Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
NEWS U CAN USE
October 2, 2020
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
The Week that was…
28
th
Sep to 2
nd
Oct
2
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Indian Economy
The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’
Index (PMI) increased from 52.0 in Aug 2020 to 56.8 in Sep 2020. The latest reading was
thus the highest in over eight-and-a-half years. The improvement came on the back of
increase in new orders and production as well as an improvement in business confidence.
The Reserve Bank of India said India’s current account surplus improved to $19.8 billion or
3.9% of gross domestic product (GDP) in Jun quarter of 2020 from $0.6 billion or 0.1% of
GDP in the Mar quarter 2020. Deficit of $15.0 billion or 2.1% of GDP was recorded in Jun
quarter of 2019. Surplus was on account of a sharp contraction in the trade deficit to $10.0
billion due to steeper decline in merchandise imports relative to exports on a year-on-year
basis.
India’s core output contracted 8.5% YoY in Aug 2020, worse than fall of 8% in Jul 2020.
Infrastructure output contracted for the sixth consecutive month as production of
petroleum refinery products and electricity shrank at a faster pace. Infrastructure output
contracted 17.8% in the first five months of FY21 compared with 2.5% rise a year ago
period.
India’s fiscal deficit for Apr to Aug 2020 stood at Rs. 8.70 lakh crore or 109.3% of the
budgetary estimate for FY21. Deficit widening sharply from Rs. 5.54 lakh crore or 78.7% of
the budgetary estimate in year ago period. Total expenditure came at Rs. 12.48 lakh crore
and total receipt was at Rs. 3.77 lakh crore.
3
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
4
Domestic Equity Market Indices
Indices 01-Oct-20 1 Week Return YTD Return
S&P BSE Sensex
38,697.05 3.50% -6.20%
Nifty 50
11,416.95 3.32% -6.18%
S&P BSE Mid-Cap
14,813.25 3.32% -1.03%
S&P BSE Small-Cap
14,970.44 3.28% 9.28%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
28-Sep-20 1447 459 3.15
29-Sep-20 817 1048 0.78
30-Sep-20 856 1002 0.85
01-Oct-20 1120 740 1.51
Source: NSE
Indian equity markets settled for the
holiday truncated week in the green,
largely led by positive global cues.
Market sentiments were buoyed after
data showed that China’s economic
recovery was gaining momentum.
Additionally, optimism about a U.S.
coronavirus relief package boosted the
risk appetite.
Back home, private survey results
showed that India's manufacturing
activity rose to the multi-year high in
Sep on robust demand. Optimism
around easing of COVID-19-related
restrictions by the government too
contributed to the gains.
Nonetheless, concerns over rising
COVID-19 cases continued to keep
gains under pressure.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
28.51 33.18 507.26 -319.44
P/B
2.92 3.23 2.34 2.14
Dividend Yield
1.00 1.39 1.17 1.09
Source: BSE, NSE Va
lue as on Oct 01, 2020
Indian Equity Market
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
18,010.2 3.86% 0.06%
S&P BSE Bankex
25,264.1 6.08% -6.86%
S&P BSE CD
24,226.9 5.77% 5.36%
S&P BSE CG
13,851.1 2.95% -1.80%
S&P BSE FMCG
11,110.0 1.28% -3.35%
S&P BSE HC
19,885.7 2.47% 5.27%
S&P BSE IT
20,159.4 1.88% 11.43%
S&P BSE Metal
8,365.7 3.34% -9.71%
S&P BSE Oil & Gas
12,257.3 -0.36% -6.98%
Source:
Refinitiv *Value as on Oct 1, 2020
On the BSE sectoral front, S&P BSE Bankex
was the top gainer, up 6.08%, followed by S&P
BSE Consumer Durables and S&P BSE Auto
which rose 5.77% and 3.86%, respectively.
Strong buying interest was seen in the stocks
of one of the key lenders following reports
that the bank will raise AT-1 bonds to the
extent of Rs. 5,000 crore through issuance of
Basel-III compliant debt instrument, within the
overall capital raising plan approved earlier.
Indian Derivatives Market Review
Nifty Oct 2020 Futures stood at 11,435.55, a premium of 18.60 points above the spot
closing of 11,416.95. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 97.12 lakh crore as against Rs. 121.45 lakh crore for the week to Sep 25.
