DSP BlackRock Investment Managers
India Equity Market – OutlookIndia Equity Market – Outlook
July 2013
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Indian Equity Markets – Challenging EnvironmentIndian Equity Markets – Challenging Environment
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Market Scenario
5 Year Sensex CAGR: 7.58%
0
5000
10000
15000
20000
25000
Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13
Sensex
1939613642
3Source: Bloomberg
Industrial Production is low
-10
010
20
Feb
-08
May
-08
Aug
-08
No
v-08
Feb
-09
May
-09
Aug
-09
No
v-09
Feb
-10
May
-10
Aug
-10
No
v-10
Feb
-11
May
-11
Aug
-11
No
v-11
Feb
-12
May
-12
Aug
-12
No
v-12
Feb
-13
May
-13
IIP
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Infrastructure Bottlenecks
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
FY
96
FY
97
FY
98
FY
99
FY
00
FY
01
FY
02
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
Rsb
n
-
5,000
10,000
15,000
20,000
25,000
Rsb
n
Projects announced vs. project stalled
4
FY
96
FY
97
FY
98
FY
99
FY
00
FY
01
FY
02
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
Projects stalled New Projects Announced (RHS)
0%
5%
10%
15%
20%
25%
30%
35%
40%
Aut
os
Con
glom
erat
es
Con
stru
ctio
n .C
ons
Non
dura
bles
Hea
lth C
are
Med
ia
Met
als
& M
inin
g
Ene
rgy IT
Tel
ecom
Util
ities
FY13E Avg (FY9-FY12)
Capex (as % of sales): FY13E vs. last 4 yr avg
Source: Bloomberg, Internal
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
CAD vs. US$/INR
Depreciating Rupee
42
44
46
48
50-15
-10
-5
0
Source: CEIC, Ministry of Commerce, Morgan Stanley Research55
50
52
54
56
58
60
62-35
-30
-25
-20
-15
Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13E
Current Account Deficit, US$ bn, LSUS$/INR, RS (reverse scale)
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
GDP growth – Back to old days of 2001-2002
4
6
8
10
12
14
16
18GDP Services Industry
GDP growth in FY11 – 9.30% GDP growth in FY12 – 6.26% GDP growth in FY13 – 5.00%
6
GDP growth in FY03 – 5.5% GDP growth in FY13 – 5.00%
-4
-2
0
2
4
Jun-
03S
ep-0
3D
ec-0
3M
ar-0
4Ju
n-04
Sep
-04
Dec
-04
Mar
-05
Jun-
05S
ep-0
5D
ec-0
5M
ar-0
6Ju
n-06
Sep
-06
Dec
-06
Mar
-07
Jun-
07S
ep-0
7D
ec-0
7M
ar-0
8Ju
n-08
Sep
-08
Dec
-08
Mar
-09
Jun-
09S
ep-0
9D
ec-0
9M
ar-1
0Ju
n-10
Sep
-10
Dec
-10
Mar
-11
Jun-
11S
ep-1
1D
ec-1
1M
ar-1
2Ju
n-12
Sep
-12
Dec
-12
Mar
-13
� GDP growth slowing down due to industry slowdown
Source: Bloomberg, Internal
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
– India’s growth slowdown is partly related to the slowdown in the global growth cycle– China and Brazil – the other two BRIC countries – have also witnessed sharp deceleration of growth in last tow years
India’s growth highly correlated with the global gr owth India’s growth correlation with other two BRIC coun tries
9
12
15
(GDP
grow
th, %
)
India not decoupled with the global growth cycle
6
9
12
(GD
P g
row
th, %
)
-3
0
3
6
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
(GDP
grow
th, %
)
Brazil China India
Fall in India’s economic growth has been sharper th an the fall in global growth in last two years
-3
0
3
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
(GD
P g
row
th, %
)
World GDP growth India GDP growth
Source: IMF
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Are we over-reacting?Are we over-reacting?
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Different Asset Class Returns
33.0%
3.7%
19.2%
6.2%8.0% 7.1%
22.1%
11.7%
16.8%
6.9% 7.8% 7.4%
FY04-FY08 FY09-FY13 FY04-FY13
Equities (CNX Nifty) Bank FD Gold 10 Year G Sec %
9
27.37%
-3.78%
12.66%
0.60% 0.50% 0.60%
16.53%
4.24%
10.32%
1.30% 0.30% 0.90%
FY04-FY08 FY09-FY13 FY04-FY13
Equities (CNX Nifty) Bank FD Gold 10 Year G Sec %
Inflation adjusted
Equities have out-performed other asset classes ove r longer periods
Source: Bloomberg, Internal
Could this phase be an exception?
