P Chidambaram's appointment as India's Home Minister and his finance portfolio going to Prime Minister Manmohan Singh will boost investors' confidence and stock markets will take it positively, bankers, analysts, investors said on Sunday.
Amid reports that Chidambaram is replacing Shivraj Patil, who this morning resigned as Home Minister in the wake of Mumbai terror attacks, a cross-section of bankers and market experts told PTI that the investors' confidence should go up and financial markets should bounce back.
Some others felt that shuffling would not make much difference and the markets will essentially follow the global market, which closed the week on a high.
"The market should bounce back. The prime minister has a proven track record of being a good finance minister and with Chidambaram taking over the Home Ministry, the investors' confidence will improve," Taurus Mutual Fund managing director R K Gupta said.
UCO Bank's CMD S K Goel said, "Today the priority is internal security and Chidambaram being a competent person would restore the confidence of the common man in the government.
"He has already set tone and tenor for the progress of financial sector so I do not think that his successor would have any problem in carrying forward the agenda."
Echoing the sentiments, Bank of Baroda CMD M D Mallya said, "Manmohan Singh is known as the architect of the reform process. Therefore, there is no concern for the banking sector. Things would progress seamlessly as they have been in past."
However, Paras Bothra of Askiha Stock Brokers and Rajesh Jain of SMC Global felt that the shuffling would not make much difference and stock market will open flat on Monday and take the global cues.
Bank of Maharashtra chairman and MD Allen Perera said that the change in portfolio for Chidambaram, who has been a very competent finance minister, would "send a strong signal as far as security of the nation is concerned."
"Reform agenda would continue as usual since such decisions are a collective decision by the Union Cabinet. I do not see that the confidence of the banking and financial sector would have any negative implication with this development," Pereira said.
Noting that the development was unlikely to impact the ongoing policies of the government, UTI Mutual Fund chairman U K Sinha said that decisions such as liquidity measures have been taken by the Reserve bank of India and the government at the highest level.
"The existing policies would continue as the prime minister himself in concert with the FM and the RBI has been monitoring the liquidity situation on day-to-day basis," Sinha said, adding that the decision was "recognition of Chidambaram's capabilities."
Oriental Insurance CMD M Ramadoss also said that the government's reform agenda would continue as usual under the leadership of the prime minister, who has been the pioneering architect of economic reforms.
"Change in guard (at Finance Ministry) would not stall the insurance reform as Cabinet has already given its nod," he added.
The Union Cabinet recently cleared the comprehensive insurance bill seeking to raise FDI cap in the sector from 26 per cent to 49 per cent and the bill is likely to be tabled in Parliament in December.
