Market Money Manager

The first step of investing is to
decide allocation among different

asset classes. Asset allocation is
the most important factor that
determines the performance of a
portfolio. How much you invest in
equity or debt depends on your
stage of life and goals. Once you
have decided the allocation, it is
time to select products that would
fit the asset classes you want to
invest in. Today with a large
product suite available to
investors, this is a point of some
amount of confusion. At an overall
level, we should consider the
product features, liquidity, costs,
Anup Bagchi
MD & CEO
potential risks and tax efficiency
ICICI
Securities Ltd.
before
selecting the product.
Amongst all the parameters of evaluation, tax efficiency is an
extremely important aspect.
Tax-efficiency determines how much of a return we get to keep after
accounting for taxes. Put simply, the net post-tax return. As
investors, our goal should be to maximize the post-tax return of a
portfolio. This can be done through selecting products that are more
tax-efficient. In general, equity-linked products are best positioned
to provide better post-tax returns over the long run due to their
beneficial tax rules.
Keep in mind, even a small amount of tax saved today can make a big
difference to our net worth in the long run. For instance, even if we
manage to save ` 15,000 every year on taxes, for a period of next 25
years, and invest this amount, it would grow to ` 16.23 lakh at 10 per
cent rate of return. This is the gain of over ` 12 lakh on an investment
of ` 3.75 lakh (15,000 X 25 years).
Further, when it comes to saving taxes, we realize that certain

deductions and benefits are well known, while others are not. It is
important to be conversant with tax laws and fully utilize the benefits
available to us. Our experience is that health insurance tax limits
under section 80D are rarely fully used and these are over and above
` 1.50 lakh that we get under section 80C. One can save maximum
up to ` 40,000 under section 80D, if assesee and parents, both are
senior citizens (above age 60 years).
Even the tax deductions available under section 80C are rarely fully
used by most of us. If we do so, we can build a sizable corpus to meet
our goals. If we consider that a taxpayer is saving ` 1.50 lakh per year
under section 80C in tax-saving instruments from the age of 30 till
the retirement age of 60, and assuming 8 per cent rate of return, this
amount will grow to ` 1.77 crore. This is the magic of compounding.
And if we make proper asset allocation among different tax-saving
products, the corpus can grow even bigger.
Although tax-efficiency is important, the investment decision should
not be solely based on it. Our investments should go beyond just tax
saving and should focus more on fulfilling goals.
Last, but not the least, we are in a growing nation with further
potential for a long foreseeable future. Therefore, we must take full
advantage of that and participate and ride the growth through
equities, either directly or through other indirect route of investment
products.Investing in equity-related instruments (ELSS) is a good
option to create wealth in the long run. With its lock-in period of three
years, it allows us to ride out the inherent volatility in the markets and
remain invested for the long term. And the tax benefit it provides is
the additional cream on the pie.
Our message remains the same - 'Keep investing and stay invested
for your life goals'. Through this magazine and our website
www.icicidirect.com we want to make an earnest attempt to partner
with you in setting and achieving your financial goals. Do walk into
any of your Neighbourhood Financial Superstore and talk to us.
ICICIdirect Money Manager
November 2014
When it comes to investing, most of us know that it is important to

look at the real rate of return. Real return is how much our
investments have grown over inflation. The returns also need to
be adjusted for tax to understand the real return in hand. While
the asset classes (equity, debt, etc.) define the real returns most of
the times, it is the product choice, in the specific asset class, that
defines the tax efficiency.
We must factor in the tax implications of each product, based on
our personal situations, in order to know what returns we are
likely to get in. Tax laws and implications keep changing. To help
you get the updated information, we, in our cover story of this
edition, list various investments across asset classes, in the light
of tax implications.
The edition also offers comprehensive information and analysis
on ELSS, tax-saving mutual funds, which are best option for
saving taxes as well as creating wealth in the long run. All in all,
this issue is a wholesome tax planning package, which we hope,
will help you plan your taxes more efficiently and in sync with
your financial goals.
I would also like to draw your attention to our interview, with
Pankaj Murarka, Head Equity, Axis Mutual Fund, who advises
investors to remain focused on their long-term asset allocation.
Further, if you wish to get clarity on different aspects of personal
finance or any other money matter through Ask our Planner, you
may write to us at money manager @icicisecurities.com. So read
on, stay updated and involved. Do write in with your feedback
and share your thoughts.
Your magazine is now also available on www.magzter.com, a
digital newsstand.
Editor & Publisher
Abhishake Mathur, CFA
Coordinating Editor
Yogita Khatri
Editorial Board
Sameer Chavan, CWM, Pankaj Pandey
Editorial Team
Azeem Ahmad, Nithyakumar VP CFPCM, Nitin Kunte, Sachin Jain,

Sheetal Ashar
November 2014
MD Desk...............................................................................................1
Editorial................................................................................................2
Contents...............................................................................................3
News.................................................................................................. .4
Markets Round-up & Outlook.................................................................. 5
Getting Technical with Dharmesh Shah................................................... 8
Derivatives Strategy by Amit Gupta.......................................................10
Stock Ideas: SKF India and L&T .............................................................. 15
Flavour of the Month: Tax implications of various investments
Here we take you through the various avenues of investments
across asset classes, in the light of tax implications..................21
Tte--tte: 'Remain focused on long-term asset allocation'
An interview with Pankaj Murarka, Head Equity, Axis Mutual
Fund..............................................................................................34
Ask Our Planner: Switching your investment options
Your personal finance queries answered....................................36
Mutual Fund Analysis: Category - ELSS
Here we analyse top-performing ELSS funds, which are best
option for saving taxes as well as creating wealth in the long
run.................................................................................................40
Equity Model Portfolio..........................................................................47
Mutual Fund Top Picks
Here we present our research team's top mutual fund
recommendations, across equity and debt categories..............52
Quiz Time............................................................................................54
Monthly Trends....................................................................................55
Premium Education Programmes Schedule.............................................58
November 2014
No PAN requirement for investment in Kisan Vikas Patra

The Finance Minister Arun Jaitley and Communication Minister Ravi
Shankar Prasad relaunched Kisan Vikas Patra (KVP) scheme. The
Finance Ministry has said that there will not be requirement of
Permanent Account Number or PAN in putting money in relaunched
KVP. It will be available to the investors in the denomination of Rs. 1000,
Rs 5,000, Rs 10,000 and Rs 50,000, with no upper ceiling on investment.
The investment made in the certificate will double in 100 months.
Courtesy: The Hindu Business Line
FII stake in Sensex companies hits all-time peak of 27 pct: BofA-ML

Maintaining a bullish stance on Indian equities, foreign investors
increased their exposure in BSE Sensex companies to an all-time high
of 27 per cent in the September quarter, says a report. FII stake in
Sensex companies has been rising continuously since 2009, the global
financial services major Bank of America Merrill Lynch said in a research
note, adding the FII stake stood at an all-time peak of 27 per cent as of
September 30. As of June 2014, FIIs collectively held around 22.5 per
cent of the market and around 46 per cent of the free float.
Courtesy: The Indian Express
Children mimic parent's money habits, spending event more: ING survey
About 80 per cent of respondents, read parents, who participated in the
annual ING Zing survey, said they believed that their children followed
their money habits. Even more discerning is the fact that children tend
to pick parents' spending habits marginally more than their saving
habits, at least among those who earn above Rs 8 lakhs annually. The
study also observes that as your income levels go up, children tend to
develop spending habits more while parents' tend to shore up their
savings habits.
Courtesy: Business Standard
October exports shrink 5% after a gap of six months

Negative growth rates in major sectors such as engineering, pharma,
gems and jewellery, and petroleum products saw the country's overall
merchandise exports shrink 5.04% in October. India's exports have
plunged into the negative zone after a gap of six months. An export
contraction was last witnessed in March when it fell 3.15%. Coupled
with the largely unexpected decline in exports, a surge in imports of
gold kept the trade deficit at $13.35 billion in October against the $10.59
billion a year earlier. The deficit was thankfully a bit lower than that in
September when it stood at an 18-month high of $14.24 billion.
Courtesy: The Financial Express

November 2014
MARKETS ROUND-UP
Markets to take cues from reforms and CPI data as

Q2 season comes to end
improved in the second half of
the month on the back of a
drastic decline in crude oil
prices to ~$85/barrel and
positive cues from around the
globe at the fag end of the
month as Bank of Japan's
M o n e t a r y Po l i c y B o a r d
unexpectedly decided to raise
the monetary base at an
annual pace of about 80 trillion
Yen.
October month was a tale of

two halves with the first half
showing weakness while the
second half saw a sharp
recovery
with
global
commodity prices correcting
sharply and an improvement
in global cues. A drop in
manufacturing PMI
(Purchasing Managers' Index)
on a month-on-month (MoM)
basis coupled with muted
global cues led to the sluggish
start to the month. Lower
industrial production data also
dented the market confidence.
The consumer price index
(CPI) for September 2014
cooled off to 6.5% vis--vis
7.8% in August 2014 (the
lowest value in the last 22
months). The WPI (wholesale
price index) was also lower
and came at its five-year low of
2.4%. The decline in both CPI
and WPI was cheered by the
markets as expectations of a
policy rate cut by the Reserve
Bank of India (RBI) in its next
monetary policy in the first
week of December resurfaced
again. The sentiments also
The Q2 earnings season in

October also influenced the
performance of the markets.
The banking sector continued
to show an improvement in the
operational performance with
both private and public sector
banks improving sequentially.
Consumer discretionary
stocks continued to show an
improvement in operational
performance, especially the
auto sector, which showed
positive earnings led by
volume growth on improved
sentiments and festive
demand. The FMCG (fast
moving consumer goods)
segment,
h o w e v e r,
November 2014
MARKETS ROUND-UP
disappointed as volume
growths continued to remain
low. The IT (Information
Technology) pack had a
disappointing earnings season
mainly
driven
by
an
unfavourable currency impact.
Pharmaceutical companies,
on the other hand, had a mixed
bag with a positive bias.
stance of the Fed on the policy

rate front, even as the
Quantitative Easing (QE)
programme ended. At the end
of the month, the Bank of
Japan unexpectedly surprised
the markets with a spurt of
monetary easing.
During the month, crude
(Brent) continued the decline
and ended at ~$85/barrel. The
trend continued in early
November as well, with crude
reaching the lows of $81.
The global markets have been

driven by contrasting news
flows across the globe. Post
the disappointing industrial
output data from Germany, the
German government had cut
the growth estimate for this
year as well as the next year to
1.2% and 1.3%, respectively.
The market sentiment further
deteriorated
as
the
International Monetary Fund
(IMF) cut its global growth
forecast to 3.3% from 3.4%,
the third such revision in the
year. The decline in crude oil
continued unabated in the
month clearly highlighting
growth concerns. The market
sentiment, however, received
a boost as the Federal Open
Market Committee (FOMC)
meeting ended with the
minutes revealing the dovish
Global markets
The US markets continued to
trade with a negative bias
through the month but ended
with a strong positive bias post
the announcement from the
Bank of Japan. Major indices,
Dow Jones, S&P 500 and the
Nasdaq gained about 1.9%,
2% and 2.8%, respectively.
European markets, however,
remained weak despite the late
surge in the indices in the last
two sessions while the FTSE
lost 2.8%. The German Dax
and French CAC lost 3.3% and
5 % , r e s p e c t i v e l y. A s i a n
markets, also gained in the last
two sessions to end on a
positive note with the Nikkei
6
November 2014
MARKETS ROUND-UP
and Shanghai SSEC gaining
0.6% and 2.6%, respectively,
while the Hang Seng posted a
gain of 3.3%.
shifts to government reforms and

