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                           Monthly Report
                             June 2012




Monthly Report June 2012       Retail Research
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                           Table of Contents
       Title                                                    Slide No.
       Monthly Equity Commentary                                   03
        −   Market Statistics                                      05
        −   Bond yields, commodities and currencies                09
        −   Comparison of Equity Returns in various emerging
           markets                                                 15
        −   Outlook Going Forward                                  20
       Technical Commentary                                        30
       Learning Technical Analysis                                 34
       Derivatives Commentary                                      36
       Learning Derivatives                                        38
       Extract of Calls during May 2012                            41
       FII & Mutual Fund Flow & Indices moves during May 2012      43
       Gainers & Losers – May 2012                                 44
       Disclosure                                                  45




Monthly Report June 2012           Retail Research
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  Monthly Equity Commentary
BSE SENSITIV-Dly .28/04/12-01/06/12 I-1                                                                TREND
Price
                                                                                                          17400

                                                                                                          17200

                                                                                                          17000

                                                                                                          16800

                                                                                                          16600

                                                                                                          16400

                                                                                                          16200

                                                                                                          16000

       12           M                                                                              J


      Indian markets reported a drop for May 2012 after a flattish April. In the initial weeks the markets were muted
      and remained in the red primarily on the back of the country’s deteriorating financial health. In the second half
      of the month the benchmark indices consolidated and than recovered towards the end of the month primarily on
      the back of Government’s decision to allow Oil companies to raise petrol prices.
      The markets started the month of May 2012 on a weak note grappling with the deteriorating economic health
      of the country. Marco-economic worries arising from the country's high fiscal and trade deficit weighed high on
      investor sentiments as the markets lost ground during the later part of the week after a positive start. The key
      benchmark indices fell in three out of four trading sessions during the first week. The week witnessed
      announcement of muted auto sales numbers reported by automobile manufacturers for the month of April 2012.
      Banks lost ground after an announcement from the RBI stated that banks need to steadily build up their capital
      buffers through March 2018. Some of the other announcements which pulled the markets down include a drop
      in the exports from India due to a Europe’s debt crisis and slower economic growth in the China. The
      Merchandise exports from India dropped 57% Y-o-Y, while the imports rose 24.3% Y-o-Y thus creating a trade
      deficit of $ 13.9 mn. Also the HSBC India manufacturing purchasing managers index (PMI) come in at 54.9 in
      April 2012, marginally up from a level of 54.7 in March 2012.


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Monthly Equity Commentary                                                                             contd…
  The second week too witnessed downward trend by the markets. The key benchmark indices - the Sensex and
  Nifty were down by 3.2% and 3.1% respectively. The macro economic worries and the weak global environment
  continued to haunt investor sentiments. Data released during the week depicted that production at factories,
  utilities and mines declined 3.5% from a year earlier as manufacturing output shrank, deepening worries of a
  slowdown in the economy. In addition to this, a report from IMF mentioned that the Indian government needs to
  introduce key reforms to improve infrastructure and address supply-side constraints to check inflation to spur
  economic growth beyond 7% in the year. Commerce Minister during the week announced that export growth from
  India might halve due to demand constraints in key markets such as the European Union and the US.
  The Indian markets continued their downward move in the third week of the month as well, however the extent
  of losses was arrested. The benchmark indices i.e. Sensex and Nifty fell 0.86% and 0.76% respectively. An
  announcement stating that Greece failed to form a government and that the fresh elections were scheduled in
  June dampened the investor sentiments across markets. This also raised concerns of Athens moving out of the
  Euro. Also India's consumer price inflation accelerated in April to 10.36%, making life harder for the RBI as it
  looks to kickstart a flagging economy. The planning commission too re-iterated the fact that falling rupee, high
  inflation could pose a hindrance for achieving the targeted economic growth of 7.5% for the current financial
  year.
  In the fourth and the final week the Indian markets managed to register marginal gains. The market fell in three
  out five trading sessions in the week. Investors cheered the government's announcement during the later part of
  the week to allow state oil companies to raise petrol prices, seeing it as a step taken forward towards fiscal
  consolidation. On the back of the government’s approval, the state oil companies raised petrol prices by Rs 7.50
  per liter. An announcement during the week stated that the South West Monsoon has hit parts of Andaman and
  Nicobar islands and is expected to reach Kerala by June 1st and Delhi by June 29th also helped lift investor
  sentiments. Also the Central bank chief mentioned that the Central Bank would take steps as needed to curb
  swings in the rupee as the currency’s slump threatens to stoke inflation and limit scope for interest-rate cuts.




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 Monthly Equity Commentary                                                                                           contd…
 Given below is an overview of global markets’ performance during April 2012 :
Indic es                Apr-12     May-12     % Change    The world markets ended the month of May 2012 in the red. All the
US - Dow Jones          13,213.6   12,393.5        -6.2   key indices were down for the month of May 2012. Brazil, Hang Seng,
US - Nasdaq              3,046.4    2,827.3        -7.2   Nikkei and Jakarta Composite fell the most by 11.9%, 11.7%, 10.3% and
UK - FTSE                5,737.8    5,320.9        -7.3   8.3% respectively. The Shanghai Composite and Strait times were down
                                                          by 0.5% and 6.9% respectively while the Dow Jones and Nifty were
Japan - Nikkei           9,520.9    8,542.7       -10.3
                                                          down by 6.2% each.
Germany - DAX            6,761.2    6,264.4        -7.3
Brazil - Bovespa        61,820.0   54,490.0       -11.9   Average daily volumes on BSE during the month of May 2012 fell by
Singapore - Strait Ti    2,978.6    2,772.5        -6.9
                                                          11.9% M-o-M. (NSE daily average volumes too were down by 0.8% - M-
                                                          o-M). The average daily derivatives volumes on NSE were up by 14.1%
Hong Kong – Hang Se     21,094.2   18,629.5       -11.7
                                                          to Rs. 1,25,986 cr in May 2012 (In April 2012: Rs. 1,110,365 cr). Mutual
India - Sensex          17,318.8   16,218.5        -6.4   funds were net sellers for the month of May 2012 to the tune of Rs.
India - Nifty            5,248.2    4,924.3        -6.2   398.1 cr. after being net sellers of Rs. 529 cr in April 2012. FIIs were
Indonesia - Jakarta      4,180.7    3,832.8        -8.3   net sellers to the tune of Rs. 1788 cr in cash markets in May 2012.
Chinese - Shanghai c     2,396.3    2,384.7        -0.5   They were net buyers to the tune of Rs 54 cr in April 2012. The FIIs
                                                          were net sellers in 10 out of 21 trading sessions in the month.

     All the sectoral indices ended the month of May 2012 in the red. The BSE Auto, Power, Bankex and Metals fell the
     most by 16.6%, 9.8%, 7.9% and 8.6% respectively while IT, Healthcare and Oil & Gas fell relatively less by 0.6%,
     2.2% and 4.7% respectively.
     The BSE Auto index fell the most amongst the BSE sectoral indices for the month of May 2012. The Auto index
     was down 16.6% and exhibited a downward trend across the month. In the initial week the auto companies were
     down primarily due to the tepid sales numbers reported by the automobile manufacturers for the month of
     April 2012. The fall in the auto index was reflected in all the index heavy weights like Tata Motors, M&M, Bajaj
     Auto, and Hero Motocorp etc. The auto index continued its downward trend and fell 2.45% for the second week
     ended 12th May 2012. The Auto index plummeted 7.9% for the third week as the index heavy weight Tata Motors
     tumbled on euro-zone debt worries. Tata Motors derives almost two-third of its revenue from Jaguar Land Rover,
     which reported flat sales at 87,377 units in April 2012. The index registered marginal gains in the fourth week
     despite the Oil marketing companies announcing an increase in the petrol prices.

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Monthly Equity Commentary                                                                              contd…
  The BSE Power index registered a fall of 9.8% for the month of May 2012. It the second leading index amongst the
  sectoral indices to fall. The index remained on a downward trend in three out of four weeks. In the initial
  weeks the power index was down as index heavy weights like BHEL fell on account of significant order losses
  and poor order visibility in the near term. NTPC, another index constituent reported certain controversies
  related to fuel supply agreements (FSAs). The power index fell 4.67% in the second week of the month on the
  back of a 6.7% fall in the net profit reported by company in its Q4FY12 results. The weak economic scenario in
  the domestic markets further added to the worries of the power stocks and pulled down the index. However in
  the final week the index bucked the trend and registered a marginal gain of 0.21% as against the previous week.
  The BSE metal index was down 8.6% for the month of May 2012. The index was the third most falling index
  amongst the BSE sectoral indices. The BSE power index closed in red for three out of four weeks in the month of
  May 2012. One of the key reasons for the metal index to plummet is the falling price of metals in the
  international markets. The LME 3 month buyer prices of key metals including Tin Copper and Lead were down by
  13%, 10.4% and 9.8% respectively on an M-o-M basis. Most of the leading metal companies declared their Q4 &
  FY12 results during the month. Aluminum major Hindalco declared its FY12 results in the initial week and
  registered a 9.6% YoY decline in the bottom-line, on account of low aluminum prices on LME and a steep rise
  in costs of production. Other Metal majors including Tata Steel too reported a steep decline in its consolidated
  bottom line. Domestic steel major SAIL too reported a decline in the bottom line of 27.8% for FY12. Therefore
  weak performance reported by the metal companies primarily pulled down the metal index. The metal index
  however recovered marginally for the fourth week.
  The BSE Bankex too declined for the month of May 2012 by 7.9%. The Banking stocks tumbled after the RBI
  outlined a schedule for banks to steadily build up their capital buffers through March 2018. As per the Basel-
  III capital rules, banks will have to achieve a minimum shareholder equity ratio or common equity as a
  percentage of their total risk-weighted assets of 4.5% by Jan. 1, 2013 and progressively build it to 5.5% by March
  31, 2018. Banks will also have to increase their Tier-I capital ratios from 6% to 7% over the same period. In
  addition to this during the month, rating agency Moodys, downgraded the standalone bank financial strength
  rating (BFSR) of three large Indian banks, which came in as a big blow to the sector per se. This resulted in the
  bankex falling by 4.9% in the third week of the month. The BSE Bankex bounced back in the final week rising by
  1.61%. This was primarily due to better than expected results posted by Banking major SBI.


