CCI NG 3.7 Product: ETDelhiBS PubDate: 05-12-2017 Zone: DelhiCapital Edition: 1 Page: ETDCECO6 User: manish.

dition: 1 Page: ETDCECO6 User: manish.kumar10 Time: 12-04-2017 23:33 Color: C

K
Y
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ETMarkets
SMART
INVESTING
Operating
Assets of 60
Firms Grew
Faster Than GDP
Beating Volatility WWW.ETMARKETS.COM
NEW DELHI / GURGAON, TUESDAY, 5 DECEMBER 2017

AT 21%, MSCI INDIA underperforms Russia, Brazil and Chile indices in the last 63 MOONS STOCK ENDS 5% LOWER AT `131.1
Market Trends
two years; Foreign investors remain worried about high valuations in country
Bombay HC
Rupee Trailing EM Peers
STOCK INDICES % CHANGE

Upholds NSEL
Nifty 50 10127.75 0.06
Sensex 32869.72 0.11

MSCI India 850.7 0.36

Merger Order
MSCI EM 2437.86 0.63
MSCI BRIC
MSCI World
SX 40
Nikkei
Hang Seng
619.72
8333.38
19576.91
22707.16
29138.28
0.45
0.17
0.14
0.49
0.22
Hurts India Dollar Returns Dismisses 63 Moons
said. It is reported that almost
99.99% of the ostensible spot trad-
ing in commodities in the entire
[email protected] Index Performance of MSCI PE Spread MSCI India Currency Performance of country was taking place on the
Strait Times 3438.47 0.32 India & Emerging Market and MSCI EM index Emerging Markets
petition against govt NSEL Spot Exchange.
ET Intelligence Group: During the four years through
Values in US $, Gross At 7 pm IST
Benchmark Indian equity indices
175 MSCI India 80 PE Spread
Russia Ruble 49.63
order to merge its 2013, the court noted, the paired con-
MSCI EM index 146.0 Avg PE 50.66
OIL ($) BOND are at record levels. But, thats not tracts offered by NSEL alone ac-
DUBAI CRUDE enough to amuse foreign investors 150 MSCI World index 60 defunct subsidiary counted for a turnover of `1.34 lakh
10-YR YIELD Brazilian Real 48.63
since Indian indices have under- 127.4 crore. It observed that these con-
60.71
0.14
7.08
performed the emerging market 125 40 NSEL with itself tracts were in violation of the gov-
0.02 South African Rand 28.09
Absolute Change Figures in % benchmark in 2017 for the second ernment exempting NSEL from the
125.9
consecutive year. 100 20 provisions of the then extant
Chilean Peso 20.31
GOLD RATE The dollar returns of the MSCI 27.53
Since Our Bureau Forward Contracts Regulation Act.
Prices per Troy Ounce ($) Russia, MSCI Brazil and MSCI Chile Jan 2016
75 0 Columbian Peso 15.73
US India was 46%, 89% and 37%, respectively, Jan 4, 2016 Nov 30, 2017 Dec 3, 2012 Nov 30, 2017 (Against US Mumbai: The Bombay High Court
compared with 21% of the MSCI dollar) has dismissed 63 Moons petition
OPEN 1277.60 1414.05 Source: Bloomberg,compiled by ETIG
India in the last two years. against a government order to
LAST* 1276.00 1407.87 The MSCI India index a key better currency performance valuations of Indian equities are not higher than the long-term average. merge its defunct subsidiary NSEL
*At 10.30pm, After adjusting for import duty, gauge for global fund managers to helped prop up returns of emerging favourable for a fund manager to in- As a result, some of the global fund with itself in public interest after
Indian spot gold lower by $ 4.27 to US Comex evaluate their performance in dollar markets other than India. The cur- crease exposure considering that managers have reduced the over- being satisfied that the two compa-
gold price on Monday. The premium on local gold terms has underperformed the rency appreciation against the dol- earnings growth forecast was low- weight of India to just over 150 basis nies operated as one entity and, in
is due to tight supply following import curbs.
MSCI EM index by 11% and 8% in lar in the resource-rich countries ered for the fifth year in a row. The points (bps) from as high as 500 bps business reality, all stakeholders
FOREX RATE (`-$ Exchange Rate) 2016 and 2017, respectively. The dollar such as Russia, Brazil, South Africa, price-earnings spread of the MSCI two years ago. Overweight reflects looked upon them as a single entity.
returns are a keenly watched matrix and Chile was 20-50% in the past two India was at 50% premium to the the percentage of higher weight in The order highlighted the vital
OPEN LAST* for foreign fund managers investing years compared with 14% for the MSCI EM index compared with the allocation to a country compared importance of stock and commod-
64.57 64.38 with a medium-term perspective. Indian rupee, according to the long-term average of 40%. Indian eq- with weight specified in the bench- ity exchanges to the national econo-
There are several reasons for Bloomberg data. uities currently trade at 21 times the mark index, MSCI Emerging my, and gave reasons why it would If exchanges such as these are
Market on Twitter@ETMarkets Indias underperformance. First, Second, the absolute and relative next years earnings, which is 31% Market index in this case. not interfere with the impugned permitted to be subverted or fail
(merger) order filed under Section without honouring their obliga-
396 of the Companies Act, 1956. tions and commitments, the confi-
US Tax Cut Plan PREMIUMISATION, HIGH AVERAGE REALISATION KEY Rupee Cheers GDP, PMI However, the high court gave 63
Moons 12 weeks to appeal in the
dence in national economic insti-
tutions is bound to suffer and the
Pushes Wall St Data; Up 9 P to 64.37 Supreme Court, to which, the com- repercussions to the national

