Risk-Return Analysis of BSE BankEx by Pushpavathi

EXECUTIVE SUMMARY

“TODAY’S MONEY IS NOT EQUAL TO TOMORROW’S MONEY”, this says

that the money invested today does not have same value tomorrow, the time value of

money affects to a great extent. So, one has to consider time value of money when going

for investment especially in securities as equity shares etc. because the price fluctuations

are very rapid.

Every individual wants to save money and instead of keeping it idle he/she wants

to invest it further for its appreciation i.e., for the returns earned from it in the future.

There are many number of investment alternatives, it depends on the individual who

wants to invest as which alternative he has to choose i.e., it depends on the rate of return

or the amount of return and risk that the individual expect from the investment. Some

individuals want high returns and ready to take high risk, few don’t want to take risk and

they will be satisfied with the returns they get from the minimum risk.

The individuals or the investors who are willing to take risk will go for equity

investment, in which they can earn more returns and the other hand those who don’t want

to take risk or who wants to minimize the risk will go for bank deposits, investments in

mutual funds, debenture bonds, preference shares etc, where they can get a fixed amount

who don’t take risk or avoid risk are called as risk aversers.

Thus our study is mainly conducted to find out the risk and return that has been

associated with the banking stocks of the BSE BankEx and also to know the relationship

between Banks return and market returns.

My intention of choosing the topic “Risk Return Analysis of BSE BankEx at

Kotak Securities, Bangalore” is that, Banking sector is emerging sector now. India is now

opening up its economy for banking investments and any country can start Banking in

PG Department of Management Studies 1Atria Institute of Technology

India. Thus keeping in mind I took up the study to know how risky the investment in

Banking Sector is and the expected return that can get for the risk he has undertaken.

Objective of the study is Risk and Returns analysis of BSE BankEx securities and

to identify and analyze the correlation between Banks returns with BSE BankEx returns.

Scope of the study is limited to only Public Sector Banks, its regards calculation

of Returns, Standard Deviation, Beta, Alpha, Co variance and Correlation.

The method of data collection is primarily the data and views regarding the

Banking sector have been collected by interacting with the executives in the organization

as well with the internal guide. Secondary data regarding prices and regarding company

profile is collected through internet, news paper etc.

Limitations of the study are a good number of explanatory variables must be

taken into consideration in order to assess the share prices movement. But, due to time

constraints detailed analysis of each bank were now made. Confidently of data, then the

analysis carried out and suggestions offered are limited to the researcher’s ability to

understand complex financial aspects.

As far as findings are concerned Canara Bank leads in the aspects of Risk and

Returns. There exists a positive correlation between Banks returns and BSE BankEx

returns.


GENERAL INTRODUCTION

INDUSTRY PROFILE

Introduction to Capital Market

Capital is an important factor of production, necessary for economic development.

It is a market for raising funds for capital formation and investment, which is referred to

as capital market. Investment comes from savings and the mobilization of savings is a

major function of the capital market.

Capital market is a wide term used to comprise all operations in the new issues

and stock market. New issues made by the companies constitute the primary market,

while trading in the existing securities relates to the secondary market. While we can only

buy in the primary market, we can buy and sell securities in the secondary market.

Capital market thus provides funds from public who are savers to investors. The

surpluses of the household sector and foreign sector are used to meet the deficits of the

Government and business sectors, who invest more than they save, or spend more than

their income.

Lending and borrowing of these surpluses and deficits and Bank credit and the

credit from financial institutions are all channelized through the capital market. Banks

commercial and co-operative as also all financial institutions intermediaries operating in

the capital market. This facilitates the project financing and growth of the corporate

sector on the one hand and there working in day-to-day operations on the other. Hence

the capital market is the market for financial assets that have long or indefinite maturity.

When a company wishes to raise capital by issuing securities or other entity intends to

raise funds through units, debt instrument, bonds, etc., it goes to the primary securities for

long-term funds. The primary market facilitates the formation of capital.


There are three ways in which a company may raise capital in the primary market:

Public Issue: This involves sale of securities to members of the public, is the

most important mode of raising long-term funds.

Rights Issue: This is the method of raising further capital from existing

shareholders by offering additional securities to them on a pre-emptive basis.

Private Placements: Is a way of selling securities privately to a small group of

investors.

The Secondary market in India, where outstanding securities are traded, consists of

the stock exchanges which are self-regulatory bodies under the overall regulatory

purview of the government/ SEBI. Recently, SEBI has proposed the trading in futures

and options (Capital Market Derivatives). Accordingly, the definition of securities under

SCRA will have to be amended.

The government has accorded powers to the Securities and Exchange Board of India

(SEBI), as an autonomous body, to oversee the functioning of the securities market and

the operations of intermediaries like mutual funds and merchant bankers, underwriters,

portfolio managers, debenture trustee, bankers to an issue, registrars to an issue and share

transfer agents, stock brokers, sub-brokers, FII s (Foreign Institutional Investors)

plantation companies schemes including rating agencies and also to prohibit insider

trading.

Structure of the market

There are various sub-markets in the capital market in India. The structure has

undergone vast changes in recent years. New instruments and new institutions have

emerged on the scene.

The sub-markets are as follows:

1. Market of Corporate securities – for new issues and old securities.

2. Market for Government securities.


3. Market for Debt instruments – debentures and bonds of private sector, bonds of

public sector undertakings, public financial institutions, etc.

4. Mutual fund schemes and UTI schemes, etc.

All these markets and submarkets have both Primary markets and Secondary markets.

The first one is for raising funds directly from the public and secondary market is for

trading and imparting liquidity to existing securities.

About BSE

The stock exchange, Mumbai, popularly known as “BSE” was established in

1875 as “The Native Share and Stock Brokers Association”. It is the oldest one in

Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is

voluntary non-profit making Association o persons (AOP) and is currently engaged in the

process of converting itself into demutualised and corporate entity. It has evolved over

the years into its present status as the premier stock exchange in the country. It is the first

stock exchange in the country to have obtained permanent recognition in 1956 from the

Govt. of India under the Securities Contracts (Regulation) Act, 1956.

The Exchange while providing an efficient market also upholds the interests of

the investors and ensures redressal of their grievances, whether against the companies or

its own member brokers. It also strives to educate and enlighten the investors by making

available necessary informative inputs.

A Governing Body comprises nine of elected directors ( one third of them retire

every year by rotation ), an Executive Director, three Government nominees, A Reserve

Bank of India nominee and five public representatives is the apex body, which regulates

the Exchange and decides its policies.

The Governing Board following the election of directors annually elects a

President, Vice-President and an honorary treasurer from among the elected directors.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day

administration of the Exchange.


About NSE

The National Stock Exchange (NSE) is India’s leading Stock Exchange covering

various cities and towns across the country. NSE was set up by leading institutions to

provide a modern, fully automated screen-based trading system with national reach. The

exchange has brought about unparalleled transparency, speed and efficiency, safety and

market integrity.

NSE has played a catalytic role in reforming the Indian securities market in terms

of microstructure, market practices and trading volumes. The market today uses state-of-

art information technology to provide an efficient and transparent trading, clearing and

settlement mechanism, and has witnessed several innovations in products & services viz.,

demutualization of stock exchange governance, screen based trading, compression of

settlement cycles, dematerialization and electronic transfer of securities, securities

lending and borrowing, professionalisation of trading members, fine-tuned risk

management systems, emergence of clearing corporations to assume counterparty risks,

market of debt and derivative instruments and intensive use of information technology.


NSE Milestones

November 1992 Incorporation

April 1993 Recognition as a Stock exchange

May 1993 Formulation of business plan

June 1994 Wholesale Debt Market segment goes live

November 1994 Capital Market (Equities) segment goes live

March 1995 Establishment of Investor Grievance Cell

April 1995 Establishment of NSCCL, the first Clearing corporation

June 1995 Introduction of centralized insurance cover for all trading members

October 1995 Establishment of Investor Protection Fund

April 1996 Became largest stock exchange in the country

April 1996 Commencement of clearing and settlement by NSCCL

April 1996 Launch of S&P CNX Nifty

June 1996 Establishment of Settlement Guarantee Fund

November 1996 Setting up of National Securities Depository Limited, first

depository in India, co-promoted by NSE

November 1996 Best IT Usage award by Computer Society of India

December 1996 Commencement of trading/settlement in dematerialized securities

December 1996 Dataquest award for Top IT User

December 1996 Launch of CNX Nifty Junior

February 1997 Regional clearing facility goes live

November 1997 Best IT Usage award by Computer Society of India

May 1998 Promotion of Joint venture, India Index Services & Products

Limited (IISL)

May 1998 Launch of NSE’s Web-site: www.nse.co.in

July 1998 Launch of NSE’s Certification Programme in Financial Mkt

August 1998 CYBER CORPORATE OF THE YEAR 1998 launch of Automated


Lending and Borrowing Mechanism

April 1999 CHIP Web Award by CHIP magazine

October 1999 Setting up of NSE.IT

January 2000 Launch of NSE Research Initiative

February 2000 Commencement of Internet Trading

June 2000 Commencement of Derivatives Trading (Index Futures)

September 2000 Launch of ‘Zero Coupon Yield Curve’

November 2000 Launch of Broker by Dotex International, a joint venture between

NSE.IT Ltd. and i-flex Solutions Ltd.

