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April 2014

The Indian economy continued to benefit from falling prices in March; declines were reported at both the wholesale and retail levels. The Wholesale Price Index (WPI) inflation fell to a nine-month low of 4.68% in February from 5.05% in the previous month and 7.28% during the same month of the last year. Retail inflation measured by the combined Consumer Price Index (CPI) fell to 8.1% in February from 8.8% in the previous month.

Positive domestic and global developments in March gave the Indian equity market the much-needed boost. The CNX Nifty rose 6.81% and the S&P BSE Sensex gained 5.99%, both at a five-month high. Major positive domestic developments came in the form of improvement in domestic economic indicators (Current account deficit (CAD), inflation and industrial output). Encouraging CAD helped the rupee appreciate, which improved stock market sentiments. Strong buying by FIIs which was largely driven by the expectation of a stable and more business friendly government in India post the general elections in April-May 2014 also aided the gains.

All the S&P BSE sectoral indices, except S&P BSE Healthcare and S&P BSE IT, ended higher in March. The S&P BSE BANKEX index was the top gainer in March, surging 18.63% helped by brokerage upgrades, the Reserve Bank of India (RBI) extending the deadline for banks to implement Basel III capital rules by a year and hopes of some easing by the central bank in its policy review. However, in its first bi-monthly monetary policy statement on April 1, 2014 the RBI kept its key rates unchanged.

The markets in April are expected to be guided by FII investments and domestic macro-economic data. Global cues will continue to impact the market too; further tapering of the quantitative easing by the US Fed and volatility in global equity markets are key monitorables. Expectations of the outcome of the upcoming general election in the country can also impact the markets.

Like an idea whose time has come, stocks of mid-cap and small-cap companies, which had to bear most of the brunt of the market slowdown, look ready for a turnaround in 2014. When the going gets tough, small-cap and mid-cap companies suffer the most due to low pricing power and weak balance sheets. Deterioration in their profitability is steeper, which is reflected in stock prices. Hence when stock market faces a lot of uncertainty the mid-cap and small-cap category underperform the broader market. Also once the economy looks up, mid-cap and small-cap stocks will go back to the high growth phase and start delivering better returns than the large-caps. Hence it is the right time to consider midcap or small cap funds in your portfolio.

We have always endeavored to provide our investors a well-diversified basket of products and most suitable services from time to time to fulfill their investment needs conveniently. Moving towards this goal, we have introduced several facilities which you will find useful.

By using our m-Easy service, you can complete any mutual fund transaction simply by sending a sms from your registered mobile number. In the Missed Call Facility, investor has to call on the toll free number 1800 2700 0060 and after 5 seconds the call gets disconnected automatically and a call back is arranged. So now you don’t have to get caught up in the hassles of making a call and can enjoy more free time.

The total asset base of the entire mutual fund industry grew to Rs 9.09 lakh crore at the end of the financial year 2013-14, shows the latest data compiled by AMFI (Association of Mutual Funds in India). With a strong growth of about 19.30% per cent, our asset base has increased to Rs 65,499 crores.

We will continue to grow our presence across India and will bring in innovation in our products and services which would be beneficial to our investors and business partners alike. I thank you all for all the support and good wishes throughout this year which kept us going against all odds.

Should you need any assistance or have any query, please feel free to call us at our dedicated customer care numbers 1800 425 5425 and 080-26599420 from Monday to Saturday (8am to 10pm) or write to us at customer.delight@sbimf.com. Alternatively you can also visit our nearest Investor Service Centre/Investor Service Desk for any assistance.

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