent in the Jan-March period.

Markets rallied on hopes that the main opposition Bharatiya Janata Party, perceived to be more business -friendly, would emerge as a winner in the general election, while hopes of a recovery in the domestic economy also aided sentiment.

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