Transcript Dr. V. Aditya Srinivas

Current
Developments in
Economy
Dr. V. Aditya Srinivas
Insurance Sector (8/6/11)
 3 companies have seen 3 CEO change
in 8 years. ICICI,Bajaj, Aviva
 14 life insurance companies have less
than 1 % market share
 Out of 23 private companies only 8 have
turned profitable
 Only ICICI and SBI Life have 10 %
market share
Insurance
 IRDA has increased lock in period from 3
to 5 years for ULIP
 Reduction in charges also creating
problems
 Break Even has increased from 8-9
years to 10-12years
Insurance Market Share
 ICICI 6.3 %
 SBI Life 6.0 %
 HDFC life 3.2 %
 Bajaj Allianz 2.8 %
 Reliance Life 2.4 %
 Birla Sunlife 1.7 %
 Max New York 1.6 %
 Tata AIG 1.10 %
FM Meets FII (8/6/11)
 Finance Minister had a close door
meeting with 30 FIIs
 He assured him about long term growth
impact of India
Indian Economy
Challenges(9/6/11)
 GDP forecast reduced to 7.8 %
 Revenue collection becoming challenge
as corporate profitability goes down
 Fiscal Deficit target of 4.6% difficult to
achieve
 Disinvestment target of Rs. 40,000 crore
difficult to achieve as stock market in
downtrend
Interest Rate problem
 RBI had since 2010 raised repo and
reverse repo rates ten times to 7.5% and
6.5%, respectively, to control high
inflation mainly due to high fuel and
commodity prices.
 Repo is the rate at which banks borrow
money from RBI. Reverse repo is the
rate at which banks lend to RBI.
Direct Tax vs GDP Growth %
(9/6/11)
 Year
 2007-08
 2008-09
 2009-10
 2010-11
GDP
9.3
6.8
8.0
8.5
Direct Taxes
34.7
8.1
14.9
19.3
US Economy Gloomy (9/6/11)
 India has invested $ 39 billion in US
Treasuries as on March 31, 2011.
 US has deficit of $ 1.4 Trillion this fiscal
year.
 QE 1 US had injected $ 1 Trillion into US
Economy
 QE 2 US had injected $ 600 billion into
US Economy
 Unemployment rate at 9.1 %
European Zone Problems
 International lenders who bailed out Greece last
year with a 110 billion euro (USD 160 billion)
loan
 GDP to shrink by 3.8% this year and start
growing in 2012
 Greece's economy shrank far more than
expected at the start of 2011, signaling a
second wave of austerity measures prescribed
by the EU and IMF will pile even more pain on a
fractious society
NIM for PSU Bank (9/6/11)
 Year
 92-95
 05-06
 06-07
 07-08
 08-09
NIM
2.72
2.85
2.55
2.15
2.10
 Private sector banks it is as high as 4 to 5%
Market Valuation (P.E)
(9/6/11)
 India Sensex at 14.85
 China Sanghai at 12.73
 Brazil Boveszpa at 10.04
 Russia RTS
at 6.74
Mutual Funds Industry
 Collection in 2010 in NFO less by 57 %
from 2009
 Only 40 % of AUM is of Equity base and
60 % is of debt
 AUM in 2004 was Rs. 1,50,000 crore
which went to Rs. 8,00,000 crore in 2007
but then reduced to 6,00,000 in 2008-09
 41 Mutual Funds are there in India
currently with more than 1000 schemes
IIP (10/6/11)
 Index of Industrial production (IIP) for the
month of April grew at 4.4% - less as
compared to growth of 7.3% in previous
month, as per old series. As per new
series, which have 45% more items than
old series, IIP grew at 6.3%.
Indirect Tax Increases
(13/6/11)
 Exercise duty collection, indication of
factory production rose 38.4 % to Rs.
11,500 crores
 Revenue from Customs rose 37 % to Rs.
25,176 crores
 Service tax mop up was 27.6 % higher at
7,722 crores.
Financial Inclusion (13/6/11)
 Govt and RBI has target to cover 73000
villages having population of more than
2000 by March 2012.
 The target is that each of them should
have bank account
 Direct cash Subsidy can be transferred
to these accounts.
 Cost of opening an account and
maintaining it is Rs. 65
Financial Inclusion (13/6/11)
 Less than 20 % of such accounts is
active even after one year of opening.
 Currently only 45 % of population has
access to bank account
 Low ratio of one bank branch per 16000
people
QIP Investment Back Fire
(14/6/11)
 A QIP helps a listed company to rise
capital in the domestic market via equity
hares, fully and partly convertible
debentures to a buyer of is choice.
 SEBI instituted the guidelines for this
relatively new financing avenue on May
8, 2006 to reduce dependence on
foreign capital.
Worst Performing QIPs

QIP Date QIP Price
 Aksh optifibre Sep
20
 Kiri Industry
Nov
598
 C&C Const
Apr
244
 Ansal Proper Oct
90
Price
6.7
219
92
41
Best Performing QIP

QIP Date QIP Price
 Exide Indus
March
108
 Tata Motors
Oct
764
 Shoppers Stop Oct
325
 Godrej consu
July
345
Price
156
1013
440
438
Inflation Rises (15/6/11)
 Inflation rises to 9.06 % from 8.66 % for
May 2011
 This has again increased the scope for
Interest rate rise by RBI
 Rise in interest rates slows down the
Economy as cost of capital goes up
Interest Rates in India
 Bank Rate at 6 %
 Repo rate is at 8.5 %
 Reverse Repo is at 7.5 %
 SLR is at 24 %
 CRR is at 6 %
World Interest Rates
 USA 0.25 %
 Japan 0 %
 Bank of England 1 %
 Europe 1.5 %
 Australia 2%
 China 3.3 %
 India average 9 to 10 %
China Ups Reserve Ratio by
50 bps (15/6/11)
 Inflation in China is at 5.5 % which is 34 months
high
 It has increase its RRR (Reserve Ratio
Requirement) to 21.5 %
 China one year lending rate is 6.6% and
deposit rate is 3.3%
 Hardening of interest rates by China bring down
the commodities prices since it is largest
consumer of commodities
Greece Credit lowest in world
(15/6/11)
 S & P has lowered the rating of Greece
which makes it lowest in the world
 It is lower than Pakistan and Ecuador
since both these were out of
international markets since 2009
 Greece was given first bailout package
of $ 158 billion
Economy finds it tough
(16/6/11)
 6.3 % IIP in April 2011 compared to 8.8
% in March 2010
 Q4 GDP rose only 7.8 % compared with
8.3 % in third quarter
 0.4 % Investment Growth in Q4 as
against 20 % year earlier
 32 % drop in net FDI inflow in 2010
 44 % drop in gross FDI inflow in 2010
Broking Industry facing tough
times (16/6/11)
 Company
 India Info line
 Edelweiss Capital
 Kotak Securities
 Indiabulls securities
 AdityaBirla Money
 Geojit BNP Paribas
% chg NP
-8.99
1.68
-30.05
-43.86
-166.56
-38.52
Types of PMS (20/6/11)
 Fundamental PMS (Multi cap )
 Value Investing PMS (long term horizon
with small and mid cap stocks)
 Quantitative PMS (purely mathematical
calculations)
 Event Driven PMS (Event base stocks
with short term focus)
 Mutual Fund PMS (Invest in different
schemes of Mutual funds)
Gold – Ever Rising Demand
(21/6/11)
 Gold has given return of 160 % in last 5
years
 Nifty has given return of 83 % in last 5
years
 Central Banks globally have become net
buyers of Gold in 2010 in last 21 years
 In 2010, Central Banks bought 76 tonnes
of gold
Gold – Ever Rising Demand
(21/6/11)
 In 2011, first 6 months saw Central
Banks buying 129 tonnes of gold
 In 2005 central banks sold gold worth
674 tonnes
 China Forex Reserve has only 1.8 % of
its in gold of $ 3 Trillion forex reserve
 World average is 11 %
 China has to buy 6000 tonnes to reach
global average
Gold cont ….
 Japan gold reserve stands 3.2 % of its
total forex reserve of $ 1.14 trillion
 India gold reserve is at 8.2 % of $ 300
billion of forex reserve
 Supply of gold for last 20 years has
increased only by 0.7 % annual rate.
Why turnaround in Gold
 Over years, Central Banks have had major




portion of their reserves in US dollar
Gold is considered as “Store of Wealth”
US economy weakening
More printing of US dollars leads to
depreciation in its value
Gold cannot be printed or mined fast, value of
currencies is sinking against gold
Gold as % of Forex Reserves
 Country
 Singapore
 Taiwan
 India
 Japan
 China
Gold Tonnes
127
424
558
765
1054
% Res
2.4
4.7
8.2
3.2
1.6
Gold Supply Tight
 South Africa which produced about 1000
tonnes in 1970 now produced less than
200 tonnes in 2010
 Very few large gold mines are expected
to come up
 Over next five years, only seven gold
mines that are capable of producing
more than 500 kilo ozones ( 1 0z = 31.1
grams)
International Fund (22/6/11)
 An international fund is a fund that can
invest in companies located anywhere
outside its investors country of residence
 Feeder funds is one that invest through
another fund called the master fund. Its
usually launched to beef up the asset
base of the master fund
Performance of International
Fund
 Funds
1 Year Return
 Fidelity Global Real Asset
19.48
 DSPBR World Energy
19.19
 DWS Global Agri Fund
18.78
 DSPBR world Mining
18.41
 Birla Commodity Equities
16.97
 Mirae Asset China Advantage
14.15
 Principal Global Opportunity
13.91
PE Investors Eye India
(23/6/11)
 Private equity investors are sitting on cash to
the tune of $20 billion to enter India
 $70-75 bn of private equity (PE) and venture
capital investment in India by 2015.
 about $22 bn is required for follow-up funding of
660 current PE-funded companies. Then, about
2,000 companies in the IT and IT-enabled
services sectors, manufacturing, engineering,
construction and healthcare are expected to
attract close to $30 bn in new PE and VC
investments over the next four years
PE Investors Eye India
(23/6/11)
 The total investment by private equity
investors over the last six years is
estimated at $50 bn through 1,600 deals
 PE investments have grown from $2 bn
in 2005 to $19 bn in 2007. Thereafter,
investment value fell to around $6.2 bn
in 2010, registering a compounded
annual growth rate of 25% over the past
six years.
PE Investors Eye India
(23/6/11)
 The real estate and property
development sector clocked 203 deals
worth $13 bn of the total of $50 bn PE
investment over the past six years.
FCCB Creates problem for
Corp India (27/6/11)
 Rs. 16000 crore convertible bonds sold by top




500 companies come for repayment by march
2012
Rs.31500 crores worth of bonds due for
redemption by March 2013
48% price discount for conversion of Assam
company
86% discount to conversion price of RCom
50 % discount to conversion price of Suzlon
ULIP Sales fall hurt companies
(27/6/11)
 LIC new business fall by 8 %
 Private life insurers fall by 23 %
 ICICI fell by 29 %
 HDFC fall by 27 %
 Reliance life fell by 52 %
 Bajaj fell by 42 %
GDP and Capital Investment
Correlate (29/6/11)
 Year
 2005-06
 2006-07
 2007-08
 2008-09
 2009-10
 2010-1
GDP
9.5 %
9.7 %
9.2%
6.7%
7.4 %
8.8%
% Capital Contri
55
56
72
-10
55
40
GDP and Capital Investment
Correlate (29/6/11)
 Higher GDP Growth requires strong
Capital Investments by Corporate sector
 Currently due to high interest rates, the
capital investment plans have been put
on hold by corporate sector
NBFC under RBI Scanner
(29/6/11)
 Around 12630 NBFC are registered with
RBI as on June 30, 2010
 There are 228 deposit taking NBFC
 212 NBFC have CAR of 12 % but RBI
wants it to 15 % by March 2012
 Banks Credit to NBFC rose 55.7 % in
April 2011 from 15 % year ago.
China holds Treasury in US
(1/7/11)
 China holds atleast $ 1.1 trillion
investment in US Treasury bills
 China accounts for 26 % of total
investment in US Treasuries
 If china pulls out this investments then
interest rates in US could go up fast
Young Working Population by
2040 15 to 59 years (1/7/11)
 2010
 2015
 2020
 2025
 2030
 2035
 2040
61.8
62.5
63.1
63.5
63.9
63.9
63.4
1980
1985
1990
1995
2000
2005
54.6
55.3
55.9
57.2
58.6
60.4
Economy on firm ground
(1/7/11)
 Core Sector grows 5.4 % in May vs 4.6
% April
 8 sector as compared to earlier 6 sectors
 Now core sector has 38 % weight age in
IIP index as compared to 26 % earlier
Indian consumption story to grow
14 % next 3 years (5/7/11)
 Consumer durables, automobiles,
personal care, food have maximum
growth potential in indian markets
MNC controls Indian markets
 MNC
Global Sales %india Rank india
 Suzuki $23.6 Billion
23.3
1
 Nokia
$58.1 Billion
11
1
 Unilever $58.7 billion
6.6
1
 LG
$49.4 billion
5.9
1
 Samsung $135.8 billion
2.5
2
 Mcdonal $24.1 billion
0.37
1
PE Investment Rise, Exist Lag
(9/7/11)
 January to June 2011 saw Private Equity
deals with $ 5.8 billion
 Total deals in this period 211
 In 2010 there were 154 deals during
same period (37 % rise)
 Deal values have increased by 34 %
compared to same period in 2010
 Infrastructure sector had 23 % highest
share of total PE funds flowing in
Mutual Sitting on Cash % of
AUM (15/7/11)
 ICICI Prudential Advisor
 ING Optimix Global Commo
 Sahara Super 20
 Axis Midcap
 HSBC Midcap Equity
 IDFC Premier Equity
28.8
18.6
17.9
15.4
13.2
12.9
 Funds need to keep 5 % of AUM as cash to
meet day to day redemptions units
US Consumption down
(18/7/11)
 US Consumption in last 14 quarters have gone





up only 0.5 %
This is from 2008 starting
Pre 2008 crisis the consumption was 4 %
average for last 12 years
That means Q3 again in Question mark ?
Increase debt limit to $ 14.3 trillion
Asian economies have $ 3 trillion in US
treasuries.
ARCIL Under stress from
Large Lenders
 Name
 ICICI
 SBI
 IDBI
 PNB
Rs. Crores
9000
3000
2000
1000
 Buying 15 year mortgage assets,
overstepping ceiling of 8 year asset
Banks aggressive for SIP
(22/7/11)
 SBI Bank targets 25 lakh SIP till March
2012
 Axis Bank targets 5 lakh SIP till March
2012
 Overall MF industry from April 2012 to
June 2012 had 7 lakh folio closing down
 No support from Distributors
India in World Trade (22/7/11)
 India is among top 20 in exports of
goods
 India is among top 10 in service exports
 Our contribution in world GDP up from
4.6 % in 2000 to 5.4% in 2010
 India share in world exports in 2000 was
0.7 % and now in 2010 it is 1.7 %
Indian Corporate Results
(1/8/11) June quarter
 612 companies so far declared results
 Sales up 23.5 % vs 18 %
 PBDIT up 19.4 % vs 12.5 %
 Net Profit 13 % vs 19 %
 Interest outgo 19.4 % vs 7.7 %
 High interest rates killing Net Profit.
US Debt Default (2/8/11)
 To raise the current limit of borrowing of
$ 14.3 trillion by further $ 2.4 trillion
 To cut spending by $ 2.4 trillion in next
10 years
 Initial cut spending by $ 917 billion and
and another $1.5 trillion by year end
 India holds $ 41 billion in Treasury bonds
World job cuts (2/8/11)
 HSBC to cut 30,000 jobs by 2013. Cost
to revenue ratio touched 57.5 % which is
more than standard of 48 % to 52 %.
 China PMI reduces from 50.7 as
compared to 50.9 in June. This index is
made by HSBC
 India PMI reduces to 53.6 in July from
55.3 in June which is 20 month low
Finance Companies to tap bonds
from retail investors (2/8/11)
 Religare, muthoot and india Infoline to
raise Rs. 5000 with average interest of
around 12. 5 %
Retail Credit Growth (3/8/11)
 Retail loan grows at 17 % in June 2011
vs 6.6% in june 2010
 Total value Rs. 6,95,000 crores
 Home loans account for 3.7 % (Rs.
3,58,000 crores) vs 2 % year ago
 Auto loans lowest in 2 years
 Maruti – 26 % Hyundai – 11 %
 Auto sales leading indicator of demand
in the economy
Banks in BRIC in Risk
 Brazil financial shares have lost as consumer
defaults hit 12 month high in june and
borrowing cost climbs to 46 %
 China bank stocks at lowest level since 2006
 Bank of moscow needed the biggest bailout in
Russia history last month after racking up 5.4
Billion dollars of unsecured bad loans
 China faces risk that 30 % of total loans may go
for default
Telecom in worst shape
(4/8/11)
 Average Revenue Per User (ARPU) has
fallen 12 % in India from Rs. 216 to Rs.
190
 Bharti Airtel made loss for 6th straight
quarter
 Africa also made loss of Rs. 302 crore
Debt as % of GDP (4/8/11)
 Russia 9 %
 China 17 %
 South Korea 29 %
 World Average 69 %
 India 64 %
 Japan 229 %
 Greece 152 %
 Italy 120 %
Ireland 114 %
Portugal 100 %
US 100 %
US Economy
Downgrade(12/8/11)
 US has been down graded from AAA
rating to AA by Standard and Poor which
sent shock waves across the globe
 France and UK may also lose its AAA
rating since the debt there is also very
high
 Equities market around world lost $ 5.4
trillion since the downgrade
US Mess
 Unemployment in 2010 9.6 % while in
2011 9.10 %
 Inflation CPI 1.6% in 2010 and 3.6 % in
2011
 GDP 2.9 % in 2010 and 1.40 % in 2011
Broking firms smell cash in
NCD (12/8/11)
 Companies like Indiainfoline, Religare
and muthoot finance are to raise Rs.
3500 crores
 This would fetch brokers commission of
Rs. 45 to 50 crores as their fees.
Sovereign Wealth
Fund(12/8/11)
 UAE investment authority $ 627 billion
 Norway/Govt Pension fund $512 billion
 China/SAFE Investment Co $ 347 billion
 China/China Investment Corp $ 332
billion
Car sales in China (12/8/11)
 1.01 million is number of passenger cars
sold in China in July
Insurance Penetration
 World average life insurance 4.5 %
 India average 4 %
 Non life penetration only 0.6 %
Euro Zone Data (18/8/11)
 17.5 % India exports to European Union
in 2010 -11
 4 % share in FDI inflows from Germany
and France in total inflows between April
2000 and May 2011
Real GDP and Fiscal Deficit
(Source IMF and year 2010)

Real GDP Fiscal Deficit
 World
5%
5.5 %
 Euro Area
1.7
6.1
 USA
2.8
10.3
 Emerging Eco
7.3
3.7
 Japan
3.9
9.6
 UK
1.3
10.2
 India
8.2
6.8
Real GDP and Fiscal Deficit
(Source IMF and year 2010)

 Ireland
 France
 Spain
 Portugal
 Belgium
 Germany
 Italy
 Greece
Real GDP
-1 %
1.5
-0.1
1.4
2.0
3.5
1.3
-4.5
Fiscal Deficit
32.2
7.1
9.2
7.3
4.6
3.3
4.5
9.6
Primary Deficit (18/8/11)
 Ireland
29.7
 France
4.8
 Spain
7.8
 Portugal 4.6
 Belgium 1.3
 Germany 1.1
 Italy
0.2
 Greece
3.2
SBI CAR falls (22/8/11)

 Tier I
 Total
2008-09 2009-10 2010-11
9.38
9.45
7.77
14.25
13.39
11.98
 Provisioning 8,794
 Rs crore
 Tier I capital is 8 %
9,155
17,071
Take out Financing (24/8/11)
 Take out financing is a procedure under
which the loans made by banks to
infrastructure firms are sold to other
institutions so that banks recover their
funds ahead of the payment schedule
under the loan agreement.
 IIFCL (India Infrastructure Finance
Company Limited) has target of Rs.
10,000 crores for Fy 12
Banks in Take out financing in
FY 12
 Union Bank








Rs. 1500 crores
Central Bank Rs. 1300 crores
IDBI bank
Rs. 600 crores
PNB
Rs. 180 crores
________________________________
Banks lending to infrastructure sector
Power Rs.2,92,342 crores
Telecom Rs.94,319
Roads Rs. 99,038
GDP of 34 countries of OECD
24/8/11
 Year
 Q4 2009
 Q1 2010
 Q2 2010
 Q3 2010
 Q4 2010
 Q1 2011
 Q2 2011
GDP
-0.9
2.5
3.3
3.3
3.0
2.4
1.6
Million job but no takers (25/8/11)
 Defense 1,88,224
 Faculty and Researchers
17,739
 Police force 5,30,580
 Field Investigators 1,300
 Doctor and medical staff 1,78,801
 National Rural and Health Mission
1,48,361
 Income tax department 16,331
Capital Goods stock Bargain
Hunting (25/8/11)
 Company
 ABB
 BHEL
 BEML
 Bharat Elec
 Crompton
 L&T
 Siemens
 Thermax
Current PE
145
14
12
14
12
24
32
15
5 year Avg PE
43
29
18
16
20.9
23.6
33.1
32.2
Gross NPA Sector Wise (25/8/11)
 Unsecured and student loans
 MSME loans
 Auto loans
 Agri loans
 Asset Finance
 Home loans
 Corporate & Institutional
 Loan against security
4.96
4.24
4.01
3.74
3.26
2.23
1.52
0.30
Japan downgraded from Aa2 to
Aa3 (25/8/11)
 Moody has downgraded Japan economy
 Real GDP
 June 2011
 Mar 2011
 Dec 2010
 Sept 2010
-1.0 %
-1.0 %
2.1 %
5.0 %
Japan to fight rising yen (25/8/11)
 Govt to release Forex Reserve to Japan
Bank for International Cooperation
(JBIC) for funding to aid exporters
 Japan has $ 1.1 trillion in forex reserves

Gold loses its Sheen (26/8/11)
 Chicago Mercantile Exchange raised its
margin after gold reached $1910 ounce
 Minimum cash deposit to trade gold rise
27 % ti $ 9450
 Maintenance margin increased to $ 7000
from $ 5500
 Shangai gold exchange also raised the
margins
Countries Contribution in World
GDP (%) (29/8/11)
 USA
 China
 Japan
 Germany
 France
 UK
 India
 Canada
23.1
9.3
8.7
5.2
4.1
3.6
2.7
2.5
Russia
Italy
Others
2.3
3.3
35.1
LIC and IIFCL to join (29/8/11)
 Infrastrcture in 12th five year plan $ 1 trillion




required
The propose venture will allow LIC and IIFCL to
buy out 40 % of bank loan with each taking 20
% exposure
This releases banks fund and removes risk
from banks
This method is different from take out finance
where only IIFCL is involved
IIFCL has Rs. 8000 idle cash to buy bank loans
RBI opens window for New banks
(30/8/11)
 Paid up capital Rs. 500 crores
 Listing within 2 years
 25 % banks branches in rural areas for
financial inclusion
 No foreign entity/NRI can hold more than
5%
 10 year successful business track record
 Sound credential and integrity
RBI opens window for New banks
(30/8/11)
 Total foreign holding cannot cross 49 %
 Broking and Real estate companies
mostly out of race
 RBI to have last and final decision
KS Oil – Commodity Death
(30/8/11)
 KS oil market cap Rs. 2600 crore last
year now only Rs. 406 crore
 Company may become take over target
 Started in 1985 by Ramesh Garg from
local farm to plantations in South East
Asia
 Edelwiss sold shares of Garg as he
could not pay margin
KS Oil – Commodity Death
(30/8/11)
 Mastard seeds prices went up 19 % from
October and December 2009
 March 2010 when crop arrived prices
crashed 30 % to Rs. 24,400 per tonne.
An then fell to Rs. 23,700 per ton.
KS Oil – Commodity Death
(30/8/11)

March 11
March 10
Ch(%)
 Net sales 4681
4091
14.41
 PBDIT
534
462
15.52
 Tax Provi
65
40
64.44
 PAT
176
212
16.67
 His ownership has fall from 16 % to 8 %
Suzlon Turnaround (30/8/11)
 June 2011 it got profit of Rs. 60 crores
vs loss of Rs. 900 crores in June 10
quarter
 Order book of Rs. 29000 crores
 62 % of order book is from RE Power
books
Suzlon Turnaround (30/8/11)
 Suzlon ready to buy 5 % remaining stake
in RE Power for Rs. 398 crores
 Suzlon gave -27 % return while sensex –
12 %
 Total debt at Rs. 12,500 crores
 Cash balance of Rs. 3000 crores
Usha Throat Recommendations –
NBFC Tighter Rules (30/8/11)
 Higher capital adquacy norms at 12 %
 New NBFC should have Minimum asset
size of Rs. 50 crores
 It should not be from Real estate and
capital market company
 In June 2011, banks exposure to NBFC
is Rs. 1,69,000 crores which is 50 % of
its total lending which is risky
Top 10 NBFC (Asset wise Rs.
crore) (30/8/11)










Shriram Transport
M&M Finance
Sundaram Finance
Cholamandalam
Shriram City
Bajaj Finance
SREI Infra
Manapuram Finance
Magma Fincorp
First Leasing
24,786
12,165
11,479
9,017
8,539
8,066
7,482
7,577
5,130
1,297
Gold imports surge (5/9/11)
 Gold Imports was 458 tonnes in 2009
but increased to 918 tonnes in 2010
 Household financial saving as % of GDP
was 12.1 % in 2009-10 but decreased to
9.7 % in 2010-2011
Gold Imports double in last five
years for India (5/9/11)
 Year
 2006-07
 2007-08
 2008-09
 2009-10
 2010-11
$ billion
14.47
16.60
20.43
28.81
33.95
% of GDP
1.5
1.4
1.6
2.1
2.0
US Unemployment more
Serious (7/9/11)
 Unemployment in US was 6 % in 2007
when the crisis had started
 Currently it is 9.8 % which is more than
earlier which is more dangerous
Ethanol Production (7/9/11)
 Ethanol is produced from Molases which
is by product of sugar cane when it is
crushed.
 Companies want Rs. 35 per litre
 Govt willing to pay Rs. 27 per liter
 Cost of production was earlier Rs. 20 per
litre
Indian Investors invest huge
abroad (7/9/11)
 Corporate investment abroad is $5.5
billion as compared to $ 2.98 billion year
ago.
 Individuals invested $ 64 million
overseas as compared $ 62 million year
ago
PMI shows clear slow down
 Indian PMI falls to 53.8 from 58.2 in
August
 China PMI falls to 50.6 shows
contraction is on way
 17 Member EURO zone also PMI at two
year low at 51.5
IIP falls (13/9/11) and Inflation
soars
 IIP data falls from 6.6 % to 3.3% which
shows severe slowdown in the economy
 Inflation went up to 9.78 % from 9.22%
which is again very risky
 Both the indicators would show the
slowdown in the economy
Mantra for Success(9/9/11)
 Ambition is a must have, but don’t let it
hurt those around you – Adil Zainulbhai
MD McKinsey India
 There is no need to hide your failure but
you do need to flaunt what you have
learnt from it – Harsh mariwala MD
marico
 Intellect is good but combine with
HUMILITY and You have unbeatable
combination – Nitin Paranjpe CEO HUL
Mantra for Success (9/9/11)
 Generalist are OK, but leaders do need
to have a clearly defined area of
extraordinary COMPETENCE – Pramod
Bhasin VC Genpact
 Think SOCIETY and not just business –
Kalpana Morparia CEO JP Morgan India
India to topple Japan as 3rd
largest economy (20/9/11)
 Japan GDP $ 4.31 trillion
 India has reached $ 4.06 trillion
 This is as per PPP (Purchasing power
parity theory) which uses crude measure
of purchasing one burger at any place in
the world.
 In rupee terms India still is only $ 1
trillion economy
US to tax Rich persons
(20/9/11)
 Warren Buffet Income $ 46 million
 Tax rate at 17.7 %
 His Secretary Income $ 60,000
 Tax Rate 30 %
SEBI for MF NFO (20/9/11)
 For NFO Equity schemes the minimum
amount Rs. 10 crores
 For non Equity funds, the minimum
amount is now Rs. 20 crores
Real PE Factor for any firm is
People (20/9/11)
 People is the only PE factor capable of
creating value for itself and unleashing
value from the other factor
 Key No. 1 Unique value proposition and
market competitive total reward package
to get best “talent”
 Key no 2 Build flexible culture with nonnegotiable ethical values
Real PE Factor for any firm is
People (20/9/11)
 Key No.3 Give customers desired value
for money
 Key No.4 Short term focus should not
eat away long term profits
Position of women’s in
Corporate world (21/9/11)
 Nandeni Sethuraman – Head Marketing
Bharti Walmart jointed sep 2011
 Geetu Varma Head, food, HUL, Sep
2011
 Anjali Mohanty, Head, Global
Transaction Banking, Deutsche Bank,
Sep 2011
 Anupama Ahluwalia, Head, Marketing,
Coca Cola India, June 2011
BRIC Statistics (21/9/11)
 Country

 China
 India
 Russia
 Brazil
Current Account Deficit
2010
2011
5.3
4
-2.6
-2.8
4.8
4.5
-2.3
-2.3
Currency Position vs Dollar Dec
2010 to Sep 2011(21/9/11)
 Currency
 India
 Vietnamese Dong
 Taiwan Dollar
 Hong kong dollar
 Japanese Yen
 Newzealand Dollar
 Australian Dollar
Apprec/Deprec
-6.2
-6.4
-1.6
-0.3
5.9
5.2
0.6
India Fiscal Deficit worrying
(21/9/11)
 April July 2011 fiscal deficit is Rs.
2,28,000 crores which is already 55 % of
Rs.4,12,000 crores budgeted for year
 Last year same period it was Rs.90,900
crores only
 FII have withdrawn $ 1.2 Billion in
August and in 2011 net investment is
only $ 4.4 billion as compared to $21.8
billion last year.
Short term rates in BRIC
(21/9/11)
 Country
 China
 India
 Russia
 Brazil
Rates (%)
3.22
8.25
8.25
12
Euro Nations debt (26/9/11)
 Debt to GDP Ratio (%)
 Greece
 Germany
 France
 UK
144.0
78.7
83.5
76.5
 Italy debt is higher than the combined of
Portugal, Ireland,Spain
STT may Cut (27/9/11)
 STT introduced in 2004
 Earlier was 0.15 % then reduced to
0.125 % on both buyer and seller for
delivery base trade
 0.025 % for intraday and applicable only
to sellers
BRICS to take on Developed 5
(3/10/11)
 % contribution to world GDP in 1995 of
developed countries was 44.6% which is
now 31.6 % in 2015 while BRICS
increased from 15.8 % to 30.3 % in 2015
 BRICS now account for 16 % of global
exports – almost 3 folds rise in last 15
years
BRICS to take on Developed 5
(3/10/11)
 In 1995 % contribution to world exports
of developed countries reduced from
40.5 % to 27.8% in 2010 and those of
BRICS increased from 6.5 % to 16.3 %
 % contribution to Global Portfolio Equity
flows in 1995 63.3% reduced to 27.4 %
for Developed countries while for BRICS
it increased from 5.8 % to 14.6%
FDI inflows ($ billion)
 Year
 2006-07
 2007-08
 2008-09
 2009-10
 2010-11
 2011-12(April-Aug)
$ billion
22.8
34.8
37.8
37.8
27.0
17.4
Indian companies sit on Cash
Pile (17/10/11)
 Company
 Coal India
 Reliance Ind.
 ONGC
 NTPC
 SAIL
 Tata Steel
FY08
20961
4474
25055
15360
13933
4231
FY11
45862
30192
28688
17859
17747
10892
GDP and Inflation (24/10/11)
 Governor
Time Inflation
 Venkitaraman 90-92 12.7
 C Rangaranjan92-97 6.6
 Bimal Jalan 97-2003 4.7
 YV Reddy
2003-08 5.9
 D Subbarao 2008
7.2
GDP
3.9
6.3
5.7
8.5
7.8
NFO Euphoria turns into Gloom (All funds launched in 2006
Rs. Crores (24/10/2011)
 Fund
NFO Collection
 Reliance Equity 5790
 SBI Blue-chip
2850
 UTI leadership 2025
 SBI One India 1854
 UTI Contra
1145
 Tatacapitalbuilder 268
 LIC Nomura Vision253
Current AUM
1215
752
667
523
165
109
48
World PMI decreases in October
2011 (2/11/2011)
 Country
 China
 US
 UK
 India
PMI Sep
51.2
51.6
50.8
50.4
PMI Oct
50.4
50.8
47.4
52.0
Power Sector Loans sticky
(2/11/2011)
 Total lending to sector Rs.4,80,000 crores
 Loans at Risk Rs. 56,000 crores
 Banks
 SBI
 ICICI
 Axis Bank
 PNB
 Union Bank
Exposure
36,914
37,223
17,110
6,706
11,902
Indian Corporate Earnings
down (21/11/2011)
 Sales up 14.3 % lowest in 7 quarters
 Operating profit up 4 % lowest in last 2
years
 Net profit down by 34.9% biggest fall in 8
quarters
 Operating margins14 1.% lowest in 10
quarter
World In MESS(24/11/2011)
 China PMI to 48
 US Economy to have 2 % GDP in 2012
as compared to 2.5 % earlier.
 Germany banks fail in Bond Auction
 Out of $ 8 billion, 6 billion funded by
Central bank other banks gave only $ 3
billion
 US fails to cut deficit of $ 2.2 trillion
Indian Economy Troubled
 High inflation around 10 %
 Rupee Depreciating 52.18
 New Pension scheme has violated
investment norms (Corpus of Rs. 9500
crores) of 26 lakh govt employees
Real Effective Exchange Rate (REER) (Reading above 100
indicates over valued vice versa

36 basket
 April 11 104.94
 May
103.03
 June
103.82
 July
104.94
 Aug
102.93
 Sep
100.13
 Oct 11
NA
6 basket
116.48
115.46
115.21
116.83
114.64
111.46
106.65
Retail loans (7/12/2011)
 Retails loans portfolio
 ICICI bank
40 %
 HDFC bank
50 %
 Axis bank
21 %
 Axis bank plans to increase to 30 %
 Current retail loan book at Rs.29,300
crores
Jim O Neill – founder of BRIC
word (7/12/2011)
 “India should not raise people hope
about FDI and then in week say “We are
only joking”
 “India inability to raise its share of global
FDI is very disappointing”
Rating of EuroZOne
(7/12/2011)
 Country









Outlook
Austria
AAA –ve Solvenia AA -ve
France
AAA –ve Slovakia A+ -ve
Finland AAA-ve
Malta
A -ve
Germany AAA-ve
Italy
A -ve
Netherland AAA –ve Ireland BBB+ -ve
Luxemberg AAA –ve Cyprus BBB+ -ve
Belgium AA –ve
Portugal BBB- -ve
Greece
Cc -ve
Rating below BBB- are considered as JUNK
Subsidy Shoots up (8/12/2011)
 Fertilizer subsidy to shoot up target by
Rs. 40,000 crores
 Food Subsidy pegged at Rs.60,753
crores will also overshoot
 Total subsidy could be around Rs.
1,00,000 crores which would widen fiscal
deficit by 5.7 % of GDP.
Global Carbon Emissions rise
 Global 5.9 %
 China 10.4 %
 Brazil 11.6 %
 South korea 9.2 %
 India 9.4 %
 USA 4.0 %
 9.14 billion tonnes of total Co2 pumped into air
 510 million was extra, largest % rise since 2003
 US is world second largest emitter of
greenhouse gases after China
Trade deficit with China
(9/12/2011)
 Total Bilateral trade of india with china is
$ 63 billion in 2010-2011
 India imports from China $ 43 billion
 Currently 26 % of total imports from
China
 Next five years Chinese imports could
touch 75 %
 Risky for india as we have strained
relationship
PSU Banks on hiring spree
(9/12/2011)
 Allahbad Bank
2200
 Bank of baroda
4000
 Bank of maharashtra 1870
 PNB
10500
 Uco Bank
2100
 Union Bank
10000
Food inflation falls (9/12/2011)
 Food inflation at 6.6% from 19.1 on
1.1.2011
 Food articles have 14.3 % weightage in
wholesale price index
Gold Loans soar to Rs.55000
crores (13/12/2011)
 Year







Loans against gold (Rs. Crores)
FY02
2500
FY07
12000
FY09
25000
FY10
37500
FY11
50000
FY12
55000
Interest rates on gold at 12% to 24 % while
personal loans it is 36%
Rupee impact on Economic
(14/12/2011)
 Rupee slides negates 11 % decline in
crude prices
 Imports $352 billion to get costlier
 Government subsidy bill to rise further
 Interest cost to go up further with foreign
borrowing
% change in currency of major
countries(14/12/2011)
 Country
 India
 Euro
 Japan
 Brazil
 China
 Russia
 Malaysia
% change vs Dollar
-21 %
-9 %
-1 %
-18%
+ 1%
-15%
-8%
Losses of Sensex & Nifty
(13/12/2011)
 Sensex -21.5 %
 Nifty -24 %
 RIL
-28.5 %
 Infosys -21.5 %
Consumption to GDP
(12/12/2011)
 Consumption to GDP of China is 33 %
 Consumption to GDP – USA is 70 %
 Consumption to GDP – india is 60 %
Foreign Borrowings hurting
(Rs crores)

Foreign currency loan total loan
 Rel com
20351
34896
 IOC
18074
73296
 Tata Steel
14464
28716
 HPCL
13687
31253
 BPCL
10698
24734
 NTPC
9334
47461
 AbanOffshore 8258
13425
IT sector creates more jobs
(26/12/2011)
 Company
FY06
 TCS
111407
 Infosys
44658
 Wipro
53742
 Tata Steel 38182
 HDFC Bank 14878
 Tata Motors 22349
 SBI
198774
FY11
Net add
198614 87207
130820 86162
122385 68643
81251 43069
55752 40874
53151 30802
222933 24159
Services vs manufacturing
(26/12/2011)
 Only 12% of total jobs are created by
manufacturing sector
 Proportion of service sector jobs in total
headcount rose to 46.5% in FY11 from
41.8% in FY06
Tata Steel Strength
(29/12/2011)
 Tata steel contributes $ 27 billion to total Tata




of $ 83 billion
Tata steel has operations in 26 countries
spread across 5 continents
67% of tata steel revenue is international
2005 Tata steel acquired South East Asia
based Natsteel
2007 Tata steel acquired Corus worth $ 12.2
billion along with 41000 Non Indian workers
BSE NSE cash volume
crashes (3/1/2012)
 Period 16-31 Dec
 2007
 2008
 2009
 2010
 2011
Volume
26239
14263
17246
15034
9911
IPO in mess (3/1/2012)
 39 firms raised Rs. 14021 crores in 2011
 In 2010, firms raised Rs.69,112 crores
Borrowing cost rise for G7
(4/1/12) ($ billion)
 The maturing debt burden of G7 and
BRIC has balloned by $200 billion in
2012
 Japan 3000
Brazil 169
 US 2783
UK
165
 Italy 428
China 121
 France 367
India
57
 Germany 285
Russia 13
 Canada 211
Ageing BRICs to limit world
growth to 4.3 % this decade
(4/1/12)
 46% increase in people aged 65 + in
BRIC by 2020
 61 Million decrease in age group 15-24
years by 2030 in China
 China factory output to be hit hard
 BRIC account for 25 % for world GDP
Forex losses looms large
(5/1/12)
 Company
Forex loss
 Renuka sugar 464
 Ranbaxy lab
498
 JSW Energy
78
 Tata Power
717
 Usha martin
120
 Essar oil
469
% of PBT
203
150
81
70
70
69
Cash market volumes on BSE
and NSE (5/1/12)
 Year
 2006
 2007
 2008
 2009
 2010
 2011
BSE
969860
1414723
1324051
1273964
1193205
693317
NSE
1916227
3093928
3188510
3812031
3657521
2762867
Total
2886087
4508705
4512562
5085996
4850726
3456185
Sebi fines Rs.60 lakhs on
Ranbaxy Ex-Independent Director
for insider trading
 Solrex had invested Rs. 200 crores in
Orchid Chemicals.
 V K kaul and his wife Bala kaul knew this
information and purchased shares
between March 31,2008 and April
11,2008.
 In June 2010, SEBI had fined Rs. 1 crore
Manmohan shetty, former MD of Adlabs
for selling shares.
Govt to come with Auction of
shares (5/1/12)
 Company
 Hindustan Copper
 MMTC
 HMT
 National Fertiliser
 RCF
 STCI
Govt holding
99.59
99.33
98.88
97.64
92.50
91.02
ECB cash averts funding crisis
in Europe (6/1/12)
 ECB has given banks $636 billion of
three year loans
 Two year Italian yields are down 50 bps
 Belgian notes also down by 22 bps
Trading volumes drop 34 %
worst in world (6/1/12 Mint)
 Country

