Advice For The Wise : September'2011


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Global economic developments remained in a sort of suspended animation through last month–especially coming on the back of the recent months of significant turbulence.

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Advice For The Wise : September'2011

  1. 1. ADVICE for the WISE Newsletter –September’11
  2. 2. ContentsIndex Page No.Economic Update 4Equity Outlook 8Debt Outlook 11Forex 14Commodities 15Real Estate 17 2
  3. 3. From the Desk of the CIO Dear Investor, We had suggested a few opportunistic strategies to benefit from the market movement across different asset classes as Global economic developments remained in a sort of suspended well as amongst stocks. Most of these have generated animation through last month – especially coming on the back of positive returns – including the strategy to be invested in Gold the recent months of significant turbulence. This was a welcome and Nifty ahead of the macroeconomic developments in the relief as most asset markets experienced relatively stable state in developed economies as well as being long in Coal India and August. While day to day volatility continued across equities, debt other mining stocks with a hedge through opposite position and gold, there was no definitive directional change. in Nifty. We continue to advise on similar short term This is driven in large parts by the actual absence of material strategies – with focus on metal stocks this month in one idea change in the fundamentals in the recent weeks. While data and equities plus gold in another. continues to pour in from all sides including US employment, European debt programs and Indian GDP growth, none of these One of the key findings of behavioral finance is the loss has any significantly better or worse information than what is aversion amongst human investors. A loss of a certain amount already known. Even the much awaited Jackson Hole speech of the psychologically hurts us lot more than a gain of similar US Fed chairman produced another inconclusive input to the amount. Similarly a real loss through action is more decision making of investors globally. bothersome than opportunity loss through inaction. This produces interesting and quite sub-optimal distortions in the We maintain our cautious short term and positive medium term typical investor’s investment decisions. As a first step, we can outlook on Indian equities. However, sectoral preferences have do well to recognize these biases and almost pre-empt them shifted in the last few months from the domestic-interest-rate- while making decisions. A timely example would be to neutral globally oriented sectors like IT towards safer bets like remember that the short term losses in equities are paper FMCG and Pharma. We also continue to advise our clients to have losses till we book them. While we live through the roller downside protection on their equity portfolios through 5%-8% coaster which may bring us some mental pain even if the net out-of-the-money put options on Nifty. returns in a year’s time are positive, what finally matters is the real money in the bank – which increases nevertheless!“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.20” 3
  4. 4. Economic Update - Snapshot of Key Markets Sensex Nifty 140 S&P 500 Nikkei 225 As on31st Change over Change over 130 Aug 2011 last month last year 120 110 BSE Sensex 16677 (8.4%) (7.2%) 100 Equity S&P Nifty 5001 (8.8%) (7.4%) 90 80 markets S&P 500 (6.1%) 15.6% 1213 Nikkei 225 8954 (8.9%) 1.5% 8.80 8.30 10 yr Gsec 7.80 7.30 10-yr G-Sec Yield 8.32% (14 bps) 35 bps 6.80 30-Aug-10 30-Nov-10 31-Dec-10 31-Aug-11 31-Oct-10 31-May-11 31-Jul-11 30-Sep-10 28-Feb-11 31-Mar-11 31-Jan-11 30-Jun-11 30-Apr-11Debt Markets Call Markets 8.05% 105 bps 290 bps 29000 Fixed Deposit* 9.25% 0 bps 250 bps 27000 25000 23000 21000 19000 RICI Index 4024 (0.2%) 30.0% 17000 Gold 15000 Commodity Gold (`/10gm) 26761 15.3% 41.5% markets 48.00 Crude Oil ($/bbl) 116 (0.3%) 53.1% 47.00 46.00 `/$ 45.00 44.00 43.00 Forex Rupee/Dollar 46.02 (4.0%) 2.3% 42.00 30-Aug-10 31-Dec-10 31-Aug-11 31-Oct-10 30-Nov-10 31-May-11 31-Jul-11 30-Sep-10 28-Feb-11 31-Mar-11 30-Jun-11 31-Jan-11 30-Apr-11 markets Yen/Dollar 76.75 1.4% 10.5%* Indicates SBI one-year FD 4
