Market Overview (as on April 30, 2018) Flows Apr-18 Mar-18 Feb-18 FIIs (Net Purchases / Sales) (Rs cr) MFs (Net Purchases / Sales) (Rs cr) Domestic Markets Macro Indicators GDP (YoY%) IIP (YoY%) Crude ($ bbl) Core Sector Growth (YoY%) Trade Deficit ($ bn) Latest Update 7.2 7.1 74.69 (Apr 30) 4.1 (Mar) (13.7) (Mar) (13.5) 22.0 Current Account Deficit ($ bn) FII Holding in Indian Equities (%) # Note: # FII hldg includes ADR/GDR (BSE500 Index); Data Source: Crisil Research (6468) 13,372 (12,491) 11,294 9,256 16,181 Apr-18 (%) Current PE 10 Yr Average S&P BSE Sensex 6.6 23.9 18.8 Nifty 50 6.2 26.0 18.6 S&P BSE Auto 7.4 25.0 16.4 S&P BSE Bankex 5.3 32.5 15.2 S&P BSE Capital Goods 5.8 30.7 29.6 S&P BSE Consumer Durables 0.5 44.8 20.6 S&P BSE FMCG 9.9 52.7 35.4 S&P BSE Healthcare 7.6 35.0 28.4 S&P BSE IT 12.1 20.0 19.3 S&P BSE Oil & Gas (1.3) 12.4 13.3 S&P BSE PSU (0.0) 24.7 13.2 S&P BSE Realty 9.0 16.0 23.4 S&P BSE Small Cap 8.3 80.3 77.0 S&P BSE Teck Index 9.0 21.5 21.3 Global Markets Apr-18 Current 10 Yr. (%) PE Avg. US 0.2 18.3 15.5 UK 6.4 13.9 18.9 Japan 4.7 16.8 20.3 Hong Kong 2.4 12.6 11.5 Singapore 5.4 11.7 12.2 China 2.8 9.2 9.0 Earnings Growth (%) FY18E FY19E FY20E Sensex 9 23 20 Previous Update 6.5 7.4 (Jan) 70.27 (Mar 29) 5.3 (12.0) (7.2) 22.5 Global Market Update The US economy expanded at an annual rate of 2.3% in Q1 2018 compared with 2.9% in Q4 2017. The IMF upgraded the US growth projection for 2018 and 2019 to 2.9% and 2.7%, respectively on the back of benefits of tax cuts passed in December 2017 as well as a $1.3 trillion spending bill. The US Federal Reserve kept its benchmark interest rate unchanged in its policy meeting and also noted that inflation is nearing its 2% target rate. European Central Bank (ECB) kept its key interest rates unchanged and reaffirmed its decision to make net asset purchases of 30 billion euro per month until the end of September 2018, or beyond, if necessary. ECB Chief acknowledged some moderation in the Eurozone economy but added that growth is expected to remain solid and broad-based. The UK s economic growth slowed to 0.1% quarter-on-quarter in Q1 2018, slowest rate since 2012 owing to sharp fall in construction output and sluggish manufacturing sector. Bank of Japan kept its monetary policy unchanged in the meeting in April. The Japanese Government maintained its economic view, saying the economy is recovering at a moderate pace. China s economy grew 6.8% in Q1 2018, same as that in the previous quarter supported by strong consumer demand and property investment. Source: CRISIL Research Indian Market Update Domestic equities recovered in April 2018 after two months of decline with Benchmarks S&P BSE Sensex and Nifty 50 climbing 6.6% and 6.2% in April 2018 respectively. The equity market rallied after the RBI kept the policy rates unchanged and lowered the inflation forecast in its April 2018 Monetary Policy Committee meet. Normal monsoon forecast for June-September 2018, easing of inflation and healthy industrial growth were some of the other key boosters. Market sentiment was also supported by upbeat domestic corporate earnings from some of the index majors. RBI easing norms for overseas investments in bonds and persistent buying by Domestic Institutional Investors (DIIs) also augured well for the market. Sentiments strengthened further after the IMF said India is expected to grow 7.4% in 2018 and 7.8% in 2019. More gains were capped after minutes of the RBI s Monetary Policy Committee's meeting showed that the central bank could take a more hawkish tone starting as early as June 2018 despite easing inflation. Volatility ahead of the expiry of the April 2018 derivatives contract and selling of the domestic equities by the Foreign Institutional Investors (FIIs) also pulled down the market. Sporadic fall in global equities amid trade tensions between US and China, rising US bond yields and rising international crude oil prices also chipped off some gains from the market. Majority of S&P BSE sectoral indices ended higher in April 2018. S&P BSE IT index was the top performer up 12.12%. A rally in auto stocks was brought on by positive sales data from some sector majors. Oil and Gas companies were among the laggards on reports that the Government has asked oil marketing companies to absorb Re 1 per litre price hike. Source: NSE, BSE; Crisil Research
Market Outlook and Triggers Indian markets ended April 2018 on a positive note, up by ~6%, outperforming the emerging markets for the first time in 2018 and was the best-performing among the larger emerging market economies. The outperformance was driven primarily by improving earnings in select sectors, even as the macro conditions remained under pressure due to rising crude oil prices. The pressure extended to the currency markets as well, which remained volatile. However, micro-economic factors signal a mixed performance. While on one hand, indicators such as auto/tractor volumes, airline traffic growth, and petroleum consumption have remained strong for the past few months, others such as port traffic, railway freight and the Naukri index have started showing weakness after a few months of improvement. Globally, markets remained volatile owing to the changing dynamics between countries leading to geo-political tensions and fear of trade wars. Some countries took affirmative actions by increasing import tariffs causing nervousness among market participants and subsequently, the markets. At this juncture, we believe investors may choose asset allocation schemes or conservative hybrid schemes. For those investors who are looking at pure equity exposure, we recommend large-cap oriented schemes. Equity Valuation Index Equity valuations show that the market valuations are in the zone where investors are recommended to invest in asset allocation schemes with low net equity levels. Equity valuation index is calculated by assigning equal weights to Price to equity (PE), Price to book (PB), G-Sec*PE and Market Cap to Gross Domestic Product (GDP) EIF ICICI Prudential Equity Income Fund; BAF ICICI Prudential Balanced Advantage Fund; Dynamic ICICI Prudential Dynamic Plan; E&D ICICI Prudential Equity & Debt Fund None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the investors are requested to consult their financial advisors before investing.