RBI policy
As the earning season comes
to an end without much
surprise (negative or positive),
the markets will eagerly look
towards government reforms
as well as the RBI's policy
stance (next policy meet on
ecember 2). In order to
expedite the reforms process,
the Modi government initiated
the much awaited portfolio
expansion by inducting
technocrats and cadre
workers in the Cabinet. After
the clear mandate for the BJP
in Haryana and the emergence
as the largest party in
Maharashtra, this expansion
will be construed as a step in
the right direction and is likely
to be cheered by the markets.
Falling crude prices and
improving CPI numbers are
likely to add to the buoyancy
with hopes of dovish
comments by the RBI in its
next policy meet. In this
scenario, markets are likely to
pay less attention to the global
cues and focus on the
domestic situation.
Domestic markets
The foreign institutional
investors (FIIs) continued to
remain net buyers in the Indian
markets although the pace has
considerably slowed down
over the past couple of months
and the net buy figure was ~`
900 crore while domestic
institutional investors (DIIs)
heavily bought to the tune of
~` 5,700 crore led by strong
inflows into mutual fund
schemes.
The Nifty and Sensex ended
firmly in the positive territory
for the month with most
sectoral indices also ending
the month in the green. Except
BSE Realty (-1.8%) and BSE
FMCG (-1.8%), all other indices
ended October on a strong
note. BSE Bankex, BSE Power,
BSE PSU, BSE Auto and BSE
Oil saw sharp gains of 10.7%,
9.5%, 7.2%, 4.7% and 4%,
respectively, while BSE IT and
BSE Healthcare ended the
month flat.
Outlook: Post Q2 numbers, focus
November 2014
TECHNICAL OUTLOOK
Bulls reign supreme; index eyeing 28800
towards 28,800/8,650 levels
over the medium-term. The
October 2014 low of
25,910/7,723 will act as a key
short- term base for the
markets.
Benchmark indices overcame

huge bouts of volatility amid
weak global cues owing to
worries about global growth
and the end of years of US
stimulus. After displaying
resilience in the face of a
volatile global environment,
market sentiments were
boosted by reform measures
announced by the government
and a strong verdict in the state
assembly elections. The
benchmarks (Sensex and
Nifty) staged a firm rebound
precisely from the close to our
earmarked support zone of
26,000/7,800 levels and surged
to new all-time highs in line
with our expectation.
The decline unfolding since

hitting the September 2014
high of 27,354/8,180 displayed
all the signs of a healthy
corrective decline within an
established uptrend and reaffirmed the overall positive
price structure as index
retraced its 25-session decline
in just 8 trading sessions.
The resolution past September
2014 highs opens target of
28,800/8,650 being the depth
of the September correction
(27,354-25,910) as projected
above September 2014 highs
over a medium term.
Sectorally, the banking index
resumed its leadership role
and ventured into new all-time
highs
ahead
of
the
benchmarks. We expect
banking
to
lead
the
benchmarks, going forward.
The auto and capital goods
sectors are also expected to
outperform in the coming
month.
The dash towards new all-time

highs
after
one
month
corrective
phase
signals
resumption
of
upward
momentum after a brief pause.
Going forward we expect
benchmarks to remain in a
rising trajectory and head
November 2014
TECHNICAL OUTLOOK
BSE Sensex Weekly Candlestick Chart
Index concluded a month long

corrective phase and signalled
resumption of upward
momentum by recouping its last
falling segment in faster time. We
expect the index to remain in
rising trajectory and head
towards 28800 over the medium
term
Extended rally measuring

3244 pts so far
3098 pts
2976 pts
21 week EMA
Weekly RSI tested its own

rising trend line support
along with price approaching
its key support of 26000
levels and produced a strong
pullback indicating strength
in the up move
Source: Bloomberg, ICICIdirect.com Research
The views expressed in the article are personal views of the author and do not necessarily
represent the views of ICICI Securities.
November 2014
DERIVATIVES STRATEGY
Nifty to move towards highest call base of 8500
has seen continuous
accumulation, which remains
the target.
Amit Gupta
Head - Derivatives Research,
ICICI Securities
Option open interest of November Series

250000
Put OI
OI (No. of Contracts)
Nifty recovered sharply in the

second half of the October
series and is currently trading
close to 8400 levels. At the
same time, strong global cues
coupled with sustained foreign
institutional investors' (FII)
interest in the equities also
helped Nifty to scale new highs
and Nifty is likely to hit target of
8500.
150000
100000
50000
0
7800
7900
8000
8100
8200
8300
8400
8500
8600
8700
8800
Bank Nifty: likely to move

towards target of 17500/17800
The Bank Nifty was the key
catalyst in the current up-leg of
the Nifty. Post the cool-off seen
in consumer price index (CPI)
and wholesale price index
(WPI) readings the index
rocketed 1400+ points to
16600 levels.
Open interest in Nifty futures

has risen to 1-year high and it
almost tested 25 million shares
during the series. FIIs have
bought more than ` 11,000
crore since October 17 when
Nifty made the low of 7730.
Looking at the significant buildup of positions, a round of
profit booking cannot be ruled
out. However, Nifty is likely to
find buying support once again
near its previous highs of 8200
which also coincides with the
highest Put open interest base.
The banking space also got a

push from bond yields. Yields
came down to a 13-month low
of 8.32 (10-year government
security (G-Sec)).
With most private sector banks
reporting stronger net interest
margins (NIMs) and profit
margins, there is a clear
preference for private sector
On higher side, 8500 call strike

Call OI
200000
10
November 2014
Call OI
Since the election verdict, this

space has been relatively
under-owned. Until recently,
most stocks were struggling to
take out their election verdict
highs. Sticky inflation was one
of the key reasons for this.
However, as inflation cooledoff sharply during the month
coupled with a weak set of Q2
numbers from technology
majors, banking stocks are
back in favour. Banking stocks
are likely to move up in the
coming month while the short
open interest (OI) in many of
the stocks is still high and is
seeing a rollover of these
positions into the November
series.
17500
17300
17100
16900
16700
Put OI
India VIX: Likely to consolidate

above 10.5 as geo-political and
economic risks stay elevated
globally
On expected lines, India
Volatility Index (VIX) saw a
jump of 30% to 17 levels as the
Nifty fell on the back of weak
global cues. However, towards
the month end, as markets
recovered, the fear gauge also
cooled-off.
Going ahead, as geo-political
risks and global market jitters
remain alive, the VIX could
remain higher above its
extraordinary low levels of 10.5
seen in September.
Looking at the options build

up, the highest Call base
remains the target for the
index, which is at 17500
followed by 18000 strike. On
the lower side, support is
placed at 16000 levels, which is
the highest Put base.
16500
16300
16100
15900
15500
15700
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
banks over public sector

banks. This bodes well for the
banking index, as private
banks have more than threefourth weightage in the
banking index.
On a positional basis, the 50 &

100 week moving average is at
18.2. This level is likely to be
tested only in the event of the
Nifty reaching 7800.
11
November 2014
participation in the move.
Russell 2000 Index has erased
all of its declines in the recent
bounce back, which was not
seen previous pull backs as
Russell Index has under
performed S&P500.
S&P 500: Current momentum likely

to continue above 1980 levels
After witnessing the worst
selling pressure of last 3 years
which eroded almost 10%
value, the recovery was even
more prominent as S&P 500
surpassed its highest Call base
of 2000 strike to make a new life
high. We expect the current
momentum is unlikely to fade
out until S&P move below 1980
levels once again.
S&P has shown tendency of

moving towards its 50-DMA
(displaced moving average) in
case of any intermediate profit
booking. Currently 50 DMA for
S&P is placed near 1980 levels
which makes it buying level on
declines.
160000
Call OI
140000
Put OI
120000
100000
80000
60000
40000
20000
Unlike the previous pull backs,

S&P 500 Index has found
support of small-cap stocks as
well suggesting broader
12
2100
2090
2075
2050
2040
2020
2000
1980
1960
1950
0
1940
Even for coming up December

series, the highest Call option
base is placed at Call 2000
strike along with the
noteworthy Put base. We
expect S&P to continue its
momentum on the back of
stuck up Call writers. Only a
move below 1980 levels is
likely to change the ongoing
trend.
S&P500 options open interest for December Series
Dax: Immediate support is placed at 9200
The German Index, Dax, has

underperformed most of its
peers as it is still trading below
its breakdown levels of 9600.
Despite a thousand points
recovery, under-performance
can largely be attributed to
weakening currency of
Eurozone.
The highest Put base of
German Index is placed at 9000
November 2014
strike for December series
which is likely to remain crucial
support for the index in the
near term. At the same time,
Call base is placed evenly
above 9500 strike. Hence a
move above 9500 may induce
fresh momentum in the DAX.
Dollar Index: Likely to surpass 2008

highs towards our immediate target
of 90
As expected, Dollar Index did
not move below 84 levels and
resume its upward trend
towards surpassing its
previous highs. Along with
s t r e n g t h i n d o l l a r,
simultaneous selling pressure
in the US Bonds suggests
money flow from safer assets
to risky assets due to
expectations of sustained
liquidity flow.
Importantly, both 100 and 200

DMA levels for German Index
are placed in the vicinity of
9500 strike indicating
immediate resistance for the
index. Hence, fresh upward
bias is expected if DAX is able
to sustain above these levels.
The Dollar Index in the last

couple of months has moved
up sharply and posted the
highest quarterly gains since
2008. The primary move from
80 to 85 in Dollar Index was
triggered by weakness in Euro.
Unlike the rest of equity

markets, volatility index for
German Index is still at higher
at 16.5. US VIX is near 12.7
while India Volatility Index is
near 14 levels. Higher volatility
i n d e x i n DA X i n d i c a t e s
prevailing skepticism in the
German markets.
Statements from European

Central Bank (ECB) hinted at
further expansion of balance
sheet, which triggered another
round of weakness in Euro
currency. We expect Euro to
remain weak and test 2010
lows of 120 in days to come. At
the same time, coupling effect
was observed from Japanese
60000
50000
40000
30000
20000
10000
9800
9700
9600
9500
9400
9300
9200
9100
9000
8900
0
DAX option open interest for December Series
13
November 2014
Brent Crude have declined
sharply to 60,000 contracts
from 240,000 contracts seen in
the June series. The current
trend of long liquidation is
likely to continue in the Brent
and declines are likely to get
extended.
Yen, which is at the highest

levels since 2008.
Both Euro and Japanese Yen
cumulatively holds more than
70% weight in the Dollar index,
given the weakness in the
major currencies, we expect
Dollar index to surpass its 2008
highs of 89.5 and move
towards 90 in the near term.
Along with speculators, Hedge

position holders for Brent are
still bearish as almost 39%
positions are still hedged
against further decline. Despite
Crude trading near 4 year lows,
such a high hedging
percentage indicates
skepticism prevailing for the
crude prices.
Brent Crude: Downsides likely to

extend for target of 78/75 levels
Recent declines have forced

crude to breach its three-year
consolidation range. It may
eventually find support at its
July 2010 breakout levels of
$78. Hence, our downside
positional target in Brent is at
$78.
As expected, Crude failed to

witness any meaningful
recovery and hovered near 80
levels for most part of the last
month. The Put base placed at
85 strike remained major
hurdle for Crude and it failed to
sustain above these levels.
12000
As per U.S. CFTC (Commodity

Futures Trading Commission)
data, net long positions in
Call OI
Put OI
8000
4000
87
86
85
84
83
82
81
80
79
78
77
0
Crude option open interest for December Series
The views expressed in the article are personal views of the author and do not necessarily
represent the views of ICICI Securities.
14
November 2014
STOCK IDEAS
SKF India: Leader in the Bearings space

Company Background
the industrial segment, SKF

India supplies to all major
industries like heavy industries
such as steel, mining etc,
agriculture, power, capital
goods, oil & gas and food &
beverage (F&B). Within
industrial, ~65% pertains to
aftermarket and 35% to OEMs.
Its clientele includes: heavy
industries: SAIL, Coal India,
JSW, Essar, Tata Steel; energy:
NTPC, Tata Power, Suzlon;
industrial machinery: Bhel, GE,
L&T; oil & gas: Reliance, ONGC,
Cairn India; F&B: Nestl, ITC,
Pepsi. SKF India has three
manufacturing facilities: Pune,
Haridwar and Bangalore.
Incorporated in 1961, SKF India

is the Indian subsidiary of the
Sweden based SKF Group,
which is a global leader in
bearings, seals and
mechatronics & lubrication
systems. The company is a
leader in the Indian bearing
market with ~28% market
share. SKF is well-diversified
across the automotive (54% of
revenues including exports,
which are manufactured in
India) and industrial segment
(46% of revenues, which are
mainly imported from SKF
Group companies) as well as
S K F Te c h n o l o g i e s ( t h e
subsidiary of the parent). In the
automotive segment, SKF India
caters to both two-wheelers as
well as four-wheelers (PV
(passenger vehicles), CV
(commercial vehicles), tractors,
etc.) of which two-thirds come
from original equipment
manufacturer (OEM) and
remaining from the
replacement markets. SKF India
caters to almost all automotive
OEMs in India such as Tata
Motors, Hero MotoCorp, HMSI,
Maruti, Bajaj Auto, Mahindra &
Mahindra, TVS, Bosch, etc. In
Investment Rationale
Leading bearing manufacturer with
equal presence in industrial & auto
SKF is the leader in the Indian
bearing market (pegged at `
8,000-8,500 crore) with ~28%
share. Known for deep groove
ball bearings (forming ~35% of
revenues and ~45% market
share), SKF is equally present
across the industrial (46% of
sales) and automotive
segments (54% of sales
including exports). With
expected industrial revival and
15
November 2014
STOCK IDEAS
up-tick in auto demand going
ahead, SKF is well poised to
capture the opportunity given
its strong balance sheet with
cash flow generation and
scalability bandwidth. We
expect revenues to grow at
13.3% compounded annual
growth rate (CAGR) over CY1316E to ` 3,266 crore.
Localisation of industrial bearing to

boost margins & market share
Industrial bearings (46% of
revenues) are sourced from the
parent (~90%) and SKF
Technologies. We expect
import substitution of industrial
bearings, through ramp up in
SKF Technologies, to be a key
revenue driver for SKF's
revenues and margin
expansion as SKF would
improve its turnaround time
while the resultant cost saving
would lead to market share
gains. Consequently, we expect
industrial (traded goods) sales
to grow at 11.6% CAGR over
CY13-16E with overall EBITDA
margins recovering to 13.7% in
CY16E vs. 11.5% in Cy13.
Early signs of recovery seen in auto,

