% % Global Economy Strong global economic recovery remains a distant dream as the global economy is expected to grow moderately in the next couple of years. The Organization for Economic Cooperation and Development (OECD) has forecasted a moderate expansion of global output in the next two years as risks and vulnerabilities persist in the Eurozone and Japan. The US economy expanded at a faster rate of 3.9% (annual) in Q3 from the earlier estimate of 3.5%. Deflation worries continue to haunt the Eurozone. European Central Bank President Mario Draghi said that the central bank may expand its quantitative easing programme to rescue the Eurozone economy. In Asia, Japan fell into a recession after the country s Gross Domestic Product (GDP) shrank 1.6% on an annualised basis in the third quarter compared with a 7.3% contraction in the second quarter. In order to revive the slowing economy, China lowered its one-year deposit rate for the first time since 2012 to 2.75% from 3.0%. (Data Source: Reuters) Fundamentals and Economics Growth India s GDP slowed to 5.3% during the quarter July to September 2014 from 5.7% in the previous quarter. The growth rates for manufacturing, agriculture and mining sectors were 0.1%, 3.2% and 1.9% respectively as compared to 3.5%, 3.8% and 2.1% in the June 2014 quarter. 8 6 4 2 0 GDP Growth Rate 6.5 5.4 4.5 4.6 4.4 4.4 4.7 5.2 4.6 4.6 5.7 5.3 6.00 4.00 2.00 0.00-2.00-4.00 Index of Industrial Production (IIP) -1.60-1.30-0.60 0.10-1.90-0.50 3.40 4.70 3.40 2.50 0.40 0.50 Source: Bloomberg The Index of Industrial Production (IIP) growth in September 2014 was 2.5% versus a revised 0.5% in August 2014. In the period April-September 2014, IIP rose to 2.8%. Manufacturing output saw some pick-up rose 2.5% in September 2014 after two consecutive months of contraction. Growth in electricity generation fell to 3.9% in September 2014 after growing at an average 13% in the preceding three months. Meanwhile, mining output grew 0.7%. Consumer goods output fell 4% with most of the decline coming from consumer durables - down 11.3%. The capital goods output recorded a growth of 11.6% compared with contraction of 6.6% in the same month last year. India s core sector growth in September 2014 plummeted to 1.9%, the slowest pace in eight months, against 9% in the same month last year due to fall in output of crude oil, natural gas, refinery products and fertiliser. (Data Source: mospi.nic.in, CRISIL Centre for Economic Research (CCER)) Inflation India s combined Consumer Price Index (CPI) inflation fell to 5.52% in October 2014 from 6.46% in September 2014 primarily due to a fall in food inflation, which declined to 5.59% in October 2014 from 7.67% in the previous month. In the food basket, the most significant decline was in vegetable inflation which dropped to 1.45% in the October 2014 from 8.59% in September 2014. Fruit inflation tumbled to 17.49% in October 2014 from 22.40% while inflation in pulses and products rose to 7.51% in October 2014 from 7.18% in the previous month.

