Mutual Fund News of the Week 26th Mar to 30th Mar’18

News U Can Use

March 30, 2018

The Week that was…

March to 30

March

Indian Economy

• India's fiscal deficit for the Apr 2017-Feb 2018 period increased to Rs. 7.16 lakh crore, which

is 120% of the government’s revised target for FY18. The fiscal deficit target for the current

fiscal was revised at 3.5% from the earlier 3.2%. The target for FY19 has been set at 3.3%

making changes to fiscal consolidation glide path.

• Government plans to borrow Rs. 2.88 lakh crore in the first half of FY19 (Apr to Sep).

Economic affairs secretary anticipated that the gross market borrowing in FY19 is likely to be

lower by Rs. 25,000 crore than the budgeted target. Government will also issue securities of

1-4 years duration, inflation index bonds linked to consumer price index and flexible rate

bonds. The secretary also said that the government and the central bank are also considering

a plan to raise the foreign investment limit in government bonds.

• Goods and Services Tax (GST) collections fell for the second consecutive month to Rs.

85,174 crore in Feb 2018 (received till Mar 26). Lower collections resulted because 69% or

around 59.51 lakh (GSTR 3B returns) of assesses filed returns till Mar 25. GST collections in

Jan 2018 were Rs. 86,318 crore while in Dec 2017 and Nov 2017 it was Rs. 88,929 crore and

Rs. 83,716 crore, respectively.

• The Income-Tax Department released a list of 24 defaulting individuals and companies who

owe about Rs. 490 crore in taxes to the government, which was published in leading national

dailies. These entities are either untraceable or have reported inadequate assets for payment

of dues.

Indian Equity Market

Domestic Equity Market Indices

Indices

28-Mar-18

1 Week Return

YTD Return

S&P BSE Sensex

32,968.68 1.14% -2.50%

Nifty 50

10,113.70 1.16% -3.08%

S&P BSE Mid

-Cap 15,962.59 1.71% -10.50%

S&P BSE Small

-Cap 16,994.36 1.15% -11.85%

Source: MFI Explorer

NSE Advance/Decline Ratio

Date Advances Declines

Advance/Decline Ratio

26-Mar-18 852 997 0.85

27-Mar-18 1317 477 2.76

28-Mar-18 588 1235 0.48

Source: NSE

• Indian equity markets gained over the

truncated trading week on reports that

the U.S. and China are likely to

negotiate about the prospective U.S.

tariff imposition on Chinese imports.

This reduced fears of a probable

global trade war. Sentiment also got

support as government announced

lower than expected borrowing

programme for the first half of the

fiscal 2018-19. The government will

borrow Rs. 2.88 lakh crore during the

Apr-Sep period.

• However, the upside was limited as

India's fiscal deficit widened to Rs.

7.16 lakh crore at the end of Feb,

exceeding the revised target of Rs

5.94 lakh crore for the entire 2017-18

fiscal and for Apr-Feb period it stood at

120% of the revised estimates due to

increased expenditure and subdued

revenue.

Ratios

S&P BSE

Sensex

Nifty 50

S&P BSE

Mid Cap

S&P BSE

Small Cap

P/E

22.66 24.66 36.64 107.95

P/B

3.01 3.42 2.76 2.44

Dividend Yield

1.18 1.29 0.89 0.68

Source: BSE, NSE Value as on Mar 28, 2018

Indian Equity Market (contd.)

Sectoral Indices

Indices

Last Returns (in %)

Closing 1-Wk 1-Mth

S&P BSE Auto

24,057.25 1.55% -3.12%

S&P BSE Bankex

27,197.88 2.58% -3.94%

S&P BSE CD

22,261.90 2.88% 5.07%

S&P BSE CG

18,476.73 2.39% -3.14%

S&P BSE FMCG

10,290.14 1.00% -2.06%

S&P BSE HC

13,157.62 0.40% -6.77%

S&P BSE IT

12,100.55

-0.61%

-3.24%

S&P BSE Metal

13,322.03 1.87%

-12.20%

S&P BSE Oil & Gas

14,614.42 0.80% -5.75%

Source: Thomson Reuters

Eikon Value as on Mar

28, 2018

• On the BSE sectoral front, barring S&P BSE

Teck (-0.68%) and S&P BSE IT (-0.61%), all

the sectoral indices closed in the green.

