Methods of analysis of equity securities risk and return : issues and prospects

Abstract

In terms of capacities and characteristic features of macroeconomic policy in Russia today, the issue of more efficient use of the equity capital market potential where the main tools are shares or equity securities is highly relevant. More efficient use of the capitals of joint stock companies, obtaining reliable information for defining the cost of the business reinforce the need of more detailed theoretical and practical analysis of the equity securities. This is one of the most important prerequisites for creating favorable informational environment and improving the quality of stock market monitoring both at the national and international levels. The author analysed opinions on this issue among Russian and foreign researches, applying the methods of theoretical knowledge and general logic. It systematizes various methodological approaches to the analysis of the equity securities and justifies the need of using the methods of fundamental and technical analysis of equity securities in the Russian context. We pay special attention to studying the rates of return and the risks of the equity securities and look at the opportunities to use this information for developing a scale of rating investment attractiveness of joint stock companies. The recommendations stated in the article may be used for operational management and development of strategic solutions to attract financial resources required for economic growth and modernization of production.