Security Analysis and Portfolio Management An Assignment on:Analysis of Indian share market since last two years.(incl. the reasons for present slides) Assignment submitted by:- Jyoti verma PGPM/07-09/23 ASBM, Bhubaneswar
Introduction:There was a time when India was discussed as the land of snake charmers, black magicand epidemics but the revolutionary Indian growth story changed everything. Indianeconomy at its height compelled the world to change its viewpoint towards India. Out ofthe several factors which changed the face of modern India, we are going to discuss themost roaring of them i.e. our share market. The earlier reform procedures adopted byIndia gave India the two most sought after world-class brands i.e. SENSEX and NIFTY.The magical figures displayed by our market turned all the heads on India. And Indiabecame one of the most favoured places for investment.Now we are going to deal with the ups and downs in the share market since last two yearsi.e. since year 2006.our share market has went through many phases in there 2 years. Wesaw the investors getting overjoyed at 21K and we saw them crying too when it crashed.We saw how the market rewarded the undervalued shares and how the overvalued sharesfell down to demonstrate the saying “everything which rise more than expected, has tofall.”So to analyze the saga of Indian share market, we had two indices to follow: BSE sensexand NSE nifty. Though NSE nifty is a more advanced option and has left BSE sensex farbehind, still we call BSE sensex as the barometer of our economy. That’s why we havefollowed the BSE sensex. It was not possible to track each and everyday figure of thesensex since last two years. The performance of the sensex is analyzed with the help ofdata and graphs collected from various sources and some of the most talked aboutmovements of sensex starting with the secondary market summary of each year, firstlyyear 2006 and then year 2007.
Year 2006 at a glance: In the secondary market, the uptrend continued in 2006-07 with BSE indices closingabove 14000(14,015) for the first time on January 3, 2007. After a somewhat dullfirsthalf conditions on the bourses turned buoyant during the later part of the year withlarge inflows from Foreign Institutional Investors (FIIs) and larger participation ofdomestic investors. During 2006, on a point-to-point basis, Sensex rose by 46.7%.The pickup in the stock indices could be attributed to impressive growth in theprofitability of Indian corporate, overall higher growth in the economy, and other globalfactors such as continuation of relatively soft interest rates and fall in the internationalcrude prices.BSE Sensex (top 30stocks) which was 9,398 at end-December 2005 and 10,399 at end-May 2006, after dropping to 8,929 on June 14, 2006, recovered soon thereafter to risesteadily to 13787 by end-December 2006.According to the number of transactions, NSE continued to occupy the third position amongthe world’s biggest exchanges in 2006, as in the previous three years. BSE occupied the sixthposition in 2006, slipping one position from 2005. In terms of listed companies, the BSEranks first in the world.In terms of volatility of weekly returns, uncertainties as depicted by Indian indices werehigher than those in outside India such as S&P 500 of United States of America and Kospi ofSouth Korea. The Indian indices recorded higher volatility on weekly returns during the two-year period. January 2005 to December 2006 as compared to January 2004 to December 2005The market valuation of Indian stocks at the end of December 2006, with the Sensex tradingat a P/E multiple of 22.76 and S&P CNX Nifty at 21.26, was higher than those in mostemerging markets of Asia, e.g. South Korea, Thailand, Malaysia and Taiwan; andwas the second highest among emerging markets. The better valuation could be on account ofthe good fundamentals and expected future growth in earnings of Indian corporateLiquidity, which serves as a fuel for the price discovery process, is one of the main criteriasought by the investor while investing in the stock market. Market forces of demandand supply determine the price of any security at any point of time. Impact cost quantifiesthe impact of a small change in such forces on prices. Higher the liquidity, lower the impactcost.SENSEX during 2006: (Economic Survey 2007-08)
