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Report on the relationship of stock prices with Economic indicators of Automobile industry
Group members Muhammad Irfan Hina Mubeen Aqeela Tariq Masham Zehra Rizvi Najma Malik Roll No: 51 Roll No: 29 Roll No: 09 Roll No: 40 Roll No: 04 Section A, MBA3 Section A, MBA3 Section A, MBA3 Section B, MBA3 Section B, MBA3
Acknowledgement
First of all we would like to thank that Great entity that helped us to get through this report safely, the one who was always there when no one was! SHUKER- ALL- HUMDULILLAH! Would that we have words to pay tribute to our loving Parents and teachers whose invaluable prays salutary admire and embodying attitude kept our spirit alive to strive for Knowledge and integrity which enable us to reach milestone We would also like to express enormous gratitude to our Respectable teacher
Table of contents
1. Gross domestic product 2. Gross national product
3. Pakistan - interest rate spread 4. Foreign direct investment, net (Bop, current US$) 5. Foreign Reserves
6. KSE 100 Index 7. Automobile Industry ( Companys profiles) 8. Data of Economic Indicators 9. Stock prices of Auto mobile Companies 10. Correlation among Stock prices of companies & Economic indicators 11. Conclusion 12. References
Introduction of Indicators:
Measuring GDP is complicated (which is why we leave it to the economists), but at its most basic, the calculation can be done in one of two ways: either by adding up what everyone earned in a year (income approach), or by adding up what everyone spent (expenditure method). Logically, both measures should arrive at roughly the same total.
The income approach, which is sometimes referred to as GDP (I), is calculated by adding up total compensation to employees, gross profits for incorporated and non incorporated firms, and taxes less any subsidies The expenditure method is the more common approach and is calculated by adding total consumption, investment, government spending and net exports. As one can imagine, economic production and growth, what GDP represents, has a large impact on nearly everyone within that economy. For example, when the economy is healthy, you will typically see low unemployment and wage increases as businesses demand labor to meet the growing economy. A significant change in GDP, whether up or down, usually has a significant effect on the stock market. It's not hard to understand why: a bad economy usually means lower profits for companies, which in turn means lower stock prices. Investors really worry about negative GDP growth, which is one of the factors economists use to determine whether an economy is in a recession.
5.Foreign Reserves:
Foreign reserves (also called Forex reserves or FX reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRs and IMF reserve positions. This broader figure is more readily available, but it is more accurately termed official international reserves or international reserves. These are assets of the central bank held in different reserve currencies, mostly the US dollar, and to a lesser extent the euro, the UK pound, and the Japanese yen, and used to back its liabilities, e.g. the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions.
Automobile industry:
1. Pak Suzuki Motors Co. Ltd. 2. Hino Pak motors Ltd. 3. Millat tractors Ltd. 4. Atlas Honda Ltd.
Pak Suzuki Motor Company Limited was formed as a joint venture between Pakistan Automobile Corporation and Suzuki Motor Corporation (SMC) - Japan. The Company was incorporated as a public limited company in August 1983 and started commercial operations in January 1984. The initial share holding of SMC was 12.5% which was gradually increased to 73.09%. Pak Suzuki is pioneer in Automobile Business having the most modern and the largest manufacturing facilities in Pakistan with an Annual production capacity of 150,000 vehicles. The vehicles produced include cars, small vans, Pickups, Cargo vans and Motorcycle. Pak Suzuki holds more than 50% Market Share. Following the aggressive policy of Indigenization, Suzuki vehicles have a healthy local content upto 72%. This was made possible by strong support of our vendors. Pak Suzuki has the largest Dealers network offering 3S (Sales, Service and Spare Parts) facilities across Pakistan. Caring for the Environment Pak Suzuki was pioneer in introduction of Factory fitted CNG vehicles. Pak Suzuki always endeavors to go aggressively for the sound
Hino Motors Japan and Toyota Tsusho Corporation in collaboration with Al-Futtaim Group of UAE and PACO Pakistan formed Hinopak Motors Limited in 1986.
