Mutual Fund News of 01 May 2020 – Nippon India Mutual Fund

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May 01, 2020

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The Week that was…

Apr to 01

May

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Indian Economy

• The index of eight core industries fell by 6.5% in Mar 20 from growth of 7.1% in the

previous month and growth of 5.8% in the same period of the period of the previous year.

The cement sector witnessed a maximum decline of 24.7% followed by natural gas and

steel sector which fell 15.2% and 13%, respectively. Only coal sector witnessed growth 4%

in Mar 20. The outbreak of coronavirus and the lockdown has taken a toll on India's core

sector growth with the index nosediving into the negative territory.

• The Asian Development Bank has approved $1.5 billion loan to India. The fund will help

fight against coronavirus pandemic. The loan has been sanctioned in order to support

immediate priorities such as disease containment and prevention, and social protection for

the poor and economically vulnerable sections.

• A major rating agency has further downgraded India’s growth projection to 1.9% in FY21,

down from 3.6% stated in Mar 2020. This will be the lowest GDP growth rate in the last 29

years and assumes that the partial lockdown will continue till mid-May. The rating agency

also assumes contraction of 2.1% for FY21 if the lockdown continued beyond mid-May,

which would take the economy to a 41-year low and would count as only the sixth instance

of negative growth.

• As per media reports, the Indian automobile industry is set to report almost zero sales in

Apr 2020, the first time in its history, as factories and dealerships are closed amid

nationwide lockdown.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

Domestic Equity Market Indices

Indices 30-Apr-20 1 Week Return YTD Return

S&P BSE Sensex

33,717.62 7.63% -18.27%

Nifty 50

9,859.90 7.71% -18.97%

S&P BSE Mid-Cap

12,013.45 4.79% -19.74%

S&P BSE Small-Cap

11,101.84 4.40% -18.96%

Source: MFI Explorer

NSE Advance/Decline Ratio

Date Advances Declines Advance/Decline Ratio

27-Apr-20 1085 762 1.42

28-Apr-20 986 830 1.19

29-Apr-20 1144 696 1.64

30-Apr-20 1095 732 1.50

Source: NSE

• Indian equity markets surged in the

holiday truncated week. Positive global

cues contributed to the upside with

increased focus on easing of lock down

measures globally.

• Bourses found initial boost after

Reserve Bank of India announced that it

shall open a special liquidity window of

Rs 50,000 crore to ease pressure on

mutual funds in the wake of the

winding up of six debt funds by one of

the mutual fund players.

• Better than expected corporate

earning numbers reported by one of

the private sector lenders also

increased risk appetite of the market

participants. Additionally, acquisition

deal by another private sector lender

boosted indices.

Ratios

S&P BSE

Sensex

Nifty 50

S&P BSE

Mid Cap

S&P BSE

Small Cap

P/E

20.90 22.35 23.31 176.75

P/B

2.63 2.81 1.98 1.64

Dividend Yield

1.13 1.54 1.44 1.48

Source: BSE, NSE Value as on Apr 30, 2020

Indian Equity Market

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Sectoral Indices

Indices

Last Returns (in %)

Closing* 1-Wk 1-Mth

S&P BSE Auto

13,349.86 9.26% 26.17%

S&P BSE Bankex

24,724.52 10.04% 18.42%

S&P BSE CD

20,525.39 6.32% 6.64%

S&P BSE CG

12,186.72 4.78% 14.10%

S&P BSE FMCG

10,770.70 -0.01% 8.81%

S&P BSE HC

15,332.39 -0.58% 28.10%

S&P BSE IT

14,235.04 9.86% 17.39%

S&P BSE Metal

6,745.97 13.85% 20.73%

S&P BSE Oil & Gas

12,066.36 8.50% 23.03%

Source: Thomson Reuters Eikon *Value as on Apr 30, 2020

• On the BSE sectoral front, S&P BSE Metal was

the top gainer, up 13.85%, followed by S&P

BSE Bankex and S&P BSE IT, which rose

10.04% and 9.86%, respectively.

• Metal sector rose after the media reports

stated that India turned out to be net

exporter of steel with an increase of 31.4% in

March 2020, as disclosed in the provisional

data from government. Further, steel imports

fell 13.6%, much of it because of a 22% fall in

steel imports from China.

Indian Derivatives Market Review

• Nifty May 2020 Futures stood at 9,830.85, a discount of 29.05 points, below the spot

closing. The total turnover on NSE’s Futures and Options segment for the week stood at Rs.

54.71 lakh crore as against Rs. 53.75 lakh crore for the week to Apr 17.

• The Put-Call ratio stood at 0.87 compared with the previous session’s close of 0.82.

