Knowledge plus series i 250513

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KNOWLEDGE PLUS For Wealth …..

VALUE PLUS- The Family Office

From Research Desk

Last week at the Financial Markets!!!

• SENSEX down by 581.79 points (-2.87%) and closed to 19704.33 at end of the week

• (FIIs) were net buyers in equity segment leading to net inflow of Rs. 6525.10 Crore

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News Impact

• US FED chairman Ben Bernanke said that US central bank could slow down its asset purchase program in the next few months.

• In short term, profit booking could be seen in “risk-on” assets.

• Inflation will reduce. • Medium term “risk on” asset will out

perform as economic growth will recover. • IT sector will be benefited.

• Rupee made its 8 month low to 56.02 level.

• Imports will be costlier. • Exporters will get an advantage of rupee

depreciation. • Current account deficit will increase.

Last week at the Financial Markets!!!

Price Performance of Different Asset Class

There was a concern that if stimulus

measures are eased in US, the consistent

liquidity being provided by the foreign investors

will get impacted.

Next Week in the Financial Markets….?

• Q4 results of the following companies will provide the next impact :

Coal India, Sun Pharma, Cipla, Wockhardt, Gail India,Power Grid Corp, MCX.

• January-March quarter GDP data is expected to be released on May 31st 2013.

• Derivative contracts will expire on May 30th 2013.

Hot Topic of the Week

Japan’s Economy Key Economic Parameters

• Japan is one the leading export country in the world.

• This week Japan’s stock market fell more than 7% in a single day, G-Sec Yield increased, and YEN appreciated. This triggered fall in Indian and other world markets also because all the economies and their financial markets co-relates with each other.

• So it becomes important to understand the economic parameters of Japan at this point of time.

Hot Topic of the Week

Economy faces continuous problem of deflation

Inflation Deflation Trend

SOURCE : WWW.TRADINGECONOMICS.COM

Money Supply by Bank of Japan

Money supply stood all time high at

8,44,548 JPY Billion in April 2013

After 34% depreciation in YEN in the last few months, YEN appreciated against the

dollar last week. This resulted in sell off in equity

markets across Asia.

USD/YEN Pair

Volatile GDP Growth Rate

Export Price Index

• Currently, historical average price of export is at 140 level. • All time high level was 207.30 in October, 1982 • A record low level was 94 in January 2012.

10 year Government Bond

Near all time low

level, possibility of change in yield curve

Yield increased after FED meeting.

Long term yield chart

Short term yield chart

Stock Market-NIKKEI 225

Stock market rallied 52% in last 1 yr because of huge money supply by

bank of Japan

Conclusion

• After years of deflationary scenario, export oriented Japan’s economy may be going through a structural change and this will be reflected in next few quarters, especially on back off increase export prices index (following by the huge depreciation in YEN).

Research Desk

@ VALUE PLUS - The Family Office

Office: (0265 -2324600,6629800) Email: crm@valueplusinv.com Website: www.valueplusinv.com

Knowledge plus series i 250513

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