CHAPTER I

INTRODUCTION
BANKEX In view of the emergence of banking stocks as a major segment in the equity markets, BSE considered it desirable to design an index exclusively for bank stocks. Sensex is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, Sensex is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of Sensex is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media. The Index was initially calculated based on the "Full Market Capitalization" methodology but was shifted to the free-float methodology with effect from September 1, 2003. The "Free-float Market Capitalization" methodology of index construction is regarded as an industry best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Free-float methodology. The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. The Sensex captured all these events in the most judicial manner. One can identify the booms and busts of the Indian stock market through Sensex. SENSEX Scrip selection criteria The general guidelines for selection of constituents in SENSEX are as follows: Listed History: The scrip should have a listing history of at least 3 months at BSE. Exception may be considered if full market capitalisation of a newly listed company ranks among top 10 1

in the list of BSE universe. In case, a company is listed on account of merger/ demerger/ amalgamation, minimum listing history would not be required. Trading Frequency: The scrip should have been traded on each and every trading day in the last three months. Exceptions can be made for extreme reasons like scrip suspension etc. Final Rank: The scrip should figure in the top 100 companies listed by final rank. The final rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average full market capitalisation and 25% weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost. Market Capitalization Weightage: The weightage of each scrip in SENSEX based on three-month average free-float market capitalisation should be at least 0.5% of the Index. Industry Representation: Scrip selection would generally take into account a balanced representation of the listed companies in the universe of BSE.

Track Record: In the opinion of the Committee, the company should have an acceptable track record. Index Review Frequency The BSE Index Committee meets every quarter to discuss index related issues. In case of a revision in the Index constituents, the announcement of the incoming and

outgoing scrips is made six weeks in advance of the actual implementation of the revision of the Index. Maintenance of SENSEX: One of the important aspects of maintaining continuity with the past is to update the base year average. The base year value adjustment ensures that replacement of stocks in Index, additional issue of capital and other corporate announcements like 'rights issue' etc. do not destroy the historical value of the index. The beauty of maintenance lies in the fact that adjustments for corporate actions in the Index should not per se affect the index values. The Index Cell of the exchange does the day-to-day maintenance of the index within the broad index policy framework set by the Index Committee. The Index Cell ensures that SENSEX and all the other BSE indices maintain their benchmark.

Sectoral Indices BSE also constructs various sectoral indices "Sector Series (90/FF)" as detailed below. All these indices are calculated and disseminated on BOLT, BSE's trading terminal on a real time basis. "90/FF" implies that the index covers 90% of the sectoral free-float market capitalization and is based on the Free-Float methodology. BSE Sector Series (90/FF) Indices

BSE Auto Index BSE BANKEX BSE Capital Goods Index BSE Consumer Durables Index BSE FMCG Index BSE Healthcare Index BSE IT Index BSE Metal Index BSE Oil & Gas Index

BSE Power Index BSE Realty Index

History of replacements in BANKEX

Date 09.02.2004

Outgoing Scrips ING Vysya Bank

Replaced by UTI Bank Ltd. Kotak Mahindra Bank UCO Bank Indian Overseas Bank Jammu & Kashmir Bank

31.01.2005

...

Vijaya Bank

06.06.2005

Corporation Bank Jammu & Kashmir Bank Ltd. UCO Bank

Allahabad Bank Ltd.

28.11.2005

...

Centurion Bank Ltd. Indusind Bank Ltd Karnataka Bank Limited

03.07.2006

Indusind Bank Ltd

Federal Bank Ltd.

08.01.2007

Karnataka Bank Vijaya Bank

...

09.07.2007

...

Karnataka Bank Ltd. Yes Bank Ltd.

09.06.2008

Centurion Bank of Punjab Ltd.

...

28.07.2008

Andhra Bank

IDBI Bank Ltd. Indusind Bank Ltd.

List of banks in BANKEX Index: ICICI BANK LTD HDFC BANK LTD STATE BANK OF INDIA AXIS BANK PUNJAB NATIONAL BANK KOTAK BANK BANK OF INDIA BANK OF BARODA UNION BANK FEDERAL BANK IDBI BANK CANARA BANK ORIENTAL BANK INDIAN OVERSEAS BANK YES BANK KARNATAKA BANK ALLAHABAD BANK INDUS IND BANK 5

1.2 OBJECTIVES
PRIMARY OBJECTIVE To study the volatility and return of bank scrips included in BSE Bankex

SECONDARY OBJECTIVE To find the volatility of the bankex scripts during the study period To study the price movements of bankex scripts during the study period (Jan 2011 March 2012) To analyze the average returns and the risk for the bankex scripts. To find the association of the bankex with stock market index

1.3 COMPANY PROFILE

EIGHT DECADES OF BROKERAGE EXCELLENCE Share khan is one of India's leading financial services companies. Share khan provides a complete life-cycle of investment solution in Equities, Derivatives, Commodities, IPO, Mutual Funds, Depository Services, Portfolio Management Services and Insurance. Share khan traces its lineage to SSKI, an organization with more than eight decades of trust & credibility in the stock mark decades of trust & credibility in the stock market. Share khan Ltd is Indias leading online retail broking house with its presence through 1288Share Shops in 325 cities and serving more than 1,000,000 customers across the nation. Launched on Feb 8th 2000 as an online trading portal, Share khan offers its clients trade execution facilities for cash as well as derivatives, on BSE and NSE, depository services, mutual funds, initial public offerings (IPOs), and commodities trading facilities on MCX and NCDEX. Besides high quality investment advice from an experienced research team Share khan provides market related news, stock quotes fundamental and statistical information across equity, mutual funds, IPOs and much more. Share khan has set category leadership through pioneering initiatives like Speed Trade, a net based executable application that emulates a broker terminal besides providing information relevant to Day traders. Their second initiative, First Step is targeted at empowering first time investors. Share khan has also set their global footprints through the India First initiative, a series of seminars conducted by Share khan to help NRIs participate and benefit from the huge investment opportunities in India. The company has a full-fledged research division involved in Macro Economic studies, Sectorial research and Company Specific Equity Research combined with a strong and well networked sales force which helps deliver current and up to date market information and news. 7

Share khan is an equities focused organization tracing its lineage to SSKI, a veteran equities solutions company with over five decades of experience in Indian stock markets SERVICES OFFERED TO CLIENTS Its operations include stock broking and distribution of various financial products- including private and secondary placement of debt, equity and mutual funds. Currently it is one of the largest broking houses in India with wide geographical coverage. The company has four main areas of business: (1)Institutional Equities, (2) Retail (equities and other financial products), (3) Portfolio Management and (4) Depository Services. 1. Institutional Business This division primarily covers secondary market broking and caters to the needs of foreign and Indian Institutional Investors in Indian Equities (both local shares and GDRs). The division also incorporates a comprehensive research cell with sect oral analysts who cover all the major areas of the Indian economy. 2. Client Money Management This division provides professional portfolio management services to high net worth individuals and corporate. Its expertise in research and stock broking gives the company the right perspective from which to provide its clients with investment advisory services. 3. Retail Distribution of financial products Share khan has a comprehensive retail distribution network, comprising approximately 1120 franchisees168 branches 325 cities across India. This network is

used for the distribution and placement of a range of financial products that includes company fixed deposits, mutual funds, Initial Public Offerings, secondary debt and equity and small savings schemes.