 US
 China
 Japan
 Uk
 Canada
 France
Avg Daily trading
(Million shares)
12468
173218
48902
2260
381
160
%ch in last
3 years
-26.3
45.7
33.2
5.2
-19.3
11.1
Trading volumes drop 34 %
worst in world (6/1/12 Mint)
 Country
Avg Daily trading

(Million shares)
 Germany
539
 Brazil
11317
 Australia
2523
 Switzerland
57
 India
872
 South Korea
3537
%ch in last
3 years
16.8
-20.2
14.5
-17.6
-34.4
-27.2
Asset class returns (6/1/12)
Mint
 Nifty -24.62%
 Cash 3.79 % (Saving Bank )
 Debt 8.24 %
 Gold 31.72 %
KFA turns NPA (6/1/12) Mint
 KFA total debt Rs. 6000 crores
 Banks loan includes
 SBI Rs. 1457 Crores
 IDBI Rs. 727 Crores
 PNB Rs. 710 Crores
 Bank of India Rs. 575 Crores
 Bank of Baroda Rs. 537 crores.
 KFA reported net loss Rs. 469 crores for july
sept 2011 quarter.
US Auto makers post best annual
sales since 2008 (6/1/12) (Million
units)
 Company
 GM
 Chrysler
 Ford
 Honda
 Toyota
 Nissan
 Hyundai
Sales in US
2.5
1.4
2.1
1.15
1.7
1.04
0.6
% chg YOY
13
26
11
-6.80
-6.70
15
20
Key factors for poor markets
 In 2010, FII put in record $ 29 billion
 In 2011, FII net sellers to tune of $ 380
million
 Sep
Jobless rates in EU (9/1/12)
 Company
 Austria
 Germany
 Crez Rup
 Sweden
 UK
 Italy
 France
% unemployment
4.0
5.5
6.7
7.4
8.3
8.6
9.8
Jobless rates in EU (9/1/12)
 Company
 Poland
 Hungary
 Ireland
 Greece
 Spain
% unemployment
10.0
10.7
14.6
18.8
22.9
US Economy improving
(9/1/12)
 US share in global exports rising from
low of 8 % in 2008.
 FDI inflow in US have picked and are
currently 1.5 % of US GDP compared to
mere 0.5 % share in 2002
 US current account deficit has reduced
from 7 % of GDP at height of US
consumption boom in 2007 to 3 % now.
US Economy improving
(9/1/12)
 For China pay and benefits between
2005 and 2010 rose 19 % annually for
average factory worked in China while
cost of employing US labour increased
by only 4 %.
 BCG estimates that by 2015
manufacturing in US will be just as
economical as China for many goods
made for North America consumers
US Economy improving
(9/1/12)
 US has become self sufficient energy
from low of 68 % in 2005 to now 78 % in
overall energy requirement
 Between 1991 and 2001, greenback
appreciated by more than 30% on trade
weighted and inflation adjusted basis.
Valuation of Stock Exchanges
(10/1/12)
 Chicago Mercantile Exchange valued at $ 16.30





billion
NYSE Euro next is $ 6.8 billion
Singapore Exchange valued at $ 6.6 billion
Johannesburg Stock is valued at Rand 6.2
billion
London stock Exchange valued at 2.2 billion
pound
NSE $ 3.5 billion but BSE less than $ 1 billion
New Investments at 5 year low
(11/1/12)
 Year
Govt Invest Pvt lnvest
 2010
7.39
11.49
 2011
4.43
6.03
 % chg
-40.04
-47.79
Total
18.88
10.46
-44.57
%Decline in 2011 vs 2010
(11/1/12)
 Approvals
% Decline
 CCEA
47.62
 CCI
59.26
 Ports
90.91
 Roads
54.05
 6 lane highways
30.28
 Communication & It 66.67
FCCB Bomb ticking (17/1/12)
 Indian corporate have to repay $ 7 billion
worth of FCCB on March 2013.
 Rcom ($ 925 million)
 Orchid chemical ($ 175 million)
 JSW Steel ($ 274 million)
 Sterling Biotech ($ 250 million)
Slowing Economy (17/1/12)
 Period
 Sep 2010
 Dec 2010
 March 2011
 June 2011
 Sep 2011
GDP%
8.9
8.4
7.8
7.7
6.9
Indian will do well (18/1/12)
 Real GDP per person change from 2007
to 2012 (forecast) % is that Indian will be
better off than their counterparts in
Britain, US, France and Japan.
 For India the rise is 34 % while for China
is 50 %
US spends on Credit Cards
(18/1/12)
 In Nov 2011, Americans spend $ 5.6
billion on Credit Cards Debt
 Total credit card debt in the country now
stands at $ 798 billion
Insurance Claim Settlement
(18/1/12)
 Company
Ratio %
 LIC
97.03
 HDFC
95.41
 Birla
94.66
 ICICI
94.61
 ING Vysya
90.49
 Overall Pvt
86.05
 Sector
Claim pending %
1.46
0.61
0.35
2.25
5.19
5.01
Non core Biz come to Brokers
Aid (18/1/12)
 Distribtuion & Wealth Mgt (Rs.Crore)
 2007-08
 2008-09
 2009-10
 2010-11
1510
1340
1280
1590
Non core Biz come to Brokers
Aid (18/1/12)
 Profit from fees basedbusiness(Rs.crore)
 2007-08
 2008-09
 2009-10
 2010-11
 2011-12E
 2012-13E
3070
670
2190
1670
400-450
500-550
UN says India to shine in
2012(18/1/12)(GDP %)
 Country
2011
2012
2013
 India
7.6
7.7
7.9
 China
9.3
8.7
8.5
 EU
1.6
0.7
1.7
 USA
1.7
1.5
2.0
 World
2.8
2.6
3.2
 Even in worst case scenario India GDP
to be 6.7 in 2012 and 6.9 in 2013
Life Insurance Premium falls
first time in decade (18/1/12)
 Year
 06-07
 07-08
 08-09
 09-10
 10-11
 11-12
Pre (Rs.Crore)
% fall or gain
61354
98.84
78502
27.95
69364
-11.64
81690
17.77
82294
0.74
62428(Apr-Nov)
HNI Portfolio (19/1/12)
 Asia Pacific reports from Merrill Lynch
and Capgemini HNI wealth in india grew
by 22% in 2009-10
 India HNI population grew from 1.27 lakh
to 1.53 lakh
HNI Portfolio (19/1/12)
 HNI Portfolio
 Cash
 Equities
 Real Estate
 Fixed Income
% of assets
6
36
23
26
 Cash/deposits
 Alternative asset
9
Implied volatility &
Nifty(19/1/12)
 Year
 Dec 2008
 Jan 09
 Dec 09
 Jan 10
 Dec 10
 Jan 11
 Dec 11
 Jan 12
Nifty
10.3
-5.23
1.54
-6.69
2.91
-10.58
-6.33
7.13
IV
-22
1.84
-8.29
10.53
-13.75
37.79
8.35
-17.87
Reliance Buy Back (19/1/12)
 SEBI guidelines allows companies to
buy back shares upto 10 % of paid up
capital and reserves without
shareholders approval.
 With shareholders approval 25 %
 In 2005 RIL announced buy back of Rs.
3000 crores but actually bought only Rs.
150 crre
Reliance Buy Back (19/1/12)
 Current laws ensure that company
spends atleast 25 % of announced offer
size that too within 35-45 days
 RIL has cash balance of Rs.61490
crores as on Sep 30, 2011
Mutual funds deals (20/1/12)
 Natrix Global Asset Mgmt bought 25 %
in IDFC MF for 5.5% of its AUM in Dec
2010
 Japan Normura bought a stake in LIC
MF for about 2.5 %
 T Row acquired 26% strategic stake in
UTI AMC for 3.6%of AUM in 2010
 IDFC bough Stancharts for 5.7 % of
AUM in 2009
Mutual funds deals (20/1/12)
 Eton Park capital paid 13 % of AUM for 5
% stake in Reliance Mutual fund in 2007
 Nippon life Buys 26 % in Reliance capital
for Rs. 1450 crore valuing 6.8% of AUM
largest ever MF deal by foreign firm
AUM of top 5 MF
(20/1/12)(Rs.Crores)
 Mutual Funds
 HDFC mutual fund
 Reliance mutual fund
 ICICI Prudential
 Birla Sun Life
 UTI Mutual Fund
AUM
88628
82305
69367
60377
57817
Real Estate on Hiring Spree
(23/1/12)
 985 milion square feet of residential
space is due for delivery between 2011
& 2013
 In 2008-10 the delivery was only of 522
million square feet.
 20% rise in total number of new hiring
Kuwait Investment Authority (KIA) gives $
1 billion to 5 fund houses (23/1/12)
 KIA has given $ 1 billion to 5 local
Mutual funds in India
 Birla Sun Life Mutual Fund
 DSP Black Rock
 ICICI Prudential
 Canara Robeco Mutual Fund
 Franklin Templeton
 Each MF has been allocated $ 200
million
FII control Sensex(24/1/12)
 Country
FII $ million
 India
-358
 Taiwan
-9074
 Japan
-323
 Korea
-8584
 Thailand
-167
 Indonesia
2950
 Philipines
1329
% chg index
-24.64
-20.61
-17.34
-10.98
-0.72
3.19
4.06
Stocks Responsible for
Sensex Crash (24/1/12)
 Company Points fall
 RIL
 LNT
 ICICI
 SBI
 Tata Steel
 BHEL
 Hindalco
-858
-699
-691
-445
-266
-253
-228
%chg FII Holding
-0.59
-2.76
-4.49
-5.48
-3.13
-1.76
-3.25
Stocks Responsible for
Sensex Crash (24/1/12)
 Company Points fall
%chg FII Holding
 Sterlite Ind
-192
-1.79
 Tata Motors -188
-0.08
 Jindal Steel
-143
-2.47
 15 stocks accounted for 85 % fall in
Sensex. As on Dec 2011 india has 3000
actively traded shares while Korea 1816,
Taiwan 824, Thailand 545 and Indonesia
440.
Large buyback by Global Energy majors from
2007 to 2010 (24.1.12)
 Company
 Exxon mobil
 Conoco Phillips
 Chevron
 BP
 Shell
 BASF
 RIL
Backbuy($ billion)
100
19
13.5
9.6
7.9
3.5
2.1
Consumption story
(30/1/12)(million units)
 Particulars Total
 TV
 2wheeler
 Fridge
 Washer
 Car
 PC
 AC
122
42.5
39.7
14.2
5.6
5.4
2.8
Urban%
47
51
68
82
73
84
93
Rural%
53
49
32
18
27
16
7
FDI flows rise (30/1/12)
 FDI flows from january 2011 to Nov 2011
increased by 25 %
 Brazil saw rise of 48 %
 Total FDI in india $ 50 billion
 FDI created 2.16 lakhs jobs
 Technology had maximum 146 projects
and growth of 51 % in value of FDI
Infra companies had huge
debt (30/1/12)
 From 2007 to 2011debt increased
 GMR
6.7 times
 BGR Energy 5.4 times
 IVRCL 5.4 times
 GVK 3.59 times
 Jaypee Infratech 31 times
Unemployment at record high
in EU (1/2/12)
 Country
Under 25 age%
 Spain
48.7
 Greece
47.2
 Portugal
30.8
 Italy
31.0
 Ireland
29.0
 France
23.8
 UK
22.3
 Germany
7.8
 Eurozone
10.4
Overall %
22.9
19.2
13.6
8.9
14.5
9.9
8.4
5.5
EU 9.9
CASA Account (1/2/12)
 Bank
CASA % of total Deposit
 IndusInd Bank
26.52
 Yes Bank
28
 Kotak Bank
28
 ICICI
43.6
 HDFC
47.7
 Axis Bank
42
 Bank of India
32.41
Sensex best since 1994 Jan
(2/2/12)
 January 2012 saw sensex giving return
of 11.3 %
 FII bought close to Rs. 11000 crores of
shares
 PMI increased to 57.5 from 54.2 in
December 2011
Jan 2012 has good data
(7/2/2012)
 Rupee gain 7.45 % in Jan highest in 17
years
 Sensex up 11.3% in Jan highest in 18
years
 RBI cuts CRR from 6 % to 5.5%
 Inflation falls to 7.5 % in Dec from 9.1%
in November, food inflation in negative
Jan 2012 has good consumer
durable data (7/2/12)
 Fiat panel TV sales up 50%
 Tablets sales up 40 %
 Smartphones 8 to 9 %
 Laptops and Desktops 5-6%
 Apparel 10 %
PE invest in water business
(7/2/2012)
 Company
PE fund Rs. Crore Invest
 Vishwa Infra
IFC
26
 Pratibha indus
Sequoia
3
 Waterlife india
matrix partner 22
 Greywater Tech Nexus venture
9
 Vishwa Infra
Olympus
240
 SMS Paryavaran Aditya Birla
40
 Neela Systems
Vinod Khosla
64
Airlines to import fuel directly
(8/2/2012)
 Rs 2500 crores saving for Airlines
industry
 Direct import would cost 4-5 % less of
total amount currently paid
 Fuel cost account for 40 % of the total
operational cost
FII bet on Corporate
Governance (9/2/2012)

FII Promoter
 IVRCL
37.1 11.2
 Ktak bank 20.4 0.0
 NCC
42.7 19.5
 IIFL
40.1 31.6
 IDFC
45.8 0.0
 Indiacement 27 25.8
Return in 2012
96.1
56.8
54.4
52.6
51.0
45.5
FII bet on Corporate
Governance (9/2/2012)

FII Promoter
 LIC Hou 40.1 36.5
 Hexaware 41.4 28.2
 Indusindbank 34.7 19.5
 Dr.Reddy 27.2 25.6
 ITC
16.3 0.0
Return in 2012
248.5
147.3
139.7
120.4
94.3
Bharti Airtel Net profit down 22
% (9/2/2012)
 Net profit down 22 % to Rs. 1011 crores
 ARPU fell 6% from Rs. 199 to Rs. 187
 Loss from African operations Rs.260
crores from Rs. 525 crores last year
RBI increases Bank rate to 9.5
% (14/2/2012)
 RBI has increased bank rate to 9.5 %
 Change has been made after 2003
 Currently it was 6 %
 The rationale it has to be more than
Marginal Adjust Facility which is 1 %
more than Repo Rate (8.5 %)
Interest cost growth lowers
(13/2/2012)(Int.Coverage Ratio)
 Sector






ICR (times) Sector
Infra
1.45
Pharma
Retail
2.77
Cement
Steel
3.03
Infotech
Power
3.82
Auto
Real Estate
5.59
FMCG
Telecom
6.11
Capital goods 7.94
Overall
ICR (times)
8.56
13.49
29.00
33.13
47.80
7.57
Interest cost Growth lower in
Dec quarter (13/2/2012)
 India Inc Interest expenses grew 42%
YOY
 Lower than Sep quarter 55 % growth
 Due to rates peak out
Best 10 year SIP returns
(13/2/2012)
 Mutual Fund SIP
 Reliance Growth
 DSPBR Equity
 HDFC top 200
 Magnum Global
 HDFC Equity
 Magnum Contra
 HDFC Growth
10 year return(%)
26.86
25.48
25.18
24.92
24.89
24.38
23.11
Best 10 year SIP returns
(13/2/2012)
 Mutual Fund SIP
10 year return(%)
 Magnum Multiplier plus
22.91
 Franklin India Bluechip
22.10
 Franklin India Prima Plus
21.97
SBI back on track (14/2/2012)
 Particulars
 Net profit
 Total Interest income
 Total deposits
 Net NPA
 Gross NPA
2.22%
4.05%
Rs crore
3263
27661
10,00,965
Inflation vs NREGA (Dalal steet page 86 feb 2012)
 In 2007 Rs. 11250 crores vs Rs.40095 crores in




2012 spend in NREGA
Guaranted 100 working days in a year
Agricuture wages in last 3 years have gone up
by 105 %
46 % of household consuption goes on food
High wages, farm labour cost and shortages
rise which forces govt to raise procurement
price.
Inflation vs NREGA (Dalal street page 86
 Public Money being wasted
 Angaluru village in krishna district in AP
 1000 families and 800 registered under
NREGA
 100 days at Rs 100 per day
 80000 man days of useful work in a year
is impossible in a village
Inflation vs NREGA (Dalal street page 86
 Agricultural wages labour have gone up
by 2.5 times
 Agriculture becoming unviable
 Farmers sell land as one acre bring Rs.
10 to 15 lakhs
 Money put in FD gives Rs.130000
 But cultivating land gives only Rs.
100000
 So no incentive for cultivation
Inflation vs NREGA (Dalal street page 86
 We are promoting dependency and
idleness and destroying work ethic by
promoting instead a welfare ethic
 The easily obtained money is spend on
liquor
 Rs. 15000 crore worth of liquor being
sold in Andhra Pradesh every year
Interesting Data (Dalal street
pg 58 Feb 2012
 241 million people would be added to working




population between 2010 to 2030
35 Million people are employed directly in textile
industry
Textile is second to agriculture
Textile industry contributes 14 % to Indian
industrial production and 4 % to GDP
PSU banks have Rs. 10,000 crores exposure to
the telecom companies of which Rs. 7500
crores is secured against assets.
India Imports from GULF
(29/2/2012) (Million Metric tonnes)
 Country
 Saudi Arabia
 Iran
 Iraq
 UAE
 Kuwait
 Qatar
 Oman
2009-10
27.18
21.19
14.96
11.60
11.79
5.41
5.39
2010-11
27.36
18.49
17.15
14.70
11.49
5.60
5.42
Economy crawls at 6.1% slowest in 3 years
(1/3/2012)
 In Q3 GDP growth at 6.1%
 In last quarter that is Q2 it was 6.9%
 Sectors
 Agriculture
 Manufacturing
 Services
Q2
3.2
2.7
9.3
Q3
2.7
0.4
8.9
BSE shares rise due to
MCX(1/3/2012)
 BSE shares now are at Rs. 180
 In Dec 2011 they were at Rs. 140
 BSE brokers were given 10,000 shares
at Rs. 1 each
 They were purchased back at Rs. 5200
 Then 12:1 bonus was given which took
the value to Rs. 400 per share
 Book value of one BSE share is Rs. 205
Structured Products (1/3/2012)
 Karvy Private Wealth managed Rs. 21,387 crore allotted






to them in 2011
Capital Guarantee
2 to 3 years lock in
Case:- Rs. 100, maturity 2 years. Rs 85 invested in FD
and Rs. 15 in shares
AT 8 % Rs.16 would be earned in 2 years which makes
85 + 16 = Rs. 100 as principal
Now Rs. 15 in equities say gives 100 % return then Rs.
30 out of it
So total return Rs. 30 + 100 = 130 which means 30%
return in 2 years which is fair enough with capital
guarantee.
Nifty PE cheaper than peers
(1/3/2012)
 Index
Current PE
 Japan Nikki
25.43
 US Nasdaq
24.18
 Korea Kospi
21.63
 Taiwan TWSE
19.16
 India Nifty
15.14
 China Shcomp
12.75
 Germany DAX
11.74
FY13 PE
15.04
13.46
8.56
12.99
13.35
8.59
9.59
Nifty PE cheaper than peers
(1/3/2012)
 Index
Current PE
 Brazil IBOV
11.47
 UK FTSE
11.24
 France CAC
10.84
 Hong Kong
10.03
 Singapore
8.58
 Russia RTSI
5.87
FY13 PE
9.41
9.57
9.11
9.86
12.56
5.91
Corporate Bribes in US Rise
(12/3/2012)
 $ 1 trillion paid in bribes annually to
governments officials
 78 corporations under investigation in
USA
 Violation of Foreign Corrupt Practice Act
which is 35 years old
 Pfizer, Goldmansach, HP,Wal Mart
RBI cuts CRR by 75 basis
points (9/3/2012)
 RBI cuts CRR by 75 basis points.
 New CRR is at 4.75 %
 It would release Rs. 48000 crores into
system.
 Earlier CRR cut of 50 basis points had
injected Rs.32000 crores
 Totally Rs. 80,000 crores
MNC Arms valued more than
parent (14/3/2012)
 Indian
PE
 Astrazeneca
90.3
 Novartis India
15.7
 Kennametal India 26.0
 Honeywell Auto 24.3
 3M India
63.0
 Blue Dart
37.8
 Oracle Fin Ser
19.7
ROE(%)
49.8
33.8
43.0
28.6
30.1
28.2
25.7
MNC Arms valued more than
parent (14/3/2012)
 Parent
PE
 Astrazeneca PLC
6.2
 Novartis India AG
14.3
 Kennametal India
12.2
 Honeywell Int
13.6
 3M Co
14.7
 Deutsche Post AG 14.4
 Oracle Corp
15.7
ROE (%)
43
14.1
15.6
19.3
27.6
27.2
24.2
First SME listed on
BSE(14/3/2012)
 BCB finance first company to list on BSE
SME
 It raised Rs 8.85 crores
 Issued 35.4 lakh shares
 Shares were priced at Rs.25 but it got
listed at Rs. 27 (gain of 8%)
Govt Borrowing in Fiscal 2012
 The Govt had initially targeted borrowing
of Rs.4,17,128 crores
 Rs. 5,10,000 crores is actual borrowing
done
IIP Growth surprises in Jan
2012 (13/3/2012)
 Month
 July 2011
 Aug 2011
 Sep 2011
 Oct 2011
 Nov 2011
 Dec 2011
 Jan 2012
IIP (%)
3.6
3.4
2.5
-5.0
5.9
2.5
6.8
Pharma sector on
Tenterhooks(15/3/2012)
 Indian pharma market worth Rs. 60,000 crores
 15 % growth of industry for last many years
 Foreign markets growing single digit
 Natco pharma allowed to sell cancer drug at 3
% of Bayer price which is too low
 Foreign MNC not happy with allowing
manufacturing and selling low cost version of
cancer drug at fraction of price charged by
patent holder Germany Bayer AG
Reduced Poverty numbers
(20/3/2012)
 In 2005 population 1140 million & in 2010 it is
1225 million
 In 2004-05 no of people below poverty line
407.2 million and in 2009-10 it is 354.7 million
 Villages see drop from 37% to 30% in 5 years
 GDP in 2004-05 7%, 2005-06 9.5%, 2006-07
9.5%, 2007-08 9.7%, 2008-09 6.5%, 2009-10
8.4%
HCC on verge of NPA
(20/3/2012)
 Rs. 8100 crore debt
 Rs. 3000 crore loans needs to be restructured
 27 lenders including SBI, PNB trying to




persuade HCC to pay
Rs. 90 crore interest payment lenders want
from HCC by March 31 to maintain its “standard
status”
Rs.134 crore loss HCC posted in Dec 2011
Rs. 1.5 lakh crore loans likely to be restructured
in Indian banking system this fiscal.
Lavasa project has also slowed down
Inequality increases Gini
Coefficient (22/3/2012)
 States
2004-05
 All India
0.35
 Maharashtra
0.35
 Gujarat
0.30
 Jammu kashmir 0.24
 Punjab
0.32
 Assam
0.30
 Rajasthan
0.30
2009-10
0.37
0.38
0.31
0.31
0.36
0.33
0.32
Inflation Index (22/3/12) Mint
 Particulars
Weight age
 Food, beverages,tobacco 50 %
 Fuel & light
9%
 Housing
10%
 Clothing,bedding,footwear 5%
 Miscellaneous
26%
Real Estate Shaky (22/3/2012)
Mint
 Year
 March 2010
 Sep
2010
 March 2011
 Sep
2011
Int.as % of Net Sales
6.50
8.78
8.01
10.62
Real Estate Shaky (22/3/2012)
Mint
 Year
 March 2010
 Sep
2010
 March 2011
 Sep
2011
Int Coverage Ratio
4.85
3.87
3.45
2.80
Real Estate Shaky (22/3/2012)
Mint
 Year
 March 2010
 Sep
2010
 March 2011
 Sep
2011
Debt Equity Ratio
5.31
8.53
9.73
10.10
Mahindra Satyam Deal
(22/2/2012)
 Strength of Combined Entity
 Valuation of Mahindra Satyam $ 1.8 billion
 $ 2.4 billion revenue
 75000 employees
 350 clients
 $ 3.1 billion market cap
 2 shares of Tech Mahindra shares to be
swapped for 17 shares of Mahindra Satyam
Mahindra Satyam Deal
(Rs.crore) (22/2/2012)

Satyam Tech Mah Combine
 Net sales 6105
5332
11437
 PBIT
751
777
1529
 PAT
444
670
1115
 Oper margin 12.3
14.6
13.4
 Reserves
4358
3682
8041
RBI Tightens Norms for Gold
loan NBFCs (22/3/2012)
 RBI has directed that companies having
half their assets in gold should have
minimum CAR of 12% Tier I by April
2014
 Companies cannot lend more than 60%
of value of gold jewellery
PE firms Big losses on Dalal
Street (26/3/2012)
 Company
Time Price CMP
 Punj Lloyd
Aug07 275 55
 NCC
Aug07 202 50
 Golandas
Aug07 275 75
 Welspun Corp June11 225 144
 IDFC
July10 176 135
 Max India
Dec 10 183 171
Loss
-80%
-75%
-73%
-36%
-23%
-7%
GAAR Scares Market
(27/3/2012)
 GAAR (General Anti Avoidance Rule)
 Aims to tax
 FII coming through Mauritius
 Participatory Notes (P-Notes)
 It may overrule the DTAA (Double Tax
Avoidance Treaty)
Sovereign Wealth Funds
(28/3/2012)











Fund
Abudhabi Investment
Norway Govt Pension
China SAFE Investment
Saudi Arabia SAMA
China Investment Corp
Kuwait Investment Authority
HK Monetary Authority
Govt of Singapore
Temasek Holdings
Russia National Welfare fund
$ Billion
627
611
568
533
439
296
293
247
157
149
ELSS outperforms traditional
tax savers (28/3/2012)
 ELSS has given 26 % return in last 10
years and 22 % return in last 3 years
 Average inflation in last 10 years is
6.05%
 PPF has given 8.10 % in last 10 years
 NSC has given 9.10 % in last 10 years
BRICS Shining (29/3/2012)
 Share of BRICS in world GDP
 Year
 2000
 2010
 2016(Est)
 Source IMF
% share
8.4
18.2
23.8
BRICS Shining (29/3/2012
 Countrywise share in world GDP
 Country
 India
 Brazil
 China
 Russia
 South Africa
% share
2.6
3.3
9.3
2.4
0.6
BRICS Shining (29/3/2012
 BRICS share in Global Exports
 2000 It was 6.9%
 2010 it was 16.3 %
 BRICS share in FDI Attraction
 2000 it was 5.3%
 2010 it was 17.8%
SEBI norms for listing Stock
Exchanges (3/4/2012)
 Bourses must separate regulatory and business




roles before listing
Listing will take place 3 years after SEBI nod
SE have to set up Independent Clearing
Corporation & transfer 25% of profit to
Settlement Guarantee Fund
No single investor should hold more than 5 % in
SE
Exchange, Depository, Insurance cos, banks,
public financial institutions to hold up to 15 %
US Improving but Europe in
mess (3/4/2012)
 US Factory employment index rose in
March 2012 to 56.1 from 53.2
 Country
Unemployment
 Spain
23.6%
 Greece
21%
 Portugal
15%
 Ireland
14.7%
 Austria
4.2%
US Back on Track (4/4/2012)
 In 2011, US household consumption was
$ 10.7 trillion
 70 % of GDP of US goes into Household
consumption
 China size in 2011 was $ 7 trillion
 Unemployment rate down at 8.3 %
MF Return and their Standard
Deviations (9/4/2012)
 Funds 1year
SD 3year SD 5year SD
 Small/Mid -0.65 21
31 28 7.93 32
 CNXmidcap-4.09 25 31 30
9.72 35
 Large cap -7.28 19
22 25 7.25 29
 BSE100 -9.23 21
22 27 6.83 31
 Sensex
-10.5 20 21 26 5.89 30
Close loss making urban bank
branches (9/4/2012)
 India has 60,153 ATM
 41 % owned by State Run Banks
 ATM viable only if 200 transactions per
day is there
 Private sector bank becomes profitable
within 10 to 12 months of its operations
 Finance Ministry requires Rs. 3.5 lakh
crore over next 10 years to capitalise
state run banks
Close loss making urban bank
branches (9/4/2012)
 74000 total branches are there in India
 20 % are in Rural India
 Only 5 % of 6 lakh villages in india have
branches (5 % of 6,00,000 = 30000)
 SBI alone has 16294 ATM
Cheap Swiss Loans for Indian
firms (10/4/2012)
 Indian firms have raised debt at below 9
% in Switzerland including hedging cost
 Local lenders in India would give at 11.5
% to 12%
 Hedging cost in Swiss franc is about
10% to 15 % lower than US dollar
Cheap Swiss Loans for Indian
firms (10/4/2012)
 Company
 SBI
 REC
 EXIM Bank
 Union Bank
 IDBI
$ million Swiss franc
325
200
175
160
110
China Surprises with Trade
Surplus (11/4/2012)
 Feb 2012 Trade deficit of $ 31.5 billion
 March 2012 Trade surplus of $ 5.35 billion
 Exports to US 10.4 % up
 Exports to EU 3.1 % down
 Year
 2008
 2009
 2010
 2011
Trade surplus
$ 296
$ 196
$ 183
$ 155
SEBI new rule creates
problems for PE(11/4/2012)
 Alternative Investment Funds (AIF)
cannot raise fresh funds unless
registered with SEBI
 Already PE firms are in midst of raising
Rs. 26000 crores
 In 2012 till March 2012 No. of PE funds
15 raised $ 2.23 billion
 PE real estate funds 9 and raised $ 3.01
billion
SEBI new rule creates
problems for PE(11/4/2012)
 New AIF rules mandate that investors
should minimum invest Rs. 1 crore
 Not more than 1000 investors should be
there
 Private Equity Fund Manager should
contribute minimum 2.5 % of total corpus
India Current Account Deficit
threatens (11/4/2012)
 Current Account Deficit 4.3 % of GDP
 Current Account Deficit should not be more




than 3 %
In 1991 crisis CAD had touched 4 %
1991 government had depreciated rupee by 24
% in 3 days
Borrowed $ 2.2 billion from IMF
Pledged 67 tonnes to gold with Bank of
England and Swizz Bank to raise $ 600 million
as foreign flows had dried up.
India per capita income
(16/4/2012)
 India is above $ 1175 per capita income
cut off for consessional IDA funds
 2010 per capital GNI (In $)
 Bangladesh
700
 India
1330
 Pakistan
1050
 Vietnam
1160
FII holding in FMCG
(16/4/2012)
 Company








Mar12
Mar11
Colgate
20.20
18.72
Dabur
18.42
17.22
Godrej
25.31
19.48
HUL
19.43
17.26
ITC
17.40
14.04
Nestle
11.03
10.55
Tata Global 9.87
8.04
GSKconsumer 15.50
12.08
% rise
1.48
1.20
5.83
2.17
3.36
0.48
1.83
3.42
India to increase IMF
quota(23/4/2012)
 India quota at IMF would increase from
2.44% to 2.75% after completion of
quota reforms
 In absolute terms, india quota would
increase from SDR(Special Drawing
Rights) 5821 million to SDR 13114
million
Indian bond market attractive
for FII (23/4/2012) (rs.crore)
 Year










FII Debt
2007
9428
2008
11772
2009
4563
2010
46408
2011
20292
2012
19213 (april 2012)
FII can invest $ 15 billion in Govt Bond
FII can invest $ 20 billion in Corp Bond
Corp bond in US give 1.95% and Germany 1.85 % while
in India it is 9.6 %
Indian Govt Bonds yield is 8.2 %
Reliance Result (23/4/2012)




Net Profit down 21 % to Rs. 4236 crores
Revenues up 16 % to Rs. 87000 crores
Oil and gas revenues fell 36.5%
refining and petrochemical segments rose
17.7% and 14%
 Oil & Gas
Net sales Rs12898 crore versus Rs 17250
crore, down 25.2% YoY
 EBIT margin: 40.7% versus 36.8%, y-o-y
 EBIT margin 3.3% versus 4.3%
GRM $8.6/bbl versus $8.4/bbl
Entry load in MF needed
(25/4/2012)
 Only 200 distributors have gross revenue of Rs.




1 crore
Out of this 200, 20 are banks and institutions
16000 odd active distributors only 185 IFA are
earning Rs. 1 crore gross revenue
In Singapore front load is 3% and expense ratio
is 2.5 %
Investors there pay in excess of 5 % to fund
managers
India to get higher IMF quota
(26/4/2012)
 India will pay Rs. 56,469 crores total for higher quota at








IMF
Cash Rs. 14,346 crores
Rs. 42,123 crores in local currency bonds
Current
Proposed
Quota
2.44 %
2.75%
Vote
2.34%
2.69%
Quotas are assigned on basis of country relative position
in world economy. India will be among top 10 countries in
terms of quota
FDI Flows (26/4/2012)
 Year
 2005-06
 2006-07
 2007-08
 2008-09
 2009-10
 2010-11
 2011-12
Rs. Crores
24,584
56,390
98,642
1,42,829
1,23,120
88,520
1,33,181
China one child policy hurting
? (27/4/2012)
 China has currently 120 million people between





20 and 24 years age
This would drop by 20 % in next decade
1979 china put one child policy
China population will peak at 1.4 billion in 2030
US couples have average 2 children
US and Europe took 100 years to become
aging societies, China has taken less than 40
years to become aging society
Mutual funds lose 8 lakh
Equity folios (2/4/2012)
 From Arpil 2011 to march 2012 over 8 lakh






mutual fund equity folios have closed
AUM bifurcation (Rs. 5,87,000 crores)
Banks/ FI
2.3 %
Corporates 43.1%
FII
0.7%
HNI
26.6%
Retail
27.4 %
GDP Growth Result of luck or efforts
? (27/4/2012)(Moneycontrol)

from 1985-86 to 1990-91, the economy grew by an average of 5.6 percent. In
the next six years (1991-92 to 1996-97), which included the glory years of
Manmohan Singh’s reforms, we grew by all of 5.7 percent. In other words, by
just 0.1 percent more, despite the big-bang reforms.
 In the six years after that (1997-98 to 2002-03, which covers the second half of
the United Front government and most of the NDA), the economy actually
tapered down to an average of 5.23 percent, before finally taking off by an
average of 8.45 in the next eight years.
 The rebound in the economy that started in the last year of the NDA (2003-04)
continued till 2010-11 – a full eight years – with a strong dip in 2008-09 during
the Lehman crisis.
 What this suggests is that it is the 2003-11 period that was the aberration, and
not the earlier periods, when we were doing 5-6 percent after reforms. Thus we
could revert to this mean if we don’t reform aggressively now. But even if we
do reform, we are likely to see a growth slowdown over the next three-to-five
years because reform, by definition, means the system will have to adjust to
new shocks. Shocks initially bring growth down: in the year after Manmohan
Singh’s reforms, India’s GDP growth in 1991-92 crashed to 1.4 percent before
rebounding to 5.4 percent.
FCCB Woes for Indian
companies (2/5/2012)
 Company
Issued Outstand Maturity
 Tata steel
875
382
5sep 12
 Tata motors 490
473
12July 12
 JP Associate 400
354
12sep 12
 JSW steel
325
274
28Jun 12
 Suzlon Energy 300
211
12Jun 12
10 Top countries with highest
gold reserves (2/5/2012)
 Country











Tonnes
% of ForexRes
US
8133
77.1
Germany
3396
74
IMF
2814
-Italy
2451
73.8
France
2435
73.3
China
1054
1.8
Switzerland
1040
18.6
Russia
879
9.7
Japan
765
3.3
Netherlands
612
62.5
Source:- World Gold Council
BASEL III Norms (4/5/2012)
 Basel III are guidelines framed by a committee
of central banks that s based in Basel,
Switzerland. RBI is also member of that
committee.
 Basel III has introduced many elements of
capital such as clearly defined common capital
that measures core equity capital in relation to
its total risk weighted assets
 Incremental equity requirement in Indian
banking industry may go up as high as Rs.3.2 –
4 Trillion over next 6 years
BASEL III Norms (4/5/2012)
 Banks to maintain minimum 5.5 % in common
equity as against 3.6% now by March 31, 2015
 Banks must create a capital conservation buffer
consisting of common equity of 2.5% by March
31, 2018
 Banks should maintain a minimum overall
capital adequacy ratio of 11.5% against 9 % by
March 31, 2018
 Banks must supplement risk based captial ratio
by maintaining leverage ratio of 4.5%
Reliance Fined Rs. 6600
crores (4/5/2012)







Year
Planned output
Actual
2009-10
27.62
39.31
2010-11
53.40
48.13
2011-12
61.88
38.61
2012-13
80.00
20.20
2013-14
80.00
14.00
Output fell as RIL did not drill wells as per
Amended Initial Development Plan (AIDP)
 RIL says drilling more well would not have
helped due to unexpected geological
complexitites
PE and P/BV of Blue Chip Stocks
(capital market April 2012) page 8
 Company Debt/Equity
 RIL
0.5
 Tata Steel 1.9
 Rcom
0.8
 ICICI Bank 0.0
 L&T
1.3
 DLF
0.8
 Suzlon
1.8
 JP Associat 3.5
PE
12
5.0
23.3
16.2
18.7
25.1
16.5
22.3
P/BV
1.6
1.3
0.4
1.8
3.2
1.4
0.6
1.6
Infrastructure Sector (capital
market page 11 april 2012)
 Rs. 50 lakh crore in 12th Five year plan (2012-2017)
 Half to come from private sector
 Investment in infrastructure was 5.7% of GDP in Eleventh
five year plan and now it is 8% in last year of 12th Five
year plan.
 FII investment limit in govt bonds, corp bonds increased
from $ 5 billion to $ 20 billion in govt bonds and $ 25
billion in corp bonds
 Withdrawal tax on interest payment has been reduced
from 20 % to 5 % for 3 years
 Investment linked deduction for capital expenditure
increased at 150 % from 100% cold chain, warehouse,
hospitals, fertilizer, affordable housing.
Debentures trading at discount to face value
(capital market page 81 april 2012)
 Company
Rate (%)
 Shiram tran 11.35
 Muthoot Fin 12.25
 IndiaInfoline 11.70
 Religare Finv 12.25
 FV Rs. 1000.
MP
995
977
952
983
Rating
AA+
AAAAAA-
Equity for all (8/5/2012)
 Equity as an asset class has grown to
nearly $ 55 trillion at end of 2010
 This is near to 87 % of world GDP
 India has 1.5 crore individuals out of 2.5
crores tax payees
 Even if 1 crore invest Rs. 50,000 in Rajiv
Gandhi Equity scheme the corpus
comes to be Rs. 50,000 crore
 This can act as counter force to FII
Equity for all (8/5/2012)
 Rajiv Gandhi Equity Saving Scheme
 France adopted this strategy in Loi Monory
scheme in late 1970
 In five years household investment in France in
equities increased from 7 % to 17%
 Germany, Belgium and Sweden also copied
this scheme with good results
 In Sweden one sixth of population was
converted into investors in equity.
World Biggest companies
(10/5/2012) ($ billion)