  5. 5. Economy Update - Global • With S&P lowering the long-term U.S. credit rating from AAA to AA-plus, the Conference Board Consumer Confidence Index, which had improved slightly in US July, plummeted in August. The Index now stands at 44.5, down from 59.2 in July. • The employment index slipped to 51.6, its lowest since September 2010, unemployment rate being 9.1% • Euro Area’s Markit composite purchasing managers index fell to 50.7 from 51.1 in July inching closer to the contraction phase. The final August manufacturing PMI Europe showed a contraction in growth, while the final services PMI slipped to a 23- month low of 51.5 from a July reading of 51.6. • Unemployment rate in the Euro zone is at 10% • Moodys lowered Japans credit rating by one notch to Aa3, due to the frequent changes in administration, weak prospects for economic growth and its recent Japan natural and nuclear disasters. • Japanese exports dropped by 3.3% more than expected during July • Japan’s unemployment rate rose to 4.7% in July ’11 from 4.6% in June ’11 • The HSBCs Services Purchasing Managers Index (PMI) slid to 50.6 in August 2011 from 53.5 in July 2011 Emergingeconomies • The GDP of China is expected to be at 9.7% for the quarter. 5
  6. 6. Economy Outlook - Domestic16.0% IIP monthly data • The GDP growth rate for Q1 FY12 came in at 7.7%, the14.0%12.0% weakest in last 6 quarters. The growth was seen at 7.8% in10.0% the last quarter. The economic growth for FY11 was 8.5% 8.0% backed by improved farm output and growth in the 6.0% services sector. 4.0% 2.0% • While the manufacturing sector grew 7.2 percent in April- 0.0% June from a year earlier, construction was a dark spot in Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov Dec 10 Jan 11 Feb 11 Mar Apr 11 May Jun 11 10 11 11 the data, rising just 1.2 percent annually, down from 7.7 percent a year earlier, as higher interest rates dampened • Industrial output as measured by the Index of Industrial the housing market and big-ticket projects were plagued by Production (IIP) increased at an unexpected rate of 8.8% delays in approvals. Mining output grew 1.8 percent, in June from an upward revised number of 5.9% in May. This data was according to the new base year (2004/05), compared with 7.4 percent a year ago while Financing, new components and weightings. This growth was insurance, real estate and business service grew 9.1 percent pushed up by capital goods, manufacturing, basic goods, versus 9.8 percent a year ago. mining and electricity. • A steady rise in interest rates combined with stubbornly high inflation would impact demand and credit sensitive • During the month, the capital goods sector growth sectors making a growth target of 8% difficult to achieve. surged by 37.7 percent from the 3.7 last June. The basic goods also rose by 7.5 percent from the 3.7 percent of 10.0 GDP growth June last year, while intermediate goods fell by 1.9 9.0 percent from 8.5 for the corresponding month last year. 8.0 7.0 • The IIP figures have been very volatile in the last year. We believe that monthly indicators and IIP in isolation 6.0 may not a very efficient way of indicating long term 5.0 growth. We expect the growth to eventually moderate 4.0 out though high input costs may also be a dampener for FY10(Q2) FY10(Q3) FY10(Q4) FY11(Q1) FY11(Q2) FY11(Q3) FY11(Q4) FY12(Q1) manufacturing. 6
  7. 7. Economic Outlook - Domestic Growth in credit & deposits of SCBs • Inflation as measured by WPI decreased Bank Credit Aggregate Deposits marginally to 9.22% in July from 9.44% in June30.0% ‘11. The number for May was revised upwards25.0% to 9.56% from an earlier estimate of 9.06%. The20.0% decrease was driven by marginally lower food15.0% and fuel costs which decreased to 8.19 (from10.0% 8.38% in June) and 12.04% (from 12.27 in June) 5.0% respectively. Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 • With an expected decrease in the fuel prices • Bank credit growth deceased to 19.3 percent in July and the monetary tightening stance by RBI, we from 21.9 percent in June* while Deposits grew by do expect WPI inflation numbers to moderate 18.1 percent compared to 20.4 percent in June 2011. out eventually. • On account of the increasing interest rates, some 10.5% moderation has been seen in the credit demand last 10.0% Wholesale Price Index month. Persistently high inflation may trigger a rate 9.5% hike in the coming months increasing the borrowing 9.0% costs further. 8.5% 8.0% 7.5% • Moderation in the credit offtake is expected to 7.0% continue in the coming months.* End of period figures 7