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Monthly Equity Commentary                                                                               contd…
  The BSE IT index fell the least amongst all the sectoral indices. The IT index was down 0.67% for the month of
  May 2012. The IT index fell for three out of four weeks in the month. The IT companies are majorly impacted by
  the rupee dollar movements. The rupee depreciated against the dollar in the month of May and made a new
  low of Rs 56.4/ $ as of May 2012 as against Rs 52.5 / $ as of April 2012. The IT stocks tend to benefit from the
  falling Rupee and hence fell the least as compared to the other sectoral indices. During the initial week IT major
  TCS announced a tie up with a leading customer for core banking solutions while Wipro announced that it has
  signed an agreement to acquire Promax applications group. Also another key reasons for the decline in the IT
  stocks is the spiraling debt crisis in the European region and a slew of weak economic data announced by the US,
  the largest outsourcing market for the Indian IT firms. The index also fell after Cognizant Technology Solutions,
  lowered its revenue guidance for 2012, citing a slower-than-anticipated pickup in demand in the banking and
  healthcare verticals.
  The Oil & Gas index was down 4.73% for the month of May 2012. The index consistently remained in a
  downward trend and fell for three out of four weeks in the month. The depreciating rupee against the dollar
  added to the concerns of the oil companies as depreciating rupee inflates the cost of production for downstream
  Oil and gas companies. In addition to this the depreciating rupee also adds to the burden of under recoveries,
  which are estimated to rise in the current financial year. Towards the end of the month the Oil Marketing
  Companies hiked the prices of petrol by Rs 7.5 per liter, which was the steepest rise taken ever. This benefited
  the Oil companies to a certain extent but resulted in wide spread protests across the country. Therefore the oil
  companies reversed most of their gains on reports the government may direct PSU OMCs to partially rollback the
  steep hike in petrol prices announced earlier. Both the Oil & gas majors ONGC and GAIL reported their FY12
  results. GAIL registered a modest rise of 10.5% at the bottom line while ONGC registered a 25.3% rise at the
  bottom line for FY12.
  Top gainers in the F&O stocks included Asian Paints (up 14%) followed by Divis Labs, Colgate Palmolive and
  Jubilant Foods, which were up by 9%, 8.6% and 7.8% respectively. Stocks including S Kumars Nationwide, Ruchi
  Soya, CESC, Zee Entertainment, BPCL and IDFC too rose in the range of 3.5 – 7%. The Top losers in the F&O space
  include Nagarjuna Constructions down by 39% while IRB, IVRCL Infra and Orchid Chemicals too were fell by
  34.5%, 34.1% and 32.7 % respectively. Mc Dowells, Educomp, Sintex, Tata Motors and Adani Power fell in the
  range of 26-28%.

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Monthly Equity Commentary                                                                                 contd…
   Fund Activity:
 FII Ac tivity     Net Buy / Net Buy /    Open       Open
                     Sell      Sell      Interest   Interest
                    May-12    Apr-12     May-12     Apr-12
 Equities (Cash)    -1789       54
 Index Futures      -5957      -724       6755       9028
 Index Options       7771      6765       31435      25561
 Stock Futures       2205      -890       19890      20447
 Stock Options       123       -112        137        555


     In the equity space, the FIIs were reported as net sellers of Rs. 1789 cr in May 2012 (in April 2012 they were
     marginal net buyers of Rs 54 cr). In the F&O space, the FIIs were net sellers in the index futures segment while
     the open interest in the segment dropped thus suggesting unwinding of longs. Simultaneously in the index options
     FIIs were net buyers to the tune of Rs 7771 cr with the open interest in the segment increasing. Similarly in the
     stock futures segment the FII turned net buyers from net sellers in the earlier month however the open interest
     declined marginally in the segment. The stock options segment continues to witness very low participation.




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Monthly Equity Commentary                                                                              contd…
Bond Yields:
  Indian G-Sec bond yields ended lower by 27 bps                              ear overnm B Y - Trend
                                                                          10 Y G        ent ond ield
  at 8.40% at the end of May 2012 after rising 10 bps      10.00

  in April 2012. Government bond yields declined on
  speculation that the Reserve Bank of India (RBI)          8.00
  was buying bonds in the secondary markets,
  though few traders expect significant debt gains




                                                          %
  anytime soon. Yields also dropped on concerns             6.00
  over global risk aversion lures investors towards
  safe-haven      government      debt.         India's
  benchmark 10-year bond prices rallied, sending            4.00




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  yields to their lowest level in a month and half at
  one point, as traders positioned for a rate cut by
  the central bank following a sharp slump of
  economic      growth     in    the    January-March                                 Period

  quarter. Yield had dropped to as low as 8.36 %, its
  lowest since April 19.

 Commodities:
   In May 2012, the Reuters/Jefferies CRB Index of 19 raw materials ended down by 10.78% to 272.97. This was on
   account of a fall witnessed in commodities like Cotton (18.3%), Crude Oil (17.5%), Orange Juice (15.7%),
   Heating Oil (13.9%), Copper (10.5%), Silver (10.3%), Corn (9.5%), Soyabeans (8.9%), Sugar (8.0%), Nickel
   (8.0%), Cocoa (7.2%), Gold (6.1%), Coffee (5.4%) and Wheat (3.2%) offset by a rise in Natural Gas (13.5%), Lean
   Hogs (6.0%), and Live Cattle (1.9%). The CRB index touched a low of 272.97 in the month, down 10.78% since
   January and more than 40% since its all-time high of July 2008. The price fall comes as investors worry that the
   decade-long boom in commodities markets on the back of strong demand in China is under threat due to the
   arrival to Beijing of a period of slower - and less commodity-intensive - economic growth. Commodities fell,
   heading for the biggest monthly slump since 2008, as Europe’s escalating debt woes dimmed prospects for
   demand and drove crude oil into a bear market. The CRB index was dragged down by a steep fall in Cotton and oil
   prices.


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Monthly Equity Commentary                                                                                     contd…
 Behaviour of Metal prices (LME 3 month buyer prices) during the month of May 2012
  Metals ended on a negative note in the month of May. The top losers were Tin, Copper, Lead, Nickel, Zinc, and
  Aluminium with each falling 13.03%, 10.48%, 9.89%, 7.99%, 7.18% and 4.03% respectively. Base metals came
  under downside pressure, lurching to fresh multi-month lows in most cases, amid continued turmoil in the
  eurozone. Alongside a yet-again firm US dollar, which has profited from Greece’s failure to form a government
  and thus the prospect of re-elections, weak equity markets also weighed on metal prices.
                                                                         Metals     31-May -12   30-A pr-12       % Chg
  LME Tin prices fell 13.03% in May 2012. Prices for tin plunged        Aluminium        2013         2098        -4.03%

  as wider markets dropped on concerns a Greek exit from the            Copper           7498         8376       -10.48%
                                                                        Zinc             1899         2046        -7.18%
  euro zone could derail global growth.                                 Nickel          16470        17900        -7.99%
                                                                        Tin             19720        22675       -13.03%
                                                                        Lead             1940         2153        -9.89%


  LME Copper fell by 10.48% in the month of May 2012. Copper fell to its lowest level sinking below $8,000 per
  tonne in London at one point, as political turmoil in Greece heightened fears about Europe's deepening debt
  crisis and its impact on demand for raw materials. Copper fell on course for a second weekly loss, as weak
  economic data from top consumer China and deepening euro zone political turmoil dented demand prospects
  for the metal. Copper declined after China’s official Xinhua News Agency said the nation has no plans to
  introduce stimulus measures on the scale unleashed in 2008, damping expectations demand from the biggest
  consumer may recover. Copper fell to its lowest level as a second-straight month of soft U.S. employment
  growth fed worries about the health of the global economy, while tight supplies of the metal outside of China
  kept losses in check. The mounting worries in Europe amplified expectations of softer exports from China, the
  region's largest trade partner, helped to drag copper down. Copper fell to a four and half month low as the euro
  dropped ahead of a European Union summit that investors feared may not come up with sufficient measures to
  tackle the debt crisis and shore up the faltering economy. Prices came under heavy selling pressure as growing
  fears over a possible Greece exit from the euro zone prompted investors to shun riskier assets ahead of a summit
  of European leaders.
  LME Lead fell by 9.89% in the month of May 2012. Lead Prices fell amid weak trend in base metals overseas and
  sluggish spot demand. Market analysts said besides a weakening trend at the London Metal Exchange (LME),
  subdued demand from battery makers in the domestic spot market, also weighed down on lead futures prices.

Monthly Report June 2012                          Retail Research
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Monthly Equity Commentary                                                                                contd…
  LME Nickel fell 7.99% in May 2012. Reportedly, the nickel prices at LME have continued falling to break USD
  17,000 per tonne affected by debt credit issues in Europe. Nickel prices dropped to USD 16,825 per tonne on May
  14, 2012 the lowest level in 2012. Amid weak trend overseas and subdued demand at spot markets from alloy-
  makers, nickel prices declined. Market analysts said besides weakness in metal at the London Metal
  Exchange (LME), sluggish demand from alloy-makers in the spot market also put pressure on nickel prices at
  futures market.
  Gold fell last month by 6.1%. During the month gold prices exhibited a mixed trend. Gold fell to its lowest since
  late December, sucked into a broad-based sell-off that dented global markets on the back of alarm over political
  turmoil in Greece. Fears over a worsening European debt crisis and sharp losses in equities and commodities
  sent the precious metal to its biggest weekly decline this year. The metal came under heavy pressure as
  disclosures of huge trading losses at JPMorgan Chase & Co, a major bullion trader, dented sentiment among gold
  investors. Gold dipped tracking a weaker euro on heightened worries about the euro zone debt crisis as Spain's
  borrowing costs spiralled towards unsustainable levels. Gold has recently been moving in lockstep with the single
  currency, which fell to its lowest level against the dollar in two years as investors continue to fret about Spain's
  vulnerable fiscal conditions. Continuous weakness in other currencies and strength in the dollar have kept gold,
  precious metals and commodities generally depressed. Gold is poised for the worst run of monthly losses in
  almost 13 years as concern that Europe’s fiscal crisis is escalating drove investors to seek the dollar as a haven
  over the precious metal.
  Crude oil (WTI) fell by 17.49% in May 2012. Oil fell below $102 as poor U.S. economic data and worries over
  Spain's deepening debt crisis brought a wave of selling across markets, putting oil on course for its biggest
  monthly percentage drop in two years. Oil had the biggest monthly drop in more than three years. Oil prices
  came under pressure after U.S. first-quarter GDP growth was revised down to 1.9 per cent from last month's
  2.2 per cent estimate. The prices also fell on the drumbeat from global stock markets, which erased the year's
  gains as investors pared holdings for safe-haven assets such as gold, on growing concerns about the euro zone
  debt crisis. Europe's financial crisis is the most immediate concern, but there have been plenty of signs of
  weaker demand. Analysts point to weak U.S. jobs numbers and a slowdown in China's manufacturing sector. The
  U.S. and China are the biggest oil consumers in the world.



