Money Weekly - 281212_10_2812120615

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Money Weekly 28 December 2012

Page No: 1

Aditya Birla Money Limited

2nd Floor, Sheil Estate, Dani Corporate Park, 158 CST Road, Kalina, Santacruz (East), Mumbai 400 098 | Tel: +91 22 42333400

PageNo.

PageNo.

Corporate News 2 Industrial Production 6

Macro Economic News 2 Consumer Durables 6

Global Sector Performance 3 Capital Goods 6

Nifty Index Forward Multiples 3 Derivatives Corner 7-9

Global Indices 4 Outlook 10

Government Bond 5 Event Calendar 10

Govt. lowers XII Five Year Plan growth forecast to 8% from 9.0-9.5%

5631

5628

5825

5931

5852

59165870

(20000)

(10000)

0

10000

20000

30000

40000

50000

60000

7000080000

15-Nov 22-Nov 29-Nov 06-Dec 13-Dec 20-Dec 27-Dec

( Mn)

5460

5520

5580

5640

5700

5760

5820

5880

59406000

FII (LHS) MF (LHS) Nifty (RHS)

Source: NSE

Note: As per Thursday closing

Bharti Airtel Ltd

3.8%

Tata Motors Ltd

3.6%Wipro Ltd 3.3%

Tata Power Co Ltd

3.1%

Axis Bank Ltd

2.9%

Cairn India Ltd

2.6%Lupin Ltd 2.5% Dlf Ltd 2.5%

GrasimIndustries Ltd

(2.2%)

Jindal Steel &Power Ltd

(1.9%)

Mahindra &Mahindra Ltd

(1.4%)

Power Grid Corp OfIndia Ltd (1%)

Hindustan

Unilever Ltd

(1%)

Ultratech

Cement Ltd

(0.8%)

Cipla Ltd (0.8%)Hcl Technologies

Ltd (0.6%)

Source: NSE

Developed Equity Markets

WTD YTD

U.S. (S&P)* 1,418 (0.8) 12.8

UK (FTSE)* 5,954 0.2 6.9

J apan (Nikkei 225) 10,395 4.6 22.9

Germany (DAX)* 7,637 0.0 29.5

France (CAC)* 3,650 (0.3) 15.5

Italy (FTSEMIB)* 16,362 0.2 8.4

Spain (IBEX)* 8,192 (1.2) (4.4)

BRIC Equity Markets

India (Sensex) 19,445 1.1 25.8

India (Nifty) 5,908 1.0 27.8

China (Shanghai) 2,233 3.7 1.5

Russia (Micex)* 1,474 (0.2) 5.1

Brazil (Ibov)* 60,416 (1.0) 6.5

Asian Equity Markets

Hong Kong(HSI) 22,667 0.7 23.0

Korea (Kospi) 1,997 0.8 9.4

BSE Sector

WTD YTDBSE Mid Cap 7,093 1.4 38.1

BSE Small Cap 7,342 0.2 32.3

Auto 11,379 1.1 39.7

Bankex 14,330 1.3 56.6

Capital Goods 10,905 1.6 35.2

Power 1,982 1.7 10.3

Realty 2,090 2.0 51.9

Technology 3,430 1.5 1.5

FMCG 5,932 0.1 47.0

Metal 11,041 0.0 18.8

Institutional Activity

WTD MTD YTD

FII (Rs bn)* 11.9 179 1,223

MF (Rs bn)* -1.5 -33 -206Commodities Update

Unit Close WTD YTD

Crude Oil(Brent)** $/Bbl 111 1.5 3.0

Gold(OTC)** $/Oz 1,659 0.1 6.4

Silver(OTC)** $/Oz 30 0.1 7.9

Copper(LME)** $/MT 7,893 1.1 4.0

Aluminum(LME)** $/MT 2,046 (0.1) 2.6

Sugar(LIFFE)** $/MT 523 1.0 (13.1)

ZINC(LME)** $/MT 2,103 1.0 14.0

Currency

Close WTD YTD

INR/USD** 54.9 0.3 (3.3)

USD/EURO** 1.3 0.1 (1.6)

USD/J PY** 86.2 (2.3) (11.0)

% Change

Last Close

% Change

Last Close

Spot market

% Change

% Change

* As per Thursday closing** As per Friday 16:30 hrs ISTSource: Bloomberg

Top Nifty Movers Shakers

Index

Nifty & Institutional Flow

Major Event of the Week

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Page No: 2



Diesel prices likely to be hiked gradually (Rs.1/l a month); positive for HPCL and BPCL from short to medium term perspective.

