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Below are Quotes on Union Budget Reactions for Mutual Fund Industry By Prathit Bhobe, CEO&MD, Tata Mutual Fund said,

Sometimes we suffer more in our imagination than in reality.   Couldn’t be more true today. In the run up to the budget market was bracing for higher taxes on the back of a pandemic year. The fact that there were no changes in taxes coupled with a boost for growth made it double joy for equity markets.

Benefits for MF industry:

DDT on Reit and INveit is a positive step.  This will further increase attractiveness and will also deepen the category.  The measure to set up a body to buy bonds upto investment grade is a good step to help deepen and market making in Corporate bond market.  It is a very positive step for MFs.

On Equity MFs

Markets usually develop anxiety on tax increase or any double taxation around budget time.  No changes in tax is a big relief for equity markets.

On Debt MFs:

Total gross borrowing will be nearly 12 lakh crs and after repayment of nearly 2.8 Lk crs the net borrowing would be 9.2 Lakh crs. This number is much higher than what was envisaged at around 8 lakh crs. It could be a busy year on bond  issuances and will put  upward pressure on bond yields.

On IFSC

Tax exemption for investment division for foreign banks are steps in the right direction to creating an vibrant  ecosystem. 

On AIF

Setting up of AIF for disposal of stressed assets is an excellent move.  Funds which are focused in running special situations will benefit from such opportunities.

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