Suman TH

Analysis of Portfolio Investment
1. INDUSTRY PROFILE The Financial Services Industry:

The financial services industry includes firms that are engaged in activities such as investing, lending, insurance, securities trading and securities issuance. In Financial economics, a financial institution acts as an agent that provides financial services for its clients. Common types of financial institutions include banks, insurance, securities, stock brokerages, and similar businesses. Following are the categories that fall under the horizon of financial services:
Financial Services Industry- Classification of various financial services Banking services

The primary operations of banks include: Keeping money safe while also allowing withdrawals when needed Issuance of checkbooks so that bills can be paid and other kinds of payments can be delivered by post Provide personal loans, commercial loans, and mortgage loans (typically loans to purchase a home, property or business) Issuance of credit cards and processing of credit card transactions and billing Issuance of debit cards for use as a substitute for checks Allow financial transactions at branches or by using Automatic Teller Machines (ATMs) Provide wire transfers of funds and Electronic fund transfers between banks Facilitation of standing orders and direct debits, so payments for bills can be made automatically Provide overdraft agreements for the temporary advancement of the Bank's own money to meet monthly spending commitments of a customer in their current account.
The Oxford College Of Engineering, Bangalore
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Investment Services
Asset management - the term usually given to describe companies which run collective investment funds. Also refers to services provided by others, generally registered with the Securities and Exchange Commission as Registered Investment Advisors.
Hedge fund management - Hedge funds often employ the services of "prime brokerage" divisions at major investment banks to execute their trades.
Custody services - the safe-keeping and processing of the world's securities trades and servicing the associated portfolios. Assets under custody in the world are approximately $100 trillion.
Insurance Services
The insurance companies provide the clients with risk coverage services. These services are designed to cover a number of risks that are related to an individual's life, property and many more. These services are not only designed to provide security but at the same time there are a number of insurance plans that are designed to provide regular income to the clients. The insurance policies can be divided in several types like general insurance, life insurance, commercial insurances and a lot more.
Reinsurance - Reinsurance is insurance sold to insurers themselves, to protect them from catastrophic losses.
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Other Financial Services
Intermediation or advisory services - These services involve stock brokers (private client services) and discount brokers. Stock brokers assist investors in buying or selling shares. Primarily internet-based companies are often referred to as discount brokerages, although many now have branch offices to assist clients. These brokerages primarily target individual investors. Full service and private client firms primarily assist and execute trades for clients with large amounts of capital to invest, such as large companies, wealthy individuals, and investment management funds.
Venture capital is a type of private equity capital typically provided by professional, outside investors to new, high-potential-growth companies in the interest of taking the company to an IPO or trade sale of the business.
Credit Rating Agencies: The credit rating agencies are those firms that evaluate different types of financial services companies. These ratings are based on a number of factors like the kind of services, risk factor involved with the services, customer facilitation
Mutual Fund: A mutual fund enables investors to pool their money and place it under professional investment management. The portfolio manager trades the fund's underlying securities, realizing a gain or loss, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. There are more mutual funds than there are individual stocks.
Foreign exchange services

Foreign exchange services are provided by many banks around the world. Foreign exchange services include:
Currency Exchange - where clients can purchase and sell foreign currency banknotes.
Wire transfer - where clients can send funds to international banks abroad.
Foreign Currency Banking - banking transactions are done in foreign currency
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Stock Broking Firms

Brokerage firms are the business entities that deal with stock trading. . Broking
Houses are financial intermediaries concerned with that service providers by which the investors who have surplus and canalization of the savings, invest their saving in those avenues where there is returns to be yield. These institutions employ their resources in such a manner as to afford for the investors the combined benefits of low risk, steady returns, high liquidity and capital appreciation diversification and expert management. India, with an increasing capital market and a growing number of investors, has a number of brokerage firms. In Indian retail brokerage industry, the brokerage firms primarily work as agents for buying and selling of securities like shares, stocks and other financial instruments and earn commission for each of the transactions Broking Insights The Indian broking industry is one of the oldest trading industries that have been around even before the establishment of the BSE in 1875. Despite passing through a number of changes in the post liberalization period, the industry has found its way towards sustainable growth. The Indian broking industry is reasonably large and fragmented with 9,000 odd brokers in the cash segment and around 24,000 sub-brokers. The market share of the top ten brokers in India has remained largely stagnant in the past four years. The top five brokers in India still control around 15-16% of the market share. Historically, retail trading contributed around 60% of the market and FII averaged around 20%. Key developments in this industry included conspicuous expansion in distribution pan India with greater diversity offered in financial product offerings and an increased emphasis on proprietary research output. There was a greater than before interest towards engendering a global footprint. With over half of financial savings still in bank deposits and equity assets comprising of only 6% of household financial savings the under penetration and relative financial illiteracy continue to ensure the allure of financial services segment in the country.
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Current Scenario of Stock Broking Industry in India Financial Markets

The financial markets have been classified as cash market, derivatives market, debt market and commodities market. Cash market, also known as spot market, is the most sought after amongst investors. Majority of the broking firms are dealing in the cash market, followed by derivative and commodities
Percentage of Companies trading in NSE and BSE In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both exchanges. In the equity derivative market, 48% of the broking houses are members of NSE and 7% trade at BSE, while 45% of the sample operate in both stock exchanges. Around 43% of the broking houses operating in the debt market, trade at both exchanges with 31% and 26% firms uniquely at NSE and BSE respectively
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Companies trading in commodities market Of the brokers operating in the commodities market, 57% firms operate at NCDEX and MCX. Around 20% and 21% firms are solely in NCDEX and MCX respectively, whereas 2% firms trade in NCDEX, MCX and NMCE.
Products
In the past couple of years, apart from trading, the firms have started offering various investment related value added services. The sustained growth of the economy in the past couple of years has resulted in broking firms offering many diversified services related to IPOs, mutual funds, company research etc. However, the core trading activity is still the predominant form of business, forming 90% of the firms in the sample. 67% firms are engaged in offering IPO related services. The broking industry seems to have capitalized on the growth of the mutual fund industry, which was pegged at 40% in 2006. More than 50% of the sample broking houses deal in mutual fund investment services. The average growth in assets under management in the last two years is almost 48%. Company research is another lucrative area where the broking firms offer their services; more than
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Analysis of Portfolio Investment 33% of the firms are engaged in providing company research services. Additionally, a host of other value added services such as fundamental and technical analysis, investment banking, arbitrage etc are offered by the firms at different levels.
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Current Scenario of Financial Services Sector in India The financial services sector contributed 15 per cent to India's GDP in FY10, and is the second-largest component after trade, hotels, transport and communication all combined together, as per the Banking & Finance Journal, released by an industry body in August 2011. Financial services, banking, insurance and real estate sectors rose by 8 per cent during the quarter ended June 2010.There are a total of 1,732 foreign funds registered with the Securities & Exchange Board of India (SEBI).Overseas funds infused US$ 4.78 billion in the capital market in November 2010, taking the year-to-date total to US$ 39 billion. The total inflows of foreign institutional investors (FIIs) as on December 2, 2010 have crossed the record US$ 38.76 billion mark. According to data available with SEBI, FIIs have made investments worth US$ 4.11 billion in equities and invested US$ 667.71 million into the debt market. The average assets under management of the mutual fund industry stood at US$ 160.44 billion for the month of September 2010, according to the data released by Association of Mutual Funds in India (AMFI). As on November 26, 2010, India's foreign exchange reserves totaled US$ 293.9 billion, according to the Reserve Bank of India's (RBI) Weekly Statistical Supplement. According to Venture Intelligence, a research firm, private equity investment in India totaled US$ 6.57 billion in the first three quarters of 2010, which is more than double the US$ 2.5 billion invested during the same period last year. As of December 7, 2010, as many as 114 private equity investments have come from domestic funds compared to 126 foreign ones, according to data available with Venture Intelligence.
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In terms of value, PE firms promoted by Indians invested US$ 1,751 million sofar this year, as against US$ 4,377 million put in by foreign fund investments, according to Venture Intelligence. Also, a study by Project Finance International (PFI), a source of global project finance intelligence and a Thomson Reuters publication has ranked India on top in the global project finance (PF) market in 2009, ahead of Australia, Spain and the US. The study said the main market for PF in 2009 was the domestic Indian market, which raised US$ 30 billion, accounting for 21.5 per cent of the global PF market. This was up from US$ 19 billion in 2008.
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2. COMPANY PROFILE A. BACKGROUND AND INCEPTION OF THE COMPANY

Sharekhan ltd. is a retail broking arm of S.S KantilalIshwarlal Investors Services Pvt Ltd, an organization with more than 8 decades of trust and credibility in the stock market. Sharekhan Ltd (Formally SSKI Investors Services Pvt Ltd) was promoted by Mr.Shripal.SMorakhia and Mr.Shreyas.SMorakhia. It is currently Indias largest broking house. It is a member of the stock exchange, Mumbai. It is a depository participant of the NSDL and CDSL. Its business includes stock broking, depository services, portfolio management and derivatives. SSKI group also comprises institutional broking and corporate finance. While the institutional broking division caters to the largest domestic and foreign institutional investors. The corporate finance division focuses on niche areas such as infrastructure, Telecom and media. SSKI holds a sizeable portion of the market in each of these segments. As the forerunner of investment research in the India market, we provide the best research coverage amongst broking houses in India. Our research team is rated as one of the best in the country. Voted four times as the top domestic brokerage house by Asia money survey. SSKI is consistently ranked almagest the top domestic brokerage houses in India. Share khan is the retail broking arm of SSKI securities Pvt ltd. SSKI owns 56% in share khan, balance ownership is HSBC and Intel pacific. Pioneers of online trading in India- Sharekhan.com was launched in 2000 and is now the second most visited broking site in India.
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B. NATURE OF BUSINESS CARRIED

Sharekhan is a stock broking company. The company offers a complete range of pre trade, trade and post trade service on the BSE (Bombay stock exchange) and the NSE (National stock exchange). Whether the client come in to the companys conventionally located offices and trade in a dedicated environment or issue instructions over the phone, the highly trained team and sophisticated equipment ensure smooth transactions and prompt service. Investment Advisory service Facilitation services to Retail Investors, Corporate. Depository services
Investment options include: Online trading (Includes equity, derivatives) Commodities trading Mutual funds Portfolio management service
Operations: Institutional broking Investment Banking Retail Broking Through trading and settlement process the investor converted into the final product. The clearing house of exchange may act as legal counter party to all dealers for all deals in equity derivatives instruments on exchanges. Thus the both the parties to an equity derivatives met either by the party itself or in the event of default on the part of the party, by clearing corporation.
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Analysis of Portfolio Investment A client can trade only through a trading member of the exchange. A clearing member can act as trading member. The process of trading is similar to screen based trading in securities like shares on an exchange. The exchange introduced standardized contract where settlement date, is specified by stock exchange and the client can enter into contracts with different contract/ strike price. In order to minimize the risk of failure parties to contract in full filling their respective obligation under the contract, the Clearing Corporation/trading members. Margins are required to be paid by clearing/trading members who in turn, collect margin from their respective clients.
C. VISION, MISSION AND OBJECTIVES