Our Recommendations Investors may continue with their SIPs in pure equity schemes. As uncertainty regarding global events and state elections cannot be ruled out, we believe the markets could be volatile in the near term. Hence for new investors we recommend investments in asset allocation schemes or conservative hybrid schemes. Investors with high risk appetite could invest in thematic schemes encompassing export and services and FMCG sectors. Our Recommendations Equity Schemes Pure Equity Schemes Asset Allocation Schemes Conservative Hybrid Schemes Theme-based schemes ICICI Prudential Value Discovery Fund ICICI Prudential Top 100 Fund ICICI Prudential Multicap Fund ICICI Prudential Focused Bluechip Equity Fund ICICI Prudential Balanced Advantage Fund ICICI Prudential Equity & Debt Fund ICICI Prudential Dynamic Plan ICICI Prudential Equity Income Fund ICICI Prudential MIP 25 (An Open Ended Income Scheme. Monthly income is not assured and is subject to the availability of distributable surplus.) ICICI Prudential Exports and Other Services Fund ICICI Prudential FMCG Fund These schemes are positioned aggressively to gain from recovery in the economy. These Schemes aim to generate long term wealth creation. These schemes aim to benefit from volatility and can be suitable for investors aiming to participate in equities with low volatility. This scheme predominantly invests in fixed income securities and a portion in equity and equity related securities Investors could invest in this thematic scheme for tactical allocation. It would be a high risk investment option. Disclaimer & Riskometers ICICI Prudential Focused Bluechip Equity Fund is suitable for investors who are seeking*: A focused large cap equity fund that aims for growth by investing in companies in the large cap category ICICI Prudential Top 100 Fund is suitable for investors who are seeking*: An equity fund that aims to provide long term capital appreciation by predominantly investing in equity and equity related securities. ICICI Prudential Value Discovery Fund is suitable for investors who are seeking*: A diversified equity fund that aims to generate returns by investing in stocks with attractive valuations
ICICI Prudential Equity & Debt Fund is suitable for investors who are seeking*: A balanced fund aiming for long term capital appreciation and current income by investing in equity as well as fixed income securities. ICICI Prudential Balanced Advantage Fund is suitable for investors who are seeking*: An equity fund that aims for growth by investing in equity and derivatives. ICICI Prudential Multicap Fund is suitable for investors who are seeking*: A growth oriented equity fund that invests in equity and equity related securities of core sectors and associated feeder industries. ICICI Prudential Equity Income Fund is suitable for investors who are seeking*: An equity scheme that seeks to generate regular income through investments in fixed income securities, arbitrage and other derivative strategies and aim for long term capital appreciation by investing in equity and equity related instruments. ICICI Prudential Exports and Other Services Fund is suitable for investors who are seeking*: An equity fund that aims for growth by predominantly investing in companies belonging to the service industry. ICICI Prudential Dynamic Plan is suitable for investors who are seeking*: A diversifed equity fund that aims for growth by investing in equity and debt (for defensive considerations) ICICI Prudential MIP 25 (An Open Ended Income Scheme. Monthly income is not assured and is subject to the availability of distributable surplus.) This Product is suitable for investors who are seeking*: Medium to Long term regular income solution A hybrid fund that aims to generate regular income through investments primarily in debt and money market instruments and long term capital appreciation by investing a portion in equity.
ICICI Prudential FMCG Fund is suitable for investors who are seeking*: An equity fund that primarily invests in a select group of companies in the FMCG sector. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. In the preparation of the material contained in this document, the AMC has used information that is publicly available, including information developed in-house. Information gathered and material used in this document is believed to be from reliable sources. The Fund however does not warrant the accuracy, reasonableness and/or completeness of any information. For data reference to any third party in this material no such party will assume any liability for the same. All recipients of this material should before dealing and or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice and carefully read the scheme information document. We have included statements in this document, which contain words, or phrases such as "will", "expect", "should", "believe" and similar expressions or variations of such expressions that are "forward looking statements". Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monitory and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic and foreign laws, regulations and taxes and changes in competition in the industry. All data/information used in the preparation of this material is dated and may or may not be relevant any time after the issuance of this material. The AMC takes no responsibility of updating any data/information in this material from time to time. he AMC (including its affiliates), the Fund and any of its officers directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on the basis of this material.