EQUITY UPDATE

April 2019

Global Market Update

Month Overview as on 29 March, 2019 US Economy: The US Federal Reserve (Fed) held the benchmark
short-term rate between 2.25% and 2.5% in its March meeting
Global Markets Mar -19 Current 10 Yr and signaled that it will keep interest rates on hold for the full
(%) PE Average year.
US 0.0 16.5 15.5 European Union: The ECB announced it would maintain the key
UK interest rates at least through the end of 2019.
2.9 17.3 18.5
UK: T The Bank of England (BoE) kept its interest rates
Japan (0.8) 15.8 20.1 unchanged at 0.75% and warned of increasing risks for the
Hong Kong 1.5 11.6 11.2 economy because of impasse over the UK‟s exit from the
Singapore 0.0 13.4 12.4
European Union.
China 0.1 9.5 8.7 Japan: The Bank of Japan maintained a pledge to guide short-
term interest rates at minus 0.1% and 10-year government bond
Data Source: Crisil Research; * Data till Mar 29, 2019 yields at around 0%. It also lowered is assessment on the
economy by acknowledging that Japan‟s exports and
production have shown some weakness.
Emerging Markets: China lowered its official GDP target to 6-
6.5% for 2019 from 6.5% as the world's second largest economy
continues to struggle with the ongoing trade war with the US
and a continued economic slowdown. The government also
unveiled plans to cut taxes and increase public expenditure and
lending to rev up its slowing economy.

Indian Market Update

Month Overview as on 29 March, 2019
Domestic Markets Mar -19 Current 10 Yr Index Performance: Indian equity indices recorded
(%) PE Average impressive performance in March 2019 boosted by positive
S&P BSE Sensex 7.8 29.4 19.8 domestic and global cues. Benchmarks S&P BSE Sensex and
NSE Nifty 7.7 26.6 20.0 Nifty 50 surged 7.82% and 7.70%, respectively, in the month.
S&P BSE Auto 0.1 NA 19.0
Inflation: Consumer Price Index (CPI)-based inflation climbed
S&P BSE Bankex 13.7 51.2 15.9 for the first time in eight months, came in at 2.57% in
S&P BSE Capital Goods 8.1 24.0 29.7 February 2019 compared with 1.97% in January 2019. The
S&P BSE Consumer uptick was largely on account of the base effect and some
Durables 11.4 43.1 27.8 firming up of core.
S&P BSE FMCG 3.4 43.1 38.5
Domestic Developments:
S&P BSE Healthcare 4.7 30.6 29.3 Tailwinds:
S&P BSE IT 0.2 21.4 19.9  Easing of the Indo-Pakistan tensions, strength in the rupee
S&P BSE Metals against the dollar and encouraging domestic service
5.5 7.4 13.1
sector data
S&P BSE Mid Cap 8.1 34.8 21.8  Buying in some index heavyweight and robust inflows by
S&P BSE Oil & Gas 10.6 11.4 12.7 foreign institutional investors (FIIs)
S&P BSE PSU 13.4 40.1 13.8  Short-covering amid March 2019 futures & options (F&O)
expiry supported the benchmarks further.
S&P BSE Realty 15.7 15.3 23.4 Headwinds:
Data Source: Crisil Research; * Data till Mar 29, 2019;  Profit booking at higher levels, selling by the domestic
institutional investors (DIIs)
Source : CRISIL Research
Indian Market Update
Global Developments:
Month Overview as on 29 March, 2019 Tailwinds:
Flows Mar -19 Feb -18 Jan-18  Gains in global equities, after the US Fed indicated
that it may not raise interest rates in 2019 amid signs
FIIs (Net Purchases 3,398.1 -4,262 3,143 of slowdown in the US economy.
/ Sales) (Rs cr)  Hopes of the US and China inching closer to settling
MFs (Net Purchases -762.7 6,995 2,736 on a trade deal and British lawmakers rejecting “No-
/ Sales) (Rs cr) Deal” Brexit also augured well for the local indices.
Headwinds:
 Sell-off in global equities on renewed fears of global
Earnings Growth (%) FY19 FY20E FY21E economic slowdown amid release of weak economic
cues from the US and Europe.
Sensex 10 28 17
 Inversion of the US bond yield curve which reignited
fears of potential recession in the world‟s largest
Macro Indicators Latest Previous economy.
Update Update
GDP (YoY%) 6.6%(3QFY19) 7.1% (2QFY19) Sectoral Impact:
IIP (YoY%) 1.7% (Jan) 2.6% (Dec) S&P BSE sectoral indices ended higher in March 2019.
Realty stocks garnered attention in March 2019 after the
Crude ($ bbl) 68.4 (Mar 29) 66.03 (Feb 28)
country‟s first real estate investment trust (REIT) initial
Core Sector Growth 1.8 2.7 public offer (IPO) got fully subscribed. S&P BSE Realty
(YoY%) (Jan 2019) (Dec 2018) index was the top gainer – surging around 16%. Gains in
Trade Deficit ($ mn) -9,595 -14,726 banking heavyweights helped S&P BSE Bankex index to
(Feb 2018) (Jan 2019) rally 13.70% in the month. Buying interest was seen in
PSU, financial and consumer durable stocks; S&P BSE
Current Account -16.9 -19.1
PSU index, S&P BSE Finance index and S&P BSE
Deficit ($ bn) (2QFY19) (2QFY19)
Consumer durable index climbed 13.42%, 12.62% and
FII Holding in Indian 21.7 21.7 11.43%.
Equities (%)# (4QFY19) (3QFY19)
Source: NSE, BSE; Crisil Research

