SYNOPSIS

ON
Investment in Stock Market

AT

Reliance Money

Master of Business Administration (Finance)

Submitted to In Partial Fulfilment of the Requirement for

the Award

of the Master of Business Administration of

Yashwantrao Chavan Mahaharashtra Open University (YCMOU),

Nashik, Maharashtra.

Submitted by
Mr. Umakant R. Dhonge
M.B.A. (Finance)

PRN:-RP0901492

Hislop College, Nagpur

Guided by
Prof. P.M. Navghare

Yashwantrao Chavan Mahaharashtra Open University (YCMOU),

Nashik, Maharashtra.
 INTRODUCTION

Investing in equities gives high returns but they correspondingly have higher risk also.
Before we invest in a company, there are more than a few things we need to know about it.

Securities Analysis

An analysis of securities and the organization and operation of their markets. The
determination of the risk reward structure of equity and debt securities and their valuation.
Special emphasis on common stocks. Other topics include options, mutual fluids and
technical analysis.

Technical analysis is a method of predicting price movements and future market trends by
studying charts of past market action which take into account price of instruments, volume
of trading and, where applicable, open interest in the instruments.

Fundamental analysis is a method of forecasting the future price movements of a financial

instrument based on economic, political, environmental and other relevant factors and
statistics that will affect the basic supply and demand of whatever underlies the financial
instrument.

India is now increasingly interlinked with the global economy, which has been grappling
with challenges like credit or liquidity crunch following the sub prime crisis, weakening
dollar, galloping rise in crude oil prices and fears of global economic slowdown especially
in the US.

The Sensex currently trades at a trailing twelve month price to earnings multiple of over 18
times. The Sensex trades at about 24 times and 32 times for FY08 and FY09 estimated
earnings.
IMPORTANCE AND SIGNIFICANCE OF THE STUDY

• One of the key advantages is that stock exchanges are an efficient medium for
raising resources and channeling savings from the public by way of issue of equity /
debt capital by joint stock companies listed on the stock exchanges.

• The second main benefit is the wide dispersal of information and the need to
disclose adequate information — not only the quarterly or year-end financial
results, but also major events that have an impact on the working of the company.

• Security (Equity) market is the competing mechanism to channel savings to

investment. The securities markets score over banks in the allocational efficiency,
as it allocates savings to those investments which have potential to yield higher
returns. As a result, savers and investors are not constrained by their individual
abilities, but by the economy’s ability to invest and save respectively, which
inevitably enhances savings and investment in the economy.
 RATIONALE FOR THE STUDY

In an industry plagued with skepticism and a stock market increasingly difficult to predict

and contend with, if one looks hard enough there may still be a genuine aid for the Day

Trader and Short Term Investor.

The price of a security represents a consensus. It is the price at which one person agrees to

buy and another agrees to sell. The price at which an investor is willing to buy or sell

depends primarily on his expectations. If he expects the security's price to rise, he will buy

it; if the investor expects the price to fall, he will sell it. These simple statements are the

cause of a major challenge in forecasting security prices, because they refer to human

expectations. As we all know firsthand, humans expectations are neither easily quantifiable

nor predictable.

Fundamental 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.
 OBJECTIVES OF THE STUDY

Stock market now represents perhaps the most appropriate investment opportunity for most

small investors. However, from the investor’s perspective, they naturally would be

interested in tracking the value of their investments on whether they get an acceptable

return on there investments. Similarly, the investor would also expect his advisor to give

him proper advice on the good performance track record of various companies. Thus, it is

very essential to carefully study the various parameters, economic indicators, Market

Watch Indicators etc.

Primary Objective:

To do equity analysis of chosen securities.

To understand the basic concept of Equity Investment.

To understand the economic factor affecting Stock Market.

To measure the performance of sector and companies (Software and Real Estate).

Sub-Objectives:

a) To justify the current investment in the chosen securities.

b) To understand the movement and performance of stocks.
c) To recommend increase/decrease of investment in a particular security.
 HYPOTHESIS

The Study throws light on the role of stock market in economic development. The results of

the study disclose that the stock market growth and economic growth have long-run, or

equilibrium, relationship.

It reveals that the stock market fluctuations do help to predict the future economy. The

findings are consistent with existing theoretical underpinnings as illustrated by rational

expectations hypothesis and wealth effect. However, the stock market liquidity effect is not

found significant for causation of economic growth. The causality has been observed only

in real variables but not in nominal variables.

To promote stock market development, government should encourage savings and

investment by appropriate policies. Therefore, equal importance must be given to both,

bank-based financial sector and market-based stock market of the economy, for fostering

capital formulation and investment to increase living standard of the people via economic

growth.
 RESEARCH METHODOLOGY

1) PRIMARY DATA :

a. Interview

b. Observations

c. Questionnaire

2) SECONDARY DATA :

a. Data collection through print media and by surfing on the net

b. Annual Reports

c. Market Analysis

d. Business Magazines
 EXPECTED CONTRIBUTION

It is suggested that investment should be made by studying present scenario of the Market.

Investment in MID Cap is the best suitable in the recession period as it may generate good

revenue in future.

BIBLIOGRAPHY

www.reliancemoney.com
www.sifybusiness.com
www.economintimes.com
www.cmie.com

Books:
Businees strategy – Morgn Stanley
Money- Life Magzine
 CHAPTERIZATION

1) Introduction

2) Importance and significance of the study

3) Rationale for the study

4) Objectives of the study

5) Hypothesis

6) Research methodology

7) Expected contribution

8) Bibliography