Anda di halaman 1dari 75

MD Desk

The calendar year 2013 saw both equity and debt markets delivering reasonable returns, though amid high volatility. Moving forward, we look at 2014 with renewed optimism as the positives outweigh the negatives. We may have probably left many uncertainties behind us, as 2014 dawns with the global and domestic economy improving and we can expect economic growth and earnings, which we believe have bottomed out in 2013, to show an uptrend. We must look at both risks and opportunities as we project into this year. There may be global uncertainty around the taper programme and growth in developed economies. A reasonable portion of earnings in the index companies in information technology, pharmaceuticals Anup Bagchi and automobiles are linked to global MD & CEO economies. In addition, due to paucity of ICICI Securities Ltd. domestic savings in equity, we are overly dependent on foreign institutional investors (FII) flows for our equity requirements both for primary as well as secondary markets. Any depreciation in our currency has immediate negative impact on FII flows. We can expect a stable to mildly depreciating dollar-rupee this year with stable current account deficit. General elections, a major event during the middle of the year 2014, assume significance in the context of risk to sovereign rating and investment cycle. A stable elected government is good for sovereign rating and FIl flows. The revival of the investment cycle will also depend on the priorities - infrastructure versus social spending - of the new government. A well-distributed monsoon last year ensured a bumper kharif harvest and a similar rabi harvest is likely to follow. Agriculture growth will continue to boost rural income and rural consumption. This will help two-wheelers and select fast moving consumer goods (FMCG) with low penetrated categories and rural focus. However, urban discretionary spending will continue to remain subdued till the economic growth picks up, inflation drops and/or salaries increase. This does not bode well for domestically exposed automobile companies.

Exports will continue to be a growth driver in this calendar year on the back of an improving global macroeconomic environment and a depreciated rupee. This will continue to benefit sectors such as IT, pharmaceuticals, commodity exporters and companies which have a global footprint and a large part of earnings abroad. Furthermore, favourable regulations and consolidation in certain sectors such as oil and gas (privatesector) and telecommunications will help them continue to improve their profitability. De-bottlenecking of investments has already been done and will increase capital efficiency in the country as a lot of stuck projects will start being delivered. However, fresh investments are still some time away and the outlook appears good for low leveraged capital goods stocks. Other infrastructure stocks could be trading opportunities based on news flows around de-leveraging by asset sales or getting sanctions, approvals to kick start stuck projects. Banks might continue to be under pressure due to high cost of funds, sluggish demand for corporate credit and elevated non-performing assets (levels). We continue to prefer private sector banks over public sector ones as the latter are likely to see significant dilutions due to capital requirements. Finally, mid-caps might be back in action in this calendar year. Select mid-caps with clean balance sheet and leadership poised for gains as valuation gap with large-cap converge. We expect Nifty to sniff 6,700 pre-election and if there is a decisive government, it can move even higher. We expect the Nifty to trade in the 6,000-6,800 range during CY14. Relative to Nifty, we are overweight on IT, pharmaceuticals, oil and gas, telecom, cement and energy; underweight on financials (banks and non-banking financial companies), industrials, materials and real estate; and equal weight on auto, FMCG and utilities. On debt front, we believe that with the macro-economic variables (GDP has bottomed out, inflation seems to be peaking out, concerns over current account deficit has abated and currency has stabilized) and the system liquidity improving, investments in this space look favorable. While longer duration income funds may offer potential gain opportunity as government bond yields are closer to their peak, short-term debt funds offer stable returns by utilizing opportunity to capitalize on current higher yields and credit spread opportunities on medium duration papers. As a part of your asset allocation strategy, it is important that you allocate your capital into both equity (for growth) and debt (to provide stability). We advise investors to focus on their asset allocation first to meet their long-term goals. Our message remains the same - Keep investing and stay invested for your life goals. Through this magazine and our website www.icicidirect.com we want to make an earnest attempt to partner with you in setting and achieving your financial goals. Give us an opportunity to serve you, walk into any of your Neighbourhood Financial Superstore and talk to us
ICICIdirect Money Manager 1
January 2014

EDITORIAL
The calendar year 2013 was reasonably well for almost all the major asset classes, though amid high volatility. As we head into another year, it is natural for most of us to come up with the question, how the New Year would be, for markets and investments, in terms of performance. It's not easy to predict the future. However, knowing where the economy and markets are headed, based on logical analysis, can help us make informed investment decisions. In our cover story of this edition, we bring to you a string of views from fund managers on how they see the year 2014 panning out for major asset classes. Further, to get the big picture of markets in particular, from both fundamental and technical point of view, we cover exclusive columns by Pankaj Pandey and Dharmesh Shah of ICICIdirect, who share their views on what's next for the markets and how you might position your portfolio for the year. Volatility demands changes in the tactical allocations. One can reduce the risk by allocating a part of his or her capital into defensives. In this edition, we offer comprehensive information and analysis on FMCG funds, which offer good investment opportunity in the current scenario. I would also like to draw your attention to our Guest Column by Rohit Salhotra, MD & CEO, ICICI Home Finance Company Ltd., who provides us with the real estate review 2013 and the outlook for 2014. So read on, stay updated and involved. Do write in with your feedback at moneymanager@ icicisecurities.com and share your thoughts. We wish you a happy and prosperous New Year.
Editor & Publisher Coordinating Editor Editorial Board Editorial Team : Abhishake Mathur, CFA : Yogita Khatri : Sameer Chavan, Pankaj Pandey : Azeem Ahmad, Nithyakumar VP , Nitin Kunte, Sachin Jain, Shaboo Razdan, Sheetal Ashar, Venil Shah

ICICIdirect Money Manager

January 2014

CONTENTS
MD Desk........................................................................................................... 01 Editorial............................................................................................................ 02 Contents........................................................................................................... 03 News................................................................................................................. 04 Fundamental Market Outlook 2014 By Pankaj Pandey, Head - Research, ICICIdirect ............................................. 05 Technical Market Outlook 2014 Dharmesh Shah, Head - Technical Research, ICICIdirect shares his views on markets, currency, gold and crude oil for 2014 ............................................. 08 Monthly Derivatives Strategy By Amit Gupta, Head - Derivatives, ICICIdirect .............................................. 14 Stock Ideas: ITC and Oberoi Reality.............................................................. 18 Flavour of the Month: Investment Outlook 2014 Here we bring to you a string of views from fund managers on how they see the year 2014 panning out for major asset classes ....................................... 24 Guest Column: Real Estate Outlook 2014 By Rohit Salhotra, MD & CEO, ICICI Home Finance Company Ltd ................ 41 Ask Our Planner: Your personal finance queries answered......................... 46 Your Financial Health Check Here we assess Mumbai-based familys finances and suggest a suitable way forward ..................................................................................................... 50 Primer: Understanding Fiscal Deficit............................................................. 53 Mutual Fund Analysis: Category FMCG Funds.......................................... 55 Equity Model Portfolio.................................................................................... 60 Mutual Funds Model Portfolio........................................................................ 63 Quiz Time......................................................................................................... 65 Monthly Trends................................................................................................ 66 Premium Education Programmes Schedule.................................................. 70
Important: All the contents of ICICIdirect Money Manager are the exclusive property of ICICI Securities Ltd. No article, either in whole or in part, may be published circulated or distributed through any medium without the express consent of ICICI Securities Ltd. Join us on Facebook at http://www.facebook.com/icicidirect ICICIdirect Money Manager 3
January 2014

NEWS
EPFO raises interest rate to 8.75% for 2013-14 Retirement fund body Employees Provident Fund Organisation (EPFO) has announced a rise in interest rate on provident fund (PF) deposits to 8.75 per cent for 2013-14, to benefit 50 million subscribers. The interest rate on PF deposits in the previous financial year was 8.5 per cent. Courtesy: Business Standard CBDT may do away with submission of ITRV forms In what could be good news for lakhs of taxpayers filing their I-T returns online, CBDT is mulling doing away with the mandatory submission of paper verification printout to its processing centre in Bangalore. Central Board of Direct Taxes (CBDT), the apex office to formulate policies for the Income Tax department, was prompted to take this customer-friendly step after it was recently informed that lakhs of such paper statements ITRV have not reached its Central Processing Centre (CPC) despite people filing their e-returns online. Courtesy: The Hindu Get landlords PAN details on plain paper for HRA claim Salaried taxpayers, who want to claim I-T exemption on house rent allowance (HRA) exceeding ` one lakh per annum, will have to obtain the PAN card number and other details of their landlord on a plain A-4 size paper before submitting it to their employer. Courtesy: The Economic Times ETF of PSUs set for launch in a month Soon investors can boast of a portfolio consisting of shares of 11 blue-chip Central Public Sector Enterprises (CPSEs) without any risk considerations. An empowered Group of Ministers (eGoM) under the chairmanship of Finance Minister P. Chidambaram has approved the composition of the Central Public Sector Enterprises Exchange Traded Fund (CPSE-ETF). This fund will be used as an alternative to direct share sales of CPSEs. It will be listed on a stock exchange and trade like other shares on the bourse. Courtesy: The Hindu Business Line

ICICIdirect Money Manager

January 2014

2014 Fundamental Outlook


Where are the markets headed in 2014? Pankaj Pandey, Head - Research, ICICIdirect shares his outlook on markets for 2014 and how you might position your portfolio for the coming year... The market performance was in line with Sensex earnings in the year 2013. After declining 9% in the middle of the year led by a slew of negative news flows on both the global and domestic front, markets were up 8% in the year. After two subdued years with negligible growth, Sensex earnings are expected to grow 1718% in FY14 and FY15 primarily due to the low base effect and earnings upgrades in select stocks. Though sentiments have already rebounded, an economic recovery and broad based earnings improvement will take time. Though some of the economic data points have shown signs of bottoming out, an all-round improvement in the macro situation still seems distant. With limited number of potential alliance partners, a Modi-led NDA may find it
ICICIdirect Money Manager 5

Pankaj Pandey Head - Research, ICICIdirect

difficult to corner a majority to form a government. We would witness an increasing dominance of regional parties, which may render the eventual alliance weaker, and puncture positive sentiments. Nonetheless, the market reaction to election results may be a short-term phenomenon. Sentiments would pick up with implementation of positive and growth oriented reforms,
January 2014

2014 Fundamental Outlook


along with improvement in other macroeconomic factors. The government may be able to restrict the fiscal deficit to the 4.8% of Gross Domestic Product (GDP) target by cutting plan expenditure by around 19% (` 1.04 lakh crore, ~ 1% of GDP) in FY14. However, even as non-plan expenditure continues to rise on the back of various social benefit schemes & subsidies and a challenging economic environment weighs on receipts, fiscal deficit challenges may resurface in FY15. We expect Wholesale Price Index (WPI) to come off by around 100 basis points (bps) and Consumer Price Index (CPI) by 200 bps from current levels to 6.5% and 8-9%, respectively, for FY15. However, the pullback in inflation may not be enough to bring it within Reserve Bank of Indias (RBIs) comfort zone. Hence, we do not expect rate cuts during majority of the next calendar year. We believe interest rates are nearing their peak, and we may witness
ICICIdirect Money Manager 6

one more rate hike of 25 bps if inflation does not soften as expected. Domestic equity markets had reacted vigorously to initial talks of quantitative easing (QE) tapering. However, with a slew of measures from the RBI and government and receding current account deficit, India looks better prepared for eventual liquidity tapering. We believe QE tapering would eventually turn out to be a non-event. On the global front, India could face stiff competition from China for global funds. Chinese markets are down 8% year-to-date (YTD), as there were apprehensions over leadership change. With a smooth transition in leadership, relatively higher economic growth and inexpensive valuations, China is better placed than India, which faces challenges on all three parameters in FY15. We expect the Sensex to trade at 15x one-year forward Earnings per Share (EPS) of 1543 (25% of FY14E EPS `
January 2014

2014 Fundamental Outlook


1361 and 75% FY15E EPS of ` 1603) at 23000 by December 2014. Correspondingly, we expect the Nifty to reach 6900. However, if corporate earnings and economic recovery do not pan out as expected, we will continue to see volatility ridden markets next year.
Strategy 2014 - Sensex & Nifty Target FY14E Sensex EPS Weightage Target Multiple Sensex / Nifty Target 1361 25% 15x 23000 / 6900 FY15E 1603 75%

growth, better asset quality), telecom (higher regulatory clarity, de-leveraging) & cement (positive operating leverage, limited capacity addition). We are neutral on Information Technology (demand intact, rich valuation), pharmaceuticals (rich valuation, tepid domestic growth), oil & gas (earnings dependent on deregulation, limited volume growth) & media (earnings visibility intact, rich valuation). We remain negative on capital intensive sectors like public sector banks (asset quality concerns, earnings volatility), capital goods & infrastructure (capital expenditure yet to revive, policy challenges to remain), power (regulatory overhang, uncertain demand), metals (low domestic growth, price volatility), real estate (muted earning cycle, leverage remains high), shipping (earnings stressed, increased tonnage capacity).

