BUY on Bank Stocks – Top Bank Stocks for Investment in 2019

CURRENCY PIVOT LEVELSCROSS CURRENCY UPDATEUSDINR 29 MAY 2019 EXPIRY OPTION UPDATE USDINR (May Future) Dollar/rupee took upside momentum from the day low 69.3825 in line with dollar rally and settled at 70.0350 levels. The US dollar rallied against its major counterparts as escalating US-China trade disputes damaged the prospects of global growth,prompting global equities selloff and safe haven buying into the US currency. However, BJP government was set to return with a comfortable majority and more than 5.50% has control further gain in USDINR.Technical, after hitting a day low 69.3825, USDINR rebounded more than 70 paisa. However, pair yet trading below its immediate resistance 70.10. In near term a break above 70.10 only would create probability for momentum gain towards 70.50and above, else it expect to retreated towards 69.65-69.40 again.Trend –VolatileGBPINR (May Future) Pound/Rupee slumped to an over five-month low 87.79 on Thursday as worries about a no-deal Brexit deepened while the broadbased dollar strength on the back of Sin-US trade war further fuelled the sterling selloff. Howerver due to weakness in Rupee pair rebounded and settled at 88.5750 compared to privious close of 88.3225. Another factor weighing on the sterling is the overall dollar strength.Technical, after hitting a new multi week low 87.79 GBPINR saw sharp rebound and settled at 88.5750. Intraday price action resulted in formation of high wave candle stick which is indicating for indecisiveness among Pound traders. On the upside, resistance is seen at 89.15 and break above only will expect to test 89.55-89.80. Else, any rise towards 88.80-88.90 could attract selling pressure for the target 88.00.Trend –BearishMajor Economic Data & Events Released Yesterday/Earlier today Eurozone Flash Composite Purchasing Managers' Index (PMI), which is considered a good guide to economic health, only nudged up to 51.6 this month from a final April reading of 51.5, below the median expectation in a Reuters poll for 51.7 German business climate index fell to 97.9 from a confirmed 99.2 in the previous month. The May reading compared with a consensus forecast for 99.1 Germany's manufacturing PMI by Markit came in at 44.3 for May from the April reading of 44.4 when the consensus was for a rise to 44.8, data showed Thursday US new home sales dropped 6.9% to a seasonally adjusted annual rate of 673,000 units last month. March's sales pace was revised up to 723,000 units, the highest level since October 2007, from the previously reported 692,000 units Major Economic Data & Events Schedule today   Note: Economic data expectations are based on median forecast by economists or Reuters and Bloomberg survey. Here positive impact indicates currency could appreciate and negative indicates currency could depreciate in comparison with US Dollar.Technical Chart Source: TickerNews Source: Ticker news, Forexfactory.com, forexlive.com and investing.com*Dos – Depends on Statement. DOV – Depends on Votes. Source - investing.com, Reuters,forexlive & ticker news.Click Here to Download the ReportDisclaimer: This document has been prepared by IndiaNivesh Securities Limited (IndiaNivesh), for use by the recipient as information only and is not for circulation or public distribution. This document is not to be reproduced, copied, redistributed or published or made available to others, in whole or in part without prior permission from us. This document is not to be construed as an offer to sell or the solicitation of an offer to buy any currency pair. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. The information contained in this document has been obtained from sources that are considered as reliable though its accuracy or completeness has not been verified by IndiaNivesh independently and cannot be guaranteed. Neither IndiaNivesh nor any of its affiliates, its directors or its employees accepts any responsibility or whatever nature for the information, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our currency opinions as of the date appearing on this material only. IndiaNivesh directors and its clients may have holdings in the currencies mentioned in the report.)

