Wishing you a very Happy & Prosperous New Year!!!

Monthly Market Presentation H Happy IInvesting i iin Festivities!!! F i i i !!!

Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 1

Please refer slide no. 23 for risk factors.

HOW GLOBAL EQUITIES FARED IN NOVEMBER 5.80

4.51

4

3.73 2.00 1.80 1.45 1.04 0.71 0.18

2 % 0

-0.54

-2 -4

-1.70 -3.72 -4.29 In ndonesia

US

Russia

Brazil

Singapore

UK

Ho ongKong

Germany G

France

India

Japan

-6

China

6

Malaysia

8

INDICES USED: India - BSE Sensex; Russia - RTS Index; France - CAC 40 Index; UK - FTSE, Japan - Nikkei; Hongkong HangSeng, US - Dow Jones, Singapore - Strait Times, Germany - DAX Index, Malaysia - KLSE, Brazil - Ibovespa Sao Paulo Index, Indonesia - Jakarta Composite, Taiwan - Taiwan Weighted, China - SSE Composite .

y

2

Sensex posted positive returns of ~4.51%. China was biggest loser for the month. Source: Reuters.

HOW GLOBAL EQUITIES HAVE FARED THIS CY?

China

Brazil

Russia

Malaysia

UK

US

Japan

In ndonesia

France

Singapore S

Ho ongKong

India

Germany

30 25.55 25.14 25 19.51 20 16.01 12.58 12 58 11 15 11.88 88 11.72 11 72 10 6.61 5.29 5.23 % 3.96 5 1.27 0 -5 -10 -9.97 -15 15

INDICES USED: India - BSE Sensex; Russia - RTS Index; France - CAC 40 Index; UK - FTSE, Japan - Nikkei; Hongkong HangSeng, US - Dow Jones, Singapore - Strait Times, Germany - DAX Index, Malaysia - KLSE, Brazil - Ibovespa Sao Paulo Index, Indonesia - Jakarta Composite, Taiwan - Taiwan Weighted, China - SSE Composite .

y

3

Amongst Emerging economies and otherwise, India has fared amongst the best this calendar year.

Source: Reuters. CY – Calendar Year: January – November 2012.

INDIAN EQUITIES: HOW SECTORAL INDICES FARED IN NOVEMBER 2012? 17.00

15.76 12.80

12 00 12.00 7.76 7.00 % 2.00

6.37 6.16

4.92 4.28

2.97

2 03 11.99 2.03 99 1.44 -1.23

-3.00

Oil & G Gas

Pow wer

CG

Mettals

IT

HC

Auto

FMCG

Teeck

Bankkex

Reaalty

CD

-8.00

Bankex - Banks; CG - Capital Goods; CD - Consumer Durables; IT - Information Technology; HC - Health Care, Teck Technology, Auto – Automobiles.

y

4

CD, Realty and Bankex comparatively out-perform during the month.

Source: BSE

MARKET CAP - PERFORMANCE MTD 40.00

YTD

34 41 34.41

32.00

28.51

31.09

29.31

24.00 24 00 % 16.00 8.00

5.12

5.12

4.97

BSE 100

BSE 500

4.10

0.00 BSE MID CAP y y

5

BSE SMALL CAP

YTD,, small-caps p and midcaps p have outperformed. p Though the margin of outperformance has reduced.

Source: BSE. (YTD: Jan – Nov. 2012). MTD (Month till date / Nov. 2012 Month end)

FII & DII FLOWS

6

Yearly FII flows (US$ m) (YTD)

Source: Bloomberg, ESIB Research; FII (Foreign Institutional Investor), DII (Domestic Institutional Investor), m (Million)

KEY FACETS OF EQUITY INVESTMENTS

E Economics….Things i Thi appear much h better b Sentiments significantly boosted Sentiments…significantly Valuations fair value zone.. Valuations…fair zone Triggers…Taxation, gg Fuel price p hike

