June

June 2024
2022

Monthly
Communication
November 2024

www.abakkusinvest.com

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Market Outlook June 2024
November 2024

Market Update months of FY25. The gross GST collection, which is the number
before adjusting refunds, stood at Rs 1.87 trillion in October.
Indian equity markets had a challenging month, with Nifty On a month-on-month basis, India’s GST collections rose 8.1
declining 6.2% for the month of October. This was its biggest per cent in October 2024. It was 8.9 per cent higher than in
monthly drop since March 2020. Small and midcap indices October 2023, when it stood at Rs 1.72 lakh crore. India 10-
dropped 3% and 6.7%, respectively. The worst-performing year G-sec yield ended the month at 6.8%. The USD/INR for
industries were oil and gas (-14%), consumer durables (-10%), the month was stable and closed at ~84. Brent crude price
and auto (-12%). Investor sentiment was impacted by (1) the was stable and closed at ~73 barrel in the month of October
Chinese market’s strong early-month surge, (2) ongoing FPI ’24.
outflows, (3) poor 2Q performance, (4) geopolitical concerns,
and (5) uncertainty around the forthcoming US presidential Brent Crude
election. Indian market performed the worst globally for the
month, with France (-4%) Hong Kong (-3.9%), and Mexico Brent Crude
(-3.5%) being the other notable losers. Dow Jones and
130
US SPX both fell by a modest 1%. Other significant events
120
include: (1) BJP winning the Haryana assembly elections;
110
(2) SEBI introducing plans to limit retail participation in 100
speculative index derivatives; (3) Government raising the 90
minimum support price for rabi crops; (4) RBI prohibiting 80 73
four NBFCs from approving and disbursing loans; and (5) IMF 70
maintaining India’s GDP forecast at 7% for FY2025. 60

Mar-24

May-24

Aug-24
Mar-23

May-23

Feb-24

Apr-24
May-22

Aug-22

Feb-23

Jun-23

Aug-23

Jun-24
Apr-22

Jun-22

Sep-22

Nov-22

Apr-23

Sep-23

Nov-23

Sep-24
Jul-22

Oct-22

Dec-22
Jan-23

Jul-23

Oct-23

Dec-23
Jan-24

Jul-24

Oct-24
The data of 2QFY25 point to a widespread decline in the
Indian economy. However, it is expected that H2FY25 will be
a much better period as demand has shifted to the second
Source: Bloomberg
half due to delayed monsoons and delayed onset of festive
and marriage seasons. 34 Nifty-50 stocks have released
their results thus far, and their net income rose 1.9% year Market Outlook
over year, which is less than the 4.5% growth which we had
anticipated. • Geopolitical Tensions and Energy Market Impact
October saw intensified geopolitical tensions, with ongoing
Foreign Portfolio Investors (FPIs) were aggressive sellers to conflicts in the Middle East leading to a temporary spike in oil
the tune of US$12.4 billion of Indian equities in the secondary prices. However crude has since reacted to $73 per barrel as
market, whereas Domestic Institutional Investors (DIIs) possibility of Iran-Israel tension escalation reduced. Though
continued to be buyers at US$12.8 billion for the month. demand for crude should increase in winter months, our view
on oil prices is soft due to massive deployment of solar and
Global and regional indices 1 Month performance (%) renewable energy as also new age technologies like battery
storage, hydrogen as also resurgence of nuclear power.
5

3 2.7
3.1
• U.S. Economic Landscape
0.6
1.2 The Federal Reserve, after its recent rate cut to support
1
employment and stabilize inflation, is still closely watching
-1
-0.7
-1.1 -1.3
-0.7 inflation trends. Elevated U.S. Treasury yields and a strong
-1.3
dollar continue to impact foreign capital flows into emerging
-1.4
-1.8 -1.8 -1.6 -1.7
-3
-2.9
-3.9
-3.5
-4 markets, creating pressure on economies like India, which
-5
rely on steady foreign investments. The dollar’s strength has
-6.2
-7
already led to some capital reallocation out of Indian equities
UK

Hong Kong
Germany
Singapore
Indonesia
US S&P 500

Australia
Nifty 50

Korea

Malaysia

France
US Dow Jones
Taiwan

Philippines
Japan

Mexico
Thailand

Shanghai
Brazil

in October, a trend likely to persist if the Fed’s hawkish stance

continues.