An overview of year 2006:During December 2005, the greatest demerger of Indian history between the Ambanispaved the way for 9000. And the sensex entered the year 2006 with a 9000 + figure. onFeb. 10th 2006, we saw two roaring figures, both sensex and sachin tendulkar crossing10000 mark. But the reason behind roaring sensex was not sachin’s records rather it wasrallied by strong FII inflows and robust data. The government forecasted a GDP growthof 8.1% in current year, with manufacturing and the agriculture sectors estimated to growat 9.4% and 2.3% respectively. The 238-point rally was contrary to expectations as itcame despite negative news flow about a fresh tussle between Ambani brothers overtransfer of ownership of the four companies demerged from erstwhile RIL.Sensex’s surge to 11000 points on 21st march 2006 was prompted by PM ManmohanSingh’s announcements on Capital Account Convertibility. On Saturday, PrimeMinister Manmohan Singh hinted at moving toward a free float of the rupee and onTuesday, the BSE responded by crossing the 11,000 mark in a lifetime intraday high. Thenew trading high was reached 29 days after Sensex entered the elite 10,000 club onFebruary 6. Only Nikkei, Hang Seng and Dow Jones could boast of being above 10,000at that time. Since full convertibility was expected to attract more foreign money and alsoallow local companies to tap foreign debt markets more easily, it was evident that themove will encourage investors and boost the confidence of the markets.RBI said it was constituting a panel to thrash out the contours for full convertibility.Although the index later ended lower with investors wanting to book gains, participantssaid it was evident the markets had sent out a message - that the growth story of Asia’sthird largest economy is intact and that liquidity flows into the bourses would continue toremain firm.After hitting a high of 11,017.25 points in mid-afternoon trade, Sensex lost 35.91 pointsto close at 10,905.20, fluctuating 153 points, with most of the volatility coming in the lasthour of trading. The rise in share prices was partly attributed to a fall in oil price. TheUS April crude oil prices plunged 3.7% or $2.35, to settle at $60.42 a barrel, on theNew York Mercantile Exchange due to ample US inventories.
After falling by 307 points on 12th April 2006 on account of Heavy selling by FIIs inboth cash and futures markets and a move by stock exchanges to raise margins onshare transactions by about 250 basis points, the 131-year-old BSE on Thursday, April20, 2006 crossed yet another milestone when it breached the 12,000-point mark, backedby strong corporate earnings, higher liquidity and robust economic growth. Theindex was being driven by the strong flow of liquidity. Earlier, it was based on theexpectations that (corporate) results would be great...and by the first few companies weremore than matching those expectationsAlthough, Sensex was beaten to the 12,000 mark by various global indices, the time ittook to breach this milestone has been one of the fastest. Traders point to the fact thatforeign investors, buoyed by a booming economy, have chosen India as one of theirtop investment destinations.Now, everything was going fine….perhaps it was the lull before the storm. Suddenly theDalal Street experienced its worst single day crash on Thursday, 18th may 2006 as anambiguous Government circular on taxing investment gains prompted foreign fundsto book profits, knocking the bottom off the jittery stock market. Opening amidst weakglobal markets and reports of rising US interest rates, the BSE-30 Sensex went on toclose 826.38. However the Dealers said the fall was accentuated by large-scale selling ofclient positions by broking firms due to margin calls or the lack of margins. The Maycrash saw the Sensex shedding its market capitalization by as much as 14% in just onemonth.Benchmark stock indices vaulted to new highs on Monday, oct 30th 2006 driven by aheady cocktail of strong corporate earnings, a rapidly growing economy andrelatively stable crude oil prices. The Sensex ended at its highest closing level of13024.26, a gain of 117.45 points or 0.9%.Marauding bulls defied the weak trend globally, which was sparked off by weak USGDP growth figure, pointing to a slowdown.Back home, the mood was upbeat even as some expect that the RBI may raise interestrates by 25 basis points in its mid-term credit policy on Tuesday. Market watchers
said sentiment could be affected only if the hike is more than 25 basis points, which isunlikely. Higher interest rates drive up borrowing costs for corporate as well as the retailconsumer, who could then cut back on their investments and spending, in turn causing aslack in domestic demand.The benchmark 30-share sensex briefly crossed the psychological 14,000-mark onTuesday, December 5, 2006. While foreign institutional investors have been aggressivebuying stocks over the past few months, the response of domestic mutual funds hasbeen guarded. In the last two months alone, FIIs bought net stocks worth Rs 17,001crore while local mutual funds have pumped in a net Rs 638.07 crore.
