Franklin Templeton MONTHLY FACT SHEET : March 2004
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Franklin Templeton MONTHLY FACT SHEET : March 2004 4 Contents Market Update 4 Templeton India Income Builder Account (TIIBA) 23 Franklin India Bluechip Fund (FIBCF) 6 Templeton India Income Builder Account (TIIBA) - Institutional Plan 24 Templeton India Growth Fund (TIGF) 7 Templeton Monthly Income Plan (TMIP) - Franklin India Prima Plus (FIPP) 8 Monthly & Quarterly Dividend Plan 25 Franklin India Prima Fund (FIPF) 9 Templeton Monthly Income Plan (TMIP) - Franklin India Opportunities Fund (FIOF) 10 Half-Yearly Dividend & Growth Plan 26 Franklin India Taxshield (FIT) 11 FT India Monthly Income Plan (FTIMIP) 27 Franklin India Index Fund (FIIF) 12 Templeton India Government Securities Fund (TGSF) 28 Franklin Infotech Fund (FIF) 13 FT India Gilt Fund (FTIGF) 29 Franklin FMCG Fund (FFF) 14 Franklin Pharma Fund (FPF) 15 Templeton Floating Rate Income Fund (TFIF) 30 FT India PE Ratio Fund (FTIPERF) 16 Templeton India Short-Term Income Plan (TISTIP) 31 FT India Asset Allocation Fund (FTIAAF) 17 Templeton India Treasury Management Account (TITMA) 32 FT India Life Stage Fund of Funds (FTLF) 18 Templeton India Liquid Fund (TILF) 33 FT India Balanced Fund (FTIBF) 19 Templeton India Money Market Account (TIMMA) 34 Templeton India Pension Plan (TIPP) 20 Franklin India Balanced Fund (FIBF) 21 Franklin India International Fund (FINTF) 34 Templeton India Income Fund (TIIF) 22 Dividend/Bonus History 35 Market Update Equity Market Snap Shot numbers, farm output grew by 16.9%. The other constituents of the economy viz. industry grew by 6.7% and services The first quarter of the New Year grew by 9%. However, one needs to keep in mind that these saw most markets across the globe numbers are off a weak base and we have to wait and see if close in positive territory despite the this double-digit growth is sustainable. weakness in Europe and US. For the quarter, the MSCI World Index We believe that the data is in line with our view that gained 2.20%, largely due to gains in capital formation is on the rise and the manufacturing sector Asian markets and select European could start witnessing capacity additions in the future as bourses. In Asia, Japanese markets in demand picks up. Overall, economic fundamentals are strong particular rose on expectations of last year’s export-led with various drivers such as infrastructure spending, retail recovery boosting employment and feeding an expansion in lending, positive demographics, outsourcing opportunities consumer spending, retailing and bank lending. The broad and a potential capex recovery, in place. The fly-in-the- MSCI Asia Pacific Index rose 6.38%. In Europe, latest data ointment has been the sharp rise in global crude oil prices. has raised concerns about the direction of the region’s largest Going ahead, the earnings season is likely to have an impact economies. Despite a fall in major indices in UK and on the markets. The recent issuances are likely to result in an Germany, the pan-European FTSE Eurotop 100 gained increase in India’s weigthage in the MSCI indices which 1.12%, boosted by a sharp fall in the Euro. After touching could lead to additional flows from global fund managers. new highs, major US markets fell in the month of March on Overall, the long term story remains strong with the the back of mixed economic data and profit booking at confluence of structural and cyclical factors making India an higher levels. This led to the Dow Jones and Nasdaq posting attractive investment destination. quarterly losses of 0.92% and 0.46% respectively, while the S&P managed a 1.3% gain. Investors will be closely Chetan Sehgal, Director - Research watching the high global crude oil prices and sifting through Templeton Equity View: economic data for pointers to the sustainability of the global April heralds a new year. economic recovery. As we enter the summer months, things have gotten a bit The quarter saw the domestic markets consolidate as warmer.... investors locked gains before the end of the fiscal year end. The INR rose very firmly to end the After touching historic highs at the start of the quarter, markets month with one of the sharpest seesawed before ending the period with losses. The period appreciations which we have seen for was marked with high volatility as heightened speculative a long time. Though there could be activity combined with concerns about the impact of the slew concern on some loss of of equity issuances on liquidity dampened sentiment. The competitiveness in many sectors technology sector in particular witnessed selling pressure on including the most written about IT account of the political backlash witnessed against sector, the