Financial Assets @ September 2015

Indian Macro Outlook

1.       Gross Value Growth suggest pick up in activities

i)        GVA growth by industry, is more robust indicator of activity which rose to 7.1% YOY (First quarter 2015-16 visa vis 6.1% in same period last year.

ii)       GDP by expenditure (at market price) came in below at 7% in comparison to 7.5% same period last year.

2.       High frequency indicators also point to recovery.

3.       Balance of Payments – Remains in Surplus with current & capital account being in check

4.       Fiscal deficit rose a bit, but remains in control.

5.       Weak external demand weighing on export growth.

6.       Inflation has surprised on downside, commodities downtrend to help.

7.       Interest Rates expected to moderate further, bringing down cost of capital

8.       Capex cycle shows some sign of recovery

9.       Indian rupee has shown some resilience, compared to other EM currencies.

10.   Financial Inclusions, gets boost in India through recent initiatives.

11.   Indian Corporate Earning was flat FY15 but is expected to pick up going forward.

(Profitability & Margin also expected to better going forward).

12.   Indian markets have corrected recently but have outperformed any market in last one year.

13.   Foreign Portfolio flows have turned negative in recent months.

14.   Domestic Equity has picked up very strongly.

15.   Indian Market valuation has dropped below long term average post corrections.

16.   Valuation gaps between large Caps & Medium Caps have closed mostly.

Recent International Activities:

·         Federal Govt. (US) holds on interest rates

·         Decline in world demand for crude

Food for thought:

Corrections are always considered to be healthy in any market as it gives time to business to adapt to its true pace (real time valuation) …as market always trades on future valuations….

Regards