Docstoc

Indian Stock Market An Overview

Document Sample
Indian Stock Market An Overview Powered By Docstoc
					INDIAN STOCK MARKET:
AN OVERVIEW
           Stock Market

   Primary Market    Secondary Market
PRIMARY MARKET
 IPO  vs Seasoned Issues
 Pricing of issues

   Fixed pricing
   Book building
       offer vs Private placement
 Public

 Demat issues
PRICING OF ISSUES

   Companies eligible to make public issue can
    freely price their equity shares or any security.

 Fixed Price
 Book Building
FIXED PRICE
 Inthe fixed-price issue method, the issuer
 fixes the issue price well before the actual
 issue. For this very reason, it is cautious
 and conservative in pricing the issue so
 that the issue is fully subscribed.
 Underwriters also do not like the issue to
 devolve on them and hence favour
 conservative pricing of the issue. For
 these practical reasons, the issue price in
 the case of traditional fixed price method
 generally errs on the lower side and,
 therefore, in the investor’s favour.
BOOK BUILDING
 Book-building is a process of price discovery used
  in public offers. The issuer sets a floor price and a
  band within which the investor is allowed to bid
  for shares.
 The upper price of the band can be a maximum of
  1.2 times the floor price.
 The investor had to bid for a quantity of shares
  he wished to subscribe to within this band.
BOOK BUILDING
 Bids to remain open for at least 5 days
 Only electronic bidding is permitted

 Bidding demand is displayed at the end of every
  day.
 The    lead manager analyses the demand
  generated and determines the issue price or cut-
  off price in consultation with the issuer.
CUT-OFF PRICE
 The  cut-off price is the price discovered by
  the market. It is the price at which the
  shares are issued to the investors.
 Investors bidding at a price below the cut-
  off price are ignored.
 Let’s  say a company wants to issue
  10,00,000 shares. The floor price for one
  share of face value, Rs10, is Rs48 and the
  band is between Rs48 and Rs55.
 At Rs55, on the basis of bids received, the
  investors are ready to buy 2,00,000
  shares. So the cut-off price can not be set
  at Rs55 as only 2 lacs shares will be sold.
 So as a next step, the price is lowered to
 Rs54. At Rs54, investors are ready to buy
 4 lacs shares. So if the cut-off price is set
 at Rs54, 6 lacs shares will be sold. This
 still leaves 4 lacs shares to be sold.
 The  price is now lowered to Rs53. At Rs53,
  investors are ready to buy 4 lacs shares.
  Now if the cut-off price is set at Rs53, all
  ten lacs shares will be sold.
 Investors who had applied for shares at
  Rs55 and Rs54 will also be issued shares
  at Rs53.
FIXED PRICE VS. BOOK BUILDING
Fixed Price                        Book Building

1.   The price is known in advance 1.   Demand can be known at the
     to investor and the demand is      end of every day but price is
     known at close of the issue.       known at the close of issue.
2.   Conservative pricing (Low 2.       Aggressive pricing (High
     price)                             Price)
3.   Generally oversubscribed      3.   No pressure of unsatisfied
                                        demand in the market.
4.   It favours the investors      4.   It favours the issuers.
BOOK BUILDING
 Objective is efficient price discovery.
 Asymmetric information between promoter and
  investors.
 Investors always remain in dark.
PRIVATE PLACEMENT
   It involves issues of securities to a limited number of
    subscribers, such as banks, FIs, MFs and high net worth
    individual.
   It is arranged through a merchant banker, an agent of
    issuers, who brings together the issuers and investor(s).
   Securities offered are exempt from public disclosers
    regulations and registration requirements of the regulatory
    body.
   This market is preferred by small and medium size firms,
    particularly new entrants who do not have track record of
    performance.
PRIVATE PLACEMENT VS PUBLIC
ISSUES
Private Placement                    Public Issues

1.   Issues are offered to mature 1.      Issues are primarily offered to
     and sophisticated institutional      retail investors.
     investors.
2.   No discloser requirements.      2.   Discloser     requirement    is
3.   Issues are not screened and          there.
     this increases the risk.        3.   All issues are screened.
DEMATERIALISATION OF
SHARES:

 Trading in the shares of the Company is
  compulsory in dematerialized form for all
  investors.
 The Company has, therefore, enlisted its shares
  with both the depositories, viz, National
  Securities Depository Limited (NSDL) and
  Central Depository Services India Limited
  (CDSL).
WHAT IS DEMATERIALISATION?
 Dematerialisation   is a process by which
  the physical share certificates of an
  investor are taken back by the Company
  and an equivalent number of securities
  are credited in electronic form at the
  request of the investor.
 An investor will have to first open an
  account with a Depository Participant so
  that the dematerialised holdings can be
  credited into that account.
 This is very similar to opening a Bank
  Account.
WHAT IS A DEPOSITORY?
   A Depository (NSDL & CDSL) is an organisation
    like a Central Bank where the securities of a
    shareholder are held in the electronic form at the
    request of the shareholder through the medium
    of a Depository Participant.
WHO IS A DEPOSITORY
PARTICIPANT?
A   Depository Participant (DP) is your
  representative (agent) in the depository
  system providing the link between the
  Company and you through the Depository.
 While the Depository can be compared to
  a Bank, DP is like a branch of your bank
  with whom you can have an account.
 According to SEBI guidelines, Financial
  Institutions like banks, stockbrokers etc.
  can become participants in the depository.
HOW DOES THE DEPOSITORY SYSTEM
OPERATE?

 The    Depository System functions very
  much like the banking system.
 A bank holds funds in accounts whereas a
  Depository holds securities in accounts for
  its clients.
 A Bank transfers funds between accounts
  whereas a Depository transfers securities
  between accounts.
 In both systems, the transfer of funds or
  securities happens without the actual
  handling of funds or securities.
SECONDARY MARKET
 Trading
 Clearing &Settlement
TRADING
 Cash Trading
 Spot Trading

 Forward, future (derivative trading)
TRADING
 The NSE trading system called 'National
  Exchange for Automated Trading' (NEAT) is a
  fully automated screen based trading system.
 It is on line and nationwide trading system.

 It adopts the principle of an order driven market.
TRADING MECHANISM
 In this system a member can punch into the
  computer quantities of securities and prices at
  which he likes to transact.
 The transaction is executed as soon as it finds a
  matching sale or buy order from a counter party.
TRADING MECHANISM
A   single consolidated order book for each
  stock displays, on a real time basis, buy
  and sell orders originating from all over
  the country.
 The book stores only limit orders, which
  are orders to buy or sell shares at a stated
  quantity and stated price.
 The limit orders are executed only if the
  price quantity conditions match.
THE LIMIT ORDER BOOK FOR TITAN ON THE
NSE (ON 12 APRIL, 2005, AT 11.00 A.M.)
Buy Qty   Buy Price   Sell Price   Sell Qty

95        237.25      237.70       129
25        237.20      237.90       72
100       237.15      238.00       827
10        237.10      238.20       50
150       237.00      238.25       10
 One can buy a share by paying Rs237.7 and sell a
  share at Rs 237.25.
 The difference is the bid-ask spread.

 There is one potential complication to this simple
  scenario.
 The prices of Rs237.25 and Rs237.7 actually
  represent commitments to trade up to a specified
  number of shares.
 If somebody wants to buy 150 shares, what will
  happen?
LIMIT ORDERS
   Investors may also place limit orders, whereby
    they specify prices at which they are willing to
    buy or sell a security.
LIMIT ORDERS
         Condition   Price below   Price above
Action
                     the limit     the limit

Buy                  Limit-buy     Stop-Buy
                     Order         Order

Sell                 Stop-Loss     Limit-Sell
                     Order         Order
 Limit-buy Order and Limit-Sale order
 Limit-buy Order