-31.8-10.6-10.0-10.3-9.5-10.5-8.2-10.1-11.2-11.8-12.2-14.2-13.4-17.5-18.9-20.2-21.7-17.1-21.1-18.2-21.8-10.8 $ Bn -5.2-4.1-7.8 $ Bn -1.2 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 % 13 11 9 7 5 3 1 Inflation WPI CPI Fuel and light inflation also recorded a fall of 3.29% in October 2014 from 3.45% in September 2014. Inflation in rural and urban areas was 5.52% and 5.55% in October 2014 against 6.68% and 6.34% in September 2014 respectively. The Wholesale Price Index (WPI)-based inflation eased to a five-year low of 1.77% in October 2014 versus 2.38% in September 2014 and 7.24% in the same month last year. Food and fuel inflation dipped to 2.7% and 0.43%, respectively, in October 2014. (Data Source: mospi.nic.in, CCER) Source: Bloomberg Deficit India's fiscal deficit was Rs. 4.76 lakh cr ($76.77 bn) during April-October 2014, or 89.6% of the Budget Estimate, compared to 84.4% for the same period in the last fiscal. The country s current account deficit (CAD) narrowed sharply to $7.8 bn (1.7% of the GDP) in the April-June 2014 quarter from $21.8 bn (4.8% of GDP) in the corresponding quarter last year. The sharp correction in CAD was driven by an increase in exports coupled with contraction in imports. Capital flows stood at $19.8 bn almost double of the last quarter buoyed by an increase in foreign institutional inflows (FIIs) as well as foreign direct investments (FDI). Current Account Deficit Trade Deficit 0.0-10.0 0-5 -20.0-10 -30.0-40.0-15 Source: Bloomberg India s trade deficit widened to $13.4 bn in October 2014 from $10.6 bn a year ago, but narrowed from the deficit of $14.25 bn last month. The widening of trade deficit was due to a rise in gold imports. Gold imports rose to 106.3 tonnes ($ 4.2 bn) in October 2014 the highest monthly imports this fiscal year, from 26 tonnes ($1.1 bn) a year ago. However, a 19% y-o-y fall in oil imports to $12.4 bn due to lower crude oil prices in October 2014 helped to cap the rise in trade deficit in October 2014. The total imports climbed 3.6% y-o-y to $39.5 bn in October 2014. Meanwhile, exports fell 5% y-o-y to $26.1 bn in October 2014. The slower growth in exports in October 2014 can be partly explained by a high base effect. (Data Source: CCER)

Brent Crude Brent crude oil prices plummeted 18.3% in November 2014 lowest level in more than four years to close at $ 70.15 a barrel on November 28, 2014 compared to $85.86 a barrel on October 31, 2014. Prices fell sharply after the Organization of the Petroleum Exporting Countries (OPEC) members decided to maintain oil production at 30 mn barrels per day. Sentiments were also dented on a stronger dollar and worries about oversupplies. Some losses were however cut short on sporadic lower-than-expected rise in US crude oil inventories. Currency The rupee weakened against the US dollar in November 2014, ending at Rs. 62.03 per dollar on November 28, 2014 as against Rs. 61.36 per dollar on October 31, 2014. Dollar weakness following lower-than-expected non-farm payroll figures supported the rupee at the start of the month. However, the rupee depreciated tracking weakness in Asian currencies after Japan recorded weak GDP figures for the quarter. Weakness in the euro coupled with persistent demand for the greenback for oil and defence-related payments weighed on the local currency. Weak Chinese manufacturing data and the release of the US Federal Open Market Committee (FOMC) meeting minutes also limited rupee gains. However, China s decision to cut interest rates helped the rupee recoup some losses. Sporadic dollar sales by custodian banks and exporters also helped the rupee. Market Sentiments FIIs (Foreign Institutional Inflows) continued to be buyers of equities in November 2014 the tenth consecutive month of buying. FIIs bought equities worth Rs. 14,302 cr in November 2014 compared with buying of Rs. 892 cr in October 2014. Mutual funds continued to remain buyers for the seventh successive month very marginal versus the previous month. The net buying by mutual funds was Rs. 1677 cr in November 2014 against buying of Rs. 5,940 cr in October 2014. (Data Source: SEBI) Market Performance The positive momentum continued for the Indian equity market with key equity indices CNX Nifty and S&P BSE Sensex gaining 3.20% and 2.97%, respectively, in November 2014. S&P BSE indices showed mixed performance in November 2014. Stock specific developments and anticipation of interest rate cuts spurred buying in banking shares. S&P BSE BANKEX was the top gainer in the month up 8.75%. S&P BSE Realty index followed rising 8.35% after the government relaxed foreign direct investment (FDI) norms for the sector. S&P BSE Metal was the biggest loser declining 4.59% due to sell-off in metal stocks amid China s disappointing manufacturing data. S&P BSE Oil & Gas index fell 2.20% following dismal earnings reports from oil marketing companies and as the government hiked excise duty on unbranded petrol and diesel. (Data Source: NSE, BSE) Triggers Goods and Services Tax (GST), Land acquisition bill and passing of FDI in insurance bill in parliament are expected to be the key triggers for the markets going ahead. Implementation of GST can bring benefits to corporate India in terms of savings in taxes and reducing legal hassles thereby allowing for a new supply chain model based on economies of scale and improve competitiveness vis-à-vis unorganized players. Other benefits would be abolition of multiple tax laws, reduction in cost of payment and collection of tax, clarity and homogeneity in taxing system, faster assessment and reduced litigation, consumption-based internationally accepted taxation and removal of distortions and simplification of the tax systems. The Government is working towards bringing necessary changes in the Land acquisition bill which has acted as a deterrent for acquiring land for infrastructure projects. The removal of obstacles in the land laws can also be a key to develop the concept of smart cities in India.