Note: # FII hldg includes ADR/GDR (BSE500 Index); Data Source: Crisil Research; * Data till Mar 29, 2019; CAD: Current Account Deficit; GDP: Gross
Domestic Product, IIP: FII: Foreign Institutional Investors; MF-Mutual Fund

Outlook & Triggers

Indian equities surged in the month of March in a catch-up rally after months of range-bound trading on the back of
easing inflation giving rise to expectation of lower interest rates, strengthening rupee and record foreign investor flows.
Indian equities rose by 7.8 per cent during the month.
Also, market sentiments turned positive post the recent opinion polls and expectations of better earnings as companies
are likely to report improving topline and bottom-line.
Sectors that performed during the month include financials, energy, industrials while IT, telecom and consumption-
related sectors underperformed the broader market.
Foreign investors net-bought nearly Rs 34,000 crore into the Indian markets after a long period of muted flows as
Central Banks of developed markets scaled back their monetary policy decisions on global growth concerns. The US
Federal Reserve maintains that it would hold back on further interest rate hikes while the European Central Bank
withdrew its bond-buying programme and hinted at interest rate hikes.
Domestic investors, on the other hand, remained net-sellers of equities at about Rs 14,000 crore, the highest since
March 2016 (about Rs 16,000 crore).
Going forward, elections would continue to grab headlines and act as the main trigger in the market and outside it.
Apart from that, earnings announcements, RBI‟s stance on policy rates, expectations from the Union Budget to be
presented by the new government, crude oil movement, and global growth would be the other factors affecting
markets.
We maintain our neutral stance and would like to remain nimble footed as valuations are not cheap and lots of macro
plus political issues are expected to crop up over the next few months. Some of these issues could be – on-going
debate around global slowdown, monetary policy actions of global central banks, global trade tensions, and national
elections in India.
For lumpsum, we recommend balanced advantage schemes or conservative hybrid schemes. Equity accumulation, in
mid- and small-caps, should be in a staggered manner via SIP/STP. The large disconnect between price and value in
many „growth‟ and „value‟ stocks has corrected. However, the valuation divergence still persists. Therefore, we expect
value and special situation themes to play out in 2019.
Market Outlook & Triggers

Equity Valuation Index

170

150 Book Partial Profits

130
120.75
Incremental Money to Debt
110
Neutral
90
Invest in Equities
70
Aggressively invest in Equities
50
Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

Mar-17

Mar-18

Mar-19
Equity valuation index is calculated by assigning equal weights to Price to equity (PE), Price to book (PB), G-Sec*PE and
Market Cap to Gross Domestic Product (GDP)

Our Recommendation
Our recommendations for various investor types are as follows:-
 Long Term Horizon – SIPs/STPs in Mid and Small Cap schemes
 Underweight On Equity – Large and Multi Cap schemes
 Moderately invested in equities – Asset Allocation schemes
 For existing investors, continue with their SIPs in pure equity schemes.

Our Recommendations – Equity Schemes

ICICI Prudential Bluechip Fund (An open ended equity scheme predominantly These Schemes aim to
Pure investing in large cap stocks) generate capital
Equity ICICI Prudential Multicap Fund (An open ended equity scheme investing across appreciation through
Schemes large cap, mid cap and small cap stocks)s.)
participation in equities.
ICICI Prudential Value Discovery Fund (An open ended equity scheme following
a value investment strategy
ICICI Prudential Smallcap Fund (An open ended equity scheme predominantly
investing in small cap stocks) These schemes aim to
Long-Term generate long term
ICICI Prudential Midcap Fund (An open ended equity scheme predominantly
SIP investing in mid cap stocks) wealth creation over a
Schemes full market cycle.
ICICI Prudential Large & Mid Cap Fund (An open ended equity scheme investing
in both large cap and mid cap stocks)