December 2000 Commencement of WAP trading

June 2001 Commencement of trading in Index Options

July 2001 Commencement of trading in Options on Individual Securities

November 2001 Commencement of trading in Futures on Individual Securities

December 2001 Launch of NSE VaR for Government Securities

January 2002 Launch of Exchange Traded Funds (ETFs)

May 2002 NSE wins the Wharton-Infosys Business Transformation Award in

the Organization-wide Transformation category

October 2002 Launch of NSE Government Securities Index

January 2003 Commencement of trading in Retail Debt Market

June 2003 Launch of Interest Rate Futures

August 2003 Launch of Futures & options in CNXIT Index

AT GLANCE:

CAPITAL MARKET (EQUITIES) SEGMENT

Number of VSATs August 31, 2004 2,869

Number of cities covered August 31, 2004 361

Settlement Guarantee Fund March 31,2004 1550.09 crores

Investor Protection Fund (CM and F&O) August 31, 2004 130.22 crores

Number of securities available for trading August 31, 2004 1,355

Record number of trades July 08, 2004 25,45,755


Record daily turnover (quantity) August 19, 2003 6,493 lakhs

Record daily turnover (value) February 28, 2001 10,366.52 crores

Record market capitalisation January 08, 2004 12,42,778 crores

Record value of S&P CNX Nifty Index January 09, 2004 2,014.65

Record value of CNX Nifty Junior Index February 23, 2000 5,365.90

Record Pay-in/Pay-out (Rolling Settlement)

Funds Pay-in/Pay-out February 05, 2004* 685.76 crores

Securities Pay-in/Pay-out (value) January 13, 2004* 1884.09 crores

Securities Pay-in/Pay-out (Quantity) August 21, 2003* 1470.14 lakhs

* Settlement Date

DERIVATIVES (F&O) SEGMENT

No. of cities covered August 31, 2004 330

Settlement Guarantee Fund March 31, 2004 4,356.85 crores

Record daily turnover (value) January 28, 2004 21,921.34 crores

WHOLESALE DEBT SEGMENT

Number of securities available for trading August 31, 2004 2,888

Record daily turnover (value) August 25, 2003 13,911.57 crores


Table showing Names of the Stock Exchanges in India

Sl.No. Name of the Stock

Exchange

Year of

Establishment

Recognition date

1 NSE 1992 Nov-1992

2 BSE 1875 31-08-1987

3 CALCUTTA 1908 10-10-1957

4 DELHI 1947 09-10-1957

5 AHMEDABAD 1984 16-10-1957

6 UTTAR PRADESH 1982 03-06-1982

7 LUDIANA 1983 29-04-1983

8 PUNE 1982 02-09-1982

9 BANGALORE 1957 16-02-1963

10 HYDERABAD 1943 02-09-1958

11 INTERCONNECTED SE 1999 1999

12 COCHIN 1978 10-05-1979

13 OTCEI 1989 Aug-1989

14 MADRAS 1908 15-10-1975

15 MADHYA PRADESH 1930 04-12-1958

16 MAGADH 1986 11-12-1986

17 VADODARA 1990 05-11-1990

18 GAUHATI 1984 01-05-1984

19 BHUVANESHVAR 1989 05-06-1989

20 COIMBATORE 1991 18-01-1991

21 JAIPUR 1984 09-11-1989

22 MANGALORE 1984 09-09-1985


23 SKSE 1989 10-07-1989

Introduction to BSE BankEx

Indian banking is riding on a major recovery both in terms of strength and soundness

since from 2002. India is making sizeable gains in expanding into consumer credit with

tightening of credit administration procedures. Major policy actions that led to sharp fall

in the interest rates enabled banks to post significant rise in operational profits. For

instance trading profits of the public sector banks shot up by Rs. 3749 crores taking their

net profits to an all time high of Rs. 8301 crores in FY 02. These developments have

impacted the performance of bank stocks significantly. Since bank stocks are emerging as

a major segment in the equity markets, BSE considered it important to design an index

exclusively for bank stocks. Earlier BSE had launched its first free float index on TMT

stocks now popularly known as the BSE TECk Index.

Features

BANKEX will track the performance of the leading banking sector stocks listed

on the BSE

BANKEX is based on the free float methodology of index construction

The base date for BANKEX is 1st January 2002.

The base value for BANKEX is 1000 points

BSE has calculated the historical index values of BANKEX since 1st January

2002.

12 stocks which represent 90 percent of the total market capitalization of all

banking sector stocks listed on BSE are included in the Index

The Index will be disseminated on a real-time basis through BSE Online Trading

(BOLT) terminals from 23rd June, 2003


Performance of the BANKEX:

During the period between 1 Jan 2002 and 13 June 2003, the total market capitalization

of BANKEX stocks has increased from 22970 cr. to 55283 cr. while the total market

capitalization of BSE TECk index stocks has fallen from 105956 cr. to 80787 cr. and that

of FMCG Index stocks from 87637 cr. to 75947 cr. During this period, BANKEX rose by

62 percent showing impressive gains among other major indices. The average daily

volatility of BANKEX from its inception to date has been 1.38% as compared to 2.24%

for BSE TECk and 1.06% for BSE FMCG Index for the same period.

BANKEX, is the new entrant in BSE’s current portfolio of 13 indices, and adds value to

BSE’s ability in reflecting both the broad market and specific sector movements in the

Indian Equity Markets.


History of replacements in BANKEX

Date Outgoing Scrips Replaced by

09.02-2004 ING Vysya Bank UTI Bank Ltd.

Kotak Mahindra Bank

UCO Bank

Indian Overseas Bank

Jammu & Kashmir Bank

31.01-2005 Corporation Bank Allahabad Bank Ltd.

Jammu & Kashmir Bank Ltd.

UCO Bank

28.11.2005 Centurion Bank Ltd.

Indusind Bank Ltd

Karnataka Bank Limited

03.07.2006 Indusind Bank Ltd Federal Bank Ltd.

08.01.2007 Karnataka Bank

Vijaya Bank

09.07.2007 Karnataka Bank Ltd.

Yes Bank Ltd.

Scrip selection criteria for BSE BankEx:

Eligible universe:

Scrips classified under banking sector that are present constituents of BSE-500 index

would form the eligible universe.


Trading Frequency:

Scrips should have a minimum of 90% trading frequency in preceding six months.

Market Capitalisation:

Scrips with a minimum of 90% market capitalisation coverage in each sector based on

free-float final rank will form the index.

Buffers

A buffer of 2% both for inclusion and exclusion in the index is considered so that

movements in and out of the index are minimized. E.g. A Company can be included in

the index only if it falls within 88% coverage and an existing index constituent cannot be

excluded unless it falls above 92% coverage. However, the above buffer criterion is

applied only after the minimum 90% market coverage is satisfied.

BANKEX Constituents

BSE BankEx was launched with an objective of measuring the performance of banking

sector stocks listed on the Bombay Stock Exchange. BankEx has a base date of 1st

January 2002 and base value of 1000 points. BankEx constituents represent 90% of the

total market capitalisation of the banking sector on BSE. The table below provides the list

of companies comprising BSE-PSU Index.

Code: Each stock listed on BSE is denoted a unique keyword that can be used to get

price and other stock related information.

Name: This column specifies the name of the company to which particular scrip is

denoted.

Adjusting Factor: Adjusting factor refers to the weightage of the constituent stocks in a

particular index. Stocks having a higher weightage are likely to have a stronger impact on

index movement as compared to stocks having a lower weightage.


As on October 04, 2006

Sl. No. Code Name Adj. Factor

1 532480 Allahabad bank Ltd 0.452 532418 Andhra Bank 0.503 532134 Bank of Baroda 0.504 532149 Bank Of India 0.355 532483 Canara Bank 0.306 532273 Centurion Bank Ltd. 0.707 500469 Federal Bank Ltd. 1.008 500180 HDFC Bank Ltd. 0.809 532174 ICICI Bank Ltd. 1.0010 532388 Indian Overseas Bank 0.4011 532652 Karnataka Bank Limited 1.0012 500247 Kotak Mahindra Bank Ltd. 0.4513 500315 Oriental Bank of Commerce 0.5014 532461 Punjab National Bank 0.4515 500112 State Bank of India 0.4516 532477 Union Bank of India 0.4517 532215 UTI Bank Ltd. 0.7518 532401 Vijaya Bank 0.50

Calculation of Total and Average BSE BankEx ReturnsWeeks Open Close Price change Returns1st 10870.88 11377.96 507.08 4.66462nd 11377.96 11486.90 108.94 0.95753rd 11335.47 10738.59 -596.88 -5.26564th 10738.59 11386.35 647.76 6.03215th 11386.35 11905.06 518.71 4.55556th 11905.06 12215.84 310.78 2.6100

Total 13.5546Average 2.2591


Introduction on Banking Sector:

Banking in one form or another, was in existence even in ancient times. The

writing of Manu (the maker of Old Hindu Law) and Kautilya (the minister of

Chandragupta Maurya) and the teaching of Christ contained references to banking

Existence of banking activities in Babylonia much before Christ.

However, modern banking (i.e., Joint Stock Banking) is of recent origin. After the

industrial revolution, with the increase in the size of industrial and business units, joint

stock company form of business organization came into existence. This form of

organization encouraged people with small means to become shareholders of big

industrial and business enterprises. Still, there were certain sections of the public who

were not prepared to invest their money on the share of joint stock companies. But they

were willing to part with their surplus money, it they were assured of the repayment of

their money with some interest there on. So, naturally, there arose the need for the

formation of financial institution that could collect the surplus funds of the people on

terms acceptable to them and make them available to the needy for productive purposes.

