sakthi fianance project report
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finance project report 2012-13TRANSCRIPT
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A STUDY ON PORTFOLIO CONSTRUCTION WITH REFERENCE TO THE NIRMAL BANG SECURITIES PVT LTD., ERODE
A PROJECT REPORTSubmitted by
M SATHIYAMOORTHI Register No: 078001114034
Of
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CONTENTS
CHAPTER PARTICULARS PAGE NO
ABSTRACT
1 INTRODUCTION
1.1 ABOUT THE STUDY 11
1.2 INDUSTRY PROFILE 27
1.3 COMPANY PROFILE 31
2 MAIN THEME OF THE PROJECT
2.1 OBJECTIVES OF THE STUDY 42
2.2 SC OPE OF THE STUDY 44
2.3 LIMITATIONS OF THE STUDY 45
2.4 REVIEW OF LITERATURE 46
2.5 RESEARCH METHODOLOGY 47
3 ANALYSIS AND INTERPRETATION 51
4 4.1 FINDINGS & SUGGESSTIONS 83
5 4.2 CONCLUSIONS 85
BIBLIOGRAPHY 87
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ABSTRACT
The study has been undertaken to find out the portfolio construction with reference to
Nirmal Bang Securities Pvt Ltd., Erode,
The main objective is to analyses is tom identifying an effective portfolio
construction for the investment made by the investors. It is mainly focus on oil sector,
construction sector, cement sector, IT sector and banking sector.
For analysis of data the researcher had adopted some statistical tools. All the data are
analyzed and interpreted in the form of tabulation, chart act through the understanding
these above things, it is easy to know about share market, portfolio construction.
The researcher adopted secondary data for collected of information. This is collected
from different sources like Nirmal Bang Securities Pvt Ltd.,, internet, Newspapers,
Magazines etc, in order to get NSE Values in sectors.
The tabulation data have been analyzed are interpreted by using suitable tactical
techniques and tools. The results of the analysis findings and suggestions are given at the
end of the report.
ABOUT NIRMAL BANG SECURITIES PVT LTD.,
Founded in 1986 by Shri Nirmal bang, the Nirmal bang, the Nirmal bang Group is
recognized as one of the largest retail broking house in India, providing an array of financial
products and services.
Our retail and institutional clients have access to products such as
Equities
Derivatives
Commodities
Currency Derivatives
Mutual funds
IPOs,
Depository services
PMS
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Throughout history, we have fostered one overriding purpose – to provide each client
with personal service and quality work. By adhering to this principle, we have grown to
become a successful and well-respected firm of highly qualified professionals.
The Group is headed by Mr.Dilip Bang and Mr.Kishore Bang who bring forward
industry expertise, Insight and most importantly, create an environment of unmatched to
clients.
We are registered members of the Bombay Stock Exchange Limited(BSE),National
Stock Exchange of India Limited (NSE),Multi Commodity Exchange of India
Limited(MCX),National Commodity & Derivatives Exchange (NCDEX),National Multi
Commodity Exchange of India Limited (NMCE) and MCX stock Exchange Limited and
are also depository participants of NSDL and CDSL.
Mission
“ To work together with integrity and make our customers feel valued”.
Vision
“ to create valuable relationships and provide the best financial services most
professionally”.
Core value
“ respect our colleagues and the business itself”.
Client Focus
Client relationships form the core of our business. We value each client, no matter
what size, as a long-term relationship. And we seek to provide unmatched service to each
client and place him as a partner at the center of everything we do.
From the very beginning of the relationship, we work closely with client to identify
their financial goals and risk tolerance levels and leverage our strength of multiple
product offerings, research and financial strength to help achieve their goals. In the
process, we become an essential partner, creting opportunities, adding value and
transforming visions into reality.
Diverse Service Offerings
In addition to traditional broking services, we are also equipped to handle
commodity trading facility as well as currency derivatives and have access to wide range
of financial services like IPOs, mutual funds and insurance.
Timely Service
In an increasingly competitive environment, clients today require personalized
solutions and greater flexibility and responsiveness than ever before. Our professionals
are always ‘on call’. We provide them service throughout the year and not just at the end
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of the year. We believe such service is essential for delivering solutions and constructive
relationships.
Able Team
We have developed a strong and enduring team by recruiting primarily from
leading graduate and postgraduate universities and promoting from within. Our team
works together to provide superior results to our clients. At the same time, each our
clients is assigned as specific team member who ‘owns’ the relationships, providing
continuity, responsiveness and point of easy access to the firm.
Culture
We strive to maintain ethical standards at all and lay strong emphasis on honesty,
integrity and confidentiality. We speak and act to ensure transparency at all levels and in
everything we do.
Financial Strength
The strength of our balance sheet is such that it gives greater confidence to all our
retail and institutional clients in dealing with us. The financial strength of the group helps
in further building the network and infrastructure to cater to the larger market.
Using up to date technology and resources, Nirmal bang serves individuals,
businesses, corporate, and institutions to enable the fulfillment of each clients vision. Our
portfolio of services include
A robust trading platform for equities, equity derivatives and currency derivatives on
NSE, BSE as well as MCX-SX
Depository services of NSDL and CDSL
Commodity trading in NCDEX, MCX and NMCE
Access to a wide range of financial products like IPOs, mutual funds, insurance and PMS
Investment and trading advisory services based on technical, fundamental and market
research
Fortnightly magazine ‘Beyond Market’ which provides readers with the latest news,
interesting stories and articles, key announcements and insightful excerpts. It also
captures current market trends, useful tips on investing and other latest developments in
the economy. The same is available on our website and is also posted to registered
members.
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Leadership Team
Our senior management team has deep expertise and experience in managing the
company through business, economic and technological cycles, as well as strong skills in
establishing and developing lasting client relationships.
Mr.Dilip Bang
Mr.Dilip Bang is the co-founder and Director of Nirmal Bang Group and has over
20 years of experience in the industry. He is known for his ability to read market trends
and has an in depth Knowledge of the Indian capital markets. He handles the front end
operations of the business and trading oppurtunities. His excellent networking and
relationship management skills are the main factors responsible for the success of the
group.
Mr.Kishore Bang
Mr.Kishore Bang is the co-founder and Director of Nirmal Bang Group. He
handles the operation And management aspects. He is also instrumental in the retail
expansion and infrastructure development of the group. A visionary and an enable
administrator with strong business acumen, Mr.Kishore Bang’s experience of around 20
years has helped the company to grow in leaps and bounds.
Mr.Rakesh Bhandari
Mr.Rakesh Bhandari is a qualified chartered Accountant and serves as the Senior
Vice-President- Corporate Planning for the Group.
M.Deepak Agarwal
M.Deepak Agarwal is a qualified chartered Accountant and serves as the Head of
Business Development for the Group
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CHAPTER I
INTRODUCTION
1.1 INTRODUCTION TO THE STUDY
This study deals with the relationship between share prices and share dividends. Most
financial textbooks point out that in a well-functioning capital market these two variables
should be related (e.g. Brealey and Myers, 1986); the present value of the share should be
equal to the dividend stream discounted by the return earned on securities of comparable risk.
Of course, this simple relationship only holds in a world of certainty where investors have
access to perfect information. Nevertheless, Shiller (1981) demonstrates that a similar
relationship should hold in a world of uncertainty where investors have rational expectations.
SUBJECT BACKGROUND OF THE RESEARCH TOPIC
A substantive body of empirical research supports the view that share prices are
influenced by changes in company dividends. For example, questionnaire surveys of investors
indicate that dividend information plays an important part in their assessment of the current
value of a share (Arnold and Moizer, 1984; Pike, Meerjanssan and Chadwick, 1993) while
interviews with financial managers suggest that companies take a great deal of care when
setting their dividend level (Lintner, 1956). For example, Arnold and Moizer (1984) reported
that 87% of the 202 investment analysts in their survey “almost always” estimated future
dividend yields when valuing shares. In Pike et al. (1993) dividend information was ranked
third behind price/earnings ratios and net assets per share, in terms of usefulness for share
valuation.
In addition, stock market studies demonstrate that share prices respond to dividend
news; dividend increases tend to be associated with share price increases while dividend cuts
are usually associated with share price falls (Pettit, 1972; Ahrony and Swary, 1980;
Abeyrathna et al., 1996). A small minority of authors has suggested that dividend cuts may
not be seen as bad news by investors; instead, they may indicate that a company has profitable
investments which it wishes to fund from internal cash resources. For example, Woolridge and
Ghosh (1984) cite the example of Gould Inc. where the share price increased by 2% on news
of a 60% cut in dividends; the authors suggested that Gould’s management had convinced the
market that the reduction in dividends was to be used to fund innovative investment.
Researchers such as Watts (1973), Johnson and Jensen (1995) and De Angelo, De Angelo and
Skinner (1996) argue that dividends do not act as a signal to investors about the future
prospects of the firm. These authors point out that dividend changes tend not to be followed
by earnings changes of the same sign. For example, they demonstrate that dividend cuts
usually indicate that the firm has already experienced several years of financial pressure and
are usually followed by earnings increases.
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Once a company makes a profit, they must decide on what to do with those profits.
They could continue to retain the profits within the company, or they could pay out the profits
to the owners of the firm in the form of dividends. Once the company decides on whether to
pay dividends, they may establish a somewhat permanent dividend policy, which may in turn
impact on investors and perceptions of the company in the financial markets. What they
decide depends on the situation of the company now and in the future. It also depends on the
preferences of investors and potential investors.
Dividends are payments made by a company to its shareholders. When a
company earns a profit, that money can be put to two uses: it can either be re-invested in the
business (called retained earnings), or it can be paid to the shareholders of the company as a
dividend. Many companies retain a portion of their earnings and pay the remainder to their
shareholders. Publicly-traded companies usually pay dividends on a fixed schedule,
commonly annually, bi-annually or quarterly; however, they may declare a dividend at any
time.
Dividends are usually paid in cash. Sometimes dividends instead take the form of
shares in the company (either newly-created shares or existing shares bought in the market).
Exceptionally, dividends might take the form of shares in other companies or other assets.
The profits of a company can either be reinvested in the business or paid to its
shareholders as a beverage. The frequency of these varies by country. In the United States
dividends of publicly-traded companies are usually declared quarterly by the board of
directors. In some other countries dividends are paid biannually, as an interim dividend shortly
after the company announces its interim results and a final dividend typically following its
annual general meeting. In other countries, the board of directors will propose the payment of
a dividend to shareholders at the annual meeting who will then vote on the proposal.
Where a company makes a loss during a year, it may opt to continue paying
dividends from the retained earnings from previous years or to suspend the dividend. Where a
company receives a non-recurring gain, e.g. from the sale of some assets, and has no plans to
reinvest the proceeds, the money is often returned to shareholders in the form of a special
dividend.
Dividends are payments made by a company to its shareholders. When a company
earns a profit, that money can be put to two uses: it can either be re-invested in the business
(called retained earnings), or it can be paid to the shareholders of the company as a dividend.
Many companies retain a portion of their earnings and pay the remainder to their shareholders.
Publicly-traded companies usually pay dividends on a fixed schedule, commonly annually, bi-
annually or quarterly; however, they may declare a dividend at any time.
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Forms of payment
Cash
Cash dividends (most common) are those paid out in form of real cash. Such
dividends are a form of investment income and are usually taxable to the recipient in the year
they are paid. This is the most common method of sharing corporate profits with the
shareholders of the company.
Stock
Stock or scrip dividends are those paid out in form of additional stock shares of the
issuing corporation, or other corporation (e.g., its subsidiary corporation). They are usually
issued in proportion to shares owned (e.g., for every 100 shares of stock owned, 5% stock
dividend will yield 5 extra shares). This is very similar to a stock split in that it increases the
total number of shares while lowering the price of each share and does not change the market
capitalization or the total value of the shares held.
