The economy will need a heavy fiscal stimulus after 45 days lockdown phase: Hemang Kapasi
The global lockdown is largely affecting the economy and will need a massive fiscal stimulus after the pandemic is over and also the current stimulus announced is quite low as stated by Portfolio Manager, Hemang Kapasi, Equity Investment Products, Sanctum Wealth Management Private Limited. The government needs to focus on preventing job losses in vulnerable sectors, avoid large scale bankruptcy at MSME & SME and other hard-hit sectors.
He shared his views on RBI bazooka 2.0 and the impact it will bring on the market and its sectors. Correct steps are taken and will directly benefit certain sectors of the economy like NBFCs, MFIs, HFCs, MSMEs, and banks that will indirectly pass on benefits to other related sectors. The RBI has reduced the reverse repo rate from 4% to 3.75%. The key focus remains on injecting liquidity to NBFCs, MFIs, HFCs, and MSMEs through Rs 0.5 trillion TLTRO scheme along with special refinance facilities of Rs 0.5 trillion for NABARD, SIDBI, and NHB. The RBI has also relaxed NPA recognition and liquidity requirement norms but at the same time has tightened prudential and governance norms by asking banks to increase account provision.
He adds that the volatility of the market will be controlled based on measures announced by the government, and once the results start to come in, it will provide insights about the damage of individual businesses and which will open up the ways to deal with it. Also, We would be carefully selecting the names in mid and smallcap space at this juncture as they would be finding it much difficult in navigating this crisis than their larger peers.