A PROJECT REPORT ON A STUDY ON FUNDAMENTAL ANALYSIS & TECHNICAL ANALYSIS OF BANKING SECTOR IN IIFL, PUNE

SUBMITED TO

UNIVERSITY OF PUNE BY
Afreen R. khan

IN PARTIAL FULFILLMENT OF MASTER IN BUSINESS ADMINISTRATION

SUKHADEV KAMAL SHARMA EDUCATIONAL TRUST LEXICON INSTITUTE OF MANAGEMENT EDUCATION WAGHOLI PUNE 411047 2010-2012.

A STUDY ON FUNDAMENTAL ANALYSIS & TECHNICAL ANALYSIS OF BANKING SECTOR IN IIFL, PUNE

LEXICON INSTITUTE OF MANAGEMENT EDUCATION, PUNE (2011-2013)

CERTIFICATE
This Is To Certify That Miss AFREEN .R.KHAN has Completed Her Project on the Topic of A STUDY ON FUNDAMENTAL ANALYSIS & TECHNICAL ANALYSIS OF BANKING SECTOR IN IIFL Prescribed by the Pune University for M.B.A-I Year Course in Lexicon Institute of Management Education, Pune. Date: Place: Pune

Project Guide

External Examiner

Internal Examiner

Acknowledgement
The research on A STUDY ON FUNDAMENTAL ANALYSIS & TECHNICAL ANALYSIS OF BANKING SECTOR IN IIFL has been given to us as a part of the curriculum in 2-Years Masters Degree in Business Administration. We have tried our best to present this information as clearly as possible using basic terms that we hope you will be comprehended by the widest spectrum of researchers, analysts and students for further studies. We have completed this study under the guidance and supervision of Prof.C.A Piyush Nathani . We would fail in our duty if we do not acknowledge the esteemed scholarly guidance, assistance and knowledge. We have received from them towards fruitful and timely completion of this work. Mere acknowledgement may not redeem the debt I owe to my parents for their direct/indirect support during the entire course of this project. We are also thankful to our friends who helped us a lot in the completion of this project

Afreen.R.Khan Student Name & Signature Date: Place: Pune

INDEX
CHAPTER NO. CHAPTER NAME

CHAPTER- II

INTRODUCTION TO FUNDAMENTAL ANALYSIS & TECHINAL ANALYSIS

CHAPTER- III

PROFILE OF INDAIINFOLINE

CHAPTER- IV

SCOPE & OBJECTIVE OF STUDY

CHAPTER- V

HYPOTHESIS

CHAPTER- VI

RESEARCH METHODOLOGY

CHAPTER- VII

DATA PRESENTATION,ANALYSIS AND INTERPRETATION

CHAPTER- VIII

CONCLUSIONS AND RECOMMENDATION

APPENDICES: ABBREVIATIONS BIBLIOGRAPHY QUESTIONARRIE

LIST OF GRAPHS

SR. No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Graph
The analysis of public bank and private bank Model summary of HDFC bank Model summary of ICICI bank Model summary of STATE BANK OF INDIA Occupation of the customer Income of the customer Online share trading Known about online trading Often do you do online share trading Site use for online trading Site guide use for online trading Customer mostly use products

Page No.

LIST OF CHARTS
SR NO. CHART PAGE NO.

1.
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Small report of market capitalization General information of HDFC bank Historic price of HDFC bank in BSE Historic price of HDFC bank in NSE Simple moving average Balance sheet of HDFC bank General information of ICICI bank Balance sheet of ICICI bank Simple moving average of SBI Historical data of SBI Balance sheet of SBI Share holding price of HDFC bank Share holding price of ICICI bank Share holding price of SBI

LITRETURE REVIEW

LITRETURE REVIEW

(1)

New Perspective on FX Markets: Order-Flow Analysis

Richard K. Lyons* Haas School of Business, UC Berkeley Berkeley, CA 94720-1900 Tel: 510-642-1059, Fax: 510-643-1420 lyons@haas.berkeley.edu 29 June 2001 Abstract Though fundamental and technical analysis is still widely used in foreign exchange markets, a new type of analysis has emerged: order- flow analysis. Order-flow analysis uses the flow of buy and sells orders to both explain exchange rates contemporaneously and forecast future movements. This article contrasts order-flow analysis with the traditional approaches and reviews lessons learned. Most important among those lessons is order flows ability to account for the lions share of movements in the major floating rates. On the Policy front, widespread availability of electronic order-flow data brings many policy questions within our reach for the first time. After reviewing these policy questions, the article closes with a discussion of how FX market institutions are evolving and how this evolution will affect application of order-flow analysis in the future.

(2)

The use of Fundamental and Technical Analysis by Stock Exchange Dealers: Indian Evidence

Venkatesh. C. K. Research Scholar, IGNOU, Assistant Professor, GFGC, Kadugudi, Bangalore-560 067 E-mail: ckv_krishna@yahoo.co.in Madhu Tyagi Professor, School of management, IGNOU, Maidan Ghari, New Delhi E-mail: tyagimadhu@hotmail.com Abstract This article reports the results of a questionnaire survey in September, October/November 2010 on the use of Fundamental and Technical analysis by brokers/fund managers in Indian stock market to form their forecasts of share price movements. The findings of the research reveal that more than 85 percent of the respondents rely upon both Fundamental and

Technical analysis for predicting future price movements at different time horizons. This paper envisages on different trends of the stock market and it relates the trends towards the usage of Fundamental and Technical analysis. The results show that when the market is bullish participants rely more upon Technical analysis and when the market is bearish it is the other way round the participants rely upon the Fundamental analysis. This paper gives special emphasis on the usage of these tools while taking positions in Large Cap, Mid cap and Small Cap companies. For this purpose various companies across the sectors were chosen, which includes, Banking, Information Technology, Manufacturing, Pharmacy etc. The study covers different Organizational set ups such as, Licensed Broking firms, Licensed Banks, Mutual Fund Companies, Equity research firms and others. The study was conducted in all major Indian cities by serving a structured questionnaire to individuals such as, Directors, Fund Managers, Research Analysts, and Senior Brokers, Junior Brokers, Portfolio managers and others.

