The document provides an overview of various markets and economic indicators for October 2015. It notes that US GDP growth slowed in Q3 adding to uncertainty around potential Fed rate hikes. China's GDP growth also slowed. Domestically, Indian markets rebounded in October due to stabilization in emerging markets and signs of economic recovery. Going forward, markets are expected to consolidate with limited volatility.

1. Advice for the Wise
November 2015

2. Contents
From the desk
of the CEO
Did you
know?
Domestic
Equity
Outlook
Global Equity
Outlook
Domestic
Debt Outlook
Domestic
Debt Strategy
Global Debt
Outlook
Global
Economy
Update
Foreign
Exchange
Commodities
Real Estate
Outlook
What’s
Trending?

3. From the desk of the CEO
Dear Investors,
Market movements are usually a result of mix of global and
domestic cues. In the third quarter, United States saw a fall in
the GDP after a formidable growth in the previous quarter,
adding to the dilemma of the Fed whether to increase rates or
not. After the Fed meeting in October, it resulted in status quo
on interest rates. Due to continuing global uncertainties, a
slightly lower inflation path and mixed macroeconomic data,
the Fed once again refrained from entering into a tightening
policy. In another part of the world, China’s six year low GDP
growth added to concerns of a continuing slower growth path.
During the tenth month of the calendar year in the absence of
major negative global cues, government policies and domestic
green shoots drove up the equity markets back home. Due to a
panic of devaluation of emerging market currencies in
August-September, markets had faced a knee-jerk reaction
then. However, October finally witnessed stabilization in
emerging markets. India was no exception. This was mainly
because of two reasons. Firstly, the stabilization led to a
rebound in global markets and thus investor sentiments.
Secondly, a domino effect of the former led to the reversal of
FII outflows that added to the recovery.
Green shoots such as IIP and inflation indicated that economic
revival is on the way, leading to the RBI front loading the rate
cuts in September. The trade deficit came in lower during the
month. Though exports contracted, imports contracted even
further. An appreciation in the domestic currency and strong
indirect taxes numbers added to the cheer and pushed markets
further up rebound of the markets.
Going forward, one can expect markets to move in the
sideways range with a quieter Diwali and no major fireworks.
However, this period of consolidation continues to provide
good opportunities for long-term investors. May the “Diyas”
bring light into your lives, while you pray to the Goddess of
wealth during Diawli. We wish you growth in your wealth
through positive market movements in the remaining part of
2015.

4. Did You Know?
#Source: huffingtonpost
The weight of a standard gold bar
is approximately 400 ounces, or
27.5 pounds.
Greece has a history of financial
troubles — the country's first
default occurred way back in the
fourth century B.C.
One of the smallest economies to
have its own U.S.-listed ETF is
Israel. The ETF trades under the
ticker symbol EIS.

5. Domestic Equity Outlook
As on 25th
Oct 2015
1 month
change
1 year
change
Equity
Markets
BSE Sensex 27471 6.21% 2.31%
CNX Nifty 8295 5.43% 3.50%
BSE Midcap 11138 5.10% 16.12%
BSE Smallcap 11519 5.37% 8.03%
Equity markets turned out to be volatile in October eventually ending at the lowest point. Earnings of interest
rate sensitive sectors have been weaker than expected. However investors remained hopeful as the banks started
transmitting lower interest rates. In the broader market, lower inflation has led to sharp decline in sales growth
while margins have improved leading to single digit growth in profits. Long term investors are advised to take
advantage of the volatility and accumulate blue chips in sectors such as IT, FMCG and private banks.
Bihar election outcome is the joker in the pack that would decide the long term direction and resolve of the
government on sticky issues like fertilizer subsidy, land acquisition, labor reforms, etc. The nature and the
undertone of the mandate would decide the direction of policy making apart from dictating investor sentiment.
90
95
100
105
110
115
120
125 S & P BSE Sensex CNX Nifty
BSE Midcap BSE Smallcap

