Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Nippon India Mutual Fund — Investor Presentation (December 2021)
55 slides from Nippon Life India Asset Management's investor presentation, December 2021
Slide 1: Outlook 2022
Nippon Mutual Fun Wealth sets you free Outlook 2022 ig Ul
Slide 2: The year gone by..
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Slide 3: Global Equity Market Performance
Global Equity Market Performance CY19 CY20 CY21 Developed Markets S&P 500 Index 29% 16% 26% Dow Jones Industrial Avg 22% 7% 17% German DAX 25% 4% 15% France CAC 26% -7% 28% UK FTSE 12% -14% 14% Japan Nikkei 18% 16% 5% Asian Markets China 22% 14% 5% Korea 8% 31% 4% Singapore 5% -12% 9% India Nifty 12
Slide 4: Global Debt Market Performance
Global Debt Market Performance Developed Markets - 10 year G-Sec yield (%) Emerging Markets- 10 years G-Sec yield (%) 2.5 12 2 10 1.5 1 8 0.5 6 0 4 -0.5 2 -1 0 US Germany Italy Japan India Brazil Indonesia Malaysia 2019 2020 2021 2019 2020 2021 Note: CY 19 & 20 yields as on 31st Dec. CY 21 yields as
Slide 5: Commodities Performance
Commodities Performance CY19 CY20 CY21 Energy Nymex Crude 34% -21% 52% Natural gas -26% 16% 47% Precious metals Gold 18% 25% -5% Silver 15% 48% -13% Palladium 59% 29% -20% Industrial metals Copper 4% 26% 24% Iron-ore 28% 73% -22% Aluminium -2% 11% 44% Zinc -8% 21% 28% Nickel 31% 18% 21% CRB (Commodi
Slide 6: Moderation in FPI Flows
Moderation in FPI Flows FPI Net Investments (Rs crs) 170,262 135,995 101,122 103,156 56,015 27,512 25,882 26,638 8,995 12,546 1,867 CY19 CY21 -79,648 CY20 Equity Debt Hybrid Total Note: CY21 flows till 23rd Dec 2021, Market scenarios are not the reliable indicators for current or future performance.
Slide 7: Net Inflows by Mutual Funds
Net Inflows by Mutual Funds Net Investments by Mutual Funds (Rs crs) 588,386 535,932 223,689 212,508 169,639 130,167 82,341 52,454 -54,050 CY19 CY20 CY21 Debt Equity Total Note: : CY21 flows till 22nd Dec 2021, Market scenarios are not the reliable indicators for current or future performance. The s
Slide 8: Global Update
Global Update
Slide 9: Re-opening growth bounce anticipated… inflation a surprise
Re-opening growth bounce anticipated… inflation a surprise Global real GDP, the eight global recessions since 1900 % yoy, US recession bars shown in grey US inflation is sharply above trend line 10 125 Sharply above trendline 5 120 (12m ma, x) 0 115 Carter credit Panic of control/Volcker -5 1907 inf
Slide 10: Global growth expected to moderate
Global growth expected to moderate Government transfers to HH subsiding US HH savings rate has normalised 8500 7000 7500 6000 6500 (USD bn) (USD bn) 5000 5500 4000 4500 3000 3500 2000 2500 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 Oct-20 Oct-21 1000 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 Oct-20 Oct-21 US govt.
