Lecture Outline

• Project Discussion

• Rationale of choosing companies

o Technical Analysis
o Fundamental Analysis
 Project Discussion

• Submissions starting from next Wednesday

• Rs 400 million- 4 portfolios

o Active Portfolio – PKR 100 million

o Passive Portfolio – PKR 100 million
o Passive Levered Portfolio – PKR100 million
o Market/Index Portfolio – PKR 100 million
• Each group will chose ten different companies for active
and ten different companies for passive portfolios

• Companies for passive portfolios will remain the same

throughout out the semester

• Companies for active portfolio (should) change

throughout out the 10 weeks.

• The performance of Index portfolio will depend on the

index performance
 To find out the share prices
• Go to
https://markets.brecorder.com/market-data/
information-by-sectors.html

• Market data---chose the industry from the

drop down menu (eg. Banking sector)--- click
on the company of your interest and get the
closing price
• Opening, closing, highest, lowest (HBL )
 For Passive portfolio- Buying and selling of
stocks
• You will purchase the stocks for passive
portfolio on Monday and will update the
prices on every coming Monday.

• and will calculate the change in wealth (ROR)

consequently.
 For active portfolio- Buying and selling of
stocks
• You will purchase the stocks for active
portfolio on Monday and sell it on Friday.

• From that point onwards, you will sell the

stocks on Friday only and will purchase new
shares on Friday only and will calculate the
change in wealth (ROR) consequently.
WEEK 1
 Index Portfolio
• I give you 100 million Rs as your OE, you assume beginning of week 1 PSX-100 index is Price of a hypothetical share, say
PSX-100 index on that day is 43,000
• Balance sheet on day 1 (beginning) of week 1 : TA =100, TL =0; OE 100
• Suppose on the last day of week 1 PSX-100 index is 43,900
• Rp for week 1 = ( 43,900 - 43,000) / 43,000 = 0.0209 or 2.09%
• Your 100 million grew by the end of week 1 by this %age, and became 100*(1 + 0.0209) =102.09 mil Rs
• Balance sheet end of week 1: TA = 102.09; TL = 0; OE = 102.09
• You can double check Rp for week 1 as :( OE ending - OE beginning) / OE Beginning = (102.09 -100) / 100 = 0.0209 or 2.09
%
• suppose End of week 2, PSX-100 Index is at 45,000.
• Rp for week 2 = (45,000 - 43,900) / 43,900 = 0.0250 or 2.5%
• Your wealth, OE end of Week 2 = OE end week 1*(1 + Rp week of week 2). 102.09(1 +0. 0205) = 104.64 mil Rs
• Balance sheet end of week2 : TA = 104.64 mil Rs; TL = 0; OE = 104.64 Mil Rs
• You can double check Rp for week 2 as :
• ( OE ending - OE beginning) / OE beginning = (104.64 - 102.09) / 102.09 = 0.025 or 2.5%
• Suppose End of week 3 PSX -100 index is at 41,000. Rp for week 3 = (41,000 - 45,000) / 45,000 = -0.089 or -8.9%
• Your wealth, OE end of Week 3 = OE end week 2*(1 + Rp week of week 3). 104.64(1 + - 0.089) = 95.32 mil Rs
• Balance Sheet end of week 3: TA = 95.32; TL = 0; OE = 95.32
• You can double check Rp for week 3 as:
• (OE ending - OE begin) / OE begin = (95.32 - 104.64) /104.64 = -0.089 or -8.9%
• And so on , you would calculate Rp for 10 weeks and also show End OE at the end of each week.
 Index Portfolio

Monday 17th Jan 2022

Monday- 28th August 2020

Rate of Return = (new wealth – old wealth)/ old wealth

Rate of Return = (10304551.37 – 10000000) / 10000000
=0.03045 * 100
3.046%
• Draw Balance Sheet
• See a sample of balance sheet in the word file
 Passive Portfolio
Monday 17th Jan 2022
Initial investment in passive portfolio: Rs. 100,000,000

CLOSING VALUE
OF EACH SHARE WEALTH
On Monday NUMBER OF (W0) = P0 *no.
No. STOCKS (P0) SHARES of shares
1 Company A 2.27 440,000 998800
2 Company B 8.68 229999 1996391
3 Company C 44.4 22,000 976800
4 Company D 91.2 34,090 3109008
5 Company E 15.49 127,437 1974000
6 Company F 2.29 4544545 5656
7 Company G 111.22 5985 6659
8 Company H 55..23 5989 8556
9 Company I 856 69 9989
10 Company J 67.5 14,000 945000
11 Free cash 1.50
TOTA WEALTH 100,000,000
 Passive Portfolio
Monday 24th Jan 2022
CLOSING VALUE
OF EACH SHARE NUMBER OF WEALTH
No. STOCKS (P1) SHARES (W1)
1 Company A 2.65 440,000 1166000
2 Company B 9.53 229999 2191890.47
3 Company C 45.93 22,000 1010460
4 Company D 94 34,090 3204460
5 Company E 16.20 127,437 2064479.4
6 Company F 68.99 4544545 965860
7 Company G 109.22 5985 6659
8 Company H 65..23 5989 8500
9 Company I 851 69 9989
10 Company J 67.5 14,000 945000
TOTA WEALTH 106303149.87