VISION: To be the best retail broking brand in the Indian equities market MISSION: To educate and empower the individual investor to make better investment decisions through quality advice and superior service OBJECTIVES: To ensure satisfaction through teamwork and professional management To provide good quality of services on a continuous basis to the satisfaction of clients. To extend effective guidance to brokers, to clearing house Corporation, companies and investor in E-Stock Trading. To eliminate paper work and bring in front of electronic stock market in India.
QUALITY POLICY User friendly online trading facility
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D. PRODUCTS AND SERVICES PROFILE

Sharekhan is one of India's leading financial services companies. It provides a complete life-cycle of investment solution in Equities, Derivatives, Commodities, IPO, Mutual Funds, Depository Services, Portfolio Management Services and Insurance. Also offers personalized wealth management services for High Networthindividuals.With a physical presence in over 300 cities of India through more than 800 "Share Shops", and an online presence through Sharekhan.com, India's premier online destination; it reaches out to more than 800,000 trading customers. The product of Sharekhan can be broadly classified into three types suiting the clients trading habit.
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Three key products IT enabled call Center for servicing clients Integrated Depository service/Demat account for transparency Online fund transfer facility with HDFC, Citibank, GTB, IDBI Bank. Regular banking facility with any bank in India. Sharekhan also offers personalized research advice through Website, e-mail, SMS and Messenger
Online products offered by Sharekhan are as follows:

1. CLASSIC ACCOUNT: This account allows the client to the trade throughout website and is suitable for the retail investors. Our online trading website also comes with the Dial Trade service that enables you to buy and sell shares by calling their dedicated toll free number. 2. SPEEDTRADE: SPEEDTRADE is a next-generation online trading product that brings the power of your brokers terminal to your PC. It is ideal for active traders who transact frequently during days trading session capitalize on intra-day price movements. SPEEDTRADE is an internet-based application available on a CD, which provides every-thing a trader needs on one screen, thereby, reducing the required to execute a trade. SPEEDTRADE has all the above-mentioned features with the power to trade in cash and derivatives from a single screen.
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Analysis of Portfolio Investment SERVICES OFFERED BY SHAREKHAN 1. Trading Facilities: Sharekhan as a member of NSE& BSE provides both offline and online trading facilities nationwide for trading the securities in secondary market to its clients. The companys wide network of outlets spread across the country facilities to executive the orders in secondary market. 2. Derivatives: (Futures and Options) The company also facilitates the trading system for trading in secondary market under future and options segment of NSE and BSE. The equity dealers in the company will be eager to give insights into the new sets introduction in the Indian Capital Market futures and options. 3. Depository services: Sharekhan is a Depository participant of National Securities Depository Limited and Central Depository and Securities Limited. Sharekhan will open De-mat accounts, which will investors to convert physical certificates of shares into electronic balances in an account maintained. 4. Margin Financing: In the present rolling settlement scenario, Sharekhan understand investor need for additional capital availability for daily purchaser shares. It offers unique facility avail finance, for purchasing shares at very competitive interest rates. 5. IPOs and Mutual Funds: Sharekhan offers the change of investing in the potentially lucrative IPO market. Sharekhan is a distribution house for all mutual funds. This is the news scheme introduced by the company and it also offers schemes catering to investors with varying risk return profiles.
6. Stock lending and Borrowing: One can place an order of shares with Sharekhan. It is approved intermediary of the security or lending scheme. These would be sent out the borrowers, these earnings fees for
Analysis of Portfolio Investment all investors idle shares. Thus Sharekhan fulfill the investor need for borrowing and lending of shares. 7. Equity Research: Sharekhan has a highly rated research using involved in macroeconomic studies, industry and company specific equity research. The research teams inputs will be available as daily trading calls, quarterly investment picks and long term investment picks, based on the fundamentals of particular company and the industry as a whole. 8. Internet Trading: Investors can also trade their securities through this facility by logging into companys website. The virtual world that Sharekhan offers online trading services through. 9. Portfolio Management Services: Sharekhan securities are a registered portfolio manager with SEBI to manage portfolios on behalf of clients with a discretionary and non discretionary right. This service is a provision for those who may not have the time to manage their stock investments or require the service of companys highly specialized profession team. 10. Other Services: Free access to investment advice from Share khans research team Sharekhan Value line (A monthly publication with review of recommendations stocks towatchout) Daily research reports and market review ( high noon and eagle eye) Daily trading calls based technical analyses Cool trading products ( Daring derivatives and market strategy) Personalized advice Live management information Internet- Based online trading Online BSE & NSE executions through BOLT & NEAT terminals).
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E. AREA OF OPERATION OF SHAREKHAN

The area of operations of SHAREKHAN is spread over two countries. They are: 1. INDIA 2. UAE The services are available through a network of 1437 Share shops spanning 170 major towns and cities in the country along with an international branch in Dubai (UAE) Growing retail network across 790 franchisees 168 branches 325 cities
F. OWNERSHIP PATTERN AT SHAREKHAN

The Major shareholders of Sharekhan are following: Citi Venture Capital And Other Private Equity Firms Barings Pvt Equity Asia IDFC Employees 23% 6% 11% 60%
The Management Team of Sharekhan are stated below: Mr. Tarun P. Shah. Mr. Shankar Vailaya. Mr. Jaideep Arora. Mr. Ketan Parekh. CEO. Director-Operations. Director-Product and Technology. Chief Technology Officer.
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G. COMPETITORS INFORMATION
The Indian retail brokerage market, which is going through a wonderful phase with high growth rate. The total trading volume of the Indian brokerage companies stood at US$ 1239.1 billion in the year 2004, which increased to US$ 1492.1 billion in 2005. It is further expected to reach US$ 6535.7 billion by the year 2015
The following are the list of top 10 competitors of Sharekhan: Kotak Securities Limited Karvy Stock Broking Limited Indiabulls II&FS Invesment Limited Motilal Oswal Securities Reliance Money India Infoline Angel Broking Limited Anand Rathi Securities Limited Geojit
H. INFRASTRUCTURAL FACILITIES AT SHAREKHAN Share khan outlets are designed to be places where retail investors can come in touch with Investment opportunities in an atmosphere of convince and comfort. The look and feel of the offices across India projects a consistent branch image for the company. The features that enable a unique facility for retailing financial service include among others. Business Focus: The main focus is Customer - Customer service, Customer education, Customer support, Customer relations and last but not the least Customer acquisition. Strong Product Basket: Specific products catering to each customer segment. Training Sessions: Comprehensive 3 day training program & dedicated online platform for ongoing training requirements.
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Analysis of Portfolio Investment Multi-Channel Access: SHAREKHAN serves its channels. Customized Retail Design: The office premises at all share shops have an invigorating look, synonymous with its corporate identity. Research-based Investment Advice: Access to all fundamental and technical research at a real time basis. Technology Infrastructure Support: Comprehensive & robust technology customers better via multiple
infrastructure to run a fully automated back-office. Pioneering Online Trading Systems: The customers can trade online, get news, research and access to special reports through the companys web portal www.sharekhan.com Support: Dedicated support for various aspects of business including Equity sales, Risk management, Business development and Operations. www.sharekhan.com
I.
ACHIEVEMENTS AND AWARDS WON BY SHAREKHAN
Sharekhan, the retail broking arm of SSKI Group and one of the largest stock broking houses in the country, has won the prestigious Awaaz Consumer Vote Awards 2005 for the Most Preferred Stock Broking Brand in India, in the Investment Advisors category. This was Indias largest Customer Study initiated by CNBC Awaaz and conducted by AC Nielson covering 7000 respondents, 21 products and services across 21 major cities. Rated among the top 20 wired companies along with RELIANCE, HLL, and INFOSYSetc. by Business Today. ORG Marg award by CNBC. India internet World 2008 for the Best Finance site. Sharekhans online trading and investment site www.sharekhan.com was launched in 2000. Sharekhans ground network includes over 250 centers across 123 cities in India and having around 120000 customers and an equal number of demat customers. The reasons behind the preferences for brands were unveiled by examining the following:
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J. WORK FLOW MODEL
CUSTOMER OVERVIEW
CALL DESK
ONLINE DESK
SALES REP
APPLICATION
PROCESSING
GENERATION OF CLASSIC A/C
PORTFOLIO ANALYSIS & RESEARCH
PAYMENT FOR INVESTMENT IN DP A/C
TRADING THROUGH SHAREKHAN
HOLDINGS & STATEMENTS
RETURNS
CUSTOMER SERVICE
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Analysis of Portfolio Investment The Service Delivery Model of SHAREKHAN is a blend of both tradition and technology. The three main components of this model include:
1. SHARE SHOPS All one has to do is walk into any of the 1200 share shops across 400 cities in India to get a host of trading and investment related services. Our friendly customer service staff will also help you with any account related queries you may have.
A Sharekhan outlet offers the following services:

Online BSE and NSE executions (through BOLT & NEAT terminals) Free access to investment advice from Sharekhan's Research team SharekhanValueLine (a monthly publication with reviews of recommendations, stocks to watch out for etc)
Daily research reports and market review (High Noon & Eagle Eye) Pre-market Report (Morning Cuppa) Daily trading calls based on Technical Analysis Cool trading products (Daring Derivatives and Market Strategy) Personalized Advice Live Market Information Depository Services: Demat & Remat Transactions Derivatives Trading (Futures and Options) Commodities Trading IPOs & Mutual Funds Distribution Internet-based Online Trading: SpeedTrade
2 .DIAL N TRADE Free with your Sharekhan Trading Account, the Dial-n-Trade service enables the customer to place orders for buying and selling shares through your telephone. All the customer has to do is dial any one of the dedicated numbers (1-800-22-7050 or 1800-270-7050or 30307600), enter the TPIN number (which is provided at the time of opening the account) and on authentication the customer will be directed to a telebroker who will buy and sell shares for him.
Analysis of Portfolio Investment Features of DIAL N TRADE THREE dedicated numbers for placing orders with cell phone or landline. Toll free numbers: 1-800-22-7050 & 1800-270-7050. For people with difficulty in accessing the tollfree number, we also have a Reliance number (Your Local STD Code) 30307600 which is charged at as local number. Simple and Secure Interactive Voice Response based system for authentication No waiting time. Enter TPIN to be transferred to teleprocess Trusted, professional advice of our telebrokers After hours order placement facility between 8.30 am and 9.00 am Reliable service, wherever the customer is.
3. ONLINE TRADING The online trading model at sharekhan consists of a choice of three trading interfaces: a. Trade tiger exe for active traders b. Web based classic interface for investors c. Web based applet fast trade for investor
K. FUTURE GROWTH AND PROSPECTS.