to New Record Heres Why Some The rupee on Monday rebounded

by 9 paise to end at 64.37 against
pany said it would. The companys
stock ended 5% lower at `131.1 on
BSE after the order.
economy will be severe. In such
situations, a negative perception
about the business environment of
Wall Street stocks
touched new record
highs early Monday
Automakers Top the US dollar in a highly volatile
trade on fresh selling of the green-
back and also emboldened by encouraging Q2
The high court bench, headed by
Chief Justice Manjula Chellur,
said stock and commodity ex-
the country is created, which has
grave repercussions on the nation-
a l e c o n o m y. T h e C e n t r a l

The M-cap Charts

changes provide vital hubs for in- Government, quite conscious of
following the Senate GDP numbers and monthly manufacturing vestors and traders to trade in all such factors, has taken a bal-
passage of a massive and long- data. The rupee opened sharply lower at shares and commodities. anced decision..
awaited tax cut plan. The blue- 64.55 compared to last Thursdays close of Commerce in the modern econo- To 63 Moonss contention that
The value assigned by In comparison, the worlds my is inconceivable without them public interest was being improp-
chip Dow Jones Industrial Av- investors to automobile top two car makers Toyota 64.31 on sustained dollar pressure. It drifted
erage hit a record of 24,534.04 and the perception of the Indian erly applied under Section 396 of
companies does not hinge just and Volkswagen (by volume sharply to hit a fresh intra-day low of 64.57 in economy, both locally and abroad, the Companies Act 1956 to force-
points before giving up some of on annual sales volumes. A lot and market cap) have mid-morning deals before making a spirited depended to a large extent on the fully merge a loss-making subsidi-
the gains. The broader S&P 500 depends on the product mix valuation per car at $22,565
recovery. After scaling a high of 64.28 to- functioning and health of its stock ary (NSEL) with a profit-making
index set a new record high at or the share of the earnings and $9,955 a fraction of
wards the fag-end trade, the local unit finally and commodity exchanges, the parent (63 Moons) in disregard of
from premium cars and also the value commanded by
2,665.19 points. US stocks are on the average realisation Ferrari and Tesla. Toyota settled at 64.37, showing a gain of 9 paise, or bench pointed out. limited liability and interest of
adding to last weeks strong The failure of a national-level FTIL shareholders and creditors
per vehicle. Typically, larger and Volkswagen sold nine 0.14%. It dropped to a low of 64.57 in intra- commodity exchange, under cir- in favour of that of investors on
gains in early action, with Sat- the share of the premium million and 10.3 million cars, day trade. The RBI, meanwhile, fixed the ref-
cars in the business mix, respectively, in 2016.
cumstances as stated in the im- NSEL, the order said:
urdays passing of the Senates erence rate for the dollar at 64.3799. PTI pugned order, is clearly a matter of
tax reform bill boosting opti- higher will be the market The price-earnings (P/E)
valuation. For instance, multiple of Toyota and serious concern, the court order Continued on XX SMART INVESTING
mism... said analysts at Charles Ferrari which sold 8,014 cars Volkswagen was 10.1 and 6.7,
Schwab brokerage. After mar- with average realisation of respectively, based on next
athon talks in Washington law- $428,850 per unit in the past years projected earnings.
makers finally passed contro- scal, commands a market On the other hand, Ferrari
versial reforms to the tax capitalisation of $20.3 billion. trades at a forward P/E of
Similarly, US car maker Tesla 30. Maruti Suzuki, Indias
system, which the president has a market cap of $51.5 largest car maker, has market
says will fire up the worlds billion and sold 76,285 cars in cap of $25,524 per car and a
number one economy. the previous scal, according forward P/E of 25.5. Maruti
to Bloomberg data. Based Suzuki commands premium
Bloomberg
on the last scal revenue of to global carmakers thanks to
$7 billion, Teslas average the dominant market share
realisation works out to be position in the one of the
$91,762 per car. This means, fastest-growing car markets in
market cap per car sold in the world.
Sebi Order on Single a year was $2.5 million for Ashutosh R Shyam
Ferrari and $675,332 for Tesla. /ETIG
Consolidated
Carmakers with highest m-cap per unit of annual volumes
List of MF Stocks Market 1 yr Market cap Next year
Sebi on Monday Company cap forward per unit of earnings
said mutual funds ($ bn) PE volume ($) growth (%)
while preparing sin- Ferrari 20.31 30.28 25,33,926 8.21
gle consolidated list Tesla 51.52 6,75,332 59.11
of stocks should consider aver- Porsche Auto 25.49 5.54 1,07,202 18.65
age full market capitalisation of BYD Company 25.49 24.21 60,397 50.06
the previous six month of the Geely Automobile 32.25 16.92 42,106 35.45
stocks. This is in partial modifi-
Tata Motors 19.93 8.79 36,543 60.33
cation of its earlier circular on
Daimler 87.56 7.66 29,203 -1.09
reduction of similar mutual
ANIRBAN BORA

