Advise for the Wise


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Advise for the wise is monthly journal which gives you a highlight of the current market analysis in terms of gold, equity, debt and forex market. Get the overview of the entire financial market in dew slides.

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Advise for the Wise

  1. 1. ADVICE for the WISE Newsletter – MARCH 2012
  2. 2. ContentsIndex Page No.Economic Update 4Equity Outlook 8Debt Outlook 12Forex 14Commodities 15Real Estate 16 2
  3. 3. From the Desk of the CIO…Dear Investor,This calendar year, along with 4 years before it, has brought home an For example, a relatively harmless and in fact positive statement by theimportant structural feature of the modern global financial system – US Fed Chairman on the 29th February this year, regarding the cautiouslyvolatility. Of course volatility of asset prices is probably as old as any optimistic state of the economic growth, caused widespread selling ofmarket for financial securities. However, what has changed in recent commodities and emerging market equities. The underlying reason wastimes is the unprecedented growth in liquid assets and along with it the his connected statement regarding there being no immediate possibilityproportion of wealth held in easily tradable instruments. This unusually of another round of quantitative easing (QE) in US. The logic here is thathigh and ever-growing liquidity of assets has translated into higher with no QE, there will not be another bout of easy liquidity pushing assetturnover – as investors flock to some assets or flee some others from prices up. Hence many investors looked to exit the riskier assets whichtime to time. The tremendous ease of transactions means that the had their prices rise sharply after an exercise similar to quantitativeopinion or outlook can readily lead to buy-sell decisions. Why does this easing in December last year – this time in EU.matter? It does because this fundamentally entrenched feature of themodern financial system implies frequent and long-lasting deviation of The equities rally in January and most of February this year along withasset prices from their fundamental value. the emergence of caution towards the end of February, as also the sharp fall in second half of 2011 are outcomes of the same structural volatilityThis deviation is confusing in its mild form but highly corrosive in its of markets around the world. If 2003 to 2007 was the period of the greatextreme form. It has the potential to inflict large real and opportunity moderation, 2008 to 2012 definitely counts as the period of greatcosts on investors – especially the non-institutional ones. It also leads the turbulence. It is very likely that the turbulence will continue throughinvestors to miss the woods for the trees since the large movements in much of the rest of the decadeasset prices make most investors overestimate the actual volatility of the Learning to live with volatility is a bit like getting used to making aprices – often causing needless panic. The practical implication of this is conversation in a very noisy café. It is stressful to start with but one oftenthat investors often find themselves selling at the worst times, buying athighs, paying too much for very little outperformance over passive gets accustomed soon enough – adjusting the pitch and intensity of one’sindexing and so on. voice almost subconsciously. In a similar vein, building wealth through the turbulence of this period, one would do well to get into a habit ofIf this is the face of the brave new world, the investors need to filtering out noise, focusing on the task at hand and having the patiencerecalibrate their expectations, thumb-rules and investment heuristics. of almost an ascetic! 3“Advisory services are provided through Karvy Stock Broking Ltd. (PMS) having SEBI Registration No: INP000001512. Investments are subject to market risks. Please read the disclaimer on slide no.19”
  4. 4. Economic Update - Snapshot of Key Markets 120 Sensex Nifty S&P 500 Nikkei 225 As on 29th Change over Change over 115 110 Feb 2012 last month last year 105 100 95 BSE Sensex 17753 3.3% (0.4%) 90 85 80 Equity S&P Nifty 5385 3.6% 1.0% 75 Markets S&P 500 1366 4.1% 2.9% 9.30 Nikkei 225 9723 10.5% (8.5%) 8.80 10 yr Gsec 8.30 7.80 7.30 6.80 10-yr G-Sec Yield 8.20% (8 bps) 20 bpsDebt Markets Call Markets 9.05% (5 bps) 220 bps 31000 Gold Fixed Deposit* 9.25% 0 bps 100 bps 29000 27000 25000 23000 21000 19000 RICI Index 3915 4.4% (6.2%) 17000 15000 Commodity Gold (Rs./10gm) 28599 1.7 37.5 Markets Crude Oil ($/bbl) 124.02 12.5% 10.5% 56.00 54.00 `/$ 52.00 50.00 48.00 46.00 44.00 Forex Rupee/Dollar 48.94 1.52% (7.68%) 42.00 40.00 Markets Yen/Dollar 80.47 (4.8%) 1.6%* Indicates SBI one-year FD 4
  5. 5. Economy Update - Global • The Consumer Price Index for all Urban Consumers increased 0.2% in January on a seasonally adjusted basis. Over the last 12 months, the all items index increased 2.9% before seasonal adjustment. US • Total U.S. nonfarm payroll employment rose by 243,000 in January 2012. The unemployment rate decreased by 0.2% to 8.3% from an 8.5% in December 2011. Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing. • The European Central Bank released the second round of its 3-year LTRO operation on 29th February 2012, which amounted to €529.53 billion to support the banking sector and help stem the crisis. This allotment Europe was higher than the amount of €489 billion the ECB had allotted in month of December 2011. • Consumer prices in the 17 countries that use the euro rose by 2.6%(y-o-y) in January 2012 down from 2.7% in month of December 2011. • The seasonally adjusted Markit /JMMA Purchasing Managers’ Index (PMI) was at 50.5 in February, slightly down from 50.7 in January, signalling a continued, albeit marginal, improvement in manufacturing sector business conditions. Japan • Japans unemployment rate inched up to 4.6% in January from a revised 4.5% in the previous month while household spending fell by 2.3% year-on-year. Japans core consumer prices fell 0.1% in January from a year earlier, the fourth consecutive month of decline. • India’s activity in the manufacturing sector continued to expand in February, although at a slightly slower pace. The seasonally adjusted HSBC Purchasing Managers’ Index (PMI), registered 56.6 in February, Emerging slightly down from 57.5 in January.economies • China’s HSBC Purchasing Managers’ Index – a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy – registered 49.6 in February, up from 48.8 in the preceding month. 5
  6. 6. Economy Outlook - Domestic 10.0% IIP • The double-digit expansion of consumer non-durables for 8.0% the second month in a row (14.4% in November 2011 and 6.0% 13.4% in December 2011) suggests some revival in consumer spending on non-durable items, following a moderation in 4.0% food inflation. 2.0% 0.0% Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -2.0% 10 11 11 11 11 11 11 11 11 11 11 11 11 • Gross domestic product in India - Asias third-largest -4.0% economy - grew at an annual 6.1% in the third quarter. It is a -6.0% significant slowdown from 6.9% in the previous quarter and marks the fourth straight quarter of growth below 8%.• Indias industrial output recorded a slow growth of 1.8% in December from 5.9% growth in November with a • The sluggish growth can be attributed to poor performance weaker performance across all the use-based categories of the manufacturing, mining and farm sectors. The except consumer non-durables. The November growth slowdown in the manufacturing sector, coupled with decline had also benefitted from factors such as a benign base in mining and quarrying, is likely to put pressure on the effect and spurt in production levels following fewer Reserve Bank of India to cut interest rate at its mid-quarter working days in October 2011 related to the festive monetary policy review on March 15, 2012. season, amidst others.• In particular, capital goods underwent a contraction for GDP growth 8.6 the fourth consecutive month, with a steep 16.5% de- 9.0 8.1 8.4 8.3 7.8 7.7 growth in December 2011, whereas intermediate goods 8.0 6.9 displayed a contraction of 2.8% in the same month. 7.0 6.1 6.0• Basic goods and consumer durables expanded by a modest 4.0% and 5.3%, respectively, in December 2011, 5.0 suggesting that demand for final goods remains moderate. 4.0 FY10(Q4) FY11(Q1) FY11(Q2) FY11(Q3) FY11(Q4) FY12(Q1) FY12(Q2) FY12(Q3) 6
  7. 7. Economic Outlook - Domestic Growth in credit & deposits of SCBs  The Wholesale Price Index (WPI) based inflation, which has remained in double digits for almost two years,24.0% Bank Credit Aggregate Deposits declined further to 6.55% in January 2012 from 7.47% in22.0% the previous month. The moderation in January 201220.0% was led by a fall in food inflation with prices in the18.0% manufactured and primary segment falling due to good16.0% harvest.14.0%12.0%  Wholesale food prices for the month of January grew at10.0% 0.52% compared to 0.74% in December. Prices of manufactured goods rose by 6.49%, moderating from 7.41% rise recorded in December. Notably, the WPI for the month of November has been revised upwards to 9.46% from 9.11%. As on January 27, bank credit grew by 50 bps i.e. 6.5% on a y-  The Consumer Price Index, which was introduced keeping o-y basis. The aggregate deposits grew by 15.7% on a y-o-y in mind that demand-side pricing would be a better basis witnessing a decline of 150 bps as compared to last indicator of inflation stood at 7.65% for January. The new month. CPI data was launched early last year and will gradually displace WPI data as the primary indicator of inflationary trends in India We believe that if the February inflation numbers come around 10.0% 6.5%, RBI might start repo rate cuts very soon. We expect a 9.5% cumulative repo rate cut of 100 bps for this calendar year. 9.0% 8.5% 8.0% 7.5% WPI 7.0% 6.5% 6.0%* End of period figures 7
  8. 8. Equity OutlookWith monetary policy remaining extremely easy in developed part of the world and developing markets like China & India starting themonetary easing cycle, we expect 2012 to be a good year for equities with India emerging as a big outperformer.European debt markets have calmed down due to massive liquidity injection (LTRO 1) done by European central bank. Bond yields ofPIIGS countries have been coming down. This supply of liquidity has resulted in big rally in risk assets across the world. Greece hasbeen able to arrive at a deal with private bond holders and European authorities resulting in a fresh bailout package. With new LTROfacility delivering 529 billion Euros to European banks, we expect the risk-on trade to continue. Performance of Indices since the Beginning of LTRO 1 USD INR, -6.6% CRB Index, 7.2% MSCI Asia Pacific, 13.0% Peformance (%) Nifty, 12.5% FTSE, 10.1% DowJones, 7.2% DXY, -1.9% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 8
  9. 9. Equity OutlookRBI has started the reversal of the tight monetary policy with a 50 bps cut in cash reserve ratio (CRR). We would expect a further CRRcut in the March policy. We believe that if February inflation number comes around 6.5%, RBI might start repo rate cuts very soon.We expect a cumulative repo rate cut of 100 bps for this calendar year. The biggest beneficiaries of the reversal in policy would beinterest rate sensitive sectors like banks, autos and capital goods.Union budget would be tabled on 16th March. We expect the finance minister to move towards Fiscal consolidation by capping fiscaldeficit. Expenditure on various social sector programme and subsidies might be raised by a limited amount. Revenue increasingmeasures like Increase in excise duty and widening of service tax net are expected. Government might also focus on acceleratinginfrastructure spending particularly for power segment. The government might also address issues like fuel linkage andenvironmental clearance for coal mines. Also, we expect removal of import duty for coal. These measures would be positive forpower and infrastructure sectors.We believe that going forward GDP growth will bounce back to 7-7.5% with monetary easing resulting in a boost to infrastructureactivity. We expect that inflation would come down this year and could average around 7% leading to nominal growth of 14-15%.That would lead to corporate earnings growth of 15%. We expect Sensex earnings of INR 1300 for FY13 and around 1500 for FY14.We arrive at a year end Sensex target of 22500 based on 15 times FY14 earnings which would give an upside of 30% from currentlevels. 9
  10. 10. Sector View Sector Stance Remarks The USD 1 trillion Infra opportunity is hard to ignore. However, The significant slowdown in order inflow activity combined with high interest rates has hurt the sector. Now since the interest rate cycle has E&C Overweight started to reverse, we have turned more constructive on this space. Expected budget push will also be a trigger. Financial sector is undeniably the lubricant for economic growth. Whether the growth comes from consumption or investments, credit growth is inevitable. Being a well regulated sector, BFSI in India has BFSI Overweight good asset quality and capital adequacy ratios. The reversal of the interest rate cycle will assist in managing asset quality better and would lead to increase in credit growth We believe in the large sized opportunity presented by Pharma sector in India. India’s strength in generics is difficult to replicate due to quality and quantity of available skilled manpower. With theHealthcare Neutral developed world keen to cut healthcare costs, and a vast pipeline of drugs going off-patent, Indian Pharma players are at the cusp of rapid growth. We would bet on the opportunity in Generics and CRAMS space We prefer “discretionary consumption” beneficiaries such as Cigarettes and branded garments, as the FMCG Neutral growth in this segment will be disproportionately higher vis-à-vis the increase in disposable incomes. The regulatory hurdles, competitive pressures and leverage prevent any return to high profitability levels Telecom Neutral in the short to medium term. However, incumbents have started to increase tariffs slowly and we believe that consolidation will happen sooner than expected. 10
  11. 11. Sector View Sector Stance Remarks While US and European customers of Indian IT companies are in good health, Order inflows might slow IT/ITES Neutral down in near term. However, in the next few quarters big rupee depreciation will provide cushion to IT companies earnings . Demand outlook remains robust with strong earnings growth. Raw material prices have started comingAutomobiles Neutral down which would boost margins. We are more bullish on two-wheeler and agricultural vehicles segment due to lesser competition and higher pricing power. Commodity prices have corrected significantly over the last few months due to concerns about growth Metals Neutral in developed parts of the world. We believe the commodity prices will bounce back once growth recovers and hence would be positive on industrial metals space. Cement demand will certainly grow over the next three years. With pricing power returning, e are Cement Neutral becoming constructive on this space. We like the regulated return characteristics of this space. This space provides steady growth inPower Utilities Neutral earnings and decent return on capital. We would stay away from oil PSUs, due to issues of cross subsidization distorting the underlying Energy Underweight economics of oil exploration and refinery businesses. 11
  12. 12. Debt Outlook 11.0 9.30 10.5 Yield curve 10-yr G-sec yield 10.0 8.80 9.5 9.0 8.30(%) 8.5 8.0 7.80 7.5 7.30 7.0 6.5 6.80 6.0 5.3 0.0 0.9 1.8 2.7 3.5 4.4 6.2 7.1 8.0 8.8 9.7 10.6 11.5 12.4 13.3 14.1 15.0 15.9 16.8 17.7 18.5 19.4 • The 10 year benchmark G–Sec yield decreased by 8 bps in February to close at 8.20%. • The 10-year G-sec yields were rather volatile and started dipping in the month end due to the GDP figures which came in at 6.1%, below market expectations. The LTRO announcement though helped the yields to jump back and end at 8.24% on 1st March 2012. • The AAA rated corporate bonds are giving an yield of around 10.75%. 12
  13. 13. Debt Strategy Category Outlook Details With the pause by RBI and the expected trend reversal of the interest rates, we would not recommend investment in ShorterShort Tenure term debt funds unless money necessarily needs to be parked for Debt the shorter term by the investor. However, the ST funds still have high YTMs (9.5% – 10%) providing interesting investment opportunities to clients for the shorter term. Some AA and select A rated securities are very attractive at the Credit current yields. A similar trend can be seen in the Fixed Deposits also. Tight liquidity in the system has also contributed to widening of the spreads making entry at current levels attractive. With the expected trend reversal in the interest rates, we would strongly recommend investment in Longer term papers. These, whileLong Tenure being available at attractive yields, also provide an opportunity for Capital appreciation due to a decrease in interest rates. Hence, these Debt would be suitable for both - investors who may want to stay invested for the medium term (exiting when prices appreciate) and those who would want to lock in high yields for the longer term. 13
  14. 14. ForexRupee movement vis-à-vis other currencies (M-o-M) Trade balance and export-import data 100 0 Export Import Trade Balance (mn $)8.00% 80 -5000 60 -100006.00% 40 -15000 204.00% 0 -20000 -20 -250002.00% • India’s exports grew 10.1% to $25.35 billion in January0.00% USD GBP EURO YEN 2012, compared to $23.02 billion in the same year-ago-2.00% month, while imports were up 20.25% at $40.10 billion translating into a trade deficit of $14.75 billion. 140000• Indian rupee posted a second straight month of gains against Capital Account Balance the US Dollar. The rupee appreciated by 1.52% against the 90000 dollar in month of February. 40000• However, surging crude oil prices and their cascading impact on inflation and growth in India, which imports about 80 per -10000 FY 10 (Q3) FY 10 (Q4) FY 11 (Q1) FY 11 (Q2) FY 11 (Q3) FY 11 (Q4) FY 12 (Q1) FY 12 (Q2) cent of its oil requirements, is expected to limit the rise in the rupee. • The projected capital account balance for Q2 FY 12 is at Rs. 84,400 Cr. while the Q1 figure was revised upwards to• Rupee depreciated against Euro due to expectation during Rs.1,02,100 Crores. the month that European Central Bank (ECB) will inject • We expect factors such as higher interest rates to attract nearly half a trillion Euros into banks in three-year more investments to India. Increased limits for investment refinancing operation. by FIIs would also help in bringing in more funds though uncertainty in the global markets could prove to be a dampener. 14
  15. 15. Commodities Having staged a good up move during most of February, gold went 30000 for a sharp selloff following comments from the Feb Chairman Ben Gold 28000 Bernanke. The expectation of QE3 that the metal market has been pricing did not materialize the way the markets were expecting, 26000 thereby denting its safer haven status, while ECB announcing LTRO2Precious postponed the default events in the Euro zone which triggered profit 24000 taking amongst the bulls. On the flip side, any such sharp down fall is 22000 Metals currently supported by the physical off take. But, given the festive 20000 and marriage season behind us, expect weakness in the counter. 18000 Nevertheless, gold was behaving as we expected and as quoted 31/Jan/11 31/Dec/10 31/Dec/11 31/Mar/11 31/May/11 28/Feb/11 30/Apr/11 31/Jul/11 30/Sep/11 30/Nov/11 31/Oct/11 30/Jun/11 31/Aug/11 earlier, we expect softness in during the 1HCY2012. Expect range bound markets with a negative bias. 130.0 As the US and Europe are out of the woods so far, the expectation of Crude 125.0 economic revival pushed Crude Oil prices further higher. Iran issue continues to be centre of focus, while U.S. officials escalated 120.0 warnings that the nation may join Israel in attacking Iran to stop theOil & Gas 115.0 development of nuclear weapons. Despite, Saudi Arabia deploying 110.0 the most oil rigs in four years as it prepares for possible shortages caused by tension with Iran, the recent rumours of Saudi pipeline 105.0 explosion further pushed prices higher. We continue to maintain our 100.0 bullish stance on oil and expect oil to trade at an elevated levels 95.0 with a possibility of spike moving forward. 90.0 31-… 31-… 28-… 31-… 30-… 31-… 30-… 31-… 31-… 30-… 31-… 30-… 31-…
  16. 16. Real Estate Outlook - IAsset Classes Outlook In the residential space, low sales volumes have led to a sharp decline in the absorption rate from 21.4% in Q1 2011 to 11.5% in Q3 2011. However, strong pre-launch sales have kept the developers far from any correction. Though sales have gone down to almost 35% as compared to last year, no correction has been witnessed in the prices. The over-supplied locations remain stagnant and are expected to remain so for the next two quarters. In cities like Pune, NCR, Hyderabad, Chennai and Bangalore entry points in the range of Rs. 3000 – Rs. 4600 per Residential Sqft are still valued by first time home -buyers. Infrastructure development and the new airports in these cities have supported the residential development. On an average, prices in this segment still remain affordable. Mumbai stands tall with prices at the peak in an over-supplied market also. Corrections are being reported by media, however not being witnessed on ground level. The retail investors (second home buyers) and HNI investors are postponing their decision due to expectations of price correction. Average q-o-q rental growth in 3Q11 was recorded at 2.5%. Mumbai SBD BKC was among the most expensive markets and Bangalore and Chennai among the least expensive in Asia Pacific, on the basis of Net Effective Rents. Among the fastest growing office market in the world, India is constructing 100 million Sqft every 7-10 quarters. Office stock is expected to become 500 million Sqft by 2015. The Net Absorption is expected to grow from 30.5 million Sqft in 2010 to 39.1 million Sqft in 2013. Absorption rate has been recorded at 13.3% in 3Q11. 8.5 million Sqft of office space was absorbed in 3Q11 compared to 10.5 million sq ft in 2Q11.Commercial/IT Still in the shadows of over-supply and cautious expansion approach by corporates, this segment has gone through a correction. Rates per Sqft have seen almost 30% down-trend and is expected to be stagnant for the coming 2-3 quarters. After this correction we believe the segment is bottoming out and is the best time to buy for companies looking at long term holding of real estate office space. With signs of recovery in the global economy, the Indian office markets are expected to be nearing the end of the downturn. Despite improving demand conditions, vacancies are rising in the short term due to massive infusion of office space. Markets of Bangalore, Mumbai and NCR-Delhi are leading the property cycle as rentals have started to increase in these markets. 16
  17. 17. Real Estate Outlook - II Asset Classes Outlook The FDI allowance has given lot of impetus to this sector. Since 2009 retail has seen a major transformation in all its business aspects and has been built to suit Indian way of consumerism. Low cost, wide reach, more variety, less innovation, close existence with competition, maximizing bottom line than top-line approach have been making the retailers smarter. In the retail space, unorganized markets are still a preferred choice. Most high-street locations are still expensive. Investors prefer Hi-street locations than malls since they would always have capital appreciation due to dearth of available space. Retail Of 9.9 mn sq ft forecasted for absorption in 2011, 7.1 mn sq ft has already been absorbed till 3Q11 and another 1.3 mn sq ft is pre-committed. The northern regions of India rate high on propensity to consume followed by the western, eastern and southern regions. Industrial towns are similar to each other in consumer preferences and socio-economic & demographic profiles. Most of them remain equally under-served despite recent