4. Depository Services It is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialized shares. Since it is also in the broking business, investors who use its depository services get a dual benefit. They are able to use its brokerage services to execute transactions and its depository services to settle. 5. Technology Superior trading platform with an intensive Multi- Channel access for customers. Real time delivery of quality service and resource. 6. Human Capital It has under its roof 3000 employees with Performance driven work ethic.

Services of Share Khan

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SPREADING ITS WINGS OVERSEAS Online trading platform for NRIs for Equities and Mutual Funds Our first representative office in Dubai Dedicated Relationship Manager for advisory services and Operational issues Simplified transactions statement Customized research reports Daily Market updates Access to research newsletters/ reports BENEFITS OF SHAREKHAN: Online trading is very user friendly and one doesn't need any software to access. They provide good quality of services like daily SMS alerts, mail alerts, stock recommendations etc. Share Khan has ability to transfer funds from most banks. Unlike ICICI Direct, HDFC Sec, etc., so investor not really needs to open an account with a particular bank as it can establish link with most modern banks. PRODUCTS OF SHAREKHAN A .Share Khan Classic account Allow investor to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, Demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer. a. Online trading account for investing in Equities and Derivatives b. Free trading through Phone (Dial-n-Trade) Two dedicated numbers for placing your orders with your cell phone or landline.

11

Automatic funds transfer with phone banking (for Citibank and HDFC bank customers) Simple and Secure Interactive Voice Response Get the trusted, professional advice of our Tele brokers After hours order placement facility between 8.00 am and 9.30 am

c. Integration of: Online trading + Bank + Demat account d. Instant cash transfer facility against purchase & sale of shares e. IPO investments

B. Share Khan Trade Tigers account This accounts for active traders who trade frequently during the day's trading sessions. Following are few features of Trade Tigers account.

VISION

Single screen interface for cash and derivatives Customize market watches by scrips or sectors and view them on a single screen. Real-time streaming quotes with Instant orders, alerts and orders Hot keys similar to a traditional broker terminal

To empower the investor with quality advice and superior service to help him take better investment decisions. We believe that our growth depends on client satisfaction.

MISSION To provide the best customer service and product innovation tuned to diverse needs of clientele Continuous up-gradation with changing technology.

12

 Respond to progressive globalization and achieving international standard. Efficiency and effectiveness built on ethical practices.

13

1.4 LITERATURE REVIEW

SENSEX - The Barometer of Indian Capital Markets For the premier Stock Exchange that pioneered the stock broking activity in India, 128 years of experience seems to be a proud milestone. A lot has changed since 1875 when 318 persons became members of what today is called "The Stock Exchange, Mumbai" by paying a princely amount of Re1. Since then, the country's capital markets have passed through both good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there was no scale to measure the ups and downs in the Indian stock market. The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market.

Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldest index in the country, it provides the time series data over a fairly long period of time (From 1979 onwards). Small wonder, the SENSEX has over the years become one of the most prominent brands in the country.

SENSEX Calculation Methodology SENSEX is calculated using the "Free-float Market Capitalization" methodology, wherein, the level of index at any point of time reflects the free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization. The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment

14

point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX on a continuous basis. Dollex-30 BSE also calculates a dollar-linked version of SENSEX and historical values of this index are available since its inception. Understanding Free-float Methodology Concept: Free-float Methodology refers to an index construction methodology that takes into consideration only the free-float market capitalization of a company for the purpose of index calculation and assigning weight to stocks in Index. Free-float market capitalization is defined as that proportion of total shares issued by the company that are readily available for trading in the market. It generally excludes promoters' holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a Free-float index is reduced to the extent of its readily available shares in the market. In India, BSE pioneered the concept of Free-float by launching BSE TECk in July 2001 and BANKEX in June 2003. While BSE TECk Index is a TMT benchmark, BANKEX is positioned as a benchmark for the banking sector stocks. SENSEX becomes the third index in India to be based on the globally accepted Free-float Methodology.

Major advantages of Free-float Methodology:

A Free-float index reflects the market trends more rationally as it takes into consideration only those shares that are available for trading in the market.

Free-float Methodology makes the index more broad-based by reducing the concentration of top few companies in Index. For example, the concentration of

15

top five companies in SENSEX has fallen under the free-float scenario thereby making the SENSEX more diversified and broad-based.

A Free-float index aids both active and passive investing styles. It aids active managers by enabling them to benchmark their fund returns vis--vis an investable index. This enables an apple-to-apple comparison thereby facilitating better evaluation of performance of active managers. Being a perfectly replicable portfolio of stocks, a Free-float adjusted index is best suited for the passive managers as it enables them to track the index with the least tracking error.

Free-float Methodology improves index flexibility in terms of including any stock from the universe of listed stocks. This improves market coverage and sector coverage of the index. For example, under a Full-market capitalization methodology, companies with large market capitalization and low free-float cannot generally be included in the Index because they tend to distort the index by having an undue influence on the index movement. However, under the Free-float Methodology, since only the free-float market capitalization of each company is considered for index calculation, it becomes possible to include such closely held companies in the index while at the same time preventing their undue influence on the index movement.

Globally, the Free-float Methodology of index construction is considered to be an industry best practice and all major index providers like MSCI, FTSE, S&P and STOXX have adopted the same. MSCI, a leading global index provider, shifted all its indices to the Free-float Methodology in 2002. The MSCI India Standard Index, which is followed by Foreign Institutional Investors (FIIs) to track Indian equities, is also based on the Free-float Methodology. NASDAQ-100, the underlying index to the famous Exchange Traded Fund (ETF) - QQQ is based on the Free-float Methodology.

Definition of Free-float: Share holdings held by investors that would not, in the normal course come into the open market for trading are treated as 'Controlling/ Strategic Holdings' and hence not

16

included in free-float. In specific, the following categories of holding are generally excluded from the definition of Free-float:
o o o o o o o o

Holdings by founders/directors/ acquirers which has control element. Holdings by persons/ bodies with "Controlling Interest" Government holding as promoter/acquirer Holdings through the FDI Route Strategic stakes by private corporate bodies/ individuals Equity held by associate/group companies (cross-holdings) Equity held by Employee Welfare Trusts Locked-in shares and shares which would not be sold in the open market in normal course.

The remaining shareholders would fall under the Free-float category.

Determining Free-float factors of companies: BSE has designed a Free-float format, which is filled and submitted by all index companies on a quarterly basis with the Exchange. The Exchange determines the Freefloat factor for each company based on the detailed information submitted by the companies in the prescribed format. Free-float factor is a multiple with which the total market capitalization of a company is adjusted to arrive at the Free-float market capitalization. Once the Free-float of a company is determined, it is rounded-off to the higher multiple of 5 and each company is categorized into one of the 20 bands given below. A Free-float factor of say 0.55 means that only 55% of the market capitalization of the company will be considered for index calculation.