S&P BSE CD (2.88%) stood as the major

gainer followed by S&P BSE Bankex

(2.58%) and S&P BSE CG (2.39%). S&P

BSE Metal (1.87%) and S&P BSE Auto

(1.55%) sectors also gained.

• Meanwhile, according to the latest data

available from oil ministry's Petroleum

Planning and Analysis Cell (PPAC), India's

oil import bill is likely to move up by a

quarter percentage to $87.7 billion in the

current fiscal year.

Indian Derivatives Market Review

• Nifty Mar 2018 Futures settled at spot closing of 10,113.70. Nifty Apr 2018 Futures were at

10,151.95 points, a premium of 38.25 points, over the spot closing. The turnover on NSE’s

Futures and Options segment stood at Rs. 35.09 lakh crore against Rs. 42.35 lakh crore on

Mar 23.

• The Put-Call ratio stood at 0.91 compared with the previous week’s close of 0.77.

• The Nifty Put-Call ratio stood at 1.10 compared with the previous week’s close of 1.04.

Domestic Debt Market

Debt Indicators

(%)

Current

Value

Ago

Mth

Ago

Mth

Ago

Call Rate

7.57 5.93 5.93 5.98

91 Day T

-Bill

6.12 6.15 6.32 6.08

7.80% 2021, (5

Yr GOI)

7.09 7.14 7.17 6.56

7.17% 2028, (10

Yr GOI)

7.40 7.56 7.73 --

Source: Thomson Reuters

Eikon

Value as on Mar 28, 2018

• Bond yields fell after the government’s

move to ease debt supply burden in

the first six months of the next financial

year. The government announced that

India will sell bonds worth Rs. 2.88

trillion during Apr-Sep of 2018

accounting to only 47.56% of the

government’s budgeted fiscal-year

borrowing, which is lower than 60%-

65% in the last five years.

• However, profit booking by investors,

rise in crude oil prices and sluggish

demand in the state development

auction capped the gains.

• Yield on the 10-year benchmark paper

(7.17% GS 2028) fell 16 bps to close

at 7.40% from the previous week’s

close of 7.56% after trading in a range

of 7.29% to 7.63%.

7.20

7.30

7.40

7.50

7.60

7.70

26-Mar 27-Mar 28-Mar

Yield in %

10 -Yr Benchmark Bond ( % )

Source: CCIL

Domestic Debt Market (Spread Analysis)

Maturity

G-

Sec Yield

(%)

Corporate Yield

(%)

Spread

bps

1 Year 6.69 7.46 77

3 Year 7.21 7.66 45

5 Year 7.49 7.80 31

10 Year 7.72 8.00 28

Source: Thomson Reuters

Eikon Value as on Mar 28

, 2018

• Yields on gilt securities fell across all

maturities in the range of 5 bps to 22 bps.

Maximum decrease was witnessed on 13-

and 14-year papers, while minimum was

witnessed on 2-year paper.

• Corporate bond yields fell across the

maturities in the range of 3 bps to 29 bps,

barring 3-year paper that closed steady.

• Spread between AAA corporate bond and

gilt contracted across 5 to 10 years’ and

15-year maturities in the range of 4 bps to

17 bps, while spread expanded for 1-, 3-

and 4-year papers by up to 6 bps and

stood steady for 2-year paper.

-18

-12

-6

5.90

6.60

7.30

8.00

3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs

India Yield Curve Shift (%) (W-o-W)

Change in bps 28-Mar-18 23-Mar-18

Yield

in %

Change

in bps

Source: Thomson Reuters Eikon

Regulatory Updates in India

• The Securities and Exchange Board of India (SEBI) is planning to put in place a stronger

mechanism to check non-compliance of listing conditions. Under the proposed framework, the

exchanges would have the power to freeze the entire shareholding of the promoter and

promoter group in non-compliant listed entity also holding in other securities.

• According to media report, Goods and Services Tax (GST) Council may soon give relief to

businesses having zero tax liability for six consecutive months under GST. The council at its

next meeting may propose that such entities file returns only twice a year. Recent data showed

that as much as 40% of return filed under GST regime have nil tax liability.

• A Niti Aayog committee has suggested some measures to encourage gold sector which

include, reduction of the import duty on gold, setting up jewellery parks and form a regulatory

body for the gold industry. The committee gave 84 recommendations with a three month to

one-year timeline for implementation. The committee is headed by the principal adviser of the

Niti Aayog.

