WorldWatch

WeeklyReport
Global financial markets broadly
remained positive for the week.
China registered the highest gain
while Japan registered a successive
second week of weakness joined only
by the Swiss market which closed
negative for the week.

21 March 2016

UK
FTSI
6189.64
0.81%

Germany
DAX
9955.00
1.22%

Hong Kong
HANG SENG
20671.63
2.34%

China
Shanghai
2955.15
5.15%

Japan
NIKKEI
16724.81
- 1.26%

US
DOW
17602.00
2.26%

DOW
Support is at 17200 levels,
above support levels Dow is
expected to remain positive
for the week ahead.

Swiss
SWISS SIX
7813.60
-2.31%

Dubai
DFM
3384.63
0.88%

Europe
FTSE above 6000.00 levels is
expected to remain positive .
DAX continues to hold well
above its pivot level of
9300.00, the index above
9600.00 will strengthen the
current rally further.

India
NIFTY
7604.35
1.25%

Australia
ASX
5239.30
0.28%

Commodity Currency
We maintain bullish on Gold,
Crude & Copper for the week
ahead.

Dollar Index is expected to

remain range bound without
any directional trend for the
week.
EURUSD Immediate
resistance is at 1.15 levels, the
currency which was
consolidating between 1.08
1.15 is showing strong
indications of staging a
breakout. Expect EURO to
strengthen going forward.

Nifty well on its way towards 8000, above 7600.

After staging a spectacular rally from 6800.00 levels ,

Nifty paused briefly between 7447.00 7547.00
and finally staged a breakout. The index finally closed
at 7604.35 (1.25%) for the week.
Nifty having conquered its multiple resistance levels
continue with its rally. Having scaled above 7550.00
followed by 7600.00 , Nifty has a strong possibility of

testing 8000.00 levels if it manages to hold above

7600.00.
We expect the current rally to gather further
momentum above 7600.00 with a possibility of
extending towards 8200.00.

Bank Nifty is well poised to conquer 17000

Bank Nifty after making a dramatic pullback from its
low of 13400.00 stayed in a congestion band between
14989.00 15355.00 and finally managed a breakout
closing at 15654.85 (3.21%) for the week.

Immediate resistance is at 15700.00 & 16200.00

respectively, Bank Nifty can test 17200.00 levels if it

holds above 15700.00.

Stock of the week

Bharat Electronics
(1102.85)
Exports has remained a focus area for BEL and it has
set up dedicated business unit and marketing group to
become key supply chain partners of global players like
Boeing, Pilatus, GE, Siemens & Philips .
Moreover, despite revenue de-growth of 5.7% YoY for
3QFY16, the operating profit increased by 5.2% YoY to
INR2.9b on account of the better product mix and a
decrease in the cost of raw materials by 496bp YoY.
Other income for the last quarter also rose by INR1.3b.

Outlook
Bharat Electronics Limited (BEL) was established at
Bangalore, India, by the Government of India
under the Ministry of Defense in 1954 to meet the
specialized electronic needs of the Indian defense
services. Over the years, it has grown into a multiproduct, multi-technology, multi-unit company
servicing the needs of customers in diverse fields
in India and abroad.

Investment Rationale
BEL leadership in defense electronics segment
makes it well positioned to benefit from the rising
defense expenditure, which is visible in the faster
project clearances by the DAC.
BEL is well supported by strong manufacturing
base (capacity utilization of ~60%) and its
execution track record. Its focus on R&D (8% of
FY15 revenues), move towards being system
integrator, increased focus on outsourcing and
strategic collaboration with foreign technology
partners for development of new products has
lead to increased exports to friendly countries.
BEL also expects contribution from civilian
segment to improve significantly as it pursues
business opportunity in home land security,
telecom segment air traffic management radars,
intelligent traffic management systems, Solar
power plants and smart city elements.

BEL has a strong balance sheet with near nil debt and
cash balance of 6038 crore (FY15). With moderate
capital expenditure of 1500 crore over the next three
years (FY16E-19E), Accelerated order inflow and BELs
consistent performance over the past 10 years
positions BEL on a very strong footing to deliver
improved results.