6. Domestic Equity Outlook
 India's wholesale prices fell for the 11th straight month in
September, to lower levels of (4.54%) compared to a
(4.95% ) drop in August.
 Overall, food inflation turned into positive zone to 0.69%
as compared to (1.13%) in August. For vegetables, it was
(9.45%). Inflation in the fuel and power segment was
(17.71%), while that of manufactured products was
(1.73%) in August.
 CPI for the month of September came in at 4.41% due
to impact of base year as compared to 3.66% in August.
 Food inflation for the month of September has come in
at 3.88% versus 2.20% month-on-month (MoM),
Cereals and products inflation stands at 1.38% versus
1.22% in August.
Wholesale Price Index Consumer Price Index
#Source: Moneycontrol, Zee news
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00% WPI CPI

7. Domestic Equity Outlook
 Industrial output growing at 6.4% in
August, indicates a revival in industrial activity. It
had grown by 0.5% in August last year.
 The manufacturing sector, which constitutes over
75% of the index, grew by 6.9% in August 2015.
Meanwhile, the mining sector output rose by 3.8% in
August 2015.
 Industrial output was at 4.1% in the April – August
period, compared with 3% a year earlier.
 India's Gross Domestic Product (GDP) growth for the
first quarter of the current financial year grew at 7%
versus 6.7% YoY .
 Manufacturing growth slowed down to 7.2% versus
8.4% YoY, whereas agricultural growth also slowed to
1.9% versus 2.6% YoY. With the change method, India's
growth topped that of China in the first quarter this
year
#Source: Business today
4.0
5.0
6.0
7.0
8.0
GDP
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Aug
14
Sep
14
Oct
14
Nov
14
Dec
14
Jan
15
Feb
15
Mar
15
Apr
15
May
15
Jun
15
Jul
15
Aug
15
IIP

8. Sector Outlook
Sector Stance Remarks
IT/ITES
Select verticals displaying better growth. Long term outlook to improve once global
uncertainties come down.
Automobiles
Passenger vehicles and CVs to outperform two-wheeler segment. Tractors to continue weak
show. Auto-ancillaries expected to do well due to revival of demand.
Healthcare
Huge global opportunity as a generic and bulk drug supplier. Better placed against peers in
terms of technology and labor cost arbitrage. To continue to gain global share and thus
generate strong earnings growth.
FMCG
We prefer “discretionary consumption” theme within FMCG. Key beneficiaries such as
durables and branded garments, as the growth in this segment will be disproportionately
higher vis-à-vis the increase in disposable incomes. Gross margin expansion to continue.
Power Utilities
Lack of fuel linkages , poor SEB health, adverse CERC guidelines have compromised the ROE’s
leading to de-rating in near term. In long run, they are core to India’s infra story.
Cement
Cement volumes witnessing pressure. Going ahead pricing and realizations would be key for
sector valuations.

9. Sector Outlook
Sector Stance Remarks
BFSI
Private sector banks continue to deliver healthy earnings in line with expectations. However,
we expect PSUs to deliver muted numbers on asset quality concerns.
E&C
Order inflows expected to improve as spending and capital expenditure likely to move up on
economic recovery.
Energy
With the price deregulation of diesel, we believe the total subsidy burden on Oil PSU’s will
come down significantly this year. Govt. has decided to pay full subsidy to OMC’s .
Metals
Lower global growth and Chinese slowdown has kept the growth subdued. Absence of US
monetary stimulus will lead to further downward pressure on prices.
Telecom
Regulatory uncertainties have come down. However, aggressive bids for spectrum has revived
fears of sub-optimal returns on capital.

10. Global Equity Outlook
As on 25th
Oct 2015
1 month
change
1 year
change
Equity
Markets
MSCI World 1705 6.92% 2.22%
Hang Seng 23152 9.28% (0.64%)
S&P 500 2075 7.45% 5.63%
Nikkie 18825 5.28% 23.11%
Prospects of an increase in interest rates by the US Fed have gripped the global markets leading them to shed
most of their annual gains. Sharp correction in Chinese markets and lower growth rates is another matter of
worry on the global front.
80
90
100
110
120
130
140
150
MSCI World Hang Seng S&P 500 Nikkie