Company
Exon Mobil
JPMorgan Chase
General Electric
Royal Dutch Shell
ICBC
HSBC Holding
PetroChina
Berkshire Hathway
Wells Fargo
Petrobras Brasil
Sales
433.5
110.8
147.3
470.2
82.6
102
310.1
143.7
87.6
145.9
Market value
407.4
170.1
213.7
227.6
237.4
164.3
294.7
202.2
178.8
180.0
Mumbai Home Prices
(14/5/2012)
 Avg price per square feet (Rs)
 June 2008
8100
 June 2009
5600
 March 2012
10833
 Total unsold stock is 120.42 million
square feet. At current absorption rate, it
could take 40 months to get rid of this
inventory
Mumbai Home Prices
(14/5/2012)
 No of months needed to sell Inventory
(2011-12)
 Q1
40
 Q2
36
 Q3
44
 Q4
40
 Sales are up 3 % from year ago and 20
% since last quarter
Inflation rises (14/5/2012)
 Inflation spiked to 7.23% on the back of
higher manufacturing and food inflation.
Analysts on average had expected it
around 6.7%.
Sensex 1986 to 2012
(17/5/2012)
 Event
Year
 Harshad scam 92
 Dotcom Bust 2000
 Global melt
2008
 Euro
2010
High
4487
5934
20827
20852
Low
2131
3181
8966
15175
Sensex 1986 to 2012
(17/5/2012)
 Year
 1 year
 2 year
 3 year
 5 year
 10 year
Min Ret Max Ret prob of loss
-25.3 % 84.5%
25.8%
-15.4% 66.1%
20.0%
-11.7% 58.3%
6.9%
-3.4%
44.8%
7.0%
1%
31.1%
0.0%
Spain again into Recession
(18/5/2012)
 Spain has again slipped into recession
 It has go offer 5 % to attract buyers with
year of 5.106 % vs 3.374 % for 3 year
bonds
Rupee vs IT sector
(18/5/2012)
 1 % fall in rupee results in 30-40 basis
point rise in operating margins
 Out of $ 100 billion export revenue of IT
and BPO of Indian sector, 58 % was
from US.
Gold demand in China more
than India (18/5/2012)
 India gold demand at 207.6 tonnes
 China gold demand at 255 tonnes
 Gold ETF have grown 3 times in last one
year
 AUM of Gold ETF is Rs. 9614 crore in
January 2012 vs Rs 3518 crores in
January 2011
PE/VC Investment in
Healthcare (18/5/2012)
 In Care Hospitals – Advent India PE
invested Rs. 560 crores
 In Vasan Healthcare – Govt of
Singapore investment corp invested Rs.
543 crores
 Moolchand healthcare – Seqola Capital
invested Rs. 100 crores
 Wellspring Healthcare – Reliance
venture capital invested Rs. 20.5 crores
Foreign claims on India $ 137
billion due in 1 year (18/5/2012)
 As per Bank for International Settlement, claim
due on india in next one year is $ 137 billion
 Currently india has $ 293 billion forex reserves
 European banks account for 40 % of India total
foreign dues
 Leaving UK out, India Euro Zone exposure is
about $ 60 billion which is 3.4 % of India GDP
Face book IPO big hit
(19/5/2012)
 the company's closely watched stock began
trading at USD 42.05, compared with an IPO
price of USD 38 .
 USD 18.4 billion in one of the biggest initial
public offerings in US history.
 With a value of USD 104 billion, Facebook
became the first American company to debut at
over a USD 100 billion. It is larger than
Starbucks Corp and Hewlett-Packard
combined.
 The website, founded in a Harvard dorm room
in 2004, has grown into the world's dominant
social network with 900 million users.
Facebook highly overvalued
(21/5/2012)
 PE for face book is at 108
 PE for market in US 14
 PE for Google is 18
 Price to Sales Facebook 26
 Price to Sales LinkedIn 17
 Google makes $ 35 for each user which
is 7 times more than Facebook
Black Money – A Hype
(22/5/2012)(Rs.crore)
 Indian deposits in Swiss Banks
 Year
ExRate

 2010
 2009
 2008
 2007
 2006
47.79
45.19
45.52
34.79
36.17
Liability
% of
towardIndian total Liabi
9295
0.13
8879
0.13
10924
0.12
14979
0.18
23373
0.29
Black Money – A Hype
(22/5/2012)(Rs.crore)
 FDI Inflows (2001 to 2011)
 Mauritius 41.80%
 Singapore 9.17%
 USA
7.28%
 UK
5.12%
 Netherland 4.39%
Japan
Cyprus
Germany
France
UAE
4.07%
3.71%
2.31%
1.75%
1.46%
Black Money – A Hype
(22/5/2012)(Rs.crore)
 Swiss bank liability towards countries in
2010
 Foreigners hold More Money
 Offshore financial centre
 UK
 USA
 European countries
 Germany
28.9%
21.5%
15.8%
6.8%
3.6%
Corporate Debt Restructuring
becomes more strict (22/5/2012)
 CDR is a platform where lenders and corporates meet to





restructure loan
Objective is to ensure that company does enter financial
trap
Company promoters misuse company funds and then go
to CDR
Banks now to hike promoter contribution to 20-25 % and
seek personal guarantee
Banks to have power to change incompetent
management if found diversion of funds or misuse of
funds
Banks have to restructure loans worth Rs. 1,50,000
crores
India still better than world
(23/5/2012)
 GDP
 USA
 UK
 Eurozone
 OECD
 China
 India
2011
1.7
0.7
1.5
1.8
9.2
7.3
2012
2.4
0.5
-0.1
1.6
8.3
7.1
2013
2.6
1.9
0.9
2.2
9.3
7.7
IPO fails (30/5/2012)
 Year
IPO %
 3 years
-18.69
 1 year
-18.59
 6 months
1.79
Sensex%
4.71
-10.12
1.54
Venture Funding picking up
(31/5/2012)
 From January to May 2012 64 new start
up got Rs. 1351 crores of venture
funding
 In 2011, funding in first time ventures
crossed $ 1 billion mark
GDP at 9 year low (31/5/2012)
 GDP at 5.3 % which is at 9 year low
 India’s economy grew 5.3% during
January-March (Q4), the eighth
successive quarterly decline, and the
slowest pace in nine years. For the full
year, the economy grew 6.5%.
 India's fiscal deficit during the 2011-12
fiscal year that ended in March was Rs
5,20,000 crore, or equivalent to 5.9% of
India's gross domestic product
Why buy gold ? (4/6/2012)
 35 % buy for auspicious events like
marriage,
 20 % buy as investment
 16% buy as back up for bad times
 15 % buy for giving gifts
 8% impulses or no reason
 6% Fond of gold
Eurozone revamp (4/6/2012)
 July 9 is the deadline for creating
Permanent Euro Area Rescue fund, the
$ 620 billion European Stability
Mechanism
Indian Inc Improving but slowly
(4/6/2012)
 Analysis of 2302 companies in march 2012
 Revenue increased by 13.5% yoy
 Net Profit fall 8 % in March 2012 as compared
to 20.6 % in Dec 2011 and 37.9% in Sep 2011
 Operating Profit margin at 14.3 %
 Interest cost jumped to 47.4% to Rs.30,123
crores is at record high in history of Indian Inc.
 Interest Coverage Ratio is at 3.8 vs 3.4 which is
heartening (ICR should go up)
FII net sellers in May
(7/6/2012)
 FII were net sellers to the tune of Rs.
1100 crores in May
 FII confidence low as policy paralysis
hitting all reforms
 Month
FII flows (Rs.Crores)
 Jan-Feb
+ 44000 crores
 March
+ 8000 crores
 April
- 777 crores
 May
- 1100 crores
China cuts rate (8/6/2012)
 China has cut one year deposit rate from
3.5 % to 3.25 %
 Lending rate cut from 6.56 % to 6.31%
 Rate cut after 2008 to boost economy
Active managed funds create
wealth (11/6/2012)













Fund
IDFC premier equity
UTI opportunities
ING Vysya Dividend yield
Birla Sun life Dividend yield
UTI MNC
Birla Sun life MNC
Tata Dividend Yield
UTI Dividend yield
ICIC Pru Discovery fund
HDFC Top 200
Canara Robeco Equity
NIFTY INDEX
5 years return %
15.31
12.69
12.16
11.92
11.78
11.70
11.45
11.42
11.13
10.12
10.16
3.54%
Years of NIL return from Indexes
world over (11/6/2012)













Country
Years with NIL return
Japan Nikki 225
29.3
Spain IBEX 35
15.12
France CAC 40
14.95
UK FTSE 100
14.45
Germany DAX
13.95
US Nasdaq
12.95
Russia Micex
6.36
US Dow Jones
5.53
China Shangai
5.53
Brazil
5.03
India Sensex
4.78
From 1992 to 2003 Sensex actually reduced by 33 % i.e long
holding of 11 years
FII no and sub accounts
(11/6/2012)
 As on June 8, the number of registered
FIIs in the country stood at 1,754 and
total number of sub-accounts were 6,343
during the same period.
Gold Prices reality (14/6/2012)
 In FY 2011-12, India imported $ 56 billion worth






of Gold
August 1, 2011 gold was $ 1621 per ounce
June 8, 2012 gold was $ 1571 per ounce
Loss of 3 %
But during the same period Rupee depreciated
from Rs. 44.07 to 55.62 per USD
Rupee fell by 26.19 %
Gold during period rise from Rs.23150 to Rs.
29680 per 10 grams
PE Struggle to Exit broking
houses (15/6/2012) ($ million)
 Company








PE
Stake
Prime Security Newvernon 6.8
Bonanza
Gaja capital 11.6
Karvy
Baring Asia
ICIC venture 40
Angel
IFC
12.5
PL
Balyasny
2.8
JRG
Baring India 45.9
Anandrathi
Citi
19.83
Amt
12.4
5.94
110
37
10
35
20
Motilal Oswal raises Rs. 475
crores for 2nd PE fund (20/6/2012)
 Motilal Oswal has raised Rs. 475 crores
 Out of 475 crores – Rs. 100 crores from
Hong kong based Sqandran Capital
Advisor
 Remaining Rs. 375 crore from HNI
investors
“Rcom poster boy for everything
that could go wrong” (20/6/2012)
 Neeraj Monga of Veritas Investment Research believes
various mergers and amalgamations have led to the Rs
22,000 crore “inflated book equity” of Reliance
Communications
 The stock is trading at Rs 60. So the market doesn’t
really believe in the book value of the company. We’ve
just come out and said it very clearly,” he claims.
 In its June 8 report, the Canada-based equity research
had assigned a value of Rs 15 to the stock of Anil
Ambani-promoted telecom firm, citing high debt,
"whimsical" accounting policies and poor corporate
governance standards as the key reasons.
India contributes to IMF war
chest (21/6/2012)






Country
India
Brazil
Russia
China
South Africa
Contribution to IMF
$ 10 billion
$ 10 billion
$ 10 billion
$ 43 billion
$ 2 billion
 IMF will issue bonds and pay interest to
countries. This is war chest that IMF has made
which has $ 456 billion but target is to create $
550 billion
Electricity shortfall (21/6/2012)
 Region







Installed
Supply Shortfall
North
49919
39798 10121
West
57108
46330
10778
South
39645
32763
6882
East
29802
21057
8745
N East
2095
1697
399
This reduces industrial production and adds to
idle capacity causing losses to companies
Figures in Mega watts
Manufacturing slows down
world over (22/6/2012)
 China factory sector shrank for eight
straight month in June
 PMI fall to seven month low of 48.1 in
June from 48.4
 US PMI has come down to 52.9 from
54.0
 10 year Spain and Italy bonds are
quoting 7 % yield showing that attracting
investors is becoming more difficult
Claim Settlement Ratio for
insurance firms (22/6/2012)
 Company
Settlement Ratio Pending %
 LIC
97.03
1.46
 HDFC life
95.41
0.61
 Birla sun life
94.66
0.35
 ICICI
94.61
2.25
 ING Vysya
90.49
5.19
 Private Sector
(overall)
86.05
5.01
PMLA getting tough
(22/6/2012)
 69,224 suspicious transactions received
by FIU India
 53,384 reports were forwarded to Law
Enforcement agencies and Intelligence
agency
 Travel agents, vehicle dealers have to
report to FIU Ind for suspicious dealings
Weak show of MF SEBI ask
questions (22/6/2012)
 SEBI planning to call MF fund managers
who have consistently performed badly
 Scheme
Return% Benchmark %
 JM Basic
-10.30
5.52
 Escorts Power -9.17
-13.05
 JM Core 11
-9.07
5.17
 SBI Infra fund -5.96
5.22
 L&T Infra
-5.56
5.87
FCCB Issuers may Default
(22/6/2012)
 3i infotech, Great offshore and Hotel Leela





ventures may default
48 companies hold FCCB that mature this year
Value of FCCB maturing this year $ 5 billion of
which $ 2.1 billion will come up for June and
July 2012
Rupee in 2007-08 Was Rs. 42 per $
In 2012 it is Rs. 56 per $
The depreciation could add Rs. 10,000 crore on
redemptions
CCI imposes Rs. 6307 crore fine on 11
cement companies (20/6/2012)
 Company
 Jaiprakash Asso
 Ultra Tech cement
 Ambuja Cement
 ACC
 Lafarge India
 Century Textiles
 Madras cement
 India cement
 Binani cement
 JK cement
 CMA
Penalty (Rs. Crore)
1323
1175
1163
1147
480
274
258
187
167
128
0.73
FMC cautions for trade
changes code (26/6/2012)
 Client code modification is done to transfer
trade from one account to another account
 It is mostly done in Jan, Feb and March to avoid
tax
 From October 2011 to march 2012 CCM was
1373 from 1,00,620 in October 2010 to March
2011
 In terms of volume it has reduced from Rs.
25000 crore to Rs. 216 crore
FII power (28/6/2012)
 FII have assets under custody of more
than $ 200 billion
 17 % of market capitalization
 40% of free float shares in Indian stock
market
 FII invested $ 32 billion in Indian debt
market
Bittersweet Ethanol Pricing
(28/6/2012)
 Government has decided Rs. 27 per litre
for ethanol to be sold to oil companies
 Earlier price was Rs. 21 per litre
 Oil companies say that cost of making
petrol is Rs. 23 per litre and paying more
than this for making ethanol will make
blending unviable
On mobile Corporate Governance
issues (29/6/2012)
 KPMG checking Onmobile books for financial




bungling Rs. 3000 crore mkt value in 2008
Rs. 400 crore current market value
CEO Arvind Rao who is founder is at center of
investigation for taking away funds
Again Corporate Governance issue shows that
wealth of shareholders destroyed
Stock trading at Rs. 33 lowest in lifetime
Monsoon Vs India (2/7/2012)
 Share of Agri & Allied activity in GDP (%)
 Year






%
1970-71
43.9
1980-81
38.3
1990-91
33.0
2000-01
25.3
2011-12
16.0
Store capacity in large dams was 177 billion
cubic meter in 1995 which is currently at 253
billion cubic meter
Monsoon Vs India (2/7/2012)
 Rainfall % of normal
 2007-08
 2008-09
 2009-10
 2010-11
 2011-12
106 %
98%
78%
102%
101%
Agri Growth %
5.5
0.4
1.7
7.0
2.8
Monsoon Vs India (2/7/2012)
 Monsoon Deviation %
 2007-08
 2008-09
 2009-10
 2010-11
 2011-12
6%
-2 %
-22%
2%
1%
Inflation %
4.8%
8.0%
3.6%
8.6%
8.8%
Textile sector loan recast
(2/7/2012)
 Textile sector has debt of Rs. 35000
crore
 35 million workers work in textile sector
 The package involves Rs. 22000 crore
term loan, Rs. 5500 crore working capital
loan and Rs. 7500 crore loan for SME
units.
Airlines Industry wants FDI
(3/7/2012)
 Airlines Industry growing at 20 % per
annum
 By 2015, 180 million people in India to
travel by airways
 Indian Aviation sector 9th largest in world
Barclay CEO Robert Diamond
in LIBOR mess (5/7/2012)
 Robert Diamond the CEO of Barclay
bank has step down
 Barclay has been accused in
manipulating LIBOR which is
international rate for lending and
borrowing.
PE investors invest in real
estate (5/7/2012)
 Target
Acquirer
 Sheth Devel Morgan stanley
 3C company Red Fort
 RMZ Corp
Baring Pvt Equ
 Phoenix
Ascendas
 Suntech Reality Kotak
RS crore
461
150
500
176
310
Globally banks cut rates
(6/7/2012)
 ECB cuts rates by 0.25 % which now
bring rate to 0.75 %
 China reduced 1 year lending rates by
31bps and deposit rate by 25 bps
Mumbai real estate slow down
(6/7/2012)
 In Mumbai 80,000 residential units are
unsold
 Value comes to Rs. 1,00,000 crore
 Buyers shun property market due to poor
sentiment and higher Interest rates
Reasons for China
slowdown (9/7/2012)
 China has $ 2.5 trillion forex reserve but household and
corporation debt is 120 % of GDP and including banks it
goes to 200% of GDP
 Real estate bubble as $ 10 trillion is in money circulation
than in US $ 8 trillion
 China has invested 9 % of GDP in real estate which is
now bubble which is even higher than Japan and US
which was real estate bust in 2007
 In last 3 decades research on 124 nations shows that 52
% were democratic and 48 % authoritarian. Political
system does’nt matter for growth
EU stock market return post
Euro introduction (9/7/2012)


 Belgium
 Finland
 France
 Germany
 Greece
 Ireland
 Italy
 Netherlands
 Portugal
 Spain
Returns since euro
launched
-37 %
-8%
-20%
-28%
-77%
-36%
-58%
-42%
-57%
-42%
MF Distributes commission
despite ban (11/7/2012)
 Top 240 distributors have earned Rs. 1830




crore commission in FY 12
This is 8 % more than last year
HSBC, HDFC and Citibank have earned the
most
30,000 small agents are out of business since
they could not run without commission
45 % of equity fund sales comes from
Independent Advisors as against 29 % by
banks
Banks mobilize NRE deposits
(11/7/2012)
 Banks mobilize $ 10 billion through NRE
deposits
 Banks are offering 9 % to NRE deposits
for one year
Arbitrage funds score over debt
and equity funds (17/7/2012)










Arbitrage Funds
1 year return (%)
IDFC
9.8
JM
9.4
UTI spread
9.3
Reliance arbitrage
9.2
SBI arbitrage
9.1
HDFC arbitrage
8.9
Kotak equity arbitrage
8.9
Religare arbitrage
8.8
Debt funds have given avg return of 8.4 % while
equity funds value dipped by 4.1 %
Gold demand rises
(30/7/2012)
 Indian households have $ 950 billion
gold
 US Mine production data
 2010
231 tonnes
 2011
237 tonnes
 US Geelogical survey reports US has
3000 tonnes of Gold reserves
 North America accounted for 16.1 % of
total output in 2011
Gold funds failed as compared
to Gold ETF (30/7/2012)
 Funds
One year return %
 SBI Gold ETF
28.04
 Reliance Gold ETF
28.03
 Religare gold ETF
28.01
 UTI gold ETF
27.97
 Quantum gold
27.96
 DSP Blackrock world gold -11.5
 AIG world gold fund
-16.5
FII buys in July (30/7/2012)
 During July 3-27, Foreign Institutional Investors (FIIs) were
gross buyers of shares worth Rs 44,192 crore, while they sold
equities amounting to Rs 35,768 crore, translating into a net
inflow of Rs 8,424 crore

After taking the latest inflows into account, FIIs investment in
the equity market stood at Rs 50,417 crore so far in 2012 and
Rs 24,048 crore into the debt market during the same period.

As on July 27, the number of registered FIIs in the country
stood at 1,756 and total number of sub-accounts were 6,341
during the same period.

FII investment in 2012 in Rs.
Crore (2/8/2012)
 Month
 January
 February
 March
 April
 May
 June
 July
Net FII Flow
10357
25212
8381
-1109
-347
-501
10271
Proposed STT to hurt market
 AT present investor pays Rs. 100 per
Rs. 1 lakh turnover on delivery base
tranaction
 Rs. 17.33 per lakh on sale of
derivatives.
 Service tax of 12.36%
 This increases the transaction cost
Eye on low tax paying sector
(4/9/2012)
 Corporate tax is 30% but average tax
rate comes to 24 %
 Certain taxes are in range of 10% to
22%
 If the average tax rate is incresed from
24 % to 26% then also govt will get Rs.
30,000 crores
Exports down 35 month low
(4/9/2012)
 For april to july 2012, exports have fallen
by 5% to % 97.6 billion compared with $
102.8 billion las year
 Slow down in exports clear show that
world economy is slowing
PMI data for world (4/9/2012)
 Countries
 India
 Russia
 UK
 China
 France
 Germany
 Spain
July
52.9
52.0
45.2
49.3
43.4
43.0
42.3
August
52.8
51.0
49.5
47.6
46.0
44.7
44.0
Two wheelers on bumpy road
(6/9/2012)
 Company
Fall in sales in August
 Hero Motocorp
- 12 %
 Bajaj Auto
- 14%
 Hondo motorcycle
39 %
 TVS
- 17%
 Suzuki Motorcycle
36 %
 Mahindra
- 34 %
MCX-SX, BSE and NSE fees

MCX-SX NSE
 Admission 5 lac
5 lakh
5000(Eq +FO)
2.5 lac equity
20 lac
1.5cr
75lac(eq)
30 lac
30lac
1 cr
75 lac

 Deposit

 Networth

BSE
30lac(Eq)
25lac (FO)
Companies paying less than 24 %
effective tax rate (7/9/2012 BS)
 Company
 Ranbaxy
 Cairn India
 Reliance infra
 Sun Pharma
 Bank of Baroda
 HCL Tech
 Tata Motors
 Maruti
Effective Tax (%)
- 8.1
4.4
9.7
11.4
17.3
17.4
18.7
19.5
Companies paying less than 24 % effective
tax rate (7/9/2012 BS)
 Company
 RIL
 Hindalco
 Wipro
 HUL
 NTPC
Effective tax (%)
20.6
21.3
22.7
23.0
23.6
Infosys Acquisitions
(11/9/2012)
 April 2006 Citigroup stake in Piegon for Rs. 518 crore
 Nov 2009 Infosys BPO buys Atlants based McCannish system
for Rs. 177 crores
 Dec 2011 Infosys BPO buys Australia based firm for Rs. 194
crore
 July 2007 Buys captive BPO centre of Royal Phillips Electronics
for Rs. 110 crore
 June 2011 Acquires software solutions of Gen-I for Rs.
18 crore
 September 2012 Acquires switzerland based
management consultancy firm lodestone holding for Rs.
1932 crore
Infosys deal costly (11/9/2012)

Axon Lodestone
 Deal value ($mil)
658
349
 Deal value/revenue(times) 1.3
1.6
 No of consultants
2500
750
 Cost per consultant
1.5crore 2.6 cr
External Debt worrisome
(11/9/2012) ( $ billion)
 India external debt in last 5 years
 FY07
 FY08
 FY09
 FY10
 FY11
 FY12
172
222
224
260
305
345
India current account deficit
(11/9/2012)
 FY08
 FY09
 FY10
 FY11
 FY12
1.3 %
2.3%
2.8%
2.7%
4.2%
RBI raises ceiling for external commercial
borrowings (Moneycontrol 12/9/2012)
 As per the new regulation, a company can
borrow offshore funds to the tune of 75% of the
average foreign exchange earnings in the
immediate past three years or 50% of the
highest foreign exchange earnings realized in
any of those three years, whichever is higher.

Currently, a company is allowed to raise 50% of
the average annual export earnings during the
same time mentioned above.
Indian Industry capital investment lowest in
5 years (17/9/2012)
 Gross fixed assets grew at 12.3 % in
FY12 vs 34% and 26 % in two years to
FY08
 3 out of 8 companies in Nifty reported
lower growth
 RIL, Ultratech, Ambuja cement, BHEL,
Crompton greaves
PSU investments targets
(17/9/2012)
 Company
Rs. Crore
 Coal India
4000 in 12-13
 NPTC
20,000
 BHEL
10,260 (next 5 year)
 ONGC
1,65,000 during 12 plan
 SAIL
45000 on projects
 Rs. 1.8 lakh crore cash pile of nine blue
chip PSU
RBI cuts CRR (18/9/2012)
 RBI cuts CRR rate by 25 basis point
 Now CRR is at 4.5 % which was earlier
4.75 %
 This would release Rs. 17000 crore into
the banking system
FII inflows strong (19/9/2012)
 In year 2012, FII have invested Rs.
61000 crores ($ 13.7 billion) so far
 DII have sold Rs. 32000 crores shares
highest since 2005
 FII invested Rs. 6135 crores after Govt
announced reforms
Swiss bourse woos Indian
firms (19/9/2012)
 Switzerland is home to $ 4000 billion
assets and world leader in cross border
private banking with market share of 30
%
 Under Swiss law, Swiss Exchange
enjoys self regulatory powers
RCOM to raise tariff
(21/9/2012)
 Reliance communication has decided to
raise tariff by 25 %
 The base price will be increased from
1.2 paise to 1.5 paise per second
Retail industry world wide
(21/9/2012)
 Global Retail industry by 2017 would be
$ 20 trillion
 In India share of organized retail 5 - 6 %
 Brazil share of organized retail 36 %
 China share of organized retail 20 %
 Indonesia share of organized retail 30 %
Companies with good ROCE
(21/9/2012)
 Company





FY10
Idea cellular 8.3
Reliance cap 8.9
JP power ven 8.4
GMR infra
4.0
Indian Hotels 3.1
FY11
7.3
7.0
4.4
0.0
0.0
FY12
9.4
13.5
7.2
3.7
5.8
 Rs. 15 lakh invested in these companies
becomes Rs. 45 lakh in 5 years
Reforms bring FII back
(24/9/2012)
 In 2012, FII have invested net Rs. 73,130 crore




in equities
On average FII purchased daily stocks worth
Rs. 395 crores on each trading day in 2012
On average mutual fund investors withdrew Rs.
64 crores every trading day in 2012
More than 10 lakh equity folios of retail and HNI
were closed between sep 2011 and March 31
2012
FII have invested Rs. 25977 crores in debt in
2012
Euro zone to have two funds
(24/9/2012)
 European Stability Mechanism (ESM)
 European Financial Stability Facility
(EFSF)
 Total bailout fund of $ 2 trillion to ensure
that even big economies are bailed out
Rajiv Gandhi Equity scheme
(24/9/2012
 Direct retail investment in equities eligible for the scheme
 Listed Mutual funds and ETF to be included
 Rs. 50,000 to be invested and 50 % of that to get as tax
deduction
 Only Income up to Rs. 10 lakh eligible
 BSE 100, CNX 100 and shares of PSU above Rs. 4000
crore of turnover eligible securities for investment
 One can book the profit after one year but principle
remain lock for 3 years
SIP stood test of time
(26/9/2012)
 SIPs have given on average 15 % since
2007
 Sensex has given 7.5 % since 2007
 Scheme
3 year
5 year
 SBI magnum emerging 18.52
21.33
 ICICI Pru Discovery
9.91
19.15
 Reliance Equity Oppor 12.85
19.07
 HDFC Mid cap Oppor
11.55
17.96
SIP stood test of time
(26/9/2012)
 Scheme
3 year
 IDFC Premier equity 9.51
 Canera Rebeco emer 10.06
 UTI opportunities
10.40
 ING dividend yield
6.85
5 year
16.67
15.75
15.31
15.25
Invesco buys 49% in Religare
AMC (28/9/2012)
 US based Invesco mutual fund has
picked up 49 % stake in Religare Mutual
fund for about Rs. 460 crore valuing the
company that has assets under
management of Rs 14600 crores at
about Rs. 950 crore.
 The deal is valued at 6.4 % of closing
AUM
SME hit by loan restructuring
(3/10/2012)
 In first half of 2012, CDR cell has
received 69 applications of SME wroth
Rs. 37,547 crores for restructuring
 Last year 35 cases worth Rs. 27,753
crore were reported to CDR
FII big buys in Sep (3/10/2012)
 FII buys record shares worth Rs. 19000
crores in September 2012
 The highest in one month in this
calender year
MF AUM distribution
(3/10/2012)
 MF assets from top 5 cities
 City






% of AUM
Mumbai
44.4
Delhi
13.7
Bangalore
5.43
Kolkata
5.3
Chennai
4.6
MF can now charge unit holders additional 30
basis point over 2.25 if they raised 30 % of
inflows from place outside top 15 cities
MF Asset beyond top 15 cities
(3/10/2012)
 City
 Gurgaon
 Bhubaneswar
 Cochin
 Ludhiana
 Patna
 Nagpur
 Indore
 Rajkot
 Nasik
 Coimbatore
% of AUM
0.52
0.47
0.42
0.41
0.36
0.35
0.33
0.31
0.29
0.26
Bank deposit reduce
(4/10/2012)
 Bank deposit grew by 13.7 % which was
less than RBI projection of 16 %
 Bank loans grew by 16.4 % as against
RBI projection of 17%
Companies paying dividend for
last 10 years (4/10/2012)
 Company
Total dividend 10 yr % retrn

paid in 10 yr %
 Hero Motor
19700
20.23
 Infosys
8265
16.19
 JSPL
2670
42.35
 HCL tech
4675
21.52
 ITC
3850
25.75
 ONGC
3040
11.38
Companies paying dividend for
last 10 years (4/10/2012)
 Company
Total dividend 10 yr % retrn

paid in 10 yr %
 Grasim
2200
18.10
 HDFC
2745
22.61
 Cummin India
3580
22.95
 MRF
2400
21.63
 Hindalco
1650
4.68
 Britannia
2230
15.53
IMF cuts India’s growth
(10/10/2012)
 IMF has cut india GDP growth forecast
to 4.9%
 In first half, our economy has grew 5.4 %
Rise in urea prices
(12/10/2012)
 Urea prices increased by Rs. 50
 Farmers now will pay Rs. 5360 per tonne
as compared to Rs.5310
 Rs. 70,000 spend on subsidy out of
which 33 % goes for urea
 Price rise happened after 2 years
 Last time it was in 2010
Trade Deficit at 11 month high
(12/10/2012)
 Trade deficit at 11 month high at $ 18
billion
 This increases current account deficit
 Currently Current Account Deficit is 4.3
% of GDP
Warren Buffet uses facebook
for sales (12/10/2012)
 Buffer insurance brokeage unit in india
would sell insuracne at 7.5 % discount
 It will use face book for selling their
product
 One year old car insurance for Honda
city Rs. 11917 with Tata AIG, Rs. 13000
with ICICI Lombard and with Berkshire
the cost comes to Rs. 11595
Big Brokers pay less Advance
tax (12/10/2012) (Rs. In crore)
 Company
Current Last year % chg
 Citigroup
5
20
-75
 Morgan Stanley 21
47
-55
 Franklin Temple 5.8
9.9
-41
 JP Morgan
9.15 15
-39
 Sharekhan
7.5
5.5
36
 Kotak
10
7
43

Suzlon defaults (12/10/2012)
 Total debt on Suzlon books Rs. 14035
crore in March 2012 vs Rs. 12,241 in
March 2011
 Cash balance in march 2012 is only Rs.
262 crores
 Defaulted for $ 209 million payment to
bond holders
India housing market huge
scope (15/10/2012)
 Outstanding housing loans as proportion
to GDP is 80 % in USA
 It is 20 % in China
 India has this ratio of 8 %
FII rise stake in Nifty
companies (15/10/2012)
 In July – Sep Quarter, FII have pumped in Rs.







38,000 crore while DII sold Rs. 18800 crores
Company
Rise in FII stake (%)
Cairn India
7.67
Axis bank
5.52
IDFC
2.12
HDFC
1.98
ICICI BANK
1.55
FII have increased their stake in 23 Nifty
companies and 101 of BSE 500 companies
IPO norms under SEBI
scrutiny (16/10/2012)
 Companies cannot use more than 25 %of the proceeds




from IPO for “General Corporate Purpose”
Issue related expense cannot be part of General
Corporate Purpose expense
Merchant banker to declare itself as Marketing Lead
Manager
Minimum application amount increased from Rs. 10,000
to Rs. 15,000
Issuer has to allot minimum lot of shares to each retail
investor
Mumbai share in NSE 62 %
(25/10/2012)
 City
Aug 12
 Mumbai
62%
 Ahmedabad
4.9%
 Delhi
8.3%
 Chennai
1.5%
 Kolkata
7.6%
 Rajkot
1.2%
FY2011-12
60.40%
6.10%
8.4%
1.4%
8.6%
1.4%
Mumbai share in NSE 62 %
(25/10/2012)
 City
Aug 12
 Mumbai
50.19%
 Ahmedabad 8.0%
 Delhi
4.43%
 Chennai
0.53%
 Koltaka
6.20%
 Rajkot
4.16%
FY2011-12
37.40%
9.5%
10.9%
0.40%
5.0%
4.9%
Public sector banks risk at
laons (29/10/2012)
 Rs. 13000 crores stuck in Deccan
holding, KFA
 Rs. 7000 crores in KFA of 11 PSU banks
 Net NPA ratio of PSU banks in 2011-12
is 1.53 which was 1.09 in 2010-11
 Net NPA ratio of Private banks was 0.46
in 2011-12 and 0.56 in 2010-11
RBI cuts only CRR
(31/10/2012)
 RBI reduced CRR by 0.25 %
 Now CRR is 4.25 %
 It will release Rs. 17,500 crores in the
system
 Repo rate kept unchanged at 8 %
Core sector grows (1/11/2012)
 Core sector of 8 Industries grew 5.1 % in
September
 Reviving the hopes of recovery
 Coal, crude oil, natural gas, refinery
products, fertilizers, steel, cement and
electricity are core sector
 It accounts for 38 % weight age in IIP
India Inc. having problems of
stress (2/11/2012)
 66 % of working professionals feel lonely
 77% want to share their high and lows
with someone
 63% work harder than they want due to
competitive environment
 57% loosing touch with emotional side
due to over dependence on technology
India valuations (20/11/2012)
 Sensex has given 18 % return this year, the







most in BRIC
FII have purchased $ 18.7 billion of indian
shares this year
Country
PE ratio
Sensex
15
Brazil
16
Russia
5.6
Shanghai
9.6
MSCI Emerging index 11.2
Debt Equity Ratio (20/11/2012)












Sector
FY01
FY12
Oil and gas
0.6
0.4
Power
0.6
1.1
Steel
2.4
1.0
Telecom
0.2
1.4
Automobile
0.6
0.5
Non-ferrous metal 0.3
0.1
Textile
0.9
1.0
Infrastructure
0.8
2.0
Cement
1.6
0.1
Pharma
0.3
0.2
Average debt equity ratio of Indian companies has increased from 0.36
to 0.79 from 2005 to 2012
IKEA gets a FIPB nod to set
up shop in India (21/11/2012)
 IKEA to invest Rs. 10,500 crores or 1.9 $
billion
 It has 336 stores in 44 countries
NIM of Indian Banks
(26/11/2011)
 Banks









NIM % (2QFY 13)
Andhra bank
3.1
Bank of Baroda
2.7
Indian bnak
3.1
Punjab National bank 3.5
SBI
3.3
Union bnak
3.0
J & K bank
3.9
Axis bank
3.5
Hdfc bank
 ICICI bank
 IDFC
4.2
3.0
4.1
FII investment (26/11/2012)
 FII have invested net $ 19 billion so far in
indian stock market
 This is second highest inflow by FIIs in
calender year.
 In 2010 FII had made net investment of
about $ 29 billion
BSE remains top
Bourse(26/11/2012)
 BSE has become world first stock
exchange in terms of listed companies
 It has 5174 listed companies
 This data is given by World Federation of
Exchange (WFE)
Direct invest plans in MF from
January 1 2013 (26/11/2012)
 Direct plans good for those who have expertise
to invest on own
 Plans to be cheaper by 50 – 75 basis points as
customer wont have to pay any fund distribution
charges
 Small investors may also shift to direct plans
which may not be good for new investors at
outset
 Distributor community may have to start looking
at alternate sources of business like Insurance
and real estate
SEBI on shareholding
(26/11/2012)
 Company
Promoter Holding
 Wipro
78.3%
 Jet airways
80%
 DLF
78.6%
 Essar Shipping
83.7%
 Jaypee Infra
83.3%
 Larson Tubro
82.6%
 Indian Bank
80%
 State bank of mysore 92.3%
Greece Rescue plan works
(28/11/2012)
 Greece got 40 Billion Euro tranche which
has rescued it
 It has to reduced debt to 124 % of GDP
by 2020
Indian GDP in trouble
(28/11/2012)
 Indian GDP growth may dip to 4.5 % this year






as per OECD
World growth estimated to only 2.9% as earlier
projection of 3.4%
Projected rise in world trade
Year
%
2012
2.8
2013
4.7
2014
6.8
I Bankers at job
risk(28/11/2012)
 Since mid 2011, nearly 15000 I bankers
have lost their jobs
 Nearly 25000 I banker jobs on the block
as slump bites
 Companies looking to shrink manpower
with decisions on fund raising and
takeover being put off
SEBI caps charge on Institutional
brokerage(28/11/2012)
 The regulator has fixed 12 basis point
(0.12%) on equity and 5 basis point
(0.05%) on derivatives trade
 It would come effect from 19th November
 Large broking houses spend Rs 40 crore
on research while mid size broking
spends Rs. 40 to 50 lakhs on individual
company research
 Cap on brokerage has negative effect
Moody upgrades India
(28/11/2012)
 Moody reaffirmed India “Stable” outlook
which was liked by investors world over.
 Sensex went up by 305 point
 This shows strength of positive rating
Banks exposure to real estate
(29/11/2012)
 Bank









Exposure (Rs. Crore)
SBI
1,44,668
ICICI
81,422
Axis
52,730
PNB
48,475
IDBI Bank
36,785
Bank of Baroda
27,157
Standard Charter 26,082
HDFC
25,020
Bank of India
24,050
Loans slow down (3/12/2012)
 Personal loan grows at 23 % against 9 % last




year which is unhealthy
Loan under credit cards have rise by 17 %
against 5 % last year
Housing loans falls to 12% from 17 %
Consumer durables lending also falls by 17 %
Unsecured personal loans are the most risky
loans as bad debt probability is high
Banking Bill open doors for
future trading (11/12/2012)
 Banking bill allows banks to trade in
futures trading
 To raise voting rights of stakeholders in
private banks to 26 % from 10%
 To raise voting rights of shareholders in
nationalised banks from 1 % to 10%
FII pumps in huge money
(11/12/2012)
 FII have invested $ 21 billion pushing
Sensex 26 % up in this calendar year
 Highest among the BRIC nations
Bankers and ARC laud debt
recovery (11/12/2012)
 Enforcement of Security Interest and
Recovery of Debts Laws (Amendment)
Bill, 2011 was approved in parliament
 It seeks to convert any part of the debt
into shares of the defaulting company by
an asset reconstruction company (ARC)
Pledge shares (12/12/2012
