17

Free-float Bands: Free-Float Factor 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00

% Free-Float Free-Float Factor >0 - 5% >5 - 10% >10 - 15% >15 - 20% >20 - 25% >25 - 30% >30 - 35% >35 - 40% >40 - 45% >45 - 50% 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50

% Free-Float >50 - 55% >55 - 60% >60 - 65% >65 - 70% >70 - 75% >75 - 80% >80 - 85% >85 - 90% >90 - 95% >95 - 100%

Index Closure Algorithm The closing SENSEX on any trading day is computed taking the weighted average of all the trades on SENSEX constituents in the last 30 minutes of trading session. If a SENSEX constituent has not traded in the last 30 minutes, the last traded price is taken for computation of the Index closure. If a SENSEX constituent has not traded at all in a day, then its last day's closing price is taken for computation of Index closure. The use of Index Closure Algorithm prevents any intentional manipulation of the closing index value.

Maintenance of SENSEX One of the important aspects of maintaining continuity with the past is to update the base year average. The base year value adjustment ensures that replacement of stocks in Index, additional issue of capital and other corporate announcements like 'rights issue' 18

etc. do not destroy the historical value of the index. The beauty of maintenance lies in the fact that adjustments for corporate actions in the Index should not per se affect the index values. The Index Cell of the exchange does the day-to-day maintenance of the index within the broad index policy framework set by the Index Committee. The Index Cell ensures that SENSEX and all the other BSE indices maintain their benchmark properties by striking a delicate balance between frequent replacements in index and maintaining its historical continuity. The Index Committee of the Exchange comprises of experts on capital markets from all major market segments. They include Academicians, Fundmanagers from leading Mutual Funds, Finance-Journalists, Market Participants, Independent Governing Board members, and Exchange administration. On-Line Computation of the Index: During market hours, prices of the index scrips, at which trades are executed, are automatically used by the trading computer to calculate the SENSEX every 15 seconds and continuously updated on all trading workstations connected to the BSE trading computer in real time. Adjustment for Bonus, Rights and Newly issued Capital: The arithmetic calculation involved in calculating SENSEX is simple, but problem arises when one of the component stocks pays a bonus or issues rights shares. If no adjustments were made, a discontinuity would arise between the current value of the index and its previous value despite the non-occurrence of any economic activity of substance. At the Index Cell of the Exchange, the base value is adjusted, which is used to alter market capitalization of the component stocks to arrive at the SENSEX value. The Index Cell of the Exchange keeps a close watch on the events that might affect the index on a regular basis and carries out daily maintenance of all the 14 Indices.

19

Adjustments for Rights Issues:

When a company, included in the compilation of the index, issues right shares, the free-float market capitalisation of that company is increased by the number of additional shares issued based on the theoretical (ex-right) price. An offsetting or proportionate adjustment is then made to the Base Market Capitalisation (see 'Base Market Capitalisation Adjustment' below).

Adjustments for Bonus Issue:

When a company, included in the compilation of the index, issues bonus shares, the market capitalisation of that company does not undergo any change. Therefore, there is no change in the Base Market Capitalisation, only the 'number of shares' in the formula is updated. BANKEX In view of the emergence of banking stocks as a major segment in the equity markets, BSE considered it desirable to design an index exclusively for bank stocks. BANKEX tracks the banking stocks. Each banking stocks have their own weightage in BANKEX. Bankex is an index of few banking scripts and depicts changes in banking industry- stock pricewise. Features A few important features of the BANKEX are given below:

BANKEX tracks the performance of the leading banking sector stocks listed on the BSE

BANKEX is based on the free-float methodology of index construction The base date for BANKEX is 1st January 2002. The base value for BANKEX is 1000 points

20

BSE has calculated the historical index values of BANKEX since 1st January 2002.

12 stocks which represent 90 percent of the total market capitalization of all banking sector stocks listed on BSE are included in the Index

The Index is disseminated on a real-time basis through BSE Online Trading (BOLT) terminals.

Stocks forming part of the BANKEX along with the particulars of their free-float adjusted market capitalization are listed below.

21

1.5 SCOPE AND SIGNIFICANCE OF THE STUDY

The study will reveal the relationship between bankex index and banking sector scripts and also to find how risk affects the index movement in the share market and fluctuation in the bankex. The study can also be used to find the future value of banking shares which are traded in BSE. The outcome of this study will help the investors for making their investment decisions and also help the bankers to analyse the movement of their scrips in along with bankex sector.

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1.6 RESEARCH METHODOLOGY

RESEARCH-DEFINED Research is the process in which the researcher wishes to find out the end result for a given problem and thus the solution helps in future course of action. According to Redman & Mory, research is defined as a systemized effort to gain new knowledge.

According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis.

1.6.1 NATURE OF RESEARCH

Research is basically of two types

Exploratory Research

It seeks to discover new relationships. They are drawn from ideas developed in the previous research studies are drawn from theory.

Descriptive Research

It helps executives to choose among the various course of action. A descriptive study attempts to obtain a complete and accurate description of a situation.

23

1.6.2 RESEARCH DESIGN:

Research design is the specification of methods and procedure for acquiring the information need to structure or to solve problem. Research design Definition as A research design is the arrangement of condition for collection and analyses of data in a manner that aims to combine relevant to research purpose with economic in procedure.

The research design followed for this study is Analytical research design. This type of research uses information which is already available for analyzing the collected data.

1.6.3 DATA COLLECTION METHODOLOGY:

Secondary data:

Secondary data is information that already exists somewhere, having been collected for specific purpose in the study. Secondary data can be collected from various books, websites and from company brochures. For the purpose of this study, the data used is mainly secondary in nature, as the facts are collected from the already published data. Such as websites, newspaper and company annual report.

1.6.4 Research Tools and Techniques

1. Return Analysis

Security Return = Todays Price Yesterdays Price *100 Yesterdays Price

24

Market Return = Todays Index Yesterdays Index *100 Yesterdays Index

2. Beta Analysis

=nxy (x) (y) / n(x ^2) (y ^2)

3. Alpha Analysis

=y- x

4 Coefficient Corrlation

r=

nxy-(x)(y) n x^2-(yx)2 ny^2-(y)2

25

1.6.5 LIMITATIONS
The study is limited to only 5 quarters of the BANKEX. The findings of the study are based on historical data. Hence the accuracy cannot be ascertained. The analysis and interpretation of data are constrained by accuracy of various tools used or analysis. The projection made for future is subject to change.

Financial Returns are not the only indicators for the financial performance of the
company.