INFRASTRUCTURE FUNDS – INVEST WITH A VISION Many investors feel the need to top up their investment portfolios with certain “in-favor” investment ideas or unique themes. Topping up the portfolio to a desired theme or idea helps in enhancing the overall return potential of the portfolio when the expected story plays out. Skewing the portfolio in a specific sector or a theme does increase the risk of the portfolio but a well-planned and researched idea pays well in the long term. One such theme that at the current juncture looks promising is the Infrastructure play. Infrastructure spending remains one of the most important fulcrum to lift economy to faster growth trajectory. Infrastructure theme provides a broad play in to many sectors ranging from capital goods, power, construction equipment’s, engineering, materials, metals, etc. Considering that infrastructure as a theme encompasses roads, ports, railways, power, communication, defense, etc., the theme touches upon many sectors directly or indirectly and hence provides a well-diversified and healthy selection of companies in the portfolio. Furthermore, the sector also provides a well spread out allocation opportunity in diverse market capitalization stocks, with a greater play in larger and mid cap space. Sectoral Spread of Infrastructure Theme Why invest in infrastructure now?One of the biggest reasons to look for infrastructure as an investment theme is the thrust of the government on infrastructural development and laying the path of faster economic growth. The government has projected a massive outlay of 100 lakh crores over the next 5 years. The projected outlay is almost twice the amount spent in last 5 years. As per the Sankalp Patra – Election Manifesto, the ruling government envisages a strong focus on roads connectivity, water resource, urban development, rail connectivity, developing new airports, coastal development, energy needs and telecommunication. The government comes with a greater resolve and focuses on continuing its economic reforms in the light of recent narrative of slowdown in economic activity and job losses. A significantly higher spend is projected to jumpstart the economy and to take India to $5trillion economy by 2025 and 3rd largest economy in next 12 years. Infrastructure Portfolios – The Market Capitalization Spread Strong infrastructure push is already visible Highway construction in India increased at a rapid pace of 23% CAGR between FY14-18 ₹ 71,000 crore was allocated for National Highways in the Union Budget 2018-19 ₹ 19,000 crore was allocated to Pradhan Mantri Gram Sadak Yojana (PMGSY) Railways received the highest ever budgetary allocation under Union Budget 2018-19 at Rs 1.48 trillion Power generation capacity has increased steadily Policy initiatives and guidelines pushing the growth forward and reducing bottlenecks Commissioning of new policies to look at ground level issues Implementation and planning of new metro rail and mono rail projects in India Development of new airports and upgradation of existing airports to expand air connectivity Recognition of logistics as infrastructure sector is a big boost for the segment. Logistics and warehousing seeing higher investments as the sector forms a key in global supply chain Developing North eastern region through North East Special Infrastructure Development Scheme (NESIDS) by implementing new highway projects, railways, through 100% funded infra projects Affordable housing was given infrastructure status and thus housing sector got the biggest boost in the last few years. The proposal to establish an Affordable Housing Fund under the National Housing Bank, will further boost the housing and related investment in India. THRUST AREAS FOR INFRASTRUCTURE SPENDS PLANNED AHEAD Roads Construct 60,000 km National Highways in 5 years Double the length of National Highways by FY22 Completion of Phase-1 of Bharatmala and commence phase –II Bring in new technologies in road construction Railways Conversion of all viable track to broad gauge by 2022 Electrification of all tracks by 2022 Expanding connectivity of high speed trains across the country complete the dedicated freight corridor project by 2022 Modernizing railway stations in the country Wi-Fi facility at stations by 2022 Airports Double the number of functional airports from 101 today Coastal Development Ensure speedy completion of the projects under this programme Doubling port capacity in next 5 years Upgradation of infrastructure to ensure smooth coastal connectivity Focus on development of inland waterways Urban Development Ensure that 50 cities are covered with a strong metro network in next 5 years Further development of suburban townships and new urban centres Launch a National Urban Mobility Mission to provide technology based urban mobility solutions to all urban local bodies Energy Ensuring a right mix of energy which leads towards a cleaner environment Supplying quality electricity to all consumers Making the state electricity entities Financially sound and administratively more efficient Rural development Launch a massive ‘Rural Road Upgradation Programme’ to connect centres of education, healthcare centres, and markets with hinterlands 25 lakh crores envisaged to improve farm productivity over next 5 years Expand Pradhan Mantri Krishi Sinchai Yojana to realize 100% irrigation potential