Property
Property dividends or dividends in specie (Latin for "in kind") are those paid out in
form of assets from the issuing corporation or another corporation, such as a subsidiary
corporation. They are relatively rare and most frequently are securities of other companies
owned by the issuer, however they can take other forms, e.g. products or services provided by
the corporation.
Dates
Dividends must be "declared" (approved) by a company’s Board of Directors each
time they are paid. There are four important dates to remember regarding dividends. These are
discussed in detail with examples at the Securities and Exchange Commission site
Declaration date
The declaration date is the day the Board of Directors announces its
intention to pay a dividend. On this day, a liability is created and the company records that
liability on its books; it now owes the money to the stockholders. On the declaration date, the
Board will also announce a date of record and a payment date.
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Ex-dividend date
The ex-dividend date is the day after which all shares bought and sold no longer
come attached with the right to be paid the most recently declared dividend. This is an
important date for any company that has many stockholders, including those that trade on
exchanges, as it makes reconciliation of who is to be paid the dividend easier. Prior to this
date, the stock is said to be cum dividend ('with dividend'): existing holders of the stock and
anyone who buys it will receive the dividend, whereas any holders selling the stock lose their
right to the dividend. On and after this date the stock becomes ex dividend: existing holders of
the stock will receive the dividend even if they now sell the stock, whereas anyone who now
buys the stock now will not receive the dividend.
Record date
Shareholders who properly registered their ownership on or before the date of record
will receive the dividend. Shareholders who are not registered as of this date will not receive
the dividend. Registration in most countries is essentially automatic for shares purchased
before the ex-dividend date.
Payment date
The payment date is the day when the dividend checks will actually be mailed to the
shareholders of a company or credited to brokerage accounts.
Dividends may affect capital structure.
• Retaining earnings increases common equity relative to debt.
• Financing with retained earnings is cheaper than issuing new common equity.
Dividend Policy and Stock Value
There are various theories that try to explain the relationship of a firm's dividend
policy and common stock value.
Dividend Irrelevance Theory
This theory purports that a firm's dividend policy has no effect on either its value or
its cost of capital. Investors value dividends and capital gains equally.
Optimal Dividend Policy
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Proponents believe that there is a dividend policy that strikes a balance between
current dividends and future growth that maximizes the firm's stock price.
Dividend Relevance Theory
The value of a firm is affected by its dividend policy. The optimal dividend policy is
the one that maximizes the firm's value.
Dividend policy remains a source of controversy despite years of theoretical and
empirical research, including one aspect of dividend policy: the linkage between dividend
policy and stock price risk (Allen and Rachim, 1996). Paying large dividends reduces risk and
thus influence stock price (Gordon, 1963) and is a proxy for the future earnings (Baskin,
1989). A number of theoretical mechanisms have been suggested that cause dividend yield
and payout ratios to vary inversely with common stock volatility. These are duration effect,
rate of return effect, arbitrage pricing effect and information effect. Duration effect implies
that high dividend yield provides more near term cash flow. If dividend policy is stable high
dividend stocks will have a shorter duration. Gordon Growth Model can be used to predict
that high-dividend will be less sensitive to fluctuations in discount rates and thus ought to
display lower price volatility.
Agency cost argument, as developed by Jensen and Meckling (1976) proposed that
dividend payments reduce costs and increase cash flow, that is payment of dividends
motivates managers to disgorge cash rather than investing at below the cost of capital or
wasting it on organizational inefficiencies (Rozeff, 1982 and Easterbrook 1984). Some authors
have stressed the importance of information content of dividend (Asquith and Mullin, 1983;
Born, Moser and officer 1983). Miller and Rock (1985) suggested that dividend
announcements provide the missing pieces of information about the firm and allows the
market to estimate the firm’s current earnings. Investors may have greater confidence that
reported earnings reflect economic profits when announcements are accompanied by ample
dividends. If investors are more certain in their opinions, they may react less to questionable
sources of information and their expectation of value may be insulated from irrational
influence.
Rate of return effect, as discussed by Gordon (1963), is that a firm with low payout
and low dividend yield may tend to be valued more in terms of future investment
opportunities (Donaldson, 1961). Consequently, its stock price may be more sensitive to
changing estimates of rates of return over distant time periods. Thus expanding firms although
may have lower payout ratio and dividend yield, exhibit price stability. This may be because
dividend yields and payout ratio serves as proxies for the amount of projected growth
opportunities. If forecasts of profits from growth opportunities are less reliable than forecasts
of returns on assets in place, firms with low payout and low dividend yield may have greater
price volatility. According to duration effect and arbitrage effect, the dividend yield and not
the payout ratio is the relevant measure. The rate of return effect implies that both dividend
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yield and payout ratio matters. Dividend policy may serve as a proxy for growth and
investment opportunities. Both the duration effect and the rate of return effect assume
differentials in the timing of the underlying cash flow of the business. If the relationship
between risk and dividend policy remains after controlling for growth, this would suggest
evidence of either the arbitrage or information effect.
THEORETICAL/FRAMEWORK/AND/MODEL/SPECIFICATION
Control variables:
Share price volatility should be related to the basic risks encountered in the firm's
product markets. Market risk may also have impact on the firm's dividend policy. Therefore
include a control variable to account for the variability in the firm's earnings stream. Given
operating risk, there should be a direct link between stock price volatility and leverage. Under
conditions of asymmetric information there is also likely to be a link between borrowing and
dividend policy. A control variable was included to reflect corporate leverage. There are
potential links between size and volatility. Small firms are likely to be less diversified in their
activities and less subject to investor scrutiny. Institutions appear to concentrate their research
activities and investment policies on larger listed companies. The market in the stocks of
small listed firms could conceivably be less informed, more illiquid, and as a consequence
subject to greater price volatility. Baskin (1989) suggests that firms with a more dispersed
body of shareholders may be more disposed towards using dividend policy as a signaling
device. The latter may also be a function of size and thus a size control was required.
Dividend payout policy could be inversely linked to growth and investment
opportunities. The previously mentioned duration and rate of return effects assume timing
differentials in the firm's underlying cash flows. A variable to reflect growth was also
included. The suggestion is that any remaining link between dividend policy and stock price
volatility, after controlling for the influence of growth, would be suggestive of either the
arbitrage or information effect. It is also possible that systematic differences in market
conditions, cost structures, regulatory restrictions etc., may lead to differences in dividend
policy.
Variable definition and opening prices only.
Dividend yield (DY)
The variable was calculated by summing all the annual cash dividends paid to
common stock holders and then dividing this sum by the average market value of the stock in
the year. The average for all available years was utilized.
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Earning volatility (EV)
In order to develop this variable, the first step is to obtain an average of available
years of the ratio of operating earnings (before taxes and interest) to total assets. The next step
is to calculate an average of the squared deviation from the overall average. A square root
transformation is then applied to the mean squared deviation to obtain estimates of standard
deviation.
Payout Ratio (POR)
To begin, total cumulative individual company earnings and dividends were
calculated for all years. Payout is the ratio of total dividends to total earnings. The use of this
procedure controls the problem of extreme values in individual years attributable to low or
possibly negative net income. The payout ratio is set to one in cases where a total dividend
exceeds total cumulative profits.
Size (SZ)
The variable size was constructed in a form that reflects the order of magnitude in
real terms. The variable was constructed by taking the average market value of common
stocks. The value of real size (Rs. milllion) was averaged over the period
Long-term Debt (DA)
The ratio of the sum of all the long-term debt (debt with maturity more than a year)
to total assets is taken. An average is taken over all available years.
Growth in Assets (ASg)
The yearly growth rate was calculated by taking the ratio of the change in total assets in a
year. Then the ratio was averaged over the years.
FACTORS RESPONSIBLE FOR PRICE FLUCTUATIONS
In a securities market, prices or returns show fluctuations for a variety of reasons:
changes in fundamental factors of firms, investors ‘endowments, tastes or alternatively the
attitudes towards risk, correct or incorrect anticipations or expectations of investor and other
market participants, differences in information and mode of evaluation, transient imbalances
between demand for and supply of securities, and the nature and number of stabilizing forces,
among others, cause prices to fluctuate either from one point of equilibrium to another or
above and below an equilibrium point. The changes in fundamental factors cause prices or
returns to shift from one point of equilibrium to another. For instance, information regarding
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changes in the economy, changes in policies, including industrial policy, as also the political
situation, and the social situation, influence the over all price behavior of a market.
Apart from fundamental factors, the transitory imbalances between supply of and
demand for securities may also cause price fluctuations. For instance, in the absence of
stabilizing forces, excess supply (demand) of securities in the short- run causes the price to
fall (rise). In the presence of stabilizing forces, such as traditional speculators and value based
investors, the extent of fluctuations tend to be small, as these stabilizing forces act as buyers
(sellers), when there is excess of supply (demand), thus, arresting the magnitude of a fall (rise)
in the price. However, the stabilizing forces may not completely mitigate the price change; as
such acts may not bestow any benefit on them. These forces require a minimum extent of
price change in order to undertake the act of stabilization of prices, which would give them
scope to earn a responsible reward.
The expectations and foresight of investors as well as speculators determine the
magnitude of price fluctuations to a large extent. If market participants anticipate changes.
In either fundamental factors or other factors correctly, and if the change or
anticipated change comes about gradually, the prices move in a smooth fashion from one point
of equilibrium to another. On the contrary, when the anticipations prove to be either too
optimistic or too pessimistic, or the changes in these factors or anticipations about them,
undergo a sudden change, the prices move erratically, rather than move in a smooth fashion
resulting in greater price fluctuations.
The numbers of speculations in relation to other traders also influences the extent of
fluctuations. The traditional role of a speculator is to act as a buyer when there is excess
supply and as a seller when there is excess demand.
Changes in fundamental and other factors as well as corrector incorrect anticipations
also determine the short- term and the long- term price changes. If the changes takes place
gradually and anticipations prove to be correct, the short-term fluctuations tend to be similar
in magnitude as that of average long-term fluctuations, as in this case, the short-term
fluctuations or price changes tend to be one direction, which add up to determine long- term
fluctuations. On the contrary, if the anticipations are not correct, irrespective of mode of
arrival of information- whether gradual or not gradual the average long-term fluctuations tend
to be smaller than the short-term fluctuations.
It is clear that the fluctuation of prices or price volatility is influenced by the
arrival of information- gradual or otherwise- and the correct or incorrect anticipation of
market participants. Further, the role played by speculators either corrects the situation by
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minimizing the extent of fluctuations, or further accentuates fluctuations and thereby
destabilizes prices.
TITLE
A study on the correlation between the equity price movement and dividend
declaration.
BRIEF BACKGROUND
The dividend policy of a firm determines what proportion of earning is paid to
shareholders by way of dividends and what proportion is ploughed back in the firm for
reinvestment purposes.
If a firm’s capital budgeting decision is independent of its dividend policy, a higher
dividend payment will entail a greater dependence on external financing. Thus the dividend
policy has a bearing on the choice of financing. On the other hand, if a firm’s capital
budgeting decision on its dividend decision, a higher dividend payment will cause shrinkage
of its capital budget and vice versa. In such a case, the dividend policy has a bearing on the
capital budgeting decision.
A firm’s dividend payout ratio obviously depends on how earnings are measured. For
the sake of simplicity, we look at the accounting measure of earnings and do not truly reflect a
firm’s capacity to pay dividends.
STATEMENT OF PROBLEM
A number of studies have been conducted on correlation between equity price
movements and dividend declaration. It is not surprising that correlation between equity price
movement and dividend declaration have become an important area in financial research
considering its strong implications for corporate policy.
The principal objective of corporate financial management is to maximize the market
value of equity shares the key question of interest to general public is: What is the relationship
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between dividend policy and market value of equity shares? This is the most controversial and
unresolved question in corporate finance.
1.2 INDUSTRY PROFILE
Stock Market of India
Introduction
Stock markets refer to a market place where investors can buy and sell
shares . The price at which each buying and selling transaction takes is determined by the
market forces (i.e. demand and supply for a particular stock).