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Inflation Erodes the Purchasing Power
100
60
80
100
120
Nom
inal
Val
ue
Over 79-14YTD, CPI Inflation has been 8.5%
10
6
-
20
40
Mar
-79
May
-80
Jun-
81
Jul-8
2
Aug
-83
Oct
-84
Nov
-85
Dec
-86
Jan-
88
Mar
-89
Apr
-90
May
-91
Jun-
92
Aug
-93
Sep
-94
Oct
-95
Nov
-96
Jan-
98
Feb
-99
Mar
-00
Apr
-01
Jun-
02
Jul-0
3
Aug
-04
Sep
-05
Oct
-06
Dec
-07
Jan-
09
Feb
-10
Mar
-11
May
-12
Jun-
13
Nom
inal
Val
ue
Purchasing Power
Source: CMIE, Bloomberg & Motilal Oswall. Data as on June 2013.
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Equities Enhance the Purchasing Power
1,226
800.00
1,000.00
1,200.00
1,400.00
1,600.00
1,800.00
Pur
chas
ing
Pow
er
11
256
100
-
200.00
400.00
600.00
Mar
-79
Aug
-80
Jan-
82
Jun-
83
Nov
-84
Apr
-86
Sep
-87
Feb
-89
Jul-9
0
Jan-
92
Jun-
93
Nov
-94
Apr
-96
Sep
-97
Feb
-99
Jul-0
0
Jan-
02
Jun-
03
Nov
-04
Apr
-06
Sep
-07
Feb
-09
Jul-1
0
Jan-
12
Jun-
13
Pur
chas
ing
Pow
er
Sensex Gold Fixed Deposit
Source: CMIE, Bloomberg & Motilal Oswall. Data as on June 2013. Information used is for illustrative purposes and should not be construed as an investment advice
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Equities Have Created Investor Wealth
Rs. 17,68,679
1,500,000
2,000,000
2,500,00020 Year CAGR: 11.4% 15 Year CAGR: 12.6% 10 Year CAGR: 18%
12
Rs. 100,000
0
500,000
1,000,000
Jan-
91
Feb
-92
Mar
-93
May
-94
Jun-
95
Aug
-96
Sep
-97
Nov
-98
Dec
-99
Feb
-01
Mar
-02
May
-03
Jun-
04
Aug
-05
Sep
-06
Nov
-07
Dec
-08
Jan-
10
Mar
-11
Apr
-12
Jun-
13
Source: Bloomberg, Internal. The figures mentioned are for illustration purpose only, it does not indicate performance of any of the schemes of
DSP BlackRock Mutual Fund
Rs. 1,00,000 invested into Sensex in January 1991 wo uld have grown to Rs. 17,68,679 as of June 2013.