 If the stock falls below the limit on a limit-buy order
  then the trade is to be executed.
 See the price list of Titan: Somebody has placed a buy
  order for 25 shares of Titan at Rs237.2 per share.
 If price falls to Rs237.2 (from its current level of
  Rs237.25), then this buy order will be executed.
 Limit-Sale order?
 What happens if a limit order is placed between
  the quoted bid and ask prices?
 Suppose you have instructed your broker to buy
  Titan at a price of Rs237.4 or better.
TRADING MECHANISM
 The trading system provides tremendous
  flexibility to the issuers in terms of kinds of
  orders that can be placed on the system.
 Several time related (Good-till-Cancelled, Good-
  till-Day, Immediate-or-Cancel), and
 Price-related (buy/sell limit and stop-loss orders)
  conditions can be easily built into an order.
STOP-LOSS ORDERS
 It is an order placed with a broker to sell once the
  stock reaches a certain price.
 A stop-loss is designed to limit an investor's loss
  on a security position.
 Setting a stop-loss order for 10% below the price
  at which you bought the stock will limit your loss
  to 10%.
 For example, let's say you just purchased ACC at
  Rs50 per share. Right after buying the stock you
  enter a stop-loss order for Rs45. This means that
  if the stock falls below Rs45, your shares will
  then be sold at the prevailing market price.
MARKET TIMINGS
 Trading on the equities segment takes
 place on all days of the week (except
 Saturdays and Sundays and holidays
 declared by the Exchange in advance).
 The market timings of the equities
 segment                            are:

 Normal Market Open : 09:55 hours
 Normal Market Close : 15:30 hours
CLEARING AND SETTLEMENT PROCESS AT NSE


                         NSE


                             1

   DEPOSITORIES   8      NSCCL       9   CLEARING
    BANK
                  6                  7
     10   5              2       3        4   11


                      CUSTODIAN / DP
CLEARING AND SETTLEMENT PROCESS
   1. Trade details from Exchange to NSCCL
   2. NSCCL notifies the consummated trade details to
    custodians who
      affirm back. Based on the affirmation, NSCCL
    determines
      obligations.
   3. Download of obligation and pay-in advice of funds/
    securities.
   4. Instructions to clearing banks to make funds available
    by pay-in-
      time.
   5. Instructions to depositories to make securities available
    by pay-in-
      time.

CLEARING AND SETTLEMENT PROCESS
   6. pay-in of securities (NSCCL advises depository to debit
    pool
      account of custodians and credit its account and
    depository does
      it).
   7. pay-in of funds (NSCCL advises Clearing Banks to debit
    account
      of custodians and credit its account and clearing bank
    does it).
   8. Pay-out of securities (NSCCL advises depository to credit
    pool
      account of custodians and debit its account and
    depository does
      it).
   9. Pay-out of funds (NSCCL advises Clearing Banks to
    credit
CLEARING AND SETTLEMENT PROCESS
   Custodians ( for A who is buyer and for B who is seller)
   Clearing bank records the following entries:
   (for 7) Custodian ( for A) A/C ……Dr
             To NSCCL A/C
   (for 9)  NSCCL A/C               ……..Dr
              To Custodian (for B) A/C

   Depositories record the following entries (shares):
   (for 6) Custodian ( for B) A/C ……Dr
             To NSCCL A/C
   (for 8) NSCCL A/C                ……..Dr
              To Custodian (for A) A/C
SETTLEMENT CYCLE
ROLLING SETTLEMENT

 At   NSE and BSE, trades in rolling
  settlement are settled on a T+2 basis i.e.
  on the 2nd working day.
 For arriving at the settlement day all
  intervening holidays, which include bank
  holidays, NSE holidays, Saturdays and
  Sundays are excluded.
 Typically trades taking place on Monday
  are settled on Wednesday, Tuesday's
  trades settled on Thursday and so on.
A TABULAR REPRESENTATION OF THE SETTLEMENT CYCLE FOR
ROLLING SETTLEMENT

                     Activity               Day

Trading              Rolling Settlement     T
                     Trading
Clearing             Custodial              T+1 working days
                     Confirmation
Settlement           Securities and Funds   T+2 working days
                     pay in

                     Securities and Funds   T+2 working days
                     pay out
INDEX-BASED MARKET-WIDE CIRCUIT
BREAKERS
(W.E. FROM JULY 2001)
 The    index-based market-wide circuit
  breaker system applies at 3 stages of the
  index movement, either way viz. at 10%,
  15% and 20%.
 These circuit breakers when triggered,
  bring about a coordinated trading halt in
  all equity and equity derivative markets
  nationwide.
 The market-wide circuit breakers are
  triggered by movement of either the BSE
  Sensex or the NSE S&P CNX Nifty,
  whichever is breached earlier.
DURATION OF TRADING HALT (IN MINUTES)
% movement   Before 1 p.m.   1 p.m. to 2    2 p.m. to 2.30   After 2.30
in either                    p.m.           p.m.             p.m.
indices in
either
direction
10           60              30             30               No halt
15           120             60             Trading halt     Trading halt
                                            for the          for the
                                            remainder of     remainder of
                                            the day          the day


