From mint · Dipti Sharma · · 1m 30s
Nilesh Shah on tax relief and foreign investment
Kotak's Shah says tax cuts may attract foreign funds but won't fix market exits.
In brief
Kotak's Shah says tax cuts may attract foreign funds but won't fix market exits. Nilesh Shah of Kotak Mahindra AMC states easing tax burdens could help foreign investors but won't reverse outflows without addressing global economic pressures. Originally reported by mint.
Tax burden on investors
The double burden of securities transaction tax and capital gains tax has long been a sore point for investors.
Finance minister's remarks
Finance minister Nirmala Sitharaman acknowledged the debate over long-term capital gains tax and STT but did not commit to changes in the upcoming Union budget.
Foreign investors' challenges
Foreign investors face tax frictions as they cannot claim credit for taxes paid in their home countries.
Market reallocation
Global investors are reallocating portfolios rather than exiting India, shifting across sectors and market caps.
Current market concerns
Oil prices, supply disruptions, rising US interest rates, and tax friction are key market worries.
Sector opportunities
Consumption sectors like automobiles, alcoholic beverages, travel and tourism show opportunities for premiumization.
Banking sector outlook
Banking and financial services are attractive with deposit and credit growth above 15% and non-performing assets at historic lows.
Investor behavior differences
Global investors seek higher returns while Indian investors are willing to settle for lower returns.
Foreign investment return
Foreign portfolio investors would return to India if investment frictions are removed and valuations look attractive relative to other markets.
Market risk management
Investors should focus on managing greed and fear rather than predicting market movements.
What matters most
Nilesh Shah of Kotak Mahindra AMC states easing tax burdens could help foreign investors but won't reverse outflows without addressing global economic pressures.
