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Welcome to a
presentation on
Portfolio Management Services
Overview
Indian Economy has witnessed a moderate growth during 07-08
with GDP growing at 8.7%.

• Agriculture grew by 2.6%

• Services Sector grew by 11.7%

• Manufacturing sector grew by 9.4%

• Infrastructure Sector grew by 9.6%

• Electricity Sector grew by 7.8%

Source: Indiabudget.nic.in
India Vs Global Economy
Global GDP Growth for the year 2007-08

14

12

10
% Growth

11.8
11.6
6

11.2

11.1

9.3
9.1

8.4
9
4

2
3.2
2.8

2.8
2.7
2.5

2.5

2.2
1.5
1.9

1.6

1.7
0 2
US Euro Area Japan China India

Apr-JunOutlook
Source: IMF World Economic 07 JulApril
- Sep2008
07 Oct - Dec 07 Jan - Mar 08
Interest Rate
Bank Rate & Prime Le nding Rate in India

15
10.25 10.25
10 Bank Rate
6 6
%

Prime Lending Rate


5

0
2007 2008
16-Feb-07 15-Feb-08

Bank Rate 6 6
Prime Lending Rate 10.25 10.25
Source: ministry of Finance, India
Stable Foreign Exchange
Reserve
Foreign Exchange Reserves (In US $ Mn)

300000
290000 9199
280000
270000 8357 8328
283595
260000 264725 266553
250000
Nov-07 Dec-07 Jan-08

Foreign Currency Asset Gold


Source: Reserve Bank of India
Indian Rupees Vs World
Currency
Indian Rupee V/s USD, EURO & YEN

70
62.4 62.55 63.76
60 57.8 57.75
50
40.53 39.93 41.2
40 39.28 39.48
36.05 37.05 39.48 38.95 39.21
30
20
10
0
Jan-08 Feb-08 Mar-08 Apr-08 May-08

USD EURO YEN

Source: Reserve Bank of India


Inflation
Inflatio n rate in In dia (Fe b 08 - M ay 08)

8 7.61
7.41 7.33
6.8
6 5.92
5.11
4 4.35

0
09/02/08 21/02/08 14/03/08 28/03/08 11/04/08 25/04/08 9//5/08
Inflation 4.35 5.92 5.11 6.8 7.41 7.33 7.61

Inflation
Monthly FDI Inflows for the year
2007 (January to August 2007)
FDI Inward

(In bn US$) (In bn US$)

FDI Inward 2005 2004 Countries 2005


United 164.53
Kingdom
Developed Nation 542 395
United States 99.44
Developing Nation 334 274
China 72.40
Others 40 41
France 63.57
Total 916 710
Netherlands 43.63
India 6.59

Source: Investment Report 2006, United Nation Centre for Trade & Development (UNCTAD);
Financial Express Dt 17th October 2006
FDI - Outward
(In bn US$)

Countries
Netherland
Source: Investment Report 2006, United Nations Centre for
Trade Development (UNCTAD);
Financial Express dt 17th October 2006
Outlook

• Indian Economy is expected to perform


well owing to the recovery in agriculture,
Coupled with the sustained momentum of
growth in industry, Infrastructure and
services.
Overview
• Capital Markets – Healthy, Safe and well
regulated.
• Substantial ownership by FII/NRI – Holds
over 30%.
• Continues to attract foreign funds.
• Repatriation of Capital & Gains – Simple.
Mutual Funds V/s FIIs

Source: Business Line


Top Stock Holdings by MFs and
FIIs

Source: Business Line


Market Capitalisation
Month/Year Market
Capitalisation
(Rs.cr)*
G r o w th o f M a r k e t C a p ita lis a tio n
Apr-07 3,650,368
7 ,0 0 0 ,0 0 0
May-07 3,898,078 6 ,0 0 0 ,0 0 0
5 ,0 0 0 ,0 0 0
Jun-07 3,978,381
4 ,0 0 0 ,0 0 0
Rs. In Crores

Jul-07 4,317,571
3 ,0 0 0 ,0 0 0
2 ,0 0 0 ,0 0 0
Aug-07 4,296,994 1 ,0 0 0 ,0 0 0
0
Sep-07 4,886,561 A p r - M a y - J u n -J u l- 0 7A u g - S e p - O c t - N o v - D e c - J a n - F e b - M a r -
07 07 07 07 07 07 07 07 08 08 08
Oct-07 5,722,227

Nov-07 5,876,742 M a rk e t C a p it a lis a t io n (R s . c r)*


Dec-07 6,543,272
Source: NSE news bulletin (March 2008)
Jan-08 5,295,387
No of listed companies
N o of Listed C ompanies across the W orld

6000 5133 4796

4000 3362
2913

2000 1165 1440


656 461
0
USA UK Japan Germ anSingapor Hong C hina India
Series1 5133 2913 3362 656 461 1165 1440 4796