20           Trading halt    Trading halt   Trading halt     Trading halt
             for the         for the        for the          for the
             remainder of    remainder of   remainder of     remainder of
             the day         the day        the day          the day
RISK MANAGEMENT
MARGIN MONEY
   Categorisation of stocks for imposition of margins

 The Stocks which have traded atleast 80% of the
  days for the previous six months shall constitute
  the Group I and Group II.
 Out of the scrips identified above, the scrips
  having mean impact cost of less than or equal to
  1% shall be categorized under Group I and the
  scrips where the impact cost is more than 1, shall
  be categorized under Group II.
 The remaining stocks shall be classified into
  Group III.
 The impact cost shall be calculated on the
 15th of each month on a rolling basis
 considering the order book snapshots of
 the previous six months. On the basis of
 the impact cost so calculated, the scrips
 shall move from one group to another
 group from the 1st of the next month.

 For securities listed for < 6 months, the
 trading frequency and the impact cost
 shall be computed using the entire trading
 history of the security.
WHAT IS IMPACT COST?


   What is impact cost? It is the cost of executing a
    transaction on the stock exchanges.

 Suppose you want to buy 150 shares of Titan.
 You would be able to buy the first 129 shares at a price
  of Rs237.7 per share. However, to buy the remaining
  21 shares, you have to pay Rs237.9 per share. The
  higher the number of shares that you want to buy will
  have an impact on the price of the stock.
 This is measured by what is known as the impact cost
  of the trade.
 The average buy price for 150 shares=
 (Rs237.7x129 + Rs237.9x21)/150 = Rs237.728

 The average of the best bid and ask price is given
  by Rs 237.475.
 You should ideally expect to buy or sell shares of
  Titan at this price.
 The impact cost of the order is therefore given by:

 Impact cost = (237.728 – 237.475)/237.475

             = 0.106%
 What does impact cost signify?
 It means you incurred a cost of 0.106% to buy 150
  shares because of the liquidity conditions in that
  stock. The more liquid a stock is the lower its
  impact cost.
VALUE AT RISK MARGIN

Security VaR Margin

Group I   The scrip wise daily volatility calculated using the
          exponentially weighted moving average (EWMA)
          method on daily return.
          The scrip wise daily VaR margin would be 3.5
          times the volatility so calculated subject to a
          minimum of 7.5%.

Group II The VaR margin shall be higher of scrip VaR (3.5
         sigma) or the index VaR (3 sigma), and it shall
         be scaled up by square root of 3.

Group III The VaR margin = 5 x the index VaR x        3.
INDEX VAR
   The index VaR would be the higher of the
    daily Index VaR based on S&P CNX
    NIFTY or BSE SENSEX. The index VaR
    would be subject to a minimum of 5%.
COMPUTATION VAR
 Calculate the daily logarithmic return of share
 Ri = In (Pi / Pi-1)

 Compute the initial volatility by calculating the
  standard deviation of returns for the one year
  period using the formula
 SD = σ0    = [ 1/n {Ri – E(Ri)}2 ]

                            n

                           
                           i 1
 Calculate the daily volatility for he subsequent
  days using EWMA mothod.
 For day 1, the volatility will be

 σ1 = [λ (σ0 )2 + (1 – λ) R12 ] ½

 For day 2, the volatility will be

 σ2 = [λ (σ1 )2 + (1 – λ) R22 ] ½
 Daily VaR for individual scrip = 3.5 sigma
 Daily Var for index = 3 sigma

 A higher SD level is used for the script because
  the script is expected to have higher volatility as
  compared to the index, which is a portfolio. The
  volaility estimate at 3 sigma level represents 99%
  VaR.
BUYING ON MARGIN
 SEBI approved margin trading in January 2004
  and it was introduced in February 2004 in India.
 If   you have a margin account with
  kotakstreet.com and your margin account
  balance is Rs10,000, then you can buy shares up
  to Rs40,000.
 Effectively kotakstreet.com provides you with a
  loan of Rs30,000 to complete your transaction.
 The margin in the account is the portion of the
  purchase price contributed by the investor; the
  reminder is borrowed from the broker.
PERCENTAGE MARGIN
   Suppose that the investor initially pays Rs6,000 toward the
    purchase of Rs10,000 worth of stock (100 shares of Rs100
    each), borrowing the remaining Rs4,000 from the broker.
   The initial balance sheet looks like this:
   Assets                           Liabilities and Owner’s
    Equity
   Value of stock Rs10,000         Loan from broker Rs4,000
                                  Equity              6,000