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Opportunity within volatility
13000
15000
17000
19000
21000
23000
13
7000
9000
11000
Sensex
…During this Phase as well, Sensex has given attract ive investment opportunities
Source: Bloomberg
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Bull – bear phases over the last 5 years
2008: - 52%
20287
9647
De
c-0
7
Jan
-08
Fe
b-0
8
Ma
r-0
8
Ap
r-0
8
Ma
y-0
8
Jun
-08
Jul-
08
Au
g-0
8
Se
p-0
8
Oct
-08
No
v-0
8
De
c-0
89647
17465
De
c-0
8
Jan
-09
Fe
b-0
9
Ma
r-0
9
Ap
r-0
9
Ma
y-0
9
Jun
-09
Jul-
09
Au
g-0
9
Se
p-0
9
Oct
-09
No
v-0
9
De
c-0
9
17465
20509
De
c-0
9
Jan
-10
Fe
b-1
0
Ma
r-1
0
Ap
r-1
0
Ma
y-1
0
Jun
-10
Jul-
10
Au
g-1
0
Se
p-1
0
Oct
-10
No
v-1
0
De
c-1
0
2009: +81% 2010: +17%
14
2011: -25% 2012: +25%
Ma
r
Ma
y
Ma
r
Ma
y
Ma
r
Ma
y
20509
15455
De
c-1
0
Jan
-11
Fe
b-1
1
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11
Jul-
11
Au
g-1
1
Se
p-1
1
Oct
-11
No
v-1
1
De
c-1
1
15455
19340
De
c-1
1
Jan
-12
Fe
b-1
2
Ma
r-1
2
Ap
r-1
2
Ma
y-1
2
Jun
-12
Jul-
12
Au
g-1
2
Se
p-1
2
Oct
-12
No
v-1
2
De
c-1
2
Source: Bloomberg
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Sensex 5 year Rolling Returns
Median CAGR 17.1%
10%
20%
30%
40%
50%
60%5yr rolling return Median Return
90% of times: Positive returns
15Source: IIFL Research, data as of June 28, 2013
On a 5 year rolling basis, Sensex has delivered a p ositive return 90% of the times
-20%
-10%
0%
Ap
r/84
Oct
/86
Mar
/89
Aug
/91
Jan/
94
Jun/
96
No
v/98
Ap
r/01
Oct
/03
Mar
/06
Aug
/08
Jan/
11
Jun/
13
10% of times: Negative returns
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Disciplined Approach: True Value Add During Volatil e Times
2.00%
4.00%
6.00%
8.00%
SIP vs Lumpsum Investment Returns
16
-6.00%
-4.00%
-2.00%
0.00%
CNX Nifty BSE Sensex BSE100 BSE200 CNX Midcap
Lumpsum Investment SIP Investment
Notes: Bloomberg, Internal.1. Assuming SIP investment done at the beginning of each month for period starting Jan 1, 2008 to Jun 1, 2013 i.e. 66 months. 2. SIP returns shown above denote the internal rate of return. Lumpsum returns shown above denote the point-to-point annualised return for the period Jan 1, 2008 to June end 2013. The above figures is for illustration purpose only and not an indication of the performance of the schemes of DSP BlackRock Mutual Fund.
3.
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Outperformance of Key stocks/Sectors
21%17% 16% 14% 13% 11%
4%
-12%
-3% -4%-8% -9%
-20%
-10%
0%
10%
20%
30%
5 Year CAGR %
17
-25%-30%
BS
E -
FM
CG
BS
E -
Aut
o
BS
E -
Hea
lth C
are
BS
E -
IT
BS
E -
Con
sum
er D
urab
les
BS
E -
Ban
kex
BS
E -
Sen
sex
BS
E -
Rea
lty
BS
E -
Pow
er
BS
E -
PS
U
BS
E -
Oil
BS
E -
Cap
ital G
oods
BS
E -
Met
al
Consumption theme has outperformed capital intensi ve sectors
Source: Bloomberg
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Stock Performance Divergence…An Opportunity to Long term Investors…
5 Year CAGR %
31%
27%25% 24%
20% 19% 17% 17%15% 15%
12% 12% 11%9%
6% 5% 5% 4% 2%0%
-2%-4%
-6% -7%
18
Stock Performance Divergence…An Opportunity to Long term Investors…
Source: Bloomberg
-6% -7% -7%-9%
-12%-15% -16%
TC
S
Sun
Pha
rma.
Inds
.
ITC
Dr
Red
dy's
Lab
s
M &
M
HD
FC
Ban
k
Her
o M
otoc
orp
Tat
a M
otor
s
Hin
d. U
nile
ver
Info
sys
H D
F C
Cip
la
Wip
ro
Mar
uti S
uzuk
i
ICIC
I Ban
k
St B
k of
Indi
a
O N
G C
SE
NS
EX
GA
IL (I
ndia
)
Jind
al S
teel
Lars
en &
Tou
bro
Tat
a P
ower
Co.
NT
PC
Bha
rti A
irtel
Rel
ianc
e In
ds.
Hin
dalc
o In
ds.
Ste
rlite
Inds
.
Tat
a S
teel
B H
E L
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Indian Equity – A Promising story ahead
19
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Government Reforms are in the Right Direction
� Boost investments:
• Cabinet Committee on Investment to speed up the approval process for big projects.
