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EQUITY RESEARCH
MADE BY
MAHEK B GALA
Roll No : 14
SR NO 1
Topics covered Introduction to IPO Introduction to Equity Fundamental Analysis Technical Analysis IT SECTOR and INFOSYS ETFs
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Introduction to IPO
IPO stands for Initial Public Offering.
It means the new offer of shares from a company which was previously
(eg : the value of a stock is perceived to be Rs 100 and the shares will be offered at a price less than 100 may be 80 so the difference is the listing gains)
exchange.
Step 5 :Red Herring Prospectus & IPO Application Forms are distributed to investors through syndicate members.
Step 6 :As per the issue date, issue opens for investors bidding. Investors fill the application forms and submit to the syndicate members, Syndicate members provide the bidding information to exchange.
Step 7 :After the bidding the bid information is shared with SEBI and Exchange by the lead managers.
Step 8 :Registrar after receiving all the information finalises the pattern of allotment. Step 9 :Finally, on 12th day after issue closure date, share of the issuer company gets listed in Stock Market for trading .
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Introduction to EQUITY
A stock or any other security representing an ownership interest.
In general, you can think of equity as ownership in any asset after all
debts associated with that asset are paid off. (eg, a car or house with no outstanding debt is considered the owner's equity because he or she can readily sell the item for cash. Stocks are equity because they represent ownership in a company)
Equity is one of the asset classes in terms of investment strategies.
Equity investments generally refers to the buying and holding of shares of stock on a stock market by individuals and firms expecting high returns.
How to invest in Equity Shares?
Investors can buy equity shares of a company from Security market that is from Primary market or Secondary market.
Why should one invest in Equity in particular?
Equities have the potential to increase in value over time. It also provides your portfolio with the growth necessary to reach your long term investment goals.
Equity Share of any company can be analyzed through :
Fundamental Analysis Technical Analysis
Fundamental Analysis
Fundamental analysis is a technique that attempts to determine a securitys value by focusing on underlying factors that affect a Companys actual business and its future prospects. It also involves analyzing financial statements and health, company's management and competitive advantages, and its competitors and markets.
Fundamental analysts attempt to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and company-specific factors (like financial condition and management).
Fundamental analysis serves to answer questions, such as:
Is the companys revenue growing? Is it actually making a profit? Is it in a strong-enough position to beat out its competitors in the future? Is it able to repay its debts?
Technical Analysis
Technical analysis is the process of analyzing a security's historical prices in
hourly), daily, weekly or monthly price data and last a few hours or many years.
What is Chart?
A chart is a graphical representation of data in which "the data is represented
by symbols , such as bars in a bar chart, lines in a line chart, or slices in a pie chart. A chart can represent tabular numeric data, functions or some kind of qualitative structures. What are the different charts used in technical analysis ???
Line Chart
Bar Chart
Candlestick Chart
Line chart
The line chart is one of the simplest charts. It is formed by plotting one price point, usually the close, of a security over a period of time. Connecting the dots, or price points, over a period of time, creates the line.
Bar Chart
Bar chart is the most popular charting method. The high, low and close are required to form the price plot for each period of a bar chart.
Candlestick charts have become quite popular in recent years. For a candlestick chart, the open, high, low and close are all required. White (clear) candlesticks form when the close is higher than the open and black (solid) candlesticks form when the close is lower than the open.
IT sector
IT is one of the most important industries in the Indian economy.
Infosys
Infosys Limited (NASDAQ: INFY) was started in 1981 by seven people with
services to help clients in over 30 countries build tomorrows enterprise with a global foot print.
Infosys gives back to the community through the Infosys Foundation that
ETFs
Exchange Traded Funds (ETFs) are mutual fund units which investors buy/
The auhtorised participants make money by offering the buy and sell quotes.
Therefore there are huge reductions in marketing expenses and commissions.
Practically any asset class can be used to create ETFs. Silver, Gold, Indices (SPDRs, Cubes, etc), etc. In India, we have ETFs on Gold, Indices such as Nifty, Bank Nifty etc.)
AMC decides of launching G-ETF Investors give money to AMC and AMC gives units to investors in return AMC buys Gold of specified quality at the prevailing rates from investors money
On an on going basis
Authorised Participants (typically large institutional investors) give money/ Gold to AMC AMC gives equivalent number of units bundled together to these authorized participants (AP) APs split these bundled units into individual units and offer for sale in the secondary market Investors can buy G-ETF units from the secondary markets either from the quantity being sold by the APs or by other retail investors Retail investors can also sell their units in the market.
Creation Units
1 Creation Unit = 100 ETF units NAV (Rs.) = 1050 Price of 1 gm of Gold (Rs.): 1000 So, 100 Units will cost (Rs.) = 1050 * 100 = 1,05,000 100 ETF will be equal to 100 gm of Gold Therefore, value of Portfolio Deposit (Rs.) = 1000 * 100 = 1,00,000 Hence Cash Component (Rs.) = 1,05,000 1,00,000 = 5,000
Thus it can be seen by depositing Gold worth Rs 1,00,000 as Portfolio Deposit and Rs. 5,000 as Cash Component, the Authorised Participant has created 1 Creation Unit comprising of 100 ETF units.
CONCLUSION
We all have personal biases, and every analyst has some sort of bias. There is
nothing wrong with this, and the research can still be of great value.
Check the track record of an analyst before taking any decision based on his
recommendation.
Corporate statements and press releases offer good information, but they should
be read with a healthy degree of skepticism to separate the facts from the spin.
Investors should become skilled readers to weed out the important information