Mergers and acquisitions: In the highly competitive and over crowded market, shakeouts and bankruptcies of online brokers can be anticipated. The trend is towards a gradual consolidation of retail investors to a few dominant players or partnerships. Stock broking applications that provided services in various delivery modes, i.e., internet, WAP, palm pilots, pocket PCs etc will get more common as more and more people start using these gadgets. Online broking would have a completely new meaning in this scenario. In a crowded stock broking industry, differentiation becomes the key to higher revenues. Better service, straight through processing (STP), immediate execution, portfolio services, investment advisors and telephone call centers or branch investment offices are needed to retain customers and to increase the revenue base.
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3. MCKENSY 7S FRAMEWORK WITH SPECIAL REFERANCE TO ORGANIZATION UNDER STUDY: The Mckensy 7S model is explained in consideration to Sharekhan as below:
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Analysis of Portfolio Investment STRUCTURE: Successfbul strategy implementation depends in the large part on a firms Organizational Structure.
Managing Director General Manager Manager
Sales Mngr
Processing
R&D
Financial
Technical
Deputy Manager
Sales Mngr
Processing
R&D
Financial
Technical
Asst. Manager Executive
Asst. Exec
Helpers
Trainees
STRATEGY: The concept of strategy the sharekhan expects to provide certain high class services, standard technology etc. And these, the Sharekhan hope to achieve by: Understand the needs of customers & offering them superior products & service. Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management & investment strategies to offer sustainable & stable return to policyholders. Providing an enabling environment to further growth & learning for employees.
Analysis of Portfolio Investment To identify & support initiatives designed to improve the capacities of the poorest of the poor to participate in the large economy. The SIG believers that the three fundamental capacities any individual should possess to be able to participate in the larger economy are in the area of financial services honesty and trustworthiness in all interactions. A pioneering spirit and excellence in action. Collaboration and teamwork. An understanding of customer needs and the desire to satisfy them. The highest service standards. A consistently above average performance. Sharekhan offers exciting career opportunities for people from a variety of streams. Read on to find out more about how each of the functions contributes to their growing business
SYSTEM: Sharekhan follows clearly well-defined system from the past years management information system is identifying the problems in between the departments and managing the problem with interrelated processes. It contributes to the organizations effectiveness and efficiency in achieving its objectives. The company is following high-tech system to measure the quality, all the departments are computerized which facilitate interaction between different departments. The system department provides the necessary technical supports for screen based trading and the computerized functioning of all other departments. The various activities of system department include. Developments of various software needed for the functioning of the company. Maintenance of multiple software, which provides online trading with NSE and BSE.
The major back office system softwares used are NESS and BOSS for NSE and BSE trades calculations respectively. This softwares are developed in house by Share khan and
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Analysis of Portfolio Investment these softwares are used to maintain the entire records of all the trades that occur each day. It also does all the required calculations for deductions and also creates all kinds of reports needed by the brokers and their clients. STAFF: In the McKinsey 7-S framework the term Staff has a specific connotation. According to Waterman and his colleagues the term Staff refers to the way organizations introduce young recruits into the main stream of their activities and the manner in which they manage their careers as the new entrants develop into future mangers. Sharekhan ltd has a well-established system of recruiting graduates from well known technical and management institutions and providing them with on the job training in a number of functional areas before deciding on the final placement in consultation with person concerned. Recruitment is done through consultancy services, Tele recruitment or through advertisement. Generally advertisements are given only for the high posts & that too after consultation with the unit head. The HR personnel are responsible to carry on the function of HR department in context to the procedure laid out while interfacing with sections and departments of both divisions. SKILLS: Waterman considers skill as one of most crucial attribution or capabilities of an organization. The term skills include those characters, which most of people user to describe a company. The company has the skills needed to carry out the company strategy like. A good & Specialized knowledge about the products of insurance High level of specialization in communication Ability to convert the person into customers.
At the executors level skills possessed by employees are communication, leadership, administration, time management, computer knowledge, presentation skills, team building etc. They are also trained under various other aspects like self-development.
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Analysis of Portfolio Investment The HR department identifies several areas for continuously updating technical / Professional skills for employees and brings out attitudinal changes in developing good work culture in all areas. STYLE: Style in McKinsey 7-S Framework refers to How managers collectively spend their time and attention and how they use symbolic behavior. How management acts is more important than what management says. Symbolic behaviors typically have more people on the board who understand exploration or have headed exploration department. The objective of the organization consists of 2 components: Organizational culture: The dominant values and beliefs, and norms, which develop over time & become relatively enduring features of organizational life. Management Style: M7ore a matter of what manager do than what they say. How do companies managers spend this time? What are they focusing attention on? In Sharekhan the leadership style followed is democratic group efforts. Here all employees play an active part in giving suggestions for decision-making. All major decisions are taken in the branches concerned. MD & DGM of the concerned department take the major decisions. SHARED VALUES Integrity: Sharekhan is honest and forthright in their dealings with employees, members. Brokers shareholders and the communities in which they do business. Commitment to excellence: company is committed to achieve highest level of excellence. They support one another: They believe in one another. They acknowledge and respect the ability of one another. They push for professional excellence. There are no second-class citizens everyone is important and everyones job is important. Empathy for the other guy is not a weakness. Suspicion breeds more suspicion. To trust and be trusted is vital/Leaders need followers. How leaders treat followers has a direct impact on the effectiveness of the leader. Interpersonal business relationships should be built. Professional courtesy is expected. Loyalty
Analysis of Portfolio Investment and respect are earned not dictated. Shared values can be altered with circumstances but carefully and with tact and consideration for one anothers needs. Share khan has technical as well as non technical staffs. Technical staffs are in the system department. The exchange is having number of skilled labors. Staff in various departments in Share khan has individual skill relating to those departments. Staff in various departments in SHAREKHAN has individual skill relating to that department. Team Work: On team on dream Customer Centricity: Serving the frontline Passionate Ownership: Energy in action
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4. SWOT ANALYSIS OF SHAREKHAN

