security analysis.ppt
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Transcript of security analysis.ppt
CONTENT
• Introduction to stock exchange
• Security meaning
• Types of securities
• Security analysis types – fundamental analysis– Technical analysis
• Conclusion
STOCK MARKET
• Stock Exchange also called Stock Market or Share Market
• The price at which each buying and selling transaction takes is determined by the market forces.
• Stock markets started in 1881.• Totally 21 stock exchanges in India.• National stock exchange and Bombay stock
exchanges are famous stock exchanges.
SECURITY ANALYSIS
• The analysis of various tradable financial instruments is called security analysis.
• It is the initial phase of the portfolio management process.
• This step consists of examining the risk-return characteristics of individual securities.
• Buy under priced securities and sell over priced securities.
FUNDAMENTAL ANALYSIS
• It is a logical and systematic approach to estimating the future dividends and share price.
• It is based on the basic premise that share price is determined by a number of fundamental factors.
• The fundamental factors are relating to EIC analysis framework
ECONOMY ANALYSIS
• Factors including while making economy analysis
– GDP
– Interest rates
– Inflation
– Exchange rates
– Government revenue , expenditure and deficits
• There are 24 sectors in Indian industry. They are– Banking sector
– Information technology sector
– Pharmaceutical sector
– Agriculture sector
– Real estate sector
– Telecommunication sector
– Textiles sector
– Media sector
– Auto mobile sector etc….
TECHNICAL ANALYSIS
• A technical analyst tries to identify the historical patterns from the chart, based on this he/she is going to forecast the future price movement.
• stages in technical analysis:– Collecting data
– Represent in charts
– Evaluation of historical patterns
– Forecasting the prices
EXAMPLE ON FUNDAMENTAL ANALYSIS
Sno. Company Fundamental analysis
P/E NPM EPS
1 Wipro 16.24 14.9 23.65
2 Bharti Airtel 26.44 3.9 10.01
3. Cipla 23.34 20.5 15.83
4 ITC 30.82 23.9 8.22
5 L&T 20.86 7.5 74.37
6 NTPC 14.45 15.5 11.70
7 ONGC 8.86 30.1 31.68
8 DR.REDDYS
18.96 13.2 88.15
9 HDFC 28.94 20 26.91
10 AXIS Bank 9.8 17.8 107.50
• Profit volume ratio (P/E ratio):-
Market price /Earnings per share(EPS)
• Earnings per share(EPS):-
Net Profit Available To Equity Shareholders/ Number Of Shareholders
EXAMPLE ON TECHNICAL ANALYSIS
Date Open Price High Price Low Price Close Price
14-Aug-12 356 357.55 352.4 355.5
16-Aug-12 354.2 354.7 347 349.4
17-Aug-12 349.4 354.5 346.5 353.5
21-Aug-12 350.65 358.5 350.65 355.75
22-Aug-12 355 357.45 350.25 354.5
23-Aug-12 355.65 366.75 355.65 363.1
24-Aug-12 362.95 366.5 360.25 365.1
27-Aug-12 366.5 366.85 360.05 361.25
28-Aug-12 360.5 365 359 363.65
29-Aug-12 364 369 361.5 364.15
30-Aug-12 364 370 362.1 369
31-Aug-12 369 372.5 360.55 362.6
3-Sep-12 362.9 372.5 361.65 364.2
4-Sep-12 363 366 360.4 363.05
5-Sep-12 361 364 357.7 362.1
6-Sep-12 362.5 379 360.7 377.45
7-Sep-12 381.5 384.8 376.9 377.8
8-Sep-12 378.5 382.6 378.5 380.75
10-Sep-12 380 382.3 375 376.45
11-Sep-12 373.5 377 372.1 374.85
12-Sep-12 377.25 386 375.3 384.55
13-Sep-12 387.1 389.35 385.5 387.9
14-Sep-12 395.95 395.95 387.55 391.55
CONCLUSION
• Both analysis are very essential to analysis the securities. Fundamental analysis gives good results comparatively technical analysis.
• If investor wants to invest his amount on long term bases he got for fundamental analysis.
• Then investor may get good amount of return.