   The initial percentage of margin is
   Margin = Equity/value of stock = 6000/10,000 = 0.60
   If the stock’s price declines to Rs70 per share, the account
    balance becomes:
   Assets                             Liabilities and Owner’s
    Equity
   Value of stock Rs7,000           Loan from broker Rs4,000
                                    Equity               3,000

   The percentage of margin is now
   Margin = Equity/value of stock = 3000/7,000 = 0.43 or 43%
MAINTENANCE MARGIN
   Suppose the maintenance margin is 30%. How far could the
    stock price fall before the investor would get a margin call?

   Let P be the price of the stock. The value of the investor’s
    100 shares is then 100P, and the equity in his or her
    account is 100P-Rs4,000.
   Thus we can say
   (100P-4000) / 100P = 0.3
   Or P = Rs57.14
   If the price of the stock were to fall below Rs57.14 per
    share, the investor would get a margin call.
SHORT SELLING
 Short selling is generally defined as the practice
  of selling borrowed securities.
 Suppose, A feels current market price of a share
  is Rs.50 and it will reduce Rs.25. He takes loan
  of a share.
 Sell Rs.50
 Buy         Rs.25 and return the share
 Profit      Rs.25
 Maximum profit is 50 if price is zero, but,
  maximum loss is unlimited.
 Dividend: If dividend is Rs.5, profit Rs.25 – 5 =
  20. Then dividend is to be paid by the short
  seller to the lender of the share.
USES OF SHORT SELLING:
Investors short sell for one of two reasons:
1. To seek speculative profit when the price of a
   security is expected to drop.
2. To protect a profit and defer taxes by
   “Hedging” their position.


   All shorts are executed on
    margin.
SHORTING OR MARGIN:
 The  investor has to deposit only margin
  money.
 Return on Invested Capital from Short
  Sale
   =   (Proceeds   from   Sales   –   Purchase   Cost   of   Share   –
    Dividend)/Equity Deposit



 Suppose  margin is 60% ( initial margin),
  Current market price of a share is
  Rs.100, and it is expected to reduce to
  Rs80. Dividend is Rs.5
 Return = (100 – 80 – 5)/60 = 15/60 = 25%
SPECULATING WITH SHORT
SALE:
   Short Sale Initiated: 300 Equity Share @ Rs50   =
    Rs15000
   Short Sale Covered: 300 x Rs30                  =
    9000
   Profit                                          =
    6000
   Dividend @ Rs.5                                 =
    1500
   N/Profit                                        =
    4500
   Equity Deposit @ 50%                            =
    7500

   Return
     = (4500/7500) x 100 = 60%
MARGIN CALLS ON SHORT POSITIONS
 Suppose   that you are bearish on ACC
  stock and that its current market price is
  Rs100 per share. You tell your broker to
  sell short 1 share. The broker borrows 1
  share either from another customer’s
  account or from another broker.
 Suppose the broker has a 50% margin
  requirement on short sales. This means
  that you must have either cash or security
  in your account worth Rs50 that can serve
  as margin on the short sale.
   Like investors who purchase stock on margin, a
    short-seller must be concerned about margin call.
    If the stock price rises, the margin in the account
    will fall; if margin falls to the maintenance level,
    the short-seller will receive a margin call.
   Suppose that the broker has a maintenance
    margin of 30% on short sales. This means that
    the equity in your account must be at least 30%
    of the value of your short position at all times.
    How far can the price of ACC go up before you get
    a margin call?
 Suppose price has increased to P (where P>100).
 The loss on short sales is P – 100.

 Then the margin money has reduced to 50 – (P -
  100).
 This reduced margin money is 30% of P.