  8. 8. Equity OutlookThe month of August witnessed the downgrading of US sovereign rating by S&P and renewed concerns on the fiscal health of euro zonecountries. This lead to huge bouts of volatility across the globe with equities undergoing a significant correction. On the domestic front,as political energies were spent on addressing the anti-corruption movement, economic reforms have again moved away fromgovernment’s radar screen. Indian markets saw significant redemption pressure from FIIs with a total outflow of Rs 12,500 crore.Standard & Poor(S&P) downgraded the U.S. credit rating from AAA to AA+ in the first week of August. S&P expressed concern about thelong term sustainability of US debt and the political wrangling during the debt limit enhancement negotiations ahead of next year’spresidential election. Growth continues to weaken in US with Q2 GDP number coming in below consensus expectations.So far, there has been no announcement regarding the coming of Quantitative Easing (QE 3) although Fed Chairman continues tomention that Fed has several tools available at their disposal to spur growth and they will use it as and when required. Central bank’spolicy panel will be having a two day meet in September where they will take a stock of the economy. For the time being, they expectthe fiscal policy to play more proactive role. So, all eyes are now on President Obama’s speech in September as he is expected toannounce some stimulus measure that could lead to job creation and continuation of tax benefits to individual tax holders.In Europe, the fiscal situation of PIIGS countries continues to be fragile and it would require constant support from the European centralbank in the short to medium term. Growth continues to weaken in Germany and France. Last month saw fresh turbulence coming up indebt markets of Italy & Spain. European governments could increase the size of European Financial stability fund (EFSF) in the months tocome and continue to buy sovereign bonds of Peripheral Eurozone countries which could help stabilize the debt markets. A durablesolution to the sovereign debt crisis still needs to be found.In India, Q1 GDP data has come at 7.7%, slightly above expectations. We believe that Q2 data will be softer and could be closer to 7%.RBI seems to be coming to an end of its interest rate tightening cycle although it could increase repo rates further by 25 bps in its policyreview on 16th September. We expect growth to recover in the second half of this fiscal with some revival in capital formation activity.The recent correction has brought the equity valuation down to very attractive levels. With inflation and interest rates expected to peakout in the next three months, the second half of this fiscal should be much better for Indian equity. Although short term volatility maycontinue due to adverse global factors, we believe it is a great time to go out and start building a long term equity portfolio. 8
  9. 9. Sector Outlook Sector Stance Remarks We believe in a 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 the developedHealthcare Overweight 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 theFMCG Overweight growth in this segment will be disproportionately higher vis-à-vis the increase in disposable incomes. 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 hasBFSI Neutral good asset quality and capital adequacy ratios. Despite the increasing in interest rates, we believe banks will be able to pass on higher cost of funds to clients as demand remains strong. Demand outlook remains robust with strong earnings growth despite raw material price hikes andAutomobiles Neutral raging competition. We are more bullish on commercial vehicle and agricultural vehicles segment due to lesser competition and higher pricing power. The USD 1 trillion Infra opportunity is hard to ignore. We believe Power sector to be a better play over other sub sectors such as ports, roads and telecom infrastructure, because of favorable economicsE&C Neutral under PPP model. Within power, we like the engineering companies over utilities, T&D and other infrastructure owners because of their superior profitability and better competitive dynamics. 9