Source: S&P Global Stock Market Fact book,Series1


2007
Indian indices Vs World
Indices
Return & Volatility of certain indices for the month of December 2007

6 6.52

4
2.38
1.67 1.82
%

2 1 1.24 1.19 1.3 1.15


0.38
0
-0.33
-0.8 -1.11
-2
-2.9
-4
Strait
S&P CNX HANG NASDAQ
DJIA FTSE100 NIKKEI Times
Nifty SENG Composite
(STI)

Monthly Returns 6.52 -0.8 -2.9 0.38 2.38 -0.33 -1.11


Volatilityof Returns 1.67 1 1.82 1.24 1.19 1.3 1.15

Monthly Returns Volatility of Returns

Source: NSE news bulletin (December 2007)


FDIs most attractive location
(2007 – 09)
Economies Percentage of respondents
1. China 52
2. India 41
3. United States 36
4. Russian Federation 22
5. Brazil 12
6. Vietnam 11
7. United Kingdom 10
8. Poland 7
9. Germany 7
10. Australia 6

Source: UNCTAD, 2007b


Business Growth of Capital Market
Segments
Month/Year No. of co.s Traded Turnover Average Market
available Quantity (lakh) (Rs.cr) Daily Capitalisation
for Turnover (Rs.cr)*
trading* (Rs.cr)

2007-08 1,236 1,498,469 3,551,038 14,148 4,858,122


2006-07 1,084 855,456 1,945,285 7,812 3,367,350
2005-06 929 844,486 1,569,556 6,253 2,813,201
2004-05 839 797,684 1,140,071 4,506 1,585,585
2003-04 787 713,301 1,09,535 4,328 1,120,976
2002-03 788 364,065 617,989 2,462 537,133
2001-02 890 278,408 513,167 2,078 636,861
Source: NSE news bulletin (March 2008)
Business Growth of Futures &
Options Market
Month / Year Average Daily
Turnover (Rs.
(Index Futures) (Stock Futures) (Index Options) (Stock Options) Total Turnover (Rs. cr.)
Turnover (Rs. cr.) Turnover (Rs. cr.) Turnover (Rs. cr.) Turnover (Rs. cr.)
cr.)

Mar-08 359970.21 330390.37 120317.73 10536.20 821214.48 45623.03


Feb-08 352226.38 421838.10 110251.39 14901.05 899216.90 42819.85
Jan-08 450657.09 851213.22 118827.22 33183.34 1453880.84f 63212.21
Dec-07 287357.02 849996.83 103165.41 33710.77 1274230.06 67064.74
Nov-07 365564.04 989112.61 116951.58 45676.22 1517304.48 68968.39
Oct-07 485079.24 1120263.25 173992.48 54327.99 1833662.96 83348.32
Sep-07 256470.34 670968.47 107964.80 37485.17 1072888.76 53644.44
Aug-07 363987.55 519384.60 140960.78 32398.36 1056731.25 48033.24
Jul-07 238577.03 647356.09 94561.19 34582.28 1015076.49 46139.84
Jun-07 240796.92 451314.30 92503.32 21927.59 806542.13 38406.77
May-07 214523.45 400096.14 85465.42 23357.81 723442.83 34449.66
Apr-07
Source: 205458.00
NSE news 296629.25
bulletin (March 08 ) 97149.56 17049.77 616286.57 30814.33
Banking Regulations

 Capital and Gains are freely repatriable.

 No lock in period.
Dividend
• Income by way of dividends distributed by
domestic companies and income received
in respect of units of a Mutual Fund
registered with SEBI, held in the Portfolio
Management Scheme, is exempt in the
hands of the investors.
Long Term Capital Gain
• Shares in a company, units of a Mutual Fund registered
with SEBI and other listed securities held as capital
assets are treated as long term capital assets if they are
held for a period of more than twelve months preceding
the date of transfer
• Under Section 10(38) of the Income Tax Act, Capital
gains arising from the transfer of a long term capital
asset being equity shares or unity of an equity oriented
fund entered into after October 1, 2004 and where such
transactions is chargeable to Securities Transaction Tax,
is exempt from Income tax.
• Share purchased before October 1, 2004 or where such
transaction was not chargeable to Securities Transaction
Tax, Section 112 of Income Tax Act is applicable.
Short Term Capital Gain
• Securities, including units of a Mutual Fund, held as a
capital assets for not more than twelve months preceding
the date of their transfer are short term capital assets.

• Capital gains arising from the transfer of a short term


capital asset being equity share or units of an equity
oriented fund referred to in Section 111A read with
Section 10(38) of the Income Tax Act, and where such
transaction is chargeable to Securities Transaction Tax,
is chargeable to tax at the rate of 15% plus applicable
surcharges and educational cess.
Overview
1) Munoth Financial Services Limited (MFSL) was incorporated on
1st November 1990.
2) MFSL is a widely held listed company.
3) Financial Performance
(Figures : In Indian Rupees Million)
Particulars 2006-07 2005-06 2004-05 2003-04 2002-03
Total Income 19.76 23.49 13.6 19.92 14.11
Gross Profit 4.52 11.88 4.25 6.15 1.86
Non-Cash Charges 1.14 0.84 0.96 1.19 1.64
Operation Income Before Tax 3.38 11.04 3.28 4.96 0.22
Provision for Taxation 1.72 3.56 1.07 1.33 0.08
Operating Income After Tax 1.66 7.48 2.21 3.62 0.13
Paid up Capital 51.35 51.35 51.35 52.26 52.26
Reserves & Surplus 42.67 41.01 33.53 31.32 27.7
Net worth 94.28 92.62 85.14 82.93 88.94
Capital Market Activities
include
- Merchant Banker
- Stock Broker
- Depository Participant
- Portfolio Management Service Provider
- Share Transfer Agent
Merchant Banker
since 1994
• Associated as Lead Manager for over hundred Initial
Public Offering/Rights Issue/ open offer.

