WHAT WILL BE THE IMPACT

OF WTC ATTACK ON GLOBAL
MARKETS
MY CLIENTS HAVE SUFFERED
 INTEREST RATES HAVE CRASHED
TO THE LEVEL OF APRIL 2001.
 EQUITY MARKETS HAVE CRASHED
TO THE LEVEL OF DEC 1998

I CANNOT GO AND FACE MY CLIENT

TEMPLETON HAS DELIVERED
TEMPLETON HAS ALWAYS STRESSED
 RISK OF INVESTING IN DEBT
MARKET ( ESPECIALLY IN LAST QUARTER )
 ASSET ALLOCATION MODEL
 RISK ADJUSTED RETURN
 FAIRNESS AND TRASNPARENCY

FUND’S HAVE PERFORMED IN LINE
WITH RISK PROFILE EVEN IN
VOLATILE TIMES LIKE THIS


WE ADVISE
 BE PATIENT
 HAVE LONG TERM HORIZION
 MATCH YOUR RISK RETURN
PROFILE WITH FUND’S RISK
RETURN PROFILE
 FOLLOW A DISCLIPINED PROCESS

WE HAVE ALWAYS SAID THAT
CRISIS IS ALWAYS AN
OPPORTUNITY FOR INVESTOR
MORE SO IF THE MARKET
EXCESSES ARE CORRECTED
WHY ARE YOU NOT WORRIED ?
 ACTION BY CENTRAL BANKS
AROUND THE WORLD
 PAST EXPERIENCE OF WORLD WAR
I TO GULF WAR
 GLOBAL LIQUIDITY : LOWER
INTEREST RATES : DEFLATION :
GREATER POLITICAL CONSENSUS


LAST WEEK'S TERRORIST ATTACKS ALTER THE
OUTLOOK FOR THE GLOBAL ECONOMY, WHICH
ALREADY HAD STALLED. THE IMMEDIATE
CONSEQUENCES ARE OBVIOUS: U.S. Q3 GDP WILL
CONTRACT; SHORT-TERM INTEREST RATES WILL
BE LOWER AROUND THE GLOBE; AND FINANCIAL
MARKETS WILL EXPERIENCE HEIGHTENED
VOLATILITY. IT IS TOO SOON TO KNOW WHAT
THE LONGER-RUN IMPACTS OF THESE EVENTS
WILL BE. JPMORGAN RESEARCH EXPECTS A PICK-
UP IN U.S. GROWTH TO BE DELAYED UNTIL THE
EARLY PART OF NEXT YEAR. WITH MONETARY AND
FISCAL POLICY EXPECTED TO TURN VERY
STIMULATIVE, THE ECONOMY WILL RECOVER
SIGNIFICANTLY IN THE SECOND HALF OF NEXT
YEAR.
BUT INDIA IS DIFFERENT
WHAT ARE YOUR WORRIES ?
 FII OUT FLOWS : PRESSURE ON
RUPEE : TIGHT LIQUIDITY
 OIL PRICE HIKE : INFLATION :
RUPEE PRESSURE : TIGHT
LIQUIDITY
 GLOBAL UNCERTAINITY : THIRD
WORLD WAR


OIL
OPAC WILL ENSURE PRICE
STABILITY IN THE MEDIUM TERM

MEETING ON 26/9/2001

NO INFLATIONARY IMPACT

EXPECTED CUTS IN DEMAND IN VIEW
OF SLOW DOWN

SEE THE CHARTS
FII OUTFLOWS
 MAJOR SELLING IN SEPT 2001
– STILL NOT MORE THAN USD 250
MILLION AT WORST
 SENSEX AT A PE RATIO OF 9 ON
MAR 2001 EARNINGS
 HOW MANY BUYERS ARE THERE ?

FII’S ARE RATIONAL INVESTOR AND
THEIR PANIC WILL SUBSIDE ON
OPENING OF US MARKETS ON
MONDAY
ALL MAJOR EQUITY
MARKETS WORLD WIDE
HAVE STABILISED.
THIRD WORLD WAR
 GULF WAR EXPERIENCE
SUGGESTS THAT MARKETS ARE
MORE EFFICIENT PROCESSOR OF
INFORMATION
 MARKETS COLLECTIVELY ARE
MORE OPTIMISTIC THAN THE
INDIVIDUAL PLAYERS
 SEE THE CHARTS
WHY DID U UNDERPERFORM ?
 WE WERE CAUTIOUS
 MOVED PORTFOLIO TO SHORT
MATURITY PAPER INSTEAD OF
CASH
 UNFORTUNATELY SHORT END
SUFFERED MORE THAN EVEN THE
LONG END
 WE HAVE DELIVERED ON THE FUND
SPECIFIC RISK RETURN PROFILE
FINAL CUT
 NO MATERIAL FUNDAMENTAL
CHANGES AFTER THE ATTACK
 RBI IS NO DIFFERENT FROM THE
REST OF THE WORLD
 INTEREST RATES HAVE TO GO
DOWN TO SPUR THE ECONOMY IN
TOUGH TIMES AHEAD
 DO NOT EXPECT THE MOON
CAN I GIVE U MY CHEQUE ?
 UNCERTAINITY STILL PERSISTS
 VOLATILITY WILL BE THE NAME OF
THE GAME
 NO SHORT CUT TO SUCCESS
 BE DISCLIPINED
 BE LONG TERM
SIP IS THE BEST WAY TO
OUTPERFORM THE FUND

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