HINDUJA BANK (SWITZERLAND) LTD

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1 HINDUJA BANK (SWITZERLAND) LTD BUILDING WEALTH, ENABLING ENTERPRISE August 1 st, 2012 WEEKLY MARKET COMMENTS INDIA SUMMARY Huge global uncertainty following renewed concerns over debt problem in Spain and Greece caused global selloff in equities during the beginning of the previous week. Consequently the Indian markets also corrected while the poor monsoon progress so far and signs of slowing economy and policy paralysis further accentuated the selloff in the domestic market. In the Indian market the selling was more evident in the midcap counters largely caused by margin calls on the expiry day. The statement by ECB chief about its commitment to preserve the euro brought in some confidence that resulted in a relief rally later on in the week. The RBI left rates unchanged for the second time since June, in line with expectations, while cutting its growth forecast and lifting its inflation outlook as economic conditions deteriorate. The monsoon progress continues to remain weak. The crude and the rupee movement continue to remain unfavorable. Automobile and cement stocks will be focus as companies from these two sector start unveil monthly sales volume data for July 2012 from Wednesday, 1 August HIGHLIGHTS IN THE HEADLINE LAST WEEK RBI holds rates as inflation, growth outlook worsens. Ignoring concerns, FIIs pump ` 84 bn in July. Sun TV inks deal with Arasu Cable. GAIL posts 15% rise in Q1 net to ` bn. Bank of Baroda net rises 10% at ` bn. Karur Vysya Bank Q1 net rises 25% to ` 1.46 bn. Titan Q1 net profit rises 9% to ` 1.56 bn. Spicejet bounces back, posts ` 560 mn profit for Q1.

2 INDUSTRY NEWS & TRENDS The governmnet plans to launch its first auction of shale gas block by 2013-end on terms that are likely to be remarkably different from those offered in bid rounds for oil and gas blocks. The Directorate General of Hydrocarbons (DGH), the oil ministry's technical arm, has proposed to offer areas for exploration of gas trapped in sedimentary rocks -- shale gas -- on royalty and production-linked payments to the government. Competition watchdog CCI has approved the proposal by Maruti Suzuki India (MSI) to merge its engine and transmission supplier Suzuki Powertrain India Ltd (SPIL) into itself. Sector Banking transactions through mobile phones have more than trebled to ` 2.86 bn during May on account of a higher number of users with hand-held devices. The value of such transactions stood at ` Metals Telecom 910 mn in May 2011, according to the Reserve Bank. The number of bank transactions through mobiles also grew over two-and-half times to 3.34 million in May, 2012 from 1.28 million in May, Auto BFSI Construction Consumer Goods Energy Industrial Manufacturing IT Average trend for the week ECONOMIC AND POLITICAL HEADLINES The Reserve Bank of India (RBI) left interest rates unchanged for the second time since June, in line with expectations, while cutting its growth forecast and lifting its inflation outlook as economic conditions deteriorate. The RBI kept its policy repo rate unchanged at 8% and left the cash reserve ratio (CRR) for banks at 4.75%. The RBI also cut its economic growth outlook for FY13 to 6.5%, from the 7.3% assumption made in April, putting its outlook closer to that of many private economists. It also raised its headline inflation projection for March 2013 to 7%, from 6.5% in its April review. India's fiscal deficit during the April-June period rose to 1.9 trillion rupees, or 37.1% of the full fiscal year 2012/13, government data showed on Tuesday. During the same period in the last fiscal year, the deficit was 39.4% of the budget target. In March, the government had budgeted a fiscal deficit of $5.14 trillion rupees or 5.1% of the gross domestic product (GDP) for the current fiscal year. The export of agricultural items monitored by APEDA, the government-run export promotion body for farm products, rose by 88% to about ` 820 bn in the last fiscal. The growth was achieved on the back of increased export of processed foods, basmati, non-basmati rice, guar (gum and seed), buffalo meat and groundnut. In a major cabinet re-shuffle, Home Minister P Chidambaram has been appointed as the new Finance minister while power minister Sushil Kumar Shinde has replaced him as Home Minister.