HDIL
INDIAN CEMENTS
UNITECH
JAIN IRRIGATION
PANTALOONS RETAILS
JSW STEEL
WELSPUN CORP
UNITED SPIRITS
SUZLON ENERGY
JP POWER
DISH TV
ZEE ENTERTAINMENT
JSW ENERGY
BHUSHAN STEEL
CROMPTON GREAVES
SINTEX INDUSTRIES
%
96%
67%
79%
48%
62%
50%
47%
98%
96%
72%
45%
31%
33%
34%
35%
37%
IIP data shoots up but on low
base effect (13/12/2012)
 Month
 Jan 2012
 Feb
 April
 May
 June
 July
 August
 Sep
 October
IIP Growth (%)
1%
4.3%
-1.3%
2.5%
-2.0%
-0.1%
2.3%
-0.7%
8.2%
New reforms by govt
(14/12/2012)
 Clears urea investment policy (sector
should see investment of Rs. 35000
crores)
 National Investment Board to be called
as Cabinet Committee on Investment
headed by PM.
 Fast execution of projects more than Rs.
1000 crores
Domestic Institutions net
sellers (14/12/2012)
 DII have been highest sellers to the tune
of Rs. 51000 crores
 Highest selling in history of Indian capital
market in one year
SEBI announces steps to prevent flash
crash (14/12/2012)
 First check on value of order, any single
buy or sale order above Rs. 10 crore
would not be accepted in normal market
 Next check is in margin with exchange
 When broker position exceeds 90 % of
margin-collateral the broker limit is
freezed and only squaring allowed
LIC makes huge profit
(17/12/2012)
 Rs. 22000 crores invested by LIC into
the market in 2012
 Rs. 21000 crores of shares sold by LIC
in 2012
 Made a profit of Rs. 11000 crores this
year and had made profit of Rs. 9000
crore last year
 Global funds have invested Rs. 1.1 lakh
crore this year in stock market
India natural resources worth $
1 trillion (17/12/2012)
 Import bill total india has $ 450 billion
 Oil imports alone are $ 150 billion
 Natural resources india has potential of
$ 1 trillion
Companies Bill 2011 cleared
(19/12/2012)
 CSR:- spending 2% of net profit on CSR for companies





having profit of Rs. 5 crore or more in last 3 years
Pay:- Directors pay should not exceed 5% of company
net profit
Compensation:- if firs winds up operations, it must pay 2
years salary to its employees
Auditor:- number of firms an auditor can serve capped at
20
Ratification:- Appointment of auditors for five years to be
ratified annually
SFIO:- More statutory powers given to SFIO to tackle
corproate fraud
Banking law (amendment Bills
2011) (19/12/2012)
 RBI gets more power can supersede bank




board
Voting rights of shareholders in bank goes up
(pvt from 10 % to 26 % and public from 1 % to
10%)
Banks not allowed to trade in commodity
futures
RBI to be banking regulator
CCI to regulate Mergers and Acquisition
SEBI slamps merchant
bankers (20/12/2012)
 From April 2008 to march 2012 out of
117 companies which came out with IPO
 42 trade above issue price
 72 are considerably below issue price
One person company gets nod
(20/12/2012)
 One person company gets nod in the
new companies bill
 Large number of sole proprietorship will
enter the corporate world
 In sole proprietorship the liability of the
member is unlimited while in company
form it is limited
SME power (26/12/2012)
 SME account for 45 % of country
industrial output
 Rs. 30,000 crores to manufacturing
output
 Rs. 12,000 crores to total exports
 SME manufacturers 8000 products
which is 9 % of india GDP
 In 2001 SME contribution to GDP was
only 6 % while it now at 22 % in 2012
Mid cap funds outperform
(26/12/2012)
 Fund
one yr return%
 Principle emerging
51.52
 SBI magnum emerging
50.27
 Reliance regular saving
42.83
 Principal growth
42.62
 Principal tax saving
43.14
 Reliance ELSS
42.55
 Reliance top 200
36.16
 ICICI top 200
32.46
Job Generation falls 21 % in
2012(26/12/2012)
 Job generation fell 21 % across various sectors





in the whole economy
Total 5.3 lakh jobs were created
IT topped with 2.1 lakh jobs being created
Academics and education 34,500 second
Insurance 27,100
Banking 24,500
Stocks where FII increased
their stake (27/12/2012)
 Company
 Bharti aritel
 ICICI bank
 LNT
 Jindal steel
 SBI
 Tata power
 ITC
% chg
2.78
2.38
2.19
2.03
1.84
1.54
1.06
FII holding %
16.44
36.38
15.4
22.17
9.14
23.45
18.32
US debt (27/12/2012)
 Total US debt $ 16 trillion
 US government owns 40 % through Fed
Reserve, Social Security trust fund
 Individuals, companies, pension fund,
mutual funds own 25 %
 Asian central banks, China, Japan and
oil exporting countries own 35 %
US Averted FISCAL CLIFF
(3/1/2013)
 Income above $4,00,000 per individual or $ 4,50,000 for





family to be taxed at 39.6% which is currently at 35%
Above same income level the capital gain tax and
dividend tax would be at 20 % from 15 %
Real estate tax at 40 % for estates of more than $ 10
million per couple which was earlier 35 % tax rate
Increase pay roll tax to 6.2% from 4.2% on workers first
$1,13,700 of income
Alternative minimum tax is linked to inflation index which
saves millions from being affected
Prevents 27% cut in payments to medicare providers for
one year
SEBI plans more strick norms
for Buyback
 Listed company should compulsory buy
back 50 % of announced shares
 Companies must complete the process
within 3 months
 They will have to park 25 % of the
maximum amount in an escrow account
PMI rises to 6 month high
(3/1/2013)
 HSBC market india manufacturing index
PMI rose to 54.7 in december from 53.7
in November
Gold imports creating
imbalance (3/1/2013)
 $ 22.3 billion Indian current account
deficit in July- september
 Current Account deficit high at 4.2 % of
GDP
 $ 38.7 billion current account deficit in
first half of 2012
India Inc set to declare good
numbers (7/1/2013)
 Operating profits of Nifty companies to
rise 18 % in Q3
 Net profit likely to rise by 12 %
 Revenue or sales growth to be 9.3 %,
which is lowest in 13 quarters as still
consumer spending low
GAAR postponed till 2016
(15/1/2013)
 GAAR to come from 1st April 2016
 P notes spared that is GAAR will not apply to Non



resident investors of FIIs and PEs
GAAR will apply only if main purpose of arragnment if to
avoid tax
Taxpayer will have chance to argue case before officer
Assessing officer will have to issue notice stating reasons
Investment before 30th August 2010 will not attract GAAR
India vs China (21/1/2013)
 China grew at 7.7% in 2012
 India grew at 5.3% in 2012
 China per capita income is $ 9146 is
more than twice of India
 Investment rate as % of GDP in China is
48% and that of India is 36%
European crisis still not over
(21/1/2013)
 European Stability Mechanism has Euro 500
billion
 Spain has debt of Euro 800 bilion (74% of GDP)
and Italy has debt of Euro 1.9 trillion (120% of
GDP)
 Banks have risk of capital flight from Europe to
other nations
 Europe banks have total deposits of Euro 8
trillion including euro 6 trillion in retail deposit
Govt raises Custom duty on
gold by 2 % (22/1/2013)
 Year









Gold import ($ billion)
2008-09
21.30
2009-10
28.80
2010-11
40.70
2011-12
56.50
2012-13
38.00
Gold has become Rs. 350 per 10 g more costly
In 2011 India imported 969 tonnes of gold and 604
tonnes till september 2012
Rs. 11674 crores of gold is held by ETF mutual funds
Gold ETF allowed to deposit physical gold with banks
RBI raises FII limit in bonds
(25/1/2013) BS
 Current account deficit 5.4 % of GDP
 FII can invest now $ 25 billion in G sec from
earlier $ 20 billion
 FII can invest now $ 50 billion in Corporate debt
instruments including sub limit of $ 25 billion for
infra bonds
 Long term investors include Sovereign wealth
funds, multilateral agencies, pension funds,
foreign central banks
Regulating IFA (24/1/2013)
 79000 odd Independent Financial Advisors are




there
Rs. 7,00,000 crore mutual fund industry is there
As on September 30, 2012 there are 86,240
AMFI registration number holders
Out of these 79636 are individuals and 6601
are corporate
Besides these there are 45,932 corporate
employees registered with AMFI as corporate
ARN holders
SEBI guidelines for Advisors
(24/1/2013)
 All advisors to be registered with SEBI within 6
months
 Registration valid for 5 years, renewable on
payment of fee
 Rs. 15000 registration fee for individuals, firms
and Rs. 1,05,000 for corporate bodies
 Insurance agent, AMFI registered MF
distributor, pension advisor, solicitors, CA,
ICWA, Acturaires and Fund managers NEED
NOT REGISTER
SEBI guidelines for Advisors
(24/1/2013)
 Minimum qualification of Post graduate degree
or diploma in finance or related fields
 Graduate with minimum 5 years of experience
in financial product advise
 Individual and partnership firm need networth of
Rs. 1 lakh and corporate bodies Rs. 25 lakh
 Disclosure like business plan, risk profiling,
infrastructure details, distribution service
offered, declaration that they will not receive
any other remuneration from third party
products
Repo Rate Cut (29/1/2013)
 t has cut repo rate—the rate at which it
lends to banks—by 25 basis points to
7.75 percent and the cash reserve
ratio—the portion of deposits that banks
have to compulsorily keep with the
RBI—by 25 basis points to 4 percent.
 This will infuse Rs. 18000 crores into the
market
GST road clear (29/1/2013)
 The center will pay Rs. 34000 crores to
the states for their compensation
 GST will set to rollout from FY15
Tax cut help low & middle
income earners (4/2/2013)
 A person earning Rs. 3 lakh in 2003-04
was taxed at 14.1 % now the effective
tax rate is 3.4%
 Individual with earning of Rs. 8 lakh was
paying 32.5 % tax in 2003-04 now pays
29.1 %
China post record capital financial account deficit
(4/2/2013)
 Since 1998, for the first time China has
recorded $ 117 billion gap annual gap in
financial account deficit in 2012
 China forex reserves is $ 3.31 trillion
which is the highest in world..
MF industry waiting for budget
(4/2/2013)
 Total AUM Rs. 7.80 lakh crore
 60 lakh folios decline in last 3 years
 MF wants tax benefit in long term
investment through pension plans
 Changes in IRDA act to let insurance
companies invest through MF
FII net buyers in January 2013
(4/2/2013)
 FII have purchased net shares worth Rs.
22000 crores in January 2013
 This is the seventh consecutive month
where the FII have been net buyers
Companies aim to reduce debt
(5/2/2013)
 Combined debt of 10 large business houses
have jumped fivefold in five years to Rupees
5.39 trillion at end of march 2012.
 10 groups are Adani Enterprise, GMR,
GVK,Vedanta,Essar, Videocon, Anil
Ambani,Jaypee, JSW and Lanco
 These groups account for 20 %of all bank loans
in country
 Combined debt of BSE 100 companies was
Rupees 65 trillion at end of fiscal 2012
Companies aim to reduce debt
(5/2/2013)
 Reliance Anil Ambani had total debt of
Rs. 86,700 crore
 Air India has debt of Rs. 47226 crores
IMF estimates for 2012 GDP
(5/2/2013)
 Countries
 Emerging markets
 Developing Asia
 China
 India
 ASEAN-5
2012-2013
5.10%
6.60%
7.80%
4.50%
5.70%
Tata pours Dividends
(5/2/2013)
 Tata group firms including Tata motors,Tata
Global Beverages, Tata Chemicals, Tata Steel,
TCS have proposed a dividend of Rs. 7200
crores in 2012 compared to Rs. 1200 crores in
2011.
 Out of proposed Rs. 4200 crore has been paid
out.
 In 2011-12 the PAT of Jaguar Land Rover grew
45 % over previous fiscal to Rs. 12000 crores
which was much higher than company indian
business
Etihad to complete Jet Airways
deal (5/2/2013)
 Etihad Airways is likely to take 24%
stake in Jet Airways by paying Rs. 1800
crores.
 This would be first deal after sector was
opened for FDI for foreign airlines in
Indian airlines
Govt Stumped at Decade low
GDP (8/2/2013)
 Central Statistical Organization has
forecasted Indian GDP at 5 %
 This is lowest forecast in one decade
 Govt Borrowing limit Rs. 5.7 lakh crore
which is already reached 90%
NTPC offer for sale (8/2/2013)
 NTPC third largest sale Rs. 11430
Crores in equity marekt after Coal India
Rs. 15000 crores and Rel power Rs.
11500 crores
 IN NTPC Govt of Singapore, Reliance
MF, SBI and LIC have invested
Transfer Pricing targeted by
Tax authority (8/2/2013)
 Govt hopes to Raise Rs. 1 Lakh crore by
taxes through Cross Border deals. Last
year Directorate of Transfer Pricing
collected Rs. 66000 crores and this year
they eye more Rs. 44000 crore so total
Rs. 1 lakh crore. Elements like
“Marketing intangibles-expenditure
incurred for building brand equity in india
will be taken for tax
FII finds P notes attractive
(8/2/2013)
 FII registration were 1767 in Dec 2011
 FII registraion fell to 1755 in Dec 2012
 P-note value climbs 48% in Dec 2012 to
Rs. 1.02 lakh crore
 FII pay 1 % brokerage in P notes as
against 0.30 paise in direct route
 P notes avoid uncertainty over taxation
of their income.
FII finds P notes attractive
(8/2/2013)
 Month
 April 12
 May 12
 June 12
 July 12
 Aug 12
 Sep 12
 Oct 12
 Nov 12
 Dec 12
Equity+Debt Pnote Exclude FO (Rs Crore)
86785
66472
69523
68677
68450
82379
95536
94658
101666
ECB and Bank of England
keep rates low (8/2/2013)
 European Central Bank has kept the
rates low at 0.75%
 Bank of England has kept the rate low at
0.5%
DLF coming out of wounds
(13/2/2013)
 DLF debt of Rs. 23,000 crores
 DLF has sold Aman resorts for Rs. 1650 crores,
NTC mill for Rs. 2727 crores and part of wind
power business for Rs. 282 crores
 DLF debt likely to come down to Rs. 18500
crores
 Promoters to sell 4.7% stake which would bring
down debt to Rs. 16500 crores
Tax-GDP Ratio (Dalal Street Feb 1124, 2013 issue page 58)
 Country
 Mexico
 United Kingdom
 Korea
 India
 USA
Tax to GDP ratio %
13.7
24.8
18.1
11.48
17.5
Inflation cools to 3 year low
(15/2/2013)
 Month








Inflation %
August 2012
8.01
Sep
2012
8.07
Oct
2012
7.32
Nov
2012
7.24
Dec
2012
7.18
Jan
2013
6.62
WPI drops to 3 year low
4.1% level of core inflation, a key measure of demand
(core inflation means rate of price increase in non-food
manufactured products – a measure of demand and
tracked closely by RBI)
Corporates in Mess
(15/2/2013)
 Suzlon incurred loss of Rs. 1154 crores
 Total debt in company Rs. 14000 crores
 Tata motors net profit falls by 52% to Rs.
1600 crores
FII buys huge in 2013
(22/2/2013)
 FII have purchased shares worth Rs.
43,854 crores ($ 8.14 billion)
 In 2012, FII have bought Rs.1,28,359
crores ($ 24 billion)
RBI banking license history
(22/2/2013)
 1993-94 RBI issued license to 10 private
banks
 2003-04 Two private banks YES bank
and Kotak Mahindra bank got license
 SUCCES stories HDFC bank, ICICI
bank, Axis bank, IndusInd bank, Kotak
and Yes bank
RBI banking license history
(22/2/2013)
 LAGGARDS IDBI bank and DCB bank
 Failures GTB merged with OBC,
Centurion bank with HDFC, Times bank
with HDFC Bank
Economic survey (28/2/2013)
 From 2007 the average return given by
various asset class
 Gold
27%
 Nifty
7.3%
 Saving deposit
8.2%
 Tax to GDP ratio had reached its peak at
11.9% of GDP in 2007-08
GDP growth in last 4 years
(28/2/2013)
 Year
GDP %
 2009-10
8.6
 2010-11
9.3
 2011-12
6.2
 2012-13
5.0
 2013-14 projected 6.1 to 6.7
GMR Cash starved (5/3/2013)
 GMR company had sold its entire stake
of 70% in infra project in inland nation of
Singapore
 The objective is to reduce debt level
from the payment received
 GMR had debt of Rs. 37,000 crores as
on December 2012
Dividend Distribution Tax
(5/3/2013)
 Dividend Distribution tax on debt mutual
funds have been increased to 25 % from
12.5%
Govt Minority stake
sale(5/3/2013) (Rs. Crores)
 Disinvestment done 2012-13
 NBCC Rs. 124 crores
 Hindustan Copper Rs. 807 crore
 NMDC Rs. 5973 crore
 Oil India Rs. 3141 crore
 NTPC Rs.11457 crore
 Due in March 2013
 RCF Rs. 300 crores
 Nalco Rs. 1350 crores
 SAIL Rs. 3000 crores
Loan incentive to help housing
loans (7/3/2013)
 Rs 30 – 40 lakh category houses would benefit




most from budget announcement
Out of 5,83,513 unsold apartments acorss
country 39% cost less than Rs. 35 lakhs
In NCR 50 % of flats are in this range
In mumbai 30 % are in this range
The budget proposal to increase interest
deduction from 1.5 lakh to 2.5 lakh covers 95 %
of interest paid in one year
Loan incentive to help housing
loans (7/3/2013)
 In 2012, 42% of the homes sold were in
category of Rs. 30 to 40 lakhs with
average loan being taken Rs. 25 lakhs
 At current interest rates of 10.5% a year,
total EMI on 25 lakh loan is Rs. 3 lakh
 2.5 lakh interest allowed as deduction
which covers 95% of interest
 Earlier interest deduction was 57%
RBI very cautious on Infra
loans (8/3/2013)
 Rs. 6925 crores lending to Infra sector
 Rs. 3874 crores lending to power sector
 Rs. 7000 crores stuck in KFA
 Rs. 5000 cr debt to Deccan Chronicle
most of which had to be written off
 ICRA reports says current NPA 3.6% at
end of Sep 12 which would rise to 6.5%
to 7.5% by June 30, 2015
India Airport Details
(11/3/2013)
 How airports boost regional economy
 Every $ 100 of airport expenditure
produces $ 325 beefits
 100 additional jobs generate 610
economy wide jobs
 Encourages access to goods and
services
 % rise in tax revenues
India Airport Details
(11/3/2013)
 Country
 USA
 Brazil
 Russia
 Indonesia
 South Africa
 China
 UK

No of airports
15000
4105
1218
676
567
497
462
India
456 (33% functional)
 AAI planning to operationalise 100 more airports by 2020
 Out of 125 aiports of AAI 87 are loss making (Losses Rs. 950 crores
Govt to scrap or ease FDI
caps (11/3/2013)
 Sector











FDI cap (%)
Multibrand retail
51
Defense
26
Airlines
49
Pvt Security agency
49
Telecom
74
Asset Reconstruction com
49
Banking pvt sector
74
Credit information com
49
Commodity exchanges
49
Infra cos in securities market 49
Insurance
26
Wealth Destroyers (18/3/2013)
 Company








From 2008 % fall in mkt cap
DLF
- 74%
R COM
- 91.2%
Sterlite Industries
-53.7%
Suzlon Energy
-94.7%
GMR Infra
-83.3%
Tata Communication -70.0%
Aban Offshore
-93.2%
GVK power & infra -84.6%
RBI cuts rate (19/3/2013)
 RBI has cut Repo Rate to 7.5%
 The Reverse Repo Rate is 6.5 %
 CRR is kept at 4 %
Banks urged to pump up
(1/4/2013)
 215 projects are stalled with investment
of Rs. 7 lakh crore
 Banks have lend Rs. 54000 crores
 Indian economy grew at 4.5% GDP
lowest in 15 quarters
 During march 2013 meet banks had
sanctioned Rs. 43000 crores for 126
projects which are estimated Rs. 3.55
lakh crore
Interest cost hurts (1/4/2013)
 Interest outgo as percentage of Profit
before interest and tax or PBIT has
increased to 29% in Dec 2012
 It was 14 % in Dec 2009. The ratio has
remained above 20% for last six
quarters.
CAD hurts Indian Economy
(1/4/2013)
 Indian economy Current Account Deficit
has touched 6.7% which is very high and
disturbing
 The estimated was 6.4%
Mutual fund investors decline
(8/4/2013)
 In FY 13, 34 lakhs individual investors
closed their folios
 The total number of folios have fallen
from 4.64 crores to 4.30 crores
 The number of investor folios for equity
schemes fell by 42.5 lakhs while debt
funds increased of 8 lakhs
RGESS fails to light up
(8/4/2013)
 RGESS collected Rs. 51.67 crores
 Total number of demat accounts 21800
 The number of demat accounts open for
RGESS is only 2.9% of total demat
accounts during the same period.
Corporate Governance issues
(8/4/2013)
 Companies
Prices
 Educomp
Rs. 757 to Rs. 66
 HDIL
Rs. 540 to Rs. 48
 SKS Micro
Rs. 1000 to Rs. 127
 BHEL
Rs. 550 to Rs. 176
 Crompton Greaves Rs. 300 to Rs. 91
 KS oil
Rs. 84 to Rs. 3
 Everon
Rs. 655 to Rs. 60
Corporate Governance issues
(8/4/2013)
 HDIL – Promoters sold their shares to
buy land, 96% of promoter holding was
pledged
 KS Oil – Promoters evaded taxes, entire
promoter holding was pledged
 Everon – Promoter was arrested on
charges of paying bribe to income tax
officer to hide income of Rs. 100 crores
Bilcare declared defaulter
(9/4/2013)
 United Bank of India has claim of Rs. 51
crore on bilcare
 Stock was Rs. 1830 In January 2008
and not it is at Rs. 101
 Rakesh junjunwala has 8 % stake in the
company in december 2012
US and Japan pulling funds
(9/4/2013)
 Fund managers have pulled out $ 951 million from india
 From BRIC countries they have pulled out $ 777 million
 Country
Funds ($ million) Jan-Mar 13
 USA
 Japan
 West Europe
 China
 Brazil
 Russia
 India
 Emerging Mkts
 Africa
+53925
+10166
+3206
+1904
- 1333
- 698
- 951
- 654
- 47
FII invest in US and Japan
(16/4/2013)
 FII have invested $ 66 billion in the last 3
months into US and Japan markets
Inflation below 6 %
(16/4/2013)
 WPI has come to 5.96% in March as
compared to 6.84% in February
 Core inflation at 3.4% down from 3.7% in
February
 Food inflation at 8.73% down from
11.38% in February
 IIP at 0.6% in February as against
expectation of -1.2%
Trade Deficit falls (18/4/2013)
 India’s trade deficit reduced by 50 % to $
10 billion
 Biggest fall in 9 months
 Due to fall in gold prices
FM speaks data on CNBC
24/4/2013
 FII have invested $ 11.8 billion in 2013 till date
 Indian Saving rate 31 % in 2012
 It was 36% in previous year
 CAD to be near 5 % in FY 14
 Reviving investments key to growth
 GST to be surely done
 Fall in Crude and Gold welcome to reduce the CAD
India Funds and ETF pull out
money (24/4/2013)
 From January 2013 to March 2013 Global funds have




invested $ 66 billion in US and Japan, Western Europe
They pulled out shares worth $ 1.2 billion in march
quarter
US Corporate dividend yield is 2.56 % while its 10 year G
sec yield is 1.7%
Japan corporate dividend yield is 1.56% while 10 year
bond yield is sub 1 %
Foreign Fund managers wants action and not words
Etihad Jet Airway Deal
(25/4/2013)

Jet Airways has sold a minority stake to fast-growing Abu Dhabi-based
carrier Etihad Airways for Rs 2,060 crore (roughly USD 379 million)
after months of negotiations.
 India's largest airline by market share said in a brief statement to the
stock exchange that its board approved the allotment to Etihad of 27.3
million shares at Rs 754.74 each on a preferential basis.
 The price represents a 31.7 percent premium to Jet's closing share
price on Tuesday . Indian markets were closed on Wednesday.
 If completed, the investment would be the first by a foreign carrier into
an Indian airline since the country relaxed ownership rules in
September and allowed foreign carriers to buy up to 49 percent in local
carriers, which are battling stiff competition and high operating costs.
Etihad gives soft loan to jet
(2/5/2013)
 Etihad has given $ 300 million soft loan
to Jet at 3 % rate of interest
 Jet as of now pay 14 % annual interest
on loans
 Jet has debt of $ 2.1 billion as on
December 2012
 Jet annually pays Rs. 1000 crores as
interest amount
 Jet has total debt of Rs. 12000 crores
FII flows dips in April 2013
 Month
 January
 February
 March
 April
FII Flows (Rs. Crores)
22,244
22,122
11660
4785
ECB cuts rate (3/5/2013)
 European Central Bank has cut its
benchmark rate at 0.50% from 0.75%
 FED has 0.25% interest rates
PMI India falls (3/5/2013)
 Purchase Managers Index has falled to
50.1 in March
 PMI above 50 and rising shows
economy expanding
 PMI below 50 shows economy
contracting
Bharti Airtel Still in losses
(3/5/2013)
 13th Straight quarter and fall in profits
continue
 Total debt in Bharti Airtel Rs. 65000
crores which is hurting its balance sheet
 Profits came down by 50 %
FII increase stake while DII
reduce (3/5/2013)
 FII holding in sectors
 Sector
 Auto
 BFSI
 FMCG
 IT services
 Oil and Gas
 Pharma
FII holding
9%
33%
9.2%
14.5%
10.1%
5.3%
DII holding (3/5/2013)
 Sector
FII holding
 BFSI
22.8%
 Engineering
8.1%
 FMCG
18.2%
 IT services
9.4%
 Metals Mining
5.1%
 Oil and Gas
16.5%
Returns of asset classes
(6/5/2013) (1979-2012)
 Asset class
 Inflation
 Fixed Deposit
 Postal schemes
 Gold
 Equity
Return %
8.1
8.8
8.7
11.1
17
Teledensity Falling (13/5/2013)
 Teledensity – number of telephone
connections for every hundred
individuals living within an area
 In june 2012 it was 79.6 and now in Feb
13 it is 72.9
 ARPU for GSM has come down to Rs.98
from Rs. 366 in March 2006
 ARPU for CDMA has come down to Rs.
80 from Rs. 256 in March 2006
Goodwill Hits (14/5/2013)
 2006 Tata steel acquired Corus for $ 13 billion
 2013 February consolidated loss of Tata Steel at Rs. 763 crores
 2009- Hindalco wrote off $ 1.5 billion goodwill for Novelis
 Dec 2012- Arcelor Mittal wrote of $ 4.5 billion in Europe
 March 2013 – Tokyo Steel took $ 1.3 billion impairment charge
 Indian Blues
 May 2010 – Vodafone Plc takes $ 3.4 billion impairment hit on
India operations
 Feb 2012 – Daiichi Sankyo takes Rs. 136 crores write off on
Ranbaxy
Trade deficit widens
(14/5/2013)
 Trade Deficit widens to $ 17.8 billion
 Last year it was $ 14 billion
 It increased to more buying of Gold as
the prices have crashed
Inflation falls to 40 month low
(14/5/2013)
 Inflation has come down to 4.89%
 It was at 5.86%
 It is at 40 month low which gives RBI
room to reduce rates
 Core inflation is at 2.8%
 Food inflation down 6.1%
 Repo rate still at 7.25% and reverse repo at 6.25% while
CRR at 4 %
Tata steel may cell Corus part
(21/5/2013)
 Tata Steel has been struggling to turn its European arm
profitable since the time of take over five years ago. The
company took an impairment hit of USD 1.6 billion on its FY13
balance-sheet on the back of weak environment in Europe.
 By unlocking value of these assets the company could raise
around Rs 4,000 crore


The company had sold Teesside Cast Products (TCP) for around USD
467 million in 2011. Tata Steel has around 4.2 billion pounds of debt
and another 570 million pounds is due in FY14 and FY15 and hence
further disposals would help ease the burden on the wider group,
Moody’s noted.
Tata steel may cell Corus part
(21/5/2013)
 Between 2007 till date, Tata Steel has
seen 30 percent fall in steel demand in
Europe. In past few years the company
has taken several austerity measures to
cut down growing losses of European
operations.
Rel Infra scraps projects
(21/5/2013)
 Reliance Infrastructure has scrapped
projects worth Rs. 20,000 crores
 This is due to delay in Governmental
clearances
Govt Reduces FII withholding
tax (22/5/2013)
 In Government bonds and securities for
long term do not need PAN Card
 Investments between June 1 2013 to
31st may 2015.
 Withholding tax reduced to 5 %
 QFI and FII will benefit from the same
Global Stimulus
continues(23/5/2013) Money control
 Bank of Japan is buying $ 75 billion of
assets per month
 US is buying $ 85 billion of assets per
month
 Japan's Nikkei witnessed its biggest fall
in two years when it closed 7.3 percent
lower on Thursday with 1100 points fall
and closed for trading
 China PMI at 49.6 at 7 months low
Larsen & Tubro in problem
(23/5/2013)
 Rs. 17000 crores worth of orders written
off
 Another Rs. 6000 crores of orders likely
to be slow
 Slow down in infrastructure projects,
high costs and rising interest burden are
the main reason
 Net profit fall 7 % to 1788 crores.
Real GDP (23/5/2013)
 Year
 2002-03
 2003-04
 2004-05
 2005-06
 2006-07
 2007-08
 2008-09
 2009-10
 2010-11
 2011-12
 2012-13
Real GDP %
4.0
8.1
7.0
9.5
9.6
9.3
6.7
8.6
9.3
6.2
5.0
Fiscal deficit as % of GDP
(23/5/2012)
 Year
fiscal deficit
 2007-08
2.5
 2008-09
6.0
 2009-10
6.5
 2010-11
4.8
 2011-12
5.7
 2012-13 (RE) 5.2
 2013-14 (BE) 4.8
Sticky loan rises (23/5/2013)
 Bank of India gross NPA rose 48% in
FY13 to Rs. 8765 crores over a year ago
 IDBI gross NPA has rised by 41% to Rs.
6449 crores
GDP reduces to ten year low
(31/5/2013) money control
 GDP Indian economy expanded by 4.8
percent in the quarter that ended in
March, in-line with consensus. The FY13
GDP has also come in line with
government estimates of 5 percent,
which is lowest in a decade.
HSBC PMI confirms slowdown
(4/6/2013)
 Headline PMI dropped 0.9 points to 50.1 in May with the
key worry being output trends (i.e. current indicators)
which fell 1.6 points to 48.6. Forward-looking indicators,
i.e. those for future production, saw mixed trends with
new orders declining (-1.8 points to 50.5) but new export
orders rising (+2.9 points to 54)
 A weak PMI, lower eight-core growth (2.3 percent in April
vs. the revised 3.2 percent in March 2013) and muted Q4
GDP growth (4.8 percent), point to a significantly bleaker
growth outlook.
FII sold highest shares
(20/6/2013)
 FII sold shares worth Rs. 2136 crores on
june 20, highest in two years.
 Fed said they are going to stop QE 3
 Earlier FII had sold May 13, 2011 ( Rs
3706.4 crore)
 Currently world has witnessed US QE3,
London LTRO (Long Term Refinance
Operations) and Japan Bond Buying
Programme
FII sales vs Rupee Level
 Date
 20/6/2013
 29/3/2012
 9/8/2011
 5/8/2011
 25/8/2011
FII Sales
-2136
-1299
-1961
-1610
-1494
Rupee/$
59.70
59.14
45.17
44.80
46.12
SEZ policy under scanner
(24/6/2013)
 Total SEZ approved so far 577
 170 operate across India and 389 still not notified
 Total jobs created as on March 31, 2013 is 10,74,904 jobs
 Exports from SEZ rose to 30 % to $ 88 billion in 2012-13 from $
68 billion last year
 Minimum Alternate Tax was charged at 20.96% on developers
and units
 Dividend Distribution tax at 17%
FII and QFI to be merged
(26/6/2013)
 Foreign Institutional Investors (FII) and
Qualified Foreign Investor (QFI) to be
merged into one entity called as Foreign
Portfolio Investor (FPI)
SEBI tightens buy back norms
(26/6/2013)

New
Old
 Minimum buyback 50 %
25%
 Minimum period 6 months
12 months
 Post buyback
1 yr no cap raise 6 mon
 If company fails to buy back 50 % then
company has to forfeit 2.5 % of total
amount earmarked
CAD Falls to low level
(28/6/2013)
 Year
 Q1 2012
 Q2 2012
 Q3 2012
 Q4 2012
 Q1 2013
 Q2 2013
 Q3 2013
 Q4 2013
CAD
3.8
4.2
4.3
4.4
3.9
5.4
6.7
3.6
Portugal Crisis (4/7/2013)
 17 countries EURO zone
 Portugal facing problem over
implementing Austerity measures
 Portugal main PSI 20 index plunged
6.4% on Wednesday
 10 year bond yield to 7.74% indicating
lack of confidence in investors
Top 30 bad loans make for
half of NPA (4/7/2013)
 In foreign banks top 30 non performing loans
account for 84 % of gross NPA as on March
2013
 For PSU banks, top 30 NPA account for 39.7%
of gross NPA. Bank of India, Andhara Bank,
Punjab & Sind bank, Corporation bank have
more than 50 % of gross NPA
 In case of Private bank, top 30 banks have
34.6% of gross NPA and for old private banks it
66.4% of gross NPA
Service PMI falls (4/7/2013)
 HSBC Service PMI falls to 51.7 from
may reading of 53.6
 The falling in the reading shows that
service sector
Company with Debt Distress
(4/7/2013)
 Company










Rs. Crores
Jindal Steel
14372
KFA
8030
Suzlon
6416
Electrosteel
5232
Hindustan Construction 4574
Bharti Shipyard
3862
Leela Ventures
3643
GTL infra
3190
Tulip Telecom
2175
Gammon India
2706
Rupee slide (10/7/2013)
 Rs 38,700 crores Daily average turnover
of the futures currreny market on NSE in
june (up 47%)
 Indian debt market FII sold $ 5.4 billion
in June and $ 1.1 billion in July
 Oil companies will buy dollars only from one
bank and not from multiple institutions
 Margin increased in currency futures on non bank players and
new positions
 Ban on banks for proprietary trading
Projects Stalled root cause
(10/7/2013)
 341 projects are stalled
 10.5 lakh crore is at stake
 This needs to be looked seriously
 No investment activity taking place
US Economy Recovering
(10/7/2013)
 US unemployment rate is 4 year low at
7.6%
 Economy to grow at 1.8% GDP as
compared to earlier estimate of 2.4%
US Proposal to reduce banks
lending power (11/7/2013)
 Federal Reserve, office of the
Comproller of the Currency and the
Federal Deposit Insurance Corp. are
planning to bring law to increase the
leverage ratio of banks to 5 % and for
FDIC to 6 % from current 3 %.
 This means banks should have more
capital to protect their asset side than
what they keep currently
US Proposal to reduce banks
lending power (11/7/2013)
 Banks
Shortage/ Surplus
 J P Morgan
- $15.6 billion
 Morgan stanley
+$14.1 billion
 Citigroup
-$ 13.2 billion
 Goldman sach
- $ 4.9 billion
 Bank of America + $ 3.6 billion
WPI inflation (15/7/2013)
 WPI inflation at 4.86%
 Core inflation at 2 %
 Food inflation at 9.74% vs 8.25% per
month
RBI raises cost of borrowing
(16/7/2013)
 Repo Rate is at 7.25%
 Marginal Standing Bank Rate raised to
200 bps to 10.25%
 Rs 12000 crore bonds Central Bank will
buy on thrusday
 Rs. 75000 crores cap on bank borrowing
 This will raise the cost of borrowing for
the consumers
Walmart stores (16/7/2013)
 Country
 Mexico
 Central America
 UK
 Brazil
 Japan
 China
 Canada
 Africa
 Chile
 Argentina
No of stores
2353
642
565
558
438
393
379
377
329
94
Gitanjali Gems under scan
(25/7/2013)
 Total debt in company Rs. 4300 crores
 Total sales of company Rs. 16000 crores
 Promoter Mehul Choksi Unique Client
Code has been disabled
 Stock has come down in circuit from Rs.
600 to Rs. 94
 Why Retail investor runs away from market ?
US has new way to calculate
GDP (25/7/2013)
 US GDP was first calculated in 1929
 Now US GDP calculation would have
Research & Development as Investment
and would be accounted for
LIC investments raise
eyebrows again (30/7/2013)
 Company
CMP % fall from 52 wk H
 Zylog system 14
95.55
 Core Edu
23
93.13
 Gitanjali gems 80
87.55
 ABG shipyard 269
35.17
 Pipavav Defen 68
30.20
 Mandhana Ind 234
24.24
FII sell record stocks in June
and July (31/7/2013)
 FII have sold Rs. 17000 crores or $ 2.9
billion in June and july 2013
 Highest in last 5 year june and july
 RBI has reduced GDP forecast to 5.5%
from 5.7%
Global Fund managers sell on
india (31/7/2013)
 Main reasons
 Slowdown in economic growth
 Threat of rating downgrade
 Concerns over rising fiscal and CAD deficit
 Depreciating rupee
 Fading hopes of rate cuts
 Absence of big ticket reforms
 Uncertain political scenario
NSEL stops one day forward
contract (1/8/2013)

NSEL has suspended all the trading in one day forward contract ) suspended trading in all
one-day forward contracts

The action taken by NSEL basically translates to almost all volumes or turnover of the exchange
coming to a standstill or near zero. E-series contracts do not have much volumes on the
exchange. It is hardly Rs 3-4 crore and the turnover of the exchange has anyways fallen from
roughly around Rs 800-900 crore a day to nearly Rs 300 crore because of the actions taken by
the Ministry of Consumer Affairs.

On July 23, NSEL had reduced delivery, payment and settlement period of all contracts traded
on the exchange to less than 11 days (T+10 or less), wherever settlement schedule was
extending beyond 11 days. NSEL had also decided to convert all the existing contract on trade
for trade basis, which means that every trade must result into delivery.

