securty and portfolio mgt

that is a portfolio project in which i try to a make a best combination of companies portfolio for the subjected 1 million investment in stock exchange.

My Stock portfolio:

We have one million of investment and we want to make a portfolio house. Our stock portfolio is highly diversified and its consist of four different industries including

1. Oil and Gas 35%

2. Engro Chemical 15%

3. Pakistan Tabacoo 15%

4. Nestle Milkpak 35%

Total 100%

I select the diversified portfolio because at the beginning I want to minimize the risk, that’s why 35% of the investment in oil and gas sector specially in OGDC (Oil and Gas Development Corporation) because the share prices of OGDC is stable and normally its shows positive trend in trading. And as well as Nestle Milkpak select for 35% of investment because of well established, positive trend in trade with a good growing EPS (earning per share) company. So through this i hedge the overall risk of my portfolio.

I started my portfolio on 1st June 2010, I have one million of investment and according to my portfolio weights, I buy shares in that trend

OGDC:

Shares of OGDC = 35% of 1 Million______

Market value of OGDC share

= 350,000__

131.42

= 2663 Shares

Engro Chemical:

Our 15% investment of portfolio in automobile sector and we purchase shares of Indus motors company, numbers of share buy from original investment are:

Shares of Engro chemical = 15% of 1 Million______

Share price of Indus Motors Co.

= 150,000____

172.9

= 869 Shares

Pakistan Tabacoo

To reduce risk of portfolio we invested 15% of 1 Million in masculine and select Pakistan Tabacoo on the basis of good reputation.

Shares of Pakistan tobacco = 15% of 1 Million_______

Share price of Pakistan Tabacoo

= 150,000__

8.93

= 16,797 Shares

Nestle Milkpak

I also invested remaining 35% of investment in food sector and company selected by Nestle Milkpak. Numbers of shares bought at the time of initial investment are:

Shares of nestle = 35% of 1 Million

Share price of Nestle Milkpak

= 350,000

1558.33

= 224.56 shares

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