Since we do not expect the economy to rebound meaningfully in the near future, we continue to favour defensive & quasi defensive sectors, which have healthy balance sheets. We like Fast Moving Consumer Goods (growth to inch up, valuation modest in select pockets); automobiles (attractive valuation, good earnings delta in case of recovery). Also, we like private banks (sustained

The views expressed in the article are personal views of the author and do not necessarily represent the views of ICICI Securities. ICICIdirect Money Manager 7
January 2014

2014 TECHNICAL OUTLOOK


Rolling over bullish sentiment into 2014 caught off-guard and investor sentiment is knocked down badly. Therefore, each subsequent revisit towards the major bull market peak invites a reaction and renders the benchmarks vulnerable to selling pressure at such peaks. As index is currently poised near its 2008 and 2010 peaks, we believe the rally towards 22000 / 6550 levels in Q1CY14 could turn out to be a fallacy as the leap to new high would be an ideal way to attract the last buyer. A closer look at the historical evidence of domestic bourses reveals the Sensex has a seasonal tendency of topping out or at least witnessing a sizable correction in the first quarter of every year. We have observed that in the last 14 years the index has made a significant top on 12 occasions in the first quarter of every year. Therefore, combining the strong seasonality traits of our markets along with key technical resistances projected around the 22000/6550 zone suggests a strong possibility of the index pausing and entering a corrective phase in the first
8
January 2014

Dharmesh Shah
Head - Technical Analysis, ICICIdirect

Domestic equity benchmarks are poised at an important crossroad near their lifetime highs. The question foremost on the minds of every equity investor is whether this is the beginning of a new bull market or is this just another bear market rally? We believe the former is true. However, we feel this will not be a tear away rally and investors will get good entry points in 2014. Our charts seem to indicate that a good buying opportunity is expected to emerge at ~18000-18500/5400-5500 levels in Q2CY14, which we strongly recommend to be bought into with an eye for 23000-24000/6900-7000 by 2015. Rationale Major Bull market peaks are preceded by extreme market frenzy and a broad sense of euphoria. As the marked tops out and does a U-turn, this euphoric sentiment is
ICICIdirect Money Manager

2014 TECHNICAL OUTLOOK


quarter of 2014. The entire up-move since December 2011 has been a well-channeled affair. The lower band of this long term rising channel for the second quarter of 2014 is pegged around the 18000-18500/54005500 region. The long term 200-week simple moving average (SMA) for the Sensex, Nifty is currently placed around 18375, 5530, respectively. As the index approaches the 200- week average, it suggests a relatively cheap valuation compared to the price range of the past four years and, therefore, triggers value buying. The major bullish gap area formed during early September 2013 after the new Reserve Bank of India (RBI) governor took charge and unleashed a slew of measures to shore up the rupee and reform the banking system is placed between 18847 & 18567 and 5552 & 5448 levels. This was the first major bullish gap, which acted as a sentiment changer after the correction during May-August 2013. Therefore, this will remain a stronghold of bulls.

BSE Sensex Weekly Candlestick Chart


Upper band of the key up-trending channel projects major resistance around 22000 levels in the first quarter of 2014

Bullish gap area @ 18847 18567

200 week SMA

The confluence of the long term 200 week moving average (18375/5520), major bullish gap area (18847 18567/5552-5448) and the lower band of the key uptrending channel around the 18300/5500 region makes this a solid base for the markets

Source: Bloomberg, ICICIdirect.com Research

ICICIdirect Money Manager

January 2014

2014 TECHNICAL OUTLOOK


Buying on declines during Election Year rewards handsomely The year 2014 being an election year will have a significant bearing on sentiments in equity markets. It has been observed that the markets tend to give a thumbs-up to a stable government whereas they tend to get nervous in an unstable political scenario. Our observation of market behaviour during an election year indicates the index has done exceedingly well on seven out of nine occasions in the last three decades. We expect volatility to shoot up in the run-up towards general elections. However, based on historical evidence, we believe any price corrections towards the 18000-18500 / 5400-5500 support zone in Q2CY14 should be utilized as an entry opportunity.
Sensex returns during election year in last three decades
90% 82% 64% 60% 81%

30%

25% 17% 8% 13% -1% -17%

0%

- 30% 1980 1984 1989 1991 1996 1998 1999 2004 2009

Election Years

Source: BSE, ICICIdirect.com Research

Currency Outlook The US$/INR pair behaved precisely in line with our expectations in the year 2013. We had indicated that the US$/ INR pair is expected to take support at 53 mark and embark upon the next up leg towards 57-57.50 during 2013. The US$/INR pair bottomed out precisely near the earmarked support of 53 levels in the first quarter of 2013 as it made a low 52.97 towards February 2013 and witnessed a stupendous rise to a record high of 68.36 levels by August 2013. After nearly 23% flight during 2013, the US dollar is expected to remain under pressure on rallies. The US$ is currently placed near its short-term support around 60-61. In the short-term, the US$/INR pair may move towards 64-65 being the 61.8% retracement of decline from 68 to 61 levels. However, we expect the US dollar to remain subject to selling pressure on such rallies and react lower towards 58 odd levels during 2014. The long term rising trend line connecting the yearly lows since 2011 is placed around 58 levels and, therefore, is seen as a very strong support for the US Dollar.
10
January 2014

ICICIdirect Money Manager

2014 TECHNICAL OUTLOOK


US$/INR - Monthly bar chart

Source: Bloomberg, ICICIdirect.com Research

Gold (International) Outlook During mid-2013, gold prices breached the lower band of their 20-month trading range of $1800-1550 led by a host of reasons like confidence returning to the recovery of the US economy, a stronger US dollar and panic created by negative news flow of countries like Cyprus selling their gold reserves to fund sovereign debt. Technically, the entire decline off September 2011 highs of
ICICIdirect Money Manager 11

$1921 is seen as a correction of the 2008-11 rally (6821921). The most significant observation has been that the 35-month rally (October 2008-September 2011) has been retraced by little less than 61.8% in the past 26 months. From a longterm trend analysis, such a slower pace highlights a healthy corrective nature of the decline as usually trend reversals are characterized by faster retracements, which are absent in case of gold prices.
January 2014

2014 TECHNICAL OUTLOOK


Therefore, going forward in 2014, we expect gold prices to find support around $1150/ ounce being the confluence of the long term rising trend ($1135) and 61.8% Fibonacci retracement of the 2008Gold (International) Outlook 11 rally placed at $1155. We expect gold prices to post a pullback towards the breakdown area of its 20-month long consolidation (September 2011-April 2013) at $1550.

Source: Bloomberg, ICICIdirect.com Research

Brent Crude Outlook The most important observation on the long term chart of Brent crude is that after the 28-month rally from December 2008 lows ($ 36/ barrel) to April 2011 highs ($127/barrel) Brent crude has been consolidating in a sideways manner for the past 33 months.
ICICIdirect Money Manager 12

While the time-wise correction has extended beyond 100% of the time taken for the rally, price-wise it has retraced the 2008-11 rally only by 38.2%. The longer time consolidation and limited price correction (38.2%) indicate the corrective nature of the decline and highlight the overall positive price structure.
January 2014

2014 TECHNICAL OUTLOOK


Another noteworthy observation is that during this consolidation each down leg has found support around the 200week moving average, which is currently placed around $102. The entire sideways action since 2011 is taking the shape of a contracting triangle. While only a break out from the conGold (International) Outlook solidation would inject further momentum and directional bias, the overall positive price structure makes us believe Brent crude prices will rally towards their identical tops of April 2011 and March 2012 placed around $128. Therefore, declines towards $102 levels are likely to provide entry opportunities.

Source: Bloomberg, ICICIdirect.com Research

The views expressed in the article are personal views of the author and do not necessarily represent the views of ICICI Securities. ICICIdirect Money Manager 13
January 2014

DERIVATIVES STRATEGY
Maintain our view of Nifty support near 6100 seen at the 6100 Put and 6300 Call strike for the January series indicating range bound bias prevailing for the index. Moreover, despite a continuous decline in the broader index, the volatility of index options has remained subdued and did not surge, suggesting options writing going on at OTM Put strikes. Since the inception of the current series, stock specific short addition has been observed, especially in banking heavyweights. Thus, a round of short covering can be expected if the Bank Nifty sustains above its major Put base of 11000 strike. In such a scenario, we believe that the Nifty may also attempt to surpass its highest Call base of 6300 strike to test the previous stated target of 6500.

Amit Gupta
Head - Derivatives Research, ICICI Securities

Short covering can be expected above 6300 for target of 6500. We maintain our view of Nifty support near 6100 in current consolidation. Amid profit booking and result announcements, the Nifty was able to hold its crucial support of 6100 in the first half of the January series. Nifty futures witnessed continuous closure of long positions since the inception of the series. As a result, the current aggregate open interest in Nifty futures is the lowest in the last four months since September. Hence, leverage factor in the index is significantly low compared to the past couple of months. In the options space also, major open interest concentration continues to be
ICICIdirect Money Manager 14

January 2014

DERIVATIVES STRATEGY
India VIX: Upsides may be capped near 19 levels in the near term. Moreover, domestically, WPI data will be seen as a trigger for any policy action. In such a scenario, a marginal rise in volatility cannot be ruled out. However, we do not expect the volatility index to surpass 19 levels in the near term. Bank Nifty: May drag broader markets if it slips below major support of 11000. While midcap PSU banking saw strong short covering trend in the December series, Bank Nifty heavyweights consisting of private stocks broadly remained in the range. The Bank Nifty moved up close to 4% during the series but the Nifty gained 2.8% during the same period. On a positional basis, major support for the Bank Nifty is placed at 11000 , which is the highest Put base in the January series continuing the trend of the previous series. The index may be dragged towards 9800-10000 if it does not hold 11000. On the higher side, the highest Call base is placed
15
January 2014

The India Volatility Index (India VIX) has continued to decline in the last couple of months and is currently placed near its six months lows. Profit booking of almost 4% in the broader index did not create any upsurge in the volatility index. However, the upcoming policy meet in India and the US towards the end of the month may trigger a rise in volatility. The volatility index has been unable to sustain above its 50-DMA since October 2013 and continued to hover below these levels. Currently, the 50DMA for India VIX is placed at 18.6. Hence, any upside in the volatility index is likely to be capped near these levels.
ICICIdirect Money Manager

DERIVATIVES STRATEGY
at 12000 and the recent top was formed at 12200, which makes a stiff resistance at 12000-12200. A move above these levels would require strong participation from the private banking space, which was absent in the December series. Key trigger for this space will be in the form of WPI numbers on January 15 and Q4 results of index heavyweights, which are expected in the second half of the January series. S&P 500: Buy on decline towards 1800 for target of 1860 In the last month, S&P has found support near our stated support of 1780 and bounced sharply towards 1850. The index has observed all the negativity regarding tapering in the US Fed policy and remained range bound. However, in the last couple of weeks, S&P hovered in a narrow range during the festive season and New Year. However, we believe the positive trend in the US market
ICICIdirect Money Manager 16

is still intact and declines in the index should be utilised for fresh buying. On the options front, major accumulation of open interest is visible at the 1800 Put strike for the February series. As the index continues to linger above 1800, a round of short covering can be expected above its Call base of 1850 once again. In recent upsides, the S&P index has witnessed continuous buying support near its 50 DMA levels. In the last month as well, it has reverted from these levels only. Currently, the 50 DMA for the S&P is placed at 1800 levels, which should act as immediate support for the index.

Gold: Current upside may be capped near 1300; downside support remains at 1180
January 2014

DERIVATIVES STRATEGY
Gold futures spent most of the time trading below 1250 levels last month. However, it has not breached its June lows of 1180 and witnessed fresh buying from these levels. Currently, the highest options base for the precious metal is placed at the 1300 Call strike. Thus, on a near term basis, upsides may be capped around these levels. However, if gold is able to remain above 1250, it may attempt to move towards the higher target of 1300 in the days to come. As per CFTC data reported for UK, almost 38% open interest in gold has positive bias. Hence, 1300 can be expected if gold moves above 1250. On downsides, immediate support can be expected around 1220. JPYUS$: Likely to decline towards 101.5. The Japanese Yen continued its depreciation against the US$ and tested 105 levels last month. However, the last couple of sessions saw a sharp deprecation towards 103.5. We expect the deprecation trend to continue for a while. It may move towards 101.5 levels in the days to come. The active futures contracts of March 2014 for JPY in CME are currently trading at a deep discount over the spot indicating the spot is expected to come down in the near term. The Japanese Yen spent almost five months from July 2013 to November 2013 near 101.5 levels. Hence, in the current decline, the currency pair is likely to find support near 101.5 in the near term.