“The exchange had reduced cost of transaction in respect of all these contacts by 80 percent.
The cumulative cost of transaction, delivery and warehouse receipt transfer was earlier Rs 100
per one lakh of turnover, which has been brought down to Rs 20 per Rs 1 lakh of turnover,”
according to a release issued on July 23.
HIGH CAD
 Current Account Deficit (CAD) is USD 80
billion, between Foreign Institutional
Investor (FII), Foreign Direct Investment
(FDI) and External Commercial Borrowings
(ECB) it would not be a problem at all in
bridging that. 7 months have passed this
year and we have got USD 20 billion FII plus
FDI put together.
FDI retail norms eased (2/8/2013)
Existing norms
Cabinet approved change
 30% of procurement value should
 At least 30% of procurement value
be from Indian small units with
upto $ 1 million investment in plant
and machinery
 Units outgrowing “small industry”
status ineligible for fulfillment of
mandatory local sourcing
 Retail outlets to be set up only in
cities with population of over 10
lakhs and cover 10 sq km around
urban agglomerations.
should be from Indian small units
with upto $ 2 million investment in
plant and machinery
 “Small Industry” requirement only
at the time of first engagement.
Such industry will qualify for
sourcing even if it outgrows
investment of $ 2 million
 States free to decide on the city
for the location of front end sores
irrespective of population
PMI service index crashes
(6/8/2013)
 HSBC Service Business Activity has
fallen from 51.7 to 47.9 in July 2013
 This is the lowest reading since April
2009
 Clear sign of Economy slowdown
 Service Sector contributes 55% in GDP
BSE 100 COMPANIES DEBT
RISES (7/8/2013)
 BSE 100 companies (Excluding banks
and financials) total debt has increased
by 75% to Rs 14.5 lakh crore
 Operating profits up only by 25 %
 IF FMCG and IT which are cash rich
removed then numbers still worse
YTD returns Global markets
(7/8/2013)
 Brazil
 Russia
 Sensex
 Nifty
 China
- 19.74%
- 19.05 %
- 5.30%
- 7.61%
-14.82%
PE Investors trapped
(12/8/2013)
 Company
PE Year stock price
 Gokuldas
Blackstone 07
-90%
 Punj lloyd
warbug pincu 07
- 91%
 NCC
Blackstone 07
-90%
 Allsec
Carlyle
07
-90%
 Great offshore Carlyle 07
-95%
International Financial Mafia in
commodities trade (12/8/2013)
 Pay Rupees equal to $ 10,000 and trade upto $
2,00,000 or 20 times
 Bucket shops in Mumbadevi and Chira Bazar
 Rs. 1200 is total cost including brokerage and
CTT in one lot of gold in MCX while in Dabba it
is Rs. 100
 Margins in International Exchanges are 6 % to
10% as against 10 to 20 % in Indian exchanges
International Funds give
returns (12/8/2013) (1 year %)
 ICICI pru US Bluechip










37.42%
Franklin US Opportunity
36.04%
DSPBR US Flexible
33.42%
JP Morgan ASEAN Equity 30.74%
Motilal Most Nasdaq
27.87%
Birla International Equity
26.4%
JP Morgan Greater China
24.67%
Kotak Global Emerging Mkt 20.66%
DSPBR World Energy
15%
DSPBR world Agriculture
13.37%
Domestic Large & Multi cap have given 3.44% 0.02%
Mid cap and small cap crash
(13/8/2013)
 Sensex down by 2.5% in 2013
 Mid cap down by 23 % and small cap
down by 28%
 Globally DAX Mid cap up 33 % and
FTSE small cap p 35% and S&P 600
Small cap up 31%
IIP crashes (13/8/2013)
 IIP for June came to -2.2 %
 IIP for May revised downward to -2.8%
 CPI at 9.64% in July
 Car sales down for 7th successive month
Gold Import duty rises
 Govt has raised the import duty for the
third time
 From 8 to 10 %
 This makes yellow metal costly by Rs.
600 per 10 grams
Inflation rises (14/8/2013)
 The WPI July inflation came to 5.79%
 WPI June was 4.86%
 Inflation again rising its head
 Food Articles Inflation At 11.91% Vs
9.74% (MoM)
Dollar vs Rupee
 In 1947 1 $ = 1 Rs.
 In 1947 10 gram gold = Rs. 88.62
 In 2013 1$ = Rs. 61
 In 2013 10 gram gold = Rs. 29000
50% of BSE shares below
book value (19/8/2013)
 Company
 Indian oil
 BHEL
 RCOM
 Tata steel
 SAIL
 JSW Steel
 Sesa Goa
 Rel Infra
 Hindalco
Mkt Price
209
105
118
235
40
487
130
325
93
Bookvalue
239
130
159
582
103
802
147
747
175
Infra Projects worth 1.1 lakh
crore cleared (19/8/2013)
 Power Projects
Rs. 83772
 4 road projects
Rs. 4359
 3 Railway projects
Rs. 7103
 BPCL Petro Distilary Rs. 1419
 OCL Iron & Steel
Rs. 1109
 Delhi Airport
Rs. 12000
 Total projects
Rs. 1,09,000 crore
Companies that gain from
rupee fall (21/8/2013)
 Company Rs. Crore gain wgt in Sensex
 TCS
 Infosys
 Wipro
 Bajaj auto
 Dr. Reddy
 BHEL
 Cipla
5775
3677
2748
1123
872
869
574
6
8.17
1.83
1.69
1.38
0.54
1.32
NPA in PSU Rise (22/8/2013)
 PSU
Mar 12
 Gross NPA
3.17
 Priority Sector NPA 4.93
 NPA other priority
5.22
 Gross NPA Retail
2.72
 NPA Corporates
2.65
Mar 13
3.78
5.42
4.66
2.37
3.44
Tax collection in different slabs
(22/8/2013)
 2011 – 2012
Tax (Crore)
 0-5 lakhs
15010
 5-10 lakhs
21976
 10-20 lakhs
17858
 Over 20 lakhs 93229
% of total
10.4
14.8
12.1
63.0
Food Security Bill (27/8/2013)
 Food Security Bill to cover 67 % of the
population
 The total subsidy burden would be Rs.
1,24,000 crore
CAD a challenge (27/8/2013)
 Last fiscal CAD was $ 88 billion
 This fiscal target is to reduce it to $ 70
billion
 Gold imports have come down by $ 1012 billion
PE funds trapped (27/8/2013) in $ million
and year 2007 of investments
 Company
Amt invt Current val % chg
 Suzlon
25
0.26
-98
 ICSA india
52
0.66
-98
 K S oil
104
2.86
-97
 Shiv Vani
25
0.55
-97
 Great offshore 41
1.30
-96
 Jai Balaji ind 69
2.18
-96
 Nagarjun con 150
7.91
-94
Key stats about Indian corporate sector
(28/8/2013) Delhi IIFT
 Parameters





2007
2013
Net Debt
0.33
060
EBIDTA has gone up 14% but interest cost gone up by
30%
Interest coverage ratio was 10.5x in 2007 which is
reduced to 4.6x in 2013
Shareholders Equity has reduced to 18% but net debt
has gone up by 31 %
FII hold 48% of free float market cap
Indian Economy mess (money
control 4/8/2013)





In 2007-08 the total deficit was Rs.1,26,000 crore currently it is
Rs. 5,42,000 crore deficit
Indian total forex reserve $250 billion (excluding gold reserves)
and debt $390 billion (31st march 2013)
60% of the loan to be repaid next year
India would not be able to give back more than 2 $ for every 3 $
owed
The drastic fall in the CAD for January-March period to 3.6
percent from 6.7 percent in the previous quarter is a signal not
of a correcting CAD, but a slowing economy
Indian Economy mess (money
control 4/8/2013)

The second negative is the obverse side of selling grains at Re 1, Rs 2
and Rs 3 a kg to the poor. The poor will buy the cheap grain and sell a
part of it in the open market which will then be used for higher-protein
food (milk, veggies, meat, eggs, etc). Recent food inflation has been
caused not by rice or wheat, but protein items. The FSB will thus
directly make food inflation worse. Nothing slows down an economy
more than inflation.
 The only antidote to it is very strong reforms in energy pricing, FDI,
labour and land markets.
 Large chunks of the public sector need to be sold off-and not just
divested piecemeal. Or else we should cut welfare spending drastically.
Banks risk of losing Rs. 30,000
crore (5/9/2013)









Company
Amout (Rs. Crore)
KS oil
2564
KFA
7000
Deccan Chronicle
4000
PSL
3200
MFI(Micro Finance) 7200
Xenitis Infotech
400
The above companies restructuring have failed
As on march 2013, loans worth Rs. 2,29,013 crore of 401 companies
restructured
Pension Bill passed in Lok
Sabha (5/9/2013)
 The total corpus is Rs. 35000 crores
 8 fund managers will manage the fund
 3 funds options with varying degree of
investments in equity, bonds
 26 state governments have joined the
scheme
 All central government employees who
joined after 1st jan 2004 will be in this
pension scheme
FII make come back
(11/9/2013)
 From June to August FII sold Rs. 23000
crores shares
 In september FII so far have bought Rs.
5000 crore of shares
BRICS strength (11/9/2013)
 World GDP
 BRICS
 US
 EU
 Japan
 Others
21%
22%
23%
8%
26%
BRICS Data
India
13%
China
55.1%
Brazil
16.2%
Russia
13.1%
South Africa 2.6%
 Debt to GDP ratio of Eurozone 92.2 % and USA 103 %
($16.7 trillion debt in USA)
$ 100 Billion fund for BRICS
(11/9/2013)
 $ 100 billion fund has been proposed to
be created by BRICS nation
 India $ 18 billion
 Brazil $ 18 billion
 Russia $ 18 billion
 China $ 41 billion
 South Africa $ 5 billion
RBI eases banks borrowings
(11/9/2013) money control
 The Reserve Bank of India (RBI) said on Tuesday banks can
raise funds overseas above 50 percent of their Tier I capital with
a minimum maturity of three years and swap these borrowings
with the central bank at a concessional rate for one to three
years. "The swaps shall be available at a concessional rate of a
hundred basis points below the market rate for all fresh
borrowing with a minimum tenor of one year and a maximum
tenor of three years, irrespective of whether such borrowings
are in excess of 50 per cent of their unimpaired Tier I capital or
not,"
the
RBI
said.
Rising Bad loans (18/9/2013)
 NPA of PSU banks have become 3.84%
in March 2013 as compared to 2.32% in
March 2011
 26 PSU banks are there
 Top 30 NPAs make Rs. 61,123 crore or
39% of their gross NPA accounts.
FII back in September
(18/9/2013)
 FII have invested Rs. 6394 crores in first
15 days of September
 Rupee appreciated 8 %
 FII were net sellers of Rs. 23000 crores
from June to August
FII POWER (18/9/2013)
 $ 200 Billion of Indian Stocks are owned
by FII
 $ 37 billion FII have invested in Indian
stock market since 2012
WPI inflation high at 6 months
(18/9/2013)
 WPI inflation is at 6.1%
 Six months high
BRIC Nations Forex Reserves
(20/9/2013)
 Brazil $ 371 billion
 Russia $ 509 billion
 India $ 274 billion
 China $ 3.3 trillion
India’s FOREX reserve
 Year
 FY08
 FY09
 FY10
 FY11
 FY12
 FY13
 FY14
Forex Reserves ($ billion)
309.7
252
279.1
304.8
294.4
292
274.8
RBI raises Repo Rate
(20/9/2013)
 RBI increased repo rate by 25 bps to 7.5
%
 The RBI did provide some relief for
banks by lowering the marginal standing
facility (MSF, an RBI window for short
term loans) to 9.5 percent from 10.25
percent.
 The CRR was kept at 4%

GAAR to be applicable from
April 2016 (27/9/2013)
 GAAR to be applicable from 1st April
2016
 For those transactions of FII which has
tax benefit exceeding Rs. 3 crore
CAD widens (1/10/2013)
 CAD widens to 4.9% in June Quarter
 It was 3.6% in last in Q4
 While CAD had touched 6.7% in Q3
 Core sector growth at 7 month high
 It is at 3.7%
 Core sector includes Coal, Crude oil, natural
gas, Fertilizer, steel, cement, electricity,
Refinery products
RBI reduces MSF (8/10/2013)
 RBI reduces MSF (Marginal Standing
Facility) by 50 bps
 From 9.5 % to 9%
 Lending to banks by RBI for 7and 14
days as against current practice of 1 day
 This will induce liquidity in the system
BRIC problems (8/10/2013)
 Emerging Markets Central Banks (except China) have






seen outflows worth $ 80 billion around 2 % of reserves
Last 4 months, Indonesia has lost around 14 % of central
bank reserves
Turkey has lost 13 %
India RBI has lost 6 % of its reserves
India, Brazil, South Africa, Turkey have large current
account deficit.
India has total fiscal and current account deficit of 10%
Emerging Economies need $ 1.5 trillion every year in
external funding to meet financial needs including
maturity debt.
BRICS Problems (8/10/2013)
 Many investments have been misdirected or




deliberately wasteful
Trophy projects like 2008 Beijing Olympics
costing $ 40 billion
Russia’s $ 51 billion 2014 Winter Olympics
Brazil 2014 football world cup and 2016
Olympics
These events absorbed scarce resources at the
expense of essential infrastructure.
Trade Deficit Reduces
(10/10/2013)
 Trade Deficit








($ billion)
April 2013
17.78
May 2013
20.1
June 2013
12.2
July 2013
12.2
August 2013
10.9
September 2013 6.8
Exports rose 11.2% in Sep and Imports reduced by 18%
Trade Deficit for Q2 is at $ 29.8 billion as against $ 50
billion for Q1
India External Debt to GDP
ratio (14/10/2013)
 India External Debt to GDP is 22%
 India has reserves of $ 280 billion which
is 15 % of GDP
 In other words, country can pay three
fourth of its debt from its forex reserves
 India holding in US treasuries is $ 59.1
billion
Inflation at 7 month high
(15/10/2013)
 Inflation was 6.10% in August
 Inflation now at 7 month high at 6.46%
 The CPI inflation has also gone up to
9.84% from 9.52%
 Prices of onion up 323%
 Vegetables prices up 89%
 Rice prices up 18.76%
 Egg, meat prices up 13.37%
India gold imports
(15/10/2013)
 In 2012, we bought 863 tonnes of gold, accounting for 28
per cent of global purchases.
 Over the years, we have accumulated 20,000-25,000
tonnes of gold, with a staggering market value of over $1
trillion.
 India's current account deficit was roughly about $80
billion in 2012-13. Since gold imports alone amounted to
about $60 billion
Retail Participation at 10 year
low (21/10/2013)
 Daily cash market average volume of
retail investors is down to Rs. 4615 crore
in 2013 which is lowest since 2003
 In 2009 retail participation used to be Rs.
13709 crores.
 From 2009 to 2013, the retail
participation has come down from 65 %
to 34%
FII back in India
 In 16 trading sessions in October, FII
have invested Rs. 13000 crores
 From January 2013, FII net investment
has been Rs. 85000 crore in Indian
markets
Infra Projects delayed
(29/10/2013)
 Rs 15 lakh crore worth of industrial projects stalled
 136 projects worth Rs 7.14 lakh crore stalled in power
sector
 Delay largely due to lack of clearances
 Gross NPA of banks have reached Rs. 1,36,970 crore
(17.43% of total) from Rs. 12,190 crore (4.66% of total )
at end of March 2009 Intensifying pressure on banks
RBI raises Repo Rate
(30/10/2013)
 Repo rate increased by 25 bps which
takes it to 7.75 %
 Reverse repo rate also increased by 25
bps
 Marginal Standing Facility (MSF)
reduced by 25 bps to 8.75 % (earlier 9
%)
India slips to 134 rank in ease
of doing business (30/10/2013)
 Ease of doing business












Country
2014
Singapore
1
Hong Kong, China 2
New Zealand
3
USA
4
Denmark
5
Malaysia
6
Korea
7
Georgia
8
Norway
9
UK
10
India
134
2013
1
2
3
4
5
8
6
9
7
11
131
Equity rising but investors
missing (11/11/2013)
 Sensex at 20,827 but with inflation adjusted it is real




value is 13000
If companies whose prices have crashed much are
removed then value of Sensex is only 11500
NSE Mid cap is 22% down and small cap is 58 % down.
According to SEBI 500 brokers have shut business since
1st April.
40,000 jobs lost and 12855 sub brokers shut their shop.
Trade Data improves
(12/11/2013)
 Exports up 13.5%
 Imports down 14.5%
 October Trade deficit at $ 10.55 billion
which was last year at $ 20.2 billion
 CAD should be less than $ 60 billion
 Exports target of $ 325 billion could be
achieved
Fizz has gone out of India
(12/11/2013)
 India has gone from “Must invest” to
“Must deal with” says pepsi CEO Nooyi
 Must Invest means it is a destination and
the country is growing
 Must deal means there are infrastructure
issues, taxation policy is not clear. So
people say “Do I have to deal with India”
 PEPSI to invest Rs. 33000 crores till
2020 into Indian markets.
FATCA to affect fund flows
(12/11/2013)
 Foreign investors have invested over Rs 92,250
crore or USD 16.7 billion so far this year. This
robust flow will be adversely impacted come
January 1 when nearly 40% of the foreign flows
will be governed by FATCA - Foreign Account
Tax compliance Act. To put it simply, FATCA
was enacted by the US government to track
down offshore investments and earnings of any
US citizen.
Inflation rises again
(13/11/2013)
 CPI inflation is at 10.09 % from 9.84 %
 Food inflation is at 12%
 September IIP is at 2 % (positive
surprise)
FII flows of 2013 (13/11/2013)
 Month
 Jan
 Feb
 March
 April
 May
 June
 July
 August
 September
 October
 November
Net flows of FII (Rs.crore)
22,245
22,122
11,660
5,145
20,678
-10,530
- 5,909
- 6,200
13,158
18,013
1,843
SBI Profit falls 35 %
(14/11/2013)
 Rs. 6000 crore debt that would be
restructured in next 2 quarters
 Rs. 9300 crore debt mainly from Infra,
power, Iron and steel sectors
 SBI total restructured loan book stood at
Rs. 52,437 crores.
Markets gets Jitters as FII unwind long
positions(24/11/2013)
 Indian Markets have lost nearly 1000
points over past 7 trading sessions
 FII have liquidated long positions worth
Rs 4000 crore in index futures in
November series
Tata opts out of bank license
(28/11/2013)
 Tata group has withdrawn its application
from bank license
 Mahindra and Mahindra also had
withdrawn its bank application
 Out of 26 applicants now 24 are in race
Economy bounce backs
(3/12/2013)
 Core Sector growth crashes -0.6% in
October as compared to 8% rise in
September
 GDP at 4.8 % in Q2 in line with
Expectation and Q1 it was 4.6%
 CAD to 1.2 % of GDP
Inflation jumps (12/12/2013)
 CPI inflation at 11.24 %
 IIP data at -1.8%
 This dampens the chances of reduction
in interest rates
WPI jumps (16/12/2013)
 WPI rises to 7.52%
 14 month high
 The wholesale price index (WPI) for the month of November
shot up to a 14-month high of 7.52 percent from 7 percent in the
previous month, led by higher primary, food and fuel prices.
The street was largely expecting the November WPI to stay at 7
percent. The September WPI number has also been revised
upwards at 7.05 percent from the provision figure of 6.46
percent.
 The biggest culprit remains food inflation which accelerated to
19.93 percent in November from 18.19 percent in October. The
primary articles inflation for the month rose to 15.92% versus
14.68% in October.
Slow Growth in Bank Deposits
(17/12/2013)
 Central Bank Comfort zone for deposit growth




is 14 %
Actual growth of deposits is 12.8%
Annual growth of deposits is 16.1% but this due
to FCNR(Foreign currency non resident) flows
of $ 34 billion
Loan growth back at 16% on Nov 29 from 18 %
in August
Companies going to money market to raise
short term funds
WPI rises sharply (17/12/2013)
 WPI at 14 month high
 June 5.16
 July






5.85
Aug 6.99
Sep 7.05
Oct 7.00
Nov 7.52
Food inflation at 19.93 % in November
This means RBI may increase Repo rate by 25
bps to 8 %
Fed Tapper effect
(17/12/2013)
 Since May 2013, FII have withdrawn $
13 billion from debt market in India with
US announcing Tapering
 FII holding in Indian rupee debt is $ 24.6
billion which was $ 37 billion
 RBI during this time has gathered $ 34
billion through special deposit scheme
for NRI
RBI plays it cool (18/12/2013)
 Repo rate unchanged at 7.75 percent
 CRR at 4 percent of net demand and time liability (NDTL)
 Reverse Repo rate under the liquidity adjustment facility (LAF)
remained unchanged at 6.75 percent
 Marginal Standing Facility (MSF) rate and the Bank Rate stood
at 8.75 percent.
Mutual funds selling spree
(26/12/2013) moneycontrol
 Mutual funds had a tough 2013. Volatile equity markets
forced domestic funds to focus more on debt
market, eyeing higher interest rates.
 Domestic mutual funds offloaded shares in November
selling equities worth Rs 482 crore in the month to take
total outflows from equities to Rs 13,721 crore in 2013 so
far.
 They have invested Rs 4.3 lakh crore in the debt market
in the first 11 months of the year.
India Inc Debt trap
(26/12/2013)
 As of september 2013, there are 3700 listed companies
 Total borrowing Rs. 24,00,000 crores
 That is quarter of India GDP as per Credit Suisse
 Of this, Rs. 8,00,000 crore is with companies whose Interest
burden is more than operating profit
 Future group reduced its debt to Rs. 3500 crore from Rs.
10,000 crore by exiting financial services and part of retail
business
 Bharti Airtel raised $ 1.26 billion by selling 5 % stake to Quatar
Foundation to reduce its debt of $ 9.69 billion
Hedge funds performed in derivatives
(26/12/2013) Business line
 Hedge funds using equity derivatives strategies delivered







18.2% return from January to November 2013
Return of Sensex has been 6.6%
2011 Hedge funds gave 28.3%
2012 Hedge funds gave 6%
2013 Hedge funds gave 18.2%
Other strategies of India focused hedge funds gave -7.1 %
negative return
Average Global Hedge funds return have given annualized 9.78
% with annualized std deviation of 5.20% since December 1999
to November 2013
In 2013, Global Hedge funds delivered average return of 7.1%
while MSCI world index gave 21% return
Core sector slows (1/1/2014)
 Core sector growth came to 1.7% in
November as against 5.8% in Nov 2012
 Fiscal Deficit has reached 94% of
Budget Estimate
 This creates hurdle to achieve Fiscal
deficit of 4.8% as targeted by
Government
New land act comes into force
(1/1/2014)

The first day of 2014 saw the 119 year old Land Acquisition law being
repealed. The new land acquisition act enacted by the parliament last
year comes into force today.
 The new law mandates that land will have to be bought at four times the
market rate in rural areas and at double the market rate in urban areas.
 Thirteen legislations including the National Highways Authority of India
Act and the coal Mines Nationalisation Act will have to be amended to
reflect the new compensation rates.
Angel Investors invest in start
ups (2/1/2014)
 162 deals closed worth Rs. 3700 crores
 45 % of all investments made went to
start ups in 2013 as compared to 41% in
2012 and 36% in 2011
FII REACH HEADROOM
(3/1/2014)
 In last 4 years FII have invested Rs.
3,71,000 crores
 More than total investment that come in
last 9 years starting 2001.
 In last 4 years, barring 2011 average net
investmetn buying by FII has been $ 20
billion
Brokers shut shop (8/1/2014)
 600 brokers have shut their business
 18000 people became job less
 BSE cash market turnover reduced by
70% which was Rs 11 lakh crore in 2011
is not Rs 3 lakh crore in 2013 december
 NSE cash market turnover reduced by
48% from Rs. 35 lakh crore to Rs. 18
lakh crore.
FII net sellers (8/1/2014)
 The first six trading sessions of 2014
saw FII selling stocks worth Rs. 567
crores
 The political uncertainty is creating
issue.
 Foreign investors also sold cash shares
worth Rs 567 crore on Tuesday, totalling
sales of Rs 839 crore since Thursday,
regulatory and exchange data shows.
Retail inflation declines
(14/1/2014)
 Consumer Price Inflation fell to 9.87% in
December from 11.16% in November.
 Vegetable inflation eased to 38.76% in
December from 61.6% in November.
 Interest rates on PF deposit raised to
8.75%
Commercial Vehicles space in disaster (15/1/2014)
Money control

Despite staring at a debt level of over Rs 5,000 crore Ashok Leyland is
being forced to continue big discounts on its heavy duty trucks. Just last
week the company unveiled a new state-of-the-art heavy duty truck
'Captain' -- with plans of launching 18 vehicles on the same platform -in an effort to spruce up demand but it has ruled out any cut back on
discounting just yet which has hit an all-time high of Rs 180,000 per
vehicle for the company.
 After being snubbed by the government on its plea for an incentive
package to revive the CV industry, there seems to be no light at the end
of the tunnel. M&M says discounts have reached a level of upto Rs
400,000 per vehicle.
 Tata Motors too saw its margins hit a rock bottom of 0.9 percent in the
last quarter as losses reached Rs 803 crore on a standalone basis.
Average cash discounts for the company have touched Rs 200,000 per
heavy duty truck
Coal india pays its highest
dividend to Govt (15/1/2014)
 Coal India has paid Rs.16,485 crores as
dividend to government
 Its highest ever dividend paid by coal
india in all these years
 Govt target is to raise Rs. 40,000 crore
through disinvestment
 So far it has been able to raise Rs. 3000
crore only
PMI rises highest in one year
(4/3/2014)
 HSBC Purchasing Manager Index for
manufacturing sector came to 52.5 in
February since February 2013
 The survey was based on 500 large
manufacturing firms.
Sensex PE ratio sector wise
(4/3/2014)
 Sector










2008
Finance
21.2
IT
23.4
FMCG
29.0
OIL GAS
21.7
Telecom
42.7
Power
35.4
Metals
14.7
Capital goods 50.3
Pharma
20.9
Automobile
18.2
2014
11.2
22.0
33.7
9.2
174.3
11.7
17.0
16.4
30.0
13.3
Weightage in Sensex
(4/3/2014)
 Finance
 IT
 FMCG
 Oil Gas
 Automobile
 Pharma
 Capital goods
 Metals
 Power
 Telecom
25.5%
18%
14.6%
13.9%
9.6%
5.8%
4.5%
3.5%
2.4%
2.3%
UPA vs NDA numbers
(6/3/2014)







Economy grew 50 % faster under UPA than in NDA
UPA fought with once in lifetime depression for 6 years out of its 10
year while NDA has comfortable economic environment
In UPA II the annual GDP growth rate was 7.1 % while world average
GDP was 1.5 %
Under UPA, Debt to GDP ratio down to 67 % while China debt to GDP
is 200 %
In 2004, Inida debt to GDP ratio was 85 % up from 73 % in 1999
Under NDA the Gross Fixed Capital Formation, a measure of
investment was around 25 % while under UPA it was 33 % under the
current macro economic environment. RUSSIA GFCG is 20 %
Under NDA, India spent 50 % of its budgetary receipts for interest
payment only, unsustainable ratio while under UPA it has come down to
30 %. The remaining 20 % is used for subsidies and programme like
NGERA.
UPA vs NDA numbers
(6/3/2014)
 Both UPA and NDA had poor show for employment figures
 On inflation UPA has problem while NDA managed well. Could
be as commodity prices were low when NDA was there.
 Since 2002 the prices of commodities have went up by 6 to 7
times.
 Since 1980 world economies have grown because of huge debt
capital used. China grew because of huge debt capital
 Now neither western countries nor china can stretch their
balance sheet.
CAD at 8 years low (6/3/2014)
 April – December CAD is at 2.3 % of GDP
 Last year it was 6.5 %
 Last year same peirod it was 5.2 %
 For the full year CAD could be in range of $ 35
to 40 billion
 Import duty on gold raised to 10 % from 2 %
which helped reduced import
 In oct - December quarter CAD is $ 4.2 billion
as compared to $ 31 billion
SEBI wants MF to grow
multifold (6/3/2014) Mint
 AUM is currently at Rs. 8,00,000 crores
 In 5 years target is to reach Rs. 20,00,000 crores
 Currently top 15 cities account for 87% of AUM
 SEBI proposes to have mutual fund linked retirement plan
 In USA same concept called as 401K plan
 SEBI estimates if 10 % of 36 million tax payers invest Rs.
50,000 then also annually Rs. 18000 crores would come into
mutual funds
 Employee Provident Fund Organization (EPFO) has total
corpus of Rs. 5.46 trillion
 SEBI has proposed to Government that 15 % of this should be
allowed to invest into equity or equity oriented funds.
Market at all time high
(6/3/2014)
 BSE Sensex has touched all time high of
21513
 FII have poured in $ 1 billion in last 15
trading sessions
 In 2014 January and February, FII net
investment in debt is Rs. 30,000 crores
and in equities it is Rs. 3900 crores
ECB and Bank of England leaves rate unchanged
(7/3/2014) Moneycontrol
 The European Central Bank (ECB) left
its benchmark rate unchanged at record
low of 0.25 percent
 Earlier in the day, the Bank of England
(BoE) also left interest rates at a record
low of 0.5 percent and its gilt purchase
target unchanged at £375 billion (USD
617 billion).
WPI inflation falls low
(18/3/2014)
 WPI inflation came to 9 month low at
4.7%
 SBI paid advance tax of Rs. 1456 crores
for the March quarter
FOMC MEET US (20/3/2014)
 US FED CUTS BOND BUYING TO $ 55
BILLION FROM $ 65 MILLION
 GDP GROWTH PROJECT AT 2.3%
 Unemployment likely to fall from 7.5 % to
6.7%
 US Current Account deficit at 14 year
low at $ 81 billion
SUUTI to sell 9 % in Axis Bank
(21/3/2014)
 Specified Undertaking of Unit Trust of
India (SUUTI) to sell 9 % in Axis Bank
 It will help Govt to raise Rs. 5500 crores
 The total proceeds of Govt from share
sale will go to Rs. 21000 crores which is
more than earlier estimate of Rs. 19000
crores.
SEZ scheme a non-started
(21/3/2014)
 389 SEZ have been notified
 Only 185 functional means have only one export unit




functional
SEZ have to pay 18.5 % Minimum Alternate Tax
SEZ gets 100 % tax exemption for first 5 years
50 % tax exempt for next 5 years
50 % of ploughing back of profit in next 5 years.
FII Pour money into india
(26/3/2014) ($ million)
 Country
 India
 Indonesia
 Japan
 Philipines
 S.Korea
 Taiwan
 Brazil
FII March
2172
1121
-7061
268
-1789
1337
-262
YTD
2579
1978
-19499
233
-3459
1780
319
FII Pour money into india
(26/3/2014) ($ million)
 FII have invested close to $ 2.5 billion
into Indian markets over past one month
 FII withdrew $ 2 billion from China and $
1billion from korea
 Invested $ 0.5 billion in Brazil
RBI KEEPS RATE
UNCHANGED (1/4/2014)
 Repo Rate at 8 %
 Reverse Repo Rate at 7 %
 CRR at 4 %
 SLR at 23%
 RBI has kept rates unchanged.
INDIAN MACRO IMPROVING
(31/3/2014)
 Fiscal Deficit at 4.6%
 Plan Expenditure at Rs. 4.75 lakh crore
 CAD at $ 35 billion
 Exports at $ 326 billion
 GDP seen at 4.9%
 April to February WPI at 5.9%
 Forex Reserves at $ 300 billion
FII money into Debt markets
(4/4/2014)
 From January to March 2014 quarter FII
have invested Rs. 35000 crores into
indian debt market
 The biggest such quarterly inflow ever
accroding to SEBI
FII Debt Market Flows
(4/4/2014) (Quarterly flows)
 Quarter ending
 Dec 2011
 March 2012
 June 12
 Sep 12
 Dec 12
 March 13
 June 13

Sep 13
 Dec 13
 March 14
Rs. crore
22555
16874
5875
13935
9607
14923
-24326
-27000
-12563
35531
WTO see Global Trade to
raise (15/4/2014)
 WTO see global trade at 4.7 % in 2014
 Last two years global trade has been
2.2%
 But still below average of 5.3 % for last
two decades
WTO see Global Trade to
raise (15/4/2014)
 Countries
Exports
 Developed Nation 3.6
 North America
4.6
 Europe
3.3
 South & central
America
4.4
Asia
6.9
Imports
3.4
3.9
3.2
4.1
6.4
FII Big buyers (15/4/2014)
 FII have purchased shares worth Rs.
30,000 croes since February 1st
 The Sensex have risen by 11 %
WPI inflation rises to
(16/4/2014)
 March WPI inflation at 5.7%
 In February it was 4.68 % at 9 month low
 IIP data has also come -1.9 % which
shows contraction in industry
 Capital goods a vital indicator at -17.4 %
vs -4 %
Auto Slump Claims 2 lakh jobs
(17/4/2014)
 About 2 lakh jobs have been lost due to production cuts




in auto industry
The auto industry employs 19 million direct and indirect
workers
This is below the target of 25 million workers by 2016
under 10 year Auto Mission plan of the government
Past 25 months there is negative sales streak for heavy
trucks and buses
In last one decade there is deepest decline in car sales
FII flows continue (29/4/2014)
 The net investments by FIIs into Indian equity
markets since the beginning of 2014 have
crossed USD 5 billion over Rs 30,000 crore),
while the same for debt markets also stands
near USD 5 billion (about Rs 29,000 crore)-taking the total to close to Rs 60,000 crore.
 There were over 1,700 registered FIIs in the
country, along with close to 6,400 subaccounts.
Commodity Exchanges new
norms (6/5/2014)




According to the new guidelines, individuals can’t hold more than 5 percent in a
commodity exchange, unlike the earlier norms where they held around 24 percent.
Only an already existing commodity exchange, a depository, banking company, an
insurance company and a public financial institution is allowed to hold around 5-15
percent in a commodity exchange.
Even foreign investors are not allowed to hold more than 5 percent. Through this,
the regulator is clearly ensuring that the concept of anchor investor doesn’t exist
from now onwards. This will also have an impact on the bidding process since,
now many players like Reliance Capital , Tata Capital may not be able to hold
more than 5 percent as an individual entity.
Sources indicate that Kotak may have an upper hand, since if it applies through
Kotak ace, commodity exchange, it can hold upto 15 percent in the exchange and
it will be interesting to see who all will not be in the race.
The new guidelines are set to expedite the MCX stake sale process. Since the
norms also spell out that if a person is not fit and proper and has a pending
divestment, then his voting rights are suppose to extinguish.
China real estate market slows
down (7/5/2014) moneycontrol

According to a survey by China Real Estate Index System (CREIS), 45
of the 100 cities experienced month-on-month property price declines in
April, up from 37 cities in March. Meanwhile, property investment in
China has also lost steam as bank funding for developers tightens.
Property investment accounted for about 12 percent of China`s gross
domestic product (GDP) in the first quarter, down from 15 percent in
2013, according to Reuters.
Inflation rises again
(12/5/2014)
 CPI inflation at 8.59 % vs 8.31%
 IIP at -0.5 % vs -1.9%
 Capital goods at -12.5% vs -17.4 %
 Manufacturing sector at -1.7%
 Food inflation 9.66%
 Rural inflation 9.25 % vs 8.89%
FII pour Rs. 1 lakh crore
(19/5/2014) money control
 Foreign investors have pumped in over Rs one lakh crore
in the Indian securities market since Narendra Modi was
announced as the prime ministerial candidate by Bhartiya
Janta Party (BJP) in September 2013.
 As per latest data compiled by capital markets regulator
Sebi, the net investments by FIIs into Indian equity
markets stood at Rs 88,772 crore since the
announcement. The same for debt markets was at Rs
13,399 crore -- taking the total to Rs 1,02,171 crore.

FII pour Rs. 1 lakh crore
(19/5/2014) money control
 FIIs, the main driver of the equity market, have helped
pushed up the benchmark BSE Sensex by over 22 per
cent since September 13.
 In 2014 alone, FIIs have infused a net amount of over Rs
74,000 crore in the domestic market, which included
more than Rs 41,000 crore in equities and nearly Rs
33,000 crore in the debt.
 Currently, there are 1,700 registered FIIs in the country,
while the number of sub-accounts stood at 6,408.
GDP stagnant (30/5/2014)
 GDP growth at 4.6%
 Annual GDP growth at 4.5%
 Core sector 8 industries growth at 4.2%
vs 2.7% last year
RBI CUTS SLR (3/6/2014)
 RBI keeps Repo rate at 8 %
 Reverse Rate at 7 %
 MSF at 9%
 CRR at 4 %
 SLR (statutory Liquidity Ratio) reduced
by 50 bps from 23% to 22.50 %
 The cut in SLR releases Rs. 40,000
crores into the system
RBI Increases overseas
investment limit
 Overseas investment limit increased to
US $ 1,25,000 from earlier $ 75000
 Last year the limit was reduced from $
US 2,00,000 to US $ 75000
 Indian residents and non residents
except pakistani and bangladeshi can
take upto Rs. 25000 outside india
Nifty Companies at low
valuation (11/6/2014)
 Company
Current PE
 Cairn India
6.3
 NMDC
9.6
 Tata Steel
8.3
 IDFC
9.9
 HDFC Bank 17.3
 ICICI Bank
14.2
10 year avg
13.8
15.0
10.8
15.2
20.8
16.9
Inflation and IIP falls
(12/6/2014)
 IIP data has come to 3.4 % as compared
to -0.5 %
 Manufacturing accounts for 75 % in IIP
where as electricity and mining account
for 25 %
 Core sector data had also come 4.2 %
as compared to 2.7%
 Inflation has come to 8.28% as
compared to 8.59 %
WPI inflation rises (16/6/2014)
 WPI inflation at 6.1% as compared to
5.3% last month
 Food articles index rose to 2.3 percent
on a month-on-month (MoM) basis as
food articles inflation saw an uptick at
9.50 percent versus 8.64 percent in the
previous month.

Govt Announces measures to control food
inflation (18/6/2014)
 Govt tells state governments to crack down on hoarders





and black marketers of food articles
Allow farmers to directly sell fruit and vegetables to any
customer instead of being forced to go to specified
markets and mandis, where middlemen thrive.
Onions to be exported at $ 300 per tonne not below that
which would ensure that less exports take place
States have been advised to delist fruits and vegetables
from APMC Act
If Delhi and Vashi market; the two biggest fruits and
vegetable markets in Delhi and Mumbai, if you can tackle
these two, half of India's fruits and vegetable can be
streamlined.
Govt Announces measures to control food
inflation (18/6/2014)
 This is because the commissions of the commission
agent of the wholesalers and even at the retail level
range from 30-50 percent, and that is where the farmer
gets a lower price, consumer has to pay a much higher
price. We have to compress this value change to make
them efficient and that required the change in law and
that was the APMC Act.
 Excess Rice and Wheat to be released from the Godown
of FCI (Food Corporation of India)
Fin Ministry plans to divest 7
PSU (19/6/2014)
 PSU









Govt Stake %
Coal India
89.65
Sail
80.00
MMTC
90.00
NMDC
80.00
NHPC
85.96
Nalco
81.06
Nevili Lignite
90.00
Government can get Rs. 22,000 crore from 10 % stake
sale in Coal India
Disinvestment target kept at Rs. 36000 crores
Core Sector Data slips
(1/7/2014)





India's core industry growth for May slowed to 2.3 percent
versus 4.2 percent month-on-month (MoM) and 5.9 percent
year-on-year (YoY). Core sector is 38 percent of IIP.
The government’s May coal output grew 5.5 percent versus 3.3
percent MoM,
while crude oil output declined 0.3 percent against 0.1 percent
decline MoM.
May electricity output grew 6.3 percent against 11.2 percent
(MoM).
Steel output in May saw a month-on-month decline at 2 percent
versus 3.1 percent growth in April.
Core sector growth (1/7/2014)
 Month
 January
 February
 March
 April
 May
Core sector %
1.6
4.5
2.5
4.2
2.3
Fiscal deficit to be higher
(1/7/2014)
 Fiscal deficit was targeted by Chidambaram at
4.1 % (assuming revenue would rise 19 %)
 But actually revenue has gone up by 3.1% only
 Fiscal deficit is Rs. 2.4 lakh crore which is
45.6% of budget estimate. This was last year
33 %.
 The fiscal deficit in 2013-14 was 4.6% as
compared to 4.9 % earlier
IIP Rises to 19th month high
(14/7/2014)

The Index of Industrial Production (IIP) for the month of May came in at
4.7 percent versus 3.4 percent month-on-month.
 The factory output in May is at a 19-month high – highest since October
2012.
 Electricity sector growth came in at 6.3 percent against 11.9 percent
MoM. Manufacturing sector growth too jumped to 4.8 percent versus
2.6 percent in April. Mining sector growth too improved at 2.7 percent
against 1.2 percent MoM.
 The jump in May IIP data is slightly surprising considering India’s core
industry growth for May slowed to 2.3 percent versus 4.2 percent
month-on-month (MoM) and 5.9 percent year-on-year (YoY) and core
sector is 38 percent in the Index of Industrial Production.
WPI inflation cools (14/7/2014)
 Wholesale Price Index inflation in June declined to 5.43 percent
from 6.01 percent in May.
 Food articles inflation slipped to 8.14 percent from 9.50 percent
 primary articles inflation dropped to 6.84 percent versus 8.58
percent but manufactured products inflation increased
marginally to 3.61 percent versus 3.55 percent month-onmonth.
 April WPI inflation was revised upwards at 5.55 percent as
against 5.20 percent provisional.
CPI cools down (14/7/2014)
 CPI cools down to 7.31% as against
8.28%
 This may give room for RBI to reduce
interest rates
Retail investors flock back to
equity funds (16/7/2014)
 Rs. 7309 crore came in equity mutual funds in June 2014
highest since Jan 2008
 Rs. 9761 crore total flows into equity mutual funds in May
and June
 Rs. 12072 crore Gross sales of equity schemes in june
 Since may 2014 20 new brokers have registered with
BSE and 36 fresh application for membership is in
process
Core sector growth jumps
(31/7/2014)
 June Core sector growth at 7.3% vs
1.2% year on year
 Its at 9 month high
 April to june core sector growth at 4.6%
vs 3.7% year on year
India July HSBC PMI
(1/8/2014)
 India July HSBC manufacgturing PMI at
53 vs 51.5 month on month
 China July official PMI rises to 51.7 from
51 which is 27 month high indicating
growth coming back
 China PMI rises to 51.7 which is 18
month high
CAD Still concern (4/8/2014)
money control
 CAD, which is the excess of foreign exchange outflows over
inflows, touched a historic high of USD 88 billion or 4.7 per cent
of GDP in 2012-13, mainly due to rising imports of gold and
petroleum products.
 In order to check rising CAD, the government had raised import
duties on the yellow metal to 10 per cent, while RBI imposed
curbs on import of gold and also laid down various preconditions for inward shipments of the precious metal. It came
down to USD 32.4 billion or 1.7 per cent of GDP in 2013-14.
US unemployment rises
(4/8/2014)
 US unemployment rises to 6.2 %
 For the sixth consecutive month US
created more than 2,00,000 jobs
China service PMI falls
(5/8/2014)
 China's Jul HSBC svcs PMI falls to
lowest in almost 9 years The services
purchasing managers' index(PMI)
compiled by HSBC/Markit fell to 50.0 in
July from a 15-month high of 53.1 in
June, the lowest reading since
November 2005 when the data collection
began.
India July Services PMI falls
(5/8/2014)
 India July Service PMI has fallen from
54.4 to 52.2 on a month on month basis.
 This shows slight slow down in the
services sector also.
667
RBI CUTS SLR (5/8/2014)
 RBI cuts SLR 50 points to 22 % from
22.5%
 Repo rate unchanged at 8 %
 CRR unchanged at 4 %
 Reverse repo rate at 7 %
US Economy Motors on,
borroiwng at 7 year low
 US Treasury borrowing is at 7year low since 2007 due to




stronger economy boost tax revenue
Treasury has paid down $ 64 billion in marketable debt in Arpil
June quarter.
Cash balance was $ 130 billion in June
Budget deficit has been falling since 2009 and in 2014 it is
projected to be 2.8% of GDP which was 9.8% in 2009 when
Barak Obama took charge
The US Economy has expanded 4 % in April to June quarter
2014.
SEBI oks REITs (11/8/2014)
 Paving the way for Rs 1 lakh crore fund inflows from
foreign and domestic investors, Sebi on Sunday cleared
new norms for setting up and listing of Real Estate and
Infrastructure Investment Trusts.
 The new guidelines, which herald a new investment
avenue in India on the lines of one in developed markets
like the US, UK, Japan, Hong Kong and Singapore,
would allow trading in units of REITs and InvITs like any
other security on stock exchanges.
 Minimum investment amount for REITs has been fixed at Rs 2
lakh and at Rs 10 lakh for InvITs for now, given the complex
nature and potential risks associated with them.
SEBI oks REITs (11/8/2014)
 The REITs alone can attract USD 8-10 billion worth funds.
Talking to reporters after the board meeting, Sebi Chairman U K
Sinha said that these trusts would help in the progress of the
real estate and infrastructure sectors.
 The government feels that these new investment avenues
would reduce the pressure on the banking system while also
making available fresh equity in form of long-term finance from
foreign and domestic sources including the NRIs
PPF vs Equity (25/8/2014)
 PPF can beat equities over 20 year period
 Since 1994 Sensex was 4588 and now it is at
26420 in 2014
 Annualised return of Sensex is 9.15 % while
PPF has given 10.46%
 Rs. 10,000 invested in 1994 in Sensex gives
today Rs. 57520 and in in PPF gives Rs.
73,124
 Since august 2007 Senesx annualised return is
8.10%
Indian GDP rises (29/8/2014)
 Indian GDP at 5.7% vs 4.6%
 Highest in 10 quarters
 Economy coming back on track
 Rise in GDP due to Government
spending on social sector at 9.9% vs
3.3%
 Govt Spending reduces as fiscal year
ends due to target of meeting fiscal
deficit
FIIs pump huge money
(8/9/2014)
 FII pumped Rs. 3400 crores in Equities
in first week of september
 FII pumped Rs. 5000 crores in Debt
market
 Totally they have invested Rs. 9000
crores in Indian markets in first week of
september
Alibaba worlds biggest IPO
(9/9/2014)
Chinese e-commerce behemoth on Friday said it expects
to price its IPO between USD 60 and USD 66 per share to
raise as much as USD 24.3 billion - making it the largest
US public offering in history.
 At USD 66 a piece, Alibaba would be valued at USD 163
billion - below analysts` expectations for a valuation of
more than USD 200 billion.
 Facebook, the world`s largest technology IPO to date,
raised USD 16.01 billion in its May 2012 debut in New
York. It had a market capitalization of USD 81.25 billion,
according
to
Associated
Press.