26

CHAPTER 2 DATA ANALYSIS AND INTERPRETATION

27

2.DATA ANALYSIS AND INTERPRETATION

2.1.RETURN ANALYSIS 2.1.1 Calculation of market and security return

Security Return = Todays Price Yesterdays Price *100 Yesterdays Price

Market Return = Todays Index Yesterdays Index *100 Yesterdays Index

28

Returns between Bankex and Andhra Bank Share Price on 2011 to 2012

Month

Bankex

Andhra Bank

X -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

Y -2.58 11.27 -7.91 2.80 -6.12 1.06 -4.13 -4.65 -3.94 -16.30 -19.52 27.76 28.79 4.56

Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012

17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

135.65 150.95 139 142.9 134.15 135.5 129.9 123.85 118.7 99.35 79.95 102.15 130.8 119.3

29

Returns between Bankex and Andhra Bank Share Price on 2011 to 2012

50 40 30 20 10 0 Apr-11 May-11 Mar-11 Y X

Nov-11

Dec-11

-10 -20 -30

Interpretation: From the above table, it is interpreted that the index return is negative and the Andhra stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

Andhra Bank return has the highest return of 28.79% during the month of January 2012 and the lowest return of -16.30% during the month of December 2011.

Returns between Bankex and Axis Bank Share Price on 2011 to 2012 30

Mar-12

Aug-11

Feb-11

Sep-11

Oct-11

Jun-11

Jan-12

Jul-11

Feb-12

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

Axis Bank
1223.9 1403.65 1286 1278.6 1289 1338.15 1075 1021.45 1159.7 947.5 806.75 1074.2 1178.05 1145.9

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

Y -1.83 14.68 -8.38 -0.57 0.81 3.81 -19.66 -4.98 13.53 9.66 -18.29 -14.85 33.15 -2.72

Returns between Bankex and Axis Bank Share Price on 2011 to 2012

31

40 30 20 10 0 Apr-11 May-11 Oct-11 Mar-11 Dec-11 y x

Jan-12

-10 -20 -30

Interpretation: From the above table, it is interpreted that the index return is negative and the Axis stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

Axis Bank return has the highest return of 33.15% during the month of January 2012 and the lowest return of -19.66% during the month of November 2011.

Returns between Bankex and Bank of Baroda Share Price on 2011 to 2012

Month

Bankex

Bank of 32

Mar-12

Aug-11

Feb-11

Jun-11

Sep-11

Nov-11

Feb-12

Jul-11

Baroda Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2
870.85 963.15 912.15 863.4 871.9 878.3 736.6 763.85 771.5 700.6 660.85 753.45 803.8 793.65

-3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

0.19 10.59 -5.29 -5.34 0.98 0.73 -16.13 3.69 1.00 -9.18 -5.67 14.01 6.68 -1.26

Returns between Bankex and Bank of Baroda Share Price on 2011 to 2012

33

30 25 20 15 10 5 0 May-11 Mar-11 Dec-11 Apr-11 Oct-11 Jun-11 y x

Jan-12

-5 -10 -15 -20 -25

Interpretation: From the above table, it is interpreted that the index return is negative and the Bank of Baroda stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

Bank of Baroda return has the highest return of 14.01% during the month of January 2012 and the lowest return of -16.13% during the month of November 2011.

Returns between Bankex and Bank of India Share Price on 2011 to 2012

Month Feb2011

Bankex 17623.4

Bank of India
439.05

x -3.84

Mar-12

Aug-11

Nov-11

Feb-11

Sep-11

Feb-12

Jul-11

Y -0.03

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Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012

19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

478.1 456.95 445.05 414.3 386.45 309.7 315.6 331.75 327.45 266.3 344.25 371.05 361

10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

8.89 -4.42 -2.60 -6.90 -6.72 -19.86 1.90 5.11 -1.29 -18.67 29.27 7.78 -2.70

Returns between Bankex and Bank of India Share Price on 2011 to 2012
50 40 30 20 10 0 Apr-11 Dec-11 May-11 Mar-11 y x

Jan-12

-10 -20 -30

35

Mar-12

Aug-11

Oct-11

Jun-11

Nov-11

Feb-11

Sep-11

Feb-12

Jul-11

Interpretation: From the above table, it is interpreted that the index return is negative and the Bank of India stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

Bank of India return has the highest return of 29.27% during the month of January 2012 and the lowest return of -19.86% during the month of August 2011.

Returns between Bankex and Canara Bank Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46

Canara Bank
610 626.15 631.1 544.6 524.3 460.6 426.6 443.75 469.25 430.1

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93

Y 1.31 2.64 0.79 -13.70 -3.72 -12.14 -7.38 4.02 5.74 -8.34

36

Dec2011 Jan2012 Feb2012 Mar2012

15454.92 17193.55 17752.66 17404.2

363.6 470.85 510.15 473.65

-4.14 11.24 3.25 -1.96

-15.46 29.49 8.34 -7.15

Returns between Bankex and Canara Bank Share Price on 2011 to 2012

50 40 30 20 10 0 Dec-11 May-11 Mar-11 y x

Jan-12

-10 -20 -30

37

Mar-12

Apr-11

Aug-11

Oct-11

Jun-11

Nov-11

Feb-11

Sep-11

Feb-12

Jul-11

Interpretation: From the above table, it is interpreted that the index return is negative and the Canara Bank stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

Canara Bank return has the highest return of 29.49% during the month of January 2012 and the lowest return of -15.46% during the month of December 2011.

Returns between Bankex and HDFC Bank Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92

HDFC Bank
2049.7 2342.95 2292.5 2388.3 2502.6 487.4 472.2 467.25 489.05 441.45 427.05

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14

Y 14.30 -2.15 4.17 4.78 -80.52 -3.11 -1.04 4.66 -9.73 -3.26 14.95

38

Jan2012 Feb2012 Mar2012

17193.55 17752.66 17404.2

490.9 517.8 520.05

11.24 3.25 -1.96

5.47 0.43 1.86

Returns between Bankex and HDFC Bank Share Price on 2011 to 2012

40 20 0 Apr-11 May-11 Mar-11 Dec-11 -20 -40 -60 -80 -100 Mar-12 Aug-11 Jun-11 Oct-11 Nov-11 Feb-11 Sep-11 Jan-12 Jul-11 Feb-12 y x

Interpretation: 39

From the above table, it is interpreted that the index return is negative and the HDFC Bank stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

HDFC Bank return has the highest return of 14.95% during the month of January 2012 and the lowest return of -80.52% during the month of July 2011.

Returns between Bankex and ICICI Bank Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66

ICICI Bank
971 1112.75 1114.25 1086 1093.1 1037.75 873.25 875.35 930.5 714.15 684.6 902 906.5

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25

Y -4.80 14.59 0.13 -2.53 0.65 -5.06 -15.85 0.24 6.30 -23.25 -4.13 31.75 0.49

40

Mar2012

17404.2

887.25

-1.96

-2.12

Returns between Bankex and ICICI Bank Share Price on 2011 to 2012

50 40 30 20 10 0 Dec-11 May-11 Mar-11 y x

Jan-12

-10 -20 -30 -40

41

Mar-12

Apr-11

Aug-11

Oct-11

Jun-11

Nov-11

Feb-11

Sep-11

Feb-12

Jul-11

Interpretation: From the above table, it is interpreted that the index return is negative and the ICICI Bank stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

ICICI Bank return has the highest return of 31.75% during the month of January 2012 and the lowest return of -23.25% during the month of November 2011.