The views expressed in the article are personal views of the author and do not necessarily represent the views of ICICI Securities. ICICIdirect Money Manager 17
January 2014

STOCK IDEAS ITC: Pricing power makes it smoking hot


Company Background ITC is the largest cigarette manufacturer and among the largest paperboard manufacturing companies in India. The company also has second largest hotel chain in India and is aggressively acquiring a strong position in the fast moving consumer goods (FMCG) space. Being the market leader in cigarettes (83% value share in FY11), it has strong pricing power and brand value with a well established distribution network, helping it to derive strength in other businesses too. It is a professionally managed company with institutions holding 49.9% of shares, British American Tobacco (BAT) holding 31.2% of shares and public having 18.9% shareholding as on FY13. Investment Rationale Pricing power in cigarettes to keep earnings growth intact The strong pricing power in cigarettes (~80% market
ICICIdirect Money Manager 18

share by value and ~75% share by volume in FY12) has helped ITC pass on the higher excise impact (~18% in FY13 and ~21% in FY14) entirely through prices without impacting profitability from the segment. Though volume growth was impacted in FY14E (-4%), premiumisation in cigarettes and increasing market share in 64-mm continued to aid its margins to 59.6% (FY13) and 64.8% (FY14E) from 56% (FY12). We believe that with excise hike moderating in FY15E and FY16E, thereby limiting price hikes, ITCs volume growth would revive to ~1% in FY15E and 2.5% in FY16E keeping margins intact at ~65% (FY16E) and earnings before interest and taxes (EBIT) contribution at +80%. FMCG business strength gaining

ITCs relentless expansion in the FMCG business has almost doubled its revenues to ` 7012.4 crore in the past five years (FY08-13)
January 2014

STOCK IDEAS
with losses declining from ` 483.5 crore in FY09 to ` 45.2 crore in FY14E. This has been in spite of constant innovation and expansion into new segments and strengthening market share across categories (noodles, packaged food, and biscuits). Further, with the companys fruitful expansion in rural India for its FMCG products and efficient sourcing model, we believe the segment would attain breakeven by FY14E and contribute to margins positively from FY15E onwards. We expect the revenue growth from the segment to remain healthy at 18.6% compounded annual growth rate (CAGR) (FY1316E). Paperboards profitability to sustain until FY16E We believe that led by ITCs dominance in paperboards industry (2nd largest player with value share of ~26% in FY12) paper boards revenues would remain healthy at 10% CAGR FY13-16E (supported by new capacity becoming operational by FY15E) and
ICICIdirect Money Manager 19

margins sustaining at ~22% until FY16E. Earnings growth remains strong, valuations attractive We expect ITCs earnings growth to remain healthy at 15.5% (CAGR FY13-16E) led by continuing strength in the cigarettes business and improving profitability from FMCG and paperboards business. With the stock trading near its five-year average price-to-earnings (P/E) multiple (one-year forward) of 22x FY16E earnings per share (EPS), we believe it is attractively valued at current market price and provides a good entry point in the ` 310-325 range. We value ITC on sum-of-theparts (SOTP) basis valuing cigarettes business at ` 303 (26x FY16E EPS), FMCG at ` 47 (3x Market capitalization/ sales FY16E), paperboards at ` 9 (4x EV/EBITDA), agriculture at ` 12 (3x P/BV FY16E) and hotels at ` 5 (1x EV/room FY16E) and adding cash per share of ` 11; arriving at a target price of ` 387. We assign a BUY rating.
January 2014

STOCK IDEAS
Key Financials
Net Profit (` Crore) EBITDA (` Crore) Net Profit (` Crore) EPS (`) FY13 29,606 10,620.7 7,418.1 9.4 FY14 32,631.1 12,738.5 8,734.4 11.0 FY15E 37,848.5 14,447.8 10,170.8 12.8 FY16E 42,759.7 16,222.2 11,470.0 14.5

Valuations Summary
P/E (x) Target P/E Dividend yield (%) Price/Sales RoNW (%) RoCE (%) FY13 34.2 41.2 1.6 8.6 33.3 43.7 FY14 29.1 35.1 1.9 7.8 34.3 46.1 FY15E 25.0 30.1 2.3 6.7 35.4 46.7 FY16E 22.2 26.7 2.8 5.9 36.0 47.7

Stock Data
Particulars Market Capitalization Total Debt (FY13) (` crore) Cash and Investments (FY13) (` crore) EV (` crore) 52-week High/Low (`) Equity capital (` crore) Face value (`) MF holding (%) FII holding (%) Figure ` 2,54,232 crore 192.0 ` 3,616.3 crore ` 2,50,807.8 Crore ` 298 / ` 192 ` 792.0 Crore `1 34.3 19.3

Key risks include: Any significant increase in excise duty for the third consecutive year in FY15E Budget and value added tax (VAT) increases across states could significantly impact the cigarettes volume growth, going ahead. Further, ITCs huge investments in the hotels business inspite of earnings from the segment remaining muted could restrict the expansion in return ratios inspite of improving profitability in cigarettes, FMCG and paperboards.
(EBITDA: Earnings before interest, taxes, depreciation, and amortization; EPS: Earnings per share; P/E: Price-to-earnings; RoNW: Return on Net Worth; RoCE: Return on Capital Employed; EV: Enterprise value MF: Mutual Funds; FII: Foreign Institutional Investors). ICICIdirect Money Manager 20
January 2014

STOCK IDEAS Oberoi Realty: Quality in Real(i)ty


Company Background Incorporated in 1998, Oberoi Realty (ORL) is a Mumbaibased real estate developer focussed on premium developments with presence in residential, office space, retail, hospitality and social infrastructure projects in mixed-use and singlesegment developments. With almost ~90% of land bank of ~ 20 million square feet in the Mumbai and its suburbs, ORL is an established brand name. The promoters and promoter group had started operation from 1983 and have collectively developed 33 projects covering over 5 million square feet so far. ORL has differentiated itself with its prudent land acquisition strategy, strong execution track record, excellent corporate governance and pristine balance sheet. Few of the key projects of ORL are Oberoi Garden City (Goregaon), Oberoi Splendor (Andheri east), Oberoi Exotica (Mulund) and Oberoi (Oasis).
ICICIdirect Money Manager 21

Investment Rationale Prudent land acquisition & balance sheet strength A key differentiator ORLs prudent land acquisition strategy (its land parcels are acquired at significantly cheaper cost largely compared to current market prices) coupled with premium realisation have made it one of the highest margin earner (58.8% in FY13) in the sector. This strategy has enabled it to command superior return ratio of 12-14% in the industry vis--vis low single digit in the industry. Furthermore, the availability of financial resources (net cash balance and investment of ~ ` 743 crore in Q2FY14) is another key differentiator for ORL. Given strategy of being prudent in land purchase along with cash at its disposal, ORL would be best suited to lap up a land deal in the scenario where most of it's peers are debt ridden.
January 2014

STOCK IDEAS
Land Parcel Year Area (acres) Cost (` crore) Cost per Developacre eable Area (` crore) (in mn sq ft) Floor space index (FSI) Land cost per sq ft (`)

Goregaon Andheri West Andheri East Mulund

1999-2005 2005 2005 2005

83.9 7.0 24.5 18.8

106.8 31.7 106.0 221.0

1.3 4.6 4.3 11.7

11.2 0.6 3.1 3.2

96 508 339 690

New launches & price cut Key catalyst for volume pick up While ORL sales volume has been subdued in the past few quarters due to un-affordable price level, we anticipate ORL sales volume to grow from 0.5 mn sq ft in FY13E to 1.1 mn sq ft in FY15E on the back of new launches such as Oberoi Exotica in Mulund & Oasis Residential in Worli. Furthermore, we also built in ~25% price cut in Oberoi Exquisite (Goregaon) from current level of ~` 23,500 per square feet (psf) in our assumptions. The pick up in volume offtake should allay investors concern over sales volume. Esquire to reach threshold in Q4FY14E; to drive earning growth of 14.8% during FY13-15E
ICICIdirect Money Manager 22

ORLs Esquire, with unrecognised revenues of ` 1270 crore, is expected to hit revenues recognition threshold in Q4FY14E. This coupled with better sales volume on the back of new launches & price cut would drive ORLs earnings at a compounded annual growth rate (CAGR) of 14.8% during FY13-FY15E. Quality player at attractive valuation ORL is our top pick in the sector given the quality of land bank, cash rich balance sheet, management bandwidth to execute the projects and anticipated pick up in the sales volume with new launches such as Mulund and Worli along with attractive valuation (1.4x FY15E P/BV and 0.7x of its net asset value (NAV)). We have BUY rating with a NAV-based price target of ` 285/share.
January 2014

STOCK IDEAS
Key Financials
Net Sales (` Crore) EBITDA (` Crore) PAT (` Crore) EPS (`) FY12 818 483 463 14.1 FY13 1,042 612 505 15.4 FY14E 1,110 625 458 14.0 FY15E 1,297 751 565 17.2

Valuations Summary
P/E (x) Target P/E (x) EV/EBITDA (x) P/BV (x) RoNW (%) RoCE (%) FY12 15.9 20.2 12.5 2.0 12.4 12.2 FY13 14.6 18.5 10.3 1.8 12.1 14.0 FY14E 16.0 20.4 10.9 1.6 10.1 13.0 FY15E 13.0 16.5 8.1 1.5 11.2 14.3

Stock Data
Particulars Market Capitalization Total debt (`) Cash and investments (` crore) EV (` crore) 52-week High/Low (`) Equity capital (` crore) Face value (`) DII Holding (%) FII Holding (%) Figure ` 7,352 crore 0 ` 743 crore ` 6,806 crore ` 328 / ` 153 ` 328.2 crore ` 10 ` 0.8 12.4

Key risks include: Business concentration restricted to Mumbai Metropolitan Region (MMR); softening lease in commercial space; delay in launches and continued weakness in volume off take; and regulatory changes such as Development Control Regulations (DCR) norms in MMR region.
(EBITDA: Earnings before interest, taxes, depreciation, and amortization; PAT: Profit after tax; EPS: Earnings per share; P/E: Price-to-earnings; EV: Enterprise value; P/BV: Price-to-book value; RoNW: Return on Net Worth; RoCE: Return on Capital Employed; DII: Domestic Institutional Investors; FII: Foreign Institutional Investors). ICICIdirect Money Manager 23
January 2014

FLAVOUR OF THE MONTH


Whats in store for investors in 2014? The calendar year 2013 saw all the major asset classes equity, debt and gold performing moderately, though amid high volatility. The year, however, proved to be relatively better for equity with 8.98% gains on Sensex, while debt posted gains of 8.27% (for short-term) and 3.79% (for long-term). Gold, on the other hand, posted negative returns of 4.50% (in rupee terms). What does 2014 have in store for investors? We asked a panel of fund managers for their views on how they see 2014 playing out for major asset classes and their advice to retail investors. Lets take a look. However, during this period the broader markets have been much weaker. Sensex and Nifty are close to their all time high, broader markets as reflected by BSE Midcap Index and BSE Small cap index are still 35% and 55% below their previous highs respectively. The key problems facing the Indian economy like the high fiscal and current account deficits, persistent inflation and low level of investments are getting addressed. There are early indicators that growth may be bottoming though full-fledged recovery may still be some time away. Improving outlook for global growth and recent
24
January 2014

Ritesh Jain
Chief Investment Officer (CIO), Tata Mutual Fund

Equity: Indian equity markets have been range bound from November 2010 with the Sensex moving in a broad range of 16000 to 21000.
ICICIdirect Money Manager

FLAVOUR OF THE MONTH


currency depreciation augurs well for exporters. Further, companies which are in the process of deleveraging and are improving their balance sheet can see significant change in their fortunes once the recovery sets in. Also, it is important to remember that the structural drivers of Indian economy such as the demographic advantage, low level of penetration of various goods and services, urbanization, low levels of debt remain intact and have not been damaged by the cyclical downturn faced by the economy in the last three years. The markets have staged a strong recovery post the lows seen in August 2013 in the wake of scares of fed tapering and escalation of Syrian conflict. The recent rally has corrected some of the valuation differences between high quality defensives and beaten down cyclical stocks. The
ICICIdirect Money Manager 25

market valuations are fair and earning expectations for the next two years are not based on optimistic assumptions. We feel investors should increase their equity exposure in 2014 in a systematic way. Investors should also allocate a part of their equity investments in the mid-cap space based on their risk appetite. Debt: We believe that the year 2014 will be an even more volatile period for investment in debt than the year 2013. There are number of local plays (elections) & global factors (Pace of quantitative easing (QE) tapering by US Fed) which will play on market sentiment. In the short term one can expect a rally in government securities (G-sec) in the next one month on the back of relief on the rate front. Moreover, with public sector banks getting conservative in their lending to corporate sector on the back of lower capital adequacy
January 2014

