MONTHLY NEWSLETTER December, 2015

Transcription

1 Market Review MONTHLY NEWSLETTER India s annual economic growth accelerated to a slightly strongerthan-expected 7.4 per cent. India s overall financial conditions have shown a healthy improvement, thanks to low cost of funds, strong liquidity, better external financial linkages and uptick in economic activity. The Financial Conditions Index has risen to 70.3, up from 67.8 in the previous quarter. The government empowered the ministry to approve projects with civil construction costs of up to Rs 1,000 crore. All this augurs well for economic activity. Road construction is a driver of economic activity - it will create demand for steel, cement, etc. With more projects getting a kick start, demand will gather speed. INR ended the month by closing at against the USD. Indian broader indices Sensex and Nifty had a bitter month of November after going down by 1.98% and 1.53% respectively. Mutual Funds were net buyers in both Equity and Debt to the tune of 5921 Crores and Crores respectively. Apart from FII and MF activity, Key domestic data released in the month of November were: 1.Foreign Trade: The country s merchandise exports contracted by 24.33% (Y-o-Y) to USD billion in Sep 15 as against USD billion recorded in Sep 14. The cumulative exports for Apr-Sep 15 also decreased by 17.63% to USD The country s merchandise imports bills eased to USD billion in Sep 15 from USD billion recorded a year ago. Continuing its 12-month decline, Oil imports eased by 54.53% (Y-o-Y) to USD 6.63 billion in Sep 15. The non-oil imports dipped by 10.68% in Sep 15 to USD billion vis-à-vis non-oil imports of USD billion recorded in the previous fiscal. 2.Inflation: Wholesale Price Index based inflation for Oct 15 stood at -3.81% compared to -4.54% in Sep 15. Food article inflation, which was 0.53% in the month of Sep 15 moderated to 0.34% in Oct 15. The fuel inflation, after declining by 1.73% in Sep 15 rose to 0.46% in the month of Oct 15. CPI in Oct 15 was at 5% against 4.41% in Sep Index of Industrial Production (IIP): Index of Industrial Production (IIP) for Sep 15 rose by 3.6% against 6.3% in Aug 15. Manufacturing output showed growth of 2.6% in Sep 15 against 6.9% in Aug 15. Basic Goods expanded further by 4% in Sep 15 against 3.4% in Aug 15. Capital goods expanded by 10.5% in Sep 15 against 2.6% in Aug 15. Among the BSE sectoral indices Consumer Durables, Auto and Oil and Gas were the major gainers ending the month in Positive closing higher by 5%, 4.39% and 2.90% respectively. While the Major losers were Health Care, Dollex 30 and Teck ending the month in negative losing by 9.79%, 4.01% and 2.82% respectively. Among the NSE sectoral indices, PSU Bank, Auto and Midcap 50 were the major gainers ending the month in positive, higher by 6.79%, 4.82% and 2.99% respectively. The Major losers for the month were Pharma, VIX and Metal losing by 12.74%, 8.11% and 3.89% respectively. Among the major Asian Indices, it was a positive month only for Nikkei which ended up by 3.48%. Straits Times (Malaysia), Hang Seng and Taiwan ended negative by 4.75%, 2.84%, 2.73% respectively. It was a mostly a positive month for major European indices as well with DAX, BEL-20 CAC40 ending the month higher by 4.90%, 4.46% and 1.22% respectively but FTSE 100 ended negative by 0.08%. Major American Indices ended the month in negative with Nasdaq, S&P 500 and Dow Jones ending the month up by 0.88%, 0.32%, 0.05% respectively but NYSE ended the month negative by 0.49%. Among the major indices across the world, Bovespa, Brazilian index ended up by 1.63%. FII Activity: (Month Between 01-Nov-2015 to -2015) Equity Date Gross Purchase (Cr.) Gross Sale (Cr.) Net (Cr.) 2-Nov-15 3, , Nov-15 3, , Nov-15 3, , Nov-15 3, , , , Nov-15 75, , , MF Activity: (Month Between 01-Nov-2015 to -2015) Equity Date Gross Purchase (Cr.) Gross Sale (Cr.) Net (Cr.) 2-Nov Nov-15 1, , Nov-15 1, Nov , Nov-15 19, , , Debt Date Gross Purchase (Cr.) Gross Sale (Cr.) Net (Cr.) 2-Nov , , Nov Nov , , Nov Nov-15 14, , , Debt Date Gross Purchase (Cr.) Gross Sale (Cr.) Net (Cr.) 2-Nov-15 8, , , Nov-15 4, , Nov-15 5, , , Nov-15 5, , , , , , Nov-15 81, , ,