(3)

Performance of Banking Industry in India

Term paper on a comparison of financial performance in the Banking sectorsome evidence from bank Nifty. Under the guidance of Mr. K. S. Venkateswara Kumar Asst. professor Ch. H. S. Pavan Kumar 10102463 MBA IV Th SEM K L University Vaddeswaram Abstract: The research paper analyzes the performance of the selected banks on the basis of the productivity and the profitability that are reflected in the stock prices. There are several dimensions through which an analysis can be done for a stable investment. The fundamental analysis and the technical analysis are the tools used in investment decisions. The fundamental analysis discusses about the industry analysis that gives the financial health of the companies, and the company analysis that gives the information regarding the investors preferences decided by the management. The decision making process plays a crucial role in performance of the banks. The price movements

and historical trends are considered for technical analysis. By considering both the Fundamental and Technical analyses, a best portfolio can be created. This research paper also takes into account various determinants that influence the performanceofacompany. Keywords: ROA, PSB, SCP, e-banking. Fundamental Analysis as a Method Of Share Valuation In Comparison With Technical Analysis

A STUDY ON FUNDAMENTAL ANALYSIS ON BANKING SECTOR

(5)

KARAN WALIA* *Research Scholar, M.M. Institute of Management, Maharishi Markandeshwar University, Mullana, Ambala. ABSTRACT Indian economy has been recording impressive growth rates since 1991. The main thrust of the financial sector reforms has been the creation of efficient and stable financial institutions and development of the markets, especially the money and government securities market. In addition, fiscal correction was undertaken and reforms in the banking and external sector were also initiated. The year 1991-92 is the year of remarkable initiatives taken by the Government of India affecting the various facets of the Indian economy. Considering the scenario in which banking sector was in the year 1990-91, a number of initiatives were taken by the Reserve Bank of India for improving the efficiency of the banking sector and for opening up the banking sector. Taking this as a base, the author intends to examine the impact of the reforms on Credit Deposit ratio, Credit to GDP ratio, Investment in Government securities to deposits, share of business of public sector banks, the proportion of various types of advances etc. Further, it goes on to examine the difference in various aspects of the working results of the Public sector banks and private banks when compared with foreign banks.

CHAPTER I INTRODUCTION

ABSTRACT

Banking Sector in India is one of the growing sectors with great dynamics. There are various factors which affect the share prices of Banking Companies. This report is all about how various factors (Internal and External) affect the Banking Sector Share Prices. In this report a detailed of fundamental & technical analysis of share prices is carried on and a model is developed to study the effect of various factors on the share prices. Here, various internal factors (Banks Profitability, Income, Expenses, And News about the Bank.) And external factors (Government policies, CRR, Repo Rate, Reverse Repo Rate, Rules and Regulations.) are considered which affect the prices of the shares of Bank. Datas are collected for all the quantifiable factors and for the rest factors a theoretical explanation is given in detail. Using SPSS a model is developed which shows the regression and correlation co-efficient between the share prices and various factors affecting the same.

INTRODUCTION MARKETS DEFINED STOCK MARKET IN INDIA

STOCK MARKET IN INDIA (As a part of the compulsory requirement of MBA I Yr syllabus prescribed by PUNE University, I have undertaken this study which deals with.) The Indian security market has become one of the most dynamic and efficient security markets in Asia today. The Indian market now conforms to International Standards in terms of operating efficiency. During the latter half of 19th century, shares of companies used to be floated in India occasionally. There were share brokers in Bombay who assisted in the floatation of shares of companies. A small group of stock brokers in Bombay joined together in 1875 to form an association called Native Share & Stock brokers Association. The association drew up codes of conduct for brokerage business and mobilizes private funds for investment in the corporate sector. It was this association which later became the Bombay Stock Exchange, Mumbai or BSE Later on in 1894 the brokers of Ahmedabad formed the Ahmedabad Stock Exchange, the second stock exchange of the country. During the 1900s Kolkata became another major centre of share trading and as a result Kolkata Stock Exchange was formed in 1908. Later on Chennai Stock Exchange was started in1920. However, by 1923, it ceased to exist. Then the Madras Stock Exchange was started in 1937. Three more stock exchanges were established before independence, at Indore in 1930, at Hyderabad in 1943 and at Delhi in 1947.

ABOUT NSE NIFTY

S&P CNX Nifty is a well diversified 50 stock index accounting for 21 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused upon the index as a core product. IISL has Marketing and licensing agreement with standard & poors (S&P), who world leaders are in index services.

the traded value for the last six months of all Nifty stocks is approximately 44.89% of the traded value of all stocks on the NSE Nifty stocks represent about 58.64% of the total market capitalization as on March 31, 2008. Impact cost of the S&P CNX Nifty for a portfolio size of Rs.2 crore is 0.15% S&P CNX Nifty is professionally maintained and is ideal for derivatives trading

ABOUT BSE SENSEX

BSE SENSEX or Bombay Stock Exchange Sensitive Index is a value index composed of 30 stocks started in 01 of January, 1986. It consists of the 30largest and most actively traded stocks, representative of various sectors, on the Exchange. These companies account for around one-fifth of the market capitalization of the BSE. The base value of the SENSEX is 100 on April 1, 1979, and the base year of BSE-SENSEX is 1978-79.At irregular intervals, the Bombay Stock Exchange (BSE) authorities review and modify its composition to make sure it reflects current market conditions. The index is calculated based on a free-float capitalization method; a variation of the market cap method. Instead of using a company's outstanding shares it uses its float, or shares that are readily available for trading. The free-float method, therefore, does not include restricted stocks, such as those held by company insiders. The index has increased by over ten times from June 1990 to the present. Using information from April 1979 onwards, the long-run rate of return on the BSESENSEX works out to be 18.6% per annum, which translates to roughly 9% perannum after compensating for inflation. There are five major indices in BSE, thirteen sector specific indices and a BSE Dollex Index for dollar prices and movements.

Trading Futures.
Trading futures as a speculator is no different from trading any other commodity or asset. Success depends on the ability to Accurately predict futures prices, and Efficiently manage risks Two techniques are commonly used to forecast prices Fundamental Analysis Technical Analysis

There are various strategies for managing the risks associated with trading. A Project work is guiding factor for us. It provides us with a platform to make a thorough understanding in an area where we want to be. The best utilization of the project is when it is implemented. A project work is good blend of practical with the theory. I have selected this project entitled a study on fundamental analysis & technical analysis of banking sector in IIFL. ` I think knowledge can be increased by getting particularly involved in the project. In this project, I would study about the fundamental analysis and technical analysis of banking sector. After a thorough study, the knowledge will be beneficial for me for the year to come.

Fundamental Analysis Definition

Fundamental analysis is the study of economic and company related factors that will influence share price. Technical analysis is the study of share price and volume being traded to determine the direction of the stock. Fundamental analysis broadly takes in pretty much everything else that could affect share price other chart patterns. Fundamental analysis focuses on cause and effect causes external to the trading markets that are likely to affect prices in the market. These factors may include the weather, current inventory levels, government policies, economic indicators, trade balances and even how traders are likely to react to certain events. Fundamental analysis maintains that markets may misprice a commodity in the short run but that the "correct" price will eventually be reached. Profits can be made by trading the mispriced commodity and then waiting for the market to recognize its "mistake" and correct it. Fundamental analysis tries to place a valuated price tag on stocks in two broad ways: quantitative and qualitative. Fundamental analysis seeks to identify the fundamental economic and political factors that determine a commoditys price. It is basically an analysis of the (current and future) demand for and supply of a commodity to determine if a price change is imminent, and In which direction and by how much prices are expected to change.

