marketexplorer8march.pdf
TRANSCRIPT
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March 2011
MAR K E T
E X P L O R E R
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EDITORIAL
Rajesh Jain, Head Of Research
Ajaykumar Shrivastava
Ajit Mishra
Anjali Shukla
Anurag Vishnoi
Asif Ahmed
Bharat Ashwin Dalal
Gaurav Sharma
Himanshu Sharma
Jyothi Krishnan
Manish Tawde
Rajesh Patel
Rinku Santosh Saraf
Shishir Kedia
Swati Saxena
Tarun Narula
Tanmay Purohit
THE TEAM
EDITOR
The Union Budget, which was initially termed insipid, got a thumbs-up fro
markets the very next day with a 623 point rise, which was also the highest on
day rise in almost two years. Sheer relief at excise duties not increasing
expected, as well as short covering contributed to this jump. The re-focus
infrastructure by allowing FII investment in bonds upto USD 40 billion has com
as the big kick for the sector. The budget may have had some misses like lo
overdue liberalization of the insurance industry but I'm sure that theinitiatives will remain on the FM's radar and show up sooner than lat
However, historically the market reaction to the budget shows up over t
following month as the implications are better understood and it would be t
early to call one way or the other.
Having reached the point of no return in our integration with the world econom
we will also need to have a ready response to the fast-changing global even
and our budget and policies,as the FM rightly pointed out, cannot be seen
isolation. The recent upheavals in North Africa and West Asia can make
severe dent in our budget projections as the price of crude shoots up. Similar
we will have to become adept at using our currency as a tool. Therefore
inflation is now a bigger issue than growth, then it may be wise to increase t
interest rates and let the rupee strengthen. That said, the projected low budg
deficits are a pleasant surprise and the proposal to allow foreign investors
invest in our Mutual Fund schemes will definitely see increased fund flow in
the equity markets. The stage is set and I feel that 2011 will prove the na
sayers wrong and may well turn out to be a banner year for equity markets
India.
The March Issue of Market Explorer brings to you a review of the Union Budg
2011-12 along with the analysis of the Technical, Derivatives and Mutual Fu
segments over the last month. I'm sure you will find it suitably informative
base your investment decisions on.
Jayant Manglik
President, Commodities, Currency & Research
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C O N T E N T
FUNDAMENTAL
Global Economic Recovery
Review : Union Budget 2011 - 12
Union Budget Announcements Pertaining To Various Sectors
01
02
03
DERIVATIVES
Derivatives Monthly Report05
MUTUAL FUND
Moderate yet Stable Returns: Agro Sector Funds
PRIDE MF Model Portfolio
07
08
TECHNICAL
Monthly Outlook06
E X P L O R E R
CONTENT
M A R K E T
M a r c h 2 0 1 1
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Source: Moodys Analytics
GLOBAL ECONOMIC RECOVERY
FUNDAMENT
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UNDAMENTAL
The government has announced the Union Budget for fiscal 2011 and
said that this Budget is seen as a transition towards a more transparentand result oriented economic management system in India. The FinanceMinister that in order to achieve desired outcomes from the policy makingexercise it is important that the expectations of investors, entrepreneursas well as the consumers are taken care of. However, the budget
announcement remained silent with respect to reforms.
The Finance Minister in his Budget speechpegged the GDP growth for FY12 at 9% with 0.25% deviation on either
side. At the same time he also maintained that average inflation will belower but still higher than government's or RBI's benchmark. The
Finance Minister singled out 'Inflation' as the biggest challenged in thenear-to-medium future and pledged to address structural concerns byimproving supply response of agriculture products, while RBI will
address the demand side of the inflation at the same time.
Here are some of the measures announced in the Union Budget toaddress the problem:
Allocation under Rashtriya Krishi Vikas Yojana has been increasedfrom Rs 6,755 crore to Rs 7,860 crore.
To improve rice-based cropping system in this region, allocation of
Rs 400 crore has been made.Allocation of Rs 300 crore to promote 60,000 pulses villages in
rainfed areas.
Credit flow for farmers raised from Rs 3,75,000 crore to Rs 4,75,000crore in 2011-12.
Approval being given to set up 15 more Mega Food Parks during2011-12.
Allocation of Rs 300 crore for Accelerated Fodder DevelopmentProgramme to benefit farmers in 25,000 villages.
