Impact of Agriculture2

8/14/2019 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

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Impact of Agriculture2