Let us take an example for a better understanding of how market forces determine
stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of an
upward movement in its stock price. More and more people would want to buy this stock (i.e.
high demand) and very few people will want to sell this stock at current market price (i.e. less
supply). Therefore, buyers will have to bid a higher price for this stock to match the ask price
from the seller which will increase the stock price of ABC Co. Ltd. On the contrary, if there
are more sellers than buyers (i.e. high supply and low demand) for the stock of ABC Co. Ltd.
in the market, its price will fall down.
In earlier times, buyers and sellers used to assemble at stock exchanges to make a
transaction but now with the dawn of IT, most of the operations are done electronically and
the stock markets have become almost paperless. Now investors dont have to gather at the
Exchanges, and can trade freely from their home or office over the phone or through Internet.
National Stock Exchange
In order to lift the Indian stock market trading system on par with the
international standards. On the basis of the recommendations of high powered Pherwani
Committee, the National Stock Exchange was incorporated in 1992 by Industrial
Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial
Finance Corporation of India, all Insurance Corporations, selected commercial banks and
others.
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Once a company's public offering is complete, it gets listed in a stock exchange. After
listing it would be available for trading to all investors in the stock exchanges where they are
listed. In India we have two major stock exchanges. They are:
\The National Stock Exchanges (NSE)
The NSE is India's largest and the worlds third largest stock exchange in terms of
Transaction volumes & amounts. The NSE is based out of Bombay. The NSE has set up its
trading platform as a nation-wide, fully automated screen based system. This enables anyone
in any part of the country to trade on shares listed in the NSE.
The NSE index or Nifty
The NSE Index or the Nifty Index as it is popularly known, is the index of the
performance of the 50 largest & most profitable, popular companies listed in the index. Each
company that is part of the index has its own weightage in the value of the Index. The value of
the Nifty Index is the weighted average of the prices of these 50 companies.
The Bombay Stock Exchanges (BSE)
The BSE is the oldest stock exchange in Asia. It is situated in Dalal Street in Mumbai. It
is the third largest stock exchange in south Asia and the tenth largest in the world. BSE has
over 5000 companies that are listed in it. The objectives of the BSE are similar to that of the
NSE. BSE also uses the latest technologies in the IT field to provide a single place where
traders from across the world can buy/sell shares in the Indian share market.
The BSE Index or Sensex (NSE)
The BSE Index or the Sensex as it is popularly known, is the index of the
performance of the 30 largest & most profitable, popular companies listed in the index. Each
company that is part of the index has its own weightage in the value of the Index. Since the
number of companies is lesser, the index variations are higher when compared to the Nifty
index.
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History of the Indian Stock Market - The Origin
One of the oldest stock markets in Asia, the Indian Stock Markets
have a 200 years old history.
18th Century
East India Company was the dominant institution and by end of the century, busuness in its loan securities gained full momentum
1830's Business on corporate stocks and shares in Bank and Cotton presses started in Bombay. Trading list by the end of 1839 got broader
1840's Recognition from banks and merchants to about half a dozen brokers
1850's Rapid development of commercial enterprise saw brokerage business attracting more people into the business
1860's The number of brokers increased to 60
1860-61
The American Civil War broke out which caused a stoppage of cotton supply from United States of America; marking the beginning of the "Share Mania" in India
1862-63
The number of brokers increased to about 200 to 250
1865 A disastrous slump began at the end of the American Civil War (as an example, Bank of Bombay Share which had touched Rs. 2850 could only be sold at Rs. 87)
1.3 COMPANY PROFILE
ICICI BANK
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
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reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering
in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of
Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by
ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the
initiative of the World Bank, the Government of India and representatives of Indian industry.
The principal objective was to create a development financial institution for
providing medium-term and long-term project financing to Indian businesses. In the 1990s,
ICICI transformed its business from a development financial institution offering only project
finance to a diversified financial services group offering a wide variety of products and
services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In
1999, ICICI become the first Indian company and the first bank or financial institution from
non-Japan Asia to be listed on the NYSE.
ICICI Bank has a network of 741 branches (including 48 extension counters) and
over 3300 ATMs in India and presence in 30 International locations. ICICI Bank offers a wide
range of banking products and financial services to corporate and retail customers through a
variety of delivery channels and through its specialised subsidiaries and affiliates in the areas
of investment banking, life and non-life insurance, venture capital and.asset.management.
STATE BANK OF INDIA
State Bank of India (SBI) (LSE: SBID) is the largest bank in India It is. also,
measured by the number of branch offices and employees, the largest bank in the world.
Established in 1806 as Bank of Bengal, it remains the oldest commercial bank in the Indian
Subcontinent and also the most successful one providing various domestic, international and
NRI products and services, through its vast network in India and overseas. With an asset base
of $126 billion and its reach, it is a regional banking behemoth. The government nationalized
the bank in 1955, with the Reserve Bank of India taking a 60% ownership stake. In recent
years the bank has focused on reducing its huge staff through Golden handshake schemes and
computerizing its operations
The roots to the State Bank of India are traceable to the first decade of 19th century,
when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June
1806. The government amalgamated Bank of Bengal and two other Presidency banks, namely,
the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras on 27 January
1921, and named the reorganized banking entity the Imperial Bank of India. All these
Presidency banks were incorporated as joint stock companies, and were the result of the royal
charters. The Imperial Bank of India continued to remain a joint stock company. Until the
establishment of a central bank in India the Imperial Bank and its early predecessors served as
the nation's central bank printing currency.
There are seven other associate banks that fall under SBI. They all use the "State
Bank of" name followed by the regional headquarters' name. These were originally banks
20
belonging to princely states before the government nationalized them in 1959. In tune with the
first Five Year Plan, emphasizing the development of rural India, the government integrated
these banks with the State Bank of India to expand its rural outreach. The State Bank group
refers to the seven associates and the parent bank. All the banks use the same logo of a blue
keyhole. There has been a proposal to merge all the associate banks into SBI to create a "mega
bank" and streamline operations.
ACC LIMITED
ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's
operations are spread throughout the country with 14 modern cement factories, 19 Ready mix
concrete plants, 19 sales offices, and several zonal offices. ACC has made significant
contributions to the nation building process by way of quality products, services and sharing
its expertise.
In the 70 years of its existence, ACC has been a pioneer in the manufacture of
cement and concrete and a trendsetter in many areas of cement and concrete technology
including improvements in raw material utilization, process improvement, energy
conservation and development of high performance concretes.
ACC’s brand name is synonymous with cement and enjoys a high level of equity in
the Indian market. It is the only cement company that figures in the list of Consumer Super
Brands of India.
ACC has rich experience in mining, being the largest user of limestone, and it is also
one of the principal users of coal. As the largest cement producer in India, it is one of the
biggest customers of the Indian Railways, and the foremost user of the road transport network
services for inward and outward movement of materials and products.
ACC has also extended its services overseas to the Middle East, Africa, and South
America, where it has provided technical and managerial consultancy to a variety of
consumers, and also helps in the operation and maintenance of cement plants abroad.
ACC is among the first companies in India to include commitment to environmental
protection as one of its corporate objectives, long before pollution control laws came into
existence. The company installed pollution control equipment and high efficiency
sophisticated electrostatic precipitators for cement kilns, raw mills, coal mills, power plants
and coolers as far back as 1966. Every factory has state-of-the art pollution control equipment
and devices.
GUJARAT AMBUJA CEMENTS
21
Ambuja Cements was set up in 1986. In the last decade the company has grown
tenfold. The total cement capacity of the company is 16 million tonnes.Its plants are some of
the most efficient in the world. With environment protection measures that are on par with the
finest in the developed world.
The company's most distinctive attribute, however, is its approach to the business.
Ambuja follows a unique homegrown philosophy of giving people the authority to set their
own targets, and the freedom to achieve their goals. This simple vision has created an
environment where there are no limits to excellence, no limits to efficiency. And has proved to
be a powerful engine of growth for the company. As a result, Ambuja is the most profitable
cement company in India, and the lowest cost producer of cement in the world.
GAMMON INDIA LIMITED
Gammon India Limited is one of the leading Construction companies in India to-day.
The company was established by late Mr. J.C.Gammon in 1919 as a firm of Civil Engineers &
Contractor which in 1922 was incorporated as a Private Limited Company under the name of
J. C. Gammon (Bombay) Pvt. Ltd. The firm went public
in/1962/and/was,rechristened,as..Gammon.India,Limited.
The first work carried out by Mr. J. C. Gammon was the construction of reinforced
concrete pile foundations for Gateway of India. Since then, the Company has executed many
multifarious civil engineering works from Cotton Godowns to Bridges/flyovers, Marine
Structures, Cooling Towers, Chimneys, Tunnels and Dams in India and in the middle-east.
Gammon is the pioneers of prestressed concrete in India. Today, the Company can claim for
the largest numbers of bridges and flyovers built in India. With over 80 years of tradition in
the field of construction, Gammon is a name that is inextricably woven into the fabric of
India. The only construction Company in India to have been accredited with ISO 9001: 1994
certifications in all fields of Civil Engineering including design.
Gammon India Limited, the only Indian Construction Company to have been
accredited with ISO 9001 certification for all fields of Civil Engineering Works including
design, stands out as gateway for Technological and Engineering excellence in Civil
Engineering fields. Gammon's dedicated and experienced team of planners, designers and
construction engineers are ever ready to contribute their expertise together and turn vision into
reality.
NAGARJUNA CONSTRUCTION COMPANY LIMITED
Nagarjuna Construction Company Limited (NCC) is one of the leading
professionally managed public limited construction company in India. The company has
successfully completed 28 years of construction excellence in executing Turnkey Projects,
22
Industrial Buildings, Multistoried/Commercial Structures, Townships, Roads & Bridges,
Pipelines, etc.
NCC is the brainchild of this visionary. Having achieved a high-caliber standing
under his able steering, the company rededicates itself with renewed vigor and commitment to
the cause of elevating the Indian infrastructure industry to international standards of
excellence. To place it on par with the best in the world, will always be the company's
endeavor.
Behind every progressive company is a dynamic team that propels it to reach higher
and greater echelons of success. NCC's governing body is a veritable treasure trove of
experience and expertise. Each of the members has made invaluable contribution in their
chosen fields of activity. From the innovating new construction and cost saving
methodologies, to identifying new areas of contribution, and ensuring an uninterrupted flow of
day-to-day activities, they have been instrumental in making NCC a formidable force in the
Indian construction sector.
NCC has made concrete contribution to nation building by fusing tremendous
engineering knowledge with unique innovative skills. It aims at offering best value solutions
by acquiring total expertise in infrastructure building for the country. In keeping with its
mission of contributing effectively to economic development, NCC has taken up the cudgels
to provide long lasting buildings and industrial structures at optimum cost and in minimal
time. Construction of large factory and workshop structures has been made speedier and more
economical by the use of modern construction methods including folded plate and shell roofs,
precast and prestressed roof/elements/etc.
INFOSYS
Infosys was established in the year 1981 and successfully completed IPO in India in
the year 1993. In 1999 the company crossed $100 Million in annual revenue. In 2000 Infosys
crossed $200 Million in annual revenue. Infosys was ranked No. 1 in the "Best Employers in
India 2002" survey conducted by Hewitt Associates for the second consecutive year.
In 2004 the company crossed US $1 Billion in annual revenue. Infosys has crossed
crosses $ 2 billion in revenue in the year 2005. Infosys Technologies Ltd. (NASDAQ: INFY)
provides consulting and IT services to clients globally - as partners to conceptualize and
realize technology driven business transformation initiatives. With over 52,000 employees
worldwide, we use a low-risk Global Delivery Model (GDM) to accelerate schedules with a
high degree of time and cost predictability.
23
The services provides by Infosys are Application Development and Maintenance,
Corporate Performance Management, Independent Validation Services, Infrastructure
Services, Packaged Application Services, Product Engineering, Systems Integration.
