NDA, don't count your chickens before 16 May: Analysts warn of high margin errors

Watch out, NDA.

Don’t get too smug about the predictions from the exit polls. We all know how wrong they can be (they got it totally wrong after the 2004 and 2009 elections).

And market experts are all too aware of that. As Credit Suisse warns in a note, exit polls out on Monday showing Bharatiya Janata Party and its allies headed for a majority still reveal a “range of high uncertainty.”

The research house points out that while national totals are within a relatively narrow range, the state numbers that add up to those totals vary “widely.” Credit Suisse also noted that a median of the polls was essentially meaningless.

“In past general elections, even if one took the median of all exit polls, the conclusions would have been wide off the mark, as remarkably, all polls erred in the same direction. Seat projections for all of the major groupings were flawed,” the report states.

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Based on these reasons, Credit Suisse said there are high margin errors in the exit poll numbers.

Neverthless, it does think the BJP will win a large tally of seats; so it is likely the party will hold key economic portfolios.

Research firm CLSA echoed the same sentiment, saying exit polls are not the ‘final word’ on the election. For proof, you don’t need to look much further than 2009, when exit polls moved away from the actual results vis–vis opinion polls.

It notes: “With the market having already run up 5 percent in the last two trading sessions on rising expectations of stable government, we believe this reduces the possibility of a large market pop on the upside.”

Actual election results will be out on Friday, 16 May.