Indian Market fall amid Chinese crisis and global uncertainty

Global cues and FII flows to dictate future trend Macroeconomic data, the performance of the monsoon rains, trend in global markets, flows from foreign portfolio

investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the

bourses.

Events to be Watched In the United States, the crucial monthly non-farm payrolls data for August is due on Friday, 4 September 2015. Investors continue to watch the performance of the monsoon rains which will have a bearing on food prices and

rural income. India's weather office India Meteorological Department (IMD) in its weekly report released on Thursday, 27 August 2015, said that as per its extended range forecast till 13 September 2015, normal to above normal rainfall activity is likely over east and northeast India during next 7 days. Below normal rainfall activity is likely over many parts of northwest, west central and central India during next two weeks, the IMD said. The IMD further said there is a possibility of normal to slightly above normal rainfall activity over south peninsula between 4 to 13 September.

The US Federal Reserve is set to meet later this month, on September 16 and 17, to decide on whether to up rates now or at a later date. Whatever be the decision, the commentary on future outlook will be eyed.

US GDP data will be announced on 25 September 2015 IIP data will be published on 11 September 2015 RBI's Fourth Bi-Monthly Policy statement for the year 2015-16 will be held on September 29, 2015

MACRO FACTORS

India's gross domestic product (GDP) growth slowed down to 7.0% in Q1FY2016 from 7.5% growth recorded in the

previous quarter. The economic activities which registered growth of over 7% in Q1FY2016 over Q1FY2015.

Eight core infrastructure sector growth eases to 1.1% in July 2015. Eight core sector recorded 2.1% growth in April-July 2015. The Eight Core Industries, carrying 38% weight in the Index of Industrial Production (IIP), recorded 1.1% growth in July 2015, showing moderation from 3% growth recorded in the previous month. Its cumulative growth during April to July, 2015-16 was 2.1%. India's merchandise exports dipped 15% to US$ 89.83 billion, while merchandise imports fell 12% to US$ 134.87 billion in April-July 2015. The decline in imports was driven by a 37.9% plunge in oil imports to US$ 34.15 billion. India's merchandise trade deficit declined to US$ 45.04 billion in April-July 2015 from US$ 47.55 billion in April-July 2014. WPI inflation dips to historical low of (-) 4.1% in July 2015. WPI inflation remain in negative zone for ninth straight month in July 2015. The Wholesale Price Index (WPI)-based inflation dipped further into sub-zero level (-) 4.05% in July 2015

compared with May 2015. The WPI inflation continued to be in negative zone for the ninth straight month in July 2015.

Conclusion

China devalued its currency yuan by 2%, creating fear of a slowdownin the second-largest economy of the world and it sent

shockwaves throughout the global markets. It pushed shares sharply lower and sent commodity prices further down. Experts

fear the Chinese economy is in a worse condition than expected. In India, cumulative rainfall has been below normal by 12%

(season to date) across the country on the whole, according to a release issued by the India Meteorological Department

(IMD). The Indian stock markets are likely to remain range-bound in the coming time. The Nifty has support at the 7700

level and the 7640 level. On the upside Nifty has resistance at 8140 and 8250. Any rate hike announcement by the US

Federal Reserve as these events are likely to give direction to the markets in the coming time.

Overview The Rs 40,600-crore Indian paint industry is likely to see a 20 per cent compounded annual growth rate until 2016,

according to the Indian Chamber of Commerce, Assocham. The demand from retail consumers, rapid urbanization, and

development of rural markets is the reason for this forecast. The industry will reach the level of Rs 62,000 crore in the

next two years. India is the second largest consumer of paint in Asia.The rural market grew 20 per cent in 2014.In FY14,

per capita consumption of paint increased to around four kg, of which the decorative segment contributed 73 per cent

at Rs 29,638 crore. The remaining Rs 10,962 crore was contributed by the industrial segment. The unorganized sector

has around 35 per cent of the Indian paint market. In the unorganized segment, there are about 2,500 units. As per the

ASSOCHAM recent report on“Indian paint Industry: 2014”reveals that India is the second-largest consumer of paint in

Asia. Top players include Asian Paints, Kansai Nerolac Paints, Berger Paints, AkzoNobel, Nippon Paints and Shalimar

Paints, adds the report. The paint industry is expected to grow at 12-13% annually over the next five years from Rs 280 bn in FY13 to around Rs

500 bn by FY18. FY14 was a challenging year for the industry as a whole due to subdued demand across key sectors and

rising inflation

Paint Segments

Decoratives:Major segments in decoratives include exterior wall paints, interior wall paints, wood finishes and

enamel and ancillary products such as primers, putties etc. Decorative paints account for over 77% of the overall paint

market in India. Asian Paints is the market leader in this segment. Demand for decorative paints arises from household

painting, architectural and other display purposes. Demand in the festive season (September-December) is significant, as

compared to other periods. This segment is price sensitive and is a higher margin business as compared to industrial

segment.

