>EQUITY MARKET OVERVIEW & OUTLOOK (CANARA ROBECO)

Political Impetus to lead to Financial Impetus

What Happened…

• Global Equity Markets
− Globally, governments are working together to provide a stimulus to the world economy; there is hope of stability in the second half of fiscal FY10
− Chinks in the Global Regulatory framework armor left the investors badly bruised
− Dramatic swing in sentiment as the developed world was plunged in to a series of crisis

• Domestic Equity Markets
− BSE Sensitive Index plunged from ~21,000 levels (in Jan 08) to ~8000 levels (in Mar 09)
– Inflation Rate tumbles down from 12.00% (in Aug 08) to 0.70% (in May 09)
– With Global Trade under clouds of fear, our Exports were affected

Indian Economy – Strong Fundamentals remain Intact!!!
• GDP estimated to grow at 6-7% in the near-term, have already clocked 9% growth rates for the past 3 years
• India stands at 4th rank in Purchasing Power Parity amongst all countries
• Savings rate – 36% of GDP – one of the largest worldwide
• Services constitute more than 50% of GDP, ensuring high employment generation
• Return on Equity (RoE) of corporates remains high & leverage is down significantly over the years
• from cooling commodity prices and new discoveries in the Oil India to benefit & Gas Sector

• Why India is standing tall –
− Stable Government – Demographic Advantage & Domestic Consumption
− Robust Banking System – Untouched by Global Sub-Prime Crisis
− Smaller Pie of Exports – Global Trade was a small % of GDP
− Consumption Demand – India, a Domestic Consumption Story

This report also includes information on:

• Back Tracking: Sequence of Events…
• The Brighter side – Perspectives to look at!!!
• Key Challenges: Equity Markets as it will be…
• India Outlook: Themes to team with…

To see full report: EQUITY MARKET OVERVIEW & OUTLOOK