FLAVOUR OF THE MONTH


would divert their deposits to government securities, which may support the ongoing rally in the sovereign bonds. However, the euphoria on status quo on rates may wane gradually. The new 10-year benchmark G-sec yield to move up to 9- 9.25% in the medium term, as we expect the Reserve Bank of India (RBI) to act on rates in the coming policy meet. The yields may come under pressure on any significant Rupee depreciation and or increase in the international oil prices which is showing renewed signs of strength. The uncertainty on the additional supply at the longer end of the yield curve due to proposed debt switch, may also keep the yields under pressure. The risk to our outlook may come from inclusion of India in the JP Morgan Emerging Market Bond Index which may lead to rally in the market or Oil prices coming down.
ICICIdirect Money Manager 26

We expect heightened volatility in debt in the year 2014. This volatility should be used to add duration (long term bond funds) as yield move higher. However, we recommend such duration exposure through dynamic bond funds as compared to regular bond funds because in a dynamic bond fund the fund manager has flexibility to tactically manage duration to benefit from the volatility. If investors have a short term investment horizon, they should look at short-term funds and Fixed Maturity Plans (FMPs). In case investors have medium to long term investment horizon; they can start investing in long term funds towards end of first quarter of 2014. Gold: US recovery notwithstanding, the unprecedented liquidity infusion by US Fed seems to be inflating asset prices in US including equities; however
January 2014

FLAVOUR OF THE MONTH


the impact of liquidity is not yet evident in inflation in US. It is yet to be seen how the unwinding of QE will play out on asset prices and its contribution (if any) to recovery in US, in terms of investments into productive assets. We believe that optimism in US recovery is misplaced and the recovery is fragile as consumers are still overleveraged and the corporates are preferring to do buybacks rather than investing in businesses making new highs in US stock market look like a mirage. Accordingly with gold trading close to its replacement cost of USD 1,000 - 1,200 (Downside Protection) and potential for upside in the event of reality check for US recovery, there is case for allocation to gold. Indian economy is stuck in stagflation. Any recovery in growth will be accompanied by disproportionate increase in inflation as negative real rates in last 5 years have
ICICIdirect Money Manager 27

brought down the productivity. High M3 growth of about 14% (to support investments in infrastructure) with real gross domestic product (GDP) growth in the range of 4.50% to 5.50%; points to a scenario of continued pressure on inflation. Given all the above domestic plays, expect Indian currency to remain under pressure against developed market currencies thus supporting the price of gold in local currency. Therefore, for Indian investor gold will continue to be an excellent hedge against high and sticky inflation.
Disclaimer: The views expressed are for information purpose only. They are not indicative of future market trends, nor is Tata Asset Management Ltd. attempting to predict the same. These views may or may not be reflected in our scheme portfolios. Kindly consult your financial advisor before investing. Tata Asset Management Limited does not have any Gold Fund and the views on Gold are personal views of the CIO. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

January 2014

FLAVOUR OF THE MONTH


institutional investor (FII) flows particularly if we see a significant rise in US treasury yields. Monetary policy is expected to remain accommodative in the US, UK and Europe. The Federal Reserve (Fed) taper will soon be a reality and would in all probability end the easing regime before 2014 ends. Beginning January 2014, the Fed will begin to taper $10 billion of asset purchases every month. It will now purchase $40 billion of long dated treasuries (as against $45 billion) and $35 billion of mortgage backed securities (as against $40 billion). The next Fed chairman Janet Yellen has suggested that rate hikes may not be a possibility till 2015. The European Central Bank and the Bank of Japan will likely lower interest rates and inject liquidity into the system. In contrast, Emerging Economies will most likely tighten monetary policy over the year, with growth momentum and inflationary expectations being the key driver. Though the economy is still in a low growth phase, it looks
28
January 2014

Soumendra Nath Lahiri


Head Equities, L&T Mutual Fund

Equity: Going into 2014, fears over the tapering in the US, the euro zone crisis and outflows from emerging markets (EM) have eased. Markets are better prepared for the taper and investor sentiment is buoyed by expectations of economic recovery across the world. We expect the global economy to improve, albeit uneven at a country level, against improving set of macroeconomic numbers. EMs should be beneficiaries of improving growth in the developed markets but could be weighed down by a strong US dollar and foreign
ICICIdirect Money Manager

FLAVOUR OF THE MONTH


close to bottoming out. GDP growth is looking set to better expectations after 10 quarters and is headed higher after hitting a trough of 4.5% for FY14. Liquidity stress is easing as influx of forex has improved liquidity at the shorter end. On the external front, an improvement in trade deficit has helped narrow the current account. Improved forex reserves on the back of USD 34 billion accretion through RBI swap window for FCNR(B) and bank borrowing have stabilized the INR at 62-63/ USD levels, which may have provided some comfort to RBI to start rebuilding its reserves. We expect 2014 to be a tale of two halves, with the first half driven by anticipation of elections and the second half by the outcome of elections and hopefully some actions on policy and reforms. This could result into a recovery in the economy and we could see a fall in inflation leading to softer interest rate regime, adding to the productivity of the corporate and finally investment led infrastructure segment. A cooling in
ICICIdirect Money Manager 29

commodity prices globally could be a contributor too. Recent state election results were a triumph of growth and governance over dole outs and entitlement, anti corruption issues even overshadowed competence like never before. India looks to be ready to turn a new leaf in sensible policy making in 2014, an important pre-requisite to build confidence and help kick-start the capital expenditure (capex) cycle - global investors are keenly looking forward to that as well. We expect growth to pick up, with a favourable outcome in the forthcoming general elections should act as a catalyst for quick recovery. Return of growth and stability of the currency is a virtuous cycle that feeds into one another and will endear steady FII and foreign direct investment (FDI) flows which should create an environment for stability. Indian retail investors who have been taking out money from equity markets for the last two years will then have a compelling reason to reverse this and participate in the journey of growth and prosperity.
January 2014

FLAVOUR OF THE MONTH


stable rupee do provide some support. While the year could start off as a mixed bag of positives and negatives, we do believe that if a strong government were to get elected, and prudent policies are put in place the market could see a sharp rally in the Shriram Ramanathan
Head Fixed Income, L&T Mutual Fund

second half of the year. Data dependency by will the be RBI price high, as has been repeatedly emphasised governor. Consumer

Debt: As we head into 2014, uncertainty still prevails in the form of upcoming central elections, fiscal policies of the new government and structural food supply problems which lead to periodic high inflation. However, a couple of positives such as - attractive absolute level of yields, tapering being much less of an overhang, inflation possibly having seen its worst, a structurally lower current account deficit (CAD) and hence a relatively more
ICICIdirect Money Manager 30

index (CPI) inflation is expected to moderate sharply, however the key is to watch whether it can drop significantly below the stubborn 9% levels seen in the past few years. Important in this regard would be the new governments resolve to bring down inflation and implement effective supply side responses. The fiscal situation is a concern, and this is despite the government sticking to a fiscal target for FY 2013 and
January 2014

FLAVOUR OF THE MONTH


possibly for FY 2014 as well. Over the next three years, a large number of government securities will mature, hence gross supply of government securities is likely to be very heavy. While the uncertainty on the government elections remains, we do expect policy to be well calibrated and forward looking, rather than reactive. The monetary policy framework is clearly changing. Increased emphasis on CPI (vs wholesale price index (WPI)), equal importance to headline inflation as given to core inflation, reduced usage of open market operations to manage yields and the need to generate a positive real return for savers are some of the important messages that have already become part of this new framework. Also, one can expect a build-up in forex reserves to be a theme over the next few years, and this will act as a guard against further
ICICIdirect Money Manager 31

rupee weakening episodes. From a fund selection and allocation perspective, we think risk reward at the start of the year is in favour of lower duration funds such as short-term and accrual oriented funds. While tactical rallies are likely given elevated yield levels, for a sustained secular drop in yields, we need to see clarity on policies post government formation. Hence, while the second half could witness a sharp rally in yields, we still believe it is better for investors to be prudent in their allocations especially given that shortend yields are fairly attractive, with much lower risk. We both would highlight some key points: Diversification investments and across across assets portfolio
January 2014

asset classes: Spread your classes as a well constructed diversified

FLAVOUR OF THE MONTH


reduces provide when risks and smooth returns products. Benefits averaging: of rupee Invest cost through

returns. Equity mutual funds attractive economic but conditions consider

are expected to be more favourable, investments in these for a longer term of more than five years. If investing in fixed income and for a short time frame liquid funds, ultra short term plans, short term income funds and fixed maturity plans are good low risk options. Investing in low risk funds is better than leaving money uninvested in savings account as inflation would eat into savings. It would be beneficial to rather allocate some amount into the accrual bond oriented products for a 2-3 year time horizon. longer Investors investment with a horizon

systematic investment plans, wherein monthly investment amount tends to be low. Longer term investors pay an average price for units over time and this helps beat volatility. Remain invested: We have always believed that in times of volatility most opportunities arise and one should stay in the market rather than away from it. Often investors make the mistake of trying to time the market and as a result end up entering the markets at higher levels and sometimes stop their SIPs or exit when markets decline. Review portfolios and pare risks: It would be important to review underlying holdings of portfolios and maybe pare those very high risk investments into lower risk avenues.
32
January 2014

could also look at allocation to long duration products such as income funds provided they are comfortable with short term volatility in those
ICICIdirect Money Manager

FLAVOUR OF THE MONTH

Sachin Relekar
Fund Manager/Senior Equity Analyst, LIC Nomura Mutual Fund

Ramnath Venkateswaran
Fund Manager/Senior Equity Analyst, LIC Nomura Mutual Fund

Equity: Elections and views on stability of newly formed government are going to be dominating market movement at-least in the first half of the 2014. We expect investment cycle to continue to receive highest attention irrespective of the political formation that will form the next government. However, progress on the fiscal consolidation front might be difficult to achieve without a decisive electoral verdict for a particular political formation. Cyclical sectors, (financials, industrials, and infrastructure) are likely see improved
ICICIdirect Money Manager 33

visibility in the earnings given the underperformance of these sectors for the past few years and attractive valuations that they are trading currently. While the actual earnings improvement might lag, stock market is a future discounting machine and this may result in these stocks performing better (some of this process may well be underway). a. Export / import substitution (industrials, textiles, Information technology (IT), and pharmaceuticals) may well be the other theme that may play out
January 2014

FLAVOUR OF THE MONTH


given the depreciated currency and improved growth outlook for the developed world. b. It is consumer staples where we expect earnings growth to be slower and stocks likely to underperform relatively. c. We also remain cautious on materials and energy sectors as there is no visible catalyst for earning growth in the near term, and subsidy reforms might take a back seat. Risk to these views is from: 1. An electoral verdict that leads to a hung parliament, which will lead to the postponement of the politically difficult decisions. 2. Higher-thanexpected tapering of QE by US Fed, and 3. Adverse geopolitical developments. Retail investors should continue to focus on asset allocation rather than individual securities, be it fixed income, equities, or alternative asset class. The asset allocation should be aligned with his / her mediumICICIdirect Money Manager 34

term and long-term financial objectives. It will be beneficial to ignore the high frequency near-term developments and stay focused on their longer term financial goals. Indian equities are expected to deliver strong long term performance, which is under-pinned by strong demographics, high quality human resource and maturity its governing institutions have gained. Further, the relatively muted performance of the equity asset class over the past 6 years improves the possibility of better returns in the future. Returns from equity markets are typically cyclical in nature, retail investors need to appreciate this and not lose sight of the longer term record of the asset class in generating returns for its investors. Therefore we advise retail investors to stay invested, however, it should be in the context of asset allocation strategy that is aligned to his / her risk profile and longer term financial objectives.
January 2014

FLAVOUR OF THE MONTH


is expected to resume its downward journey in the New Year post the taper impact. We expect a decisive mandate in the 2014 general elections which could accelerate the downward shift of the key rates in India. The fixedincome returns are likely to be better than expected by large segment of investors. S. Ramasamy
Chief Investment Officer (Debt), LIC Nomura Mutual Fund

Debt: The RBI has been effectively communicating that it is not just interest rates that matter but also a deeper and vibrant debt market. The events of Indian bonds getting added in the global bond indices, more than 1 benchmarks being launched and tracked (short term and long term), a debt market with a healthy exchange traded volume and newer instruments will change the way the debt market looks and works. Of course the rate cycle
35

The India story is in nascent stage and will only get bigger and real with time. Investors must focus on asset allocation, thrift and discipline rather than the noise they hear about market factors or schemes. With equity and debt schemes poised for a better show in 2014 compared to 2013, investors must make up their plans and deploy legitimate amounts in equity, long term debt and short term debt funds. To gain from volatility, we suggest investors use liquid funds to pool their savings and use Systematic Transfer Plan (STP) facility to channelize investment into equity and
January 2014

