Recovery Fund
Recovery Fund
Recovery Fund
HIGH RISK
(BROWN)
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
Note - Risk may be represented as:
(BLUE) investors understand that
their principal will be at low risk
GDP%
1,200
CNX Nifty
GDP Growth
1,100
1,000
900
800
700
1995
1996
1997
5.4
11.2
3.9
8.1
6.2
Mgf
Manufacturing
Ser
Services
400
1994
5.6
6.9
9.9
13.4
8.1
Industry
1993
5.7
7.4
5.8
10
7.5
Ind
500
1992
3.1
8.6
11
16
9.5
1991
AFF
600
300
Real
AFF Ind
GDP
1993 5.3
6.7 3.2
1994 5.7
3.3 5.5
1995 6.4
4.7 9.2
1996 7.4 -0.7 11
1997 7.8
9.9 6.4
in % terms
Year
FIRB
"Industry" (led by manufacturing), and "services" (led by trade, transport and communication) were
driving the growth, while agriculture was mixed.
Source: UBS Securities
CNX Nifty
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2002
2003
2004
2005
2006
Real
Year
AFF Ind Mgf Ser THTC FIRB
GDP%
GDP
12 2003 3.9 -6.6 7.2 6.9 6.7
8.3
7.2
2004 8
9
7.3 6.3 7.9 11.2
5.3
10
2005 7.1
0.2 9.8 7.4 8.3
9.5
7.7
2006 9.5
5.1 9.7 10 11
12
12.6
8
2007 9.6
4.2 12 14 10 11.6
14
6
2008 9.3
5.8 9.7 10 10 10.9
12
in % terms
4
AFF
Ind
Industry
Mgf
Manufacturing
0
2007
Ser
Services
In the 2003-08, "industry" did well led by manufacturing, while services growth improvement was
led more by financing and real estate.
Source: UBS Securities
Lower
Inflation
Supply
Constraints
Higher
Interest
Rates
Better Supply
Response
Lower Interest
Rates
No further
Investment
Depressed
Demand
Higher
Investment
Higher
Demand
Lower
Capacity
Utilization
Better
Capacity
Utilization
Economic
Indicators
Business
sentiment
improvement
Reforms
Investment
Recovery
Economic Indicators
Indicator
November
2012
November
2013
Now
WPI (%)
7.2
7.5
-0.39
CPI (%)
9.9
11.6
5.11
CAD as % of GDP
-4.7
-1.7
-1.7 to 2
4.9
4.6
4.1 (E)*
110
112
60
8.22
8.74
7.70
14
14
11
4.6
5.2
5.3
--
7.5
7.8
-1.01
-1.30
1.70
Source: Bloomberg; CAD Current Account Deficit; GDP Gross Domestic Product; WPI Wholesale Price Index; CPI Consumer
Price Index; * Estimate as per Union Budget 2015; Now refers to as per latest available data as on 31st January 2015
Railways
Ports
Make in India
Source: Motilal Oswal Securities * Refer Appendix for details on reforms undertaken by Government
Investment Commitments
Business sentiment
improvement
Purchasing Managers Index
Index
55
65
50
45
60
40
55
35
30
50
25
20
45
15
10
Nov-14
Jun-14
Jan-14
Aug-13
Mar-13
Oct-12
May-12
Dec-11
Jul-11
Feb-11
Sep-10
Apr-10
Nov-09
PMI - manufacturing
PMI - services
5
Dec-06
May-07
Oct-07
Mar-08
Aug-08
Jan-09
Jun-09
Nov-09
Apr-10
Sep-10
Feb-11
Jul-11
Dec-11
May-12
Oct-12
Mar-13
Aug-13
Jan-14
Jun-14
Nov-14
PMI - composite
Jun-09
Jan-09
Aug-08
Mar-08
Oct-07
May-07
Dec-06
40
Financial Situation
The purchasing managers' index (PMI), has been above 50 (denoting expansion), driven
more by manufacturing recently, though the services index has also been robust.