The Put-Call ratio remained unchanged compared with the previous session’s close of 0.83.
The Nifty Put-Call ratio stood at 1.57 compared with the previous session’s close of 1.31.
Indian Equity Market (contd.)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.44 3.41 3.42 4.29
91 Day T-Bill
3.26 3.39 3.26 4.25
05.22% 2025, (5 Yr GOI)
5.30 5.38 5.15
05.79% 2030, (10 YrGOI)
6.00 6.04 5.92
Source: Refinitiv Value as on Oct 01, 2020
Bond yields fell after the central
government did not change its full-
year borrowing target, dismissing
fears of additional supply at least for
some time.
Yield on the 10-year benchmark paper
(5.77% GS 2030) fell 4 bps to close at
6.00% compared to the previous
week’s close of 6.04% after moving in
a range of 5.97% to 6.08%.
RBI released scheduled calendar of
government securities borrowings
from Oct 2020 to Mar 2021 for an
aggregated amount of Rs. 4,34,000
crore.
RBI conducted the auction of open
market operations (OMO) purchase
and sale of Rs. 10,000 crore each,
which were completely accepted.
Domestic Debt Market
5.90
6.00
6.10
28-Sep 29-Sep 30-Sep 1-Oct
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.60 5.62 202
3 Year 4.97 5.80 83
5 Year 5.37 6.72 135
10 Year 6.09 7.05 96
Source: Refinitiv Value as on
Oct 01, 2020
Yields on gilt securities rose across
maturities by up to 31 bps barring 1-, 3- to
5-, 7- & 11-year papers that fell by up to 18
bps and 10-year paper that stood steady.
Corporate bond yields fell across
maturities in the range of 3 bps to 16 bps
barring 4- to 7-year papers and 8-year
paper.
Difference in spread between AAA
corporate bond and gilt contracted across
maturities by up to 22 bps barring 1-, 4-, 5-
and 7-year papers.
Domestic Debt Market (Spread Analysis)
-22
-8
6
2.50
5.00
7.50
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 01-Oct-20 25-Sep-20
Yield in %
Change in bps
Source: Thomson Reuters Eikon
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
8
SEBI relaxed norms for valuation agencies that are engaged by AMFI and other asset
management companies. According to SEBI, valuation agencies need to use discretion while
undertaking valuation of debt securities held by mutual funds in case the company that has
issued the debt security goes through a debt restructuring due to stress arising out of
COVID-19 pandemic. SEBI further added that valuation agencies need to ensure that change
in terms of investment, financial stress of the issuer and the capability of issuer to
repay the dues/borrowings on the extended dates are reflected in the valuation of the
securities. Also, in case there is any difference in the valuation of two securities provided by
the two valuation agencies, then the conservative valuation route needs to be adopted.
SEBI introduced a Code of Conduct for fund managers including chief investment officers
and dealers of asset management companies. SEBI further added that the chief executive
officer needs to ensure that the code of conduct is followed by all such officers.
SEBI gave approval to asset management companies to become a self-clearing member of
the recognized Clearing Corporations. The move will help asset management companies to
clear and settle trades in the debt segment of recognized stock exchanges, on behalf of
their mutual fund schemes.
SEBI mandated that asset management companies to report to credit rating agencies any
proposal that they receive from lenders or debenture trustees (DTs) for restructuring of
debt arising out of stress due to COVID-19 pandemic. SEBI also mandated DTs to
communicate directly to investors any such restructuring proposal.
Regulatory Updates in India
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
9
SEBI approved the proposal of strengthening the role of Debenture Trustees. The
objective of the move is to protect the interest of debenture holders.
SEBI has granted exemption from the reverse book building process for delisting of listed
subsidiary, where it becomes the wholly owned subsidiary of the listed parent pursuant to
a scheme of arrangement. However, the listed holding company and the listed subsidiary
need to be in the same line of business. SEBI further mandated that the shares of the
parent listed company and the listed subsidiary entity need to be listed for at least 3 years
and should not be suspended at the time of delisting. SEBI further added that the
subsidiary should have been a listed subsidiary of the listed holding entity for at least
three preceding years.
SEBI noted that there is a concern over information asymmetry when it comes to forensic
audit of listed companies. Such audits are typically initiated by banks, management, new
management among others. SEBI mandated that listed entities need to disclose any such
audits that are initiated, the final report and management commentary to stock
exchanges.
