Every Opinion Poll in the country points towards a change in the leadership of Indian democracy from “The Accidental Puppet Prime Minister of India” towards a business & progressive Shri Narendra Modi. Here are the various Voice of FIIs who have bet heavily in Indian equities on the back of opinion polls,
UBS in a Report said,
Opinion polls have been the key catalyst for markets, as expected, in 2014. The last ones were released at the end of last week and voting has begun today. Actual election results are expected on 16th May but there may be exit polls between 12th May (last day of voting) and 16th May. Our discussions with investors suggest that these polls have aided expectations around increased probability of a Modi/BJP led Govt.
Our discussions with investors indicate that markets are hoping for a Modi-led BJP Govt. We have been highlighting Nifty at 6900 would be a possibility if markets start believing in a positive election outcome, based on 15x PE (5yr avg of 1yr fwd multiples, range 12x-19x) and 15% earnings growth in FY15. In our view, a more euphoric sentiment among investors could imply higher multiples.
StanChart Report Says,
We argue that there are many similarities between the economic ideologies of the UPA and NDA, although the UPA is marginally left of centre and the NDA leans a bit to the right. This should ensure broad continuity in the policy framework, but implementing reforms and removing bottlenecks will be crucial to reviving the economy. In this report, we also discuss the recently released manifestos of the two national parties, INC and BJP, to better understand their areas of focus.
The NDA’s growth promises are likely to enthuse markets, but it faces challenges in delivering on these promises. A divided parliament could delay the pace of legislation, and it might be difficult for an NDA government at the national level to build consensus among non-NDA states (19 of 28) in a politically charged atmosphere. The economy-ecology debate, the activist stance of the judiciary, and a land acquisition bill that is biased against industry may also be obstacles to kick-starting the economy. A new generation of voters with higher incomes is also demanding more of political parties and is impatient for change.
Credit Suisse in a report said,
With opinion polls now predicting a BJP win, its manifesto becomes important. It covers a broad range of topics: from steps to address immediate challenges (inflation, employment) to systemic changes (administrative reforms, participatory democracy, more federalism, e-governance). It has some radical and exciting ideas, e.g., universal access to pucca housing by 2022 with electricity, running water, sanitation and roads, and a high-speed rail network.
The policy where it differs significantly from others is in highlighting the need for the central and state governments to work together on various fronts: from mega projects to GST. While it desires fiscal discipline, not surprisingly, food security is an important target (also featured in 1999), as are higher MSPs, universal healthcare and doubling the spending on education to 6% of GDP.