4318.

30

July 27– Aug 03 ; 2007

Outlook for the Week

The index took support exactly at the support level mentioned at 14,700. This is a strong support and outlook will
turn negative only if the index falls below this level. This is a good point to start purchases and switches to equity
as mentioned in our earlier report.

Domestic Market Watch

After trading sideways for over a week, the index finally broke down highlighting fresh concerns in economies
such as US, Japan and China. Indian markets continued to trade with a weak market breadth with selling pressure
persisting in mid-caps. Major Indian indices closed in red with Sensex being down by 0.63% and Nifty being
down by 0.96%. The major losers in this week’s market had been IT, which is down by 3.53%, followed by Oil
and gas being down by 2.59%.

Global Market Watch

The global markets were marginally up with DowJ being up by 203.31 pts and Nasdaq being down by 14.91 pts.
Compared to last week there was a decrease in the prices of Crude futures by 5.62$/Barrel.

Indian Indices Gainers & losers

Index 27- July 3- Aug % change Gainers

Scrip
Sensex 15,234.57 15,138.40 -0.63 % Rs.
Nifty 4,444.20 4,401.55 -0.96 INGERSOLL RAND 16.90% 352.05
Bank 7,920.19 8,048.51 1.62 INDIA CEMENTS 13.00% 229.95
Oil Gas 8,015.75 7,808.34 -2.59 UNITED
PHOSPHORUS 11.80% 335.35
CGoods 12,748.77 12,976.28 1.78
HC 3,691.36 3,628.45 -1.70 Losers
Scrip
IT 4,876.34 4,704.30 -3.53 % Rs.
PSU 6,983.57 7,019.50 0.51 NIIT -20.20% 939.75

FMCG 1,927.86 1,957.11 1.52 POLARIS SOFTWARE -12.00% 108.5

MASTEK -9.50% 261
 July 27– Aug 03 ; 2007

Sector in Focus (Sugar)

At the end of the week when the market was deep in the red, sugar stocks were cheering. This was attributed
to the government's decision to free sugar exports completely. The group of ministers (GoM) approved
mandatory extension of the ethanol blending program which is currently at 5%. The GoM were expected to
discuss the issue of financial and debt restructuring which would enable the mill owners to pay off farmer's
debt and clear off their loans. The decline in domestic sugar price of around 29% YoY to Rs.13.6 per Kg (S-
grade, Mumbai) is expected to impact the margins of sugar companies for the quarter ended June 2007.
However, the integrated players like Balrampur are likely to report marginal profits on the back of strong
performance of distillery and power division. While Triveni Engineering and Renuka Sugar ran up 3-8%,
Stocks like Bajaj Hindustan and Balrampur Chini dipped by 2% each during the week.

Other Indicators
Gold:
India's demand for gold remained slack on this week with traders waiting for prices to fall further and retail
demand to pick up. India's busy season for gold usually begins in August, but a late start of Hindu festivals has
delayed retail sales that set the ball rolling in the gold industry. Overseas gold is softer ahead of a key meeting
in the U.S. on interest rates with a stronger rupee further softening prices in the local market. The Indian
rupee's value against the dollar plays a role in determining prices in the local market because most of India's
gold is imported and paid for in the U.S. currency. Indian analysts said gold prices were expected to rise
beyond the psychological level of 9,000 rupees per 10 grams this week amid worries over U.S. economic
growth and the rupee's weakness. The upcoming busy season is likely to see good demand irrespective of
prices as festivals and weddings prompt consumers to splurge.

Global Scenario Indian Scenario

Index 27- July 3- Aug Index 27- July 3- Aug

S&P 500 1458.95 1,467.67 Inflation 4.41 4.36
DOW J 13265.47 13,468.78 1Yr GOI Bonds 6.60 7.20
NASDAQ 2562.24 2,547.33 10yr GOI Bonds 7.82 7.83

USD 3m Libor 5.376 5.376

Rupee 40.49 40.35

10Y US Treasury 4.788 4.731 FII’s 21596 21100

Brent Spot (US $) 77.00 71.38 MF’s 2774 2652
 July 27– Aug 03 ; 2007

Fund Review (JM Basic)

Over the past 15 months the fund has slowly reduced exposure to the energy sector and instead added
capital goods. Even among capital goods the fund has occasionally booked profits in stocks such as
Bharat Bijlee and Emco. As of April, the fund had about 60 per cent of its assets in stocks with market
capitalisation of less than Rs 5000 crore. This is in contrast to about 30 per cent in the same market cap
segment in May 2006. The move to mid-cap stocks post market correction and reduced holdings in
energy stocks over the year clearly contributed to the improved performance.