Accordingly, a large number of such financial institutions called joint stock banks were

set up. So, joint stock banks or modern banks are of recent development.

Nationalization of Banks:

In a free enterprise economy, commercial banks operate like any other business

and are mainly concerned with the maximization of their private gains. Lacking any

social purpose they often channel funds to business units in which the management has


its interest and thus contribute in a big way to growth of monopolies and concentration of

economic and political power, while overall economic activity suffers because priority

sectors/industries fails to get adequate funds. The Hazari committee in its report on

‘Industrial Planning and Licensing Policy’ submitted to the planning commission in

September 14, 1967, clearly stated that, “it would be difficult to undertaken credit

planning unless the linked control of industry and banks in the same hands is snapped by

nationalization of banks”. The government however, decided in favor of social control.

The social control phase, however, turned out to be transitory. Expectations of the

government that the social control would remove objectionable banking practices of the

past and would give a new sense of purpose to the banks for future were believed. Having

realized that nothing short of nationalization would solve the mainly, the government

took a bold decision to bring under its direct control a substantial segment of the banking

system. On July 19, 1969 – fourteen commercial banks with deposits worth Rs. 50 crore

or more were nationalized. This was hailed as historic event by the people of the country.

GLOBAL TREND

Indian banking industry too has fallen in line with the global trend and has made a

beginning with small forays into such areas as selling mutual fund units or insurance

policies. Viewed thus, the decision to branch out into the business of offering an

electronic trading platform in stocks of listed companies for a fee is but a logical

extension of its desire to deepen the relationship with its customers.

Moreover, the fabric of customer loyalty is beginning to get frayed at the edges in

a world of increasing customer choice and changing cultural ethos that looks down upon

permanent relationships. So the more facets that a bank evolves to the relationship that it

has with the customer greater are the prospects of such a relationship enduring and

possibly even flourish in the future.

BASEL II NORMS

Meaning:


Main feature of Basel – II is that its structure rests on a set of three “Mutually

reinforcing” pillars, namely, capital requirements, supervisory review and market

discipline. Through this approach, Basel – II aims to correct most of the deficiencies that

Basel – I has suffered from. To start with, the standards are now more risk-sensitive. In

other words, Banks which have a larger risk exposure will have to set apart more capital

to meet the unexpected losses that go with it.

The Three Pillars:

The capital framework, under the New Basel Capital Accord, rests on the following three

“Mutually reinforcing” pillars:

Pillar 1: Minimum Capital Requirements

Banks will be required to set apart capital for the credit market and operational

risks faced by them. A menu of approaches of increasing sophistication and lesser capital

requirement will be available to choose from for each of the three risks.

Pillar 2: Supervisory Review

This will involve a comprehensive review of the systems to calculate capital and

also risks not covered under pillar 1 to ensure required as a minimum. The supervisor

may, based on the review, adjust the capital requirement upward.

Pillar 3: Market Discipline

This is aimed at enhancing market discipline by ensuring that an adequate level of

transparency is maintained by banks in their disclosures to the market participants in

respect of various critical aspects of their functioning.


Introduction to Banks under study

1. Allahabad Bank

Allahabad Bank was set up on 24th April, 1865 at Allahabad by a Group of Europeans

with subscribed capital of Rs.3 lakh. It is the oldest Bank in the country at present. The P

& O Banking Corporation took over the bank by acquiring its shares. In 1969 it was

nationalized. The Bank has entered into an MOU with the Small Industries Development

Bank of India (SIDBI) for financing small scale industrial units. The Bank has 5

International Branches and 4 International Divisions. The Allahabad Bank has become

one of the first banks in the country to draw up a credit management policy following the

dismantling of the Reserve Bank of India-prescribed Maximum Permissible Bank

Finance (MPBF) norms. Allahabad Bank becomes the first public sector bank to have an

exclusive Web site of its own, www.allbankcarloans.com, dedicated to sanctioning car

loans through the Internet.

2. Andhra Bank

The Bank came into existence on by consequent to the taking over of the undertaking of

Andhra Bank, Ltd. It is a Government of India undertaking. The Bank transacts general

banking business of all kinds including foreign exchange. The Bank has 974 full fledged

branches, 40 cluster branches, 76 extension counters. Andhra Bank has tied up with a real

estate portal indiaproperties.com, to provide housing loans through the Internet. Bank

started a new service called collection of Direct taxes which comprises corporate tax,

estate tax, gift tax etc. Andhra Bank has received Insurance Regulatory and Development


http://www.allbankcarloans.com/

Authority license to act as a corporate agent for procuring or soliciting business of the

United India Insurance Company Ltd. Andhra Bank has achieved 100% computerization

of all its branches and all of them are running on uniform application software.

3. Bank of Baroda

The Bank was brought into existence by an Ordinance issue, by the Central Government.

The Bank is a Government of India Undertaking and carries on all types of banking

business including foreign exchange. The bank had established a new department to act

as custodian of local shares issued by Indian companies who came out with Euro Issues

(GDRs/ADRs) to raise funds from abroad. With this in view, the bank entered into an

agreement with Bank of New York, who act as Depository for issue of GDRs by

companies. The bank was associated as lead manager/co-manager in respect of 142 issues

involving a sum of Rs 3411 crores. The Bank of Baroda has signed up to be a depository

participant with Central Depository Services (India) Ltd.

4. Bank of India

The Bank was brought into existence by an Ordinance issued, by the Central

Government. In terms of the Ordinance, the Undertaking of `The Bank of India Ltd.' was

transferred to and vested in the new bank. The Company became Depository Participate

of National Securities Depository Ltd., for the purpose of clearing and settlement of

trades in the dematerialized segment of BSE. Bank of India has introduced floating

interest rate on deposits for select customers, besides advancing on Mumbai Inter Bank

Offer Rate (MIBOR). The Bank has joined Central Depository Services as depository

participant. Four state-owned banks (Bank of India (BoI), Indian Bank, Syndicate Bank

and United Bank of India) enter into an agreement to share their respective ATM

(automated teller machine) networks.

5. Canara Bank

The Bank is a Government of India undertaking, and carries on all banking business. The

Bank was brought into existence by an ordinance, by the Central Government.Canara


Bank became the first public sector bank to join the MasterCard ATM network. The

Public Sector Canara Bank has entered into an arrangement with the Infrastructure

Development Finance Company for financing core sector projects. Canara Bank, Central

Bank of India (CBI), Indian Overseas Bank (IOB), UCO Bank and Union Bank of India

(UBI) form an alliance to launch `Cash Online' ATM network Canara Bank has entered

into a franchise agreement with Western Union Financial Services for money transfer

facility.

6. Indian Overseas Bank

Indian overseas bank, had the distinction of three branches, at Chennai, Karaikudi and

Rangoon simultaneously commencing business on the inaugural day. When it was

nationalized, the bank had 208 branches and business mix of Rs.156 crores. Indian

Overseas Bank the first public sector bank in the country to introduce mobile banking

services using Wireless Application Protocol (WAP). Indian Overseas Bank (IOB) ties up

with Times Online Money to launch an Internet-based remittance product, e-Cash Home,

targeted at NRIs in the US wishing to transfer money to India.

7. Punjab National Bank

Punjab National Bank (PNB) has formed a strategic alliance with Infrastructure Leasing

and Financial Services Ltd (IL&FS) to set up a private equity fund for investing in

domestic companies. Punjab National Bank has informed that the Government of India,

Ministry of Finance, Department of Economic Affairs (Banking Division), New Delhi

vide Notification dated June 06, 2007 has appointed Shri. Jag Mohan Garg as a Whole-

time-Director (designated as Executive Director) on the Board of Punjab National Bank

from the date of his taking over charge of his post or until further orders or till the date of

his superannuation i.e. upto July 31, 2010 whichever is earlier. Punjab National Bank is

entering into a MoU with India Infrastructure Finance Co. (IIFC) on October 17, 2007

with an aim to extend its cooperation and support to IIFC in areas of creating a deal flow

of infrastructure projects.


8. State Bank of India

In 1921, the Imperial Bank of India, the precursor to State Bank of India, was formed as

the result of amalgamation of the Bank of Bengal and two other presidency banks,

namely, Bank of Madras and Bank of Bombay. In 1955, it was abolished by an Act of

Parliament, which handed over its assets and operations to a new entity called State Bank

of India. As the government wanted more control over the credit delivery, it nationalized

14 largest commercial banks in India in 1969. The SBI has a sense of social responsibility

and caters to various sections of the society.

Current Issues Regarding Banking Sector

E-trading: A Strategic imperative for banks

The country’s leading public sector banks has recently said that its own broking arm

SBICAP securities would be offering an electronic trading platform in listed stocks for its

customers. This would supplement an arrangement it already has with a private stock

broking firm. Other banks such as Punjab National Bank, Union Bank, Bank of India etc.,

too have announced tie-ups with broking outfits to offer such a facility. It is just as well

that a number of public sector banks are taking to offering an online trading platform in

listed stocks for their customers.

The concept of a bank cross-selling its third-party financial products to supplement its

core business of accepting deposits and on-lending it to borrowers at a profit has come to

be well recognized within the industry as a key component of a successful business

strategy. It seeks to leverage a bank’s core strength of a customer network to generate

higher profits than may be inherent in the banking relationship that it may have with its

customers.