This approach requires gathering substantial amounts of economic data and political intelligence, assessing the expectations of market participants, and analyzing these information to predict futures price movement

Quantitative Analysis of Fundamentals

Quantitative analysis is the study of anything that has a number associated with it. Examples of quantitative numbers are: How much money did the company make last year? By much debt does the company have? What is the ratio of profit made to cash on hand?

Qualitative Analysis of Fundamentals

Qualitative analysis is less tangible than quantitative. These are usually not clear cut numbers that can be plugged into a valuation formula. Instead the qualitative analysis might probe into such areas as: How smart does the management team seem? What proprietary technology does the company have? Is the company straightforward and simple to run or are there many complex parts that can lead to efficiency problems? Is the industry group a sustainable concept or just the flavour of the week?

Technical Analysis
Technical analysis is the study of historical prices for the purpose of predicting prices in the future.Technical analysts frequently utilize charts of past prices to identify historical price patterns.These price patterns are then used to forecast prices in the future.A basic belief of technical analysts is that market

prices themselves contain useful and timely information .Prices quickly reflect all available fundamental information, as well as other information, such as traders expectations and the psychology of the market.

Role of Technical Analysis

Identify and predict changes in direction of price trends Determine the timing of action entry and exit decisions All smart investors do some form of due diligence before making any investment or trade. There are two basic forms of investment analysis; fundamental and technical. Fundamental analysis involves evaluating an investment on the merits of its balance sheet, products, supply and demand, and the economic climate. Technical analysis assumes that the market has discounted the fundamental information (the market knows the information before it becomes public) and seeks to interpret the market reaction to this information by analyzing price movements for a given investment.

Definition of 'Technical Analysis

A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

What is the difference between fundamental and technical analysis?

These terms refer to two different stock-picking methodologies used for researching and forecasting the future growth trends of stocks. Like any investment strategy or philosophy, both have their advocates and adversaries. Here are the defining principles of each of these methods of stock analysis: Fundamental analysis is a method of evaluating securities by attempting to measure the intrinsic value of a stock. Fundamental analysts study everything from the overall economy and industry conditions to the financial condition and management of companies. Technical analysis is the evaluation of securities by means of studying statistics generated by market activity, such as past prices and volume.

Technical analysts do not attempt to measure a security's intrinsic value but instead use stock charts to identify patterns and trends that may suggest what a stock will do in the future. In the world of stock analysis, fundamental and technical analysis is on completely opposite sides of the spectrum. Earnings, expenses, assets and liabilities are all important characteristics to fundamental analysts, whereas technical analysts could not care less about these numbers.

Criticisms of Technical Analysis

Non-believers of technical analysis (who are usually staunch fundamental analysis believers) see it like gambling. Any attempt to predict future price actions is a form of guessing and gambling. They fail to see how drawing of trend lines here and there like little kids, and seeing technical indicators of past price actions, will give an idea of a stock's worth. "Do not predict the market", they say. The fact that most use against technical analysis is that the world's richest man, Warren Buffett, uses mainly fundamental analysis. Also, some of the people whom I have come across tell me that their earnings are more when they use fundamental instead of technical analysis. However, from personal experience, technical analysis does work when done correctly. Strict money management and tight cut loss rules are paramount to the success of technical analysis. In addition, the mindset of a technical analyst must be different from a fundamental analyst.

Criticisms of Fundamental Analysis

The main attack on fundamental analysis is value traps and fake information. Companies such as Enron, Chartered, Ferro China, Beauty China, are used as examples. The critics I know so far on fundamental analysis had bad experience with buying and holding. A lot of Singaporeans also lost money on investing in the GLC Chartered Semiconductor. In short, fundamental analysis has failed them. The second criticism on fundamental analysis has its basis in the theory of efficient market hypothesis. The theory states that the market's price is always

the correct one. Any past trading information is already reflected in the price of the stock and, therefore, any analysis to find undervalued securities is useless. With regards to the first criticism, it's in my belief that these people had not done proper homework on fundamental analysis before making their buy decisions. Also, they were greedy for more, even when prices are high. Everyone hopes to be the next Warren Buffett, but is sorely disappointed. Just like technical analysis done wrongly would lead to monetary losses, so would fundamental analysis! The efficient market hypothesis theory holds more weight in my opinion, which is the main reason why I do not totally forego technical analysis as part of my arsenal of determining a buy-in price.

CHAPTER II PROFILE OF INDIA INFOLINE LTD, PUNE

PROFILE OF INDIA INFO LINE LTD

About IIFL
We are a one-stop financial services shop (Equity, Commodity, and CURRENCY); most respected for quality of its advice, and personalized service and cutting-edge technology. Keeping with its tradition of personalized service, India Info line provides customized and integrated equity solutions to Investors like you. The IIFL (India Info line) group, comprising the holding company, India Info line Ltd (NSE: INDIAINFO, BSE: 532636) and its subsidiaries, is one of the leading players in the Indian financial services space. IIFL offers advice and execution platform for the entire range of financial services covering products ranging from Equities and derivatives, Commodities, Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, Gold bonds and other small savings instruments. IIFL recently received an in-principle approval for Securities Trading and Clearing memberships from Singapore Exchange (SGX) paving the way for IIFL to become the first Indian brokerage to get a membership of the SGX. IIFL also received membership of the Colombo Stock Exchange becoming the first foreign broker to enter Sri Lanka. IIFL owns and manages the website, www.indiainfoline.com, which is one of Indias leading online destinations for personal finance, stock markets, economy and business. IIFL has been awarded the Best Broker, India by Finance Asia and the Most improved brokerage, India in the Asia Money polls. India Info line was also adjudged as Fastest Growing Equity Broking House - Large firms by Dun & Bradstreet. A forerunner in the field of equity research, IIFLs research is acknowledged by none other than Forbes as Best of the Web and a must read for investors in Asia. Our research is available not just over the Internet but also on international wire services like Bloomberg, Thomson First Call and Internet Securities where it is amongst one of the most read Indian brokers. A network of over 2,500 business locations spread over more

than 500 cities and towns across India facilitates the smooth acquisition and servicing of a large customer base. All our offices are connected with the corporate office in Mumbai with cutting edge networking technology. The group caters to a customer base of about a million customers, over a variety of mediums viz. online, over the phone and at our branches. IIFL/India Info line refer to India Info line Ltd and its subsidiaries/ group companies. India Infoline is one of the best brands amongst Indian domestic broking houses enjoying an unmatched & unparalleled brand recall. Financially sound with an excellent track record of consistent market growth in all key business segments. It also undertakes equity Research which is acknowledged by none other than Forbes as Best of the Web & must read for investors in Asia .

