Tweet Buster: How D-Street digested super-rich tax and higher public float

NEW DELHI: The Union Budget 2019 is out of the way for markets and at least on the B-day, it did not go down well with market participants.

In this edition of the Tweet Buster, we explore what top D-Street honchos made of the Budget and its impact on markets and other major developments of the week.

The Budget brouhaha:


> Tax on the ultra rich
The Finance Minister proposed to increase the income-tax surcharge on individuals having taxable income of Rs 2 crore to Rs 5 crore and Rs 5 crore and above by around 3 per cent and 7 per cent, respectively. This development was perceived differently by Dalal Street veterans.

Safir Anand, a value investor, did not see any reason for it, and argued that top taxpayers in India now pay one of the highest taxes in the world when counted with GST impact, but are nowhere closer to the developed world in terms of quality of life, health benefits, social security, etc.


However, Shyam Sekhar, co-founder, iThought, called the super-rich "self-seeking kanjoos" and that if asked to spend that money, most of them will be super-reluctant even to do that?


Smallcap czar Porinju Veliyath offered three options to individuals with incomes over Rs 5 crore.


> Shareholding norms
Nirmala Sitharaman urged Sebi to reduce maximum promoter shareholding from the current level of 75 per cent to 65 per cent in the Union Budget and if Sebi follows up on the proposal, then some 1,174 listed companies will have to sell shares to meet the requirement. D-Street is expecting an oversupply of paper in the market, but Shyam Sekhar believes this would demolish the artificial scarcity and is central to price discovery.


> Hike in customs duty on gold
Sekhar fears the increase in customs duty on gold would increase smuggling of the precious metal into the country.


> Bank recap
Basant Maheshwari, co-founder and partner Basant Maheshwari Wealth Advisers, questioned the Rs 70,000 crore bank recapitalisation scheme of the government, saying, "Do you have any more NPA, which you didn’t show till now?"


> Budget & Markets
Maheshwari said the markets were narrow and now they'll get narrower.


Sandip Sabharwal, independent market advisor, cracked a joke, saying investors should have taken the hint from the red cover of Budget documents that it would be bad for the market.


Sabaharwal claimed he would remain a buyer in the market post Budget.


On a lighter note, Anand summed up the state of the market: Once upon a time there was a bull market, but very few lived happily again.


Off the Budget
Given the large number of debt defaults plaguing Dalal Street, Shyam Sekhar said an investor is always going to lose against a fraudulent promoter.


Sekhar in a separate tweet added that discussing distressed, badly managed companies is best education.


Samir Arora made a tongue-in-cheek remark, asking, "Do rumours move stock prices or does movement in stock prices lead to creation of rumours?"


Sabharwal believes crude oil prices are likely to fall going ahead and that augurs well for the Indian market.


Shankar Sharma congratulated IndiaMart on the stellar Dalal Street debut.


Add lastly, any thought about naming roads on stock market investors? Here’s one: