India Equities – Upgrade could continue        Outlook 2013        Right Horizons PMS              YOUR LOGOFor private ci...
Agenda / Table of contentsWhy we could be closer to the take off point? 1        A review of the asset markets in 2012 2  ...
1        2012: A year in review          Equities have been a runaway success in 2012  Though equities have had a stellar ...
2        The dud period; compared with earlier dudThe seven year period 1996-2003 was classic dud where the stock markets ...
3        Where are we compared with our peer set? Indian Fundamentals remain strong 1. Barring the “expensive defensives”,...
4        Outlook for 2013 and beyond (Summary)    Nifty target of around 6800 by December 2013, implying a 16% annual upsi...
4        Outlook 2013 – all the brass tacks                                                   Valuations appears cheap eve...
4        Outlook 2013 – all the brass tacks                        …cont’d                                              Th...
5        Inflexion point: closer than we might think! The Lessons from 2003    Bull markets in the past have all but been ...
6        Right Horizons PMS portfolios – wealth creation vehiclesRight Horizons – Portfolios  1       Nifty Plus Portfolio...
1       Nifty Plus Portfolio                                 Double Click to launch                                       ...
2       Flexicap Portfolio                               Double Click to launch                                          Y...
3       Capital Protection Portfolio – (Open for subscription - hurry)                                                    ...
4       Super Value Portfolio                                  Double Click to launch                                     ...
DisclaimerThe information contained herein has been obtained from reports secured from third parties, publicly available s...
Questions?                               Q   ti   ?                               Reach us:                               ...
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Right Horizons PMS India 2012 Review & Outlook 2013

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Right Horizons PMS India 2012 Review & Outlook 2013

  1. 1. India Equities – Upgrade could continue Outlook 2013 Right Horizons PMS YOUR LOGOFor private circulation only
  2. 2. Agenda / Table of contentsWhy we could be closer to the take off point? 1 A review of the asset markets in 2012 2 The dud period, compared with earlier duds 3 Where are we as compared to peers 4 What is the outlook for 2013 and beyond 5 How are we closer to the inflection point? 6 Right Horizons PMS – why is there no traction? g y YOUR LOGOPage 2For private circulation only
  3. 3. 1 2012: A year in review Equities have been a runaway success in 2012 Though equities have had a stellar run in 2012, 2012 the returns has been volatile at Asset return in 2012 in India best. 40.00% Rise in equities has been on the back of p poor p performance in 2011 ( (-24%) and ) 30.00% hence majority could have missed the 20.00% bus. 10.00% Debt returns have been higher than in those witnessed i 2011 (7.5%) th it d in (7 5%) 0.00% Equities - Equities - Bond - Bond - Gold - Real Gold performed badly as compared with Nifty CNX Mid Short Long ETF Estate - Cap Term Term Tier I earlier 3-5 year time frame and returns (GILT) from real estate are showing signs of investor fatigue. YOUR LOGOPage 3For private circulation only
  4. 4. 2 The dud period; compared with earlier dudThe seven year period 1996-2003 was classic dud where the stock markets did provide for highvolatility, negative real returns and were highly frustrating to the average investor. 2008-2012 appears tobe one such classic dud period where the volatility remained high, negative real returns ensued andconsiderable anxiety was created. Dud periods are followed by heavy bull periods where wealthcreation is astounding 2003-2007 was one such period. Investor should consolidate their position in dud astounding. periodperiod to reap benefits during Bull ones. ? YOUR LOGOPage 4 For private circulation only
  5. 5. 3 Where are we compared with our peer set? Indian Fundamentals remain strong 1. Barring the “expensive defensives”, which is a Asian wide syndrome, the relative cheapness of other sectors – notably investment/CAPEX driven ones in the region is a mild positive. 2. Bigger Asian markets such as China, Korea and Australia are cheaper than India on this metric, however, fundamental factors point to worse off situation in these countries relative to India For India. Source: Credit Suisse December 2012 Asia Equity Strategy report. report instance, slow down in China appears to be far deeper India still in the relatively cheaper territory than that compared with India. Consumer confidence indicators are also worse off in China than India – Relative value of the Asian region on the basis of P/B versus R E valuation model. M t of th hi h RoE l ti d l Most f the higher explaining the relative cheapness and inability for a valuation of the countries are driven by the rapid turnaround on a relative basis. “expensive defensives” sectors. The same is true for India as well. YOUR LOGO Page 5For private circulation only
  6. 6. 4 Outlook for 2013 and beyond (Summary) Nifty target of around 6800 by December 2013, implying a 16% annual upside - Factors taking Nifty higher to these levels include - Lower cost of borrowing levels than 2011 & 2012 by nearly 100-150 bps, driven by reversal of the yields - Higher liquidity conditions, generally healthy business environment and easier availability of credit - Strong consumption due to end-use demand from staples, consumer discretionary and durables. - Sectors which have underperformed in the medium term could start to turn around. Read – financials around financials, consumer discretionary, global cyclical and infrastructure. The radical index levels would be reached by 2015, led by catalyst such as: - Strong policy level changes driven by fresh mandate in 2014, strong thrust on growth - Better corporate balance sheet and twin impact of low debt/low interest payouts and strong earnings - Strong investments across a spectrum of growth sectors, infrastructure, energy, power, industrials and housing. YOUR LOGOPage 6For private circulation only