Strengths :
Cost advantage Effective communication High R&D Online growth Loyal customers Market share leadership Strong management team Strong financial position Pricing Real estate Reputed management Strong brand recall Strong reach to the masses Nationwide reach of the masses Among the top 5 brokerage houses in the country
Opportunities :
Financial markets (raise money through debt, etc) Innovation Online Product and services expansion Penetration in developing cities Increase in awareness of people about stock market Increase in wealth Positive market sentiments Growth of technology and awareness Increased internet usage
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Analysis of Portfolio Investment Weaknesses :
Diseconomies to scale Not innovative Not diversified High employee turnover Less competitive Employees not properly skilled Infrastructure not up to the mark
Threats :
Competition Cheaper technology Economic slowdown External changes (government, politics, taxes, etc) Exchange rate fluctuations Lower cost competitors or imports Price wars Product substitution
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Analysis of Portfolio Investment 5) ANALYSIS OF FINANCIAL STATEMENT. ANNUAL REPORT:
Mar-11 OWNER'S FUND Equity Share Capital Share Application Money Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loans Total USES OF FUNDS Gross Block Less : Accumulated Depreciation Net Block Capital Work-in-progress Investments NET CURRENT ASSETS Current Assets, Loans & Advances Less : Current Liabilities & Provisions Total Net Current Assets 92596.55 92617.12 -20.57 108941.27 73083.35 35857.92 94807.31 3356.10 778.27 5512.96 121618.48 4277.76 0.00 111049.4
Miscellaneous expenses not written Total
796.06 134796.82
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NOTE Book Value of Unquoted Investments Market Value of Quoted Investments Contingent liabilities Number of Equity shares outstanding (in Lakhs) 72042.38 85554.90 53178.71 46609.84 29412.77 20933.12 21388.73 21388.73 21388.73 21388.73 0.00 0.00 0.00 6480.54 9979.81 3356.10 5159.31 3480.35 2864.98 1966.07
INTERPRETATION: Current assetsThe investments in the current assets are very low but the positive thing is that the current assets are increasing day by day. In the year 2010-2011 net current assets showing a negative balance of -20.57 which is not a positive sign for the company.
InvestmentsThere is a drastic change in investment compared to last year there is a net decrease of 1803.21. This shows that the company is not progressive in investment.
Current liabilitiesCurrent liabilities are more than current assets i.e. 92617.12 so the company is facing illiquidity problem. RATIOS Current ratio= Current assets Current liabilities = 92596.55 92617.12 = 0.99
Liquid ratio=
Quick assets Current liabilities
= 92596.55 92617.12
= 0.99
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Debt equity ratio= Outsiders fund Shareholders fund
= 9291.23 4277.76
= 1.47
From the above calculated liquid ratio it is clear that the company is facing shortage of cash, so it needs to work on it.
Income statement:
Mar-11 Income Operating Income Expenses Material Consumed Manufacturing Expenses Personnel Expenses Selling Expenses Adminstrative Expenses Cost Of Sales Operating Profit Other Recurring Income Adjusted PBDIT Depreciation 33398.29 43668.16 6865.53 6888.83 -21026.52 69794.30 48208.57 5635.84 53844.40 8451.56 118002.86
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Analysis of Portfolio Investment Adjusted PBT Tax Charges Adjusted PAT Minority Interest Share Of P/L Of Associates Adjusted PAT after Minority Interest & Share Of P/L Of Associates Non Recurring Items Other Non Cash adjustments Reported Net Profit Earnigs Before Appropriation Equity Dividend Preference Dividend Dividend Tax Retained Earnings 33821.29 12307.47 21513.81 -372.04 3.00 21144.77
-235.87 1533.51 22455.93 34449.18 7486.05 0.00 25710.32
Gross profit ratio: = Gross profit Total sales
*100 48208.57 *100 118002.86 = 41%
Net profit ratio: = Net profit *100 Net sales 22455.93 *100 118002.86 = 19%
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Interpretation:
From the Gross profit ratio we can say that company earning enough of profit. The higher the gross profit ratio, the better it is. No ideal standard is fixed for this ratio, but the gross profit ratio should be adequate not only to cover the operating expenses but to cover depreciation, interest on loans, dividends and creation of loans. Net profit ratio indicates the efficiency of the management to in manufacturing, selling, and administrative activities. The company has a net profit of 19% it is a good profit.
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6) LEARNING EXPERIENCE
It was indeed a great experience working at SHAREKHAN LTD. The Research study carried on here gave me immense learning opportunities. The Company staff were quite helpful and co operative due to which the above project was successfully accomplished. Working at SHAREKHAN LTD enabled me to, Enrich my knowledge in the subject area of this project, which is typically my chief area of interest. Gave me an exposure to the complexities of the Trading mechanism of the stock markets. An opportunity to sit through the e-learning modules of the organization which gave me a further exposure regarding the functions, roles. Responsibilities and activities of Stock Broking firms in India. Knowledge about the various products and services offered by SHAREKHAN LTD. Interaction with existing and prospective customers of the company through personal visits and tele-calling. Ability to handle objections of the customers. Exposure to the customized software of SHAREKHAN through which trading takes place (placing of orders to buy and sell) TRADE TIGER
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PART-B DESIGN OF THE STUDY 1. A. GENERAL INTRODUCTION
STATEMENT OF PROBLEM
The Research Study titled ANALYSIS OF PORTFOLIO INVESTMENT is an attempt to analyze how closely the securities belonging to Banking and IT sectors move with its benchmark index. The study aims to understand the relationship between the chosen security and the benchmark index, i.e. S&P, NIFTY. Active fund managers are expected to reward risk optimized returns to their investors, selecting a security which is less volatile is preferred by most of the investors to ensure consistent returns. Hence this research study would set very important criteria to the investor to choose securities to be included in his portfolio. OBJECTIVES: This research topic has been undertaken to meet the following specific objectives: To compare the security returns with the market returns using various statistical tools. To test the volatility (Beta) of each individual security. To test the significance of market over individual companies using F-test. To suggest guidelines for the investors based on the analysis consensus. SCOPE OF THE STUDY The study covers two important sectors namely IT, and banking with three securities chosen from each sector. The study covers a period of twelve months, i.e. from 1st March 2011 to 29sth Feb 2012. The study takes into consideration the weekly closing returns of each security for the year 2011-12 for the purpose of analysis.
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Analysis of Portfolio Investment RESEARCH METHODOLOGY. Type of Research: Empirical Study For the purpose of this study, the following methodology was adopted: Identification of the study period. The study period comprises the calendar year 2011-12. (March 1st 2011 to Feb29th 2012) Identification of two industries that are banking and IT sectors considered to be leading indicators of stock market and identifying three companies each from these industries. Collection of weekly closing prices of equity stocks of companies in the above industries. Conducting serial correlation tests, beta, T-test and weekly performance of these stocks. Collection of S&P, NIFTY closing values for the same period on a weekly basis and comparing individual stocks with the Index.
LIMITATIONS OF THE STUDY The study confines itself only to two sectors of the economy. Hence other important sectors are excluded. The study covers a period of only one year which is relatively a short duration. Small sample size since only two and three companies respectively in IT and Banking sectors is considered for analysis. Analysis is based on one main parameter i.e returns of the securities. Neglects other important criteria which an investor has to take into account for constructing his portfolio, eg: liquidity, standard deviation, future prospects of the stock etc. SOURCES OF DATA: The required data was collected from primary and secondary sources.
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Analysis of Portfolio Investment PRIMARY DATA The primary data was collected through detailed discussions with the company officials and a few random customers who visited the office. The method adopted for data collection was mainly through clients about their portfolio decisions and the basis on which they decide to invest in various stocks. SECONDARY DATA Secondary data was collected by referring the following sources: SHAREKHANS publication: Value guide magazine Company Website NSE Website Textbooks, journals and the Company brochures Risk refers to the possibility of loss; the degree or probability of loss due to uncertainty about future. The actual return an investor receives form a stock may vary from his / her expected return due to several factors, either common to all stocks or to a specific stock. Risk is expressed in terms of variability of returns. Return of a stock includes both current income and capital gains caused by the appreciation of price which are expressed as a percentage of money invested in the beginning. The historical returns are derived from the cash flow (dividend) received as well as the price changes that occur during the period of holding the stock or any asset. Some useful criteria for selection of stocks by Investors Stock selection criteria are methods for selecting a stock(s) for investment. The stock investment or position can be "long" (to benefit from a stock price increase) or "short" (to benefit from a decrease in a stock's price), depending on the investor's expectation of how the stock price is going to move. The stock selection criteria may include systematic stock picking methods that utilize computer software and/or data. The objective of stock selection criteria is to:
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Analysis of Portfolio Investment 1. Maximize the total return on investment (appreciation plus any dividends received) for the targeted holding period 2. Limit risk (according to an individual's risks tolerance levels) 3. Maintain an appropriate degrees of portfolio diversification Sector analysis Sector analysis involves identification and analysis of industries or economic sectors that are likely to exhibit superior performance. Academic studies indicate that the health of a stock's sector is as important as the performance of the individual stock itself. In other words even the best stock located in a weak sector will often perform poorly because that sector is out of favor. Each industry has differences in terms of its customer base, market share among firms, industry growth, competition, regulation and business cycles. Learning how the industry operates provides a deeper understanding of a company's financial health. Quantitative cumulative value analysis Quantitative cumulative value analysis: This method is also commonly referred to as fundamental analysis. Fundamental analysts consider past records of assets, earnings, sales, products, management, and markets in predicting future trends in these indicators and how they may affect a companys future success or failure. By appraising a firms prospects, these analysts determine a stocks intrinsic value and assess whether a particular stock or group of stocks is undervalued or overvalued at the current market price. If the intrinsic value is more than the current share price, then this stock would appear to be undervalued and a possible candidate for investment. Technical analysis Technical analysis: Involves examining how the company is currently perceived by investors as a whole. Technical analysis is a method of evaluating securities by researching the demand and supply for a stock or asset based on recent trading volume, price studies, as well as the buying and selling behavior of investors. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts or computer programs to identify and project price trends in
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B. STATISTICAL TOOLS USED FOR ANALYSIS

