2

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Current Market Scenario

2

\December Meeting

2

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2

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2

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2

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2

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Harshad Mehta Scam

P/E OF 57 in April 1992P/E of 34 in April 2000

Software Boom

P/E of 13.4 on Apr 2003

P/E of 28.12 in Jan 2008

History of Bull Markets

in the last 28 years

P/E of 10.36 in Oct 2008

8509

P/E of 24 in October 2010

P/E of 13 in

Dec 2011

P/E of 10.7 Dec 1996

P/E of 25 Jan 2018

1994 Boom P/E of

54 in June 1994

P/E of 14 in

Aug 2013

P/E of 22 in March 2015

PE of 17 in

Feb 2016

2

\Sensex Annual Performance

26

73

13

42 47 47

-52

81

17

-259

30

- 5 2

28

2

\Markets Hits Record Level

• Indices at All Time High

• Mid and Small Cap Outperforms

• US Market continues strong bull run

• Commodities RallyINDEX WATCH

INDEX 13, Jan 8, Dec % Change

Nifty 10,681 10,265 4.0

Sensex 34,592 33,250 4.0

Nifty Midcap 21,694 20,014 8.3

BSE Small Cap 19,993 18,211 9.7

2

\Markets At All Time High –

Scepticism Persists

• Lack of earnings growth and Higher

Valuations

• Lesson of 2008 still in memory

2

\

2

\Budget Expectations

• To focus on sectors related to rural

economy

• Tax Sops for middle class segment

• Introduction of long term capital gains

2

\Will Govt. Introduce LTCG ?

• Debate on introduction of Long Term

Capital Gain for shares started

• STT was introduced in Oct 2004 in lieu of

LTCG

• Immediate market reaction depends upon

the form of LTCG

• Right now there is no tax if we sell shares

after one year

2

\Green Shoots Visible – IIP at 17 Month High

2.4

3.5

1.2

4.4

3.22.9

-0.3

1

4.54.1

2.2

8.4

-1

0

1

2

3

4

5

6

7

8

9

2

\December Vehicle Sales

Segment % Change (YoY)

Car 0

Two Wheelers 41

Commercial Vehicle 52

2

\Concern on Domestic Macro Economy

• Higher fiscal deficit on lower tax collection

due to GST implementation

• Higher current account deficit on higher

crude oil prices

• Higher interest rate on more Govt.

borrowing

2

\US Markets on Huge Rally

• Rally triggered by Trump Policy on

infrastructure spending and Corporate Tax

Cut

• Recovery in economy giving fundamental

support

• Valuations at higher levels

• US markets will have impact on global market

2

\Valuations Near All Time High

US Total Market Cap to GDP Ratio

2

\China strict Environment Laws

• Plant closure in China on pollution control

leading to supply squeeze in metals and

chemicals

• Steel Exports from China has come down

significantly

• Stopped importing waste paper and

plastics

2

\Mutual Fund Inflows

7871

5380.5

11086.510895

12076.5

6,532

8,743

11,192

12,997

14,571

11,893

16,659

24,754

23,007

18,951

24,115

20,965

0

5000

10000

15000

20000

25000

30000

Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Cr.

2

\Record Inflows in Mutual Fund

29,060

49,817

4,054 1,802

-12,849

313

-14,479

-10,262

75,942

83,89588,672

1,67,910

-40000

-20000

0

20000

40000

60000

80000

100000

120000

140000

160000

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018

Till DecEquity Funds + ELSS + 50% of Balanced Fund

2

\HDFC Twins To Raise Huge Money

• HDFC Bank to raise 24,000 Cr. through various

means out of which HDFC will subscribe for

8,500 Cr.

• HDFC to raise 13,000 Cr.

• Overall HDFC twins to raise around 28,500 Cr.

2

\Bitcon – Is it Another Bubble ?

2

\Events to Watch

• Union Budget on Feb 1

• Global markets

2

\

Thank You