TITLE – RELATIONSHIP BETWEEN NIFTY50 AND EQUITY(PUNJAB NATIONAL BANK)
AUTHOR– PRACHI SOMNATHE (BATCH F1)
COMPANY NAME-Punjab National Bank
Introduction– Punjab National Bank (abbreviated as PNB) is an Indian public sector bank based in New Delhi. It was founded in May 1894 and is the third-largest public sector bank in India in terms of its business volumes, with over 180 million customers, 12,248 branches, and 13,000+ ATMs.PNB has a banking subsidiary in the UK (PNB International Bank, with seven branches in the UK), as well as branches in Hong Kong, Kowloon, Dubai, and Kabul. It has representative offices in Almaty (Kazakhstan), Dubai (United Arab Emirates), Shanghai (China), Oslo (Norway), and Sydney (Australia). In Bhutan, it owns 51% of Druk PNB Bank, which has five branches. In Nepal, PNB owns 20% of Everest Bank, which has 122 branches. PNB also owns 41.64% of JSC (SB) PNB Bank in Kazakhstan, which has four branches.
Objective-
In the regression analysis we performed to investigate the relationship between equities and the Nifty50, coefficient ‘B’ performs a crucial role. With each successive modification of one unit in the Nifty50, it captures the exact numerical impact on equity and offers a deep understanding of the dynamic interrelationship between these variables.
Reviews
Punjab National Bank has TTM P/E ratio 16.69 as compared to the sector P/E of 12.53. There are 6 analysts who have initiated coverage on Punjab National Bank. There are 4 analysts who have given it a strong buy rating & 1 analyst have given it a buy rating.
Data Collection :
There are two different data that we are collected and then we start our analysis-
- Collecting the Nifty50’s historical data from January 11, 2022, to October 31, 2023, from the NSE India website. Only the Friday data are collected by shorting the total data once the complete data for the specified time period has been collected. Return values are gathered using the calculation of return based on the closing data of the Nifty 50 for the period.
- Collecting historical stock data (Jindal Steel and Power Limited) from the NSE India website between November 1, 2022, and October 31, 2023. Only the Friday data are collected by shorting the total data once the complete data for the specified time period has been collected. Using the return formula, return values are gathered based on the Nifty 50 closing data for that time period.
Equation:
Y = A + B * X
Y = (-1.063973857) + 0.766994264* X
Interpretation:
The above equation, shows us the relationship between Nifty50 and Equity. Here Nifty50 is the independent variable and the Equity is the dependent variable. Here we get the value of A is negative that means when Nifty50 increase the equity is decrease and when Nifty50 decrease the Equity is increase. If the Nifty50 increase by 1 unit the Equity decrease by 0.03681 paisa. The t-Stat for B(The co-efficient of Nifty50) is 0.7669 and the P value is 0.186, which means Equity is statically not significant for Nifty50 at 1% significant level. And we also conclude that our Significance f value is greater that 0.05 standard value, which means we consider the null hypothesis. That means the two variable that we take are not depend on each other.
Here the no of observation is 49 and the value of R2 is 0.036 which means if 1% of independent variable Nifty50 change happen then 3.6% of change is happen on the dependent variable Equity.
Here the standard error is 55% . This is happen due to the variable which are not in the model.
Here F value is the 1.796282 and the P value is 0.186606 which means overall model is statistically not significant at 1% significant level.
Conclusion :
After doing all the analysis we conclude that our B value is 0.766994264 which is less than 1 and it’s a good sign for doing long term investment.