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Monthly Equity Commentary                                                                                            contd…
  The Baltic Dry Index (BDI), a measure of shipping costs for commodities, fell by 20.1% last month. The Baltic
  Dry Index is more influenced by the movement of goods from / to China and primarily that of iron ore. The
  index, which tracks rates to ship dry commodities, turned negative - its lowest since April 17 due to weakness
  in dry bulk shipments and analysts expect that a rebound is unlikely in the near term and also on weak iron
  ore demand in China. The index also fell amid weak preliminary manufacturing data from China, and a
  decline in demand for larger freight vessels, panamaxes and capesizes.
Currencies
  The US dollar rose against all its peers for May 2012 except for the Japanese yen against which the USD fell by
  1.4% for the month. The USD gained the most against the Indian Rupee, Euro, Brazilian Real, Korean Won,
  Malaysian Ringgit, Indonesia Rupiah, Thai Baht, Taiwan Dollar and Argentine Peso by 7.4%, 6.5%, 6.0%, 4.1%,
  3.8%, 3.3%, 1.6%, 1.9%and 1.2% respectively
         Given below is a table that shows the depreciation (-)/appreciation (+) of the dollar against various currencies
     for the month of May 2012:
                                             The USD appreciated against the Rupee by 7.4% for May 2012. During the month the
USD to:           31-May-12 30-Apr-12 % Chg  Indian rupee fell to a historic low against the U.S. dollar as importers rushed to
Pakistani rupee       93.97     91.55   2.6% cover short-term exposures amid a modest intervention by the central bank.
Hong Kong dollar       7.76      7.76   0.0% Worsening macroeconomic scenario and policy uncertainty, leading to weak foreign
Chinese yuan           6.35      6.33   0.2% fund inflows, also pushed the rupee to historic low levels. The rupee also fell as
Indian rupee          56.44     52.54   7.4% concerns over a record trade deficit, which widened to 10.9% of gross domestic
Taiwan dollar         29.75     29.28   1.6% product (GDP) in the last fiscal, and deteriorating economic fundamentals take
Singapore dollar       1.28      1.24   3.6% their toll on the currency and threaten to undermine India’s growth story. The fall in
Argentine peso         4.47      4.42   1.2% the rupee came as the euro failed to gain much traction despite broader weakness
Euro                   0.80      0.75   6.5% in the dollar, given concerns about the toll that harsh austerity measures are taking
Thai baht             31.83     31.24   1.9% on activity across the region. Forex dealers said intense dollar demand from banks
Malaysian ringgit      3.16      3.05   3.8% and importers, mainly oil refiners, in view of higher dollar overseas affected the
Indonesian rupiah   9514.75   9208.10   3.3% rupee value against the dollar, despite RBI steps to stem the fall of the local unit.
Japanese yen          79.26     80.38  -1.4%
                                             Continuation of uncertainty in the eurozone economic crisis and global risk aversion
Brazilian real         2.00      1.89   6.0%
                                             dragged the rupee down, as investors preferred a safe dollar compared to any other
Korean won          1180.08   1133.79   4.1%
                                             assets. The rupee lost more than 16 per cent since its peak in February. A sharp
                                             weakening of the rupee unnerved markets and the fall encompassed equity markets
                                             also.

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Monthly Equity Commentary                                                                               contd…
  USD rose 6.5% against the Euro. The dollar rose after the European Central Bank made it seem unlikely that it
  would take more steps to ease the region’s debt crisis anytime soon. The ECB kept its main interest rate
  unchanged, as expected. The greenback rose from the lowest in almost a month against the euro as the data
  highlighted a divergence between U.S. economic performance and that of Europe, where reports showed the
  U.K. and Spain have fallen into recession. The euro fell on worries that political uncertainty in Greece and a
  French leadership change may undermine austerity plans key to tackling the euro zone's debt crisis and also
  after disappointing manufacturing reports from China and India. The euro fell reaching a three-month low, as
  concerns mounted that politicians in Greece won’t be able to form a coalition government and the nation may
  exit the monetary union. Europe’s shared currency remained lower against most of its major counterparts after
  Fitch Ratings downgraded Greece’s long- term credit rating to CCC from B-, citing heightened risk that the
  nation may not be able to sustain membership in the monetary union. The euro touched the weakest level
  against the dollar since July 2010 as German manufacturing data weakened and China said its biggest banks may
  fall short of loan targets. It also fell on speculation that a summit of European Union leaders will provide no new
  measures to stem the sovereign-debt crisis. The euro's drop accelerated after Dow Jones quoted former Prime
  Minister Lucas Papademos as saying Greece had no choice but to stick with a painful austerity program or face a
  damaging exit from the euro zone. The fall was also as Europe's sovereign debt crisis and banking sector concerns
  sapped investors' resolve and pushed them to sell the euro zone common currency.
  Brazilian Real depreciated against the US Dollar in May 2012. Real fell to a three-year low, prompting the central
  bank to auction currency swaps for the first time to stem the losses. The real fell to its lowest level in almost
  three years as intensified political turmoil in Greece sapped demand for emerging-market assets including
  Brazilian stocks. The currency has dropped almost 25% against the dollar since the highs of Feb 2012, the worst
  performance among the 16 most-traded currencies, as central bank dollar purchases to weaken the real to aid
  exporters and interest-rate cuts have coincided with concern instability in Europe will further weigh on economic
  growth. Brazil's currency traded sharply weaker amid renewed concerns about a possible Greek exit from the
  euro zone and the effect Europe's ongoing crisis is having on the global economy.




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Monthly Equity Commentary                                                                              contd…
  The USD appreciated against the Korean Won by 4.1% for May 2012. The South Korean won fell to its lowest since
  mid-January as it tracked global markets where investor risk sentiment was focused on fears of a political
  impasse in Greece and the sustainability of Spanish banks. South Korea’s exports declined for a third month in
  May, adding pressure on the central bank to hold off from raising interest rates. The central bank reduced its
  economic growth forecast for this year to 3.5 percent from 3.7 percent on April 16, citing downside risks from
  the European debt crisis and high oil prices. Political uncertainty over Greece grew after a leftist party gave up
  on its attempt to form a new government, creating more uncertainties about the euro zone's ability to cope with
  its burgeoning sovereign debt problem. The won fell 4.1 percent during May, the biggest monthly loss for the
  currency since September 2011 amid renewed uncertainty about the euro zone's future on Greece's political
  turmoil and Spain's banking sector.
  The US dollar depreciated against the Yen by 1.4% for May 2012. The yen rose versus all of its 16 most-traded
  peers as a smaller- than-forecast payrolls gain in the U.S., recessions in the U.K. and Spain increased demand
  for haven assets and the premium investors receive for buying debt of the U.S., U.K. and Germany instead of
  Japanese securities fell. Yen rose to a more than two-month high against the dollar as the greenback was
  pummeled by more disappointing U.S. economic data. Dollar slipped after a government report showed U.S.
  employers added fewer jobs in May than expected, adding to recent concern the economy were slowing. The U.S.
  dollar fell below Y80 for the first time since Feb. 24, as investors sought perceived havens given another round
  of weak U.S. economic data and more bad news out of Europe. The safe-haven yen posted sharp gains against
  the dollar on concerns about banks in Spain and Greece, chances of contagion if Greece leaves the euro and
  disappointing U.S. economic data. The yen gained to a more than 11-year high against the euro as investors
  sought the perceived safety of the nation’s debt amid a deepening European crisis and slowing U.S. growth.




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Monthly Equity Commentary                                                                                                           contd…
 Comparison of Equity Returns in various markets - MSCI Indices in US$ terms

                                     Monthly 3 Month       Y TD    1 Y ear                                   Monthly   3 Month      Y TD    1 Y ear
MSCI Index                    Last Returns Returns      Returns   Returns MSCI Index                  Last Returns     Returns   Returns   Returns
Emerging Mark ets                                                            Developed Mark ets
BRI C                       256.1     -14.0%   -21.2%     -4.4%    -27.9% EUROPE                   1,164.8    -13.0%    -16.3%     -7.2%    -26.7%
EM (EMERGI NG MARKETS)      906.3     -11.7%   -16.0%     -1.1%    -22.4% G7 I NDEX                1,038.8     -8.3%     -8.1%      0.8%    -10.4%
EM ASI A                    384.9      -9.8%   -12.9%      1.6%    -20.2% WORLD                    1,177.6     -9.0%     -9.3%     -0.4%    -13.1%
EM EUROPE                   367.7     -19.5%   -25.4%     -7.0%    -35.0%
EM EUROPE & MI DDLE EAST    312.6     -19.5%   -25.4%     -7.0%    -35.0% USA                      1,251.3     -6.4%     -4.2%      4.3%     -2.8%
EM LATI N AMERI CA         3,393.8    -13.5%   -20.3%     -5.8%    -24.3% BELGI UM                  960.3      -8.7%     -7.8%      4.5%    -17.6%
                                                                             JAPAN                 2,030.1     -9.0%    -11.5%     -2.9%    -12.4%
MALAYSI A                   448.0      -4.5%    -6.2%      1.9%     -5.6% NEW ZEALAND               104.3      -9.2%     -6.2%      3.8%     -9.9%
PHI LI PPI NES              399.9      -4.5%    1.7%      17.8%     18.0% I RELAND                  113.7      -9.4%     -8.7%     -4.0%     -4.2%
EGYPT                       580.1      -5.0%   -11.0%     31.7%    -12.6% FI NLAND                  277.1     -17.9%    -26.3%    -14.5%    -41.0%
TAI WAN                     249.8      -5.0%   -11.0%      4.2%    -21.4% SPAI N                    281.1     -18.7%    -33.8%    -32.6%    -50.5%
PERU                       1,457.4     -6.9%    -3.5%      5.4%     -1.6% AUSTRI A                  841.4     -19.7%    -25.2%    -10.4%    -45.9%
COLOMBI A                  1,193.7     -7.5%    -1.7%     15.5%      0.7% PORTUGAL                   70.9     -21.5%    -25.5%    -23.9%    -47.9%
MOROCCO                     329.4      -8.0%   -17.8%    -12.1%    -31.4% GREECE                     60.5     -30.3%    -35.4%    -25.9%    -72.0%
SOUTH AFRI CA               497.1     -10.9%   -14.8%     -1.7%    -15.8%
CHI NA                       53.3     -11.4%   -14.5%      0.9%    -22.6%
KOREA                       362.4     -11.4%   -11.9%      1.4%    -19.2%
THAI LAND                   350.5     -11.8%   -10.0%      9.0%     -1.6% Frontier Mark ets
I NDI A                     348.9     -11.9%   -20.6%      0.6%    -30.4% FM (FRONTI ER MARKETS)    448.7      -5.8%     -6.5%     -3.9%      -0.2
I NDONESI A                 786.7     -12.0%   -11.4%     -9.2%    -14.3%
MEXI CO                    5,626.5    -12.2%    -9.1%      0.4%    -11.6% ZI MBABWE                1,018.8      4.3%      0.5%      0.5%    -14.9%
TURKEY                      420.8     -13.0%   -16.1%      6.5%    -24.8% BAHRAI N                  203.7       0.6%     10.3%      5.3%    -12.4%
CHI LE                     2,263.0    -13.3%   -14.5%     -0.2%    -20.8% SLOVENI A                 230.0     -16.0%    -21.1%    -22.1%    -39.6%
CZECH REPUBLI C             397.9     -13.7%   -19.6%    -11.1%    -34.4% ARGENTI NA               1,121.0    -17.0%    -41.5%    -45.3%    -62.7%
BRAZI L                    2,532.8    -14.8%   -26.0%    -10.4%    -30.6% BULGARI A                  96.7     -18.1%    -25.4%    -29.3%    -62.0%
POLAND                      646.2     -17.1%   -21.4%     -5.6%    -44.1% SERBI A                   172.4     -20.4%    -33.0%    -20.7%    -59.8%
RUSSI A                     664.7     -21.4%   -28.3%     -9.8%    -33.7% ROMANI A                  309.4     -22.2%    -20.2%     -2.0%    -35.9%
HUNGARY                     411.1     -23.1%   -27.0%     -5.0%    -50.0% UKRAI NE                  117.7     -27.9%    -33.1%    -33.6%    -68.1%