Fund Details Past Returns.

Risk Grade Below Average Trailing Returns

Return Grade Average As on 06 Aug 2007 Fund Category

Benchmark BSE Basic Year to Date 42.03 11.43

Min invt. 5000 1-Year 85.21 42.8

Plans Growth, Dividend 3-Year -- 43.91

Fund Manager Sandip Sabharwal 5-Year -- 44.87

Mutual Funds – News

v Principal Mutual Fund has announced August 9, 2007 as the record date for the declaration of
dividend under Principal Pnb Fixed Maturity Plan - 91 Days - Series VII.
v Tata Mutual Fund has announced August 10, 2007 as the record date for the declaration of
dividend under Tata Fixed Horizon Fund - Series 3 - Scheme F.
v UTI Mutual Fund has announced August 7, 2007 as the record date for the declaration of dividend
under UTI FMP Quarterly May 07 Series I.

Mutual Funds – Monthly Picks

Equity Diversified Funds ELSS Funds Balanced Funds

Scheme 1 Mth Scheme 1 Mth Scheme 1 Mth

JM Emerging Leaders 4.19 DWS Tax Saving 4.06 HDFC Prudence 2.59
Birla Sun Life Tax Relief
JM Basic 4.09 '96 3.13 Birla Sun Life'95 2.39

Taurus INFRA-TIPS 2.93 UTI Equity Tax Savings 1.18

JM Balanced 2.28
Birla Sun Life Basic DSPML Tax Saver 1.14 Reliance Regular Savings
Industries 2.63
 July 27– Aug 03 ; 2007

JM Contra- Open Ended Fund- Equity Diversified- NFO

Fund Objective
Details of Fund Capital appreciation by following contrarian style of

Recommendation – “Subscribe” investing

Objective of Scheme
Issue Details
The fund plans to at buying into fundamentally sound

Offer Period July 16- August 14

stocks that have been overlooked by the market (for

Benchmark BSE 500 Index reasons of short term trend) and waiting for the market
Min invt. 5000 to give these stocks their real value in course of time.
Growth, Dividend,
Plans Reinvestment, About Fund House
Divident payout One of India's first private sector mutual funds.
Lock N.A.
Entry / Exit Load 2.25%/ 0.50%
Currently there are 10 equity funds offered by this
Mr. Nimesh house.
Fund Manager
Kampani
Rationale
Some of its existing funds have performed extremely
Asset Allocation
well in the past. Further, the fund manager brings
Avenue Range along with him expertise of managing funds which
Equity 70%-100%
have shown consistency, also have shown phenomenal
Debt & Money Market 0% -30%.
returns Indian companies have the potential to grow at

Performance of Existing Funds

above- average rates in the years to come. Growth-
focused strategy of investing in such stocks will help
Fund Name 1 Yr 3Yr Launch
investors capture the growth potential in a
Magnum
Contra 48.27 61.16 34.24 comprehensive manner.
JM Equity 38.16 44.45 36.43
Risks
JM Basic 85.21 - 54.43
Since the NFO comes at a time when the markets are
very volatile, if the market continues uptrend when the
fund re-opens, there is a possibility that the fund may
be required to deploy the cash during market highs
Disclaimer: Right Horizons has used information that is publicly available and developed in-house; and gathered from
Sources believed to be reliable. Right Horizons does not warrant accuracy and/or completeness of the same. Please
note that persons subscribing or planning to subscribe the recommended products should do so after verifying the
terms of the products. Financial products and instruments are subject to market risks and yields could fluctuate
depending on various factors affecting capital / debt markets. Please note that past performance may or may or may
not be sustained in future. Insurance is the subject matter of the solicitation for the Insurance Plans suggested. Right
Horizons shall not be responsible for any loss or damage of any nature, including and not limited to direct, indirect,
punitive, special, exemplary, consequential, as also any loss or profit in any way arising out of the report and its
recommendation. The recipient alone shall be fully responsible and liable for any decision taken on the basis of this
report. This report is based on the proprietary financial modeling of Right Horizons. No part of this report may be
replicated in any form and/or redistributed without prior written permission of the CEO.