Fundamental Analysis of Banking Stocks
A STUDY ON FUNDAMENTAL ANALYSIS OF BANKING STOCKS
INTRODUCTION
The stock market is the most volatile market and is similar to the weather. Though this does not mean that the markets cannot be predicted but it only means that trends may change without warning, as with weather. The stockmarkets are characterized by almost all factors, again starting right from weather and ending at the political environment. Effects of one market also causes as pillover into the other and an external cause in one market can lead to the reaction in another market. The pulse of the market also depends upon timely exit and entry. For arriving at a correct conclusion, reasonable data is required to understand the mechanics of the stock and the industry – vis-à-vis global and local environment in which the company operates. While a practical long-term view will help reduce risks, marrying the stock on the other hand may totally increase risks. By going through the Industry Reports, the investor can arm himself with reasonable information about the stocks, which are being tracked by the investor. However, for consistent monitoring of stocks, it is imperative that the investor has limited exposure to the stocks, which are being capable of being tracked by him – a too big a portfolio will divert attention and ultimately harm investor interests. In the present project an attempt is made to conduct the fundamental analysis on banking stocks. The objective of the study is to know the financial status of the scripts in banking industry to recommend for a buy or sell option by comparing the intrinsic value of the share with the market price of using fundamental
INTRODUCTION
The stock market is the most volatile market and is similar to the weather. Though this does not mean that the markets cannot be predicted but it only means that trends may change without warning, as with weather. The stockmarkets are characterized by almost all factors, again starting right from weather and ending at the political environment. Effects of one market also causes as pillover into the other and an external cause in one market can lead to the reaction in another market. The pulse of the market also depends upon timely exit and entry. For arriving at a correct conclusion, reasonable data is required to understand the mechanics of the stock and the industry – vis-à-vis global and local environment in which the company operates. While a practical long-term view will help reduce risks, marrying the stock on the other hand may totally increase risks. By going through the Industry Reports, the investor can arm himself with reasonable information about the stocks, which are being tracked by the investor. However, for consistent monitoring of stocks, it is imperative that the investor has limited exposure to the stocks, which are being capable of being tracked by him – a too big a portfolio will divert attention and ultimately harm investor interests. In the present project an attempt is made to conduct the fundamental analysis on banking stocks. The objective of the study is to know the financial status of the scripts in banking industry to recommend for a buy or sell option by comparing the intrinsic value of the share with the market price of using fundamental