Returns between Bankex and IDBI Bank Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66

IDBI Bank
131.35 142.45 143.55 134.25 136.05 128.65 110.3 102.75 116.8 92.7 77.8 101.3 108.1

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25

Y -7.10 8.45 0.77 -6.47 1.34 -5.43 -14.26 -6.84 13.67 -20.63 -16.07 30.20 6.71

42

Mar2012

17404.2

104.7

-1.96

-3.14

Returns between Bankex and IDBI Bank Share Price on 2011 to 2012

50 40 30 20 10 0 Apr-11 Dec-11 May-11 Mar-11 y x

Jan-12

-10 -20 -30 -40

Interpretation:

43

Mar-12

Aug-11

Oct-11

Jun-11

Nov-11

Feb-11

Sep-11

Feb-12

Jul-11

From the above table, it is interpreted that the index return is negative and the IDBI Bank stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

IDBI Bank return has the highest return of 30.20% during the month of January 2012 and the lowest return of -20.63% during the month of November 2011.

Returns between Bankex and Indian Bank Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66

Indian Bank
204.55 232.45 241 222.25 212.65 225.5 206.4 212.8 217.25 189.05 184.2 221.3 240.15

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25

Y -2.68 13.63 3.67 -7.78 -4.31 6.04 -8.47 3.10 2.09 -12.98 -2.56 20.14 8.51

44

Mar2012

17404.2

239.7

-1.96

-0.18

Returns between Bankex and Indian Bank Share Price on 2011 to 2012

40 30 20 10 0 Apr-11 May-11 Oct-11 Mar-11 Dec-11 y x

Jan-12

-10 -20 -30

45

Mar-12

Aug-11

Feb-11

Jun-11

Sep-11

Nov-11

Feb-12

Jul-11

Interpretation: From the above table, it is interpreted that the index return is negative and the Indian Bank stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

Indian Bank return has the highest return of 20.14% during the month of January 2012 and the lowest return of -12.98% during the month of November 2011.

Returns between Bankex and IOB Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55

IOB Bank
132.75 143.6 152.65 142.25 146.85 138.45 109.95 92.65 102.4 92.55 73.55 87.55

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24

Y 1.76 8.17 6.30 -6.81 -3.23 -5.72 -20.58 -15.73 10.52 -9.61 -20.52 19.03

46

Feb2012 Mar2012

17752.66 17404.2

102 94.3

3.25 -1.96

16.50 -7.54

Returns between Bankex and IOB Share Price on 2011 to 2012

40 30 20 10 0 Apr-11 May-11 Mar-11 Dec-11 y x

Jan-12

-10 -20 -30

Interpretation: 47

Mar-12

Aug-11

Oct-11

Jun-11

Nov-11

Feb-11

Sep-11

Feb-12

Jul-11

From the above table, it is interpreted that the index return is negative and the IOB stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

IOB return has the highest return of 19.03% during the month of January 2012 and the lowest return of -20.58% during the month of December 2011.

Returns between Bankex and Punjab National Bank Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

PN Bank
1054.75 1220.15 1185.85 1099.7 1089.6 1124.25 930.5 951.75 976.5 882.9 784 940.3 956.35 926.05

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

Y -4.32 15.68 -2.81 -7.26 -0.91 3.18 -17.23 2.28 -9.58 -11.20 19.96 1.70 -3.16 -0.27

48

Returns between Bankex and Punjab National Bank Share Price on 2011 to 2012

30 20 10 0 May-11 Mar-11 Dec-11 Apr-11 Jun-11 Oct-11 -10 -20 -30 Mar-12 Aug-11 Nov-11 Feb-11 Sep-11 Jan-12 Feb-12 Jul-11 y x

Interpretation: 49

From the above table, it is interpreted that the index return is negative and the PNB stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

PNB return has the highest return of 19.96% during the month of January 2012 and the lowest return of -17.23% during the month of August 2011.

Returns between Bankex and State Bank of India Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

SBI Bank
2632 2767.9 2805.6 2297.8 2405.95 2342 1974.5 1911.1 1906.7 1762.85 1619.5 2061.05 2243.4 2095

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

Y -0.34 5.16 1.36 -18.09 4.70 -2.65 -15.69 -3.21 -0.23 -7.54 -8.13 27.26 8.84 -6.61

50

Returns between Bankex and State Bank of India Share Price on 2011 to 2012

50 40 30 20 10 0 May-11 Apr-11 Oct-11 Mar-11 Dec-11 -10 -20 -30 Mar-12 Aug-11 Feb-11 Jun-11 Sep-11 Jan-12 Nov-11 Feb-12 Jul-11 y x

Interpretation: From the above table, it is interpreted that the index return is negative and the SBI stock return is also negative. This is because the stock price fell continuously during the period

51

the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

SBI return has the highest return of 27.26% during the month of January 2012 and the lowest return of -18.09% during the month of May 2011.

Returns between Bankex and Syndicate Bank Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

Syndicate Bank
114.2 121.95 116.9 116.95 117.45 119.75 101.25 104 108.25 99.65 68.5 96.25 109.8 111.05

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

Y 7.17 6.78 -4.14 0.04 0.42 1.95 -15.44 2.71 4.08 -7.94 -31.25 40.51 14.07 1.13

52

Returns between Bankex and Syndicate Bank Share Price on 2011 to 2012

60 50 40 30 20 10 0 May-11 Mar-11 Dec-11 Apr-11 Oct-11 Jun-11 -10 -20 -30 -40 Mar-12 Aug-11 Nov-11 Feb-11 Sep-11 Jan-12 Feb-12 Jul-11 y x

Interpretation:

From the above table, it is interpreted that the index return is negative and the Syndicate Bank stock return is also negative. This is because the stock price fell continuously 53

during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011.

Syndicate Bank return has the highest return of 40.51% during the month of January 2012 and the lowest return of -31.25% during the month of December 2011.

Returns between Bankex and Union Bank Share Price on 2011 to 2012

Month Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012

Bankex 17623.4 19445.22 19135.19 18503.28 18845.87 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

Union Bank
312.75 347.45 319.55 317.95 292.8 289.35 241.6 246.05 225.7 212.25 169.55 229.15 233.2 234.85

x -3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

Y -5.42 11.09 -8.02 -0.50 -7.91 -1.17 -16.50 1.84 -8.27 -5.95 -20.11 35.15 1.76 0.70

54

Returns between Bankex and Union Bank Share Price on 2011 to 2012

50 40 30 20 10 0 May-11 Mar-11 Dec-11 Apr-11 Oct-11 -10 -20 -30 Mar-12 Aug-11 Feb-11 Jun-11 Sep-11 Jan-12 Nov-11 Feb-12 Jul-11 y x

Interpretation:

From the above table, it is interpreted that the index return is negative and the Union Bank stock return is also negative. This is because the stock price fell continuously during the period the bankex returns has reached highest of 11.24% in the month of January 2012 and the lowest of -14.05% during the month of November 2011. 55

Union Bank return has the highest return of 35.15% during the month of January 2012 and the lowest return of -20.11% during the month of December 2011.