TATA CONSULTANCY SERVICES
TCS commenced operations in 1968, when the IT services industry didn’t exist as it
does today. Now, with a presence in 34 countries across 6 continents, & a comprehensive
range of services across diverse industries, TCS is one of the world's leading Information
Technology companies. Six of the Fortune Top 10 companies are among their valued
customers.
Tata Consultancy Services Limited (TCS) is the world-leading information
technology consulting, services, and business process outsourcing organization that
envisioned and pioneered the adoption of the flexible global business practices that today
enable companies to operate more efficiently and produce more value.
TCS is a part of one of Asia's largest conglomerates - the TATA Group -
which, with its interests in Energy, Telecommunications, Financial Services, Chemicals,
Engineering & Materials, provides them with a grounded understanding of specific business
challenges facing global companies.
INDIAN OIL CORPORATION LTD
Indian Oil Corporation Ltd. (Indian Oil) was formed in 1964 through the merger of
Indian Oil Company Ltd. (Estd. 1959) and Indian Refineries Ltd. (Estd. 1958).It is currently
India’s largest company by sales with a turnover of Rs. 1,83,204 crore (US $ 41 billion) and
profits of Rs. 4,915 crore (US $ 1.10 billion) for fiscal 2005.
Indian Oil is also the highest ranked Indian company in the prestigious Fortune
‘Global 500’ listing, having moved up 17 places to the153rd position this year based on fiscal
2005 performance. It is also the 21st largest petroleum company in the world and the No 1
petroleum trading companies among the National Oil Companies in the Asia-Pacific region.
Indian Oil and its subsidiaries account for 47% petroleum products market share
among public sector oil companies, 43.5% national refining capacity and 74% petroleum
products pipeline capacity. The Indian Oil Group of companies owns and operates 10 of
India’s 18 refineries with a combined refining capacity of 60.20 million tones per annum (1.2
million barrels per day). These include two refineries of subsidiary Chennai Petroleum
Corporation Ltd. (CPCL) and one of Bongaigaon Refinery and Petrochemicals Limited
24
(BRPL).The Company’s cross-country crude oil and product pipelines network spanning over
9,000 km meets the vital energy needs of the country.
As the flagship national oil company in the downstream sector, Indian Oil, together
with its marketing subsidiary, IBP Co. Ltd., reaches precious petroleum products to millions
of people everyday through a countrywide network of over 30,000 sales points. They are
backed for supplies by 183 bulk storage terminals and depots, 97 aviation fuel stations and 88
Indane LPG bottling plants.
OIL AND NATURAL GAS CORPORATION
In 1955, Government of India developed the oil and natural gas resources in the
various regions of the country as part of the Public Sector development. With this objective,
an Oil and Natural Gas Directorate was set up towards the end of 1955, as a subordinate office
under the then Ministry of Natural Resources and Scientific Research. The department was
constituted with a nucleus of geoscientists from the Geological survey of India.
ONGC is placed at the top of all Indian Corporates listed in Forbes 400 Global
Corporates (rank 133rd) and Financial Times Global 500 (rank 326th), by Market
Capitalization. ONGC is the only Indian company to have earned a Net Profit of over Rs
10,000 crores (2002-03).
Oil and Natural Gas Corporation Limited (ONGC) is India’s Most Valuable
Company, having a market share of above 80% in India’s Crude Oil and Natural Gas
Exploration and Production. ONGC registered the highest profit among all Indian companies
at US $ 1.92 billion (Rs. 8664.4 Crore) in the year 2003-04. Its production of Crude Oil in
2003-04 was 26.7 MMT and of Natural Gas 25.70 Billion Cubic Meters. ONGC also produce
Value-Added Products (VAP) like C2-C3; LPG; Naphtha and SKO.
25
1.4 REVIEW OF LITERATURE
In this project work, secondary data are used as a basis of analysis. In this study, Beta
and Volatility calculations and different types of trading strategies are analyzed. The current
study has been undertaken to measure the risk and variability of different company’s shares at
different point of time. It is also helpful for analyzing the company’s performance in the share
market at the time of dividend declaration. So the progress in the share market is high and we
can see the investors are in the right path or they are achieving their objectives.
Methods of Review
In this project work, the researcher used the one month share prices of ten different
company’s before dividend declaration, after dividend declaration till ex date and after ex date
for the purpose of calculating the Beta values, correlation coefficient and Volatility values and
trading strategy analysis. In order to get the Beta values Nifty is the base for all the ten
different companies. The data collected for the purpose of calculations are mainly from the
websites like nseindia.com and corresponding company’s websites.
Benefits from the Literature
The monthly prices of the shares were the main source for the Beta, coefficient of
correlation and Volatility calculation and for analyzing the different strategies.
Without these secondary sources, it is not able to do the same; the web site is one of
the much useful sources of secondary data for getting information about the share prices and
26
dividend declaration. Thus this secondary data played an important role in completing this
project.
1.5 OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVE
To identify an effective portfolio construction for the investment made by the
investors.
SECONDARY OBJECTIVES
To identify the correlation between price movement of equities corresponding
with dividend declaration.
To find out the good dividend yield companies for best investors
To help investors to made wise investment strategy
To show the beta and volatility calculation for measuring the risk and variability
of different companies share.
27
1.6 SCOPE OF THE STUDY
The study is confined to very few sectors like oil, construction, cement, IT and
Banking. The study is undertaken to know beta values, coefficient of correlation and Volatility
of ten companies from the said industries. They are:
1. ICICI
2. SBI
3. ACC
4. GUJARAT AMBUJA CEMENTS
5. GAMMON INDIA LIMITED
6. NAGARJUNA CONSTRUCTION COMPANY LIMITED
7. INFOSYS
8. TCS
9. IOC
10. ONGC
1.7 LIMITATIONS TO THE STUDY
Since the study is confined to five sectors that itself selective few
companies, a universally applicable results cannot be drawn.
The trend in dividend declaration cannot be expected to continue in the
same manner.
28
CHAPTER-II
RESEARCH METHODOLOGY
CHAPTER 2
RESEARCH METHODOLOGY
. It covers the type of research used in this project, sample size chosen, sample
description, data collection. Each will be described separately under the following headings.
Type of research
29
Research design is purely and simply the framework for a study that guides the
collection and analysis of data.
Sellitz and others (1962) define the research design as the arrangement of data
collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure. It is a conceptual structure within which research is
conducted.
This study is basically an exploratory research. Exploratory research is a study
undertaken to define nature of problem & opportunity and to gain a better understanding of
the environment within which the problem &opportunity has occurred.
Convenient Sampling
Under this method researcher is conveniently drawing the sample. Researcher is
conveniently picking samples from companies with track trend of consistency in dividend
declaration
Statistical Tools used for calculation of volatility
Beta
Beta measures the non diversifiable risk. Beta shows how the price of a security
responds to market forces. In effect, the more responsive the price of a security is to changes
in the market, the higher will be its Beta. Beta is calculated by relating the returns on a
security with the return for the market. It can be positive or negative.
Beta for each stock calculated using daily opening and closing share price each
company and corresponding daily National Stock Exchange Sensex. First, rate of returns of
companies and National Stock Exchange Sensex are calculated. The calculation as follows:
Rate of Return = share price in the closing – share price at the opening
Share price in the opening
Computation of Beta:
β = N
30
N
Coefficient of Correlation
Coefficient of correlation is a statistical technique, which measures the degree or
extent to which two or more variables fluctuate with reference to one another. Correlation
analysis helps in determining the degree of relationship between two variables but correlation
does not always imply cause and effect relationship
The coefficient of correlation is essentially the covariance taken not as an absolute
value but relative to the standard deviations of the individual securities. It indicates, in effect,
how much x and y vary together as a proportion of their combined individual variations,
measured by SD of x multiplied by SD of Y
Coefficient of correlation
=
2/12222
EXPECTED CONTRIBUTION
This study will be useful from the point of view of investors and portfolio managers
as tool for identifying the market volatility.
CHAPTER-III
31
ANALYSIS AND INTERPRETATION OF DATA
CHAPTER 3
ANALYSIS AND INTERPRETATION OF DATA
CALCULATION OF BETA
Formula used for the calculation of Beta and Standard Deviation Correlation Coefficient
This chapter provides the beta, coefficient of correlation and Volatility of shares of
ten companies.
Computation of Beta:
β = N
N
Market Return (X) = (Adj close – Open) / Open *100 (of sensex price)
Stock Return (Y) = (Adj close – open)/ Open *100 (of stock price)
32
NSE VALUE OF ICICI BANK
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)H - L C - O
4 May 2009 732.00 751.70 722.00 733.50 737.20 994539 20260 733,173,360 29.70 1.50 5 May 2009 725.00 739.80 714.55 733.35 725.47 1916509 29733 1,390,379,055 25.25 8.35 6 May 2009 737.00 749.50 716.20 722.50 733.92 1835316 30958 1,346,968,603 33.30 -14.50 7 May 2009 723.10 734.90 695.00 703.85 717.49 2180669 32285 1,564,597,731 39.90 -19.25 8 May 2009 712.85 722.80 684.00 713.75 700.73 2709386 47431 1,898,538,388 38.80 0.90 11May 2009 720.00 749.00 720.00 726.90 735.99 1735206 33729 1,277,093,435 29.00 6.90 12 May 2009 715.00 715.00 684.50 697.45 694.88 2479121 38022 1,722,680,412. 30.50 -17.55 13 May 2009 702.00 706.00 675.15 689.35 685.48 2029813 38175 1,391,402,877 30.85 -12.65 14 May 2009 700.00 713.35 691.10 698.70 703.45 1836787 33640 1,292,080,034 22.25 -1.30 15 May 2009 709.00 762.00 706.00 754.35 736.75 2387661 46361 1,759,105,821 56.00 45.35 18 May 2009 760.00 772.70 740.00 748.70 759.92 2124451 40048 1,614,414,839 32.70 -11.30 19 May 2009 753.75 754.90 716.25 722.00 731.73 1684010 29582 1,232,243,424 38.65 -31.75 20 May 2009 740.00 740.00 704.00 729.25 724.02 2018225 40888 1,461,239,312 36.00 -10.75 21 May 2009 732.50 744.00 720.00 731.70 731.51 1523633 31367 1,114,553,502 24.00 -0.80 22 May 2009 721.00 760.00 715.00 754.05 742.19 1838423 36514 1,364,451,911 45.00 33.05 25 May 2009 760.00 776.80 665.05 678.00 710.12 3565241 54796 2,531,761,953 111.75 -82.00 26 May 2009 683.00 713.00 683.00 695.00 697.77 2981209 39933 2,080,196,860 30.00 12.00 27 May 2009 685.00 685.00 642.55 654.55 657.56 2281854 39115 1,500,446,610 42.45 -30.45 28 May 2009 654.55 668.70 622.15 636.45 637.35 2072218 40461 1,320,723,603 46.55 -18.10
Table 1.1 shows about the beta value of ICICI Bank
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
33
4 May 2009 732.00 733.50 3478.57 3654 5.04 0.20 1.00 25.405 May 2009 725.00 733.35 3664.50 3661.59 -0.07 1.15 -0.08 0.00496 May 2009 737.00 722.50 3662 3625.05 -1.00 -1.96 1.96 17 May 2009 723.10 703.85 3671.5 3683.90 0.34 -2.66 -0.90 0.118 May 2009 712.85 713.75 3681.80 3620.70 -1.66 0.12 -0.19 2.7611 May 2009 720.00 726.90 3615.75 3554.60 -1.69 0.95 -1.61 2.8612 May 2009 715.00 697.45 3554.65 3681.10 3.55 -2.45 -8.70 12.6013 May 2009 702.00 689.35 3668.75 3621.85 -1.27 -1.80 2.29 1.6114 May 2009 700.00 698.70 3631.90 3593.45 -1.05 -0.18 0.19 1.1015 May 2009 709.00 754.35 3595.85 3671.65 2.10 6.39 13.42 4.4118 May 2009 760.00 748.70 3673.15 4323.15 17.69 -1.48 -26.18 312.9319 May 2009 753.75 722.00 4324.95 4318.45 -0.15 -4.21 0.63 0.0220 May 2009 740.00 729.25 4318.75 4320.30 0.03 -1.45 -0.04 0.000921 May 2009 732.50 731.70 4217.30 4210.90 -0.15 -0.10 0.01 0.0222 May 2009 721.00 754.05 4211.85 4238.50 0.63 4.58 2.89 0.4025 May 2009 760.00 678.00 4213.10 4237.55 0.58 -10.78 -6.25 0.3426 May 2009 683.00 695.00 4239.55 4116.70 -2.89 1.75 -5.05 8.3527 May 2009 685.00 654.55 4117.30 4276.05 3.85 -4.44 -17.09 14.8228 May 2009 654.55 636.45 4276.15 4337.10 1.42 -2.76 -3.92 2.01
25.30 -19.13 -47.62 390.75
Calculation of Beta
β = N
N
β = -47.62 – (25.30) (19.13) / 390.75 – (25.30)2
β = 1.7
INTERPRETATION:
The above table shows as beta value is greater than one, so there is
high risk to the investor.
