TITLE: Relationship of Panasonic Holdings Corporation (PCRFY) Nifty Fifty and to calculate Beta.
AUTHOR: Punyashri Shetty (MBA-HRM)
INTRODUCTION:
Panasonic Holdings Corporation is a Japanese multinational electronics company, headquartered in Kadoma, Osaka. It was founded in 1918 as Matsushita Electric Housewares Manufacturing Works in Fukushima, Osaka by Kōnosuke Matsushita. In 1935, it was incorporated and renamed Matsushita Electric Industrial Co., Ltd. In 2008, it changed its name to Panasonic Corporation. In 2022, it became a holding company and was renamed. In addition to consumer electronics, of which it was the world’s largest maker in the late 20th century, Panasonic offers a wide range of products and services, including rechargeable batteries, automotive and avionic systems, industrial systems, as well as home renovation and construction.
OBJECTIVE: To calculate Beta of Panasonic Holding Corporation and see its significance.
LITERATURE REVIEW:
- Wakayama, et al., (2012) In a break from the conventional flow of innovation from the home country to emerging markets, Panasonic brought the sterilization idea back to Japan, where consumers are typically not concerned about bacteria in clothing but worry about contamination in food. So for the Japanese market, Panasonic now routinely uses the sterilization feature in refrigerators. Panasonic established a lifestyle research centre in Europe (Wiesbaden, Germany) and in 2010 brought similar capacities to India (the Volume Zone Marketing Research Centre in Delhi). That research is part of Panasonic’s move into what it calls “integrated solutions”—holistic electronic systems for an entire home or building. These include networked appliances, smart kitchen and bath systems, linked electronic products, and solar-power generation and storage systems.
- Mukherjee, W. (2021) Panasonic India group chairman Manish Sharma said the company will exit all commoditised segments in refrigerator, washing machine and microwave ovens by 2024 after its exit from smartphones, shrinking the fixed speed AC segment and non-smart televisions. He said Panasonic India will be profitable from next fiscal, while it will grow revenue in the current fiscal itself. Panasonic improved profitability of the India business during the pandemic year, even though their sales continued to slide down continuing the trend of decline for over four years due to exit from high volume categories like smartphones and entry-level televisions to stave off from the increased Chinese competition.
DATA COLLECTION:
The data for Nifty and Equity for Panasonic Holdings Corporation has been downloaded from finance.yahoo.com for the period 1st Nov 2022 to 31st Oct 2023. The data was manipulated for closing price of nifty and equity. The weekly returns of nifty and equity were found.
DATA ANALYSIS:
Panasonic Shares = 0.1542+0.874 nifty
n =48, R-square = 0.165, F= 9.335
Hypothesis:
H0: b = 0 (There is no significant impact of nifty50 on Panasonic shares) H1: b#0 (There is a significant impact of nifty50 on Panasonic shares)
The above equation shows the relationship of Panasonic withNifty. If nifty rises by 1 unit, Panasonic will rise by 0.643 units. T-stat for beta is 0.652 and the p value is 0.518 which is more than 0.05 so b=0, meaning Nifty does not impacts Panasonic Shares.
R square is 0.08, meaning 8% of Panasonic shares is explained by Nifty, meaning 92% depends upon other things like fundamentals
F =0.4239, and p Value is more than 0.05, so the model is not statistically significant at 5% level.
CONCLUSION:
As beta (0.652) is less than 1, so Panasonic shares are good for long term investment.
REFERENCE:
- Mukherjee, W. (2021, Dec 24). Sony & panasonic improved profitability amid pandemic [companies]: Their sales in india, though, continued to decline due to the exit from high volume categories four years ago. The Economic Times (Online) Retrieved from https://www.proquest.com/newspapers/sony-amp-panasonic-improved-profitability-amid/docview/2612980547/se-
- Wakayama, Toshiro, Junjiro Shintaku, and Tomofumi Amano. “What panasonic learned in China.” Harvard Business Review 90.12 (2012): 109-113. Atu.dk.