SEBI eased fund raising norms for Real Estate Investment Trusts (REITs) and Infrastructure
Investment Trusts (InvITs). Now REITs and InvITs will be able to raise equity capital through
institutional placement route two weeks after a previous such exercise. Earlier the
mandated time gap was six months between two institutional placements.
Regulatory Updates in India (contd..)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
According to media reports, the U.S. House of Representatives has approved a new fiscal
stimulus package worth $2.2 trillion. However, the move failed to bring an end to the
political deadlock over additional relief for the U.S. economy.
According to report released by the Labor Department, non-farm payroll employment rose
by 661,000 jobs in Sep 2020 after rising by an upwardly revised 1.489 million jobs in Aug
2020.
According to the flash data from Eurostat, eurozone consumer prices fell for the second
straight month by 0.3% in Sep 2020 YoY following 0.2% fall in Aug 2020. On a monthly
basis, the harmonized index of consumer prices rose 0.1% in Sep 2020.
U.K.’s gross domestic product (GDP) contracted 19.8% QoQ compared with 20.4% fall
estimated initially in the Jun quarter of 2020. Annually, GDP was down 21.5% in the second
quarter, which was revised from -21.7%.
According to government data, profits of Chinese industrial firms had grown for the fourth
straight month in a row in Aug, led by rebound in commodity prices alongside a steeper-
than-anticipated turnaround in equipment manufacturing. China’s industrial firm profits
had witnessed a record rise of 19.1% in Aug to $89.9 billion, while the gains had followed a
19.6 % rise in industrial profits in July.
According to data from National Bureau of Statistics, the official manufacturing Purchasing
Manager’s Index (PMI) of China for Sep came in at 51.5 as compared to 51.0 in Aug. The
official services PMI came in at 55.9 for the month of Sep as compared to 55.2 for Aug.
10
Global News/Economy
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
11
Global Indices
Indices
02-Oct-20
1-Week
Return
YTD
Return
Russell 3000 1,727.68 1.50% 21.15%
Nasdaq 100 11,255.69 0.94% 28.89%
FTSE 100 5,902.12 1.02% -21.75%
DAX Index 12,689.04 1.76% -4.23%
Nikkei Average 23,029.90 -0.75% -2.65%
Straits Times 2,496.11 0.96% -22.55%
Source: Refinitiv Value as on Oct 02, 2020
U.S.
U.S. markets traded higher as investors
sentiments were buoyed by reports that
the Democratic-controlled U.S. House of
Representatives has approved a new
fiscal stimulus package worth $2.2
trillion. However, the move failed to
break the political deadlock over
additional relief for the U.S. economy.
Gains were restricted after the U.S.
President is tested positive for
coronavirus.
Europe
European markets went up following notable increase in China's industrial profits in Aug.
Nonetheless, the coronavirus flareups caused renewed concerns over more lockdown
measures, thereby restricting gains.
Asia
Asian markets witnessed a mixed trend as concerns over rising COVID-19 cases and the
uncertainty surrounding the U.S. election result neutralised data from China indicating a
steady recovery for the economy. Meanwhile, caution prevailed ahead of the release of
U.S. jobs data.
Global Equity Markets
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
12
Yields on the 10-year U.S. Treasury rose
3 bps to close at 0.69% compared with
the previous week’s close of 0.66%.
Initially, U.S. Treasury prices rose ahead
of the presidential debate and
employment data.
However, gains reversed as demand for
safe-haven bonds dried on some signs
of progress in negotiations over a
coronavirus stimulus bill.
Treasury prices fell further despite news
that the U.S. President has contracted
COVID-19 and that U.S. jobs growth
slowed in Sep 2020.
Global Debt (U.S.)
0.60
0.63
0.65
0.68
0.70
28-Sep 29-Sep 30-Sep 1-Oct 2-Oct
US 10-Year Treasury Yield Movement
Source: Refinitiv
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
38.49 40.83
Gold ($/Oz)
1,898.70 1,860.05
Gold (Rs/10 gm)
50,249 49,589
Silver ($/Oz)
23.70 22.86
Silver (Rs/Kg)
58,910 57,323
Source: Refinitiv *Value as on Oct 02, 2020
Gold
Gold prices went up as spiralling
coronavirus infections coupled with
uncertainty about the outcome of the U.S.
presidential election dented investors' risk
appetite.