Chart 1.1 shows about the market return and stock return of
ICICI Bank
34
NSE VALUE OF ACC LTD
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)H - L C - O
35
4 May 2009 846.00 873.00 842.00 852.65 858.13 87061 2698 74,709,874.00 31.00 6.65 5 May 2009 848.00 858.00 826.10 853.15 843.01 96947 3003 81,726,853.00 31.90 5.15 6 May 2009 842.00 849.00 821.00 826.55 836.02 70282 2282 58,757,105.00 28.00 -15.45 7 May 2009 817.00 820.90 750.40 758.35 770.53 185848 5868 143,200,552.00 70.50 -58.65 8 May 2009 770.00 774.85 732.85 750.65 749.96 135378 4471 101,527,498.00 42.00 -19.35 11May 2009753. 760.00 772.90 733.25 740.50 755.20 99616 3227 75,229,956.00 39.65 -19.50 12 May 2009 729.80 750.00 709.00 744.55 729.90 123504 4506 90,145,384.00 41.00 14.75 13 May 2009 750.00 772.70 745.00 768.65 757.80 117866 3473 89,318,813.00 27.70 18.65 14 May 2009 777.00 788.95 763.50 781.95 778.03 114238 3517 88,880,536.00 25.45 4.95 15 May 2009 790.00 802.80 778.50 799.05 794.11 121787 3878 96,712,875.00 24.30 9.05 18 May 2009 805.00 812.20 783.15 794.00 797.24 103975 3309 82,893,273.00 29.05 -11.00 19 May 2009 801.00 808.70 763.10 768.90 783.20 95011 2875 74,412,628.00 45.60 -32.10 20 May 2009 760.00 774.80 743.35 763.90 755.22 140176 4484 105,863,483.00 31.45 3.90 21 May 2009 775.00 777.00 753.50 761.30 761.81 74164 2395 56,499,131.00 23.50 -13.70 22 May 2009 753.80 774.00 752.00 766.90 764.58 77288 2894 59,093,217.00 22.00 13.10 25 May 2009 770.00 774.00 720.00 723.80 741.64 140703 3716 104,350,718.00 54.00 -46.20 26 May 2009 727.00 770.00 720.00 762.45 743.76 217147 4581 161,506,086.00 50.00 35.45 27 May 2009 755.00 809.10 738.50 786.00 786.16 289472 8817 227,572,607.00 70.60 31.00 28 May 2009 796.00 796.00 774.00 782.50 784.96 219052 4258 171,947,064.00 22.00 -13.50
Table 1.2 shows about the beta value of Acc Ltd
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
4 May 2009 846.00 852.65 3478.57 3654 5.04 0.78 3.93 25.405 May 2009 848.00 853.15 3664.50 3661.59 -0.07 0.60 -0.04 0.00496 May 2009 842.00 826.55 3662 3625.05 -1.00 -1.83 1.83 17 May 2009 817.00 758.35 3671.5 3683.90 0.34 -7.17 -2.44 0.118 May 2009 770.00 750.65 3681.80 3620.70 -1.66 -2.51 4.17 2.7611 May 2009753. 760.00 740.50 3615.75 3554.60 -1.69 -2.56 4.33 2.8612 May 2009 729.80 744.55 3554.65 3681.10 3.55 2.02 7.17 12.6013 May 2009 750.00 768.65 3668.75 3621.85 -1.27 2.48 -3.15 1.6114 May 2009 777.00 781.95 3631.90 3593.45 -1.05 0.63 -0.66 1.1015 May 2009 790.00 799.05 3595.85 3671.65 2.10 1.14 2.39 4.4118 May 2009 805.00 794.00 3673.15 4323.15 17.69 -1.36 -24.05 312.9319 May 2009 801.00 768.90 4324.95 4318.45 -0.15 4.00 -0.6 0.0220 May 2009 760.00 763.90 4318.75 4320.30 0.03 0.51 0.01 0.000921 May 2009 775.00 761.30 4217.30 4210.90 -0.15 -1.76 0.26 0.0222 May 2009 753.80 766.90 4211.85 4238.50 0.63 1.73 1.08 0.4025 May 2009 770.00 723.80 4213.10 4237.55 0.58 -6.00 -3.48 0.3426 May 2009 727.00 762.45 4239.55 4116.70 -2.89 4.87 -14.07 8.3527 May 2009 755.00 786.00 4117.30 4276.05 3.85 4.10 15.79 14.8228 May 2009 796.00 782.50 4276.15 4337.10 1.42 1.70 2.41 2.01
25.30 1.37 -9.9 390.75
36
Calculation of Beta
β = N
N
β = -9.9 – (25.30) (1.37)/ 390.75 – (25.30)2
β = 0.17
INTERPRETATION:
The above table shows as beta value is less than one, so there is less
risk to the investor.
Chart 1.2 shows about the market return and stock
return of Acc Ltd
37
NSE VALUE OF GUJARAT AMBUJA CEMENTS
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)
H - L C - O
4 May 2009 27.00 28.20 26.50 26.55 26.87 5830 55 156,666.00 1.70 -0.45 5 May 2009 26.00 26.00 25.55 25.95 25.89 7857 48 203,454.00 0.45 -0.05 6 May 2009 25.20 27.15 24.80 24.90 25.55 12613 79 322,266.00 2.35 -0.30 7 May 2009 24.30 24.35 23.70 23.70 23.86 6075 36 144,973.00 0.65 -0.60
38
8 May 2009 23.50 23.50 22.55 22.55 22.75 3247 35 73,858.00 0.95 -0.95 11May 2009 22.50 22.50 21.45 21.50 21.77 13249 90 288,495.00 1.05 -1.00 12 May 2009 21.95 22.00 20.85 21.05 21.15 11363 48 240,345.00 1.15 -0.90 13 May 2009 21.00 21.90 20.60 21.00 21.07 17377 69 366,167.00 1.30 0.00 14 May 2009 21.75 21.75 20.00 20.15 20.62 19631 94 404,729.00 1.75 -1.60 15 May 2009 20.00 20.95 19.80 20.00 20.13 17577 60 353,892.00 1.15 0.00 18 May 2009 20.95 20.95 19.50 19.85 20.08 24123 105 484,465.00 1.45 -1.10 19 May 2009 20.10 20.75 19.60 19.80 19.92 10478 63 208,767.00 1.15 -0.30 20 May 2009 20.65 20.65 19.20 19.75 19.71 12086 88 238,198.00 1.45 -0.90 21 May 2009 20.00 20.00 19.15 19.85 19.88 13406 57 266,550.00 0.85 -0.15 22 May 2009 20.00 20.00 18.90 19.00 19.52 18912 97 369,107.00 1.10 -1.00 25 May 2009 19.95 19.95 19.05 19.15 19.76 13699 80 270,636.00 0.90 -0.80 26 May 2009 20.00 20.00 18.70 19.40 19.15 6539 38 125,204.00 1.30 -0.60 27 May 2009 18.50 19.20 18.45 18.45 18.74 4270 32 80,018.00 0.75 -0.05 28 May 2009 18.50 18.50 17.70 17.75 17.91 5291 53 94,756.00 0.80 -0.75
Table 1.3 shows about the beta value of Gujarat
Ambuja Cements
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
4 May 2009 27.00 26.55 3478.57 3654 5.04 -1.67 -8.41 25.405 May 2009 26.00 25.95 3664.50 3661.59 -0.07 -0.19 0.01 0.00496 May 2009 25.20 24.90 3662 3625.05 -1.00 -1.19 1.19 17 May 2009 24.30 23.70 3671.5 3683.90 0.34 -2.46 -0.83 0.118 May 2009 23.50 22.55 3681.80 3620.70 -1.66 -4.04 6.71 2.76
39
11 May 2009 22.50 21.50 3615.75 3554.60 -1.69 -4.44 7.50 2.8612 May 2009 21.95 21.05 3554.65 3681.10 3.55 -4.10 -14.55 12.6013 May 2009 21.00 21.00 3668.75 3621.85 -1.27 0 0 1.6114 May 2009 21.75 20.15 3631.90 3593.45 -1.05 -7.35 7.71 1.1015 May 2009 20.00 20.00 3595.85 3671.65 2.10 0 0 4.4118 May 2009 20.95 19.85 3673.15 4323.15 17.69 -5.25 -92.87 312.9319 May 2009 20.10 19.80 4324.95 4318.45 -0.15 -1.49 0.22 0.0220 May 2009 20.65 19.75 4318.75 4320.30 0.03 -4.35 0.13 0.000921 May 2009 20.00 19.85 4217.30 4210.90 -0.15 -0.75 0.11 0.0222 May 2009 20.00 19.00 4211.85 4238.50 0.63 -5.00 -3.15 0.4025 May 2009 19.95 19.15 4213.10 4237.55 0.58 -4.01 -2.32 0.3426 May 2009 20.00 19.40 4239.55 4116.70 -2.89 -3.00 8.67 8.3527 May 2009 18.50 18.45 4117.30 4276.05 3.85 -0.27 1.03 14.8228 May 2009 18.50 17.75 4276.15 4337.10 1.42 -4.05 5.75 2.01
25.30 -53.61 -83.10 390.75
Calculation of Beta
β = N
N
β = -83.10 – (25.30) (-53.61) / 390.75 – (25.30)2
β = 0.06
INTERPRETATION:
The above table shows as beta value is less than one, so there is less
risk to the investor.
Chart 1.3 shows about the market return and stock return of
Gujarat Ambuja Cements
40
NSE VALUE OF INFOSYS
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No.ofShares
No.ofTrades
Total Turnover(Rs.)
