The quarterly GDP numbers released by the developed & developing economies have given rise to the hope that the world economy seems to be stabilizing and is beginning its ride out of the recession. An all-round recovery would be a slow, difficult and complicated process but there were enough telltale signs to reflect improved economic prospects in 2010. It is now expected that while developed economies overall will grow by approx 1% in 2010, developing economies are expected to grow around 5% and they would be the major driver for sustaining world growth in 2010.

Indias real GDP grew by 6.1% YOY during June quarter. This has come on the back of 5.8% YOY growth in the previous quarter. While the Agriculture & Services sector growth slowed, Industry showed better growth aided by the manufacturing sector. The growth in the second quarter reflects the strength of the Indian economy. Though Agriculture accounts for only approx 18% of the Indian GDP, almost 74% of our population is dependent on agriculture. Indias exports & imports have also been falling and inflationary pressures are intensifying. This would definitely hurt growth yet, I would like to throw my weight behind the optimists who maintain that the strengths in Industry & Services will offset the weakness in Agriculture and allow India to remain one of the fastest growing economies in the world. India has sufficient food stocks and the market has factored a weak monsoon to a large extent in its behaviour.

The month of August 09 saw a sell-off happening in the Chinese markets on more than one occasion and this had ripple effects across the world. On MOM basis Indian markets remained flat. During the month BSE Sensex was volatile in the month of August 2009 and closed the month at 15666. We believe that prudent investors should stay invested and try to add on to their portfolios at every dips. The pace of FII inflows into the Indian equity markets slowed a bit but yet they made a net investment of Rs 4900 crs during August 09. During 2009 FIIs have till August 09 made a net investment of Rs 40272 crs in Indian equities. With inflation once again on the rise, there is expectation that interest rates would harden, but we expect RBI to be taking a holistic view of the overall economy.

Taurus MF logged a growth of 23.42% in Average AUM. Taurus Short Term Bond Fund (formerly known as Taurus Liquid Plus) which is rated AAAf by CRISIL closed August 2009 with an Average AUM of Rs 504.15 crs.

Keeping in line with our thoughts that the MF business is a knowledge based industry we have embarked upon and launched “Taurus MF Knowledge Series”, the first edition of which titled “ABC of Financial Planning” has been released by us in August 2009. The same is also available on our website. We will be following this up with more booklets on diverse topics of investor interest to contribute in our way to the enrichment of the investors.

Extending my warm greetings to you & your family members for the forthcoming festivals of Eid and Dusherra.

Kind regards

Yours truly,

Waqar Naqvi
Chief Executive