 Thus, 50 – (P -100) = .3 P

 Or 150 – P = .3P

 Or 1.3 P = 150

 Or P 115.38.
 If ACC stock should rise above Rs115.38,
  you would get a margin call, and you will
  either have to put up additional cash or
  cover your short position.
STOP-BUY ORDER
 You have sold ACC on short for Rs100.
 If the share price falls, you will profit from short
  sale.
 On the other hand, if the share price rises, let’s
  say Rs130, you will lose Rs30 per share.
 But suppose that when you initiate the short
  sale, you also enter a stop-buy order at Rs120.
 The stop-buy order will be executed if the share
  price surpasses Rs120, thereby limiting your
  losses to Rs20 per share.
 The stop-buy order thus provides protection to
  the short-seller if the share price moves up.
SHORT SALES TO PROTECT A PROFIT AND
DEFER TAXES BY “HEDGING” THEIR
POSITION:
   01.01.2005
   Bought 100 Shares of X Company @ Rs.20       Cost
         Rs.2000
   Now Price Rs.50                              Value
         Rs.5000

        Net Profit
         Rs.3000

   To protect Net Profit, he will now short sales of 100 shares
    @ Rs.50.

   He has two positions one short and one long of equity
    shares.

   Note that although this short sales is executed with
    borrowed securities, it is not necessary to deposit margin
    money, because his current holding of the stock serves this
SHORT SALES TO PROTECT A PROFIT AND
DEFER TAXES BY “HEDGING” THEIR
POSITION:
                                 Price Rs.80                Price
    Rs.30
   Value of the Stock                 8000
    3000
   Original Cost                      2000
    2000
                          ___________
    ____________
   Profit                              6000
    1000
   Less Loss on short sales
   (Add profit on Short Sales)
   Short Sales Initiated 5000                     5000
   Short Sales Covered 8000                       3000

                    ________                   ________
                                     (-)3000
    +2000
                                  ________                _______
SHORT-SALES MAY BE
REINTRODUCED
 Why SEBI is planning to reintroduce Short-
  sales?
 When it was banned?

 How does short- sale help the market?
IndianSecurity Market
   A profile
GROWTH AND DEVELOPMENT OF
INDIAN STOCK MARKET (BSE)


   AVERAGE DAILY TURNOVER
        Average Daily Vol. of Turnover(Rs.



                                             4500
                                             4000
                                             3500
                                             3000
                                             2500
                       cr)




                                             2000
                                             1500
                                             1000
                                              500
                                               0
                                                    95 96 97 98 99 00 01 02 03 04
                                                                Year
NO. OF COS LISTED




                                    6000

                                    5900
          No. of Listed Companies



                                    5800

                                    5700

                                    5600

                                    5500

                                    5400

                                    5300
                                           98   99   00    01    02   03   04
                                                          Year
MARKET CAPITALIZATION

                                        1400000



        Market Capitalization (Rs cr)
                                        1200000

                                        1000000

                                        800000

                                        600000

                                        400000

                                        200000

                                             0
                                                  95 96 97 98 99 00 01 02 03 04
                                                              Year
INTERNATIONAL SCENARIO AT END DECEMBER
2001
(SOURCE: S&P EMERGING STOCK MARKET FACT BOOK, 2002)

Particulars             USA      UK      Japan   Germany   Singapor   Hong   China   India
                                                           e          kong


No. of listed Cos.      6,355    1,923   2,471   988       386        857    1,160   5,795



Market capitalisation   13,810   2,217   2,252   1,072     117        506    524     110
($ Bn.)


Turnover ($ Mn.)        29,041   1,872   1,826   1,420     63         196    449     249