* Spread (Rs.)H - L C - O
4 May 2009 1,724.95 1,775.00 1,690.00 1,720.35 1,722.40 143796 5090 247,674,354.00 85.00 -4.60 5 May 2009 1,702.00 1,733.75 1,685.35 1,724.15 1,712.40 83072 4208 142,252,089.00 48.40 22.15
41
6 May 2009 1,740.00 1,744.70 1,672.00 1,710.50 1,707.58 159038 7219 271,569,474.00 72.70 -29.50 7 May 2009 1,710.00 1,760.00 1,694.00 1,721.45 1,736.62 166085 7004 288,427,038.00 66.00 11.45 8 May 2009 1,725.00 1,785.00 1,720.00 1,771.10 1,761.71 147777 7251 260,339,952.00 65.00 46.10 11May 2009 1,775.00 1,790.00 1,749.15 1,765.75 1,770.49 99748 4624 176,602,767.00 40.85 -9.25 12 May 2009 1,699.00 1,770.00 1,699.00 1,746.05 1,744.62 178176 5096 310,848,898.00 71.00 47.05 13 May 2009 1,751.10 1,773.90 1,722.20 1,759.15 1,748.00 109492 4409 191,391,536.00 51.70 8.05 14 May 2009 1,780.00 1,797.70 1,746.05 1,757.75 1,776.61 97423 4971 173,082,848.00 51.65 -22.25 15 May 2009 1,770.00 1,838.70 1,752.35 1,826.75 1,798.41 216841 10615 389,968,997.00 86.35 56.75 18 May 2009 1,820.20 1,830.00 1,772.55 1,783.75 1,794.04 136266 5958 244,466,061.00 57.45 -36.45 19 May 2009 1,785.05 1,799.00 1,760.00 1,776.90 1,777.59 115372 4205 205,083,638.00 39.00 -8.15 20 May 2009 1,776.80 1,812.90 1,771.05 1,796.70 1,791.91 99230 4475 177,811,131.00 41.85 19.90 21 May 2009 1,785.00 1,800.00 1,765.00 1,795.90 1,779.14 76312 3030 135,770,045.00 35.00 10.90 22 May 2009 1,780.00 1,810.00 1,750.00 1,800.90 1,774.98 111967 4144 198,739,392.00 60.00 20.90 25 May 2009 1,799.95 1,819.00 1,750.00 1,760.00 1,771.31 208007 5603 368,444,368.00 69.00 -39.95 26 May 2009 1,770.00 1,775.00 1,726.00 1,739.20 1,752.87 144282 4159 252,908,165.00 49.00 -30.80 27 May 2009 1,725.00 1,733.00 1,688.00 1,705.70 1,707.18 225767 4670 385,425,028.00 45.00 -19.30 28 May 2009 1,708.00 1,712.00 1,670.00 1,676.75 1,688.48 201347 5109 339,971,094.00 42.00 -31.25
Table 1.4 shows about the beta values of Infosys
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
4 May 2009 1,724.95 1,720.35 3478.57 3654 5.04 -0.26 -1.31 25.405 May 2009 1,702.00 1,724.15 3664.50 3661.59 -0.07 1.30 -0.09 0.00496 May 2009 1,740.00 1,710.50 3662 3625.05 -1.00 -1.70 1.70 17 May 2009 1,710.00 1,721.45 3671.5 3683.90 0.34 0.66 0.22 0.118 May 2009 1,725.00 1,771.10 3681.80 3620.70 -1.66 2.67 4.43 2.7611 May 2009 1,775.00 1,765.75 3615.75 3554.60 -1.69 -0.52 0.87 2.8612 May 2009 1,699.00 1,746.05 3554.65 3681.10 3.55 2.76 9.79 12.6013 May 2009 1,751.10 1,759.15 3668.75 3621.85 -1.27 0.45 0.57 1.6114 May 2009 1,780.00 1,757.75 3631.90 3593.45 -1.05 -1.25 1.31 1.1015 May 2009 1,770.00 1,826.75 3595.85 3671.65 2.10 3.20 6.72 4.4118 May 2009 1,820.20 1,783.75 3673.15 4323.15 17.69 2.00 35.38 312.9319 May 2009 1,785.05 1,776.90 4324.95 4318.45 -0.15 -0.45 0.06 0.0220 May 2009 1,776.80 1,796.70 4318.75 4320.30 0.03 1.11 0.03 0.000921 May 2009 1,785.00 1,795.90 4217.30 4210.90 -0.15 0.61 0.09 0.0222 May 2009 1,780.00 1,800.90 4211.85 4238.50 0.63 1.17 0.73 0.4025 May 2009 1,799.95 1,760.00 4213.10 4237.55 0.58 -2.21 -1.28 0.3426 May 2009 1,770.00 1,739.20 4239.55 4116.70 -2.89 -1.74 5.02 8.3527 May 2009 1,725.00 1,705.70 4117.30 4276.05 3.85 -1.11 -4.27 14.8228 May 2009 1,708.00 1,676.75 4276.15 4337.10 1.42 1.82 2.58 2.01
25.30 8.52 62.55 390.75
Calculation of Beta
β = N
N
42
β = 62.55 – (25.30) (8.52) / 390.75 – (25.30)2
β = 0.61
INTERPRETATION:
The above table shows as beta value is less than one, so there is less
risk to the investor.
Chart 1.4 shows about the market return and stock
return of Infosys
43
NSE VALUE OF Indian Oil Corporation
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)
H - L C - O
4 May 2009 500.00 567.90 500.00 562.45 557.50 224082 4050 124,925,787.00 67.90 62.45 5 May 2009 562.00 578.00 561.00 572.85 570.95 171502 4259 97,918,449.00 17.00 10.85 6 May 2009 570.00 574.70 558.00 562.95 565.75 208085 2398 117,724,785.00 16.70 -7.05 7 May 2009 565.05 570.00 538.00 550.55 549.92 140339 2804 77,175,014.00 32.00 -14.50 8 May 2009 555.00 559.35 541.15 551.80 550.14 153267 1744 84,318,363.00 18.20 -3.20 11May 2009 553.00 556.00 538.35 545.45 544.45 208390 3693 113,457,861.00 17.65 -7.55 12 May 2009 540.00 554.00 540.00 544.95 547.12 116120 2541 63,531,527.00 14.00 4.95 13 May 2009 548.00 551.00 540.00 542.75 544.28 52918 1379 28,802,417.00 11.00 -5.25 14 May 2009 550.00 552.00 526.10 534.55 544.37 103385 1709 56,279,452.00 25.90 -15.45 15 May 2009 535.00 541.90 533.00 537.90 537.20 50896 1165 27,341,549.00 8.90 2.90 18 May 2009 545.00 559.00 539.00 545.40 551.05 98602 2601 54,334,373.00 20.00 0.40 19 May 2009 550.00 550.50 525.15 532.05 536.81 322980 1997 173,378,775.00 25.35 -17.95 20 May 2009 534.00 547.00 523.10 541.20 539.08 240516 2944 129,658,350.00 23.90 7.20 21 May 2009 520.00 567.00 520.00 549.35 553.63 265804 8272 147,157,228.00 47.00 29.35 22 May 2009 552.00 565.00 545.25 562.60 557.94 169482 4577 94,561,013.00 19.75 10.60 25 May 2009 568.00 571.00 531.00 540.75 551.26 98452 2949 54,272,819.00 40.00 -27.25 26 May 2009 550.00 551.00 535.50 541.50 541.26 45535 1162 24,646,175.00 15.50 -8.50 27 May 2009 544.00 574.70 536.00 562.35 559.58 234175 6498 131,039,699.00 38.70 18.35 28 May 2009 562.00 573.00 554.00 565.60 567.09 131525 3767 74,586,013.00 19.00 3.60
Table 1.5 shows about the beta values of Indian oil Corporation
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
4 May 2009 500.00 562.45 3478.57 3654 5.04 12.49 62.94 25.405 May 2009 562.00 572.85 3664.50 3661.59 -0.07 1.93 0.13 0.00496 May 2009 570.00 562.95 3662 3625.05 -1.00 -1.23 1.23 17 May 2009 565.05 550.55 3671.5 3683.90 0.34 -2.56 -0.87 0.11
44
8 May 2009 555.00 551.80 3681.80 3620.70 -1.66 -0.57 0.94 2.7611 May 2009 553.00 545.45 3615.75 3554.60 -1.69 -1.36 2.29 2.8612 May 2009 540.00 544.95 3554.65 3681.10 3.55 0.91 3.23 12.6013 May 2009 548.00 542.75 3668.75 3621.85 -1.27 -0.95 1.20 1.6114 May 2009 550.00 534.55 3631.90 3593.45 -1.05 -2.80 2.94 1.1015 May 2009 535.00 537.90 3595.85 3671.65 2.10 0.54 1.13 4.4118 May 2009 545.00 545.40 3673.15 4323.15 17.69 0.0007 0.01 312.9319 May 2009 550.00 532.05 4324.95 4318.45 -0.15 -3.26 0.48 0.0220 May 2009 534.00 541.20 4318.75 4320.30 0.03 1.34 0.04 0.000921 May 2009 520.00 549.35 4217.30 4210.90 -0.15 5.64 0.84 0.0222 May 2009 552.00 562.60 4211.85 4238.50 0.63 1.92 1.20 0.4025 May 2009 568.00 540.75 4213.10 4237.55 0.58 -4.79 -2.77 0.3426 May 2009 550.00 541.50 4239.55 4116.70 -2.89 -0.01 0.02 8.3527 May 2009 544.00 562.35 4117.30 4276.05 3.85 3.37 12.97 14.8228 May 2009 562.00 565.60 4276.15 4337.10 1.42 0.64 0.90 2.01
25.30 11.25 88.85 390.75
Calculation of Beta
β = N
N
β = 88.85 – (25.3) (11.25) / 390.75 – (25.30)2
β = 0.78
INTERPRETATION:
The above table shows as beta value is less than one, so there is less
risk to the investor.
Chart 1.5 shows about the market return and stock return of
Indian Oil Corporation
45
NSE VALUE OF NAGARJUNA CONSTRUCTION
COMPANY LIMITED
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)H - L C - O
4 May 2009 134.00 139.90 127.85 130.95 133.72 486920 4843 65,112,684.00 12.05 -3.05 5 May 2009 127.85 135.45 124.00 133.05 131.72 348807 3379 45,944,609.00 .45 5.20 6 May 2009 130.00 136.90 124.00 126.90 132.05 387299 3734 51,141,579.00 12.90 -3.10 7 May 2009 127.00 128.70 116.00 122.70 123.08 241103 2876 29,673,940.00 12.70 -4.30 8 May 2009 126.35 126.90 116.15 120.95 121.61 438403 3333 53,315,699.00 10.75 -5.40 11May 2009 122.90 125.65 120.25 121.55 123.52 333395 3312 41,181,932.00 5.40 -1.35 12 May 2009 116.50 122.65 116.00 121.00 120.59 266860 2294 32,180,993.00 6.65 4.50 13 May 2009 122.95 127.40 120.00 124.85 124.91 505581 3982 63,152,207.00 7.40 1.90
46
14 May 2009 126.30 133.00 125.40 128.90 129.01 481524 4885 62,119,237.00 7.60 2.60 15 May 2009 131.00 138.00 125.25 136.35 132.84 723203 6546 96,067,615.00 12.75 5.35 18 May 2009 139.00 146.50 137.50 142.80 142.46 1208137 9772 172,112,160.00 9.00 3.80 19 May 2009 145.70 145.80 132.80 134.80 139.55 402249 4227 56,132,292.00 13.00 -10.90 20 May 2009 135.00 140.10 131.00 137.40 136.44 581768 6468 79,373,945.00 9.10 2.40 21 May 2009 138.90 138.90 133.55 137.50 136.77 228723 2600 31,281,838.00 5.35 -1.40 22 May 2009 137.00 141.60 134.00 140.25 138.74 572262 3944 79,398,253.00 7.60 3.25 25 May 2009 141.45 144.30 125.35 128.65 137.55 408446 4491 56,180,996.00 18.95 -12.80 26 May 2009 128.40 135.50 126.55 132.65 131.13 218297 3101 28,625,836.00 8.95 4.25 27 May 2009 130.00 130.90 120.50 126.20 125.21 538272 4249 67,398,687.00 10.40 -3.80 28 May 2009 125.50 133.50 125.00 130.25 128.96 548982 3460 70,795,705.00 8.50 4.75
Table 1.6 shows about the beta values of Nagarjuna Construction Company Limited
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
4 May 2009 134.00 130.95 3478.57 3654 5.04 -2.27 -11.44 25.405 May 2009 127.85 133.05 3664.50 3661.59 -0.07 4.06 -0.28 0.00496 May 2009 130.00 126.90 3662 3625.05 -1.00 -2.38 2.38 17 May 2009 127.00 122.70 3671.5 3683.90 0.34 -3.38 -1.14 0.118 May 2009 126.35 120.95 3681.80 3620.70 -1.66 -4.27 7.08 2.7611 May 2009 122.90 121.55 3615.75 3554.60 -1.69 -1.09 1.84 2.8612 May 2009 116.50 121.00 3554.65 3681.10 3.55 3.86 13.70 12.6013 May 2009 122.95 124.85 3668.75 3621.85 -1.27 1.54 1.95 1.6114 May 2009 126.30 128.90 3631.90 3593.45 -1.05 2.05 -2.15 1.1015 May 2009 131.00 136.35 3595.85 3671.65 2.10 4.08 8.56 4.4118 May 2009 139.00 142.80 3673.15 4323.15 17.69 2.73 48.29 312.9319 May 2009 145.70 134.80 4324.95 4318.45 -0.15 -7.48 1.07 0.0220 May 2009 135.00 137.40 4318.75 4320.30 0.03 1.78 0.05 0.000921 May 2009 138.90 137.50 4217.30 4210.90 -0.15 -1 0.15 0.0222 May 2009 137.00 140.25 4211.85 4238.50 0.63 2.37 1.50 0.4025 May 2009 141.45 128.65 4213.10 4237.55 0.58 -9.04 -5.24 0.3426 May 2009 128.40 132.65 4239.55 4116.70 -2.89 3.30 -9.53 8.3527 May 2009 130.00 126.20 4117.30 4276.05 3.85 -2.92 -11.24 14.8228 May 2009 125.50 130.25 4276.15 4337.10 1.42 3.78 5.36 2.01
25.30 -2.28 48.63 390.75
47
Calculation of Beta
β = N
N
β = 48.63 – (25.30) (-2.28) / 390.75 – (25.30)
β = 0.42
INTERPRETATION:
The above table shows as beta value is less than one, so there is less
risk to the investor.