ICICIdirect Money Manager

FLAVOUR OF THE MONTH


debt schemes spread over 3-4 month periods. We suggest use of weekly STPs. Also, to gain from volatility, investors must book profits whenever there is profit in excess of 5% absolute (nearly 3.5% net of tax) by switching small portions (say 20% each time) of their holdings to liquid schemes and continue the (re) investments through STP cycle. Gold: With the macro positives outweighing the negatives, the safe haven status of gold is a fallacy. We expect gold to underperform throughout 2014. Real estate: We do not see major uptick in real-estate prices as the real economy has to start showing consistent growth for further growth in demand for land and buildings. We however are bullish on some of the realestate and housing finance companies as we believe the demand for physical realestate will return by 2015.
ICICIdirect Money Manager 36

Sankaran Naren
Chief Investment Officer (CIO), ICICI Prudential Mutual Fund

Equity: Indian corporates have turned in a decent second quarter performance. While sales and operating profits have increased marginally, high interest cost has eroded the bottom line. 1 year forward price-to-earnings (PE) of the Sensex is now below the historical average and so is the market cap/GDP ratio. These two are favorable indicators for the return potential of equities. The equity markets witnessed a recent upturn which was purely driven by FII money which predominantly went into large cap stocks and that too only in selected sectors. This
January 2014

FLAVOUR OF THE MONTH


has created large valuation gaps between the different sections of the market, making the situation ripe for attractive value picking especially among mid caps and small cap stocks. Severe market polarization has widely distorted the valuations of mid/small cap companies vis--vis large cap companies. Over the last one year, while large-cap stocks have returned approximately +7%, mid cap companies have lost 7% while small-cap stocks have lost over 12%. A widespread bull market will correct this anomaly lifting values of mid/ small cap stocks wherein they would out-perform large-cap stocks. In addition to mid caps and small cap stocks, cyclical stocks are also attractive on two counts; first, cyclicals, especially in the infrastructure space, are currently valued at about 20% below their long term averages; second, over a ten-year period, defensives like FMCG, IT and Pharma stocks have traded at an average premium of approximately 60% over cyclical stocks (metals, basic manufacturing,
ICICIdirect Money Manager 37

capital goods etc.). However, over the recent past due to severe market polarization, this premium is now hovering in excess of 110%. Over the next few years, we expect interest rates to gradually decline resulting in the investment cycle kick starting in the Indian economy. Once this takes place, the valuation premium gap should regress to the long-term average of ~ 60% resulting in increase in value of cyclical stocks. Though foreigners have poured money by the billions, the Indian retail investor is still reluctant towards equity. Over the past few years, retail investors have been focusing on physical assets like real estate and gold. It is our belief that physical assets cannot be outperforming financial assets over long periods of time. Over the last 5 years, physical assets have outperformed financial assets. In our opinion, we are currently at the stage where financial assets have become extremely attractive from the long term investing perspective. There are a number of reasons for this
January 2014

FLAVOUR OF THE MONTH


contention. Firstly, the Indian economy seems to have bottomed out in the second quarter of this fiscal year. Periods of low economic growth have historically been good periods to invest in equities. Equity markets typically tend to move ahead of the economy. By the time the news of good economic performance hits the headlines, the market may well have raced away. Historical indicators prove this contention. Secondly, although retail investors have been staying away from the market due to volatility, historical indicators bring out that equities have given good returns post elections. Given the good pointers to high potential returns from equities in the coming years, this is a good time for retail investors to correct the severe under-allocation to equities. Despite the risk of sounding repetitive and the lackluster equity returns in the recent past, the fact that equity as an asset class has proved to be
ICICIdirect Money Manager 38

the best wealth creator over long term needs emphasis. Retail investors have mostly missed the bus in the past and the same hopefully is not the story again. Debt: Interest rates are high and hardly conducive for growth to pick up. On the other hand, with falling food prices, inflation is expected to start cooling down. These two factors shall actuate the central bank to look forward for an accommodative policy. Hence, we expect duration funds to do well in the coming quarters once interest rates starts coming down. Investors are recommended to consider investing in duration funds for the next 18 to 24 months based on their individual risk appetite and investment horizon. People who have already invested in duration funds can stay invested as these are favorable times to be invested. Investors with low risk appetite, however, may consider investing in funds which benefit out of accruals and have low interest rate risk.
January 2014

FLAVOUR OF THE MONTH


seems to have bottomed out. There are initial signs that capital expenditure is likely to get revived with some of the stuck projects getting cleared. New government is expected to take steps to accelerate the pace of economic earnings growth. Sanjay Chawla
Chief Investment Officer (CIO), Baroda Pioneer Mutual Fund

Quarterly

for period ended September 2013 were better than market expectation. Improvements in economy globally augur well for equities. For India, improvement in US economy is always good for exportoriented sectors. Globally, tapering will lead to coming down of overall pool of money in all asset class. Fixed income market may be impacted more than equities and developed markets may get more inflows than the emerging markets. We are positive on equities for CY14. It is important to remember that wealth can
39
January 2014

Equity: There was a lot of talk in the market about two events in the last year. One: Tapering in US and the other, surrounding general elections in India. One event is over and market is preparing itself for the second event in India. Ultimately, market likes growth and improvement in earnings. The most recent economic data underlines recovery in the developed market. At domestic level, CAD is improving, rupee is stabilizing and GDP growth
ICICIdirect Money Manager

FLAVOUR OF THE MONTH


be created in equity markets only and over through regular a longer disciplined investments period of prices and its second round impacts may keep inflation and inflationary expectations elevated. We expect growth to pick up in next busy season starting September 2014. As growth starts to pick up, we may witness rebound in core inflation due to demand led increase in prices. On fiscal side, concern will remain as there can be expenditure spill over to the current calendar year along with huge subsidy burden, which may put pressure on the yields. Having said that, the monetary policy may remain accommodative along with stable rupee due to contained CAD and good yield level of 10-year GOI, which can provide decent returns to investors. We expect a rally in the 10-year GOI in the current calendar year which can provide decent returns to investors.

time. Contrary to popular belief, equity markets have outperformed gold in the last two years. In the short term, we think that market will keep giving opportunities. We are positive on equities and advise investors to use the volatility to build their longterm portfolio. Debt: Last year was not a good year for the debt investors though at the beginning it looked promising. Current year should be relatively better. We expect RBI to go on pause for rest of the year after a probable rate hike. Though inflation may come down in near future due to sharp fall in vegetable prices, CPI and WPI is expected to remain sticky throughout the year. Gradual rise in diesel

The views expressed in the article are personal views of the author and do not necessarily represent the views of ICICI Securities. Please send your feedback to moneymanager@icicisecurities.com ICICIdirect Money Manager 40
January 2014

GUEST COLUMN
Real Estate Outlook 2014 Rohit Salhotra, MD & CEO, ICICI Home Finance Company Ltd. shares with us the real estate review of 2013 and the outlook for 2014. Real Estate is close to most heartsNo doubt then, wherever we meet clients, friends, business associates, a common question asked is: Where do you see real estate going? I must say that, quite like for any other asset class, outlook estimation is a culmination of current trends, analysis and expectations. Cautious may be able to summarize the state and the sentiment at the moment. The first half of 2014 could well be a phase of indecision. Home buying is a high involvement decision making, and it would surely require a positive sentiment in the macro market to drive that decision making. A decisive verdict in the general elections could provide that positive news the markets are waiting for. This
ICICIdirect Money Manager 41

Rohit Salhotra
MD & CEO, ICICI Home Finance Company Ltd.

may kick start the buying in H2-CY 2014, and if the new government, in the first few days in office was to send out decisive sound bytes on measures to boost economy, the investment climate may well be activated. This will be a significant boost for the real estate sector. Consumption (self-use) led home buying continues regardless of these
January 2014

GUEST COLUMN
sentiments, and will continue to be the core driver in the months ahead. As an investor, the real estate asset class may not offer significant arbitrage in the short to medium term, as compared to other investment options. One, therefore, must look at this asset class with a long-term perspective. (See the Chart 1 below, showcasing the property prices movement as per the National Housing Bank (NHB) Residex).

Chart 1: City-wise Housing Price Index (Upto Quarter JulySeptember 2013)


300 250 200 150 100 2007 Base Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 CY CY CY CY CY CY CY CY CY CY 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013

Delhi Mumbai Pune Bengaluru Chennai Hyderabad Kolkata

(* Delhi does not include Gurgaon, Noida etc. It is not NCR. * Mumbai includes Thane, Navi Mumbai)

Over the past 12 months, we have seen fewer new launches, and a lower absorption. We estimate that CY 2013 would have ended at approximately 22-25% lower absorption as
ICICIdirect Money Manager 42

compared to CY 2012 (Top 7 cities), on the residential sales (see Chart 2), and approx. 5-8% or so lower office space absorption (see Chart 3).
January 2014

GUEST COLUMN
Chart 2: Residential sales numbers of top 7 cities
400000 350000 300000 250000 200000 150000 100000 50000 0 2008 2009 2010 2011 2012 2013*
2013 * is CY end estimates based on 9-month data available from PropEquity

Kolkatta Hyderabad Chennai Bengaluru Pune MMR NCR

Chart 3: Commercial (excluding retail) sales numbers of top 7 cities


40 35 30 25 20 15 10 5 0 2009 2010 2011 2012 2013
Source: ICICI Property Services Group estimates and market reports

Kolkatta Hyderabad Chennai Bengaluru Pune MMR NCR

ICICIdirect Money Manager

43

January 2014

GUEST COLUMN
The early part of CY 2014 may continue to remain lackluster. The developers have started incentives to buyers in the form of masked discounts, and offerings. With fewer new launches, the developers are also focusing on production and execution of the projects on hand. If sales do not pick up, and availability of money continues to stay at a premium, then execution of projects could be affected. Affordability will be a key term if the residential off-take is to increase/improve. Architects and developers will have to think out-of-the-box to bring in more economical supply. The macro number of 19 million units housing shortage almost masks the fact that 95% of this demand is in the economic weak class (EWS) and low income groups (LIG) segments a demand almost un-catered to. The regulatory environment
ICICIdirect Money Manager 44

(Real Estate Regulatory Bill, and the Land Acquisition Resettlement and Rehabilitation RARR Bill) will surely infuse transparency in the real estate sector in the year ahead, but also threatens to induce a price increase. Office space absorption too may not pick up till the macroeconomic indicators send out positive signals. Office vacancy rates in the Top 7 cities have been in the 20-25% range (see Chart 4), and this has kept the prices under check. The Securities and Exchange Board of Indias (SEBIs) decision to release the draft regulations for Real Estate Investment Trusts (REITs) to make their entry into India has fuelled some investor interest in this segment. The commercial (office) real estate market saw some interesting private equity (PE) investments into large portfolio holding during the past year.
January 2014

GUEST COLUMN
Chart 4: Office vacancy rates in the top 7 cities
35% 30% 25% 20% 15% 10% 5% 0% Vacancy Rate

Source: ICICI Property Services Group estimates and market reports

Retail or shopping space could see increased activity. The young India population has been driving consumption, and provides an attractive opportunity to many retailers. The government has also eased investment norms for multi-brand and single-brand retail. Retailer margins though have been shrinking, putting a pressure on real estate component of the input costs. We could see the emergence of more performance driven rental models, rather than

simple straight rentals on a per square foot basis. In summary, it will be an interesting 12 months, possibly split into 2 distinct halves. Though sentiments may be low, the changes in terms of transparency, pricing and investments through REIT do augur well for the industry as a whole. Also considering the underlying demand for housing in India, in the long run return expectations from real estate remain intact.

The views expressed in the article are personal views of the author and do not necessarily represent the views of ICICI Securities. ICICIdirect Money Manager 45
January 2014

ASK OUR PLANNER Mutual funds: Growth or dividend re-investment plan?