The winter session of the parliament is also expected to see amendment to the Insurance Act. The amendment can result in increase in FDI limit in the sector to 49% from existing 26%. This can also enable higher FDI flows into the pension sector. Outlook Growth dynamics appear to have bottomed out. Global developments of softer crude oil prices and commodity prices and the concurrent drop in the retail inflation (especially food) are likely positive factors that can support a pick-up in overall growth. Much of the future growth dynamics will depend on the continuation of the government s efforts to address the revival of the investment cycle. Our outlook on equities can be viewed from four perspectives: Cycle: We believe the current market cycle shall reach its peak when the industrial production and credit growth reaches double digit growth and government revenue deficit is low. Taking note of these factors, we believe we are away from the peak of the current bull cycle. Triggers: GST, Land Acquisition Bill, FDI in insurance and labour laws can be potential triggers for the equity markets going ahead. These reforms will be instrumental in restoring the confidence of domestic as well as International investors into the Indian economy. Sentiments: FII flows have been robust and we believe once dis-investment program kick starts, it may prove sentiment booster for the equity market participants. Valuations: The market is moving ahead of the economic cycle and has hit record high. However it is trading at fair valuations. We continue to remain bullish but with a cautious approach. We continue to recommend equities to investors with 3 years and above investment horizon. We believe there is a fair chance of earning reasonable returns from equities in the long term. Recommendations Types of Investors Funds Rationale For long term investors and as a part of core mutual fund portfolio For investors who track their investments frequently For investors who have 3 year investment horizon 1. ICICI Prudential Focused Bluechip Equity Fund 2. ICICI Prudential Value Discovery Fund 3. ICICI Prudential Target Returns Fund (There is no guarantee or assurance of returns) 1. ICICI Prudential Dynamic Plan 2. ICICI Prudential Balanced Advantage Fund 3. ICICI Prudential Balanced Fund 1. ICICI Prudential Infrastructure Fund 2. ICICI Prudential Banking & Financial Services Fund 3. ICICI Prudential Midcap Fund These funds are suitable for investors who are willing to invest for a fairly long term with an aim to benefit from the full investment cycle. These funds have the potential to specifically benefit from range bound equity markets and can generate reasonable return per unit of risk. These funds are suitable for investors seeking to participate in equities with relatively lower risk. These funds can benefit from revival in the economy and provides aggressive investment opportunity over next three years. These funds are suitable for investors aiming for absolute returns rather than risk adjusted returns over next three years. Note: None of the aforesaid recommendations are based on any assumptions. These are purely for reference and it is advisable to consult the financial advisors before investing.

Note - Risk may be represented as: (BLUE) investors understand that their principal will be at low risk (YELLOW) investors understand that their principal will be at medium risk (BROWN) investors understand that their principal will be at high risk Disclaimer Mutual Fund investments are subject to market risks, read all scheme related documents carefully. All figures and other data given in this document are as on 31st October, 2014 unless stated otherwise. The same may or may not be relevant at a future date. The AMC takes no responsibility of updating any data/information in this material from time to time. The information shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Prudential Asset Management Company Limited. Prospective investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of ICICI Prudential Mutual Fund. Data source: Bloomberg, except as mentioned specifically. Disclaimer: In the preparation of the material contained in this document, ICICI Prudential Asset Management Company Ltd. (the AMC) has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. We have included statements / opinions / recommendations 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 monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. ICICI Prudential Asset Management Company Limited (including its affiliates), the Mutual Fund, The Trust 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. Further, the information contained herein should not be construed as forecast or promise. The recipient alone shall be fully responsible/are liable for any decision taken on this material. The sector(s) mentioned in this communication do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s). Past performance may or may not be sustained in the future. The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme. Please refer to the SID for investment pattern, strategy and risk factors.