Year 2007 at a glance:In the secondary market segment, the market activity expanded further during 2007-08with BSE and NSE indices scaling new peaks of 21,000 and 6,300, respectively, inJanuary 2008. Although the indices showed some intermittent fluctuations, reflectingchange in the market sentiments, the indices maintained their north-bound trend duringthe year. This could be attributed to the larger inflows from Foreign Institutional Investors(FIIs) and wider participation of domestic investors, particularly the institutionalinvestors. During 2007, on a point-to-point basis, Sensex and Nifty Indices rose by 47.1and 54.8 per cent, respectively. The buoyant conditions in the Indian bourses were aidedby, among other things, India posting a relatively higher GDP growth amongst theemerging economies, continued uptrend in the profitability of Indian corporate,persistence of difference in domestic and international levels of interest rates, impressivereturns on equities and a strong Indian rupee on the back of larger capital inflows.The BSE Sensex (top 30 stocks) too echoed a similar trend to NSE nifty. The sell-off inIndian bourses in August 2007 could partly be attributed to the concerns on the possiblefallout of the sub-prime crisis in the West. While the climb of BSE Sensex during 2007-08 so far was the fastest ever, the journey ofBSE Sensex from 18,000 to 19,000 mark was achieved in just four trading sessionsduring October 2007. It further crossed the 20,000 mark in December 2007 and 21,000 inan intra-day trading in January 2008. However, BSE and NSE indices declinedsubsequently reflecting concerns on global developments. BSE Sensex yielded aCompounded return of 36.5 per cent per year between 2003 and 2007. In terms of simpleaverage, BSE Sensex has given an annual return of more than 40 per cent during the lastthree years.
Sensex during 2007: (source: Economic Survey 2007-08) 2007 BSE Jan 14091 Feb 12938 Mar 13072 Apr 13872 May 14544 Jun 14651 Jul 15551 Aug 15319 Sep 17251 Oct 19838 Nov 19363 Dec 20287
An overview of year 2007:After touching 14K mark on December 5th 2006, sensex entered into 2007 with apromising figure of 14000+, though the year started on a rather tentative note with amarked slowdown being observed in the FII inflows into the country. The inflowsreceived from FIIs in January and February 2007 was 48 per cent less than what wasreceived during the same period in 2006. The return provided by the BSE Sensex for2007 turned into negative territory following the 389-point tumble on Friday, February23rd; the year-to-date return generated by the Sensex was negative 0.97 per cent.FIIs have pressed substantial sales over those days in contrast to an intermittentsurge in inflow in February 2007. As a result, the sensex which closed at 14091 onJanuary 31st, closed at 12938 on February 28th.As per provisional data FIIs were net sellers to the tune of Rs 613 crore on Friday 2March, the day when Sensex had lost 273 points. Their net outflow was worth Rs 3080.80crore in four trading sessions from 26 February to 1 March 2007. Market continued toreel under selling pressure on 5th march 2007 taking cue from weak global markets andheavy FII sales as a result of fall over 400 points, all the indices were in red.On April 24th, The Sensex again crossed the 14K mark and was trading at 14,150.18having gained 221.85 points or 1.59%. The midcap and smallcap indices were rathermoving slow indicating that the actual movers are the large cap stocks but at the monthend it finally closed at 13872. Further we can see May and June having month end figuresat 14544 and 14651 respectively.The benchmark BSE 30-Share Sensitive Index (Sensex) breached the 15,000-mark, toreach a record high of 15007.22, for the first time intra-day on Friday, July 06 2007before closing at 14964.12. Despite weak global cues, Indian stocks were in greatdemand, especially auto, pharma, IT and metals stocks. On Friday, this lifted theBombay Stock Exchanges benchmark 30-share Sensex past the magical 15,000-mark.The Sensex took 146 sessions to cover the 1,000 point distance from 14,000 till 15,000.This is the highest since the index took 371 trading sessions to move up from 6,000 to7,000.The sensex experienced its second bigger ever fall on 2nd august 2007. The fall came inafter the Fed Reserve cut its discount interest rate at an emergency meeting and
