After the spectacular rise in the month of May 09, the markets took a breather. During June 09, BSE Sensex declined marginally by 0.9% and CNX Nifty declined by 3.55%. The decline in Nifty was higher due to the realignment in the weights of the constituents of Nifty with the introduction of the free-float methodology. FIIs continued to keep their faith on the Indian markets and net bought Rs 3830 crs of equities during June 09. This comes on the back of net buying of Rs 20117 crs in May 09. The Mutual Funds were net buyers to the extent of Rs 840 crs during June 09.

The global cues were mixed. The investors who had taken a flight to safety are once again selectively scouting for higher returns and they have started looking at emerging markets as a superior investment destination and India definitely stands to benefit from the increased allocation. It is widely expected that the government would step-up the reform process. New infrastructure related projects, PSU divestment, far-reaching reforms in education & rural economy seem to be top on the agenda of the government. Indias GDP growth projections have been revised upwards by most of the rating agencies. After several decades, Inflation went into negative territory. Even though exports & imports continued to decline, the Auto & Cement sales numbers were positive. The slow progress of Monsoon was a major concern for the better part of the month but by the last week of June the monsoon covered a major part of the country and a projection of a 93% of the long-term average brought in much needed relief.

In a surprise but welcome move, the government appointed Mr. Nandan Nilekani as Head of Unique Identification Authority of India, a new agency for creating National Identification database. This is the first time that a performance-oriented businessman with no political affiliations has been chosen for an important assignment.

Our equity funds continued to deliver superior returns. Taurus Infrastructure Fund was the top performing Infrastructure Fund over the 3, 6 & 12 months time-frames. Taurus Starshare & Taurus Tax Shield continued to be in top quartile. What was heartening was that while we kept opening new accounts on the fixed income side, we witnessed very good retail participation for our equity funds. Our channel partners have supported us in good measure. We plan to reward our investors with regular dividends in our equity funds at appropriate intervals.

Our two symposiums - Quo Vadis on the Emerging Economic Scenario post Elections addressed by the renowned Economist & Columnist Mr. Swaminathan S Anklesaria Aiyar organised at Mumbai & Delhi during the first week of June 09 were much appreciated by our investors & channel partners.

The Regulators recent directive on Load Structure has generated a lot of debate within the Industry. The Industry dynamics would definitely undergo a major change and we wish & hope that the Mutual Fund Industry would rise to the new challenges and evolve stronger along with its channel partners.

By the time this communication reaches you, the suspense related to the presentation & expectations from the Budget would be over. We believe that Indias long term structural story stays intact and we look at the Budget as one among the several events that can at best have short-term impacts on the markets. Investors would be wiser to invest at regular intervals and should not allow short-term volatilities to sway them from the ultimate goal of wealth creation over the long-term.

Kind regards
Yours truly,

Waqar Naqvi
Chief Executive