STOCK MARKET BAROMETER

OF THE ECONOMY
(Against)

Presented By:
1. Hemanth K
2. Arvind Kumar
3. Siddhartha S

INDIAN FINANCIAL SERVICES 1

STOCK MARKET IS NOT THE BAROMETER OF
THE ECONOMY

INDIAN FINANCIAL SERVICES 2

1. Role of corporate sector is not dominant

2. The stock market is not the barometer for

performance of the entire corporate sector

3. Stock market does not help completely

channelize saving the economy

INDIAN FINANCIAL SERVICES 3

1. ROLE OF CORPORATE SECTOR IS NOT
DOMINENT

Non- Corporate

23.5 Government

37.7 private Corporate

Agriculture
Others
14.9

23.8

SOURCE: WWW.BLONNET.COM
INDIAN FINANCIAL SERVICES 4
 NON - CORPORATE SECTOR

 PARTNERSHIP /PROPRITERSHIP (38%)

 AGRICULTURE (24%)

 Government (24%)

INDIAN FINANCIAL SERVICES 5

 In trade, transportation, hotels, restaurants –
share of non corporate sector is 70%

INDIAN FINANCIAL SERVICES 6

 The average annual growth rate is more then 8
%, while the growth rate of the industrial sector
is around 5%

 Service sector-main drive for GDP growth

 Even if the entire corporate sector vanishes, the

national income will only drop by some 14%

INDIAN FINANCIAL SERVICES 7

2.THE STOCK MARKET IS NOT THE BAROMETER FOR
PERFORMANCE OF THE ENTIRE CORPORATE SECTOR

 7 lakh companies in India- approx 6 thousand are listed

 Among 6000 only Top 100 account for 45% of the trading
in stock market

 A substantial portion of the transaction is for gains or

losses at the margin and it is the day-traders who are
active in the market.

INDIAN FINANCIAL SERVICES 8

3.STOCK MARKET DOES NOT COMPLETELY
CHANNELIZE SAVINGS OF THE ECONOMY

 ThePercentage of HOUSEHOLD SAVINGS as a

portion of investment in STOCK MARKET is 17%
(approx)

 HenceCorporate Sector plays a small role in

our economy than non corporate

INDIAN FINANCIAL SERVICES 9

HOW DO WE ASSESS GROWTH IN THE
ECONOMY???

 Infrastructure

 Transportation

 Retail outlets

 Service outlets

INDIAN FINANCIAL SERVICES 10

INDIAN FINANCIAL SERVICES 11