Ramu starts investing at the age of 31 and invests for

10 years, Damu starts investing at the age of 41 and
invests for 20 years and Somu starts investing at the
age of 51 and invests for 10 years.
Assuming rate of return to be 12% per annum, we
can observe from the table that wealth created by
Ramu is substantially higher compared to other
friends.
The Power of Compounding
The reason behind this is power of compounding.
Compounding is the ability of an asset to generate
earnings, which are then reinvested in order to
generate their own earnings. In other words,
compounding refers to generating earnings from
previous earnings.

the age of 60 years

31100,000

112,000

32100,000

237,440

33100,000

377,933

34100,000

535,285

35100,000

711,519

36100,000

908,901

37100,000

1,129,969

38100,000

1,377,566

39100,000

1,654,874

40100,000

1,965,458

41

2,201,313 100,000

112,000

42

2,465,471 100,000

237,440

43

2,761,327 100,000

377,933

44

3,092,687 100,000

535,285

45

3,463,809 100,000

711,519

46

3,879,466 100,000

908,901

47

4,345,002 100,000

1,129,969

48

4,866,402 100,000

1,377,566

49

5,450,371 100,000

1,654,874

50

6,104,415 100,000

1,965,458

51

6,836,945 100,000

2,313,313 100,000

112,000

7,657,378 100,000

2,702,911 100,000

237,440

8,576,264 100,000

3,139,260 100,000

377,933

9,605,416 100,000

3,627,971 100,000

535,285

10,758,065 100,000

4,175,328 100,000

711,519

12,049,033 100,000

4,788,367 100,000

908,901

13,494,917 100,000

5,474,971 100,000

1,129,969

15,114,307 100,000

6,243,968 100,000

1,377,566

16,928,024 100,000

7,105,244 100,000

1,654,874

18,959,387 100,000

8,069,874 100,000

1,965,458

18,959,387 2,000,000

8,069,874 1,000,000

1,965,458

52
53
54
55
56
57
58
59
60

1,000,000

10*100000 = 10 lacs
lacs, value at the age of 60 years

Let us compare three friends Ramu, Somu and Damu.

Early Investor
Second Investor
Third Investor
Yearly
Year End Yearly
Year End Yearly
Year End
Investment Value
Investment Value
Investment Value

20*100000 = 20 lacs, value at

Investing early makes significant impact on wealth

creation. Let us take an example,

AGE

10*100000 = 10 lacs, value at the age of 60 years

Financial well Being

- Why you must start early.

USDINR
The currency pair which was at overbought levels,
slipped below its immediate support at 68.35. This
lead to a sharp correction, with the currency pair
slipping below 67.00 and closed at 66.37 (-0.80%) for
the week.
This weakness is expected to continue going forward
with immediate target at 65.80.

Crude

Gold

Crude after testing a low of 1805.00 managed a

rebound. It managed to breakout from its
consolidation band between 1900.00 - 2300.00 levels,
A breakout above 2300.00 is expected to trigger a
short term rally towards 2700.00 - 2800.00 levels.
Crude closed at 2648.00 (2.04%) for the week.

Gold since 2015 has remained in a broad trading band

between 24800.00 - 27600.00, after forming a base at
25600.00 it managed a breakout above 27600.00
testing a high of 30095.00, it closed at 29131.00
(-1.25%) for the week.
Immediate pivot for Gold is at 28425.00, a close below
this support level will lead to a short term correction
towards 27600.00.

Disclaimer: All care has been taken to ensure that the information contained herein is not misleading or
untrue at the time of publication, but we make no representation as to its accuracy or completeness. All
information is for the private use of the person to whom it is provided without any liability whatsoever on
the part of Go Stocks Advisors Pvt. Ltd., any associated company, or employee thereof. Nothing
contained herein should be construed as an offer to buy or sell or a solicitation of an offer to buy or sell.
The value of any investment may fall as well as rise. Past Performance is no guide to the future.

Go Stocks Advisors Pvt Ltd, No 68,

Taylors Road, Kilpauk,Chennai-600010,
Tamil Nadu, India, T : (044)26447431/ 32
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