value of a strong INR in outsourcing in countries like US. The FMCG and pharma benefiting large parts of the economy should not be sectors also came under pressure on account of the ongoing undermined. It is interesting to note that the ruling coalition is price war and legal setbacks in the US respectively. Stocks in also of the opinion that the INR should be stronger and we the Mid cap segment bore the brunt of selling as investors continue to estimate that the INR is undervalued on a booked profits, which was reflected in the 10.67% fall in the purchasing power basis. CNX Midcap 200. On the other hand, the BSE Sensex lost 4.25% India finally broke through the 10% growth rate market during the quarter. Amidst all the albeit for a quarter on the back of poor base comparisons. volatility, FII flows remained strong However, the headline was strong enough to make waves and were to the tune of $3.18 billion across international media. Finally, the attention and focus on during the quarter, with around $1.95 China and India rather than China Vs. India. billion coming in March largely due to Politically, we have seen dramatic developments in Korea, inflows for the IPO subscriptions. Taiwan and closer home in Sri Lanka which have had effects The positive news flow on the economic front continued in on market volatility. With Indian elections approaching earnest as the industrial production and infrastructure shortly, it is interesting to see debate being centered around numbers reflected robust activity. The icing on the cake was issues of economic importance. “Roads, electricity and the GDP numbers as the latest data showed that the GDP water” are now central pieces of both economics and politics. grew by 10.4% during the quarter ending December 03, well Employment generation is key. ahead of market estimates, reconfirming India’s place in the With most of the large IPOs behind us there was in large league of the fastest growing economies in the world. Aided part a relief in the markets. There is generally positive by a strong monsoon and a downward revision of last year’s sentiment going into the result reason. Some of this is already 4 in the prices of stocks, and therefore there is a chance that GOVERNMENT BORROWING á á disappointments could result in higher volatility. However, During the quarter, RBI lowered its projection for fiscal with increased data flow on a monthly basis on a large deficit and announced that the borrowings for the first half of section of the economy, chances are that the surprises could the next fiscal year would be Rs.59,000 crores which was be fewer. lower than expectations. The fiscal deficit at the end of February was Rs 110,470 crores, representing 83.6% of the Fixed Income Market Snap Shot revised budgeted estimate for FY 2003-04. The deficit till February works out to 4.0% of GDP and the government FACTORS Short Term Medium Term targets to rein in deficit to 4.8% of the GDP during the period. (1-3 months) (3-6 months) FOREIGN EXCHANGE MARKET â á INFLATION â á The rupee rose strongly towards the end of the quarter as Wholesale Inflation numbers exhibited a firm trend for a combination of continued foreign inflows and lack of RBI most of the quarter before easing in March to below 4.5% intervention aided its rise. The rupee closed the quarter at a due to a fall in food and edible oil prices and the higher base effect. Annual wholesale inflation (WPI) fall to 4.3% for the 47-month high of 43.65/70 per dollar with most of the gains week ended March 20. However the numbers of earlier coming in the last 9 trading sessions. It ended the fiscal year weeks were constantly revised upwards. We expect the 2003-04 with an 8.7% gain against the US dollar, and the inflation to inch up in the coming months due to the higher quarter with around 4.8% gain. Forex reserves continued base effect and oil price hike which is overdue. The less their upward movement and were at $ 110.317 billion on widely tracked consumer price index (CPI) fell to 4.13% in March 26th. The appreciating rupee will have a smoothing February from 4.35% in January. effect on the inflation. MONEY SUPPLY â á RBI POLICY = = Robust forex inflows and increased government spending RBI has announced the issue of market stabilisation bonds resulted in excessively easy liquidity throughout the quarter. (MSB) to the tune of Rs.35,500 crores during the first quarter Excess liquidity was reflected in significant amounts received of next fiscal. It has also announced various measures at by the RBI in daily LAF repo auctions, which averaged streamlining the money markets including a cut in reverse around Rs.36,000 crores for the first two months of the repo rate and merging of the normal and back-stop facilities.