June 20 (Bloomberg) -- Chokkalingam G., chief investment officer at Centrum Broking Pvt., a Mumbai-based brokerage that also manages assets for individuals, comments on the decline in Indian stocks. He spoke in a phone interview.
The Bombay Stock Exchange Sensitive Index lost 256.28, or 1.4 percent, to 17,614.25 at 1:08 p.m. in Mumbai, set for the lowest close in four months. The gauge dropped as much as 3.1 percent earlier, the most in 22 months.
“In last two to three days nothing has gone wrong with fundamentals. There’s a 33 percent rise in advance-tax numbers, 25 of 36 states have received good monsoon and oil prices have dropped 20 percent from their peak. The stress is there, industrial growth has moderated but we also have to see the price paid by the index.”
On Mauritius tax issue:
“Which government can afford to do away with the taxation treaty? The market is already beaten down so why will they do it now and spoil the market. If at all they do it now, then it will be a great blunder. They have to do it when markets are heated up, that is good for the economy.”
India will seek to tax capital gains on investments made through Mauritius as negotiations on its taxation treaty with the island nation resume after three years, Business Standard reported yesterday. India wants to impose a tax as the capital gains are being made locally, the report cited Prakash Chandra, chairman of the tax board, as saying. Mauritius doesn’t impose capital gains tax, the report said.
Advice to investors:
“India is always known for micro-individual stock stories. Look for good management, high dividend yield stocks. Don’t worry if Sensex comes to 15,000. We cannot predict bottom, so start investing now.”
He recommends tire maker MRF Ltd., lender Dhanlaxmi Bank Ltd. and Siemens India Ltd.
To contact the reporter on this story: Hemal Savai in Mumbai at at firstname.lastname@example.org
To contact the editor responsible for this story: David Merritt at at Dmerritt1@bloomberg.net