1. The World This Week
Mar 19 – Mar 23, 2012

2. Equity View:
Indian equity markets were flattish last week with a correction of 0.75% from previous week’s closing. Indian equity markets
have witnessed a pause in the upward rally from last couple of weeks. This is due to the Union Budget turning out a non-
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event and no rate cut being announced in RBI’s Monetary Policy on 15 March 2012. Markets would now look for Q4
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earnings which would start from 10 April 2012. Our own sense is that the Q4 earnings would be in range of 10%-12% year-
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on-year basis. We believe the earnings have bottomed out in 3 quarter and this quarter might deliver slight improved
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earnings for large Nifty companies. The next monetary policy review is scheduled on 24 April 2012 in which we expect the
RBI to cut the repo rate by 25 basis points.
Manufacturing and PMI data for China & Germany were announced last week. The data was below consensus expectations.
With renewed concerns of hard-landing scenario in China the commodity markets have seen correction with oil being the
exception. Government of China came out with a set of guidance for the Chinese GDP growth numbers at about 7.5 %, we
would consider this number as “floor” rather than “ceiling” on the Chinese growth numbers. The Chinese government has
been guiding the growth for the last 15 years and they have always held a very conservative target and actual growth that is
clocked is significantly higher than what the government has mentioned. Hence, we could see some kind of moderation in
growth to 8.5% levels from 10% plus levels that China has been witnessing for several years now.
Last week we saw the merger of Tech Mahindra and Satyam Computers. With this development it would close the ugly
chapter of the Satyam Computers fiasco which happened in the year 2009-10. Satyam Computers will be fully merged with
Tech Mahindra and the merger ratio has been announced at 1:8.5. So, for every 8.5 shares of Satyam held, the investor would
get one share of Tech Mahindra. This merger would lead to creation of fifth largest IT Company with revenues of around $2.5
billion. We see this as a positive development in terms of India’s capability to handle a scam of that magnitude and finally
curtains have been drawn on that chapter. We believe that Tech Mahindra would start bidding for bigger orders and would
pose a serious challenge for other Tier-1 IT players.
News:
DOMESTIC MACRO:
The Reserve Bank of India is not uncomfortable with the recent surge in government bond yields and is unlikely to use
debt buys through open market operation as a tool to contain the rise in yields, three central bank officials said.
The Reserve Bank of India has said all non-banking finance companies that lend against gold collateral should maintain
a loan-to-value ratio not exceeding 60% for loans granted against gold jewellery.
The year-on-year credit growth of Indian banks was broadly in line with the Reserve Bank of India's projection of
16.0% rise in the current financial year which ends on March 31, data released by the central bank showed on
Wednesday.
As of March 9, banks' deposit stood at 58.53 trillion rupees, while advances amounted to 44.87 trillion rupees, data
released by the RBI showed. Credit grew 16.29% from a year earlier, while deposits were up 13.78%.
GLOBAL MACRO
Euro:
Greece must strictly adhere to the reforms agreed with its international lenders to regain market confidence and
help its economy recover, the country's central bank said in an annual monetary policy report on Monday.

3. US:
The number of Americans claiming new unemployment benefits dropped to a four-year low last week, offering
further evidence the jobs market recovery was gaining traction. Initial claims for state unemployment benefits fell
5,000 to a seasonally adjusted 348,000, the lowest level since February 2008, the Labor Department said on Thursday.
China:
The HSBC flash purchasing managers index, the earliest indicator of China's industrial activity, fell back to 48.1 for
month of March from February's four-month high of 49.6. New orders sank to a four-month low, an expected
rebound in export orders failed to emerge and new hiring slumped to a two-year low.

4. Swapnil Pawar Varun Goel Jharna Agarwal
Palak Nanjani Abbas Naheed Kanika Khorana
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