The document provides an outlook on Indian asset markets in 2014 from Right Horizons PMS. It summarizes the performance of asset markets in 2013, argues that signs point to India potentially being in the early stages of a bull market. It also discusses factors that provide safety nets for the Indian economy and lays out the foundation for the next bull market. Right Horizons believes the turning point for fixed income and equity markets in India will come in the next few quarters.

1. Indian Asset markets – Time to pick the low hanging fruit.
Outlook 2014
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2. Agenda / Table of contents
Why we could be closer to the take off point?
1
A review of the asset markets in 2013
2
Are we already in the bull market and we don’t know about it?
3
Do we have a safety net for the economy
4
The next bull market, how does the foundation look like
5
We are on the inflextion point, please catch it
6
Right Horizons PMS – better than most
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3. 1
A review of the asset markets in India - 2013
Asset market in its volatile best – no asset spared…
Equities have continued to perplex the
common man and seasoned investor alike,
leaving no arbitrage between the two.
Large caps have been highly volatile and
positive currently; mid-caps have still a lot
of value left.
Inverted yield curve means that short term
was better in 2013 than long duration.
Asset return in 2013# in India
20.00%
10.00%
0.00%
-10.00%
Gold performed its worst medium term
performance by Indian standards; globally
there was a rout in the asset – falling over
20% in USD terms.
Equities - Equities Nifty
CNX Mid
Cap
#
YTD Nov 20th 2013
Bond Short
Term
Bond Long
Term
(GILT)
Gold ETF
Real
Estate
- Tier I
Real estate in metros continue to grow
~10% yoy, but volumes dry up indicating
medium term slump coming soon.
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4. 2
Are we already in the bull market and we don’t know about it?
Volatility precedes bull markets. 2001-03 was a
time which succeeded a period of agony, lackluster
returns and high volatility
Early period of the bull market appear like
mirage. In 2004-05, at every high point
appeared like pullback is eminent. Market
trudges higher every quarter with an occasional
pull back.
Not until we reach higher peaks that media and
general public proclaim “BULL Market”. But most of
the gains are skimmed, frenzy starts to kick in – time to
be selective.
Disbelief!!
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Chart Source: Yahoo Finance

5. 3
Where is our safety net; why are we a unique market?
Growth driver #1: Demography remains favorable
Growth driver #2: Savings rising = higher investments
Growth driver #3: Integration with global trade rising
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Growth driver #4: Structural reforms inevitable