Industrial:Three main segments of the industrial sector include automotive coatings, powder coatings and

protective coatings. Kansai Nerolac is the market leader in this segment. User industries for industrial paints

include automobiles engineering and consumer durables. The industrial paints segment is far more technology

intensive than the decorative segment.The paints sector is raw material intensive, with over 300 raw materials

(50% petro-based derivatives) involved in the manufacturing process. Since most of the raw materials are

petroleum based, the industry benefits from softening crude prices

Strengths Indian Paint Market has very strong potential in terms of market share in the organized sector Comprehensive nation wide coverage of the market - urban, semi-urban and rural areas.Widest product range in

terms of products, shades, pack sizes - different decorative, some in 150 shades, 20 different pack sizes; are availablecountry wide distribution network and transportation facility is available within the industry

Paint Industry is quite strong in production-marketing coordination. Their policy Of offering tailor-made products to suit customer need has resulted in an ever growing product range.

Conclusion

Crude derivatives constitute about a third of the raw material costs for paint companies. Hence, a sharp fall in

crude prices will lead to better gross margins for these companies. Raw materials for paint companies include

titanium dioxide, additives, pigments, resins and solvents — most of these are crude derivatives. On an average,

a 10 per cent drop in crude prices will improve gross margins by 200-300 basis points. However, the actual

benefit can vary across companies, depending on their product mix. Asian Paints has a strong brand name and

leadership position in the decorative paints segment. The company is the market leader in the segment, which

contributes about 80 per cent to its total revenues. The company’s focus on international operations (13 per cent

of revenues), will also boost revenues. Asian Paints has a good track record of performance.

Indian Paint Sector: A colorful outlook Fall in crude oil prices will benefit

the industry

Fall in crude oil prices will benefit the industry

the sector

Asian Paints: CMP:Rs.826 Asian Paints Limited is today stands as India's largest and Asia's third largest paint company. Asian Paints

operates in 17 countries and has 25 paint manufacturing facilities in the world servicing consumers in over 65

countries. The company manufactures paints in the category of Decorative, Automative and Industrial segment.

Apart from these the company also manufactures various Acessories like, Wall Primar, Wood Primer, Putty and

Stainers etc. Driven by its strong consumer-focus and innovative spirit, the company has been the market leader

in paints since 1967. The company is having its strategically located Indian plants at Bhandup (Maharashtra),

Kasna (Uttar Pradesh) and Sriperumbudur (Tamil Nadu), Ankleshwar (Gujarat), Patancheru (Andhra Pradesh)

and the newly built plant at Rohtak (Haryana). All the company's paints plants in India, two chemical plants, 18

processing centres, 350 raw material and intermediate goods suppliers, 140 packing material vendors, 6 regional

distribution centres, 72 depots are integrated. .

Berger paints: CMP:Rs.213 Berger Paints was incorporated in 1923. It is the third largest paint manufacturer and second largest

manufacturer in decorative paints. Its headquarter is located in Kolkata, it has distribution network of 75 stock

points and 12,000 paint retailers. The company has come a long way to become at one point of time; a part of

the worldwide BERGER group in 1983 and thereby acquiring its present name Berger Paints India Limited to

having subsequently gone through further ups & downs as well as ownership changes to gain its present status

wherein the majority stake is with Delhi based Dhingra brothers. Presently Dhingras' control a majority stake of

almost 73% in Berger Paints India Limited, which is a professionally managed organization, headquartered in