11. Global Economy Update
United States
•U.S. economic growth braked sharply in the third quarter as
businesses cut back on restocking warehouses, but solid
domestic demand could encourage the rate hike by US Fed in
December. GDP increased at a 1.5 percent annual rate after
expanding at a 3.9 percent clip in the second quarter.
•U.S. jobless claims rise, four-week average lowest since
1973.
Emerging Economies
• Growth in India's manufacturing sector cooled to its
slowest in 22 months in October as domestic demand
softened, a private survey showed.
• Activity in China's manufacturing sector unexpectedly
contracted in October for a third straight month, an
official survey showed on Sunday.
Japan
• Japanese manufacturing activity in October expanded at
the fastest pace in a year as new domestic and export
orders increased, a private business survey showed on
Monday.
• The Bank of Japan is expected to hold monetary policy
steady even while diluting its rosy inflation forecasts.
Europe
• British consumer morale slipped to its lowest in four
months in October, a survey showed on Friday, adding to
signs that domestically driven growth is continuing to
ease in the final three months of the year.
• Euro zone inflation zero in October, pressure on for more
ECB easing
#Source: Reuters

12. Domestic Debt Outlook
•The yields on 10 Yr G sec closed at 7.59% which is 13 bps lower than
the last months close of 7.72%.
•The central bank conducted reverse repo auctions in almost all
sessions, providing banks with opportunities to park funds to the
tune of Rs 70,000 cr.
•Banks’ net average borrowings under the RBI’s LAF (Liquidity
Adjustment Facility stood at 11481.42 crore.)
•Month-end inflows from government spending and reversals of
reverse repo auctions held in earlier sessions, prevented the
liquidity deficit from widening.
As on 25th
Oct 2015
1 month
change
1 year
change
Debt Markets
10-Yr G-Sec Yield 7.59 (13bps) (84bps)
Fixed Deposit 7.25 (25bps) (150bps)
0
50
100
150
200
250
300
AAA AA+ AA AA- A+ A A- BBB+
Corporate Bond Spreads
5 Years 10 Years 15 Years
7.40
7.60
7.80
8.00
8.20
8.40
8.60
8.80
9.00
9.20
9.40
G-Sec
10 YR Gsec Yield 5 YR Gsec Yield
15 YR Gsec Yield

13. Domestic Debt Strategy
Our recommendations regarding short term debt is that investors with the time horizon
of 1 year to 2 years can look for short term debt funds. Even though, most of the short
term fund’s YTMs have fallen to sub-9%, our recommended short term debt funds still
have high YTMs (9.0%-10.7%) providing interesting investment opportunities.
The corporate bond market segment continues to be attractive over the medium term,
especially with expectations of an improvement in corporate profitability; an improved
economic outlook and due to the benefits of credit easing. With credit easing, there are
chances that the companies’ rating will be upgraded that would further cause a rally in
bonds, which in turn will benefit corporate bond funds.
As RBI has reduced the key policy rates, dynamic bond funds have benefited a lot as most
of them have a mix of gilt and long term bonds in their portfolio. A rally caused by easing
yields could lead to capital appreciation in gilts as well as corporate bonds, which means
over medium to long term we could see more gains coming from these funds.
As RBI has done the front loading of rate cut, we expect it to halt it for some time and go
for further rate cuts over medium to long term as inflation comes down. Long term debt
and Gilt funds looks attractive over medium to long term and is advisable for aggressive
investors only.
Short Term
Debt
Corporate
Bond Funds
Dynamic
Bond Funds
Long Term
Debt Funds

14. Global Debt Outlook
• US 10 years yields appreciated marginally to trade
at 2.133 as markets remained weak on Friday and
debate about a rate hike from the US still remains
on the table.
• Japanese authorities are trying to bring greater
transparency to corporate bonds with new price
data, but with new rules extending to only a part of
the market few see the changes having an
immediate impact.
• China's corporate debt-to-GDP ratio has risen to
140%-150% and is expected to get worse, sparking
concerns over a potential rise in defaults in the
corporate bond market.
•The European Central Bank is right to consider
stepping up its bond buying to boost inflation but
should think very carefully before doing so.
#Source: Reuters
Ratings Country
10 Yr G-Sec
Yield
1 month
change
AAA
Germany 0.44% (15bps)
Hong Kong 1.48% (23bps)
Sweden 0.64% 5bps
Switzerland (0.33%) (21bps)
AA+ USA 2.08% 1bp
AA-
China 3.01% (32bps)
Japan 0.31% (4bps)