Q: I have invested in mutual funds via SIPs and have the following questions: 1. What option has to be chosen while investing in MF? Growth any or I Dividend am not on re-investment? expecting one is more tax-efficient than the other, depending on what type of fund you choose and how long you stay invested. Debt funds - Dividends from debt funds are subject to a dividend distribution tax (DDT) of 28.325%, including surcharge and cess. Every time your MF scheme it and distributes distributable dividends, dividend

income

regular basis. Rather I want to grow my investment. 2. I have SIPs going in 11 mutual funds 9 equity funds & 2 gold funds totaling to `11,700 p.m., of which few funds are not performing well. Should I remain invested in these funds? Or should I sell those at higher level and invest in other funds? - Rushikesh Kulkarni A: To dividend answer your first

first deducts DDT out of the pays you the rest. You dont pay directly; it goes out of the dividend due to you. Under the dividend your re-investment scheme first option,

declares a dividend and then immediately re-invests it in the same scheme at that days net asset value (NAV). The growth option does not declare any dividends; the NAVs move up or down, depending upon the market movement. Both
46
January 2014

question, both growth and re-investment options do the same thing, but
ICICIdirect Money Manager

ASK OUR PLANNER


dividend re-investment and the growth options, therefore, do not give dividends in your hands. The effects of both these plans are the same, but the tax treatment differs. If you are in the 10% and 20% tax brackets and invest in debt funds for less than a year, choose the growth plan. The reason: the tax outgo in the growth plan is less than that in the dividend reinvestment plan. The DDT rate is higher than the short-term capital gains tax rate for the 10% and 20% tax brackets. If you are in the 30% tax bracket, choose the dividend re-investment plan. The total tax outgo in the case of dividend reinvestment option (capital gains and DDT) is lower than the tax outgo under the growth option (capital gains only). Equity funds - For equity
ICICIdirect Money Manager 47

funds, we assume you would invest for the long term; in other words definitely more than a year. In this case, it doesnt matter whether you choose the growth plan or the dividend re-investment plan because equity funds neither impose DDT nor do they attract long-term capital gains tax. Coming to your second question, you should review your funds regularly, at least once in a year, if not less. If your fund consistently underperforms its benchmark and its peers, you can consider exiting them. Also, keep your portfolio to a maximum of 4 to 5 mutual funds only, as investing into mutual funds itself will provide you the required diversification; diversifying again into more number of funds will be like investing into same shares, as some of your funds might be
January 2014

ASK OUR PLANNER


investing into those shares. Q: My query relates to home loan and home registration. In case my wife is a home maker and not employed elsewhere, what are the tax and property implications of: a. Taking a home loan in our joint names. b. Getting the house registered after construction in our joint names. Perhaps, there is no advantage being accrued by taking a home loan and making the registration names. adverse But on is our there joint any deduction under Section 80C and Section 24 of the IncomeTax Act towards the principal and interest deductions. That is, while calculating your taxable income, both you and your spouse can deduct up to ` 1 lakh on principal (Section 80C) and up to ` 1.5 lakh on interest (section 24) paid on the loan in that year. But this benefit is only if the home is registered in both your names. Being a co-applicant to the loan alone doesnt get you this tax break. While signing on as co-applicant, however, it is also essential for you to know your liabilities. When the primary borrower defaults / has to file for insolvency / passes away, it becomes the co-applicants responsibility to settle the loan in full. But to apply as a co-applicant for a loan, your spouse should have a separate source of income.
48
January 2014

implication/fallout - Vivek Uberoy

applicable in such a case?

Many couples opt for A: a joint loan as it gives them additional tax benefits. For instance, if you take a joint home loan, both you and your spouse can individually claim
ICICIdirect Money Manager

ASK OUR PLANNER


Joint ownership by a couple will imply that both have equal share in the property. On demise of one of them, the share of the deceased will not pass on to the other automatically. If theres no Will written by the deceased, then the share will go to the legal heirs of the deceased. In short, each of the joint owners can pass on their share in the property to anyone they wish in their Will. Q: I am 41 years old and have 2 kids - 14 & 12 years old. My take home is `1.1 lakh p.m. I have been investing `24,000 p.m. in SIP since last 2 years and `1 lakh per year in Public Provident Fund (PPF) since last 5 years. I will require `50 lakh after 10 years for the higher education of my kids and `1 crore for the marriage after 12 years.
ICICIdirect Money Manager 49

Please advise how to manage it. - Alok Kumar Rai A: Your existing investments into mutual funds & PPF will grow to around `1.05 crore in the next 10 years, assuming an average return of 12% p.a. from mutual funds & 8.50% p.a. from PPF. You can then utilize the maturity proceeds of PPF and part of the mutual funds accumulation for funding higher education of your kids; the balance amount in your mutual funds can be left to grow for another 2 years, with your SIP continuing in these 2 years. This will give you an amount of `74.95 lakh after 12 years for the marriage of your kids. To bridge the shortfall, we suggest you to increase your existing SIP by `6,000 p.m. i.e. from `24,000 to 30,000 p.m.

January 2014

YOUR FINANCIAL HEALTH CHECK


Increase life cover to protect your loved ones Every month, ICICIdirect Money Manager assesses one family's current financial situation, and suggests a suitable way forward to help them reach their goals... The Joshis Shashank (43), Nikita (40), Salil (11), Saumya (8) Reside in: Mumbai Annual income: 7,20,000 Family Profile Shashank Joshi, a government employee by profession, is the sole bread-winner in the family. He stays in Mumbai with his wife Nikita and two children Salil and Saumya. BASIC EXPENSES (ANNUAL BREAKUP) Household Entertainment Medical Education Travel Holidays Vehicle maintenance Total Expenses INVESTMENT DETAILS (ANNUAL) Public Provident Fund (PPF) Investments through Systematic Investment plan (SIP) Total Annual cash outflow Annual outflow): ` 7,20,000 - ` 5,94,000 = ` 1,26,000
50
January 2014

` 2,04,000 ` 12,000 ` 36,000 ` 96,000 ` 18,000 ` 12,000 ` 6,000 ` 3,84,000 ` 66,000 ` 1,44,000 ` 2,10,000 surplus

investible

(Annual expenses + Annual (Annual Income - Annual cash investments): ` 3,84,000+ ` 2,10,000 = ` 5,94,000
ICICIdirect Money Manager

YOUR FINANCIAL HEALTH CHECK


NETWORTH Assets Amount (Present value) Liabilities Amount House (Self-occupied) ` 50,00,000 NIL `0 Vehicle ` 2,45,000 Equity ` 1,90,000 Debt mutual funds ` 6,00,000 Bank fixed deposits (FDs) ` 3,50,000 Total ` 63,85,000 Total `0 Net-worth (Assets Liabilities) ` 63,85,000 GOALS Goal name Goal cost in Years to Future value todays price achieve goal Salils graduation 1,00,000 4 146,410 Salils marriage 10,00,000 10 1,967,151 Saumyas graduation 1,50,000 7 292,308 Saumyas marriage 25,00,000 12 5,630,479 Buy a new vehicle 5,00,000 3 6,12,522
Assumed inflation for graduation: 10% p.a. and for marriage: 7% p.a.

GOALS PLANNING Goal Name Salils graduation Salils marriage Existing investments to allocate Bank FDs Current SIP Amount Balance future Monthly/ (Present value to be Annual SIP value) achieved recommended ` 1,20,000 NIL NIL ` 1,13,000 NIL NIL p.a. ` 2,00,000 NIL NIL ` 1,90,000 + ` 31,000 p.a. + ` 2,30,000 + ` 2,00,000 1,50,000 31,16,263 10,115 p.m. or 1,15,293 p.a.

Saumyas Debt mutual graduation funds Saumyas marriage Equity + balance SIP + bank FDs + Debt mutual funds New vehicle (For Debt mutual down payment funds amount of ` 1 lakh in present value)

NIL

NIL

Assumed rate of return for SIP / Equity - 12% p.a., bank FDs 6% p.a., Debt mutual funds 7% p.a.

ICICIdirect Money Manager

51

January 2014

YOUR FINANCIAL HEALTH CHECK


Retirement Planning Shashank wants to retire at the age of 60. He is expecting `15,000 p.m. pension (in present value) to continue post-retirement and will receive interest and dividend income of `25,000 p.m. As a first step, Shashank should outline what expenses will increase and what will decrease post-retirement. He is expecting annual expenses of `4,44,000 in todays cost post-retirement. He has `6,00,000 in EPF where he is contributing `50,000 p.a. and has saved `4,00,000 in PPF account and contributes `66,000 p.a. towards this. Heres his retirement planning looks like: Post-retirement life span is considered to be 20 years. Retirement corpus required: `1.48 crore Corpus built with existing investments: ` 93.70 lakh Shortfall in retirement corpus: ` 54.89 lakh Recommended investments: ` 8,218 p.m. or ` 1,00,260 p.a.
ICICIdirect Money Manager 52

With your current investible surplus, i.e. ` 10,500 per month, you can start investing immediately for accumulating the shortfall for Saumyas marriage. And, as and when your income increases, you can set aside certain portion of it and invest the same for building corpus for your retirement. Insurance Planning As Shashank is the sole earning member of the family and has three dependants, he must take adequate life insurance cover to take care of the family and children goals. Shashank has a life cover of ` 13 lakh, at present. Considering his expenses and goals, he has a shortfall of ~ ` 80 lakh. He should consider buying a term plan to meet the gap. Health insurance is another important cover Shashank should consider. Currently, he has an employer-provided cover. We recommend taking a separate family floater cover of ` 4 lakh and increasing it regularly to ` 6 lakh in 5 years, ` 8 lakh in 10 years and ` 10 lakh in 15 years.
January 2014

PRIMERS Understanding Fiscal Deficit


When stock markets show their continuous movements, there are talks of different macro-economic factors that affect them. How does it affect you as an investor? In our new series Understanding Macroeconomic Indicators, well de mystify some of the important indicators that can have a bearing on your investments. In our previous editions, we looked at Gross Domestic Product (GDP) and Inflation. Here, we make an attempt to simplify another important macroeconomic indicator Fiscal deficit. Every year, the government puts up a plan for its income and expenditure for the coming year. This is known as an annual Union Budget. A budget consists of incoming money (Revenue) and outgoing money (Expenditure). When the governments expenditures are greater than its revenues, it is said to be running a fiscal deficit. Lets understand what accounts for governments expenditure and revenue. Expenditure: The spending of the government can be divided into two parts: (i) Revenue expenditure and (ii) Capital expenditure. Revenue
ICICIdirect Money Manager 53

expenditure includes salaries payable to the government employees, expenses incurred in running various government departments, and so on. Capital expenditure, on the other hand, includes money spent on some sort of asset creation such as building roads, dams, infrastructure, etc. Governments expenditures can be plan and non-plan. Plan expenditure means spending on the activities related to the national five year plan. Revenue: A major chunk of governments revenue comes from direct and indirect taxes (known as tax revenues). The government also collects revenue from other sources such as
January 2014

PRIMERS
dividends, interest, fees, fine, regulatory charges and license fees, etc. (known as non-tax revenue). A fiscal deficit means that the government is living beyond it means, and in order to bridge this gap, the government borrows additional funds to finance its expenditures. It can borrow either within India (from the Reserve Bank of India, other banks, etc) or outside India (from Word Bank, International Monetary Fund (IMF), etc.). A countrys fiscal deficit is expressed as a percentage of its Gross Domestic Product (GDP). How is current account deficit (CAD) different from fiscal deficit? CAD is the difference between exports and imports of a country, whereas fiscal deficit is the difference between governments total income and total expenditure. Indias recent fiscal deficit numbers: India's fiscal deficit touched ` 5,09,557 crore during AprilICICIdirect Money Manager 54

November, or 93.9% of the annual target, the Controller General of Accounts (CGA) said on December 31, 2013. The gap was 80.4% of the budget estimate at the end of November in 2012-13. The target for the fiscal deficit - the gap between expenditure and revenue - was set at `5,42,499 crore for this financial year. The government has repeatedly asserted that the fiscal deficit would be restricted to 4.8 per cent of GDP , down from 4.9 percent in 2012-13.
Indias fiscal deficit trend
600,000 500,000 400,000 300,000 200,000 100,000 2008-09 2009-10 2010-11 2011-12 2012-13RE 2013-14BE 336,992 418,482 373,592 515,990 520,925 542,499 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

Fiscal deficit (` crore)

Fiscal deficit as % of GDP

Source: Finance Research

Ministry,

ICICIdirect.com

To sum up, as citizens, we must pay attention to the fiscal deficit and try and understand the different areas of government spending.
January 2014

MUTUAL FUND ANALYSIS


Cushion your portfolio with FMCG funds After an unexpected slowdown in the Fast Moving Consumer Goods (FMCG) revenue growth to ~12% in CY13E (~16% in 2012) due to weak macros, we expect the growth of the sector to recover to ~15% in CY14E. Growth would be led by a revival in volumes (7-12%), changing product mix and higher pricing power. We expect rural sales (~40% of FMCG revenues) growth (1.3-1.5x of urban sales growth) to be the key volume growth driver in CY14E with urban demand recovering at a slower pace. Further, rural growth would be supported by a trickledown effect of higher pre-election spending in H1CY14 and better yields due to favourable monsoon in CY13. The unfolding rural demand keeping abreast of the Indian consumption story has significantly pushed valuations of FMCG companies with higher rural exposure (HUL, Dabur). Hence, we prefer ITC and Marico, which are actively expanding their rural reach and are available at relatively cheaper valuation of 19x (FY16E earnings per share (EPS)) and 22x (FY15E EPS), respectively. Also, considering that most stocks have not seen large movements in the last six to eight months, valuation multiples have contracted discounting two years forward earnings. Therefore, we believe FMCG funds may perform well in the near to medium term. Being a defensive sector, huge downside also gets restricted. Therefore, the sector can be good to invest given the broader equity market seeing increased volatility. Investment in these FMCG funds can be made. However, allocation should be restricted to 10% of the overall portfolio.
ICICIdirect Money Manager

