- Global equity markets rose as central banks emphasized growth over inflation, though manufacturing data was weak. Bond yields were largely unchanged.
- In Asia, regional markets were up except Japan and Indonesia. China's PMI fell slightly. Taiwan's economy grew slower due to weaker trade. India cut rates further.
- European stocks rose as the ECB cut rates and Italy formed a new government. Growth forecasts for Europe were lowered. UK data beat expectations.
- US stocks outperformed on strong jobs and consumer confidence data. The Fed maintained asset purchases but may adjust the amount based on conditions.
Interim Budget 2019, presented on Feb 1, held a few good surprises for the farmer community and the salaried classes but was largely in line with market expectations. Markets, which had already ended January 2019 on a flat note (up 0.5% for the month), remained largely unaffected by the Budget announcements. Read the document to know more.
Indian equities surged in the month of March in a catch-up rally after months of range-bound trading on the back of easing inflation giving rise to expectation of lower interest rates, strengthening rupee and record foreign investor flows. Indian equities rose by 7.8 per cent during the month.
Read the full document to know more.
The unabated rise in Non-Performing Assets (NPAs) of
the Indian banking sector is a cause for concern for the
economy. Due to this reason, the Economic Survey de-
voted considerable attention to what it terms India’s
Twin Balance Sheet problem - overleveraged and dis-
tressed companies and the rising NPAs in Public Sector
Bank balance sheets. The issue is important because it is
holding up private investment in the country and there-
fore, growth across all sectors. Some of the major rea-
sons for increase in NPAs of banks are the subdued do-
mestic demand conditions and no signs of a turnaround
in private investment along with continuing uncertainty
in the global markets leading to lower exports of various
products like textiles, engineering goods, leather, gems,
etc.
In its effort to breathe new life into the Indian corporate bond market, the Reserve Bank of India (RBI) announced a slew of measures. RBI’s measures included, allowing corporate bonds to be accepted under the liquidity adjustment facility, higher ceiling on credit enhancements, providing Foreign Portfolio investors (FPIs) direct access to bond trading platforms and increasing the risk weightages for non-rated corporate borrowers. These measures are intended to further market development, enhance participation, facilitate greater market liquidity and improve communication.
In the current issue of Economy Matters, the Focus of the month is on ‘Towards a Vibrant Corporate Bond Market & Developments in State Finances’. In Domestic Trends, we present analysis of the trends emanating out of the recent releases on GDP, IIP, Inflation, Trade, Balance of payment and Monsoon progress. Corporate performance in 1QFY17 has been analysed as well. In Policy Focus, we present the highlights of the key policy documents released during August-September 2016. Analysis of monetary policy stance of central banks of US, Japan and UK is covered in Global Trends.
Interim Budget 2019, presented on Feb 1, held a few good surprises for the farmer community and the salaried classes but was largely in line with market expectations. Markets, which had already ended January 2019 on a flat note (up 0.5% for the month), remained largely unaffected by the Budget announcements. Read the document to know more.
Indian equities surged in the month of March in a catch-up rally after months of range-bound trading on the back of easing inflation giving rise to expectation of lower interest rates, strengthening rupee and record foreign investor flows. Indian equities rose by 7.8 per cent during the month.
Read the full document to know more.
The unabated rise in Non-Performing Assets (NPAs) of
the Indian banking sector is a cause for concern for the
economy. Due to this reason, the Economic Survey de-
voted considerable attention to what it terms India’s
Twin Balance Sheet problem - overleveraged and dis-
tressed companies and the rising NPAs in Public Sector
Bank balance sheets. The issue is important because it is
holding up private investment in the country and there-
fore, growth across all sectors. Some of the major rea-
sons for increase in NPAs of banks are the subdued do-
mestic demand conditions and no signs of a turnaround
in private investment along with continuing uncertainty
in the global markets leading to lower exports of various
products like textiles, engineering goods, leather, gems,
etc.