Make in India Take India into Top 50 Ranking in Ease of Doing Business Index New Industrial Policy to improve competitiveness of manufacturing and services Easing regulatory requirement for start-ups Encourage Startups through creation of a ‘Seed Start up Fund’ of ₹20,000 crore Housing Pucca house to every family by 2022 Piped water connection to every household by 2024 Open separate Jal Shakti Mantralaya Source: BJP Manifesto 2019 Given the size of planned investment in infrastructure, greater emphasis will be put in encouraging private investments. International participation in India’s growth story through increased FDI also remains an important element in financing high expenditure budgets. In the recent times the state of shadow banking entities have become quite vulnerable and effective resolution needs to be brought in to tackle the industry issues and reinvigorate the financial sector. Infrastructure projects by its very nature requires substantial capital investments both from government as well as private players, and hence require clear policy guidelines, ease of financing, continuance of reforms, commitment to long term mutual participation etc. Private capex commitment comes with easy capital availability, equal government participation and encouragement, clear and coherent policy reforms, etc. Over the past few years, government's efforts towards eradicating corruption and black economy and streamlining indirect taxation through implementation of GST has had a negative impact on business sentiment and slowdown in capex. However, this has laid the ground work for enhancing the tax base of the country, increasing compliance and progressively increasing tax revenue. GST collection as well as compliance is steadily rising. The number of tax payers has doubled after the move of demonetisation and the direct tax kitty has expanded to 11 lakh crores. Capital inflows in the form of foreign direct investment too have remains robust reinforcing the expectations of international financing. Taking cues from the manifesto it is evident that the government is sensitive to the issues of employment and economic growth and has envisaged large public expenditure. Investment View: In our opinion, the massive thrust in the governmental spending is expected to boost private capex and growth in several sectors. Sectors associated with infrastructure such as cement, engineering companies, industrial machinery makers, defense, capital goods, power and utilities, telecom, construction material, energy, housing, housing finance, metals, etc., are expected to get the required investment impetus. A pure play on infrastructure would include industries and companies which are basically asset owner or developers and asset creators while a quasi-play on infrastructure would also involve asset financiers, which is the banking segment. Mutual Funds catering to infrastructure story usually play with a broader theme including direct and quasi play. The definition of infrastructure theme remains diverse across fund houses and government agencies and variances largely emanate from direct and indirect impact on sectors across the spectrum. For e.g., metals, banks and finance are primarily outside the ambit of pure infrastructure play for a few fund houses but mutual fund industry largely considers banking as a part of the theme. From a conservative perspective, the inclusion of banking sectors further broadens the theme and also provides a cushion to the infrastructure theme. Moreover, as banks remains critical for financing the growth story, it is quite usual that banking features as an important sector in the theme. The banking sector is gradually coming out of the NPA issues and certain select stocks provide pockets of opportunities, it would be prudent to have a mix of pure play and diversified infrastructure theme portfolios. We recommend investment in Infrastructure theme from a investment perspective for moderate and aggressive investors to benefit from the long term structural growth story of India. It is imperative to mention here that Infrastructure businesses are capital intensive in nature and have long gestation periods. It is therefore prudent to have longer investment horizon of 3-5 years to benefit from investment idea. Sectoral/thematic investments should be restricted to 5-10% of the overall equity portfolio. Recommended schemes in Infrastructure Space      Click Here to Download the Report     Disclaimer: This document is STRICTLY for authorised recipients only and is prepared for information purposes only. The information provided herein, we believe, is from reliable sources. IndiaNivesh is not liable for the accuracy of the source data as well as the results of the calculations based on the same. We do not claim that the data provided herein is accurate and complete in all respects. This is not an offer or solicitation of any offer to buy or sell securities. No action is intended to be taken by the recipients based on this document. The recipients may take their decisions based on their own judgement and independent advice that they may receive before making any investment or disinvestment decisions. The recipients are advised not to take any decision only on the basis of this document. No portion of this document should be printed, reprinted, redistributed, reproduced, duplicated or sold.)