Chart 1.6 shows about the market return and stock return of
Nagarjuna Construction Company Limited
48
NSE VALUE OF OIL AND NATURAL GAS CORPPORATION
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)H - L C - O
4 May 2009 1,112.00 1,167.00 1,093.50 1,123.10 1,142.52 261432 6788 298,690,383.00 73.50 11.10 5 May 2009 1,100.00 1,138.00 1,100.00 1,124.55 1,121.68 136586 5469 153,205,370.00 38.00 24.55 6 May 2009 1,130.00 1,130.00 1,052.10 1,064.25 1,091.14 345263 7998 376,730,200.00 77.90 -65.75 7 May 2009 1,050.00 1,077.00 1,001.10 1,012.40 1,032.76 508818 9490 525,486,186.00 75.90 -37.60 8 May 2009 1,000.00 1,020.00 973.30 1,010.05 994.90 512227 15256 509,615,455.00 46.70 10.05 11May 2009 1,017.00 1,019.00 971.25 993.70 989.08 505153 11161 499,638,099.00 47.75 -23.30 12 May 2009 980.00 1,042.65 978.90 1,026.45 1,019.48 523748 14938 533,948,859.00 63.75 46.45 13 May 2009 1,034.00 1,056.00 1,027.00 1,051.00 1,042.83 346784 11792 361,635,166.00 29.00 17.00 14 May 2009 1,045.25 1,052.00 1,005.00 1,025.20 1,022.85 485239 11092 496,326,552.00 47.00 -20.05 15 May 2009 1,035.00 1,048.00 1,009.00 1,040.90 1,026.00 327640 8294 336,157,274.00 39.00 5.90 18 May 2009 1,055.00 1,088.70 1,041.15 1,068.05 1,070.30 215485 6678 230,633,257.00 47.55 13.05 19 May 2009 1,078.00 1,089.00 1,062.50 1,067.10 1,074.11 308004 7416 330,828,816.00 26.50 -10.90 20 May 2009 1,067.00 1,083.00 1,046.00 1,052.60 1,054.17 263921 5579 278,218,795.00 37.00 -14.40 21 May 2009 1,081.10 1,155.70 1,076.10 1,126.45 1,125.75 1922749 33992 2,164,539,961.00 79.60 45.35 22 May 2009 1,104.00 1,140.50 1,091.15 1,134.65 1,125.51 806485 13564 907,706,231.00 49.35 30.65 25 May 2009 1,145.00 1,150.00 1,054.00 1,070.35 1,095.42 546666 12031 598,826,725.00 96.00 -74.65 26 May 2009 1,080.50 1,080.50 1,030.00 1,049.95 1,048.64 295532 7706 309,907,109.00 50.50 -30.55 27 May 2009 1,049.95 1,055.00 996.00 1,009.15 1,016.44 259033 7608 263,291,092.00 59.00 -40.80 28 May 2009 1,025.00 1,029.00 990.00 998.95 999.34 196290 5972 196,159,684.00 39.00 -26.05
Table 1.7 shows about the beta values of Oil and Natural
Gas Corporation
49
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
4 May 2009 1,112.00 1,123.10 3478.57 3654 5.04 0.99 4.98 25.405 May 2009 1,100.00 1,124.55 3664.50 3661.59 -0.07 2.23 -0.15 0.00496 May 2009 1,130.00 1,064.25 3662 3625.05 -1.00 -5.81 5.81 17 May 2009 1,050.00 1,012.40 3671.5 3683.90 0.34 -3.58 -1.21 0.118 May 2009 1,000.00 1,010.05 3681.80 3620.70 -1.66 1 -1.66 2.7611 May 2009 1,017.00 993.70 3615.75 3554.60 -1.69 2.29 -3.87 2.8612 May 2009 980.00 1,026.45 3554.65 3681.10 3.55 4.73 16.79 12.6013 May 2009 1,034.00 1,051.00 3668.75 3621.85 -1.27 1.64 -2.08 1.6114 May 2009 1,045.25 1,025.20 3631.90 3593.45 -1.05 -1.91 2.00 1.1015 May 2009 1,035.00 1,040.90 3595.85 3671.65 2.10 0.57 1.197 4.4118 May 2009 1,055.00 1,068.05 3673.15 4323.15 17.69 1.23 21.75 312.9319 May 2009 1,078.00 1,067.10 4324.95 4318.45 -0.15 -1.01 0.15 0.0220 May 2009 1,067.00 1,052.60 4318.75 4320.30 0.03 -1.34 -0.04 0.000921 May 2009 1,081.10 1,126.45 4217.30 4210.90 -0.15 4.31 -0.64 0.0222 May 2009 1,104.00 1,134.65 4211.85 4238.50 0.63 2.77 1.74 0.4025 May 2009 1,145.00 1,070.35 4213.10 4237.55 0.58 -6.51 -3.77 0.3426 May 2009 1,080.50 1,049.95 4239.55 4116.70 -2.89 -2.82 8.14 8.3527 May 2009 1,049.95 1,009.15 4117.30 4276.05 3.85 -3.88 -14.93 14.8228 May 2009 1,025.00 998.95 4276.15 4337.10 1.42 -2.54 -3.6 2.01
25.30 -6.83 30.6 390.75
Calculation of Beta
β = N
N
β = 30.60 – (25.30) (-6.83) / 390.75 – (25.30)2
β = 0.57
INTERPRETATION:
The above table shows as beta value is less than one, so there is less
risk to the investor.
Chart 1.7 shows about the market return and stock return of
Oil and Natural Gas Corporation
50
NSE VALUE OF STATE BANK OF INDIA
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)
H - L C - O
4 May 2009 1,623.90 1,673.70 1,612.00 1,642.00 1,650.71 544000 21704 897,987,353.00 61.70 18.105 May 2009 1,634.00 1,722.00 1,620.00 1,714.10 1,693.61 736347 30740 1,247,086,537.00 102.00 80.106 May 2009 1,725.00 1,725.00 1,654.50 1,663.40 1,685.65 640633 22197 1,079,885,099.00 70.50 -61.607 May 2009 1,672.00 1,729.00 1,660.00 1,702.20 1,696.55 843253 32376 1,430,624,781.00 69.00 30.208 May 2009 1,725.00 1,744.90 1,680.00 1,724.35 1,715.76 624982 27302 1,072,320,825.00 64.90 -0.6511May 2009 1,735.00 1,759.50 1,686.10 1,694.75 1,720.12 629308 23981 1,082,488,153.00 73.40 -40.2512 May 2009 1,694.70 1,724.00 1,663.00 1,708.35 1,701.07 592613 24067 1,008,074,194.00 61.00 13.6513 May 2009 1,725.00 1,731.00 1,696.00 1,716.50 1,712.74 400117 16095 685,296,153.00 35.00 -8.5014 May 2009 1,735.00 1,740.00 1,697.15 1,704.30 1,717.90 502872 19269 863,883,812.00 42.85 -30.7015 May 2009 1,715.00 1,759.90 1,692.60 1,748.95 1,725.91 533863 21614 921,397,735.00 67.30 33.9518 May 2009 1,760.00 1,777.60 1,737.00 1,765.10 1,762.36 517919 19447 912,759,103.00 40.60 5.10 19 May 2009 1,780.00 1,781.70 1,735.60 1,742.05 1,755.19 487124 16350 854,993,950.00 46.10 -37.95
51
20 May 2009 1,737.90 1,792.00 1,724.00 1,779.80 1,765.44 536145 19617 946,532,128.00 68.00 41.9021 May 2009 1,791.00 1,794.40 1,734.15 1,758.90 1,754.91 412677 15522 724,212,556.00 60.25 -32.1022 May 2009 1,754.00 1,820.00 1,740.05 1,810.65 1,792.46 588701 21190 1,055,225,462.00 79.95 56.6525 May 2009 1,815.00 1,840.00 1,635.00 1,655.00 1,713.85 1156976 39979 1,982,878,708.00 205.00 -160.0026 May 2009 1,670.00 1,694.60 1,616.55 1,636.35 1,641.78 846044 21996 1,389,018,496.00 78.05 -33.6527 May 2009 1,630.00 1,630.00 1,570.15 1,587.00 1,589.73 671593 25395 1,067,651,575.00 59.85 -43.0028 May 2009 1,580.00 1,624.80 1,570.60 1,601.95 1,601.03 550159 24355 880,819,568.00 54.20 21.95
Table 1.8 shows about the beta values of State Bank of India
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
4 May 2009 1,623.90 1,642.00 3478.57 3654 5.04 1.11 5.59 25.405 May 2009 1,634.00 1,714.10 3664.50 3661.59 -0.07 4.90 -0.34 0.00496 May 2009 1,725.00 1,663.40 3662 3625.05 -1.00 -3.57 3.57 17 May 2009 1,672.00 1,702.20 3671.5 3683.90 0.34 1.80 0.61 0.118 May 2009 1,725.00 1,724.35 3681.80 3620.70 -1.66 -0.03 0.04 2.7611 May 2009 1,735.00 1,694.75 3615.75 3554.60 -1.69 -2.31 3.90 2.8612 May 2009 1,694.70 1,708.35 3554.65 3681.10 3.55 0.80 2.84 12.6013 May 2009 1,725.00 1,716.50 3668.75 3621.85 -1.27 -0.49 0.62 1.6114 May 2009 1,735.00 1,704.30 3631.90 3593.45 -1.05 -1.76 1.84 1.1015 May 2009 1,715.00 1,748.95 3595.85 3671.65 2.10 1.97 4.13 4.4118 May 2009 1,760.00 1,765.10 3673.15 4323.15 17.69 0.28 4.95 312.9319 May 2009 1,780.00 1,742.05 4324.95 4318.45 -0.15 -2.13 0.31 0.0220 May 2009 1,737.90 1,779.80 4318.75 4320.30 0.03 2.41 0.07 0.000921 May 2009 1,791.00 1,758.90 4217.30 4210.90 -0.15 -1.79 0.26 0.0222 May 2009 1,754.00 1,810.65 4211.85 4238.50 0.63 3.22 2.02 0.4025 May 2009 1,815.00 1,655.00 4213.10 4237.55 0.58 -8.81 -5.10 0.3426 May 2009 1,670.00 1,636.35 4239.55 4116.70 -2.89 -2.01 5.80 8.3527 May 2009 1,630.00 1,587.00 4117.30 4276.05 3.85 -2.63 -10.12 14.8228 May 2009 1,580.00 1,601.95 4276.15 4337.10 1.42 1.38 0.04 2.01
25.30 -7.66 20.35 390.75
Calculation of Beta
β = N
N
β = 20.35 – (25.30) (-7.66) / 390.75 – (20.35)2
β = 0.69
INTERPRETATION:
52
The above table shows as beta value is less than one, so there is less
risk to the investor.