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Monthly Equity Commentary                                                                            contd…
Comparison of Equity Returns in various markets - MSCI Indices in US$ terms
  Most equity markets across the globe ended the month of May 2012 on a negative note. European markets
  were the worst performers amongst the global equity markets followed by BRIC and Emerging Markets. Frontier
  Markets fell the least (-5.8%).
  All the Developed markets ended in the red with Europe losing the most (13%). Amongst the European
  markets, Greece fell sharply by 30.3%. Troubles in Greece dominated headlines for much of the month. It will
  have to spend almost US$24 bn to bail out one of its biggest banks. Fitch Ratings cut Greece’s
  creditworthiness earlier this month. The deepening political turmoil in Greece has begun reverberating
  throughout the global financial markets as Athens’ failure to form a government threatens to further
  undermine the battered European economy and banking system. Greece’s fragmented political leadership
  failed in another last-ditch effort to form a government, all but assuring another round of elections next
  month. Voters swept from power the two major parties that had engineered a painful austerity plan with
  Europe’s wealthier countries, led by Germany, in exchange for an ongoing financial lifeline. This has raised the
  likelihood that Greece will be forced to leave the 17-nation compact that shares a common currency. The
  Athens government is due to run out of cash in June.
  The Portuguese stock market dropped 21.5% in May. Portugal Telecom SGPS SA (PTC), the country’s biggest
  telecommunications company, fell sharply in May to the lowest price in nearly 16 years as investors fled
  from stocks in some euro countries. Portugal’s gross domestic product fell for the sixth quarter in a row for
  Q1 2012, but the 0.1% drop was better than the -1.0% shrink expected by analysts. The GDP dropped -2.2%
  compared to the first quarter of 2011, which was also better than analysts’ expectations. The economic
  slowdown was due to the lower government spending and tax hikes implemented to cut debt in Portugal.
  The austerity measures were stipulated by the 78 billion euro bailout plan provided by the EU and IMF.




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Monthly Equity Commentary                                                                              contd…
  Spanish markets ended lower by 18.7% during the month. Higher borrowing costs in Spain are putting
  pressure on Mariano Rajoy's five month-old government to join Greece, Portugal and Ireland in seeking a rescue
  that would be the European Union's biggest. Spain struggled to bolster its banks. Spain's Ibex 35 index fell to a
  fresh 9-year low during the month as investors worried that soaring borrowing costs may force the country,
  engaged in an expensive recapitalisation of its banking sector, to seek an international bailout. The
  European Commission offered Madrid more time to reduce its budget deficit and direct aid to recapitalise
  distressed banks - two measures that had so far been opposed by Europe's paymaster, Germany. The Spanish
  government tried to reassure investors about the deepening crisis in the country’s banks and sovereign debt
  position. In another sign of shrinking confidence in Spain's banking sector, retail and corporate deposits at
  its banks fell in April to the lowest level since the start of the euro-crisis. Spanish 10-year yields soared 0.23
  percentage point to 6.64% as European markets closed, while Italy's 10-year yield broke above 6%, rising 0.18
  percentage point to 6.06%. Borrowing costs at these levels are widely considered to be unsustainable in the long
  run. Indeed, strategists at Royal Bank of Scotland Group warned that Spanish 10-year yields are likely to hit 7% in
  the coming weeks, which they said could prompt market intervention by the ECB or the euro zone's bailout fund.
  Finnish stock market dropped by ~18% as confidence in Finland's manufacturing industry deteriorated
  significantly in May, hurt by decline in new orders. The manufacturing confidence index fell to -12 in May from
  -2 in April. The downturn was influenced by a fall in new business and an increase in stocks of final products,
  data showed. The outlook component of the sentiment index indicated that the volume of production is set
  to decrease slightly during the next few months. Finland’s government raised its borrowing estimate for this
  year as it announced a capital transfer to the European crisis fund. Borrowing will be a net 8.7 billion euros
  ($11.1 billion) this year, up from 7.5 billion euros announced March 22, the government said on its website.
  Government debt is expected to be at 45 percent of gross domestic product at the end of 2012.
  BRIC lost 14% with Russia losing the most (21.4%). Russia’s Micex Index tumbled to the lowest since 2010
  during May 2012 on declines for power utility companies. Federal Grid, Russia’s state-run high voltage power
  transmission company, retreated to the lowest level since April 2009. Russia, the world’s biggest energy
  exporter, received almost 50% of budget revenue from oil and gas sales last year, according to government
  estimates. Russia was the first of the so-called BRIC countries to enter a bear market in 2012 after the RTS index
  fell more than 20% from a March 15 peak. Russian stocks and the ruble hit multi-month lows, dragged down by
  weaker oil prices and sovereign debt worries in Europe. Russia’s Micex Index entered a bear market amid
  concerns that Greece’s financial crisis is worsening and as OAO Sberbank, the country’s biggest bank, tumbled
  after a policy maker said lending is stagnating.

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Monthly Equity Commentary                                                                             contd…
  Brazil dropped ~15% as Oi SA, the Brazilian telephone company, led declines after the shares fell to the
  lowest level since May 2004. Brazil’s economy grew less than analysts expected in the first quarter,
  reinforcing signs that its consumer-led growth model, a magnet for investment over the past decade, is running
  out of steam. Gross domestic product expanded 0.2 percent in the first quarter from the previous three
  months, the government statistics agency said in a report. Retail sales barely rose in February and March,
  while vehicle sales fell 11 percent in April as the default rate among tapped-out consumers rose to 5.8
  percent. China, a key purchaser of Latin American commodities and Brazil's biggest trading partner, added
  pressure to local markets after an article published by the official Xinhua news agency denied the Asian giant is
  planning to enact large-scale fiscal stimulus measures to boost growth. Brazil’s industrial production
  contracted for a second straight month in April. Brazilian stocks also fell as homebuilders dropped on
  speculation policy makers will slow the pace of interest-rate cuts and oil producers followed crude lower.
  China dropped nearly 11.4% on speculation the nation’s economic slowdown may deepen and as Greece’s
  failure to form a new government increased concern the country will leave the euro. A slowdown in China
  and the risk of a Greek exit from the euro region are clouding the outlook for exports, which are equivalent to
  about half of gross domestic product. Slower economic growth in China also hurt metal and energy prices in May.
  China’s economy may have the worst growth in more than two decades if Greece leaves the euro, according to
  China International Capital Corp., the nation’s biggest investment bank. Expansion in the world’s second-
  biggest economy would slow to 6.4% in 2012 without policy stimulus if an exit drags down global growth by
  half as much as the 2008-2009 financial crisis did, economists led by Beijing-based Peng Wensheng said. With
  its growth slowing down in the face of global economic downturn, China decided to lower banks' reserve
  requirement ratio (RRR) by 0.5 percentage points starting May 18 to pump prime the economy. The Chinese
  cut in reserve-ratio requirements indicates the government’s concern about the economy’s health. Investors
  are expecting the growth to slow further in the second quarter.
  The Frontier markets fell the least (5.8%) with Ukraine falling the most (27.9%). However, Zimbabwe and
  Bahrain were the two countries to end in the green by 4.3% and 0.6% respectively. Romania and Serbia ended
  lower by 22.2% and 20.4% respectively followed by Argentina, which dropped by 17%.




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Monthly Equity Commentary                                                                             contd…
  Investors and officials say the corporate seizures eroded Ukraine's tottering economy by sapping badly
  needed overseas investment. Ukraine’s stock market ended ~28% lower and it is hampering Kiev's efforts to
  forge deeper economic and political ties with the European Union. The International Monetary Fund (IMF) is not
  convinced the Ukrainian government can achieve a 2012 budget deficit of 1.8% of GDP, and is suggesting
  that the authorities increase taxes on wealthy citizens. The IMF is recommending that the cabinet of ministers
  consider the possibility of either reducing the number of tax breaks or limiting budget expenditures.
  Increasing tariffs on gas and heating for households remains an important component for Ukraine achieving
  energy independence. Ukraine's banking sector has sufficient capital but requires further reforms, among
  which is reducing the amount of non-performing loans. The IMF expects Ukraine's economy to grow 3% this
  year (real GDP was up 5.2% in 2011), as demand for the country's exports declines. Ukraine's state budget for
  this year, with the most recent changes, has revenues at UAH 366.62 bn and spending at UAH 391.81 billion. The
  deficit gap is UAH 25.13 bn, or, according to the government's projections, 1.8% of GDP.
  Argentine stocks posted sharp losses in May 2012 as worries over the financial crisis in Europe stoked a
  global sell off. Stocks across the globe came under selling pressure as worries grew over the health of Spanish
  banks. Argentina's benchmark Merval stock index finished May with losses on last Thursday, as a report that
  the International Monetary Fund might aid Spain overshadowed weak U.S. economic data. Argentina is on
  track to end 2012 with a primary budget deficit for the first time since the country started recovering from
  its sovereign debt default a decade ago, government data suggest. If government spending keeps the pace it
  has set so far this year, the primary balance will be pushed into the red by January. That would threaten funds
  needed for the welfare programs and subsidies that lie at the heart of President Cristina Fernandez's popularity.
  This would come at a time of economic growth constrained by global sluggishness. The alarm sounded on
  Wednesday when the Economy Ministry said April's primary budget surplus was 1.06 bn pesos (US$237 mn),
  down 46% from the surplus posted in the same month last year. Argentina is the world's No. 1 exporter of
  soymeal, used as animal feed at a time of soaring demand from China, whose emerging middle class has acquired
  a taste for beef steak. But global high soy demand will not save Argentina from a 2012 primary deficit if state
  spending doesn't ease. Growth is slowing due to fallout from Europe's financial mess and slackening demand
  from No. 1 trade partner Brazil, whose economy is also slowing.
  Share prices on the Zimbabwe Stock Exchange ended last month on a positive note as investors continued to
  adopt a wait and see attitude in anticipation of attractive returns. In the past four months, the market has
  witnessed the entry of foreign investors with deep pockets to recapitalise ailing companies. Companies have
  resorted to restructuring in a bid to cut costs and analysts are expecting a spate of mergers and
  consolidations on the market due to tight operating conditions in the economy.

