“A STUDY ON IMPACT OF CHANGES IN THE BOND RATING

ON THE STOCK PRICES OF THE SELECTED COMPANIES”

MRP – PHASE 4
{DATA ANALYSIS & INTERPRITATION}

SUBMITTED TO
DHARMSINH DESAI UNIVERSITY

SUBMITTED BY
SMIT KAPASI
(MB021)

UNDER THE GUIDENCE OF

PROF. AGNYA PATEL
ASSISTANT PROFESSOR (FINANCE)
1) To study perception of Investors related to bond rating
changes.

Sample size:101

• Data Analysis & Interpretation

1)

• Interpretation

There are basically give idea about age of the person and on the basis of that
we have identified more or less number of age of the particular range.
There are 58.4% people whose age between 18-30 years. 58 people out of
101 have come under this category. There are least number of people under
the range of Above 60 is only 10.
2)

• Interpretation

It has been observed that the gender category indicates the

idea regarding number of Male and Female. We can see
that out of 101 there are total around 63 people of male
and 38 are female. It suggests the male number of people
are more interested towards the particular activity.
3)

• Interpretation
The education level has defined under the four categories. There are 52
people out of 101 have taken college education, 36 people have taken
professional education and other people have school as well as other
education.

4)

• Interpretation
The marital status has defined by two types, either married or unmarried.
There are 60 people are married and 40 people are not married.
5)

• Interpretation
The occupation level indicated the employment level of the individuals.
There are 24 people are salaried, 16 people are engaged with
professional, 18 people have their own business and 43 people have
other occupation.

6)

• Interpretation
This part indicated the size of the family. There are 28 people having
less than 4 members, 59 people having range between 4 to 6 and 14
people having more then 6 members in their family.
7)

• Interpretation
This indicated the monthly income of the person. There are 42 people
have the income below 25000. There are 28 and 31 people have income
range between above 50000 and between the 25000 and 50000
respectively.
8)

• Interpretation
This question gives the answer of the investment portfolio of the
investors. There are basically six categories. The highest number of
people have invested in shares and lowest number of people invested in
future and option 57 and 21 respectively.
9)

• Interpretation
This indicates the objectives of the investors. The majority of the
investor have interested in Safty (55%), Tax benefits (51%) and the least
number of investors interested in capital gain (34%).
10)

• Interpretation
This indicates the investor’s stocks of the particular sector. There are 44
person have stock in IT sector, 41 investors have stock in municipal
companies, 35 person having public sector enterprises and 22 people
having no any stocks of any sector of above categories.
11)

• Interpretation
It indicates the various bond type and investor’s stack in it. The majority
people have no any bond and the other having following bond. Treasury
bond-13, corporate bond- 16, municipal bond -15, and remaining people
out of 101 having mortgage backed bonds.

12)

• Interpretation
There are 78 investors are referring the credit rating of their investment
in asset before investing and 23 investors are not referring the credit
rating before any kind of Investment.
13)

• Interpretation
There are various kinds of credit analysis institutions, out of which 32
people are referring ratings from CRAs, 18 people are referring rating
with quick scan of key financials, 21 people referring rating combined
with other measures, and 30 people are referring in house advance
models.
14)

• Interpretation
There are various factors influencing the credit analysis. 53 Investors
have considered market share of the firm, 30% and 40% investors have
considered analytical methodologies, and recognition of name and
Quality.
15)

• Interpretation
There are 33 people have referring Moody, 17 people have referring
Fitch, 28 People have referring S&P, and 23 people have referring other
institutions.
16)

• Interpretation
It has been categorized under four aspects, out of which 38 people have
considered external credit rating from CRAs, 39 people have considered
other market information, 35 people have considered internal rating
models, 45 people have considered information published by issuer.
17)

• Interpretation
As per the investor’s perception, 26 investors believed the significant
increase, 53 investors believed in mild increase and 22 investors
believed in no increase after disclosure of CRA methodologies.
18)

• Interpretation
As per investors opinion, there are only 16 people believed in highly
favorable, 28 people believed in Neutral, and 9 people believed in highly
unfavorable change in Bond rating upward and Downward.
2) To study correlation between prices of bond market and stock
market.