In its effort to breathe new life into the Indian corporate bond market, the Reserve Bank of India (RBI) announced a slew of measures. RBI’s measures included, allowing corporate bonds to be accepted under the liquidity adjustment facility, higher ceiling on credit enhancements, providing Foreign Portfolio investors (FPIs) direct access to bond trading platforms and increasing the risk weightages for non-rated corporate borrowers. These measures are intended to further market development, enhance participation, facilitate greater market liquidity and improve communication.
In the current issue of Economy Matters, the Focus of the month is on ‘Towards a Vibrant Corporate Bond Market & Developments in State Finances’. In Domestic Trends, we present analysis of the trends emanating out of the recent releases on GDP, IIP, Inflation, Trade, Balance of payment and Monsoon progress. Corporate performance in 1QFY17 has been analysed as well. In Policy Focus, we present the highlights of the key policy documents released during August-September 2016. Analysis of monetary policy stance of central banks of US, Japan and UK is covered in Global Trends.
We believe valuations are not cheap, but business cycle remains in the nascent stage. Prefer middle-of-the-road approach and recommend investing in schemes with higher flexibility.
Dear Investors,
September saw a spillover of the previous month’s equity
market correction. The main reason for this was the continuing
bleak global events, which also negated domestic macro greenshoots to a large extent. In the West, the possibility of a US Fed
rate hike lingers, keeping investors globally on their toes.
Amidst this global weakness, uncertainties of global markets
with respect to the Euro have reduced after Alexis Tsipras’
Syriza party returned to power once again in Greece, this time
with a majority. The Chinese government is also taking
initiatives like tightening trading rules on forex and stock
market to stabilize their economy. The slowdown in China in a
way has been India’s gain, which has led to India emerging as
the top destination for FDI investments, attracting $30 billion
by the end of June 2015.
Closer home, better looking green-shoots portray a recovering
economy. Industrial growth has been above 4% for the past 2
months, whereas retail inflation continues to remain lower.
Although there has been a double digit deficit in the rainfall
this year, RBI is not too much worried about the pressure on
the food prices given the comfort it has derived from the
actions by the government to manage supply. An addition to
these positives was RBI increasing the foreign investment limit
in central government securities. This will help create a new
pool of money to compensate for the lowering SLR imposed on
banks.
Markets rejoiced at the bonnes nouvelles (good news) of the
50 basis points rate cut by RBI at the fourth bi-monthly
meeting. The main objective behind this was to enhance
growth in the economy. Mr. Raghuram Rajan hopes that
investment should respond more strongly after some certainty
about the extent of monetary stimulus in pipeline, even if the
transmission is low. With this transmission, investments in the
real economy would increase. This announcement was then
followed by a highly ‘dovish’ stance, with the RBI repeating
that it would remain in an ‘accommodative mode’. The rate cut
has increased the cumulative rate cut this year to 125 bps. It is
hearting that banks like SBI has cut its base rate by 40 bps.
All in all, the month saw events that were unexpected, events
that created a yin-yang sentiment among investors and events
that made India shining more convincing. RBI has taken the
first bold step on its part. The question now is what the
government will do on its part to grow our economy!
Global as well as domestic markets rallied during the month on back of upbeat economic data and positive sentiments. Hence we dig deeper into the nitty-gritties of markets in this Equity Market Update.
#ICICIPrudentialMutualFund #EquityMarketUpdate #Equity #Investment
Similar to Weekly Market Review ; May 3, 2013 (20)
A mutual fund is the money pooled in by a large number of investors and offers an opportunity to invest in a diversified and professionally managed basket of securities at a relatively lower cost. Read for more details.
Risk is a result or outcome which is other than what is / was expected. It is the amount of money that an investor can afford to lose in the interim, in his quest for certain return on investments. It is a state of uncertainty. Read more to find out how to access your risk appetite.
Asset allocation is an investment strategy. It helps to keep a balance between risk and return of any particular asset class. Asset allocation refers to investing a certain percentage of your investible surplus in respective asset classes, such as equity, debt, gold and real estate. Read to understand asset allocation in detail.