SKF to be key beneficiary
For year-to-date (YTD) Cy14,
the auto sector has shown signs
of recovery with ~12.3%
growth (mainly driven by two
wheeler segment growth,
which was up 16.3% year-onyear (YoY)). With the auto
industry finally showing signs of
recovery after nearly two years
of a demand slump, new
launches and product refreshes
are the key, going ahead. SKF,
being the largest bearings
player
in
the
industry,
commands
scalability
bandwidth coupled with a lean
balance sheet and is poised to
capture the opportunity arising
from the revival in demand in
the automotive segment. We
expect SKF's manufactured
product (auto) sales to exhibit
~14.6% CAGR over CY13-16E,
in line with overall auto growth
assumptions.
Premium valuations driven by

growth prospects ahead
SKF is trading at 20.8x CY16E
EPS. Given SKF's leadership
position in the bearing space,
strong earnings growth (CAGR
of 24% in CY13-16E), healthy
balance sheet with robust cash
flow generation (` 680 crore
over CY14E-16E) and core
return on equity (RoE) in excess
of 30%, we ascribe a P/E
multiple of 24x (implying a PEG
(Price/Earnings to Growth) of
1x) on CY16E EPS. Hence, we
assign a target price of `
1,448/share with a BUY rating.
16
November 2014
STOCK IDEAS
Key Financials
Net sales (` crore)
CY13
CY14E
CY15E
CY16E
2,246.4
2,446.8
2,802.4
3,266.5
EBITDA (` crore)
261.4
318.9
376.2
453.1
Net profit (` crore)
166.7
223.4
263.6
318
31.6
42.4
50
60.3
EPS (`)
Valuations Summary
CY13
CY14E
CY15E
CY16E
P/E (x)
39.7
29.6
25.1
20.8
Target P/E (x)
45.8
34.2
28.9
24
EV / EBITDA (x)
23.9
19.2
16
12.9
P/BV (x)
5.2
4.7
4.2
3.7
RoNW (%)
13
15.9
16.7
17.6
16.6
18.9
20.2
21.7
RoCE (%)
Stock Data
Market capitalization (` crore)
6,620
Total debt (CY13) (` crore)
Cash and investments (CY13) (` crore)
376
Enterprise value (` crore)
6,244
52-week High/ Low (`)
1,248/ 511
Equity capital (` crore)
52.7
Face value (`)
10
FII holding (%)
15.5
DII holding (%)
17.1
Key risks include: Japanese competition which may thwart market share,
Sustained slowdown in key segment, Raw material cost rise, Delay in
SKF Technologies ramp up may delay localisation process and Forex
Risk impact on financial performance.
(EBITDA: Earnings before interest, taxes, depreciation, and amortization; EPS:
Earnings per share; P/E: Price-to-earnings; EV: Enterprise value; RoNW: Return
on net worth; RoCE: Return on Capital Employed; FII: Foreign Institutional
Investors; DII: Domestic Institutional Investors)
17
November 2014
STOCK IDEAS
L&T: Best way to capture capex recovery cycle

Company Background
L&T is the most diversified

engineering & infrastructure
developer in the country with a
presence across all segments
of infrastructure i.e. power,
roads, hydrocarbons &
process industries. It is also
planning to scale up in niche
areas like defence, nuclear
power and shipbuilding, which
have the potential to add
significantly to overall
revenues in the next three to
five years (for instance,
opening of defence foreign
direct investment (FDI) and
ordering can help L&T achieve
scale of 5x in terms of defence
segment revenues from
current ` 1,000 crore run rate).
Over the last couple of years,
L&T has added capacity to
meet increasing volumes. For
instance, the company had
added 5,000 MW (MegaWatts)
of power equipment facility,
the heavy engineering facility
in Oman (FY10) and recently
added a complex shipbuilding
facility. Hence, we expect L&T
to register a revenue CAGR
(compounded annual growth
rate) of 16.58% in FY14-16E as
it commands a strong order
backlog of ` 2,14,000 crore,
thereby providing visibility for
After being incorporated in

1938, Larsen & Toubro (L&T)
has come a long way to
become India's largest
engineering and construction
(E&C) company. The company
has business interests in
engineering, construction,
manufacturing, information
technology and financial
services. Considered the
bellwether of the Indian
engineering sector, it is
renowned for its strong
execution capabilities and
professional management.
The company commands a
dominant presence in India's
i n f r a s t r u c t u r e , p o w e r,
hydrocarbon, machinery and
railway related projects. With a
customer base spanning
across 30 countries, the
company has significantly
increased its global footprint,
along with a notable presence
in the Middle East. The
company operates across
different business verticals
through the independent
companies.
Investment Rationale
Proxy play on India Infrastructure
story
18
November 2014
STOCK IDEAS
three years.
component in FY16E over

FY14 while depreciation and
interest costs are expected to
exhibit a CAGR of ~9% and
3%, respectively. Hence, we
expect L&T's PAT to be at `
6,461 crore in FY16E vs. ` 5,247
crore in Fy14.
Ghost of hydrocarbon segment

losses receding gradually
In Q1FY15, hydrocarbon
business reported an EBIT
(earnings before interest and
taxes) loss of ` 942 crore. This
was mainly due to cost/time
overruns in Middle East
hydrocarbon orders to the
tune of ` 10,000 crore. The
management expects these
orders to get executed by
FY15E. However, in Q2FY15,
the segment reported a minor
loss of ` 54 crore indicating
that most provisions are
provided for and losses will be
completely provided for in the
next six to nine months.
Hence, we expect most of the
pain to be over by Q4FY15.
Worst seems to be getting over as

FY16E to see robust execution;
recommend 'Buy
Concerns such as a depleting
order book in the power/heavy
engineering segment seem to
be abating as ordering trends
in H1FY15 for these segments
seems to be encouraging. This,
we believe will lead to robust
revenue booking over Fy16
17E coupled with continued
strong execution of the
infrastructure segment. Even
the ghost of hydrocarbon
seems to be factored into the
valuation. We assign a target
price of ` 2,206 (24-months
perspective) as we believe by
December 2015, we will get
clarity on the intensity of the
capex (capital expenditure)
cycle recovery and markets
will start discounting into
FY17E -18E earnings and
visibility. Thus, we believe
L&T's is the best option to play
the capex recovery cycle in
India. We recommend 'Buy'.
Revenue and PAT to exhibit 16.8%

and 11% CAGR in FY14-16E on pick
up in execution, margin stability
We expect revenue CAGR of
16.8% over FY14-16E while
EBITDA (earnings before
interest, taxes, depreciation,
and amortization) CAGR over
the same period is expected at
13.4%. Hence, with operating
leverage in play, our PAT (profit
after tax) CAGR over FY14-16E
stands at ~11% as we have
assumed flattish other income
19
November 2014
STOCK IDEAS
Key Financials
Net sales (` crore)
60,874
66,580.2
74,114.5
90,823.8
EBITDA (` crore)
6,403.9
7,280.5
7,915.8
9,365.3
Net profit (` crore)
4,729.5
5,247.2
5,374.8
6,461.8
51.1
56.7
58.1
69.9
EPS (`)
Valuations Summary
P/E (x)
32.3
29.1
28.4
23.6
Target P/E (x)
18.9
17.1
16.7
13.9
EV / EBITDA (x)
25.1
22.1
20.3
17.2
5.2
4.7
4.2
3.8
P/BV (x)
RoNW (%)
16.2
16.2
14.9
16
RoCE (%)
14.8
15.1
14.8
16.2
Stock Data
Market capitalization (` crore)
1,52,608.5
Total debt (FY15E) (` crore)
10,836.2
Cash and investments (FY15E) (` crore)
2,799.3
Enterprise value (EV) (` crore)
16,0645.4
52-week High/ Low (`)
1.5
Equity capital (` crore)
185
Face value (`)
DII holding (%)
36.6
FII holding (%)
15.6
Key risks include: Delay in macro economic environment pickup, policy

inaction and rising competitive intensity from domestic as well as
Chinese and Korean players.
(EBITDA: Earnings before interest, taxes, depreciation, and amortization; EPS:
Earnings per share; P/E: Price-to-earnings; EV: Enterprise value; P/BV: Price-tobook value; RoNW: Return on net worth; RoCE: Return on Capital Employed; DII:
Domestic institutional investors; FII: Foreign Institutional Investors)
20
November 2014
FLAVOUR OF THE MONTH

Tax implications of various investments
One of the important aspects of investments, which, we as investors often
overlook, is: Tax-efficiency of returns. Tax efficiency is a measure of how
much of an investment's return is left over after taxes are paid. Tax
efficiency is essential in order to maximize net returns on our investments.
As regards the return of investment, one needs to consider the real net
returns and not gross returns. There are various tax implications, as
regards to returns on investments, which one needs to consider before
investing, says CA Dhananjay J. Gokhale. A basic understanding of
investment income and taxes can go a long way in helping you build a taxefficient portfolio. Mr. Gokhale takes us through the various avenues of
investments across asset classes, in the light of tax implications. Read on.
company pays dividend
distribution tax or DDT at
17.65% on the same. (It Was
15% up to September 30, 2014
and has been increased to
17.65% w.e.f. October 01,
2014). For details on DDT,
please refer Section 115O of
Income Tax Act, 1961.
CA Dhananjay J. Gokhale
INVESTMENTS IN EQUITY
When a stock is sold, the same

is considered as capital gain
except in case wherein the
investment is made in the
course of business of trading in
securities and not as an
investment. As regards the tax
aspect on Gain / (Loss) on sale
of stock the period of holding is
important to determine the
taxability of the income, which
will be clear from the following
table:
Stocks (Equity and Preference

Shares):
There are two types of income
which are earned from stock,
viz., Dividend and / or Capital
Gain / (Loss) when the stock is
sold.
As regards the tax aspect on
dividend on shares of
d o m e s t i c c o m p a n y, t h e
dividend is not taxable in the
hands of the investor as the
21
November 2014

Type of security
Equity shares /
preference
shares which are
listed
Equity shares /
preference
shares which are
not listed
Period of
holding
Up to 12
months
More than 12
months
Up to 36
months
More than 36
months
Type of capital
gain / (loss)
Short -term
capital gain /
(loss) at 15%
Long -term
capital gain /
(loss )
Short -term
capital gain /
(loss)
Long -term
capital gain /
(loss)
Taxability
Taxable
Not Taxable if
securities
tran saction tax
(STT ) paid
Taxable if STT is
not paid
Taxable
Taxable
There are various avenues to prudently save the taxable longterm capital gains, which are as follows:
Section
54F
Particulars
If net consideration
is
invested in residential house
property purchased either
before one year or within
two years or constructed
within three years
54EC
If amount of capital gain

invested in specified
securities
is
Amount / Limitations
The benefit cannot be availed
if the assessee owns more
than one house property
(other than the newly
acquired / constructed
property) as on the date of
capital gain
If the amount is not utilised
for purchase / construction
of house property by the end
of the financial year, the
same needs to be deposited
in Capital Gain Scheme
Account on or before the due
date of filing Income Tax
return
Rs. 50 lakh
Employee Stock Option Plans