56

2.2 Correlation coefficient

2.2.1 Correlation between Bankex and ANDHRA BANK Share Price for the period Feb 11-Mar 12 r= nxy-(x)(y) n x^2-(yx)2 Month Feb2011 Bankex 17623.4 Andhra Bank
135.65 150.95 139 142.9 134.15 135.5 129.9 123.85 118.7 99.35 79.95 102.15 130.8 119.3

ny^2-(y)2 X y -2.58 11.27 7.91 2.80 -6.12 1.06 4.13 -4.65 -3.94 -16.30 19.52 27.76 28.04 4.56 X2 14.76 106.86 2.54 8.93 3.42 197.52 8.73 1.78 59.70 79.80 17.19 126.54 10.57 3.85 Y2 6.68 127.21 62.67 7.87 37.49 1.01 17.08 21.69 15.59 265.74 381.29 771.02 786.62 77.29 Xy 9.93 116.59 12.62 -8.38 -11.33 -14.44 -12.23 6.22 -30.51 145.62 80.96 312.36 91.20 17.25

-3.84 10.33 -1.59 -2.98 1.85 -14.05 2.96 -1.33 7.72 -8.93 -4.14 11.24 3.25 -1.96

Mar2011 19445.22 Apr2011 19135.19

May2011 18503.28 June2011 18845.87 July2011 16197.2

Aug2011 16676.75 Sep2011 Oct2011 16453.76 17705.1

Nov2011 16123.46 Dec2011 Jan2012 Feb2012 Mar2012 r = 0.55 Inference 15454.92 17193.55 17752.66 17404.2

r2 =0.30

The correlation between BANKEX and ANDHRA BANK is 0.55. Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.30 shows that there is 30% of variation in Andhra stock return as compared to the return on the Bankex. 57

Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

Axis
1223.9 1403.65 1286 1278.6 1289 1338.15 1075 1021.45 1159.7 947.5 806.75 1074.2 1178.05 1145.9

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

y -1.83 14.68 -8.38 -0.57 0.81 3.81 -19.66 -4.98 13.53 9.66 -18.29 -14.85 33.15 -2.72

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.55 10.57 3.85

Y2 3.35 215.69 70.25 0.33 0.66 14.53 386.72 24.81 183.18 334.80 220.66 1099.0 93.46 7.44

Xy 7.04 151.82 13.36 1.90 1.50 53.58 58.22 6.66 102.93 163.45 61.59 372.94 31.43 5.35

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.79 r2 =0.62

Inference The correlation between BANKEX and AXIS BANK is 0.79 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.62 shows that there is 62% of variation in Axis stock return as compared to the return on the Bankex.

58

Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

BOB
870.85 963.15 912.15 863.4 871.9 878.3 736.6 763.85 771.5 700.6 660.85 753.45 803.8 793.65

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

y 0.19 10.59 -5.29 -5.34 0.98 0.73 -16.13 3.69 1.00 -9.18 -5.67 14.01 6.68 -1.26

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 0.03 112.33 28.03 28.56 0.96 0.53 260.28 13.68 1.00 84.45 32.19 196.34 44.65 1.59

Xy -0.75 109.56 8.44 17.64 1.82 -10.31 -47.76 -4.94 7.61 82.09 23.52 157.53 21.73 2.47

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.40 r2 =0.16

Inference The correlation between BANKEX and BOB BANK is 0.40 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.16 shows that there is 16% of variation in BOB stock return as compared to the return on the Bankex.

59

Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

BOI
439.05 478.1 456.95 445.05 414.3 386.45 309.7 315.6 331.75 327.45 266.3 344.25 371.05 361

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

y -0.03 8.89 -4.42 -2.60 -6.90 -6.72 -19.86 1.90 5.11 -1.29 -18.67 29.27 7.78 -2.70

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 1.16 79.10 19.56 6.78 47.73 45.18 394.42 3.62 26.18 1.67 348.74 856.81 60.60 7.33

Xy 0.13 91.94 7.05 8.59 -12.79 94.47 -58.80 -2.54 38.91 11.57 77.43 329.08 25.31 5.31

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.55 r2 =0.31

Inference The correlation between BANKEX and BOI BANK is 0.55 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.31 shows that there is 31% of variation in BOI stock return as compared to the return on the Bankex.

60

Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

CANARAB X BANK -3.84

610 626.15 631.1 544.6 524.3 460.6 426.6 443.75 469.25 430.1 363.6 470.85 510.15 473.65

Y 1.31 2.64 0.79 -13.70 -3.72 -12.14 -7.38 4.02 5.74 -8.34 -15.46 29.49 8.34 -7.15

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 1.72 7.00 0.62 187.85 13.89 147.61 54.48 16.16 33.02 69.60 239.05 870.04 69.66 51.18

Xy -5.04 27.36 -1.26 45.26 -6.90 170.75 -21.85 -5.37 43.70 74.53 64.10 331.62 27.14 14.04

10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.71 r2 =0.51

Inference The correlation between BANKEX and CANARA BANK is 0.71 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.51 shows that there is 51% of variation in Canara Bank stock return as compared to the return on the Bankex.

61

Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

HDFC
2049.7 2342.95 2292.5 2388.3 2502.6 487.4 472.2 467.25 489.05 441.45 427.05 490.9 517.8 520.05

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

y 14.30 -2.15 4.17 4.78 -80.52 -3.11 -1.04 4.66 -9.73 -3.26 14.95 5.47 0.43 1.83

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 204.68 4.63 17.46 22.90 6484 9.72 1.09 21.76 94.73 10.63 223.54 30.02 0.18 3.37

Xy -54.98 -22.25 -6.66 -15.80 -149.09 43.82 -3.10 -6.23 -74.02 29.13 -61.99 61.64 1.41 -3.60

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.12 r2 =0.01

Inference The correlation between BANKEX and HDFC BANK is 0.12 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.01 shows that there is 01% of variation in HDFC Bank stock return as compared to the return on the Bankex.

62

Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

ICICI
971 1112.75 1114.25 1086 1093.1 1037.75 873.25 875.35 930.5 714.15 684.6 902 906.5 887.25

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

y -4.80 14.59 0.13 -2.53 0.65 -5.06 -15.85 0.24 6.30 -23.25 -4.13 31.75 0.49 -2.12

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 23.07 213.11 0.01 6.42 0.42 25.63 251.27 0.57 39.69 540.60 17.12 1008.4 0.24 4.50

Xy 18.46 150.90 -0.21 8.37 1.21 71.16 -46.93 -0.32 47.91 -207.70 17.15 357.24 1.62 4.16

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.37 r2 =0.14

Inference The correlation between BANKEX and ICICI BANK is 0.37 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.14 shows that there is 14% of variation in ICICI Bank stock return as compared to the return on the Bankex.

