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FIIs frustrated with India; market may drag after stellar April: Samir Arora

Samir Arora said the government’s response has not been adequate.

, ETMarkets.com|
Last Updated: May 02, 2020, 11.47 AM IST
SAmir Arora-1200
To ease liquidity pressure on mutual funds, RBI last week announced a special liquidity facility of Rs 50,000 crore for mutual funds.
Mumbai: Market veteran Samir Arora on Friday expressed concern over what he called ‘inadequate’ response of the Indian government to the coronavirus pandemic and the subsequent economic crisis.

“If you put it on a scale relative to the world, we would have to put it near zero, except some response from the Reserve Bank of India (RBI),” said Arora, Founder and Fund Manager at the Singapore-based Helios Capital.

He felt the even RBI’s measures could have been better. Arora was speaking at the ETMarkets Investor Conference.

“It is unrealistic, knowing that the banks have their own money in reverse repo with RBI. When they have money which they are not lending, why would they take additional money and lend to mutual funds?” he asked.

To ease liquidity pressure on mutual funds, RBI last week announced a special liquidity facility of Rs 50,000 crore for mutual funds. Under this facility, the central bank will provide funds to banks at lower rates and banks can avail it for exclusively meeting liquidity requirements of mutual funds.

Watch Samir Arora's full speech at ETMarkets Investor Conference!

Arora felt the government response could have been much faster.

India Inc has been patiently waiting for the government to dole out a second round of stimulus measures, this time to provide some much-needed respite to the medium, small and micro enterprises (MSMEs), even as the country enters the 41st day of the coronavirus-induced lockdown.

After announcing the first stimulus of Rs 1.70 lakh crore, mainly to support the poor and the underprivileged, many industrial sectors have been hoping for a similar package, but no such announcement has come in as yet.

“Every time, we leave everything for the last day,” he said, expressing concern.

The lockdown has been extended up to May 3, but there is no clarity on the relaxation or extension of the same beyond this date.

Arora said the Indian market will underperform in the near term, after the strong gains seen in April.

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