(ESOPs):
offering a stake in the

ownership of the company.
To d a y, t h e r e a r e m a n y
corporates who offer ESOPs to
its employees wherein the
employees are rewarded by
As regards the taxability of the

ESOPs, when an employee
exercises the option under
ESOP, i.e., when he subscribes
22
November 2014

to the equity shares (securities)
of the company, his taxability is
dependent on the Fair Market
Value (FMV) as on the date of
exercising the option:
w.e.f. financial year 2005-06,

thanks to the provisions of
Fi n a n c e A c t , 2 0 0 5 . T h e
classification of income from
derivatives as capital gain or
business income depends on
various factors in relation to
the assessee such as:
(I) If the FMV is lower than the

exercise price, the difference is
taxable in the hands of the
employee as a perquisite and is
considered as Income from
Salary and taxed accordingly;
(I) I n t e n t i o n b e h i n d
undertaking transactions
(ii) Frequency of transactions
(iii) Holding period
(iv) Volume of transaction
(ii) If the FMV is higher than the

exercise price, generally the
employee does not exercise
the option to subscribe the
equity shares. In case if it is
exercised, there is no tax
incidence.
However, as all the above

factors are subjective in nature,
there is always a grey area to
determine the nature of
income from derivatives
transactions. In case if the said
income is considered as
business income, the
compliance of tax audit needs
to be kept in mind, if the
turnover (which is gross
summation of profit and loss
from derivative transactions),
exceeds ` 1 crore during a
financial year and in other
cases, compliance with section
44AD needs to be ensured.
When equity acquired under

ESOPs are sold, the same are
governed by the regulations
applicable to equity shares,
except that the cost price is
required to be considered as
FMV or exercise price
whichever is higher
(presuming that the taxability
of the same is taken care of at
the time of exercising the
option as stated in the above
para).
Equity Mutual Funds:

There are two types of income
which are earned from equityoriented mutual funds, viz.,
Dividend (in case of dividend
Derivatives:
The transactions in derivatives
are not considered as
Speculative Transactions
23
November 2014

mutual fund pays DDT at
14.28% on the same (Note:
14.28% is for individual
investors and for others it is
42.86%). For details on DDT,
please refer Section 115R of
Income Tax Act, 1961.
option) and/or Capital Gain/

Loss when the units are
redeemed.
As regards the tax aspect on
dividend (income) from equityoriented mutual funds, the
dividend is not taxable in the
hands of the investor as the
When mutual fund units are sold or redeemed, the same is

considered as capital gain, which is subject to taxability as
follows:
Type of
security
Equity
oriented
mutual funds
where in STT
is paid
Period of
holding
Up to 12 months
Equity
oriented
mutual funds
where in STT
is not paid
Up to 36 months
More than 12
months
More than 36
months
Type of capital
gain / (loss)
Short -term
capital gain /
(loss)
Long -term
capital gain /
(loss)
Sho rt -term
capital gain /
(loss)
Long -term
capital gain /
(loss)
Further, in case if an assessee

invests in Equity Linked
Savings Scheme (ELSS)
mutual funds, the investment is
eligible for deduction from his
Taxability
Taxable
Not t axable
Taxable
Taxable
taxable income to the extent of

` 1,50,000 (Refer section 80C of
Income Tax Act, 1961) with a
lock-in period of three years
from the date of investment.
Following table will give a comparative statistics as regards the

various angles related to tax implications w.r.t. growth and
regular (dividend) option of equity mutual funds.
Holding period
wherein STT is paid
Equity mutual
fund Growth
Up to 12 months
Taxable as shortterm capital gain

at 15%
More than 12 months Not taxable
Equity mutual fund Dividend

Principal amount
Dividend
DDT p aid by MF
at 14.28%
Taxable as short-term
capital gain at 15%
DDT paid by MF at
14.28%
Not taxable
24
November 2014

Thus, an investor should
prudently choose the type of
scheme, depending on his
taxable income and applicable
tax bracket.
The taxability of income (in the

form of dividend / gain arising
out of redemption of units) is
same as in case of equity
mutual funds.
Rajiv Gandhi Equity Savings

Scheme (RGESS):
Unit Linked Insurance Plans

(ULIPs)/ Unit Linked Pension Plan
(ULPPs)/ National Pension System
(NPS):
The scheme was launched as a

new tax advantage saving
scheme for equity investors in
India, who are first time retail
investors in securities market.
Under the scheme an investor
was allowed to invest a
maximum amount of ` 50,000
per financial year and was
eligible for 50% deduction
from his taxable income. The
said scheme can be availed by
the investor for three
consecutive years and the
gains arising out the scheme
can be realized after one year.
The said scheme is applicable
for investors with annual
income not more than ` 12 lakh
per annum.
The investment made under

ULIP as well as ULPP/NPS, is
eligible for deduction from
taxable income, under section
80C to the extent of ` 1,50,000
per annum. (In case of NPS,
eligible for deduction under
section 80CCD to the extent of
` 1,00,000 within over all limit
of ` 1,50,000 under section
80CCE). However, as regards
the taxability from encashment
of the same, one needs to
check various aspects which
are summarised in the
following table:
25
November 2014

Type of
investment
ULIP
Event for
encashment
Death of policy
holder
Taxability
Not taxable in
the hands of the
recipient
Not taxable in
the hands of the
recipient
Taxable in the
hands of the
recipient
Not taxable in
the hands of the
recipient
Not taxable in
the hands of the
recipient
Benefit availed
under section
80C will be
reversed and
the surrender
value will be
required to be
offered to tax
1/3 rd of the
surrender value
is tax -free and
balance 2/3 rd
needs to be
used for
purchas e of
annuity plan
Not taxable in
the hands of the
recipient
Taxable
Surrender of
policy before
maturity
ULPP
Surrender of
policy at the
time of maturity
Death of policy
holder
Surrender of
policy before
maturity
Surrender of
policy at the
time of maturity
NPS
Death of policy
holder
Closure or
opting out of the
scheme or
pension
received from
annuity plan
purchased
As regards NPS, there is an

additional benefit available for
employees which is in addition
to the overall ceiling of `
1,50,000 under section 80CCE,
wherein the contribution is
Conditions
If paid for five

years
If not paid for
five years
made by an employer to
account of an employee under
NPS, subject to a ceiling of 10%
employee's salary will be
eligible for deduction from his
taxable income. (Please refer
26
November 2014

sub-section (2) of section
80CCD of Income Tax Act, 1961
for more details on this
additional benefit).
same is taxable in the hands of

the assessee.
Corporate Fixed Deposits (Fds):
The investment in corporate
fixed deposits (FDs) does not
offer any tax benefit. As
regards the interest received
on corporate FDs, the same is
assessee.
INVESTMENTS IN FIXED-INCOME
Bank Fixed Deposits (Fds): There
are no tax-incentives for
investment in bank fixed
deposits (FDs) except for Fds
kept with a scheduled bank
with a lock-in period of not less
than five years, wherein
deduction under section 80C is
available. However, such taxbenefit FDs are subjected to
certain conditions like lock-in
period of at least five years, no
advances can be granted
against security of these Fds.
As regards the interest
received on bank FDs, the
Debentures / Non-Convertible
Debentures (NCDs):
The investment in Debentures
/ NCDs does not offer any tax
benefit. As regards the interest
received on Debentures /
NCDs, the same is taxable in
the hands of the assessee.
Debt Mutual Funds (Including Fixed
Maturity Plans or FMPs):
The investment in debt mutual funds does not offer any tax
benefit. As regards the taxability of the income earned on the
debt mutual funds, the taxability is as per following table:
Holding period
Debt mutual
fund Growth
Up to 36 months
Taxable as
short-term
capital gain
More than 36
months
Taxable as
long-term
capital gain at
20% after
indexation
Debt mutual fund Dividend

Dividend
Principal
amount
DDT paid by MF
Taxable as
at 33.33%
short-term
(42.86% if the
capital gain
investor is other
than Individual)
DDT paid by MF
Taxable as longat 33.33%
term capital
gain at 20%
after indexation
27
November 2014

PPF/ EPF/ KVP/ NSC/ SCSS/ Other Post Office Savings Schemes:
There are various other avenues for investments which are
fixed-income generating and the taxability w.r.t. the same is
given in the following table:
Type of
investment
Public Provident
Fund (PPF)
Employees
Provident Fund
(EPF)
Kisan Vikas
Patra (KVP)
National
Sa vings
Certificates
(NSC)
Senior Citizen
Savings Scheme
(SCSS)
Five -year time

deposit with
Post Office
Recurring
Deposit (RD) /
Monthly Income
Scheme (MIS)
with Post Office
Tax benefit
available on
investment
Eligible for
deduction under
section 80C
within overall
limit of Rs.
1,50,000 p.a.
Eligible for
deduction un der
section 80C
within overall
limit of Rs.
1,50,000 p.a.
Taxability on
income earned
Tax -free
Tax -free
Taxability on
withdrawal of
principal amount
Tax -free
Tax -free,
provided the
employee is in
employment for
a continuous
period of not
less than five
years, otherwise
taxable
Not taxable
No benefit
Taxable
Eligible for
deduction under
section 80C
within overall
limit of Rs.
1,50,000 p.a.
Eligible for
deduction under
section 80C
with in overall
limit of Rs.
1,50,000 p.a.
Eligible for
deduction under
section 80C
within overall
limit of Rs.
1,50,000 p.a.
No benefit
Taxable but
eligible for
deduction
under section
80C
Not taxable
Taxable
Not taxable
Taxable
Not taxable
Taxable
Not taxable
28
November 2014

INVESTMENTS IN CASH /LIQUID
ASSETS
individual.
Savings Bank Account:
The investment in liquid

mutual funds does not offer
any tax benefit. However, these
mutual funds are popular
amongst the investors for
parking of surplus funds and
earn better returns as
compared to short-term fixed
deposits of banks and also due
to very lower or nil exit load
charged by the mutual funds.
Liquid Mutual Funds:
The interest earned on savings

bank account in excess of `
10,000 p.a. is taxable in the
hands of the individual
(Deduction to the extent of `
10,000 is available under
section 80TTA of Income Tax
Act, 1961). In case if the
amount of interest does not
exceed ` 10,000, the same is
not taxable in the hands of the
As regards the taxability of the income earned on the liquid

mutual funds, the taxability is as per following table:
Holding period
Liquid mutual
fundsGrowth
Up to 36 months
Taxable as
sho rt -term
capital gain
More than 36
months
Taxable as
long -term
capital gain at
20% after
indexation
Liquid mutual fundsDividend

Dividend
Principal
amount
DDT paid by MF
Taxable as
at 33.33%
short -term
(42.86% if the
capital gain
investor is other
than Individual)
DDT paid by MF
Taxable as longat 33.33%
term capital
gain at 20%
after indexation
INVESTMENTS IN GOLD
following forms attracts same

tax treatment w.e.f. FY: 201415:
In India, almost every

household invests in gold in
various forms (though
traditionally is purchased in
physical form) and at various
occasions.
Investment in gold in any of the
29
I)
Physical Form
ii)
Gold Exchange Traded

Funds (ETFs)
iii)
Gold Mutual Funds
November 2014

Holding period
Taxability
Taxrate
Up to 36 months
Taxable as short term

capital gain
Will be clubbed along

with the overall
income, thus,
app licable tax bracket
depending on the
taxable income of the
assessee
More than 36 months
Taxable as long
capital gain
20% after indexation
-term
There are various avenues to prudently save the taxable longterm capital gain, which are as follows:
Section
54F
Particulars
If net consideration is
property purchased either
within three years
.
54EC
If amount of capital gain is

securities
INVESTMENTS IN REAL ESTATE
capital gain
return
Rs. 50 lakh
considered as Income from