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Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

IDBI
131.35 142.45 143.55 134.25 136.05 128.65 110.3 102.75 116.8 92.7 77.8 101.3 108.1

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25

Y -7.10 8.45 0.77 -6.47 1.34 -5.43 -14.26 -6.84 13.67 -20.63 -16.07 30.20 6.71 -3.14

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 50.51 71.41 0.59 41.97 1.79 29.58 203.44 46.85 186.97 425.74 258.35 912.37 45.06 9.89

Xy 27.31 87.35 -1.23 21.39 2.48 76.44 -42.22 9.15 103.99 184.32 66.64 339.59 21.82 6.17

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

104.7

-1.96

r=0.75 r2 =0.56

Inference The correlation between BANKEX and IDBI BANK is 0.75 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.56 shows that there is 56% of variation in IDBI Bank stock return as compared to the return on the Bankex.

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Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

INDIAN X BANK -3.84

204.55 232.45 241 222.25 212.65 225.5 206.4 212.8 217.25 189.05 184.2 221.3 240.15 239.7

y -2.68 13.63 3.67 -7.78 -4.31 6.04 -8.47 3.10 2.09 -12.98 -2.56 20.14 8.51 -0.18

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 7.22 186.03 13.52 60.52 18.65 36.51 71.74 9.61 4.37 168.49 6.58 405.66 72.55 0.03

Xy 10.32 140.99 -21.57 199.88 -7.99 -84.92 -25.07 -4.14 15.90 115.95 10.63 226.44 275.69 0.36

10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.74 r2 =0.55

Inference The correlation between BANKEX and INDIAN BANK is 0.74 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.55 shows that there is 55% of variation in INDIAN Bank stock return as compared to the return on the Bankex.

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Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

IOB
132.75 143.6 152.65 142.25 146.85 138.45 109.95 92.65 102.4 92.55 73.55 87.55 102 94.3

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

Y 1.76 8.17 6.30 -6.81 3.23 -5.72 -20.58 -15.73 10.52 -9.61 -20.52 19.03 16.50 -7.54

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 3.10 66.80 39.71 46.41 10.45 32.71 423.74 247.57 110.74 92.52 421.45 362.31 272.40 56.98

Xy -6.77 84.49 -63.32 153.27 5.98 80.39 -60.94 21.03 80.03 85.92 85.12 214.0 53.67 14.81

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.02 r2 =4.04

Inference The correlation between BANKEX and IOB BANK is 0.02 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 4.04 shows that there is 04% of variation in IOB Bank stock return as compared to the return on the Bankex.

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Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

PNB
971 1040 1175 1009 1030 1082.4 900.35 897.45 872 846 751.1 756.7 889 890.1

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

Y -4.32 -15.68 -2.81 -7.26 -0.91 3.18 -17.23 2.28 -9.58 -11.20 19.93 1.70 -3.16 -0.27

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 18.68 245.90 7.90 52.77 0.84 10.11 297.0 5.21 91.87 125.47 397.45 2.91 10.03 0.07

Xy 16.61 162.10 4.48 23.99 -1.70 -44.69 -51.02 -3.05 -72.89 100.06 82.66 -19.20 -10.30 0.54

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.06 r2 =4.85

Inference The correlation between BANKEX and PNB BANK is 0.06 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 4.85 shows that there is 04% of variation in PNB Bank stock return as compared to the return on the Bankex.

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Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

SBI
2632 2767.9 2805.6 2297.8 2405.95 2342 1974.5 1911.1 1906.7 1762.85 1619.5 2061.05 2243.4 2095

X -3.84 10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

Y -0.34 5.13 1.36 -8.09 4.70 -2.65 -15.67 -3.21 -0.23 -7.54 -8.13 27.26 8.84 -6.61

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 0.11 26.65 1.85 327.59 22.15 7.06 246.22 10.30 0.05 56.91 66.12 743.35 78.27 43.75

Xy 1.31 53.37 -2.17 59.76 8.71 7.35 -46.45 4.29 -1.75 67.39 33.71 306.71 28.77 12.98

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.55 r2 =0.30

Inference The correlation between BANKEX and SBI BANK is 0.55 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.30 shows that there is 30% of variation in SBI Bank stock return as compared to the return on the Bankex.

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Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

SYNDICATE X BANK -3.84

114.2 121.95 116.9 116.95 117.45 119.75 101.25 104 108.25 99.65 68.5 96.25 109.8 111.05

Y 7.17 6.78 -4.14 0.04 0.42 1.95 15.44 2.71 4.08 -7.94 -31.25 40.51 14.07 1.13

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 51.54 46.05 17.14 1.82 0.18 3.83 238.66 7.37 16.69 63.11 977.15 1641.13 198.18 1.29

Xy -27.59 70.15 6.60 -0.14 0.79 -27.52 -45.73 -3.63 -31.07 70.96 129.61 455.73 45.77 -2.23

10.33 -1.59 -3.30 1.85 -14.05 2.96 -1.33 7.60 -8.93 -4.14 11.24 3.25 -1.96

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

r=0.49 r2 =0.24

Inference The correlation between BANKEX and SYNDICATE BANK is 0.49 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.24 shows that there is 24% of variation in SYNDICATE Bank stock return as compared to the return on the Bankex.

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Month Feb2011 Mar2011 Apr2011

Bankex 17623.4 19445.22 19135.19

UNION BANK X Y -3.84 -5.42

300.05 315 317 286.1 287.5 280.6 225.5 224.55 207.2 197.25 155.5 165.25 221.3 208.6

X2 14.76 106.86 2.54 10.90 3.42 197.52 8.76 1.78 57.83 79.80 17.19 126.39 10.57 3.85

Y2 29.46 123.10 64.47 0.25 62.56 1.38 272.33 3.39 68.40 35.51 404.72 1233.54 3.12 0.50

Xy 20.85 114.69 12.80 1.65 -14.64 16.55 -48.85 -2.46 -62.89 53.23 83.41 395.44 5.74 -1.38

10.33 11.09 -1.59 -8.02 -3.30 -0.50 1.85 -7.91

May2011 18503.28 June2011 18845.87 July2011 Aug2011 Sep2011 Oct2011 Nov2011 Dec2011 Jan2012 Feb2012 Mar2012 16197.2 16676.75 16453.76 17705.1 16123.46 15454.92 17193.55 17752.66 17404.2

-14.05 -1.17 2.96 -16.50

-1.33 1.84 7.60 8.27

-8.93 -5.95 -4.14 -20.11 11.24 35.15 3.25 1.76

-1.96 0.70

r=0.47 r2 =0.22

Inference The correlation between BANKEX and UNION BANK is 0.47 Thus we find that there is a positive correlation between the above two returns.

Correlation coefficient of 0.22 shows that there is 22% of variation in UNION Bank stock return as compared to the return on the Bankex.

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BETA ANALYSIS
Beta is the slope of the characteristic regression line. Beta describes the relationship between the stocks return and the index returns.

Beta =+1.0 one percent change in market index return. It indicates that the stock moves in tandem with the market.

Beta =+0.5 one percent change in market index return. The stock is less volatile compared to the market.

Beta =+2.0 one percent change in market index return cause 2 percent change in the stock return. The stock return is more volatile. The stocks with more then 1 beta value are considered to be risky.

Negative beta value indicates that the stocks return movies in the opposite direction to the market return. A stock with a negative beta value of -1 would provide a return of 10 percent, if the market return decline by 10 percent and vice versa.