CORRELATION ANALYSIS: Correlation analysis measures the relationship between two items, for example, a securitys price and an indicator. The resulting value (called the .correlation coefficient.) shows if changes in one item (e.g., an indicator) will result in changes in the other item (e.g., the securities prices).When comparing the correlation between two items, one item is called the dependent Item and the other the independent item. The goal is to see if a change in the independent item (which is usually an indicator) will result in a change in the dependent item (usually a securities price).This information helps to understand an indicators predictive ability. The correlation coefficient can range between +1 or - 1(plus or minus one).
r= n XY - (x) (y) nX2 (X)2 nY2 (y)2
(Correlation coefficient)
A coefficient of + 1.0, a perfect positive correlation, means that changes in the independent item will result in an identical change in the dependent item (e.g. a change in the indicator will result in an identical change in the securities price. A coefficient of -1.0, a .perfect negative correlation., means that changes in the independent item will results in an identical changes in the dependent item, but the change will be in the opposite direction. A coefficient of zero means, there is no relationship between the two items and that a change in the independent item will have no effect in the dependent item. A low correlation coefficient (e.g., less than+-0.10) suggests that the relationship between two items is weak or nonexistent. A high correlation coefficient (i.e., closer to plus or minus one) indicates that the dependent variable (e.g., the securitys price) will usually change when the independent variable (e.g., an indicator) changes. The direction of the depended variables changes depends on the sign of the coefficient. If the coefficient is a positive number, than the dependent variable will move in the same direction as the independent variable, if the coefficient is negative than the dependent variable will move in the opposite direction of the independent variable.
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Analysis of Portfolio Investment Correlation analysis can be used in two basic ways, to determine the predictive ability of an indicator and to determine the correlation two securities. When comparing the correlation between an indicator and a securities price, a high positive coefficient (e.g., more than + 0.70) tells that a change in the indicator will usually predict a change in securities price. A high negative correlation (e.g. less than 0.70) tells that when the indicator changes, the securities price will usually move in the opposite direction. A low coefficient (e.g., close to zero) indicates that the relationship between the securities price and the indicator is not significant. Correlation analysis is also valuable in gauging the relationship between two securities. Often, one securities price Leads or predict the price of another security. For example the correlation coefficient of gold versus the dollar shows a strong negative relationship. This means that an increase in the dollar usually predicts a decrease in the price of the gold The characteristic regression line or CRL is a simple linear regression model estimated for a particular stock against the market index return to measure its diversifiable and undiversifiable risk. The security return is, if (Daily basis): Todays Price Yesterdays Price x100 Todays security return = Yesterdays Price
Todays index Yesterdays index Todays market return = Yesterdays Price X 100
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BETA CALCULATION: Beta is the slope of the characteristic regression line beta describes the relationship between the stocks return and the index returns.
=nxy - x y nx2-(x)2
Decisions: 1. Beta = +1.0: one percent change in market index return causes exactly 1% change in stock return. It indicates that the moves with tandem with the market. 2. Beta = +0.5: one percent changes in the market index return causes 0.5 percent change in the stock return. The stock is less volatile compared to the market. 3. Beta = +2.0: one percent changes in the market index return causes 2 percent change in the stock return. The stock return is more volatile. When there is a decline of 10 percent in the market return, the stock with a beta of 2 would give a negative return of 20 percent. The stocks with more than 1 beta value are considered to be risky. Negative beta value indicates that the stock return moves in the opposite direction to the market return. A stock with a negative beta of -1 would provide a return of 10 percent, if he market return declines by 10 percent and vice versa. Stocks with negative beta resist the decline in the market return, but stocks with negative returns are very rare
F-Test: An F-test ( Snedecor and Cochran, 1983) is used to test if the standard deviations of two populations are equal. This test can be a two-tailed test or a one-tailed test. The two-tailed version tests against the alternative that the standard deviations are not equal. The one-tailed version only tests in one direction that is the standard deviation from the first population is either greater than or less than (but not both) the second population standard deviation. The
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Analysis of Portfolio Investment choice is determined by the problem. For example, if we are testing a new process, we may only be interested in knowing if the new process is less variable than the old process. H0: Ha: for a lower one tailed test for an upper one tailed test for a two tailed test
Test Statistic: F= Where and are the sample variances.
The more this ratio deviates from 1, the stronger the evidence for unequal
population variances
HYPOTHISIS Ho= The individual stock of the companies depend on market. Ha= The individual stock of the companies does not depend on market
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Analysis of Portfolio Investment BANKING SECTOR BANKING INDUSTRY DEVELPOMENT In financial year 2010-11, the repo and the reverse repo rates have been raised by 175 basis points and 225 basis points, respectively in a calibrated manner, as part of the normalization of policy. The increase in Cash Reserve Ratio (CRR) in February and April 2010 contributed to the gradual tightening of liquidity. Liquidity conditions remained tight during the third quarter of 2010-11, warranting liquidity easing measures by the Reserve Bank. The tight liquidity conditions since end -October 2010 were primarily on account of unusually large unspent cash balances of the government. The divergence between the growth rates of credit and aggregate deposits of Scheduled Commercial Banks (SCBs) widened during the third quarter of 2010-11 (the gap peaked at 9 percentage points in mid- December), emerging thereby as a structural source of pressure on liquidity. While the year-on-year non-food credit growth at 23% upto February was above the indicative projection of 20%, the pace of credit expansion moderated since December 2010 narrowing the divergence.
Current Scenario
The industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of the Indian Banking system, are in the process of shedding their flab in terms of excessive manpower, excessive non Performing Assets (NPAs) and excessive governmental equity, while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. Private sector Banks have pioneered internet banking, phone banking, anywhere banking, mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various other services and integrated them into the mainstream banking arena, while the PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes.
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Analysis of Portfolio Investment IDBI Weekend price of weeks IDBI 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2206.5 * 2184.65 2151.6 2305.15 2395.75 2368.95 2410.65 2295.55 2297.25 2251.05 2315.7 2303.65 2356.75 2362.45 2349.3 2383.15 2501.25 2559.15 508.95 501.55 486.8 473.05 468.05 453.05 456.45 488.1 -0.990 -1.512 7.1365 3.9303 -1.118 1.7603 -4.774 0.0741 -2.011 2.872 -0.520 2.305 0.2419 -0.556 1.4409 4.9556 2.3148 -80.11 -1.454 -2.940 -2.824 -1.057 -3.204 0.7505 6.9339 Y * 0.9806 2.2886 50.93 15.447 1.2514 3.0986 22.797 0.0055 4.0445 8.2483 0.2708 5.3132 0.0585 0.3098 2.0761 24.558 5.3585 6418 2.114 8.6488 7.9782 1.1172 10.271 0.5632 48.08 Y2 Weekend price of NIFTY 5520.8 * 5449.65 5413.85 5736.35 5910.05 5911.5 5884.7 5749.5 5551.45 5544.75 5486.35 5476.1 5516.75 5485.8 5366.4 5471.25 5627.2 5660.65 5581.1 5633.95 5482 5211.25 5072.95 4898.8 4919.6 5124.65 -1.2888 -0.6569 5.95694 3.02806 0.02453 -0.4534 -2.2975 -3.4446 -0.1207 -1.0532 -0.1868 0.74232 -0.561 -2.1765 1.95382 2.85035 0.59443 -1.4053 0.94695 -2.697 -4.9389 -2.6539 -3.4329 0.42459 4.16802 X * 1.66091 0.43155 35.4852 9.16913 0.0006 0.20553 5.27843 11.8656 0.01457 1.10933 0.0349 0.55103 0.31474 4.73728 3.81743 8.12452 0.35335 1.97491 0.89671 7.27404 24.3926 7.04305 11.7849 0.18028 17.3724 X2 ** 1.2762 0.99381 42.512 11.9013 -0.0274 -0.798 10.9697 -0.2551 0.24272 -3.0249 0.09722 1.71107 -0.1357 1.21151 2.81518 14.1253 1.37602 112.583 -1.3768 7.93169 13.9502 2.80507 11.0018 0.31864 28.9008 XY
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Analysis of Portfolio Investment 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 478.9 494.5 458 438.7 470.65 489.55 482.65 483 472.25 444.05 435.2 467.1 434.35 435.45 439.8 443.3 459.7 468.4 488.8 497.15 508.45 533.05 533.15 -1.884 3.2575 -7.381 -4.214 7.2829 4.0157 -1.409 0.0725 -2.225 -5.971 -1.993 7.33 -7.011 0.2533 0.999 0.7958 3.6995 1.8925 4.3553 1.7083 2.273 4.8382 0.0188 3.5527 10.611 54.482 17.758 53.04 16.126 1.9866 0.0053 4.9536 35.658 3.9721 53.728 49.159 0.0641 0.9979 0.6333 13.686 3.5817 18.968 2.9182 5.1663 23.409 0.0004 5012.55 5133.25 4945.9 4751.3 5077.85 5091.9 5360.7 5360.7 5068.5 4812.35 4805.1 5062.6 4763.25 4693.15 4705.8 4749.65 4849.55 4967.3 5127.35 5235.7 5368.15 5531.95 5483.3 -2.1875 2.40796 -3.6497 -3.9346 6.87286 0.27669 5.27897 0 -5.4508 -5.0538 -0.1507 5.35889 -5.913 -1.4717 0.26954 0.93183 2.10331 2.42806 3.22207 2.11318 2.52975 3.05133 -0.8794 4.78501 5.79825 13.3206 15.4809 47.2361 0.07656 27.8676 0 29.711 25.5405 0.0227 28.7177 34.9632 2.16585 0.07265 0.8683 4.42393 5.89548 10.3818 4.46552 6.39962 9.31062 0.77341 4.12307 7.84383 26.9394 16.5802 50.0542 1.11112 -7.4405 0 12.1317 30.1781 0.30026 39.2805 41.4579 -0.3727 0.26926 0.74156 7.78126 4.5952 14.0329 3.60987 5.75 14.7631 -0.0165
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Analysis of Portfolio Investment x y (x)2 (y)2 (x*y) Correlation co-efficient Beta 1.475884 -57.6616 432.35 7018.3 520.2795 0.309588 1.204448
BETA ANALYSIS
Since the beta is greater than 1 (and is positive), the stock price experiences movements that are greater and more volatile than the stock market. Hence both the risk as well as returns from the stock would be high. The IDBI stock can be preferred by an investor for an aggressive portfolio (an aggressive portfolio is the one whos risk and returns are higher than the market risk and returns).
CORRELATION ANALYSIS
The above figure of r indicates that there is a positive correlation between the scrip and the market returns, there is a moderate correlation between the two.
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F-Test F-Test Variances -0.9903 Mean Variance Observations Degree freedom F P(F<=f) one-tail F Critical one-tail of 46 16.14078603 4.81697E-17 1.632463865 46 -1.20577234 151.0662022 47 -1.2888 0.05882234 9.359284109 47 Two-Sample for
Ho= The IDBI stock depends on CNX S&P NIFTY. Ha= The IDBI stock does not depends on CNX S&P NIFTY. Since the F calculated value is greater than table value it is significant hence Ho may be rejected and we conclude that the difference in sample variability is significant. x2=x2= 151.0662022 y2= y2= 9.359284109 Since the null hypothesis is rejected we can conclude that the IDBI stocks are not purely depends on CNX S&P NIFTY.
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Diagram showing the variation in returns of IDBI compared to NIFTY

80 60 40 20 0 1 3 5 7 9 11131517192123252729313335373941434547 -20 -40 -60 -80 NIFTY IDBI WEEKS
Interpretation: The above diagram shows the comparison between IDBI returns with the CNX S&P NIFTY, there seems to be perfect correlation of returns between the company and the market as the company reacting to the ups and downs in the market.
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Analysis of Portfolio Investment CANARA BANK

