Acknowledging the dramatic spike in market volatility over the last few days:
The Tantallon India Fund closed 0.59% higher in July, a frustrating month in which markets aggressively sold down high-quality industrials, capital goods and defence companies over concerns that a more populist Modi government, constrained by coalition politics, would have to curtail spending on core infrastructure and defence projects while rotating into the perceived safety of the large-cap index constituents.
- Having parsed the details and the intent of the Annual Budget that was presented in Parliament, we remain sanguine on Modi’s fiscal and social spending priorities coalescing around industrialisation, indigenisation, job creation and targeted rural/agricultural stimulus, and in the credible budgetary glide path towards greater fiscal discipline and consolidation.
- Anticipating volatile markets, we plan to use the market pullback and rotation to build on our exposure to high-quality, idiosyncratic growth in industrial, discretionary consumption and financial stocks.