6. 3
Where is our safety net; why are we a unique market?
Safety Net #1
1/4th population of middle income earners – a potent force expected to
reach 1/3rd population by 2025
Safety Net #2
Highest amount of working class population and addition to workforce by
2030 in the world
Safety Net #3
Lowest age dependency ratio amongst the developing and developed
economies in the world
Safety Net #4
Households practically immune to world currency crises. Est. total
collective GOLD holdings (physical) ~ 22,000 tones = USD 1 Tr at current
prices
Safety Net #5
Staples such as Rice, Wheat, Fruits & Veggies and Cereals are NOT
imported and produced locally = food insecurity and inflation is temporary
Safety Net #6
Energy resources such as Oil and Gas are currency independent, policy
dependent = Iran accepts local currency /GOLD in event of a crises
Safety Net #7
Weak currency = higher exports = higher manufacturing. CAD is a
temporary phenomenon.
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7. 4
Next Bull market & Outlook for 2014 and beyond
Nifty target of around 7200 by December 2014, implying a 18% annual upside
- Factors taking Nifty higher to these levels include
- De-levered balance sheet of corporate India over the next twelve months
- Policy clarity driven by results of Lok-Sabha elections and next central government fomation
- Inflation fatigue due to high base on CPI and WPI indices and consequent softening of RBI stance on
tight monetary policy
- Availability of value picks in the large cap space (Index constituents) and higher value proposition in
the bigger mid-cap space
2013-2018 (medium term) outlook. ISRO the market!!!
- Corrective actions imminent after 5 years of flux, inactivity, low productivity and policy
paralysis
- Discretionary demand revival imminent due severe cut-back, higher savings and pent-up
demand outburst
- Strong investments uptick in spectrum of growth sectors – low ticket infrastructure (roads,
water projects, urban infra); capital goods and prosumer goods’ demand
- Strong Index movement based on favorable valuations and growth momentum pick up
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8. 5
Inflexion point: closer than we might think!
The foundation of a equity bull market lies in the following ingredients
Low inflation and sustainably comfortable interest rate outlook.
Policy clarity at local and national level
Easy access to capital, with growing/stable equity markets
Stable domestic currency outlook.
At this moment, it appears that none of the ingredients are present for making a bull market
recipe over the next several months/quarters. Before we jump – it is extremely important to put
the asset market cycle in perspective, explained in the next slide.
However, we believe that the next six months would take care of bullet # 2 and that could pave way
to bullet # 4.
Bullet # 1 & #3 could be the outcome of many things including cleansing of the system by severe stress that
the system has seen during 2011, 2012 and 2013, consequently leading to decade low GDP.
We believe, as a result, the turning point for Fixed income and equities market is expected in the
next few quarters.
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9. 5
Inflexion point: closer than we might think!
Loss of
purchasin
g power
Higher
Interest
rates
Rising
Inflation
Higher
Savings
BUY
Real Estate Higher Corporate
Low Money
Supply
profits
Increase in
Consumption
Asset
Market
Cycle
Higher Money
Supply
BUY
Equities
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Lower
investments
Fall in
consumption
Investments
pick up
BUY Fixed
Income
Lower
Investments
Fall in
Interest
rates
Fall in
Inflation
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10. 6
Right Horizons PMS portfolios – wealth creation vehicles
Portfolio
Strategy
Nifty Plus
Flexicap
Capital
Protection
Objective
Long term Wealth
creation
Long term weath
creation
Lower Capital
Volatility
Equities
Equities
Fixed Income
securities
• Nifty Index stocks
•BSE 500 stocks
Super
Value
Fixed
Income
• Equity Indices
Predominantly
invests in
• BSE 200 stocks
Recommended
Holding Horizon
Portfolio Strategy
> 18 months > 30 months
BUY & Hold; Weight BUY & Hold;
Management Thesis Driven
Risk Level
Minimum Strategy
Size1
1
Provide for high Provide for
capital
Inflation beating
appreciation
returns
Fixed Income
Securities
Equities
• 100%
• Mid-cap
listed/Unlisted
Equities
Fixed income
securities
24 months
>36 months
12 months
BUY & Hold;
Trading Driven
Active
Strategy;
Bottom Up
BUY & Hold;
• Listed securities
(80%)
Medium
Medium
Low
High
Low to Medium
INR 1million
INR 1million
INR 1million
INR 1million
INR 1million
Each PMS account shall be a minimum of INR25,00,000 set up value
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11. 6
Right Horizons PMS portfolios – performance
Portfolio Performance
(%)
1 month
3 months
6 months
1 year
Since
Inception
Nifty Plus
2.22%
9.25%
5.49%
6.45%
9.15%
Flexicap
1.02%
6.99%
0.7%
5.86%
3.56%
Super Value
(Mid & Small cap)
3.07%
9.87%
-0.45%
-
-8.76%
Nifty Index
-0.93%
5.47%
1.01%
6.53%
8.75%
CNX MidCAP Index
2.00%
7.98%
-5.17%
-
-12.63%
Capital Protection
0.76%
1.67%
1.08%
6.76%
6.76%
GSEC Index
0.43%
2.80%
0.73%
5.52%
5.52%
All time frames based on Nov 22 2013 data; Inception dates vary with respect to the different benchmarks adopted by
the portfolios
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12. Disclaimer
The information contained herein has been obtained from reports secured from third parties, publicly available sources and
Right Horizons, its affiliates, subsidiaries and/or Group companies take no responsibilities – express or implied for
inaccuracies contained herein.
This document is meant for the use of the intended recipient only. Though dissemination to all intended recipients is
simultaneous, not all intended recipients may receive this document at the same time. This document is neither an offer nor
solicitation 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 an
investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document
should make such investigation as he deems necessary to arrive at an independent evaluation, including the merits and risks
involved, for investment in the securities referred to in this document and should consult his own advisors to determine the
merits and risks of such investment.
The investment discussed or views expressed may not be suitable for all investors. This document has been prepared on the
basis of information obtained from publicly available, accessible resources. Right Horizons has not independently verified all
the information given in this document. Accordingly, no representation or warranty, express or implied, is made as to
accuracy, completeness or fairness of the information and opinion contained in this document.
The information given in this document is as of the date of this document and there can be no assurance that future results
or events will be consistent with this information. Though Right Horizons endeavors to update the information contained
herein 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 be
regulatory, compliance or other reasons that may prevent us from doing so.
Right Horizons and its affiliates expressly disclaim any and all liabilities that may arise from information, error or omission in
this connection. Right Horizons and its affiliates shall not be liable for any damages whether direct, indirect, special or
consequential, 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
portion thereof may not be duplicated in any form and/or reproduced or redistributed without the prior written consent of
Right Horizons.
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13. Questions?
Reach us:
contactus@righthorizons.com
+91 80 4120 9582
+91 22 4100 2018
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