2 Sensex & Nifty: S&P BSE SENSEX Date Close Price Points Diff %age Change , % % % % -1.92% CNX Nifty Index Date Close Price Points Diff %age Change , % % % % -1.62% Outlook In spite of some disappointing economic data flow, poor corporate earnings, political setback for the central government in state elections, and a rise in social tension, India remains a favorite in the investor community. The government has made some progress in reaching out to foreign investors, there has been some traction on spending on roads and highways, and the running of the civil government has become more efficient. On the external front, a bust in global commodity prices has reduced India s import bill, especially led by lower oil and gold imports but exports have been affected as well (Indian exports have fared the worst within Asia this year), given the outsized share of oil-exports in total exports (18% of total). Consequently in the first half of 2015, net exports contribution to growth has been nil on average. As long as global commodity prices remain depressed, India s exports will also likely remain muted, in our view, especially given the nature of exports composition. With China s economic growth expected to remain weak and global demand expected to pick up only modestly in the years to come, commodity prices are likely to remain soft, in our view. This implies that an export-led strategy to boost growth may not help in the shortterm, which makes it even more critical that domestic demand revives expeditiously to push India s growth above 8%+ levels. The global risks stem from the potential impact of Fed s rates normalization policy, further growth slowdown in China and advanced countries, persistence of global trade deflation, contagion effects from fragile EM countries and unexpected geo-political risks. With India having become much more globalized than a decade ago, potential manifestation of any or several of these risks would may continue to put downside pressure on India s growth. Note on NFO Tata MF is coming up with a unique theme named - Own a piece of India which involves simultaneous launch of 5 NFOs along with an existing fund. It is a maiden new equity fund offer from the house of Tata after over 6 years. The objective is to seek long term capital appreciation by investing at least 80% of the net assets in equity/equity related instruments. For the first time, Tata has followed a multi-manager approach which increases depth of investment management thought and decision making process. This could be a complete solution for customized/tailor made portfolio. For ease of investment, one application and one cheque would suffice for investing in these multiple schemes. NFOs will open on 4 th Dec 2015 and close on 18 th Dec Following are the NFOs offered: Tata Digital India Tata India Pharma and Healthcare Tata India Consumer Tata Banking and Financial Services Tata Resources and Energy Tata Infrastructure (existing) 2

3 MONTHLY NEWSLETTER 3

4 Industry News Interview with MR. RAVI GOPALAKRISHNAN FUND MANAGER - CANARA ROBECO Mr. Ravi Gopalakrishnan is the Head Equities, Canara Robeco Mutual Fund. He is responsible for the overall performance of the domestic equity segment. He has 24 years of experience in research and asset management with Pramerica AMC, Principal PNB AMC, SUN F&C and UTI Mutual Fund. He has been with Canara Robeco since September He manages CR Equity Diversified and Large Cap+ and is Co-Fund Manager for CR Infrastructure, CR MIP and CR Emerging Equities. WE ENDEAVOR TO PROVIDE OUR INVESTORS WITH STEADY AND CONSISTENT RETURNS MR. RAVI GOPALAKRISHNAN, FUND MANAGER CANARA ROBECO. How often do you re-balance your equity allocation? While altering the scheme s exposure to a particular company the main criteria looked at is the long term earning potential of a company rather than short term impact due to market events. Re-balancing is done largely on account of fundamental and valuation considerations. What is your advice to investors in the current scenario with respect to investing in equity related instruments? In the growth phase of an economy, equities usually deliver faster earnings growth and therefore offer attractive investment opportunities. The current improving macroeconomic scenario and declining interest rates provide twin support to businesses driving their growth. We believe, equities are likely to be the best asset class from a 3-5 year investment horizon. Investors wanting to participate in the India s growth story may maintain overweight position in equities in their portfolios. How do you cope up with the ever increasing competition in the equity funds space? While there is no denial that there is very high competition in the Mutual fund space, the performance of a fund house largely depends on the fund performance and its distribution franchise. At Canara Robeco, we strongly believe in offering value added products to our Investors. We endeavor to provide our investors with steady and consistent returns from a long term perspective across all our products. In addition to the strong brand associated with both Canara Bank and Robeco, we have a very strong network of distributors Pan India, including the wide branch network of Canara Bank. India has highest population of people up to 35 years of age, what will be your advice to this set of investors? Young investors should ideally invest majority of their investments in equity to benefit from the opportunities prevailing in the Indian Equities markets. Certain investors who might have missed the past rally could view the recent correction as a good entry point. These investors may adopt a staggered approach to investing to even out the market volatility as well as participate in the India s growth story. 4