fund schemes. The regulator BMW 65.28 7.77 27,573 -1.04

said whenever the portfolio Isuzu Motors 13.00 11.32 25,685 9.72
duration is reduced below the Maruti Suzuki 39.95 25.49 25,524 19.46
specified floors of three years Most valued global car companies by M-cap
and four years in respect of 240 12
medium and medium-to-long
duration funds, respectively, 180 9
the asset management compa- 120 6
ny will be required to record
the reasons for the same with 60 3
adequate justification and 0 0
maintain the same for inspec- Toyota Volks- Daimler BMW General Honda Saic Tesla Ford Nissan Maruti
tion. The written justifications Motor wagen Motors Motor Motor Motor Motor Suzuki
need to be also placed before Market cap ($ bn) (LHS) Annual auto sales worldwide (mn units)
Source: Bloomberg, ETIG database
the trustees. Our Bureau

We Should Not Just Look at US...

Very Optimistic About India
Q&A Ray Dalio important economy, the Indian
economy, the Chinese economy,
Founder, Bridgewater Associates the Asian economy, the world
In an exclusive interview with proach to life. What motivated economy are also very impor-
ET Nows Tanvir Gill and me was that I am at a stage in tant. So, we should not just be
Nikunj Dalmia, Ray Dalio, found- my life where I feel the respon- looking at the US economy.
er, Bridgewater Associates, dis- sibility for passing on my The US economy is going to
cusses his book Principles: Life & knowledge. That is why I did benefit from stimulation by a
Work and also the current mar- this book. It is not about the combination of reduced regula-
ket conditions and his outlook on hedge fund. Over a period of 25 tions. It will produce a bit of a
India. Dalio talks about how mis- years, I wrote down the essen- pickup in the economy but not
takes are steps to knowledge and tial recipes for success and they very much.
what lies ahead for the markets. helped our relationships and If you lower corporate tax
Edited excerpts: helped us to be more success- rates, then by necessity the
ful. I accumulated those and de- growth real, inclusive and sus- stocks are worth more and that
What inspired you to write this cided to pass those along. tainable and can it fuel markets is not necessarily commensu-
book and how easy was it as a even further amidst the rate rate with the benefit of the
hedge fund manager to share Today, We are seeing rates go tightening cycle? overall economy.
your edge with the world? up in the US. Whats your out- It is important to realise now that
Continued on XX
This is mostly a book about ap- look on the US economy? Is the while the US economy is a very
MONEY MATTERS