Weekend price DATE Canara 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Y Y2 * -2.025 -0.466 1.2721 3.6629 0.2892 2.6425 -4.033 -8.238 -1.871 -8.067 2.495 -1.52 -0.691 -2.642 0.7053 2.6748 0.1989 -1.702 0.3943 -12.06 -5.578 3.8075 -7.002 0.992 3.858 -3.156 4.1 0.217 1.618 13.42 0.084 6.983 16.26 67.86 3.502 65.08 6.225 2.311 0.478 6.978 0.497 7.155 0.04 2.896 0.156 145.5 31.11 14.5 49.03 0.984 14.88 9.962 Weekend price NIFTY X * -1.28 -0.65 5.957 3.028 0.025 -0.45 -2.29 -3.44 -0.12 -1.05 -0.18 0.742 -0.56 -2.17 1.954 2.85 0.594 -1.40 0.947 -2.69 -4.93 -2.65 -3.43 0.425 4.168 -2.18 1.6609 0.4315 35.485 9.1691 0.0006 0.2055 5.2784 11.866 0.0146 1.1093 0.0349 0.551 0.3147 4.7373 3.8174 8.1245 0.3534 1.9749 0.8967 7.274 24.393 7.043 11.785 0.1803 17.372 4.785 X2 XY * 2.6095 0.3059 7.5776 11.091 0.0071 -1.198 9.2646 28.376 0.2258 8.4971 -0.466 -1.128 0.3879 5.7496 1.378 7.6242 0.1183 2.3916 0.3734 32.531 27.549 -10.1 24.038 0.4212 16.08 6.9044
624.75 * 612.1 609.25 617 639.6 641.45 658.4 631.85 579.8 568.95 523.05 536.1 527.95 524.3 510.45 514.05 527.8 528.85 519.85 521.9 458.95 433.35 449.85 418.35 422.5 438.8 424.95
5520.8 * 5449.65 5413.85 5736.35 5910.05 5911.5 5884.7 5749.5 5551.45 5544.75 5486.35 5476.1 5516.75 5485.8 5366.4 5471.25 5627.2 5660.65 5581.1 5633.95 5482 5211.25 5072.95 4898.8 4919.6 5124.65 5012.55
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28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 438.1 451.9 422.1 451.15 457.75 463 491.6 445.75 436.75 436.1 452.2 411.05 373.3 353.8 387.3 412.6 421.25 474.15 470.05 523.45 550.25 508.95 3.0945 3.15 -6.594 6.8823 1.4629 1.1469 6.1771 -9.327 -2.019 -0.149 3.6918 -9.1 -9.184 -5.224 9.4686 6.5324 2.0965 12.558 -0.865 11.36 5.1199 -7.506 9.576 9.922 43.49 47.37 2.14 1.315 38.16 86.99 4.077 0.022 13.63 82.81 84.34 27.29 89.65 42.67 4.395 157.7 0.748 129.1 26.21 56.34
5133.25 4945.9 4751.3 5077.85 5091.9 5360.7 5360.7 5068.5 4812.35 4805.1 5062.6 4763.25 4693.15 4705.8 4749.65 4849.55 4967.3 5127.35 5235.7 5368.15 5531.95 5483.3
2.408 -3.65 -3.93 6.873 0.277 5.279 0 -5.45 -5.05 -0.15 5.359 -5.91 -1.47 0.27 0.932 2.103 2.428 3.222 2.113 2.53 3.051 -0.87
5.7983 13.321 15.481 47.236 0.0766 27.868 0 29.711 25.541 0.0227 28.718 34.963 2.1659 0.0727 0.8683 4.4239 5.8955 10.382 4.4655 6.3996 9.3106 0.7734
7.4514 -11.5 25.946 47.301 0.4048 6.0545 0 50.838 10.204 0.0224 19.784 53.808 13.516 -1.408 8.8231 13.74 5.0903 40.462 -1.827 28.739 15.622 6.6008
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Analysis of Portfolio Investment x y (x)2 (y)2 (x*y) Correlation co-efficient Beta 1.475884 -13.2859 432.3502 1429.714 520.2795 0.663158 1.204448
BETA ANALYSIS
Since the beta is greater than 1 (and is positive), the stock price experiences movements that are greater and more volatile than the stock market. Hence both the risk as well as returns from the stock would be high. The CANARA BANK stock can be preferred by an investor for an aggressive portfolio (an aggressive portfolio is the one whos risk and returns are higher than the market risk and returns).
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F-Test F-Test Two-Sample for Variances -2.024809924 Mean Variance Observations df F P(F<=f) one-tail F Critical onetail 1.632463865 -0.239596918 30.9329499 47 46 3.305058074 4.40252E-05 -1.288762498 0.058822262 9.359275756 47 46
Ho= The Canara Bank stock depends on CNX S&P NIFTY. Ha= The Canara Bank stock does not depends on CNX S&P NIFTY. Since the F calculated value is greater than table value it is significant hence Ho may be rejected and we conclude that the difference in sample variability is significant. x2=x2= 30.9329499 y2= y2= 9.359275756
Since the null hypothesis is rejected we can conclude that the Canara Bank stocks are not purely depend on CNX S&P NIFTY. Though there is a correlation between the bank and company they are not varying as it is.
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Analysis of Portfolio Investment Diagram showing the variation in return of Canara Bank compared to NIFTY
70 60 50 40 30 20 10 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 -10 NIFTY CANARA BANK WEEKS
Interpretation: In the above diagram we can see that almost 90% of the variations in Canara Bank returns are explainable by the market. The political and economic changes in the market directly affects on the companies listed under a particular index.
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Analysis of Portfolio Investment SYNDICATE BANK: Weekend price WEEKS Syndicate 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Y Y2 * Weekend price NIFTY 5520.8 * 5449.65 5413.85 X * X2 XY *
114.65 * 112.05 114.35 114.35 120.35 130.55 124.9 123.4 116.85 114.55 115.3 111.35 113.85 117.35 114.15 114.25 116.4 118.75 118.75 122.15 119.65 115 112.1 93.45 97.7 105.55
-2.267771 5.142787 2.0526551 4.213393 0 0
-1.28876 1.66091 2.92262 -0.65692 0.43155 -1.3484 0
5736.35 5.956944 35.4852
5.2470485 27.53152 8.4752804 71.83038 -4.327843 18.73023 -1.200960 1.442307 -5.307941 28.17424 -1.968335 3.874345 0.6547359 0.428679 -3.425845 11.73642 2.2451729 5.040801 3.0742205 9.450831 -2.726885 7.435904 0.087604 0.007674 1.8818381 3.541315 2.0189003 4.075959 0 0
5910.05 3.028058 9.16913 15.8884 5911.5 0.024534 5884.7 5749.5 5551.45 5544.75 5486.35 5476.1 0.0006 0.20794
-0.45335 0.20553 1.96204 -2.29748 5.27843 2.75919 -3.44464 11.8656 18.284
-0.12068 0.01457 0.23756 -1.05324 1.10933 -0.18682 -0.6896
0.0349 0.64004
5516.75 0.742317 0.55103 1.66663 5485.8 5366.4 -0.56101 0.31474 -1.7247
-2.17652 4.73728 5.93514
5471.25 1.953824 3.81743 0.17116 5627.2 2.850354 8.12452 5660.65 0.594434 0.35335 5581.1 -1.40531 1.97491 5.3639 1.2001 0
2.8631579 8.197673 -2.046663 4.188833 -3.886335 15.1036
5633.95 0.946946 0.89671 2.71126 5482 5211.25 5072.95 4898.8 -2.69704 7.27404 5.51994 -4.93889 24.3926 19.1942 -2.65387 7.04305 6.69238 -3.43291 11.7849 57.1132 1.931
-2.521739 6.359168 -16.63693 276.7875 4.5478866 20.68327 8.0348004 64.55802
4919.6 0.424594 0.18028
5124.65 4.168022 17.3724 33.4892
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Analysis of Portfolio Investment 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 102 106 101.5 97.15 103.35 102.5 109.5 106.05 101.6 99.3 100.4 102.6 93.95 78.4 71.4 76.35 81.8 86.55 96.5 97.8 109.7 116.7 108.45 -3.363334 11.31202 3.9215686 15.3787 5012.55 -2.18746 4.78501 7.35718
5133.25 2.407956 5.79825 9.44296 4945.9 4751.3 -3.64973 13.3206 15.4942 -3.93457 15.4809 16.8625
-4.245283 18.02243 -4.285714 18.36735 6.3818837 40.72844 -0.822448 0.676421 6.8292683 46.63891 -3.150684 9.926816 -4.196133 17.60754 -2.263779 5.124698 1.1077543 1.22712
5077.85 6.872856 47.2361 43.8618 5091.9 0.276692 0.07656 -0.2275
5360.7 5.278972 27.8676 36.0515 5360.7 5068.5 4812.35 4805.1 5062.6 4763.25 4693.15 0 -5.45078 0 0
29.711 22.8722
-5.05376 25.5405 11.4406 -0.15065 0.0227 -0.1668
2.1912351 4.801511 -8.430799 71.07838 -16.55135 273.9474 -8.928571 79.71939 6.9327731 48.06334 7.1381794 50.95361 5.806846 33.71946 11.496245 132.1636 1.3471503 1.814814 12.167689 148.0527 6.3810392 40.71766 -7.069408 49.97654 3.2601639 1718.554
5.35889 28.7177 11.7426 -5.91297 34.9632 49.8511 -1.47168 2.16585 24.3584 -2.4066
4705.8 0.269542 0.07265 4749.65 0.931829
0.8683 6.46016
4849.55 2.103313 4.42393 15.0138 4967.3 2.42806 5.89548 14.0994
5127.35 3.222072 10.3818 37.0417 5235.7 2.113177 4.46552 2.84677 5368.15 2.529748 6.39962 30.7812 5531.95 3.051331 9.31062 19.4707 5483.3 -0.87943 0.77341 1.475884 6.2171
432.35 558.592
Page 57
Analysis of Portfolio Investment x y (x)2 (y)2 (x*y) Correlation co-efficient Beta 1.475884 3.260164 432.3502 1718.554 558.5917 0.647989 1.291893
BETA ANALYSIS
Since the beta is greater than 1 (and is positive), the stock price experiences movements that are greater and more volatile than the stock market. Hence both the risk as well as returns from the stock would be high. The SYNDICATE BANK stock can be preferred by an investor for an aggressive portfolio (an aggressive portfolio is the one whos risk and returns are higher than the market risk and returns).
Page 58
Analysis of Portfolio Investment F-Test F-Test Two-Sample for Variances -2.267771478 Mean Variance Observations df F P(F<=f) one-tail F Critical one-tail -1.2887625
0.117615647 0.058822262 37.23392909 9.359275756 47 46 3.978291703 3.54817E-06 1.632463865 47 46
Ho= The Syndicate Bank stock depends on CNX S&P NIFTY. Ha= The Syndicate Bank stock does not depends on CNX S&P NIFTY. Since the F calculated value is greater than table value it is significant hence Ho may be rejected and we conclude that the difference in sample variability is significant. x2=x2= 37.23392909 y2= y2= 9.359275756
Since the null hypothesis is rejected we can conclude that the Syndicate Bank stocks are not purely depend on CNX S&P NIFTY. Though there is a correlation between the bank and company they are not varying as it is.
Page 59
Analysis of Portfolio Investment Diagram showing the variation in return of Syndicate Bank compared to NIFTY
70 60 50 40 30 20 10 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 -10 NIFTY SYNDICATE WEEKS
Analysis: The above graph shows the comparison of returns of Syndicate bank with the CNX S&P NIFTY, in which we can analyze that the returns of the security is directly dependent on market fluctuation.
IT SECTOR
Information Technology (IT) industry in India is one of the fastest growing industries. Indian IT industry has built up valuable brand equity for itself in the global markets. IT industry in India comprises of software industry and information technology enabled services (ITES), which also includes business process outsourcing (BPO) industry. India is considered as a pioneer in software development and a favorite destination for ITenabled services. Today, Indian IT companies such as Wipro, Infosys, HCL etc all are renowned in the global market for their IT prowess.
HCL
Analysis of Portfolio Investment Weekend price WEEKS HCL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Y 464 * 455.5 452.05 Y2 * -1.8319 3.355845 -0.75741 0.573669 38.2288 Weekend price NIFTY 5520.8 * 5449.65 5413.85 X * X2 XY * 2.36088 0.49756
-1.28876 1.660909 -0.65692 0.431548
480 6.182944
5736.35 5.956944 35.48518 36.83145 5910.05 3.028058 9.169135 4.289749 5911.5 0.024534 0.000602 0.052919 5884.7 5749.5 5551.45 5544.75 5486.35 5476.1 -0.45335 -2.29748 -3.44465 0.20553 5.27843 -1.97824 -0.97389
486.8 1.416667 2.006944 497.3 2.156943 4.652404 519 4.363563 19.04068 521.2 0.423892 0.179685 504.75 -3.15618 9.96146
11.8656 10.87192 -0.02869 -0.58288 -0.1322 -1.3764
505.95 0.237741 0.056521 508.75 0.553414 0.306267 512.35 0.707617 0.500721 502.85 479.95 -1.8542 3.438062 -4.55404 20.7393
-0.12069 0.014566 -1.05325 1.109333 -0.18683 0.034904
5516.75 0.742317 0.551034 5485.8 5366.4
-0.56102 0.314742 2.554903 -2.17653 4.737276 -5.82736
492.8 2.677362 7.168268 496.2 0.689935 0.47601
5471.25 1.953824 3.817427 1.348012 5627.2 2.850354 8.124519 3.475341 5660.65 0.594434 0.353352 0.236708 5581.1 -1.40532 1.974912 -0.18115 -3.39468
502.25 1.219266 1.486611 504.25 0.398208 0.15857
504.9 0.128904 0.016616 486.8 443.45 407.75 387.15 -3.58487 12.85128 -8.90509 79.30071 -8.05051 64.81076 -5.05212 25.52387
5633.95 0.946946 0.896707 5482 5211.25 5072.95 4898.8
-2.69704 7.274036 24.01741 -4.93889 24.39264 39.76061 -2.65387 7.043046 13.40768 -3.43291 11.7849 0.18028 -2.92616 1.75079 -11.6362 -5.47974 1.12938
390.45 0.852383 0.726556 406.55 4.123447 17.00282 395.2 -2.79178 7.794061
4919.6 0.424594
5124.65 4.168022 17.37241 5012.55 -2.18747 4.78501
405.1 2.505061 6.275329 407 395.35 0.46902 0.21998
5133.25 2.407956 5.798252 4945.9
-2.86241 8.193379
-3.64973 13.32056 10.44703
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Analysis of Portfolio Investment 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 426.55 7.891741 62.27958 411.7 -3.48142 12.12029 4751.3 -3.93457 15.48086 -31.0506 -23.9273
5077.85 6.872856 47.23615
451.75 9.727957 94.63315 438.75 425.35 391.75 390.65 -2.8777 8.281145 -3.05413 9.327716 -7.89938 62.40016 -0.28079 0.078844
5091.9 0.276692 0.076558 2.691647 5360.7 5.278972 27.86755 5360.7 5068.5 4812.35 4805.1 5062.6 4763.25 4693.15 0 0 -15.1913 0
-5.45078 29.71101 43.05777 -5.05376 25.54052 1.419053 -0.15065 0.022697 5.35889 28.7177 -1.03933 -7.63539
417.6 6.898758 47.59287 411.65 389.25 -1.42481 2.030079 -5.44152 29.61009
-5.91297 34.96321 32.17552 -1.47168 2.165855 -0.98301
391.85 0.667951 0.446159 418.4 6.775552 45.9081
4705.8 0.269542 0.072653 1.826294 4749.65 0.931829 0.868305 0.334069 4849.55 2.103313 4.423925 2.754994 4967.3 2.42806 5.895477 1.740852
419.9 0.358509 0.128528 425.4 1.309836 1.715669 428.45 0.716972 0.514049 437.9 2.205625 4.864781 467.2 6.691025 44.76982 469.7 0.535103 0.286335 495.4 5.471578 29.93816 484.95 -2.10941 4.449596 8.387317 796.4203
5127.35 3.222072 10.38175 7.106683 5235.7 2.113177 4.465519 14.13932 5368.15 2.529748 6.399623 1.353675 5531.95 3.051331 9.310618 16.69559 5483.3 -0.87944 0.773409 1.85509
1.475884 432.3502 165.8384
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x y (x)2 (y)2 (x*y) Correlation co-efficient Beta
1.475884 8.387317 432.3502 796.4203 165.8384 0.282451 0.383022
BETA ANALYSIS
Since the beta is lesser than 1 (and is positive), the stock price experiences movements that are lesser and less volatile than the stock market. Hence both the risk as well as returns from the stock would be low. The HCL stock can be preferred by an investor for an moderate portfolio (an moderate portfolio is the one whos risk and returns are almost at par with the market risk and returns).
The above figure of r indicates that there is a positive correlation between the scrip and the market returns, there is a moderate correlation between the two
F-Test
Analysis of Portfolio Investment F-Test Two-Sample for Variances -1.831896552 Mean Variance Observations df F P(F<=f) one-tail F Critical one-tail 0.217430079 17.19222831 47 46 1.836918663 0.020897204 1.632463865 -1.2887625 0.058822262 9.359275756 47 46
Ho= The HCL stock depends on CNX S&P NIFTY. Ha= The HCL stock does not depends on CNX S&P NIFTY. Since the F calculated value is greater than table value it is significant hence Ho may be rejected and we conclude that the difference in sample variability is significant. x2=x2= 17.19222831 y2= y2= 9.359275756
Since the null hypothesis is rejected we can conclude that the HCL stocks are not purely depend on CNX S&P NIFTY. Though there is a correlation between the bank and company they are not varying as it is.
Diagram showing the variation in return of HCL compared to NIFTY.