JPMorgan Chase agreed to buy Bear Stearns for USD 2 a share. Sensex closed down951.03 points or 6.03% at 14809.49,When FIIs were pumping money in stock market and were Net Buyers of Equity worthCrores; the Sensex was moving Up , Up and Up on weekly basis. Many thought that FIIswere playing blind in Indian stock market. But when FIIs have turned Net Sellers ofEquity and have started booking profit backed by massive sell off of shares in globalmarkets; Sensex has to go down. As expected; the Sensex plunged by 600 Points in earlytrading on 16th August and most of the shares were down by 4 to 5 per cent.But very soon the sensex surpassed the gloomy days and Stock markets on Wednesday,September 19th, 2007 gave thumbs up to the decision of the U.S. Fed Reserve toreduce the rates by 50 basis points, as the benchmark 30-share BSE Sensex moved upsharply by 653.63 points or 4.17 per cent at 16322.75. By staying well above the 16000-mark, it outperformed most Asian peers and it was the biggest single day gain. This trendshows that global cues had an influential effect on our market.On the auspicious occasion of Ganesh chaturathi, India experienced a flow of good news.The festive spirit did not end with the immersion of Ganapati. On Wednesday, it boiledover to the streets of Mumbai and its financial district, the Sensex touched the magical17,000 number. It took Dalal Street just 5 days to travel 1,000 points. Suddenly, techstocks, which were the whipping boys till Tuesday, became hot favourites. Why? Hopesthat the rupee will soften as a result of RBIs latest announcements to allow moreoutflow sparked a rally in tech stocks, pushing the Sensex to a new high of 17,073.87during the day. At the end of the day, RBIs measures may not be enough to rein in therupee. But there were no takers for this. The bellwether index finally settled at 16,921.39.On October 9th, 2007, Sensex hits a record high of 18,280 on the back of eye-poppingrallies in Reliance & Reliance. At the height of the dotcom mania in 1999-00, the easiestway to maximize returns was to buy into any stock with the suffix ‘Software’ or‘Technologies’. Eight years on, the same seems to hold true for any stock with the prefix‘Reliance’, given their baffling run-up over the past one month. Eye-popping rallies inReliance Industries, Reliance Energy and Reliance Communications lifted the 30-shareSensex to a record high of 18,327.42 intra-days.
On October 15th 2007, amidst heavy buying by investors, the bull roared to breach the 19000mark in just 4 sessions Sensex was up by 639.63 points or 3.47 per cent at 19058.67. Thisrise came on the back of some strong sectors for which the macro picture is quitebright — power, capital goods, infrastructure and telecom.Foreign Institutional Investors were pumping in huge money in the equity market and thistoo was pushing up the index. Since September, they nearly pumped in more than Rs.30,000 crore in the cash market. After the U.S. Federal Reserve cut interest rates by50 basis points, a re-rating of the emerging markets had been seen wherein liquidityflows were quite robust.Then suddenly happened the second biggest crash the sensex ever experienced when thesensex crashed by 1743 points on 17th October 2007 within minutes of opening,prompting suspension of trade for hour fallout of regulator Sebis move to curb ForeignInstitutional Investors. In a knee-jerk reaction to the cap proposed by the marketregulator for the Participatory Notes, an overseas derivative instrument (ODI), usedby foreign institutional investors (FIIs), the stock market crashed by 1743 points inintra-day, but recovered substantially later to close with a loss of 336.04 points or 1.76per cent at 18715.82. but it was followed by a huge one-day gain as on October 23 whenthe BSE barometer rose 878.85 points after market regulator SEBI allowed sub-accountsof Foreign Institutional Investors (FIIS) to tradeIt took the index a little over 20 years to reach the first 10,000 mark, but just a little over20 months to double that score and the sensex made history with touching the 20000mark on October 29 2007. Significantly, it was the local institutions that were in thedriver’s seat. As per BSE data, foreign funds have net sold over Rs 1,100 crore worth ofshares over the last three trading sessions while local funds have net bought over Rs2,300 crore worth of shares. Sceptics point to the fact that there were only a handfulof stocks that was driving the market higher.On 13th November, BSE Sensex registered its biggest ever gain in a single of 893.58points to settle at the third-highest level ever on buying by investors in bank countersand blue chip companies such as Reliance Industries. The market gain was becauseof global cues. Besides, the political development also gelled well with the sentiment.
The rally was driven by short covering, strong buying by domestic investors.However, there was not much involvement of foreign investors.But in December 2007, sensex again experienced a black Monday on 17th December. Themarket succumbed to profit booking, that came in due to weak global cues as well asprofit booking by FIIs in the holiday season. The Sensex ended losing 769 points fromthe previous close, at 19,261.
