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Chapter- 1 EXECUTIVE SUMMERY Why should I put my hard earned money into shares when I am not sure of a return?

If theres a science to investing then why do we call investing a risk? And if its not a risk, then why do people end up losing money from their investments in shares? In this project report I have tried to answer the questions you might have about investing in shares. When is investing in shares a risk and when does it become a science? How can you be assured that your investment in shares is safe? And more importantly, Ive tried to explain some basic concepts that most investors take for granted but that are crucial knowledge for a person just entering into the financial jungle. So concepts like risk premium, dividend, stock split etc have been explained in a simple manner for the benefit of the first-timers. Not only that this project report also seeks to educate the would-be investors in the various aspects of share trading, both offline and online. I hope the project report shall succeed in satisfying your desire for knowledge of the share market as well as in lending investor a helping hand as they take your FIRST STEP into the world of investing.

Main purpose of investment is returns and liquidity, share market is less preferred by investors due to lack of awareness. The major findings of this study are that people are interested to invest in stock market but they lack knowledge.

CRITICAL SUCCESS FACTORS THAT COMES OUT OF THE STUDY AS FOLLOWS

(1) Importance of information- timely and accurately.

(2) Responsiveness of the company.

(3) Implementation.

(4) Forecasting.

These all are helpful to increase the successive factors which find out during the working positions.

The primary approach to study was exploratory research and descriptive research was also carried out.

Chapter- 2 Company Profile KARVY

Is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments. The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company, Karvy Consultants Limited. They started with consulting and financial accounting automation and carved inroads into the field of registry and share accounting by 1985. Since then, karvy utilized its experience and superlative expertise to go from strength to strength, to better their services, to innovate, diversify and in the process, evolved as one of Indias premier integrated financial service enterprise.

PRODUCT AND SERVICES OF KARVY GROUP

1. Karvy comtrade.

2. Karvy consultant ltd.

3. Karvy merchant banking.

4. Karvy global services ltd.


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Karvy was started by a group of five chartered accountants in 1979. The partners decided to offer, other than the audit services, value added services like corporate advisory services to their clients. The first firm in the group, Karvy Consultants Limited was incorporated on 23rd July, 1983. In a very short period, it became the largest Registrar and Transfer Agent in India. This business was spun off to form a separate joint venture with Computershare of Australia, in 2005. Karvys foray into stock broking began with marketing IPOs, in 1993. Within a few years, Karvy began topping the IPO procurement league tables and it has consistently maintained its position among the top 5. Karvy was among the first few members of National Stock Exchange, in 1994 and became a member of The Stock Exchange, Mumbai in 2001. Dematerialization of shares gathered pace in mid-90s and Karvy was in the forefront educating investors on the advantages of dematerializing their shares. Today Karvy is among the top 5 Depositary Participant in India. Independent financial advisors (or IFAs) For mutual fund investors, two factors that play a significant role in the total return of the investments are expenses and asset allocation. IFAs are professionals skilled in giving independent advice to people about mutual fund to manage assets or provide investment advice .The Mutual fund financial advisors thoughts go beyond just investment objectives and rate of return. The IFA channel is the oldest channel for distribution and was widely employed at the time when UTI monopoly in the market. In recent times with the emergence significantly decreased.

Importance of Financial advisors An agent who basically acts as an interface between the customer and the fund house there is a unique systems in place in India , wherein several sub-brokers are working under one main broker. The huge network of sub-brokers, thus ensure larger market penetration and geographic coverage. Financial advisors gives more accurate advice on selecting mutual funds Most of the customers are willing to take advice from financial advice for getting information regarding investments. Financial advisors can give advices on mutual funds depending on changing market outlook and evolving trends The huge network of financial advisors ensures larger market penetration and geographic coverage. As per AMFI, over one lakh agents are registered to sell mutual funds and other financial products such as insurance across the country. Karvy is offering services to about 33 AMC Mutual funds have servings for everybody. Whichever type of investor you are, you will surely get a mutual fund meeting your requirements. But investing in mutual funds is no childs play therefore karvy mutual fund advisory services is there to guide in each and every step of investment in mutual funds so that the dream of wealth creation doesnt turns into nightmares. Its offerings includes: products of all the 33 major AMCs, research report about all the existing funds as well as NFOs, customized mutual fund portfolios designed for individual as well as institutional customers, it not only design the portfolios rather it offers continuous
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portfolio revision too depending on changing market outlook and evolving trends, it further gives access to its online consolidated portfolio statement. Thus karvy with its various offerings makes the investor feel safe in this dynamic environment of the Indian financial market. It can be said that karvy is dedicated towards providing quality service to all these three facets of the investment process. Karvy being an intermediary is well registered with the Association of Mutual Funds of India (AMFI). KARVY has got the registration no [ARN 0018] for mutual funds, which is mentioned on every form. After the procurement of forms from various AMCs, the forms are passed on to its various zonal and branch offices (as per their requirements) and then further processing is done either directly or through sub-brokers.Karvy operates through its sub- brokers, associates and its excellent pool of own direct employees. The employees are offered salary by karvy whereas the sub- brokers and associates get certain commission. The amount offered may vary from AMC to AMC. Also, the franchisees have to pay a certain amount every month. Now karvy also pay a certain amount to the sub brokers and associates known as pay-out. The payout is decided according to the procurement done by them.

Now karvy group consists of 8 highly renowned entities which are as follow: 1. : The first securities registry to receive ISO 9002 certification

in India. Registered with SEBI as Category I Registrar, is Number 1 Registrar in the Country. The award of being Most Admired Registrar is one among many of the acknowledgements we received for our customer friendly and competent services. 2. : karvy stock broking ltd. Consists of five units namely stock

broking servics, depository participant, advisory services, distribution of financial products, advisory services and private client goups. 3. clientele : it is registered with SEBI as a category 1 merchant banker. Its includesinclude leading corporate, State Governments, foreign

institutional investors, public and private sector companies and banks, in Indian and global markets. 4. : karvy insurance broking ltd is also a part of karvy stock

broking ltd. At Karvy Insurance Broking Limited both life and non-life insurance products are provided to retail individuals, high net-worth clients and corporates. 5. : The company provides investment, advisory and brokerage

services in Indian Commodities Markets. And most importantly, it offer a wide reach through our branch network of over 225 branches located across 180 cities.

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: Karvy Global is a leading business and knowledge process

outsourcing Services Company offering creative business solutions to clients globally. It operates in banking and financial services, inurance, healthcare and pharmaceuticals, media , telecom and technology. It has its sales and business development office in New York, USA and the offshore global delivery center in Hyderabad, India

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: Karvy Realty (India) Limited is engaged in the business of

real estate and property services offering:


Buying/ selling/ renting of properties Identifying valuable investments opportunities in the real estate sector Facilitating financial support for real estate and investments in properties Real estate portfolio advisory services

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: it is a joint venture between Computershare, Australia and

Karvy Consultants Limited, India in the registry management services industry.

Organization structure of karvy: Talking about the organization structure of karvy, we have the board of directors as the supreme governing body , the chairman being Mr.C Parthasarthy, Mr. M yugandhar as the managing director, Mr. M. S Ramakrishna and Mr. Prasad v. potluri as directors.The board of diretors head the karvy group, karvy computershares limited, karvy investors services ltd., karvy comtrade, karvy stock broking ltd., and karvy global services ltd.Karvy group being the flagship company looks after the functional departments such as corporate affairs, group human resources, finance & accounting, training & development, technology services and corporate quality.Karvy computershare private limited facilitates mutual fund

services, share registry and issue registry whereas merchant banking is looked after by karvy investor services ltd. The services offered by KSBL are: stock broking, depository, research, distribution, personal client group and institutional desk. And finally the BPO services are managed by karvy global services ltd. Summarizing it in a diagram, it can be presented as:

Major Competitors in market place

Share khan Ltd. is one of the leading retail brokerage of Citi Venture which is running successfully since 1922 in the country. Earlier it was the retail broking arm of the Mumbaibased

SSKI Group, which has over eight decades of experience in the stock broking business. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advice etc.