The resilient Indian economy in 2011-12 showedimpressive performance on the fiscal consolidation front. Fiscalconsolidation targets at Centre and States have shown positive effect on
macroeconomic management of the economy said the Finance Ministerin his Budget Speech. Consequently, the FM surpassed his own target ofFiscal Deficit for FY11. Fiscal Deficit brought down from 5.5% in BE2010-11 to 5.1% of GDP in RE 2010-11. For the FY12, the government
has set an ambitious fiscal deficit target of 4.6% of GDP for 2011-12 withnet market borrowing of Rs 3.43 lakh crore in 2011-12.
However, if one were to take the overall subsidies and uncertainty overcrude prices, the target looks a little farfetched. Full accounting of offbalance sheet items could raise the deficit to 5.5% of GDP. Hence,goingby the last few years, the gap (between printed and actual figures) is here
We look at some of the main features of the Budgetannouncement in detail:
Growth and Inflation
Fiscal Deficit:
to stay. Further, one can only hope the divestment target of Rs 40,00
crore comes through given the Rs 27,000 crorerealisation last yeaversus the same target.
India is on the cusp of two major tax reformsthat have thpotential to provide significant tax buoyancy and iron out anomalies. Ihis speech, Mr.Pranab Mukherjee seemed confident about thimplementation of Direct Taxes Code (DTC) from April 1, 2012. As far athe Central Goods and Services Tax (GST) is concerned, the FinancMinister said the difference between states and the centre havmellowed and that the discussion are in final stages and GST rollout cabe expected from April 2012. As a step towards the roll out of GST, FMwill propose a Constitution Amendment Bill in this session of Parliament
In order to align tax slabs with proposed DTC, the exemption limit fothe General Category of individual taxpayers is enhanced from R1,60,000 to Rs 1,80,000 giving uniform tax relief of Rs 2,000.Exemption limit enhanced and qualifying age reduced for senio
citizens to 60 years from 65 years.Higher exemption limit (Rs 5 lakh) for Very Senior Citizens, who ar
80 years or above.Tax exemption limit has women remains at Rs 1.9 lakh.Additional deduction of Rs 20,000 for investment in long-term
infrastructure bonds proposed to be extended for one more year.
However, the indirect taxes like Central Excise Duty at 10% and servictax duty remained untouched primarily because the rate for GST is alsaround 10%.
Overall the Union Budget 11-12 has set its focus on growth and reignininflation. The key positives include no increase in excise duties and peacustoms dutyas well as allowing foreign investments into the Indian stocmarkets by the Mutual Fund route. However, attaining the target of lower fiscal deficit in 2011-12 and increased spending along with tax cutis an ambitious project not only for the government but also for the RB
since it is the RBI that will manage the government borrowing and decidon crucial issues like - how much to raise and whether the exercise will bfrontloaded or not. The RBI, already saddled with managing pricsituation will now have the additional responsibility of managinborrowings in a manner that doesn't result in crowing out. Besides thfiscal deficit figure does not include off-balance sheet items and icontingent to a lot of things viz., tax buoyancy&export growth andisinvestment.However, in the face of fragile economic recovery ideveloped markets and jittery market scenario back home we fell short oattaining the disinvestment targets of Rs 40,000 crore for FY11. Hencea lot will depend on the approach of the government and the RBI towardattaining the fiscal deficit figure of 4.6% of GDP.
Tax Proposals:
Personal Tax
In Summary
As far as is concerned, the following announcements wermade:
REVIEW: UNION BUDGET 2011-12
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UNION BUDGET ANNOUNCEMENTS PERTAINING TO VARIOUS SECTORS
Sector Measures Impact
Automobiles
BFSI
Information
Tecnology
Infrastructure
Companies
Higher disposable income as a result of widening tax
slabs and enhanced rural income; Excise duty for two-
wheeler retained at 10%
Positive impact Hero
Honda, TVS Motors,
Bajaj Auto
Positive impact on all
Public Sector Banks and
Infrastructure Finance
Companies; Reliance
Capital, IDFC and Aditya
Birla Nuvo
Negative for smaller &
Mid IT firms; Overall
positive for big players
Negative for Mundra
Port, units operating in
SEZ; Overall positive for
Other Infra Companies
MAT has been increased to 18.5%
though surcharge is reduced;
STPI has not been extended
and will be levied on
units operating in SEZ,
MAT levy; Enhanced flow of funds to infrastructure sector
(investment up 23%, tax free bonds of Rs 30,000 crore by
PSU in FY12,Benefits under Section 80CCF extend for 1
more year); FII limit for investment in infra Bonds raised
to USD 25 bn
Recapitalization to the tune of Rs 6000 crore in FY12;
Benefits under Section 80CCF extend for 1 more year;
FII limit in corporate bonds of infrastructure companies
raised from USD 5bn to USD 25bn; borrowings lower
than estimate; MFs allowed to raise funds abroad
FUNDAMENT
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DERIVATIVES MONTHLY REPORT
Outlook for Nifty
117 with a stop loss of INR 1267 total return approx 8%
Nifty futures in Feb series have declined by 6 %.Call build up seen in the 5400-5600 strike prices in the March series
The market had a lousy month as indices, after opening at 5617made high of 5622 before closing at 5265.3Nifty rollovers: 65%v/s 65% for the previous month (3 month avg66%).The March futures however closed at 5279.35 at a premium of 14points. OI increased by 21 % from Feb series. Going by the Marchfutures, the undertone is range bound.Nifty in the series has major support at 5170 and a strong resistanceat 5450, a closing below and above this will result in a major triggerfor the Nifty.