• The Nifty Put-Call ratio stood at 1.78 compared with the previous session’s close of 1.34.

Indian Equity Market (contd.)

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

Debt Indicators

(%)

Current

Value

1-Wk

Ago

1-Mth

Ago

6-Mth

Ago

Call Rate

4.19 4.04 4.29 5.07

91 Day T-Bill

3.64 3.65 4.25 5.04

07.32% 2024, (5 Yr GOI)

5.10 5.13 5.59 6.23

06.45% 2029, (10 Yr GOI)

6.11 6.17 6.14 6.45

Source: Thomson Reuters Eikon Value as on Apr 30, 2020

• Bond yields fell as the Reserve Bank of

India’s (RBI) special open market

operation (OMO) absorbed the supply

of higher-duration securities. Yields

also fell on expectations that the 10-

year paper may be included in the next

auction of special open market

operation, which could be as early as

next week.

• Yield on the 10-year benchmark paper

(6.45% GS 2029) fell 6 bps to close at

6.11% compared with the previous

week’s close of 6.17% after trading in

a range of 6.10% to 6.20%.

• RBI conducted the auction of

operation market operations (OMO)

purchase and sale of four securities

each aggregating to Rs. 20,000 crore

(both purchase and sale) for which full

amount was accepted.

Domestic Debt Market

6.00

6.09

6.18

27-Apr 28-Apr 29-Apr 30-Apr

Yield in %

10 -Yr Benchmark Bond ( % )

Source: CCIL

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Maturity

G-Sec Yield

(%)

Corporate Yield

(%)

Spread

bps

1 Year

3.97 5.72 175

3 Year

4.78 6.55 177

5 Year

5.22 6.86 164

10 Year

6.20 7.47 126

Source: Thomson Reuters Eikon

Valueason

Apr 30, 2020

• Yields on gilt securities fell across

maturities in the range of 2 bps to 9 bps

barring 2-, 3-, 11-year papers that rose by 1

bps or 7 bps and 19-year paper that stood

steady.

• Corporate bond yields rose across the

maturities by up to 62 bps barring 5- to 7-

year papers that fell by 1 bps or 3 bps.

• Spread between AAA corporate bond and

gilt expanded across maturities by up to

65 bps barring 6-year paper that stood

steady.

Domestic Debt Market (Spread Analysis)

-12

-6

3.00

5.00

7.00

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

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

Change in bps 30-Apr-20 24-Apr-20

Yield in %

Change in bps

Source: Thomson Reuters Eikon

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

• The Reserve Bank of India (RBI) announced that it will open a special liquidity window of Rs.

50,000 crore to reduce pressure on mutual funds as they are facing liquidity concerns due to

increased volatility in capital markets amid Coronavirus outbreak. Under this liquidity

window, the RBI will conduct 90 days tenor repo operations at the fixed repo rate. The

facility will be on-tap and open-ended. Banks can submit their bids to avail funding on any

day from Monday to Friday. Funds availed under the scheme can be solely used by banks for

meeting the liquidity requirements of mutual funds by extending loans, and undertaking

outright purchase of and/or repos against investment collateral.

• The finance ministry has established the International Financial Services Centres Authority

(IFSCA), headquartered in Gandhinagar in Gujarat. The new establishment is a unified

authority to regulate all financial services in the country. The main function of the authority

is to regulate financial products such as securities, deposits or contracts of insurance,

financial services and financial institutions which have been previously approved by any

appropriate regulator in an IFSC which are SEBI, RBI, IRDAI and the Pension Fund Regulatory

and Development Authority. The IFSCA will comprise of a chairperson, and one member

each nominated by the regulators mentioned earlier. There will also be two members from

the central government and full-time or part-time members.

Regulatory Updates in India

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• The Securities and Exchange Board of India (Sebi) has decided to reduce broker turnover

fees and filing fees on offer documents for public issue, rights issue and buyback of shares.

The broker turnover fee will be reduced to 50% of the existing fee structure for the period

Jun 2020 to Mar 2021 in order to help investors to tide over challenges due to Covid-19

and boost market sentiment. The benefit of the above reduction in fees will automatically

be passed on to the investors.

• The Securities Exchange Board of India (Sebi) has clarified that the grandfathering of the

existing unlisted non-convertible debentures (NCDs) is applicable across the mutual fund

industry and thus mutual funds can transact in such NCDs. However, investments in such

NCDs will continue to be subject to compliance with investment due diligence and all

other applicable investment restrictions. Sebi has also extended timelines for reducing

exposure to unlisted NCDs in phased manner that is by Sep 30, 2020, mutual funds can

bring down exposure to 15%, and 10% by Dec 31, 2020.

• Sebi has invited research proposals from researchers on various issues of stock markets.

