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ICICI Prudential Banking and Financial

Services Fund
(An Open Ended Equity Scheme)

NFO closes on August 7, 2008


Presentation Structure

1.Current Market Dynamics

2.Banking and Financial Services

3.ICICI Prudential Banking and Financial Services Fund

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Current Market Dynamics

3
Current Market Dynamics
Inflation Rates are Rising
WPI (YoY%)
12

11

10

3
Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08

Inflation at 13-year high due to rise in Fuel &


other Commodity prices
4 Data Source: Bloomberg
Current Market Dynamics
Interest Rates are Rising
10 Year G-Sec Yields(%)
8.6

8.4

8.2

8.0

7.8

7.6

7.4

7.2

7.0
Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08

Expectation of RBI hiking key rates is


pushing up rates
5 Data Source: Bloomberg
Current Market Dynamics
Deposit Rates are High
Average 2-5 year deposit rate (%)
10.00

9.00

8.00

7.00

6.00

5.00
Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07

6 Data Source: Emkay Share and Stock Brokers Ltd


Current Market Dynamics
PLR = Lending rates are not rising fast
PLR (%)
14.00

13.00

12.00

11.00

10.00

9.00

8.00
Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07

7 Data Source: Emkay Share and Stock Brokers Ltd


Current Market Dynamics
Net Interest Margins Under Pressure

5.00 ICICI Bank NIM (%) 5.00 SBI NIM (%)

4.00 4.00

3.00 3.00

2.00 2.00

1.00 1.00

0.00 0.00
FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08
8 Data Source: Emkay Share and Stock Brokers Ltd, The Stock mentioned above does not constitute any recommendation of
the same and the portfolios may or may not have any future positions in this Stock.
Current Market Dynamics
Recent IIP numbers suggest some softening
IIP (% change YoY)
16

12

0
Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08

9 Data Source: Bloomberg


Current Market Dynamics

Banking & Financial Services Sector is under


stress from Macro environment point of view

ƒInflation rates are rising


ƒInterest rates are rising
ƒDeposit rates are high
ƒLending rates are not rising fast
ƒNet Interest Margins under pressure
ƒRecent IIP numbers suggest some softening

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Current Market Dynamics
Do Prices factor majority of bad news?
Bank 52-Week High CMP % Fall from
(18/06/08) 52-Week High
State Bank of India 2397 1351 43.64%

ICICI Bank 1465 785 46.42%

Bank of Baroda 501 245 51.10%

Federal Bank 395 215 45.57%

Development 162 63 61.11%


Credit Bank

11 Data Source: Capital line (As on 18/06/2008), The Stock mentioned above does not constitute any recommendation of the
same and the portfolios may or may not have any future positions in this Stock.
Current Market Dynamics
Price-to-Book Value

6.0
5.0
5.0

4.0 3.2 3.3


3.0
2.2
1.7 1.6 1.8 1.8
2.0 1.2
1.1
0.8 0.8
1.0

0.0
BoB FedBk HDFC ICICI PNB SBI

At 52-Week High Current

Majority of bad news already Priced in ?


12 Data Source: Capital line, Bloomberg, Current P/BV as on 18/06/08, The Stock mentioned above does not constitute any
recommendation of the same and the portfolios may or may not have any future positions in this Stock.
Banking and Financial Services

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Banking and Financial Services
Standard Chartered Bank – Branch in Kolkata
1858 2008

sau saal pehale banking tha.... aaj bhi hai aur


kal bhi rahega
14 Data Source: Company website
Banking and Financial Services
CHINA

GDP for FY08 : US$ 3.94 trillion

ICBC Market Cap : US$ 242 billion

15 Data Source: Bloomberg, World Economic Outlook 2008(IMF), Market Cap as on 18/06/08, The Stock mentioned above does not constitute any
recommendation of the same and the portfolios may or may not have any future positions in this Stock.
Banking and Financial Services
SPAIN

GDP for FY08 : US$ 1.62 trillion

Banco Santander : US$ 118 billion


Market Cap
16 Data Source: Bloomberg, World Economic Outlook 2008(IMF), Market Cap as on 18/06/08, The Stock mentioned above does not constitute any
recommendation of the same and the portfolios may or may not have any future positions in this Stock.
Banking and Financial Services
INDIA

GDP for FY08 : US$ 1.23 trillion

SBI Market Cap : US$ 20 billion

17 Data Source: Bloomberg, World Economic Outlook 2008(IMF), Market Cap as on 18/06/08, The Stock mentioned above does not constitute any
recommendation of the same and the portfolios may or may not have any future positions in this Stock.
Banking and Financial Services
Top 5 Banks in the World in terms of Market Cap

RANK NAME COUNTRY MARKET CAP


(USD Bn)
1 ICBC China 242

2 HSBC UK 191

3 China Construction China 190


Bank
4 Bank of China China 141

5 J P Morgan Chase US 134

Where is India?
18 Data Source: Bloomberg, Market Cap as on 18/06/08, The Stock mentioned above does not constitute any recommendation of the same and the
portfolios may or may not have any future positions in this Stock.
ICICI Prudential Banking and
Financial Services Fund

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ICICI Prudential Banking and Financial Services Fund

About the Fund


Sector Fund:
ƒCannot be part of the Core portfolio
ƒShould be small fraction of overall portfolio
ƒInvest through SIP