Nifty March series Options Data:
with 5500 having the largest concentration of 3.91 million shares.Put build up seen in the 5000-5400 strike prices. The 5300 Put ha
highest concentration of 5.76 million shares.5200-5600 should be the broad range for the February series t
begin with though with a positive bias as Nifty could find resistancfrom 5450 levels.
FII Trading Activity for FEB series
Rollovers For Jan series
Rollovers: 64% v/s 65% for the previous month (3 month avg 66%).Roll Spread at premium of 17 basis points compared to 27 basis pointlast month.
Rollovers: 83 % v/s 83 (3 mth avg 84%) average rolls.
Nifty
Market-Wide
DERIVATIVES
Falcon-Nifty Future Price, OI and Volume Chart
Source: My F&O
Index Futures
-231.88
Index Options
1803.47
Stock Futures
3429.22
Stock Options
-41.12
(Figures in Crore
SCRIP
PANTALOONR
GTL
STERLINBIO
GLAXO
BALRAMCHIN
APOLLOTYRE
GTLINFRA
BRFL
MCLEODRUSS
PTC
High Rollovers
Oil (in mn)
5.76
6.66
3.95
0.18
24.12
17.13
47.20
9.58
6.15
4.45
Rollover %
95.98
95.29
93.67
93.62
93.58
92.99
92.95
92.56
91.85
91.82
Last Month
88.89
98.86
90.04
97.45
91.33
90.83
73.36
89.97
93.89
92.35
3 Months Avg
88.8
98.8
90.0
97.4
91.3
90.8
73.3
89.9
93.8
92.3
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Sector Wise Rollover
Rollover highlights
While rollover has been maintained at 84% and compares favorably withJan and the 3-month avg several counters have attracted negative COC.The main ones are BOI,CanBank,Core Project,DLF,Educomp,HeroHonda,Hind Unilever and Maruti.
Directional Calls for the Month
Buy Cipla March Future:
Rationale:
Cipla has witnessed heavy short build up in last 3 months with good openinterest. We expect huge short covering from these levels which help thestock to gain. Therefore we recommend buying Cipla March future at `298 with a Target of`328 and stop loss of `283.
Source: My F&O
Cipla
LTP
Target
Stop Loss
LIC Housing Finance
LTP
Target
Stop Loss
Rollover
Automobile
Banking
Capitalgoods
Cement
Fertilisers
Finance
FMCG
Hotels
Index
Infrastructure
Media
Metals
Oil&Gas
Others
Pharma
Power
Reality
Sugar
Technology
Telecom
Textile
Trading
Transport
78
.2
77
.1
79
.283
.3
79
.2
79
.0
79
.1 88
.0
50
.7
81
.7
84
.3
76
.379
.5
76
.5 81
.2
81
.5
81
.9
84
.2
80
.383
.984
.3
73
.2 82
.1
Buy
298
328
283
Buy
188
207
178
Source: My F&O
Buy LIC Housing Finance
Rationale:
We expect LIC Housing Finance to go up in the March series on the basof strong Open interest build up. Therefore we suggest to long LICHousing Finance at`188 with a target of `207 and a stop loss of `178.