Business area :

1- Equity Trading Platform (Online/Offline). 2- Commodities Trading Platform (Online/Offline). 3- Portfolio Management Service. 4- Mutual Fund Advisory and Distribution. 5- Insurance Distribution. (Give details about the nature of the business)

History of share khan Ltd.

Earlier with a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. SSKI is one of the leading players in institutional broking and corporate finance activities.

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SSKI holds a sizeable portion of the market in each of these segments. SSKIs institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country.

ICICI DIRECT

ICICI Web Trade Limited (IWTL) maintains www.icicidirect.com (herein after referred to as the "Website") whereas IWTL is an affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank Limited. IWTL has launched and established an online trading service on the Website.

PRODUCTS AND SERVICES OF ICICI DIRECT

1. Investing in Mutual funds

2. Personal Finance

3. Customer Service Features 4. IPOs

5. Margin Trading

6. Margin PLUS Trading

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7. Call Trade

8. Trading on NSE/BSE

9. Trade in derivative

INDIAINFOLINE SECURITY PRIVATE LTD.\

India Infoline.com Securities Pvt. Ltd. is a wholly owned subsidiary of India Infoline.com Ltd and is the stock broking arm of India Infoline.com. The subsidiary was formed to comply with regulatory guidelines. www.5paisa.com is a focused website for online stock market trading. 5paisa.com is a trade name owned by the India Infoline.com group. IILSPL has applied for trading membership of the BSE under Securities and Exchange Board of India (Stock Brokers and SubBrokers) Rules 1992. IILSPL is in the business of providing broking services online via the Internet ("E-broking Services") and has been permitted by the NSE by way of registration permission no: NSEIL/CMO/INET/1103/2000 dated 03/July/2000, andwill be applying for permission to the BSE, to provide E-broking Services to its clients. IILSPL is a TRADING MEMBER of the National Stock Exchange of India.

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PRODUCT OFFERED BY IILSPL

Stock market:-IILSPL deals in stock market by trading in equity and derivatives.

Personal finance:- It Deals In Mutual Fund And Insurance.

Online Trading :- It provides services in stock and commodity trading (through Internet).

HDFC SECURITY

HDFC security is the subsidiary of HDFC (Housing Development Financial Corporation). www.hdfcsec.com would have an exclusive discretion to decide the customers who would be entitled to its online investing services.

www.hdfcsec.com also reserves the right to decide on the criteria based on which customers would be chosen to participate in these services .The present web site (www.hdfcsec.com) contains features of services that they offer/propose to offer in due course. The launch of new services is subject to the clearance of the regulators. i.e. SEBI, NSE and BSE.

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PRODUCT OFFERED BY HDFC SECURITY Online trading for Resident & Non Resident Indians. Cash-n-Carry on both NSE and BSE. Day trading on both NSE and BSE. Trade on Futures & Options on the NSE. Online IPO's. Telephone-based Broking (Equity & Derivatives).\

INDIABULLS SECURITIES LIMITED:

Indiabulls Securities Limited was incorporated as GPF Securities Private Limited on June 9, 1995. The name of the company was changed to Orbis Securities Private Limited on December 15, 1995 to change the profile of the company and subsequently due to theconversion of the company into a public limited company; the name was further changed to Orbis Securities Limited on January 5, 2004. The name of the company was again changed to Indiabulls Securities Limited on February 16, 2004 so as to capitalize on the brand image of the term Indiabulls in the company name. ISL is a corporate member of capital market & derivative segment of The National Stock Exchange of India Ltd. At present, ISL accounts for approximately 3% of the total daily turnover of the Exchange with 32,359 client relationships and 70 branches spread across the country as of April 30, 2004.

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PRODUCT OFFERED BY INDIA BULLS Equity & Debt Stock Broking Insurance Commodity trading Depository Services Derivatives Broking Services Equity Research Services Mutual Fund Distribution IPO Distribution Staff Strength Experience

SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia Money broker's poll held recently, SSKI won the 'India's best broking house for 2004' award. Ever since it launched Sharekhan as its retail broking division in February 2000, it has been providing institutional-level research and broking services to individual investors. Technology With their online trading account one can buy and sell shares in an instant from any PC with an internet connection. Customers get access to the powerful online tradingtools that will help them to take complete control over their investment in shares.

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Accessibility

Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for investors. These services are accessible through many centers across the country (Over 650 locations in 150 cities), over the Internet (through the website (www.sharekhan.com) as well as over the Voice Tool. Knowledge

In a business where the right information at the right time can translate into direct profits, investors get access to a wide range of information on the content-rich portal, www.sharekhan.com. Investors will also get a useful set of knowledgebased tools that will empower them to take informed decisions. Convenience One can call Sharekhans Dial-N-Trade number to get investment advice and execute his/her transactions. They have a dedicated call-center to provide this service via a Toll Free Number 1800-22-7500 & 39707500 from anywhere in India.

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Dedicated to Customer for Service

Its customer service team assist their customer for any help that they need relating to transactions, billing, demat and other queries. Their customer service can be contacted via a toll-free number, email or live chat on www.sharekhan.com. Analytical Investment Advice

Sharekhan has dedicated research teams of more than 30 people for fundamental and technical research. Their analysts constantly track the pulse of the market and provide timely investment advice to customer in the form of daily research emails, online chat, printed reports etc.

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Chapter-3

Project Detail This study suggest that people are reluctant while investing in stock market due to lack of knowledge

This is the project on the analyzing of equities to invest the money to future for get higher return on investment. This project report to all investor who want to invest their money in equities. But they should analysis the securities before to invest because the money has very much value in our life. I chose this project to do because I want to analysis the equities for investor point of view so they can get good return in future, want to do fundamental and technical analysis of securities through the various theories, try to understand the movement and performance of stocks and also try to know the factors that affect the movement of stock prices in the Indian Stock Markets. Through this project we were also able to understand, what are our Companys (Sharekhan Ltd.) positive and strong points, on the basis of which we come to know what can be the basis of pitching to a potential client. We also gave suggestions to the company, what improvement can be done to our product. undamental analysis and technical analysis can co-exist in peace and complement each other. Since all the investors in the stock market want to make the maximum profits possible, they just cannot afford to ignore either fundamental or technical analysis

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Team:

This my solo project assign by project guide and whole staff of that branch. I did my analysis with relation manager.

Duration:

The time was very crucial factor in project report the training was for six week so I spent as much as time to learn from the internship and prepare this report to share my golden time with you.

Key Deliverables:

The company was expecting to me to dedication for project, queries about project to fill the tank as much as I can and discipline in branch office as they follow.

PROJECT- MY ROLE

I did my project on the basis of topic given by the project guide in this project I contribute my best that I can do. I decide to choose some stock listed in NSE for fundamental and technical analysis. I approach my project guide and whole staff person to get knowledge. I sought out my queries with discussion with all staff members and my project guide. I note all important figures and facts about financial market and update my project report Step by step

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Achievements: The main achievement during the entire project was the knowledge about the financial market which was unseen for me. Successfully finishing project analysis by my self and the compliment by project guide was best achievement for me in that entire project.

Key Learning's:

A proper interaction with staff members and project guide to gain knowledge is require for a good internship. I learn how to analysis the equities for investing money.

Challenges Faced: Busy schedule of project guide. I had to wait whole day to talk to him about project. There was no operational work in branch for me.

Reasons for Success:

Success story of this project is my dedication, passion, good relationship with all staff members and assistance of my project guide.

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Chapter-4 Introduction

FUNDAMENTAL ANALYSIS

Fundamental analysis refers to the study of the core underlying elements that influence the economy of a particular entity. It is a method of study that attempts to predict price action and market trends by analyzing economic indicators, government policy and societal factors (to name just a few elements) within a business cycle framework.

1. POLITICO-ECONOMIC ANALYSIS:

No industry or company can exist in isolation. It may have splendid managers and a tremendous product. However, its sales and its costs are affected by factors, some of which are beyond its control - the world economy, price inflation, taxes and a host of others. It is important, therefore, to have an appreciation of the politicoeconomic factors that affect an industry and a company.

The political equation

A stable political environment is necessary for steady, balanced growth. If a country is ruled by a stable government which takes decisions for the long-term development of the country, industry and companies will prosper.