RESEARCH
World class research reports, sector reports and update, corporate news, announcements, Technical stocks Ideas on trader terminal, SMS (paid service), fundamental investment ideas in Large Cap, Mid Cap, Small Cap, result updates, Daily market strategies (DMS), Weekly wrap, Daily Derivatives Strategy, Daily Market watch (DMV) and Online recommendations.

BACK OFFICE
Web and application based online back office, centralized data processing. Contract notes through e-mails and courier. Online ledger accounts, DP accounts, trade information.

FEATURES OF TTADV (ONLINE TRADING SOFTWARE):

Trade execution in a fraction of a second! Live streaming quotes. Price watch on any number of scripts. Intraday charts, updated live, tick-by-tick. Live margin, position, marked to market profit & loss report. The Lowest Brokerage on the face of the earth!

Set any number of price alerts on any number of scripts. Flexibility to customize screen layout and setting. Facility to customize any number of portfolios & watch lists. Facility to cancel all pending orders at one click. Facility to square off all transactions at one click. Top Gainers, Top Losers, Most Active, updated live. Index information; index chart, index stock information live. Market depth, i.e. Best 5 bids and offers, updated live for all scripts Instant trade confirmation. Online access to both accounts and DP. Live updated Order and Trade Book. Details of pending executed and rejected orders. Online access to Customer Service. Facility to place orders on the phone in all major cities. Facility to place after market orders Online fund transfer facility from leading Banks Online intra-day technical calls. Exhaustive database of over 5000 companies Historical charts and technical analysis tools. India Info lines world - acclaimed news service and research. Lots more Last but not the least, ideas that help you to make money!

PUNCH LINE: ITS ALL ABOUT MONEY, HONEY!

CHAPTER III SCOPE & OBJECTIVE OF STUDY

OBJECTIVE OF THE STUDY

The objective of the project is to identify, understand and analyze the impact of various factors that affect the Indian Equity Market (BANKING SECTOR). The main focus will be on understanding, analyzing and providing a valid explanation both theoretically and technically, that how technical & fundamental analysis affects the share prices of BNAKING SECTOR. By undertaking this study I would like to keep my first step in the field of research. This project will help me in enhancing my analytical skills and will give me a better understanding of how things move on and are to be studied. At the same time with this study I will be providing the organization a list of technical & fundamental analysis that affect the market, so that they can keep a watch on the same and use the same for the benefit of clients and company and also increase their accuracy and profits. This will be my contribution to this huge company.

Scope of study
It gave me an opportunity to study the banking sector in a detailed manner. I got knowledge of prevailing market scenario. It helped me in learning the market dynamics , study the movement of share prices and to give a proper justification for the same, theoretically and technically. It helped me in understanding and learning the corporate culture and above all, the concerned organization can get some valuable recommendations, which can definitely improve the performance of the organization. To assess the performance selecting banking companies listed NSE & BSE. To evaluate the financial strength of the selected banking companies listed in BSE & NSE. To evaluate intrinsic value of share & compare it with present market price to decide whether a share is overvalued or undervalued.

CHAPTER IV HYPOTHESIS

HYPOTHESIS
The hypothesis can be stated as follows: Various Factors affect the Share Prices Various Factors do not affect the Share Prices. Thus, we will conduct all the analysis keeping in mind the hypothesis and will try to reach a conclusion whether or not to accept the Hypothesis. The sample is limited to two public & private sector banks for analysis.
Reserve bank of india

Bank

Financial institution

Scheduledl commercial banks (SCB)

Co-opretive credit institution

All india financial institution

public sector bank (27)

private sector bank (22)

state level institution

foregin bank (31)

other institution

regional rural bank RRB (84)

urban coopretive bank (1721)

rural cooperative credit institution (96061)

CHAPTER V RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
Starting off with the project, in the initial phase of SIP, I learnt the basics of the stock market. As I had to work here in this market for 2 months this was the basic necessity. In that phase I had a nice exposure of how to deal with clients, how to handle the queries of the investors, it was a practical exposure to learn the working of the market, how the market moves and all about the corporate culture .Also I had learnt what factors basically affects the equity market. Then I decided to limit my project to just Banking Sector, because it is one of the most dynamic sector and also availability of time was not permitting me to go beyond this. There are N numbers of factors which affect the share prices. They can be broadly classified into two: Primary Factor. Secondary Factor.

(1) Primary Factor:

As the name suggests, Internal Factors are those which affect the share prices internally, i.e. they are internal to the company or more specifically bank. Some of the major internal factors that affect the share prices of a bank are as follows:

EARNINGS OF THE COMPANY:

How much Profit a company earns acts as a significant factor in price movements. If the quarterly results are good for a bank, then the price goes up, and if the results are not good, the investors show no interest in such banks share and thus price falls. Investors invest money in the companies who earn well and in turn give good return on investment. Thus, a wealthy and a profitable company have good investors and thus have positive price movements. Price/Earnings Ratio also gives us idea about the same.

MARKET CAPITALIZATION:

Generally we commit one mistake that we guess the companys worth from the price of its stock. It is the market capitalization of the company, rather than the stock price, that is more important when it comes to determining the worth of the company. We need to multiply the stock price with the total number of outstanding stocks in the market to get the market capitalization of a company and that is the worth of the company. Thus, a company or bank with high Market Capitalization turns out to be more popular among investors. For example, HDFCBANK, ICICI BANK and SBI are more popular among investors than other banks because they have huge market share and market capitalization. As market capitalization increases, the share price tends to increase and as market capitalization decreases, the share price tends to decrease.

PRICE/EARNINGS RATIO:
Price/Earnings ratio or the P/E ratio gives us a fair idea of how a company's share price compares to its earnings. If the price of the share is too much lower than the earning of the company, the stock is undervalued and it has the potential to rise in the near future. On the other hand, if the price is way too much higher than the actual earning of the company and then the stock is said to overvalued and the price can fall at any point. The earnings also have a direct relation with price which is already explained above.

INTERNAL AFFAIRS OF THE COMPANY:

Any happening inside the company or any internal news does affect its share price. For example any key person moving out of the company, acquisition or takeover or merger news, share split, employee strike and any other thing internal to the affairs of the bank affects the share price. A positive note from the internal affairs takes the price to new highs and a negative does vice versa.

INTERST RATES:
Interest rates play a major role in determining stock market trends. Bull markets (those in an upward market) are usually associated with low interest rates and high Capital Gains, and bear markets (those in a downward trend) with high interest rates and low Capital gains. Interest rates are determined by the demand for capital pushes them up and normally indicates that the economy is thriving and that shares probably expensive. Low interest indicate low demand for capital, thus liquidity builds up on the economy, driving share price down. Other interest rates like that of on Deposits and Borrowings also have impact on share prices.