Kolkata, with the stewardship resting since 1994 with the current Managing Director Mr. Subir Bose. The

company's manufacturing facilities are located in West Bengal, Uttar Pradesh, Pondicherry, Goa, and Jammu

and Kashmir. Headquartered at Kolkata, with 11 strategically located manufacturing units and about 170 sales

offices( all including those belonging to the Company's own division and subsidiaries). The company also has

an international presence in 3 countries

Akzo Noble: CMP:Rs.1286 Akzo Nobel India (previously known as ICI India) is engaged in manufacturing and marketing of paints,

speciality chemicals and adhesives. The company forayed in manufacturing of fertiliser in Panki near Kanpur in

1969. It had a capacity of manufacturing 675,000 tpa of urea fertiliser. Later the company went through more

restructuring and retained two division paints and national starch. However, in late 2010, the National Starch

Business of the Company was sold to an affiliate of Corn Products Group of the USA. The company presently

earns 34% of its revenue from Specialty Chemicals, 33% from Performance Coatings and 33% from Decorative

Paints and employs over 57,200 people across globe. In July 2011 AkzoNobel launched their international car

refinish paint Dynacoat across various distribution points in India. Paints- The Company owns two paint brands

such as Dulux and Duco. The company manufactures wide range of decorative paints. For exterior emulsion it

has created brands like Weathershield and Supercote. It has created retail brands like Dulux Velvet Touch,

Acrylic Emulsion and Gloss.

Kansai Nerolac : CMP:Rs.249 Today Kansai Nerolac Paints is amongst the leading paint companies in India. Headquartered in Mumbai,

company's manufacturing facilities are located at Uttar Pradesh, Maharashtra, Tamil Nadu and Haryana. In

India the company has presence in Assam, Goa, Gujarat, Haryana, Himachal Pradesh, Madhya Pradesh, Orissa,

West Bengal, Rajasthan, Maharashtra, Punjab, Uttaranchal, Bihar, New Delhi, Tamil Nadu, Uttar Pradesh and

many more. Company's R&D facility focuses on improving its manufacturing processes and innovate its

products. This facility has officially recognized by the Department of Science and Technology (DTI),

Government of India. Company has technically collaborated with two companies Kansai Paint Co. and Oshima

Kogyo Co. of Japan. The company is engaged in manufacturing of automotive coating, general industrial

coating, high performance coating and powder coating. The company markets its products under the brand

name such as 'Impressions', 'Beauty', 'Excel' and 'Suraksha'.

U.S. auto sales beat all expectations in August, coming in at the highest sales pace since July 2005 despite having one less selling day than last year. Total sales of 1.6 million were up half a percent from a

year ago and came in at a seasonally adjusted rate of 17.8 million units, compared with 17.3 million units

a year ago. It was the best August since 2003. On a not seasonally adjusted basis, estimates for July 2014

through July 2015 indicate an increase in employment of 108,600 for the state. The private sector added

101,200 jobs while the public sector gained an estimated 7,400 jobs over the year.

The US trade deficit shrank to a five-month low in July, The US Commerce Department said the

country's trade deficit in goods and services stood at $41.9bn (£27.5bn; €37.7bn) in July, compared with

$45.2bn in June. Exports increased 0.4% to $188.5bn despite a strong dollar, while imports were down

1.1% to $230.4bn. The goods trade deficit for July also narrowed to $61.4bn from $64.8bn, again marking

its lowest level for five months, while the surplus in services was broadly unchanged at $19.6bn. The ADP National Employment Report showed private payrolls increased 190,000 last month. While that was

below economists' expectations for a gain of 201,000 jobs, it was a step-up from the 177,000 positions created in July and in line with the trend for the first seven months of this year.

The European Central Bank has cut growth and inflation rates but stands to ready act should further signs

of deterioration in the eurozone economy appear, ECB President Mario Draghi said. The ECB said

growth in the euro area is now projected to be 1.4 per cent in 2015, versus the 1.5 per cent it forecast

back in June, while inflation would be a mere 0.1 per cent instead of 0.3 per cent.

The eurozone economy kept up a solid pace in August with expansions in both manufacturing and

services, The figures indicate that the eurozone economy is on track to grow 0.4% in the third quarter

from the second, marking a slight acceleration from 0.3%, data firm Markit said.

Markit, which surveys more than 5,000 businesses in the eurozone, said its composite purchasing

managers index—a measure of activity in the manufacturing and services sector—rose to 54.1 in

August from 53.9 in July. A reading below 50.0 indicates activity is declining, while a reading above

that level indicates it is increasing. In services, the PMI rose to 54.3 from 54 in July and in manufacturing

to 53.8 from 53.6.