This is for Sebi’s Development Research Group (DRG)-III studies. The study is an initiative by

regulator’s Department of Economic and Policy Analysis and is aimed at undertaking

policy-oriented research study on seminal topics. In addition, the regulator has planned to

conduct a study on household investors to ascertain their risk profile and match it with

their investment behaviour as well as to find out mutual fund investors' behaviour and

investment patterns.

Regulatory Updates in India (contd..)

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• A report from the U.S. Commerce Department showed that U.S. real gross domestic

product decreased at an annual rate of 4.8% in the first quarter of 2020 following a 2.1%

increase in the fourth quarter of 2019.

• Preliminary data from Eurostat showed that Gross domestic product of the euro zone

contracted 3.8% sequentially in the first quarter of 2020 following a 0.1% rise in the fourth

quarter of 2019.

• The U.S. Federal Reserve in its monetary policy review kept interest rates unchanged at

near zero and pledged to keep it there until the U.S. economy recovers. The U.S. Federal

Reserve warned that the COVID-19 pandemic will “weigh heavily” on economic activity of

the U.S. economy.

• The European Central Bank (ECB) in its monetary policy review strengthened its liquidity

supportive measures in order to combat the COVID-19 pandemic. ECB lowered the interest

rate on TLTRO (targeted longer-term refinancing operations) operations to 50 basis points

below the average interest rate. In addition, ECB introduced a new series of non-targeted

pandemic emergency longer-term refinancing operations, or PELTRO that will be

conducted from May 2020.

• The Bank of Japan (BoJ) in its monetary policy review voted 8-1 to keep interest rates on

hold at -0.1% in its monetary policy review. However, BoJ expanded the monetary stimulus

as it removed the limit for government bond purchases.

Global News/Economy

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Global Indices

Indices

01-May-20

1-Week

Return

YTD

Return

Russell 3000 1,350.24 -0.05% -5.32%

Nasdaq 100 8,718.18 -0.78% -0.17%

FTSE 100 5,763.06 0.19% -23.59%

DAX Index* 10,861.64 5.08% -18.02%

Nikkei Average 19,619.35 1.86% -17.07%

Straits Times 2,624.23 4.21% -18.57%

Source: Thomson Reuters Eikon

Valueason

May 01, 2020; * as on Apr 30, 2020

U.S.

• U.S. markets mostly fell during the

week. Initially, market rose largely led

by prospects of a potential treatment of

COVID-19 infection.

• By the end, gains reversed after reports

showing contraction in U.S. economic

activity and disappointed corporate

quarterly earnings.

Europe

• European markets too witnessed buying spree with investors taking positive cues from

the latest batch of corporate earning numbers and stabilisation of oil prices following

initial plunge. Optimism over potential treatment of the coronavirus infection also

contributed to the upside.

Asia

• Asian markets reflected gains in the global peers following developments on potential

new treatment for Covid-19 patients. Market sentiments boosted after Bank of Japan

increased its purchases of corporate debt in order to ease funding strains.

Global Equity Markets

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• Yields on the 10-year U.S. Treasury went

up for the first time in three weeks and

rose 4 bps to close at 0.64% compared

to the previous week’s close of 0.60%.

• U.S. Treasury prices fell as market

participants braced for massive looming

supply of U.S. Treasuries which will be

issued to finance the stimulus measures

taken by the U.S. government to

combat the economic fallout of the

coronavirus pandemic across the

country.

• However, further losses were restricted

after the U.S. Federal Reserve in its

monetary policy review vowed to use

every possible measure to rescue the

coronavirus-ravaged U.S. economy.

Global Debt (U.S.)

0.60

0.63

0.66

27-Apr 28-Apr 29-Apr 30-Apr 1-May

US 10-Year Treasury Yield Movement

Source: Thomson Reuters Eikon

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

Performance of various commodities

Commodities Last Closing* 1-Week Ago

Brent Crude($/Barrel) 14.85 12.29

Gold ($/Oz) 1,699.12 1,727.43

Gold (Rs/10 gm)^ 40,989 40,989

Silver ($/Oz) 14.94 15.24

Silver (Rs/Kg)^ 36,871 36,871

Source: Thomson Reuters Eikon *Value as on May 01, 2020; ^ as on Apr 30, 2020

Gold

• Gold prices slipped as the investor risk

sentiment improved on hopes that

countries across the globe might ease

restrictions on coronavirus-driven

lockdowns.

Brent Crude

• Brent crude prices remained in recovery

path as concerns over demand outlook

in the wake of COVID-19 pandemic was

outweighed by data from U.S. Energy

Information Administration showing

lower than expected build up in crude

stockpiles for the week to Apr 24.

Baltic Dry Index

• Baltic Dry Index fell due to sluggish

capsize and panamax activities.

