INTERNSHIP REPORT

ON
“CONSTRUCTION OF OPTIMAL PORTFOLIO USING SHARPE’S INDEX
MODEL (CNX NIFTY FMCG)
AT
PENTAD SECURITIES KASARGOD
Submitted by
ABDUL AZEEZ
U.S.NO 4PA14MBA01
TO
VISVESVARAYA TECHNOLOGICAL UNIVERSITY
BELGAUM
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
Under the Guidance of

Mr.Habeeb Ur Rahman Mr.Samshuddin

Asst. Professor Branch Manager
Centre for management studies and research Pentad securities
P.A. College of Engineering Kasargod
Mangalore-574153 (External Guide)
(Internal Guide)

CENTRE FOR MANAGEMENT STUDIES AND RESEARCH

P.A.COLLEGE OF ENGINEERING, MANGALORE-574153
2016
 ACKNOWLEDGEMENTS
I thank Almighty, for the blessings that have been showed upon me to complete the
project work successfully. It gives me immense pleasure to acknowledge and thank all those
who have given consistent guidance, advice and encouragement in my effort.

I express my gratitude to my project guide, Mr.Habeeb Ur Rahman Assistant Professor,

MBA Department, P.A College of engineering who has enthusiastically imparted relevant
information, guided and supported me in carrying out this project, with valuable suggestions
and encouragement throughout the internship.

My sincere thanks to Mr.Samshuddeen Branch manager, Pentad securities Kasargod, for

his support as external guide, co-operation and for providing all necessary information required
for the project.

My sincere thanks to Dr. Beeran Moidin, Director, MBA Department, P.A College of
engineering for permitting me to do the project work.

I would also like to thank Dr. Rashmi Kodikal and all the faculty members of MBA
Department for their constant support and encouragement.

Finally, I owe my gratitude to my family and friends who had given me continuous
encouragement and support for the completion of the project.

ABDUL AZEEZ
 TABLE OF CONTENTS

Chapter No Contents Page No

Executive Summary

1 Introduction 1-----8

2 Industry and Company profile 9-----28

3 Theoretical Background of the Study 29----45

4 Data Analysis and interpretation 46----68

5 Summary of Findings, suggestions and 69----73

Conclusion

Bibliography and Webliography 74----76

 LIST OF TABLES

TABLE PARTICULARS PAGE

NO NUMBERS

2.1 Ranking of Stock Exchanges on basis of Market capitalization 11

2.2: Balance sheet of the company for 2 years 23

2.3 Statement of profit and loss for 2 years 24
2.4 The current ratios of company for 2 years 26
2.5 Solvency ratio of company 27
2.6 Proprietary ratio of company for 2 years 28
4.1 List of CNX Nifty FMCG shares 46
4.2 Average return of each security 47
4.3 Alpha of each security 48-49
4.4 Beta of each security 50
4.5 Table showing Return, Alpha, Beta, and Variance 51
4.6 Systematic Risk of CNX NIFTY FMCG Shares 53
4.7 Unsystematic risk of CNX NIFTY FMCG shares 55
4.8 Total risk of CNX NIFTY FMCG shares 57
4.9 Table showing risk free return. 58
4.10 Ranking of CNX NIFTY FMCG shares 59
4.11 Calculation of cut-off point 60
4.12 Calculation of optimal portfolio 61-62
4.13 Calculation of alpha of optimal portfolio 63
4.14 Calculation of beta of optimal portfolio 64
4.15 Calculation of return on optimal portfolio 65
4.16 Calculation of unsystematic risk of optimal portfolio 66
4.17 Calculation of systematic risk of optimal portfolio 67
4.18 Calculation of Total risk of optimal portfolio 67
 LIST OF FIGURES AND CHARTS

CHART PARTICULARS PAGE

NO NUMBERS
2.1 Figure below shows Bombay Stock Exchange 12
2.2 Figure showing National Stock exchange 13
2.3 The dematerialisation process 16
2.4 competitors of the company 20
2.5 Chart showing the loss of the company for two years 25
2.6 Current ratios of company for 2 years 26
2.7 Solvency ratio of the company for 2 years 27
2.8 Proprietary ratio of the company 28
3.1 Stages in Fundamental Analysis 30
3.2 Trends in the market 33
3.3 Simple Moving Averages 34
3.4 Line chart 35
3.5 Bar chart 36
3.6 Candle stick chart 37
3.7 Point & Figure chart 38
4.1 Average return 48
4.2 Alpha values of each security 49
4.3 Beta values of each security 50
4.4 Return, Alpha, Beta, and Variance of each security 52
4.5 Systematic Risk of Securities 54
4.6 Unsystematic risk of securities 56
4.7 Total risk of securities 57
4.8 Proportion of investment in each security 62