11-12-2012, 06:28 PM
A STUDY ON SECURITY ANALYSIS OF BANKING SECTOR AT INDIA INFOLINE LTD
A STUDY ON SECURITY ANALYSIS OF BANKING.doc (Size: 528.5 KB / Downloads: 67)
ABSTRACT
A lot of investors trading in the financial markets with securities and stocks are trying to foresee the market movements with the help of accessible information of the press. This may concern the question will securities with higher prospective benefits get greater revenues to securities with lower prospective benefits? These ideas can be investigated using time research and deeper analysis. If a security is determined precisely, the future return of the security will come to the beta at the securities market line. Nevertheless, if it goes down that line then that states the security is understated and it is overrated if it goes above the line. In any situation, regulations have to be implemented.
Security market line is a line that shows the risks against revenue in the trading market at a specified time and can expose all the securities that are in a good demand. It is also called characteristic line or SML. Security market line really shows the outcomes of the financial capital asset pricing model. It is also called CAPM formula. Risk on the market is represented through the X-axis also called beta. Prospective revenue is represented through the Y-axis. Securities risk premium is identified with the help of security market line.
Security market line turns out to be an effective instrument in identifying if a security involved in your Security market gives sensible prospective revenue for specified risks. Your securities are represented on the chart with security market line. So, if the securities risks against the prospective profits are situated above the line it is undervalued security. It is so, as the trader supposes to get higher revenue for specified risk. The asset that is situated below the line is overvalued. This can happen when the trader can take less profit for the considered risk. Take this effective knowledge for your consideration and use for earning profits.
STATEMENT OF THE PROBLEM
INTRADATION
The investor while buying stock has the primary purpose of gain. But it is not so easy, so the need has been raised for analyzing the stock. If he invests for a short period of time it is speculative but when he holds it for a fairly long period of time the anticipation is that he would receive some return on his investment.
The behavior of stock prices as well as forecasting the prices of stock help the investor to take certain decisions in the investment market. Fundamental analysis is a method of finding out the future price of a stock which an investor wishes to buy, the method for forecasting the future behavior of investments and the rate of return on them is clearly through an analysis of the broad economic forces in which they operate, the kind of industry to which they belong, and the analysis of the company’s internal working through statements like income statement, balance sheet and statement of changes of income.
In the past 5 to 6 months there has been increase in the prices of Banking shares. It has reached highs which are not before. So, an analysis with respect to the intrinsic value of these companies is needed.
In this study, an analysis of fundamentals with respect to top 4 Banks securities traded in Vertexviz , SBI, ICICI, HDFC Bank, Corporation Bank.
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NEED OF THE STUDY:
Stock market is an important part of the economy of a country.
The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country to a great extent. That is reason that the government, industry and even the central banks of the country keep a close watch on the happenings of the stock market.
The stock market is important from both the industry’s point of view as well as the investor’s point of view.
This project helps in understanding the stock market and Risk-return characteristics of stocks of different companies.
OBJECTIVES OF THE STUDY
To analyze the economy of India for the securities of Banking sector.
To analyze the Banking sector in India.
To study the financial performance of the following Banking Companies.
1. State Bank of India
2. ICICI Bank
3. HDFC Bank
4. Corporation Bank
SCOPE OF THE STUDY
The study of security analysis would provide an in-depth view about the economic situation pertaining to the Banking sector with particular reference to state Bank of India, ICICI Bank, Punjab National Bank, Syndicate Bank, thus the study would involve economic analysis, Sect oral analysis and the individual Company’s analysis.
Based on the findings the report one could find whether the market price of each share is under priced or over priced.
RESEARCH METHODOLOGY:
Data collection:
Primary data: - The primary data is the data which is collected, by interviewing directly with the organizations concerned executives. This is the direct information gathered from the organization.
Secondary data: - The secondary data is the data which is gathered from publications and websites