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Foreign Exchange Reserves

A country needs foreign exchange reserves to meet its commitments, pay for its imports andservice foreign debts.

Foreign Exchange Risk

This is a real risk and one must be cognizant of the effect of a revaluation or devaluation of the currency either in the home country or in the country the company deals in.

Restrictive Practices

Restrictive practices or cartels imposed by countries can affect companies and industries. Crystallizing the exposure.

Foreign Debt and the Balance of Trade

Foreign debt, especially if it is very large, can be a tremendous burden on an economy. India pays around $ 5 billion a year in principal repayments and interest payments.

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Inflation

Inflation has an enormous effect in the economy. Within the country it erodes purchasing power. As a consequence, demand falls. If the rate of inflation in the country from which a company imports is high then the cost of production in that country will automatically go up.

The Threat of Nationalization The threat of nationalization is a real threat in many countries the fear that a company may become nationalized.

Interest Rates

A low interest rate stimulates investment and industry. Conversely, high interest rates result in higher cost of production and lower consumption.

Taxation

The level of taxation in a country has a direct effect on the economy. If tax rates are low, people have more disposable income.

Government Policy

Government policy has a direct impact on the economy. A government that is perceived to be pro-industry will attract investment.

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2. INDUSTRY ANALYSIS

The importance of industry analysis is now dawning on the Indian investor as never before.

BUSINESS CYCLE

The first step in industry is to determine the cycle it is in, or the stage of maturity of the industry. All industries evolve through the following stages:

1. Entrepreneurial, sunrise or nascent stage

2. Expansion or growth stage

3. Stabilization, stagnation or maturity stage, and

4. Decline or sunset stage to properly establish itself. In the early days, it may actually make losses.

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3. COMPANY ANALYSIS:

At the final stage of fundamental analysis, the investor analyzes the company. This analysis has two thrusts:

How has the company performed vis--vis other similar companies and How has the company performed in comparison to earlier years. It is imperative that one completes the politico economic analysis and the industry analysis before a company is analyzed because the company's performance at a period of time is to an extent a reflection of the economy, the political situation and the industry. What does one look at when analyzing a company? The different issues regarding a company that should be examined are:

THE MANAGEMENT:

The single most important factor one should consider when investing in a company and one often never considered is its management. In India management can be broadly divided in two types: Family Management Professional Management

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THE COMPANY:

An aspect not necessarily examined during an analysis of fundamentals is the company. Acompany may have made losses consecutively for two years or more and one may not wish totouch its shares - yet it may be a good company and worth purchasing into. There are severalfactors one should look at.

1. How a company is perceived by its competitors?

One of the key factors to ascertain is how a company is perceived by its competitors. It isheld in high regard. Its management may be known for its maturity, vision, competence andaggressiveness. The investor must ascertain the reason and then determine whether the reasonwill continue into the foreseeable future.

2. Whether the company is the market leader in its products or in its segment

Another aspect that should be ascertained is whether the company is the market leader in its products or in its segment. When you invest in market leaders, the risk is less. The Shares of market leaders do not fall as quickly as those of other companies. There is a magic to their name that would make individuals prefer to buy their products as opposed to others.

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3. Company Policies

The policy a company follows is also important. What are its plans for growth? What is its vision? Every company has a life. If it is allowed to live a normal life it will grow up to a point and then begin to level out and eventually die. It is at the point of leveling out that it must be given new life. This can give it renewed vigor and a new lease of life.

4. Labour Relations

Labour relations are extremely important. A company that has motivated, industrious work force has high productivity and practically no disruption of work. On the other hand, a company that has bad industrial relations will lose several hundred man-days as a consequence of strikes and go slows.

5. Where the company is located and where its factories are?

One must also consider where the companies Plants and Factories are located..

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THE ANNUAL REPORT:

The primary and most important source of information about a company is its Annual Report. By law, this is prepared every year and distributed to the shareholders. Annual Reports are usually very well presented. A tremendous amount of data is given about the performance of a company over a period of time.

The Annual Report is broken down into the following specific parts:

A) The Director's Report,

B) The Auditor's Report,

C) The Financial Statements, and

D) The Schedules and Notes to the Accounts.

A. The Directors Report The Directors Report is a report submitted by the directors of a company to its shareholders, advising them of the performance of the company under their stewardship.

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1. It enunciates the opinion of the directors on the state of the economy and the political situation vis--vis the company.

2. Explains the performance and the financial results of the company in the period under review. This is an extremely important part. The results and operations of the various separate divisions are usually detailed and investors can determine the reasons for their good or bad performance. 3. The Directors Report details the company's plans for modernization, expansion and diversification. Without these, a company will remain static and eventually decline.

4. Discusses the profit earned in the period under review and the dividend. Recommended by the directors. This paragraph should normally be read with some skepticism, as the directors will always argue that the performance was satisfactory. If adverse economic conditions are usually at fault.

5. Elaborates on the directors' views of the company's prospects in the future. 6. Discusses plans for new acquisition and investments. An investor must intelligently evaluate the issues raised in a Directors Report. Industry conditions and the management's knowledge of the business must be considered.

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B. The Auditor's Report

The auditor represents the shareholders and it is his duty to report to the shareholders and the general public on the stewardship of the company by its directors. Auditors are required to report whether the financial statements presented do, in fact, present a true and fair view of the state of the company. Investors must remember that the auditors are their representatives and that they are required by law to point out if the financial statements are not true and fair..

C. Financial Statements

The published financial statements of a company in an Annual Report consist of its Balance Sheet as at the end of the accounting period detailing the financing condition of the company at that date, and the Profit and Loss Account or Income Statement summarizing the activitiesof the company for the accounting period.

BALANCE SHEET

The Balance Sheet details the financial position of a company on a particular date; of the company's assets (that which the company owns), and liabilities (that which the company owes), grouped logically under specific heads. It must however, be noted that the Balance Sheet details the financial position on a particular day and that the position can be materially different on the next day or the day after.

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SOURCES OF FUNDS

SHAREHOLDERS FUNDS

SHARE CAPITAL

(i) Private Placement

(ii) Public Issue

(iii) Rights issues

RESERVES i) Capital Reserves

ii) Revenue Reserves

LOAN FUNDS

i) Secured loans:

ii) Unsecured loans

FIXED ASSETS

INVESTMENTS
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STOCK OR INVENTORIES

i) Raw materials

ii) Work in progress

iii) Finished goods

CASH AND BANK BALANCES

LOANS AND ADVANCES

PROFIT AND LOSS ACCOUNT

The Profit and Loss account summarizes the activities of a company during an accounting period which may be a month, a quarter, six months, a year or longer, and the result achieved by the company. It details the income earned by the company, its cost and the resulting profit or loss. It is, in effect, the performance appraisal not only of the company but also of its management- its competence, foresight and ability to lead.

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RATIOS:

Ratios express mathematically the relationship between performance figures and/or assets/liabilities in a form that can be easily understood and interpreted.

No single ratio tells the complete story

Ratios can be broken down into four broad categories:

(A)Profit and Loss Ratios

B) These show the relationship between two items or groups of items in a profit and loss account or income statement. The more common of these ratios are:

1. Sales to cost of goods sold.

2. Selling expenses to sales.

3. Net profit to sales and

4. Gross profit to sales.

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(B) Balance Sheet Ratios

These deal with the relationship in the balance sheet such as :

1. Shareholders equity to borrowed funds.

2. Current assets to current liabilities.

3. Liabilities to net worth.

4. Debt to assets and

5. Liabilities to assets.

(C) Balance Sheet and Profit and Loss Account Ratios.

These relate an item on the balance sheet to another in the profit and loss account such as: 1. Earnings to shareholder's funds.

2. Net income to assets employed.

3. Sales to stock.

4. Sales to debtors and

5. Cost of goods sold to creditors.


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(D) Financial Statements and Market Ratios

These are normally known as market ratios and are arrived at by relative financial figures to market prices:

1. Market value to earnings and

2. Book value to market value.

(a) Market value

(b) Earnings

(c) Profitability

(d) Liquidity

(e) Leverage

(f) Debt Service Capacity

(g) Asset Management/Efficiency (h) Margins.

