24TH NOV 2017

Husains

MARKET WRAP
Benchmark indices ended the session on a positive note after the range bound day of trade.

The Sensex closed up 26.53 points or 0.08% at 33588.08, while the Nifty was up 6.50
points at 10348.80. The market breadth was positive as 1442 shares advanced against a
decline of 1255 shares, while 151 shares were unchanged.

BHEL, Infosys and Sun Pharma were the top gainers on both indices, while DRL, Bajaj
Auto and Adani Ports were the top losers.

BROAD MARKET INDICES

INDEX CURRENT OPEN HIGH LOW P. Close %CHANGE

NIFTY 50 10,348.75 10,358.45 10,374.30 10,307.30 10,342.30 0.06

NIFTY NEXT 50 29,780.80 29,845.90 29,865.75 29,613.40 29,791.45 -0.04

NIFTY MIDCAP 50 5,198.40 5,205.35 5,210.15 5,149.75 5,187.80 0.20

NIFTY100 LIQ15 4,545.90 4,558.75 4,570.40 4,504.55 4,554.10 -0.18

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 ASIAN INDEX
INDEX OPEN HIGH LOW CLOSE %CHANGE
NIKKEI 225 22,601.55 22,677.34 22,513.44 22,523.15 0.47

HANG SENG 30,033.18 30,169.99 29,593.79 29,707.94 -0.99

TAIWAN 10,837.61 10,872.29 10,809.09 10,854.57 0.29

SSE 3,425.01 3,429.42 3,342.33 3,352.99 -2.31

INDIAN MAJOR SECTORAL INDICES

INDEX CURRENT OPEN HIGH LOW P. Close %CHANGE

NIFTY BANK 25,736.25 25,826.30 25,838.55 25,620.95 25,766.65 -0.12

NIFTY FIN SERVICE 10,485.00 10,534.30 10,537.75 10,452.00 10,518.40 -0.32

NIFTY IT 11,230.60 11,149.80 11,255.05 11,132.75 11,117.50 1.02

NIFTY PHARMA 9,293.20 9,290.65 9,321.60 9,244.75 9,278.00 0.16

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 STOCK UPDATE

HDFC Life, SBI Life, ICICI Pru slip 3-6% as tax rate may increase

under new direct tax law

Kotak said increase in tax rate would have one time impact on
embedded value (EV) and going forward lower NBAP (new business
achieved profit) margins.

Hero Motocorp, the countrys largest two-wheeler maker, is keen to spruce up its presence in the
SBI Life Insurance Company, HDFC Standard Life Insurance Company, ICICI
Prudential Life Insurance Company and Max Financial Services (Max Life) shares
fell 3-6 percent intraday Thursday as tax rate for insurance companies may increase to
corporate tax rate level.

The Finance Ministry has constituted a task force for redrafting the direct tax law.
The task force will submit its report within the next six months. Notably, the FY09
direct tax code had two proposed changes with respect to life insurance companies:

1> Income from insurance for policyholders to be considered under the EET method
(i.e. insurance income should be taxable) unless premium payable is less than 5
percent of sum assured i.e. sum assured should be 20X of premium.

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 STOCK UPDATE

With focus on selling more protection policies, Kotak believes that it may not be a
challenge for life insurance companies to package and sell higher component of
protection in their ULIPs.

2> Life insurance companies should pay income tax at corporate tax rates (proposed
at 25 percent) as compared to current practice of 14.3 percent.

Insurance actuaries are currently building in tax rate of 14.3 percent.

Kotak said increase in tax rate would have one time impact on embedded value (EV)
and going forward lower NBAP (new business achieved profit) margins.

ICICI Prudential Life and HDFC Standard Life, in their IPO documents, have
reported sensitivity of EV and new business value (NBV) to higher tax rates.

If tax rate increases to 25 percent from 14.3 percent, Kotak estimates EV and RoEV
(return on embedded value) of HDFC Life, ICICI Life and Max Life assuming 7-9
percent lower FY2017 EV and 13-17 percent decline in NBV margins..

At 14:04 hours IST, the stock price of SBI Life Insurance Company was down 3.05
percent at Rs 670.05, ICICI Prudential Life Insurance Company down 4.12 percent at
Rs 378.30, HDFC Standard Life Insurance Company was down 5.11 percent at Rs
375 while Max Financial Services was down 3.10 percent at Rs 566.75 on the BSE.

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