❖ For satisfying this objective I have taken bond data and stock data
of five companies and at the time of rating change, as per
Literature review after and before respective duration prices of
both the things have been taken.

❖ Then find out mean, standard deviation, covariance, and

correlation.

❖ I have also done technical analysis threw chart of both stock and
bond prices.

❖ Interpretation of correlation
+1 - Perfect Positive Relationship
+0.70 – Strong Positive Relationship
+0.50 – Moderate Positive Relationship
+0.30 – Weak Positive relationship

0.00 - No linear relationship

-1 - Perfect Negative Relationship
-0.70 – Strong Negative Relationship
-0.50 – Moderate Negative Relationship
-0.30 – Weak Negative Relationship
1) TATA MOTORS

Date STOCK BOND

02-05- 207.14999
99.9862
102.6 Mean 169.18058
19 4 6 8

03-05-
2.17826
209.5
102.6 Std Dev. 30.582083
19 4 4
06-05- 200.10000 Correlation 0.7857068
102.4
19 6
07-05- 190.89999 102.5 covariance 51.907964
19 4 1
08-05- 185.55000 102.3
19 3 5

09-05- 185.80000 102.3

KEY
19 3 4 DATA

10-05- 102.3 Yield in

186 Coupon in % 5.75% 5.27%
1 %
19
13-05- 102.3 Modified 7.293
180.25 Duration 7.6783
Duration 6
19 4

14-05- 184.35000 102.2 Accrued Currenc

0.559 USD
Interest y
19 6 6

15-05- 169.60000 101.7

BOND
19 6 9 DATA

16-05- 101.4 XS112190821

175.5 ISIN
1
19 1
TATA
17-05- 176.69999 101.4 Name MOTORS
19 7 8 14/24

20-05- 101.5 Country India

190
19 3
21-05- 176.60000 101.6 ISSUEANCE
19 6 6

22-05- 179.44999 Tata Motors

101.8 Issuer
19 7 2 Ltd.

23-05- 101.8 Issue

175 250,000,000
Volume
19 1
24-05- 182.14999 101.4 Currency USD
19 4 6
27-05- 181.35000 101.7 Issue Price
19 6 1
28-05- 101.8 Issue Date 10/30/2014
180.75
19 9
29-05- 176.30000 101.2 COUPON
19 3 7
30-05- 175.05000 101.4 Coupon 5.75%
19 3 7
31-05- 101.2 Denominatio
172.5 1000
n
19 5

03-06- 174.55000 101.0 Quotation

Type
19 3 9

04-06- 173.39999 101.3 Payment

regular interest
Type
19 4 3

06-06- 169.80000 101.3 Special

Coupon Type
19 3 3
07-06- 169.39999 101.3 Maturity Date 10/30/2024
19 4 5
Coupon
10-06- 166.14999 Payment 4/30/2020
99.2
19 4 Date