DERIVATIV
Scrip
COLPAL
NATIONALUM
MUNDRAPORT
EXIDEIND
HAVELLS
TATAPOWER
M&M
SUNPHARMA
BHUSANSTL
ITC
Low Rollovers
Oil (in mn)
0.22
1.21
3.37
1.90
0.15
1.58
5.44
2.78
0.91
24.96
Rollover %
41.76
44.60
57.89
61.93
63.43
63.77
63.93
63.99
65.06
65.28
Last Month
77.23
83.40
74.06
80.66
68.00
75.44
71.73
69.34
72.09
62.97
3 Months Avg.
78.07
83.40
74.06
80.66
68.00
75.44
71.73
69.34
75.32
62.97
Source: My F&O
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SBI Option Strategy:
Rationale:
We expect SBIN to go up in March series on basis of strong open interestand strong options build up. We recommend a Bull call spread were in webuy 2650 call `87 and sell a 2700 put `67 total cost of the spread`20
Nifty Option Strategy:
Rationale:
We expect Nifty to go up in March series on basis of strong open interesPositive COC and strong options build up. We recommend buying 2 calof 5300 at 163 and buy 1 put of 5300 strike at 126 total cost of strateg452.
DERIVATIVES
Source: My F&O
Source: My F&O
SBIN
BUY 2650 March Call
SELL 2700 March Put
Total Cost
Maximum Profit
Maximum loss
BEP
Bull Call Spread
87
67
20
30
20
2670
Nifty
BUY 5300 March Call (TWO LOTS )
BUY 5300 March Put
Total Cost
Maximum Profit
Maximum loss
Upper BEP
Lower BEP
Strap
163
126
452
unlimited
452
5526
4848
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MONTHLY OUTLOOK
The Month That Was:-
Nifty fell 172 points in the month of February to settle at 5333 and it tested5177 as lowest point in the month.
Below is a summary of Top Nifty Gainers & Losers:
Top Nifty Gainers for February 2011
Top Nifty Losers for February 2011
Nifty is down by 3.1% in the month of Feb-2011.FMCG and OIL & GAS stocks outperformed the Nifty while
REALTY, CAPITAL GOODS & HEALTHCARE were laggards.
* All the sector have been compared with Nifty & the zero line representNifty. The movement of the sector vis-a-vis Nifty whether they outperformor underperform is shown in the chart below. It goes to show where themoney is going & where the money is exiting.
Outlook for S&P CNX Nifty
Nifty (5333.25) - Support 5170/5040/4800 Resistance
5440/5590/5680
Nifty tested 5177 as lowest point in February and it turned out to be volatile month owing to budget and parliament session. Nifty hascompleted 16 weeks after forming lower top at 6338 in November 201and we are witnessing an intermediate correction. It still trades below200DMA (at 5606) and it has been able to hold on to 5177 bottom inrecent dip. Going into March, Nifty crucial support exists near 5160 levelholding which there can be a recovery till 5500-5600 levels too. Below
5160 correction may deepen and next support would be near 5040 an4800 levels.
Stock Recommendations For March-2011
Jaiprakash Associates Limited (JPASSOCIAT)
CMP Rs 77.20
Buy range Rs 73-75 Stop Loss Rs 70 Target Rs 8
Scrip Name
Siemens Limited
Kotak Mahindra Bank Limited
Reliance Industries Limited
Cairn India Limited
Hindustan Unilever Limited
Scrip Name
Reliance Communications Ltd
Sesa Goa Limited
Reliance Power Limited
Ranbaxy Laboratories Limited
Reliance Infrastructure Limited
% Change
16.39
6.72
5.61
3.73
3.70
% Change
-31.48
-20.70
-19.39
-18.83
-15.84
Latest Close (Rs)
847.35
405.05
964.25
339.20
282.00
Latest Close (Rs)
85.75
261.20
110.35
434.65
609.80
TECHNIC
Auto
Ba
nkex
CapitalG
oods
ConsumerDurables
F
MCG
Health
Care IT
Metal
MidCap
Oil&
Gas
P
ower
PSU
RealtyIndex
SmallCap
Teck
SECTOR PERFORMANCE
-4.08%
1.28%
-5.19%
-2.94%
5.10%
-5.18%
-1.01%-1.62%
-4.07%
2.90%
-4.91%
-0.61%
-7.95%
-4.66%
-1.17%
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The stock had underperformed broader indices, forming high of 180 inOctober 2009. It has tested crucial support levels around 70. It ralliedquickly from 70 till 92 levels and settled at 77 levels to close the month.Dips towards 73-75 can once again be a chance to buy into this stock fortargets above 85 levels.
Polaris Limited (POLARIS)
CMP Rs 181.85
The stock has closed higher by more than 8% in February and tradesabove long term moving averages indicating better relative strengthagainst Nifty. On weekly graphs it trades in up-slanting channel. Thestock trades very close to monthly resistance of 215 above which it wouldbe a major breakout. Dips towards 170 can be a chance to buy into thisstock.