Rate of Return = (new wealth – old wealth)/ old wealth

Rate of Return = (106303149.87 – 100000000) / 100000000
= 0.06031 * 100
= 6.031 %
• Draw Balance Sheet
• See a sample of balance sheet in the word file
 Levered Passive Portfolio
Monday 17th Jan 2022
Initial investment in passive portfolio: Rs. 150,000,000
CLOSING VALUE OF EACH
SHARE WEALTH
On Monday (W0) = P0 *no. of
No. STOCKS (P0) NUMBER OF SHARES shares
1 Company A 2.27 440,000 998800
2 Company B 8.68 229999 1996391
3 Company C 44.4 22,000 976800
4 Company D 91.2 34,090 3109008
5 Company E 15.49 127,437 1974000
6 Company F 2.29 4544545 5656
7 Company G 111.22 5985 6659
8 Company H 55..23 5989 8556
9 Company I 856 69 9989
10 Company J 67.5 14,000 945000
11 Free cash 5,000,000
TOTA WEALTH 150,000,000

Pay every week on 50 mil Rs bank loan interest = 50 mil * 0.2/52 = 0.1923 mil Rs interest.
So beginning of week one keep some cash in hand so you can pay weekly interest for the next 10 weeks, which is about 0.1923 *10
=1.923 mil Rs total for 10 weeks. So, keep at least 2 mil cash in portfolio
 Levered Passive Portfolio
Monday 24th Jan 2022
CLOSING VALUE OF
EACH SHARE WEALTH
No. STOCKS (P1) NUMBER OF SHARES (W1)
1 Company A 2.65 440,000 1166000
2 Company B 9.53 229999 2191890.47
3 Company C 45.93 22,000 1010460
4 Company D 94 34,090 3204460
5 Company E 16.20 127,437 2064479.4
6 Company F 68.99 4544545 965860
7 Company G 109.22 5985 6659
8 Company H 65..23 5989 8500
9 Company I 851 69 9989
10 Company J 67.5 14,000 945000
4.8 million
11 Cash =(5-0.1923)
TOTA WEALTH 1606303149.87

Rate of Return = (new wealth – old wealth)/ old wealth

Rate of Return = (1606303149.87 – 100000000) / 100000000
= 0.06031 * 100
= 6.031 %
• Draw Balance Sheet
• See a sample of balance sheet in the word file
 Active Portfolio
Monday 17th Jan 2022
Initial investment in passive portfolio: Rs. 100,000,000

CLOSING VALUE
OF EACH SHARE NUMBER OF WEALTH
No. STOCKS (P0) SHARES (W0)
1 Company A 2.27 440,000 998800
2 Company B 8.68 22000 1996391
3 Company C 44.4 14,000 976800
4 Company D 91.2 34,090 3109008
5 Company E 15.49 127,437 1974000
6 Company F 2.29 4544545 5656
7 Company G 111.22 5985 6659
8 Company H 55..23 5989 8556
9 Company I 856 69 9989
10 Company J 67.5 14,000 945000
TOTA WEALTH 100,000,000
 Active Portfolio
Shares sold on Friday 21st Jan 2022
No. STOCKS STATUS P1 NO. OF SHARES WEALTH
1 Company A Sell 2.85 440,000 1166000
2 Company B Sell 15.93 22,000 1010460
3 Company C Sell 68.99 14,000 965860
TOTAL 3142320

New shares bought on Friday 21st Jan 2022

No. Stock Status P1 No. of Shares Wealth

1 Company X Newly Bought 165.12 6059 1000462

2 Company Y Newly Bought 283.23 3530 999802
3 Company Z Newly Bought 156.74 7286 1142056
TOTAL 3142320
Active Portfolio on Friday 21st Jan 2022

NUMBER OF
No. STOCKS P1 SHARES WEALTH (W1)
1 Company X 165.12 440,000 1166000
2 Company Y 283.23 229999 2191890.47
3 Company Z 156.74 34,090 3109008
4 Company D 15.49 127,437 1974000
5 Company E 8.68 229999 1996391
6 Company F 165.12 6059 1000462
7 Company G 283.23 3530 999802
8 Company H 156.74 7286 1142056
9 Company I 91.2 34,090 3109008
10 Company J 67.5 14,000 945000
TOTA WEALTH 102221719

Rate of Return = (new wealth – old wealth)/ old wealth

Rate of Return = (102221719 – 100,000,000) / 100,000,000
= 0.06031 * 100
= 6.031 %
NOTE: DO NOT FORGET TO UPDATE THE PRICES OF UNSOLD STOCKS
• Draw Balance Sheet
• See a sample of balance sheet in the word file
WEEK 2
 Index Portfolio
Monday – 24th Jan 2022

PSX-100 index value on Monday – 17,119.12

P0 No. of Shares Wealth (W0)