Commodities Market

1-Apr-20 11-Apr-20 21-Apr-20 1-May-20

Global Commodity Movement

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

Global Commodity Prices

Rebased to 10

Source: Thomson Reuters Eikon

‐1.97%

20.83%

‐1.64%

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

Movement of Rupee vs Other Currencies

Currency Last Closing* 1-Wk Ago

US Dollar

75.12 76.42

Pound Sterling

93.59 94.22

EURO

81.62 82.21

100 Yen

70.48 71.00

Source: RBI Figures in INR , *Value as on Apr 30, 2020

Rupee

• The Indian rupee surged against the U.S.

dollar following rise in domestic equities

and dollar sales by exporters and

corporate dollar inflows.

Euro

• Euro rose against the U.S. dollar as

equity market surged after Gilead

Sciences reported an encouraging

update on a potential treatment for the

Covid-19.

Pound

• The pound rose against the greenback

on improved risk sentiment.

Yen

• YenroseagainsttheweakU.S.dollar

after the U.S. President threatened to

impose new tariffs on China over the

coronavirus crisis.

Currencies Markets

9.70

9.80

9.90

10.00

10.10

10.20

10.30

31-Mar-20 10-Apr-20 20-Apr-20 30-Apr-20

USD GBP Euro JPY

Source: Thomson Reuters Eikon

Currency Prices ( in terms of INR)

Rebased to 10

Currency Movement

-0.67%

-1.70%

-0.73%

-0.72%

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

The Week that was…

Apr to 01

May

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The Week that was (Apr 27– May 01)

Date Events Present Value Previous Value

Monday,

April 27, 2020

• Bank of Japan Interest Rate Decision -0.10% -0.10%

• Japan Unemployment Rate (Mar) 2.50% 2.40%

Tuesday,

April 28, 2020

• U.S. S&P/Case-Shiller Home Price Indices (YoY)(Feb) 3.50% 3.10%

• U.S. Richmond Fed Manufacturing Index (Apr) -53 2

Wednesday,

April 29, 2020

• U.S. Federal Reserve Interest Rate Decision 0.25% 0.25%

• U.S. EIA Crude Oil Stocks Change (Apr 24) 8.991 M 15.022 M

• U.S. Gross Domestic Product Annualized(Q1) P -4.80% 2.10%

• U.S. Pending Home Sales (MoM)(Mar) -20.80% 2.30%

• Japan Industrial Production (MoM)(Mar) P -3.70% -0.30%

Thursday,

April 30, 2020

• Germany Retail Sales (MoM)(Mar) -5.60% 0.80%

• Euro Zone Unemployment Rate (Mar) 7.40% 7.30%

• Euro Zone Gross Domestic Product s.a. (YoY)(Q1) P -3.30% 1.0%

• European Central Bank Monetary Policy Review 0% 0%

• U.S. Initial Jobless Claims (Apr 24) 3839 K 4442 K

• U.S. Personal Income (MoM)(Mar) -2.00% 0.60%

• U.S. Personal Spending (Mar) -7.50% 0.20%

Friday,

May 1, 2020

• U.K. Markit Manufacturing PMI (Apr) 32.60 32.90

• U.S. Markit Manufacturing PMI (Apr) 36.10 36.90

• U.S. ISM Manufacturing PMI (Apr) 36.10 49.10

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

The Week Ahead

May to 08

May

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Day Event

Monday,

May 04, 2020

• U.S. Factory Orders MM Mar 2020

• Euro Zone Sentix Index May 2020

• India IHS Markit Manufacturing PMI Apr 2020

• Germany Markit/BME Manufacturing PMI Apr 2020

• Euro Zone Markit Manufacturing Final PMI Apr 2020

Tuesday,

May 05, 2020

• U.K. Composite PMI Apr 2020

• U.S. Goods Trade Balance (R) Mar 2020

• U.S. Markit Services PMI Final Apr 2020

Wednesday,

May 06, 2020

• India IHS Markit Services PMI Apr 2020

• Euro Zone Markit Comp Final PMI Apr 2020

• Germany Industrial Orders MM Mar 2020

• U.S. ADP National Employment Apr 2020

Thursday,

May 07, 2020

• Germany Industrial Output MM Mar 2020

• U.K. Halifax House Prices MM Apr 2020

• Bank of England Monetary Policy Review

Friday,

May 08, 2020

• U.S. Non-Farm Payrolls Apr 2020

• U.S. Average Earnings YY Apr 2020

The Week Ahead

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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 guideforthereaders.ItmaybenotedthatsinceNipponLifeIndiaAsset

Management Company Limited (NAM India) 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; NAM India 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 NAM India’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 warrantthe

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

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