55

January 2014

MUTUAL FUND ANALYSIS


Category: Sector Fund (FMCG) Key Information
NAV as on December 31, 2013 (`) Inception Date Fund Manager Minimum Investment (`) Lumpsum SIP Expense Ratio(%) Exit Load Benchmark Last declared Quarterly AAUM (` cr) 116.2 March 31, 1999 Yogesh Bhatt 5000 1000 2.7 1% on or before 1Y, NIL after 1Y CNX FMCG 226

ICICI Prudential FMCG Fund


Fund objective The scheme seeks to generate long-term capital appreciation through investments predominantly in equity and related securities of FMCG companies. Around 90% of the corpus would be invested in equities of FMCG companies, with the balance 10% invested in debt and money market instruments. Fund Management: Yogesh Bhatt is managing the fund since February 2012 and has an overall 21 years of experience. Fund Performance:
Periodic Performance
Return% 29 .6 27.3 20.9 21.8

Product Label
This product is suitable for investors seeking*: l Long term investment l An equity fund that primarily invests in a select group of companies in the FMCG sector l High risk (BROWN)

Calendar Year-wise Performance 2013 2012 2011 2010 2009 NAV as on Dec 31 (`) Return(%) Benchmark (%) Net Assets(` Cr) 116.2 106.3 9.3 12.2 226 40.8 48.5 215 75.5 15.0 8.6 117 65.7 24.9 30.6 78 52.6 65.2 41.6 68

Last three Year Performance Fund Name Fund Benchmark 31-Dec-12 31-Dec-13 9.27 12.18 31-Dec-11 31-Dec-12 40.81 48.53 31-Dec-10 31-Dec-11 14.96 8.58

40 30 20 10 0

4.3

6 Month

9.3

1 Year Fund

12.2

3 Year Benchmark

5 Year

ICICIdirect Money Manager

56

January 2014

MUTUAL FUND ANALYSIS


Portfolio: Being a sector fund, it is natural that a major part of the corpus gets invested in a few stocks due to limited availability of stocks in the defined sector. In case of this fund, 50% of its ` 226 crore corpus is invested in ITC. Hindustan Unilever does not find a space in the portfolio despite ~14% weightage in the index. The portfolio comprises 17 stocks from across sub-sectors like food, retail distribution, apparel and consumables. In CY13, the fund manager added Bata India, Bajaj Corp and Colgate Palmolive.
Fund Name ICICI Pru US Bluechip Equity Fund(G) S&P 500 ICICI Pru Exports & Other Services Fund-Reg(G) CNX Service Sector ICICI Pru Balanced Fund-Reg(G) Crisil Balanced Fund Index ICICI Pru FMCG Fund-Reg(G) CNX FMCG ICICI Pru Target Returns Fund-Reg(G) S&P BSE 100 ICICI Pru Top 200 Fund-Reg(G) S&P BSE 200 ICICI Pru Infrastructure Fund-Reg(G) CNX Infrastructure
Note : Risk is represented as: (BLUE) Investors understand that their principal will be at low risk (YELLOW) Investors understand that their principal will be at medium risk (BROWN) Investors understand that their principal will be at high risk

Top 10 Holdings ITC Ltd. United Spirits Ltd. CBLO

Asset Type % Domestic Equities 52.4 Domestic Equities 6.9 Cash & Cash 6.1 Equivalents VST Industries Ltd. Domestic Equities 5.2 Tata Global Domestic Equities 4.3 Beverages Ltd Bata India Ltd. Domestic Equities 4.2 Dabur India Ltd. Domestic Equities 3.9 Britannia Industries Domestic Equities 3.9 Ltd. Pidilite Industries Domestic Equities 3.6 Ltd. Marico Ltd. Domestic Equities 2.9 Dividend History Date Dec-30-2013 Dec-31-2012 Mar-30-2011 Feb-15-2010 Aug-24-2009 Feb-16-2009 31-Dec-11 31-Dec-12 45.73 29.60 43.59 8.77 11.18 6.05 9.27 12.18 9.22 5.87 6.42 4.38 -5.03 -4.16 31-Dec-10 31-Dec-11 --34.49 26.87 29.38 21.27 40.81 48.53 30.90 29.96 36.53 30.98 25.50 21.65 Dividend(%) 40 45 20 12 12 12 31-Dec-09 31-Dec-10 ---24.53 -24.16 -9.33 -14.39 14.96 8.58 -23.76 -25.73 -27.41 -26.95 -31.02 -38.54

Performance of all the schemes managed by the fund managers

*Investors should consult their financial advisors if in doubt about whether the product is suitable for them

Data and portfolio details are as on December 31, 2013 Source: Accord Fintech, ICICIdirect Research

ICICIdirect Money Manager

57

January 2014

MUTUAL FUND ANALYSIS


Category: Sector Fund (FMCG) Key Information
NAV as on December 31, 2013 (`) Inception Date 46.7 July 14, 1999 Saurabh Pant 5000 1000 2.6 Nil S&P BSE FMCG 221

SBI FMCG Fund


Fund objective A diversified equity by fund that seeks to provide capital appreciation in companies investing on focused

Fund Manager Minimum Investment (`) Lumpsum SIP Expense Ratio(%) Exit Load Benchmark Last declared Quarterly AAUM(` cr)

shareholder wealth creation. It is an open ended growth scheme that has the objective of providing growth of capital plus regular dividends through a diversified portfolio of equities, fixed income securities and money market instruments. Fund Management: Saurabh 2011. Performance:
Periodic Performance
34.7 21 .7 40 1.7 20 0 6 Month 1 Year Fund 3 Year Benchmark 5 Year 4 .3 21.2 27

Product Label
This product is suitable for investors seeking*:
l l

Long term investment Equity Investments in stock of FMCG sector of the economy to provide sector specific growth opportunities High risk (BROWN)

Calendar Year-wise Performance

Pant

has

been
NAV as on Dec 31 (`) Return(%) Benchmark (%) Net Assets(` Cr)

2013 2012 2011 2010 2009 69.7 9.3 11.0 221 63.8 55.3 46.6 172 41.1 6.2 9.5 62 38.7 48.1 32.0 35 26.1 66.4 40.5 9

managing the fund since June

Last three Year Performance Fund Name SBI Magnum Benchmark 31-Dec-12 31-Dec-13 9.30 11.00 31-Dec-11 31-Dec-12 55.30 46.61 31-Dec-10 31-Dec-11 6.18 9.53

Return%

9.3

ICICIdirect Money Manager

11

58

January 2014

MUTUAL FUND ANALYSIS


Portfolio: ITC is the top holding with ~43% of the AUM invested in the single stock though comparatively allocation fund. Even over in its this lesser peer fund,
Top 10 Holdings ITC Ltd. United Spirits Ltd. Colgate-Palmolive (India) Ltd. VST Industries Ltd. Procter & Gamble Hygiene & Health Care Ltd. Agro Tech Foods Ltd. Kansai Nerolac Paints Ltd. Nestle India Ltd. Radico Khaitan Ltd. Emami Ltd. Asset Type %

Domestic Equities 42.7 Domestic Equities Domestic Equities Domestic Equities Domestic Equities 9.6 7.0 6.9 5.0

Hindustan Unilever does not find space in the portfolio despite ~14% weightage in the index. This fund has more of multinational FMCG companies like P&G, Nestle, etc. The portfolio is more diverse compared to its peer FMCG fund in terms of subsector allocation.

Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities

4.9 4.4 3.7 3.5 3.3

Dividend History Date May-17-2013 Mar-03-2006 Dividend(%) 80 60

Performance of all the schemes managed by the fund manager Fund Name SBI FMCG Fund-Reg(D) S&P BSE FMCG
31-Dec-11 31-Dec-12 31-Dec-10 31-Dec-11 31-Dec-09 31-Dec-10

9.29 11.00

55.30 46.61

6.18 9.53

*Investors should consult their financial advisors if in doubt about whether the product is suitable for them Note : Risk is represented as: (BLUE) Investors understand that their principal will be at low risk (YELLOW) Investors understand that their principal will be at medium risk (BROWN) Investors understand that their principal will be at high risk

Data and portfolio details are as on December 31, 2013 Source: Accord Fintech, ICICIdirect Research

ICICIdirect Money Manager

59

January 2014

EQUITY MODEL PORTFOLIO


Our indicative large cap equity model portfolio has continued to deliver an impressive return (inclusive of dividends) of 36.6% since its inception (June 21, 2011) vis--vis Sensex return of 20% during the same period, nearly 2x the index performance. This has lent further confidence to our stock picking philosophy for Quality-21 large cap stocks. The midcap portfolio has gone a step ahead and beat the midcap index in excess of ~3x returns for the same period even though, of late, the market has started to look at the midcap space more favourably. The Consistent-15 delivered a return ahead of its benchmark index (12% since its inception vis--vis CNX Midcap return of 3.7% during the same period). Some key performers of our portfolio are Sun Pharmaceuticals, Lupin, TCS, Tata Motors, ITC, Glenmark Pharmaceuticals and Dabur India delivering 50-110%returns since inception. The index is delicately poised near life-time highs at ~6,300 levels. We feel the turbulence will increase as we approach uncertainties of general elections in May 2014. Thus, we have leaned forward towards inclusion of stocks with some export exposure or limited domestic government control. We have added Bajaj Auto, UltraTech and NMDC. We have favoured booking profit in stocks that could be shrouded in uncertainty in future times, thus exiting Yes Bank with a return of ~29% since inception. We believe we have a better balance to the portfolio going into possibly huge bouts of uncertainty in H1FY14E. In terms of relative weightage to the sector vis--vis the Sensex, we continue to remain overweight on pharma and telecom given their relatively better earnings growth profile. We also have upgraded IT and auto to the overweight stance as we believe both sectors are high quality with good earning growth possibilities. We are also overweight on the media and retail space via Zee Entertainment and Titan. We are underweight on financials (prefer private vis--vis public sector banks), oil & gas, metals & mining (prefer mining to metals) as real economic recovery remains still some time away. Also, we would still want to have relatively lesser exposure to sectors exposed to any kind of political and legal uncertainty. For other equal weight sectors we are playing specific themes like FMCG (overweight ITC) and the infra space (cement, infra and power) as we like individual names like L&T in the pure play infra space, feel bullish on the cement space via UltraTech Cement while remaining negative on the power space.
ICICIdirect Money Manager 60
January 2014

EQUITY MODEL PORTFOLIO


Name of the company Largecap (%) Largecap Stocks Auto Maruti Suzuki Tata Motors DVR Bajaj Auto BFSI HDFC HDFC Bank SBI Axis Bank Power, Infrastructure & Cement L&T Ultratech Cement FMCG Nestle ITC Metals & Mining NMDC Oil and Gas Reliance Pharma Lupin Sun Pharma IT Infosys TCS Wipro Telecom Bharti Airtel Media Zee Entertainment Retail Titan Largecap share in diversified 12 5 4 3 19 6 6 3 4 8 5 3 13 3 10 3 3 10 10 7 3 4 19 7 8 4 3 3 3 3 3 3 100 Model Portfolio Midcap (%) Diversified (%) 8.4 3.5 2.8 2.1 13.3 4.2 4.2 2.1 2.8 5.6 3.5 2.1 9.1 2.1 7 2.1 2.1 7.0 7.0 4.9 2.1 2.8 13.3 4.9 5.6 2.8 2.1 2.1 2.1 2.1 2.1 2.1 70

ICICIdirect Money Manager

61

January 2014

EQUITY MODEL PORTFOLIO


Name of the company Largecap (%) Midcap Stocks Auto Bosch IT Info Edge BFSI J&K Bank IndusInd Bank FMCG Kansai Nerolac Dabur Tata Global Beverages Pharma Cadilla Natco Pharma Retail Navneet Publications Media Sun TV Capital Goods Cummins Realty/Infrasturcture/Cement Container Corporation of India Oberoi Realty Shree Cement Midcap share in diversified Total of all three portfolios
Content source: ICICIdirect.com Research

Model Portfolio Midcap (%) 8 8 6 6 16 8 8 20 8 6 6 14 8 6 6 6 6 6 6 6 18 6 6 6 100 100 100 Diversified (%) 2.4 2.4 1.8 1.8 4.8 2.4 2.4 6 2.4 1.8 1.8 4.2 2.4 1.8 1.8 1.8 1.8 1.8 1.8 1.8 5.4 1.8 1.8 1.8 30 100