Coal block decision delay
(9/9/2014)

he Supreme Court has reserved its order in the coal block allocation
case and has also refrained from giving any specific date to pass the
order. The apex court heard the final arguments today to determine the
fate of 218 coal blocks awarded since 1993 which it has termed as
"illegal" and "unconstitutional.“
 The government at the hearing on September 1, left it to the apex court
to decide the fate of these coal blocks, held as illegal by it, while stating
that about 40 blocks are operational and another six are ready to
produce 50 million tonnes coal in the current year.
NRI may find it easier to invest
in india (10/9/2014)
 1991 through SBI India Development
Bond had raised $ 1.6 billion
 1998 Resurgent Bonds which college $
4.2 billion after Nuclear test put
sanctions by USA
 In 2001, India Millennium Deposits
raised $ 5.5 billion
GMR group debt (12/9/2014)
 GMR group debt has increased to Rs.
37000 crores
 The stock trades at 25 Rs.
 High debt kills the EPS growth
LIC king of personal loans
(12/9/2014)
 LIC has given secured personal loans
against LIC policies of Rs. 60,000 crore
 LIC gives loans at 10 %
 Bank loans against FD are Rs. 54,200
crore
 Bank loans against shares Rs. 3200
crore
Difficult to do business in india
(12/9/2014)
 Vodafone India chief says difficult to do
business in india
 In china telco are reglated and three
players have invested $ 50 billion in
network last year
 India has spend only 10% of that in
createion of networks
 Vodafone still faces Rs. 20,000 crore in
tax problems.
Inflation stubborn and IIP
slows (12/9/2014)
 CPI Inflation has been stubborn at 7.8%
from 7.96% last month
 IIP slowed down from 3.4 % to 0.5 %
which shows still recovery is not
sustaining
August WPI at 5 year low
 Inflation data based on wholesale price index (WPI) for August
hit a five year low at 3.74 percent vs 5.19 percent seen in July
 Food inflation in August hit a lowest level since January 2012. It
eased to 5.15 percent versus 8.43 percent on a month-onmonth (MoM) basis.
 Further, August fuel inflation also hit a five-year low with the fuel
and power group inflation declining to 4.54 percent versus 7.40
percent (MoM).
NPA rising (15/9/2014)
 According to ICRA report, there has
been rise in NPA loans to 38%
 It was Rs. 1.65 trillion which has now
become Rs. 2.27 trillion
 Trade deficit narrows to $10.83bn in
Aug; exports slow Trade deficit during
the period (April-August) stood at USD
56.15 billion down from USD 70.6 billion
during the same period last year.
FII flows continues (16/9/2014)
 Foreign Institutional Investors (FII) flows
during calendar year 2013 invested
Rs.1,13,000 croes while DII were net
sellers to the tune of Rs. 74,000 crores.
In 2014 till date FII have invested Rs.
86,000 crores while DII sold shares
worth Rs. 34,000 crores. Taking the net
investment to Rs. 51,500 crores.
Corporate raising funds
(16/9/2014)
 In this year Indian corporates have
raised Rs. 26,000 crores through
Institutional Placement
 They plan to raise Rs. 50,000 crores in
coming months as more QIP are
expected to follow
Expected fund raising in next
12 months (16/9/2014)
 Methods
 PSU Divestment
 Banks FPO
 IPO & FPO
 Hind Zinc & Blaco Pvt
 SUUTI Stake sale
Rs. Crores
45000
40000
35000
20000
10000
ET 500 reflects revival sweeping across india
(16/9/2014)
 Total revenue of top 500 listed
companies have increased by 11 %
 The total rise in revenue is Rs. 67 lakh
crore
1 year return of stocks
(16/9/2014)












Company
Sensex
RIL
IOC
BPCL
HPCL
Tata Motors
SBI
ONGC
Tata Steel
Essar oil
Hindalco
1 year return
37.1
18.9
69.1
119.5
136.1
64.4
67.7
54.4
120.2
123.2
104.5
Govt cash rich (22/9/2014)
 Govt has reduced its first half borrowing by Rs. 16000 crore and
may not borrow this at all.
 Govt had budgeted to borrow Rs. 3.68 trillion in first half and
Rs. 2.32 trillion in the second half of FY15.
 Govt to ask ministries to spend more
 This would help GDP to grow as spending would create
demand and consumption
PM Prepares to help world
make in India(22/9/2014)
 Govt would set up fully functional online
system
 Budding entrepreneurs can get 100
central and state government approvals
online
 Only one single window clearance
system.
Manufacturing growth
stagnated (22/9/2014)
 Year
 1993-94
 2003-04
 2013-14
Manufac share in GDP
14.6%
15.2%
14.9%
Facts about India (I watch
book) Krishnan Khanna
 India contributes 2.6 % in world GDP
 India has 17 % of world population
 India contributes 2.2% in world trade which
means 97.8% world trade not with India
 Our per capita income is $ 1583 per year as
compared to China $ 5210 and USA $ 47000
 300 million people live below poverty line
 Criteria for BPL is Rs. 26 per day in rural india
and Rs. 32 per day in urban area
Facts about India (I watch
book) Krishnan Khanna
 Literacy ratio is 61 % as compared to china 93 %
 88% is drop out rate between kinder garden and 12 std in




india.
In China all children go through compulsorily 9 years of
schooling
2,50,000 india go abroad every year for studies which
result into Rs. 75,000 crore of forex spending
This amount can be used to create 60 IIM and 40 IITs
Only 28000 foreing students come to india for studies
while in Dubai it is 50,000, Australia 4,00,000 and
singapore 1,50,000
Facts about India (I watch
book) Krishnan Khanna
 India has 1.2 billion population and china
1.3 billion
 In India 28 million people are born every
year while in China 17 million
 Life expectancy in India is 67 years and
in china is 75 years.
Core Sector Grows
(1/10/2014)
 Core sector growth for the month of August was 5.8% vs
2.7% in July
 Last year In august core sector growth was 4.7%
 Experts believe that the overall core sector growth of 5.8
percent is a positive for the economy given that it forms
37 percent of the index of industrial production.
IMF lowers world growth to
3.3% (13/10/2014)

Sentiment on global growth has taken the severest knock since the
global FINANCIAL crisis.
 Mid-September data showed that Chinese industrial output grew by just
6.9 percent in August, down from the 9 percent level in July, that's the
lowest level since 2008;
 last week data showed that German industrial output in August slid 4
percent, the biggest fall in 5-1/2 years.
 And earlier this week, the IMF pulled down global growth numbers for
2014 to 3.3 percent from 3.4 percent forecast in June and 3.7 percent
forecast in April.
IIP Data again shocks
(13/10/2014)
 IIP data has come to 0.4 % as compared
to projection of 2.4 %
 Last month also the IIP data had come
to 0.5%
 Validity of IIP data under question as too
much volatility
WPI cools to 5 year low
(14/10/2014)
 Inflation data based on Wholesale Price Index (WPI) for
September eased to 5-year low at 2.38 percent against
3.74 percent on a month-on-month basis on lower food
and fuel prices.
 Food inflation, which came in at 33-month low, stood at
3.52 percent against 5.15 percent
 Fuel and power group inflation came in at 1.33 percent
against 4.54 percent on a month-on-month basis.
Manufactured products inflation came in at 2.84 percent
against 3.45 percent. The July WPI inflation has been
revised to 5.41 percent from 5.19 percent.
Trade Deficit widens
(14/10/2014)
 Trade Deficit widens to $ 14 billion
 Exports went up by 2.38%
 Imports up by 20 %
 Oil imports up by 9.76%
 Non Oil Imports up by 36%
 Out of $ 4 Billion rise in imports, gold
accounted for $ 1.75 billion and another
$ 1 billion was due to jems and jewellery
DLF promoters barred
(16/10/2014)
 DLF has total debt of Rs. 19000 crore
 Annual interest outflow of Rs. 13500
crore
Brokers closing (16/10/2014)
 Brokers are closing their shops though
markets up
 Corporate brokers 400 got closed
 Sub Brokers from 51000 have come to
46000. In sep 2013, the total number of
sub brokers was 79000
 In 2014, around 7700 sub brokers got
closed
Switzerland exports gold to India
(27/10/2014) business line
 Gold exports from Switzerland to India
has reached record high of Rs. 70,000
crore
 In september 2014 alone the export was
Rs. 15000 crore
 Gold being used for “layering” purposes
to move funds from Swiss bank to India
Europeans banks fail stress
test (27/10/2014) Business line
 13 banks out of 130 top European banks
have failed stress test
 They need to increase their capital buffer
against losses by $ 12.5 billion
 ECB has given 2 weeks time to banks to
increase their capital buffer
India set to grow 6.4% in FY16: World
Bank (28/10/2014)
 Buoyed by expectations from the new
government, the World Bank asserted that
India's growth story is on track with its economy
set to grow by 6.4 percent in FY16 and at 7
percent the following fiscal versus 5.6 percent
in FY15.
 The multi-lateral FUNDING agency also
forecasts FY15 inflation (WPI) at 4.3 percent
and current account deficit at 2 percent.
Oct 28, 2014, 08.27 AM IST | Source: CNBC
Why OPEC's losing its ability to set oil prices
 US shale oil will replace the Organization of the Petroleum




Exporting Countries as the first-mover "swing producer,"
according to a Goldman Sachs report
The shift in pricing power became apparent to Goldman when
U.S. shale's spare capacity, at around 5 million barrels per day,
exceeded Saudi Arabia's spare capacity of 1.5 million
Spare capacity refers to the amount of crude a country is able
to produce in 30 days in case of an emergency.
By 2019, US shale OIL production will jump to 9.6 million
barrles per day, from 8 million now.
In comparison, Saudi Arabia currently produces 9.6 million
barrels of crude oil a day.
Snapdeal makes the news
(29/10/2014)
 Softbank is japan Internet and telecom
group
 Its has invested $ 627 million (Rs 3800
crores) in Snapdeal
 It had invested $ 20 million in Ali baba
which is now $ 80 billion
US ends its bond buying
program (30/10/2014)
 USA has ended its bond buying
programme
 It had announced $ 85 billion per month
bond buying
 It has ended as economy has revived
strongly
 Interest rates still to remain till next year
Small shareholders in suspended companies suffer
(30/10/2014)
 Stocks
No of retail investors
 Consortex Kari
4,00,122
 Birla Power
2,03,633
 Silverline tech
1,98,135
 Nextgen Animation 1,79,062
 Ispat Profiles
1,42,823
 NEPC Agro
1,34,870
 Bellary steel
1,09,529
Govt relaxes FDI in construction sector
(30/102014)
 Minimum Foreign investment cut to $ 5
million from $ 10 million
 Minimum Floor area cut to 20,000 sq m
from 50,000 sq m
 No conditions for projects with 30 %
affordable housing
Japan gives stimulus
(3/11/2014) business line
 Bank of Japan has increased it bond
buying from Yen 60 trillion to Yen 80
trillion
 Increased maturity time from 7 to 10
years
 It was pleasure surprise for global
markets as US Fed has stopped the
“Quantitative Easing”.
Inflation cools and IIP rises
(12/11/2014)
 Inflation based on the Consumer Price Index (CPI) for the
month of October eased to its all-time low of 5.52 percent, the
lowest since India started computing consumer price index
(CPI) in January 2012, triggered by lower food prices and fuel
costs.
 Meanwhile, the index for industrial output (IIP) for the month of
September came in at 2.5 percent beating street estimate of 2
percent, against 0.4 percent in August.
Trade deficit falls (17/11/2014)
Exports hit 7 month low

India's TRADE deficit in October narrowed sharply to USD 13.36 billion
from USD 14.25 billion in the previous month courtesy decline in oil
imports.
 However, on an annual basis, trade deficit has surged 26.1 percent to
USD 13.36 billion. India's imports fell to USD 39.45 billion from USD
43.15 billion in September, but on a year-on-year basis, it has increased
3.16 percent. Oil and gold are the key contributors to India's import bill.
Oil imports fell to USD 12.36 billion as against USD 14.50 billion, on a
month-on-month basis. Non-oil imports stood at USD 27.08 billion as
against USD 28.65 billion, m-o-m. GOLD imports surged to USD 4.18
billion from USD 3.75 billion in the previous month.
 On a year-on-year basis, gold imports jumped to USD 4.17 billion from
USD 1.09 billion. This spike in could be because of the festivals like
Diwali and Dhanteras, which are considered as most auspicious
occasions in India to buy the yellow metal. Silver imports also rose to
USD 686 million from USD 477.61 million in September.
Global investors poll
(18/112014)
 Best opportunities over next 12 months
 Country
 USA
 India
 China
 EU
 UK
%
49
22
22
17
17
KVP back in flavour
(18/11/2014)
 Financial savings were at 12% in FY 10 which






reduced to 7.1 % in FY 12
Kisan Vikas Patra is relaunched
Denomination of Rs. 1000, R.s 5000,Rs.
10,000, Rs. 50,000
No upper limit of investment
Money doubles in 100 months (8 years 4
months)
Annual return of 8.7%
Encash certificate after lock in of 2.5 years
GDP slows (28/11/2014)
 GDP growth comes to 5.3 % vs 5.7 %
last quarter
 Last quarter growth was 4.6 % which
was 10 year low
World Economy still fragile
(1/12/2014)
 China PMI falls to 49.6 which is at 6
months low
 China's economic growth is expected to
slow to a 24-year low of 7.4 percent
 European Union to roll out more stimulus
 Bank of Japan has increased Yen
stimulus from 60 trillion yen to 80 trillion
yen
Core Sector picks up
(1/12/2014)
 Core Sector growth comes to 6.3 %
 The HSBC PMI hit a 21-month high in
November at 53.3 versus 51.6 in
October. Manufacturing operating
conditions in India improved for the
thirteenth month in a row in November
Bank of England (5/12/2014)
 Bank of England leaves rates
unchanged a 0.5 %
 Continues asset buying programme of
375 billion pounds
NSE seeks 25 % from Brokers
for SGF (5/12/2014)
 Stock Brokers who are clearing
members will have to give 25 % to core
SGF fund
 This money cannot be used for margin
 Additional cost may hit business
 NSE has Rs 625 crores, BSE Rs. 129
crores and MCX-SX 17 crores as SGF
Trade deficit widens
(8/12/2014)
 CAD increased from 1.7% to 2.1% of GDP
 Exports 4.9% vs 11.1%
 Imports $ 10 billion vs $ 5 billion
 Increase in gold imports
 Export growth slid to 4.9 percent in Q2 of 2014-15 from 11.9
percent YoY,
 Imports increased by 8.1 percent in Q2 of 2014-15 as against a
decline of 4.8 percent in Q2 YoY, largely due to a sharp rise in
gold imports.
 Trade deficit in Q2 now stands at USD 38.56 billion versus USD
34.6 billion in the preceding quarter.
WPI at 0 % (15/12/2014)
 WPI inflation at 0 % vs 1.77% month on
month
 Food inflation at 0.63% vs 2.77%
 All commodities down 1.3%
 Manufactured products inflation at 2.03
% vs 2.43%
 Fuel and power -4.91%
FII rush back in 2015(22/12/2014)
 Year
Net flows ($ billion)
 2012
24
 2013
20
 2014
16.5
 In 2014 Sensex has given return of 32 %
 1 $ billion = Rs. 6000 crore (Rs. 60 per
dollar)
Indian manufacturing contracts
(22/12/2014)
 Indian Manufacturing output contracted
0.7% in 2013-2014 for first time in 2
decades and only third time after
national gained independence
 In october the IIP has contracted 4.2%
 National Manufacturing Competitive
Council (NMCC) needs to be revamped
CSR now geeting real
(23/12/2014)
 For CSR the following conditions
 Rs. 500 crore profit or more OR
 Rs. 1000 crore turnover or more OR
 Rs. 5 crore net profit or more
 Out of 9,50,000 companies only 16000 come under CSR
rule
 According to estimates Rs. 22000 crores would be spend
in CSR this year but implementation is slow
Mutual Funds (23/12/2014)
 Rs. 10.67 lakh crore Assets managed by Indian




Mutual funds industry
67% is through distributors
33% through direct investments
90% investment in equity and 55% in debt is
through distributors
SEBI plans to reduce expenses incurred by
funds to 1.5 % of assets as compared to 2.5 %
which was set 20 years ago
USA Economy back on track
(24/12/2014)
 The U.S. economy grew at a 5.0 percent clip in the third
quarter, its quickest pace in 11 years and the strongest
sign yet that growth has decisively shifted into higher
gear.
 Wall Street had expected growth would be raised to only
a 4.3 percent rate.
 The reports further set the U.S. economy apart from the
rest of the world, where growth is sputtering or activity
shrinking.
China Nov industrial profits fall 4.2%,
steepest in 27 mths (29/12/2014)
 China Nov industrial profits fall 4.2%,
steepest in 27 mths
 the biggest annual decline since August
2012.
 In October, profits slid 2.1 percent
compared with the same month in 2013.
Companies raise 14 % in 2014
(29/12/2014) moneycontrol
 Cos raise Rs 39,127 cr in 2014; down 14% from
2013: PRIME Saving grace came in the form of
the 33 QIPs this calendar year, which saw Rs
31,684 crore being raised from institutional
investors, the highest in 5 years, accounting for
81 percent of the total amount mobilized this
year
 Rs 45,440 crore raised in the 2013
Global Indian money may be
treated as local (31/12/2014)
 Since April 2000 ( In $ billion)
 Total FDI
235
 Investment by NRI 4.7
 Share of NRI (%) 2
 Government plans to merge Persons of
Indian Origin (PIO) and Overseas
Citizens of India
Amazon and Flipkart wrestle to
shoppers (31/12/2014)
 Flipkart to raise Rs. 1300 crore though
rights issue and borrow Rs. 400 crore
from Kotak Mahindra Bank
 FY 14 Revenues it had Rs. 2846 crores
but loss of Rs. 400 crores
 AMAZON to issue shares worth Rs. 610
crore to parent company
 FY 14 $ 1 billion sales but loss of Rs.
321 crores
Repo Rate (31/12/2014)
 Dates
Repo Rate (%)
 July 27 2010
5.75
 Mar 17, 2011
6.75
 Oct 25, 2011
8.5
 April 17, 2012
8.0
 May 3, 2013
7.25
 Jan 28, 2014
8.0
Cleanse PSU Banks
(31/12/2014)
 PSU Banks have stressed assets t
12.9% of their total loans in Sep 2014
 Private Banks have stressed assets at
4.4% of their total loans in Sep 2014
 The Return on Equity for PSU banks
was 8.44% while for Private Banks it is
16.22%
Sensex Returns and FII Flows
(31/12/2014)
 Year
 2010
 2011
 2012
 2013
 2014
Sensex(%) FII flows ($ billion)
17.4
29.3
-24.6
0.4
25.7
24.5
9.0
19.9
29.4
16.0
Sensex Returns (31/12/2014)
 Year
 2014
 1985
 1991
 2006
 2007
 2009
Sensex Return (%)
30 %
93%
82%
46%
47%
81 %
Investment & not interest rates
matter (31/12/2014)
 From 1952 to 2010, study for American
companies showed that profitability
drives investment rather than lowe
interest rates.
 Interest rate is one of the catalyst but not
the core one
Promoters need to put in more
capital (31/12/2014)
 Take project of Rs. 10,000 crore project with 70:30 debt equity.
Promoter has to put in Rs. 3000 crore as equity. But he can get
only Rs. 1000 crore. So he inflates cost of project to Rs. 15000
crore.
 Now his equity contribution comes to Rs. 4500 crore but he gets
credit worth Rs. 10,500 crore more than enough to finance his
entire project.
 During implementation through promoter owned companies,
money will be taken out of the project to fund a part of his equity
contribution and grease palms that allow such inflated project
cost to go not just unchallenged but actually blesssed.
Best Performing Equity
markets in 2014 (31/12/2014)
 Markets
 Agertina
 China
 Venezuela
 Egypt
 India
% Return in 2014
56.62
49.61
38.35
32.77
29.44
Core sector growth rises
(31/12/2014)
 8 core sector growth rises to 6.7% vs
6.3% month on month
 It is at highest level since june 2014
Govt fiscal deficit high
(31/12/2014)
 Govt touches fiscal deficit at 98.9% in just 8 months
 India's fiscal deficit was Rs 5.25 trillion (USD 83.08 billion)
during April-November, or 98.9 percent of the full-year target,
government data showed on Wednesday.
 The deficit was 93.9 percent during the same period a year ago.
 Difficult to have fiscal deficit of 4.1% annually
Markets Tanked (6/1/2015)
 Markets tanked 3 % biggest fall after
June 2009
 FII sold in cash market Rs. 1500 crores
of shares
 Greece exit talks from EU main reason.
Greece has 177 % Debt t GDP ratio and
Unemployment level of 62 %
Greece failing (6/1/2015)
 Greece has to repay 6 to 7 billion Euro in
July and August 2015
 It may run out of cash in March 2015
 In elections in Greece in January 2015, if
opposition wins, they would tear up MOU
signed with EU.
 Greece falling out of EU would create
panic for world markets
SBI wants to merge with UTI
(7/1/2015)
 AMC







AUM (Rs. Crore)
HDFC
1,50,468
ICICI Pru
1,36,763
Rel Capital
1,26,069
Birla Sun Life
1,07,968
UTI
87,390
SBI
72,142
The merger if happens would make the largest AMC
Divestment coming soon
(12/1/2015)
 Govt plans to sell Coal India stake to
raise Rs. 24000 crores
 In 2010, Govt had sold 10% in coal india
to raise Rs.15000 crores
IIP wins (12/1/2015)
 November IIP improves from -4.2% to
3.8 %
 IIP at 5 month high
 Inflation CPI from 4.38% to 5%
 Manufacturing fro m -7.6% to
 Capital goods from -2.3% to 6.5%
 Manufacturing -7.6% to 3 %
Pvt Life Insurers Find tough
(13/1/2015)
 LIC opened 1313 offices in 2013-2014
 Pvt Life insurance companies closed 732 offices and




opened 166 offices
Net closure of offices 566
Industry saw 9.43% rise in premium income mainly due
to LIC while Pvt life insurance companies saw fall of
1.35% fall in premium collection
Life Insurance Industry reported profit of Rs. 7588 crores
during 2013-2014. Six companies in private sector gave
dividend
Total agents in industry is 21.88 lakhs
VC funds back (13/1/2015)
 Venture capital firms are on road to raise
neary $ 2 billion or Rs. 12,400 crore to
invest in startups in India
 In 2014 firms raise $ 1 billion to invest in
start ups
World bank report (14/1/2015)
 World bank Bi-annually report says world GDP to grow at






3 % in 2015 and 3.3% in 2016
Earlier forecast was 3.4% and 3.5%
“The global economy is running on one single engine…
the American one”
India to grow at 7 % in 2016
Russia -2.9% in 2015 and 0.1% in 2016
Eurozone 1.1% in 2015
Japan 1.2% in 2015
RBI cuts Repo Rate
(15/1/2015)
 RBI cuts Repo rate by 0.25% to 7.75 %
from 8 %
 Reverse repo rate now 6.75%
 CRR at 4 %
 SLR at 22 %
 MSF and Bank Rate at 8.75% (earlier it
was 9 %)
Dec trade deficit at $9.43 bn
vs $16.86 bn (MoM)
 Trade deficit during December fell sharply to USD 9
billion from USD 16.8 billion in November 2014.
 While exports for the month came in at USD 25.40 billion
from USD 25.96 billion in November, imports declined to
USD 34.83 billion from USD 42.82 billion in the previous
month.
Eurozone gives stimulus
(22/1/2015)
 ECB has given 60 billion euro stimulus
per month till sep 2016
 Total quantum to be 1.14 trillion euros
 Interest rates kept unchanged
10 challenges India faces
(23/1/2015)

1. Revive Growth (job creation)

2.Improve consumer sentiments (rate cut)
3.Revive Investment through public spending (pvt sector in huge debt so govt has to spend)
4.Fiscal Consolidation (2016 target 3.6% and 2017 target 3 %)
5. Supply side inflation (Investment in supply chain, higher farm productivity)
6. Disinvestment (Target of Rs. 43000 crore but only Rs. 1700 crore achieved)
7. Bad loans of State Run Banks (Gross NPA has touched 5.32% in Sep 2014)
8. Boost Financial Savings (Higher savings so money for investments)
9. Aggressive taxation (Retrospective tax to be removed)
10. Improve Ease of Doing Business








Bad loans of State Run banks
(23/1/2015)
 Period
 March 13
 Sep 13
 March 14
 Sep 14
Gross NPAs
3.84
4.82
4.72
5.32
India ask US for investment in
smart cities (23/1/2015)
 Make in India to boost 25 manufacturing
sectors
 Since 2000 USA has invested $ 13
billion into India
 USA is the sixth largest investor in India
 In 2013-2014 US Companies have
invested close to $ 1 billion
Euro zone elections
(27/1/2015)
 Opposition party has won elections
 They want to cancel 2012 MOU with EU
 Greece has Debt to GDP ratio of 177%
 Greece has unemployment of 62%
 Greece may run out of cash in March
 Greece has to pay 6 billion euro in july
Unemployment rates in
Europe
 Germany 8 %
 UK 20%
 France 24%
 Italy 40 %
 Spain 57%
 Greece 62%
Rate cut saw 2000 points rally
(29/1/2015)
 RBI rate cut has lead to 2000 points in
last 10 trading sessions
 Stocks
Points contributed
 HDFC bank
449
 ICICI bank
245
 Axis bank
184
RBI CUTS SLR (3/2/2015)
 RBI cuts SLR by 50 bps from 22 % to 21.5 %
 Repo rate at 7.75%
 Reverse Repo rate at 6.75%
 CRR at 4 %
 Benchmark policy rate at 7.75%F
 FII can invest in Corporate bonds with 3 year maturity
 RBI to allow Interest rate future contracts on 5-7 year, 13-15
year Govt bonds
US creating jobs (9/2/2015)
 USA consecutively for last 11 months
have added more than 2,00,000 jobs on
monthly basis
 The best turn since 1994
 Average of 3,36,000 jobs created a
month for the past 3 months, the best in
last 17 years
Govt infuses Rs. 6990 crore in
9 PSU banks (9/2/2015)
 Govt would infuse Rs. 6990 crore in 9
Public Sector Banks
 This decision comes surprise to reports
that Govt would infuse only in those PSU
banks who perform.
14th Finance Commission
(25/2/2015)
 States to get 42 % as compared to
earlier 32 % from central taxes
 States given more autonomy to
implement welfare programmes
 States will co-operate more for GST now
with Centre this initiative
Greece Gets Time (24/2/2015)
 Greece gets 4 months time for
repayment schedule
 Lenders accepts reforms list given by
Greece
 Some breathing time for world economy
 Greece has Debt to GDP ratio of 177%
 Unemployment rate at 62 %
China PMI rises (25/2/2015)
 China PMI has increased from 49 .7 to
50.3
 First time in last 3 months
 Raising hope that Chinese economy
comes back on track
 China GDP is already at 24 years low at
7.4% which is lowest since 1990 when it
had registered 7.6%
3 PSU banks to raise Rs. 4500 crore in
Perpetual bonds (26/2/2015)
 Bank
Gross NPA Fund
Rate %
 Canara
3.35
1500 cr
9.55
 UBI
5.08
2000 cr
10.08
 Dena
5.61
1000 cr
10.25
 Perpetual bond do not have maturity
dates
 Under BASEL III, perpetual bond is more
of quasi equity obligation
SEBI Planning OFCD in IPOs
(26/2/2015)
 IPO could have Optionally Fully Convertible Debentures
 If share price goes below lising, the investors gets
principal and Interest
 If share price goes above lisitng, the investor can convert
debenture into shares and sell
 Objective to give retail investor protection of capital
 Between 2008-2011 out of 117 stocks, 72 that is 62 %
were trading below issue price after six months of listing.
Indian Railways (26/2/2015)
 Currently, there are 676 projects worth
Rs 1,57,883 crore sanctioned and out of
these, only 317 projects could be
completed and 359 projects remain to be
completed which will now require as
much as Rs 1,82,000 crore.
S & P raises India GDP
Forecast (26/2/2015)
 S & P has raised Indian GDP forecast at
7.9% in FY 2016
 China growth forecast has been reduced
to 6.9% for this year
Economic Survey (27/2/2015)
 The Economic Survey for 2014-15 has projected a growth of




8.1- 8.5 percent for FY16, and said there was scope for big
bang reforms.
It sees growth rate for the current fiscal at 7.4 percent Gd
In addition, the government should meet its medium term fiscal
deficit target of 3 percent of GDP, the Survey said.
The Survey estimates current account deficit at 1.3 percent of
GDP this fiscal.
They Survey saw turmoil in the Eurozone and interest rate
policy in the US as key external risks.
Core Sector Growth slows
(2/3/2015)
 Month







Core sector growth
October
6.7
Nov
6.3
Dec
2.4
January
3.7
February
1.8
Lowest in last 13 months
Core sector has 38% weightage in IIP index
Fiscal Deficit rises (3/3/2015)
 April January Fiscal deficit came at 107
%
 It was earlier at 98.9 %
 The targets for fiscal deficit has been
now 3.9% and it has been extended to 3
years
RBI cuts Repo Rate (4/3/2015)
 RBI cuts the repo rate by 25 basis point
 Repo rate now at 7.5%
 Reverse Repo at 6.5%
 CRR at 4 %
 SLR at 21.5%
HSBC PMI service index rises
(4/3/2015)
 Indian services companies on a monthly basis, rose to an
eight-month high of 53.9 in February, as against 52.4 in
the previous month, indicating a robust expansion across
the sector.
 A score above 50 indicates that the sector is expanding,
while a figure below that level means contraction.
US Job Data makes D street
nervous (10/3/2015)
 US jobless rate dropped to 5.5% in
February as compared to 5.7% in
January
 US created 2,95,000 jobs in February
beating forecast of 2,40,000 jobs
ECB to start pumping
(10/3/2015)
 European Central Bank has started
pumping 60 billion euro from Monday
which is monthly buying
 ECB had earlier announced bond buying
of 1.14 trillion euro till sep 2016.
CAD narrow to 1.6%
(10/3/2015)
 Current account deficit narrows to USD 8.2 bn in Q3 India’s
current account deficit (CAD) narrowed to USD 8.2 billion or 1.6
percent of GDP in Q3 of 2014-15 from USD 10.1 billion or 2
percent of GDP in Q2.
 The reduction in the CAD in Q3 2014-15 was primarily on
account of net exports of services which picked up in q-o-q
terms on the back of an improvement in net earnings through
travel and software services, and lower net outflows under
primary
income
(profit,
dividend
and
interest).
IMF raises India growth
forecast (12/3/2015)
 IMF has forecasted India growth to 7.5%
for 2016
 For 2015, IMF has forecasted Indian
GDP 7.2%
Govt clears Insurance Bill
(13/3/2015)
 Insruance Bill has been cleared by both
houses
 FDI limit raised to 49 % from 26 %
 Total capital required Rs. 55000
 Rs. 44000 in Life insruance and Rs.
11,000 crore in General insurance
IIP slows down (12/3/2015)














IIP data for January 2015 came at 2.6%
For December 2014 it was 3.2%
Month
IIP data
April 2014
3.7
May 2014
5.6
June 2014
4.3
July 2014
0.9
Aug 2014
0.4
Sep 2014
2.5
Oct 2014
-2.6
Nov 2014
3.9
Dec 2014
3.2
Jan 2015
2.6
In IIP data 75% weightate is given to manufacturing sector
CPI rises (12/3/2015)
 CPI inflation increased to 5.37% as
earlier of 5.19% mainly due to higher
food prices
 Rise in inflation could reduce the
chances of rate cut
Mutual fund industry
(12/3/2015)
 Mutual fund industry AUM crossed Rs.
12 lakh crore
 Equity AUM at highest Rs. 3.8 lakh crore
 Avg Equity net sales Rs. 8000 crore
each month. Net equity sales this
financial year Rs. 72000 crore
 In February 2015 no of SIP 3.7 lakh sold
highest in last few years
 Industry has 70 lakh active SIP
WPI falls further (16/3/2015)
 WPI has come to -2.6%
 Earlier it was -0.39% vs -0.11%
 It raises fear of deflation
 Food inflation seen at 7.74.% vs 8 %
earlier
 Unseasonal rainfall would cause higher
inflaiton
IMF HIGHLIGHTS (17/3/2015)


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Below are the highlights of IMF Chief Christine Lagarde's speech:
Growth In US & UK To Remain Above Trend In Near-term
India’s Corporate Sector Not Immune To $ Strengthening
India’s Corp Sector Debt Doubled To $120Bn In Last 5Yrs
India’s Corporate Sector Debt Has Risen Very Rapidly
India Contained Local, External Vulnerability More Than Peers
EMs Need To Prepare Well In Advance w.r.t Fed Decisions
India Ahead Of Many Nations In Implementing Basel-III Stds
Domestic demand yet to recover in Japan & Euro area.
See growth rebound in U.S. while growth in U.K. remains above trend.
Expect world economy to grow at 3.5% in 2015 & 3.7% in 2016.
Global growth still fragile & uneven.
Likely volatility in Fin Mkts could pose potential stability risks.
United States expected to raise interest rates later this year.
World looking at India to lead it to higher, sustainable growth path.
RBI Governor has deftly steered Indian economy to safer waters.
India ahead of many nations in implementing Basel-III Stds
EMs need to prepare well in advance w.r.t Fed Decisions
'Among emerging markets, India is shining brightly‘
US DATA (19/3/2015)
 USA Current Account deficit at 2.6% vs
2.4% of GDP
 USA CAD at $ 410 billion
 US Economy more than 67 % is
depended on consumption
Core sector data
falls(31/3/2015)












Core sector data falls to 1.4% as compared to 1.8% month on month
Coal production 11.7% vs 1.7%
Cement production up
April– feb core sector 3.8% vs 4.2 % yoy
Month
Core sector growth
October
6.7
Nov
6.3
Dec
2.4
January
3.7
February
1.8
Lowest in last 13 months
Core sector has 38% weight age in IIP index
HSBC PMI shows growth
(6/4/2015)
 The HSBC Services Purchasing
Managers' Index eased to 53.0 in March
from February's eight-month high of
53.9.
 A reading above 50 indicates growth,
and March was the 11th straight month
of expansion.
India not tax heaven
(7/4/2015)
 FII are likely to come under the MAT
(Minimum Alternate Tax) at 20 %
 Tax Authorities have send notices to 90
Foreign Portfolio Investors (FPI)
 FII have received tax notices for MAT for
the year 2010-2011
 Estimates suggest that MAT amount
may touch $ 5 to 8 billion
RBI keeps rate unchanged
(7/4/2015)
 RBI keeps repo rate in 7.5% and CRR at
4%
 Inflation target for January 2016 at 6 %
and January 2018 at 4 %
 Inflation in August 2015 likely to come
down at 4 % from current 6 %
MUDRA BANK (8/4/2015)
 Big industrial houses provide jobs to only 1.25 crore people,
while small entrepreneurs employ 12 crore people.
 There are about 5.77 crore small business units. It will also lay
down "responsible financing practices" to ward off over
indebtedness and ensure proper client protection principles and
methods of recovery, besides development of standardized set
of covenants governing last mile lending to micro enterprise.
 Micro Units Development Refinance Agency (MUDRA) with a
corpus of Rs 20,000 crore, and credit guarantee corpus of Rs
3,000 crore.
 Shishu would cover loans up to Rs 50,000 while Kishor above
Rs 50,000 and up to Rs 5 lakh. Tarun category will cover loans
of above Rs 5 lakh and upto Rs 10 lakh.

