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Preface

In this summer internship program we get the idea about both the fields that is Finance
and marketing. We learn about market research and target the particular customer
segment. We get our practical knowledge of marketing in Reliance Capital Ltd. We also
get the theoretical knowledge about finance from our project.

Our aim of Portfolio Management is to achieve the maximum return from a portfolio,
which has been delegated to be managed by an individual manager or financial
institution. The manager has to balance the parameters which define a Good investment
i.e. security, liquidity and return. The goal is to obtain the highest return for the client of
the managed portfolio. The basis for constructing a portfolio should reflect the
enterprise’s particular needs.

In finance, a portfolio is a collection of investments held by an institution or a private


individual. In building up an investment portfolio a financial institution will typically
conduct its own investment analysis, whilst a private individual may make use of the
services of a financial advisor or a financial institution that offers portfolio management
services. Holding a portfolio is part of an investment and risk-limiting strategy called
diversification. By owning several assets, certain types of risk (in particular specific risk)
can be reduced. The assets in the portfolio could include stocks, commodities, insurance
etc.

With the help of this project we can get the basic idea about PMS. This project gives us a
good knowledge about financial topics such as Fundamental analysis, technical analysis.
We also learn Z-score model, ratios, and different types of charts which will help in our

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study and practical field also. As it is new for us we are very interested in doing this
project and learning new things.

We try our best in this project but in this project we have some limitations.
• We can not include all the sectors and all industries of Indian stock exchanges.
• We can’t get all companies latest financial reports so we can not calculate all the
ratios in fundamental analysis.
• Many portfolio managing companies can not provide their clients’ information.
• We only take the five charts for technical analysis.

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Acknowledgement

With so much excitement, we present our summer project for MBA-1 on study on
Investor’s behaviour towards Mutual Fund.

We are greatly thankful to Gujarat University that gave us the opportunity to undertake
the project and enhance our knowledge. The study has proved as a great value addition
for us.

We convey our deepest gratitude to our college - N. R. Institute of Business


Management and our director Dr. Hitesh Ruparel. Our sincere thanks to Prof. Viral
Pandya who has been continuously guiding and mentoring us since the commencement
of the Project without whom this study would not have come to this stage.

We are also thankful to Mrs. Vasudha Lal – our mentor at Reliance Money who also
gives important tips on our project. Our sincere thanks to Mr. Abhijit Sanghani- head at
Reliance Money- Vastrapur branch who allow us to carry our summer training at
Reliance Money.

At last we are also thankful to our family members and friends who had given us their
constructive advice, educative suggestions, encouragement and co-operation to prepare
this report.

Thanking you all,

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Dhaval Nayak (08063)


Amish Soni (08108)

Executive Summary

Our project is mainly based on Portfolio Management Service of equity. In the project we
consider 10 different industrial sectors of Indian stock market. Then we consider 6 major
companies of each sector. After selecting the companies we do the mainly two types of
analysis (a) Fundamental analysis and (b) Technical analysis. Fundamental analysis is
done mainly it gives us long term prospect of the industry and Technical analysis will
give us short term perspective of the industry. As we have to focus both long term as well
as short term of the company to invest lump sum amount in that particular industry.

We have done the fundamental analysis with the help of different ratios they are Market
Capitalization, Return on Total Assets, Net Profit Margin (%), and Bonus in Equity
Capital, Return on Long Term Funds, Debt Equity Ratio, Quick Ratio to find the top two
companies of each sectors. We select the two companies with the help of ranking them
and the list two ranked companies are selected out of six companies in each sector.

After that we have done the fundamental as well as technical analysis of selected twenty
companies. In it Edward Altman’s Z score model through analysis of selected top 20
companies, ratios such as Dividend per share, Net Operation Profit per share, Net Profit
Margin, Return on capital employed, Return on long term fund, Debt to owners fund,
Dividend pay out ratio of Net Profit, Earning Retention Ratio, Adjusted cash flow times,
Earning per share, Book value and then take average of three years for each company and
give rank accordingly to get the proportion of distribution of out Portfolio amount.

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In technical analysis we consider mainly 5 types of charts for portfolio. They are (1)
Exponential Moving Average (EMA) (2) Accumulation and Distribution (3) Moving
Average Convergence Divergence (4) Relative Strength Index (5) Bollinger Band. Then
we divide our portfolio as per current situation of each stock chart. In technical analysis
we consider maximum 3 months period.

After doing the analysis and dividing Rs.5, 000,000 according to proportions we find the
returns. For getting the return we take 1st April 2009 and assume if investor invest
according to our portfolio till 30th June 2009 then they may get the return of 71% which
is quite higher than other portfolio managing services as well as BSE and NSE. By
having the following limitations also we get these much higher returns. We try our best in
this project but in this project we have some limitations.
• We can not include all the sectors and all industries of Indian stock exchanges.
• We can’t get all companies latest financial reports so we can not calculate all the
ratios in fundamental analysis.
• Many portfolio managing companies can not provide their clients’ information.
• We only take the five charts for technical analysis.

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