Budget 2019: Foreign Investors Won’t Mind A Slight Breach In Borrowing Targets, Says IIFL’s Schiessl

The government borrowing slightly beyond its budgeted fiscal targets may not trigger “negative” reactions among foreign investors, according to Jonathan Schiessl, senior vice president at IIFL Asset Management.

“There is room for the government to borrow slightly more and I do think markets will be forgiving for that,” he told BloombergQuint. “But the extra money raised has to be spent very prudently and in the right areas such as improving agricultural productivity and infrastructure.”

Schiessl said the government may mobilise resources through divestment in public sector undertakings to take advantage of the “buoyant” stock market.

In December, the government announced plans to offload stake in seven PSUs, including National Seed Corporation of India Ltd. and Railtel Corporation of India Ltd. The divestment receipts for the financial year ended 2019 touched Rs 85,000 crore against the targeted Rs 80,000 crore.

What Is IIFL Asset Management Bullish On?

IIFL Asset Management said its portfolio doesn't get altered in anticipation of budgets. The firm, however, is betting on cyclical trends expected in the industrial and auto sector in the long term, Schiessl said.

Watch the full interview here: