Markets at a Glance. India Q2 CY For Distributors use only

Transcription

1 Markets at a Glance India Q CY 17 For Distributors use only

2 India Macro Economy Trade Inflation Monetary Sector Valuations Liquidity

3 Macro Economy GDP Emerging vs Developed (In % YoY) Credit Growth vs Nominal GDP (In % YoY) Jun-1 China.9 Sep-1 Nov-1 Jan-13 May-13 Jul-13 Nov-13 Jan-1 May-1 US. UK. India. Euro Jun-1 Aug-1 Oct-1 Dec-1 Feb-13 Apr-13 Aug-13 Oct-13 Feb-1 Apr-1 Jun-1 Aug-1 Oct-1 Dec-1 Feb-1..7 China (R1) US (L1) India (R1) UK (L1) Euro (L1) Credit Growth India Qtrly GVA Current Account & Fiscal Deficit IIP (In % YoY) -1 - Mar-1 Jul-1 Nov-1 Jul-13 Nov-13 Mar-1 Jul-1 Nov-1 Mar-1 Jul-1 Nov Dec- May-11 Sep-11 Jan-1 May-1 Sep-1 Jan-13 May-13 Jan-1 May-1 May-1 Sep-1 Jan-1 May-1 Sep-1 May-17 Current Account Fiscal Deficit IIP Base - In the past, GDP growth has not been correlated across developed and key emerging markets, all major economies are now showing almost synchronous growth Credit growth numbers are the result of PSU banks credit numbers but excludes NBFCs and other financing alternatives, that have cornered the bulk of incremental credit disbursements, Therefore, charts may not be reflecting the true picture of credit growth trend Considerable improvement in Current Account deficit and the government is on track to reduce it further Industrial production numbers are still showing a downward trend, however the GDP component of manufacturing has reduced in recent times and services growth has accelerated. IIP does not capture services growth 3 Source: Bloomberg, Data as on 31 March 17, IIP Data as on 31 May 17

4 Trade Trade Deficit Trade Balance vs FDI -, Sep- Mar- Sep- Mar-7 Sep-7 Mar- Sep- Mar-9 Sep-9 Mar- Sep- Mar-11 Sep-11 Mar-1 Sep-1 Mar-1 Sep-1 Mar-1 Sep ,, -, -3, USD -9.7 bn -,, -, -1 3, -, -, - 3, 1, - Trade Balance USD Million Trade Balance (R1) USD mn FDI (R) USD mn India Imports Trade Balance vs INR,,, 3, 3,,, 1,,, Dec- Jun- Dec- Jun-7 Dec-7 Jun- Dec- Jun-9 Dec-9 Jun- Dec- Jun-1 Dec-1 Jun-1 Dec-1 USD 3. mn USD mn USD 1.1 mn USD 3.9 mn Apr- Nov- May-7 Nov-7 May- Nov- May-9 Nov-9 May- Nov- May-11 Nov-11 May-1 Nov-1 Jun-1 Dec India Merchandise Imports $ India Merchandise Imports Non Oil India Merchandise Imports Oil India Imports of Principle Gold USD mn INMTBAL Index - USD mn INR BGN Currency - USD mn Trade deficit has shown signs of recovery since 13 and the trend continues Composition of Imports has moved away from consumption oriented items such as oil and gold to value added imports Source: Bloomberg, Trade Deficit Data as on 31 March 17, Trade Balance vs FDI Data as on 31 May 17, India Imports & Trade Balance vs INR Data as on 3 June 17.

5 Inflation CPI & WPI all Comodity YOY WPI, CPI & Int Rate (In % YoY) (In % YoY) Apr-13 Aug-13 Oct-13 Feb-1 Apr-1 Jun-1 Aug-1 Oct-1 Dec-1 Feb-1 WPI (R1) CPI (R1) RBI Rate (L1) Crude vs Inventories.. 91,,,,.....,,,, 3,, 3,, Jan-1 May-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 May-17 Feb-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 May-17 India CPI Combined YOY India WPI All Commodities YOY Real Yield (In % YoY) 1 Apr-13 Aug-13 Oct-13 Feb-1 Apr-1 Jun-1 Aug-1 Oct-1 Dec-1 Feb-1 Year yield (L1) CPI (R1) 1. Real Yield (R1). WPI (L1).9 Crude (R1) US Inventories (R) CPI (R1) Year yield (L1) WPI (L1) Real Yield (R1) Consumer Price Index or CPI continues to come off sharply. While this is expected to inch up, it is still lower than historical averages India Real Yield is leading to more investment in financial assets vs. real assets. Global investors too, have shown much attraction for this yield Source: Bloomberg, CPI & WPI all Comodity YOY Data as on 3 June 17, WPI, CPI & Int Rate Data as on 31 January 17, Crude vs Inventories & Real Yield Data as on 3 June 17.

