Page 118 - DCOM504_SECURITY_ANALYSIS_AND_PORTFOLIO_MANAGEMENT

Unit 4: Fundamental Analysis

5. Inflation Notes
6. Growth in GDP
7. Institutional lending
8. Stock prices

9. Monsoons
10. Productivity of factors of production
11. Fiscal deficit
12. Credit/Deposit ratio

13. Stock of food grains and essential commodities
14. Industrial wages
15. Foreign trade and balance of payments position
16. Status of political and economic stability

17. Industrial wages
18. Technological innovations
19. Infrastructural facilities
20. Economic and industrial policies of the government

21. Debt recovery and loans outstanding
22. Interest rates
23. Cost of living index
24. Foreign investments

25. Trends in capital market
26. Stage of the business cycle
27. Foreign exchange reserves

Notes In a globalised business environment, the top-down analysis of the prospects of a
firm must begin with the global economy. The global economy has a bearing on the
export prospects of the firm, the competition it faces from international competitors, and
the profitability of its overseas investors.

The government employs two broad classes of macroeconomic policies, viz. demand-side policies
and supply-side policies.

Traditionally, the focus was mostly on fiscal and monetary policies, the two major tools of
demand-side economics. From the 1980s onward, however, supply-side economics has received
a lot of attention.
1. Fiscal Policy: Fiscal policy is concerned with the spending and tax initiatives of the
government. It is the most direct tool to stimulate or dampen the economy.

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