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The major ratios that are considered:

(i) Market value

(ii) Price- earnings ratio

(iii) Market-to-book ratio

(iv) Earnings

(v) Earning per share

(vi) Dividend per share

(vii) Dividend payout ratio

(viii) Leverage ratios

(ix) Return on investments/total assets

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CASH FLOW:

A statement of sources and uses begins with the profit for the year to which are added the increases in liability accounts (sources) and from which are reduced the increases in asset accounts (uses). The net result shows whether there has been an excess or deficit of funds and how this was financed. Investors must examine a company's cash flow as it reveals exactly where the money came from how it was utilized. Investors must be concerned if a company is financing either its inventories or paying dividends from borrowings without real growth as that shows deterioration.

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TECHNICAL ANALYSIS

Technical analysis is concerned with predicting future price trends from historical price and volume data. The underlying axiom of technical analysis is that all fundamentals (including expectations) are factored into the market and are reflected in exchange rates. It is also a method of predicting price movements and future market trends by studying chartsof past market action which take into account price of instruments, volume of trading and, where applicable, open interest in the instruments.

Stock Charts

Stock charts gained popularity in the late 19th Century from the writings of Charles H. Dow in the Wall Street Journal. His comments, later known as "Dow Theory", alleged that markets move in all kinds of measurable trends and that these trends could be deciphered and predicted in the price movement seen on all charts. A stock chart is a simple two-axis (x-y) plotted graph of price and time. Each individual equity, market and index listed on a public exchange has a chart that illustrates this movement of price over time. Individual data plots for charts can be made using the CLOSING price for each day. The plots are connected together in a single line, creating the graph. Also, a combination of the OPENING, CLOSING, HIGH and/or LOW prices for that market session can be used for the data plots. This second type of data is called a PRICE BAR. Individual price bars are then overlaid onto the graph, creating a dense visual display of stock movement. Stock charts can be created in many different time frames. Mutual fund holders use monthly charts in which each individual data plot consists of a single month of activity. Day traders use 1 minute and 5 minute stock charts to make
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quick buy and sell decisions. The most common type of stock chart is the daily plot, showing a single complete market session foreach unit.

Stock charts can be drawn in two different ways. An ARITHMETIC chart has equal vertical distances between each unit of price. A LOGARITHMIC chart is a percentage growth chart. It has equal vertical distances between the same percentages of price growth.

For example, a price movement from 10 to 20 is a 100% move. A move from 20 to 40 is alsoa 100% move. For this reason, the vertical distance from 10 to 20 and the vertical distance from 20 to 40 will be identical on a logarithmic chart.Stock chart analysis can be applied equally to individual stocks and major indices. Analysts use their technical research on index charts to decide whether the current market is a BULL MARKET or a BEAR MARKET. On individual charts, investors and traders can learn the same thing about their favorite companies.

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Trends:

Use the stock chart to identify the current trend. A trend reflects the average rate of change in a stock's price over time. Trends exist in all time frames and all markets. Day traders can establish the trend of their stocks to within minutes. Long term investors watch trends that persist for many years. Trends can be classified in three ways: UP, DOWN or RANGEBOUND. In an uptrend, a stock rallies often with intermediate periods of consolidation or movement against the trend. In doing so, it draws a series of higher highs and higher lows on the stock chart. In an uptrend, there will be a POSITIVE rate of price change over time. In a downtrend, a stock declines often with intermediate periods of consolidation or movement against the trend. In doing so, it draws a series of lower highs and lower lows on the stock chart. In a downtrend, there will be a NEGATIVE rate of price change over time.
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Rangebound price swings back and forth for long periods between easily seen upper and lower limits. There is no apparent direction to the price movement on the stock chart and there will be LITTLE or NO rate of price change. Trends tend to persist over time. A stock in an uptrend will continue to rise until some change in value or conditions occurs. Declining stocks will continue to fall until some change in value or conditions occurs. Chart readers try to locate TOPS and BOTTOMS, which are those points where a rally or a decline ends. Taking a position near a top or a bottom can be very profitable. Trends can be measured using TRENDLINES. Very often a straight line can be drawn UNDER three or more pullbacks from rallies or OVER pullbacks from declines.

When price bars then return to that trend line, they tend to find SUPPORT or RESISTANCE and bounce off the line in the opposite direction. A famous quote about trends advises that "The trend is your friend". For traders and investors, this wisdom teaches that you will have more success taking stock positions in the direction of the prevailing trend than against it.

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Volume:

Volume measures the participation of the crowd. Stock charts display volume through individual HISTOGRAMS below the price pane. Often these will show green bars for up days and red bars for down days. Investors and traders can measure buying and selling interest by watching how many up or down days in a row occur and how their volume compares with days in which price moves in the opposite direction. Stocks that are bought with greater interest than sold are said to be under ACCUMULATION. Stocks that are sold with great interest than bought are said to be under DISTRIBUTION. Accumulation and distribution often LEAD price movement.

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In other words, stocks under accumulation often will rise some time after the buying begins.Alternatively, stocks under distribution will often fall some time after selling begins. It takes volume for a stock to rise but it can fall of its own weight. Rallies require the enthusiastic participation of the crowd. When a rally runs out of new participants, a stock can easily fall. Investors and traders use indicators such as ON BALANCE VOLUME to see whether participation is lagging (behind) or leading (ahead) the price action.

Stocks trade daily with an average volume that determines their LIQUIDITY. Liquid stocks are very easy for traders to buy and sell. Illiquid stocks require very high SPREADS (transaction costs) to buy or sell and often cannot be eliminated quickly from a portfolio. Stock chart analysis does not work well on illiquid stocks.Breakouts accompanied by volume much higher than the average for that stock are healthy for the continuation of the price movement in that direction. But after long rallies or declines, stocks often have a day of very high volume known as a CLIMAX. During these days, the last of the buyers or sellers take positions. The stock then reverses as there are no longer enough participants to cause price to move in that direction.

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Patterns and Indicators:

Charts allow investors and traders to look at past and present price action in order to make reasonable predictions and wise choices. It is a highly visual medium. This one fact separates it from the colder world of value-based analysis. The oldest form of interpreting charts is PATTERN ANALYSIS. This method gained popularity through both the writings of Charles Dow and Technical Analysis of Stock Trends. The newer form of interpretation is INDICATOR ANALYSIS, a math-oriented examination in which the basic elements of price and volume are run through a series of calculations in order to predict where price will go next. Pattern analysis gains its power from the tendency of charts to repeat the same bar formations over
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and over again. These patterns have been categorized over the years as having a bullish or bearish bias. Some well-known ones include HEAD and SHOULDERS, TRIANGLES, RECTANGLES, DOUBLE TOPS, DOUBLE BOTTOMS and FLAGS. Also, chart landscape features such as GAPS and TRENDLINES are said to have great significance on the future course of price action. Indicator analysis uses math calculations to measure the relationship of current price to past price action. Almost all indicators can be categorized as TRENDFOLLOWING or OSCILLATORS. Popular trend-following indicators include MOVING AVERAGES, ON BALANCE VOLUME and MACD. Common oscillators include STOCHASTICS, RSI and RATE OF CHANGE. Trendfollowing indicators react much more slowly than oscillators. They look deeply into the rear view mirror to locate the future. Oscillators react very quickly to short-term changes in price, flipping back and forth between OVERBOUGHT and OVERSOLD levels. Both patterns and indicators measure market psychology. The core of investors and traders that make up the market each day tend to act with a herd mentality as price rises and falls. This "crowd" tends to develop known characteristics that repeat themselves over and over again. Chart interpretation using these two important analysis tools uncovers growing stress within the crowd that should eventually translate into price change.

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Moving Averages:

The most popular technical indicator for studying stock charts is the MOVING AVERAGE. This versatile tool has many important uses for investors and traders. Take the sum of any number of previous CLOSE prices and then divide it by that same number. This creates an average price for that stock in that period of time. A moving average can be displayed by re-computing this result daily and plotting it in the same graphic pane as the price bars. Moving averages LAG price. In other words, if price starts to move sharply upward or downward, it will take some time for the moving average to "catch up". Plotting moving averages in stock charts reveals how well current price is behaving as compared to the past. The power of the moving average line comes from its direct interaction with the price bars. Current price will always be above or below any moving average computation. When it is above, conditions are "bullish". When below, conditions are "bearish". Additionally, moving averages will slope upward or downward over time. This adds another visual dimension to a stock analysis.

