Take-aways from the budget - 2022

Continuity

As you would undoubtedly have received multiple notes on the budget, we would limit this to direct impact of the same in our portfolios and investment thinking

Investment led growth - The mega-trend captured in the ABC Portfolio (i.e. increase in investments – GDP ratio when a country transitions from a low-income to a middle-income economy), is in complete alignment with what the Govt. is trying to achieve via on-going policy initiatives in terms of public and private capex across sectors. 

Impending roll-out of Central Bank Digital Currencies (CBDCs) – directly impacts the current banking system as the regulator starts competing with the regulated. With 1/3rd of the market index allocated to private banks, we see the potential for value traps & value destruction in the space and hence avoid it altogether in the portfolio.

CBDCs are essential for completing Digitized eco-systems - They act as the interoperable currency layer that stitches together the commerce, digital connectivity and the trust layer.  Digitized eco-systems is a sub-trend we invest into under Diversified Platforms.

We will explore these eco-systems in more details in the coming newsletters.