Sensex during year 2008:After scaling new heights of 20000+, sensex entered year 2008 with rosy pictures. Thetrade pundits, brokers and even investors predicted new heights for the year. And they felttheir predictions coming true when sensex touched the 21000 mark on 8 th January 2008.It’s interesting if one sees in terms of flows; the journey from 20,000 to 21,000 isdominated by domestic institutional investors; FIIs were negative sellers, they sold inthe cash market to the tune of USD 45 billion. So if one has to take out some pointersfrom this journey from 20,000 to 21,000, it is the longest journey which we have seen inthe last 5,000 marks, the midcaps and smallcaps have been outperformers and in terms offlows, it has been domestic institutional investors which have been really putting themoney.But the rosy picture soon turned gloomy. The skyrocketing sensex suddenly startedheading south and Sensex saw the biggest absolute fall in history, shedding 2062 pointsintra-day. It closed at 17,605.35, down 1408.35 points or 7.4 per cent. It fell to a low of16,951.50. The fall was triggered as a result of weakness in global markets, but theimpact of the global rout was the biggest in India. The market tumbled on account of abroad based sell-off that emerged in global equity markets. Fears over the solvencyof major Western banks rattled stocks in Asia and Europe.After the worst January in the last 20 years for Indian equities, February turned out to bea flat month with the BSE sensex down 0.4%. India finished the month as the secondworst emerging market. The underperformance can partly be attributed to the fact thatIndian markets outperformed global markets in the last two months of 2007and hence wewere seeing the lagged impact of that outperformance. In the shorter term, developmentsin the US economy and US markets continued to dominate investor sentimentsglobally and we saw volatility move up sharply across most markets.The Bombay Stock Exchange (BSE) Sensex fell 4.44 percent on Monday, 31st march thelast day of the financial quarter, to end the quarter of March down 22.9 percent, itsbiggest quarterly fall since the June 1992 quarter, as reports of rising inflation andglobal economic slowdown dampened market sentiments. Financial stocks led theSensex slide along with IT. According to market analysts, IT stocks fell on worries
about the health of the US economy. Indian IT firms depend on the US clients for amajor share of their revenues.Reasons for the present slowdown (Q1, FY 08-09)The first month of the financial year 08-09 proved to be a good one for investors with themonth ending on a positive note. The BSE sensex showed a gain of 10.5% to close at17287 points. A combination of firming global markets and technical factors likeshort covering were the main reasons for the up move in the markets. Thoughinflation touched a high of 7.57% against 6.68% in march 2008 as a result RBI hikedCRR by 50 bps to take the figure to 8%, still emergence of retail investors was also seen;a fact reinforced by the strong movement in the mid-cap and small- cap index that rose16% and 18% respectively.So April was the last month to close positive. Then after nobody saw a stable sensexeven. Sometimes it surged by 600+ points, but very next day it plunged by some 800 oddpoints and this story is still continuing. Every prediction, every forecasting has failed. Thesensex is dancing on the music of lifetime high inflation rates, historic crude prices,tightening RBI policies, weak industrial production data, political uncertainties andobviously the sentiments of domestic as well as FIIs. The only relief came in the formof weakening Indian rupees which enlightened the IT sector and most recently the UPAgaining vote of confidence. Presently it is revolving around the figures of 14000 and noone knows what next?The 30-share BSE Sensex fell 117.89 points or 0.67% at 17,373.01 on Tuesday, 6 May2008. The key benchmark indices ended lower as investors resorted to profitbooking due to lack of positive triggers in the market. On 30th May an imminent hikein domestic retail fuel prices due to soaring crude oil prices weighed on the market lastweek. Foreign institutional investors sold close to Rs 2204 crore in the first three tradingsessions of the week which accentuated the downfall. However better than expected Q4gross domestic product figures provided some relief to the bourses on Friday. IT stocksgained on slipping rupee. BSE Sensex rose in two out of five trading sessions. In May,Indian inflation stood at 8.2%.The market declined sharply as a hike in fuel prices by about 10% announced by theUnion government on Wednesday, 4 June 2008, triggered possibility of a surge in