OTHER FACTORS:
Other factors like Growth of the company, figures of deposits, advances, balance sheet, Profit and Loss Account, etc... Also affect the share prices drastically. A discussion for the same is done in later part of the report.

(2)EXTERNAL FACTORS:
After studying the internal factors, lets take a look at some External Factors which affect the Share Prices.

SENTIMENTS:
Investor sentiment is almost impossible to predict and can be infuriating if, for example, you have bought shares in a company that you think is a good buy but the price remains flat. Investor sentiment is influenced by a wide variety of factors. Share prices can, for example, be flat during the summer simply because so many major investors are on holiday or attending major sporting events such as Royal Ascot and Wimbledon, hence the adage sell in May and go away. Investor sentiment can lead to irrational buying or selling of shares and result in bull and bear markets. A bull market is when share prices rise while a bear market is when they fall. In the technology boom of the late 1990s, for example, investors paid extremely high prices for shares and ignored traditional valuation measures, such as P/E ratios. This carried on until 2000 when investors belatedly realized these shares has risen too far and resulted in a three year bear market in shares. Thus, Sentiments of investors affect the share prices a lot and this is something unpredictable and immeasurable factor, but still the most important one.

COMPANY NEWS and OTHER NEWS:

The way investors interpret news coming out of companies is also a major influence on share prices. If, for example, a company puts out a warning that business conditions are tough, shares will often drop in value. If, however, a Director buys shares in the firm; it may be a signal that the companys prospects are improving. Companies put out a great deal of news and most of the major announcements are covered by the financial press. But some announcements not regarded as so important and sometimes, particularly among smaller firms that are monitored less by investors and financial journalists, indicators of the companys health can be missed. Takeovers or even rumours of takeovers also have a big influence on prices. This is because investors expect the bidder to pay a premium to share holders. Also any other

news or speculation about factors like change in Repo Rate, Cash Reserve Ratio, Reverse Repo Rate, any change or likely change in the policies of government or RBI or SEBI, any new guidelines issued by the concerned authority, etc. affect the price of the share. A positive news in any of these respects leads to a rise in price and a negative takes it to the other side. Thus, news in any respect is undoubtedly a huge factor when it comes to stock price. Positive news about a company can increase buying interest in the market while a negative press release can ruin the prospect of a stock. Having said that, we must always remember that often times, despite amazingly good news, a stock can show least movement. It is the overall performance of the company that matters more than news. It is always wise to take a wait and watch policy in a volatile market or when there is mixed reaction about a particular stock.

DEMAND AND SUPPLY:

This fundamental rule of economics holds good for the equity market as well. The price is directly affected by the trend of stock market trading. When more people are buying a certain stock, the price of that stock increases and when more people are selling the stock, the price of that particular stock falls. Now it is difficult to predict the trend. Thus, we should be very careful while dealing in stocks as buying or selling pressure may lead to steep rise or fall in price of the shares.

ANALYSTS REPORTS:
Reports produced by independent analysts also influence share prices. If an analyst changes their recommendation from sell to buy, for example, the shares will often rise in value. Analysts reports are produced primarily by investment banks for professional investors, although some stockbrokers will make their research available to private investors. We may find summaries of some reports published on financial news websites or in newspapers and magazines. Some investment banks also publish their reports on their websites for free. We should remember that the recommendation an analyst puts on a company will affect its share price very quickly and can become irrelevant within hours. This is because the analyst will usually say a stock is a buy within a particular price range. If the price moves above their targets the improvements the analyst expects may be priced in and so the shares are not worth buying. But analysts reports are always worth reading, even if the recommendation is out of date. The reports usually contain a great deal of useful information on the company and how its business is developing. They also often look at how the company rates against its competitors.

THE ECONOMY:
The health of the global economy has a fundamental influence on share prices because it is ultimately responsible for driving company profits. Broadly speaking, if the economy is growing, company profits improve and shares will become more highly valued. If the economy is weakening, company profits will fall and share prices will go down. Investors look at a vast amount of data to try and work out what is going to happen to the economy and shift their portfolios before the events occur. This is why we will often see markets move well ahead of an actual event occurring. For example, we could get little reaction from the stock market when interest rates rise. This is because investors have already anticipated the shift months in advance and adjusted their portfolios beforehand. We can usually assume that the stock market will anticipate moves in the economy by around six to nine months. So if we want to stay ahead of the game we need to follow economic data as closely as the professionals.

TECHNICAL INFLUENCES:
Share prices can rise and fall for a variety of technical reasons that may have nothing to do with the actual outlook for an individual company or the outlook for the market. It is, for example, a common occurrence for share prices to drop back after a strong rally. This happens because investors take profits on some of the shares that have risen in value, protecting their gains just in case the shares start to slip back. Investors often refer to this as market consolidation. Another technical reason for share prices to rise or fall is the quarterly adjustment in the FTSE 100 index. Shares that are expected to enter the FTSE 100 may experience a sharper rise than one would expect in the weeks beforehand while shares that leave the index can fall more sharply. This happens because funds that simply track the index have to match the composition of the index. Some professional fund managers who hold the affected stocks also adjust their portfolios as they do not want their holding to be too far above or below the companys weighting in the index. Share prices can also be affected by investors who use technical analysis to drive their investment techniques. Technical analysis, also known as Chartism, is simply the study of past share price movements and stock market index trends, which are then used to forecast how shares and stock markets will behave in future. Market makers can also influence prices. If they, for example, do not own enough shares to balance their books they will have to buy more. Market makers also influence prices if the market is looking flat, reducing prices to attract buyers. Thus, technical reasons can also be a cause for the rise or fall in the prices of shares.

OTHER FACTORS:
Some other factors which influence share prices are as follows:

(a) Change in Rates by RBI:

Looking at the changing scenario, RBI keeps on changing rates like Repo Rate, Reverse Repo Rate and Cash Reserve Ratio. These rates have a direct relation with the Banks performance and in turn the share prices are linked with Banks Performance. Thus, a change in these rates or even a speculation of change in these rates affects share prices.

(b) Global Changes:

Any change in the global economy or in other words global changes also affects Indian economy. Thus, the performance of an economy and its banks is affected by these global changes. For example: The recession was first observed in the USA and later on it caught its lead in other countries too. When it entered India, the share market crashed literally. So, a careful and logical investor always keeps this in mind that what global changes affect the market and thus leads to rise or fall in share prices.

(c) Change in Government Policies:

Keeping in mind the progress and well wishes about the country, the government takes desired steps and keeps on reviewing its policies, rules and regulations and procedures. A change in FDI and FII inflow restrictions, entry exit barriers for foreign banks in India, EXIM regulations, change in Basel Norms, etc form part of important government policies. Thus, a change in these policies affects the market scenario. For example: if government allows entry of foreign Banks in India, then the competition would rise and it might happen that those foreign Banks may outperform and leave our own banks far behind. Then in this case, the investors would be interested in investing in those foreign Banks and a government would never like that the funds are invested in some foreign banks rather than our own banks. Thus, some restriction would follow and this will definitely affect the share prices.