• Addressed various bottlenecks in road (easier exit clause), coal (imported coal price pass-through), gas (price hike) and power sectors (SEB restructuring, expanding projects eligible for FSA, etc)
� Attract foreign capital
Recent initiatives Key reforms in the pipeline
� Fiscal prudence
• Direct Cash Transfer
• Goods and Services Tax
� Boost investments
• Land Acquisition Bill
• Mining Development Bill
� Attract capital flows
Source: OECD, CEIC and Nomura Global Economics.
� Attract foreign capital
• Increase FDI limit in multi brand retail, aviation, broadcasting
� Reduce fiscal deficit
• Gradually deregulate diesel prices
• Rationalize spending
• Increase tax compliance
� Reduce inflation
• Smaller increase in Minimum Support Prices
� Attract capital flows
• FDI limits in telecom, defense, insurance and pension sectors
20
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Fiscal Deficit is Under Control
Fiscal Deficit
5
6
7
Return to fiscal prudence
% of GDPFiscal stimulus post the crisis
Fiscal prudence
� India has always had a high fiscal deficit, but the deficitballooned post 2008 due to consumption-orientedgovernment spending and lower revenues due to slowgrowth.
� However, the government has returned back to the path offiscal prudence starting Sep 2012 by cutting back onspending and hiking diesel prices. Fiscal deficit in FY13 at4.9% of GDP was better than budgeted (5.1%).
� In FY14, while cutting back on spending will be difficultgiven the upcoming general elections, increased taxcompliance is likely to help keep the fiscal deficit in checkat 4.8% of GDP.
0
1
2
3
4
FY00 FY02 FY04 FY06 FY08 FY10 FY12 FY14 FY16
at 4.8% of GDP.
� The government is committed to lowering the fiscal deficitto 3% of GDP by FY17. Structural reforms such as theGoods and Services Tax and the Direct Cash transfer willhelp bring down the fiscal deficit in the medium term.
� Hence, risks from the fiscal deficit – a pre-dominantconcern over the last 5 years - have receded.
21Source: Ministry of Finance and Nomura
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Current Account Deficit: Worst is Behind Us
-6
-5
-4
-3
-2
-1
0
1
2
3
Current account balance
% of GDP
Source: CEIC and Nomura Global Economics estimates.
� INR deprecation - a medium term positive
Along with a fiscal deficit, India has also historically had a current account deficit. Recent currency weakness (due to lower inflows) will delay ratecuts. However over time, INR depreciation should improve export competitiveness.
� Lower commodity prices a boon for India
A large part of India’s import basket (45%) is commodity oriented. The fall in commodity prices should help lower the import bill.
Sharp fall in gold prices and lower investment demand for gold (due to lower prices and lower inflation) should reduce the gold import bill.
� Structural reforms an added positive
Government’s decision to gradually deregulate diesel prices should help rationalize domestic energy demand and thus reduce oil imports.
Therefore, we expect the current account deficit to moderate from 4.8% of GDP in FY13 to 4.3% in FY14 and to 3.0-4.0% by FY15.
-6FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
22
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Falling Commodity Prices: Boon for India
� India, unlike other emerging economies like China, Brazil, etc. is net consumer of commodities.
� Wholesales Price Inflation (WPI) for June at 4.86% Y-o-Y, the lowest since Nov 2009, is a positive sign
� Core inflation has also declined to 2.1% Y-o-Y
� This decline was a result of the drop in prices of crude oil and gold, which together account for 45% of India’ import bill
� Every 10% decline in global crude oil prices (for the full year), would result in reducing WPI by 0.8-1.0 percentage point & consumer price inflation by about 0.6 percentage point
� Every 10% reduction in crude oil prices would result in India’s import bill and current account deficit reducing by about 0.6% of GDP
� Oil – 6.3% of GDP and 60% of trade deficit� US Shale Gas – a game changer
23Source: Bloomberg, Internal & Deutsche Bank Research
account deficit reducing by about 0.6% of GDP
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Feb
-08
Aug
-08
Feb
-09
Aug
-09
Feb
-10
Aug
-10
Feb
-11
Sep
-11
Mar
-12
Sep
-12
Mar
-13
WPI Inflation (%)
…should lead to further fall in inflation
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
Feb
-08
Aug
-08
Feb
-09
Aug
-09
Feb
-10
Aug
-10
Feb
-11
Sep
-11
Mar
-12
Sep
-12
Mar
-13
Change in Commodity Prices YoY%, US$ terms
Crude
Gold
CRB Index
Fall in commodity prices….
