SECURITY ANALYSIS

Presented by: S.Anusha V. Jyothsna sowgandhi MIC College of Technology

CONTENT
Introduction to stock exchange Security meaning Types of securities Security analysis types fundamental analysis Technical analysis Conclusion

STOCK MARKET
Stock Exchange also called Stock Market or Share Market market forces. Stock markets started in 1881. Totally 21 stock exchanges in India. National stock exchange and Bombay stock exchanges are famous stock exchanges.

SECURITY
According to securities contract act 1956 , has defined the security as inclusive of shares, scripts, bonds , stocks , debentures (or) any other marketable securities of like nature.

TYPES OF SECURITIES
Equity shares

Shares
Preference shares Government securities

Securities market

Debt

Debentures

Bonds

Futures

Derivatives
Options

EQUITY SHARE CERTIFICATE

PREFERENCE SHARE CERTIFICATE

BOND

DEBENTURE

DERIVATIVES

SECURITY ANALYSIS
The analysis of various tradable financial instruments is called security analysis. It is the initial phase of the portfolio management process. This step consists of examining the risk-return characteristics of individual securities. Buy under priced securities and sell over priced securities.

TYPES OF SECURITY ANALYSIS

Security analysis

Fundamental analysis

Technical analysis

FUNDAMENTAL ANALYSIS
It is a logical and systematic approach. The fundamental factors are relating to EIC analysis framework

EIC analysis framework

Economy analysis

Fundamental analysis

Company analysis

Industry analysis

ECONOMY ANALYSIS
Factors including while making economy analysis
GDP Interest rates Inflation Exchange rates Government revenue , expenditure and deficits

INDUSTRY ANALYSIS
Industry life cycle

 There are 24 sectors in Indian industry. They are

Banking sector Information technology sector Pharmaceutical sector Agriculture sector Real estate sector Telecommunication sector Textiles sector Media sector Auto mobile sector etc.

COMPANY ANALYSIS
Profit volume ratio (P/E ratio):Market price /Earnings per share(EPS) Earnings per share(EPS):Net Profit Available To Equity Shareholders/ Number Of Shareholders

EXAMPLE ON FUNDAMENTAL ANALYSIS

Sno.
1 2 3. 4 5 6 7

Company P/E
Wipro Bharti Airtel Cipla ITC L&T NTPC ONGC 16.24 26.44 23.34 30.82 20.86 14.45 8.86

Fundamental analysis NPM EPS

14.9 3.9 20.5 23.9 7.5 15.5 30.1 23.65 10.01 15.83 8.22 74.37 11.70 31.68

8
9 10

DR.REDDY S HDFC
AXIS Bank

18.96
28.94 9.8

13.2
20 17.8

88.15
26.91 107.50

TECHNICAL ANALYSIS
A technical analyst tries to identify the historical patterns from the chart, based on this he/she is going to forecast the future price movement. stages in technical analysis:
Collecting data Represent in charts Evaluation of historical patterns Forecasting the prices

TYPES OF CHARTS
Line chart

Bar charts

A candlestick chart

EXAMPLE ON TECHNICAL ANALYSIS

Date 14-Aug-12 16-Aug-12 17-Aug-12 21-Aug-12 Open Price 356 354.2 349.4 350.65 High Price 357.55 354.7 354.5 358.5 Low Price 352.4 347 346.5 350.65 Close Price 355.5 349.4 353.5 355.75

22-Aug-12
23-Aug-12 24-Aug-12 27-Aug-12 28-Aug-12 29-Aug-12 30-Aug-12 31-Aug-12

355
355.65 362.95 366.5 360.5 364 364 369

357.45
366.75 366.5 366.85 365 369 370 372.5

350.25
355.65 360.25 360.05 359 361.5 362.1 360.55

354.5
363.1 365.1 361.25 363.65 364.15 369 362.6

3-Sep-12 4-Sep-12 5-Sep-12 6-Sep-12 7-Sep-12 8-Sep-12 10-Sep-12

362.9 363 361 362.5 381.5 378.5 380

372.5 366 364 379 384.8 382.6 382.3

361.65 360.4 357.7 360.7 376.9 378.5 375

364.2 363.05 362.1 377.45 377.8 380.75 376.45

11-Sep-12
12-Sep-12 13-Sep-12 14-Sep-12

373.5
377.25 387.1 395.95

377
386 389.35 395.95

372.1
375.3 385.5 387.55

374.85
384.55 387.9 391.55

CONCLUSION
Helpful for the investor Long term investments Minimizes the risk Maximizes the profits Knowledge about the market conditions