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V I E W S A N D R E C O M M E N D AT I O N S
A PRIL - J U NE, 2015
MARKET OVERVIEW
Indian equity markets continued their positive streak during the quarter
Markets remained volatile during the quarter due to key events like Union Budget, RBI policy action and monetary actions by
ECB and US Fed. The Q3 corporate results turned out to be a disappointment which further added to market volatility
Large Caps outperformed both Mid Caps and Small Caps during the quarter
Union Budget for FY 16 was presented in the back drop of huge expectations. The Union Budget was a step in the right
direction by boosting infrastructure investments, encouraging financial savings, taking measures to ease business and
maintaining fiscal credibility in the medium term
We are positive on the equity markets on the back of reforms push agenda of the government, improving macro domestic
& external factors and likely re-rating of India
RBI also provided couple of off-cycle rate cuts (in Jan & Mar) of 25 bps each driven by strong disinflationary force and
expectation of better than reported fiscal consolidation
We maintain our outlook on Indian equity markets of Marginal Overweight. Investors can accumulate equities from a 3 to 5
year perspective
Bond yields could fall further in the medium to long term on the back of decline in inflation
Investors with an investment horizon of at least 18 to 24 months can look at investing in long term income, gilt and dynamic
bond funds
Short term income funds can be recommended for investors with an investment horizon of at least 12 to 18 months
We are positive from a medium to long term perspective with a pro-active inflation targeting RBI and a credible government
at the Centre
INVESTMENT PERSPECTIVES APRIL, 2015
Marginal Overweight
MID-CAP STOCKS
SMALL-CAP STOCKS
Marginal Overweight
Marginal Overweight
Marginal Overweight
COMPANY NAME
DISH TV LTD.
LARSEN & TOUBRO LTD.
CMP*
TARGET PRICE
`77
`96
`1,670
`2,000
FUND NAME
1 YEAR
2 YEARS
3 YEARS
41.65
26.78
23.39
60.70
36.39
26.85
57.57
34.88
25.95
84.49
46.40
35.45
60.25
34.90
26.21
51.17
32.99
24.29
38.64
29.02
21.47
59.55
35.38
27.20
61.35
34.61
27.88
CNX 500
41.79
24.44
18.03
CATEGORY*
56.61
32.52
23.55
FUND NAME
1 YEAR
2 YEARS
3 YEARS
47.78
25.97
49.05
30.08
25.22
49.90
31.59
24.96
43.98
28.54
21.92
39.66
27.23
21.10
54.09
31.15
27.11
45.78
26.11
20.70
50.36
30.67
23.50
43.74
27.47
19.96
CNX NIFTY
33.18
21.57
16.78
CATEGORY*
43.80
26.77
20.73
FUND NAME
1 YEAR
2 YEARS
3 YEARS
79.54
42.40
34.60
81.96
46.70
35.54
90.22
54.84
41.59
48.42
31.23
23.62
81.06
45.16
33.83
76.16
42.92
32.82
88.65
55.52
37.55
CNX MIDCAP
63.30
30.47
18.87
CATEGORY*
80.92
45.05
32.41
FUND NAME
1 YEAR
2 YEARS
3 YEARS
70.70
47.21
35.64
56.55
33.39
26.00
59.86
34.87
25.90
54.35
34.54
25.99
53.26
33.64
25.11
CNX 500
41.79
24.44
18.03
CATEGORY*
58.94
34.95
25.80
BALANCED FUNDS
FUND NAME
1 YEAR
2 YEARS
3 YEARS
49.85
28.91
22.42
48.65
29.47
22.30
51.85
32.66
22.75
46.06
29.57
23.90
48.70
30.56
25.83
59.46
33.76
26.38
27.61
17.56
15.06
CATEGORY*
47.15
27.98
21.60
INFLATION
INDUSTRIAL PRODUCTION
CURRENT ACCOUNT
DEFICIT
FISCAL DEFICIT
10
INR
11
Yields on benchmark 10 yr paper (8.40% 2024) found support at 7.65%-7.70% despite the surprise rate cut by RBI
PSU banks were seen selling paper, while there was limited interest from other traders in current year
