Topic Name: Relationship of Punjab National Bank (PNB) with NIFTY.
Author: Pritesh Deeliprao Mehtre, Roll No. : 95
Introduction: Punjab National Bank (PNB) stands as one of India’s prominent and well-established public sector banks, with a rich history spanning over a century. Founded in 1894, PNB has grown to become one of the leading financial institutions in the country. It has consistently played a pivotal role in India’s economic growth and development by providing a range of banking and financial services to individuals, businesses, and industries. PNB’s commitment to innovation, customer service, and community welfare has cemented its reputation as a trustworthy and reliable banking partner. Over the years, the bank’s expansion, adoption of modern technologies, and dedication to maintaining high ethical standards have contributed to its prominence in the Indian banking sector.
Objective: To calculate beta of Punjab National Bank (PNB) and find out its significance.
Views & reviews: Atul Kumar Goel, CEO of Punjab National Bank, shared his insights on the bank’s dedication to delivering unparalleled financial experiences: “At Punjab National Bank, our objective is to revolutionize banking by offering the finest financial solutions to our customers. We persistently push the boundaries to bring innovation and elevate our services, guaranteeing that every interaction with our bank is noteworthy and gratifying.”
Data Collection: Data is collected from 01-07-2022, to 30-06- 2023. It has been obtained from a reliable financial source, and weekly closing prices of Nifty (X) and Punjab National Bank (PNB) (Y) have been calculated.
Data Analysis: – Equation “Y= -0.28586 + 0.2035 (X)”
(tstat = 1.224168)
n = 45, R2 =0.0344, F = 1.4985
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of Punjab National Bank. (y) the positive sign means a negative relationship meaning if “x” rises “y” rises and vice versa. If “x” rises by 1 unit, “y” rises by 0.2035, “n” means there are 45 observations. The t-stat for b is 1.2241, which means b is statistically significant at 5% level. R2 is 0.0344 means 3.45% of y is explained by x, balance 96.55% is error due to the variables which are not in model. As the calculated value of F =1.4985 is more than the tabulated F (F 0.05,1DF,44DF) = 4.073, the overall model is statistically significant at the 5% level. So overall the model is statistically not significant at the 5% level.
Conclusion: As Beta is 0.2035 which is less than 1, the share is good for long term.