Stocks with negative beta resist the decline in the market return, but stocks with negative returns are very rare.

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Table of Beta values of banking sector for the period Feb 11 Mar 12

= n xy-(x)( y)
____________ n(x^2)-( y^2) NAME OF THE BANKS ANDHRA BANK AXIS BANK BANK OF BARODA BANK OF INDIA CANARA BANK HDFC BANK ICICI BANK IDBI BANK INDIAN BANK IOB BANK PUNJAB NATIONAL BANK STATE BANK OF INDIA SYNDICATE BANK UNION BANK BETA VALUES =1.11 =1.60 =0.44 =0.96 =1.18 =-0.41 =0.66 =1.41 =0.94 =1.16 =0.09 =0.88 =1.10 =1.11

Inference : ANDHRA BANK Beta for Andhra Bank is 1.11% which indicates risk much in line with the BANKEX. AXIS BANK Beta for Axis Bank is 1.60% which indicates risk much in line with the BANKEX. BOB Beta for BOB Bank is 0.44% which indicates risk much in line with the BANKEX. BOI Beta for BOI Bank is 0.96% which indicates risk much in line with the BANKEX. CANARA BANK Beta for CANARA Bank is 1.18% which indicates risk much in line with the BANKEX. HDFC Beta for HDFC Bank is -0.41% which indicates risk much in line with the BANKEX. ICICI Beta for ICICI Bank is 0.66% which indicates risk much in line with the BANKEX. 72

IDBI Beta for IDBI Bank is 1.41% which indicates risk much in line with the BANKEX. INDIAN BANK Beta for INDIAN Bank is 0.94% which indicates risk much in line with the BANKEX. IOB Beta for IOB Bank is 1.16% which indicates risk much in line with the BANKEX. PNB Beta for PNB Bank is 0.09 % which indicates risk much in line with the BANKEX. SBI Beta for SBI Bank is 0.88 % which indicates risk much in line with the BANKEX. SYNDICATE BANK Beta for SYNDICATE Bank is 1.10 % which indicates risk much in line with the BANKEX. UNION BANK Beta for UNION Bank is 1.11 % which indicates risk much in line with the BANKEX.

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2.3. ALPHA ANALYSIS OF THE BANKS ON 2011 2012

= . x

Name of the Bank ANDHRA BANK AXIS BANK BANK OF BARODA BANK OF INDIA CANARA BANK HDFC BANK ICICI BANK IDBI BANK INDIAN BANK IOB BANK PUNJAB NATIONAL BANK STATE BANK OF INDIA SYNDICATE BANK UNION BANK

Alpha values

=0.25 =0.53 =-0.29 =-0.60 =-0.94 =-3.57 =3.15 =-1.15 =1.43 =-1.34 =-0.98 =-0.96 =1.58 =-1.54

Interpretation:

The positive value of alpha is a healthy sign. positive alpha value would yield profitable return. Those who banks are got positive sign it considered to be healthy return and those who banks are got negative sign it considered to be unhealthy returns.

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ANDHRA BANK: The Andhra bank has positive sign of 0.25% therefore it will yield profitable returns.

AXIS BANK: The Axis bank has positive sign of 0.53% therefore it will yield profitable returns.

BOB: The BOB bank has negative alpha of -0.29% thereby indicating the probability of getting low or no returns.

BOI: The BOI bank has negative alpha of -0.60% thereby indicating the probability of getting low or no returns.

CANARA BANK: The CANARA Bank has negative alpha of -0.94% thereby indicating the probability of getting low or no returns.

HDFC: The HDFC Bank has negative alpha of -3.37% thereby indicating the probability of getting low or no returns.

ICICI: The ICICI Bank has positive sign of 3.15% therefore it will yield profitable returns.

IDBI: The IDBI Bank has negative alpha of -1.15% thereby indicating the probability of getting low or no returns.

INDIAN BANK: The INDIAN Bank has positive sign of 1.43% therefore it will yield profitable returns.

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IOB: The IOB Bank has negative alpha of -1.34% thereby indicating the probability of getting low or no returns.

PNB: The PNB Bank has negative alpha of -0.98% thereby indicating the probability of getting low or no returns.

SBI: The SBI Bank has negative alpha of -0.96% thereby indicating the probability of getting low or no returns.

SYNDICATE BANK: The SYNDICATE Bank has positive sign of 1.58% therefore it will yield profitable returns.

UNION BANK: The UNION Bank has negative alpha of -1.54% thereby indicating the probability of getting low or no returns.

76

SUMMARY OF FINDINGS The Correlation between BANKEX and BANK stock returns are positive throughout the study period. ANDHRA BANK Andhra bank return are highly volatile. Alpha value has postive sign of 0.25% therefore it will yield profitable returns. Axis Bank Axis bank returns are highly volatile. Alpha value has positive sign of 0.53% therefore it will yield profitable returns. BOB BOB bank returns are highly volatile. The Alpha value has negative sign of -0.29% therefore it will not yield profitable returns to the investors. BOI BOI Bank returns are highly volatile. The Alpha value has negative sign of -0.60 % therefore it will not yield profitable returns to the investors. CANARA BANK Canara bank returns are highly volatile. The Alpha value has negative sign of -0.94% therefore it will not yield profitable returns to the investors. HDFC HDFC bank stocks returns are highly volatile.The Alpha has negative sign of -3.57 therefore it will not yield profitable returns to the investors. ICICI ICICI bank returns are highly volatile. The Alpha value has positive sign of 3.15% therefore it will yield profitable returns. IDBI - IDBI bank stocks returns are highly volatile. The Alpha value has negative sign of -1.15 therefore it will not yield profitable returns to the investors.

77

 INDIAN BANK- INDIAN bank returns are highly volatile. The Alpha value has postive sign of 1.46 therefore it will yield profitable returns. IOB - IOB bank returns are highly volatile ..The alpha has negative sign of -1.34 therefore it will not yield profitable returns to the investors. PNB PNB bank returns are highly volatile. The alpha value has negative sign of -0.98% therefore it will not yield profitable returns to the investors. SBI - SBI bank returns are highly volatile. The alpha value has negative sign of 0.96% therefore it will not yield profitable returns to the investors. SYNDICATE BANK - SYNDICATE bank returns are highly volatile. The Alpha value has positive sign of 1.58 therefore it will yield profitable returns. UNION BANK - UNION bank returns are highly volatile. The alpha value has negative sign of -1.94% therefore it will not yield profitable returns to the investors.

78

SUGGESTION

When calculating the real index, more number of banks can be included. When calculating index, the developing banking share prices can be included, because it will help to find the real growth of the banking sector and index. It is found that Axis, ICICI, BOI, IDBI and SBI have highly volatility in the BANKEX. It is risky for the investors.

79

CONCLUSION

From the above study, it is concluded that the share price movement and the BANKEX movements are parallel. Majority of the bankex scripts are highly volatile and they are risky for the investors. There is a positive correlation between bank stock returns and bankex index. The economys recession condition also will determine the volatility movement of the Bankex index which is a variant of the Sensex. The Sensex index movement also based on the world various stock index reflection.

80