Investment Universe: Invest into following types of companies


ƒBanking Companies
ƒBroking Companies
ƒAsset Management Companies
ƒWealth Management Companies
ƒInsurance Companies
ƒNon-Banking Financial Companies (NBFC)
ƒInvestment Banking Companies
ƒLeasing and Finance Companies
ƒTerm Lending Institutions
ƒAny other company engaged in providing banking and financial
services

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ICICI Prudential Banking and Financial Services Fund

Investment Strategy
Bottom-up Stock Picking
ƒIntrinsic value arrived at after intensive, internal research; reference to analyst
reports and face-to-face meetings with management to analyze company’s
strengths, business model, sustainable competitive advantages and ability to
grow
Across Market Capitalization
ƒThe fund would look at stocks across the universe of banking and financial
services companies without any capitalization bias
Target Investment Companies
ƒFocus will be on companies gaining market share in businesses through
excellent customer service, product innovation and operating efficiency

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ICICI Prudential Banking and Financial Services Fund

Scheme Features
An Open-ended Equity Scheme seeking to generate long-term capital
Type of Scheme
appreciation

Options Retail and Institutional Option I

Retail Option: Growth and Dividend (Payout and Reinvestment)


Sub-Options
Institutional Option I: Growth

Minimum Retail – Rs. 5,000


Application Amount Institutional Option I – Rs. 10 crores

Retail: (i) For investments of less than Rs.5 Crores: 2.25% of applicable
Entry Load NAV (ii) For investments of Rs.5 Crores and above: Nil
Institutional Option I: Nil
Retail: (i) For investments of Rs.5 Crores and above: Nil (ii) For
investments of less than Rs.5 Crores made during the NFO period and
Exit Load redeemed before 6 months from the date of allotment: 1% of applicable
NAV
Institutional Option I: Nil

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Risk Factors
• Statutory Details: ICICI Prudential Mutual Fund (the Fund) was set up as a Trust sponsored by Prudential plc (through its
wholly owned subsidiary namely Prudential Corporation Holdings Ltd) and ICICI Bank Ltd. ICICI Prudential Trust Limited (the
Trust Company), a company incorporated under the Companies Act, 1956, is the Trustee to the Fund. ICICI Prudential Asset
Management Company Ltd (the AMC). a company incorporated under the Companies Act, 1956, is the Investment Manager to
the Fund. ICICI Bank Ltd and Prudential Plc (acting through its wholly owned subsidiary namely Prudential Corporation Holdings
Ltd) are the promoters of the AMC and the Trust Company.
• Risk Factors: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that
the objectives of the Schemes will be achieved. As with any securities investment, the NAV of the Units issued under the
Schemes can go up or down, depending on the factors and forces affecting the capital markets. Past performance of the
Sponsors, AMC/Fund does not indicate the future performance of the Schemes of the Fund. The Sponsors are not responsible or
liable for any loss resulting from the operation of the Schemes beyond the contribution of an amount of Rs.22.2 lacs, collectively
made by them towards setting up the Fund and such other accretions and additions to the corpus set up by the Sponsors.
• Investment Objective: ICICI Prudential Banking and Financial Services Fund is an Open-ended equity scheme that seeks to
generate long-term capital appreciation to unitholders from a portfolio that is invested predominantly in equity and equity related
securities of companies engaged in banking and financial services. Asset Allocation Pattern: Equity & equity related securities
of companies engaged in Banking and Financial Services Sector # $ - 70% to 100%, Debt *$ - 0% to 30% $ Including derivatives
instruments to the extent of 75% of the Net Assets as permitted by SEBI #Including investment in ADR/GDR up to 50% of
allocation to Equity & Equity related securities maximum to the extent permitted under SEBI Regulations.*Including 50% in
Securitized debt. Stock lending upto 30% of the Net Asset of the Scheme Terms of issue: The Units of the Scheme can be
subscribed during the New Fund Offer (NFO) at Rs. 10/- per unit plus applicable loads and at NAV bases prices subject to load
upon re-opening. Liquidity: Being open-ended in nature, the Scheme will commence sale and redemption of units not later than
30 days after the close of the New Fund Offer period Retail and Institutional Option I are available for investments. Entry Load -
Retail Option: i)For investment of Rs. 5 crores and above: Nil. ii) For investment of less than Rs. 5 crores 2.25 % of the
applicable NAV. Institutional Option I: Nil. Exit Load - Retail Option : i)For investment of Rs. 5 crores and above: Nil. ii) For
investment of less than Rs. 5 crores and redeemed before 6 months from the date of allotment: 1% of the applicable NAV.
Institutional Option I: Nil. ICICI Prudential Banking and Financial Services Fund is only the name of the scheme and does not in
any manner indicate either the quality of the scheme, its future prospects or returns. Investors in the scheme are not offered any
guaranteed returns.For Scheme Specific Risk Factors and other details, Please refer to Offer Document and Key Information
Memorandum, contact your financial advisor or log onto www.icicipruamc.com or visit any of the branches of the AMC. Mutual
Fund Investments are subject to market risks. Please read the Offer Document carefully before investing.

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Risk Factors
• 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 AMC however does not warrant the accuracy, reasonableness and / or
completeness of any information. We have 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.
• The Stock (s) /Sector(s) mentioned in this material do not constitute any recommendation of the same and the portfolios may
or may not have any future positions in this Stock.(s) /Sector(s)

• 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. 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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