As you may be aware, life expectancy of individuals has increased; which brings with it rise in medical and living costs during old age. Therefore, it is imperative to make provision for expenses wisely. All of us want to maintain our standard of living during our old age as well, but to do so we need to actually start thinking and planning for our retirement right from the beginning of our career when we are young. This ppt aims to help you understand how you can identify and establish your financial goals.
As you may be aware, life expectancy of individuals has increased; which brings with it rise in medical and living costs during old age. Therefore, it is imperative to make provision for expenses wisely. All of us want to maintain our standard of living during our old age as well, but to do so we need to actually start thinking and planning for our retirement right from the beginning of our career when we are young.
This session aims to help you understand how you can identify and establish your financial goals.
An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund
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An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund
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An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund
Many people often misconstrue savings with investments. But let us tell you that there is indeed a difference between the two. Merely putting aside money under the mattress, or in a vault, bank locker or savings bank account after meeting your expenses and liabilities may not mean that money works for you. In times where the inflation bug is eating into your earnings, you need to move a step forward and invest. More importantly, invest wisely! By now many of you may have realized that there is indeed a difference between saving and investing. So let’s delve a little deeper and understand the difference between the two…which can help us march forward in our journey of wealth creation.
An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund
1. International
Global equity markets moved up as investors took comfort from increased central bank bias towards growth,
even as latest manufacturing data came in weak. Sentiment was also boosted by the latest US payroll data
and the MSCI AC World Index closed up 1.72%. Bond yields were largely unchanged as comfort from
policy support was offset by increased demand for riskier assets and data out of US. Strong rally in gold and
crude oil helped the Reuters Jefferies CRB Index close up 1.67%. In currency markets, the Chinese
renminbi touched record highs and there is speculation the government may be willing to widen the
trading band. Better payroll numbers helped the US dollar index pare losses at close of week.
• Asia-Pacific: Regional equities were largely trading higher, with the exception of key markets such as
Japanese and Indonesian equity markets. Japan industrial output increased marginally in March while
retail sales fell 0.3%. China’s official PMI index dropped from 50.9 to 50.6, the headline trend was in
line with the readings from the HSBC index revealed in the week before.Taiwan’s economy grew at a
relatively slower pace of 1.5% in Q1-2013 due to fall in demand from key trading partners. India’s central
bank announced another 25 bps cut in rates to 7.25%, but was circumspect about future rate cuts.
• Europe: European equity markets moved up amidst positive policy action and formation of a
coalition government in Italy. ECB lowered its benchmark refinancing rate by 25 bps to 0.5% and
indicated it remains on stand-by to take further action if required. The European Commission
lowered 2013 & 2014 growth forecasts for the region to -0.4% (from -0.3%) and 1.2% (from 1.4%)
respectively and said there is scope for easing the pace of austerity. Greece agreed to divest its
controlling stake in gaming company OPAP for €712 mln. Portugal proposed reducing public sector
jobs to meet its deficit reduction targets. UK economic data beat market expectations - April
Manufacturing PMI inched up from 48.6 to 49.8. The Czech National Bank left policy rates
unchanged and Romania’s central bank narrowed its standing facility corridor.
• Americas: US equity indices outperformed global markets and the S&P 500 touched record all-
time highs amidst better than expected economic and positive corporate news. Non-farm payrolls
expanded by 165,000 in April and the unemployment rate fell to multi-year lows of 7.5%. Payroll
data for February and March were revised upwards.The April ISM manufacturing index retreated to
50.7 from 51.3 in March, but the Conference Board’s consumer confidence index rose. The US
Federal Reserve said it will continue its asset purchase programme, but will tweak the quantum/pace
of purchases based on evolving economic conditions. Elsewhere in the region, Canada GDP grew
by 0.3% for the second consecutive month in February. On the corporate front, Apple commenced
a $17 bln bond offering, one of the largest bond issuances ever.