House Property and taxed
according to the provisions
under Income Tax.
Physical Property:
The taxability of income from
investment in real estate
(physical investment) is
As regards the gains arising out of sale of physical property, the

tax incidence and avenues of saving of tax are as follows:
30
November 2014

Type of security
Period of holding*
i) Residential
house property
Up to 36
months
ii) Land used for

agricultural
purposes
More than 36
months
Type of capital
gain / (loss)
Short -term
capital gain /
(loss)
Long -term
capital gain /
(los s)
Taxability
Taxable
Taxable
*To be calculated from the date of possession of the house property and not
from the date of purchase agreement
Section
Type of capital gain
Particulars
54
Residential
house property
If amount of capital
gain is invested in
residential house
property purchased
either before one
year or within two
years or
constructed within
three years
54B
Land used for

agricultural
purposes
gain is invested in
land to be used for
agricultural
purpose within two
years from the date
of transfer
54EC
gain is invested in
specified securities
31
No limit
If the amount is not
ut ilised for purchase
/construction of
house property by
the end of the
financial year, the
same needs to be
deposited in Capital
Gain Scheme
Account on or before
the due date of filing
Income Tax return
The land sold should
have been used for
agricultural purpose
for two years
immediately
preceding the date
on which transfer
took place
If th e amount is not
utilised for purchase
/construction of
house property by
the end of the
financial year, the
same needs to be
deposited in Capital
Gain Scheme
Account on or before
the due date of filing
Income Tax return
Rs. 50 lakh
November 2014

Real Estate Investment Trusts
(REITs):
ALTERNATE INVESTMENTS
The recent announcement by

the Securities and Exchange
Board of India (SEBI) as
regards guidelines for creation
of REITs, it is expected that it
would be a new investment
avenue for avid investors who
are on the look-out for nontraditional investment
a v e n u e s . H o w e v e r, t h e
success of REITs would largely
depend on the way the scheme
are drafted and launched. As
regards the taxability of the
REITs, presuming that the
same are launched as mutual
funds, is likely to be in line with
non-equity mutual funds. But
one needs to wait and watch
for the REITs to be launched to
understand the nitty-gritty of
taxation.
Art Effects /Private Equity (PE)

/Venture Capital:
These are unconventional
investment avenues, not
s u i t a b l e f o r r i s k- a v e r s e
investors, thanks to the
illiquidity of such investments
and uncertainty of income
generation on the same. As
regards the income
generation, the same may be
generated in the form of
dividend on Private Equity (PE)
investments, which has
taxability similar to dividend on
equity shares, which is not
investor. As regards income
received on Venture Capital,
the taxability depends on the
nature of instruments as to
whether the same is in the form
of units of mutual fund, or
equity or debentures.
The taxability on sale of investments made in Art (effects), Private

Equity and Venture Capital (whether in the form of units, equity or
debentures) is as follows:
Holding Period
Taxability
Tax Rate
Up to 36 months
Taxable as short-term
capital gain
Will be clubbed along

with the overall
income, thus,
applicable tax bracket
depending on the
taxable income of the
assessee
More than 36 months
Taxable as long-term
capital gain
20% after indexation
32
November 2014

Section
54F
Particulars
If net consideration is
property purcha sed either
within three years
54EC
If amount of capital gain is

securities
Portfolio Management Services

(PMS):
The taxability of investments
made under PMS depend on
the intention of the investor,
i.e., whether the same is to be
treated as business income or
capital gain. Depending on the
capital gain
return
Rs. 50 lakh
intention of the investor (which

is a subjective concept), the tax
incidence on such transaction
needs to be determined as
stated earlier in relevant type
of securities (dependent on the
type of investment, viz., equity,
debentures, etc.).
Note:The implication of tax on various aspects of investment is a vast

subject and is dependent on case to case basis. This article is limited to the
extent of having an overview of the same. It may be noted that the reader of
the article is expected to take a decision only after consulting an expert in the
field of taxation and not depending on the contents of this article. This article
is not an expression of an opinion by the author, and in no manner is intended
to provide guidance to the investor in what so ever manner. The decision of
investment made by the reader of the article should be made at his own risk
and without any recourse to the author of this article.
Please send your feedback to moneymanager@icicisecurities.com
33
November 2014
Tte--tte
'Remain focused on long-term asset allocation'
Indian macro has stabilized and has become more supportive for economic
growth, says Pankaj Murarka, Head Equity, Axis Mutual Fund in an
interview with ICICIdirect Money Manager. He advises investors to
remain focused on their long-term asset allocation and not make too many
frequent adjustments based on recent market actions.
to implement growthenhancing policies over the
next 6-12 months.
Q: Do valuations look expensive?
A: Valuations are around the
fair-value range. However, it
should be noted that corporate
earnings are at the low-end of
the cycle and any growth
rebound should lead to a strong
earnings boost.
Q: How is the economic situation
looking like?
Pankaj Murarka,
Head Equity,
A: Indian macro has stabilized

and has become more
supportive for economic
growth. While growth has
revived, it remains weak and
uneven. It will take a couple of
years for the economy to move
to a decisively higher growth
path and government policies
will be crucial to decide the
trajectory.
Axis Mutual Fund
Q : Markets seem to be in
consolidation mode, after sharp
gains in the recent past. How do you
see them trending in the near term?
What are the risks to the market?
A: We do not take a view on
markets in the short-term as we
do not think it is possible to
predict short-term market
movements.
Q: How are September quarter

earnings looking like? What is the
road ahead for corporate earnings?
The key risk to the market over

the medium-term is linked to
execution by the government.
Market expects the government
A: In the absence of a broad

based recovery so far, Earnings
activity is extremely stockspecific. Higher quality
34
November 2014
Tte--tte
companies have been able to
maintain/grow profits but many
other companies have got
impacted by the weak
economy. On a consolidated
basis, earnings-to-GDP (gross
domestic product) ratio is far
lower than the level seen in
2007. Sustained revival in
growth should provide a strong
boost to earnings.
Q: How do you see the currency

reacting to the expected Fed action
in 2015?
A: Given the stability in Indian
macro situation, the economy
should not face any disruptive
risk from any rate hikes by the
Fed. Some points to note are
the significant fall in current
account deficit (CAD), higher
forex (FX) reserves, one of the
highest interest rates in
emerging markets, and being at
a different stage in the
economic cycle compared to
the US.
Q: Which sectors are you favoring

currently and why?
A: Rather than looking at
sectors, our approach has
always been to look at quality
companies across sectors that
offer good medium-term
earnings growth prospects.
From a portfolio perspective,
over the last few months, we
have run a higher exposure to
cyclical stocks that are exposed
to the economic recovery. We
believe that the economy has
bottomed and the revival over
the medium term will provide a
big boost to quality stocks that
can take advantage of the same.
Q: What is your advice for investors

at this point in terms of their overall
portfolio and asset allocation?
A: Investors should remain
focused on their long-term
asset allocation and not make
too many frequent adjustments
based on recent market actions.
Going forward, from a mediumto-long term perspective, both
equity and fixed-income seem
to be poised to generate
reasonable returns for
investors. Investors should only
look at quality portfolios and
avoid making large allocations
to narrow strategies.
Q: The Reserve Bank of India (RBI)

has maintained status quo in its
recent monetary policy. By when do
you see the interest rates easing?
A: Inflation is on a weakening
trend and the RBI should be able
to comfortably meet its glide
path target in January 2015. We
expect policy rates to be cut
over the next 6-12 months.
The views expressed in the interview

are personal views of the authors and
do not necessarily represent the views
of ICICI Securities.
35
November 2014
ASK OUR PLANNER

Switching your investment options
provident fund accumulation
can be utilized for funding your
initial post-retirement years,
say 10 to 15 years, depending
on the accumulation and your
post-retirement expenses.
This means that your other
investments can stay invested
into
equity - oriented
instruments for this period too,
adding to the 10-12 years left
now for retirement.
Q: Our Group Superannuation Fund

is managed by ICICI Prudential Life
Insurance for the last 7 years. We
have been given a choice to select
the fund and I have chosen 'Short
Term Debt Fund' from the
beginning. We have the option of
switching to Tradition Plan /
Balanced Plan / Growth Plan. Is it
advisable to switch it to Traditional
plan / Balanced Plan for a better
return with minimal risk? My age is
47.
Since the number of years your

other investments can stay
invested is over 15-20 years,
you can consider switching the
funds even to Growth Plan.
Growth Plan carries risk, but
the risk can get minimized if
you hold it over a longer period
of time (15-20 years).
- Sivaramakrishnan KG
A: Short Term Debt Funds are
ideal for investing for shorter
term i.e. less than 1 year.
Staying invested in them for a
period of 7 years is not
advisable. If your horizon is
long i.e.15 years or more, you
should consider investing
some portion into equityoriented funds. Now that you
are 47 and might retire in the
next 10-12 years, you can still
consider investing into equity
for below reasons:
Also, while switching to

Growth Plan, it is suggested
not to switch the entire amount
in lump sum, rather it is better
to switch systematically on a
regular basis, say, once in a
month or quarter, depending
on how it is allowed for you in
your Superannuation Fund.
This will help in averaging the
entry point into equity.
One, your provident fund

already invests into debt
instruments and will be a
significant part of your
retirement corpus. Two, the
Q: I am a retired employee aged 60
36
November 2014
ASK OUR PLANNER

years. My requirement of housing,
medical and monthly income is
taken care of. I would like to invest
part of my retirement corpus of
around ` 30 lakh in mutual funds
with following objectives: To beat
the inflation and grow the corpus in
tax-efficient manner in next five
seven years.
entire amount in liquid funds,

which will provide better return
than savings bank account.
You can then start an STP from
liquid mutual fund, which will
systematically transfer a fixed
amount from your liquid
mutual fund into equity mutual
fund regularly, say, every
month. However, the gains
from your liquid mutual fund
shall be added to your income
and will be taxable as per your
income slab.
Since investing big amount of

money through SIP route is not
possible in a short time, please let
me know if it is a good idea to invest
in lump sum in mutual funds at
current levels. Please suggest
funds for investment keeping my
profile in mind.
Let's say you invest ` 30 lakh

into liquid mutual funds and
start doing an STP of ` 1.50
lakh per month into equity
mutual funds from next month
onwards. You would have
transferred the entire amount
into equity funds over the next
22 months approximately. The
gain booked from the liquid
mutual funds while
transferring every month will
be added to your income. This
can be around ` 2 lakh in the
first year and ` 60,000 in the
next year (assuming the liquid
fund gives you a return of 9%
p.a.).
- Manjunath
A: In order to beat inflation and
grow tax-efficient corpus, the
best option is to invest into
equity. However, it is not
advisable to invest lump sum
amount in equity, given its
inherent volatile nature.
Hence, it is best to invest
systematically, either through
SIP (systematic investment
plan) or STP (systematic
transfer plan).
If you invest through SIP, the
entire amount would be kept in
savings bank account, earning
you a nominal rate of return.
Instead, you may shift the
On equity side, if your horizon

is more than 10 years, it is
better to stick to balanced
37
November 2014
ASK OUR PLANNER

funds and large-cap funds
only. Of the entire gamut of
equity funds, these will be the
lesser
riskier
ones
comparatively. However, if you
are looking at strictly 5 to 7
years horizon, it is better to
stick to Monthly Income Plans
(MIPs), as shifting all your
funds into equity funds will
itself take close to 2 years,
leaving you with only 3 to 5
years for growth, which may
not be an ideal time horizon for
investing the full amount into
equity funds.
account, or entire amount is

credited to my NPS account? Or, is
there any other tax beneficial
option?
- A Saraswat
A: First option: If you surrender
any pension plan before its
maturity, then the entire
surrender proceeds, not just
the gain, will be added to your
income and taxed as per your
income slab. This had been
done to discourage investors
from surrendering pension
plans. However, there is no Tax
Deducted at Source (TDS).
For our recommended mutual

funds, please refer our MF Top
Picks in this edition or visit our
website www.icicidirect.com.
Second option: On maturity of a

pension plan, you can
rd
withdraw a maximum of 1/3 of
the maturity value in lumpsum, which will be exempt
rd
from tax. The balance 2/3 has
to be necessarily utilized to
purchase annuity.
Q: I have an ICICI Prudential Life