Buy range Rs 170-175 Stop Loss Rs 158 Target Rs 204
ECHNICAL
Monthly trend sheet for Nifty 50 Stocks
Stocks LTP Trend Trend When Changed Closing StoplossRate When Trend Changed
ACC
AMBUJACEM
AXISBANK
BAJAJ-AUTO
BHARTIARTL
BHEL
BPCL
CAIRN
CIPLA
DLF
DRREDDY
GAIL
HCLTECH
HDFC
HDFCBANK
HEROHONDA
HINDALCO
HINDUNILVR
ICICIBANK
IDFC
INFOSYSTCH
ITC
JINDALSTEL
JPASSOCIAT
969.35
117.85
1218.55
1269.15
331.3
2001.1
553.45
339.2
299.65
211.85
1546
426.55
442.45
629.2
2052.25
1465.2
201.35
282
970.85
145.2
2997.1
169
657.75
77.2
Up
Down
Down
Down
Up
Down
Down
Up
Down
Down
Down
Down
Up
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
27-Aug-10
7-Jan-11
7-Jan-11
7-Jan-11
9-Jul-10
12-Nov-10
26-Nov-10
19-Mar-10
28-Jan-11
19-Nov-10
11-Feb-11
21-Jan-11
31-Dec-10
14-Jan-11
14-Jan-11
21-Jan-11
25-Feb-11
28-Jan-11
7-Jan-11
19-Nov-10
25-Feb-11
25-Feb-11
19-Nov-10
19-Nov-10
872.1
128.85
1280
1316.6
308.65
2389
667.7
285.35
337.2
307.95
1497.25
453
455
641.75
2049.55
1753.25
200.05
273
1049.2
184.8
3007.3
153
648
120.6
970
140
1470
1500
320
2380
700
310
335
310
1780
500
420
710
2370
1900
245
305
1150
186
3350
175
720
105
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When trend changes to up, one can buy & when trend changes to down one can sell.Resistance is mentioned for stocks which are in downtrend where one can go short with closing stoploss as mentioned. Support is mentioned fo
stocks which are in uptrend where one can go long with closing stoploss as mentioned.Closing stoploss has to be seen at closing at 3:30pm. All stocks prices refer to spot price.In this table of trends, it has been observed that if someone tries to take all levels of a stock or index continuously, the losses are small but once the
market catches a strong trend in either direction, one makes a huge profit that time.The trend changes are considered on weekly basis, so always watch weekly closing for changes in trend.
Stocks LTP Trend Trend When Changed Closing StoplossRate When Trend Changed
KOTAKBANK
LT
M&M
MARUTI
NTPC
ONGC
PNB
POWERGRID
RANBAXY
RCOM
RELCAPITAL
RELIANCE
RELINFRA
RPOWER
SAIL
SBIN
SESA GOA
SIEMENS
STER
SUNPHARMA
SUZLON
TATAMOTORS
TATAPOWER
TATASTEEL
TCS
WIPRO
405.05
1527.95
615.75
1208.2
169.85
270.35
1062
98.95
434.65
85.75
475.45
964.25
609.8
110.35
152.55
2630.45
261.2
847.35
164.05
423.5
46.65
1082.75
1150.15
607.15
1110.25
438.2
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Down
Up
Down
Up
Down
Down
Down
Down
Up
Down
7-Jan-11
7-Jan-11
28-Jan-11
14-Jan-11
29-Oct-10
12-Nov-10
26-Nov-10
29-Oct-10
28-Jan-11
12-Nov-10
12-Nov-10
19-Nov-10
13-Aug-10
10-Dec-10
5-Nov-10
10-Dec-10
29-Oct-10
4-Feb-11
25-Feb-11
4-Jun-10
19-Nov-10
25-Feb-11
26-Nov-10
11-Feb-11
16-Jul-10
11-Feb-11
435.2
1846.25
698
1269.7
195.3
260.95
1151.45
100.4
536
169.9
784.2
996.25
1083.75
151.85
196.75
2732.45
321.6
848.5
159.2
340.96
51.7
1110
1290.2
595.3
833.65
420.25
460
1950
780
1425
195
260
1250
101
580
145
690
1040
850
153
190
2930
348
760
190
410
55
1300
1350
670
1050
500
TECHNIC
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MUTUAL FUND
MODERATE YET STABLE RETURNS: AGRO SECTOR FUNDS
Sectors such as Infra, Construction, Auto, Consumer Durables &
Banking are more of interest rate driven industries. In the currentscenario interest rates are just 15 - 20% behind the highest levels we
have seen in recent years or just before recession of 2008.