15. Commodities
Gold has been sideways with a mild positive bias as it remains
the primary tool of speculation against the prospects of US dollar
in the backdrop of a global currency upheaval.
.
As on 25th Oct, 2015 : `26,764 per 10gm
1 month change : 1.29%
1 year change : (1.99%)
Crude oil prices are expected to be binging below $50 for the
forceable future.
As on 25th Oct, 2015 : $46.30per bbl
1 month change : (2.10%)
1 year change : (45.90%)
*RICI: Rogers International Commodity Index – Tracks 38 commodity futures from 13 international exchanges.
24000
25000
26000
27000
28000
29000
Gold
2,000
2,500
3,000
3,500
RICI
0.00
20.00
40.00
60.00
80.00
100.00
Crude

16. Foreign Exchange
• The Indian rupee has depreciated against all the major currencies. It has depreciated by 2.56% against the EURO,
1.84% against GBP, 2.34% against YEN and 0.99% against USD.
• The rupee weakened against the US dollar owing to intermittent weakness in equities and demand for the greenback
from importers.
• Domestic wholesale price inflation figures, however, aided sentiment for the local currency and prevented further
decline.
• However periodic demand for the dollar from state-owned banks on behalf of oil companies and other importers
prevented gains in the rupee.
Currency
As on 25th
Oct 2015
1 month
change
1 year
change
USD/INR 64.88 (1.84%) (5.63%)
GBP/INR 99.88 (0.99%) (1.36%)
Euro/INR 72.06 (2.56%) 7.90%
Yen/INR 53.79 (2.34%) 5.43%
USD/Euro 0.90 1.77% 14.89%
-1.84%
-0.99%
-2.56%
-2.34%
-3.00%
-2.50%
-2.00%
-1.50%
-1.00%
-0.50%
0.00%
USD GBP EURO YEN

17. Real Estate Outlook
Tier I
RBI has exceeded expectations with a 50 bps rate cut in
September. SBI has followed suit and cut lending rates by 40 bps
for home, car and other retail loans. The home loan rates are
among the lowest in recent times. Developers have unsold
inventory and are constantly innovating lower down payment and
large back ended payment schemes with/without requirement of
a home loan . New launches have reduced and focus has been on
completing projects on hand.
Tier II
Larger demand is being seen in Bangalore, Hyderabad and Pune
by E commerce and consulting firms. Rentals are expected to
largely remain stable in 2015–16 as supply pipeline is still strong.
Absorption volumes have been surpassing new completions
consistently since H1 2014, as a result of which, the vacancy levels
in India have been dwindling
Low unit sizes have played an important role in maintaining
the absorption levels in these markets. Lease rentals as well as
capital values continue to be stable at their current levels in
the commercial asset class.
With improvements in infrastructure across cities like
Chandigarh, Jaipur, Lucknow, Ahmedabad, Bhopal, Nagpur,
Patna and Cochin and quality products being offered the end
users /investors are being spoilt for choice. The Demand
drivers remain increasing nuclearization, rising disposable
incomes and easier availability of credit.
Residential
Commercial

18. Tier I Tier II
The Mall concept is new to Tier II cities and High Street retail
is still popular. Anecdotal evidence suggests that rentals have
remained stagnant in this space.
Not much has changed for retail market in the last few months
and capital values and rentals remain flaccid. The absorption is
low and vacancy remains high.
Land in Tier II and III cities along upcoming / established
growth corridors have seen good %age appreciation due to
low investment base in such areas.
Fringe areas with improving connectivity to Metro cities and
other top 8 to 10 cities in India have seen interest in purchase of
Plotted / Villa developments due to lower ticket size and better
marketing by developers /aggregators. There is an uptick in
demand for warehousing with the growth of E commerce.
Retail
Land
Real Estate Outlook

19. Ease of Doing Business Index
• What is it?
The ease of doing business index is an index created by the World Bank Group. Higher rankings indicate
better, usually simpler, regulations for businesses and stronger protections of property rights.
• Parameters considered for evaluating countries?
A nation's ranking on the index is based on the average of 10 sub indices and they are as follows, Starting a
business, Getting electricity, Dealing with construction permits, Getting credit, Protecting minority
investors, Registering property, Paying taxes, Trading across borders, Enforcing contracts and Resolving
insolvency.
• Ranking of India?
India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from last year,
according to a World Bank report.
What’s Trending?

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