GST is more of a sentiment than anything else: Andrew Holland

In a conversation with Bloomberg TV India, Ambit Investment Advisory’s CEO Andrew Holland speaks about Indian markets, Chinese markets and the much awaited GST Bill.

It is now looking like a possibility that we may actually see a breakthrough on the GST front. What kind of fillip do you feel this would give the markets?

We have been waiting for some good news for quite a bit of time now. I think if we can get it through then obviously sentiment wise it is a very big positive, particularly for the foreign investors who have been looking for a reform agenda to kick-start and this will be a part of that.

Obviously we will have to see all the numbers to see what positive impact it might have on the economy but I have never been a great believer that it is going to add so much to the GDP straight away. I can’t imagine it would be implemented from April of next year. So it is more of a sentiment than it is anything else. So many negatives that people focus on at the moment. Hopefully it will get everyone focusing on the positives for the economy which are certainly starting to bear fruit in my view.

Are we expecting a China-like recovery when we talk about the Indian markets? As you said, people probably need to start focusing on a couple of positives. So are you still optimistic when we talk about the Indian markets?

On China, I mean on Friday, you could say maybe it was a one-off. But those jitters around China are still there. I am still of the view that we need some fiscal stimulus from China to steady markets globally. For India, we have been kind of dragged down for a number of reasons, primarily the disappointment over earnings.

But the real action is where the government spending is happening — whether it is Railways, roads and getting some of the projects which have been stuck for a number of years moved forward.

So there is a lot of scope for reforms in India in terms of getting these sectors moving forward and that will start to have a multiplier effect.

Whilst the corporates are still very pessimistic, I think you will see that change happen over the next quarter as the order books start to improve. Obviously that will be another big swing in sentiment and the markets will move significantly high.

The flows from foreign investors to India are still low. That has held back Indian markets. I think if we can get the GST through that will be a sentiment improving our markets and we can touch 8,200-8,300 in a very short term.

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