Security Analysis and Portfolio Management Lecture 1 July 2009

1. Security Analysis and Portfolio Management Prersented by Kaushal Mandalia [email_address]

4. Why Investment? Hence…. Why SAPM?

9. Investment Objectives.. Why? For Whom? What is in it for me?

11. A Range of Financial Products to choose from … Fixed Deposits Insurance Mutual Funds RBI Bonds Forex Real Estate / Gold etc Equities Post Office Schemes

13. Investment Alternatives Investment Alternative Risk Return Liquidity Post Office Schemes Low Low Limited Bank FD Low Low Limited Company FD Medium Medium Limited Gold Low Medium High Real Estate High High Low Direct Equity / PMS High High High Mutual Fund (SIP) Medium Medium High

14. Investment Choices – Nominal V/s Real Returns Investment Type Nominal Returns Inflation Real Returns Post Office Sch 8% 7.5% 0.5% Gold 10% 7.5% 2.5% Bank FD 10% 7.5% 2.5% Company FD 14% 7.5% 6.5% Real Estate 18% 7.5% 10.5% Equity 20% 7.5% 12.5%

20. Why do Equity Gives Higher Returns? Because it represents portion of the business (Profit) which is growing.

21. What Returns to Expect from Equity Market? Returns = Earning Growth + Dividend

22. Power of Equity Lets look at the power of Profit (Dividend)

27. Returns - Power of Time Horizon

28. Market Size.. Is it self sufficient? Is there a chance of GROWTH? Can we make money out of it?

31. Favorable Socio – Economic Factors 1. More than 50% of Population under 25 Yrs of Age. 2. More than 80% of Population under 45 Yrs of Age. 3. Growing Urbanization and Disposable Income 4. Middle Class more than 23% of Population 5. 66 Millions to be added to working population in 20-34 age group in next 5 Yrs.

34. Thank You!