Above that, Interest rates are expected to move up in this year further
with increasing inflation. So these Industries may not yield huge returns
like in the past in short to medium term period. In this trying period it
makes sense to go overweight on conservative but stable return
generating industries such as FMCG, Agro Products which have
continuous demand for products even in lower money liquidity
conditions.
We have considered our target investors to be Moderate Risk appetite &
looking for stable returns in the long term w.r. to this investment idea.
The agriculture sector, which has so far been a laggard in terms o
contributing to the Indian GDP growth is all set to achieve a growth of 4%
(Annual growth rate for the 12th five year plan) as per government'
estimates. The north-bound food price inflation can be viewed as
trigger point for the Indian government to come out with a two pronge
strategy of
A. Steps necessary to plug the leakages in the supply of agro produc
(by the way of better storage capacity) and
B. Reduce the demand-supply gap (through better agro-productivit
irrigation, subsidies and credit facilities)
FMCG
Fertilizers
Financials (Banking)
21.20%
4.54%
36%
13.80%
5%
21.90%
Improvement in the farm productivity could lead to lowering of prices of primary food articles which could
lower the raw material input cost for the agro-based FMCG companies.
Better disposable rural income could also increase demand for the FMCG products.
Investment in fertilizer to be considered as an infrastructure sub-sector, could attract higher investment
and lead to better capacity additions in the fertilizer sector
Rs 1bn India microfinance equity fund to be controlled by SIDBI could be positive for Micro
Finance Institutions
Recapitalization of PSU banks Positive for banks with low tier I and banks where government
holding is 51%.
Rise in the home loan ticket size positive for banks; interest subvention beneficial for banks and housing
finance companies
Sales growth Q3FY11Sub - sector Net profit growth Q3FY11 Post budget Outlook
Budget positives for the agro-oriented sectors:
Fertilizer subsidies - Direct subsidies for Fertilizers for the end users
(i.e. farmers) will ensure its proper utilization
Priority loans - Increasing subsidy on loans will ensure effective
repayment of loans by farmers thus improving the Supply of Credit by
Banks to farmers
Irrigation equipments: Basic Custom Duty reduced for specified
agricultural machinery from 5% to 2.5%. Basic Custom Duty reduced on
micro-irrigation equipment from 7.5% to 5%.
Rural infrastructure:
Rural infrastructure development fund corpus will be raised to Rs
18000 Cr from Rs 16000 Cr.
A corpus of Rs 2000 Cr set aside for additional warehousing
capacity
FII limit in corporate bonds in infrastructure is being raised b
additional USD 20bn
Tax free bonds of Rs 30,000 Cr to be issued for infrastructur
development. This will cover Warehousing Corporation, NHA
IRFC and HUDCO.
There has been allocation of Rs.2.14 Cr towards infrastructur
development
Cold storage chains to be given infrastructure status
Investment in fertiliser to be considered as an infrastructure subsector
Cold storage facilities to be enhanced.
The Govt. plans to create 150 lakh metric tons food storage capacit
Farmers
Credit flows to farmers raised from Rs 3.75 lakh Cr to Rs 4.75 lakh C
Interest subsidy for farmers who promptly repay their loans raise
from 2% to 3% thus reducing the effective Interest to 4%.
The Budget proposes to move to direct cash subsidy for fertilizer
Source: Religare Capital Market Research,
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Mutual Fund Schemes focused on Agro Sector:
Top MF schemes with returns will be provided here (pending)
Scheme Name
Tata Dividend Yield Fund - Growth
Fidelity India Special Situations Fund - Growth
Tata Contra Fund - Growth
Sundaram Rural India Fund - Growth
HDFC Arbitrage Fund - Retail - Growth
Tata Equity P/E Fund - Growth
Benchmark Derivative Fund - Growth
Tata Growth Fund - Growth
Tata Midcap Fund - Growth
SBI Magnum COMMA Fund - Growth
Sundaram SMILE Fund - Growth
NAV Launch Date 1 Month 3 Months 6 Months 1 Year 3 Years 5 YearsSince Inception
(P2P)-C
Source: MFI, Data as on 3rd March 2011, Absolute returns below 1 year, CAGR returns above 1 year
31.60
17.94
17.04
14.28
12.40
45.70
1452.69
39.53
15.89
23.04
29.59
22-Nov-04
22-May-06
14-Nov-05
12-May-06
23-Oct-07
29-Jun-04
18-Dec-04
01-Jul-94
11-Jul-05
08-Aug-05
15-Feb-05
-2.67
-0.33
-1.28
-0.14
0.57
-2.31
0.59
-3.74
-4.44
-2.78
-3.96
-8.28
-9.30
-8.06
-14.45
1.71
-8.74
1.59
-15.48
-15.18
-10.45
-17.18
-4.65
-3.81
-4.67
-9.86
4.42
-4.57
3.46
-14.58
-15.43
-8.61
-16.88
15.12
11.53
9.47
7.56
7.14
6.53
5.19
2.95
-1.73
-2.33
-2.88
10.74
5.63
5.88
-2.22
6.24
7.90
--
-1.00
-2.39
-0.46
5.09
14.29
--
9.26
--
--
16.11
6.30
7.08
4.36
12.12
12.55
20.11
13.00
10.58
7.69
6.62
25.54
6.20
8.59
8.55
16.17
19.65
MUTUAL FU
and kerosene. Kerosene and fertiliser subsidies will be 'directly
transferred' to beneficiaries. The Govt. mulls nutrient-based subsidy
policy for urea
Banks will step up direct lending to farmersTo create Rs 100cr equity fund for microfinance companies
Farm Productivity and production
Government proposes to promote organic farming methods to
improve Farm productivity
Increase allocation of Rs 400 Cr for Green Revolution
Rs 300 Cr provided to promote pulses cultivation in rain-fed areas.