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Monthly Equity Commentary                                                                                contd…
Outlook going forward
 Global Market Outlook
 Spain could follow Greece…Banking system under pressure
   In order to avoid default, Greece, Ireland, and Portugal had resorted to bailouts from the European union or the
   IMF and have resisted immediate headwinds. On the similar lines is Spain, who has a higher threat of becoming
   the fourth Eurozone country looking desperately for a bailout. The current watchword in the ailing nation of
   Spain is “CRISIS”. Spain is slowly and steadily witnessing the rising magnitude of recession, which is evident from
   the liquidity crisis, debt crisis, banking crisis, economic crisis including jobless claims and weaker consumer
   confidence levels. The effect of the Bankia news was devastating. The nationalized lender Bankia collapsed
   needing urgent recapitalisation. Spanish markets dived to 9-year lows, the euro sank and investors fled Spanish
   government debt, pushing the yield towards the 7 per cent level at which fellow euro zone members Ireland and
   Portugal were forced to seek national bailouts from Brussels.
   Spain’s problems are mounting on from all fronts. The cost of borrowings for the nation has already reached a
   high of 7% and this has resulted in most of the foreign investors shunning the Spanish debt. The unemployment
   rate in the nation is at the highest levels of around 24.4%, which are the highest levels in the Euro area. The
   immediate liability for the Government is to refinance Euro 98 bn of debt and find another Euro 52 bn to fund its
   deficit for the current year. Local banks are barely left with any funds to lend thus squeezing companies and
   increasing the risk of a chain of bankruptcies, which could tumble the economy. The banking system's total loans
   to the business sector stand at Euro 44.6 bn. With the consistent contraction in the economy the situation looks
   worse. The effect of the crisis is visible on the consumer segment with consumers postponing their purchases
   and cutting back spending. This is turn is adding to the worries of the corporations.
   However even as the Spanish government acknowledges that the situation is critical, it could only urge the other
   European nations for a bail out fund. Also the nation has resorted to implementing austerity measures, which
   include spending cuts, and tax hikes. However the austerity measures implemented by the nation also boost
   unemployment levels. Though the Spanish Prime Minister is making every possible effort to prevent bank runs,
   the situation is getting worse as the time passes by.
   As per industry reports Spain’s sovereign debt stands at Euro ~ 709 bn. This is twice the collective debt of
   Greece, Ireland, and Portugal. This makes things worst as many European region banks have substantial
   exposures to the Spanish economy and the banking sector in specific. The fact that Spain’s debt is almost twice
   that of the combined debt of Greece, Ireland and Portugal signifies the huge size of the economy and even a
   bitter problem for the European leaders to bail out the country.

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Monthly Equity Commentary                                                                               contd…
Greece…. still gets worse. (rising probability of exiting from the Eurozone)
   Greece went to polls in the month of May 2012 envisaging likely positives coming in from the new government.
   However the New Democracy and the Pan-Hellenic Socialist Movement just fell short of the number of seats
   required for the coalition government to continue. This has resulted in a new round of elections, which are
   scheduled on the 17th June 2012. Whether Greece would stay or get out of the European Union, would depend
   on the new incumbent Government with respect to the acceptance of the bailout plan including austerity
   measures.
Only a part of the bailout fund being transferred to the Greek banks:
   Currently around half of the Euro 49 bn in international funds for Greek bank recapitalization has been
   transferred to the recapitalization fund so far and the rest is being scheduled to be transferred in June, mostly
   post the new Government coming in. If the new government refuses to implement the 5% fiscal tightening
   already enacted or implement the Euro 11bn of fiscal tightening needed in June/July for 2013/14, then the
   troika (European Commission, IMF and ECB) could refuse to release the additional funds required to recapitalize
   the Greek banks. The troika has indicated that they will not release money until there is a new government.
   Moreover, if the troika refuses to release the money there would likely be a default on Greek ‘international law’
   bonds, maturing this year totaling ~ Euro 1 bn and around Euro 2 bn next year. A default on international bonds
   in Greece could then potentially lead to the ECB refusing to repo Greek government bonds which in turn could
   force Greece to leave the Euro-area. This in turn could lead to panic deposit flight elsewhere in the periphery.
 Greece leaving the Euro Zone could cause a severe dent than a dent caused by being in:
   Around 70% of the debt of Greece is owned by the official sector i.e. IMF, ECB and EU loans. This suggests that if
   Greece exits the Euro Zone, it could cause a severe dent to the Euro region, as the IMF, ECB and EU would have
   to write off the loans or modify the terms accordingly. Finally there is a possibility of a higher compromise from
   Europe towards Greece as the cost of break up could be quite high than that of a bailout.
France Elections to be keenly watched..
   In the early days of May 2012, France got its new President, Francois Hollende. The new president has claimed
   that the austerity pact negotiated by Sarkozy and Merkel were so harsh and severe that it killed growth and
   therefore hindered rather than helped recovery.

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Monthly Equity Commentary                                                                                contd…
   The challenges facing the new President are numerous and varied in nature. Some of the problems, such as
   reducing France’s budget deficit, are common to the majority of the euro zone’s peer members. In addition to
   this the new President also needs to confront issues such as uncompetitive labor market, limited deregulation so
   far within the country, very high government spending as a proportion of GDP and a deteriorating trade deficit.
   There are a few positives with France, which include a 1.7% GDP growth last year against an average Euro area
   growth of 1.4% and high household saving ratio of 16% as against 11% in Germany, which is one of the key nations
   in the Euro zone.
   However Francois Hollande made a campaign commitment to reduce France’s headline budget to 3% in 2013 and
   to eliminate the deficit by 2017. News reports suggests that the new President has turned very positive
   regarding the growth in the coming years, which could be a challenge in itself. The new President will also have
   to overcome the above-mentioned challenges in order to realize his budgetary objectives.
   As mentioned above, though in the campaign the new President has signaled at reducing the fiscal deficit and
   Government spending, there is no clear road map from him on that front.
U.S. economy gradual and slow recovery – Recent economic data signals stabilization
   The US economy remains on a recovery path and latest reports on housing also raised hope that the sector,
   which was the weakest in the economy, is showing signs of recovering. Fed officials have also revised up their
   growth forecasts for this year. While the Fed decided to maintain its monetary policy stance at the latest
   meeting, the Fed Chairman Bernanke has clearly mentioned in his statement on different occasions that he was
   prepared to take “additional balance sheet options” should the economy require that additional support.
   The recent reports from the US signal mixed reactions, suggesting that though the economy remains on a
   recovery path, uncertainties still exists which could pose a thereat to the recovery. US consumer spending
   showed signs of slowing early in the second quarter, perhaps reflecting recent slowing in hiring. Retail sales rose
   a mere 0.1% in April, after a 0.7% gain in the previous month. Sales of clothing declined, but purchases excluding
   cars, building materials and service stations, (the category used to calculate GDP) rose more than forecast.




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Monthly Equity Commentary                                                                               contd…
   In contrast, housing reports have been more positive, suggesting that the sector might finally witness stable
   cycle. Demand for housing as per the report was on a rise. Sales of existing homes rose 3.4% from the previous
   month, to an annual rate of 4.62 mn units in April, which is the fastest pace in nearly two years. The median
   price of an existing home also jumped to USD1,77,400 during the month, up 10.1% from a year earlier. This was
   the largest rise registered since January 2006. The market for new homes showed a similar picture, with sales
   increasing 3.3% to an annual rate of 343,000 units in April. The median price of a new home also rose to
   USD235,700, up 4.9% from a year ago. Homebuilders too turned a bit more optimistic on the outlook, with
   sentiment jumping in May to its highest in five years. They also broke more ground for housing projects. US
   housing starts rose 2.6% to a 717,000 annual rate in April. Although building permits decreased 7% during the
   month, the number for March was revised upward substantially, to its highest level since September 2008.
   Despite this the US policy makers see the spiraling Euro Zone Debt worries to overweigh the positives in the US
   markets. Also the policy makers are concerned about the severe hit the US economy would take if USpoliticians
   do not take steps to postpone some of the spending cuts and tax hikes.
 Indian Economy Outlook
 Depreciating Rupee.
   The steep decline in the USD / INR exchange rate by 24.5% as of 1st June 2012 reflects the growing concerns
   for the Indian economy. The INR has taken a beating against the greenback. It has hit an all-time low from its
   recent peak. The INR along with the other Emerging currencies have taken a hit, however the INR has fallen
   the most amongst the emerging nations pack.
   INR swings in the last 5 years have been driven/accompanied by strong equity flows. This is not the case this
   time (CAD/Economy/Global uncertainty) – and could impact the market differently. The INR’s woes are a little
   different this time – more a casualty (rather than a cause) of India’s economy/market performance.
   Some of the key reasons that could be attributable to the fall are the high current account and fiscal deficits
   coupled with a mix of high interest rates with rising inflation but rapidly slowing economic growth. However
   the strengthening of the US$ against all other major currencies is also one of the key reasons for the INR to
   depreciate. Unlike say a Brazil or an Indonesia, does not have a history of extreme exchange rate volatility. In
   this respect the currency volatility of late has been greater than at any time since the early 1990s. The chart
   below depicts the USD / INR movement for the past three years on a daily basis:

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Monthly Equity Commentary                                                                                                                                          contd…

                                                                       $ / INR-Daily Movem ents
   40

   42

   44

   46

   48

   50

   52

   54

   56

   58
                                            Mar-10

                                                     May-10




                                                                                                    Mar-11

                                                                                                             May-11




                                                                                                                                                          Mar-12

                                                                                                                                                                    May-12
        Jul-09




                          Nov-09

                                   Jan-10




                                                              Jul-10




                                                                                  Nov-10

                                                                                           Jan-11




                                                                                                                      Jul-11




                                                                                                                                        Nov-11

                                                                                                                                                 Jan-12
                 Sep-09




                                                                        Sep-10




                                                                                                                               Sep-11
   One differentiating factor in the INR’s fall this time has been the relative sharp swings. This are more so a
   function of the India centric issues rather than weaker global market scenario. As per the chart above the Indian
   Rupee has slipped from a level of Rs 44.89/$ to Rs 55.92/$. Financing pressures remain a key worry for the
   currency. With the current account deficit rising eightfold in absolute terms, from USD 9.6 bn in FY91 to USD
   74.3 bn in FY12 (~4% of GDP), the pressure on the financial front has only aggravated during the period.




