Impact of Agriculture2
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Transcript of Impact of Agriculture2
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IMPACT OF AGRICULTUREIN SHARE MARKET
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FINANCIAL MARKET
(deals with financial assets)
Money Market- Short term market regulated bythe RBI
Credit Market- Short & long term marketregulated by the RBI
For-ex Market- Short & long term market for
foreign exchange regulated by the RBICredit Market- Long term market regulated by
the SEBI Act,1992
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CAPITAL MARKET
PRIMARY MARKET
Where securitiesare first issued
SECONDARY MARKET
Where securitiesalready issued are
traded
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ANALYSIS OF FLUCTUATIONS
Can be done through two approaches-
Fundamental Analysis Technical Analysis
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TECHNICAL ANALYSIS
Deals with theeffect of demand
and supply in the
market
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FUNDAMENTAL ANALYSIS
Classified into three types-
Economic Analysis Industry Analysis
Company Analysis
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ECONOMIC ANALYSIS
GDP
Exchange Rate The Balance Of Payments
Current Account Depriciated
Government Policies
Unemployment Inflation
Interest Rate etc.
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INDUSTRY ANALYSIS
Sensitivity Of Business Cycle
Industrial Life Cycle
Industrial Structure And Performance etc
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COMPANY ANALYSIS
Business & Financial Risks
Financial Statement Of The Company
Business Plan Of The Company
Management Of The Company etc
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GENERAL TERMINOLOGIES
SHARE MARKET A share is the holding of
an individual of an entity for which he is toreceive a proportionate part of the profit
measurable in terms of money. A place
where the collective shares of different
companies are traded is a share market.
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LINK OF AGRICULTURE TO
SHARES (economic analysis)
From the economic analysis point of view-
Share prices are higher when the economy is
growing
An indicator of economic growth is a healthy
export, low imports, high employment, a
prospering GDP etc.
Agriculture by contributing to all these lead to
economic growth and hence indirectly affect share
prices
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FOODGRAIN PRODUCTION
Food grain production was
estimated at 201 million tonnes in2005-2006
Commercial crops was estimated
at 244.8 million tonnes in 2003-
2004
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GROSS DOMESTIC PRODUCT
It is a measure of National Income. GDP
is the total market value of all the finalgoods and services produced in a
country during a period of time. A
prospering GDP means a highervaluation of shares.
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PERCENTAGE GROWTH OF
AGRICULTURE IN GDP
Growth of 6.5% in2001-02
Came down by 5.2% in2002-03
Rose to 9.1% in 2003-04
Fell by a mere 0.5% in2004-05
Rose to an estimated10.7% in 2005-06
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EMPLOYMENT
Provide nearly 53% of the total employment.
Good production means higher income andhigher spending.
Seeks out for low wage, resulting in higher
profits which could be used for further
investment
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EXPORTS AND IMPORTS
Agricultural exports
constitute about 20%
of the total exports.The entire amount of
which can be spent on
import of non-
agricultural goods.
Agricultural imports
constitute about 25%
of the total imports.Leads to a great loss in
foreign exchange.
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INTEREST RATE
In 2003, Rs 43000 crores of farm debt
was sourced by non-fanancialinstitutions
18000 crores was given away as
interest
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GLOBAL WARMING
Threatening 2025% of world
vegetationRise in temperature
Changing pattern of monsoons
Natural disastersChanging cropping pattern
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INFLATION
As reported by World Bank, the present price
rise will continue till 2009.After that it will decline when demand and
supply reacts to high prices.
Speculation regarding the rise of future prices
generally affect the share prices.
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CONTRIBUTION TO OTHER
SECTORS
Agri surpluses are used for industrial
development. Good productionindicates a healthy atmosphere and
higher investment most critical for
influencing share prices
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CONCLUSION
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VOTE OF THANKS