In Q2FY20, the Nifty 50 reported revenue de-growth of -3% and net profit de-growth of -10% on YoY basis. The prudent way of analysing Q2FY20 numbers would be to look at the top line and operating profit numbers, which paint a dismal picture. EBITDA slipped by -2% on YoY basis. The key takeaways were as follows: (1) banks and financials reported better numbers, (2) net profit was boosted by tax write-backs (many companies availed of the lower tax rate in accordance with the new tax structure), (3) de-growth in revenue and operating profit continues, and (4) Bharti Airtel dragged the profits down by around Rs. 23,045 crore. Ex-financial aggregates are even more alarming where revenue dropped by -4% and operating profit witnessed a decline of -18% YoY.
Next 150 stocks by market capitalisation
The story was no different outside the Nifty 50. A study of the next 134 out of the 150 stocks by market capitalisation that have reported earnings so far shows that Q2FY20 revenue de-grew by -2% and operating profit declined by -5%. At net profit level, the companies reported a loss of Rs. 22,561 crore, primarily on account of Vodafone Idea’s net loss of Rs. 50,922 crore. The outliers were financials, while Airlines, Refiners, Metals, Vodafone Idea and IDBI Bank were key draggers. Here, the fall in operating profit of ex-financials being -55% was far more severe than overall. In general, financials, cement and pharmaceuticals (Ex-Lupin and Cadila) saw some positive traction in revenue and profitability.
Next 300 stocks by market capitalisation (outside the top 200 basket)
The favourable low base, migration to a new tax structure (lower rate), and better numbers of PSU banks helped this basket post positive growth numbers on all counts for the second consecutive quarter. In Q2FY20, revenue grew by 2%, operating profit by 16% and net profit by 74%.
Q2FY20 aggregates
Our take: Decent monsoons, lower interest rate trajectory, subdued commodity inflation, range-bound & manageable crude oil prices, healthy foreign exchange reserves, firm rupee, proactive government leaving no stone unturned to revive economy, paradigm tax reforms are reasons enough to revive the economy soon. We expect long-lasting measures initiated by the government will start bearing fruits by CY20. We expect financials, FMCG, and infra stocks to positively surprise on earnings in H2FY20, while green shoots for automobiles seems round the corner. Traction in the Nifty 50 is likely to be led by expanding EPS rather than PER multiples. Going forward, corrections are likely to be bought till the roll out of Budget 2020, the caveat being an unprecedented global event.
Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. 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. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, 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 current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document. This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis report Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh Kant Following table contains the disclosure of interest in order to adhere to utmost transparency in the matter:
INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time. Research Analyst has not served as an officer, director or employee of Subject Company One year Price history of the daily closing price of the securities covered in this note is available at www.nseindia.com and www.economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose name of company in the list browse companies and select 1 year in icon YTD in the price chart
Posted by Mehul Kothari | Published on 15-NOV-2019
Stock market is one of the biggest wealth creators in India. It is the most popular investment option that provides ample opportunity to multiply your capital. There are number of ways or strategies through which you can do stock investment. The stock investment strategy varies from one person to another as it majorly depends upon your financial goals, risk appetite and investment horizon. In this article, we will walk you through the strategies that you can use while investing in stocks.
Stock Investment Strategies
Invest in Business, Not Stocks
One of the important principles of stock investment is that you must invest in the business and not in stocks. This means that if a business is viable and has a bright future, the stock price will ultimately move up. You must avoid looking at the market trends and other noise and study the fundamentals of a company. Purchasing the stock of a company having a good business and whose probable future performance seems bright will help you in earning higher returns. This, however, requires research, long term commitment and patience to hold the stock for the long term.
Be Passionate About What You Buy
When you make a stock market investment you must be passionate about the companies where you are putting your money. Being passionate here means that you must keep each and every information about the business of the company. This is because often the investors get trapped by buying stocks just by looking at the financial statements. Instead, you must conduct deep research about the various ratios like price to equity, debt to equity, EPS, etc. When you invest in companies by looking beyond the financials, you are likely to make higher returns and keep them for a long period in your portfolio. Thus, getting into the deep details of the company should be your mantra for stock market investment.
Invest in Companies Whose Business You Understand
You must make the stock investment in those companies whose business you understand easily. To become a successful investor, you must be aware of the various activities of the company and sector in which you are investing. However, sometimes it might not be possible for you to get or understand each and every detail of the company. In such cases, as an investor, you have to factor that as uncertain risk. Moreover, value investors look for simple business model companies because in such companies even incompetent management cannot cause much harm to the business.
Invest in Well Managed Companies
It is no secret that the market has always been harsh on companies that have poor management quality. Therefore, before making stock market investment, you must find companies that have a good set of management. Good management can do wonders for a company. There have been many cases in the past where investor’s stock market strategy has been to invest money in companies with good management and they have made huge profits in the long run. Good management always ignores the market value of a company and focuses on business growth.