� Gold – 2.7% of GDP and 26% of trade deficit
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Lower Twin Deficit to Correct India’s Macro Imbala nces
� After a tough period from 2009-2012, we expect India’s macro-imbalances (rising consumption-investment gap, sticky inflation, twin deficits and low growth) to start to correct due to fiscal consolidation and recent reforms.
� While none of the reforms will lead to a quick turnaround in the economy, the government is moving in the right direction. For instance, gas and power price hikes will increase the cost for consumers (which is negative for consumption), while easing the burden for producers and encouraging increased supply (positive for investment) – a rebalancing that is long overdue in India.
� Lower twin deficit and falling inflation should open up the room for further interest rate cuts. Lower inflation should also lead to a move away from physical savings to financial savings, which will improve banking system liquidity.
� As India’s macro-economic imbalances correct, we expect the investment cycle to gradually recover, productivity to improve and a pick up in growth.
24
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Sensex EPS CAGR FY93-13: 15%
450523
718
833 820 834
10241123
1196
1346
1543
FY93-96: 45% CAGR
FY96-03: 1% CAGR
FY03-08: 25% CAGR
FY08-13: 7% CAGR
FY13-15E: 14% CAGR
FY93-12: 15% CAGR
25
81129
181250 266 291 278 280
216 236 272348
450
FY
93
FY
94
FY
95
FY
96
FY
97
FY
98
FY
99
FY
00
FY
01
FY
02
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14E
FY
15E
Source: Data as on May 2013 Motilal Oswal Research
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
20.421.3
23.424.2 24.0
22.8
19.0
15.316.9 17.1 16.7
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Sensex ROE (%)
Gap Between RoE and Interest Rates Near 10 Year Low
26
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
13.5
15.917.2 17.1
16.214.9
11.3
8.09.0 8.7 8.5
6.9
5.4
6.27.1
7.87.9
7.6
7.2
7.9
8.4 8.2
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Difference RoE - G-Sec 10 Year G-Sec (%) Average - RHS
Source: Motilal Oswal Research
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
BSE Sensex Valuation snapshot
Mar’91 – Mar’13 P/E P/B ROE
Low 8.29 1.58 14.30
Average 14.88 2.57 19.01
High 24.64 4.15 24.19
Current 14.10 2.39 16.7
27
Is this a bad time to invest?
Source: Data as on May 2013 Motilal Oswal Research
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Market returns Vs. Starting P/E
0
20
40
60
80 Avg. 1 yr return
Median 1 yr returnCurrent PE is 14x
% 1 yr return
28
(60)
(40)
(20)
<10x 10-12 12-14 14-16 16-19 19-22 >22
Sensex PE at start of period
Historical analysis suggest that investing at curre nt levels has generally yielded double digit return s in the equity market
P/E – Price/Earnings; Source: CLSA, data since 1992 for BSE Sensex Index
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Valuation Discount of Mid Caps to Large Caps is at Historical Extremes
0.40
0.50
0.60
0.70
0.80
0.90 BSE Mid Cap Index P/B to BSE Sensex P/B
0.30
0.40
0.50
0.60
0.70 BSE Small Cap Index P/B to BSE Sensex P/B
29
0.30
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
0.20
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Source: Bloomberg, Ambit Capital
Calendar YTD performance as on June 24, 2013 INR USD
BSE Sensex -4.56% -12.81%
BSE Mid Cap -17.29% -24.44%
BSE Small Cap -24.20% -30.76%
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Risks
� Geo-political risk
� Oil prices: India imports ~85% of its oil requirement yearly
� Twin Deficits: Fiscal Deficit and Current Account Deficit (CAD) - though there has been some improvement recently
� Rupee Depreciation
� Incremental Demand in gold due to falling prices
� Global macro� Global macro
30
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Disclaimer
The views expressed are as of July 18, 2013 and may change as subsequent conditions vary. This is a generic presentation on IndiaEquity Market; it shall not constitute any offer to sell or solicitation of an offer to buy units of any of the Schemes of the DSPBlackRock Mutual Fund.
Mutual Fund investments are subject to market risks , read all scheme related documents carefully.
31
Invest in Mutual funds online. Contact your Wealth Advisor:LIC Agent ANANDARAMAN ARN-30155 Mob: +919843146519 Email : [email protected]
Top Related