Improved confidence

As the 50 bps hike in CRR has already been expected by market men, it did not affect the

sentiment towards banking sector.

“People seem to have digested the 50 bps hike in CRR by the RBI, has reduced

uncertainty towards the banking sector now. Most banks are also reducing their interest


rates, which will take care of the growth of this sector. Now, the overall confidence of

investors has increased,” said a banking analyst with a broking firm.

Economists have said the banking industry will reflect the growth of an economy. “FIIs

bet on India because of the growth of the economy, they also bet on the banking sector,

as it is performing quiet well”. Even though the interest rate has increased this hasn’t

deteriorated the asset quality as much, as most banks have updated their technical

platform.

Mr. P Chidambaram, Union Finance Minister, said

Public Sector Banks have largely driven the growth in the banking industry in spite of the

several constraints faced by them. He also says Tech adoption can quicken financial

inclusion and the Indian Banking industry was among the best in the world. “Our non-

performing assets are the smallest and the net interest margin and return on assets are of

substantial standards,” he said.

Emphasising the role of technology, he said that it was a key factor in bringing about

greater financial inclusion. “We must push the frontiers of technology in order to speed

up the process of financial inclusion,” he said. The technology centre would host the

bank’s data centre with high-end servers. The bank announced its plans to bring all its

2,400 branches under the core-banking platform by March 2008.

Banks with global ambition must have India presence: E&Y

“In the near future, banks will not be able to say they are global unless they have a

presence in China, India, because these emerging markets are going to be a major source

of financial sector revenue and profit growth,” the international consulting firm said in a

report. The report titled ‘Strategic Business Risk 2008 – the top 10 risks for business’,

noted that a late entry into Asia would make it difficult for foreign banks to keep up with

competition. For the Asian banks themselves, one of the main threats is the rapid

transformation from “Government bureaucracies into corporate governance and

transparency-driven organizations”.


STATE BANK OF INDIA

State Bank of India plans to enter general insurance early this year. The

bank is likely to tie up with a foreign player to set up a joint venture for

general venture Mr. O.P.Bhatt its chairman said.

Higher non-interest income helped State Bank of India, to report a 36 per

cent rise in second quarter net profit at Rs.1611.4 crore against Rs.1,184.4

crore in the same quarter last year. The bank’s Capital Adequacy Ratio

was 12.85 per cent (12.63 percent).

The bank also has plenty of liquidity because it had opened a lot of

accounts, especially term deposits due to the smart products and

aggressive pricing. But Mr. Bhatt expects credit to pick up in the second

half. The bank has about Rs.1,000 crore of sanctions pending disbursals.

Canara Bank rejigs credit portfolio; Q2 net up 11%

Canara Bank rebalanced its credit portfolio and shifted focus to priority sector areas

during the second quarter of the current financial year. Canara Bank Chairman and

Managing Director, Mr. M.B.N. Rao said, “We have contained the growth of retail

advances.” Retail advances grew only 5.91 % on year-on-year basis to Rs. 17,187 crore.

Priority sector advances grew 25.08 % during the same period to Rs. 38,920 crore.


Introduction to Company

The Kotak Mahindra Group

Kotak Mahindra is one of India's leading financial conglomerates, offering complete

financial solutions that encompass every sphere of life. From commercial banking, to

stock broking, to mutual funds, to life insurance, to investment banking, the group caters

to the financial needs of individuals and corporates.

The group has a net worth of over Rs. 5,230 crore, employs around 15,300 people in its

various businesses and has a distribution network of branches, franchisees, representative

offices and satellite offices across 340 cities and towns in India and offices in New York,

London, Dubai, Mauritius and Singapore. The Group services around 3.2 million

customer accounts.

MILESTONE

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance

Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak &

Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and

that's when the company changed its name to Kotak Mahindra Finance Limited.

Since then it's been a steady and confident journey to growth and success.

First Phase (1986-1990)


Kotak Mahindra Finance Limited starts the activity of Bill Discounting, Lease and

Hire Purchase market, and The Auto Finance division.

Second Phase (1991-1995)

The Investment Banking Division is started. Takes over FICOM, one of India's

largest financial retail marketing networks, Enters the Funds Syndication sector,

Brokerage and Distribution businesses incorporated into a separate company - Kotak

Securities. Investment banking division incorporated into a separate company - Kotak

Mahindra Capital Company

Third Phase (1996-2000)

The Auto Finance Business is hived off into a separate company - Kotak Mahindra

Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak

Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for

financing Ford vehicles. Enters the mutual fund market with the launch of Kotak

Mahindra Asset Management Company. Kotak Mahindra ties up with Old Mutual plc

for the Life Insurance business; Kotak Securities launches its on-line broking site

(now www.kotaksecurities.com). Commencement of private equity activity through

setting up of Kotak Mahindra Venture Capital Fund.

Fourth Phase (2001-2006)

Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian

company to do so. Launches India Growth Fund, a private equity fund, Kotak Group

realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known

as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra.Launches a

real estate fund, Bought the 25% stake held by Goldman Sachs in Kotak Mahindra

Capital Company and Kotak Securities

MANAGEMENT CONTROL

Mr. Uday Kotak Executive Vice Chairman & Managing Director.

Mr. Shivaji Dam


Mr. C. Jayaram

Mr. Dipak Gupta

CORPORATE IDENTITY

Kotak Group Product & Services:

Bank

Life Insurance

Mutual Fund

Car Finance

Securities

Institutional Equities

Investment Banking

Kotak Mahindra International

Kotak Private Equity

Kotak Realty Fund

Kotak Securities Ltd. is India's leading stock broking house with a market share of 8.5

percent as on 30th September, 2007. Kotak Securities Ltd. has been the largest in IPO

distribution.

The accolades that Kotak Securities has been graced with include:


"Best Brokerage Firm in India" by Asiamoney in 2007

‘The Leading Equity House in India’ in Thomson Extel Surveys Awards for the

year 2007.

Euromoney Award (2006 & 2007) - Best Provider of Portfolio Management :

Equities

Avaya Customer Responsiveness Awards (2006) in Financial Institution Sector

Asiamoney Award (2006)- Best Broker In India

Euromoney Award (2005)-Best Equities House In India

Finance Asia Award (2005)-Best Broker In India

Finance Asia Award (2004)- India's best Equity House

Prime Ranking Award (2003-04)- Largest Distributor of IPO's

The company has a full-fledged research division involved in Macro Economic studies,

Sectoral research and Company Specific Equity Research combined with a strong and

well networked sales force which helps deliver current and up to date market information

and news.

Kotak Securities Ltd is also a depository participant with National Securities Depository

Limited (NSDL) and Central Depository Services Limited (CDSL), providing dual

benefit services wherein the investors can use the brokerage services of the company for

executing the transactions and the depository services for settling them.

Kotak Securities has 862 outlets servicing over 3,60,000 customers and a coverage of 310


cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers

Internet Broking services and also online IPO and Mutual Fund Investments.

Kotak Securities Limited has over Rs. 3490 crore of Assets Under Management (AUM)

as of 30th September, 2007. The portfolio Management Services provide top class

service, catering to the high end of the market. Portfolio Management from Kotak

Securities comes as an answer to those who would like to grow exponentially on the crest

of the stock market, with the backing of an expert.

Kotak Mahindra Old Mutual Life Insurance Ltd.

Kotak Mahindra Old Mutual Life Insurance is a 74:26 joint venture between Kotak

Mahindra Bank Ltd. and Old Mutual plc. Kotak Mahindra Old Mutual Life Insurance is

one of the fastest growing insurance companies in India and has shown remarkable

growth since its inception in 2001.

Old Mutual, a company with 160 years experience in life insurance, is an international

financial services group listed on the London Stock Exchange and included in the FTSE

100 list of companies, with assets under management worth $ 400 Billion as on 30th

June, 2006. For customers, this joint venture translates into a company that combines

international expertise with the understanding of the local market.

Kotak Mahindra Asset Management Company Limited (KMAMC)

Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned

subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF).

KMAMC started operations in December 1998 and has over 4 Lac investors in various

schemes. KMMF offers schemes catering to investors with varying risk - return profiles

and was the first fund house in the country to launch a dedicated gilt scheme investing

only in government securities.

We are sponsored by Kotak Mahindra Bank Limited, one of India's fastest growing

banks, with a pedigree of over twenty years in the Indian Financial Markets. Kotak

Mahindra Asset Management Co. Ltd., a wholly owned subsidiary of the bank, is our

Investment Manager.


We made a humble beginning in the Mutual Fund space with the launch of our first

scheme in December, 1998. Today we offer a complete bouquet of products and services

suiting the diverse and varying needs and risk-return profiles of our investors.

We are committed to offering innovative investment solutions and world-class services

and conveniences to facilitate wealth creation for our investors

Car Finance

Kotak Mahindra Prime Limited (KMPL) is a subsidiary of Kotak Mahindra Bank Limited

formed to finance all passenger vehicles. The company is dedicated to financing and

supporting automotive and automotive related manufacturers, dealers and retail

customers. The Company offers car financing in the form of loans for the entire range of

passenger cars and multi utility vehicles. The Company also offers Inventory funding to

car dealers and has entered into strategic arrangement with various car manufacturers in

India for being their preferred financier.