Brent Crude
Brent crude prices fell as persisting
concerns over increase in coronavirus
infection cases across the globe hit the
demand outlook of the commodity. Oil
prices were further hit after the U.S.
President was tested positive for
coronavirus.
Baltic Dry Index
The index rose due to improved capesize
and panamax activities.
Commodities Market
7.80
9.30
10.80
2-Sep-20 17-Sep-20 2-Oct-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
3.67%
-5.73%
2.08%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
73.38 73.73
Pound Sterling
94.99 94.06
EURO
86.22 86.04
100 Yen
69.55 70.00
Source:
Refinitiv Figures in INR , *Value as on Oct 01, 2020
Rupee
The rupee rose against the greenback
following gains in the domestic equity
market and prospects of more stimulus in
the U.S. region.
Euro
The euro rose against the greenback as
hopes of more fiscal stimulus in U.S.
improved the investor risk sentiment.
Pound
The pound rose against the greenback on
hopes that Britain could secure a Brexit
trade deal with the European Union before
the end of 2020.
Yen
The yen rose against the greenback as the
safe-haven appeal of the yen improved
after the U.S. President tested positive for
COVID-19.
Currencies Markets
9.40
9.90
10.40
1-Sep-20 16-Sep-20 1-Oct-20
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
0.21%
-0.64%
-0.47%
0.99%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
15
The Week that was…
28
th
Sep to 2
nd
Oct
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
16
The Week that was (Sep 28 Oct 2)
Date Events Present Value Previous Value
Monday,
Sep 28, 2020
• Japan Leading Economic Index (Jul) 86.9 83.8
• Japan Coincident Index(Jul) 76.2 74.4
Tuesday,
Sep 29, 2020
• Germany Harmonized Index of Consumer Prices
(YoY)(Sep) PREL
-0.4% -0.1%
• Eurozone Consumer Confidence (Sep) -13.9 -14.7
• Japan Retail Trade (YoY) (Aug) -1.9% -2.9%
Wednesday,
Sep 30, 2020
• India Infrastructure Output (YoY) (AUG) -8.5% -8.0%
• China Non-Manufacturing PMI (Sep) 55.9 55.2
• China NBS Manufacturing PMI(Sep) 51.5 51.0
• U.K. Gross Domestic Product (QoQ)(Q2) -19.80% -20.40%
• Germany Unemployment Rate (Sep) 6.3% 6.4%
• U.S. ADP Employment Change(Sep) 749K 481K
• U.S. Gross Domestic Product Annualized(Q2) -31.4% -31.7%
Thursday,
Oct 01, 2020
• U.S. ISM Manufacturing PMI (Sep) 55.4 56.0
• Eurozone Unemployment Rate (Aug) 8.1% 8.0%
• Germany Markit Manufacturing PMI (Sep) 56.4 56.6
Friday,
Oct 02, 2020
• Eurozone Consumer Price Index (YoY)(Sep) PREL -0.3% -0.2%
• U.S. Unemployment Rate(Sep) 7.9% 8.4%
• U.S. Nonfarm Payrolls (Sep) 661K 1489K
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
5
th
Oct to 9
th
Oct
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
18
Day Event
Monday,
Oct 5, 2020
U.S. ISM Services PMI (Sep)
Germany Markit PMI Composite (Sep)
Eurozone Markit PMI Composite (Sep)
U.S. Markit Composite PMI (Sep)
Tuesday,
Oct 6, 2020
India Markit Services PMI (Sep)
Germany Factory Orders (MoM) (Aug)
U.S. Trade Balance (Aug)
Wednesday,
Oct 7, 2020
U.S. FOMC Minutes
Japan Leading Economic Index (Aug) PREL
Germany Industrial Production (MoM) (Aug)
Japan Current Account (Aug)
Thursday,
Oct 8, 2020
Germany Trade Balance (Aug)
Japan Overall Household Spending (YoY) (Aug)
Friday,
Oct 9, 2020
China Caixin Services PMI (Sep)
U.K. Industrial Production (MoM) (Aug)
U.K. Manufacturing Production (YoY) (Aug)
U.K. Gross Domestic Product (MoM) (Aug)
The Week Ahead
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
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 Nippon Life India Asset
Management 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 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 Analytics 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 Analytics 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 Analytics 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.
19
Disclaimer
Thank you for
your time.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Thank you for
your time.