11-06- 170.64999 Payment

99.07 Frequency
19 4
12-06- 333333 2,0
169 99.19
19
13-06- 167.39999 Coupon Start
99.11 4/30/2015
Date
19 4
14-06- 164.10000 Final Coupon
99.14 10/29/2024
Date
19 6
17-06- 158.85000 Floater? No
98.83
19 6
18-06- 158.30000
98.91
19 3
19-06- 154.64999
98.77
19 4
20-06- 159.14999
99.07
19 4
21-06-
159 98.87
19
2) NTPC LTD
01-
Dec- 193.13 106.53
17
04-
Dec- 151.08 106.75 Mean 171.78504 106.717
17
05-
Dec- 150.17 106.7 Std dev 25.4910564 1.10838
17
06- -
Dec- 147.58 106.74 Covariance
17
16.53825393
07- -
Dec- 146.37 106.76 Correlation
17
0.590666449
08-
Dec- 150.25 106.71 KEY DATA
17
11-
Dec- 150.33 106.58 Coupon in % 4.75% Yield in % 2.81%
17
12- Modified
Dec- 148.62 106.61 Duration 5.0077
Duration
4.8708
17
13- Accrued
Dec- 146.58 106.67 Interest 0.818 Currency USD
17
14- BOND
Dec- 146.71 106.76
DATA
17
15-
Dec- 147.75 107.05 ISIN XS0835676353
17
18- NTPC 12/22
Dec- 147.87 106.95 Name MTN
17
19-
Dec- 148.12 107.02 Country India
17
20-
Dec- 150.04 107.03 ISSUEANCE
17
21-
Dec- 148.71 106.93 Issuer NTPC Ltd.
17
22-
Dec- 150.08 107.12 Issue Volume 500,000,000
17
30-
11- 149.79 107.2 Currency USD
17
29-
11- 196.75 107.25 Issue Price 99.89
17
28-
11- 197.03 107.33 Issue Date 10-03-12
17
27-
11- 195.43 107.07 COUPON
17
24-
11- 196.4 107.14 Coupon 4.75%
17
23-
11- 197.5 106.94 Denomination 1000
17
22- Quotation
11- 197.05 107.15 Type
17
21- regular
11- 197.83 107.21 Payment Type interest
17
20- Special Coupon
11- 198 107.51 Type
17
17-
11- 196.38 107.37 Maturity Date 10-03-22
17
16- Coupon
11- 197.53 107.41 Payment Date 04-03-20
17
15- Payment
11- 196.18 107.19 Frequency
17
No. of
14-
11- 194.68 107.34 Payments per 2,0
17 Year
3) AXIS BANK
31-
07- 550.1 98.15
18
30-
07- 568.45 98.1 MEAN 541.929661 97.98262712
18
27-
07- 553.65 98.1 STD 38.57325046 0.754031249
18
26-
07- 541.65 98.1 COVARIANCE -20.77539572
18
25-
07- 531.85 98.1 CORRELATION -0.720393638
18
24-
07- 546 98.05 KEY DATA
18
23- Yield in
07- 540.8 98.15 Coupon in % 3.25%
%
5.19%
18
20- Modified
07- 534.45 98.15 Duration 0.8791
Duration
0.8357
18
19- Accrued
07- 527.3 98.1 0.1263 Currency USD
Interest
18
18- BOND
07- 524.2 97.65
DATA
18
17-
07- 538.05 97.65 ISIN US05463EAC21
18
AXIS BK
16-
07- 523.1 97.7 Name (DU.BR.)14/20
18 MTN