60 50 40 30 20 10 0 1 3 5 7 9 1113151719212325272931333537394143454749 -10 NIFTY HCL WEEKS
Analysis: In the diagram the companys returns varying with the market index. Which indicates that company stock price or returns is positively correlated to the market fluctuation.
WIPRO
Page 65
Analysis of Portfolio Investment Weekend price weeks (WIPRO) Y 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 449 * 442.4 434.4 463.5 Y2 * Weekend price (NIFTY) 5520.8 * 5449.65 5413.85 X * X2 XY *
-1.4699 2.160704 -1.8083 3.270015 6.6989 44.87519
-1.2888 1.6609088 1.8943948 -0.6569 0.4315477 1.1879257
5736.35 5.95694 35.485179 39.904941 5910.05 3.02806 9.1691347 11.432797 5911.5 0.02453 0.0006019 5884.7 5749.5 5551.45 5544.75 5486.35 5476.1 -0.043866
481 3.77562 14.25531 472.4 463.15 450.3 442.5 442.55 -1.7879 3.196736 -1.9581 3.834102 -2.7745 7.697734 -1.7322 3.000443 0.0113 0.000128
-0.4534 0.2055295 0.8877056 -2.2975 5.2784295 6.3743194 -3.4446 11.865595 5.9667443 -0.1207 0.0145659 -1.0532 1.1093325 -0.001364 -1.142378
447.35 1.08462 1.176407 442.05 -1.1848 1.403644 0.05642
-0.1868 0.0349044 0.2213445 0.551034 0.1763222 0.314742 0.715359
443.1 0.23753 437.45 408.85
5516.75 0.74232 5485.8 5366.4 -0.561
-1.2751 1.625898 -6.5379 42.74401
-2.1765 4.7372763 14.229904
424.2 3.75443 14.09577 424.4 0.04715 0.002223 420.9 413.65 410.15 391.9 357.85 340.4 332.95 -0.8247 0.68012
5471.25 1.95382 3.8174274 7.3355008 5627.2 2.85035 8.1245186 0.1343873 5660.65 0.59443 5581.1 0.353352 -0.490226
-1.7225 2.967004 -0.8461 0.715929 -4.4496 19.79887 -8.6884 75.48901 -4.8763 23.77874 -2.1886 4.789977
-1.4053 1.9749121 2.4206554 -0.801236
5633.95 0.94695 0.8967066 5482 5211.25 5072.95 4898.8
-2.697 7.2740358 12.000736 -4.9389 24.392643 42.911262 -2.6539 7.0430463 12.941204 -3.4329 11.784897 7.5132808 0.293307
335.25 0.69079 0.477197 338.15 0.86503 0.74827
4919.6 0.42459 0.1802799
5124.65 4.16802 17.372406 3.6054476 5012.55 -2.1875 4.7850095 -6.501268 -5.42862 -7.774519
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348.2 2.97205 8.833104 340.35 -2.2545 5.082551
5133.25 2.40796 5.7982522 4945.9 -3.6497 13.320562
347.6 2.13016 4.537582
Analysis of Portfolio Investment 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 333.8 -3.9701 15.76154 4751.3 -3.9346 15.480857 15.620568
363.3 8.83763 78.10366 354.05 366.6 369.3 374.15 365.9 -2.5461 6.482651 3.5447 12.56488 0.7365 0.542429 1.3133 1.724745 -2.205 4.862016
5077.85 6.87286 47.236148 60.739739 5091.9 0.27669 0.0765584 -0.704487
5360.7 5.27897 27.867551 18.712358 5360.7 5068.5 4812.35 4805.1 0 -5.4508 0 29.71101 0 -7.158485
-5.0538 25.540525 11.143538 -0.1507 0.0226966 -0.465261
377.2 3.08828 9.537445 412.75 9.42471 88.82513 406.6 397.55 -1.49 2.220118 -2.2258 4.954073
5062.6 5.35889 28.717697 50.505971 4763.25 4693.15 -5.913 34.96321 8.8103605
-1.4717 2.1658545 3.2756376
398.35 0.20123 0.040495 414.95 4.16719 17.36547 401.3 -3.2896 10.82116 0.48683
4705.8 0.26954 0.0726528 0.0542406 4749.65 0.93183 0.8683049 3.8831074 4849.55 2.10331 4.4239251 4967.3 2.42806 5127.35 3.22207 -6.918959
404.1 0.69773
5.895477 1.6941363 10.38175 12.318985
419.55 3.82331 14.61771 426.05 1.54928 2.400265 445.6 4.58866 21.05583 439.35 437.9 -1.4026 1.967296 -0.33 0.108922 0.4015 585.7357
5235.7 2.11318 4.4655186 3.2739013 5368.15 2.52975 6.3996234 5531.95 3.05133 5483.3 -0.8794 9.310618 11.60816 -4.279806
0.773409 0.2902431
1.47588 432.35022 332.36801
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Analysis of Portfolio Investment x y (x)2 (y)2 (x*y) Correlation co-efficient Beta 1.4759 0.4015 432.35 585.74 332.37 0.660478 0.768804
BETA ANALYSIS
F-Test
Analysis of Portfolio Investment F-Test Two-Sample for Variances -1.469933185 Mean Variance Observations df F P(F<=f) one-tail F Critical one-tail 0.03981772 12.68479371 47 46 1.355317873 0.153037007 1.632463865 -1.288762498 0.058822262 9.359275756 47 46
Ho= The WIPRO stock depends on CNX S&P NIFTY. Ha= The WIPRO stock does not depends on CNX S&P NIFTY. Since the F calculated value is greater than table value it is significant hence Ho may be rejected and we conclude that the difference in sample variability is significant. x2=x2= 12.68479371 y2= y2= 9.359275756 Since the null hypothesis is rejected we can conclude that the WIPRO stocks are not purely depend on CNX S&P NIFTY. Though there is a correlation between the bank and company they are not varying as it is.
Page 69
Analysis of Portfolio Investment Diagram showing the variation in return of WIPRO compared to NIFTY.
60 50 40 30 20 10 0 1 3 5 7 9 1113151719212325272931333537394143454749 -10 NIFTY WIPRO WEEKS
Page 70
Analysis of Portfolio Investment TCS Weekend price (TCS) weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Y 1117.7 * 1089.8 1069.5 -2.4962 6.231002 -1.8627 3.469752 Y^2 Weekend price (NIFTY) 5520.8 * 5449.65 5413.85 X X^2 * XY
-1.28876 1.660909 3.2170058 -0.65692 0.431548 1.2236681
1138.7 6.47031 41.86495 1239.85 8.88294 78.90656 1210.1 1192.1 1165.65 1148.95 1127.1 -2.3994 5.757523 -1.4874 2.212598 -2.2187 4.922956 -1.4326 2.052564 -1.9017 3.616601
5736.35 5.956944 35.48518 38.543292 5910.05 3.028058 9.169135 26.898047 5911.5 0.024534 0.000602 5884.7 5749.5 5551.45 5544.75 5486.35 5476.1 -0.45335 -2.29748 -3.44465 -0.058870
0.20553 0.6743546 5.27843 5.0975953 11.8656 4.9350672 0.229519 -4.476142 0.484161
-0.12069 0.014566 -1.05325 1.109333 -0.18683 0.034904
1175 4.24984 18.06118 1144.55 -2.5914 6.715817
1152.1 0.65965 0.435135 1189.2 3.22021 10.36973 1109.2 -6.7272 45.25538
5516.75 0.742317 0.551034 0.4896676 5485.8 5366.4 -0.56102 0.314742 -1.806596
-2.17653 4.737276 14.641968
1137.75 2.57393 6.625101 1191.9 4.75939 22.65183 1171.65 1146.05 1133.4 -1.6989 2.886492 -2.1849 4.774019 -1.1037 1.218355
5471.25 1.953824 3.817427 5.0290001 5627.2 2.850354 8.124519 13.565957 5660.65 0.594434 0.353352 5581.1 -1.009924
-1.40532 1.974912 3.0705484 -1.045230 -0.856657
5633.95 0.946946 0.896707 5482 5211.25 5072.95 4898.8 -2.69704 7.274036
1137 0.31763 0.100888 1057.95 947.15 918.05 -6.9525 48.33735 -10.473 109.6855 -3.0723 9.439488
-4.93889 24.39264 34.337672 -2.65387 7.043046 27.794246 -3.43291 11.7849 10.547199 0.18028 4.6966394
1019.6 11.0615 122.3565 1031 1.11809 1.250115 1015.1 -1.5421 2.378356
4919.6 0.424594
5124.65 4.168022 17.37241 4.6602048 5012.55 -2.18747 4.78501 3.3734934