The petroleum ministry has proposed a gradual rise in diesel prices, by 1 per litre every month over a 10-month period, in order to avoid

controversy lead by steep hikes and infrequent revisions. The ministry's has also proposed to gradually increase the prices of kerosene by

10 per litre over a two-year period. The under-recovery on subsidized diesel is ~9.28/litre while under-recovery of over 30 a litre onkerosene sold through the public distribution system. We believe the governments move to gradually increase the price if passes through it

will help oil marketing companies to recover their losses over a period of time.

Government announces various sops to boost exports.

The government has announced various measures to boost the countrys exports. Some of the measures announced a) extension of the

2% interest subsidy on bank loans for certain sectors for an additional year till March 2014 b) inclusion of the sub-sectors of engineering

goods as beneficiaries of the scheme and provision of incentives on incremental exports made to the US, the European Union and

countries in Asia and c)Government has also announced the introduction of the 2% interest subvention for exports to countries in South

Asia, Africa and Myanmar.

Domestic International

Government announces sops for exporters

Among the measures announced was an extension of the 2%

interest subvention scheme for an additional year till March

2014, inclusion of sub-sectors of engineering goods for interest

subvention and provision of incentives on incremental exports

made to U.S., EU and countries in Asia.

PM calls for phased fuel price hike

PM Manmohan Singh pitched for difficult reform measures at

the NDC meeting, which saw the average 12th Plan GDP

growth target scaled down to 8% from 9-9.5%. He also called for

a phased reduction in energy subsidies and an early

implementation of the GST.

10-Yr yield fell to lowest level since July

The 10-year yield has declined four basis points to 8.11%, the

lowest level since J uly, since Subbarao, RBI Governor, said that

easing inflation increases room for easing policy.

Foreign exchange reserve jump by $1.64bn

The foreign exchange reserves rose by a robust $1.64 bn to

touch $296.63 bn during the week ended Dec. 14 on the back of

healthy addition of core currency assets, the Reserve Bank said

Obama now pressing for limited fiscal-cliff deal

Summoning a sense of urgency about the looming fiscal cliff,

President Obama pressed lawmakers to accept a scaled-back

deal to avert tax increases on the middle class and protect soon-

to-expire unemployment insurance. He said hed immediately sign

a bill into law that extends tax cuts for those making $250,000 or

less.

Yen breaches 85 a dollar before Abe sworn

The J apanese yen weakened to the lowest since April 2011 before

Shinzo Abe takes over as prime minister amid expectations he will

push for further stimulus. Abe, whos liberal Democratic Party, won

a landslide victory in the Dec election.

Geithner warns Lawmakers deficit standoff risk

Treasury Secretary Geithner said he will take extraordinary

measures to postpone a U.S. default into early 2013 while

President Obama and Congress work out a deficit-reduction deal.

Source: Economic Times, Business Line, Business Standard, Times of India, DNA Money, Mint, Financial Express, Bloomberg