ICICI Prudential Balanced Advantage Fund (An open ended dynamic asset
allocation fund)
ICICI Prudential Equity & Debt Fund (An open ended hybrid scheme investing
These schemes aim to
Asset predominantly in equity and equity related instruments)
benefit from volatility
Allocation ICICI Prudential Multi-Asset Fund (An open ended scheme investing in Equity, and can be suitable for
Schemes Debt, Gold/Gold ETF/units of REITs & InvITs and other asset classes as may be
permitted from time to time) investors aiming to
participate in equities
ICICI Prudential Equity Savings Fund (An open ended scheme investing in with low volatility.
equity, arbitrage and debt)
ICICI Prudential Regular Savings Fund (An open ended hybrid scheme investing
predominantly in debt instruments)
 ICICI Prudential Asset Allocator Fund (An open ended fund of funds scheme
investing in equity oriented schemes, debt oriented schemes and gold
ETFs/schemes) *Investors may please note that they will be bearing the recurring expenses of this Scheme in
addition to the expenses of the underlying Schemes in which this Scheme makes investment.

Thematic/S Investors could invest

ICICI Prudential India Opportunities Fund (An open ended equity scheme
ectoral in this thematic scheme
following special situation theme) risk investmen
themes for tactical allocation.

None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the investors
are requested to consult their financial advisors.

Riskometers

ICICI Prudential Bluechip Fund is suitable for investors who are seeking*:

 Long term wealth creation

 An open ended equity scheme predominantly investing in large cap stocks.

*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
ICICI Prudential Large & Mid Cap Fund is suitable for investors who are seeking*:

 Long term wealth creation

 An open ended equity scheme investing in both largecap and mid cap stocks

*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
ICICI Prudential Value Discovery Fund is suitable for investors who are seeking*:

 Long term wealth creation

 An open ended equity scheme following a value investment strategy.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
ICICI Prudential Equity & Debt Fund is suitable for investors who are seeking*:

 Long term wealth creation solution

 A balanced fund aiming for long term capital appreciation and current income by investing
in equity as well as fixed income securities.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
ICICI Prudential Balanced Advantage Fund is suitable for investors who are seeking*:

 Long term wealth creation solution

 An equity fund that aims for growth by investing in equity and derivatives.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.

ICICI Prudential Multicap Fund is suitable for investors who are seeking*:

 Long term wealth creation

 An open ended equity scheme investing across largecap, mid cap and small cap stocks.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
ICICI Prudential Equity Savings Fund is suitable for investors who are seeking*:

 Long term wealth creation

 An Open ended scheme that seeks to generate regular income through investments in
fixed income securities, arbitrage and other derivative strategies and aim for long term
capital appreciation by investing in equity and equity related instruments.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
 ICICI Prudential Multi-Asset Fund is suitable for investors who are seeking*:

• Long term wealth creation

• An open ended scheme investing across asset classes.

*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.

ICICI Prudential Regular Savings Fund is suitable for investors who are seeking*:
 Medium to Long term regular income solution
 A hybrid fund that aims to generate regular income through investments primarily in debt
and money market instruments and long term capital appreciation by investing a portion in
equity.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
ICICI Prudential Midcap Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An open-ended equity scheme that aims for capital appreciation by investing in diversified
mid cap companies.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
ICICI Prudential Smallcap Fund is suitable for investors who are seeking*:
 Long term wealth creation
 An open ended equity scheme that seeks to generate capital appreciation by
predominantly investing in equity and equity related securities of small cap companies.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.
ICICI Prudential Asset Allocator Fund is suitable for investors who are seeking*:
 Long Term Wealth Creation
 An open ended fund of funds scheme investing in equity oriented schemes, debt oriented
schemes and gold ETFs/ schemes.
*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.

ICICI Prudential India Opportunities Fund is suitable for investors who are seeking*:
 Long Term Wealth Creation
 An equity scheme that invests in stocks based on special situations theme.

*Investors should consult their financial advisers if in doubt about whether the product is suitable
for them.

Disclaimer
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
In the preparation of the material contained in this document, the AMC has used information that is publicly available,
including information developed in-house. Information gathered and material used in this document is believed to be
from reliable sources. The Fund however does not warrant the accuracy, reasonableness and/or completeness of any
information. For data reference to any third party in this material no such party will assume any liability for the same.
All recipients of this material should before dealing and or transacting in any of the products referred to in this material
make their own investigation, seek appropriate professional advice and carefully read the scheme information
document. We have included statements in this document, which contain words, or phrases such as "will", "expect",
"should", "believe" and similar expressions or variations of such expressions that are "forward looking statements".
Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties
associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and
political conditions in India and other countries globally, which have an impact on our services and / or investments, the
monitory and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange
rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in
domestic and foreign laws, regulations and taxes and changes in competition in the industry. All data/information used
in the preparation of this material is dated and may or may not be relevant any time after the issuance of this material.
The AMC takes no responsibility of updating any data/information in this material from time to time. he AMC (including
its affiliates), the Fund and any of its officers directors, personnel and employees, shall not liable for any loss, damage
of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of
profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are
liable for any decision taken on the basis of this material.