• Currently handling Malar Publication Limited a Media


Conglomerate from Chennai, India. Handled ESOP
shares for Orchid Chemicals & pharmaceuticals Limited

• Registered with SEBI (INM000003739)


Stock Broker
Since 1995
• Member of National Stock Exchange (Equity) (CM INB230803634)

• Member of National Stock Exchange (Derivatives) INF230803634)

• Member of Madras Stock Exchange (INB040803634)

• Member of Over the Counter Exchange of India INB200803630)

• Present in Retail & Institutional segment

• Clients in Institutional segment include –


a) United India Insurance b) Oriental insurance company
c) Indian Overseas Bank d) Federal Bank Limited, etc
Depository Participant
since 1997

• First Depository Participant in South India

• Has a client base of over 4000 Accounts.

• Registered with SEBI (IN-DP-NSDL-3739)


Share Transfer Agent

• MFSL has still not commenced STA activities.

• Registered with SEBI (INR2OOOOOO641)


Portfolio Management Services
Since 1999
• Registered with SEBI (INP000000308)

• Offers Discretionary Portfolio Services

• Munoth Growth Portfolio Scheme (MGPS) : Seeks to generate capital


appreciation in line with risk taking capacity. Targeted for Non Resident
Indians.

• Munoth Arbitrage Portfolio Services (MAPS) : Seeks to generate income


through arbitrage opportunities emerging out of mis – pricing between
cash and derivative market.

• Munoth Dividend Yield Services (MDYS) : Seeks to generate returns


through a combination of dividend accrual and capital appreciation.
Discretionary Portfolio Scheme -
MGPS

• Investments will primarily be made in equities


and some time in debt and bank deposits.

• Investment Objective : To generate capital


appreciation in line with risk profile.

• Minimum Size : IRS Ten Million.


The investment objective of MGPS is to generate capital
appreciation on investment for investor in line with the risk
profile. This will be done by primarily investing in equity.
• ➢
Discretionary Portfolio Scheme
-MGPS
 Investment Pattern : Equity / Equity related securities.

 Exposure to script : Typically 15 to 20 scripts.

 Cap on Script : Typically 10% of funds.

 Cap on Industry : Typically 25% of funds.

 Investable Stock : Top 100 stocks by market cap.


Portfolio Management
Performance - MGPS

Types of service

No. of portfolio c
Model Portfolio Sector
Allocation - MGPS

Scrip Na
INDUSTRY WISE ALLOCATION OF PORTFOLIO

CASH/DEBT 1.56

OTHERS 8.06

FINANCIAL 3.03
IT 70.92
CHEMICALS 3.16

POWER 1.9

OIL & GAS 0.52

TELECOM 3.26

HCLTEC
AVIATION 7.6
IT AVIATION TELECOM OIL & GAS POWER
CHEMICALS FINANCIAL OTHERS CASH/DEBT

HCL INF
MGPS - FORESIGHT
• Over 70% in Cash/Debt in March 2006 end – waiting for the
correction to take place.
Industry Wise allocation of Portfolio as on 31st March 2006

Textiles 1.74

Sugar 0.47

Others 1.59
Cash 77.52 IT 4.76

Media 2.99

Pharma 2.21

FMCG 1.56

Aviation 7.15

Textiles Sugar Others IT Media Pharma FMCG Aviation Cash


Comparison with index
Growth of Nifty V/s Income
Value in Percentage

0.250

0.200 0.200
0.171
0.150

0.100 0.091 0.090


0.063
0.050 0.046
0.032 0.026
0.000
1 2 3 4
% Increase in Income 0.032 0.046 0.026 0.063
% Increase in Nifty 0.091 0.171 0.090 0.200

% Increase in Income % Increase in Nifty


Procedure
• Complete Documentation

• Get Bank, Broking, Depository Accounts activated

• Get RBI permission for Portfolio Investment Scheme

• Get Started
Accounting Policies
• In line with Accounting Standards as stipulated by
Institute of Chartered Accountants of India.
• Maintains proper books of Accounts, Records and
Documents for each Client.
• FIFO followed to compute capital gains
• Weighted average followed to derive holding cost.

• Dividend, Rights and Bonus recognised on the ex


dates.
Risk Factors
• Normal risk associated with equities
exposure.

• Past performance no gurantee for future


performance

• For Detailed risk factors – refer disclosure


document.
Thank you