Macro Economy & Other News

Top Corporate News during the week

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Page No: 3



DevelopedIndex

value

Index

ReturnTechnology

Basic

MaterialsFinancials Telecom Industrials Utilities

Oil &

Gas

Health

Care

Consumer

Goods

% % % % % % % % %

US DOW 13096 -0.72 -2.14 -0.64 -1.42 -1.2 -1.52 ---- -2.08 -1.39 -2.21

UK FTSE 5954 0.23 -1.27 1.09 -0.17 -0.02 -0.14 0.09 0.09 -0.24 -0.58

GERMANY DAX 7637 0.01 -0.84 -0.7 -0.44 0.16 -0.86 -1.18 ---- -0.93 0.63

FRANCE CAC 3651 -0.28 -0.43 -0.22 -0.87 1.97 -0.2 0.57 1.33 0.28 0.11

J APAN NIKKEI 10395 4.58 1.4 2.07 4.47 1.57 2.02 -0.45 0.94 0.35 1.76

BRIC

BRAZIL BOVESPA 60416 -0.97 ---- -0.54 -1.16 -0.32 0.28 0.91 -7.31 -2.68 -0.23

RUSSIA MICEX 1474 -0.21 ---- -1.07 -1.49 1.23 -2.22 -1.21 0.76 -2.23 1.16

INDIA NIFTY 5908 1.04 -0.19 -1.67 -0.13 0.55 -1.26 0.07 -1.46 -0.92 -0.68

CHINA SANGHAI 2233 3.71 2.13 1.56 1.7 1.73 2.6 2.45 2.37 5.29 1.38

Asian

HONG KONG H S I 22667 0.71 -0.56 0.13 -0.11 -0.25 0.2 0.9 -0.52 ---- -0.52

KOREA KOSPI 1997 0.84 -0.39 -1.76 -0.49 -5.03 -1.09 -0.91 -0.43 3.23 0.34

SINGAPORE STRAITS 3192 0.89 ---- ---- -0.33 -0.12 2.97 ---- 0.75 ---- 1.51

TAIWAN TWSE 7700 2.11 0.62 2.54 0.58 0.21 1.09 1.31 -2.18 1.05 0.46 Source: Bloomberg, ABML ResearchNote: As per Friday 16:30 hrs IST

1Yr Forward P/E

8.0

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

26.0

Mar-07 Oct-07 May-08 Nov-08 Jun-09 Jan-10 Jul-10 Feb-11 Sep-11 Mar-12 Oct-12

Mean: 15.0

+1 SD

+2 SD

-1 SD

-2 SD

1Yr Forward P/B

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Mar-07 Nov-07 Jun-08 Feb-09 Sep-09 Apr-10 Dec-10 Jul-11 Mar-12 Oct-12

-1 SD

Mean: 2.6

+1 SD

+2 SD

-2 SD

Source: NSE, ABML Research

Nifty Relative Valuation Metrics (1 Year Forward)

Global Equity Indices & Sectoral Performance

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Page No: 4



0.0

5.0

10.0

15.0

20.0

25.0

Brazil

BOVESPA

Russia

Micex

India

Nifty*

China

SHCOMP

US

DowJ

Germany

DAX

France

CAC

UK

FTSE

J apan

NIKKEI*

Hong Kong

His-

Korea

Kospi

Singapore

Straits

Taiwan

TWSE

0%

10%

20%

30%

40%

50%

60%

PE CY11 PE CY12 EPS % Change

PE FY11* PE FY12*PE FY11* PE FY12*

Source: Bloomberg, ABML ResearchNote: As per Friday 16:30 hrs IST

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Brazil

BOVESPA

Russia

Micex

India

Nifty*

China

SHCOMP

US

DowJ

Germany

DAX

France

CAC

UK

FTSE

J apan

NIKKEI*

Hong Kong

His-

Korea

Kospi

Singapore

Straits

Taiwan

TWSE

0.0

1.0

2.0

3.0

4.0

5.0

(%)

P/BV CY11 P/BV CY12 Dividend Y ield CY12

PE FY11* PE FY12*PE FY11* PE FY12*

Source: Bloomberg, ABML Research

Note: As per Friday 16:30 hrs IST

RoE

5%

7%

9%

11%

13%

15%

17%

19%

21%

23%

Brazil

BOVESPA

Russia

Micex

India

Nifty*

China

SHCOMP

US

DowJ

Germany

DAX

France

CAC

UK

FTSE

J apan

NIKKEI*

Hong Kong

His-

Korea

Kospi

Singapore

Straits

Taiwan

TWSE

CY 11 CY 12 FY11* FY12*FY11* FY12*FY11* FY12*

Source: Bloomberg, ABML ResearchNote: As per Friday 16:30 hrs IST

Global Indices Forward P/BV

Global Indices RoE

Global Indices Forward P/E

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Page No: 5



Government Bond Yields

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

Apr-

09

Nov-0

9

Jun-1

0

Jan-1

1

Aug-1

1

Mar-

12

Oc

t-12

(%)