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Moving averages define STOCK TRENDS. They can be computed for any period of time.Investors and traders find them most helpful when they provide input about the SHORTTERM, INTERMEDIATE and LONG-TERM trends. For this reason, using multiple moving averages that reflect these characteristics assist important decision making. Common moving average settings for daily stock charts are: 20 days for short-term, 50 days for intermediate and 200 days for long-term. One of the most common buy or sell signals in all chart analysis is the MOVING AVERAGE CROSSOVER. These occur when two moving averages representing different trends criss-cross. For example, when a shortterm average crosses BELOW a long-term one, a SELL signal is generated. Conversely, when a short-term crosses ABOVE the long-term, a BUY signal is generated.

Moving averages can be "speeded up" through the application of further math calculations. Common averages are known as SIMPLE or SMA. These tend to be very slow. By giving more weight to the current changes in price rather than those many bars ago, a faster EXPONENTIAL or EMA moving average can be created. Many technicians favor the EMA over the SMA. Fortunately all common stock chart programs, online and offline do the difficult moving average calculations for you and plot price perfectly Support and Resistance

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The concept of SUPPORT AND RESISTANCE is essential to understanding and interpreting stock charts. Just as a ball bounces when it hits the floor or drops after being thrown to the ceiling, support and resistance define natural boundaries for rising and falling prices. Buyers and sellers are constantly in battle mode. Support defines that level where buyers are strong enough to keep price from falling further. Resistance defines that level where sellers are too strong to allow price to rise further. Support and resistance play different roles in up trends and downtrends. In an uptrend, support is where a pullback from a rally should end. In a downtrend, resistance is where a pullback from a decline should end. Support and resistance are created because price has memory. Those prices where significant buyers or sellers entered the market in the past will tend to generate a similar mix of participants when price again returns to that level.

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When price pushes above resistance, it becomes a new support level. When price falls below support, that level becomes resistance. When a level of support or resistance is penetrated, price tends to thrust forward sharply as the crowd notices the BREAKOUT and jumps in to buy or sell. When a level is penetrated but does not attract a crowd of buyers or sellers, it often falls back below the old support or resistance. This failure is known as a FALSE BREAKOUT. Support and resistance come in all varieties and strengths. They most often manifest as horizontal price levels. But trendlines at various angles represent support and resistance as well. The length of time that a support or resistance level exists determines the strength or weakness of that level. The strength or weakness determines how much buying or selling interest will be required to break the level. Also, the greater volume traded at any level, the stronger that level will be. Support and resistance exist in all time frames and all markets. Levels in longer time frames are stronger than those in shorter time frames.

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Chapter-5 Literature review Only buy something that youd be perfectly happy to hold if the market shut down for 10 years - Warren Buffet Investment Guru Prevailing wisdom is that markets are always right, I assume they are always wrong - George Soros, Chairman, Soros Fund Management

According to Michal Parness, Founder & CEO Investors dont Make Money in the Stock Market. One reason the institutions make so much money is that they are trading. They make money every time you buy or sell. They make money whether you win or lose. That means that when youre investing, youre basically just sitting there. Youre not going anywhere. Youre not making money as an investor.

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Trading the Trend: The Only Way to Make Money in the Market If you dont know this already, Trend Trading means trading trends based on human emotions. Not lagging indicators. Not complex statistical analysis and not Ph.D. levelmathematical equations. With trend trading, you look for market movement. That could mean stocks that are going to move up or down during the course of a day (intraday). Youll play the gaps up and down, often several days a week. The Trend trading means being aware and taking advantage of trends like the run-ups that happen around earning sessions. These are trends that have worked time and time again in the market. They consistently yield results

Fundamental and Technical Analysis: Substitutes or Compliments? Jenni L. Bettman

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Australian National University Stephen Sault Australian National University - Faculty of Economics & Commerce March 28, 2006

While the fundamental and technical analysis literatures invest considerable effort in assessing their respective ability to explain share prices, they invariably do so without reference to each other. In this context, we propose an equity valuation model integrating both fundamental and technical analysis and, in doing so, recognize their potential as complements rather than as substitutes. Testing confirms the complementary nature of fundamental and technical analysis by showing that, while each performs well in isolation, models integrating both have superior explanatory power. While our findings relate to the valuation of shares, they also have implications for other valuation exercises.

Keywords: Equity valuation models, Fundamental information, Technical information

JEL Classifications: G12, G14, M41

Although the fundamental and technical analysis literatures invest considerable effort in assessing their respective ability to explain share prices, they invariably do so without reference to each other. In this context, we propose an equity valuation model integrating both fundamental and technical analysis and, in doing so, recognize their potential as complements rather than as substitutes. Testing confirms the complementary nature of fundamental and technical analysis by showing that, although each performs well in isolation, models integrating both
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have superior explanatory power. While our findings relate to the valuation of shares, they also have implications for other valuation exercises.

Accepted Paper Series Accounting & Finance, Vol. 49, No. 1, pp. 21-36, March 2009 ISSN 1822-6515 ISSN 1822-6515 EKONOMIKA IR VADYBA: 2009. 14 ECONOMICS & MANAGEMENT: 2009. 14

RELEVANCE OF FUNDAMENTAL ANALYSIS ON THE BALTIC EQUITY MARKET Julia Bistrova, Natalja Lace Riga Technical University, Latvia, The main target of the present research was to discover the importance of fundamental analysis on the Baltic equity markets. The hypothesis that fundamental analysis is not able to generate substantial additional value to the performance of the portfolio comprised of Baltic enterprises stocks was proved. The relevance and need of fundamental analysis was checked by analyzing the performances of portfolios, which were created on the basis of key fundamental ratios: ROE, equity ratio, ROIC, net debt to assets as well as PE and PB. Naturally, the companies with better than average ratios were selected to form stock portfolios. The findings of the conducted study demonstrate that neither of the mentioned ratios helped in the creating portfolio, performance of which would beat markets performance. The only exception was price to earnings ratio, which proved that cheap companies seem to be attractive to the investors. It was decided
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to look closer at the major performers and to find out whether there are any common patterns among the winners and the losers of the Baltic equity markets. Basically, equity investors ignored financial situation of the companies (profitability, stability of balance sheets) and focused mainly on assessing their growth opportunities and attractiveness of business model. So, investors were mainly forward-looking when making company selection. As a result, major sufferers performance-wise were the companies with limited growth potential or total business model erosion. The authors of the research have also checked whether the trading volumes of the stock have any impact on the performance. The study results show that in the phase of the major capital inflows (2001-2006), indeed, most liquid companies tended to reward investors with higher performances. However, the shareholders of these companies suffered the most in financial years 2007 and 2008, when there was a major selling across stock market all over the world.

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By Sandy Jadeja 9- Oct -2004 Should you use Technical or Fundamental analysis to make your decisions?

Volumes have been written about the different ways to forecast or predict market movement. Traditionally, there are two distinct schools of thought that an individual may choose from,and that being Fundamental analysis or Technical analysis. By choosing fundamental analysis, your decisions are based upon underlying economic factors, cash flows, and price earnings. This information will aim to tell you why a stock willmove.

