This is a presentation prepared by the students of Jahangirnagar University. Presentation on Macro Analysis and Micro-valuation of Stock Market.

1. WELCOME

2. Persons of Interset
Isteak Ahmed 1478
Sajid Kamal (L) 1488
Faisal Bin Didar 1489
Fahim Hasanul Islam 1503
Robiul Islam 1509

3. Macroanlysis and
Microvaluation
of the Stock Market

4. HELLO!
I am SAJID KAMAL (1488)
WE are here because we love to give presentations.
You can find me at @sajid_kamal_06@yahoo.com

5. Market Analysis

6. Analysis of
Alternative
Economics And
Security Markets
Analysis of
Alternative
Industries
Analysis Of
Individual
Companies and
Stocks

7. Macromarket Analysis
Economic Activity and Security Markets

8. laggingCoincidentLeading
Cyclical Indicator Approach
National Bureau of Economic Research

9. • Average weekly
hours,manufacturing
• Index of supplier
deliveries
• Money supply
• Stock price
• Interest rate spread
Leading
• Employees on non
agricultural payrolls
• Inustrial Production
• Manufacturing and
trade sales
Coincident
• Average duration of
unemployment
• Inventory to sales ratio
• Labor cost per unit
• Commercial and
industrial loans
• Consumer price index
Lagging
Cyclical Indicator Approach

10. 0
1
2
3
4
5
6
7
8
Year 1 Year 2 Year 3 year 4 Year 5 year 6
Business Cycle Indicator Series
Leading Coincident Lagging

11. Limitations of Cyclical Indicator Approach
False
signals
Currency of
the data
and
Revision
Economic
sectors not
represented

12. Analytical Measures of performance
Diffusion Index
◉ Rates of changes
◉ Comparison with previous cycles

13. HELLO!
I am Fahim Hasanul Islam (1503)
WE are here because we love to give presentations.
You can find me at @frsclicks@gmail.com

14. Money Supply and
Stock Prices

15. Money Supply and Stock Prices
Open
market
policy
Treasury
bonds
More
investment
S
T
O
C
K
P
R
I
C
E

16. Inflation and
Interst Rates

17. “E (r) = (1+ RRFR)(1+Inflation)+RP -1
NRFR

19. Interest Rates and
Bond Price

20. “

21. HELLO!
I am Isteak Ahmed (1478)
WE are here because we love to give presentations
You can find me at @isteak_isto@yahoo.com

22. Interest Rates and
Stock Prices

23. Interest Rates and Stock Prices
Positive
Scenario
Mildly
Negative
Scenario
Very
Negative
Scenario
Stock price= D1 / ( k-g)

24. Microvaluation Analysis

25. Dividend Discount Model

26. Growth rate of stock
g= f (b, ROE)
b = expected retention ratio (1-D/E)
ROE = expected return on equity = net income/equity

27. ROE (DuPont analysis)

28. HELLO!
I am Robiul Islam (1509)
WE are here because we love to give presentations.
You can find me at @srobiulislam1509@gmail.com

29. Dividend Discount Models vs. Free Cash Flow Models
◉ FCFE = Net Income
+ Depreciation
– Capital Expenditures
– Increase in NC Working Capital
+ New Debt Issued
– Debt Paid

31. Step 1: Forecast FCFE Values
FCFE2 = $850,000 + $250,000 - $100,000 – $100,000
+ $75,000 - $100,000 = $875,000
FCFE3 = $900,000 + $225,000 - $400,000 – (-$75,000)
+ $180,000 - $150,000 = $830,000
FCFE4 = $940,000 + $275,000 - $300,000 – $25,000
+ $150,000 - $125,000 = $915,000
FCFE1 = $800,000 + $200,000 - $300,000 – (-$50,000)
+ $150,000 - $100,000 = $800,000

32. Step 2: Determine the Required Return
SML, k = kRF + β(K ̅m – kRF)
k = 4% + 1.30(10% - 4%)
k = 4% + 1.30(6%)
k = 4% + 7.80%
k = 11.80%

33. Step 3: Solve for value of all FCFE in Constant Growth Stage

34. Step 4: Solve for Value of Firm Equity

35. Step 5: Convert to Value per Share
P0 = 11,638,683/500,000 = $23.28

36. HELLO!
I am Faisal Bin Didar (1489)
WE are here because we love to give presentations.
You can find me at @faisal_41@yahoo.com

37. Earning Multiplier Model

38. Earning Multiplier Model
◉Basic concept
the value of any investment is the present values of
future returns.
Common stock net earningsReturns

39. Computation

40. Computation
Investors must decide if they agree with the
prevailing price earning ratio based on how it
compare to the P/E ratio for the aggregate market,
for the farms industry and similar firms and stocks .

41. Factors Affecting P/E Ratio

44. THANKS!
Any questions?
You can find me at
@poi_41@gmail.com
😉