Another Rs 300 Cr has been provided to promote farm product
cultivation
Allocation under Rashtriya Krishi Vikas Yojana to be raised from
Rs.6755 Cr in the current year to Rs.7860Cr50 new food parks to be implemented
Support for production of nutritious cereals like Bajra, Jowar, Ragi.
Rs 300 Cr to encourage vegetable production and higher income for
farmers
Rs 300 Cr to be allocated for enhancing oil palm production
Provision of Rs 300 Cr being made to promote production of Bajra,
Jowar, Ragi
To allocate Rs 300 Cr for fodder development
Rs 300 Cr allocation for Nutricereals for higher production through
upgradation of Technology and awareness
Food security bill to be introduced this year
Proposal to introduce self-assessment of customs duty whereinimporters and exporters will themselves assess payment of duty
Rs 5000 Cr additional corpus to SIDBI for priority sector lending
Outlook for the agro-based sectors
Better farm productivity: Improving farm productivity remains the
single most important factor for increasing the production of Food
products. With area under cultivation remaining stagnant, i
becomes imperative that the productivity should improve. This
could bring down the agro prices which in turn would enhance
margins for agro-based industries (FMCG).
Improving food storage and distribution system to reduce
wastage and fetch better pricing.
Higher disposable income for rural population based on bette
farm productivity and easier credit availability to the farmers could
lead to incremental rural demand and consumption for FMCG
consumer durables and 2-3 wheelers, farm equipmen
manufacturers among others.
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MUTUAL FUND
Target Age Group: 20 to 35 years
AGGRESSIVE MF MODEL PORTFOLIO
Asset Allocation: Equity MF : 90% - Debt MF : 10%
Large Cap MF,
30%
Mid Cap MF,
20%
Sector MF,
10%Flexi Cap MF,
30%
Liquid MF,
10%
PRIDE MUTUAL FUND MODEL PORTFOLIO
Investment Universe: High Weightage to aggressive Equity schemes
with the combination of Large Cap, Mid Cap, Sector Funds. Within
equity categories higher weight to Mid Cap / Sector Funds compare to
other types of portfolio such as Conservative.
Pride advised 2 months back to be under weight on equities while nifty
was hovering around 6200 levels. Since then in last 4 months market
has corrected significantly. Pride's Aggressive MF Portfolio has
outperformed Nifty & given lesser negative returns in the same period.
With market valuation becoming more attractive at Nifty 5400 or
around 20 trail P/E levels, we have increase around 5% in each
portfolio post correction we advice mutual fund investors to invest in
following mutual fund schemes on the regular basis.
Scheme Returns 1 Year %
Large Cap Funds
Flexi Cap Funds
Mid Cap Funds
Thematic & Sector Funds
Liquid Funds
ICICI Prudential Focused Bluechip Equity Fund - Ret - Growth
Birla Sun Life Frontline Equity Fund (plan A)
ICICI Prudential Dynamic Plan - Growth
Reliance Equity Opportunities Fund - Growth
Religare Contra Fund - Growth
ICICI Prudential Discovery Fund - Growth
Reliance Banking Fund - Growth
ICICI Prudential Liquid Plan - Growth
15.1
8.2
13.0
15.3
3.6
10.7
7.0
3 Month %
90
15
30
30
20
10
10
15
10
10
10
10
10
10
5
Recommended Allocation %Pride MF Rating Radar
Equity Funds
1
6
13
9
32
2
2
Debt Funds
76
IDFC Small & Midcap Equity Fund - Growth 11.4
32.5
103
IDFC Ultra Short Term Fund - Growth 8.157
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MUTUAL FU
Target Age Group: 36 to 50 years
MODERATE MF MODEL PORTFOLIO
Investment Universe: Balanced Weightage to Equity & Fixed Income
instruments like Debt & Liquid schemes. With correction in the market
considering current market valuations, where Nifty is at around 20 trail
P/E, equity weightage is moved to 60% & Debt / Liquid funds while
debt allocation is down to 40%.