Technical analysis aims to show you how and when a stock will move. This method discounts all news and information regarding the value of the stock. In other words, you only pay attention to a chart. The saying a picture is worth a thousand words truly summarizes this concept nicely. You can of course choose to use a combination of both if you prefer. This would imply that when the stock you are looking at becomes undervalued fundamentally, you would wait for a technical setup to get you in to the market. Deciding on which method is appropriate and gives bigger returns is truly a matter of opinion. Respectively, both methods have the same goal; to determine market direction. I know of a number of individuals who only use one or the other and is equally successful with phenomenal returns. It becomes interesting when one speaks to traders from each school. The fundamental traders believe that charts are a waste of time and provide no real sense as to why one would make trading decisions based on indicators and repetitive patterns. This group are essentially bargain hunters. They want to buy stocks which they feel are under priced and will return to a normal value at a later stage. Fundamental traders often hold stocks for longer periods of time compared to technical traders.
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On the other hand, the technical traders believe that numbers do not lie and that information based on value, supply and demand are already factored into the price. They also argue that people can be predictable and that these behaviors occur in the form of price patterns. These patterns repeat with a degree of predictability and therefore can be used to forecast future price movements. Technical traders generally hold positions for shorter periods of time compared to fundamental traders. Clearly both avenues are important, and one must make careful decisions before jumping into trading without having an objective. I have always said that finding a method, style or strategy depends on ones personality. If you are thinking of long term investing then the fundamental approach may suit your needs whereas if you are looking for short term market moves, then technical analysis can provide a myriad of systems to accommodate your personal style. Some of which we shall take a look at further into the course.

WHERE TO FIND THE NUMBERS. Richard Seddon, head of Online Share Trading at the Standard Online Share Trading is operated by Standard Financial Markets (Pty) Ltd ITS CLEAR THAT analysis whether fundamental or technical requires a suite of tools. And though those tools are specialized, the good news is that most are readily available to the novice investor. Richard Seddon, head of Online Share Trading at the Standard, says that the discount broking website

www.securities.co.za provides many of those tools to its broking customers as part of its product offering. On the fundamental analysis side the website carries topdown insights from Standard Banks economic research division, plus notes on individual companies from its rated research team. For bottom-up fundamental analysis the website contains the financial statements for the past 10 years of every
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single company listed on the JSE. Over and above that raw data it also provides key ratios, such as price: earnings (p:e) multiples, beta, return on equity (ROE) and many others. Well deal with those more fully in two weeks time when we work with bottom-up fundamental analysis. But the website isnt the only place where investors can find some of those key ratios: the share price pages of the daily and weekly press (including Fin week) publish information in addition to share prices, including p:e ratios, dividend yields, market capitalization and share price changes over specific time periods. The website can also provide more complex bottom-up analysis tools by filtering shares that meet certain criteria. Those could include searching for shares that fall within a prescribed p:e ratio or dividend yield range.

In addition, it provides a database of share movements for specified time periods, such as the past month, past three months, past year and past 10 years. The website also provides forecast data. Thats provided by I-Net Bridge, a company that collates analysts forecasts and recommendations to determine the average (or consensus) projected earnings per share and market view of the share: whether analysts recommend it as a buy, sell or hold. On the technical analysis side, the Online Share Trading website provides full interactive charting tools with 10 years worth of data. In addition, customers receive a discount when downloading third-party technical analysis data, paying as little as R90/month. Over and above all that, the website provides other interesting information, such as directors dealings, 52-week highs and lows, exchange rates, international indices, news from both Reuters and the JSE, key shareholders of each company, dividends that are payable, as well as the biggest gainers and losers and the most active shares on the JSE in any one trading day. Its everything that a full-service broker would provide plus more

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chapter-6 Research Methodology Every project is started with the objective of getting results either positive or negative. And each and every project reaches to the stage of completion through the way of some research either with the help of primary data or secondary data. And getting of any project and getting genuine results from that depends on the research method used by researcher. Research is a common parlance refers to a search for knowledge. According to REDMEN Research is a systematized effort to gain knowledge.

TYPE OF RESEARCH STUDY

The research has been based on secondary data analysis. The study has been exploratory as it aims at examining the secondary data for analyzing the previous researches that have been done in the area of technical and fundamental analysis of stocks. The knowledge thus gained from this preliminary study forms the basis for the further detailed Descriptive research. In the exploratory study, the various technical indicators that are important for analyzing stock were actually identified and important ones short listed.

OBJECTIVES OF THE STUDY

Primary Objective:

1.) To do technical and fundamental analysis of chosen securities

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Sub-Objectives: 1.) To study the various theories of technical analysis and fundamental analysis for various stocks that chosen.

2.) To understand the movement and performance of stocks to take decision to invest.

3.) To understanding and analyzing the factors that affect the movement of stock prices in the Indian Stock Markets

SAMPLE DESIGN

Data collection methods include the various methods used by the researcher in his project. The application of method for collecting the data mainly depends upon the type of project researcher is going to undertake. In case the survey project questionnaire is the best tool for collecting data. But in case of projects other than surveys like this project all the data is collected already prepared or published in the form of annual reports.

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SAMPLE SIZE

The sample size for the number of stocks is taken as 8 for technical analysis and 3 forfundamental analysis of stocks as fundamental analysis is very exhaustive and requires detailed study

DATA COLLECTION METHOD The sample of the stocks for the purpose of collecting secondary data has been selected on the basis of Random Sampling. The stocks are chosen in an unbiased manner and each stock is chosen independent of the other stocks chosen.

SOURCES OF DATA

Data can be classified into Primary source

Through conversation with the Relationship, Head and the staff of the branch of KARVY Ltd.

Secondary source

- Annual Reports of selected stocks - Financial Statements - Internet

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Steps for Analysis

Selection - It involves selection of information relevant to the purpose of analysis. Classification It involves methodological classification of the data. Interpretation It includes drawing of inferences and conclusion.

PROCEDURE

1. Acquaint with the Principles and postulates of analyzing.

2. Determining the extent of analysis so that the sphere of working may be decided.

3. Re-arranging the data.

4. Reducing data to a standardized form.

5. Establishing relationship with the help of tools of analyzing.

6 Interpreting information in a simple and understandable form.

7. Drawing the conclusion.

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LIMITATIONS OF STUDY

The scope of study was limited due to some constraints given below:-

1. Analysis is only a means not an end. The analysis has been done on the basis of my own interpretations and up to my best knowledge but every analyst have his or her own interpretations and suggestions.

2. It does not take into consideration the time taken for the completion of the jobs.

4. The non-monetary factors are not taken into consideration for the analysis

5. No personal contacts with stakeholders of companies also a limitation for analyzing the project.

6. Error due to some oversight or misinterpretation.

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Chapter-7 Findings and Analysis FUNDAMENTAL ANALYSIS OF STOCKS

Basically fundamental analysis covers three parts:

1. Market/economical analysis

2. Industry analysis

3. Company analysis

HDFC BANK LTD.

Company detail:

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The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.As on 31st March, 2009 the authorized share capital of HDFC Bank is Rs. 550 crore. The paid-up capital as on the said date is Rs. 425,38,41,090/- ( 42,53,84,109 equity shares of Rs.10/- each). The HDFC Group holds 19.38% of the Bank's equity and about 17.70 % of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). 27.69 % of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has about 5,48,774 shareholders. The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Bank's American Depository
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Shares ( ADS ) are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002.

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Key points : Your directors recommend payment of dividend for the year ended March 31, 2008 of Rs. 25 per share as against Rs. 22 per share for the previous year. Loan approvals during the year were Rs. 42,520 crores as compared to Rs. 33,332 crores in the previous year, representing a growth of 28%. Loan disbursements during the year were Rs. 32,875 crores as against Rs. 26,178 crores in the previous year, representing a growth of 26%. As at March 31, 2008, the loan book stood at Rs. 72,998 crores as against Rs. 56,512 crores in the previous year - an increase of 29%. During the year, the Corporation raised loans amounting to Rs. 8,803 crores from commercial banks, of which Rs. 3,867 crores were under the priority sector category of commercial banks. The Corporation further raised Rs. 2,860 crores from the banking sector as loans. As at March 31, 2008, HDFC together with its wholly owned subsidiaries, HDFC Investments Limited and HDFC Holdings Limited holds 23.27% of the equity sharecapital of HDFC Bank. HDFC had 1,445 employees as of March 31, 2008 (previous year 1,388). During the year, 24 employees employed throughout the year and 1 employee employed
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for part of the year were in receipt of remuneration of Rs. 24 lacs or more per annum.

TATA MOTOR LTD.