Time Pension policy maturing on
23.01.15. I do not want annuity now
as my age is 51 years. The total
amount is approximately ` 2.40
lakh on maturity. My annual income
is above ` 25 lakh. My query is:
1. What is the tax implication if I
surrender the policy now and invest
the whole amount in National
Pension System (NPS)?
In the first option, you can

invest the post-tax surrender
proceeds into NPS. If you opt
for the second option, you will
be able to invest only 1/3rd of
the maturity value into NPS on
maturity of the policy.
2. Is it possible that on maturity I

get 1/3rd amount back as tax-free
and instead of purchasing annuity,
balance 2/3rd is credited to my NPS
From taxation perspective,

pulling out money from one
EET (Exempt-Exempt-Tax)
investment, i.e. pension policy,
38
November 2014
ASK OUR PLANNER

and putting it into another EET
( E x e m p t - E x e m p t Ta x )
investment, i.e. NPS will not
make much difference.
and also the gains after a

period of 1 year from
investment into equity funds
will be exempt from tax.
(EET regime means your

investment at the stages of
contribution and accumulation
is Exempt from tax, denoted by
E-E-, but at the time of
withdrawal, it is Taxable,
denoted by T).
Q: I want to know the two best

mutual funds to invest ` 3,000 p.m.
for long term purpose. I would also
like to get some rough idea of the
corpus that these two funds would
generate in next say 15 or 20 years.
If you are not keen on receiving

annuity, then surrendering the
amount and investing into
equity mutual funds in a
staggered manner may be a
better choice, as this will help
you recover the tax paid on
surrender proceeds quicker
than NPS if markets do well
- H S Harikrishnan
A: The table below gives you an
idea of how much corpus will
be generated if you invest `
3,000 per month in two equity
mutual funds for a period of
next 15 or 20 years. This is at
different rates of returns.
Returns (p.a.)
8%
Period
10%
12%
15%
15 years
` 10,19,335
` 12,04,864
` 14,27,794
` 18,49,097
20 years
` 17,17,980
` 21,71,960
` 27,59,572
` 39,81,220
In the last 15 years, some of the

consistently performing equity
mutual funds have given
returns of around 15% p.a.
While no return is guaranteed
by any mutual fund, in the
longer term 15 to 20 years,
you can expect a decent
return, which will help you beat

inflation comfortably.
To k n o w a b o u t o u r
recommended mutual funds,
please refer our MF Top Picks
in this edition or visit our
website www.icicidirect.com.
Do you also have similar queries to ask our experts? Write to us at:
moneymanager@icicisecurities.com
39
November 2014
MUTUAL FUND ANALYSIS

Category: Equity Linked Savings Scheme (ELSS)
The Equity Linked Savings Schemes (ELSS), tax-saving mutual funds, are the
best avenue for saving taxes as well as creating wealth in the long run. Here
we analyse the top-performing funds.
Axis Long Term Equity
Fund Manager:
Jinesh Gopani has a total
experience of 13 years in the
capital markets of which four
years are in equity fund
management. He has done his
MMS in finance from Mumbai
University.
Fund Objective:
To generate income and longterm capital appreciation from
a diversified portfolio of
predominantly equity and
equity-related securities.
However, there can be no
assurance the investment
objective of the scheme will be
achieved.
Performance:
Exceptionally good
performance so far makes the
fund a top ranking ELSS fund.
On a one-year basis, the fund
has delivered a whopping 66%
return (as on October 30, 2014)
vs. 35% delivered by its
benchmark and ~47% being
category average in the same
year.
Key Information:
NAV as on October 30, 2014 (`)
26.7
Inception Date
December 29,2009
Fund Manager
Jinesh Gopani
Minimum Investment (`)

- Lumpsum
500
- SIP
Expense Ratio (%)
2.33
Exit Load
Nil
Benchmark
S&P BSE 200
Last declared Quarterly AAUM(` cr)
2512
Over three years - minimum for

which ELSS funds get locked
in, the fund has delivered
28.3% compounded
annualised return (CAR),
thereby not only beating other
tax-saving instruments but
comparing very well against its
own benchmark (S&P BSE 200)
CAR of 15.5% and ELSS
category average CAR of
~20% for the same three-year
Product Label:
This product is suitable for investors
seeking*:
Capital appreciation & generating

income over long term
Investment in a diversified portfolio

predominantly consisting of equity
and equity related instruments
High risk
40
September 2014

period. An investment of `
100,000 would have grown to `
2,17,094 in three years.
Additionally, the investment
would have earned tax savings
of ` 30,900 for the individual
falling in the highest tax
bracket. Therefore, a
cumulative return of ` 147,997
(` 117,097+` 30,900) is the
gain on the ` 1,00,000 invested
within a period of three years.
Portfolio:
Being an ELSS, funds get
locked in for three years, which
give fund managers the liberty
to increase exposure to
midcap stocks. Some of Mr.
Gopani's mid-cap bets have
been exceptionally rewarding:
e.g. Page Industries, Astral
Polytechnic. The portfolio is a
selection of high-quality stocks
within the chosen sector.
Banking exposure is restricted
to private sector banks as asset
quality pressure is lowest.
Public sector banks reeling
under asset quality pressure
find no place in the portfolio.
The fund manager has
remained so cautious that
even the leader - State Bank of
India (SBI), the favourite stock
of his peers and an index
heavyweight - has not been
included.
6 Month
Fund Name
11.2
28.3
1 Year
Fund
15.5
66.3
34.9
38.4
70
60
50
40
30
20
10
0
24
Return%
Performance vs. Benchmark
3 Year
5 Year
Benchmark
Last Three Years Performance

30-Sep-13
30-Sep-12
30-Sep-14
30-Sep-13
30-Sep-11
30-Sep-12
Fund
76.27
3.26
18.97
Benchmark
42.50
-1.11
13.77
CNX Nifty
38.87
0.56
14.42
Calendar Year-wise Performance

2013 2012 2011 2010
NAV as on Dec 31 (`) 17.3
Return (%)
14.8
11.1
13.0
2009
10.0
16.5
33.7
-14.8
30.0
0.0
Benchmark (%)
4.4
31.0
-27.0
16.2
88.5
Net Assets (` Cr)
840
426
137
60
Overall, the portfolio is mix of

fundamentally strong largecap and mid-cap companies. It
is the optimum fund
forinvesting with three year
horizon.
Value of investement of ` 10000 since inception

Date
`
Fund
25950
Benchmark
14957
CNX Nifty
15532
* As on Sep 30, 2014
Note: Investors should note that past performance may or

may not be repeated in future
41
September 2014

Top 10 Holdings
HDFC Bank Ltd.
Kotak MahindraBank Ltd.
Tata Consultancy Services Ltd.
Housing Development Finance Corporation Ltd.
Larsen & Toubro Ltd.
Sun Pharmaceutical Industries Ltd.
TTK Prestige Ltd.
Motherson Sumi Systems Ltd.
Tech Mahindra Ltd.
Maruti Suzuki India Ltd.
Asset Type
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
8.2
5.5
5.3
4.9
4.8
4.2
4.0
3.4
3.4
3.4
Asset Type
Top 10 Sector
Bank - Private
IT - Software
Pharmaceuticals & Drugs
Finance - Housing
Auto Ancillary
Consumer Durables - Domestic Appliances
Engineering - Construction
Automobiles - Passenger Cars
Finance - NBFC
Diesel Engines
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Domestic Equities
Market Capitalisation (%)
17.0
11.1
10.0
7.2
6.8
6.1
4.8
3.4
3.2
2.9
Asset Allocation
Large
68.1
Equity
97.6
Mid
26.7
Debt
0.0
2.8
Cash
Small
Portfolio Attributes
Total Stocks
Top 10 Holdings (%)
Fund P/E Ratio
Benchmark P/E Ratio
Fund P/BV Ratio
2.4
Risk Parameters
41.0
47.2
35.8
7.5
Standard Deviation (%)

Beta
Sharpe ratio
R Squared
Alpha (%)
11.85
0.79
0.26
0.82
7.73
Dividend History
Dividend (%)
Date
Jan-07-2014
Aug-08-2012
Sep-01-2010
10
8
10
Performance of all the schemes managed by the fund manager

30-Sep-13
30-Sep-14
Fund Name
Axis LT Equity Fund(G)
S&P BSE 2004
Axis Hybrid Fund-7-Reg(G)
Crisil MIP Blended Index
76.27
2.50
22.82
15.45
30-Sep-12
30-Sep-13
31-Sep-11
31-Sep-12
3.26
-1.11
18.97
13.77
--
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
(Blue) Investors understand that
(Yellow) Investors understand that
their principal will be at low risk
their principal will be at meduim risk
(Brown) Investors understand

that their principal will be at high
risk
Data as on October 31, 2014; Portfolio details as on September 30, 2014
Source: ICICIdirect.com Research, Accord Fintech

42
September 2014

management (Indian MBA),
from the Indian Institute of
Management (IIM),
Ahmedabad, and a Bachelor of
Te c h n o l o g y d e g r e e ,
specialising in chemical
engineering from Anna
University, Chennai in 1990. He
is also a Chartered Financial
Analyst (CFA) charter holder.
Franklin India Tax Shield
Fund Objective:
To provide medium to long term
growth of capital along with
income tax rebate.
Key Information:
NAV as on October 30, 2014 (`)
373.8
Inception Date
April 10, 1999
Fund Managers
Anand Radhakrishnan
and Anil Prabhudas
Minimum Investment (`)

- Lumpsum
500
- SIP
500
Expense Ratio (%)
2.39
Exit Load
Nil
Benchmark
CNX 500 Index
Last declared Quarterly

AAUM(` cr)
1413
Anil Prabhudas is assistant vice

president and senior research
analyst for Franklin Templeton
India AMC Ltd, based in
Chennai, India. He holds a
bachelor in commerce from
Bombay University, and is also
a chartered accountant.
Product Label:
This product is suitable for investors
seeking*:
Long term capital appreciation
An ELSS fund offering tax benefits
underSection 80C of the Income Tax Act
Performance:
Medium risk
The fund is a steady performer.

It is sure to deliver above
category average return in any
kind of market (bull market,
bear market or consolidation).
However, the fund hardly ever
is a top ranker. It will always fall
in the first quartile beating
several of its peer funds in
terms of performance. This
uniqueness is across all funds
from the Franklin Templeton
AMC stable in their respective
categories.
Fund Managers:
Anand Radhakrishnan and Anil
Prabhudas
Anand Radhakrishnan is Chief
Investment Officer (CIO),
Franklin Templeton Asset
Management (India) Pvt Ltd.
He has overall 18 years of
experience in the investment
management industry. Mr.
Radhakrishnan holds a
postgraduate degree in
43
September 2014

Portfolio:
An investment of ` 1,00,000
would have grown to `
1,81,340 in three years.
Additionally, the investment
would have earned tax
savings of ` 30,900 for the
individual falling in the
highest tax bracket. Therefore
`
a cumulative return of
1,12,240 is the gain on the `
1,00,000 invested.
The portfolio comprises of largecap stocks with highest weightage

to private sector banks. The two
large public sector banks - State
Bank of India (SBI) and Punjab
National Bank (PNB) also form
part of the portfolio indicating the
fund manger's preference
towards the sector. Finance
companies and rating agencies
also find a place indicating the
fund manger is positive on the
economic recovery cycle leading
increased growth rates for
banking & finance companies. The
fund has also benefited from the
rally in the auto and auto ancillary
companies and still continues to
hold many of them (combined
exposure: ~10% of portfolio).
18.4
1 Year
3 Year
Fund
Benchmark
11.3
21.1
15.8
51.6
6 Month
Fund Name
37.9
34.6
25
Return%
Performance vs. Benchmark

60
50
40
30
20
10
0
5 Year
Last Three Years Performance

30-Sep-13
30-Sep-12
30-Sep-14
30-Sep-13
30-Sep-11
30-Sep-12
Franklin India
Taxshield
59.14
0.21
13.54
Benchmark
46.08
-2.49
13.22
CNX Nifty
38.87
0.56
15.42
Calendar Year-wise Performance

2013 2012 2011
2010
There is no bias towards a

particular theme and the portfolio
comprises companies from
diverse sectors.
2009
NAV as on Dec 31 (`) 256.1 241.3 186.5 219.9 178.1

Return (%)
Benchmark (%)
Net Assets (` Cr)
6.1
29.4
-15.2
23.5
78.8
3.6
31.8
-27.2
14.1
88.6
1004
942
747
884
760
A large-cap bias along with

optimum sector diversification
makes the fund relatively low on
risk. It is a suitable ELSS fund for a
moderate to conservative
investor.
Value of investement of ` 10000 since inception