Ignore the Market Most of Times
When making the stock investment, you must ignore the market. This is because you are making an investment in the company and you will hold on to it until the fundamentals are good. The market may have a temporary effect on the price of the stock but in the long run stocks with strong fundamentals will give you good gains and help your portfolio grow. There would be times when there would be huge sell-off in the market and holding to the stocks during such period is the key to success.
Diversify But Don’t Over Stress
It is a known fact that a diversified portfolio is the best portfolio. However, one should not overstress on diversification. This is because there can be a scenario in the market where only a few stocks are having a good run and adding them in large quantities would be against the diversification theory. In such situation, a value investor invests more money in stocks where the upside is obvious rather than keeping his capital idle.
Be Consistent
Always maintain a consistent approach to be successful in the stock market. Investors always seek the best stocks to buy today and in the process forget to maintain discipline. You can build and maintain your portfolio well when you are consistent with the strategies, your financial goals and have the patience to hold stocks for the long term. Taking irrational decisions when the market is volatile can prove to be fatal and it is against the basic rule of investing in the stock market.
The above mentioned are a few strategies for investing in stocks. The best stock to buy today shall always be the one that successfully meets your research and analysis benchmarks. If you want any more assistance for stock investment, you can contact IndiaNivesh Ltd. We assist you in creating wealth through our customised solutions. We aim to exceed our client’s expectations in all endeavours.
Disclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing.")
Posted by Mehul Kothari | Published on 18-NOV-2019
Key Factors and Analysis:Indian equity markets: Indian equity markets have seen steady gains since the second half of October as the sentiment has improved on paradigm policy reforms initiated by Government of India, better than expected Q2 FY20 numbers of financials, good monsoons, rate cuts by all major economies including ours, and never-ending hope that ‘the U.S. & China can negotiate a trade deal’.Corporate earnings:Corporate earnings for September quarter affirmed continued slow down. At operating level Nifty 50 EBITDA was down -2% whereas Ex-financials it was down a steep -18% Y/Y. Hope, being decent monsoons, lower interest rate trajectory, subdued commodity inflation, range-bound & manageable crude oil prices, healthy foreign exchange reserves, firm rupee, proactive government leaving no stone unturned to revive economy, paradigm tax reforms are reasons enough to revive the economy soon.We expect long-lasting measures initiated by the government to start bearing fruits by CY20. We expect financials, FMCG, and infra stocks to positively surprise on earnings in H2FY20, while green shoots for automobiles seem to be round the corner. Traction in the Nifty 50 is likely to be led by expanding the EPS rather than PER multiples.Equity market valuations:Risk-reward for equities for mid & small caps looks pretty attractive when compared to long-term averages. The premium between large caps and mid & small caps has narrowed. Cherry-picking can be done in cyclicals like financials, construction, consumer durables, and automobiles.Equity outlook going forward: We remain constructive on equities and recommend to increase the allocation to equities in your portfolio. Valuation-wise, certain large-cap stocks look overvalued so a staggered shift from large to mid & small caps is recommended. The most important caveat being that quality based on a foreseeable earnings trajectory, clean balance sheet, and high pedigree of corporate governance should rein supreme in selection of investment ideas.
Monetary policy actions:The Reserve Bank of India (RBI) in its October policy cut policy rates by 25 bps to 5.15%. This was the fifth consecutive rate cut in CY2019, resulting in a cumulative cut of 135bps so far. While transmission has remained a challenge, it is gradually improving.
The US FOMC delivered one more rate cut of 25 bps as expected. Global bond yields of developed economies continue to remain low or in the negative zone. This may lead to a chase for sovereign assets of certain emerging economies, which are offering high real rates.Policy rate outlook:We expect the pace of monetary stimulus to come down and that a combination of monetary and fiscal measures would be used to revive the economy. Markets expect the RBI to deliver another ~25 bps rate cut to revive consumption and investment activity, and be watchful on any fiscal slippages and any further deterioration of current account balance.
Overall economic environment remains conducive for the RBI to maintain its accommodative stance owing to factors like faltering growth, manageable inflation rate, and accommodative stance of global central banks.
Liquidity & bond rates:We expect liquidity to remain in the surplus zone, which bodes well for the shorter end of the yield curve. We continue to be positive on AAA-oriented funds as the risk-reward benefit is favorable in the 1 to 4 year segment of the yield curve and spread assets, as they provide better risk adjusted returns. Credit concerns and NBFC liquidity issues have kept the corporate bond spread at elevated levels.Debt outlook from here:We believe that the investment opportunity in Corporate Bond Funds and banking and PSU funds looks attractive and Investors may look to invest in the funds depending on the scale of risk appetite and the investment horizon.Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. 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. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, 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 current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document.)