Company detail:

Tata Motors Limited is India's largest automobile company, with standalone revenues of Rs. 25,660.79 crores (USD 5.5 billion) in 2008-09. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in thecompact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the
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world's second largest bus manufacturer. The company's 23,000 employees are guided by the vision to be "best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics." Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka) Since, 1991 opening of the economy has changed the face of auto industry. Today, it is amongst the main drivers of growth of Indian economy with an output multiplier of 2.24(for every Re.1 invested, auto sector gives back Rs.2.24 to the economy). In recent years we have seen increasing number of global players entering Indian market by way of Joint ventures, collaborations or wholly owned subsidiary. The automobile industry is torn between trying to reduce costs on the one hand and, on the other, dealing with the high price of performanceenhancing technology and environmental compliance. Key drivers in the automotive industry are: Reducing air pollution Reduction of weight Recyclability Safety Better performance and engine efficiency Aesthetics Longer service Life

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MAJOR COMPETITORS OF TATA MOTORS

Key points : India's largest automobile company, Tata Motors, is planning to launch the world's cheapest car -- Nano -- in Thailand and other South East Asian markets. Tata Motors has entered into joint venture agreement with Thonburi Group to form Tata Motors (Thailand). The company will utilize Thailand as manufacturing base in order to export its products in the region. Earlier, Tata Motors had expressed its desire to introduce Nano in European market by 2011. The auto major mopped up Rs 456.8 cr by selling the stake to Tata Sons. Tata Motors, the biggest vehicle maker of the country, which UK-based car brands Jaguar and Land Rover (JLR) for whopping $2.3 billion last year, may concentrate onsmaller towns of the country like Ludhiana, apart from the major cities to market these brands by setting up exclusive showrooms.

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Automobile manufacturer Tata Motors has posted a 13.26% dip in total sales in month of May 2009. The company sold 40,916 units in May of this fiscal year as compared to 46,339 units in May 2008.

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Opportunities and Threats a) Opportunities Road Development: The ongoing road development program would improve connectivity to ports, cities and villages through a network of highways and interconnecting roads by 2010-11. Improved road network would help in faster movement of goods between various cities and towns. The Company launched TATA Novus range of vehicles in the heavy segment and TATA ACE for last mile distribution. Car penetration in India: Car penetration in India is 7 cars per 1,000 persons. International: In FY 2006-07, the Company increased share of its overseas vehicle sales from 7.6% last year to record high of 11.1% (as % of its total sales) and has planned further increase in this year.

b) Threats Global Competition: India is increasingly attracting global players to set up manufacturing facility for producing cars, especially small cars. Global automobile manufacturers are also entering India in commercial vehicle segment to leverage Indias low cost production advantage to their favor. Fuel Prices: The continuing fuel price increase in the domestic market could significantly impact demand of commercial and passenger vehicles.

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Input costs: Commodity items particularly steel, non-ferrous metals, rubber and engineering plastics have witnessed huge price increases in the past. These prices are expected to increase further affecting the Companys profitability. Interest rate hardening and other inflationary trends: With interest rates hardening and liquidity crunch in the system, growth in sales may be adversely impacted. Government Regulations: Stringent emission and safety requirements could bring new complexities for automotive and component manufacturers impacting the Companys business.

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Henning Holck-Larsen and Soren Kristian Toubro, school-mates in Denmark, would not have dreamt, as they were learning about India in history classes that they would, one day, create history in that land. In 1938, the two friends decided to forgo the comforts of working in Europe, and started their own operation in India. All they had was a dream. And the courage to dare. Their first office in Mumbai (Bombay) was so small that only one of the partners could use the office at a time!

In the early years, they represented Danish manufacturers of dairy equipment for a modest retainer. But with the start of the Second World War in 1939, imports were restricted, compelling them to start a small work-shop to undertake jobs and provide service facilities. Germany's invasion of Denmark in 1940 stopped supplies of Danish products. This crisis forced the partners to stand on their own feet and innovate. They started manufacturing dairy equipment indigenously. These products proved to be a success, and L&T came to be recognized as a reliable fabricator with high standards.

In December 1950, L&T became a Public Company with a paid-up capital of Rs.2 million. The sales turnover in that year was Rs.10.9 million. Prestigious orders executed by the Company during this period included the Amul Dairy at Anand and Blast Furnaces at Rourkela Steel Plant. With the successful completion of these jobs, L&T emerged as the largest erection contractor in the country.

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In 1956, a major part of the company's Bombay office moved to ICI House in Ballard Estate. A decade later this imposing grey-stone building was purchased by L&T, and renamed as L&T House - its Corporate Office. The sixties saw a significant change at L&T - S. K. Toubro retired from active management in 1962. The sixties were also a decade of rapid growth for the company, and witnessed the formation of many new ventures: UTMAL (set up in 1960), Audco India Limited (1961), Eutectic Welding Alloys (1962) and TENGL (1963).

Profit & loss a/c

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Key points: On May 14, 2008, the Company entered into a definitive agreement for sale of RMC business to Lafarge Aggregates & Concrete India Private Limited for an enterprise value of Rs.1,480 crore. The financial effect of this sale will be given in the year 2008-2009, on conclusion of the transaction. The Directors recommend payment of final dividend of Rs.15/- per equity share of Rs.2/- each, which together with the Interim Dividend of Rs.2/- per equity share declared on July 3, 2007 works out to Rs.17/- per equity share for the year under review. As at March 31, 2008, the gross fixed and intangible assets, including leased assets, stood at Rs. 4,935.02 crore and the net fixed and intangible assets, including leased assets, at Rs. 3,645.44 crore. Additions during the year amounted to Rs. 1,647.20 crore.

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TECHNICAL ANALYSIS 1. Reliance industries.

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Chapter-8 CONCLUSION AND RECOMMENDATION Fundamental analysis of stocks:

1.HDFC Bank Ltd. Recommend BUY HDFC Bank delivered a Net Profit growth of 45% yoy to Rs464cr (Rs321cr). However, the numbers are not comparable as 1QFY2009 numbers are after accounting for the merger with Centurion Bank of Punjab (CBoP). EPS growth was 13% yoy. While a breakup of line items into HDFC Bank standalone and CBoP was not available, including CBoP 1QFY2008 Net Profits, profits grew 31% yoy. The Bank absorbed the additional Provisioning Expenses to bring CBoPs accounting policies for NPAs in line with its own stricter policies, by adjusting the same against Reserves, with an estimated impact of roughly Rs15-20 per share. Management indicated Core NIMs of the merged entity stood at about 4.1%, while the CASA ratio declined to 45%. At the same time, Operating Expenses, excluding Staff Costs were down 1% sequentially, indicating substantial costcutting measures implemented during the quarter, in line with peers. Asset quality remained stable, with the Net NPA ratio remaining at 0.5%. MTM losses on Bond and Equity books were manageable at around Rs78cr

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2. TATA MOTOR.

Recommend SELL OR HOLD. TAMOs long term debt on a consolidated basis went up to Rs.163bn in FY09. In addition to it the company has raised NCDs for Rs.42bn and it also raised ~$1bn for JL for working capital requirements. TAMO has charged actuarial loss for JLR pension plan of Rs.14.57bn to Reserves which along with losses incurred during FY09, impacted consolidated net worth and book value at consolidated stood a Rs.113 per share compared to current estimated debt levels of ~Rs.240bn. We believe the debt equity ratio for FY10E to become >2x and apart from this the company is also likely to raise debt on JLR books which would increase leverage risk going ahead. We believe CV industry would continue to face pressures in FY10E mainly due to slowdown in overall economy, lower industrial production and stringent financing norms. We also dont expect any immediate revival in JLR sales volume in FY10E. We estimate TAMO to report EPS of Rs.14 and Rs.19 for FY10E and FY11E respectively. At current market price of Rs.314, the stock trades at a PE multiple of 23x and 16x for FY10E and FY11E respectively. We value TAMO at Rs.194 (10x FY11E) and other subsidiaries at Rs40 (including JLR). We recommend a SELL on the stock with a target price of Rs.235.

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3. LARSEN & TOUBRO

Recommend to hold and keep eyes on stock before BUY

Keeping in view the improving macroeconomic fundamentals and the UPAled government at the Centre, we are optimistic about an increase in spending on infrastructure in India over the next few years. L&Ts strategic initiatives to augment business prospects in some of the most promising sectors such as Power, Railways, Defence, and Nuclear Energy and excellent execution skills are likely to help the Company exploit the full potential of emerging opportunities. Consequently, we have upwardly revised the order book growth estimate for FY10 to 20%, as against the earlier expectation of a 9% growth.

