STOCK REACTION TO THE MARKET CHANGES ON THE [Autosaved]

8/7/2019 STOCK REACTION TO THE MARKET CHANGES ON THE [Autosaved]

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Presented by: Reg. no

Sameer Kumar Srivastava 2941470

FROM Co.: Under the guidelines of

MADRAS STOCK EXCHANGE Mr. John Paul


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` A method of evaluating a security that entails attempting tomeasure its intrinsic value by examining related economic,financial and other qualitative and quantitativefactors. Fundamental analysis attempt to study everything

that can affect the security's value, includingmacroeconomic factors (like the overall economy andindustry conditions) and company-specific factors (likefinancial condition and management).

The end goal of performing fundamental analysis is to

produce a value that an investor can compare with thesecurity's current price, with the aim of figuring out whatsort of position to take with that security


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` The fundamental school of thought appraised the

intrinsic value of shares through

Economic Analysis

Industry Analysis

Company Analysis


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ECONOMY

ANALYSIS

INDUSTRY

ANALYSIS

COMPANY

ANALYSIS

Inflation Product line Balance sheet

Tax structure Sector wise Income statement

GDP Business cycle Financial statement

Budget Past performance Market share

Interest Rate Performance of Product Growth of sales

Monsoon & Agriculture Role of government inindustry

Operating efficiency

Foreign exchange rate Labour conditions Earnings of the company

Money supply & Liquidity Competitive condition Preference share

Saving & investment Industry life cycle Ratio analysis

Business cycle SWOT analysis Management


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` A stock market or equity market is a public (a loosenetwork of economic transactions, not a physicalfacility or discrete) entity for the trading ofcompany stock (shares) and derivatives at an agreedprice; these are securities listed on a stockexchange as well as those only traded privately

` The size of the world stock market was estimated atabout $36.6 trillion at the start of October2010.[1] The total world derivatives market has beenestimated at about $791 trillion face or nominal

value,[2] 11 times the size of the entire world economy


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` The stock market is one of the most importantsources for companies to raise money. This allowsbusinesses to be publicly traded, or raiseadditional capital for expansion by selling sharesof ownership of the company in a public market.The liquidity that an exchange provides affords

investors the ability to quickly and easily sellsecurities. This is an attractive feature of investingin stocks, compared to other less liquidinvestments such as real estate


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` A stock exchange is an entity that provides "trading" facilitiesfor stock brokers and traders to trade stocks, bonds, andother securities. Stock exchanges also provide facilities for issueand redemption of securities and other financial instruments, andcapital events including the payment of income and dividends.Securities traded on a stock exchange include shares issued bycompanies, unit trusts, derivatives, pooled investment productsand bonds.

` The initial offering of stocks and bonds to investors is by definitiondone in the primary market and subsequent trading is done inthe secondary market. A stock exchange is often the most

important component of a stock market. Supply and demand instock markets is driven by various factors that, as in all freemarkets, affect the price of stocks.


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` Raising capital for businesses

` Mobilizing savings for investment

` Facilitating company growth

`

Profit sharing` Corporate governance

` Creating investment opportunities for smallinvestors

`

Government capital-raising for developmentprojects

` Barometer of the economy


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1. Sensex. INDIA2. New York Stock Exchange, New York City3. London Stock Exchange, the City of London4. Tokyo Stock Exchange,Tokyo5. Toronto Stock Exchange,Toronto6. Sao Paulo Stock Exchange,Sao Paulo7. Australian Securities Exchange's Sydney Exchange

Centre, Sydney

8. Borsa Italiana, Milan Stock Exchange9. Paris Stock Exchange, Paris10. SWX Swiss Exchange, Zurich


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INDIAN STOCK EXCHANGE

NATIONAL STOCKEXCHANGE

BOMBAY STOCKEXCHANGE


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There are 23 stockexchanges in

India. Among themtwo are national

level stockexchanges namely

Bombay StockExchange (BSE)

and National Stock

Exchange of India(NSE). The rest 21are Regional StockExchanges (RSE).

Ludhiana

Madhya Pradesh

Madras

Magadh

Mangalore Meerut

OTC Exchange Of

India

Pune

Saurashtra Kutch

Uttar Pradesh Vadodara

Ahmadabad

Bangalore

Bhubaneswar

Calcutta

Cochin Coimbatore

Delhi

Guwahati

Hyderabad

Jaipur


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` Madras Stock Exchange Ltd (MSE) is a self regulatory organization

having permanent recognition under the Securities Contracts(Regulations) Act, 1956, and the fist Stock Exchange in the southernpart of the country. Established in the year 1937, the Exchange hasa long history of service to the nation and pioneered thedevelopment of the capital market in this part of the country bycatering to the needs of the industrial entrepreneurs to raise capitalfor industrial promotion and providing investment opportunities tothe public.