6 Monetary Sector Bank Credit Trends Bank Deposit Growth Sep- Mar- Sep- Mar-7 Sep-7 Mar- Sep- Mar-9 Sep-9 Mar- Sep- Mar-11 Sep-11 Mar-1 Sep-1 Mar-1 Sep-1 Mar-1 Sep-1 Mar-1 Sep-1 Mar- Sep- Mar-3 Sep-3 Mar- Sep- Mar- Sep- Mar- Sep- Mar-7 Sep-7 Mar- Sep- Mar-9 Sep-9 Mar- Sep- Mar-11 Sep-11 Mar-1 Sep-1 Mar-1 Sep-1 Mar-1 Sep-1 Credit Growth Bank Deposit Growth Deposit vs Loan Rate Cash Deposit Ratio Feb-7 Jun-7 Oct-7 Feb- Jun- Oct- Feb-9 Jun-9 Oct-9 Feb- Jun- Oct- Feb-11 Oct-11 Feb-1 Jun-1 Sep-1 Jan-13 May-13 Jan-1 May-1 May-1 Sep-1 Jan-1 May-1 Sep-1 Feb-1 Apr-1 Jun-1 Aug-1 Oct-1 Dec-1 Feb-1 IMF India Bank Prime Loan Rate Deposit rate Cash Deposit Ratio Credit growth may not be growing as fast as it used to but it is certainly not growing at the slowest pace of.% as seen in chart Gap between Deposit vs Loan Rate has narrowed in the last years Demonetisation effect is visible in CDR in the month of Dec 1 Source: Bloomberg, Bank Credit Trends Data as on 31 March 17, Bank Deposit Growth Data as on 3 June 17, Deposit vs Loan Rate Data as on 31 January 17, Cash Deposit Ratio Data as on 3 June 17.

7 Monetary Sector India CP Outstanding Feb-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 May-17 India Commercial Paper O/S Credit Spreads Jan-1 May-1 Aug-1 Oct-1 Dec-1 Feb-1 Govt Yield India Corporate Bond Curve AA yrs India Corporate Bond Curve AAA yrs IGB yrs Oct-1 Dec-1 Feb-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 May-17 3 Month 1 Month Year Year Year PLR-CRR Jun-1 Dec-1 Jun- Dec- Jun-3 Dec-3 Jun- Dec- Jun- Dec- Jun- Dec- Jun-7 Dec-7 Jun- Dec- Jun-9 Dec-9 Jun- Dec- Jun-1 Dec-1 Jun-1 Dec-1 7 The gap between government bond and AAA rated corporate bond yield has expanded in the last 3 years indicating higher risk perception.. India PLR RBI CRR Source: Bloomberg, India CP Outstanding Data as on 1 June 17, Credit Spreads, Govt Yield & PLR-CRR Data as on 3 June 17.

8 Valuations Market Cap vs India GDP Sensex vs Midcap PB (% of GDP) BSE PE+PB 1 yr Forward 1,,, Sep- Dec- Mar- Jun- Sep- Dec- Mar-7 Jun-7 Sep-7 Dec-7 Mar- Jun- Sep- Dec- Mar-9 Jun-9 Sep-9 Dec-9 Mar- Jun- Sep- Dec- Mar-11 Sep-11 Mar-1 Jun-1 Sep-1 Dec-1 Jun-1 Dec-1 Mar-1 Sep-1 Mar-1 Sep-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Mkt Cap % of GDP SENSEX / MIDCAP P/B SENSEX / MIDCAP P/E Sensex PE vs Market Cap 1 1,,,,,, 1,9,,,,,,,,,,,,,, Jan-1 May-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Dec-3 Apr- Aug- Dec- Apr- Aug- Dec- Apr- Aug- Dec- Apr-7 Aug-7 Dec-7 Apr- Aug- Dec- Apr-9 Aug-9 Dec-9 Apr- Aug- Dec- Apr-11 Aug-11 Apr-1 Aug-1 Dec-1 Apr-13 Aug-13 Apr-1 Aug-1 Dec-1 SENSEX (P/E) (L1) INR mn BSE Market Cap (R1) INR mn BSE P/E BSE P/B Market cap to GDP number of 7% is close to long term average, indicating that the market at 31, is cheaper than the market at 1, in 7 on this metric. Market capitalisation (BSE) has moved up by over ~ 7% to USD 1.97 trillion in the last 3. years since the new government came in to power Valuations are ruling slightly above long term averages, on a forward price to earnings or price to book basis. Source: Bloomberg, Mkt Cap vs India GDP Data as on 31 December 1, Sensex vs Midcap PE+PB, Sensex PE vs Mkt Cap & BSE PE+PB 1 yr Forward Data as on 3 June 17.