7

ECONOMICS

8

y

FDI to revive overall business confidence and help arrest decline in private investment

y

Indicators suggest stabilization in both GDP and ea nings earnings, with ith Q2 aggregate agg egate earnings ea nings seeing negligible net downgrades

y

Eight-core industry group shows highest growth in the last 8 months. Hope for better industrial production growth th figure fi even after ft a weakk IIP print i t in i Sep’12 S ’12

y

Expect early decision on NIB as per statements of Finance Minister IIP – Index of Industrial Production, Q2 – second quarter, NIB – National Investment Board

SENTIMENTS

9

y

Sentiments significantly boosted by Parliamentary approval on FDI and progressive government action

y

FIIs bullish on Indian Equities…

y

Mutual Fund net selling on account of redemption pressures

y

Recent measures are undoubtedly y positive p and being g viewed as a good beginning

VALUATIONS - FAIR VALUE

Valuation levels of the Sensex based on earnings estimate of Rs. 1329 (4 Quarter Forward)

y

10

Dichotomy of Valuations y Set of quality stocks are trading at very high valuations in FMCG, Cements, Pharmaceutical sector y Excluding these stocks, the broader market is attractive

TRIGGERS y

y y

y

11

Follow up on policy reforms - Steps outside divestment like increased taxation and further hike in diesel prices that will aid in further fiscal consolidation Macro boost likely through the National Investment Board and focus on roads and railways Crude prices not having rallied despite the liquidity gush & middle-east geopolitics, is a positive. Crude below or at US $ 100 per barrel works in favor of equities Lower global commodity prices could result in lower inflation providing more leeway for monetary policy & RBI cutting interest rates

IF TRIGGERS ARE ACHIEVED, MARKET CAN BE AT NEW HIGHS!!!!! A look at Year Till Date (YTD) performance & News Flow

12

Source: Bloomberg, Macquarie Research , ECB – European Central Bank, LTRO – Long Term Refinancing Options, QE3 – Quantitative Easing 3, ESM – European Stability Mechanism

EQUITY OUTLOOK y y y

y

13

The recent measures have clearly taken away the risk of a persistent decline in private investment The government is likely to continue announcing more measures in a bid to revive investment sentiment. US fiscal cliff, cliff Euro E o Area A ea uncertainty nce taint and Middle East geo-politics will play its role as India's dependence on global capital and risk appetite remains high Global and domestic events will result in continued volatility in markets

EQUITY RECOMMENDATION y

y y y

For lump-sum allocations, invest in any of ICICI Prudential’s Volatility Advantage Products which aim to benefit out of market volatility Continue SIPs in all core products of ICICI Prudential Mutual Fund to benefit from long term wealth creation. creation For overseas diversification, invest in ICICI Prudential US Bluechip Equity Fund Investors can meet twin objectives of saving on Tax and potential benefits of long term wealth creation through investments in ICICI Prudential Tax Plan

None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the Investors are requested to consult their financial advisors before investing. 14

Fixed Income Outlook Rate cut delayed but inevitable; Opportunity for investors to add duration

15

RBI Policy Rates

y

16

RBI Cut CRR in anticipation of liquidity tightness

Source: Morgan Stanley Research, RBI: CRR- Cash Reserve Ratio, MSF – Marginal Standing Facility

Inflation (WPI)

WPI Eased E d to t a nine-month i th low l i October in O t b 2012 to t 7.45% 7 45% Year-on-Year (Y-o-Y) y We expect WPI inflation to accelerate to around 8-8.25% by D December b 2012 before b f it moderates d t t around to d the th 7.257 25 7.5% level by Quarter ended (QE) March 2013 y

17

Source: Morgan Stanley Research, Office of Economic Adviser: WPI – Wholesale Price Index