Kotak Securities Ltd - Institutional Equities

Kotak Securities, a subsidiary of Kotak Mahindra Bank, is the stock-broking and

distribution arm of the Kotak Mahindra Group. The institutional business division

primarily covers secondary market broking. It caters to the needs of foreign and Indian

institutional investors in Indian equities (both local shares and GDRs). The division also

has a comprehensive research cell with sectoral analysts covering all the major areas of

the Indian economy.

Kotak Mahindra Capital Company (KMCC)

Kotak Mahindra Capital Company (KMCC) helps leading Indian corporations, banks,

financial institutions and government companies’ access domestic and international

capital markets. KMCC has the most current understanding of investor appetite, having

been the leading book runner/lead manager in public equity offerings in the period FY

2002-06.

Kotak Private Equity:

"Partnering to Build Leaders of Tomorrow"


Kotak Private Equity Group (KPEG) is a specialist Private Equity arm of Kotak

Mahindra Bank. We are a leading Private Equity Fund Manager focused on helping

emerging corporates and mid-size enterprises evolve into tomorrow's industry leaders.

KPEG provides these companies a combination of equity capital, strategic support and

other value added services, playing a pro-active role with the entrepreneur in building the

business.

Kotak Reality Fund

Kotak Realty Fund, established in May 2005, is one of India's first private equity funds

with a focus on real estate and real estate intensive businesses. Kotak Realty Fund

operates as a venture capital fund, under the SEBI Venture Capital Fund Regulations,

1996 in India. The fund's corpuses have been contributed by leading banks, domestic

corporates, family offices and high net worth individuals. The fund is closed ended and

has a life of seven years.

Investment Formats

The funds would seek equity investments in development projects, enterprise level

investments in real estate operating companies, and in real estate intensive businesses not

limited to hotels, healthcare, retailing, education and property management. Further, the

funds would also be investing in non-performing loans with underlying property

collateral.

Asset Class

The funds would invest in all the main property asset classes such as residential

(townships, luxury residential, low cost housing, golf communities), hospitality (hotels

and serviced apartments), office (core and business parks), shopping centers and

alternative asset classes such as logistics and warehousing.

Geographical Locations:

In order to achieve geographical diversity, the funds would invest in not just the Tier I

cities such as Mumbai, NCR and Bangalore but also in Tier II cities such as Pune,


Kolkatta, Hyderabad and Chennai) and other Tier III cities, examples of which are

Nagpur, Coimbatore, Mysore and Ludhiana)

The Fund Manager believes that through diversification in geographies, asset class and

investment formats, the Funds should be well positioned to achieve superior risk adjusted

returns.

Fund Management Team:

Kotak Realty Fund is managed by its investment team located in Mumbai, India and

supported by an organization in which thought leadership, contrarian play, due diligence,

communication and collaborative partnerships take precedence. The Funds have a core

team of professionals dedicated to sourcing, analyzing, executing and managing the

investments. This unique team brings together profiles combining real estate corporate

finance advisory, investment banking, venture capital, infrastructure development and

finance, and REITS valuation experience.

Leading players:

In a competitive world the following emerging stock broking firms are leading the

industry.

Motilal Oswal Securities Ltd.

Kotak Securities Ltd.

Karvy Financials.

India Bulls.

Geojit Financial Services Limited.

Sharekhan.

IL&FS Investments Ltd.


Motilal Oswal Securities Ltd:

One of the top-3 stock – broking houses in India, with a dominant position in both

institutional and retail broking. MOSL is amongst the best-capitalized firms in the

broking industry in terms of net worth.

MOSL was founded in 1987 as a small sub-broking unit, with just two people

running the show. Focus on customer-first-attitude, ethical and transparent business

practices, respect for professionalism, research-based value investing and implementation

of cutting-edge technology have enabled it to blossom into a thousand-member team.

The institutional business unit has relationships with several leading Foreign

Institutional Investors (FII’s) in the US, UK, Hong Kong and Singapore. In a recent

media report MOSL was rated as one of the top-10 brokers in terms of business

transacted for FII’s.

The retail business unit provides equity investment solutions to more than 74,000

investors through 400 outlets spanning 200 cities and 22 states.

MOSL provides,

Advice-Based Broking

Portfolio Management Services (PMS)

E-Broking Services, Depository Services,

Commodities Trading

IPO and Mutual Fund Investment Advisory Services.

One thing that sets MOSL apart is its time-tested and well-recognized equity research

capability. With value investing at the core of its investment philosophy, a strong


research team consistently provides high-performance ideas. These are in turn converted

to sound, personalized investment strategies, keeping in view unique client needs. As a

result, the Capital Market now recognizes MOSL as synonymous to Solid Research and

Solid Advice.

Kotak Securities Ltd:

Kotak Securities Ltd., a strategic joint venture between Kotak Mahindra Bank and

Goldman Sachs (holding 25% - one of the world’s leading investment banks and

brokerage firms) is India’s leading stock broking house with a market share of 5 – 6%.

Kotak Securities Ltd has been the largest in IPO distribution – it was ranked number one

in 2003-04 as Book Running Lead Managers in public equity offerings by PRIME

Database. It has also won the Best Equity House Award from Finance Asia – April 2004.

The company has a full fledged research division involved in Macro Economic

Studies, Sectoral research and company specific equity research combined with a strong

and well networked sales force which helps deliver current and up to date market

information and news.

Kotak Securities Ltd is also a depository participant with National Securities

Depository Limited (NSDL) and Central Depository Services Limited (CDSL) providing

dual benefit services wherein the investors can use the brokerage services of the company

for executing the transactions and the depository services for settling them.

Kotak Securities has 862 outlets servicing over 3,60,000 customers and a

coverage of 310 cities. Kotaksecurities.com, the online division of Kotak Securities

Limited offers Internet Broking services and also online IPO and Mutual Fund

Investments.

Kotak Securities Limited has over Rs. 3490 crore of Assets Under Management

(AUM) as of 30th September, 2007. The portfolio Management Services provide top

class service, catering to the high end of the market. Portfolio Management from Kotak


Securities comes as an answer to those who would like to grow exponentially on the crest

of the stock market, with the backing of an expert.

Karvy Financials:

Karvy is a premier integrated financial services provider, and ranked among the

top five in the country in all its business segments, services over 16 million individual

investors in various capacities, and provides investor services to over 300 corporates.

KARVY covers the entire spectrum of financial services such as Stock Broking,

Depository Participants, Distribution of Financial Products – Mutual funds, Bonds, Fixed

Deposit, Equities, Insurance Broking, Commodities Broking, Personal Finance Advisory

Services, Merchant banking and Corporate finance, Placement of Equity, IPO’s among

others. Karvy has a professional management team and ranks among the best in

technology, operations and research of various industrial segments.

India Bulls:

India bulls are India’s leading retail financial services company with 135

locations spread across 95 cities. Which its size and strong balance sheet allow us to

provide you with varied products and services at very attractive price, it’s over 750 Client

Relationship Managers are dedicated to serving your unique needs.

India bulls are lead by a highly regarded management team that has invested

crores of rupees into a world class Infrastructure that provides clients with real-time

service & 24/7 access to all information and products. Flagship India Bulls Professional

Network TM offers real-time prices detailed data and news, intelligent analytics, and

electronic trading capabilities, right at your fingertips. This powerful technology is

complemented by our knowledgeable and customer focused Relationship Managers. IB

are creating a world of Smart Investor.

India bulls offer a full range of financial services and products ranging from

Equities to Insurance to enhance your wealth and hence, achieve your financial goals.


India bulls is a full service investment firm offering clients access to a tremendous

range of financial services from 135 locations across 95 cities. We have a strong team of

over 750 Client Relationship Managers focused on serving your unique needs.

Geojit Financial Services Limited:

Geojit Financial Services Limited was founded by Mr. George in 1987 as a

Partnership for doing Broking business in Cochin Stock Exchange. In 1994, the business

was taken over by Geojit’s Financial Services Ltd, a Joint Venture between Mr. George

and the Kerala State Industrial Development Corporation Ltd. In the following year, the

company came up with an IPO and the shares were listed in various stock exchanges in

India in 1995.

Geojit’s Business Plan is developed and implemented under the supervision of a

Board constituted by eminent professionals who are experts in varied fields. Mr. Kurian,

chairman of Geojit Financial Services Ltd, is a former executive trustee of Unit Trust of

India, India’s largest mutual fund. Mr. Kurian is presently the chairman of the

Association of Mutual Funds in India (AMFI) and is on the Board of National Stock

Exchange (NSE) and several of the country’s leading corporations.

Sharekhan:

Sharekhan is an Equities focused organization tracing its lineage to SSKI, a

veteran Equities solutions company with over 8 decades of experience in the Sharekhan

does not claim expertise in too many things. Sharekhan’s expertise lies in stocks and

that’s what he talks about with authority. So when he says that investing in stocks should

not be confused with trading in stocks or a portfolio based strategy is better than betting

on a single horse, it is something that is spoken with years of focused learning and

experience in the stock markets. And these beliefs are reflected in everything Sharekhan

does in fact Sharekhan runs India’s largest chain of share shops with around 250 outlets

in 113 cities.

IL&FS Investments Ltd:


IL&FS Investsmart leverages on its pedigree of IL&FS, which has the core

competency of institutional and retail financial services.

Infrastructure Leasing and Financial Services Limited (IL&FS), the promoters of

IL&FS Investsmart Limited, is a multi-faceted organization providing a range of fund

and non-fund based financial services. IL&FS was incorporated in 1987 and is amongst

the few institutions in the country specifically mandated to implement infrastructure

projects on a commercial format.