ICICIdirect Money Manager

62

January 2014

MUTUAL FUND MODEL PORTFOLIO


EQUITY FUNDS MODEL PORTFOLIO Investors who are wary of investing directly into equities can still get returns almost as good s equity markets through the mutual fund route. We have designed three mutual fund model portfolios, namely, conservative, moderate and aggressive mutual fund portfolios. These portfolios have been designed keeping in mind various key parameters like investment horizon, investment objective, scheme ratings, and fund management. Particulars Review Interval Risk Return Funds Allocation Franklin India Prima Plus Birla Sunlife Frontline Equity ICICI Prudential Dynamic Plan ICICI Prudential Focussed Bluechip Equity UTI Opportunites Grand Total (a+b)
Source: ICICIdirect.com Research

Aggressive Moderate Conservative Monthly Monthly Quarterly High Risk- High Medium Risk Low Risk - Low Return - Medium Return Return % Allocation 25 25 25 25 100 25 25 25 25 100 25 25 25 25 100

All portfolios have outperformed the BSE 100 index in CY13

CY13 absolute returns in %; Source: Crisil Fund Analyser, ICICIdirect.com Research; Portfolio inception date : September 15, 2009

ICICIdirect Money Manager

63

January 2014

MUTUAL FUND MODEL PORTFOLIO


DEBT FUNDS MODEL PORTFOLIO We have designed three different mutual fund model portfolios for different investment duration namely less than six months, six months to one year and above one year. These portfolios have been designed keeping in mind various key parameters like investment horizon, interest rate scenarios, credit quality of the portfolio and fund management, etc. Keeping in mind the current market scenario and portfolio of the funds we have changed the allocation. Based on the portfolios of individual funds, we have introduced new funds in the portfolio.
Particulars Objective Review Interval Risk Return Funds Allocation Ultra Short term Funds IDFC Money Manager Fund - Investment Plan Templeton India Low Duration Fund Reliance Medium term fund Short Term Debt Funds Taurus Short Term Income Fund Birla Sunlife Short Term Fund Birla Sunlife Short Term Opportunites Fund ICICI Prudential Short Term ICICI Prudential Regular Savings IDFC SSI Short Term Sundaram Select Debt UTI Short Term Fund Tempelton Short term income Long Term/Dynamic Debt Funds IDFC Dynamic Bond fund Total
Source: ICICIdirect.com Research

0 6 months Liquidity Monthly Very Low Risk Nominal Return 20 20 20 20 20 100

Time Horizon 6 months - 1 Year Above 1 Year Liquidity with Above FD moderate return Monthly Quarterly Medium Risk Low Risk - High Medium Return Return % Allocation 20 20 20 20 20 100 20 20 20 20 20 100

Jump in the short term yields led to volatility in returns in CY13


10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 8.32 8.62 6.39 7.84 5.68 3.16

0 -6 Months

6Months - 1Year Portfolio Index

Above 1yr

Model portfolio performance: CY13; Source: Crisil Fund Analyser, ICICIdirect.com Research; *Index: 0-6 months portfolio Crisil Liquid Fund Index; 6 months-1 year Crisil Short term Index; Above 1 year: Crisil Composite Bond Index.

ICICIdirect Money Manager

64

January 2014

QUIZ TIME

1. Employees' Provident Fund Organisation (EPFO) hikes interest rate on deposits from _______ per cent to _______ per cent. 2. You can get landlords PAN details on plain paper for claiming HRA exceeding ` 1 lakh per annum. True / False 3. Dividends from debt funds are subject to a dividend distribution tax (DDT) of _______ per cent including surcharge and cess. 4. If you take a joint home loan, both you and your spouse can individually claim deduction under Section 80C and Section 24, provided the said home is registered in both your names. True/ False 5. The _______ option in mutual funds does not declare any dividends. Note: All the answers are in the stories that have appeared in this edition of ICICIdirect Money Manager. You may send in your answers at: moneymanager@ icicisecurities.com The answers will be published in our next edition. The names of the earliest all correct entries will be published too. So jog your grey cells and be quick to send in your entries. Correct answers for the last quiz are: 1. For life insurance policies issued after April 1 2012, the tax deduction under section 80C is available only if the premium paid is not more than _______ per cent of the sum assured. A: 10 2. Under new section _______, the additional tax benefit on home loan interest paid is available, for first-time home buyers, subject to certain conditions. A: 80EE 3. If assessee and his parents are both senior citizens, then the total tax deduction for health insurance premium under section 80D would be ` _______. A: 40,000 4. As per the current tax rates, an individual earning ` 8,00,000 and above, is charged tax at _______ per cent. A: 20 5. You get tax deduction on health insurance premium paid by any mode - cash, cheque, etc. True / False A: False Congratulations to the following winner for providing correct answers! Anup Singh, Gandhinagar

ICICIdirect Money Manager

65

January 2014

MONTHLY TRENDS
INFLATION (FOOD)
25.0 20.0 15.0
(%)

19.93 13.68

10.0 5.0 0.0 Nov-13 Dec-13

(The figures are in %) CRUDE OIL


102.0 100.0 98.0 $ per barrel 96.0 94.0 92.0 90.0 88.0 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 -Jan 8 - Jan 92.33 97.34

NYMEX crude oil prices ($/barrel) FII & DII INVESTMENTS


3000 2000 1000 0 -1000 -2000 -1,205.81 9 - Dec 14 - Dec 19 -Dec 24 - Dec FII 29 - Dec DII 3 - Jan . -88.15 8 - Jan 2,473.17 79.68

(Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DII) net equity investment (` in crore)
ICICIdirect Money Manager 66
January 2014

MONTHLY TRENDS

VOLATILITY INDEX (VIX)


VIX 20 16 12 9 - Dec 14 - Dec 19 - Dec 24 - Dec VIX 29 - Dec 3 - Dec 8 -Dec 19.16 16.32

VIX is a key measure of market expectations of near term volatility. When the markets are highly volatile, the VIX tends to rise. DOMESTIC INDICES BSE Sensex
21400 21200 21000 20800 20600 20400 20200 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan 20729.38 21326.42

2.80%

NSE Nifty
6400 6350 6300 6250 6200 6150 6100 6050 6000 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan 6174 .60 6363.90

2.97%

ICICIdirect Money Manager

67

January 2014

MONTHLY TRENDS

GLOBAL INDICES Dow Jones


16800 16500 16200 15900 15600 15300 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan 16025.53 16462 .74

2.73%

NASDAQ
4200 4165.61

4100

4068.75

4000

2.38%

3900 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan

EXCHANGE RATES USD-INR


62.5 62.0 USD / INR 61.5 61.0 60.5 60.0 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan 62.15

61.13

1.67%

POUND-INR
103.0 102.5 102.0 101.5 102.22

/ INR

101.0 100.5 100.0 99.5 99.0 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan 100.42

1.79%

ICICIdirect Money Manager

68

January 2014

MONTHLY TRENDS
EURO-INR
86.0 83.97 84.37 84.0 / INR

82.0

0.47%
80.0

78.0 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan

BULLION Gold
1300

$ per Ounce

1225

1240.56

1225.71

1150 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan

(The prices are in $ per ounce). SILVER


22.0

$ per Ounce

20.0 19.84 19.51

18.0 9 - Dec 14 - Dec 19 - Dec 24 - Dec 29 - Dec 3 - Jan 8 - Jan

(The prices are in $ per ounce).


(Source for all indicators: Bloomberg, Reuters)

ICICIdirect Money Manager

69

January 2014

Premium Education Programmes Schedule


ICICIdirect Centre for Financial Learning (ICFL) imparts quality education on financial markets to beginners and amateurs, student, housewives, working professionals and self employed. ICFLs broad objective is to make participant feel confident to start investing in stock market. Here is the list of our programmes scheduled for the month of January, 2014.
Schedule for Beginners Programme on Futures and Options Trading Sr. No 1 2 3 4 5 6 7 8 9 10 11 Sr. No 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 City Pune Nagpur Navi Mumbai Chennai New Delhi New Delhi Mumbai-Andheri Bangalore Mumbai-Chembur Navi Mumbai Hyderabad City Dhanbad Ghaziabad Bhopal Vadodara Surat Kochi Vishakapatnam TIRUPATHI Vadodara Pune Pune Hyderabad Chennai New Delhi New Delhi Noida Chandigarh Thane Dates Jan 18 and 19 2014 Jan 18 and 19 2014 Jan 25 and 26 2014 Jan 25 and 26 2014 Jan 18 and 19 2014 Jan 18 and 19 2014 Jan 11 and 12 2014 Jan 25 and 26 2014 Jan 11 and 12 2014 Jan 11 and 12 2014 Jan 18 and 19 2014 Dates Jan 19, 2014 Jan 19, 2014 Jan 19, 2014 Jan 19, 2014 Jan 19, 2014 Jan 11, 2014 Jan 25, 2014 Jan 19, 2014 Jan 12, 2014 Jan 11 and 12 2014 Jan 25 and 26 2014 Jan 18 and 19 2014 Jan 25 and 26 2014 Jan 11 and 12 2014 Jan 11 and 12 2014 Jan 18 and 19 2014 Jan 18 and 19 2014 Jan 11 and 12 2014 For More Information & Registration call: Kusmakar on 7875442311 Kusmakar on 7875442311 Manish on 8451057943 Vaisakh on 9962218201 Vishal on 07838290143, Harneet on 09582158693 Vishal on 07838290143, Harneet on 09582158693 Vidhu on 9619716146 Subrata on 9620001478 Manish on 8451057943 Manish on 8451057943 Ruchi on 8297362323 For More Information & Registration call: Sumit on 8017516187 Vishal on 07838290143 Yogesh on 8238053563 Yogesh on 8238053563 Yogesh on 8238053563 Subrata on 9620001478 Ruchi on 8297362323 Ruchi on 8297362323 Yogesh on 8238053563 Kusmakar on 7875442311 Kusmakar on 7875442311 Ruchi on 8297362323 Vaisakh on 9962218201 Vishal on 07838290143, Harneet on 09582158693 Vishal on 07838290143, Harneet on 09582158693 Vishal on 07838290143 Harneet on 09582158693 Manish on 8451057943

Schedule for Fast Track Beginners programme on Futures and Options Trading

ICICIdirect Money Manager

70

January 2014

Sr. No 30 31 32 33 34 35 36 Sr. No 37 38 39 40 41 42 43 44 45 46 47 Sr. No 48 49 50 51 52 Sr. No 53 54

City

Schedule for Foundation Programme on Stock Investing Dates For More Information & Registration call:

Mumbai-Andheri Jan 18 and 19 2014 Vidhu on 9619716146 Bangalore Jan 18 and 19 2014 Subrata on 9620001478 Indore Jan 11 and 12 2014 Yogesh on 8238053563 Kolkata Jan 25 and 26 2014 Sumit on 8017516187 Navi Mumbai Jan 25 and 26 2014 Manish on 8451057943 Mumbai-Chembur Jan 25 and 26 2014 Manish on 8451057943 Hyderabad Jan 25 and 26 2014 Ruchi on 8297362323 Schedule for Fast Track Foundation Programme on Stock Investing City Dates For More Information & Registration call: Ranchi Faridabad Ahmedabad THIRSSUR Ajmer Jaipur Aurangabad Gurgaon Agra Lucknow Allahabad City Mumbai-Chembur Pune Bangalore Kolkata Bhubaneshwar City Patna Ahmedabad Jan 19, 2014 Sumit on 8017516187 Jan 19, 2014 Vishal on 07838290143 Jan 26, 2014 Yogesh on 8238053563 Jan 11, 2014 Subrata on 9620001478 Jan 19, 2014 Harneet on 09582158693 Jan 12, 2014 Harneet on 09582158693 Jan 19, 2014 Kusmakar on 7875442311 Jan 12, 2014 Harneet on 09582158693 Jan 19, 2014 Vishal on 07838290143 Jan 19, 2014 Vishal on 07838290143 Jan 19, 2014 Vishal on 07838290143 Schedule for Technical Analysis Dates For More Information & Registration call: Jan 18 and 19 2014 Manish on 8451057943 Jan 11 and 12 2014 Kusmakar on 7875442311 Jan 18 and 19 2014 Subrata on 9620001478 Jan 11 and 12 2014 Sumit on 8017516187 Jan 25 and 26 2014 Sumit on 8017516187 Schedule for Fast Track Technical Analysis Date For More Information & Registration, Call: Jan 19, 2014 Jan 12, 2014 Sumit on 8017516187 Yogesh on 8238053563

Contact us Email: Send us an email at learning@icicisecurities.com Please mention the name, date and venue of the programme you have attended or wish to attend, for faster resolution of your queries. SMS: SMS EDU to 5676766 for more details

ICICIdirect Money Manager

71

January 2014

Printed at: SAP Print Solutions 28A, Laxmi Industrial Estate, S.N. Path, Lower 400 Parel (W), Mumbai 400 013. Printed at: SAP Print Solutions Pvt. Ltd.,Pvt. 28A,Ltd., Laxmi Industrial Estate, S.N. Path, Lower Parel (W), Mumbai 013.