In 1998, Hino Motors Ltd., and Toyota Tsusho Corporation obtained majority shareholding in
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The largest Manufacturer of Buses in Pakistan, Hinopak is fully-equipped to design and manufacture a wide range of Bus Chassis and all types of Bus Bodies. Hinopaks Bus Line Up includes the Roadliner Supreme Luxury Bus for long journeys, Citiliner Intercity Buses, Citiliner Urban Buses and the luxury Senator Coach and Rapidliner Deluxe Coaches.Hinopak delivers only the safest most reliable products and remains the Pioneer in supplying the largest number of Urban Buses those are successfully facilitating the commuters of Punjab and Sindh.Hinopak is fully-equipped to design and manufacture a wide range of Bus Chassis and all types of Bus Bodies. Hinopaks Bus Line Up includes the Roadliner Supreme air-condition Super Luxury Bus, Citiliner Intercity Buses, Citiliner Urban Buses, Senator Pride, air-condition luxury coach and Rapidliner Deluxe Coach.
By continuing to move forward and staying alert to the ever-changing market & social needs, Hinopak will continue to be a successful and respected corporate citizen of Pakistan, reflecting their commitment and belief in the Hinopak corporate philosophy to "contribute to the development of a more prosperous and comfortable society by providing the world with a new set of values".
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A wide range of Massey Ferguson Tractors from 50 hp to 85 hp is available to cater to the needs of farmers. These Tractors can be procured against Cash, as well as through Bank Financing. Brief Specifications of each of the Tractors are available under Tractors. In Industrial Products , a wide range of Generating Sets 15 KVA to 40 KVA, Forklift Trucks (3 ton) and Prime Movers (Power packs) from 50 hp to 85 hp. Also deals in range of Generating Sets from 27 kVA to 2000 kVA. A wide range of Agricultural Implements is also available like Chisel, Disc & Mould Board Plough, Tine Tillers, Offset Disc Harrow, Ridger, Front Blade, Multi-purpose Rear Blade, Agricultural Loader, Farm Trailer, Hydraulic Tipping Trailer, Jib Crane, Post Hole Digger, Lawn Mover, and Pneumatic Pruning Set etc. The biggest Spares Network ensures the availability of Genuine Parts, for the complete range of products throughout the country. Now HOLOGRAM SEAL backed by one year warranty ensures its genuineness. Millat also ensures to provide prompt after-sales service to its valued customers through spread network of main and rural
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Atlas Honda Limited (AHL) is a joint venture between the Atlas Group and Honda Motor Co. Ltd., Japan. The company was created by the merger of Panjdarya Limited and Atlas Autos Ltd. in 1988. Both these motorcycle manufacturing concerns were established by the Atlas Group. In addition, a third concern, Atlas Epak Ltd. was taken over by the Government of Bangladesh in 1971 after the fall of Dhaka. AHL manufactures and markets Honda motorcycles in collaboration with Honda Motor Company. Honda motorcycles are by far the largest selling motorcycles in the country with an unmatched reputation for high quality, reliability and after-sales-service.
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In line with these basic principles, since its establishment AHL has remained on the leading edge by creating new value by providing products of the highest quality at a reasonable price for the customer's satisfaction. In addition, the Company has conducted its activities with a commitment to protecting the environment and enhancing safety in a mobile society.
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Security analysis and portfolio management Correlation among stock prices of companies & economic indicators:
Companies GDP GNI Interest rate Pak Suzuki motors Co. Ltd. HinoPak motors Ltd. Milat tractors Ltd. Atlas Honda 0.21 0.27 0.06 0.78 0.13 0.05 0.69 0.29 0.77 0.87 -0.35 0.3 0.03 0.47 0.02 0.88 -0.4 -0.32 0.72 -0.73 -0.68 0.21 FDI Foreign reserves 0.45 KSE 100 index 0.71
Conclusion:
The objective of the study is to analyze the relationship among stock price & economic indicators. The correlation of each set of variable shows, the stock prices of companies is highly related to the FDI. GDP & GNI has almost the same impact on the stock prices. Foreign reserves & KSE 100 Index points have moderate impact on the stock prices. There are many other factors contribute to the stock price of any company than just the economic indicators.
References:
www.boi.gov.pk www.investinpakistan.com www.indexmundi.com www.finance.gov.pk www.answer.com