Source: UBS Securities
Investment Recovery
Stage 1
2014
Stage 2
2015E
2016E
Stage 3
2017E
2018E
2019E
Power BTG
Short cycle
Industrial capex
Smart cities
Infra ordering
pickup, DFC
Policy
announcements
Infrastructure capex
acceleration
River cleaning
Renewable, metro
Source: Barclays; The above graph depicts a 3 stage bottom-up cyclical model
DFC - Dedicated Freight Corridor; BTG - Boiler-Turbine-Generator, T&D Transmission and Distribution
Investment Recovery
Early signs of Capex Revival
90
9
8
80
70
60
50
40
30
20
10
0
Dec 05
Jun 07
Dec 08
Jun 10
Dec 11
Jun 13
Dec 14
0
Dec 05
Jun 07
Dec 08
Jun 10
Dec 11
Jun 13
Dec 14
Investment Recovery
Projects cleared by CCI
No. of projects
Chemicals & Fertilizers - Chemicals/Petrochemicals
Chemicals and Fertilizers - Fertilizers
Civil Aviation
Coal
Commerce and Industry - Commerce
Commerce and Industry-DIPP
Mines
Petroleum and Natural Gas
Pow er
Railw ays
Road Transport and Highw ays
Shipping
Steel
Textiles
Urban Development
Grand Total
Pending
1
3
0
50
6
16
5
32
86
16
24
11
45
0
3
298
Cleared
0
0
2
29
2
4
3
17
99
9
13
8
6
1
0
193
Total
1
3
2
79
8
20
8
49
185
25
37
19
51
1
3
491
The Cabinet Committee on Investments (CCI) has cleared a lot of stuck projects 190+
projects, worth Rs6.5 trillion (over 5% of GDP), out of the 491 accepted for consideration.
Source: UBS Securities
FY15
FY16
FY17
210
1107
50
210
50
150
313
10
24
80
150
61
15
315
22
35
55
150
75
13
351
16
35
30
44
30
8
120%
10
9
-60%
Nov-14
-40%
Nov-13
Nov-12
-20%
Nov-11
Nov-10
0%
Nov-09
Nov-08
20%
Nov-07
Nov-06
40%
Nov-05
Nov-04
60%
Nov-03
Nov-02
80%
Nov-01
Nov-00
100%
0.0
FY14
0.0
FY13
5.0
FY12
5.0
FY11
10.0
FY10
10.0
FY09
15.0
FY08
15.0
FY07
20.0
FY06
20.0
FY05
25.0
FY04
25.0
FY03
30.0
FY02
30.0
FY01
35.0
FY00
35.0
Recovery in the economy can fuel the credit growth of the banking sector
which may lead to increase in NIMs.
Between 2004-08, credit growth of banking sector was way above the GDP
growth.
Source: Motilal Oswal; NIMs Net Interest Margins
35.5
India
33.7
Philippines
10.3
Thailand
0.7
Malaysia
0.6
China
0.6
(%)
10
15
20
25
30
35
40
2,454
Singapore
1,946
Japan
1,810
China
1,785
Taiwan
1,744
Korea
1,607
Malaysia
901
China
851
Thailand
493
India
180
Philippines
170
Indonesia
(W per capita)
121
0
500
1,000
1,500
2,000
2,500
Indias power generation per capita is at 180 w per capita as compared to 2454 w
per capita for Australia.
Source: CLSA; w per capita watt per capita
68.0
Philippines
40.0
Indonesia
37.0
Thailand
37.0
China
35.0
Taiwan
2.2
Korea
2.2
Malaysia
(%)
0.4
0
10
20
30
40
50
60
70
80
66.0
Indonesia
46.0
China
36.0
Philippines
26.0
Thailand
4.0
(%)
Malaysia
4.0
0
10
20
30
40
50
60
70
100
China
100
Thailand
98.5
Taiwan
94.9
Japan
80.6
Malaysia
80.4
South
79.7
China
60.2
Indonesia
57
India
50.8
Australia
44.6
Philippines
30.3
0
Source: CLSA
(%)
10
20
30
40
50
60
70
80
90
100
26
Scheme Features
Type of scheme
Investment Objective
Options
Minimum
Amt.
Not Applicable
Benchmark Index
Fund Manager*
Appendix
Policy
Details
Resource Allocation
Subsidy Reforms
Food
Control inflation
Power
Manifesto/Promises
Appendix
Policy
Details
Manifesto/Promises
Restructuring of PSUs
FDI in Defence
FDI in Railways
Develop Railways
FDI in Construction
Smart cities
Smart Cities
REITs
GST
Tax reforms
Source: Jefferies; GST Goods and Sales Tax; FDI Foreign Direct Investment; REIT Real Estate Investment Trusts
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carefully.
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