CHAPTER VI DATAPRESENTATION, ANALYSIS ANDINTERPRETATION

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

The MODEL is all about a relation between the Share Prices and various other factors which affect it. As I have already stated that the Banking Sector is affected by N number of factors. A comprehensive explanation we have already discussed earlier. Now, here I have tried to provide a technical view to the relation between Share prices and the factors affecting it by developing a technical MODEL using SPSS. Now using the AVERAGE SHARE PRICE as DEPENDENT VARIABLE and taking INTEREST INCOME, ADVANCES, NET PROFIT, CLOSE OF BANKNIFTY, and DEPOSITS AND DUMMY VARIABLE as INDEPENDENT VARIABLES I applied MULTIPLE REGRESSION on the data for all the three BANKS. Thus, I got the regression coefficient from the analysis. Now let us talk about the analysis for all the three BANKS separately. (1) HDFC BANK (2) ICICI BANK (3) STATE BANK OF INDIA For a proper, detailed and valid study, I have chosen top three banks in the Banking Sector viz. HDFC BANK, ICICI BANK and STATE BANK OF INDIA. The reason behind choosing these 3 banks is their huge turnover in the stock market, they have been given the highest weight age and they serve as top leading banks in the sector. A small report of Market Capitalization for 31st March, 2009is also shown here.

Sr No 1 2 3 4 5 6 7 8 9 10 11 12

INDEX\EXCHANGE Company Name CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index CNX Bank Index Total AXIS Bank LTD BANK OF BARODA BANK OF INDIA CANARA BANK HDFC BANK LTD. ICICI BANK LTD. IDBI BANK LTD. KOTAK MAHINDRA BANK ORENTAL BANK OF COMMERCE PUNJAB National BANK STATE BANK OF INDIA UNION BANK OF INDIA

Close Price 414.95 234.35 219.4 165.7 973.4 332.8 45.4 282.2 110.1 411.45 1067.1 146.85

Mkt CA.in Rs Mn 148969.17 85365.83 115222.91 67937 414062.52 370343.67 32902.6 97547.75 27584.42 129731.21 677480.68 74176.56 2241324.32

Weightage 6.65 3.81 5.14 3.03 18.47 16.52 1.47 4.35 1.23 5.79 30.23 3.31 100

HDFC BANK
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 liberalisation 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. The output summary tables are shown below:

General Information Name HDFC Bank Ltd.

Sector Current Price Price Change Previous Close Average Volume Nse Code Bse Code Part of Index BSE Part of Index NSE BANKS 534.4 -7.35 / -1.36% 541.75 3230420.0 HDFCBANK 500180 Sensex 30 Nifty 50

Historic Prices of HDFC Bank

BSE
1 week Price Gain / Loss 549.55 -2.93% 2 week 496.80 7.38% 1 month 497.45 7.24% 3 month 498.65 6.98% 6 month 406.05 31.38% 9 month 484.80 10.04% 1 year 460.70 15.79%

Historic Prices of HDFC Bank

NSE
1 week 2 week 495.65 7.54% 1 month 497.45 7.15% 3 month 498.85 6.85% 6 month 406.00 31.28% 9 month 484.75 9.95% 1 year 459.80 15.92%

Price Gain / Loss

549.60 -3.02%

Simple Moving Averages

Days 30 50 150 200 BSE 513.12 523.40 495.78 490.05 NSE 513.30 523.57 496.03 490.28

Model summary of HDFC Bank

2500

2000

1500

1000

Series 1

500

Balance sheet of HDFC bank

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

Sources of funds
Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus 469.34 0.30 29,455.04 465.23 24,914.04 457.74 21,064.75 425.38 400.92 14,226.43 354.43 11,142.80

Loan funds
Secured loans Unsecured loans Total 2,46,706.45 2,08,586.41 1,67,404.44 1,42,811.58 1,00,768.60 2,76,631.12 2,33,965.67 1,88,926.93 1,57,864.31 1,12,265.83

Uses of funds
Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments 5,930.24 3,583.05 2,347.19 97,482.91 5,244.21 3,073.56 2,170.65 70,929.37 4,707.97 2,585.16 2,122.81 58,607.62 3,956.63 2,249.90 1,706.73 58,817.55 2,386.99 1,211.86 1,175.13 49,393.54

Net current assets

Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total 21,721.64 37,431.87 14,601.08 28,992.86 5,955.15 20,615.94 6,356.83 22,720.62 4,402.69 16,431.91

-15,710.23 -14,391.78 -14,660.79 -16,363.79 -12,029.22 84,119.87 58,708.23 46,069.63 44,160.49 38,539.45

Notes:
Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity -

8,83,985.32 5,88,550.98 4,87,176.37 4,14,533.93 5,99,928.79 23466.88 4652.26 4577.43 4253.84 3544.33

Mar ' 12 sharesoutstanding (Lacs)

Mar ' 11

Mar ' 10

Mar ' 09

Mar ' 08

ICICI BANK
.

ICICI Bank is India's second-largest bank with total assets of Rs. 4,736.47 billion (US$ 93 billion) at March 31, 2012 and profit after tax Rs. 64.65 billion (US$ 1,271 million) for the year ended March 31, 2012. The Bank has a network of 2,755 branches and 9,363 ATMs in India, and has a presence in 19 countries, including India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management
BSE: 532174 | NSE: ICICIBANK | ISIN: INE090A01013 | SECTOR: BANKS - PRIVATE SECTOR

General Information Name ICICI Bank

859.45 8.50 (1.00%) OPEN PRICE HIGH PRICE LOW PRICE PREV. CLOSE AVERAGE PRICE NO. OF CONTRACTS TRADED TURNOVER (Rs. in Lakh) MARKET LOT OPEN INTEREST OPEN INTEREST CHANGE OPEN INTEREST CHANGE %

858.00 970.60 854.85 850.95 858.90 6,013 12,911.41 250 6,189,000 176,500 2.94

ICICI Bank BSE: 532174 | NSE: ICICIBANK | ISIN: INE090A01013 Historic Data for the Period:Jan-2011 to May-2012 Period High: 1158.00 Period Low: 641.00 Change in market-cap: -31.98%

Date May 2012 Apr 2012 Mar 2012 Feb 2012 Jan 2012 Dec 2011 Nov 2011 Oct 2011 Sep 2011 Aug 2011 July 2011 June 2011 May 2011 Apr 2011 Mar 2011 Feb 2011 Jan 2011

Open 884.55 887.65 904.90 901.00 690.00 753.05 919.50 857.00 892.00 1055.00 1102.90 1082.80 1116.45 1110.00 983.00 1021.00 1153.00