5 Readers Corner SIX WAYS TO HELP YOUR CHILD BECOME FINANCIALLY STRONG Kids have become smarter and smarter as time went by. This is nothing special to discuss. But, the million dollar question is, have they become financially smarter? Answer is both Yes as well as No. They are slightly better thanks to better financial awareness in the adults (just going by intuition, no proper data to substantiate this). However, there is much more to go in this regard. Personal finance, which is the most used aspect in our daily lives, is still not included in the curriculum. Kids do not seem to understand the concepts of money management until they grow up and even worse until they encounter bad experiences such as mis-sellings or debt traps or any other financial setbacks. This is a small effort on our part to teach you how to teach your children personal finance now so that they would be financially strong later. To read the full Article, Click here FATCA REGULATION - HOW DOES IT IMPACT YOU? FATCA: It has been in the news recently. There are a lot of queries raised on it. This is FATCA. It is a mandatory regulation with regards to international taxation which needs to be filled by all individuals. So, what is it and how will it impact you? Let us see now. FATCA is Foreign Account Tax Compliance Act, initiated by the USA in order to fight suspected tax evasion by its citizens. It is being implemented as part of the Hiring Incentives to Restore Employment (HIRE) act. It intends to provide the Govt with information on all financial accounts including any undisclosed assets held by citizens of USA, including NRIs. It has now transformed into an information sharing agreement between India and USA. FATCA mandates NRIs living in USA need to disclose all the financial assets held by them in both the countries. These include all the deposits, Mutual Fund investments, etc along with the total income earned from all sources. This is set to be a mutual benefit for the two countries as a whole. To read the full Article, Click here 5

6 SIP Performance S&P BSE SENSEX Large-cap Current NAV (`) 3 Year SIP 5 Year SIP Rs Rs Profit-SIP XIRR(%) Profit-SIP XIRR(%) Birla SL Advantage Fund(G) Birla SL Equity Fund(G) SBI BlueChip Fund-Reg(G) BNP Paribas Equity Fund(G) Reliance Top 200 Fund(G) HDFC Capital Builder Fund(G) Birla SL Top 100 Fund(G) Multi cap Birla SL India Opportunities Fund(G) Birla SL Pure Value Fund(G) L&T India Value Fund(G) Escorts High Yield Eq(G) Escorts Leading Sectors Fund(G) Franklin India High Growth Cos Fund(G) Birla SL Buy India Fund(G) Mid Cap & Small Cap SBI Small & Midcap Fund-Reg(G) Canara Rob Emerg Eq Fund-Reg(G) Sundaram S.M.I.L.E Fund(G) DSPBR Micro-Cap Fund-Reg(G) Escorts Growth(G) Reliance Small Cap Fund(G) ELSS Axis LT Equity Fund(G) Reliance Tax Saver (ELSS) Fund(G) Birla SL Tax Relief '96(G) Birla SL Tax Relief'96 Fund- (ELSS U/S 80C)-(G) Birla SL Tax Plan(G) Franklin India Taxshield(G) Sector SBI Pharma Fund-Reg(G) Reliance Pharma Fund(G) ICICI Pru Exports & Other Services Fund-Reg(G) Franklin Build India Fund(G) UTI Pharma & Healthcare Fund(G) Kotak Infra & Eco Reform Fund(G) Index ICICI Pru Nifty Junior Index Fund-Reg(G) IDBI Nifty Junior Index Fund(G) GS CNX 500(G) HDFC Index Fund-Sensex Plus(G) HDFC Index Fund-Sensex Plus(G)(Post Addendum) As on 03 rd November 15 (Funds have been arranged on 5 years performance) 6

7 Category Average s Category Diversified Sector Funds Sub Category 1 Week 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year Since Inception Large-cap Mid-cap Multi-cap Small-cap Banks & Financial Services Energy & Power FMCG Infrastructure Media & Entertainment Pharma & Health Care Service Industry TECk Speciality Contra Dividend Yield Index - Nifty Index - Sensex MNC Equity Exchange Traded Funds Equity Linked Savings Scheme Arbitrage Funds Debt-Oriented Equity-Oriented Asset Allocation Balanced Funds Debt-Oriented Equity-Oriented Category Capital Protection Funds Monthly Income Plans Fund Of Funds Debt-Oriented Equity-Oriented Hybrid-Oriented Gold - FOF Gold Exchange Traded Funds Income Gilt Floating Rate Speciality- Debt Long Term Medium Term Short Term Long Term Medium Term Short Term Long Term Floating Rate Med Term Floating Rate Short Term Floating Rate Interval Funds - Half Yrly Interval Funds - Monthly Interval Funds - Quarterly Interval Funds - Yearly Liquid Ultra Short Term Plan s are as on 30 th November 15 7