Source: Bloomberg, Kotak Institutional Equities (Data as on 31st October 2024 in local • Developments in China and Japan
currency) China’s markets witnessed continued momentum in October,
Macro Update driven by government stimulus measures that have now
On the economic front, CPI inflation in September rose to catalyzed a nearly 15% rise in the Shanghai Composite Index
5.5% from 3.7% in August. WPI inflation fell to 1.8% (Provisional) over the past month. Investors are increasingly reallocating
from 1.3% in August. August IIP witnessed a contraction of 0.1% funds to Chinese equities, viewing the country’s economic
against a growth of 4.7% in July. India’s total exports during policies as stabilizing factors amidst global uncertainties.
April-September 2024 saw a growth of 4.86% as compared There was a clear move of allocation away from India to
to total exports during April-September 2023 and the total China, a combination of Indian markets having done very
imports rose by 6.89% during the same period resulting in an well, valuation difference and positive outlook post stimulus
overall trade deficit of USD $54.83 billion during the first six on Chinese equities. In Japan, a policy shift under new

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 June 2024
November 2024

leadership could signal the start of monetary tightening, sentiment and could lead to short-term fluctuations. This
raising concerns about the yen carry trade’s sustainability. period might also provide potential entry points for long-
This could redirect some liquidity away from emerging term investors as Indian markets adjust, balancing short-
markets, impacting global investment flows, including those term pressures with underlying economic strength.
into India.
As we write this communication, the news of Donald Trump
• India’s Domestic Economy coming out winner in the US Presidential elections comes
The Indian economy has shown resilience, though consumer as a positive for the global equity markets generally and for
spending in first half of current financial year has been soft. India in particular. We expect a risk on emerging in global
However, festive spending has led to a revival in demand, markets and the trend away from Indian equities to Chinese
bolstering retail sales and consumption. Positive monsoon equities to reverse a bit, lending support to Indian equities.
effects have boosted the agricultural sector and can also
contribute to increased consumer spending in second half Valuations in certain sectors remain high, with IPOs and offer
of FY25. for sale reflecting market enthusiasm, but also signalling
potential overvaluation and desperation to invest in
• Near-Term Outlook some areas. Our strategy focuses on quality investments,
Looking into November, we anticipate persistent global emphasizing fundamentals over speculative growth. With
volatility, driven by geopolitical tensions, U.S. election India’s structural growth drivers intact, particularly in sectors
developments, and shifting policies in major economies. like infrastructure, technology, and finance, we advise a
Additionally, any fluctuations in crude prices will likely cautious approach—prioritizing companies with strong
impact India’s inflation and fiscal balance. State elections fundamentals while avoiding overheated segments. Our
in Maharashtra and Jharkhand are set to influence market fundamental based investment philosophy has worked well,
with our broader market focussed mid and small cap fund
delivering positive returns even in a very challenging month
of October.

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Abakkus All Cap Approach
PMS Strategy June 2024
November 2024

Portfolio Update
The Portfolio continues to focus on our core philosophy of fundamental based investing. The strategy did very well in
a challenging month, declining a much lower 4.8% in comparison to the almost 6.5% decline in the benchmark. Since
inception the portfolio is up 196.5% absolute. Focus on risk-adjusted returns over maximum returns will be the mantra
for us over the near term. The portfolio has been deploying the inflows carefully and gradually, while avoiding stocks
that are intrinsically significantly overpriced, even at the cost of near-term performance drag due to cash holdings.

Portfolio Performance as on October 31, 2024 (in INR)

Since
1 3 6 1 2 3 Since FY25 CY24
Inception FY24 CY23
Period Month Months Months Year Years Years Inception YTD YTD
Absolute (%) (%)
(%) (%) (%) (%) (%) (%) CAGR (%) (%) (%)
(%)

Abakkus All Cap

-4.8 -1.2 6.9 29.3 27.2 17.3 31.2 196.5 11.8 44.8 15.9 36.2
Approach

BSE 500 TRI -6.5 -3.6 8.7 35.9 22.1 15.7 25.1 146.9 12.5 40.2 17.5 26.5
**Unaudited Performance data for Portfolio Manager and Investment Approach provided hereunder is not verified by any regulatory authority and Past performance may
or may not sustain in the future. The performance is based on TWRR as on October 31, 2024. Inception Date is October 29, 2020. As per SEBI guidelines, returns are net of all
expenses and investor returns may differ, based on their period of investment, fee structure and point of capital flows.