To serve the investors of various kinds, the broking firms offer different types of

products and services to cater to the needs of all such customers. The following are the

main products offered by the brokering institutions:

Online securities trading

Offline securities trading

Portfolio Management Services

Commodities trading

Demat services

Apart from these trading products they provide some Research Products, i.e., the

Fundamental and Technical analysis Reports, Comprehensive Market Research Reports

etc for particular sectors and for individual companies also. These special services are

provided as daily, weekly, or on monthly basis.

a. STATEMENT OF PROBLEM

“Risk – Return Analysis of BSE BankEx at Kotak Securities, Bangalore”

b. OBJECTIVES OF THE STUDY


1. The study will deal with Return and Risk analysis of BSE BankEx securities.

2. To identify and analyze the correlation between Banks returns with BSE BankEx

returns.

3. To examine and evaluate the growth prospects of BSE BankEx securities.

4. To identify profitable investment opportunities in Banking Sector Stocks.

5. To fulfill the requirement of award of MBA.

6. To offer suggestions.

c. SCOPE OF THE STUDY

1. The scope of the study limits to the Public Sector banks only.

2. To understand the causes, which leads to investment ideas.

3. To ascertain the technique for investing in banking sectors.

4. To calculate Returns, Standard Deviation, Beta, Alpha, Covariance and

Correlation.

d. METHODOLOGY

SOURCES OF DATA:

Primary Data

The primary data has been collected from discussions with the officials of the

company.

Secondary Data

The secondary data for this study was collected from News Papers, Magazines,

Internet, and Text Books etc.

LIMITATIONS OF THE STUDY


1. A good number of explanatory variables must be taken into consideration in order

to assess the share price movement. But due to time constraints detailed analysis

of each bank were not made.

2. This is a one time study.

3. This being an academic study suffers from time and cost constraints

4. This is limited to BSE BANKEX.

5. This study is related to data collected from 3rd December, 2007 to 11th January,

2008.

6. During the study the Stock Market was Bullish.

7. Confidentiality of data – organizational constraints.

8. The analysis carried out and suggestions offered are limited to the researcher’s

ability to understand complex financial aspects.

9. Observations made and suggestions offered cannot be generalized.


INTRODUCTION TO RISK AND RETURN

RISK

Risk and Uncertainty are an integral part of an investment decision. Technically

‘Risk’ can be defined as a situation where the possible consequences of the decision that

is to be taken are known. ‘Uncertainty’ is generally defined to apply to situation where

the probabilities cannot be estimated. However, Risk and Uncertainty are used

interchangeably.

Risk is composed of the demands that bring in variations in return of income. The

main forces contributing to risk are price and interest. Risk is also influenced by external

and internal considerations. External risks are uncontrollable and broadly affect

investments. These external risks are called systematic risk. Risk due to internal

environment of a firm or that affecting a particular industry is referred to as unsystematic

risk.

Systematic risk is non-diversifiable and is associated with the securities market as

well as the economic, sociological, political and legal considerations of the prices of all

securities in the economy. The effect of these factors is to put pressure on all securities in

such a way that the prices of stock will move in the same direction. For example, during a

boom period, prices of all securities will rise indicate that the economy is moving

towards prosperity.

Unsystematic risk is unique to a firm or industry. It does not affect an average

investor. Unsystematic risk is caused by factors like labor strike, irregular disorganized

management policies and consumer preferences. These factors are independent of the

price mechanism operating in the securities market. The problems of both systematic and

unsystematic risk are inherent in industries dealing with basic raw materials as well as in

consumer goods industries.


SYSTEMATIC RISK

Market risk, Interest rate risk and Purchasing power risk are grouped under systematic

risk.

Market risk:

Market risk is referred to as stock variability due to changes in investor’s attitude and

expectations. The investor’s reaction towards tangible and intangible events in the

chief cause affecting ‘market risk’. Market risk triggers off through real events

comprising political, social and economic reasons.

Interest rate risk:

There are four types of movements in prices of stocks in the market. These may be

termed as (1) long-term, (2) cyclical (bull and bear markets), (3) intermediate or

within the cycle and (4) short-term. The prices of all securities rise or fall depending

on the change in interest rates.

Purchasing Power Risk:

Purchasing power risk is also known as inflation risk. This risk rises out of change in

the prices of goods and services and technically it covers both inflation and deflation

periods. During the last two decades, it has been seen that inflationary pressures have

been continuously affecting the Indian Economy.

UNSYSTEMATIC RISK

The importance of unsystematic risk arises out of uncertainty surrounding a

particular firm or industry due to facts like labor strike, consumer preferences and

management policies.

Business Risk

Business risk is also associated with risks directly affecting the internal environment

of the firm and those of circumstances beyond its control. The former is classified as


internal business risk and the later as external business risk. Within these two broad

categories of risk the firm operates.

Financial Risk

Financial risk in a company is associated with the method through which it plans its

financial structure. If the capital structure of a company tends to make earnings

unstable, the company may fail financially.

BETA

An important measure of risk, the beta coefficient or simply ‘beta’ measure the

sensitivity of a stock price relative to the fluctuations of a particular stock market index.

Risk and Return are the two sides of the investment coin. Many investors are familiar

with techniques to calculate returns of investment; but they are not familiar with the

measure of risk of an investment. Beta is calculated by relating the relevant returns on a

security with the returns for the market. Market return is measured by the average returns

of a large sample of stocks such as BSE BankEx, S&P CNX Nifty etc., beta can be

positive or negative.

The risk in a share can be divided into two parts; one is market risk and other is

company specific risk. The market risk is also called systematic risk; affect all the stocks

in the market. E.g., a change of Government policy, revision of interest rates, exim polity

etc., will affect all the stocks in the market. The company specific risk is also known as

unsystematic risk and affects the specific company or industry.

The systematic portion of risk is practically impossible to reduce. So it is

important to quantify this market risk. This risk can be measured by the Scrips betas. If a

stock moves exactly in tandem with a market index such as the BSE BankEx, it is said to

have a beta of one. A stock with a beta higher than one is called a risky stock i.e., that is

Aggressive stock and its market price may move faster than the market. If beta is less

than one, the stock is called a Defensive stock.


The concept of beta for measuring the riskiness of a stock is, if an investor selects

stocks with low betas (i.e., less than 1), then the investor will suffer less in a falling

market. Of course, at the same time investor will also stand to gain less than the market

average in rising market. In case an investor is prepared to take greater risk then he can

choose stock with higher betas (beta>1) in order to gain more than the market average in

a rising market. At the same time the investor should be prepared to lose more than the

market average, in case the market crashes. However, it is desirable to choose stocks with

betas varying between 0.5 and 1.5.

ALPHA

Alpha is commonly known as Unique Risk. This unique risk is mainly for a

particular organization and does not affect the whole industry. Lesser the value of Alpha

lesser is the risk.

VARIANCE

The variance is the sum of the squares of the deviations of actual returns from the

expected returns. Positive value of variance is considered unfavorable and negative

values as favorable.

STANDARD DEVIATION

It is the square root of averaged of squared deviations. Positive value of Standard

Deviation is considered unfavorable and negative values as favorable.

CORRELATION

It is simply the covariance divided by the product of Standard Deviations. The

Correlation co-efficient can vary between -1.0 and +1.0. A value of -1.0 means perfect

negative correlation or co movement in a opposite direction, a value of 0 means no

correlation or co movement. Whatsoever a value of +1.0 means perfect correlation or co

movement in the same direction.


TOOLS OF ANALYSIS

Before calculating Beta and Correlation Coefficient for each of the securities we

have to calculate the Returns and Standard Deviation i.e., the risk factors for the

individual securities. The following tables show the Returns and Standard Deviation for

each of the securities based on the total observations and matched observations with BSE

BankEx. We are calculating returns based on opening and closing price of the securities

by collecting the prices weekly for 6 weeks. Thus the calculations wholly depend on the

data collected from internet.

1) Beta

2) Alpha

3) Variance

4) Standard Deviation

5) Correlation


Use of Tools

Formulas used;

1. Computation of Rate of Return for Listed Banks.

The rate of return is calculated using opening and closing prices of each Bank on

weekly basis.

RA = Closing price of last day of a week – Opening price of the first day of a week

Opening price of the first day of a week

2. Computation of Rate of Return for BSE BANKEX.

The rate of return is calculated using opening and closing prices of each Bank on

weekly basis.

