Recent changes that investors should note in the Indian Stock Market
We are currently and almost in a recession globally. Quarterly results of Public listed companies for most of the sectors did not yield growth. Bigger companies are losing their revenue especially in the Automotive Sector. If the results of the next 2 – 3 quarters remain the same, then the recession can be assured.
The Economy slowdown is not just happening in India. There are few factors that impact for the Slowdown – Sino-US Trade war, Hong kong event, Tensions in the Oil nation and Domestic policies.
However, recent changes in the Indian stock market are driving the market on Post Budget 2019. The Foreign investors sold shares of worth more than USD 3 Billion.in the last two months in the Indian Stock market.
There are few changes in the Stock market – Post Budget India 2019,
- Reduce the Promoters Holding to 65 Percent from 75 percent (For Listed Companies). It means enhancing the Public Share holding from 25 Percent to 35 Percent. This may lead for the Good Fundamental Companies with highest shareholding are likely to exit the Market – Delisting
- 20 Percent Tax for the Buyback of Shares. Generally, Fundamentally good companies and those have good reserves, will buyback their Shares.
- Tax Increased for the Foreign Portfolio Investors (FPI)
- Disinvestment Target increased in the Budget 2019, the Government has decided to sell PSU Shares to over 51 Percent.
- FPI Limit increased to 24 Percent. NRI investment merged with Foreign Portfolio Investments.
- Housing Finance Companies under RBI regulation.
- Corporate Tax of 25 Percent limit increased to Rs. 400 Crore from Rs. 250 Crore.
Over a period of time, the Fundamentally good companies have the largest percentage on Promoters Holding. Promoters holding more than 50 Percent is said to be a good stock based on Value Investing. But now, it costs a Disadvantage. The said things above are expected to change in the coming future, if they need to make.
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