China's official manufacturing Purchasing Managers' Index (PMI) fell to 49.7 in August from 50.0

in July, the National Bureau of Statistics said. New orders - a proxy for domestic and foreign demand -

fell to 49.7 in August from July's 49.9. New export orders contracted for an 11th straight month. In another sign that economic weakness was spreading to the services sector, the Caixin/Markit services PMI

showed the labor market deteriorated for the 22nd straight month in August. Employment in the services sector fell to 50.1, barely remaining in expansionary territory. Chinese consumers bought the fewest passenger vehicles in 17 months in July, extending a slump in the world’s largest auto market as deeper discounts failed to revive demand. Retail deliveries fell 2.5 percent to 1.3 million units, the lowest level since February 2014, according to the China Passenger Car Association. A separate set of figures from the China Association of Automobile Manufacturers showed passenger-vehicle sales declined 6.6 percent, also to a 17-month low.

US

EUROZONE

ASIA

SHAH INVESTOR’S HOME LTD

FIXED DEPOSITS OF THE MONTH

COMPANY RATING

Min. Deposit INTEREST RATE (%)

Amount * Months 12

Months 24

Months 36

Months

DEWAN HOUSING FINANCE CORP. LTD* *

CARE (AAA) & BWR (FAAA)

10000*1000 9.25

(14MONTH) 9.00 9.25 9.25

SHRIRAM UNNATI CRISIL"FAA"

& ICRA "MAA" 5000*1000-C 10000 – Q

48 & 60M 9.25 9.00- 9.25-

9.25-

HDFC PREMIUM DEPOSITS**

FAAA

M-40000 Q-20000 H-20000 A-20000

15 MONTHS-8.70

22 MONTHS-

8.75

30 MONTHS-

8.70

44 MONTHS-

8.75

HDFC DEPOSITS** FAAA 20000*1000 12M-23M

8.60 24M-60M

8.60

MAHINDRA FINANCE LTD**

CRISIL "FAA+"

Cum 10000*1000

18M-9.25

9.00-C 9.25 -C 9.25 -C

H.Y- 25,000 QTR- 50,000

8.00-Q 8.75-Q 8.75-Q

BAJAJ FINANCE LTD** CRISIL-“FAAA”

100000

9.20-C

8.90-Q

(18MONTHS)

9.10-C 8.80-Q

9.25-C 8.95-Q

9.25-C 8.95-Q

NATIONAL HOUSING BANK SR.- 0.60 EXTRA***

CRISIL-“FAAA”

50000

8.25 8.25 8.50

PNB HOUSING FINANCE** CRISIL-“FAAA”

20000

8.70

8.70 8.70

GRUH FINANCE LTD**

FAAA by

CRISIL, MAAA

by ICRA

1000*1000

8.25 8.50 8.50

K.T.D.F.C**

10000*1000 9.75 9.75 9.75

CENT BANK HONE FINANCE LTD (Subsidiary of Central Bank Of India)

CRISIL BY

“FA/STABLE”

10000*1000 9.00 9.00 9.00

SRS LTD

FA- by CRISIL

3000*1000 12 12.25 12.50

** 0.25% Extra for Senior Citizen *** 0.60% Extra for Senior Citizen

Call Mukesh Shah/Rajesh Bandre on 93-77-66-4942 or 079 300 25 325(Ext: 8107) for more details. For Free Home

Visit to opt a FD of Rs. 50,000 or more in any company. Call today to schedule an appointment.