Date
`
Fund
373196
Benchmark
BSE Sensex
NA
76876
44
September 2014

Top 10 Holdings
Asset Type
Call Money
Cash & Cash Equivalents
6.6
Bharti Airtel Ltd.
Domestic Equities
5.6
Infosys Ltd.
Domestic Equities
5.4
ICICI Bank Ltd.
Domestic Equities
5.3
HDFC Bank Ltd.
Domestic Equities
5.0
3.6
IndusInd Bank Ltd.
Domestic Equities
Yes Bank Ltd.
Domestic Equities
3.2
Eicher Motors Ltd.
Domestic Equities
3.1
Torrent Pharmaceuticals Ltd.
Domestic Equities
3.1
Dr. Reddys Laboratories Ltd.
Domestic Equities
3.0
Asset Type
Top 10 Sectors
Bank - Private
Domestic Equities
24.7
IT - Software
Domestic Equities
9.0
Pharmaceuticals & Drugs
Domestic Equities
8.8
Telecommunication - Service Provider
Domestic Equities
5.9
Auto Ancillary
Domestic Equities
5.9
Automobiles-Trucks/Lcv
Domestic Equities
4.2
Diversified
Domestic Equities
3.6
Refineries
Domestic Equities
3.3
Diesel Engines
Domestic Equities
3.3
Ratings
Domestic Equities
3.1
Whats Out
Crompton Greaves Ltd.
0.4
SKF India Ltd.
0.9
Housing Development Finance

Corporation Ltd.
1.6
Idea Cellular Ltd.
0.5
Alstom T&D India Ltd.
0.1
Whats In
Numero Uno International Ltd.
Large
76.1
169.0
Small
5.0
Total Stocks
55.0
Top 10 Holdings (%)
43.9
Fund P/E Ratio
26.2
Benchmark P/E Ratio
Fund P/BV Ratio
Risk Parameters
Standard Deviation (%)
Portfolio Attributes
Market Capitalisation (%)

Mid
11.70
4.9
Asset Allocation
Beta
0.81
Equity
Sharpe ratio
0.22
R Squared
0.90
Debt
Cash
Alpha (%)
1.99
93.4
0.0
6.6
Dividend History
Dividend (%)
Date
Jan-27-2014
30
Jan-21-2013
20
Feb-06-2012
30
Jan-17-2011
40
Jan-18-2010
30
Dec-19-2008
30
45
September 2014
Performance of all the schemes managed by the fund manager

30-Jun-13
30-Jun-14
Fund Name
30-Jun-12
30-Jun-13
31-Jun-11
31-Jun-12
Franklin Build India Fund(G)
87.81
1.48
16.37
CNX 500 Index
46.08
-2.49
13.22
Franklin India Taxshield(G)
59.14
0.21
13.54
CNX 500 Index
46.08
-2.49
13.22
Franklin India Prima Plus Fund(G)
58.95
0.38
13.49
CNX 500 Index
46.08
-2.49
13.22
Franklin India Balanced Fund(G)
46.77
1.39
11.49
Crisil Balanced Fund Index
28.89
1.86
13.74
Franklin India Life Stage FOFs-20(G)
42.62
-0.41
11.95
CNX 500 Index
46.08
-2.49
13.22
Franklin India Bluechip Fund(G)
41.41
-0.61
12.28
S&P BSE SENSEX
37.41
3.29
14.03
Franklin India Index Fund-NSE Nifty(G)
38.57
0.73
15.26
CNX Nifty Index
38.87
0.56
15.38
Franklin Infotech Fund(G)
34.47
27.62
13.75
S&P BSE IT
36.33
32.36
12.27
31.64
1.07
11.09
CNX 500 Index
46.08
-2.49
13.22
Franklin India Pension Plan(G)
28.87
2.37
11.15
CNX 500 Index
46.08
-2.49
13.22
Franklin India Dynamic PE Ratio FOFs(G)
27.89
0.38
10.77
Crisil Balanced Fund Index
28.89
1.86
13.74
24.46
2.53
10.98
CNX 500 Index
46.08
-2.49
13.22
Franklin India MIP(G)
19.88
5.24
9.94
Crisil MIP Blended Index
15.45
3.18
10.64
17.01
2.74
10.23
Crisil Composite Bond Fund Index
11.61
3.45
9.55
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
(Blue) Investors understand that
their principal will be at low risk
(Yellow) Investors understand that

their principal will be at meduim risk
(Brown) Investors understand

that their principal will be at high
risk
Data as on October 31, 2014; Portfolio details as on September 30, 2014
Source: ICICIdirect.com Research, Accord Fintech

46
September 2014
EQUITY MODEL PORTFOLIO

Our indicative large-cap equity model portfolio has continued to
deliver an impressive return of 78.7% (inclusive of dividends) till
date (as on November 11, 2014) since its inception (June 21,
2011) vis--vis the benchmark index (S&P BSE Sensex) return of
58.9% during the same period, out-performance of ~20%. Our
portfolio approach towards high-quality stocks aided us in
outperforming the Sensex with continued success. We continue
to trust our philosophy of choosing stocks where the risk reward
is favourable and not just the reward aspect. We feel Quality-21
large-cap portfolio will continue to be aligned to the same
philosophy.
Our Consistent-15 mid-cap portfolio also continues to
outperform, delivering 87% (inclusive of dividends) till date (as
on November 11, 2014) vis--vis the benchmark index (CNX
Midcap) return of 57.1%, as we continued to identify
fundamentally strong stocks. Some key performers of our
portfolio are Sun Pharmaceuticals, Lupin, Tata Consultancy
Services (TCS), Tata Motors, Info Edge and Dabur India delivering
97%-190% returns since inception.
We have always suggested the systematic investment plan (SIP)
mode of investment and still find a lot of merit in it as the
preferred mode of deployment given the market conditions and
volatility associated since the inception of the portfolio. It has
outperformed other portfolios, thus, reinforcing our belief in a
plan of investment. However, now we are also advising clients to
look at lump-sum investments at any possible dips.
In the last few years, anxiety stemming from weak economic
health and unstable policy environment has resulted in defensive
sectors commanding high scarcity premium while debt-ridden
cyclicals witnessed a de-rating. However, the recent decisive
election verdict has given investors optimism over the overall
growth prospects of the economy. Thus, the current rally has
totally reversed the penchant for defensives (like information
technology (IT), pharmaceuticals and fast-moving consumer
goods (FMCG)), which have underperformed in 2014 year-todate (YTD). On the other hand, old economy sectors, including
capital goods, realty, metals, power and oil & gas have been
47
November 2014

topping the charts this year, signifying changing investor
preference.
Thus, from a portfolio perspective, we have now leaned forward
towards inclusion of stocks with more real economy, domestic
discretionary exposure viz. GAIL, JK Cement, Arvind, etc. We
have, thus, taken a strategic call of including stocks that possibly
have a larger opportunity size either via reforms push or via
revival in the discretionary demand from domestic consumers.
Thus, we exit Page Industries and Nestl with minimal returns.
Hence, we have made a significant shift in our portfolio stance to
play the recovery cycle. In terms of relative weightage of the
sector vis--vis the Sensex, we have changed our stance and
gone overweight on financials (raising weights of public sector
banks), oil & gas, the infrastructure space (cement, infrastructure
and power). This has been primarily triggered by the possibility
of decisive action in the infrastructure and real economy space
by the new government. We have maintained our overweight
stance on telecom considering the reducing regulatory hurdles
and relatively better earnings growth profile. We are also
overweight on sunrise sectors like media via Zee Entertainment.
We have, thus, positioned away from pure play defensives like
the pure play mature exporter- IT and the expensive FMCG
space. We feel both these sectors may have normalised earnings
growth but the sectoral churning would cause them to de-rate on
valuation terms.
For other equal weight sectors we are playing consumer
discretionary sectors like autos (pent up demand, strong
franchises) and the metals and mining space (high infrastructure
demand expected), pharmaceuticals (large global generic
opportunity yet to be tapped).
On individual names, we are strongly overweight on companies
like L&T and UltraTech Cement in the infrastructure space while in
public sector banks we like State Bank of India (SBI).
We believe we now have a better balance to our portfolio going
into a recovery cycle and possibly a longer-term Bull Run.
48
November 2014

Name of the company
Largecap
(%)
Largecap Stocks
Consumer Discretionary
United Spirits
Tata Motors DVR
Bajaj Auto
Titan
BFSI
HDFC
HDFC Bank
SBI
Axis Bank
Power, Infrastructure & Cement
L&T
Ultratech Cement
FMCG
ITC
Metals & Mining
NMDC
Oil and Gas
Reliance
Gail
Pharma
Lupin
Sun Pharma
IT
Infosys
TCS
Wipro
Telecom
Bharti Airtel
Media
Zee Entertainment
Largecap share in diversified
10
2
4
2
2
27
6
6
8
7
13
8
5
10
10
4
4
14
11
3
5
2
3
12
3
6
3
3
3
2
2
49
Model Portfolio
Midcap
(%)
Diversified
(%)
7
1.4
2.8
1.4
1.4
18.9
4.2
4.2
5.6
4.9
9.1
5.6
3.5
7
7
2.8
2.8
9.8
7.7
2.1
3.5
1.4
2.1
8.4
2.1
4.2
2.1
2.1
2.1
1.4
1.4
70
November 2014

Name of the company
Largecap
(%)
Midcap Stocks
Consumer Discretionary
Bosch
Cox & Kings
Arvind
IT
Info Edge
BFSI
DCB
IndusInd Bank
FMCG
Kansai Nerolac
Tata Global Beverages
Pharma
Natco Pharma
Media
PVR
Capital Goods
Cummins
Realty/Infrasturcture/Cement
JK Cement
Container Corporation of India
Oberoi Realty
Shree Cement
Midcap share in diversified
Total of all three portfolios
100
Model Portfolio
Midcap
(%)
Diversified
(%)
20
6
6
8
6
6
16
8
8
14
8
6
6
6
8
8
6
6
24
6
6
6
6
6
1.8
1.8
2.4
1.8
1.8
4.8
2.4
2.4
4.2
2.4
1.8
1.8
1.8
2.4
2.4
1.8
1.8
7.2
1.8
1.8
1.8
1.8
30
100
100
Content source: ICICIdirect.com Research

ICICI Securities Ltd. has been assigned an advisory mandate by Ranbaxy
Laboratories Limited with regard to Sun Pharmaceutical Industries Limited's
acquisition of Ranbaxy Laboratories Limited. This report is prepared on the
basis of publicly available information.
50
November 2014

Performance* so far Since inception
100
80
87.0
78.8
78.7
58.9
57.1
55.8
60
40
20
0
Large Cap
Midcap
Portfolio
Diversified
Benchmark
*Returns (in %) as on November 11, 2014

Large-cap Portfolio Benchmark: BSE Sensex; Mid-cap Portfolio
Benchmark: CNX Midcap; Diversified Portfolio Benchmark: Combination
of BSE Sensex and CNX Midcap
Value of ` 1,00,000 invested via SIP at the end of every month
7,000,000
4,929,208
6,267,522
4,200,000
5,749,177
4,200,000
3,000,000
4,200,000
4,000,000
5,995,339
5,000,000
6,302,586
7,060,788
6,000,000
2,000,000
Largecap
Investment
Midcap
Value of Investment in Portfolio
Divesified
Value if invested in Benchmark
Start date of SIP: June 30, 2011; *Value as on November 11, 2014
51
November 2014
MUTUAL FUND TOP PICKS

Mutual Fund Top Picks
Wth over thousand of mutual fund schemes available in the market,
selecting the right ones may become too complex. To make it easy
for you, we present our research teams top recommendations,
across equity and debt categories
Equity
Category
Top Picks
Largecaps
Axis Equity Fund

Birla Sunlife Frontline equity Fund
ICICI Pru Focussed Bluechip Equity Fund
UTI Opportunities Fund
Midcaps
HDFC Midcap Opportunities Fund

ICICI Prudential Value Discovery Fund
Franklin India Smaller Companies Fund
SBI Magnum Global Fund
Diversified
Franklin India Prima Plus

ICICI Prudential Dynamic Plan
Reliance Equity Opportunities
ELSS
Axis Long Term Equity

ICICI Prudential Tax Plan
Franklin India Tax shield
Sector - Banking
ICICI Prudential Banking

Reliance Banking
UTI Banking
52
November 2014
MUTUAL FUND TOP PICKS

Debt
Category
Top Picks
Liquid Funds
HDFC Cash Mgmnt Saving Plan

ICIC Pru Liquid Plan
Reliance Liquid Treasury Plan
Ultra Short Term
Birla Sunlife Savings Fund

Franklin India Ultra Short Term Bond
Fund
ICICI Pru Flexible Income Plan
Short Term
Birla Sunlife Short Term Fund

HDFC Short Term Opportunities Fund
ICICI Pru Short Term Plan
Credit Opportunities
Fund
Birla Sunlife Medium Term Plan

Franklin India Short term Plan
ICICI Prudential Regular Savings
Income Funds
ICICI Prudential Dynamic Bond Fund