Pride's Moderate MF Portfolio has outperformed Nifty.
Large Cap MF,
25%
Flexi Cap MF,
15%
Mid Cap MF,
10% Sector MF,
5%
Liquid MF,
30%
Income MF,
5%
MIP MF,
5%
ELSS MF,
5%
Scheme Returns 1 Year %
Large Cap Funds
Flexi Cap Funds
Mid Cap Funds
ELSS
Thematic & Sector Funds
Liquid Funds
Income Funds
MIP
Franklin India Blue chip Fund
IDFC Imperial Equity Fund (plan A)
Fidelity Equity Fund - Growth
Reliance Equity Opportunities Fund - Growth
DSP BlackRock Small and Midcap Fund - Growth
HDFC Taxsaver - Growth
ICICI Prudential Technology Fund - Growth
DSP BlackRock Liquidity Fund - Regular Plan - Growth
Religare Active Income Fund
Reliance MIP - Growth
10.9
4.5
15.6
15.3
9.3
12.3
7.5
8.1
-1.6
3 Month %
60
10
25
15
10
30
5
5
5
5
5
10
5
10
5
5
40
10
5
5
Recommended Allocation %Pride MF Rating Radar
Equity Funds
4
8
2
9
1
1
8
Debt Funds
44
1
4
28.8
IDFC Ultra Short Term Fund - Growth
Birla Sun Life Cash Manager - Growth
8.1
7.3
10
10
7
46
DSP BlackRock Top 100 Equity Fund 8.71013
Asset Allocation: Equity MF : 60% - Debt MF : 40%
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MUTUAL FUND
Target Age Group: 36 to 50 years
CONSERVATIVE MF MODEL PORTFOLIO
Asset Allocation: Equity MF : 30% - Debt MF : 70%
Investment Universe: Investors looking for safer & stable revenue
generation without taking high risk should stick to conservative MF
Model Portfolio. High Weightage to Debt & Liquid schemes,
Conservative Debt MF Schemes such as Liquid Funds. Within debt
categories higher weight to Liquid Funds compare to other types of
portfolio such as Moderate as expectations of hike in interest rates is
expected to be positive for Liquid Funds in next 3 months.
Conservative MF Model Portfolio was able to outperform Nifty with
descent returns as timely increase Debt Funds weightage gavesupport the portfolio. Asset allocation for equities increased to 30% in
this month.
Large Cap MF,
20%
Flexi Cap MF,
5%
Liquid MF,
25%
Income MF,
5%
MIP MF,
10%
ELSS MF,
5%
STP MF,
15%
Gilt LT MF,
15%
Scheme Returns 1 Year %
Large Cap Funds
Flexi Cap Funds
ELSS
Liquid Funds
Income Funds
MIP
Short Term Plans
Gilt Funds
ICICI Prudential Focused Bluechip Equity Fund - Ret - Growth
Franklin India Blue chip Fund
Birla Sun Life Dividend Yield Plus - Growth
Religare Tax Plan - Growth
HDFC Liquid Fund - Growth
Birla Sun Life Medium Term Plan - Ret - Growth
Birla Sun Life Short Term Opportunities Fund - Ret - Growth
Birla Sun Life G Sec Fund - LT - Growth (Gilt - Long Term)
15.1
10.9
13.3
9.6
7.4
7.0
7.7
4.8
3 Month %
30
5
20
5
30
5
10
15
15
5
10
5
5
70
10
5
10
10
Recommended Allocation %Pride MF Rating Radar
Equity Funds
1
4
1
4
Debt Funds
50
3
1
1
Religare Liquid Fund - Regular - Growth 7.71039
Reliance Equity Advantage Fund - Retail - Growth 9.7512
Birla Sun Life Cash Manager - Growth 7.31046
Religare MIP / MIP Plus
Religare Credit Opportunities Fund - IP - Growth
-1.2
5.4
10
5
11
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