GOI carried out debt switch with FY16 paper on RBI balance sheet. Limited OMO sale stock (FY17 and 18 papers only just enough for debt switch)
increase longer run supply
GOI H1 issuance calendar is at Rs. 3.6 tn, with higher supply of long end paper. 40 year paper sale is envisioned
Further cuts of 25-50 bps are likely in FY16, subject to continued reforms, progress on high quality consolidation, pass- through of past rate cuts, a
supportive monsoon and stable external conditions
Liquidity is likely to remain neutral in Q4, as RBI FX intervention is matched by government cash absorption to meet fiscal targets, as well as by seasonal
currency leakages. Liquidity is expected to improve sharply in mid Q1 2015, requiring RBI to absorb this through OMO sales
Despite the higher fiscal deficit announced in the Budget, the net borrowings for FY16 remain largely flat. The demand- supply dynamics for G-Secs
looks favourable for FY 16
Yields may be range bound in the near term. However, we are positive from a medium to long term perspective with a pro-active inflation targeting
RBI and a credible government at the Centre
Investors who have an investment horizon of at least 18 to 24 months can look at investing in long term income and gilt funds and dynamic bond funds
Investors can look at short term income funds with an investment horizon of at least 12 to 18 months
Short term funds, via active fund management, can take advantage of current yields by investing in G-Secs, corp. bonds, CPs & CDs to gain from high
accruals & capital appreciation, if any
INVESTMENT PERSPECTIVES APRIL, 2015
12
11
FUND NAME
1 YEAR
2 YEARS
3 YEARS
15.30
9.80
15.81
9.46
10.39
15.76
8.29
9.40
13.22
7.71
9.44
13.35
9.74
10.31
16.59
9.27
10.08
14.88
9.25
9.26
CATEGORY*
15.31
9.01
9.70
13
FUND NAME
1 YEAR
2 YEARS
18.32
9.61
10.29
17.02
10.48
11.49
18.13
8.18
9.67
19.05
10.45
11.11
21.36
12.83
12.45
18.14
11.19
10.83
14.11
6.34
7.50
CATEGORY*
18.41
9.84
10.09
3 YEARS
14
FUND NAME
1 YEAR
2 YEARS
3 YEARS
15.40
10.95
10.79
16.95
10.64
10.64
15.69
9.23
10.34
15.75
9.76
10.41
14.82
11.07
10.88
14.88
9.25
9.26
CATEGORY*
15.18
9.86
10.24
15
FUND NAME
1 YEAR
2 YEARS
3 YEARS
21.42
14.19
11.95
29.06
19.08
15.73
23.56
15.27
13.60
25.16
15.75
13.82
21.17
12.76
12.88
25.02
14.84
13.06
17.43
10.95
10.50
CATEGORY*
22.66
14.42
12.76
16
FUND NAME
1 YEAR
2 YEARS
3 YEARS
18.44
12.35
11.39
21.16
13.31
11.98
20.30
11.98
12.09
17.43
10.95
10.50
CATEGORY*
18.50
12.18
11.10
17
FUND NAME
9 MONTHS
I YEAR
10.41
11.20
9.35
9.56
10.67
9.76
9.88
11.01
9.61
9.80
10.49
9.54
CATEGORY*
9.96
11.08
9.30
2 YEARS
-
18
FUND NAME
9 MONTHS
I YEAR
2 YEARS
9.32
10.03
8.75
9.92
11.08
9.76
9.61
10.45
9.51
9.62
10.52
9.34
CATEGORY*
9.53
10.57
9.08
19
LIQUID FUNDS
FUND NAME
1 MONTH
3 MONTHS
6 MONTHS
8.43
8.46
8.65
8.43
8.45
8.63
8.46
8.46
8.64
8.44
8.47
8.65
8.49
8.48
8.66
8.45
8.45
8.63
8.45
8.44
8.61
8.43
8.41
8.59
8.39
8.43
8.61
9.03
8.35
8.56
CATEGORY*
8.22
8.22
8.39
20
FUND NAME
1 MONTH
3 MONTHS
6 MONTHS
9.43
8.13
9.07
10.46
9.11
9.57
9.81
8.37
9.02
9.68
7.86
8.41
9.39
8.29
8.76
8.53
8.52
9.05
9.03
8.35
8.56
CATEGORY*
9.23
8.16
8.85
21
FUND NAME
3 MONTHS
6 MONTHS
10.73
9.35
9.80
7.45
8.06
8.79
9.03
8.35
8.56
CATEGORY*
9.37
9.17
9.37
1 MONTH
22
GDP
INFLATION - CPI
23
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