Slide 11: Equity Market
Equity Market
Slide 12: Broader markets outperform
Broader markets outperform Market Cap wise performance 55.6% 43.0% 24.4% 25.1% 22.3% 14.9% 10.4% -0.3% -8.3% CY19 CY20 CY21 Nifty 100 Nifty Midcap 150 Nifty Smallcap 250 Note: CY21 absolute returns till 22nd Dec 2021 Note: The above data should not be construed as a promise, guarantee on or a foreca
Slide 13: Cyclicals shine
Cyclicals shine Sectoral Performance – CY21 S&P BSE FMCG 6.2% S&P BSE Bankex 10.9% S&P BSE HC 14.8% S&P BSE Auto 16.2% S&P BSE Oil & Gas 23.0% S&P BSE CD 40.4% S&P BSE Telecom 40.5% S&P BSE IT 49.4% S&P BSE Realty 51.7% S&P BSE Industrials 62.4% S&P BSE Utilities 64.9% S&P BSE Metal 66.7% S&P BSE Po
Slide 14: Growth vs Value
Growth vs Value Value Stocks (+29%) have outperformed Growth (+22%) 145 135 125 115 105 95 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Dec-21 MSCI India Growth MSCI India Value Source: BofA Global Research, Bloomberg Note: The above data should not be construed as a promise
Slide 15: High frequency data indicate economy has recovered from Covid 2.0
High frequency data indicate economy has recovered from Covid 2.0 Manufacturing PMI increased sharply in Nov’21; while services Electricity Consumption grew by 2% yoy to 100 BU in Nov’21 PMI eased 2Y-CAGR: 2.7% 65.0 58.1 2% YoY 55.0 130 57.6 125 120 45.0 114 115 110 110 35.0 105 100 100 25.0 95 90 8
Slide 16: Rapid Vaccination giving comfort on sustainable recovery
Rapid Vaccination giving comfort on sustainable recovery Daily Covid-19 Cases Range-bound Recovery Rate Remains Steady Thousands 36 Active Cases + Fatalities 450 120.0% Increase in fatality rate due to Maharashtra 4.0% Millions govt revising death toll to recognize more than 32 Cured 400 1300 fatali
Slide 17: Excess liquidity getting channeled into the economy
Excess liquidity getting channeled into the economy Ample liquidity in the banking system to fund growth & keep interest rates low 8.2 10 6.6 5.3 7.0 7.2 8 6.5 6.0 6 4.2 5.5 4 5.0 2 1.2 4.5 0 4.0 -2 3.3 3.5 -1.0 -4 3.0 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-
Slide 18: Government focus on Capex
Government focus on Capex Higher tax buoyancy is leading to govt. revenues running ahead of the Centre is accelerating Capex, which grew by 25.8% to budgeted target... Rs. 2.5tn in Apr-Oct’21 from Rs. 2tn in Apr-Oct’19 3,100 Capex (Rs. bn) 3,309 3700 3,113 2,533 2,728 2,704 3200 2,600 2,444 2,319 2,
Slide 19: Green shoots visible in Private Capex
Green shoots visible in Private Capex Corporate Capex announcements of Rs 8.6 trn Capex growth triggers in place: Better Balance sheets in a long time for Top 100 corporates, High Margins, Growth recovery a perfect recipe for Investment. Underperforming and Under owned sectors like Capital goods alr
Slide 20: Current Environment conducive for Capex Cycle pick-up
Current Environment conducive for Capex Cycle pick-up 20-year Snapshot of Indian Capex Cycle Capex revival on the Cards: Balance sheets may strengthen across large companies Large assets under NCLT may find a resolution Corporate NPA cycle may see a decline Source: Spark Capital Research, NIMF Resea
Slide 21: India macro well placed for growth
India macro well placed for growth Private consumption Private investment Pent up demand, asset inflation, under Low base, penetration China+1, PLI Government Trade spending Global demand, High fiscal deficit, tax China+1, IT services collections healthy Source: CEIC, Bloomberg, NIMF Research
Slide 22: Bull Markets !! How similar are we to 2003-08 ?
Bull Markets !! How similar are we to 2003-08 ? Weeks into the bull market The ongoing bull market compares well with history. This bull market is reminiscent of that in 2003-08, especially given a likely fresh earnings cycle Past performance may or may not be sustained in future and the same may no
Slide 23: Macro Survey
Macro Survey Questions Consensus Replies Services led by urban consumption & normalization What segments may lead the Investment cycle led by Government spending economic recovery? Green shoots in Private Capex and Real Estate can also aid in recovery Domestic Recovery plays - Industrials, Financial
Slide 24: Structural Reforms and Long term Drivers
Structural Reforms and Long term Drivers Structural Policy Reforms Reforms in Labor Law, Coal, Minerals, Defense, Civil Aviation, Power distributing, Space and Atomic Energy to increase ease of doing business Huge investment in productive assets Launch of National Infrastructure Pipeline to provide
Slide 25: Key Themes
Key Themes Structural Secular Manufacturing Normalization Consolidators Growth Opportunities & Engineering Beneficiaries Leaders across Segments which were In India, where Domestic Capex segments like Banking, most impacted in Communications there is reasonable cycle is at the cusp pandemic led etc.