16,119.12 620.38 10304551.37

P1 No. of Shares Wealth (W1)

17119.12 620.38 11304551.37

Rate of Return = (new wealth – old wealth)/ old wealth

Rate of Return = (11304551.37 – 10304551.37) / 10304551.37
=0.05045 * 100
4.046%
• Draw Balance Sheet
• See a sample of balance sheet in the word file
 Passive Portfolio
Monday – 24th Jan 2022

CLOSING VALUE OF
EACH SHARE
No. STOCKS (P0) NUMBER OF SHARES WEALTH (W0)
1 Company A 2.65 440,000 1166000
2 Company B 9.53 229999 2191890.47
3 Company C 45.93 22,000 1010460
4 Company D 94 34,090 3204460
5 Company E 16.20 127,437 2064479.4
6 Company F 68.99 4544545 965860
7 Company G 109.22 5985 6659
8 Company H 65..23 5989 8500
9 Company I 851 69 9989
10 Company J 67.5 14,000 945000
TOTA WEALTH 10603149.87
 Passive Portfolio
Monday – 31st Jan 2022

CLOSING VALUE
OF EACH SHARE NUMBER OF
No. STOCKS (P1) SHARES WEALTH (W1)
1 Company A 3.65 440,000 1266000
2 Company B 8.53 229999 2291890.47
3 Company C 44.93 22,000 1110460
4 Company D 97 34,090 3104460
5 Company E 17.20 127,437 2074479.4
6 Company F 65.99 4544545 955860
7 Company G 102.22 5985 666659
8 Company H 66.23 5989 87700
9 Company I 881 69 95689
10 Company J 70.5 14,000 9565000
TOTA WEALTH 21603149.87

Rate of Return = (new wealth – old wealth)/ old wealth

Rate of Return = (21603149.87 – 10603149.87) / 10603149.87
= 0.08031 * 100
= 8.031 %
• Draw Balance Sheet
• See a sample of balance sheet in the word file
 Active Portfolio
Friday- 28th August 2020

NUMBER OF
No. STOCKS P0 SHARES WEALTH (W0)
1 Company X 165.12 440,000 1166000
2 Company Y 283.23 229999 2191890.47
3 Company Z 156.74 34,090 3109008
4 Company D 15.49 127,437 1974000
5 Company E 8.68 229999 1996391
6 Company F 165.12 6059 1000462
7 Company G 283.23 3530 999802
8 Company H 156.74 7286 1142056
9 Company I 91.2 34,090 3109008
10 Company J 67.5 14,000 945000
TOTA WEALTH 10221719
 Active Portfolio
Shares sold on Friday - 28th Jan 2022
No. STOCKS STATUS P1 NO. OF SHARES WEALTH
1 Company H Sell 2.85 440,000 1166000
2 Company I Sell 156.74 22,000 1010460
3 Company J Sell 91.2 14,000 965860
TOTAL 3142320

New shares bought on Friday - 28th Jan 2022

No. Stock Status P1 No. of Shares Wealth

1 Company M Newly Bought 166.74 6059 1000462

2 Company N Newly Bought 101.2 3530 999802
3 Company O Newly Bought 77.5 7286 1142056
TOTAL 3142320
 Active Portfolio
Friday - 28th Jan 2022

NUMBER OF
No. STOCKS P1 SHARES WEALTH (W1)
1 Company X 164.12 440,000 1166000
2 Company Y 283.23 229999 2191890.47
3 Company Z 156.74 34,090 3109008
4 Company D 14.49 127,437 1974000
5 Company E 8.68 229999 1996391
6 Company F 165.12 6059 1000462
7 Company G 283.23 3530 999802
8 Company M 166.74 7286 1142056
9 Company N 101.2 34,090 3109008
10 Company O 77.5 14,000 945000
TOTA WEALTH 10603149.8

Rate of Return = (new wealth – old wealth)/ old wealth

Rate of Return = (10603149.8 – 10221719) / 10221719

= 0.08031 * 100
= 8.031 %
NOTE: DO NOT FORGET TO UPDATE THE PRICES OF UNSOLD
• Draw Balance Sheet
• See a sample of balance sheet in the word file
 Checklist before submitting the weekly assignment
• MAKE SURE THE ASSIGNMENT IS ON TIME

• Make sure you provide the screen shots of all share prices with every assignment – should be pasted at the
end of the assignment.

• For first week , please provide 10 articles for each company for active portfolio only.

• From second week onwards, make sure you provide three news articles (or more) for for all three
companies which you are selling/ buying. (for active portfolio only).

• The articles can be related to the industry or may be specifically related to the company --- archived from
internet or from any newspaper.

• Underline / highlight the main points of the articles.

• Please do not forget to include balance sheet of each of your 4 portfolio at the beginning of that week
and also at the end of that week .

• You can also give rationale of choosing firms by discussing technical analysis and/or fundamental analysis.
Technical vs Fundamental
Analysis
These terms refer to two different stock-picking
methodologies used by researchers and to forecast the
future growth trends of stocks.

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