Investments

(Lecture 1)
Lecture Outline

 Project Discussion

 Rationale of choosing companies

o Technical Analysis
o Fundamental Analysis
 Project Discussion

 Submissions starting from next Monday

 Rs 30 million- 3 portfolios

o Active Portfolio – 10 million

o Passive Portfolio – 10 million
o Market/Index Portfolio – 10 million
 Each group will chose ten different companies for
active and ten different companies for passive
portfolios

 Companies for passive portfolio will remain the same

throughout out the semester

 Companies for active portfolio (should) change

throughout out the semester

 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/informati
on-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 (ABL )
For Passive portfolio- Buying
and selling of stocks
 You will purchase the stocks for passive portfolio
on Friday (28th Jan) and will update the prices
on every Friday then.

 You will also calculate the change in wealth

(ROR) consequently.
For active portfolio- Buying
and selling of stocks
 You will purchase the stocks for active
portfolio on Friday (28th Jan) and start
trading for next 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.
Example

 Index Portfolio – 2 tables

 Passive Portfolio –2 tables
 Active Portfolio - 4 tables
WEEK 1
Index Portfolio
Monday- 31st Jan 2022
Initial investment in market portfolio: Rs. 10,000,000
PSX-100 index value on Monday = 16,119.12
L= Initial investment / PSX-100 index value
L = 10,000,000 / 16,119.12
L = 620.38
L = 620 shares

P0 No. of Shares Wealth (W0)

16,119.12 620.38 10000000

Friday- 4th Feb 2022

PSX -100 index value on Friday – 16610.03
Rate of Return = (new wealth – old wealth)/ old wealth
Rate of Return = (10304551.37 – 10000000) / 10000000
=0.03045 * 100
3.046%
P1 No. of Shares Wealth (W1)

16610.03 620.38 10304551.37

Passive Portfolio
Monday 31st Jan 2022
Initial investment in passive portfolio: Rs. 10,000,000

CLOSING VALUE WEALTH

OF EACH SHARE (W0) = P0
On Monday NUMBER OF *no. of
No. STOCKS (P0) 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 5656000
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 10,000,000
Passive Portfolio
Friday 4th Feb 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 10603149.87

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

Rate of Return = (10603149.87 – 10000000) / 10000000
= 0.06031 * 100
= 6.031 %
For all the portfolios A,P,M
 Week 1 : 28th Jan – 4th Feb (Fri - Fri)
 Week 2: 4th Feb – 11th Feb (Fri - Fri)
 Week 3: 11th Feb – 18th Feb (Fri - Fri)
 And so on…….
Active Portfolio
Monday 31st Jan 2022
Initial investment in passive portfolio: Rs. 10,000,000

CLOSING VALUE
WEALTH
OF EACH SHARE NUMBER OF
No. STOCKS
SHARES
(P0) (W0)
1 Company A 2.27 440,000 998800
2 Company B 8.68 22000 190960
3 Company C 44.4 14,000 621600
4 Company D 91.2 34,090 3109008
5 Company E 15.49 127,437 1973999.13
6 Company F 2.29 65000 148850
7 Company G 111.22 5985 665651.7
8 Company H 55.23 6200 342426
9 Company I 856 1200 1027200
10 Company J 67.5 13,652 921510
TOTA WEALTH 10,000,005
 Active Portfolio
Shares sold on Friday 4th Feb 2022
NO. OF
No. STOCKS STATUS P1 WEALTH
SHARES
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 4th Feb

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 4th
Feb 2022
NUMBER OF WEALTH
No. STOCKS P1 SHARES (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 10221719
Rate of Return = (new wealth – old wealth)/ old wealth
Rate of Return = (10221719 – 10000000) / 10000000
= 0.06031 * 100
= 6.031 %
NOTE: DO NOT FORGET TO UPDATE THE PRICES OF UNSOLD STOCKS
WEEK 2
Index Portfolio
Friday – 11th Feb 2022

PSX-100 index value on Friday – 17,119.12

P0 No. of Shares Wealth (W1)

16,119.12 620.38 10304551.37

P1 No. of Shares Wealth (W2)

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%
Passive Portfolio
Friday- 4th Feb 2022

CLOSING VALUE
OF EACH SHARE NUMBER OF
No. STOCKS (P1) SHARES WEALTH (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 10603149.87
Passive Portfolio CLOSING VALUE
Friday – 11th Feb 2022 OF EACH SHARE NUMBER OF
No. STOCKS (P2) SHARES WEALTH (W2)
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 %
Active Portfolio
Friday- 11th Feb 2022

NUMBER OF WEALTH
No. STOCKS P0 SHARES (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 – 11th Feb 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 – 11th Feb 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 – 11th Feb 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
STOCKS
Checklist before submitting the weekly
assignment
 MAKE SURE THE ASSIGNMENT IS ON TIME – Every Monday by 11am

 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
both active and passive portfolio.

 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 article can be related to the industry or may be specifically
related to the company.

 The articles have to be recent (the article must show date) and
can be archived from internet or from any newspaper.

 Please underline and highlight the relevant lines of the articles.

Must give reference / link from where you got the article from.
If we click on the link, we should be able to retrieve the same
article.

 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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