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Monthly Equity Commentary                                                                                                                    contd…
 The correlation between the INR and the equity market remain distinctly positive but has moderated in the
   recent past.
                                                             Se ns e x - USD/INR



  22000                                                                                                                                                    40

                                                                                                                                                           42
  20000

                                                                                                                                                           44
  18000
                                                                                                                                                           46
  16000
                                                                                                                                                           48

  14000                                                                                                                                                    50

  12000                                                                                                                                                    52

                                                                                                                                                           54
  10000
                                                                                                                                                           56
   8000
      Jan-09   May-09   Jul-09   Oct-09   Jan-10   A pr-10     Jul-10   Oct-10     Jan-11   May-11        Jul-11    Nov-11      Feb-12       May-12

                                                        Sensex-LHS           USD/INR-RHS



Also some of the key issues that could further deteriorate the INR                                                   Components of GDP
   against the USD are:                                                                       Sec tor                                                 FY11 FY12
                                                                                              Agric ulture & Allied Servic es                          7        2.8
Weak GDP & IIP Numbers:
                                                                                              Industry                                                6.8       2.6
  The recent GDP and IIP numbers indicate a muted growth. For the                             Mining & Quarrying                                       5        -0.9
  period April-March 2012 the IIP (use based) has registered a steep fall                     Manufacturing                                           7.5       2.5
  in its growth rate to 2.83% from the earlier growth levels of 5.92% for                     Electricity, Gas & Water Supply                          3        7.9
  FY11. The IIP has registered a fall of 3.47% for the month of March                         Servic es                                               9.2       8.5
  2012 as against March 2011. The contraction in the factory output has                       Construction                                             8        5.3
  resulted in a lack of visibility for the industrial growth. This in turn                    Trade, Hotel, Transportation & Communication            11.1 9.9
  could potentially worsen the country’s macroeconomic woes as it                             Financing, Insurance, Real Estate & Business Services   10.4 9.6
  raises domestic growth concerns at a time when the central bank is                          Community, Social & Personal Services                   4.5       5.8
  already battling to contain the weakening of the rupee in the face of
                                                                                              Real GDP at Factor Cost                                 8.4       6.5
  the high current account deficit and volatile capital inflows.

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Monthly Equity Commentary                                                                                                                                   contd…
 Dollar index could remain buoyant:
    The dollar index (DXY) is on an upward trend since August 2011.The strengthening in the USD index induced by
    decline in global risk appetite is likely to sustain in the wake of relatively strong US economic conditions and
    persistent and deepening European debt crisis. The chart below depicts the trend in the DXY:
    The strengthening in DXY is primarily driven by decline in global risk appetite especially in the Euro Zone. The
    possibility of break away of Greece from the euro-zone and perhaps a more chaotic outcome from possible
    exit of countries like Italy and Spain are things that are yet to happen and will likely prolong the strength in
    USD. A strong DXY could pressurize the INR in future unless India addresses its economic challenges.

                                                                                DXY Chart
  95


  90


  85


  80


  75


  70
                         Nov-09




                                                                                 Nov-10




                                                                                                                                       Nov-11
       Jul-09




                                  Jan-10




                                                             Jul-10




                                                                                          Jan-11




                                                                                                                     Jul-11




                                                                                                                                                Jan-12
                Sep-09




                                           Mar-10

                                                    May-10




                                                                      Sep-10




                                                                                                   Mar-11

                                                                                                            May-11




                                                                                                                              Sep-11




                                                                                                                                                         Mar-12

                                                                                                                                                                  May-12
 Current account deficit:
    Balance of payments (BOP) / Current Account Deficit (CAD) accounts are an accounting record of all monetary
    transactions between a country and the rest of the world. These transactions include payments for the
    country's exports and imports of goods, services, financial capital, and financial transfers. Sources of funds for
    a nation, such as exports or the receipts of loans and investments, are recorded as positive or surplus items.
    Uses of funds, such as for imports or to invest in foreign countries, are recorded as negative or deficit items.
    When all components of the BOP accounts are included they must sum to zero with no overall surplus or
    deficit.

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Monthly Equity Commentary                                                                               contd…
  The depreciation of the rupee could be also attributable to the mismatch between the current account deficit
  and the capital inflows. India’s current account deficit continues to remain high in the past two years. This was
  not a problem in the previous year as there were enough capital inflows to cover the same. However in FY12 the
  capital inflows, which are a function of the various factors in the economy, have dropped down thus widening
  the CAD.
   Notwithstanding the positive capital account balance (USD 8bn in Q3FY12), the overall BOP was in deficit of
  USD 12.8bn, reflected by the drawdown in Forex reserves by RBI, which implies negative accommodative capital
  flows. Also the crude oil imports have further worsened the CAD position. However with the cooling off of
  international crude oil prices some respite could not be ruled out.
  The chain reaction of weakening external capital flows in response to slowing growth and inadequate
  compression in trade deficit has forced RBI to rundown its Forex reserves (inclusive of valuation changes foreign
  currency assets stands at USD 256bn and Fx reserves at USD 290bn), thereby resulting in constant liquidity
  deficit. Given the declining Forex coverage ratios, RBI could continue to be more open to flexibility in the
  currency and also could resort to preventive measures like continued OMOs.
  Likewise INR can depreciate even with a contraction in CAD if growth slows significantly. Hence, domestic
  growth outlook, which currently is on a weakening trajectory, is central to both capital flows and INR.
Could we see an improvement in the GDP Growth???
  On the back a downward revision in the GDP forecast for FY13 by the Central Statistical Organization (CSO) from
  6.9% to 6.5%, Crisil one of the leading independent research house too has followed the footsteps of the CSO.
  Key reasons for a downward revision in the forecast is the rising downside risks from recession in the Euro zone,
  muted domestic investment demand scenario and restrictive fiscal and monetary cushion to stimulate the
  economy.




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Monthly Equity Commentary                                                                               contd…
  The GDP growth in India is also dependent on the external demand scenario. The Euro Zone continues to
  grapple with the spiraling debt crisis and the demand from the region is at historic lows. Services growth is
  being revised downwards by various agencies / companies to reflect the sluggish growth in IT/ITES as a result of
  slowing export demand from the Eurozone, and also the slower-than-earlier-anticipated growth of the hotels,
  trade and transport sector. Although industry may benefit from expansion of the mining sector on a low base,
  manufacturing and construction growth could remain weak due to limited space for cut in the interest rates and
  weak investment demand. Also sub-normal monsoons could aggravate the concerns for the GDP growth and a
  worsening Eurozone situation could create downside risks. The Indian economy is in the grip of an investment
  slowdown, and growth momentum is weakening. This would be reflected in relatively weak industrial growth,
  expectations for which have been revised down for FY13.
  With every US$10 decline in the crude oil price lowers the government’s subsidy burden by 0.3% of GDP. If the
  trend of falling crude prices continues it would portend well for the Government finances.
Inflation (WPI):
  WPI inflation forecast is revised upward to 7.0% for FY13 to reflect the higher-than-anticipated increase in food
  inflation, and the impact of weak currency. The weak rupee is offsetting the gains from lower global crude oil
  and commodity prices, and will keep the cost of imported items high. Lower growth in FY13 could reduce
  demand-side pressures on inflation, but there are other pressure points that may keep inflation at elevated
  levels, which include decisions on revision of electricity prices, increase in minimum support price for food
  crops, revision in prices of petrol, diesel, kerosene, and LPG, all have the potential to enhance inflationary
  pressures in the economy.
The Indian markets though remain attractive, but headwinds exists:
  At the current levels, the Sensex trades at 13xFY13E EPS (consensus) of Rs. 1200. Still it remains the case that
  India is still nowhere near the trough valuations seen in March 2009 when the Sensex was trading at 10x forward
  earnings and 1.7x book. In May 2012, MSCI India’s absolute valuations plummeted to a 38- month low, although
  relative valuations stood at a 38% premium to EM. Though the market does not seem over priced at the current
  levels but headwinds do exists which overweigh the probable positives. Therefore the Sensex could continue to
  grapple with some of the key issues like depreciating Rupee, higher inflation, widening CAD and a slowing
  growth. Unless the ongoing issues listed above are tackled, the Indian market could continue to underperform
  and may not get a higher valuation.

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Monthly Equity Commentary                                                                                    contd…
  Apart from the domestic issues (that rae partly under our control), the global cues are also not supportive at
  present. Until the global cues improve, the upside in the market looks capped. One key reason for the derating
  of the Indian markets is also the fall in the ROE of components of Sensex – that has fallen from 24% to 16% over
  the last five years. This has to be correcte dover the medium term for the Indian markets to regain premium
  over other markets.
   The de-rating of the market in the past seven quarters, which is the consequence of the sharp slowdown in the
  investment cycle, has so far not led to much net selling by foreign institutional investors. FII ownership of Indian
  equities has remained remarkably stable ranging from 15.1% in September 2010 to 15.4% at the end of 2011
  before increasing to 16.1% in March. In this respect, the risk is that there is more selling to come. Still, it is also
  the case that if credible evidence emerges in coming months and quarters that the Indian investment cycle is
  picking up, then India will be positioned to become again the best performing market in Asia.
   Across the world with volatility so high, investors coming in now need double-digit returns from equities to
  provide an adequate reward for the additional risk they now have to take.
   The Fed's next policy meeting occurs on June 19-20. A Reuters poll of 15 dealers gives a 35 percent chance of
  the Fed extending its stimulative operating twist at that meeting. The poll showed that dealers expecting
  further quantitative easing, or QE3, rose to 50 percent from 33 percent in May. Stock market rallies in each of
  the past three years were fueled by combinations of massive central bank and government stimulus spending.
  That maybe the only hope for equities this year, too.
   We expect the Sensex to trade in the range of 15400-16800 in the month of June.




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Technical Commentary




  As we have shown in the chart above, currently we are assuming the Sensex is wave ‘D’ of a contracting
  triangle. This wave ‘D’ is getting subdivided into a-b-c and currently the Sensex is in wave ‘b’. According to the
  theory if the a-c line gets breached during the formation of the wave ‘D’ which is marked on the chart above
  with red dotted line then the formation of Contracting triangle gains more credibility. Hence even though the
  Sensex is below 16,358 (the support from the a-c line), we are not alarmed by it.
  Till the level of 15,135 which was the bottom of wave ‘C’ marked on the chart above with black arrow is
  breached, we can safely assume that currently the Sensex is wave ‘b’ of wave ‘D’. In case this level is
  breached we will have to unlock wave ‘C’ and assume that the ‘C’ wave is not yet over. At this juncture the
  Sensex is closed at 15,965 and it is 829 points away from this.
  As expected the Sensex is forming a normal Flat which is a structure anticipated/ expected for wave ‘D’. In
  normal Flat wave ‘b’ always retraces wave ‘a’ by 100% and this phase currently going on.
  In case the Sensex does not go below 15,678 and turns upwards, then wave b would have retraced less than
  100% of wave a. Hence the following wave c could in all probability breach the top of wave ‘a’ i.e. 18,524.
  However in case the Sensex goes below 15,678 but remains above 15,135, the ensuing rise may not be as sharp.
  In case the Sensex goes below 15,135, then the larger wave “C” would be deemed to have continued and the
  next level on the downside could be 14,610 (50% retracement of the rise from 8047 to 21109).

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Technical Commentary                                                                                  contd…




  In the chart 1 above, we have given a long term count of the Sensex. In the chart above we shall discuss the
  structure and time of wave ‘b’ and which is in progress. The starting point of wave ‘D’ has been taken as 15,678
  as there were 2 major things present there.
   It was a higher bottom vis-à-vis the bottom which was formed at 15,136.
  The acceleration was witnessed from this point as the Sensex traveled 2844 points in 30 trading sessions without
  any significant correction on the downward side, so one can say this rise was almost vertical in nature.
  The construction of wave ‘a’ was ‘Double Zigzag’ and so it was corrective in nature. We were expecting the
  Sensex to come below 61.8% of the previous rise, so that a Flat structure can be formed. So far the Sensex has
  witnessed 95% correction of wave ‘a’ and a Normal Flat has been established so far.