GIND5YR Index GIND10YR Index

Monthly changed in Govt. Bond Yield Curve

8.238.18

7.91

8.12

8.23

8.28

8.22

8.17

7.95

8.20

8.318.35

7.8

7.9

8.0

8.1

8.2

8.3

8.4

8.5

3m 6m 1Yr 5Yr 10Yr 15Yr

(%)

27-Dec-12 27-Nov-12


5 Yr Corp Bond Spread

4

5

6

7

8

9

10

Jan-0

9

Aug-0

9

Fe

b-1

0

Aug-1

0

Mar-

11

Sep-1

1

Mar-

12

Oc

t-12

(%)

5 Yr AAA Corporate Bond Yield 5 Yr Govt Bond Yield

10 Year Corp Bond Spread

4

5

6

7

8

9

10

11

Jan-0

9

Aug-0

9

Fe

b-1

0

Aug-1

0

Mar-11

Sep-1

1

Mar-12

Oct-12

(%)

10 Yr AAA Corporate Bond Yield 10 Yr Govt Bond Yield


Certificate of Depos it Rates

1.5

3.5

5.5

7.5

9.5

11.5

13.5

Jan/09

Aug/09

Apr/10

Nov/10

Ju

l/11

Mar/12

Oct/12

(%)

CD 3month CD 6month CD 12month

Commercial Paper Rates

3

5

7

9

11

13

Fe

b/09

Aug

/09

Fe

b/10

Aug

/10

Mar/

11

Sep

/11

Mar/

12

Oc

t/12

(%)

CP 3month CP 6month CP 12 month


CD & CP Rates Movement

G-sec AAA Corporate Bond Spread (India)

Government Bond Yield (India)

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Page No: 6



Index of Industrial Production

158

178

171

168

180

175

188

164 1

70

168

167

165

163

140

150

160

170

180

190

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

( 4 )

6 8

( 1)

( 1)

7

(13)

4

( 1) (1) ( 1) (1) 5

- 5

6

31

4

- 3

- 1

2

- 2 0

2-1

8

(15)(10)

(5)

-5

10

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

(10)(5)

-

5

10

MoM (%) (LHS) YoY (%) (RHS)

% in Industrial Production


Consumer Durables Index

288

287 3

36

298

298

298 3

27

306

310

307

307

280 3

03

100

200

300

400

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

( 7)

30

( 4 )

4

10

( 6 )

1(1)

( 0 )

( 9 )

8

110

105

- 8 - 6

1

510 9

1

1

- 2

16

(10)(5)

- 5

1015

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

-10

0

10

20

MoM (%) (LHS) Y oY (%) (RHS)

% in Consumer Durables Index


Consumer Non Durables Index

121

168

133140 1

72

1

60

1

56

141

138

138

134 131 128

0

50

100

150

200

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

( 4 )16

2 3

(2 ) ( 5)

( 2 )

(10)

( 2 ) ( 0 ) ( 2 )

( 3 )

( 2 )

4

0

15

14

11

4

1

2

( 0) ( 1) 1

6

2

10

(20)(10)-

1020

30

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

(5)-5

1015

20


% in Consume r Non Durables Index


Capital Goods Index

225 2

57

242

257

264

262 3

13

208

227

235

234

253

250

0

200

400

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

(21)

14

2( 3 )

2

2 0

( 3 4 )

93

( 0 )

8( 1)

( 3 )

( 2 6 )

( 5)

(16)

( 3 )

10

( 2 0 )(21)

( 9 )

( 2 8 )

( 6 )( 3 )

(13)

8

(40)(30)(20)(10)-102030

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

-30

-20-10

010

20


% in Capital Goods Index


Capital Goods

Consumer Non Durables

Consumer Durables

Index of Industrial Production

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Page No: 7



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