Macro economocis
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Macro economocis

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Professional Training Academy introduce a part of Macro Economic --- Impact of Interest Rates on Stock Market,Gross Domestic Product (GDP),Index of Industrial production (IIP),IIP Data & Stock ...

Professional Training Academy introduce a part of Macro Economic --- Impact of Interest Rates on Stock Market,Gross Domestic Product (GDP),Index of Industrial production (IIP),IIP Data & Stock Market,Why Rupee Appreciate or Depreciate?

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Macro economocis Macro economocis Presentation Transcript

  • Macro -economics Economic Analysis
  • Macro –Economic Environment GDP Saving & Interest Rates Inflation Investment Balance of Monsoon & Budget Tax Structure Payment AgricultureInfrastructure Demographic Monetary Fiscal Facilities Factors Policy Policy
  • Economic Cycle
  • Factors in Macro EconomicsInterest GDP Inflation RatesExchange Balance of IIP Rates Payment
  • Interest rates
  • Interest Rates
  • Impact of Rising Interest Rates• A Bank has taken a deposit of 100 from public and CRR is 9 and SLR is 25 then available funds to lend from deposits with the bank will be 100-9-25=66• Raising interest rates are required to control excess liquidity in the markets
  • Terms in Interest Rates• CRR(Cash Reserve Ratio)• Repo Rates• Reverse Repo Rates• SLR(Statutory Liquid Ratio)
  • Cash Reserve Ratio• Amount of cash that bank is to kept with RBI• To secure solvency of the bank and to drain out the excessive money from the banks.• Present Rate is 4%• If RBI decides to increase the percent of this, the available amount with the banks comes down (To reduce liquidity in market)
  • Repo Rate• Rate at which our bank borrow rupees from RBI• Short term measure and to fill gaps between demand and supply of money in a bank• Present Rate is 7.75%• Decreased from 8.00% which was continuing since 17/04/2012
  • Reverse Repo Rate• Rate which is paid by RBI to banks on Deposit of funds with RBI(surplus fund with bank)• Present Rate is 6.75%• Decreased from 7.00% which was continuing since 17/04/2012
  • Statutory Liquidity Ratio (SLR)• Bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers• SLR rate is determined and maintained by the RBI in order to control the expansion of bank credit• Present rate is 23%• Decreased from 24% which was continuing since 18/12/2010
  • Impact of Interest Rates on Stock Market
  • Interest Rate in WorldTOP ECONOMIES LAST PREVIOUS HIGHEST LOWEST AUSTRALIA 3.00 3.00 17.50 3.00 BRAZIL 7.25 7.25 45.00 7.25 CHINA 6.00 6.00 10.98 5.31 EURO AREA 0.75 0.75 4.75 0.75 FRANCE 0.75 0.75 4.75 0.75 GERMANY 0.75 0.75 4.75 0.75 INDIA 7.75 8.00 14.50 4.25UNITED KINGDOM 0.50 0.50 17.00 0.50UNITED STATES 0.25 0.25 20.00 0.25
  • Interest RatesDetails FactsFrequency Quarterly 8 to 12 announcementLow Interest Rate High liquidity positive for Stocks, Currency but negative for bondsHigh Interest Rate Low liquidity negative for stocks , currency but positive for bondsBelow or above the Short term Volatilitybenchmark
  • Gross Domestic Product (GDP)
  • Gross Domestic Product (GDP) Total market value of all final Goods & Services ProducedWithin the country in a given period of timeGDP = Consumption + Gross Investment +Government Spending + (Exports – Imports)
  • Debt to GDP in WorldTOP ECONOMIES LAST PREVIOUS HIGHEST LOWEST AUSTRALIA 22.90 20.40 31.70 9.70 BRAZIL 65.10 66.20 79.80 63.50 CHINA 25.80 33.50 33.50 1.00 EURO AREA 87.30 85.40 87.30 66.20 FRANCE 86.00 82.30 86.00 20.70 GERMANY 80.50 82.50 82.50 55.60 INDIA 68.05 69.43 84.30 67.62UNITED KINGDOM 85.00 79.40 85.00 31.30UNITED STATES 101.60 99.40 121.70 31.70
  • GDP Rate in World TOP GDP (USD LAST PREVIOUS HIGHEST ECONOMIES Billion)AUSTRALIA 3.10 3.70 9.00 1371BRAZIL 1.40 0.90 10.10 2476CHINA 7.90 7.40 14.20 7298EURO AREA -0.90 -0.60 5.00 13075FRANCE -0.30 0.15 4.90 2773GERMANY 0.10 0.40 4.70 3750INDIA 4.50 5.30 10.20 1847ITALY -2.70 -2.40 10.30 2194JAPAN 0.30 0.40 9.40 5867UNITED 0.30 0.20 10.20 2431KINGDOMUNITED STATES 1.60 2.60 13.40 15094
  • GDP Rate
  • GDP Rate in World
  • GDPDetails FactsFrequency Quarterly (Revised monthly)High GDP Positive for Stocks, Currency strong(Due to foreign investor) but negative for bonds (Also create risk of high inflation)Component of GDP Sector perform as per the growth contributed by each sectorBelow or above the Short term Volatilitybenchmark
  • Index of Industrial production (IIP)
