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February 2012

The New Year 2012 started on a very positive note as the markets bounced back with a broad based rally. The BSE Sensex and S & P Nifty both gained significantly and ended the month with gains of 11.25% and 12.43% respectively. This has been the highest increase for the month of January in many years. BSE Midcap and BSE Small Cap indices too made significant upward movements, rising 14.35% and 16.45% respectively. This movement was underlined by renewed interest in the Indian economy by the foreign institutional investors (FIIs). FIIs have invested a total of US$2bn in the month of January 2012. While it is difficult to say whether and how long this will sustain, given the strong headwinds on account of several macro parameters, it is undoubtedly a good beginning.

Improved economic data from the US and better news flow from Europe also contributed to rallies in international markets. The Rupee appreciated by a massive 7% during the month and posted one of the biggest gains in the recent past. Positive news flow from various sources led to this optimism and euphoria in the equity markets. As expected, RBI has given signals of easing the monetary cycle with a 50 bps cut in Cash Reserve Ratio. The headline inflation for December fell below 8% and this brought a lot of relief to the markets.

 
Investors who have stayed invested in these volatile markets and not panicked have benefited from the upturn in the equity markets. We would continue to advise investors to have a long term horizon while investing in equity markets so as to stay focused on their financial objectives.

 
You would be aware that we have launched SBI Tax Advantage – Series II, which is a 10 year, closed Equity Linked Savings Scheme having a 3 year lock-in period. The New Fund Offer is open from December 22, 2011 and it closes on March 21, 2012. It offers investors an avenue to get potential gains from the equity markets and at the same time helps you save tax under Section 80C of the Income Tax Act, 1961. Please feel free to approach your nearest SBI Mutual Fund Investor Center to know more about how to save taxes with SBI Tax Advantage Fund – Series II.
We are absolutely committed to providing unparalleled service to our investors and to cater to your information, investment and servicing needs. Please feel free to call at our dedicated customer care numbers 1-800-425-5425 (MTNL/BSNL users only) and 080-26599420 from Monday to Saturday (8am – 10pm) or write to us at customer.delight@sbimf.com with your queries. Alternatively you can also visit your nearest Investor Service Centre / Investor Service Desk for any assistance.

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