Sajeel’s pre-election preference in the presidency battle between Trump and Hillary: Sajeel to DNA
DNA spoke to several Indian IT companies to gauge who they saw as the next US President and the likely impact it would have on their businesses.
The preference of the markets for the outcome of the US Presidential election couldn’t have been communicated better than what happened on the bourses around the world last week. While Democratic Presidential candidate Hillary Clinton is perceived as the status quo candidate, according to a Reuters report, Republican presidential front-runner Donald Trump has managed to draw the ire of the business world, for one, thanks to his controversial trade policy statements.
We spoke to the Indian IT sector, which stands to bear a direct impact of the outcome of the US Presidential elections result.
Recent national polls in the US had showed Clinton only 1.7% ahead of Trump, while another showed him leading by 1-2%, triggering a sell-off on the S&P 500 and MSCI’s broadest index of Asia-Pacific outside Japan, to South Korea, and even at home, on the BSE and the National Stock Exchange (NSE).
S&P 500 witnessed its longest losing streak in five years, while BSE Sensex fell over 300 points in one trading session in the week.
A recent Bloomberg report titled ‘Hillary: Wall Street’s favourite enemy’, said, “Wall Street appears unperturbed by the prospect of a Clinton presidency…Ultimately, what bankers most like about Clinton is that she is not Donald Trump.”
On Monday, the Wall Street recovered and the dollar was firm after the Federal Bureau of Investigation cleared Clinton’s name in the infamous e-mail scandal that has plagued her campaign. A Reuters report said, “Markets have tended to see US presidential contender Clinton as the status quo candidate, and news favouring her bid often boosts risk appetite.”
Trump, on the other hand, has caught the business community off guard with his advocacy of anti-free trade practices, promising a levy of 35% tax on Ford cars coming from Mexico indicative of his policy to boost manufacturing in the US; a clampdown on the crucial H1B visas, and taking jobs from China and India, to give them back to the Americans.
Indian IT companies unanimous that sector needs stability from the next US President
“The world is vulnerable to Britain’s Brexit vote, the refugee crisis, the shifts in power, and the changes in balances,” Umeed Kothavala, Chief Executive Officer and Co-Founder, Pune-based Extentia Information Technology, said. “There is a great need for stability, for someone who can help lower the temperature of prospect quo rather than raise it,” he said.
“The industry will gain from stability in foreign and trade-related policies, which makes Clinton a safer bet, Abhishek Rungta, Chief Executive Officer, Indus Net Technologies, said. “Trump’s statements on business have been unclear and inconsistent. A crackdown on H1B visas would hit profitability while restrictions on BPO could lower revenue,” he added.
However, “only time would tell how seriously Trump would pursue his statements, since his businesses have extensively used offshore outsourcing,” Rungta said.
“Like all politicians, Trump will say what it takes to win votes with his audience, but the government has enough checks and balances to ensure a single person doesn’t unilaterally dictate policy, Kothavala added.
“Clinton seems fairly neutral; she doesn’t seem too regressive or outdated on international business. Her balanced perspective gives us some respite,” Sajeel Khanna, Senior Vice President of global technology consulting company, BluEnt, said.
On the other hand, Trump “seems more rigid” and gives no “picture of certainty”. To safeguard US businesses, under Trump Indian companies may have to reposition themselves more strategically, he added.
MYZEAL IT Solutions LCC’s chief executive, Anshul Bagai, said Clinton may mean minimal changes as the Obama legacy may continue. However, its Trump, we anticipate some stringent implementation of the existing laws which would impact small-medium businesses in US.