  • Index of Industrial Production (IIP) A short term indicator Measures industrial growth till the actual result availableUsed by Ministries, Industrial Associations, Research Institutes & Academicians
  • IIP Data & Stock Market
  • IIP Data & Stock Market
  • IIP Data & Stock Market
  • IIP Rate in World TOP LAST PREVIOUS HIGHEST LOWEST FREQUENCYECONOMIESAUSTRALIA 4.33 2.69 13.72 -8.00 Quarterly BRAZIL -3.60 -1.00 20.12 -17.47 Monthly CHINA 10.30 10.10 29.40 -21.10 MonthlyEURO AREA -2.40 -4.00 9.80 -21.40 Monthly FRANCE -3.10 -3.20 8.50 -19.30 MonthlyGERMANY -1.10 -3.10 15.00 -22.00 Monthly INDIA -0.60 -0.10 20.00 -7.20 Monthly UNITED -1.70 -2.40 22.60 -11.90 MonthlyKINGDOM UNITED 2.10 2.20 62.00 -33.70 Monthly STATES
  • Unemployment Rate in WorldTOP ECONOMIES LAST PREVIOUS HIGHEST LOWESTAUSTRALIA 5.40 5.40 10.90 4.00BRAZIL 5.40 4.60 13.10 4.60CANADA 7.00 7.10 13.10 2.90CHINA 4.10 4.10 4.30 3.90EURO AREA 11.90 11.80 11.90 7.20FRANCE 10.30 10.20 11.20 7.50GERMANY 5.90 5.30 14.20 0.40INDIA 3.80 9.40 9.40 3.80UNITED 7.80 7.70 12.00 3.40KINGDOMUNITED STATES 7.90 7.80 10.80 2.50
  • IIPDetails FactsFrequency MonthlyHigh IIP Positive for Stocks, Currency strong, Commodity but negative for bonds (Also create risk of high inflation)Below or above the Short term Volatilitybenchmark
  • Balance of payment
  • Balance of Payment Measures the payments that flow between any individual country and all other countrySummarizes all international transaction for that country in a year It includes Export-Import, Financial capitals,deposits,borrowings etc
  • Balance of PaymentCurrent • Consists of Goods & Services Account, Primary Income Account & SecondaryAccount Income Account • Capital transfers receivables and payableCapital • The acquisition and disposal of nonAccount produced non financial assets. • Involve financial assets & liabilitiesFinancial • Take place between residents &Account nonresidents
  • Balance of Trade
  • Imports
  • Exports
  • Balance of TradeTOP LAST PREVIOUS HIGHEST LOWEST UNITECONOMIESBRAZIL -1276.00 -4036.33 5659.37 -4036.33 USD Million USD HundredCHINA 291.46 316.18 404.00 -319.81 MillionFRANCE -5349.00 -4289.00 2674.00 -7021.00 EUR MillionGERMANY 12.00 17.00 20.10 -0.50 EUR BillionINDIA -1086.12 -965.73 13.91 -1111.46 INR BillionJAPAN -1629.44 -643.29 1608.68 -1629.44 Billion JPYUNITED -3201.00 -3577.00 2946.00 -6067.00 GBP MillionKINGDOMUNITED USD Million -38539.00 -48613.00 -831.00 -67351.00STATES
  • Balance Of PaymentDetails FactsFrequency MonthlyHigh deficit on BOP Negative for the currency (Low inflow of foreign currency) Also International commodities are also risingBelow or above the Short term Volatilitybenchmark
  • Exchange Rates
  • Why Rupee Appreciate or Depreciate?
  • Exchange Rate• Exchange rate means how much one currency is worth in terms of another currency. If we can buy $ 1 with Rs. 46, the exchange rate of the two currencies would be $1 = Rs. 46.• Two types of exchange rate: Fixed and Floating• In India, we have a Managed Floating Exchange Rate System- Indian government intervenes only if the exchange rate seems to go out of hand by increasing or reducing the money supply as the situation demands.
  • Factors drive the demand for a currency • Interest Rates – Differential rates between two countries (For ex – in India interest rates 7-8% and in US 2-3% this lead to greater capital inflow in India) rupee Appreciate • Inflation Rates- If inflation rate is lower than more good are exported which lead to currency inflow .then Rupee Appreciate • Export-Import- If export is more than import ,more currency inflow of other country, which lead to currency appreciation • Trading in currency in Forex Market
  • INflation
  • INflation
  • Inflation Rate in World COUNTRIES PREVIOUS HIGHEST LOWEST FREQUENCYAUSTRALIA 2.20 2.00 23.90 Dec/2012BRAZIL 6.15 5.84 6821.31 Jan/2013CANADA 0.50 0.80 21.60 Jan/2013CHINA 2.00 2.50 28.40 Jan/2013EURO AREA 1.80 2.00 5.00 Feb/2013FRANCE 1.20 1.30 18.80 Jan/2013GERMANY 1.55 1.70 11.40 Feb/2013INDIA 6.62 7.18 34.68 Jan/2013ITALY 1.91 2.20 25.64 Feb/2013JAPAN -0.30 -0.10 25.00 Jan/2013UNITED 2.70 2.70 8.50 Jan/2013KINGDOMUNITED STATES 1.60 1.70 23.70
  • Inflation Rate in World
  • InflationDetails FactsFrequency MonthlyHigh Inflation Negative for currency , Increase risk interest rate hike which effect stock market ,Bonds are stable commodity are risingBelow or above the Short term Volatilitybenchmark
  • Major Obstacles in Indian Economy• Infrastructure Shortage• Inflation V/s GDP• Fiscal Deficit• Unemployment Rate• Financial Sector
  • THANK YOU
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