Nifty 50 – Q2 FY20 Earnings Aggregate Key Highlights
Next 150 stocks by market capitalisation
The story was no different outside the Nifty 50. A study of the next 134 out of the 150 stocks by market capitalisation that have reported earnings so far shows that Q2FY20 revenue de-grew by -2% and operating profit declined by -5%. At net profit level, the companies reported a loss of Rs. 22,561 crore, primarily on account of Vodafone Idea’s net loss of Rs. 50,922 crore. The outliers were financials, while Airlines, Refiners, Metals, Vodafone Idea and IDBI Bank were key draggers. Here, the fall in operating profit of ex-financials being -55% was far more severe than overall. In general, financials, cement and pharmaceuticals (Ex-Lupin and Cadila) saw some positive traction in revenue and profitability.
Next 300 stocks by market capitalisation (outside the top 200 basket)
The favourable low base, migration to a new tax structure (lower rate), and better numbers of PSU banks helped this basket post positive growth numbers on all counts for the second consecutive quarter. In Q2FY20, revenue grew by 2%, operating profit by 16% and net profit by 74%.
Q2FY20 aggregates
Our take: Decent monsoons, lower interest rate trajectory, subdued commodity inflation, range-bound & manageable crude oil prices, healthy foreign exchange reserves, firm rupee, proactive government leaving no stone unturned to revive economy, paradigm tax reforms are reasons enough to revive the economy soon. We expect long-lasting measures initiated by the government will start bearing fruits by CY20. We expect financials, FMCG, and infra stocks to positively surprise on earnings in H2FY20, while green shoots for automobiles seems round the corner. Traction in the Nifty 50 is likely to be led by expanding EPS rather than PER multiples. Going forward, corrections are likely to be bought till the roll out of Budget 2020, the caveat being an unprecedented global event.
Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. 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. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, 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 current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document.
This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis report
Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh Kant
Following table contains the disclosure of interest in order to adhere to utmost transparency in the matter:
INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time. Research Analyst has not served as an officer, director or employee of Subject Company
One year Price history of the daily closing price of the securities covered in this note is available at www.nseindia.com and www.economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose name of company in the list browse companies and select 1 year in icon YTD in the price chart
IndiaNivesh Securities Limited
Research Analyst SEBI Registration No. INH000000511
Corporate Office: Lodha Supremus, 17th Floor, Senapati Bapat Marg, Lower Parel (West), Mumbai - 400 013.
Registered Office: 601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai - 400 007.
Tel (Board): 022 6240 6240 | Fax: 022 6240 6241
e-mail: research@indianivesh.in | Website: www.indianivesh.in
Previous Story
Stock Investment Strategies before investing in Stocks
Stock market is one of the biggest wealth creators in India. It is the most popular investment option that provides ample opportunity to multiply your capital. There are number of ways or strategies through which you can do stock investment. The stock investment strategy varies from one person to another as it majorly depends upon your financial goals, risk appetite and investment horizon. In this article, we will walk you through the strategies that you can use while investing in stocks. Stock Investment Strategies Invest in Business, Not Stocks One of the important principles of stock investment is that you must invest in the business and not in stocks. This means that if a business is viable and has a bright future, the stock price will ultimately move up. You must avoid looking at the market trends and other noise and study the fundamentals of a company. Purchasing the stock of a company having a good business and whose probable future performance seems bright will help you in earning higher returns. This, however, requires research, long term commitment and patience to hold the stock for the long term. Be Passionate About What You Buy When you make a stock market investment you must be passionate about the companies where you are putting your money. Being passionate here means that you must keep each and every information about the business of the company. This is because often the investors get trapped by buying stocks just by looking at the financial statements. Instead, you must conduct deep research about the various ratios like price to equity, debt to equity, EPS, etc. When you invest in companies by looking beyond the financials, you are likely to make higher returns and keep them for a long period in your portfolio. Thus, getting into the deep details of the company should be your mantra for stock market investment. Invest in Companies Whose Business You Understand You must make the stock investment in those companies whose business you understand easily. To become a successful investor, you must be aware of the various activities of the company and sector in which you are investing. However, sometimes it might not be possible for you to get or understand each and every detail of the company. In such cases, as an investor, you have to factor that as uncertain risk. Moreover, value investors look for simple business model companies because in such companies even incompetent management cannot cause much harm to the business. Invest in Well Managed Companies It is no secret that the market has always been harsh on companies that have poor management quality. Therefore, before making stock market investment, you must find companies that have a good set of management. Good management can do wonders for a company. There have been many cases in the past where investor’s stock market strategy has been to invest money in companies with good