RBI Policy y

y y

y

y

18

RBI indicates a reasonable chance of further easing in the last quarter of FY13, subject to an evolving growth inflation d dynamics i While Inflation eased in October, it still continues to remain above RBI’s comfort zone By January policy RBI may likely need to revise its growth forecasts downwards without increasing inflation forecast upwards If such a situation arises, it will provide RBI with opportunity to deliver more aggressive monetary easing than in the year so far As per our expectation a high probability of decline in interest rates to the extent of 50-75 bps over next six months exists Bps – Basis Points

Fiscal Deficit & Borrowing y y y

y y

19

Budgeted fiscal deficit for FY 13 at 5.1% (Rs. 5.13 trillion) will lead to net market borrowing of Rs. 4.79 trillion The indication of slippage to the extent of another 0.2% of GDP by FM will result in additional borrowing of Rs. 200 bn Our expectations p are that the fiscal deficit numbers will overshoot by Rs. 500-700 bn, taking the fiscal deficit to 5.65.8% of GDP Concerns remain since we expect revenue growth to moderate The extra borrowing maybe through combination of dated securities i i and d T-Bills T Bill

Bn (billion)

Liquidity y

y y y y y

Banks’ net average borrowings under the RBI’s repo window stood higher at around Rs. 92,500 crore (Previous month’s th’ average figure fi off Rs. R 67,000 67 000 crore)) Higher government borrowing and the ongoing festive season led to the liquidity deficit RBI announced fresh OMOs of Rs. 12,000 crore through multi-security auction In next 3-4 3 4 months, months expect fresh OMOs to the extent of equivalent of 1% of NDTL. Such step will not only bring liquidity within RBI’s comfort zone but b also l may result l in i drifting d if i down d 10 yield 10yr i ld to 7.9% 7 9% Expect 10yr to trade in a range of 7.90-8.25% in next 3 months y

20

This potentially brings forward an opportunity for investors to add / increase duration to their portfolios

OMOs – Open Market Operations, NDTL – Net Demand & Time Liabilities

Outlook & Strategy y y

We expect Liquidity to remain tight for period up to the March quarter as well. We expect Corporate spreads to widen from here as currently these are at low levels Expect p spreads p to widen to 80-85 bps p in next 4-6 months time. y Hence, we have made adjustments in our strategy y Not increasing any exposure to Corporate Bonds in our duration funds. y Having increased exposure to G-Secs including SDLs. y

y

y 21

As we see spreads widening to a more comfortable level of 80-90 bps, then we may again start increasing exposure to Corporate Bonds. As off now we are overweight G-Secs GS and SDLs. S SDLs – State Development Loans, bps – basis points

Fixed Income product recommendation y

We recommend investments in funds as follows: y

ICICI Prudential P d i l Short Sh T Term Pl for Plan f 9-12 9 12 month h horizon h i

y

ICICI Prudential Regular Savings Fund for 1 Year and above horizon

y

Investors with a 2 y year view may y consider ICICI Prudential Corporate Bond Fund

y

For duration play – Invest in the longer term Gilt and Income with a 24-36 months investment horizon

None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the Investors are requested to consult their financial advisors before investing. 22

DISCLAIMER Mutual M t l Fund F d investments i t t are subject bj t to t market k t risks, read all scheme related documents carefully. All figures and other data given in this document is as on 30 November 2012 unless stated otherwise. The same may or may not be relevant at a future date. date The AMC takes no responsibility of updating any data/information in this material from time to time. time The information shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Prudential Asset Management Company Limited. Prospective investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of ICICI Prudential Mutual Fund. Data source: Bloomberg, except as mentioned specifically. Disclaimer: In the preparation of the material contained in this document, ICICI Prudential Asset Management Company Ltd. (the AMC) has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The Th AMC however h d does nott warrantt the th accuracy, reasonableness bl and d / or completeness l t off any information. i f ti W have We h included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such expressions, that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. ICICI Prudential Asset Management Company Limited (including its affiliates), the Mutual Fund, The Trust and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. Further, the information contained herein should not be construed as forecast or promise. The recipient alone shall be fully responsible/are liable for any decision taken on this material.

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Thank you

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