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Technical Commentary                                                                                    contd…




  There are 2 methods which are taken into account in Elliott wave analysis where the retracement theory is used
  from 2 different points. In our case it has been explained as follows.
  The starting point of wave ‘D’ as we have marked on the chart above is at 15,678 and the ending point is at 18,524
  which we have labeled as wave ‘a’ and currently the wave ‘b’ is in progress. If we take 15,678 to 18,524 then it has
  been retraced 95% so far which comes under the category of normal Flat.
  If we take 15,136 as an extreme point of the down fall and take retracement then so far it has retraced 80% of the
  previous upward move from 15,136 to 18,524. 80% is a very important concept in technical analysis when we are
  using Elliott wave theory as a tool.

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Technical Commentary - Month Gone By                                                                   contd…




   For the month of May, the Sensex opened at 17,432 made an intraday high at 17,432 and it was the top of the
   month. There onwards for next 12 trading sessions the Sensex continuously came down and made an
   intermediate bottom at 15,810 which is still held so far.
   After the bottom of 15,810 for the next 2 trading sessions, the Sensex went up to 16,367 where selling pressure
   was witnessed again. For 1 trading session the Sensex came down up to 15,847 but formed a bullish Hammer
   pattern which was followed by a bullish Morning star pattern in next 1 trading session.
   After 3 trading sessions the Sensex made an intermediate top at 16,544 and exactly after 3 trading sessions it
   formed ‘Evening Star’ pattern on daily charts.
   In next 2 trading sessions this was confirmed by a Gap down opening and large bear candle on the daily
   charts. Still the gap which was formed on 31st May 2012 between 16,295 and 16,277 remains unfilled.


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Learning Technical Analysis
On-Balance Volume: The Way To Smart Money
  On-balance volume (OBV), a momentum indicator that measures positive and negative volume flow, was
  developed by Joseph Granville and introduced in 1963 to the technical community inside the pages of his book,
  "Granville's New Key to Stock Market Profits."
  Granville felt that volume was the driving force behind the markets, and designed OBV to project when major
  moves in the markets would occur. In his book, he described the increase or decrease of his indicator, setting
  new highs or lows, as "a spring being wound tightly.“
Breaking Down the Theory
  Granville went on to explain his theory by stating that when volume increased or decreased dramatically
  without any significant change in the issue's price, then at some point the price would "spring" upward or
  downward.
  It appears that as institutions (pension funds, investment funds and large trading houses) begin to buy into an
  issue that retail investors are still selling, volume increases as the price is still slightly falling or leveling out.
  Over a period of time, volume begins to drive the price upward and the converse then begins to take over as the
  institutions begin to sell their position and the retail investors begin again to accumulate their positions.
Smart Money
  Thus, the term "smart money" begins to appear crystal clear - the institutions are buying the stock of the
  "average Joe" at the bottom and then selling it back to him at or near the top.
Here is an easy formula explaining OBV:
  If today's close is greater than yesterday's close, then today's volume is added to yesterday's OBV, and is
  considered up volume.
  If today's close is less than yesterday's close, then today's volume is subtracted from yesterday's OBV and it is
  considered down volume.
  And if today's close is equal to yesterday's close then today's OBV is equal to yesterday's OBV.


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Learning Technical Analysis                                                                          contd…
One can combine OBV with its moving averages and see crossovers to decide entry/exit levels.




  Apart from moving average crossovers, one can also look at divergences and trendline breakouts for getting
  signals from OBV.
  The OBV line should follow in the same direction as the price trend. If prices are in an uptrend, the OBV line
  should do the same. If prices are trending lower, the OBV line should do the same. If the OBV line shows a
  divergence from the price trend, you have a warning of a possible trend reversal. OBV changes usually precede
  price changes.
  One of the weaknesses of the OBV indicator is that an entire day's volume is assigned a plus or minus value.
  Many experimental variations of OBV have been developed in trying to discover a more accurate measure for
  the flow of volume. One of the more advanced, and useful, is the Money Flow Index.




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Derivatives Commentary




  The month of May 12 saw the Nifty breaking the lows of 5135 and trending lower. A bounce back from the 4803
  levels towards the end of the month helped to curb the losses. It was the third consecutive month of losses. M-
  o-M, the Nifty lost 6.2%.
  FIIs were reported as net sellers of Rs. 1789 cr in May 2012 (in April 2012 they were marginal net buyers of Rs 54
  cr). In the F&O space, the FIIs were net sellers in the index futures segment while the open interest in the
  segment dropped thus suggesting unwinding of longs. Simultaneously in the index options FIIs were net buyers to
  the tune of Rs 7771 cr with the open interest in the segment increasing. Similarly in the stock futures segment
  the FII turned net buyers from net sellers in the earlier month however the open interest declined marginally in
  the segment.
  The June series has started on a slightly heavier note compared to the previous series. In terms of value, the
  June 2012 series has begun with market wide OI at Rs.78,535 crs. Vs. Rs.75,673 crs. at the beginning of the May
  2012 series. It was Rs.80,427 crs. at the beginning of the April 2012 series.


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Derivatives Commentary                                                                              contd…
  Rollovers to the June series were lower compared to the previous series, indicating that traders were not
  comfortable with carrying forward their positions and preferred to remain on the sidelines due to market
  uncertainty. Short rollover costs rose due to extreme pessimism among traders.
  Nifty rollovers were at 59% Vs. 72% during the same time in the previous series. Market wide rollovers were
  marginally lower at 82% Vs. 83% the same time in the previous series.
  Coming to stock specific rollovers, highest rollovers were seen in McLeod Russell, Raymond, Guj Flouro, Piramal
  health, Videocon Ind and Core Projects. The lowest rollovers were seen in Asian Paints, Colpal, Wipro and ITC.
  Reflecting the increasing volatility expectations in the market, the Nifty IV rose to 25% from 17-18% last month.
  The Nifty OI PCR climbed to 1.46 from 1.28 levels, indicating a greater build up of puts in the market.
  Technically, the intermediate downtrend is likely to continue if the crucial supports of 4803 on the Nifty are
  convincingly broken.
  Index option activity suggests that traders are expecting the Nifty to trade within the 4500-5100 levels in the
  coming month. We say this because the maximum call writing is currently being seen in the 5000 and 5100
  strikes. Maximum put writing is being seen in the 4500 and 4800 strikes.




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Learning Derivatives Analysis
 Pair Strategy:
   This strategy was pioneered by Nunzio Tartaglia’s quant group at Morgan Stanley in the 1980’s. It remains an
   important statistical arbitrage technique used by hedge funds. They found that certain securities were
   correlated in their day-to-day price movements. When a well established price correlation between A and B
   broke down, i.e. stock A traded up while B traded down, they would sell A and buy B, betting that the spread
   would eventually converge. This divergence between pairs may be caused by temporary supply/demand
   changes, when a single large investor changes position in a single security.
 Advantages of Pair Trading: Market Neutrality
   The pairs trade helps to hedge sector and market risk. If the market or sector crashes, you should experience
   a gain on the short position and a negating loss on the long position, leaving your profit close to zero in spite
   of the large move.
   In a pairs trade, you bet on the direction of the stocks relative to each other.
   Trading strategies which are independent of market movements are said to be market neutral. Pairs trading is
   a mean-reverting strategy, assuming that prices will revert to historical trends. Pairs trading is largely self-
   funding, since the short sale returns can be used to buy the long position.
 Dangers of Pair Trading: News Reaction
   The increased divergence between two stocks can be a rational response to news about one of the companies.
   Transaction costs (e.g. commissions, bid-ask spreads) can eat up the theoretical returns in such an active
   strategy. Pairs trading became less advantageous as more groups started doing it. Hedge funds use algorithmic
   trading strategies that monitor for deviations in price, automatically buying and selling to capitalize on
   market inefficiencies. Such program trading requires fast reaction/execution time to take advantage of
   tighter spreads before other groups can.




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Learning Derivatives Analysis                                                                            contd…
Identifying Pairs
  Correlation analysis can be used to identify interesting potential pairs, but beware of spurious correlation.
  Competing companies in the same sector make natural potential pairs.

Example: Tata Motors vs. Maruti
  The price ratio is flat long term but fluctuates day to day.
  The trailing dip would suggest buying Tata Motors and shorting the Maruti.
  The ratio reverting to its historical mean suggests a logical time to exit both positions.

Why Might Pairs Trading Work?
  Reversion to the mean requires a driving mechanism; pairs trading would not work were prices truly random
  walks. The Law of One Price (LOP) is the proposition that two investments with the same payoff in every state
  of nature must have the same current value. A strong historical correlation suggests they behave the same in a
  large number of states, and so should be priced the same.

Strategy Specification
  Pairs were formed based on price correlations over a 6 – 12 - months period, starting every month. Each pair
  was then traded (possibly multiple times) over the next six months.
   The pair was “bought” when its ratio spread was outside two standard deviations of its 6 – 12 -months spread. If
  normally distributed, this should happen about 5% of the time.The position is closed when the ratio returned to
  its historical parity, or when the given six-month period ended.




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Learning Derivatives Analysis                                                                         contd…




 Pairs Trading: Conclusion
   Pairs trading is an important type of statistical arbitrage technique. There is good theoretical, experimental
   and practical experience that it can be a profitable strategy. Such strategies become much harder to employ
   once they become popular; hedge funds deploy them on a massive scale as part of algorithmic trading
   systems.