  7. 7. 4 Outlook 2013 – all the brass tacks Valuations appears cheap even with all those downgrades: It appears that most of the earnings downgrades have been factored in for the FY14 earnings. At the current level too; the 1 year forward multiple does not exceed the long period average, which is very reasonable given the consistent, through lower, growth in earnings. earnings Long period average valuations and cheaper relative value is compelling for investors: 1. Improving earnings profile and a long period average valuations provide comfort to investors 2. Average premium over emerging markets also provide lot of scope for upside. upside YOUR LOGOPage 7For private circulation only
  8. 8. 4 Outlook 2013 – all the brass tacks …cont’d The consumption story has just begun: Domestic cyclical could take the lead in the upcoming upgrade season, followed by defensives. The biggest let down has been during the ‘dud period’ (2008-2012) from the Infrastructure & cap goods sector due to a variety of issues, largely internal. The uptick on this segment could provide the boost to this segment. Global cyclical could remain the ‘wild card’. Domestically this is the most under-rated segment. d t d t Expensive defensives, could lose favor if the re-rating begins. YOUR LOGOPage 8For private circulation only
  9. 9. 5 Inflexion point: closer than we might think! The Lessons from 2003 Bull markets in the past have all but been gradual and steady unlike ‘shock & awe’ bear phases have, but, steady, shock awe phases. Bull markets are normally preceded by sustainable bond rallies and cooling of yields. The general level of inflation is also lower Bull markets start with defensives getting expensive and higher risk appetite for rate sensitives beginning sensitive s to gather momentum. YOUR LOGOPage 9For private circulation only
  10. 10. 6 Right Horizons PMS portfolios – wealth creation vehiclesRight Horizons – Portfolios 1 Nifty Plus Portfolio 2 Flexicap Portfolio 3 Capital Protection Portfolio – December 2012 (hurry now) 4 Super Value Portfolio YOUR LOGOPage 10For private circulation only
  11. 11. 1 Nifty Plus Portfolio Double Click to launch YOUR LOGOPage 11For private circulation only
  12. 12. 2 Flexicap Portfolio Double Click to launch YOUR LOGOPage 12For private circulation only
  13. 13. 3 Capital Protection Portfolio – (Open for subscription - hurry) Double Click to launch YOUR LOGOPage 13For private circulation only
  14. 14. 4 Super Value Portfolio Double Click to launch YOUR LOGOPage 14For private circulation only
  15. 15. DisclaimerThe information contained herein has been obtained from reports secured from third parties, publicly available sources andRight Horizons, its affiliates, subsidiaries and/or Group companies take no responsibilities – express or implied forinaccuracies contained herein.This document is meant for the use of the intended recipient only. Though dissemination to all intended recipients issimultaneous, not all intended recipients may receive this document at the same time. This document is neither an offer norsolicitation for an offer to buy and/or sell any securities mentioned herein and/or official confirmation of any transaction.This document is provided for assistance only and is not intended to be, and must not be taken as, the sole basis for aninvestment decision. The user assumes the entire risk of any use made of this information. Each recipient of this documentshould make such investigation as he deems necessary to arrive at an independent evaluation, including the merits and risksinvolved, for investment in the securities referred to in this document and should consult his own advisors to determine themerits and risks of such investment investment.The investment discussed or views expressed may not be suitable for all investors. This document has been prepared on thebasis of information obtained from publicly available, accessible resources. Right Horizons has not independently verified allthe information given in this document. Accordingly, no representation or warranty, express or implied, is made as toaccuracy, completeness or fairness of the information and opinion contained in this document. y, p pThe information given in this document is as of the date of this document and there can be no assurance that future resultsor events will be consistent with this information. Though Right Horizons endeavors to update the information containedherein on reasonable basis, Right Horizons, its associate companies, their directors, employees, agents or representatives(“Right Horizons and its affiliates”) are under no obligation to update or keep the information current. Also, there may beregulatory, compliance or other reasons that may prevent us f l li h h from d i so. doingRight Horizons and its affiliates expressly disclaim any and all liabilities that may arise from information, error or omission inthis connection. Right Horizons and its affiliates shall not be liable for any damages whether direct, indirect, special orconsequential, including lost revenue or lost profits, which may arise from or in connection with the use of this document.This document is strictly confidential and is being furnished to you solely for your information. This document and/or any informationportion thereof may not be duplicated in any form and/or reproduced or redistributed without the prior written consent ofRight Horizons. YOUR LOGOPage 15For private circulation only
  16. 16. Questions? Q ti ? Reach us: contactus@righthorizons.com +91 80 41209582 +91 22 3225 2864 YOUR LOGOPage 16For private circulation only
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