• According to the commerce and industry minister, the government may resume negotiations of

the long-stalled free trade agreement (FTA) between India and European Union (EU). He

added that after 2013, and completing 16 rounds of talks, the negotiations had not moved

further.

Regulatory Updates in India (contd..)

• According to the media reports, the Insolvency and Bankruptcy Code (IBC) review panel has

called for sweeping changes in the law that aims at easing insolvency rules for small

enterprises. Also, these changes would provide relief to home buyers by treating them as

financial creditors while deeming the amount raised from them for real estate projects as

financial debt. Per the proposal by the committee, promoters of micro, small and medium

enterprises (MSMEs) who are not willful defaulters should be allowed to bid during the

insolvency process. If the change is adopted, it would massively improve the prospects of such

companies being acquired and revived, thereby saving jobs, instead of going into liquidation.

• Prime Minister said a planned increase in guaranteed price for farm goods take into account

the cost of production including land rentals and unpaid labour by family members of a farmer.

In the latest budget, government said the MSP will be set at least one and a half times the cost

of production. This is a major step taken by the government since over the past three years the

rise in the average minimum support price was in single digits.

• An inter-ministerial panel formed by the government, with an objective to double farmers’

income by 2022 will submit its final report in Apr 2018. The committee, which was set up in Apr

2016 points out that real income of farmers needs to register a compound annual growth rate

of 10.4% in order to double by 2022. Some of the panel’s recommendations are already being

implemented by the government.

Global News/Economy

• A report from the Commerce Department showed that U.S. Gross Domestic Product (GDP)

grew 2.9% in the fourth quarter that came in higher than previous expectation of an increase of

2.5% driven by upward revisions to consumer spending and private inventory investment.

However, it was modestly lower than 3.2% increase in the third quarter.

• According to a report from the Commerce Department, U.S. personal income came in line with

market expectations and grew 0.4% in Feb 2018, which matched the increases witnessed in the

two previous months. Disposable personal income grew by 0.4% in Feb as against a gain of 1%

in Jan 2018. Also, personal spending grew 0.2% for the second consecutive month.

• A flash report from Destatis showed that Germany’s inflation grew 1.6% in Mar 2018 as against

a gain of 1.4% in Feb 2018. Consumer price index gained 0.4% on monthly basis.

• A report from the Office for National Statistics showed that U.K. GDP grew 0.4% quarter on

quarter in the fourth quarter of 2017, which is slightly down as against 0.5% gain in the third

quarter. However, it was in line with preliminary expectations.

• A report from the Ministry of Economy, Trade and Industry showed that total value of retail sales

in Japan grew 0.4% (seasonally adjusted) month on month in Feb 2018 as against an upwardly

revised 1.6% contraction in Jan 2018 (1.8% decline originally reported). Retail sales gained

1.6% in Feb on a yearly basis as against downwardly revised gain of 1.56% (1.6% gain

originally reported) in Jan.

Global Equity Markets

Global Indices

Indices

29-Mar-18

1-Week

Return

YTD

Return

Dow Jones

24,103.11 2.42% -2.90%

Nasdaq 100

6,581.13 1.12% 1.07%

FTSE 100

7,056.61 1.95% -7.73%

DAX Index

12,096.73 1.77% -6.02%

Nikkei Average*

21,454.30 4.06% -8.73%

Straits Times

3,427.97 0.19% 0.74%

Source: Thomson Reuters

Eikon

Value as on Mar

29, 2018 * Last close as on Mar 30, 2018

U.S.

• U.S. markets recouped previous week’s

loss to end the holiday truncated week

in the green. Bargain hunting

contributed to the rally on Wall Street.

Easing concerns about a potential trade

war between the U.S. and China

soothed investors’ nerves.

• Stocks rallied further as U.S. economic

activity grew more than previously

estimated in the fourth quarter of 2017.

Europe

• European markets closed on a positive note ahead of the four-day Easter holiday

weekend. Investor sentiment was buoyed as worries over a potential trade war between

the U.S. and China eased after officials of both the nations indicated a willingness to

negotiate. Markets found additional support after a survey data from the market research

group GfK showed that German consumer confidence is set to improve in Apr.