High 895.00 917.50 957.60 998.50 906.40 791.00 923.90 953.25 930.00 1059.00 1111.00 1098.90 1118.70 1137.90 1126.00 1072.00 1158.00

Low 767.00 827.85 843.50 878.45 685.10 641.00 706.05 762.05 833.10 813.55 1004.00 1004.00 1002.25 1073.20 980.00 940.15 993.50

Close 784.30 881.45 887.25 906.50 902.00 684.60 714.15 930.50 875.35 873.25 1037.75 1093.10 1086.00 1114.25 1112.75 971.00 1020.00

Model summary of ICICI Bank LTD

Series 1
1000 900 800 700 600 500 400 300 200 100 0

Axis Title

Series 1

Axis Title

Balance sheet of ICICI bank

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

Sources of funds
Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus 1,152.77 2.39 59,250.09 1,151.82 0.29 53,938.82 1,114.89 50,503.48 1,113.29 350.00 48,419.73 1,112.68 350.00 45,357.53

Loan funds
Secured loans Unsecured loans Total 2,55,499.96 2,25,602.11 2,02,016.60 2,18,347.82 2,44,431.05 3,15,905.20 2,80,693.05 2,53,634.96 2,68,230.84 2,91,251.26

Uses of funds
Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments 9,424.39 4,809.70 9,107.47 4,363.21 7,114.12 3,901.43 7,443.71 3,642.09 7,036.00 2,927.11

4,614.69 4,744.26 3,212.69 3,801.62 4,108.90 1,59,560.04 1,34,685.96 1,20,892.80 1,03,058.31 1,11,454.34

Net current assets

Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total 34,618.88 17,576.98 17,041.89 27,630.41 15,986.35 11,644.06 29,997.23 15,501.18 14,496.05 34,384.06 43,746.43 -9,362.37 31,129.77 42,895.38 -11,765.62 1,03,797.62

1,81,216.62 1,51,074.28 1,38,601.54 97,497.56

Notes:
Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity -

9,23,024.36 9,31,638.84 7,33,546.20 8,40,670.63 4,01,114.91 11527.14 11517.72 11148.45 11132.51 11126.87

Mar ' 12 sharesoutstanding (Lacs)

Mar ' 11

Mar ' 10

Mar ' 09

Mar ' 08

STATE BANK OF INDIA

The State Bank of India, popularly known as SBI, is one of the leading banks in India. The bank traces its origin to the first decade of the 19th century. Later on, it was merged with the Imperial Bank. In the year 1955, the Government of India nationalized the Imperial Bank along with the Reserve Bank of India. Ever since that time, the bank acquired its present name that is SBI. The State Bank of India is India's largest commercial bank. The bank has been striving sincerely to adhere to the efforts of providing utmost customer satisfaction to the best possible extent.

Simple Moving Averages

Days 30 50 150 200 BSE 2141.46 2069.94 2043.06 1993.84 NSE 2141.98 2070.12 2043.30 1994.20

Search Historic Data SBI BSE: 500112 | NSE: SBIN | ISIN: INE062A01012 Historic Data for the Period:Jan-2011 to Jul-2012

Period High: 2959.90 Period Low: 1576.00 Change in market-cap: -23.71% Date Open High Low Close June 2012 2062.00 2241.95 1975.00 2159.15 May 2012 2146.00 2167.40 1804.50 2055.60 Apr 2012 2096.50 2347.00 2090.20 2137.95 Mar 2012 2232.00 2374.00 2047.65 2095.00 Feb 2012 2054.00 2474.80 1975.05 2243.40 Jan 2012 1625.20 2083.80 1611.50 2061.05 Dec 2011 1812.00 1951.75 1576.00 1619.50 Nov 2011 1894.00 2018.25 1629.10 1762.85 Oct 2011 1884.90 1989.50 1708.55 1906.70

Sep 2011 Aug 2011 July 2011 June 2011 May 2011 Apr 2011 Mar 2011 Feb 2011 Jan 2011

1990.00 2366.90 2419.80 2308.00 2811.50 2772.00 2651.00 2651.90 2830.05

2049.00 2383.85 2529.50 2430.00 2819.55 2959.90 2888.00 2813.40 2852.45

1812.90 1872.00 2335.00 2123.00 2165.00 2707.00 2523.55 2478.60 2468.80

1911.10 1974.50 2342.00 2405.95 2297.80 2805.60 2767.90 2632.00 2641.05

MODEL SUMMARY OF STATE BANK OF INDIA

Series 1
2500 Axis Title 2000 1500 1000 500 0 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 Series 1 May-12 Jun-12 Jul-12

Series 1

Balance sheet of STATE BANK OF INDIA

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

Sources of funds
Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus 671.04 83,280.16 635.00 64,351.04 634.88 65,314.32 634.88 57,312.82 631.47 48,401.19

Loan funds
Secured loans Unsecured loans Total ########### 9,33,932.81 8,04,116.23 7,42,073.13 5,37,403.94 # ########### 9,98,918.86 8,70,065.43 8,00,020.82 5,86,436.60 #

Uses of funds
Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments 14,792.33 9,658.46 5,133.87 332.68 3,12,197.61 13,189.28 8,757.33 11,831.63 7,713.90 10,403.06 6,828.65 8,988.35 5,849.13

4,431.96 4,117.72 3,574.41 3,139.22 332.23 295.18 263.44 234.26 2,95,600.57 2,85,790.07 2,75,953.96 1,89,501.27

Net current assets

Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total 53,113.02 80,915.09 -27,802.08 2,89,862.08 43,777.85 35,112.76 37,733.27 44,417.03

1,05,248.39 80,336.70

1,10,697.57 83,362.30

-61,470.54 -45,223.94 -72,964.30 -38,945.27 -

2,38,894.22 2,44,979.03 2,06,827.50 1,53,929.48

Notes:
Book value of unquoted investments Market value of quoted investments -

Contingent liabilities Number of equity sharesoutstanding (Lacs)

Mar ' 12 8,99,565.18 6710.45

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 7,90,386.79 5,96,366.41 7,67,567.52 8,29,740.48 6349.99 6348.83 6348.80 6314.70

SHARE HOLDING PRICE OF BANKS

Share holding of HDFC bank

Share holding pattern as on : 30/06/2012 31/03/2012 31/12/2011 Face value 2.00 2.00 2.00 % No. Of % No. Of % Holding Shares Holding Shares Holding Promoter's holding 543216100 23.06 543216100 23.15 543216100 23.20 405656975 17.33 543216100 23.06 543216100 23.15 948873075 40.53 Non promoter's holding Institutional investors 146694316 733359659 984547920 6.23 149081890 6.35 156498551 6.68 694730486 29.67 949212132 40.54 No. Of Shares

Indian Promoters Foreign Promoters Sub total

Banks Fin. Inst. and Insurance FII's Sub total Private Corporate Bodies NRI's/OCB's/Foreign Others GDR/ADR Govt Sub total General public Grand total