  10. 10. Sector Outlook Sector Stance Remarks The regulatory hurdles, competitive pressures and leverage prevent any return to high profitabilityTelecom Neutral levels in the short to medium term. However, incumbents have started to increase tariffs slowly and we believe that consolidation will happen sooner than expected. Commodity prices are coming under pressure due to concerns about growth in developed partsMetals Underweight of the world. Hence a cautious stance is recommended We would stay away from oil PSUs, due to issues of cross subsidization distorting the underlyingEnergy Underweight economics of oil exploration and refinery businesses. IT space might come under pressure due to continued concerns about growth in developed partsIT/ITES Underweight of the world. While US and European customers of Indian IT companies are in good health, Order inflows might slow down in near term. Cement demand will certainly grow over the next three years. But the issue is on the supply side.Cement Underweight We do see an oversupply situation for the next 3-4 quarters. We like the growth prospects of power sector but believe that value will be created byPower Utilities Underweight engineering services providers. Merchant power rates have been sliding downwards and coal prices have been on the way up putting pressure on return ratios. 10
  11. 11. Debt Outlook 9.2 Yield curve 10-yr G-sec yield 9.0 8.60 8.40 8.8 8.20 8.00 8.6 7.80 8.4 7.60 7.40(%) 8.2 7.20 8.0 7.00 6.80 7.8 0.0 0.9 1.8 2.7 3.5 4.4 5.3 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 • After consistent increase in the interest rates, moderation was seen in the interest rates in the last month. The benchmark 10 yr G-sec yield decreased from 8.45% in July ’11 to 8.33% in June’11. • The yields for the 2 year period saw a marginal increase while moderation was seen for all other tenors. Corporate bond yields also saw a marginal dip in interest rates in the month. • With no respite from the high inflation in spite of monetary tightening, we expect another 25 - 50 bps hike in the year. 11
  12. 12. Debt Strategy Category Outlook Details We recommend investment into short term bond funds with a 6-12 month investment horizon as we expect them toShort Tenure deliver superior returns due to high YTM. We have seen the Debt short term yields harden due to reduced liquidity and consecutive rate hikes prompted by inflationary pressures. Till these factors do not stabilize, we see Short term bond funds and FMPs as an interesting investment option. Some AA and select A rated securities are very attractive at the current yields. A similar trend can be seen in the Fixed Credit Deposits also. Tight liquidity in the system has also contributed to widening of the spreads making entry at current levels attractive. With inflationary pressure not easing, we expect more rate hikes in the year though these may not be implemented immediately Long Tenure and could be limited to a couple of hikes. Moreover, these hikes are already expected and may get factored in. Hence, we have Debt changed our stance from negative to neutral and believe that it may be a good time to start looking for interesting investment opportunities in the medium term. 12
  13. 13. Mutual Fund in Focus – Reliance MIP Basic Theme – Monthly Income PlanThe fund aims to generate regular returns through investment in Debt and Money Market Instrument and long-term capitalappreciation by investing a portion of the Schemes assets in equity and equity related instruments. The fund manager keeps moderateequity exposure averaging around 15-18% but takes active calls on the debt front. Over the years, he has taken active calls on theduration front which has helped him deliver superior returns.The fund is managed by Mr.Ashwani Kumar and Mr. Amit Tripathi. Fund Details Returns (%)AUM Rs.7565 Cr. 3m 6m 1 Yr 3 YrsExpense Ratio 1.54% Reliance MIP(G) 0.3% 3.2% 3.3% 14.1%Exit Load 1% on or before 1y, nil after that Crisil MIP BlendedAverage Maturity 3.52 years 0.5% 2.2% 4.0% 7.4% IndexEquity Portfolio Market Cap BlendedPortfolio 78% Debt, 18% Equity Top Holdings