mall developments in the last couple of years. The trend of investment in land is still nascent since lack of transparency and unclear national land acquisition policy/rules makes it tough for the organized players/investors to transact. However this seems to be a very interesting time to buy land which is being traded more as a commodity now. It is getting absorbed fast. Land Land sees immense opportunity since it can be used as a tangible asset and is the most credible pledge against business. With the growing commitment of the Government in improving infrastructure (roads, bridges, airports, rail metros), in the last 5 years many far flung areas now have very good connectivity to the CBD locations.The IC note is proposed to be presented every quarter 17
  18. 18. Why Karvy Private Wealth? Open Architecture – Widest array of products We are an open-architecture firm at two levels – asset class level and product level : • Offering COMPREHENSIVE choice of investing across all asset classes • Offering EXTENSIVE choice of multiple products from different product providers under each asset class Intensive Research We closely track the historical performance across asset classes, sub-asset classes and product providers to identify, evaluate and recommend investment products (KPW’s or third-party). We have our own proprietary methodology for evaluating products; for product providers, we also note the investment style and risk management philosophy. Our comprehensive analysis determines truly exceptional performers to be added to your portfolio Honest, unbiased adviseGroup-wide, we have no Mutual Fund or Insurance products of our own unlike most of the financial services groups (banks orbroking houses), who are doing wealth management. Neither do we have exclusive tie-up with any single insurance company likeall banks do. The KPW 3-S Service promise: When you become a Client of KPW, besides getting intelligent & practicable Investment Advice, you get the benefit of “The KPW 3- S Service Promise” : • Smooth and Hassle Free – Attention, Service & Convenience • Sharp and proactive – Portfolio monitoring and tracking • Smart –Incisive insights on markets and Investment products Pedigreed Senior Management Team A talented team of leaders with global and Indian experience, having a unique blend of backgrounds of wealth management, private equity, strategy consulting and building businesses powers Karvy Private Wealth and its operations. 18
  19. 19. DisclaimerThe information and views presented here are prepared by Karvy Private Wealth(a division of Karvy Stock Broking Limited) or other Karvy Groupcompanies. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for theaccuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it.The investments discussed or recommended here may not be suitable for all investors. Investors must make their own investment decisions based ontheir specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon anyinformation or analysis mentioned here, investors may please note that neither Karvy nor any person connected with any associated companies ofKarvy accepts any liability arising from the use of this information and views mentioned here.The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above-mentioned companies from time totime. Every employee of Karvy and its associated companies are required to disclose their individual stock holdings and details of trades, if any, thatthey undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or othersecurities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are furtherrestricted to place orders only through Karvy Stock Broking Ltd.The information given in this document on tax are for guidance only, and should not be construed as tax advice. Investors are advised to consult theirrespective tax advisers to understand the specific tax incidence applicable to them. We also expect significant changes in the tax laws once the newDirect Tax Code is in force – this could change the applicability and incidence of tax on investmentsKarvy Private Wealth (A division of Karvy Stock Broking Limited) operates from within India and is subject to Indian regulations.Karvy Stock Broking Ltd. is a SEBI registered stock broker, depository participant having its offices at:702, Hallmark Business plaza, Sant Dnyaneshwar Marg, Bandra (East), off Bandra Kurla Complex, Mumbai 400 051 .(Registered office Address: Karvy Stock Broking Limited, “KARVY HOUSE”, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad 500 034)SEBI registration No’s:”NSE(CM):INB230770138, NSE(F&O): INF230770138, BSE: INB010770130, BSE(F&O): INF010770131,NCDEX(00236,NSE(CDS):INE230770138, NSDL – SEBI Registration No: IN-DP-NSDL-247-2005, CSDL-SEBI Registration No:IN-DP-CSDL-305-2005, PMS Registration No.:INP000001512” 19
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