` The Exchange is a demutualised corporate entity pursuant to theMSE (Corporatization and Demutualization) Scheme, 2005approved by the Securities and Exchange Board of India (SEBI).

The stakeholders of the Exchange include Financial Institution of theTamil Nadu State Government, leading corporate houses, high networth individuals and Trading Members of the Exchange.


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` MSE has a strategic arrangement with the National StockExchange (NSE) which provides for the facility of trading by themembers of MSE on NSE platform and also for trading of MSElisted companies on the NSE.

` Board of Directors:The following is the list of Board of Directors of theExchange 2010-2011

Mr.V.C.Davey Public Interest Director Mr. Kalpathi S. Suresh Shareholder Director Mr. N. Sandeep Reddy Shareholder Director Mr. Hiren B. Shah Shareholder Director

Mr. V. Nagappan Trading Member Director Mr. S. Veeraraghavan Trading Member Director


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1. Empowerment of the investors through educationhas been the focus of the Exchange. The Exchangehas established an exclusive investment educationcentre named as the MSE Institute of Capital

Markets to cater to the educational needs of themarket participants.2. The Exchange also provides Depository Services as

Depository Participant of CDSL and NSDL.3. MSE has set up subsidiary, trading facilities are

provided to the investors.4. Account Modification.5. Initial Public Offer.


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Chen, Roll and Ross (1986) who considered somesignificant economic variables to have systematic influenceon asset returns implemented one of the most famous APTtests on this subject

Roll and Ross (1980) found that three or four systematicrisk factors are statistically adequate to explain the assetreturns in the period of 1962-1972

Chen (1983) found five factors in the NYSE and AMEXduring 1963-1978

Dhrymesetal (1985) found a changing number offactors depending on the period length and the size of thestock groups under analysis.


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Cheng (1995)implemented factor analysis on bothasset returns and macroeconomic variables in order to

derive priced security factors and macroeconomicfactors, and then compared these two categories offactors with a canonical correlation analysis in order toreach a statistically significant relation

A research by zcam (1997)

zcam (1997) can be considered anexample of APT testing in Istanbul Stock Exchange. Inthis research, seven macroeconomic variables ofTurkish economy are separated into expected andunexpected series by a regression process, and then

two-step testing methodology is implemented on theseseries


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Altay (2001) is another example of two different APT testsin Istanbul Stock Exchange. In the first test, factor analysismethod is employed in daily returns of 121 to 265 stocks in

the1993-2000 periods for each year and one dominantsignificant factor is found among several minor significantfactors for each year

In Indian context, Naka, Atsuyuki, Mukherjee, Tarun K.Tufte,

Naka, Atsuyuki, Mukherjee, Tarun K. Tufte, David R. (1998) David R. (1998) analyzed relationships among selected macroeconomic variables and the Indian stock market.

They found that three long-term equilibrium relationshipsexist among these variables. Their results suggested that

domestic inflation is the most severe deterrent to Indianstock market performance, and domestic output growth isits predominant driving force


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` IndustrialProduction;Inflation;Interestrates;Treasury billrates;Long andshort-termsGovt. bond

` rates` Corporate

bond ratesEquityreturnsPer capita

consumptionRiskPremiumTermstructureForeign

exchangerateMarketindices;Oil priceOverallproduction;GrossDomesticProductionGrossnationalproduct;WeeklywagesMoney

supply,WholesalesalesLabour forceBuildingconstruction

` Exports andImports

` Population` Inventories` Book-to

market equityvalue;

` Dividendyields;

` Spread oflong andshort-runsbond

` Yield` High and low-

grades bondyield;

` Currentliabilities;

` Consumer

creditoutstanding

` Commercialbank assetvalue;

` Moneystock;

` Consumerprice index;` Price-

earningsratio;

` Farm size;` Corporate

profit;` International

or globalindex

` Federal debt` Federal

budgetfinancing;

` Housingconstruction


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` PRIMARY:

To Analyze the stock market reaction to thechanges in market on the basis of E.I.C analysis

` SECONDARY:a) To analyze the Volatility of stock market

b) To analyze the affect of FII on stock

market


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` To make the proper decision of buy & sell.

` To value the share properly.

` To know the investment perspective.

` To know the factors which influence the market.` To know how the FII influence the stock exchange

& to what extent market depends on them.

` To understand the volatile behavior of market.


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` Time constraints.

` Unavailability of Historical data.

` Less awareness about Financial complexity.

` The reliance on secondary sources of informationlimits the degree of detail sought about a specificsector or a company in some cases.

` The complexity of the stock market & economy.


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` Use multiple regression analysis and investigate

the relationship of macroeconomic variable withstock prices

` Use historical Data and there comparison


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` Primary Data:

SEBI Bulletin is the main source of data

collection

` Secondary Data:

Wikipedia

Investopidia

FICCI WebsiteEconomy watch


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STOCK REACTION TO THE MARKET CHANGES ON THE [Autosaved]