Sensex at 40k in Zephyr Financial Publishers Pvt Ltd, - Positioning for the Future Arjun Parthasarathy Founder

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1 Sensex at 40k in 2019 Zephyr Financial Publishers Pvt Ltd, - Positioning for the Future Arjun Parthasarathy Founder

2 Sensex at 40,000 in 2019 Agenda Key Risk Factors Global Markets & Macros Indian Markets & Macros

3 Sensex at 40k in 2019 Indian equity markets will start playing for 2019 reelection of the Modi Government Resounding win in key state of UP in its state election in March gives the optimism for reelection Demonetization, the Black Swan event in November 2016 has helped not hurt the government in the eyes of the electorate 25/06/14 3

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5 Sensex 38% Upside Sensex at 29,000 offers 38% upside till 2019 Global markets highly optimistic on economic growth Indian macros are looking positive Global liquidity ample despite Fed rate hikes Government has shown commitment to fiscal consolidation, tax reforms

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7 25/06/14 7

8 Sentiment + Earnings = 40,000 Sensex PE at 22X trailing as of 3 rd qtr 2016 Reelection plus on the ground economic growth to raise PE to 26X in 2019 Sensex EPS to grow 14% over the next two year

9 Sensex to Catch Up with Nominal GDP Growth Nominal GDP has grown at a CAGR of 11.8% since 2008 Sensex has grown at a CAGR of just 4% since 2008 Sensex to play catch up with nominal GDP

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11 Base year is changed in

12 Key Risk Factors

13 Global Risks Political risk in Eurozone if Frexit, Nexit happens and German elections turn negative for EU solidarity Commodity driven economies drag down global growth Inflation leading to faster pace of rate hikes by Fed and other Central Banks

14 China Risk China facing hard landing on structural change in its economy China trade wars with US on President Trump s trade policies Credit bubble burst

15 India Risk Government losing popularity going into 2019 Twin balance sheet crisis of bank NPA s and corporate leverage is not resolved Disruptions to Indian manufacturing on global innovations

16 Global Markets & Macros

17 Global Equities at Record Highs

18 High Central Bank Liquidity

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22 Still Low Rates with QE

23 High Risk Appetite

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25 Low Credit Spreads

26 Reflation Trades on Bonds

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38 Improved Global Economic Growth Prospects

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51 Strong USD helping Exporters

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59 Indian Markets & Macros

60 Mixed Sector Performance 25/06/

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62 Low Interest Rates

63 INR Stable since

64 Strong Macros 64

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67 Bank NPA s Drag on Economy Last Legs? 67

68 Good Fiscal Consolidation 68

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71 Low Commodity Prices to keep Inflation Down 71

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89 Thank You Information herein is believed to be reliable but Arjun Parthasarathy Editor: Investors are Idiots.com INRBONDS.com and Zephyr Financial Publishers Private Limited does not warrant its completeness or accuracy. Opinions and estimates are subject to change without notice. This information is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The financial markets are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved. Unauthorized copying, distribution or sale of this publication is strictly prohibited. The author(s) of the content published in the site inrbonds.com may or may not have investments in the assets discussed in the pages/posts. Copyright Investors are Idiots, INRBONDS by Arjun Parthasarathy