RM = Closing index of last day of a week – Closing index of the first day of a week

Closing index of the first day of a week

3. Computation of Covariance

COV (RA

, RM

) or σ

im = Σ(RA – RA/) (RM – RM/)

n - 1

4. Computation of variance of the Market Index

σm

2= Σ(RM – RM/) 2

n – 1

5. Computation of Beta

βeta = σ im

σm 2

6. Computation of Alpha


άA = RA/ – β.RM/

7. Computation of Variance of the scrips

Variance or σA 2 = Σ(RA – RA/) 2

n – 1

8. Computation of standard deviation of the scrips

σA = variance or σA 2

9. Computation of standard deviation of the market

σM = variance of market or σm2

10. computation of Correlation

correlation = Cov(RA.RM)

σA.σM

Calculation part

1. Allahabad Bank

Calculation of Total and Average Returns

Weeks Open Close Price change Valid Returns


1st 113.00 116.10 3.10 2.74342nd 116.50 121.30 4.80 4.12023rd 121.00 113.40 -7.60 -6.28104th 115.00 117.25 2.25 1.95655th 119.00 134.90 15.90 13.36136th 135.00 124.65 -10.35 -7.6667


Weeks RA RM RA-RA/ RM-RM/RA-RA/*RM-RM/ (RA-RA/)2 (RM-RM/)2

1st 2.7434 4.6646 1.3711 2.4055 3.2982 1.8799 5.7864

2nd 4.1202 0.9575 2.7479 -1.3016 -3.5767 7.5510 1.6942

3rd -6.2810 -5.2656 -7.6533 -7.5247 57.5887 58.5727 56.6211

4th 1.9565 6.0321 0.5842 3.7730 2.2042 0.3413 14.2355

5th 13.3613 4.5555 11.9890 2.2964 27.5316 143.7365 5.2735

6th -7.6667 2.6105 -9.0390 0.3514 -3.1763 81.7032 0.1235Total 8.2337 13.5546 83.8697 293.7848 83.7342

1 RA/ 1.37232 RM/ 2.25913 COV(RA,RM) 16.77394 Variance of Scrips 58.75705 Variance of Market 16.74686 Beta 1.00167 Alpha -0.89058 SD of Scrips 7.66539 SD of Market 4.0923

10 Correlation 0.5347

2. Andhra Bank



Weeks Open Close Price change Valid Returns1st 103.00 104.35 1.35 1.31072nd 106.50 110.40 3.90 3.66203rd 111.80 101.40 -10.40 -9.30234th 104.95 105.50 0.55 0.52415th 106.00 124.65 18.65 17.59436th 122.00 112.60 -9.40 -7.7049



1st 1.3107 4.6646 0.2967 2.4055 0.7138 0.0880 5.7864

2nd 3.6620 0.9575 2.6480 -1.3016 -3.4467 7.0120 1.6942

3rd -9.3023 -5.2656 -10.3163 -7.5247 77.6269 106.4257 56.6211

4th 0.5241 6.0321 -0.4899 3.7730 -1.8483 0.2399 14.2355

5th 17.5943 4.5555 16.5803 2.2964 38.0750 274.9069 5.2735

6th -7.7049 2.6105 -8.7189 0.3514 -3.0638 76.0189 0.1235Total 6.0839 13.5546 108.0569 464.6916 83.7342



3. Bank of Baroda






1st 2.4339 4.6646 -0.8840 2.4055 -2.1265 0.7815 5.7864

2nd 10.0064 0.9575 6.6885 -1.3016 -8.7058 44.7360 1.6942

3rd -5.1878 -5.2656 -8.5057 -7.5247 64.0028 72.3469 56.6211

4th 12.4877 6.0321 9.1698 3.7730 34.5977 84.0852 14.2355

5th 6.0676 4.5555 2.7497 2.2964 6.3144 7.5609 5.2735

6th -5.9004 2.6105 -9.2183 0.3514 -3.2393 84.9771 0.1235

Total 19.9074 13.5546 90.8434 294.4876 83.7342

1 RA/ 3.31792 RM/ 2.25913 COV(RA,RM) 18.16874 Variance of Scrips 58.89755 Variance of Market 16.74686 Beta 1.08497 Alpha 0.86708 SD of Scrips 7.67459 SD of Market 4.0923


4. Bank of India



Weeks Open Close Price change Valid Returns1st 353.00 357.45 4.45 1.26062nd 355.00 370.60 15.60 4.39443rd 369.00 351.25 -17.75 -4.81034th 355.00 365.25 10.25 2.88735th 366.00 380.20 14.20 3.87986th 382.10 412.75 30.65 8.0215



1st 1.2606 4.6646 -1.3450 2.4055 -3.2353 1.8089 5.7864

2nd 4.3944 0.9575 1.7889 -1.3016 -2.3284 3.1999 1.6942

3rd -4.8103 -5.2656 -7.4159 -7.5247 55.8020 54.9948 56.6211

4th 2.8873 6.0321 0.2818 3.7730 1.0630 0.0794 14.2355

5th 3.8798 4.5555 1.2743 2.2964 2.9262 1.6237 5.2735

6th 8.0215 2.6105 5.4160 0.3514 1.9032 29.3325 0.1235

Total 15.6333 13.5546 56.1308 91.0393 83.7342



5. Canara Bank






1st 9.7964 4.6646 4.0626 2.4055 9.7726 16.5047 5.7864

2nd 1.8994 0.9575 -3.8344 -1.3016 4.9909 14.7026 1.6942

3rd -3.9735 -5.2656 -9.7073 -7.5247 73.0445 94.2317 56.6211

4th 2.0997 6.0321 -3.6341 3.773 -13.7115 13.2067 14.2355

5th 26.8571 4.5555 21.1233 2.2964 48.5075 446.1938 5.2735

6th -2.2763 2.6105 -8.0101 0.3514 -2.8147 64.1617 0.1235

Total 34.4028 13.5546 119.7893 649.0012 83.7342



6. Indian Overseas Bank



Weeks Open Close Price change Valid Returns1st 166.00 174.85 8.85 5.33132nd 172.65 186.25 13.60 7.87723rd 185.00 165.20 -19.80 -10.70274th 178.90 177.30 -1.60 -0.89445th 180.70 201.85 21.15 11.70456th 202.00 186.20 -15.80 -7.8218



1st 5.3313 4.6646 4.4156 2.4055 10.6218 19.4977 5.7864

2nd 7.8772 0.9575 6.9615 -1.3016 -9.0611 48.4627 1.6942

3rd -10.7027 -5.2656 -11.6184 -7.5247 87.4248 134.9868 56.6211

4th -0.8944 6.0321 -1.8101 3.7730 -6.8294 3.2764 14.2355

5th 11.7045 4.5555 10.7888 2.2964 24.7754 116.3986 5.2735

6th -7.8218 2.6105 -8.7375 0.3514 -3.0704 76.3436 0.1235

Total 5.4941 13.5546 103.8611 398.9658 83.7342



7. Punjab National Bank






1st 4.0890 4.6646 2.4156 2.4055 5.8106 5.8350 5.7864

2nd 7.2520 0.9575 5.5786 -1.3016 -7.2611 31.1204 1.6942

3rd -8.3776 -5.2656 -10.0510 -7.5247 75.6310 101.0233 56.6211

4th 6.5476 6.0321 4.8742 3.7730 18.3902 23.7575 14.2355

5th 2.8088 4.5555 1.1354 2.2964 2.6073 1.2891 5.2735

6th -2.2792 2.6105 -3.9526 0.3514 -1.3890 15.6233 0.1235

Total 10.0406 13.5546 93.7891 178.6485 83.7342



8. State Bank of India



Weeks Open Close Price change Valid Returns1st 2330.00 2436.60 106.60 4.57512nd 2445.00 2410.55 -34.45 -1.40903rd 2415.00 2265.20 -149.80 -6.20294th 2295.00 2384.45 89.45 3.89765th 2400.00 2390.75 -9.25 -0.38546th 2392.00 2437.25 45.25 1.8917



1st 4.5751 4.6646 4.180583 2.4055 10.0564 17.4773 5.7864

2nd -1.4090 0.9575 -1.803520 -1.3016 2.3475 3.2527 1.6942

3rd -6.2029 -5.2656 -6.59742 -7.5247 49.6436 43.5259 56.6211

4th 3.8976 6.0321 3.503083 3.7730 13.2171 12.2716 14.2355

5th -0.3854 4.5555 -0.77992 2.2964 -1.7910 0.6083 5.2735

6th 1.8917 2.6105 1.497183 0.3514 0.5261 2.2416 0.1235

Total 2.3671 13.5546 73.9997 79.3773 83.7342



(iv). Interpretation and Inference

Table showing Returns of Banks


0

5

10

15

20

25

30

35

Values

Banks

Returns Chart

Valid Returns 8.23 6.08 19.91 15.63 34.4 5.49 10.04 2.37

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Canara Bank

Indian Overseas

Bank

Punjab National

Bank

State Bank of

India


Sl.No Banks Valid Returns

1 Allahabad Bank 8.23

2 Andhra Bank 6.08

3 Bank of Baroda 19.91

4 Bank of India 15.63

5 Canara Bank 34.40

6 Indian Overseas Bank 5.49

7 Punjab National Bank 10.04

8 State Bank of India 2.37

Interpretation and Inference :

The above graph represents the Returns of Banks. The above table shows that, the

returns of Canara Bank are highest compared to any other banks. Therefore, Canara Bank

leads with highest returns of 34.40% and thus investor who are willing to get high return

can invest and gain in this securities. Followed by Bank of Baroda having next highest

returns of 19.91%. The State Bank of India has the least returns of 2.37%.


Table showing Average weekly returns of Banks

Since the study is conducted for 6 weeks. The weekly average return of each bank is as

under

0

1

2

3

4

5

6

Values

Banks

Average weekly returns chart

Average weekly returns 1.37 1.01 3.32 2.61 5.73 0.92 1.67 0.39

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Canara Bank

Indian Overseas

Bank

Punjab National

Bank

State Bank of India


Sl.No Banks Average weekly returns


2 Andhra Bank 1.01



5 Canara Bank 5.73





The above graph represents the average weekly Returns of Banks. The above

table shows that, the average weekly returns of Canara Bank are highest compared to any

other banks. Therefore, Canara Bank leads with highest average weekly returns of 5.73%

and thus investor who are willing to get high average weekly return can invest and gain in

these securities. Followed by Bank of Baroda having next highest average weekly returns

of 3.32%. The State Bank of India has the least average weekly returns of 0.39%.