RBI 5:25 Scheme (8/4/2015)

Under the new scheme banks can stretch this repayment schedule to
25 years with the option of refinancing at the end of every 5 years and
can even selling this loan to another bank
 According to top sources over Rs 50,000 crore worth of loans are up for
refinancing with the lenders.
 Bhushan Steel has approached bankers to refinance its debt worth Rs
40,000 crore. Adani Power is also looking to refinance partly its debt
worth Rs 45,000.
 Other companies that are looking to refinance their debt under the new
scheme are, GMR Infra with a debt of Rs 4,000 crore and Essar Steel
with a debt of Rs 38,000 crore
IMF's Lagarde sees 'new reality' of mediocre
growth (10/4/2015)
 Mediocre economic growth could become the "new reality,"
leaving millions stuck without jobs and increasing the risks to
global financial stability, the head of the International Monetary
Fund warned on Thursday.
 In its last forecasts in January, the IMF said the global economy
grew 3.3 percent last year, advanced economies expanded by
1.8 percent and emerging markets grew 4.4 percent.
Inflation eases (13/4/2015)

Retail inflation, as measured by the consumer price index (CPI), slowed
to 5.17 percent year-on-year in March, government data released today
showed, compared to 5.37 percent in February.
 The fall was largely broad-based with food inflation, which constitutes
nearly half the index, coming in at 6.14 percent compared to 6.79
percent in February,
 Clothing and footwear slowed to 6.27 percent YoY from 6.38 percent,
though fuel and light inflation perked up a bit.
China slows down (23/4/2015)
 China PMI has come 49.2 as compared to earlier project
of 49.6
 People's Republic of China slashed the reserve
requirement ratio (RRR) of major banks. The 100 basis
point-cut to 18.5 percent is the biggest since 2008, during
the height of the global financial crisis.
 CHINA GDP is now projected at 7 % which has come
down from 7.4 % which was 24 years low
MAT ON FII (23/4/2015)
 Government has clarified that MAT (20
% ) will not be applicable on countries
where DTAA (Double Taxation
Avoidance Treaty)
 31% of FII flows comes from Singapore
and Mauritius which we have DTAA
MAT from US, UK still worry
(24/4/2015)
 US, UK and Luxemberg account for 50
% of the total FPI which would have to
pay MAT at 20 %
 PE Fund managers are also scary that
IT department may ask them also to pay
MAT
 Mauritius and Singapore account for 33
% of total FPI flows
RBI revises Priority sector
lending (24/4/2015)
 All banks have to lend 40 % of their net
credit to priority sector ledning
 Foreing Banks with less than 20
branches have to meet target by 20192020
 Medium enterprise, social infrastructure,
renewable energy form part of priority
sector
Rural India Debt Profile
(24/4/2015)
 More than 50 % of agriculture household
in country are indebted
 Avg amount of loan outstanding is Rs.
47000
 Andhra Pradesh has highest % of 92.9
% of household indebted
 All India Average is 51.9 %
US slows down (30/4/2015)
 US Economy has slowed down as its
GDP came to 1 % as compared to 2.2%
last quarter
 US Fed Reserve has postponed the
decision to rise interest rates
China PMI slows (4/5/2015)
 Chinese PMI has come to 48.2 as
compared to estimate of 49.6
 China slowing down cause of concern
 Worlds largest consumer of commodities
MF flows highest in April in last
7 years (4/5/2015)
 Mutual fund managers pumped in over Rs 7,600 crore in equity
markets in April, making it their highest net inflow in more than
seven years.
 This was the highest net inflow in equities since January 2008,
when fund managers poured in Rs 7,703 crore. Besides, fund
managers invested a net amount of Rs 28,650 crore in debt
markets last month.
 The huge inflows also helped the MF industry reach around Rs
12 lakh crore mark in assets under management (AUM) at the
end of the financial year.
FII selling spree (8/5/2015)
 FII have sold stocks wroth Rs. 6500 in
May 2015
 In April 2015, FII sold stocks wroth Rs.
1100 crore
 FII not comfortable with MAT issue
CPI eases (12/5/2015)
 CPI inflation has come to 4.87% as
compared to estimate of 5.04%
 Last month it was 5.17%
 Easing of inflation calls for Interest rate
cut
IIP falls sharply (12/5/2015)
 IIP falls to 2.1% as compared to 5% last
month
 Fall in IIP shows that industry still not
picking up momentum
 IIP data lowest since October 2014.
WPI FALLS (14/5/2015)
 WPI has came to -2.65%
 This shows that economy is slowing down
 Continuous




slowdown of WPI means that manufacturing is
slowing
Food inflation has come down. Food articles inflation at 5.73%
Vs 6.31% (MoM).
Its indicating that deflation has set in
This is fifth successive month of negative WPI after the flat
reading for November.
While a downtrend in inflation was much awaited, sustained
deflation spells bad news for the economy as a whole. That is
because producers will start cutting down on production
because of weak demand, which in turn will further reduce
economic activity and lead to job losses or poor wage growth
Bad loans turning rotten now
(21/5/2015)
 Loans worth Rs. 56995 crores
restructured loans classified as failed as
on 31st march 2015.
 Last year, Rs. 29980 crores of loans
were classified as failed
 90 % rise in debt recast failure
 Rs. 2.86 lakh crore restructured loans as
on March 31,2015
FII seek softer license
(25/5/2015)
 FII hold $ 328 billion in India as asset
under management
 They hold little more than 51 % of shares
in free float
 In BSE 200, FII holds 25.6 %
FII sell off continues
(25/5/2015)
 FPI investments in January were higher at Rs 33,688 crore and
more than halved to Rs. 15,266 crore in April.
 In May things took a turn for the worse as FPIs withdrew an
estimated Rs 14,674 crore (USD 2.3 billion) during the month
so far, a report stated adding that the outflow was of Rs 5,867
crore from the equities and another Rs 8,807 crore from the
debt markets.
FII ownership pattern
(25/5/2015)
 Sector
MSCI %
 Consumer Discre
8.1
 Consumer staples
13.3
 Cement
1.9
 Energy
9.3
 Financials
18.1
 Industrials
5.6
 Metals Mining
5.1
 Healthcare
8.4
 Real Estate
0.4
 Software
23.3
 Telecom
2.5
 Utilities
2.8
FII hold %
10.7
9.2
2.5
5.3
32.6
5.7
3.0
6.8
0.8
15.2
2.7
2.9
GDP at 7.5 % (1/6/2015)
 GDP has come at 7.5%
 GVA which is Gross Value Added is at
6.1% which has come down from 6.6%
and 8.4% in previous quarters
 GVA is total output minus consumption –
value of goods and services produced
 GVA is actually what is left with
consumer after taxes and subsidies are
taken away by govt.
RBI cuts Repo Rate (2/6/2015)
 RBI cuts repo rate by 25 basis point
 Repo Rate now at 7.25%
 Reverse Repo Rate at 6.25%
 CRR unchanged at 4 %
 SLR at 21.5 % unchanged
RBI policy highlights
(2/6/2015)
 Monsoon to be critical factor for inflation
 Inflation target revised from 5.8% to 6%
 Gross value added revised downward
from 7.8% to 7.6%
 Bad loans main concerns for banks
 Geo political risk still persists large
India may face $3.8 bn outflow
if China A enters MSCI
 India's current weightage is 7.49 percent and China’s is 24.88
percent in the MSCI EM index. Post inclusion, India's weight
may reduce to 7.13 percent while China may stand at 28.51
percent in the index. Hence, it is more likely that MSCI will
gradually include the A shares to avoid market volatility.
 India may see selling worth USD 3.8 billion and exchange
traded fund ( ETF )-related selling worth USD 0.9 billion as
India's weight age in the index could reduce as a result.
CAD lowers (15/6/2015)
 CAD has reduced to 0.2% as compared
to 1.6 % earlier
 CAD reduction makes BOP more strong
India's trade deficit narrows in
May (16/6/2015)

India's trade deficit for the month of May came in at a three-month low
at USD 10.41 billion, marginally lower than USD 10.99 in April. Imports
for the month too came in at a three-month low.
 India exported USD 22.34 billion worth of goods in May versus USD
22.05 billion month-on-month. India's exports in the year-ago period
stood at USD 27.99 billion, which is 20.19 percent lower in dollar terms
and 14.14 percent lower in rupee terms.
 Export data continues to be at a low level and this trend may
continue for some time, which is worrying as it will spill into the
IIP number
 Both imports and exports are staying low and prices have a role
to play in this. Weak exports is a concern despite weak rupee.
Greece troubles again
(25/6/2015)
 Greece is on verge of default
 The government has 12 more seats for
majority.
 There is possibility for new election
 Further economic uncertainty would be
added
India among top 10 countries
to attract high FDIs: UNCTAD
 India’s investment inflows grew 23 percent whereas global
inflows reduced 16 percent last year. Nazareth also pointed out
that in 2014, the country received USD 34 billion in comparison
to USD 45 billion in 2007.

Singapore, Hong Kong and all the other BRIC have crossed USD 50
billion in annual FDI inflows," she said, adding "we are the only BRIC
that has not. We have not got even USD 50 billion in annual inflows in
one year".
India Inc Profit to GDP ratio slips on Interest cost
(29/6/2015)











Profit to GDP ratio fell for 5th consecutive year to 4.1% as compared to 10
year average of 5.3 %
The 10 year average has been 9 to 14 % in developed economies while 5 to
8 % for developing economies
Operating Profit margin for BSE 500 companies have fell to 18.18% lowest
in one decade from 10 year average of 21%
Average interest paid on debt increased to 7.35% higher than 10 year
average of 5.81%
Average manufacturing capacity utilisation has fallen to 72% as compared to
83%
Components
10 Year CAGR Growth
Revenue
19%
Operating Profit
15%
Interest
28%
Depreciation
21%
Net Profit
10%
Euro Zone Debt to GDP Ratio
(29/6/2015)
 Country
 Greece
 Italy
 Spain
 UK
 Germany
Debt to GDP %
175.1
132.6
93.9
90.6
78.4
VC Funds Coming in Droves
(29/6/2015)
 Year
Deals
 2013
246
 2014
297
 2015
197
 Angel Deal
 2013
274
 2014
313
 2015
221
VC Funds ($ billion)
1.43
2.34
2.46
$ 75 million
$ 121 million
$ 221 million
IPO coming in big way
(29/6/2015)
 30 IPO worth Rs. 20,000 crores are in
pipeline for Indian stock market
 20 IPO have got SEBI clearance
Core Sector Growth rises
(30/6/2015)
 Core sector growth rises to 4.4% in May vs decline of 0.4% in
April
 The eight core sector industries include coal, crude oil, natural
gas, refinery products, fertilizer, steel, cement and electricity

For the April-May period, output rose 2.1 percent against 4.7 percent
year-on-year (YoY).
PMI also slows (1/7/2015)
 The HSBC India Purchasing Managers' Index (PMI) fell to
51.3 in June from 52.6 in May, amid slowest rise in new
orders since September 2014.
 it was reflective of the continuing weakness in
manufacturing activity.

MF assets base perks up by Rs 39,000
cr in Apr-Jun qtr(money control)

The country's 44 fund houses together had an average assets under
management (AUM) of Rs 11.88 lakh crore during January-March quarter of
2014-15 as compared to Rs 12.27 lakh crore in the first quarter of current
financial year, as per the latest data available with Association of Mutual
Funds in India (AMFI).

HDFC Mutual Fund (MF) has retained its top position with an average AUM of Rs
1.65 lakh crore, a surge in asset base by 2.1 cent, while ICICI Prudential MF's
asset base grew by 4.7 percent to Rs 1.55 lakh crore.,Reliance MF (Rs 1.45 lakh
crore) Birla Sunlife (Rs 1.25 lakh crore) and UTI MF (Rs 92,730 crore) in terms of
average AUM in the first quarter of 2015-16.
Govt Agri push (2/7/2015)
 The Union Cabinet yesterday approved the Pradhan Mantri
Krishi Sinchayi Yojana and a National Policy For Skill
Development & Entrepreneur ship.
 Through the Rs 50,000 crore Krishi Sinchai Yojana, the
government over the next five years will focus on improving
irrigation in non rain-fed areas as well as strive to improve water
efficiency through the country.
 65% of the total agriculture land (142 million hectare) does not
have irrigation facility
 Only 35% of the total agriculture land has irrigation facility

Socio Economic and Caste
Census (6/7/2015)
 Total Household in country 24.39 crore
 Households in rural india 17.91 crore
 Household with kuccha walls
13.25%(2.37 crore)
 No adult member between 18 to 59 age
3.64% (65.15 lakh household)
 Female headed household with no adult
male member 3.85% (68.96 lakh)
Socio Economic and Caste
Census (6/7/2015)
 SC / ST households 3.86 crore (21.53%)
 Household with no literate adult 4.21
crore (23.52%)
 Landless households deriving major part
of income from manual labour 5.37 crore
(29.97%)
Greece impact (8/7/2015)
 Rank
 1
 2
 3
 4
 5
 6
 7
 8
 9
 10
 92
Country
% share in India trade
China
9.5
USA
8.5
UAE
7.8
Saudi Arab
5.2
Switzerland
3.1
Germany
2.7
Hong Kong
2.5
Indonesia
2.5
South Korea
2.4
Singapore
2.3
Greece
0.1
China in mess (8/7/2015)
 Chinese stock market down 30 % from mid June
 Losses $ 3.4 trillion in market cap in 3 weeks
 Trading stops in 203 mainland Chinese companies.
 China regulator has given $ 20 trillion to 21 brokerage
houses for proprietary trading
 China has Debt to GDP ratio of 200 %
 China is biggest trading partner of India at 9.5% of total
trade with India
Oil and gold prices down
(27/7/2015)
 Crop area is 26 % higher than last year
as monsoon has done well so far
 Monsoon deficit now just 5 % only
 Gold prices are 4 year low
 Oil import bill has fallen by 40 % in the
first quarter
 Oil I snow just 23 % of imports as
compared to 35 % in Q1 last fiscal
P notes back in focus
(27/7/2015)





P notes are offshore derivative instruments used by foreign investors
who are interested in betting on Indian securities but not keen on
registering with the capital market regulator SEBI. P notes are issued by
foreign brokerages registered with SEBI or foreign arms of domestic
brokerages to overseas investors. The broker buys the Indian securities
and issues P notes to the client for a fee.
Positions held through P notes are Rs 2,75,436 crores or 11.5 % of
assets under custody of foreign portfolio investors which is Rs.
23,86,457 crores
In October 16, 2007, SEBI had put discussion paper o P notes
The next 3 days markets came down by 9% on october 17 leading to to
trades being halted for one hour.
In October 2007 the P notes holding had touched 50 % of the total FII
assets under custody
Greece details 3 bailout
package (27/7/2015)money
 The
European Union, International Monetary Fund and
European Central Bank make up the so-called "troika" of
Greece's creditors.
 In hammering out details of a third bailout package for Greece
of up to 86 billion euros (USD 94 billion), those three
organizations will be joined by a fourth negotiator, the European
Stability Mechanism.
SIP gives more (29/7/2015)
 Average Return for 15 year period have
been 21.54%
 The worst performer schemes have also
given 13.71%
 SIP best way to make wealth in the long
term investment
 Rs. 10,000 per month invested for 15
years means Rs. 18 lakh becomes 1.09
crore
China slows down (10/8/2015)
 China exports fell lowest in last 4 months
 China may give more easing
 It has reduced its Reserve Ratio
Requirement by 1 % to 18.5 %
Greece to finalize deal
(10/8/2015)
 Greece has to finalize deal worth $ 86
billion euro on Tuesday
 Greece has to pay by 20 August to
international lenders
 Greece Debt to GDP ratio is 177%
 Unemployment ratio is 62%
Banks converting non paid
loan into equity (10/8/2015)
 Banks to convert part of Rs 2400 crore dues of hydro
power unit to 51 % equity
 Special Debt Restructuring (SDR) scheme allows banks
to acquire 51 % sake in stressed asset by converting part
of debt into equity
 Another company where banks converted Stressed asset
into equity was Electro steel where banks converted Rs.
780 crore debt into equity
China to depreciate yuan
(11/8/2015)
 Equity markets in China were choppy early Tuesday, on
the back of unexpected news that the People's Bank of
China (PBOC) is implementing a one-time depreciation of
nearly 2 percent to the Chinese yuan.
 China has artificially managed its currency
 It does not give real picture of the economy
Make In India starts
(10/8/2015)
 China XIAOMI has tied up with Taiwan FOXCONN to




make mobiles in India
The manufacturing plant would be in Sri City Plant in
Andhra Pradesh
The phone sis Redmi 2 Prime priced at 6999 Rs
Foxconn has started earlier plant in Brazil to make
phones there
It took 18 months in Brazil to start manufacturing which is
3 times the time in India
China devalues its currency
(12/8/2015)
 China has devalued its currency by 2%
 Yuan is at its 3 year low
 Makes Chinese exports more
competitive
 China accounts for 9.5% of total foreign
trade with India
 US also condemned it for unfair export
advantage
Gold Rises as China fumbles
(12/8/2015)
 Gold gained for a fifth session in a row on Wednesday to
trade near a three-week high, benefiting from weaker
equities after China's devaluation of the yuan stoked
fears of a currency war.
 Weaker yuan would make it more expensive for China,
the world's top consumer, to import gold, potentially
extending weak Chinese demand that has been the case
since 2014.
CPI cools off (12/8/2015)
 CPI inflation July for 3.8 % as compared
to 5.01% last month
 CPI inflation lower data raises hope of
rate cut
IIP rises (12/8/2015)
 IIP data has increased to 3.8% from 3 %
last month
 Earlier IIP had shown huge volatility
 It was -0.4% then it went 4.4% then fell
at 3% then it came at 3.8%
 The inputs used in IIP data needs to be
checked
Trade deficit widens
(17/8/2015)
 Trade deficit widens from $ 10 billion to $
12 billion
 Imports at $ 35 billion
 Exports at $ 23 billion
 Indian exports slowdown due to world
economies in mess
 China slowdown, Japan deflation,
Europe grappling with Greece issues
UAE Strategic partner
(18/8/2015)
 UAE and India has two way trade of $ 60
billion
 India exports $ 30 billion to UAE, its
second largest export destination
 7 million Indian lives and work in UAE
 India received remittances worth $ 50
billion
Moody lowers India GDP
forecast (19/8/2015)
 Moody Investor service has reduced
India forecast of GDP from 7.5% to 7%
 Reasons are below average monsoon,
reforms stalling
RBI gives payment banks
(20/8/2015)
 RBI gave 11 applicants permission for
Payment Banks
 Payment banks will take deposit, convey
remittances and dispense payment to
recipients which would be useful to send
money.
 They will not engage in lending.
India best performer market in
lst three months (20/8/2015)
 Index










3 month %
PE
Nifty
1.64
17.14
Nikkie 225
0.98
19.14
MSCI world
-3.30
17.27
Dow jones
-4.37
15.82
Kospi (Korea)
-8.56
11.88
Dax Index(Germany) -9.25
13.40
Shangai (china)
-14.11
15.51
Ibovespa (Brazil)
-14.50
12.91
MSCI Emerging
-18.52
11.81
The domestic Mutual Funds in India have deployed Rs. 17000
crores in past 3 months while FII have been net sellers Rs. 945
crores in same period
Indian rupee still strong
(20/8/2015)
 Currency
 Brazil real
 Turkish Lira
 Malaysian ringgit
 Indonesia rupia
 South Africa rand
 South Korea won
 Rusian Rouble
 Indian Rupee
 China Rembini
Close rate
3.48
2.86
4.10
13822.0
12.89
1182.81
65.28
65.32
6.39
YTD % fall
23.69
18.27
14.69
10.38
10.21
7.76
6.97
3.48
2.96
Greece PM resigns
(20/8/2015)
 Greece PM has resigned
 New elections on 20th September
 Greece paid 86 billion Euro the third largest bailout to
Greece
 In last 5 years, there have been 3 times elections
 Greece total debt is 312 billion Euros which is
unsustainable as per IMF
 India has only 0.1% trade with Greece
China PMI falls to 6 year low
(21/8/2015)
 The final Caixin China PMI dropped to a two-year low of
47.8 in July, while the official China PMI avoided falling
into contraction territory by coming in at 50 for the month.
 Caixin's China PMI data tends to focus on smaller and
medium-sized companies, filling a niche that isn't covered
by the official data.
 A reading above 50 indicates expanding activity and one
below 50 signals contraction.
Market falls like pin of cards
(24/8/2015)
 SENSEX falls like pin of cards
 SENSEX down 1700 points
 Highest intraday fall since July 2009
 Highest intraday fall in mid cap since
July 2008
Emerging markets fall
(25/8/2015)
 Country
Days Fall
 India
-5.94%
 Brazil
-1.99%
 Russia
-4.85%
 China
-8.49%
 South Africa -3.34%
 Mexico
-2.09%
YTD fall
-11.76%
-31.88%
-27.01%
-3.75%
-16.89%
-15.82%
Indian investors wealth losses
(25/8/2015)
 Indian markets saw Rs. 7 lakh crore of
investor wealth wiped off
 Rupee went to 2 year low at 66.64
 Sensex went down by 1624 points or
5.94%
China cuts interest rates
(25/8/2015)
 China cuts interest rates with immediate effect
 The People's Bank of China cut its main interest rate by




0.25 percentage points to 4.6% after two days of stock
market turmoil.
It is the fifth interest rate cut since November and will take
effect on Wednesday.
China rate cut clearly shows that China economy is in
mess
The Reserve Ratio Requirement has been reduced by
0.50 %
China has Debt to GDP ratio of 282 %
Primary market action
(27/8/2015)
 Company










IPO price
Power Mech
640
Syngene Int.
250
Manpasand Beverage 320
PNC Infratech
378
UFO Movie
625
MEP infra
63
VRL Logistics
205
Inox Wind
325
Adlabs Ent
180
Ortel Comm
181
CMP
585
317
411
447
552
42
393
345
124
202
India Inc loss only 3.7% of Global Mcap Erosion
(27/8/2015)
 Country











YTD Fall% % contribution fall in world markets
World
-6.25
USA
-7.32
21.00
China
1.15
41.00
Japan
2.44
11.85
Hong Kong
-9.80
14.00
UK
-5.08
2.12
France
2.66
0.43
Germany
-2.85
0.18
Canada
-20.28
1.82
India
-7.57
3.70
World markets corrected by $ 12 trillion in 2015 but India accounted
for only 3.7 % of total loss.
Indian Construction slows
down (27/8/2015)
 Across India 40 % of the new
constructions housing has stopped
 7,00,000 unsold flats pan india
 Cement demand grew at 0.9% as
compared to 9.6 %
IIP slows down (31/8/2015)
 The combined Index of Eight Core Industries stands
at 168.0 in July, 2015, which was 1.1 % higher
compared to the index of July, 2014.
 Its cumulative growth during April to July, 2015-16
was 2.1 %.
 The Eight Core Industries comprise nearly 38 % of the
weight of items included in the Index of Industrial
Production (IIP).
GDP slows (31/8/2015)
 GDP data slows to 7 % from 7.5 %
 Gross Value Added was at 7.1% vs 7.4
% year on year
 GVA is net output of goods which is
taxes added in GDP minus subsidies
China slows again (1/9/2015)
 China official PMI came to 49.7 which is
below the 50 base reading
 Below 50 means there is contraction in
the economy
 The final Caixin/Markit manufacturing
purchasing managers' index (PMI) came
in at 47.3 in August, above a preliminary
reading of 47.1 but down from 47.8 in
July.
India core sector slows
(1/9/2015)
 8 core sector growth came at 1.1% vs
3% month on month
 Core sector has 38 % weight age in IIP
 The eight core sector industries include
coal, crude oil, natural gas, refinery
products, fertilizer, steel, cement and
electricity.
 The core sector last year was 2.1 %
FII sells (9/9/2015)
 FII have sold shares worth Rs. 21500
crores in August and till September 8
 In August alone FII have sold shares
worth Rs. 17000 crores
 Markets have lost 2500 points in last 2
months
NRI Data (9/9/2015)
 NRI (Non Resident Indians) are 22
million (2 crore 20 lacs) globally
 They have investible surplus of $ 360
billion investible assets
 UAE alone has 7 million Indians
 UAE NRI has send $ 50 billion as NRI
remittances
Bad loans challenge (Times of
India 9/9/2015)
 Total bad loans Rs. 2.60 lakh crore
 30 top defaulters account for Rs. 95000
crore bad loans
 Stressed and Bad loans account for
11.1% of total loans
S & P cuts Brazil to Junk
(11/9/2015)
 S & P has put Brazil to Junk because of
rising debt and political turnmoil
 Brazil GDP has grown to 7.5 % in 2010
when there was commodity boom
 But after then market crashed
IIP data rises (11/9/2015)
 IIP data has risen to 4.2% as against
3.8% earlier month
 Manufacturing has 75 % weight age
 Mining has 14 % weight age
CPI and WPI inflation comes
down (14/9/2015)
 CPI inflation comes down 3.66% from 3.78%
 CPI food inflation has come to 2.20% as compared to
2.15% which is flat
 vegetable price inflation stands at -6.36 percent against 7.93 percent (MoM).
 Food and beverages account for 46 percent of the CPI
basket
WPI further weakens
(14/9/2015)
 WPI for straight 10th month has entered negative -4.95%
for august vs -4.05% july
 weakening of rural demand and that is corroborated by all
other leading indicators like tractor sales, two wheeler
sales or fertilizer sale
 This number is sustaining at a level which is near 40 year
low. So, as a whole it is very clear that there is a very
strong
trend
of
disinflation
in
the system.
India could grow 8 % by 2020
(15/9/2015)
 Goldman Sach has projected India to
grow by 8 % by 2020
 Indian economy could gain over 300
million more internet users
 50 million more high school graduates
 2000 bank accounts being opened every
day
 800 government services have moved
online reducing rep tape
CPI and WPI inflation falling
(15/9/2015)
 Month
 March
 April
 May
 June
 July
 August
CPI
5.25
4.87
5.0
5.4
3.69
3.66
WPI
-2.33
-2.43
-2.2
-2.13
-4.05
-4.95
Chinese imports in tyre
industry (15/9/2015)
 China exports 1 lac Chinese tyre into
India
 Mostly used in commercial vehicles
 Cost of Chinese tyre is Rs. 14000 vs Rs.
20000 of Indian tyre
 MRF has reduced its tyre price by 8 % in
last one year
Bank of Japan continues its
monetary easing (15/9/2015)
 BOJ has decided to continue its Yen 80
trillion
 Japan economy is facing deflation
 Prices go down but still no demand picks
up
 The policy decision was done vote 8-1
Trade Deficit (15/9/2015)
 August trade deficit flat at $12.48 bn, exports fall
 The big setback comes on the exports front, which




stood at USD 21.27 billion versus USD 23.14 billion
MoM.
Exports are a 5 year low since october 2010
Exports are down 20 % from last year
The rise in Gold imports from $ 2.9 billion to $ 4.7
billion is disturbing
Weakness in global markets have started showing
effects on Indian exports
Trade Deficit (15/9/2015)
 Decline in exports in many sectors
 Engineering goods down by 24.2%
 Gold imports rise by 140 %
 Exports $21.3 billion down by 20.3%
 Imports $ 33.7 billion down by 10%
 Job losses in many sectors possible
USA GDP Rises (28/9/2015)
 USA GDP has come to 3.9% as
compared to estimate of 3.7%
 US Economy showing strong signs of
growth
 Rate hike eminent in December
China industry slows
(28/9/2015)
 China industry slows by 8.8% year on
year
 Rising cost and falling prices is killing
industry
 The inventory of industrial firms
increased by 5.7 percent in August from
a year ago, easing from 6.8 percent
growth in July and marking the second
consecutive month of slower gains
RBI cuts repo rate (29/9/2015)
 RBI cuts repo rate by 50 bps to 6.75%
 Reverse Repo at 5.75%
 CRR unchanged at 4 %
 SLR at 21.5 %
 Corporate investment weak
 Capacity utilization weak
 Cuts GDP growth from 7.6% to 7.4%
 CPI inflation target for January 2016 at 5.8%
 Will work with govt to pass 125 bps benefit to consumers
 Fiscal deficit target of 3.9% to be met
 In march 2011 the repo rate was at 6.75%
August Core sector rises
(30/9/2015)
 August core sector growth at 2.6 % vs
1.1% month on month
 Fertilizer at 12.6% vs 8.6%
 Coal at 0.4% vs 0.3%
 Natural gas at 3.7% vs 4.4%
 Petroleum Refinery at 5.8% vs 2.9%
 Steel at -5.9% vs 2.6%
 Electricity at 5.6% vs 2.9%
China slows further
(1/10/2015)
 China Private survey Caixin/Markit has
contracted to 47.2
 It is at 6 years low
 Again proves that China is contracting
 Government's official gauge of factory activity
improved with the manufacturing PMI rising to
49.8, up from August's three-year low of 49.7
but still marking two straight months of decline.
India a bright spot in slowing world economy: IMF
(1/10/2015)
 China slowing down
 Euro zone still facing uncertainity
 Brazil and Russia facing economic
difficulties
 Modest pick up in 2016
 India remains bright spot
 USA and UK doing robust well
World bank trims china growth
(5/10/2015)
 World bank has reduced China GDP growth
from 7.1 % to 6.9%
 China slowdown & USA interest rates are key
risk to East Asia pacific
 Growth in developing East Asia excluding
China is expected to hold steady in 2015 at 4.6
percent before accelerating to 4.9 percent in
2016, the World Bank said. Those were down
from previous forecasts of 5.1 percent growth in
2015
and
5.4
percent
in
2016.
GDP to exceed 7.5%, taxes to
fall short of target: FinMin
 Economy to grow at 7.5%
 The revenue target would be short by Rs.
50,000 crores
 The total tax revenues are likely to be around
Rs 14 lakh crore in the current fiscal, as against
the budget estimate of Rs 14.5 lakh crore.
IMF sounds warning
(6/10/2015)
 IMF cuts world GDP growth rate
projection from 3.3% to 3.1%
 Cuts China growth rate from 7.1% to
6.9%
 It also cut India's 2015 GDP growth
forecast from 7.5 percent to 7.3 percent
IMF projection for 2015
(7/10/2015)
 Country
 World
 USA
 Eurozone
 China
 India
2015
3.1
2.6
1.5
6.8
7.3
2016
3.6
2.8
1.6
6.3
7.5
Mutual funds add 12000 accounts per day
in FY16(8/10/2015)
 Mutual funds are adding 12000 new
investors per day in equity segment
 Total mutual fund equity investors have
reached 33.8 million from 31.7 million
 In september Rs 77000 crore have been
pulled out from mutual funds the highest
outflow in last 6 month.
 In August Rs. 46000 have been
withdrawn from mutual funds
FII investments (12/10/2015)
Rs.Crores

Month
 January
 Feb
 March
 April
 May
 June
 July
 August
 Sep
 October
 Total
Equity
12919
11476
12078
11721
-5768
-3344
5319
-16877
-6475
1607
22655
Debt
20769
13088
8645
3612
-8504
1737
4
-647
692
406
39802
IIP data positive (12/10/2015)
 IIP data has increased from 4.2 % to
6.4% which is very positive
 CPI has increased from 3.66% from
4.49%
 Both will give elbow room to RBI for
reducing interest rates
Demat Accounts rise
(14/10/2015)
 9 lakh demat accounts opened in first six month of FY16
 In 2013-2014, 8 lakh demat accounts were opened
 In 2014-2015, 16 lakh demat accounts were added.
 Total demat account in country is 2.5 crore
 Students are main ones opening demat accounts
India exports fall 25%
(16/10/2015)
 Indian exports fall for straight 10th month
 Exports have fallen by 21% by $ 21
billion
 Imports have fallen by 25 % by $ 32
billion
 Full year exports could reach $ 265 to $
270 billion
 Falling exports threat to Manufacturing
dream of PM
Euro to give stimulus
(27/10/2015)
 Eurozone to give stimulus if required
 Stuimulus can continue beyond 2016
also
 This shows that Eurozone still in doll
drums
 No clear signs of improvement
 World Economy still fragile
China slows down
(27/10/2015)
 China has cut its Reserve Ratio
Requirement again
 In last 11 months, 6 times rate cut has
been done
 Its GDP has come 6.9% as compared to
6.8%
Ease of doing business
(28/10/2015)
 India moved up to 130 rank out of 189
countries as per world bank
 Ease of doing business criteria
 Earlier India was at 142 rank
 Upward movement of 12 ranks for
country like India is real good
FDI in PSU banks may rise
(29/10/2015)
 FDI in PSU banks may rise to 49 % from
current 20%
 This may be done in budget 2016
 Currently in Private banks FDI limite is at
74%
Realty fails to build up
(29/10/2015)
 Real Estate is fast losing its charm from HNI
investors
 HNI investors are moving to invest in start ups
 Average investment in start up is Rs. 1.3 crore
but it could be as low as Rs. 10 lakhs
 In last 3 years investments in Real estate
completely stuck as no price movement
Gold falls on US rate hike fear
(money control 2/11/2015)
 SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, said
its holdings fell 0.3 percent to 692.26
tonnes on Friday.

India world's 7th most valued
'nation brand'; US on top
 US is at top with valuation of $ 19 billion
 Next is China and thrid Germany
 UK is fourth
 India is 7th with rise of 32 per cent to $
2.1 billion
 Incredible India slogan has went well in
rise of brand valuation
Larger female workforce can add Rs
46lk cr to GDP: McKinsey
 Bridging the gender gap in India could
add Rs 46 lakh crore (or abour USD 0.7
trillion) to the country's gross domestic
product (GDP) in 2025.
 India's share of women's contribution to
GDP is at 17 percent, much lower than
the global average of 37 percent, and
the lowest among all ten regions in the
world analyzed by Mckinsey Global.
Japan shrinks into recession
(16/11/2015)
 Japan GDP shrinks to 0.8% as
compared to estimates of 0.2%
 Back into recession
 Japan thus slipped back into technical
recession, which is defined as two
consecutive quarters of contraction
 After suffering one last year due to the
hit on consumer spending from a sales
tax hike in April 2014.
Indian corporates raised Rs. 3
lakh crore (15/11/2015)
 Indian corporates have raised Rs. 2,90,000
crores mainly through debt route
 Rs. 2,44,000 through debt route and Rs. 46000
crore through equity route
 In the equity segment, money was raised
through the preferential route (Rs 20,874 crore)
followed by qualified institutional placements
(Rs 12,658 crore), rights issue (Rs 7,760 crore)
and initial public offers (Rs 4,904 crore).
Bonds: Growing uncertainity
(China Daily Nov 13-19,pg 5)
 Amount of Dollar denominated debt of emerging




economies -- $ 858 billion
61% of Asian debt is alone with China
Emerging Economies local currency debt in 2014 --- $ 8.7
trillion
Since year 2000 rise of debt average 14.5 % annually of
Asian sovereign debt
Strong dollar will hurt all Asian economies since their
currencies would become more weak
Exporters get incentive
(19/11/2015)
 Exporters will get 3% interest sub
vention for 5 years period
 This will boost exports
 Exports are at 5 years low
Japan continues loose
monetary policy (19/11/2015)
 Bank of Japan has decided to continue
with its 80 trillion yen stimulus plan
 Japan has slipped into recession after its
GDP contracted by 0.8% as against
predicted 0.2%
 Japan has zero interest rate policy
NSE BSE Volumes fall lowest
in 2015 (19/11/2015)
 BSE and NSE have witnessed falled of
12 % in cash market volumes
 The FO volumes are down by 24 %
 Increase in lot size by SEBI has
increased the margin requirement
7th pay commission to give
report (19/11/2015)
 7th pay commission will submit its report
on 19th Nov 2015 at 7.30 pm to
government.
 There is proposed hike of 15 % in
salaries
 This is being opposed by Trade Unions
as pay commission give their
recommendations once in 10 years.
Promoter Pleding of shares at
6 year high (19/11/2015) Mint
 434 companies of the BSE 500
companies have seen Promoter pledging
of shares to 6 year high
 The quarter ended September saw rise
of 12.28% as compared to 6.96% in
March 2009
 Rise in promoter pledging means there
is distress financing and companies
balance sheets are weak.
Real estate firms face finance
risk (19/11/2015)
 25 property developers which account for 95% of
market capitalization face risk of refinancing debt of
Rs. 30,000 crores
 Lack of demand and high funding cost to make real
estate projects go is the main reason
 There is substantial fall in demand of housing due to
high interest rates and unaffordable pricing
 Total debt taken to build homes surged 25 % to Rs
61,500 crores in 2014-15 compared to Rs. 48,800
crore in 2013
GDP at 7.4 % (1/12/2015)
 GDP grew at 7.4 % vs 7% quarter on quarter (september








quarter)
This is good indicator as it was on high base of 8.4% last
year
Particular
Q1
Q2
Agriculture
1.9
2.2
Mining
4
3.2
Manufacturing
7.2
9.3
Construction
6.9
2.6
Electricity
3.2
6.7
Services
8.8
8.9
Core Sector slows (1/12/2015)
 8 infrastructure sector that make up the core sector are Coal,










Crude oil, Natural Gas, Refinery products, fertilizers, steel,
cement, electricity together have 38 % weight age in IIP .
Month
Core Sector % Month
Core sector
Oct 2014
9
July 2015
1.1
Nov 2014
6.7
Aug 2015
2.6
Dec 2014
2.4
Sep 2015
3.2
Jan 2015
1.8
Oct 2015
3.2
Feb 2015
1.4
March 2015
-0.1
April 2015
-0.4
May 2015
4.4
June 2015
3.0
Banks to clean balance sheet
by 2017 (2/12/2015)
 Banks have been told by RBI to clean their balance sheet by










2017
Year
Gross NPA (Rs. crore)
2013
1.85 lakh crore
2014
2.51 lakh crore
2015
3.1 lakh crore (24% rise)
Top 5 banks Gross NPA
SBI
56,834
PNB
24,945
Canara bank
14,021
Bank of India
29,894
Bank of Baroda 23,710
Oil Prices per barrel
(2/12/2015)
 Year
 2010
 2011
 2012
 2013
 2014
 2015
 2016
$ per barrel
79
104
105
105
96
45 (Projected 52 by IMF)
50 (IMF projection)
Manufacturing slows to 2 year
low in November (2/12/2015)
 Manufacturing has been at 25 months low as per Private





survey conducted
Nikkie Manufacturing Purchasing Manager Index
contracted to 50.3 In Nov as compared to 50.7 in October
Fall for 4th consecutive month
Low demand in rural economy
Rising cost
1822 companies gave result which shows that Revenue
up by 1.5% and Net profit up by 1.6%
RBI keeps rates unchanged
(2/12/2015)
 RBI has kept Repo rate unchanged at
6.75% and Reverse Repo at 5.75%
 RBI kept CRR at 4% and SLR at 21.5%
 In 2015 RBI has done rate cut of 125
basis points
 Banks has passed only 60 basis points
to customers
ECB cuts deposit rate
(4/12/2015)
 European Central Bank has cut the
deposit rate by 0.1%
 Kept lending rate at 0.5%
 ECB will continue to buy 60 billion euro
bond buying programme till March 2017
 Clearly indicating more pain left for
Europe
Startup world Pink Season
(11/12/2015)
 Around 3720 employees lost their jobs in
20 starts up in last 6 months
 18% of employees lost their jobs
 15% of startups layoff 30% of employees
 30% layoff in ecommerce companies
 20% layoff in consumer companies
Reasons for layoff in startups
(11/12/2015)
 30% unable to meet growth projections
 20% inaccessible institutional funding for
follow up rounds
 20% Business model pivot
 10% need to streamline operations
 15% automation
 5% potential acquisition
RBI cuts SLR by 100 bps in 4
stage reduction (11/12/2015)
 SLR is what banks invest in government
securities
 Currently SLR is 21.5%
 Timetable for SLR reduction
 21.25% on April 2, 2016
 21 % on July 9, 2016
 20.75% on October 1, 2016
 20.50% on January 1, 2017
2015 best year for IPO
(11/12/2015)
 In 2013, only 3 IPO got listed and raised
Rs. 1284 crores
 In 2014, 6 IPO hit market and raised Rs.
1261 crores
 In 2015 companies raised Rs. 15000
crores
 In 2010 last 64 companies had raised
Rs. 37000 crores in IPO
IIP data rises (11/12/2015)
 IIP data has come to 9.8% as compared
to 3.6%
 This is due to lower base effect
 There is no such phenomenal rise in
industrial activity.
WPI falls (14/12/2015)
 WPI inflation has come down to -1.99 % as compared to -
3.81%
 Vegetable inflation increased during the month to 14.08
percent from 2.56 percent in previous month
 Non-food articles inflation also rose to 6.33 percent from
5.10 percent in same period.
 Manufactured products inflation for November came in at
negative 1.42 percent against negative 1.67 percent in
preceding month.
US Fed Rate Hike
(17/12/2015)
 US Fed ultimately raised the rate to
0.25%
 Now Fed rate is in range of 0.25% to
0.50%
 Markets had discounted this effect
 Indian markets up 325 points, Dow
Jones up by
Mutual Funds AUM
(21/12/2015)
 Mutual Funds AUM has crossed Rs. 13 lakh crore
 50 lakhs new investors added this year
 The industry is hopeful of trebling its AUM to around Rs
40 trillion over the next three years.
 At least four MNC fund houses -- US giant Goldman
Sachs, Deutsche Bank Group, Nomura and KBC -encashed their holdings
 As per the industry body Amfi, 4-7 lakh retail folios are
being added to the industry every month
FII flows slows in 2015
(30/12/2015)
 Year 2015 had FII flows of only $ 3 billion
 In last 3 years that is 2012, 2013 and 2014, FII




have Invested $ 20 billion each year
Sensex gave -5 % return in 2015
In 2014, Sensex had give 31 % return
Domestic Mutual Funds saw Rs. 90,000 crore
coming in equity schemes
It is highest flow in equity schemes in last 10
years
NIIF Fund (30/12/2015)
 National Investment and Infrastructure
Fund (NIIF) would create corpus of Rs.
40,000 crores
 Rs. 20,000 crore from Budget 2015
 Rs. 20,000 crore from private players
 International Pension and Soverign
Wealth Funds from Russia, Singapore,
UAE keen on investing in this fund.
FDI highest in 17 months
(30/12/2015)
 FDI flow has increased by 35 % in last 17




months.
Across the world FDI flows have falled by 16 %
Make in India was launched on 25 September
2014
Since then FDI has increased by 40 %
FDI has come in Manufacturing, food
processing, consumer goods, logistics
Recovery in some sector
(30/12/2015)
 Capacity Utilization is only 71.5% in industry
 Last year it was 70.2%
 Cabinet Committee on Investments has
resolved 332 projects worth Rs. 11.5 lakh crore
 372 projects still are stalled worth Rs. 18.4 lakh
crore (32% in power, 16% steel and 18 %
petroleum and natural gas)
Core Sector data weak
(1/1/2016)
 Core Sector Data at -1.3% for November vs






3.2% in October
Last year in November the Core sector was
8.5%
Core sector has 38 % weightage in IIP index
Steel production -8.4%
Cement -1.8%
Crude oil -3.3%
Natural gas -3.9%
Fiscal Deficit High (1/1/2016)
 Fiscal deficit has touched 87% of budget
estimate
 The fiscal deficit for 2015-2016 has been
kept at Rs. 5.5 lkah core or 3.9% of GDP
China PMI falls (4/1/2016)
 The Caixin Purchasing Managers' Index
(PMI) fell to 48.2 in December, from 48.6
in November, contracting for a tenth
month and coming in below a Reuters
poll forecast for 49.0.
 IMF has projected China GDP at 6.3%
 Currently China GDP at 6.8% which is
lowest since 1990 when it was 7.6%
Mutual Fund AUM rises
(4/1/2016)
 MF industry's asset base surges 21% to Rs 13.4
lakh cr in 2015
 The country's 44 fund houses together had an
average assets under management (AUM) of Rs
11.06 lakh crore at the end of December 2014,
compared to Rs 13.39 lakh crore registered in
December 2015
 Equity assets crossed the Rs 4 lakh crore mark for the
first time in the history of Indian mutual fund industry,
signalling the return of domestic investors taking the
mutual funds route.
FPI in Debt also lower
(4/1/2016)