9 Valuations BSE Index - Return on Common Equity BSE Index - Trailing 1M Earnings per Share Dec- Jun- Dec- Jun-7 Dec-7 Jun- Dec- Jun-9 Dec-9 Jun- Dec- Jun-1 Dec-1 Jun-1 Dec-1 Dec- Jun- Dec- Jun-7 Dec-7 Jun- Dec- Jun-9 Dec-9 Jun- Dec- Jun-1 Dec-1 Jun-1 Dec-1 BSE Index - Return on Common Equity BSE Index - Trailing 1M Earnings per Share Sector Performance Interest Rate Sensitives Sector Performance Cyclicals % % % % % %.1% % % 3% % 1.1% % -.9% % -% Aug-7 Dec-7 Apr- Aug- Dec- Apr-9 Aug-9 Dec-9 Apr- Aug- Dec- Apr-11 Jul-11 Nov-11 Mar-1 Jul-1 Nov-1 Jul-13 Nov-13 Oct-1 Feb-1 -% -% BSEREAL Index - Last Price (R1) % BANKEX Index - Last Price (L1) % BSEAUTO Index - Last Price (L1) % -3.1% -1.1% % -% -% -3% -% Feb- Jun- Oct- Feb-7 Jun-7 Oct-7 Feb- Jun- Sep- Jan-9 May-9 Sep-9 Jan- May- Sep- Jan-11 May-11 Aug-11 Apr-1 Aug-1 Dec-1 Apr-13 Aug-13 Nov-13 Mar-1 Jul-1 Nov-1 Mar-1 Jul-1 9 BSE Metal Indez (L1) % BSE Capital Goods Index % Return on Equity or ROE showing signs of revival from the historical multiyear lows of 1 EPS or Earnings Per Share is at historical multiyear high Source: Bloomberg, Data as on 3 June 17.

10 Liquidity INR vs Forex Reserve Dec-1 Mar-1 Sep-1 Mar-1 Sep-1 Forex Reserve (USD mn) right INR left Money Multiplier M Feb-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 May-17 India Funds Flow INMSM3Y Index Oct- Feb-7 Jun-7 Oct-7 Feb- Jun- Oct- Feb-9 Jun-9 Oct-9 Feb- Jun- Oct- Feb-11 Oct-11 Feb-1 Jun-1 Oct-1 Feb-13 Oct-13 Feb-1 Jun-1 Oct-1 Feb-1 Mutual Fund Flows in Rs. Billions Daily FII flows in USD Millions Forex reserves are on the rise while domestic fund inflows continues to grow stronger Source: Bloomberg, INR vs Forex Reserve & India Funds Flow Data as on 3 June 17, Money Multiplier M3 Data as on 9 June 17.

11 In a nutshell In the past, GDP growth has not been correlated across developed and key emerging markets, all major economies are now showing almost synchronous growth Credit growth numbers are the result of PSU banks credit numbers but excludes NBFCs and other financing alternatives, that have cornered the bulk of incremental credit disbursements, Credit growth may not be growing as fast as it used to but it is certainly not growing at the slowest pace of.% as seen in chart Trade deficit has shown signs of recovery since 13 and the trend continues Consumer Price Index or CPI continues to come off sharply. While this is expected to inch up, it is still lower than historical averages The gap between government bond and AAA rated corporate bond yield has expanded in the last 3 years indicating higher risk perception Valuations are ruling slightly above long term averages, on a forward price to earnings or price to book basis. Forex reserves are on the rise while domestic fund inflows continues to grow stronger Market cap to GDP number of 7% is close to long term average, indicating that the market at 31, is cheaper than the market at 1, in 7 on this metric. 11

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