Turnover ratio (%)      201.3    78.4    67.9    124.7     46.9       34.8   81.3    191.4
MARKET CAPITALIZATION AND TURNOVER OF MAJOR MARKETS (US $
MILLION)
(SOURCE: S&P EMERGING STOCK MARKET FACT BOOK, 2002)
Country/Region    MC           MC           MC          TO           TO           TO
                 1990         2000         2001        1990         2000         2001
Developed
Markets          8,795,239   29,614,264   25,246,554   4,616,473   43,912,999   39,676,018
 Australia         108,879      372,794      374,269      40,113      226,325      240,667
 Japan           2,917,679    3,157,222    2,251,814   1,602,388    2,693,856    1,826,230
 UK                848,866    2,576,992    2,217,324     278,740    1,835,278    1,871,894
 USA             3,059,434   15,104,037   13,810,429   1,751,252   31,862,485    29,040739
All Emerging
Markets            604,420    2,608,486    2,572,064    898,233     3,956,869    2,400,844
  China                  -      580,991      523,952          -       721,538      448,928
  India             38,567      148,064      110,396     21,918       509,812      249,298
  Indonesia          8,081       26,834       23,006      3,992        14,311        9,667
  Korea            110,594      148,649      220,046     75,949     1,067,669      703,960
  Malaysia          48,611      116,935      120,007     10,871        58,500       20,772
  Philippines        5,927       51,554       41,523      1,216         8,196        3,148
 Taiwan           1,00,710      247,602      292,621    715,005       983,491      544,808


World Total      9,399,659   32,222,750   27,818,618   5,514,706   47,869,867   42,076,862
US as % of           32.55        46.87        49.64       31.76        66.56        69.02
World
India as % of         0.41         0.46         0.40        0.40         1.06         0.59
World
SAVINGS OF HOUSEHOLD SECTOR IN
FINANCIAL ASSETS
 According to RBI data, household sector
  accounted for 89% of gross domestic savings
  during 2000-01, 53% of their savings were in
  financial assets.
 They invested

    44% of financial savings in deposits
    34% in insurance/PFs
    12 % on small savings

SAVINGS OF HOUSEHOLD SECTOR IN FINANCIAL ASSETS
 (SOURCE:RBI)
Financial Assets          1990-91   1992-93   1994-95   1996-97   1998-99   2000-01
Currency                  10.6      8.2       10.9      8.6       10.4      6.4
Fixed income securities   74.9      74.6      77.0      84.5      85.3      89.4
  Deposits                33.3      42.5      45.5      48.1      39.2      44.3
  Insurance/PF            28.4      27.2      22.5      29.4      33.3      33.5
  Small savings           13.2      4.9       9.0       7.0       12.8      11.6
Securities Market         14.4      17.2      12.1      6.9       4.2       4.3
  MFs                     9.1       8.6       3.8       2.7       1.9       1.3
  Govt. Securities        0.2       0         0.1       0.4       0.6       1.6
  Other Securities        5.1       8.6       8.2       3.8       1.7       1.4


Total                     100       100       100       100       100       100
STOCK MARKET INDEX
 All India All Industries Share Price Index
  combined and published by the Economic Times
  on daily basis.
 S&P CNX Nifty combined and published by NSE
  India on daily basis.
 BSE Sensex combined and published by BSE on
  daily basis.
COMBINED MARKET INDEX AND RETURN OF
ECONOMIC TIMES AND NIFTY FROM MAY 1961 TO
JUNE 2005


                                                                 .2

                                                                 .1
                       Market Return
                                                                 .0

                                                                 -.1


2500                                                             -.2

2000

1500

1000

 500                       Market Index

   0
       65   68   72   76      80     84   89   92 94   98   02
 ECONOMIC TIMES DAILY PRICES AND RETURNS FROM MAY 1961
 TO   JUNE 1990

                                                               .08
                        Economic Times Return
                                                               .04

                                                               .00

                                                               -.04


600                                                            -.08

500
400
300
                       Economic Times Price
200
100
  0
      61    65    68     72         76          80   84   89
NIFTY PRICES AND RETURNS FROM JULY 1990 TO
JUNE 2005
                                                 .2

                                                 .1
                 Nifty Return

                                                 .0

                                                 -.1


    2500                                         -.2

    2000

    1500              Nifty Price

    1000

     500

       0
            1992 1994 1996 1998 2000 2002 2004
CONDITIONAL STANDARD DEVIATION OF THE COMBINED INDICES
OF THE ECONOMIC TIMES AND S&P CNX NIFTY (MAY 1961 TO
JUNE 2005) ESTIMATED ON THE CONDITIONAL VARIANCE
EQUATION OF TGARCH (1,1)


         .08

         .07

         .06

         .05

         .04

         .03

         .02

         .01

         .00
               65   70   75    80    85   90 92       97   02

                     Conditional standard deviation
     DO VISIT

   www.projectbaba.com

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:27
posted:8/14/2011
language:English
pages:83