Asia

• Asian markets largely remained high as concerns over probable trade war receded

following reports that the U.S. and China are willing to negotiate trade-related issues.

Growing expectation over the resolution of geopolitical tensions surrounding the Korean

Peninsula further supported investor sentiment.

Global Debt (U.S.)

• Yield on the 10-year U.S. Treasury bond

fell 9 bps to close at 2.74% from the

previous week’s close of 2.83%.

• U.S. Treasury prices fell initially as the

government planned to sell a record

$294 billion of debt in the week in order

to test investor appetite.

• However, the trend reversed and prices

rose amid decline in equity market

especially technology sector on Tuesday

on government scrutiny over political

consultants' use of a U.S. technology

major’s user data.

• Meanwhile, the auction of $29 billion 7-

year auction sailed was completed

successfully despite higher bond supply

during the week.

2.70

2.80

2.90

26-Mar 27-Mar 28-Mar 29-Mar

US 10-Year Treasury Yield Movement

Source: Thomson Reuters Eikon

Commodities Market

Performance of various commodities

Commodities

Last Closing 1-Week Ago

Brent Crude($/Barrel)

68.21 68.62

Gold ($/Oz)

1,324.00 1,346.76

Gold (Rs/10 gm)*

30,630 30,700

Silver ($/Oz)

16.32 16.52

Silver (Rs/Kg)*

38,325 38,219

Source: Thomson Reuters

Eikon * Last closing as on Mar 28, 2018 Value as on Mar 29,

2018

Gold

• Gold prices moved down when news

that U.S. and China might negotiate

over U.S. tariff plans on Chinese

imports eased fears of a global trade

war. Better than expected U.S.

economic data also lowered the prices

of the precious metal.

Crude

• Brent crude prices inched down on

persisting concerns over supply glut

after data from the Energy Information

Agency indicated that U.S. crude

inventories rose in the week to Mar 23.

• The downside was limited after data

from energy services firm Baker Hughes

indicated that U.S. oil rigs count fell for

the week ended Mar 29.

Baltic Dry Index

• The Baltic Dry Index fell on the back of

lower capesize and panamax activities.

9.20

9.60

10.00

10.40

28-Feb-18 9-Mar-18 18-Mar-18 27-Mar-18

Global Commodity Movement

Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)

Global

Commodity Prices

Rebased to 10

Source: Thomson Reuters Eikon

-0.60%

-1.69%

-1.22%

29-Mar-18

Currencies Markets

Movement of Rupee vs Other Currencies

Currency

Last Closing 1-Wk Ago

US Dollar

65.04 65.13

Pound Sterling

92.28 91.96

EURO

80.62 80.34

100 JPY

61.54 62.13

Source: RBI Figures in INR ,

Value as on

Mar 28, 2018

Rupee

• The Indian rupee fell against the U.S

dollar due to month-end dollar demand

from importers and after India’s fiscal

deficit for the 11-month period ended Feb

2018 reached 120% of the revised

budgeted target of FY18.

Euro

• Euro rose initially against the U.S. dollar

as investors' risk appetite improved on

expectations of easing concerns of a

trade war between the U.S. and China.

Gains soon reversed, and euro fell on

quarter-end flows into the greenback.

Pound

• Pound fell against the U.S dollar after a

survey showed British retail sales

dropped in Mar 2018.

Yen

• Yen plunged against the U.S dollar as

safe haven appeal receded on optimism

that the U.S. and China will begin

negotiations on trade.

9.80

10.00

10.20

10.40

28-Feb-18 14-Mar-18 28-Mar-18

USD GBP Euro JPY

Source: RBI

Currency

Prices (

in terms of INR)

Rebased to 10

Currency Movement

-0.14%

0.36%

-0.95%

The Week that was…

March to 30

March

The Week that was (Mar 26 – Mar 30)

Date Events

Present

Value

Monday,

Mar 26, 2018

• Euro zone French Gross Domestic Product (YoY) (4Q F)

2.5% 2.5%

Tuesday,

Mar 27, 2018

• U.S. Consumer Confidence Index (Mar)

127.7 130.8

• U.S. S&P/Case

-Shiller US Home Price Index (YoY) (Jan) 6.18% 6.28%

Wednesday,

Mar 28, 2018

• Euro zone German GfK Consumer Confidence (Apr)

10.9 10.8

• U.S. MBA Mortgage Applications (Mar 23)