management and they have made huge profits in the long run. Good management always ignores the market value of a company and focuses on business growth. Ignore the Market Most of Times When making the stock investment, you must ignore the market. This is because you are making an investment in the company and you will hold on to it until the fundamentals are good. The market may have a temporary effect on the price of the stock but in the long run stocks with strong fundamentals will give you good gains and help your portfolio grow. There would be times when there would be huge sell-off in the market and holding to the stocks during such period is the key to success. Diversify But Don’t Over Stress It is a known fact that a diversified portfolio is the best portfolio. However, one should not overstress on diversification. This is because there can be a scenario in the market where only a few stocks are having a good run and adding them in large quantities would be against the diversification theory. In such situation, a value investor invests more money in stocks where the upside is obvious rather than keeping his capital idle. Be Consistent Always maintain a consistent approach to be successful in the stock market. Investors always seek the best stocks to buy today and in the process forget to maintain discipline. You can build and maintain your portfolio well when you are consistent with the strategies, your financial goals and have the patience to hold stocks for the long term. Taking irrational decisions when the market is volatile can prove to be fatal and it is against the basic rule of investing in the stock market. The above mentioned are a few strategies for investing in stocks. The best stock to buy today shall always be the one that successfully meets your research and analysis benchmarks. If you want any more assistance for stock investment, you can contact IndiaNivesh Ltd. We assist you in creating wealth through our customised solutions. We aim to exceed our client’s expectations in all endeavours. Disclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing.")
Next Story
Monthly Market Outlook – November 2019
Key Factors and Analysis:Indian equity markets: Indian equity markets have seen steady gains since the second half of October as the sentiment has improved on paradigm policy reforms initiated by Government of India, better than expected Q2 FY20 numbers of financials, good monsoons, rate cuts by all major economies including ours, and never-ending hope that ‘the U.S. & China can negotiate a trade deal’.Corporate earnings:Corporate earnings for September quarter affirmed continued slow down. At operating level Nifty 50 EBITDA was down -2% whereas Ex-financials it was down a steep -18% Y/Y. Hope, being decent monsoons, lower interest rate trajectory, subdued commodity inflation, range-bound & manageable crude oil prices, healthy foreign exchange reserves, firm rupee, proactive government leaving no stone unturned to revive economy, paradigm tax reforms are reasons enough to revive the economy soon.We expect long-lasting measures initiated by the government to start bearing fruits by CY20. We expect financials, FMCG, and infra stocks to positively surprise on earnings in H2FY20, while green shoots for automobiles seem to be round the corner. Traction in the Nifty 50 is likely to be led by expanding the EPS rather than PER multiples.Equity market valuations:Risk-reward for equities for mid & small caps looks pretty attractive when compared to long-term averages. The premium between large caps and mid & small caps has narrowed. Cherry-picking can be done in cyclicals like financials, construction, consumer durables, and automobiles.Equity outlook going forward: We remain constructive on equities and recommend to increase the allocation to equities in your portfolio. Valuation-wise, certain large-cap stocks look overvalued so a staggered shift from large to mid & small caps is recommended. The most important caveat being that quality based on a foreseeable earnings trajectory, clean balance sheet, and high pedigree of corporate governance should rein supreme in selection of investment ideas. Monetary policy actions:The Reserve Bank of India (RBI) in its October policy cut policy rates by 25 bps to 5.15%. This was the fifth consecutive rate cut in CY2019, resulting in a cumulative cut of 135bps so far. While transmission has remained a challenge, it is gradually improving. The US FOMC delivered one more rate cut of 25 bps as expected. Global bond yields of developed economies continue to remain low or in the negative zone. This may lead to a chase for sovereign assets of certain emerging economies, which are offering high real rates.Policy rate outlook:We expect the pace of monetary stimulus to come down and that a combination of monetary and fiscal measures would be used to revive the economy. Markets expect the RBI to deliver another ~25 bps rate cut to revive consumption and investment activity, and be watchful on any fiscal slippages and any further deterioration of current account balance. Overall economic environment remains conducive for the RBI to maintain its accommodative stance owing to factors like faltering growth, manageable inflation rate, and accommodative stance of global central banks. Liquidity & bond rates:We expect liquidity to remain in the surplus zone, which bodes well for the shorter end of the yield curve. We continue to be positive on AAA-oriented funds as the risk-reward benefit is favorable in the 1 to 4 year segment of the yield curve and spread assets, as they provide better risk adjusted returns. Credit concerns and NBFC liquidity issues have kept the corporate bond spread at elevated levels.Debt outlook from here:We believe that the investment opportunity in Corporate Bond Funds and banking and PSU funds looks attractive and Investors may look to invest in the funds depending on the scale of risk appetite and the investment horizon.Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. 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. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, 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 current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document.)