inflation to double digit level. The BSE Sensex declined 843.39 points or 5.14% to15,572.18 in the week ended 6 June 2008. The S&P CNX Nifty fell 242.3 points or4.97% to 4627.80 in the week.On 6 June 2008, local benchmark indices underperformed their global peers, hit byrumours that the Reserve Bank of India (RBI) may hike cash reserve ratio (CRR) orinterest rate later in the day to tame runaway inflation. The 30-share BSE Sensexdeclined 197.54 points or 1.25% to settle at 15,572.18.On 9th June 2008, Bombay’s Sensex index closed 506.08 points down at 15,066.10,having earlier fallen 4.4% and slipped below 15,000 for the first time since March. Oilprices surged to record levels, fanning fears that they will keep climbing and hurt worldgrowth.Central banks across the globe warned that interest rates may have to rise as theylook to keep inflation under control, despite the fact that economic growth is slowing inkey nations such as the US and UK.On the week ending 27th June 2008 Sensex declined 769.07 points or 5.28% to 13,802.22.The S&P CNX Nifty lost 210.90 points or 4.85% to 4136.65 in the week. Equitiesextended losses for the fifth straight day on 24 June 2008 with the barometer index BSESensex falling below the psychologically important 14,000 mark for the first time in 10months since late August 2007. On 25 June 2008, equities staged a solid rebound aftertouching fresh calendar 2008 lows in early trade. The initial jolt was caused by theReserve Bank of Indias move to hike the key lending rate. A setback to stocks inAsia and US, sharp spurt in crude oil prices and political uncertainty due to Indo-US nuclear deal rattled bourses on 27 June 2008.On July 15th 2008, Indian shares fell 4.9 per cent to their lowest close in 15 months,joining a world equities rout as investors dumped financials on concerns about thefallout from worsening global credit turmoil. Although Indian banks have no directexposure to the US subprime mortgage sector, the global financial sector turmoilimpacts sentiment in the local market and raises worries of more withdrawals byforeign funds.
An 800+ point surge was experienced in the market on the day following UPA gainingvote of confidence but the very next day market couldn’t maintain the momentum andsince then its in a doldrums’ position.Presently, we can saw market plunging after the RBI announced further hikes in Reporate as well as CRR both increased to 9%. Also, the serial blasts at Ahmadabad andBangalore adding to the worries and enhancing the negative sentiments. And aboveall we cant see any positive trigger that can dilute the flow of negative news.Conclusion:After going through all the analysis regarding the stock market in last 2 years, we can saythat stock market touched its peak at 21000 but then crashed badly. Now it is revolvingaround a 14000-16000 figure. Though the sensex is a barometer and after seeing suchfluctuations one could be afraid of investing. Still we can say that people can play safe byinvesting the blue-chips and undervalued shares.During year 2006, if we keep aside that brief period of loss that the market witnessedfrom may 10 2006 to June 14 2006, investors’ wealth seem to have grown double foldwith the Sensex touching the 10000, 11000, 12000, 13000 and 14000 levels in the samecalendar year. Investor wealth in terms of market capitalization has been growing in therange of 6.84-12.41%And talking about year 2007, we can summarize the happenings of year 2007 as a yearwhich redefined the resistance levels at sensex. Strong economic data, heavy inflow offunds from FIIs towards the close of previous calendar year and decent to highlyencouraging surge in earnings of top notch companies all pointed to a rosy 2007. Therupees rise against the US dollar the regulators decision to restrict investments madethrough participatory notes, rising crude oil prices, the sub-prime mortgage woes in US,concerns over a slowing down US economy and The Left parties opposition to the Indo-US nuclear pact, did halt the markets progress at times. But the inherent strength of theIndian economy, fairly buoyant results quarter after quarter, the various chops andsubsidies announced by the government and sustained efforts made by the marketregulator to keep investor confidence in the system alive kept the momentum going.
Presently the hike and seek being played by crude prices, inflation and RBI is affectingour market to a great extent. And adding to the worries are global slowdown, politicalinstability, serial bomb blasts, negative public sentiments etc. It is indeed surprising thatthough the epicenter of the sub-prime crisis is the US, the tremors are being felt in India.The loss of market cap in the US is only 14 per cent vis-À-vis 38 per cent in India.But even after analyzing the causes for downturn, we can say that India story has notended; else $200 billion with institutional investors would have fled for safer waters.Exports being 14 per cent of GDP, India is less vulnerable to external shocks than manyother Asian nations. Political uncertainties too have narrowed down. Savings in Indiahave risen at a historic rate of 35 per cent on the growing GDP base; 17 per cent of this isin gold, commodities and real-estate while financial savings represent 18 per cent ofGDP. Even this is skewed towards deposits both banking and non-banking, while thepercentage of savings in shares and debentures is a mere 6.3 per cent. If this percentagegoes to 25 per cent, it would amount to $40 billion of incremental money being divertedto capital markets. So even after such downturns, we can be hopeful for a positive market. Jyoti Verma PGPM/07-09/23