Table showing Standard Deviation of banks

0

2

4

6

8

10

12

Values

Banks

Standard Deviation chart

Standard Deviation 7.67 9.64 7.67 4.27 11.39 8.39 5.98 3.98

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Canara Bank

Indian Overseas

Bank

Punjab National

Bank

State Bank of

India


Sl.No Banks Standard Deviation


2 Andhra Bank 9.64



5 Canara Bank 11.39





The most commonly used measures of risk in finance are variance or its square

root i.e. the Standard Deviation. Positive value of Standard Deviation is considered

unfavorable and negative values as favorable.

The above graph shows that, Canara Bank stocks have highest volatility though

the Canara Bank has the highest returns but when it comes to certainty investors are not

guaranteed about the returns, they may get even less than that also. From the Standard

Deviation one may infer that Canara Bank stocks have standard deviation of 11.39% and

followed by Andhra Bank with 9.64%. The State Bank of India has the least i.e. 3.98%.


Table showing Beta of Banks

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Values

Banks

Beta chart

Beta 1 1.29 1.08 0.67 1.43 1.24 1.12 0.88

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Canara Bank

Indian Overseas

Bank

Punjab National

Bank

State Bank of

India


Sl.No Banks Beta


2 Andhra Bank 1.29



5 Canara Bank 1.43




Beta values No. of Banks

0.00 – 0.50 0

0.50 – 1.00 2

1.00 – 1.50 6

1.50 – 2.00 0

Total 8


Compared with BSE BankEx, Canara Bank with Beta of 1.43% is leading and

Bank of India with Beta 0.67% is least among the list.

Bank of India and State Bank of India having the Beta in the range of 0.50 to

below 1.00, when the market moves by 10%, the stocks of these companies will move up

by 5 to 10 % and if the market declines by 10%, the stocks price will decline an average

of 5 to 10%. Hence, these stocks are lesser sensitive to market risk, at the same time

investor will also stand to gain less than the market average in rising market.

Remaining banks are having Beta in the range of 1.00 to below 1.50, when the

market moves up by 10%, the stocks of these companies will move up by 10 to 15% and

if the market declines by 10%, the stock price will decline an average by 10 to 15%.

Though, the stocks of these banks are more sensitive, during bullish trend the holders will

get more than the market average. It is not sensible to invest when the market is bearish.

Hence, it is desirable to choose stocks with betas varying between 0.50 to 1.50.


Table showing Alpha of Banks

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

2.5

Values

Banks

Alpha chart

Alpha -0.89 -1.9 0.87 1.09 2.5 -1.89 -0.86 -1.6

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Canara Bank

Indian Overseas

Bank

Punjab National

Bank

State Bank of

India


Sl.No Banks Alpha

1 Allahabad Bank -0.89

2 Andhra Bank -1.90



5 Canara Bank 2.50

6 Indian Overseas Bank -1.89

7 Punjab National Bank -0.86

8 State Bank of India -1.60


The above graph represents the value of Alpha which is commonly known as

Unique Risk. This unique risk is mainly for a particular organization and does not affect

the whole industry. It is calculated and exhibited in the form of graph for banks. Lesser

the value of Alpha lesser is the risk.

From the above table, one can infer that Andhra Bank is having Alpha of -1.90

followed by Indian Overseas Bank with -1.89 which are lesser sensitive and thus have

less risk. In this respect, Canara Bank is having an Alpha of 2.50 i.e. its stocks being

highly sensitive and riskier.


Table showing Variance of Banks

0

20

40

60

80

100

120

140

Values

Banks

Variance charts

Variance 58.76 92.94 58.9 18.2 129.8 79.79 35.73 15.88

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Canara Bank

Indian Overseas

Bank

Punjab National

Bank

State Bank of

India


Sl.No Banks Variance


2 Andhra Bank 92.94



5 Canara Bank 129.80





The most commonly used measures of risk in finance are variance. Positive value

of variance is considered unfavorable and Negative values of variance are considered

favorable. Therefore from the above values and chart it is evident that State Bank of India

has least risk of 15.88% followed by Bank of India with 18.20%.

The above graph shows that, Canara Bank has highest variance of 129.80% and

followed by Andhra Bank with 92.94%. From the Variance one may infer that Canara

Bank and Andhra Bank securities have more risk of volatility.


Table showing Correlation of Banks

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Values

Banks

Correlation chart

Correlation 0.53 0.55 0.58 0.64 0.51 0.57 0.77 0.91

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Canara Bank

Indian Overseas

Bank

Punjab National

Bank

State Bank of

India


Sl.No Banks Correlation


2 Andhra Bank 0.55



5 Canara Bank 0.51





Correlation co-efficient is simply covariance divided by the product of Standard

Deviation. The Correlation co-efficient can vary between -1 to +1.

As the correlation values are positive, there is a perfect correlation or co-

movement in the same direction. Hence, there is a positive correlation a small increase in

BankEx will lead to change in Share prices and vice versa.

By the above graph we can infer that State Bank of India, Punjab National Bank

and Bank of India stocks are closely correlated with correlation of 0.91, 0.77 and 0.64

respectively, Whereas Canara Bank and Allahabad Bank stocks are lesser correlated with

correlation co-efficient of 0.53 and 0.51 respectively.


(V) FINDINGS AND RECOMMENDATIONS

1. It is clearly evident that Canara Bank has the highest returns of 34.40% followed

by Bank of Baroda with 19.91%. Whereas, State Bank of India has the least

returns of 2.37%. It has been calculated by considering weekly values of stocks

for 6 weeks.

2. It is clearly evident that Canara Bank has the highest average weekly returns of

5.73% followed by Bank of Baroda with 3.32%. Whereas, State Bank of India has

the least average weekly returns of 0.39%. It has been calculated by dividing the

total returns by 6 weeks as the study is conducted for 6 weeks.

3. Positive values of Standard deviation are considered unfavorable and Negative

values as favorable. Therefore, as per the study Canara Bank is having standard

deviation of 11.39% followed by Andhra Bank with 9.64%. Whereas, State Bank

of India has the least standard deviation of 3.98%. Thus, it is less volatile.

4. Bank of India and State Bank of India is having Beta ranging from 0.50 to 1.00

therefore, they are lesser sensitive. Whereas, remaining 6 Banks have Beta

ranging from 1.00 to 1.50, hence, they are much volatile at the same time holders

will get more than the market average.

5. Andhra Bank and Indian Overseas Bank are having less risk i.e. Alpha value of

-1.90 and -1.89 respectively. Whereas, Canara Bank is having an Alpha of 2.50,

which clearly states that these stocks are highly sensitive and riskier.

6. Positive values of Variance are considered unfavorable and Negative values as

favorable. Therefore, it is evident that State Bank of India and Bank of India are

having least risk i.e. 15.88% and 18.20% respectively. Whereas, Canara Bank and

Andhra Bank are having highest risk of 129.80% and 92.94% respectively.

7. As far as our study to find out the relationship between BankEx returns and Bank

returns is considered there is a positive correlation between them, as it is evident


through the values or correlation calculated. State Bank of India, Punjab National

Bank and Bank of India are having correlation co-efficient of 0.91, 0.77 and 0.64

respectively. Whereas, Allahabad Bank and Canara Bank are having correlation

co-efficient of 0.53 and 0.51 respectively.

(VI) CONCLUSION

As far as our study is concerned Canara Bank is giving highest returns with

moderate risk i.e. 34.40% of returns, for the risk of 11.39%. Thus, as the returns are

double an investor can think of investment in these shares. It is suitable to risk taking

investors.

Even Bank of Baroda is giving moderate returns for moderate risk i.e. 19.91% of

returns, for the risk of 7.68%. Thus, as the returns are more than one and half percent

investment in these shares are also recommended. It is suitable for risk averse investors.

Even the Bank of India is giving high returns with least risk i.e. 15.63% of

returns, for the risk of 4.27%. Thus as the returns are more as compared to risk

investment in these shares are also recommended. It is suitable for risk averse investors.


BIBLIOGRAPHY

WEBSITES

www.Kotaksecurities.com

www.Bseindia.com

www.Rediffmail.com

www.Moneycontrol.com

www.Google.com

www.Allahabadbank.com

www.Andhrabank.com

www.Bankofbaroda.com

www.Bankofindia.com

www.Canarabank.com

www.Indianoverseasbank.com

www.Punjabnationalbank.com

www.Statebankofindia.com

TEXT BOOKS

Sl. no Title Author Publication and Edition

1 Investment Analysis and

Portfolio Management

Prasanna Chandra Tata McGraw-Hill

Publishing co. ltd, Second

Edition

2 Financial Management M.Y. Khan and P.K. Jain Tata McGraw-Hill

Publishing co. ltd, Fifth

Edition


http://www.Statebankofindia.com/

http://www.Punjabnationalbank.com/

http://www.Indianoverseasbank.com/

http://www.Canarabank.com/

http://www.Bankofindia.com/

http://www.Bankofbaroda.com/

http://www.Andhrabank.com/

http://www.Allahabadbank.com/

http://www.Google.com/

http://www.Moneycontrol.com/

http://www.Rediffmail.com/

http://www.Bseindia.com/

http://www.Kotaksecurities.com/


Risk-Return Analysis of BSE BankEx by Pushpavathi

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