Slide 26: Equity Market Outlook
Equity Market Outlook Along with reopening led positive growth delta, record low interest rates, moderate inflation and with a modest current account surplus, Indian economy is growing faster than expected Acceleration in Government spending as confidence on revenues has improved Expect government c
Slide 27: Market Opportunity
Market Opportunity China withdrawal from manufacturing and geopolitical scenario gives Indian manufacturing/capex cycle a huge boost Negative real rates make equities attractive compared to other asset classes India consumption has strong structural positives Normalisation may aid revival in pandemi
Slide 28: Products you may consider
Products you may consider Nippon India Growth Fund & Nippon India Multi Cap Fund May benefit meaningfully from anticipated broad based market recovery Nippon India Large Cap Fund May be part of core portfolio allocation Nippon India Power & Infra Fund Well positioned to capture potential investment
Slide 29: Fixed Income Market
Jw Fixed Income Market Lo <> Nippon india Mutual Fund Wealth sets you free
Slide 30: Macro Dynamics: Flux in Growth and Inflation Dynamics
Macro Dynamics: Flux in Growth and Inflation Dynamics
Slide 31: FY22 Growth: No negative surprises
FY22 Growth: No negative surprises Source : NIMF research, Jefferies Most Hi-frequency indicators back to pre-Covid levels and better Broad-based revival – rural leading Going Forward : Activity levels to consolidate around these levels Urban likely to outperform on return to school/office/ travel e
Slide 32: FY22 Growth: Likely Growth Engines
FY22 Growth: Likely Growth Engines GDP % change over the Quarters GDP in absolute terms 20.1 (2011-12 prices in lakh crore) 8.4 H1 2019-20 71.28 5.4 4.6 3.3 3 0.5 1.6 H1 2020-21 59.92 -7.4 H1 2021-22 68.11 Q2 2019-20 35.62 -24.4 Q2 2020-21 32.97 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 2021-22 35.73 FY 20 F
Slide 33: Inflation: What's driving Headline print?
Inflation: What’s driving Headline print? %y/y Evolving Trends in Headline CPI 7 RBI’s Inflation Target Upper limit Core Infaltion 6 5 Headline Inflation 4 3 2 1 0 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Source : CEIC, NI
Slide 34: Inflation: Within RBI's range?
Inflation: Within RBI’s range? Ample food grains stock Inoculation speed to determine further protection Consumption demand uncertainty over medium term Downside Risk Rising Upside Risk Worsening global macros (High commodity prices, Supply chain disruptions, Sharp firming up of global inflation) Ta
Slide 35: Fiscal Stance: Growth Focus
Fiscal Stance: Growth Focus Elevated Combined (Central + State) Fiscal Deficit (% of GDP) 16 14 Growth focused Fiscal Policy evident 12 Focus to improve Medium term Growth trajectory 10 Improved quality of expenditure (capex-oriented) 8 0.7 0.7 Better Fiscal credence: Bringing more off-budget items
Slide 36: Fiscal Stance: Reasonable Space available
Fiscal Stance: Reasonable Space available How far is fiscal protected ? Limited downside to Nominal GDP growth (due to higher FY22 avg WPI expectations) Comfortable Revenue position : Modest Budget assumption of tax buoyancy. Actuals might prove better Apr-Oct’21 Robust revenue collections growth (t
Slide 37: Ample System Liquidity
Ample System Liquidity From ~ 3 trillion liquidity at the start of pandemic, core liquidity rose sharply to ~9 trn by March end 21 and has improved further to ~12 trn by Dec’21 Main Contributors: RBI ‘s Conventional measures (Cash Reserve Ratio (CRR) cut) & Trends in Core System Liquidity (Rs. Cr.)