4.8% -1.1%

• U.S. Gross Domestic Product Annualized (QoQ) (4Q T)

2.9% 2.5%

• U.S. Advance Goods Trade Balance (Feb)

-$75.4b -$75.3b

• U.S. Pending Home Sales (YoY) (Feb)

-4.4% -1.9%

• Japan Retail Trade (YoY) (Feb)

1.6% 1.5%

Thursday,

Mar 29, 2018

• Euro zone German Unemployment Change (000's) (Mar)

-19k -23k

• U.K. Mortgage Approvals (Feb)

63.9b 67.1k

• U.K. Gross Domestic Product (YoY) (4Q F)

1.4% 1.4%

• Euro zone German Consumer Price Index (YoY) (Mar P)

1.6% 1.4%

• U.S. PCE Core (YoY) (Feb)

1.6% 1.5%

• U.S. U. of Mich. Sentiment (Mar F)

101.4 102.0

• Japan Jobless Rate (Feb)

2.5% 2.4%

• Japan Industrial Production (YoY) (Feb P)

1.4% 2.5%

Friday,

Mar 30, 2018

• Japan Housing Starts (YoY) (Feb)

-2.6% -13.2%

• Japan Construction Orders (YoY) (Feb)

19.2% 0.9%

The Week Ahead

April to 6

April

The Week Ahead

Day Event

Monday,

April 2, 2018

• U.S. ISM Manufacturing (Mar)

• Index of Eight Core Industries (India) (Feb)

• Nikkei Japan PMI Manufacturing (Mar F)

Tuesday,

April 3, 2018

• U.K. Markit UK PMI Manufacturing s.a. (Mar)

• Euro zone German Retail Sales (YoY) (Feb)

• Nikkei India PMI Manufacturing (Mar)

Wednesday,

April 4, 2018

• Euro zone Consumer Price Index Estimate (YoY) (Mar)

• U.S. ADP Employment Change (Mar)

• U.S. ISM Non-Manufacturing/Services Composite (Mar)

• Japan Nikkei Japan PMI Composite (Mar)

Thursday,

April 5, 2018

• Euro zone Retail Sales (YoY) (Feb)

• Nikkei India Services PMI

Friday,

April 6, 2018

• U.S. Change in Non-farm Payrolls (Mar)

• U.S. Unemployment Rate (Mar)

• Japan Leading Index CI (Feb P)

Disclaimer

The information herein is meant only for general reading purposes and contains all factual and statistical information pertaining to Industry and markets which

have been obtained from independent third party sources and which are deemed to be reliable. The information provided cannot be considered as guidelines,

recommendations or as a professional guide for the readers. It may be noted that since Reliance Nippon Life Asset Management Company Limited (RNLAM)

(formerly Reliance Capital Asset Management Limited) has not independently verified the accuracy or authenticity of such information or data, or for that matter

the reasonableness of the assumptions upon which such data and information has been processed or arrive data; RNLAM does not in any manner assures the

accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect RNLAM’s views or opinions,

which in turn may have been formed on the basis of such data or information. The Sponsor(s), the Investment Manager, the Trustee or any of their respective

directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such

data or information. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate

and opinions given are fair and reasonable, to the extent possible. This information is not intended to be an offer or solicitation for the purchase or sale of any

financial product or instrument. Recipients of this information should rely on information/data arising out of their own investigations. Before making any

investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision. None of

the Sponsor(s), the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct,

indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this

material.

All information contained in this document has been obtained by ICRA Online Limited from sources believed by it to be accurate and reliable. Although reasonable

care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of any kind, and ICRA Online Limited or

its affiliates or group companies and its respective directors, officers, or employees in particular, makes no representation or warranty, express or implied, as to the

accuracy, suitability, reliability, timelines or completeness of any such information. All information contained herein must be construed solely as statements of

opinion, and ICRA Online Limited, or its affiliates or group companies and its respective directors, officers, or employees shall not be liable for any losses or injury,

liability or damage of any kind incurred from and arising out of any use of this document or its contents in any manner, whatsoever. Opinions expressed in this

document are not the opinions of our holding company, ICRA Limited (ICRA), and should not be construed as any indication of credit rating or grading of ICRA for

any instruments that have been issued or are to be issued by any entity.

Thank you for

your time.