Top 5 Sector Classification as on October 31, 2024

Sector Asset % Top 10 Holdings on the basis of Asset %*

BANKS 15.2 BHARTI AIRTEL PP LIMITED NTPC LIMITED
INDUSTRIALS 11.9 SUN PHARMACEUTICAL INDUS- AXIS BANK LIMITED
NBFC 11.3 TRIES LIMITED
MAX FINANCIAL SERVICES LARSEN AND TOUBRO LIMITED
TELECOMMUNICATION 10.9 LIMITED
COMMODITIES 8.5 HCL TECHNOLOGIES LIMITED JINDAL STAINLESS LIMITED
Securities/sectors quoted are for illustration only and not recommendatory. The STATE BANK OF INDIA HDFC BANK LIMITED
sectors are classified as per internal classification.
Data as on October 31, 2024. *The current portfolio holdings may or may not be
a part of the future portfolio holdings and may or may not be part of all client
portfolios.

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Disclaimers
June 2024
November 2024

About Us website/email/content are true to the best of its knowledge,

Abakkus Asset Manager Private Limited (formerly known as however, assume no liability for the relevance, accuracy or
Abakkus Asset Manager LLP) (“Abakkus”) is registered as a completeness of the contents herein.
Portfolio Manager with SEBI under SEBI (Portfolio Managers)
Regulations, 2020 as amended from time to time and the Abakkus declares that the data and analysis provided shall
Circulars and Guidelines issued there under from time to time be for informational purposes. The information contained in
vide SEBI Reg. No.: INP000006457 dated March 14, 2019 and the analysis shall been obtained from various sources and
as an Investment Advisor under SEBI (Investment Advisors) reasonable care would be taken to ensure sources of data to
Regulations, 2013 as amended from time to time and the be accurate and reliable. Abakkus will not be responsible for any
Circulars and Guidelines issued there under from time to time error or omission in the data or for any losses suffered on account
vide SEBI Reg. No.: INA000015729 dated February 03, 2021. of information contained in the analysis. While the Abakkus
will take due care to ensure that all information provided is
Abakkus is also the Investment Manager to Abakkus Growth accurate however the Abakkus neither guarantees/warrants the
Fund, a SEBI registered Category III AIF vide SEBI Reg. No.: IN/ sequence, accuracy, completeness, or timeliness of the report.
AIF3/18-19/0550 dated June 05, 2018, India-Ahead Venture Neither the Abakkus nor its affiliates or their partners, directors,
Trust, a SEBI registered Category I AIF vide SEBI Reg. No.: IN/ employees, agents, or representatives, shall be responsible or
AIF1/21-22/0976 dated January 25, 2022, India-Ahead Private liable in any manner, directly or indirectly, for views or opinions
Equity Trust, a SEBI registered Category II AIF vide SEBI Reg. No.: expressed in this analysis or the contents or any systemic errors
IN/AIF2/21-22/0980 dated January 27, 2022 and Abakkus India or discrepancies or for any decisions or actions taken in reliance
Equity Trust, a SEBI registered Category III AIF vide SEBI Reg. No.: on the analysis. Abakkus does not take any responsibility for any
IN/AIF3/23-24/1326 dated August 9, 2023 under SEBI (Alternative clerical, computational, systemic, or other errors in comparison
Investment Fund) Regulations, 2012 as amended from time analysis.
to time and the Circulars and Guidelines issued there under
from time to time collectively referred as the SEBI Registered There can be no assurance that future results, performance or
Intermediary. The branch office of Abakkus situated at IFSC-GIFT events will be consistent with the information provided in this
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(IFSCA/FME/II/2022-23/041) under IFSCA (Fund Management) of the future/assured performance. Any decision or action
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based on this information shall be solely and entirely at the
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Abakkus retains all the rights in relation to all information be responsible or liable in any manner, directly or indirectly, for
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this website/email/content are provisional and may be subject losses, costs, damages, expenses that may be suffered by the
to change. In the preparation of the material contained in this person accessing this information due to any errors and delays.
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publicly available, certain research reports including information Abakkus (including its affiliates) and any of its Partners, officers,
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Disclaimers
June 2024
November 2024

loss, damage of any nature, including but not limited to direct, with each other.
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