1) The Sensex was down 581.79 points (-2.87%) last week, while FIIs were net buyers in the equity segment, adding Rs. 6525.10 Crore. 2) US Fed Chairman Ben Bernanke said the central bank could slow its asset purchase program in the next few months, which could lead to short-term profit taking in risk assets but medium-term outperformance of risk assets as growth recovers. 3) Japan's economy faces challenges like deflation, volatile GDP growth, and a recently appreciating yen, which triggered falls in Indian and other world markets last week. After years of deflation, Japan's export-oriented economy may be undergoing

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2. Last week at the Financial Markets!!!
• SENSEX down by 581.79 points (-2.87%) and closed to 19704.33
at end of the week
• (FIIs) were net buyers in equity segment leading to net inflow of
Rs. 6525.10 Crore
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News Impact
• US FED chairman Ben Bernanke said
that US central bank could slow down
its asset purchase program in the next
few months.
• In short term, profit booking could be seen
in “risk-on” assets.
• Inflation will reduce.
• Medium term “risk on” asset will out
perform as economic growth will recover.
• IT sector will be benefited.
• Rupee made its 8 month low to 56.02
level.
• Imports will be costlier.
• Exporters will get an advantage of rupee
depreciation.
• Current account deficit will increase.

3. Last week at the Financial Markets!!!
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Price Performance of Different Asset Class
There was a concern
that if stimulus
measures are eased in
US, the consistent
liquidity being provided
by the foreign investors
will get impacted.

4. Next Week in the Financial Markets….?
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• Q4 results of the following companies will provide the next
impact :
 Coal India, Sun Pharma, Cipla, Wockhardt, Gail India,Power Grid Corp, MCX.
• January-March quarter GDP data is expected to be released on
May 31st 2013.
• Derivative contracts will expire on May 30th 2013.

5. Hot Topic of the Week
Japan’s Economy
Key Economic Parameters
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6. • Japan is one the leading export country in the world.
• This week Japan’s stock market fell more than 7% in a single day,
G-Sec Yield increased, and YEN appreciated. This triggered fall in
Indian and other world markets also because all the economies
and their financial markets co-relates with each other.
• So it becomes important to understand the economic
parameters of Japan at this point of time.
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Hot Topic of the Week

7. Economy faces
continuous
problem of
deflation
Inflation Deflation Trend
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SOURCE : WWW.TRADINGECONOMICS.COM

8. Money Supply by Bank of Japan
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Money supply stood
all time high at
8,44,548 JPY Billion
in April 2013

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After 34% depreciation in
YEN in the last few months,
YEN appreciated against the
dollar last week. This
resulted in sell off in equity
markets across Asia.
USD/YEN Pair

10. Volatile GDP Growth Rate
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11. Export Price Index
• Currently, historical average price of export is at 140 level.
• All time high level was 207.30 in October, 1982
• A record low level was 94 in January 2012.
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12. 10 year Government Bond
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Near all time low
level, possibility of
change in yield curve
Yield increased
after FED meeting.
Long term yield chart
Short term yield chart

13. Stock Market-NIKKEI 225
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Stock market rallied 52%
in last 1 yr because of
huge money supply by
bank of Japan

14. Conclusion
• After years of deflationary scenario, export oriented Japan’s
economy may be going through a structural change and this will
be reflected in next few quarters, especially on back off increase
export prices index (following by the huge depreciation in YEN).
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Research Desk
@
VALUE PLUS - The Family Office
Office: (0265 -2324600,6629800)
Email: crm@valueplusinv.com
Website: www.valueplusinv.com