Technical analysis of stocks:

1. As on 30th June 2009 RELIANCE closed @ 2029 and we RECOMMEND Buy for LONG-TERM with STOPLOSS of 1859.14 and Sell for SHORTTERM and we also expect STOCK to react on Following IMPORTANT LEVELS .

Simple moving avg. 100 days : 1782.60 Resistance 2 1953.66 Resistance 1 1921.78 Support 1 1830.82 Support 2 1798.94

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2. JPASSOCIAT closed @ 206.10 and we RECOMMEND Strong Buy for LONGTERM with STOPLOSS of 119.49 and Buy for SHORT-TERM with STOPLOSS of 188.22 and we also expect STOCK to react on Following 100 days SMA : 142.05

IMPORTANT LEVELS.

Resistance 2 221.16 Resistance 1 214.96 Support 1 197.24 Support 2 191.04

3. INFOSYSTCH closed @ 1777.65 and we RECOMMEND Strong Buy for LONG-TERM with STOPLOSS of 1430.34 and Strong Buy for SHORT-TERM with STOPLOSS of 1672.11 and we also expect STOCK to react on Following

IMPORTANT LEVELS 100 days SMA: 1505.91 Resistance 2 1855.1 Resistance 1 1828.96 upport 1 1754.34 Support 2 1728.2

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4. As on 30th June 2009 SBIN closed @ 1748.05 and we RECOMMEND Buy for LONG-TERM with STOPLOSS of 1340.86 and Buy for SHORT-TERM with STOPLOSS of 1629.84 and we also expect STOCK to react on Following

IMPORTANT LEVELS. 100 days SMA: 1384.60 Resistance 2 1694.29 Resistance 1 1670.68 Support 1 1603.32 Support 2 1579.71

5. SUNPHARMA closed @ 1091.95 and we RECOMMEND Sell for LONGTERM with STOPLOSS of 1037.35 and Sell for SHORT-TERM with STOPLOSS of 1141.96 and we also expect STOCK to react on Following

IMPORTANT LEVELS. 100 days SMA: 1178.18 Resistance 2 1287.54 Resistance 1 1256.89 Support 1 1169.41 Support 2 1138.76

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6. As on 30th June 2009 SUZLON closed @ 103.95 and we RECOMMEND Sell for LONG-TERM with STOPLOSS of 96.83 and Sell for SHORT-TERM with STOPLOSS of 97.78 and we also expect STOCK to react on Following

IMPORTANT LEVELS. 100 days SMA: 74.40 Resistance 2 97.7 Resistance 1 96.13 Support 1 91.67 Support 2 90.1

7. As on 30th June 2009 DISHTV closed @ 38.80 and we RECOMMEND Buy for LONG-TERM with STOPLOSS of 23.50 and Sell for SHORT-TERM with STOPLOSS of 35.67 and we also expect STOCK to react on Following

IMPORTANT LEVELS. 100 days SMA: 30.95 Resistance 2 35.93 Resistance 1 35.59 Support 1 34.61 Support 2 34.27

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8. ICICIBANK closed @ 725.60 and we RECOMMEND Strong Buy for LONG-TERM with STOPLOSS of 538.11 and Strong Buy for SHORTTERM with STOPLOSS of 701.64 and we also expect STOCK to react on Following

IMPORTANT LEVELS .

100 days SMA: 531.44 Resistance 2 732.37 Resistance 1 717.55 Support 1 675.25 Support 2 660.43

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A brief introduction to some terms you are likely to encounter as you start investing... SECURITY ANALYSIS: stands for the proposition that a well-disciplined investor can determine a rough value for a company from all of its financial statements, make purchases when the market inevitably under-prices some of them, earn a satisfactory return, and never be in real danger of permanent loss. FUNDAMENTAL ANALYSIS: is the analysis of a stock on the basis of core financial and economic analysis to predict the movement of stocks price. TECHNICAL ANALYSIS: is the study of prices and volume, for forecasting of future stock price or financial price movements. DOW JONES THEORY: The Dow theory is a method of interpreting and signaling changes in the stock market direction based on the monitoring of the Dow Jones Industrial and Transportation Averages. ELLIOT WAVES BASICS: Breaking through support or resistance levels results in a change of traders expectations SUPPORT: Support is a level at which bulls (i.e., buyers) take control over the prices and prevent them from falling lower. RESISTANCE: is the point at which sellers (bears) take control of prices and prevent them from rising higher

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ROLE REVERSAL: When a resistance level is successfully broken through, that level becomes a support level. Similarly, when a support level is successfully brokenthrough, that level becomes a resistance level. BULL TREND: The start of an up trend is signaled when price makes a higher low (trough), followed by a rally above the previous high (peak) BEAR TREND: when a rally ends with a lower peak and then retreats below the previous low. The end of a bear trend is identical to the start of a bull trend. LARGE CORRECTION: A large correction occurs when price falls below the previous low (during a bull trend) or where price rises above the previous high (in a bear trend). MOVING AVERAGE: A moving average is the average price of a financial instrument over a given time. RELATIVE STRENGTH INDEX: The Relative Strength Index Technical Indicator (RSI) is a price-following oscillator that ranges between 0 and 100 ADVANCE/DECLINE LINE: The advance/decline line shows, for some period, the cumulative difference between advancing and declining issues. CLOSING TICK: Closing tick is the difference between the number of shares thatclosed on an uptick and those that closed on a downtick.

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CLOSING ARMS: Closing arms or trin (trading index) is the ratio of average trading volume in declining issues to average trading volume in advancing issues. Z-BLOCK TRADES: zBlock trades are trades in excess of 10,000 shares. HI-LO-CLOSE CHART: A hi-lo-close chart is a bar chart showing, for each day, the high price, low price, and closing price. CANDESTICK CHART: A candlestick chart is an extended version of the hiloclose chart. It plots the high, low, open, and closing prices, and also shows whether the closing price was above or below the opening price POINT AND FIGURE CHARTS: Point-and-figure charts are a way of showing only major price moves and their direction. A major up move is marked with an X, while a major down move is marked with an O. A new column starts every time there is a change in direction HEAD AND SHOULDERS FORMATION: Once a chart is drawn, technical analysts examine it for various formations or pattern types in an attempt to predict stock price or market direction in the case of head-and-shoulders formation. ODD-LOT: The odd-lot indicator looks at whether odd-lot purchases are up or down. HEMLINE: Followers of the hemline indicator claim that hemlines tend to rise in good times.
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SUPER BOWL: The Super Bowl indicator forecasts the direction of the market based on whether the National Football Conference or the American Football Conference wins. BETA: Beta is a risk measure comparing the volatility of a stock's price movement to the general market. MOMENTUM: Momentum measures the speed of price change and provides a leading indicator of changes in trend. UPSIDE/DOWNSIDE: Measures of Upside/Downside separate the volumes for rising markets from those in falling markets. Since volume is independent of price, it makes a valuable tool for measuring the quality of a price trend. SWING INDEX: Is a swing or wave system used to capitalize on breakout patterns. ASI is commonly used to confirm trend line breakouts on price charts. ARMS INDEX (TRIN): Short term breadth indicator showing whether volume is flowing into advancing or declining issues.

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BOOKS: Erich A. Helfert, D.B.A., Financial Analysis: Tools and Techniques (2000) Sharekhan, Fundamental Analysis: Which Company? (October, 2004) Share khan first step to share market by Tarun shah CEO of share khan John L. Person, A Complete Guide to Technical Trading Tactics, Ninth Edition (March 26, 2004) VALUELINE (share khans monthly magazine) Research methodology -C.R. Kothari, VIKASH PUBLICATION. Financial management Khan & Jain NEW DELHI, TATA Mc GROW- HIL PUBLICATION.

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WEB-SITES: http://www.nseindia.com/ http://www.sharekhan.com/ http://www.moneycontrol.com/ http://www.indiainfoline.com/ http://www.icicidirect.com/ http://economictimes.indiatimes.com/

TV- CHANNELS: NDTV-PROFIT

CNBC-AWAZ

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