Excel Funds Management Inc.

Emerging Markets

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BSE Sensex up over 400PTS – Biggest Jump in 2012

The Bombay Stock Exchange (BSE Sensex) rose more than 400 PTS overnight on government policy reforms aimed at taking India into a next phase of development. Finance Minister P. Chidambaram took further steps in reducing borrowing costs as well as cutting taxes on overseas borrowing leading to a surge by investors back into the equity markets. With elections coming in 2014, the ruling coalition made the economy its primary focus, and this week’s measures demonstrate this commitment while also making it an ideal time to invest in India.

The two largest benefactors of this announcement were the infrastructure and financial sectors as, easier access to overseas funding markets and the hope that foreign direct investment limits would be increased help bolster investor sentiment. Portfolio Managers quickly improved their outlook on the Indian economy leading to the reallocation of defensive holdings and cash into the market. The Excel India Fund’s top holdings led the charge with stocks such as ICICI Bank gaining 4.7%, State Bank of India up 4.6% and Larsen & Toubro up 4.2%. These strong companies, held within the Excel India Fund, are showing significant growth prospects as their P/E ratios are currently near their historic lows.

The message is clear; the time to invest is now! The combination of government reforms, measures taken by the ECB, an increase in infrastructure investment and historic low valuations make this an ideal time to capture India’s next phase of growth. The Excel India Fund is ideally positioned to capture this growth as it is proudly Canada’s largest and longest running India equity fund. The Fund’s unique, grandfathered tax structure, its best-in-class, on-the-ground portfolio manager, Birla Sunlife AMC boasts a 12.3% 10 year return and during that time has outperformed the TSX by 66% and the Sensex by 60%.

Source: BSE Sensex surges; govt seen resolute in reforms (http://www.moneycontrol.com/news/wire-news/bse-sensex-surges-govt-seen-resolutereforms_760351.html)


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Investors Remain Bullish on Rupee

The Indian rupee ended unchanged on Tuesday after two sessions of gains, although investors remained bullish on the prospects of the local unit on the back of the government’s new reforms push.

The rupee has rallied 2.6 percent over the previous two sessions, buoyed by a suddenly emboldened government pushing ahead with a hike in diesel prices, as well as with action to attract foreign direct investments.

The government’s renewed resolve, along with the Federal Reserve’s new asset purchase programme, have already increased equities inflows.

Indian stocks have attracted 51.1 billion rupees ($949.37 million) in net foreign inflows in the last two sessions, or about half of the amount received for all of August.

This is the scenario that we have been talking to with advisors here at Excel Funds as well. The evaluations in India have been at an all time low and represents

Great buying opportunities to investors. The recent rally on the Rupee and gains in the Sensex  have been consistent with our forecast in the near term in the India market.

“The sentiment has changed for the rupee. Any bounce in the USD/INR will be used to sell dollars,” said Hemal Doshi, currency strategist at Geojit Comtrade.

The rupee closed trade at 54.01/02 per dollar, as per the State Bank of India closing rate, unchanged from its previous close.

It traded in a 53.96-54.375 range during the session in a volatile session.

Traders cited heavy dollar demand from a large mutual fund house looking to meet redemptions in the morning session, but the rupee recovered most losses and briefly even gained on the day on the back of dollar sales from foreign funds.

The rupee could see gains in the days ahead as technical charts show the break of 54.03-18 for the USD/INR as significant, opening the way for a test of 52.95.

In the offshore non-deliverable forward market, the one-month contract was at 54.18 while the three-month was at 54.70.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.04 with a total traded volume of around $5.6 billion.

Written by Sam A.

Source: India rupee ends
flat; prospects bullish in near term