Sector Allocation Performance (as on 31st August 2011) Derivatives Cash &Government Of India 12.1 Equity, , 0.13% Equivalent, 16.00% Reliance MIP(G)Power Finance Corpn. Ltd. 8.4 17.89% 3.89% 14.00%REC 5.9 12.00% Crisil MIP Blended IndexTata Teleservices AAA & 10.00% 4.5 Others,(Maharashtra) Ltd. Equivalent, 8.00% 15.50%Reliance Capital Ltd. 3.6 62.59% 6.00% 4.00%Tata Power 3.1 2.00%Aditya Birla Nuvo Ltd. 3.9 0.00%Tata Motors 3.1 3 Months 6 Months 1 Year 3 Year 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 $) 80 -5000 0.00 60 40 -10000 USD GBP EURO YEN 20 -0.01 -15000 0 -20 -20000 -0.02 -0.03 -0.04 • Exports for the month of May increased by 81.7% (y-o-y) while imports increased by 51.5% over last year. The trade -0.05 deficit increased to USD 11 bn. -0.06 140000 Capital Account Balance• The Rupee depreciated against USD, GPB, Euro & Yen 90000• The rupee weakened due to global meltdown in equities on the back of US economic problems along with the euro zone 40000 banking woes• The slide in global equities world over has increased the -10000 FY 10 (Q1) FY 10 (Q2) FY 10 (Q3) FY 10 (Q4) FY 11 (Q1) FY 11 (Q2) FY 11 (Q3) FY 11 (Q4) demand for safe-haven currencies like the Japanese yen and the Swiss franc• We expect the rupee to continue to weaken given the • Capital account balance was positive throughout FY11 and continuous demand for dollars by oil importers. In stands at `273133 Cr. for the fiscal while it was 37,298 Cr. anticipation of this, banks have been engaging in buy-sell for Q4. swaps (buying dollars in spot market and selling in forward • We expect the capital account balance to remain positive market) resulting in a dollar shortage and pushing its value as higher interest rates would make investment in the higher. Indian markets attractive hence drawing investments into the market. 14
  15. 15. Commodities 29000 The recent downgrade by US credit rating to AA+ by S&P has 27000 Gold triggered a bout of selling across all major asset classes 25000 barring precious metals. Gold Futures in the COMEX has 23000 21000 climbed to a record $1700 an ounce following investors rushPrecious 19000 to the safer haven. As commodities are likely to correct 17000 Metals following global fund liquidation, any dips in gold prices 15000 31-Jul-11 31-May-11 30-Sep-10 28-Feb-11 30-Aug-10 31-Dec-10 31-Aug-11 30-Nov-10 31-Jan-11 30-Apr-11 30-Jun-11 31-Oct-10 31-Mar-11 should be bought. Coupled with the domino effect on global stock markets mayhem, gold is entering into a seasonally strong fourth quarter and gold can only go up. We continue to maintain our year-end target of $1780 an ounce. Crude The recent bout of global uncertainty have pressurized crude 130.0 120.0 oil amid concern of double dip recession in the US and global 110.0 economy slipping into red. We expect crude oil prices have 100.0Oil & Gas topped out in the interim and can only move down from here 90.0 on. Although, the middle east will be hit by the falling dollar 80.0 70.0 income and might try to limit their production in order to 60.0 support prices, we believe any such temporary uptick shall not 31-May-2011 30-Sep-2010 31-Jan-2011 28-Feb-2011 31-Mar-2011 30-Jun-2011 30-Aug-2010 31-Dec-2010 30-Apr-2011 31-Aug-2011 31-Oct-2010 30-Nov-2010 31-Jul-2011 be sustained. This is obviously a positive news for the emerging markets. Expect crude oil to remain under pressure. 15
  16. 16. Cygnus IIObjective:To generate provide enhanced upside participation in gold while mitigating any downside risk and providing capitalprotection to the investor Product Specifications Issuer Karvy Financial Services Limited Instrument Secured Redeemable Non-Convertible Debenture Reference Index MCX Front Month Futures Gold price Tenor 36/40 Months Initial Level Reference Index as on Deemed Date of Allotment Final Level Simple average of reference index on Final Fixing Date Opening Date 29-August-2011 Closing Date 21- September-2011 Proposed Deemed date of 29- September-2011 Allotment Coupon Max {0%, PR * Gold Performance} Participation Rate 120% Principal Protection 100% Placement Charges 3%+10.30%S.T. on placement charges collected upfront 16