Slide 38: Monetary Policy: Normalization looming
Monetary Policy: Normalization looming Multiple Challenges Policy Drivers What can force RBI’s hand Uniformity & On the horns of Sustainability of Core Momentum ‘inflation-growth’ Growth Recovery Global Central Banks dilemma Supply side Inflation actions led Market Huge Overhang of Pressures (FY22 V
Slide 39: Monetary Policy: India focus
Monetary Policy: India focus Revival in sustainable growth conditions has been prime focus in last 24 months Risk of shift in focus if core continues to show upside surprises Shift also may be led by global central bank behavior Policymakers focused on calibrated liquidity normalisation Preference f
Slide 40: Market Dynamics
Market Dynamics <> Nippon india Mutual Fun Wealth sets you free
Slide 41: Implied Rates & Curve Steepness
Implied Rates & Curve Steepness OIS Curve Implied Implied Current OIS Curve OIS Curve Implied Forward Rates Forward Rates Forward Maturity OIS Curve (3 months (6 months Forward Rates (3 months (6 months Curve (Annualised) back) back) (Current) back) back) Forward Rates implied 1 4.32% 3.86% 3.87% 2
Slide 42: Curve Steepness (PSU Curve)
Curve Steepness (PSU Curve) Latest Sep 21 end Mar 21 end Dec 20 end Sep 20 end March 20 end AAA PSU (3-1) Yr 100 93 136 67 101 40 AAA PSU (10-3) Yr 130 165 153 200 161 89 Spreads Analysis (SDL-Gsec, SDL-PSU, PSU-Swap) Spread Analysis (SDL-G-sec) Latest Sep 21 end Mar 21 end Dec 20 end Sep 20 end Mar
Slide 43: Tenor Spreads
Tenor Spreads Tenor-wise spreads in G-sec (bps) Long term average Current 3 months back September 2019 (Since 2005) Repo rate (%) 4.00 4.00 5.40 6.70 1 yr over repo rate 40 -39 30 24 3 yr -1yr 80 121 55 27 10 yr - 3yr 124 138 46 40 Tenor-wise spreads in AAA PSU (bps) Long term average Current 3 mont
Slide 44: Fixed Income Market Outlook
| 4 Fixed Income Market Outlook EK expectation for year 2022: + Markets may keep on pre-empting RBI till the actual RBI action starts + Expect volatility in a range * Carry may become more important in preserving total returns EK inflation or Growth: What may dominate MPC next year? * MPC may remain
Slide 45: Credit Commentary
BE Credit Commentary EK credit environment MK current Preferences * Conservative balance sheets, strong liquidity * Non-discretionary nature of products/services like utilities * Better prepared for uncertainties * Business backed by strong promoter groups . reing Power Sustainability : Consumption
Slide 46: Market Opportunity
BE Market Opportunity * Steepness across the Yield Curve (Slow Normalisation) * 2x4 year corporates + 3X5xI5 year G-Secs / 3x5X10 years SDLs Opportunities — - polidown Led Protection in Duration Assets (steepness) Absolute protection in Duration Assets (fiscal) + High Grade Structured assets & Non-F
Slide 47: Note: For complete portfolio, please refer website mf.nipponindiaim.com
Note: For complete portfolio, please refer website mf.nipponindiaim.com
Slide 48: s s s
s s s s Note: For complete portfolio, please refer website mf.nipponindiaim.com
Slide 49: Nippon India Balanced Advantage Fund; Multi Cap Fund
Nippon India Balanced Advantage Fund Nippon India Multi Cap Fund (An open ended dynamic asset allocation fund) (Multi Cap Fund - An open ended equity scheme investing across large cap, mid cap, small cap stocks) This product is suitable for investors who are seeking*: This product is suitable for in
Slide 50: Nippon India Large Cap Fund; Growth Fund
Nippon India Large Cap Fund Nippon India Growth Fund (An open ended equity scheme predominantly investing in large cap stocks) (Mid Cap Fund - An open ended equity scheme predominantly investing in mid cap stocks) This product is suitable for investors who are seeking*: This product is suitable for
Slide 51: Nippon India Low Duration Fund; Floating Rate Fund
Nippon India Low Duration Fund Nippon India Floating Rate Fund (An open ended low duration debt scheme investing in debt and money market instruments such that the Macaulay duration (An open ended debt scheme predominantly investing in floating rate instruments (including fixed rate instruments conv
Slide 52: Nippon India Dynamic Bond Fund; Credit Risk Fund
Nippon India Dynamic Bond Fund Nippon India Credit Risk Fund (Number of Segregated Portfolios - 2) (An open ended debt scheme predominantly investing in AA and below rated corporate bonds (An open ended dynamic debt scheme investing across duration. Relatively High interest rate risk and Relatively
Slide 53: PRC Matrix
PRC Matrix Nippon India ETF Nifty CPSE Bond Plus SDL-2024 Maturity Nippon India Dynamic Bond Fund, Nippon India ETF Nifty SDL-2026 Maturity Potential Risk Class Potential Risk Class Credit Risk Relatively Moderate Relatively Credit Risk Relatively Moderate Relatively Interest Rate Risk Low (Class A)
Slide 54: Disclaimer
Disclaimer Past performance may or may not be sustained in the future. The data/statistics/comments are given to explain general market trends in the securities market, it should not be construed as any research report/ research recommendation. Investors are requested to read the offer document/SAI/
Slide 55: Thank you!
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