Birla Sun Life Income Plus - Regular Plan
IDFC Dynamic Bond Fund
Gilts Funds
ICICI Pru Gilt Inv. PF Plan

Birla Sunlife Gilt Plus
MIP
(Aggressive)
Birla Sunlife Savings 5

ICICI Prudential MIP 25
DSP Blackrock MIP
53
November 2014
QUIZ TIME
1. When a domestic company pays dividend, it pays dividend

distribution tax (DDT) at ______ per cent currently.
2. If an assessee invests in Equity Linked Savings Scheme (ELSS)
mutual funds, the investment is eligible for deduction from his
taxable income to the extent of Rs. ______ under section 80C.
3. There are no tax-incentives for investment in bank and corporate
fixed deposits (FDs). True/ False
4. The interest earned on savings bank account in excess of Rs.
______ p.a. is taxable in the hands of the individual.
5. Expand EET (Hint: It's a taxation regime).
Note: All the answers are in the stories that have appeared in this
edition of ICICIdirect Money Manager. You may send in your
answers at:moneymanager@icicisecurities.com
The answers will be published in our next edition. The names of the
earliest all correct entries will be published too. So jog your grey
cells and be quick to send in your entries.
Correct answers for the October 2014 quiz are:
1. Expand UAN (Hint: It would be provided for provident fund (PF)
accounts).
A: Universal Account Number
2. Non-equity mutual funds do not invite tax on dividends for unit
holders. True/ False.
A: True; the tax on dividend is payable by the mutual fund houses
3. The period for long-term capital gains has been changed from 12
months to 24 months in case of non-equity mutual funds for
taxation purpose. True/ False.
A: False; it has been increased to 36 months
4. All Monthly Income Plans (MIPs) are debt-oriented funds. True/
False.
A: True
5. Short-term capital gains are taxed at ______% for equity mutual
funds.
A: 15%
Congratulations to the following winners for providing correct answers!
Neelakandan Eswaran
54
November 2014
MONTHLY TRENDS
WPI INFLATION (FOOD)
4.0
3.52
3.5
3.0
2.70
(%)
2.5
2.0
1.5
1.0
0.5
0.0
Sep-14
Oct-14
(The figures are in %)
CRUDE OIL
91.16
92.0
90.0
$ per barrel
88.0
86.0
84.0
82.20
82.0
80.0
78.0
76.0
74.0
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
30-Oct
NYMEX crude oil prices ($/barrel)
FII & DII INVESTMENTS

2500
2000
1906.73
1500
1000
500
201.24
0
-500
-276.49
-157.13
-1000
-1500
-2000
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
FII
25-Oct
30-Oct
DII
(Foreign institutional investors (FIIs) and domestic institutional

investors (DII) net equity investment ( ` in crore)
VOLATILITY INDEX (VIX)

18.0
17.0
16.0
15.0
14.0
13.0
12.0
11.0
10.0
13.30
13.15
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
30-Oct
VIX
55
November 2014
MONTHLY TRENDS
DOMESTIC INDICES
BSE Sensex
28500
27865.83
28000
27500
27000
26500
26630.51
4.64%
26000
25500
25000
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
30-Oct
NSE Nifty
8400
8322.20
8300
8200
8100
8000
7900
7964.80
4.49%
7800
7700
7600
7500
7400
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
30-Oct
GLOBAL INDICES
Dow Jones
17700
17390.52
17400
17100
17042.90
16800
16500
2.04%
16200
15900
15600
15300
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
30-Oct
NASDAQ
4700
4630.74
4600
4500
4493.39
4400
4300
3.06%
4200
4100
4000
30-Sep
5-Oct
10-Oct
15-Oct
56
20-Oct
25-Oct
30-Oct
November 2014
MONTHLY TRENDS
EXCHANGE RATES
USD-INR
61.93
62.0
61.8
61.6
USD / INR
61.4
61.39
61.2
0.86%
61.0
60.8
60.6
60.4
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
30-Oct
POUND-INR
101.0
100.5
100.39
100.0
/ INR
99.5
99.0
98.5
98.19
98.0
2.19%
97.5
97.0
96.5
96.0
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
30-Oct
EURO-INR
/ INR
80.0
78.22
78.0
1.70%
76.89
76.0
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
30-Oct
25-Oct
30-Oct
BULLION
GOLD
$ per Ounce
1300
1225
1208.74
1173.92
1150
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
(The prices are in $ per ounce).
SILVER
$ per Ounce
19.0
16.94
17.0
16.14
15.0
30-Sep
5-Oct
10-Oct
15-Oct
20-Oct
25-Oct
(The prices are in $ per ounce).

(Source for all indicators: Bloomberg, Reuters)
57
30-Oct
November 2014
Premium Education Programmes Schedule

ICICIdirect Centre for Financial Learning (ICFL) imparts quality education on
financial markets to beginners and amateurs, student, housewives, working
professionals and self employed. ICFL's broad objective is to make participant
feel confident to start investing in stock market.
Here is the list of our programmes scheduled for the month of November, 2014.
Schedule for Beginners' programme on Futures and Options (F&O) Trading
Sr.
No
City
1
New Delhi
2
Kolkata
3
Mumbai-Andheri
4
Pune
5
Thane
6
Kolkata
7
Bangalore
8
Navi Mumbai
9
New Delhi
10 Mumbai-Chembur
Sr.
No
11
12
Sr.
No
13
Sr.
No
14
15
Sr.
No
16
Sr.
No
Nov 01 and 02, 2014

Nov 01 and 02, 2014
Nov 08 and 09, 2014
Nov 15 and 16, 2014
Nov 15 and 16, 2014
Nov 15 and 16, 2014
Nov 22 and 23, 2014
Nov 22 and 23, 2014
Nov 22 and 23, 2014
Nov 22 and 23, 2014
Vishal on 07838290143, Harneet on 09582158693

Sumit on 08017516187
Vidhu on 9619716146
Kusmakar on 7875442311
Vidhu on 9619716146
Sumit on 08017516187
Subrata on 9620001478
Manish on 8451057943
Schedule for Chartered Financial Analyst (CFA) Level 1

For More Information & Registration call:
Dates
City
Mumbai-Malad
New Delhi
Nov 02 and 09, 2014

Nov 02 and 09, 2014
Vidhu on 9619716146
Schedule for Chartered Financial Analyst (CFA) Level 1 ( FOR ICICI GROUP EMPLOYESS)
City
Dates
New Delhi
Nov 02 and 09, 2014 Vishal on 07838290143, Harneet on 09582158693

Schedule for Certified Financial PlannerCM (CFP CM) certification
City
Dates
Mumbai-Malad
Nov 02 and 09, 2014
Vidhu on 9619716146
New Delhi
Nov 09 and 16, 2014
Schedule for Chartered Wealth Manager (CWM) certification
City
Dates
New Delhi
Nov 09 and 14, 2014
Schedule for Fast-Track Programme on Futures & Options (F&O)

City
Dates
17
18
19
20
Ahmedabad
Rajkot
Lucknow
Surat
Sr.
No
City
21
22
23
24
25
26
Dates
02 Nov, 2014
09 Nov, 2014
09 Nov, 2014
16 Nov, 2014
Yogesh on 8238053563
Harneet on 09582158693
Schedule for Fast-Track Programme on Stock Investing

Dates
Bhubaneshwar
Aurangabad
Ludhiana
Jalandhar
Ghaziabad
Dehradun
02 Nov, 2014
02 Nov, 2014
02 Nov, 2014
02 Nov, 2014
02 Nov, 2014
02 Nov, 2014
Sumit Sarkar on 8017516187

Vishal on 7838290143
Vishal on 7838290143
58
November 2014
27
28
29
30
31
32
33
34
Sr.
No
35
36
Sr.
No
37
38
Sr.
No
39
40
41
42
43
44
45
Sr.
No
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Vadodara
Jaipur
Jamshedpur
Dhanbad
Ajmer
Bikaner
Guwahati
Amritsar
City
16 Nov, 2014
16 Nov, 2014
23 Nov, 2014
23 Nov, 2014
23 Nov, 2014
23 Nov, 2014
30 Nov, 2014
30 Nov, 2014
Schedule for Fast-Track Programme on Technical Analysis

Dates
Meerut
Ranchi
09 Nov, 2014
23 Nov, 2014
Chandigarh
New Delhi
08 and 09 Nov, 2014 Vishal on 07838290143, Harneet on 09582158693

Schedule for Technical Analysis
City
64
65
Bangalore
New Delhi
15 and 16 Nov, 2014

15 and 16 Nov, 2014
15 and 16 Nov, 2014
22 and 23 Nov, 2014
22 and 23 Nov, 2014
29 and 30 Nov, 2014
29 and 30 Nov, 2014
Ruchi on 8297362323
Vidhu on 9619716146
Ruchi on 8297362323
Sumit on 08017516187
Schedule for Foundation Programme on Stock Investing

Dates
Pune
New Delhi
Kolkata
NEw Delhi
Pune
Bangalore
Mumbai-Chembur
Thane
Nagpur
Navi Mumbai
Mumbai-Andheri
New Delhi
Chandigarh
Mumbai-Andheri
Hyderabad
New Delhi
Pune
Mumbai-Andheri
City
Dates
Bangalore
Hyderabad
New Delhi
Pune
Mumbai-Andheri
Hyderabad
Kolkata
Sr.
No

Schedule for MarketMaster Programme

Dates
City
City
Vishal on 07838290143
Nov 01 and 02, 2014

Nov 01 and 02, 2014
Nov 01 and 02, 2014
08 and 09 Nov, 2014
08 and 09 Nov, 2014
08 and 09 Nov, 2014
08 and 09 Nov, 2014
08 and 09 Nov, 2014
15 and 16 Nov, 2014
15 and 16 Nov, 2014
15 and 16 Nov, 2014
15 and 16 Nov, 2014
22 and 23 Nov, 2014
22 and 23 Nov, 2014
22 and 23 Nov, 2014
22 and 23 Nov, 2014
29 and 30 Nov, 2014
29 and 30 Nov, 2014
Sumit on 08017516187
Vidhu on 9619716146
KUsmakar on 7875442311
Vidhu on 9619716146
Vidhu on 9619716146
Ruchi on 8297362323
Vidhu on 9619716146
Schedule for Advanced Derivatives Trading Strategies

Dates
29 and 30 Nov, 2014
59
November 2014

Market Money Manager

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The first step of investing is to

decide allocation among different

Further, when it comes to saving taxes, we realize that certain

ICICIdirect Money Manager

When it comes to investing, most of us know that it is important to

Abhishake Mathur, CFA

Sameer Chavan, CWM, Pankaj Pandey

Azeem Ahmad, Nithyakumar VP CFPCM, Nitin Kunte, Sachin Jain,

ICICIdirect Money Manager

ICICIdirect Money Manager

No PAN requirement for investment in Kisan Vikas Patra

Courtesy: The Hindu Business Line

FII stake in Sensex companies hits all-time peak of 27 pct: BofA-ML

Courtesy: The Indian Express

Courtesy: Business Standard

October exports shrink 5% after a gap of six months

Courtesy: The Financial Express

Markets to take cues from reforms and CPI data as

October month was a tale of

The Q2 earnings season in

stance of the Fed on the policy

The global markets have been

ICICIdirect Money Manager

shifts to government reforms and

Benchmark indices overcame

The decline unfolding since

The dash towards new all-time

ICICIdirect Money Manager

BSE Sensex Weekly Candlestick Chart

Index concluded a month long

Extended rally measuring

Weekly RSI tested its own

Source: Bloomberg, ICICIdirect.com Research

ICICIdirect Money Manager

Option open interest of November Series

Nifty recovered sharply in the

Bank Nifty: likely to move

Open interest in Nifty futures

The banking space also got a

On higher side, 8500 call strike

Since the election verdict, this

India VIX: Likely to consolidate

Looking at the options build

banks over public sector

On a positional basis, the 50 &

S&P 500: Current momentum likely

S&P has shown tendency of

Unlike the previous pull backs,

Even for coming up December

S&P500 options open interest for December Series

Dax: Immediate support is placed at 9200

The German Index, Dax, has

Dollar Index: Likely to surpass 2008

Importantly, both 100 and 200

The Dollar Index in the last

Unlike the rest of equity

Statements from European

ICICIdirect Money Manager

Yen, which is at the highest

Along with speculators, Hedge

Brent Crude: Downsides likely to

Recent declines have forced

As expected, Crude failed to