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Analysis of Portfolio Investment 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 1043.5 1047.9 0.42166 0.177795 1043.55 -0.4151 0.172321 4945.9 4751.3 -3.64973 13.32056 -1.538939
-3.93457 15.48086 1.6333036
1092.75 4.71468 22.22817 1044.9 -4.3788 19.17442
5077.85 6.872856 47.23615 32.403288 5091.9 0.276692 0.076558 -1.211595
1121.5 7.33085 53.74129 1099.8 -1.9349 3.743871
5360.7 5.278972 27.86755 38.699329 5360.7 5068.5 4812.35 4805.1 5062.6 4763.25 4693.15 0 0 0 -12.19214
1124.4 2.23677 5.003141 1081.85 -3.7842 14.32048
-5.45078 29.71101
-5.05376 25.54052 19.124656 -0.15065 0.022697 5.35889 -0.159448
1093.3 1.05837 1.120152 1179.55 7.88896 62.23569 1182.45 0.24586 0.060445 1158.7 -2.0085 4.034239
28.7177 42.276065 -1.453741 2.955939
-5.91297 34.96321 -1.47168 2.165855
1169.2 0.90619 0.821177 1173 0.32501 0.105631 1165.4 1103.95 1088.7 -0.6479 0.419789 -5.2728 27.80313 -1.3814 1.908275
4705.8 0.269542 0.072653 0.2442555 4749.65 0.931829 0.868305 0.3028523 4849.55 2.103313 4.423925 4967.3 2.42806 5.895477 -1.362760 -12.80284 -4.450980
5127.35 3.222072 10.38175
1128.7 3.67411 13.49906 1219.65 8.05794 64.93044 1241.6 1.7997 3.238908
5235.7 2.113177 4.465519 7.7640392 5368.15 2.529748 6.399623 20.384562 5531.95 3.051331 9.310618 5.4914693 5483.3 -0.87944 0.773409 1.475884 432.3502 -1.289122 433.8261
1259.8 1.46585 2.148718 5483.3 870.2904
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x y (x)2 (y)2 (x*y) Correlation co-efficient
1.47588 5483.3 432.35 870.2904 433.8261 0.548404
BETA ANALYSIS
The above figure of r indicates that there is a positive correlation between the scrip and the market returns, there is a moderate correlation between the two
Page 73
Analysis of Portfolio Investment F-Test F-Test Variances 2.496197549 Mean Variance Observations df F P(F<=f) one-tail F Critical onetail 1.632463865 0.399231031 18.62104866 47 46 1.989582223 0.010779212 -1.288762498 0.058822262 9.359275756 47 46 Two-Sample for
Ho= The TCS stock depends on CNX S&P NIFTY. Ha= The TCS stock does not depends on CNX S&P NIFTY. Since the F calculated value is greater than table value it is significant hence Ho may be rejected and we conclude that the difference in sample variability is significant. x2=x2= 12.68479371 y2= y2= 9.359275756 Since the null hypothesis is rejected we can conclude that the TCS stocks are not purely depend on CNX S&P NIFTY. Though there is a correlation between the bank and company they are not varying as it is.
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Analysis of Portfolio Investment Diagram showing the variation in return of WIPRO compared to NIFTY.
70 60 50 40 30 20 10 0 1 3 5 7 9 11131517192123252729313335373941434547 -10 NIFTY * TCS * weeks 1
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FINDINGS:
IDBI BANK When we analyze beta value of IDBI Bank (i.e. 1.233033) it is clear that the beta greater than one that means the risk associated with the stock is pretty high and the price of the shares are more fluctuating. Hence correlation of the bank (i.e. 0.3096) is positive the stock price of the IDBI Bank depends more on CNX S&P NIFTY. From the f-test we can say that the IDBI bank is not significantly depending upon market index. When we consider IDBI Bank from returns point of view of one year it is negative (i.e. 57.6616). CANARA BANK Beta value more than one means risk is comparatively high in Canara Bank (i.e. 1.20448). For investors who want to reap the benefit of speculation or hedging can invest in this stock. As correlation (0.6632) diversification of portfolio may help the investor to eliminate the controllable risk associated with this stock. Since the null hypothesis rejected the effect of market index over IDBI Bank is not significant. Returns % of Canara bank is negative (i.e. -13.2859).
SYNDICATE BANK Since the correlation of the bank (i.e. 0.6480) is positive the stock price of the Syndicate Bank depends more on CNX S&P NIFTY. Beta value of Syndicate Bank (i.e. 1.291893) shows beta greater than one so the stock volatility is pretty high and the price of the shares are more fluctuating. F-test shows a calculated value less than table value so our null hypothesis is rejected so the bank is not depending on market index up to 95%.
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HCL HCL has a positive return of 8.387317%. Correlation and beta both showing the positive value of 0.28251, 0.3830 respectively. F-test calculation shows a null hypothesis rejected.
WPRO Wipro has a return of 0.40%. Correlation is positive (i.e. 0.6605) it helps an investor to anticipate the future trends of the company stock price. Beta value of 0.7688 says that there is a moderate volatility of stock price in the company. And f-test result reveals that there is no perfect significance between company and the market.
TCS TCS has a beta value less than one (i.e. 0.) so 10% change in market will cause for 5% change in TCS either positively or negatively. TCS has positive correlation of 0.5484 it shows that the market trends actively influence the company. Amongst the stock considered for the study TCS gives highest return of 16.2689. From the f-test we can witness that the dependency of the stock on market index is not significant at 5% level of significance. Liquidity position of SHAREKHAN PVT LTD is week since the net current assets showing a negative balance in the previous year 2010-11 (I.e. -20.57).
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RECOMMENDATION AND SUGGESTION:
Liquidity position of SHAREKHAN PVT LTD is weak since the net current assets showing a negative balance in the year 2010-11 (I.e. -20.57). The investor must be provided with the relevant information about the current market scenario to determine the degree of risk involved and then invest in any security. The one who wants to invest in banking sector stocks must be very careful about his investment decisions as there is a high volatility in the stock price of this sector it is advisable for the investor to go for stop loss order to minimize huge possible losses. Investor in banking sector should always take short position through intraday trading to exploit the opportunity of high volatility.
Since Indian IT companies are more service based rather than product based anybody can enter in to that sooner or later but the advantage of Indian IT companies is the talent pool available in India.
Investors in HCL, WIPRO, and TCS are exposed to average risk and volatility of stocks so investor must take longer position. When we consider IT sector as a whole it is exposed for more risk, but the stocks chosen in our study from IT sector shows average risk and volatility so this portfolio is preferred.
An investor should diversify his investment portfolio so that he is exposed to minimum risk.
Investor should not depend entirely on the past returns as the future is uncertain and the stock market is highly volatile.
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Analysis of Portfolio Investment CONCLUSION The study did a brief analysis of portfolio investment of the selected stocks. The portfolio investment analysis helps an investor to decide whether he has to purchase the stock based on his/ her expected returns and risk appetite. A correlation analysis of a stock and an index helps an investor to understand the movement of stock in relation to the index. A positive correlation is an indication of movement of the stock in same direction as the index and a negative correlation is an indication of movement of the stock in the opposite direction An Index is used to give information about the price movements of products in the financial, commodities or any other markets. Financial indices are constructed to measure price movements of stocks, bonds, T-bills and other forms of investments. Stock market indices are meant to capture the overall behavior of equity markets. From the above study it is evident that an index is crucial to represent the true status of the entire stock market. The stock indices are used as economic indicators i.e. used as a measure to indicate the status of an economy of a country. Thus the monitoring of an index is very important and should be able to represent the movement of the market as a whole. The overall objective of the study was to provide a useful basis to the investor to be able to decide the scrips to be included in his portfolio based on his risk-return appetite.
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BIBLIOGRAPHY
SECURITY
ANALYSIS
AND
PORTFOLIO
MANAGEMENT
Punithavathy Pandian.
Fundamentals Of Statistics S C Gupta (6th revised and enlarged edition)
STATISTICS vol.2- RAJ MOHAN SHAREKHANS publication: Value guide magazine Cost and financial analysis -Jawaharlal Himalaya Publisher 3nd Edition 11
Website www.sharekhan.com www.nseindia.com www.moneycontrol.com
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Analysis of Portfolio Investment

1. INDUSTRY PROFILE The Financial Services Industry:

Financial Services Industry- Classification of various financial services Banking services

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

Other Financial Services

Foreign exchange services

Foreign Currency Banking - banking transactions are done in foreign currency

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

Stock Broking Firms

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

Current Scenario of Stock Broking Industry in India Financial Markets

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

2. COMPANY PROFILE A. BACKGROUND AND INCEPTION OF THE COMPANY

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

B. NATURE OF BUSINESS CARRIED

The Oxford College Of Engineering, Bangalore

C. VISION, MISSION AND OBJECTIVES

QUALITY POLICY User friendly online trading facility

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

D. PRODUCTS AND SERVICES PROFILE

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

Online products offered by Sharekhan are as follows:

The Oxford College Of Engineering, Bangalore

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

E. AREA OF OPERATION OF SHAREKHAN

F. OWNERSHIP PATTERN AT SHAREKHAN

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

The Oxford College Of Engineering, Bangalore

ACHIEVEMENTS AND AWARDS WON BY SHAREKHAN

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

J. WORK FLOW MODEL

GENERATION OF CLASSIC A/C

PORTFOLIO ANALYSIS & RESEARCH

PAYMENT FOR INVESTMENT IN DP A/C

TRADING THROUGH SHAREKHAN

HOLDINGS & STATEMENTS

The Oxford College Of Engineering, Bangalore

A Sharekhan outlet offers the following services:

K. FUTURE GROWTH AND PROSPECTS.

The Oxford College Of Engineering, Bangalore

Analysis of Portfolio Investment

The Oxford College Of Engineering, Bangalore

Managing Director General Manager Manager

Asst. Manager Executive

The Oxford College Of Engineering, Bangalore

100 48208.57 100 118002.86 = 41%