  17. 17. Real Estate Outlook - IAsset Classes Tier-1* Tier-II** Sales are under pressure as usual, Q2 & Q3 of 2011 The demand is keeping the Tier II cities afloat, the would clear clouds on possible correction in this infrastructure development in these cities have sector. Lot of developers launching new projects made the residential development spread across the since the existing ones have hit roadblocks due to city limits. On an average price is still affordable. Key high prices. The loading on actual usable area has development developer are seeing demand of 3BHK seen a sharp rise in Mumbai, Bangalore & Pune, and luxury development but are only doing well if from an average 20% to 35%, this is another way to the project size is limited to 100-150 units. The Residential hedge the realty prices. Investors seem to be trend seems to be favorable since there is lot of interested in under development, pre-launched demand comes from smaller cities closer to these projects which clearly give them appreciation Tier-II & III cities without any possible speculation. RBI credit rate increase with tightening of construction finance to developer is only increasing pressure on developers. Still in the shadows of over-supply and cautious Commercial segment not that significant, but unlike expansion approach by corporate, this segment Tier-I the price differentiation is double favoring has gone through correction. Rates per sqft have commercial since most of them are in CBD areas. seen almost 30% down-trend and will be stagnantCommercial/IT for the coming 2-3 quarters. Surely, the segment is at the down-tip of the cycle, and is the best opportunity for companies looking for long term holding of real estate office space. 17
  18. 18. Real Estate Outlook - II Asset Classes Tier-1* Tier-II** The FDI allowance is given lot of impetus to this Retail is slow in these markets; unorganized markets sector, its been now almost 3 years since retail has are still a hot choice. Most high-street locations are seen a major transformation on all its business expensive to own thus have a high lease rental and aspects and have been built to suit Indian way for have witnesses heavy churn. Investment would consumerism. Low cost, high reach, heavy variety, always have capital protected due to dearth of less innovation, existence with competition, available space. Retail maximizing bottom line than top-line approach have been making the retailers smarter. Revenue share model with a built in MG is how the deals are done Most interesting times, traded now more as Still available cheaper, plotted development is a hit commodity, very fastly getting absorbed, locked. since the trend of standalone homes are prevalent. Non-real estate sector see immense opportunity Land since it can be used as tangible and most credible pledge against business*Tier I markets include Mumbai, Delhi & NCR, Bangalore, Pune, Chennai, Hyderabad and Kolkatta**Tier II markets includes all state capitals other than the Tier I marketsThe outlook is updated on a quarterly basis 18
  19. 19. 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. 19
  20. 20. DisclaimerThe information and views presented here are prepared by Karvy Private Wealth or other Karvy Group companies. The information containedherein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completenessthereof. 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 decisionsbased on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While actingupon any information or analysis mentioned here, investors may please note that neither Karvy nor any person connected with any associatedcompanies of Karvy 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 fromtime to time. Every employee of Karvy and its associated companies are required to disclose their individual stock holdings and details of trades,if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling ofshares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. Allemployees are further restricted 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 consulttheir respective tax advisers to understand the specific tax incidence applicable to them. We also expect significant changes in the tax laws oncethe new Direct 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.Mumbai office Address: 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 RegistrationNo.: INP000001512” 20
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