What is Fundamental

Analysis
 Studying information about the past
performance & the the expected future
performance of companies, industries &
Economy for investment purpose.

Economic Analysis

Company Analysis

Industry Analysis
Which Country to Invest
 Analyzing in which Country to invest the
money is a crucial decision.
 John Templeton invested in USA at the
time of world war 2
 Buffet invested in china in 1980.
 MNC’s started investing in India from
1995
 Choosing the country of investment
results in opportunity lost
Which Country to Invest
 Imagine if you were a investor in which
country would you invest India, Sri
lanka, and why
Which Country to Invest
Properties INDIA SRI LANKA
Population 118 Crore people 20 Crore people
GDP real growth +7.29%per year +5.96%per year
Inflation rate +7.642%per year +16.32%per year
GDP by sector agriculture (18%), agriculture: 12.8%;
industry (22%), services industry: 29.2%;
(60%) services: 58%
Ease of doing 133 105
Business
Public debt 58% of GDP 82.9% of GDP
Foreign reserves $282.84 billion $5.2 billion
DETERMINANTS
 GDP growth rate
 Inflation
 Investment Rate
 Savings Rate
 Government Revenue & Expenditure
 Infrastructure
 Economic Stability
 Political Stability
 Population of the country
 Resources
 Budget Proposals
 Taxation policy
 Monsoon and Agriculture
ECONOMIC CYCLE

RECOVERY BOOM

DEPRESSION RECESSION
INVESTMENT
INFORMATION
 Surveys of Government
 Industry Reports
 Business Analytics
 Research by Individual Economist, Analyst
 Share Research Companies Reports.
 View point of CEOs, Business persons
 Key Actions of companies
TECHNIQUES OF ECONOMIC
FORECASTING
 Surveys
 Indicators
 Diffusion
Index
 Economic Model Building
ECONOMIC
FORECASTING
 Surveys of Government, business, Industry

 Indicators
Leading – Predicts before event, activity in stock
market
Coincidental – Predicts at happening of event,
personal income and industrial production
Lagging - indicating after event Eg, GDP
Growth rate, Employment
ECONOMIC
FORECASTING
 Economic Model Building
 Equations are formed to study the
relationship between the overall
economy & the respective industry
 For E.g: If GDP grows at 7% then
service sector grows at 14%... Car sales
grows at 21%.
 This helps to select the sector of
investment.
Assignments
 Which countries are called as Tiger
Economics.
 What’s BRIC, which countries are
included in it. Who coined this.
 Do economic analysis on China, India,
USA. Get their GDP, Growth rate,
Interest Rate, Inflation level form
internet.