Market Review
WEEK ENDED MAY 3, 2013
2. Weekly Weekly
change (%) change (%)
MSCI AC World Index 1.72 Xetra DAX 3.94
FTSE Eurotop 100 1.88 CAC 40 2.70
MSCI AC Asia Pacific -0.23 FTSE 100 1.48
Dow Jones 1.78 Hang Seng 0.63
Nasdaq 3.03 Nikkei* -1.37
S&P 500 2.03 KOSPI 1.09
*As of May 02, 2013
India - Equity
Positive global sentiment and hopes of monetary easing helped markets extend gains during the holiday
shortened week. However, markets pared gains after RBI provided a cautious guidance on further rate
cuts. Mid-cap stocks outperformed large caps. Amongst sectoral indices, the FMCG and technology
indices were the top gainers.The former benefitted from a spike in the shares of Hindustan Unilever, after
its parent company Unilever announced an open offer to purchase additional stake. In other corporate
developments, Bharti Airtel is raising equity through sale of 5% stake to Qatar Foundation Endowment.
FIIs bought equities to the tune of $605 mln in the first three trading days of the week.
• Macro: Latest manufacturing data was mixed - India’s index of eight core infrastructure industries
recorded growth of 2.9% in March as against a decline of 2.5% in February. Growth was led by growth
in steel, petroleum refinery and cement production. On the other hand, the HSBC Manufacturing
Purchasing Managers' Index (PMI) dipped from 52 to 51 in April, indicating economic activity
remains sluggish.
• Banking Sector: In its annual monetary policy review, RBI announced a slew of prudential measures
aimed at plugging systemic risks and increasing transparency.The central bank said it will issue draft
guidelines on wealth management services/distribution of third party products and has disallowed
direct incentives to bank employees through distribution and tightened KYC norms. Other policy
measures announced include lower risk weightages for credit to residential real estate developers and
norms for dynamic loan loss provisioning as well as restructuring of credit. Separately, the bank has
also rolled out measures to increase financial inclusion and boost sector’s reach. In an unusual move,
RBI has announced controls on banks’ ability to import gold, besides introducing additional
restrictions on lending against gold. It aims to put in place guidelines for NBFCs dealing in gold loans.
The measures are positive and should lead to better governance and correct pricing of risks within
the system. One will have to see the detailed guidelines to evaluate any impact on fee income for
banks. Broadly in our view, private banks remain well placed vis-à-vis public sector peers due to their
higher capital adequacy levels and asset quality. Overall, India’s financial sector will be one of the key
beneficiaries of rising income levels and the growing demand for financial services/products. In
addition, efforts to promote financial inclusion and increasing comfort with market-linked
investments are positive trends for the sector.
3. Weekly change (%)
S&P BSE Sensex 1.50
CNX Nifty 1.24
CNX 500 1.47
CNX Midcap 2.36
S&P BSE Smallcap 0.14
India - Debt
Indian bond yields closed the week mixed after RBI delivered a 25 bps cut in repo rate but warned there
was limited scope for further monetary easing.The policy tone weighed on market sentiment, but markets
managed to recover from the sell-off and ended below highs.
• Markets: : Treasury bond yields at the shorter end of the curve eased – both 1 & 5 year gilt yields
traded 5 bps lower. In contrast, yield on the 10-year benchmark paper increased 6 bps. Overnight call
money rates slid from around 7.5% to 7.2% levels.The Indian rupee was bolstered by government move
to cut withholding tax on FII debt holdings and relaxation of Tax Residency Certificate rules.
Source: RBI
• Liquidity/borrowings: The policy outcome was in line with expectations, amidst softer economic
data and fall in global commodity prices. However, the tone was cautious (compared to market
expectations), despite the latest inflation and current account deficit (CAD) data.Whilst acknowledging
the growth slowdown, the central bank said it is ready to use “all instruments under its command” to
keep inflation at desired levels (about 5% by March 2014).The central bank sees supply side-imbalances,
particularly in food and infrastructure segment, along with rise in wages and MSPs (minimum prices for
agricultural goods), as the key drivers of inflation. Besides, it has cited CAD as well as its funding as the
biggest risks to macro-economic stability.
GDP growth projections for FY14 at 5.7% represent only a marginal recovery over its FY13 estimates
(5.5%) and factor in tepid growth in manufacturing amidst weak external environment and stalled
investment cycle. It has clearly stated the recovery will not be sustainable without meaningful rebound
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