8 Fixed Deposits Schemes FD Name Rating Industry Interest Rate * (Up to) Bajaj Finance Ltd. FAAA by CRISIL ICRA MAAA Bajaj Finserv is the most diversifed non-bank in the country, the largest financier of consumer durables in India and one of the most profitable firms in the category. 9.15% Cent Bank Home Finance Limited FA Stable by CRISIL Cent Bank Home Finance Ltd is housing finance company recognized by National Housing Bank. 8.75% DHFL Aashray Deposit Plus CARE AAA FD, BWR FAAA Dewan Housing Finance Ltd (DHFL) is the second housing finance company to be set up in the private sector in India. 9.35% Gruh Finance Ltd. MAAA by ICRA, FAAA by CRISIL GRUH Finance Ltd is subsidiary of HDFC Ltd is housing finance company (HFC) recognized by National Housing Bank. 8.50% HDFC Ltd. FAAA by CRISIL, MAAA by ICRA A pioneer and leader in housing finance in India, since inception, HDFC has assisted more than 4.9 million customers to own a home of their own. HDFC is the Largest mobiliser of public deposits outside the banking system and the HDFC Group has a strong asset base of over Rs.2.97 trillion and a customer base of over 42.5 million. 8.65% HUDCO taa+(ind) by FITCH, CARE AA+(FD) by CARE HUDCO is a premier techno-financing company set up in 1970 by the Government of India to accelerate the pace of housing and urban development in the country. 8.40% ICICI Home Finance Ltd CARE FAAA, ICRA MAAA ICICI Home Finance Company Limited is one of the leaders in the Indian mortgage finance and realty space. 9.05% KTDFC KTDFC is a Non Banking Financial Company fully owned by the Government of Kerala. 9.00% LIC Housing Finance Ltd. FAAA / STABLE by CRISIL One of India s largest housing finance companies, having nation-wide network. Consistent record of dividend payments. 8.75% Mahindra & Mahindra Financial Services Ltd CRISIL FAAA Mahindra and Mahindra Financial Services Limited (MMFSL) commenced its journey two decades back in the rural non-banking finance industry. 8.70% PNB Housing Finance Ltd. FAAA by CRISIL PNB Housing Finance (PNBHF) is a subsidiary of Punjab National Bank and a partner of Destimoney Enterprises Pvt. Ltd. PNBHF was incorporated in 1988 and is based in New Delhi. 8.50% Shriram City Union Finance Ltd. IND +AA- CARE AA FD As a deposit-accepting non-banking financial company (NBFC), Shriram City is today India s premier financial services company specializing in retail finance. 9.25% Shriram Unnati Deposits MAA+ by ICRA, FAA+ by CRISIL With a track record of about 30 years in this business, STFC is among the leading organized finance provider for the commercial vehicle industry 9.25% Sundaram BNP Paribas Home Finance Ltd. ICRA MAA+ Sundaram BNP Paribas Home Finance combines its expertise in Home Finance with the Service Orientiation of its promoter Sundaram Finance. 9.50% * highest rate including additional interest for Senior citizens, employees etc. wherever applicable 8

9 Equity Funds Performance Scheme Name Latest NAV (`) Absolute CAGR 1 Year 3 Year 5 Year SINCE INCEPTION Diversified SBI Small & Midcap Fund-Reg(G) Reliance Small Cap Fund(G) DSPBR Micro-Cap Fund-Reg(G) Franklin India Smaller Cos Fund(G) Mirae Asset Emerging BlueChip-Reg(G) ELSS Axis LT Equity Fund(G) Reliance Tax Saver (ELSS) Fund(G) Birla SL Tax Relief '96(G) Birla SL Tax Relief'96 Fund- (ELSS U/S 80C of IT ACT)-(G) Birla SL Tax Plan(G) Sector ICICI Pru Exports & Other Services Fund-Reg(G) SBI Pharma Fund-Reg(G) Franklin Build India Fund(G) Reliance Pharma Fund(G) ICICI Pru Technology Fund-Reg(G) Dividend Yield BNP Paribas Dividend Yield Fund(G) Tata Dividend Yield Fund(G) Birla SL Dividend Yield Plus(G) UTI Dividend Yield Fund(G) Principal Dividend Yield Fund(G) Equity Index Birla SL MNC Fund(G) UTI MNC Fund(G) Religare Invesco Contra Fund(G) Equity FOF Franklin India Feeder - Franklin U.S. Opportunities Fund(G) DSPBR US Flexible Equity Fund-Reg(G) Quantum Equity FoF Fund(G) Birla SL 5 Star Multi-Mgr FoF(G) Kotak Asset Allocator Fund(G) (Funds has been arranged on the basis of 3 years performance) 9