3 CORPORATE NEWS The Sun TV Network Ltd has said that it has concluded an agreement with Tamil Nadu Arasu Cable TV Corporation Ltd., an undertaking owned by the Government of Tamil Nadu. This agreement will enable total availability of the Company's channels on all cable TV distribution systems run by Arasu Cable across the state of Tamil Nadu with immediate effect, said the company's announcement. Tata group firm Titan Industries reported 8.77% increase in its net profit for the quarter ended June 30 at ` 1.56 bn on the back of good performance by all segments. The net income during the first quarter of the fiscal also went up by 9.17% to ` bn. Karur Vysya Bank reported 25% rise in its net profit at ` 1.45 bn for the first quarter ended June 30, The bank's total income in the first quarter of current fiscal stood at ` bn, up from ` 7.68 bn over the corresponding period of previous fiscal. Ipca Laboratories reported 30.31% decline in its net profit for the quarter ended June 30, 2012, at ` mn. The net income during the first quarter of this fiscal, however, increased by 19.72% to ` 6.34 bn. BPO player Firstsource Solutions said its net profit has more than doubled to ` mn for the quarter ended June 30, 2012, on the back of strong business pipeline and cost optimisation initiatives. Air conditioner maker Blue Star reported an over two-fold increase in its net profit to ` mn for the quarter ended June 30. The net income during the first quarter of this fiscal went up by 3.89% to ` 7.31 bn. Drug firm Zydus Cadila said it has received the US health regulator's approval to market aripiprazole orally disintegrating tablets, used in treating schizophrenia, in the American market. Public sector lender Allahabad Bank's net profit was up by 23% year-on-year to ` 5.14 bn in the April-June quarter of 2012 due to less provisions. The bank's net interest income rose by 11% to ` bn from ` bn during the same period. Public sector lender, Bank of Baroda reported a rise of 10.26% in net profit at ` bn for the quarter ended June 30, Total income has gone up 28.27% y- o-y to ` bn for the quarter. State-owned lender Oriental Bank of Commerce's net profit rose by 10% yearon-year to ` 3.91 bn in the quarter ended June Net interest income too grew by more than 10% to ` bn from ` bn during the same period. Indian Overseas Bank (IOB) reported 13.5% increase in net profit at ` 2.33 bn for the first quarter ended June 30, The total income for the reporting quarter rose to ` bn from ` bn registered during the same period of After hovering in losses for five consecutive quarters, budget carrier Spicejet reported a net profit of ` 560 mn for the April-June period on the back of significant growth in sales and better yields. The Chennai-based airline promoted by Kalanithi Maran had posted a net loss of ` mn in the same period last fiscal. Gold loan company Muthoot Finance reported 29% growth in net profit at ` 2.46 bn during the first quarter ended June 30. Total income grew by 41% at ` bn. State-owned gas utility GAIL India Ltd reported 15% increase in net profit in the quarter ended June 30, 2012, as its fuel subsidy burden rose marginally. Turnover rose 25% to ` bn.

4 GLOBAL NEWS China has increased its budget for railway investment this year by 16%, a fresh sign that Beijing is boosting the economy through infrastructure spending. In its latest bond prospectus published on Chinabond, an official website for debt issues, the railway ministry said on Monday it plans to spend 470 billion yuan (US$73 billion) on infrastructure investment this year, up from the 406 billion yuan sated in a prospectus issued earlier this month. Eurogroup head Jean-Claude Juncker on Sunday, 29 July 2012, said that the eurozone members, their rescue fund and the European Central Bank will soon act to save the euro, according to a report. He also indicated that the European Financial Stability Fund and the ECB would buy Spanish government debt amid surging borrowing costs. Borrowing costs fell at an Italian bond auction on Monday, 30 July 2012, as the country's Treasury sold a total of billion euros ($6.749) of debt with various maturities, according to media reports. The total amount sold met the upper end of the Treasury's 3 billion euros to 5.5 billion euros target range. The yield on 10-year paper fell to 5.96% from 6.19% in a previous auction. UBS reported a surprise slump in profit, hit by a big trading loss on Facebook's stock market debut and a drop in revenue that pushed its investment bank into the red. Second-quarter net profit more than halved to 425 million Swiss francs, the Swiss bank said on Tuesday, in a dramatic miss of analysts' forecasts. INDICES WEEKLY PERFORMANCE Asian Indices BSE Sensex 17,236 16, China Shanghai Comp 2,104 2, Hong Kong Hang Seng 19,797 18, Indonesia Jakarta Comp 4,142 4, Japan Nikkei 225 8,695 8, Malaysia KLCI Comp 1,632 1, Pakistan Karachi ,577 14, Philippines PSEi 5,308 5, South Korea Kospi 1,882 1, Singapore Straits Times 3,036 2, Sri Lanka All Share 4,945 4, Thailand SET 1,199 1,

5 Indian Benchmark Indices BSE Sensex 17,236 16, S&P CNX Nifty 5,229 5, BSE 100 5,229 5, BSE 200 2,114 2, BSE Smallcap 6,448 6, CNX Midcap 7,169 7, Indian Sectoral Indices BSE Auto 9,114 8, BSE Bank 11,910 11, BSE Capital Goods 9,600 9, BSE Consumer Durable 6,297 6, BSE FMCG 5,046 4, BSE Healthcare 7,142 6, BSE IT 5,345 5, BSE Metal 10,478 10, BSE Oil & Gas 8,158 7, BSE Power 1,897 1, BSE PSU 7,105 7, BSE Realty 1,638 1, BSE Technology 3,162 3,

6 Nifty Gainers & Losers Grasim Ind 2,904 2, Sun Pharma Cipla Power Grid Corp Ambuja Cement Wipro SAIL Asian Paints 3,620 4, Jindal Steel Infosys 2,219 2, FII / DII ACTIVITY OVER THE WEEK (Figures in ` bn) The information in this publication was developed using data which Hinduja Bank (Switzerland) Ltd assumes to be accurate; nevertheless, Hinduja Bank (Switzerland) Ltd accepts no liability and offers no guarantee. The availability of such information does not constitute a recommendation to buy or sell any of the securities discussed therein. Statements made in this publication can be changed without prior notice. Moreover, the content is not intended for individuals (or entities) who (which), by reason of their nationality or domicile or for any other reason, are subject to foreign regulations prohibiting access to banking services or investment instruments via one or several distribution channels, or prohibiting or restricting the use of any information provided in this document.