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Daily NAV News

The Finance Minister presented the budget for the FY12 with focus on Fiscal
Consolidation, augmenting infrastructure funding & Inclusive Growth with
NAV as on 17 Mar 11(view all NAV)
an emphasis on rural Economy. The FY12 GDP Growth is projected at 9%
taking the size of the Indian economy to close to $2 trillion. Fiscal Deficit is
Individual-Super 20 Rs.13.1002
pegged at 4.6% of GDP in FY12 against 5.1% revised estimates for FY11 &
more stringent than the FRBM target of 4.8%.
Individual-Platinum Plus-III Rs.12.4444
India's real GDP grew ~8.2% Y-o-Y in Q3FY11, taking the 9MFY11 growth
to a robust 8.6%. Agriculture sector has rebounded this year with 5.7% Individual-Platinum Plus-I Rs.11.5657
growth in the nine months ended Dec2010 against 0.2%recorded in the
corresponding period of last year. While private consumption has shown a For other NAVs...
robust growth, gross fixed capital formation still remain sluggish.

WPI inflation was recorded at 8.2% in January 2011. Inflation is largely Need To Ensure Fund Flows From Multiple
driven by structural supply-constraints & rising prices of crude oil & Sources
commodities. Banking system Liquidity has shown some signs of easing The Financial Express, 23rd February, 2011
during the month. The Union Budget 2011-12 announced Rs 3.43 trillion
Sensex-Nifty Plunge
government borrowing programme for FY12, which was lower than market
7th February, 2011
expectation of Rs3.8 trilion. The Union budget has tried to give a push to
the corporate bond market by increasing the limits for FII investment in the FIIs Likely To Book Profit Everytime Market
corporate bonds issued by infrastructure companies by US$20 Bn. Surges
5th February, 2011
Debt Outlook

The RBI has been gradually hiking policy rates & has done 7 such hikes
since March 2010 taking the reverse repo and repo rate to 5.5% and 6.5%
respectively. With Inflation still a concern and global crude oil price
continuing on the rising spree led by geo-political concerns in certain part
of the world, we expect to see another ~50bps hike in the current calendar
year.

In our view, liquidity will continue to be in the deficit mode during the
month led by pressure from advance tax outflows. Further, until inflation
shows a decisive downward trend, RBI is likely to keep liquidity in the
deficit mode only. As a result, we expect markets to remain range-bound
only with 10-yr G-Sec yield remaining in the range to of ~8 % during the
month. The corporate bond spreads which is currently at ~110 bps, is also
expected to remain around similar levels in March 2011.

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