10 Debt Funds Performance Scheme Name Gilt Funds Latest NAV (`) Absolute CAGR 1 Year 3 Year 5 Year SINCE INCEPTION Sundaram Gilt Fund(G) SBI Magnum Gilt-LTP-Reg(G) L&T Gilt Fund(G) IDFC G Sec-STP-Reg(G) Tata Gilt Mid Term Fund(G) Income ICICI Pru Long Term Plan-Reg(G) Tata Dynamic Bond Fund-Plan A(G) Birla SL Medium Term Fund(G) Birla SL Treasury Optimizer Plan(G) SBI Corporate Bond Fund-Reg(G) Hybrid Funds Performance Scheme Name Latest NAV (`) Absolute CAGR 1 Year 3 Year 5 Year SINCE INCEPTION Balanced L&T India Prudence Fund(G) HDFC Balanced Fund(G) SBI Magnum Balanced Fund-Reg(G) Tata Balanced Fund(G) Franklin India Balanced Fund(G) MIP ICICI Pru Child Care Plan-Study Plan Birla SL MIP II-Wealth 25(G) SBI Magnum Children Benefit Plan ICICI Pru MIP 25(G) Franklin India MIP(G) Arbitrage Edelweiss Absolute Fund(G) ICICI Pru Equity-Arbitrage Fund-Reg(G) Reliance Arbitrage Advantage Fund(G) Kotak Equity Arbitrage Scheme(G) ICICI Pru Blended-B-I-Reg(G) Gold-FOF Axis Gold Fund(G) ICICI Pru Regular Gold Savings Fund(G) Quantum Gold Saving Fund(G) HDFC Gold Fund(G) IDBI Gold Fund(G) (Funds has been arranged on the basis of 1 year performance) 10

11 Global Markets at a Glance Exhibit: Nifty Exhibit: INR Exhibit: India 10 Yr Yld % Exhibit: S&P 500 2,110 2,100 2,090 2,080 2,070 2,060 Exhibit: Dollar Index Exhibit: US 10 Yr Yld % Exhibit: Euro Stoxx Exhibit: Eur Exhibit: Germany 10 Yr Yld % Exhibit: Nikkei Exhibit: JPY Exhibit: Japan 10 Yr Yld % Exhibit: Shanghai Exhibit: CNY Exhibit: China 10 Yr Yld % Source: Bloomberg, Karvy Research 11

12 Indices Watch Indian Indices: Index Name As on 31-Oct-15 As on -15 % Change Index Name As on 31-Oct-15 As on -15 % Change S&P BSE Capital Goods % S&P BSE BANKEX % S&P BSE Power Index % S&P BSE PSU % S&P BSE DOLLEX % S&P BSE AUTO Index % S&P BSE SENSEX % S&P BSE % S&P BSE % S&P BSE % S&P BSE O & G Index % S&P BSE METAL Index % S&P BSE Mid-Cap % S&P BSE GREENEX % S&P BSE Small-Cap % S&P BSE TECk Index % S&P BSE Consumer Durables % S&P BSE IT % S&P BSE Health Care % S&P BSE FMCG % S&P BSE Realty Index % Global Indices: NIFTY FMCG % NIFTY MEDIA % NIFTY COMMODITIES % NIFTY % Nifty 500 Shariah index % NIFTY PSE % NIFTY DIV OPPS % NIFTY FINANCE % NIFTY IT % NIFTY REALTY % Nifty Midcap % INDIA VIX % NIFTY MIDCAP % NIFTY SERV SECTOR % NIFTY % NIFTY INFRA % NIFTY PHARMA % NIFTY METAL % NIFTY PSU BANK % NIFTY % NIFTY % NIFTY CONSUMPTION % NIFTY BANK % Index Name As on 31-Oct-15 As on -15 % Change NIFTY ENERGY % NIFTY MNC % Nikkei % Nasdaq % S&P % DAX % CAC % Dow Jones % BEL % NYSE % Dow Jones % FTSE % Nifty-TRI % NIFTY AUTO % For more information on MUTUAL FUNDS call or contact your nearest Karvy branch. Research Team PF/MFNL/ /25 Ankit Choradia ankit.choradia@karvy.com Phone : Production: Naga Babu K Disclaimer The information and views presented in this report are prepared by Karvy Stock Broking Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Stock Broking nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. This report is intended for a restricted audience and we are not soliciting any action based on it. 12