Chart 1.8 shows about the market return and stock return of
State Bank of India
53
NSE VALUE OF TATA CONSULTANCY SERVICES
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)
H - L C - O
4 May 2009 764.00 785.00 764.00 778.60 774.86 339566 6548 263,117,223.00 21.00 14.60 5 May 2009 392.70 393.00 370.05 389.80 385.28 435141 10302 167,649,007.00 22.95 -2.90 6 May 2009 380.00 394.90 375.30 379.00 381.12 458299 9571 174,667,395.00 19.60 -1.00 7 May 2009 370.00 393.50 370.00 379.75 383.59 321161 7799 123,195,238.00 23.50 9.75 8 May 2009 383.00 392.40 374.50 380.85 385.39 349964 7116 134,873,368.00 17.90 -2.15 11May 2009 387.80 388.00 368.00 369.75 377.51 372042 9414 140,449,227.00 20.00 -18.05 12 May 2009 360.00 377.00 355.25 366.20 368.03 400450 6930 147,378,889.00 21.75 6.20 13 May 2009 367.00 387.70 360.60 382.05 376.15 406331 8476 152,840,199.00 27.10 15.05 14 May 2009 384.00 391.95 373.30 380.35 385.80 456652 7345 176,174,709.00 18.65 -3.65 15 May 2009 375.00 402.40 375.00 396.90 389.21 511628 9241 199,131,115.00 27.40 21.90 18 May 2009 402.00 402.00 384.00 385.90 390.68 656652 8773 256,537,546.00 18.00 -16.10 19 May 2009 380.00 397.90 380.00 389.70 391.45 632618 9301 247,640,153.00 17.90 9.70 20 May 2009 380.00 399.60 380.00 392.35 389.29 343883 6927 133,869,870.00 19.60 12.35 21 May 2009 385.00 396.00 383.00 390.15 387.54 313459 4490 121,477,077.00 13.00 5.15 22 May 2009 385.00 394.00 385.00 391.40 389.50 197265 4068 76,835,669.00 9.00 6.40 25 May 2009 394.50 397.95 378.20 381.60 387.03 444835 6602 172,165,181.00 19.75 -12.90 26 May 2009 383.00 393.05 381.05 389.00 387.00 329007 5715 127,324,828.00 12.00 6.00 27 May 2009 385.00 386.00 368.00 380.05 376.62 652210 7629 245,636,349.00 18.00 -4.95 28 May 2009 381.00 390.90 375.00 388.60 385.07 352803 6408 135,853,454.00 15.90 7.60
Table 1.9 shows about the beta values of Tata Consultancy services
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
54
4 May 2009 764.00 778.60 3478.57 3654 5.04 1.91 9.62 25.405 May 2009 392.70 389.80 3664.50 3661.59 -0.07 -0.73 0.05 0.00496 May 2009 380.00 379.00 3662 3625.05 -1.00 -0.26 0.26 17 May 2009 370.00 379.75 3671.5 3683.90 0.34 2.63 0.89 0.118 May 2009 383.00 380.85 3681.80 3620.70 -1.66 -0.005 0.008 2.7611 May 2009 387.80 369.75 3615.75 3554.60 -1.69 -4.65 7.85 2.8612 May 2009 360.00 366.20 3554.65 3681.10 3.55 1.72 6.10 12.6013 May 2009 367.00 382.05 3668.75 3621.85 -1.27 4.10 -5.20 1.6114 May 2009 384.00 380.35 3631.90 3593.45 -1.05 -0.95 0.99 1.1015 May 2009 375.00 396.90 3595.85 3671.65 2.10 5.84 12.26 4.4118 May 2009 402.00 385.90 3673.15 4323.15 17.69 -4 -70.76 312.9319 May 2009 380.00 389.70 4324.95 4318.45 -0.15 2.55 0.38 0.0220 May 2009 380.00 392.35 4318.75 4320.30 0.03 3.25 0.09 0.000921 May 2009 385.00 390.15 4217.30 4210.90 -0.15 1.33 -0.19 0.0222 May 2009 385.00 391.40 4211.85 4238.50 0.63 1.66 1.04 0.4025 May 2009 394.50 381.60 4213.10 4237.55 0.58 -3.26 1.89 0.3426 May 2009 383.00 389.00 4239.55 4116.70 -2.89 1.56 -4.5 8.3527 May 2009 385.00 380.05 4117.30 4276.05 3.85 -1.28 -4.92 14.8228 May 2009 381.00 388.60 4276.15 4337.10 1.42 1.99 2.82 2.01
25.30 13.40 -36.81 390.75
Calculation of Beta
β = N
N
β = -36.81 – (25.3) (13.4) / 390.75 – (25.30)2
β = 1.50
INTERPRETATION:
The above table shows as beta value is less than one, so
there is less risk to the investor.
Chart 1.9 shows about the market return and stock return of
Tata Consultancy services
55
NSE VALUE OF GAMMON INDIA LIMITED
Date Open Price
High Price
Low Price
Close Price
Weighted AveragePrice
No. ofShares
No. ofTrades
Total Turnover(Rs.)
* Spread (Rs.)
H - L C - O
4 May 2009 844.45 865.00 820.00 829.05 832.52 371 60 308,864.00 45.00 -15.40 5 May 2009 806.00 830.00 806.00 820.50 817.61 797 63 651,636.00 24.00 14.50 6 May 2009 827.00 859.00 813.00 818.30 830.18 1533 130 1,272,665.00 46.00 -8.70 7 May 2009 819.00 824.00 800.00 806.30 808.03 786 62 635,113.00 24.00 -12.70
56
8 May 2009 810.00 817.00 806.00 807.10 808.97 30 13 24,269.00 11.00 -2.90 11May 2009 805.00 825.00 805.00 808.10 810.42 504 50 408,451.00 20.00 3.10 12 May 2009 815.00 815.00 788.00 802.50 801.84 1252 83 1,003,909.00 27.00 -12.50 13 May 2009 795.15 819.95 795.15 812.00 809.24 1385 44 1,120,802.00 24.80 16.85 14 May 2009 810.00 811.00 795.15 799.10 801.89 1208 43 968,679.00 15.85 -10.90 15 May 2009 799.95 800.00 789.00 790.60 794.83 939 81 746,343.00 11.00 -9.35 18 May 2009 799.00 799.00 766.75 771.75 774.79 2645 149 2,049,317.00 32.25 -27.25 19 May 2009 779.95 824.00 771.75 792.05 801.37 872 158 698,792.00 52.25 12.10 20 May 2009 796.00 864.00 796.00 817.50 834.47 4584 506 3,825,213.00 68.00 21.50 21 May 2009 818.05 834.00 803.65 809.40 820.84 1381 108 1,133,584.00 30.35 -8.65 22 May 2009 819.95 819.95 805.00 808.65 807.80 162 20 130,864.00 14.95 -11.30 25 May 2009 819.00 827.95 776.00 784.50 801.66 1414 125 1,133,548.00 51.95 -34.50 26 May 2009 782.00 859.00 781.20 827.25 835.49 5441 484 4,545,894.00 77.80 45.25 27 May 2009 824.95 830.00 800.05 820.40 815.26 1313 107 1,070,433.00 29.95 -4.55 28 May 2009 829.00 832.00 816.00 828.20 823.04 773 45 636,211.00 16.00 -0.80
Table 1.10 shows about the beta values of Gammon India Limited
DATE OPEN CLOSE OPEN CLOSE MR(X) SR(Y) XY X2
4 May 2009 844.45 829.05 3478.57 3654 5.04 -1.82 -9.17 25.405 May 2009 806.00 820.50 3664.50 3661.59 -0.07 1.79 -0.12 0.00496 May 2009 827.00 818.30 3662 3625.05 -1.00 -1.05 1.05 17 May 2009 819.00 806.30 3671.5 3683.90 0.34 1.55 0.52 0.118 May 2009 810.00 807.10 3681.80 3620.70 -1.66 -0.35 0.58 2.7611 May 2009 805.00 808.10 3615.75 3554.60 -1.69 0.38 -0.64 2.8612 May 2009 815.00 802.50 3554.65 3681.10 3.55 -1.53 -5.43 12.6013 May 2009 795.15 812.00 3668.75 3621.85 -1.27 2.11 2.67 1.6114 May 2009 810.00 799.10 3631.90 3593.45 -1.05 -1.34 1.40 1.1015 May 2009 799.95 790.60 3595.85 3671.65 2.10 -1.16 -2.43 4.4118 May 2009 799.00 771.75 3673.15 4323.15 17.69 -3.41 -60.32 312.9319 May 2009 779.95 792.05 4324.95 4318.45 -0.15 1.55 -9.67 0.0220 May 2009 796.00 817.50 4318.75 4320.30 0.03 2.70 8.1 0.000921 May 2009 818.05 809.40 4217.30 4210.90 -0.15 -1.05 15.75 0.0222 May 2009 819.95 808.65 4211.85 4238.50 0.63 -1.37 -0.86 0.4025 May 2009 819.00 784.50 4213.10 4237.55 0.58 -4.21 -2.44 0.3426 May 2009 782.00 827.25 4239.55 4116.70 -2.89 5.78 -16.70 8.35
57
27 May 2009 824.95 820.40 4117.30 4276.05 3.85 -0.55 -2.11 14.8228 May 2009 829.00 828.20 4276.15 4337.10 1.42 -0.09 -0.12 2.01
25.30 -2.07 -62.50 390.75
Calculation of Beta
β = N
N
β = -62.50 – (25.30) (-2.07) / 390.75 - (25.30)2
β = 0.46
INTERPRETATION:
The above table shows as beta value is less than,one, so there is less
risk to the investor.
Chart 1.10 shows about the market return and stock
return of Gammon India Limited
58
CHAPTER-IV
FINDINGS & SUGGESSTIONS
CHAPTER 4
59
FINDINGS
From the analysis of table, most of the investors were in low risk with their
investment.
From the analysis of table there is ups and downs in market return and stock return.
From the analysis the investors are in risk with two companies of their investment.
From the analysis of table the beta value should be less than one so the investors are
with low risk.
From the analysis of table the investors are not met with high risk.
SUGGESSTIONS
The investors should invest their money in good company shares.
The investor should analyse that which gives maximum profit with low risk.
The investors should invest in different shares so they can compensate with their loss
in profit shares.
They could make good profit with less minimum of risk.
They can invest their shares in bank also to get maximum return.
CHAPTER-V
CONCLUSION
60
CHAPTER 5
CONCLUSION
The study on portfolio construction of Gupta Equities Coimbatore reveals that
there is a slight risk facing an investors where discomfort is felt. They can arrange it more
favourable to maintain the return value.
They can enable to contribute to increase the level of income from the investors
current level. Hence investing in different share will reduce risk and in increases the return.
BIBLIOGRAPHY
A. BOOKS
1. Dr. Gurusamy S., "Capital Markets", Vijay Nicole Imprints Pvt. Ltd., 2006.
2. Gupta S.P., "Statistical Method", Sultan Chand and Sons, New Delhi, 2000.
3. Kothari C.R., "Research Methodology", Vishwa Prakasam, New Delhi, 1996 edition.
61
4. Memoria C.B., "Marketing Management", Kitab Mahal, Allahabad, 1998.
5. Philip Kotler, "Marketing Management", Pearson Education (Singapore) Pvt. Ltd.,
New Delhi, 2003.
6. Preeti Singh, "Investment Management Security analysis and portfolio management",
Himalaya Publishing House, Mumbai, 2006.