13-
07- 523.9 97.65 Country India
18
12-
07- 537.25 97.65 ISSUEANCE
18
11-
07- 536.6 97.65 Issuer AXIS BANK
18
10-
07- 532.55 97.65 Issue Volume 750,000,000
18
09-
07- 523.65 97.6 Currency USD
18
06-
07- 514.25 97.7 Issue Price 99.66
18
05-
07- 510.9 97.65 Issue Date 11/21/2014
18
04-
07- 514.3 97.65 COUPON
18
29-
06- 510.4 97.75 Coupon 3.25%
18
28-
06- 504.95 97.75 Denomination 1000
18
27-
06- 507.6 97.75
18
26-
06- 514.05 97.7
18
25-
06- 515.15 97.75
18
22-
06- 524.65 97.85
18
21-
06- 513.25 97.8
18
20-
06- 519.15 97.8
18
19-
06- 516.75 97.8
18
4) BHARAT PETROLEUM
29-
12- 518.7 104.7 MEAN 502.98875 104.6675
17
28-
12- 524.8 104.7 STD 18.55717201 0.177002
17
27-
12- 533.2 104.7 COVARIANCE 0.434113542
17
26-
12- 537.45 104.7 CORRELATION 0.133274417
17
22- KEY
12- 534.3 104.75 DATA
17
21- Coupon in Yield in
12- 535.1 104.8 3.00% -
% %
17
20- Modified
12- 532.05 104.75 Duration -
Duration
-
17
19- Accrued
12- 530.6 104.8 2.875 Currency CHF
Interest
17
18- BOND
12- 525.85 104.8
DATA
17
15-
12- 522.05 104.8 ISIN CH0234487392
17
14- BHARAT
12- 513.5 104.9 Name
PETRO 14/19
17
13-
12- 504.85 104.7 Country India
17
12-
12- 499.8 104.7 ISSUEANCE
17
Bharat
11-
12- 513 104.75 Issuer Petroleum
17 Corp. Ltd.
08- Issue
12- 514.25 104.9 ########
Volume
17
07-
12- 498.2 104.9 Currency CHF
17
06-
12- 491.1 104.9 Issue Price 100.52
17
05-
12- 498.8 105 Issue Date 3/20/2014
17
04-
12- 494.95 105 COUPON
17
01-
12- 496.35 104.95 Coupon 3.00%
17
30-
11- 502.75 104.85 Denomination 5000
17
29-
11- 508.95 104.85 Quotation Type
17
28-
11- 507.9 105 Payment Type regular interest
17
27-
11- 507.75 104.95 Special Coupon Type
17
24- Maturity
11- 511.35 104.6 12/20/2019
Date
17
Coupon
23-
11- 506.7 104.6 Payment 12/20/2019
17 Date

22- Payment
11- 507.9 104.6 Frequency
17
No. of
21-
11- 511.85 104.65 Payments 1,0
17 per Year

20- Coupon
11- 504.1 104.65 Start Date 12/20/2014
17
5) INDIAN OIL CORPORATION

30-
11- 196.75 109.1 MEAN 109.4643 203.127
17
29-
11- 197.03 109.25 STD 0.810571 7.928174
17
28-
11- 195.43 109.35 CORRELATION 0.635699
17
27-
11- 196.4 109.39 COVARIANCE 4.051174
17
24-
11- 197.5 109.28 KEY DATA
17
23- Yield in
11- 197.05 109.33 Coupon in % 5.63%
%
2.74%
17
22- Modified
11- 197.83 109.3 Duration 2.9859 2.9062
Duration
17
21- Accrued
11- 198 109.2 1.9218 Currency USD
Interest
17
20-
11- 196.38 109.35 BOND DATA
17
17-
11- 197.53 109.45 ISIN XS0654493823
17
16- INDIAN OIL
11- 196.18 109.5 Name
CORP.11/21REGS
17
15-
11- 194.68 109.21 Country India
17
14-
11- 193.93 109.54 ISSUEANCE
17
13- Indian Oil Corp.
11- 198.35 109.16 Issuer Ltd.
17
10-
11- 197.18 109.4 Issue Volume ########
17
09-
11- 197.03 109.65 Currency USD
17
08-
11- 198.4 109.55 Issue Price 99.22
17
07-
11- 200.08 109.73 Issue Date 08-02-11
17
06-
11- 205.23 109.51 COUPON
17
03-
11- 206.13 109.85 Coupon 5.63%
17
31-
10- 207.15 109.8 Denomination 1000
17
30- Quotation
10- 207.25 109.4 Type
17
27-
10- 207.1 109.65 Payment Type regular interest
17
26- Special
10- 217.63 109.75 Coupon Type
17
25-
10- 208.53 109.55 Maturity Date 08-02-21
17
24- Coupon
10- 203.68 109.31 Payment Date 02-02-20
17
23- Payment
10- 202.05 109.55 Frequency
17
No. of
19-
10- 205.13 109.74 Payments per 2,0
17 Year

18- Coupon Start

10- 205.75 109.8 02-02-12
Date
17