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 Extract of Calls during May 2012                                                                                                                                                        contd…
Index Futures Calls
Date         B/S       Trading Call                        Entry at            Sloss Targets Exit Pric e / CMP      Exit Date   % G/L Comments                      Time Horizon A vg. Entry A bs. Gain/Loss
25-May-12        B     Nifty June Fut                    4931-4901        4926.0       5000.0              4978.0   28-May-12      1.1 Premature Profit Booked                7 days    4925.0           53.0
22-May-12        S     Bank Nifty Fut                    9391-9415        9455.0       9270.0              9286.0   22-May-12      1.1 Premature Profit Booked               2-3 days   9391.0         -105.0
15-May-12        S     Bank Nifty Fut                    9310-9330        9370.0       9200.0              9234.0   15-May-12      0.8 Premature Profit Booked               2-3 days   9310.0           -76.0
17-May-12        S     Nifty Fut                         4894-4910        4925.0       4840.0              4858.0   17-May-12      0.8 Premature Profit Booked               2-3 days   4896.0           -38.0
10-May-12        S     Nifty Fut                         5012-5020        5028.0       4980.0              4985.5   10-May-12      0.6 Premature Profit Booked               1-2 days   5014.0           -28.5
9-May-12         B     Bank Nifty Fut                    9450-9515        9445.0       9687.0              9445.0    9-May-12     -0.4 Stop Loss Triggered                   2-3 days   9482.5           -37.5



Stock and Nifty Options Calls
Date         B/S       Trading Call                        Entry at            Sloss Targets Exit Pric e / CMP      Exit Date   % G/L Comments                      Time Horizon Avg. Entry A bs. Gain/Loss
24-May-12        B     RPower May 90 Call Option                  4.75          3.3         8.0               3.6   29-May-12    -24.2 Premature Exit                        1-3 days      4.8            1.2
28-May-12        B     Pantaloon 160 Call Option                   1-2          0.8         4.5               2.0   29-May-12     33.3 Premature Profit Booked               2-3 days      1.5            -0.5
22-May-12        B     RCOM 65 Call Option                      1-1.85          0.9         4.0               3.9   28-May-12   116.7 Premature Profit Booked                2-3 days      1.8            -2.1
24-May-12        B     BHEL May 200 Put Option              2.7-2.1             1.4         5.5               1.4   25-May-12    -41.7 Stop Loss Triggered                   2-3 days      2.4            1.0
23-May-12        B     PFC May 140 Put Option               1.5-1.2             0.8         3.0               2.0   23-May-12     33.3 Premature Profit Booked               2-3 days      1.5            -0.5
22-May-12        B     Sterlite 95 Put Option              0.85-1.6             0.8         3.0               2.1   22-May-12     40.0 Premature Profit Booked               2-3 days      1.5            -0.6
17-May-12        B     Punjlloyd 50 Call Option            0.55-0.4             0.3         1.2               0.8   17-May-12     36.4 Premature Profit Booked               2-3 days      0.6            0.2
14-May-12        B     ITC 240 Call Option                  3.5-2.5             1.5         7.0               4.3   14-May-12     21.4 Premature Profit Booked               2-3 days      3.5            0.8
9-May-12         B     Tata Motors 300 Put Option         12.60-10              7.0        25.0              15.2   11-May-12     26.7 Premature Profit Booked                5 days      12.0            3.2
9-May-12         S     Suzlon 20 Put Option                       1.25          0.9         2.1               1.7   10-May-12     36.0 Premature Profit Booked               1-3 days      1.3            0.5
7-May-12         B     Arvind 90 Call Option                1.5-2.5             1.4         5.0               3.7    7-May-12     55.3 Premature Profit Booked               2-3 days      2.4            1.3
4-May-12         B     ICICI Bank 840 Put Option                31.25          22.0        52.0              48.0    4-May-12     53.6 Premature Profit Booked               1-3 days     31.3           16.8


Trading/BTST/Futures Calls
Date        B/S      Trading Call                     Entry at      Sloss Targets Exit Pric e / CMP          Exit Date % G/L Comments                     Time Horizon Avg. Entry Abs. Gain/Loss Time of issue
30-May-12   B        Adani Enterprises              272.05-270           262       292             262.0      41060.0   -3.3        Stop Loss Triggered        2-3 days 271.02              9.02       9.57 AM
25-May-12   B        Lovable                         308-315             306       326             326.0      41059.0    4.5           Target Achieved         2-3 days 312                  -14       9.50 AM
24-May-12   B        Sintex Inds                    52.45-51.45           50          60            54.7      41054.0    5.1    Premature Profit Booked          7 days 52                  -2.65     11.21 AM
22-May-12    S       IDBI Fut                         88.5-89        90.3          84.6             86.0      41052.0    3.0    Premature Profit Booked        1-3 days 88.63               2.63       1.10 PM
21-May-12   B        Raymond                         350-358             349       370             367.0      41050.0    2.8    Premature Profit Booked        2-3 days 357                  -10       9.23 AM
17-May-12    S       IRB Fut                        112.5-113.5     116.5          104             107.5      41047.0    4.9    Premature Profit Booked        2-3 days 113                  5.5       2.00 PM
14-May-12    S       Tata Global Fut                 106-108             110          98           103.0      41043.0    2.8    Premature Profit Booked        2-3 days 106                       3   11.59 AM
8-May-12    B        Century Textiles                311-300             295       340             295.0      41038.0   -3.9        Stop Loss Triggered        10 days 307                       12    9.24 AM
4-May-12     S       Havells Fut                     540-550             559       500             559.0      41036.0   -3.5        Stop Loss Triggered          5 days 540                  -19       3.16 PM
4-May-12     S       Hind Oil Explor May Fut         119-121             124       110             115.8      41033.0    2.7    Premature Profit Booked        2-3 days 119                  3.2       9.53 AM
2-May-12     S       PFC Fut                        168.5-174            175       155             163.5      41032.0    3.2    Premature Profit Booked        2-3 days 168.85              5.35      10.18 AM




 Monthly Report June 2012                                                                         Retail Research
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 Extract of Calls during May 2012                                                                                                                        contd…
Positional Calls
Date        B/S   Trading Call                Entry at   Sloss Targets Exit Pric e / CMP   Exit Date   % G/L Comments                 Time Horizon Avg. Entry A bs. Gain/Loss
28-May-12    B    Apollo Hospitals            655-645    622.0   720.0            686.9    29-May-12    4.9 Premature Profit Booked         1 week       655.0          -31.9
28-May-12    B    HDIL                       64.4-63.5    61.3    70.5             67.0    29-May-12    4.0 Premature Profit Booked         1 Week        64.4           -2.6
23-May-12    S    Central Bank June Fut        70.6-72    73.0    65.0             73.0    23-May-12    -2.7 Stop Loss Triggered          4-10 days       71.1           -1.9
9-May-12     S    Balrampur Chini May Fut    49.7-50.5    52.8    44.0             49.0    16-May-12    1.7 Premature Profit Booked      1-2 weeks        49.9            0.9
3-May-12     B    Dishman Pharma                 43-48    42.5    65.0             42.5     9-May-12    -8.3 Stop Loss Triggered         3-5 weeks        46.4            3.9
2-May-12     B    Raymond                   408.25-403   387.0   450.0            423.0     4-May-12    3.7 Premature Profit Booked         1 week       407.9          -15.1




 Monthly Report June 2012                                                Retail Research
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 FII & Mutual Fund Flow and indices moves during May 2012
                                    Total FII Inflow s/Outflow s during the month of May 2012. (A ll figures in Rs. Cr.)
                                 W eek Ended                     Buy                      Sold               Net          Cumulative
                                    4/5/2012                    8015.2                   7253.1              762.1           762.1
                                    11/5/2012                   9740.9                  10570.2             -829.3           -67.2
                                    18/5/2012                  10108.7                  10508.9             -400.2           -467.4
                                    25/5/2012                   7135.5                   8283.6             -1148.1         -1615.5
                                   31/05/2012                  11348.9                  11521.6             -172.7          -1788.2

                                       Total                   46349.2                  48137.4             -1788.2
                                Da ta no t a va ila ble fo r 22-M a r-2012 a nd 30-M a r-2012
                                    Total MF Inflow s/Outflow s during the month of May 2012. (A ll figures in Rs. Cr.)
                                 W eek Ended                     Buy                      Sold               Net          Cumulative
                                    4/5/2012                    1175.4                   1675.5             -500.1           -500.1
                                    11/5/2012                   2490.4                   2497.8              -7.4            -507.5
                                    18/5/2012                   2351.2                   1940.9              410.3           -97.2
                                    25/5/2012                   1664.3                   1247.7              416.6           319.4
                                   31/05/2012                   1190.3                   1907.8             -717.5           -398.1

                                       Total                    8871.6                   9269.7             -398.1



                 BSE Indic es                31-May-12          30-Apr-12                % c hg BSE Indic es          31-May-12   30-Apr-12     % c hg
                 Sensex                          16218.5           17318.8                -6.35 Bankex                  10884.5       11828.6    -7.98
                 Smallcap                         6271.0             6764.6               -7.30 Power                    1813.9        2012.5    -9.87
                 Midcap                           5907.9             6315.9               -6.46 Capital Goods            8816.9        9409.1    -6.29
                 500                              6280.0             6698.5               -6.25 Auto                     8873.0       10645.5   -16.65
                 200                              2003.1             2136.8               -6.26 Oil & Gas                7587.8        7964.6    -4.73
                 100                              8520.9             9083.5               -6.19 PSU                      6760.1        7249.0    -6.74
                 Realty                           1578.9             1692.6               -6.72 IT                       5666.1        5704.3    -0.67
                 Consumer Durables                6201.5             6591.9               -5.92 FMCG                     4574.3        4772.1    -4.15
                 Metal                           10106.4           11066.6                -8.68 Healthcare               6645.3        6795.6    -2.21




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Gainers & Losers – May 2012
              Top Gainers From F&O                                                           Top Losers From F&O

                            Pric e       Pric e                                                     Pric e        Pric e
                      30-Apr-12      31-May -12   % c hg                                        30-Apr-12     31-May -12     % c hg
 ASIANPAINT                3526.8       4021.6       14.0                     NCC                    50.2          30.6        -39.0
 DIVISLAB                   856.2        933.5        9.0                     IRB                   172.1         112.7        -34.5
 COLPAL                    1109.0       1204.1        8.6                     IVRCLINFRA             61.7          40.6        -34.1
 JUBLFOOD                  1185.4       1277.7        7.8                     ORCHIDCHEM            179.6         120.9        -32.7
 SKUMARSYNF                  31.3         33.3        6.6                     NAGAROIL                8.0           5.7        -28.3
 RUCHISOYA                   88.6         94.4        6.5                     MCDOWELL-N            781.5         563.7        -27.9
 CESC                       255.5        268.7        5.2                     EDUCOMP               194.0         140.4        -27.6
 ZEEL                       126.3        132.2        4.6                     SINTEX                 73.9          53.9        -27.1
 BPCL                       670.7        697.7        4.0                     TATAMOTORS            316.6         233.0        -26.4
 IDFC                       121.0        125.4        3.6                     ADANIPOWER             64.2          47.3        -26.3



              Top Gainers From CNX 500                                                      Top Losers From CNX 500

                            Pric e       Pric e                                                      Pric e         Pric e
                      30-Apr-12      31-May -12    % c hg                                        30-Apr-12     31-May -12     % c hg
 CHEMPLAST                   10.0         14.7       47.0                      RAMKY                 201.1           95.7        -52.4
 KPIT                        85.6        118.5       38.4                      SKSMICRO              104.8           57.0        -45.6
 SHANTIGEAR                  37.1         50.7       36.8                      ARSSINFRA             104.4           57.8        -44.6
 DBREALTY                    73.8         88.1       19.5                      NCC                     50.2          30.6        -39.0
 DCW                         14.3         17.0       18.9                      IRB                   172.1          112.7        -34.5
 PGHH                      2065.6       2396.5       16.0                      IVRCLINFRA              61.7          40.6        -34.1
 BERGEPAINT                 120.6        139.5       15.7                      ORCHIDCHEM            179.6          120.9        -32.7
 ASIANPAINT                3526.8       4021.6       14.0                      TV18BRDCST              26.8          18.1        -32.5
 SHRENUJ                     72.4         81.3       12.4                      RELMEDIA                73.6          49.8        -32.3
 BANARISUG                  534.8        600.5       12.3                      DCHL                    40.0          27.1        -32.3



Monthly Report June 2012                                    Retail Research
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                                                    RETAIL RESEARCH TEAM


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Monthly Report June 2012                                       Retail Research

								
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