UTI Asset Looks Beyond Rupee Slump as India's Poll Season Near Noor Arora
Rising crude oil prices and a tumbling currency have already battered India’s $725 billion government bond market. The next focus of risk for the nation’s oldest mutual-fund company now are the upcoming elections. Revenue from the goods and services tax has undershot the target for five straight months, and UTI Asset Management Company fears the government may have little scope to cut expenditure before the three key state polls later this year and general elections in 2019. “Political uncertainty will play out in the coming months that will have the most bearing on government bonds,” Sudhir Agrawal, a fund manager at Mumbai-based UTI Asset, said in an interview. The rupee’s decline, on the other hand, has been in line with fundamentals and “there’s no need to worry excessively about the depreciation,” he said. Prime Minister Narendra Modi’s Bharatiya Janata Party will contest with the main opposition Congress party in the states of Madhya Pradesh, Rajasthan and Chhattisgarh -- all ruled by the BJP -- before a national ballot in 2019. The elections are expected to be tight, with the incumbent headed for a loss in Rajasthan, according to an India Today-Axis pre-poll survey
ARTICLE SOURCE: BS