Exploratory Analysis of High Frequency, Leading Macroeconomic Indicators and Their Ability to Predict Corporate Performance

Exploratory Analysis of High Frequency, Leading Macroeconomic Indicators and their ability to predict Corporate Performance

Submitted in partial fulfillment of PGDM Programme by

JITESH SAWRIRAJAN

PGDM (2015 – 2017)

Roll No. 80011215126 (C019)

Faculty Mentor

Prof. Rajesh Madhavan

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PREFACE

The Economy of India is the seventh-largest in the world measured by Nominal GDP and third-largest in terms of purchasing power parity. India has been recently christened as a newly industrialized country and one of the G-20 major economies. Adding to this, the shift in political power and inflow of money from foreign quarters in the recent times has spurred the growth rate in general. India has replaced People’s Republic of China as the fastest growing major economy. The above factors coupled with not so promising investment scenario in emerging countries made India to be touted as “Investor-friendly”. However, given the fact that it is a part of globalized economy and affects economic contours, it is essential to look into the aspects which affect the India economy internally as well as externally. Also, it is essential that the investments are made in the right sectors to generate the expected returns. This study takes us through the collection of relevant Macroeconomic Data and analysis of the same. The datasets used for analysis being the Banking Stocks, Bank Indices, Consumer Price Index, high frequency indicators such as the Oil Prices & Bank Credit Data, automobile sales, Balance of Payments, individual GDP components. All these macroeconomic variables were studied in relation to each other and the correlation between them was used to analyze the investment friendly sectors.

                JITESH SAWRIRAJAN

BANGALORE
04th July, 2016

ACKNOWLEDGEMENT

I would like to express my thanks and gratitude to my mentors at Azim Premji Foundation and my faculty mentor. The constant guidance and advice from them was significant in completing the summer internship successfully.

First and foremost, I would like to thank Mr. K. R. Lakshminarayan, Chief Endowment Office, Azim Premji Foundation, for giving me an opportunity of joining the Foundation and providing the required resources to complete the Internship.

The project would not have taken the right direction if not for the constant support and guidance given by my mentors – Mr. Sriram Mahadevan, Principal – Endowment Investment Group and Mr. Ravi Kiran Vadapally. I would like to sincerely express my thanks to them without which the project would have been incomplete.

Also the project was an outcome of constant interest in knowing the world economy and the investment avenues in foreign countries, which was initiated by my faculty guide Prof. Rajesh Madhavan. His advice at various stages of the project helped me immensely in successfully completing the project.