31.13 720027157 30.68 41.79 966410656 41.18 Other investors 8.60 0.61 17.23 26.43 8.72 100.00 204972487 8.73 20189537 405629791 630777855 206269699 2346674310 0.86 17.29 26.88 8.79 100.00

202598208 14259005 405847035 12000 622702288 205439107 2355905415

202028068 8.63 24825134 42500 226881742 216334111 2341301060 1.06 9.69 9.24 100.00

Share holding of ICICI bank

Share holding pattern as on : 31/03/2012 31/12/2011 30/09/2011 Face value 10.00 10.00 10.00 No. Of Shares Sub total % No. Of Holding Shares Promoter's holding Non promoter's holding Institutional investors % Holding No. Of Shares % Holding -

Banks Fin. Inst. and Insurance FII's Sub total Private Corporate Bodies NRI's/OCB's/Foreign Others GDR/ADR Direcctors/Employees Govt Others Sub total General public Grand total

205313108 17.81

217764315 18.89

201283703 17.47 441091420 38.28 730712873 63.41

413796200 35.90 401518652 34.84 721082152 62.56 722235829 62.66 Other investors 45779565 4513542 309514994 929650 9629 7934142 368670585 62950768 1152703505 3.97 0.39 26.85 0.08 0.69 31.98 5.46 100.00 50760334 5036602 305639194 904928 10418 2106834 364447373 65870518 1152553720 4.40 0.44 26.52 0.08 0.18 31.62 5.72 100.00

47919092 5565113 302492918 853428 9583 2385466 359214663 62473606 1152401142

4.16 0.48 26.25 0.07 0.21 31.17 5.42 100.00

Share holding of STATE BNAK OF INDIA

Share holding pattern as on : 31/03/2012 31/12/2011 30/09/2011 Face value 10.00 10.00 10.00 % No. Of Holding Shares Promoter's holding 413252443 61.58 377207200 18046376 413252443 61.58 395253576 Non promoter's holding Institutional investors 82595365 12.31 89175087 No. Of Shares % Holding 59.40 2.84 62.24 No. Of Shares % Holding

Indian Promoters Foreign Promoters Sub total

377207200 59.40 377207200 59.40

Banks Fin. Inst. and Insurance FII's Sub total Private Corporate Bodies NRI's/OCB's/Foreign Others GDR/ADR Govt Others Sub total General public Grand total

14.04

85065942

13.40

58360275 8.70 50037438 7.88 173258718 25.82 168667583 26.56 Other investors 24190632 1123728 16977498 126760 1463068 43881423 40651991 671044575 3.60 0.17 2.53 0.02 0.22 6.54 6.06 100.00 25006531 1275957 126891 2135234 28544350 42533823 634999332 3.94 0.20 0.02 0.34 4.50 6.70 100.00

54940125 8.65 172539385 27.17

24423992 1115914 18088688 125686 1199221 44953238 40298905 634998728

3.85 0.18 2.85 0.02 0.19 7.08 6.35 100.00

CHAPTER VII CONCLUSIONS AND RECOMMENDATION

CONCLUSIONS
Indian Banking Industry has gone through various phases of development in history. The present growth in the banking sector can be attributed to the various financial reforms undertaken by the government. Banking companies are having more than sufficient capital to shield itself from risk weighted assets. The deposits of banking companies are increasing with increase in GDP at market price. Statutory requirement is being used as tool by RBI to keep inflation under check. Past five year has seen an average growth of nearly 30% in Profit after Tax of the banking companies Non Performing Assets Ratio of Indian banking companies is around 1.2%, well below the RBI set danger level of 10%. Banking companies in India differs in the shareholding pattern.

APPENDICES

ABBREVIATIONS

ABBREVIATIONS
ATM: Automated Teller Machine BCBS: Basel Committee on Banking Supervision BFS: Board of Financial Supervision BIA: Basic Indicator Approach BPR: Business Process Reengineering BPSS: Board for Regulation and Supervision of Payment and Settlement Systems CIBIL: Credit Information Bureau (India) Limited CRAR: Capital to Risk-weighted Assets Ratio DEMAT: De Materialize EPS: Earning per Share FDI: Foreign Direct Investments GDP: Gross Domestic Product HDFC: Housing Development and Financial Corporation ICICI: Industrial Credit and Investment Corporation of India IRB: Internal Rating Based OOC: Office of the Comptroller of the Currency ROAA: Return on Average Assets ROC: Rate of Change RSI: Relative Strength Index SBI: State Bank of India SLR: Statutory Liquidity Ratio VRS: Voluntary Retirement Schemes WPI: Wholesale Price Index

BIBLIOGRAPHY

BIBLIOGRAPHY
The following articles from internet have been used for the study purpose: (1) (2) (3) (4) (5) (6) (7) (8) (9) www.nseindia.com www.bseindia.com www.moneycontrol.com www.indiainfoline.com www.google.com www.statebankofindia.com www.icicibank.com www.hdfcbank.com www.rediffmoney.com

QUESTIONARRIE

QUESTIONARRIE FOR CUSTOMER

(1) What is your occupation (a) Businessmen-(30) (b) Employee (20) (b) housewife- (40) (d) others (10)

ocuupation of the customer

40 30 20 10 0 Series 1 Series 1

(2) Income:

a. 10,000 And above

b. 10,000 to 20,000

c. 20,000 to 30,000 d. 30,000 and above

income
40000 35000 30000 25000 20000 15000 10000 5000 0 a b c income

(3)

Are you interested in online share-trading? a. Yes- 45 b. No-55

online share trading

yes no

45% 55%

(4) How do you know about on-line share trading? A. Reference by friends - (30) C. On-line advertisements (45)

B. advice by financial consultants (25)

know about online trading

reference by friend online advertisement advice by financial consultants

25%

30%

45%

(5) How often do you do on-line share trading? a. Daily basis-(20) b. Monthly basis-(48) c. Weekly basis-(17) d. Irregular-(15)

often do you do online share trading

daily basis weekly basis monthiy basis irregular

17% 48% 63% 20% 15%

(6) Which site do you use for trading? a. Motilal Oswal-(10) b. Share khan-(20)
E. KOTAK SECURITIES LTD-(28)

c. India infoline Ltd-(17) d. ICICI direct.com-(17) f. If others- (8)

site use for online trading

30 25 20 15 10 5 0 site use for online trading

(7) Does the site guide you on on-line trading? a. Yes-(79) b. No-(21)

site gude you for online trading

80 70 60 50 40 30 20 10 0 YES NO site gude you for online trading

(8) Which product mostly customers use? (a) Currency-(20) (c) Equity-(50) (b) commodity-(10) (d) mutual funds-(20) (e) others-10

customer mostly use product

currency commodity equity mutual funds other

10% 10%

20% 10%

50%