Aditya Birla Sun Life AMC Limited

Equity Outlook Monthly Update - November 2018

Dec 01, 2018
5 mins | Views 1009
  • Starting with global macro, Brent crude prices have declined more than 15% from peak levels on the back of supply assurances from Saudi Arabia and concerns of a global demand slowdown going forward.
  • On the domestic front, the re-pricing of risk in the credit market and tightened liquidity have had a contagion effect on the NBFC sector. It is believed that most NBFCs will be able to tide over this environment while some better-capitalized private banks will be able to take share from NBFCs.
  • A positive point to note is that India has leapfrogged 23 places to 77th rank in the World Bank's global Ease of Doing Business rankings. This should raise the count’s attractiveness for global investors.
  • Fear in the market has led to distressed prices and good value is emerging in individual stocks. The recent correction could provide a good opportunity for prudent investors to build equity exposure for the long term.

  • It would be prudent for investors to allocate some portion of their corpus to midcap and smallcap funds. Valuations in that space have become reasonable and we remain constructive on overall economic growth.
  • In terms of sectoral outlook, sectors which will be impacted positively by a weaker Rupee include IT, Pharma, Metals & Mining, and Auto ancillaries. We also believe that for private sector banks, the increase in market share will be a secular trend over the next decade.

Source: ABSLAMC Research, Bloomberg, Financial Express, Mint)

Portfolio Action
  • Aditya Birla Sun Life Equity Hybrid ‘95 Fund (formerly known as Aditya Birla Sun Life Balanced ’95 Fund) (An open ended hybrid scheme investing predominantly in equity and equity related instruments.):

    We increased weight incorporate banks as slippage have declined and are reasonably valued. Reduced weight in NBFCs, expected growth slow down due to liquidity concerns. We added an Indian multinational car manufacturing corporation as company is available at attractive valuations, post recent correction.
  • Aditya Birla Sun Life Small Cap Fund (formerly known as Aditya Birla Sun Life Small & Midcap Fund) (An open ended equity scheme predominantly investing in small cap stocks):

    We continue to remain positive on financial services. Increased exposure to one of the leading players in the road sector construction, with strong financials available at attractive valuations. We continue to add weight in to an Indian consumer electrical equipment company in appliance segment (consumer durables) and its recent acquisition is expected to provide a portfolio of brands which complement its existing offerings and a ready business setup with a well-recognized name.
  • Aditya Birla Sun Life Equity Fund (An open ended equity scheme investing across large cap, mid cap, small cap stocks):

    We Added exposure to an Indian IT company in the software sector which would benefit from INR depreciation. In the automobile space, an Indian car manufacturing company was a new entrant given its strong leadership in farm equipment segment (FES), revival in rural growth, a slew of new launches couple with reasonable valuations.
All the Data mentioned above is as on 31st October, 2018
The Scheme(s) may or may not have any present or future positions in these sectors
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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