The Right Systematic Investment Plan Amount

As you keep investing it is natural for the question, “Am I saving enough?” to pop up once in a while. The last thing you would want is to have an acute shortage just before you need a corpus for the fulfillment of a financial goal; while all the years you had the opportunity to add more funds but you did not. Hence, you will not be able to reach the ‘right’ SIP amount. Despite continued investments, the failure to reach the right amount keeps gnawing at an investor. Systematic Investment Plans or SIPs are mostly done by investors who are looking to fulfill a certain goal or goals with a stipulated amount. This is largely the reason advisors often stress on calculating the present value and the estimated future value based on inflation related factors. Investors invest with the mindset that they will get a certain elevated amount but whether the amount will be the right amount is the gnawing question. Hence, let us see a few ways which could help you to get the right SIP amount. As an investor you must keep in mind there are no sure shot way just options for possible trial and error investments to get the right amount. Link SIPs to a Goal You may not have a particular goal in mind while investing in SIPs. You could just be testing investment waters and making small investments. While there is no harm in doing that, not linking a certain investment with a particular goal often devoid the investor of personal motivation. Soon you might start to miss out on the monthly payments and small corpus that you had started to accumulate will dwindle. Suddenly you will require the corpus for a personal need and you might not have one to speak of. Linking the SIP to a goal does the simple task of ensuring that you do not lag behind the investment because that would imply lagging behind an important goal. Hence, to get the right amount you need the right goals. The Future Value The simplest way to get the right amount is to know the right amount, which is future value of the goal. A fatal investment mistake is not knowing the future value of your goals and investing to get a matured corpus of the present value. During investments the rising factor of inflation has to be considered which will affect the prices in the economy in the future. The Mutual Funds are known to give inflation adjusted returns. Hence, after estimating the future value along with the returns, you might be able to keep inflation at an arms distance.

Given above are some future value estimations. Hence, you can see that the future value is nowhere near the present value and it is time you started calculating the future value estimates for your investments. Once you reach a step closer to figuring out the right amount you will be a step closer to getting the right SIP amount. Be Extremely Flexible One cannot emphasis on this point more than what has already been done. Being flexible is the fine ground between being a fickle minded investor and a stubborn investor. There is no quick fix solution to get a right amount but rather a number of ways which are often reached after a few trial and errors. Given in the table below are some possible asset allocations that show with age how the asset allocation of investments has to be changed. As an investor being flexible is inevitable. For example you started investing for your retirement when you were 30 and your investments were primarily in equity funds. Twenty five years later at the age of 55 when you are close to retirement and it is time to perhaps shift to a debt option or lesser risky options among equities like large cap funds and balanced and not expose your funds to any further volatility

Investments are not a onetime activity; it requires your constant vigilance. You may need to rebalance your portfolio or stop current investments and make fresh ones. To reach the right SIP amount you need to get your asset allocation done with the help of a financial adviser and keep rebalancing it as and when your needs change or your age progresses. Investors often fall prey to readymade asset allocation plans or tools and calculators that show asset allocation mix. While these might give you an idea about asset allocation they are a sure way to deter you from getting the right amount. Asset allocation has to be customized as every investor is different. Hence, to reach the right amount you need to start allocating assets based on your needs and goals and not a predetermined plan. Reaching the SIP amount is more than just making investments. It is also about making the right and informed choices. Use Systematic Transfer Plans (STPs) and Systematic Withdrawal Plans (SWPs) You do not have to go from being invested to not having any investments at all. You can gradually withdraw just the way you had gradually accumulated. SWPs or Systematic Withdrawal plans are opposite of SIPs and using this method of withdrawal you can create a steady monthly or periodic income stream by either withdrawing systematically a fixed amount or the profits of the funds. This ensures that the part of the corpus that is not being withdrawn continues to stay invested and generate returns while you continue to withdraw. If you are not sure about a fund’s performance you may start a STP to transfer a stipulated sum to a different scheme periodically while keeping a watch on the performance of both funds. This allows you to get the best of both worlds and your investments are generating returns from both funds. Similarly, if you want to start a SIP and you also have some lump sum in your bank account, then it is prudent to start a STP or Systematic Transfer Plan. STP works like SIPs. In SIPs a fixed amount gets auto debited from your bank account on a chosen date or dates. Whereas, in case of a STP, you put the lump sum amount in a liquid fund and transfer a fixed amount on the chosen date or dates every month, or week or fortnightly to an equity fund of the same fund house. Make Increments As it has already been emphasized investments are not a static process. They require an investor to be active. Hence, as your age progresses so does your income. It is usually said that when an individual enters the age of 40 they are at the peak of their career which means you have increased financial power and funds at your disposal. While you may already have an investment plan at place adding extra funds will not only boost your investments you may have a corpus ready for certain goals earlier than your determined timeline. Hence, keep increasing the SIP amount if you want be keep inflation at an arms distance. With increased financial power comes the inevitable lifestyle change. Hence, to be able to account for that and maintain the same in future you need to make fresh investments or add to the already existing SIP accounts. It is good to aim for the right amount but do not shy away if you can make more than just the right amount.

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