As per the data available with depositories, Foreign Portfolio Investors
(FPIs) infused a net amount of Rs 45,856 crore (USD 7.4 billion) in the
debt markets in 2015 as compared to a record investment of Rs 1.6
lakh crore (USD 26 billion) in the previous year.
In 2013, FPIs had pulled out around Rs 51,000 crore (USD 8 billion).
Prior to that, overseas investors had invested about Rs 35,000 crore,
Rs 42,000 crore and Rs 46,408 crore in 2012, 2011 and 2010
respectively.
Year
FII in Debt (Rs. crore)
2015
45,856
2014
1,60,000
2013
- 51000 (net outflow)
2012
35000
2011
42000
2010
46408
China guides lower Yuan
(7/1/2016)
 The People's Bank of China (PBOC) set the yuan
reference rate at 6.5646 against the dollar, down
0.51 percent from Wednesday's fix. That represents
the largest change in the fix from the previous day
since August 13, according to Reuters data.
 China's central bank lets the yuan spot rate rise or
fall a maximum of 2 percent against the dollar,
relative
to
the
official
fixing
rate.
China suspends share trading
(7/1/2016)
 China has suspended share trading after
CSI 700 index fall by 7 %
 On the mainland, the Shanghai
Composite was down 7.32 percent at the
time of the halt, while the Shenzhen
Composite saw losses of 8.34 percent.
China depreciates its currency
(11/1/2016)

In the span of one week, China depreciated its currency by over 1.5
percent and the world’s aggregate equity market capitalization
evaporated by nearly USD 2.5 trillion in just four days.
 On January 4, the first day global markets opened, China fixed the
opening rates of its currency 0.2 percent lower than its previous level
signaling a higher than usual depreciation. The Shanghai stock market
swung wildly and closed the day 7 percent lower.
 The pattern was to repeat on Thursday when the renminbi was
depreciated by an unusually high 0.56 percent. By end of day, on
Thursday, most equity markets from the Dow Jones and S&P 500 to the
FTSE to the Nikkei to the Indian Nifty had lost nearly 5 percent each.
IIP falls (12/1/2016)
 IIP data came – 3.2% vs 9.8%
 Expected IIP was 2 %
 IIP data again shows economy not on
good track
 The core sector data was also -1.3% vs
3.2% earlier
Inflation rises again
(12/1/2016)
 Inflation raised its ugly head
 Inflation at 5.61% vs 5.41% last month
 Puts pressure on RBI in rate cuts in
2016
 Rainfall was deficient by 15%
China to inject money in
money markets (21/1/2016)
 People Bank of China to inject 315 billion
yuan in money markets this week
 Last week it had injected 40 billion yuan
into money markets
 This shows that chinese financial system
is weakening
IMF cancels rule made in 2010
to fund Greece (21/1/2016)
 The International Monetary Fund has abolished a rule created
in 2010 that allowed it to participate in an international bailout of
Greece despite doubts about the country's debt sustainability.
For the IMF, that amounted to 30 billion euros (USD 32.7 billion)
in May 2010, then an additional 18 billion euros in a second
bailout two years later.
 The systemic exemption was used more than 30 times to permit
loan payments to Greece but also for Ireland and Portugal, two
other eurozone members receiving assistance from the troika,
by end-May 2014.
 The IMF thus created the "systemic exemption" provision which
paved the way for it to join the European Union and the
European Central Bank in the so-called "troika" of international
lenders
throwing
a
lifeline
to
Greece.
FII net sellers (26/1/2016)
 In January 2016, FII have been net
sellers to the tune of Rs. 9900 crores
 Mutual funds pumped in Rs. 5000 crores
 Last year in January 2015 the FII were
net buyers to the tune of Rs. 17000
crores
 Indian markets are constantly falling
down due to higher outflow from the
Indian stock marekts
Core sector in positive range
(1/2/2016)
 Dec core sector up 0.9% vs -1.3% in
Nov
 April to December 2015 was 1.9% as
compared to 5.7% last year
 Core sector growth not healthy and data
very volatile
 Economy facing sluggish growth
US Economy weak (3/2/2016)







US GDP in 4th Quarter has grown only 0.7%
After $ 3.7 trillion in Quantitative easing and $ 6 trillion in public debt
Economy not even touching 2.5 % GDP
Full year growth in economy is only GDP 2.4%
Demand for commercial and industrial loans has plunged in 2016, with
declines happening across business sizes. Large- and medium-sized
businesses had an 11.1 percent decline, while demand from small
businesses fell 12.7 percent.
The Institute for Supply Management reported that its index tracking
manufacturing registered a 48.2 in January, with a number below 50
representing contraction.
World has $ 57 trillion of debt floating. This is the biggest risk to the
world economy
GDP rises (8/2/2016)
 Q 3 GDP growth at 7.3%
 Last quarter GDP was at 7.4%
 GVA at 7.3% vs 7.1% last year
 The gross value added is seen at 7.3 percent, compared
to 7.1 percent in the previous year.
 The full year GDP forecast has been revised to 7.6
percent from 7.2 percent
 Manufacturing sector 9.5% vs 5.5%
 Agriculture growth only 1.1%
GDP Rises (8/2/2016)
 Year
 2013
 2014
 2015
 2016
Nominal GDP
13.9
13.3
10.8
8.6
Real GDP
5.6
6.6
7.2
7.6
Amazon puts more money
(9/2/2016)
 Amazon to invest Rs. 1980 crore in its
Indian arm in Feb 2016
 In January 2016, Amazon had invested
Rs. 1696 crores
 Since January 2015 Rs. 6700 crore
invested by Amazon in Indian operations
Banking Sector update
(10/2/2016)
 PSU banks still account for 70 % of total banking assets




(Loans given)
14.1% is their stressed asset
26 PSU banks, 25 private banks, 43 foreign banks, 56
regional rural banks, 1589 urban co-op banks, 93550
rural co-op banks
Jan Dhan Yojana got 192 million accounts with deposits
of Rs. 27000 crore
BASEl III Norms require banks to have Rs.2.5 lakh crore
to Rs. 4 lakh crore
Retail shops are flourishing
(10/2/2016)
 Online shops like Amazon, Flipcart, Snapdeal have total






loss of Rs. 5052 crores
Brick and Motor shops see sales rising in OctoberDecember quarter
Companies
Sales rise
Shoppers stop
17.4%
Future Lifestyle
16.9%
Central
16.6%
Arrow and flying
12.0%
Macro Data still weak
(15/2/2016)
 WPI data has come -0.90 Vs -0.73.
Rural demand still weak
 CPI inflation has come to 5.69% vs
5.61%. This would dampen RBI way to
reduce interest rates
 IIP data come at -1.3% vs 0.9 %.
Industry demand still not picking up. The
capacity utilization is only 71%

Trade Data weak (15/2/2016)
 14th Consecutive month Indian exports fell by





13.6% due to poor demand of petroleum and
engineering goods
Global slow down main reason for poor
exports
Exports only at $ 21 billion
Imports fell by 11 % to $ 28 billion
Trade deficit at $ 7 billion
Mainly due to rise in gold imports which
increased by 85% to $ 2.91 billion
FII selling continues
(17/2/2016)
 FII have sold shares worth Rs. 14000
crores from 1st January 2016 till date
 There is huge selling pressure
 Global turmoil and weakness in Indian
macro economic data are key reasons
Budget Expectations
(18/2/2016)
 Rs. 2 lakh crore lost on direct and
indirect tax exemptions
 Only 3.5% of total population files
income tax return
 About 4 crore people file income tax
return and 2 crore people pay TDS
 Tax to GDP ratio at 10%
NPA creating Issues
(22/2/2016)







PSU banks likely to reach Rs. 4 lacs crore
PSU banks have 1.5 times of bad loans as compared to their total
assets.
More than market cap of all PSU banks
24 PSU banks are listed
Private banks have only 6.6 % of total assets as Bad Loan
The problem appears less acute at private sector banks as their gross
NPAs are only about one-eighth at about Rs 46,000 crore, which is also
well below their total market value.
The gross NPA of 16 listed private sector lenders stood at Rs 46,271
crore as on December 30, 2015. This compares with their total market
value of over Rs 7 lakh crore. Taken together, the cumulative gross
NPAs of all listed banks - public and private - has risen to Rs 4.4 lakh
crore, while their total market value stands at Rs 9.6 lakh crore.
Economic Survey (26/2/2016)
 GDP growth seen at 7 to 7.75%
 Current Account deficit at 1 – 1.5%
 Govt says pressure on credit off take and corporate balance






sheet to remain
Global Economic concerns persist
Forex reserves at $ 349 billion
Industrial output at 3.1 % for whole year
Govt confident of maintaining Fiscal Deficit target of 3.9%
7th Pay commission not to put pressure on prices
Inflation seen at 4 – 4.5 %
ECB reduces rates (11/3/2016)
 ECB has increased bond buying from 60 billion euros to
80 billion euros
 Surprising markets, it cut its main refinancing rate to zero
from 0.05 percent. The euro fell around 1 percent against
the dollar.
 Reduced Deposit rate to -0.4 % from -0.3%
 It cut the marginal lending rate, used by banks to borrow
from the ECB overnight, to 0.25 percent from 0.3 percent.
Real Estate Bill passed
(11/3/2016)








All projects including current ones needs to be registered with regulator
Delay in handing over will attract interest on builders
75 % of the amount collected for project to be kept in Escrow account
If project starts without registration, then 10 % penalty of value of
project
Misleading advertisement may attract jail sentence
Project to be completed within 3 years or else interest to be paid by the
builders
No alternation in plan without 66% buyers approving the alteration
Valuation of the property on “Carpet Area” basis and not on “Super
Builtup area” – very key measure as it will correct prices
IIP data in negative territory
(11/3/2016)
 India's Index of Industrial Production (IIP) for the month of
January has come in at -1.5.
 December IIP has been revised to -1.2 percent against 1.3 percent reported earlier.
 This is the third consecutive month of decline led by
manufacturing which slipped to -2.8 percent vs -2.4
percent month-on-month (MoM).
 Further, the April-January IIP data has slipped to 2.7
percent against 3.1 percent (YoY).
CPI falls (14/3/2016)
 CPI inflation has come down from 5.69%
to 5.18%
 Food inflation fell from 6.85% to 5.3%
which was major relief provider
 However Core inflation increased from
4.79% to 4.97%
 RBI rate cut chances have increased
MUDRA banks disburse loans
(15/3/2016)
 Loans worth Rs 1.09 lakh crore have been given to small




entrepreneur s under the Pradhan Mantri MUDRA Yojana.
Loans worth over Rs 1.09 lakh crore were given to over 2.96
crore beneficiaries.
Under Pradhan Mantri MUDRA Yojana, which was launched in
April last year, loans between Rs 50,000 and Rs 10 lakh are
provided to small entrepreneurs
The Micro Units Development and Refinance Agency Ltd
(MUDRA) focuses on the 5.75 crore self-employed who deploy
funds totaling Rs 11 lakh crore and provide jobs to 12 crore
people.
The banking sector has been allocated an overall disbursement
target of about Rs 1.22 lakh crore during 2015-16 for MUDRA
loans.
US Fed keeps rate unchanged
(16/3/2016)
 US FED has kept the rates unchanged
 US citied world economy slowdown as
key reason for not raising rates
 FOMC believes that this year the
economy may grow at 2.2% as
compared to 2.4 % last year
Bank of England keeps rates
unchanged (17/3/2016)
 Bank of England has kept rates
unchanged at 0.5 %
 Continues to buy assets worth 375 billion
pounds
FII buys huge in March
(22/3/2016)
 FII have bought shares worth Rs. 14000
crore in March 2016
 In jan and Feb they were net sellers to
the tune of Rs. 14500 crores
 On 21st March 2016, FII bought shares
worth Rs. 1400 crore in one single day
Emerging Markets returns
(22/3/2016)
 Country YTD % in $








Chg fr 52 wk low
Brazil
28.10
37.17
Taiwan
7.37
22.35
Russia
13.15
20.64
South Africa 7.06
17.07
China
-14.52
14.42
Malaysia
7.31
14.28
India
-3.63
12.41
South Korea
2.78
10.50
GAAR to come from 1st April
2017
 General Anti Avoidance Rule (GAAR) to
come into force from 1st April 2017
 It has clause of “Commercial substance”
to decide the tax liability
 FII are apprehensive that this clause
may lead to litigations and thus affecting
the FII flows
ADB slashes India GDP
(30/3/2016)
 The Asian Development Bank's (ADB)
growth forecast of 7.4 percent for 201617 is substantially lower than its earlier
projection of 7.8 percent.
 US Fed Reserve Chairperson Janet
Yellen has indicated that interest rate
hike will be very gradual

Tata Steel decides to exit
Corus (31/3/2016)
 Tata Steel has invested Rs. 19000 crore
in UK operations in Corus
 15000 employees job in UK at risk
 Tata Steel posted loss Rs. 2127 crore in
december 2015 quarter
 In 2007 Tata steel had spent $ 12.1
billion to buy Corus
 Out of 14 mtpa, 7 million tonnes per
annum capacity out for sale by tata
Two mega steel Acquisition fail
(31/3/2016)
 In 2006-2007, Two Indian steel firms one
Mittal Steel Acquired Arcelor and then
Tata Steel Acquired Corus.
 In 2007 price of steel were $550 to $ 575
per tonne and in 2016 it came down to $
380 per tonne
RBI cuts Repo Rate (5/4/2016)
 RBI cuts Repo rate by 25 basis points
 Repo rate at 6.50 %
 Reverse repo rate at 6.0 %
 CRR unchanged at 4 %
 SLR reduced from 21.5 % to 21.25 %
 Repo rate is the rate at which the central bank lends to
banks. CRR and SLR are percentage of liabilities that banks
have to hold in cash and liquid assets, respectively.
 Daily CRR balance reduced from 95 % to 90% for banks. This
will push liquidity into system
CPI eases and IIP rises
(12/4/2016)
 Retail Inflation has eased to 4.83% from
5.18% which was earlier at 5.69%
 Food inflation at 5.21% which was earlier
5.52% and before than 6.66%
 El Nino impact fading
 Positive that rainfall would be more
 Urban inflation at 3.95% vs 4.42%
IIP becomes positive
(12/4/2016)
 Feb IIP at 2 % vs -1.5% last month
 Positive trend shows that manufacturing
may be picking up
 Capital goods output at -9.8% vs 20%
 Consumer durable 9.7% vs 5.8%
Core sector grows (2/5/2016)
 In March driving core sector growth by
6.4 percent -- a well-timed surprise that
sits well with the positive earnings
season we have had so far.
 In February, the rise was 5.7 percent.
 The core sector growth was at its
highest level since November 2014.
BSE IPO Details (2/5/2016)
 Stakeholders
% holding
 Deutsche Borse
4.75
 Singapore exchange
4.75
 SBI
4.75
 LIC
4.68
 GKFF Ventures
4.58
 Coporate Trading members 21.06
 Individual trading members
7.2
BSE IPO Details (2/5/2016)
 BSE IPO to come by December 2016
 BSE shares between Rs. 400 to Rs. 600
 BSE valued at Rs. 6500 crores
SIP rising (3/5/2016)
 SIP registrations are up 26 % though
Nifty is down by 9%
 29.8 lakh SIP got registered in FY 16
 23.7 lakh SIP were registered in FY 15
 Average size of SIP in FY15 was Rs.
3368
 Average size of SIP in FY16 is Rs. 3449
 Total Active SIP is 57.95 lakhs arise of
32 % in year ended march 2016
FII vs DII vs Mutual Funds
(3/5/2016) (Rs crore)
 Month
 Jan
 Feb
 March
 April
MF
6703
5602
-10194
-273
DII
12875
10492
-15740
-2356
FII
-11371
-7987
22849
8416
IMF worries for world growth
(3/5/2016)
 The European Commission now sees euro zone GDP in
2016 at 1.6 percent from a previous forecast of 1.7
percent growth. It also lowered its 2017 forecast to 1.8
percent from 1.9 percent.
 International Monetary Fund has retained its growth
forecast for India this year at 7.5 percent, largely driven
by private consumption even as weak exports and
sluggish credit growth weigh on the economy.
India to charge capital gains
from Mauritius (11/5/2016)
 Mauritius Double Tax Avoidance Agreement, which
comes into effect April 1, 2017, will give India the right to
tax capital gains from investments coming from the tax
haven.
 Tax lawyers said that while the move may have a shortterm negative impact on market sentiment, given the fact
that about USD 33 billion of inflows come into India via
the controversial participatory-notes route, more sharing
of information would be a long-term positive.
India to charge capital gains
from Mauritius (11/5/2016)
 Up10 March 31, 2017 everything is exempted, beyond
that they will pay only 17 percent on derivatives and 7.5
percent on short-term capital gains and no long-term
capital gains. They have set out a clear picture up to
March 31, 2019.
 Today I pay 34 percent tax on my derivatives trades, for
FIIs it is tax free. Post 2017, they will pay 7.5%. I am
playing after paying 34% and I don't withdraw (from the
market), and they (FIIs) will withdraw if they have to pay
7.5% tax. What kind of argument is this.
IIP and CPI shocks
(12/5/2016)
 IIP data came as rude shock with 0.1%
as compared to 2 % in March
 CPI inflaiton also came unexpected with
5.39% as compared to 4.83% last month
 Both indicators have created questions
about the pace of grwoth and stability of
macro data
IIP and CPI shocks
(12/5/2016)
 Food inflation at 6.32% Vs 5.21% (MoM)
 Rural inflation at 6.09% Vs 5.7% (MoM)
 Urban inflation at 4.68% Vs 3.95% (MoM)
March IIP highlights:
Mining sector output at -0.1% Vs 5% (MoM)
Manufacturing sector output at -1.2% Vs 0.7% (MoM)
Electricity sector output at 11.3% Vs 9.6% (MoM)
Basic goods output at 4% Vs 5.4% (MoM)
Capital goods output at -15.4% Vs -9.8% (MoM)
Intermediate goods output at 3.7% Vs 5.7% (MoM)
Consumer goods output at 0.4% Vs 0.8% (MoM)
Consumer durables output at 8.7% Vs 9.7% (MoM)
Consumer non-durables output at -4.4% Vs -4.2% (MoM)
China slows down (16/5/2016)
 China industrial output grew at 6 % as
compared to 6.8% last month
 Separately, retail sales -- an indicator of
domestic consumption -- rose 10.1 percent on
the year in April, the bureau said, weaker than
the 10.5 percent gain in March
 China was likely to have an "L-shaped" growth
pattern, suggesting it will remain flat
WPI becomes positive
(16/5/2016)
 WPI has come 0.34 % as compared to
-0.85% last month.
 This has become positive after almost 17
months
 Last year WPI was -2.43%
 Signs that rural economy may pick up
 Monsoon to be key factor
GST to plug tax evasion
(31/5/2016)
 GST to plug tax evasion
 Last year Rs. 71000 crore direct and
indirect tax evasion has taken place
 GST is consumption based destination
tax which will reduce tax evasion
 GST would also make Indian economy
from $1.9 trillion to $4 trillion economy
India lower middle income country says world bank
(31/5/2016)
 Parameters
India world
 Time to start business days 29
20
 Stock Mkt cap to GDP
76
94
 Tax revenue collect by got
11
14
 Access to better sanitation
40
68
 Labour participation
54
63
GDP rises (31/5/2016)
 GDP growth came at 7.6% as against
expected of 7.3% for the year ended
march 2016
 Jan-March quarter saw GDP at 7.9%
 Gross Value Added came to 7.2%
 India again officially becomes fastest
growing economy, ahead of China
Core Sector output rises
(31/5/2016)
 Core sector data grew at 8.5% in may vs
6.4% in March
 Core sector has 38 % weight age in IIP
index
 Economy coming on track but
manufacturing growth still to make mark
RBI keeps rate unchanged
(7/6/2016)
 Repo rate kept unchanged at 6.5 %
 Reverse repo at 6 %
 CRR at 4 %
 SLR at 21.25 %
 Since the rate-cutting cycle began in January 2015, the key
policy repo rate has been cut by 150 basis points to 6.50
percent.
 On the lending side, only about 75 percent basis point cut has
been passed on to customers by the banks.
 Retail inflation, largely driven by food prices, inched up to 5.4
percent in April from 4.8 percent in the previous month, making
it difficult for the RBI to cut rates any further.
Repo rates in last one year
(moneycontrol 7/6/2016)
 Year
 Feb 15
 Mar 15
 Arp 15
 June 15
 Aug 15
 Sep 15
 Dec 15
 Feb 16
 Apr 16
 June 16
Repo Rate
7.75
7.50
7.50
7.25
7.25
6.75
6.75
6.75
6.50
6.50
World Bank lower growth
projections (8/6/2016)
 World Bank has lowered the world
economic growth to 2.4%
 This is way below the projection of 2.9%
it did in January 2016
Technology, Globalization
causing anxiety (10/6/2016)
 RBI Governor says technology, globalization causing
anxiety to middle class people.
 In may growth in USA was slowest and 10,000
manufacturing jobs disappeared
 Future of jobs --- no one knows
 Indian economy especially which has huge labour supply
has to have more manufacturing jobs rather than
technology oriented jobs
CPI RISES (13/6/2016)
 CPI has increased from 5.39% to 5.76%
 Food inflation has increased from 6 % to.
7.5 %
 CPI rising is bad news since it will stop
RBI to reduce interest rates
 Pressure on Monsoon would further
create pressure on agriculture
RBI Stress Tests (29/6/2016)
 Gross Bad Loans at High of 7.6% of total
loans
 Large Borrowers share of bad loans at
86.4%
 Large borrowers share in total loans is
58%
 Banks have exposure to mutual funds
and insurance of Rs. 17,600 crores
RBI Stress Tests (29/6/2016)
 Sectors
% of bad loans
 Infra
32.8
 Metals
13.6
 Textiles
6.9
 Engineering
5.3
 Food Processing
5.3
India Inc Balance Sheet
Improving (29/6/2016)
 Leverage companies with negative networth or debt
equity ratio of more than 2 have fallen from 19% to 14 %.
 The debt of above companies have fallen 20.6% of total
corporate debt as compared to 33.8% last year
 Companies with debt equity ratio of more than 3 have
fallen from 14.2% to 12.9%
 RBI sample consist of 1800 to 2600 listed companies.
The net profit has increased by only 2.1% and sales by
2.2%
DLF to reduce debt
(29/6/2016)
 DLF has consolidated debt of Rs. 22,202
crores
 DCCDL accounts for Rs. 12,325 crores
of debt
 KP Singh and Family to infuse Rs.
10,000 crore into company
 This will help company reduce debt and
make balance sheet strong
Past Global events and indian stock
market returns (29/6/2016)
 Event






1 Day later
1 year later
Asian Crisis
-3.6
11.2
Pokhran II
-4.1
8.6
WTC
-3.7
42.0
PIIGS
-2.7
20.3
US QE 3
-2.7
45.9
Indian stock markets have always rebounded after global
knee jerk reaction to stock markets
7th pay commission
(30/6/2016)
 47 lakh central govt employees to benefit
 53 lakh pensioners to benefit
 Total outgo for govt nearly Rs. 1 lakh crore
 Salary rise between 14 to 25 %
 Lowest salary to rise from Rs. 7000 to Rs. 18000
 Cabinet secretary to get Rs. 2.5 lakh from current Rs.




90,000
Benefits and challenges
Consumption of capital goods, automobiles to rise
Fiscal deficit may rise
Inflation may go up
May core sector growth slows
to 2.8% vs 8.5% in April
 The eight 'core' sectors of the Indian
economy grew 2.8 percent year-on-year
in May, government data released today
showed, having slowed from 8.5 percent
in April.
 The eight sectors make up about 38
percent of the index of industrial
production (IIP) benchmark.
IIP surprises and CPI flat
 The Index of Industrial Production for May surprised on the
upside coming in at 1.2 percent against a decline of -0.8
percent in April.
 This figure is the best figure since February 2016. Out of the
last six months, four months have seen a contraction.
 Consumer non-durables have been declining for the seventh
consecutive month. The contraction has declined to 2.2 percent
for the month in question.
 The Consumer Price Index for June was flat at 5.77 percent
against 5.76 percent in May. Food inflation quickened to 7.79
percent last month.
FII wary of India’s High PE
(14/7/2016)
 Past data shows that FII buying picks up
when PE of sensex is less than 15.5
 Current PE of Sensex is 16.5 and thus
FII average buying for last 21 days is
$18.5 million as compared to $197
million in April 2016
 Before 2014 general elections, when PE
was between 12 an 14.5 the buying of
FII were more aggressive
UK may head for recession
(14/7/2016)
 49% of 350 FTSE companies had not plan for back up in




case of BREXIT which is now a reality
EU may discriminate UK exports if UK goes with
restrictive policy on free movement of labour
FDI into UK can dry fast which would reduce the GDP by
1%
Inventory is pilled up in UK companies and with slow
down in corner the situation would get bad
Saving rate in UK is low at 5.9% which could also create
more trouble in case of slowdown
IMF Reduces world growth
(20/7/2016)
 IMF reduces Global Growth forecast
from 3.8% to 3.1%
 In January 2016, IMF had projected
3.8%
 In July 2016 it has reduced to 3.1%
 The lower projection is due to BREXIT
and its effect
 The world bank has also reduced its
global growth from 2.9% to 2.4%
Govt Infuses Rs. 22,900 crore
(20/7/2016)
 Govt infuses Rs. 22,900 crore in 13 PSU
banks
 SBI gets one third that is Rs. 7575 crore
 Indian Overseas bank gets Rs. 3101
crore
 The credit offtake in economy is only 8
% as compared to 8.5% last year
IMF trims Indian GDP growth
(20/7/2016)









2015
2016
2017
World
3.1
3.1
3.4
USA
2.4
2.2
2.5
EURO
1.7
1.6
1.4
UK
2.2
1.7
1.3
JAPAN
0.5
0.3
0.1
INDIA
7.6
7.4
7.4
CHINA
6.9
6.6
6.2
IMF recommends to avoid protectionist policies, structural
reforms should be done and countries to spend more
where there is room for fiscal deficit
FII putting money in India
(27/7/2016)
 From June 20 to July 25, FII have
invested Rs. 7800 crore in Indian stock
market
 FII have invested Rs. 1900 crore in the
debt market during same period
 Since January 1, 2016 Midcaps have
given 12 % returns while SENSEX has
given 8 % return so far.
GST Roll out finally (3/8/2016)
 GST rate to be 18%
 50 % state should pass in order to be
applicable pan India
 GDP may rise by 2 %
 Lower logistic cost by 30 % saving as
per some estimates
Bank of England reduces rates
(5/8/2016)
 Bank of England reduced their rate from
0.50% to 0.25%
 Announces QE of 60 billion pounds
 Cheap money to come from FII to indian
markets.
IIP rises and inflation rises
(16/8/2016)
 IIP has increased from 1.2 % to 2.1%.
 Surprisingly it has increased
 CPI inflation has increased from 5.77% to
6.07%
 Inflation above 6 % means that RBI would
not be able to reduce interest rates any time
soon
 The food inflation is already at 7.79%
WPI Rises to 2 year high
(16/8/2016)
 WPI inflation rises to near two-year high of 3.55% from
1.62%
 WPI inflation climbs to a two-year high at 3.55 percent as
against 1.62 percent month-on-month.
 Food Inflation too increased to 11.82 percent from 8.18
percent last month.
 The vegetable inflation accelerated to 28 percent from
16.9 percent in June while the pulses inflation has gone
upto 35.76 percent from 26.61 percent.
Consumers using cards
(18/8/2016)
 Year
Debit Card Credit card Swipe
 2015 57.50 cr
2.15 cr
11,32,955
 2016 68.81 cr
2.55 cr
14,29,420
 50 % of consumers buy through loans
and cards and prefer non-cash deals
 Non cash transactions likely to grow by
45 % by 2020
Internet usage by 2020
(18/8/2016)
 No of internet users currently 330 million
will go up to 730 million
 75% to 80% of the users would be from
villages
 175 million no of online shoppers by
2020
 Rural India key to success for
sustainable economic development
GDP Data disappoints
(1/9/2016)
 GDP came at 7.1% as compared to 7.9% in last year and
7.5% last quarter
 Agriculture was main dragger with growth of only 1.8%
from 2.3% quarter on quarter
 Mining sector saw a contraction with growth plunging to
0.4 percent from 8.6 percent in the last quarter (QoQ).
Services sector, however, saw a strong growth at 9.6
percent compared to 8.7 percent QoQ.
 Gross value added (GVA) was down to 7.3 percent
from 7.4 percent year-on-year and 7.2 percent in fourth
quarter FY16.
Core sector growth slows
(1/9/2016)
 Core sector growth which has 8 industries which have
weight age of 38% in IIP index
 The core sector growth has come down to 3.2% as
compared to 5.2% in June
 However, the growth rate of the eight infrastructure
sectors -- coal, crude oil, natural gas, refinery products,
fertilizers, steel, cement and electricity -- was slower than
the 5.2 percent recorded in June.
MF AUM RISES (9/9/2016)
 Mutual Fund Industry AUM has touced
Rs. 15.6 lakh crore
 Highest in the hisotry of MF
 Equity Mutual funds AUM has reached
Rs.4.67 lakh crore against highest
 Balance funds category AUM has
touhced Rs. 50,000 crore
FII puts money (9/9/2016)
 FII have invested Rs. 43000 crore in
Indian stock markets in this year
 FII were net sellers in Jan and Feb 2016
after the Fed Rate Hike in Dec 2015
 In march and April 2016 they did huge
buying to the tune of Rs. 26000 crore
SIP Gaining Momentum
(12/9/2016)
 Equity mutual funds witnessed an inflow of Rs 6,505
crore in August, making it the highest in a year, mainly on
account of optimistic investor sentiment.
 Also, monthly SIP (systematic investment plans) book
has crossed 1 crore SIPs
 Monthly net contributions through SIP alone is over Rs
3,000 crore leading to higher positive net inflows in equity
markets
CPI FALLS AND IIP
CONTRACTS (12/9/2016)
 August CPI falls to 5.05%; July IIP contracts by 2.4%
August consumer price index (CPI) fell sharply to 5.05
percent year-on-year from 6.07 percent in July, thanks a
sharp fall in food prices, which enjoy about 50 percent
weight in the inflation basket, government data released
today showed.
 Separately,
data showed that July index of
industrial production (IIP) came in at -2.4 percent,
compared to 1.95 percent (revised) in June, and an
expectation
of
1.37
percent.
WPI rises (14/9/2016)
 Wholesale Price Index inflation increased to
3.74 percent in the month of August compared
with 3.55 percent in preceding month.
 WPI rising indicates that rural economy is
picking up demand
 CPI falling and IIP negatives makes a case for
RBI to reduce interest rates
Fed rates unchanged
(22/9/2016)
 Fed has not changed its interest rates
 Inflation in USA is less than its 2 %
target
 Labour market has created job but risk of
slowing down still exists
 Last December 2015 Fed had increased
its rate from 0.25 % to 0.50%
 In 2017, there are chances of 2 rate hike
FII put in Rs. 9300 crore in
September 2016 (26/9/2016)
 Foreign investors have pumped Rs 9,500 crore (USD 1.4
billion) into the country's capital markets so far this
month, driven by sound progress on rollout of GST and
contraction in current account deficit (CAD).
 The latest infusion comes on top of a whopping inflow of
Rs 25,904 crore in the preceding two months (JulyAugust). Prior to that, foreign portfolio investors (FPIs)
had pulled out a total of Rs 4,373 crore from the capital
markets (equity and debt) in June and July.
 So far this year, FPIs have invested Rs 46,493 crore in
equities while withdrawing Rs 3,442 crore from the debt
market. This resulted in a net flow of Rs 43,051 crore.
FII put in Rs. 9300 crore in
September 2016 (26/9/2016)
 Currently, investments made by Sebi-
registered FPIs in domestic capital
market stands at Rs11.5 lakh crore.
 This include Rs 8.45 lakh crore in
equities and Rs 3.06 lakh crore in debt.
SEBI allows FPI for direct membership of stock exchange in
bond markets (26/9/2016)
 Under the new proposal approved by Sebi’s board here
today, the Securities and Exchange Board of India (Sebi)
would take up the matter with the government to permit
FPIs to become members of the stock exchanges for
their proprietary trading.
 In a statement, Sebi said it has decided to allow Category
I and Category II FPIs to have an option to directly
access the corporate bond market without brokers, as
has been allowed to domestic institutions such as banks,
insurance companies and pension funds.
Emerging Economies getting
funds flows (26/9/2016)
 About 545 million people are middle class in Asia,
according to recent data from Ernst & Young, which
estimates 3 billion people will move into the middle class
by 2030 — most of them in emerging markets.
 With investors recently funneling more than USD 9 billion
into emerging market funds — a three-year high — and
the benchmark MSCI emerging market fund up nearly 15
percent
year
to
date,
OPEC to cut output by 750,000 barrels per day (29/9/2016)
 OPEC to cut output by 750,000 barrels per day
 Crude prices went up by 6 %
 OPEC members, whose countries produce 40 percent of the
world's crude oil, agreed to cut their output to 32.5 million
barrels per day.
 informal OPEC meeting opened in Algiers earlier today to
discuss a possible freeze in output by the cartel, with the aim of
raising prices which have fallen by more than half since mid2014.
 More than 70 countries are facing problems due to lower curde
prices
RBI cuts Repo Rate
(4/10/2016)
 RBI reduces Repo rate from 6.5 % to 6.25%
 Reverse Repo rate is now 5.75%
 The decision of the monetary policy committee (MPC),
headed by new RBI governor Urjit Patel, will likely cheer
business leaders and households as cheaper loans will
aid investment and spending.
 The six member panel, which brainstormed over two
days, unanimously agreed that inflation was unlikely to
gallop past the tolerance threshold of 6 percent in the
near future.
 The MPC expects retail inflation rates to hover around 5
percent by March 2017, the RBI said in a statement,
which is well within the comfort zone.
IMF raises Indian growth rate
(4/10/2016)
 IMF has raised Indian GDP growth from 7.4% to 7.6%
 World GDP kept constant at 3.1%
 Emerging economies growth at 4.2% while Developed




economies at 1.6%
India needs to improve labour market
More jobs to be created
India needs to create 1.5 crore jobs for next 20 years
World economy passing through tough phase
World Bank says automation
creates job risk (5/10/2016)
 World bank says automation threatens 69% jobs in India
 77% jobs in China
 85% jobs in Ethiopia
 India and china being labour intensive needs to have
policies which creates jobs and not destroy jobs
 Automation is good but not at cost of human resources
Global debt at record high,
warns IMF (6/10/2016)
 Global Debt is at record high at $ 152 trillion
 Two Thirds are owned by private sector
 Measured against the size of the world economy, it rose
from less than 200 percent of global GDP to 225 percent
over the 15 years to 2015.
 High debt levels are costly as they often end up in
financial recessions that are deeper and longer than
normal recessions.
MF Business again in trouble
(19/10/2016)
 In India Mutual Funds constitute 7 % of individual





investment in financial products
In China this is 11 % and Japan it is 30 % of house hold
investment
There are right now 10,000 active distributors and only
486 Registered Investment Advisors
SEBI wants to separate distribution from Advisory
This may further harm in the industry, since in India
people do not pay for any advice
MF industry has 350 equity schemes and 1500 debt
schemes
GST in Four rates (4/11/2016)
 GST to be rolled out in 4 rates
 These rates would be 5 %, 12 %, 18% and 28 %
 For gold it would be 4 % but likely to be further reduced
 50 % of the items that are under Consumer Price Index
are exempt from GST
 Remaining 50 % of goods would come under the lowest
rates
 Objective is that GST will not create inflation
Banks allowed to issue Masala
bonds (4/11/2016)
 RBI has allowed banks to issue Masala bonds
 Masala bonds are rupee denominated bonds issued




outside India
Banks can issue perpetual bonds which would classify as
Tier I capital
Also banks can issue time bonds which would be as Tier
II capital
Banks can also raise long term funds for infrastructure
and affordable housing
This is within overall limit of Rs. 2,44,000 lakh crore for
corporate bonds fund raising
ICICI Bank NPA Rises
(8/11/2016)
 ICICI Bank NPA has increased from Rs.
15000 crore to Rs. 32000 crore
 Highest rise in NPA in last few years
 NIM (Net Interest Margin) has remained
flat at Rs. 5200 crore
WPI falls (15/11/2016)
 India’s wholesale inflation rose to 3.39
percent in October year-on-year,
marginally lower than the previous
month’s 3.57 percent.
 Food inflation moderated to four month
low of 4.34 percent aided by fresh arrival
of seasonal vegetable supplies.
 The inflation should go down in the short
term.
CPI falls (15/11/2016)
 CPI inflation has come down to 4.2% as
compared to earlier of 4.39%
 Inflaiton is down 14 months low
 Low vegetable and food prices have
reduced inflation
 This give RBI next room to cut rates
Demonetization effect









The Indian Economy will slow down drastically in terms of GDP (Nomura already
telling GDP to come down from 7.5 % to 6.3%)
FII selling shares in big way the markets have started crashing (more than 1000
points down in last 3 trading sessions)
Real estate sector worst hit and it has 11 % weightage in GDP so GDP will surely
come down and make Indian economy unattractive
Banks may get Rs. 8 to 10 lakh crore which means huge liquidity with banks
RBI to reduce around 50 to 75 basis point interest rate cut
They would reduce the interest rates and thus house and auto loans to become
more cheaper
Demand would pick up for real estate projects which accept 100 % white payment
may benefit the most
Currently the construction, mining, steel and other sectors where workers are paid
in cash would suffer the most
Farmers may get affected since they don’t have cash to buy seeds and farming
material
Italy Referendum (8/12/2016)
 Italy unemployment rate at 38%
 Banks bad loans 360 billion euros
 Wants to exit Eurozone like UK
 Eurozone may disintegrate in next 2
years
 Italy Debt to GDP ratio at 160%
US Economy (8/12/2016)
 US Economy unemployment at 4.6%
 US creating more than 1.5 lakh jobs each month for last 2
years
 US to tax 35 % to companies shifting jobs outside USA
 On 14 and 15 December, US Fed may increase interest
rates
 Emerging Economies stock market may crash. In October
already Rs. 23000 crore FII has sold
Monetary Instruments
(8/12/2016)
 Bank Rate 6.75%%
 Repo Rate 6.25%%
 Reverse Repo Rate 5.75%%
 CRR 4.00%
 SLR 20.75%%
 These rates are old rates
RBI keeps rate unchanged
(8/12/2016)
 RBI has kept Repo Rate unchanged
 Stock markets fell as rate cut was expected
 Indian Economy GDP cut from 7.6% to 7.1%
 So far, people have deposited Rs 11.55 lakh crore worth
of “demonetized” notes.
 The central bank said that the RBI has so far replaced Rs
4 lakh crore of new notes since November 8 when the
unexpected currency culling exercise was announced.
ECB to buy bonds (9/12/2016)
 European Central Bank to buy 60 billion euro bonds
 This would continue till end of 2017
 The ECB has already spent more than 1.4 trillion euros




($1.5 trillion) buying bonds and has been at pains to
emphasize that maintaining easy financing conditions is
'crucial', with underlying inflation stuck below 1 percent.
The outlook for Euro zone has been weak
The GDP growth forecast is even around 1.6% which is
not much encouraging
Italy already facing problems of 38% unemployment
Banks in Italy has bad debt of 360 billion Euros
CPI inflation falls (13/12/2016)
 CPI inflation has fallen to 3.63% from
4.20%
 Drastic fall in CPI inflation
 Need to wait and watch since this fall
could be result of demonetization
 Economy has slowed down drastically
 No cash movement
 80% of the economy runs of cash
WPI falls (14/12/2016)
 WPI inflation comes to 3.15 % as
compared to 3.39% in October 2016
 WPI also eases as CPI has also come
down
 RBI gets more elbow room to reduce the
interest rates
US Fed raises Rate
(15/12/2016)
 US Fed has raised rates by 25 basis
point
 Now interest rates in USA are in range of
50 to75 basis points
 In December 2015 Fed had raised rates
by 25 basis points which they did after 8
years of global recession
FPI net sellers (19/12/2016)
 FII are net sellers of Rs. 49700 crore in last two months
from equity markets
 FII invested Rs. 46000 crore from June to Sep 2016
 Net withdrawal by foreign portfolio investors (FPIs) from
equities stood at Rs 1,142 crore this month, while the
same from the debt market was Rs 18,452 crore,
translating into a total outflow of Rs 19,594 crore,
depositories' data showed.
 This year, so far, FPIs have invested a net sum of Rs
27,600 crore in stocks, while they pulled out Rs 43,162
crore from the debt market, resulting in a combined net
inflow of Rs 15,561 crore.