Your SlideShare is downloading. ×
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
A project report on angle broking
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

A project report on angle broking

974

Published on

angle broking finance project

angle broking finance project

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
974
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
102
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. A PROJECT REPORT ON . SUBMITTED BY: GUIDED BY: SUBMITTED TO TABLE OF CONTENT
  • 2. SR.NO. TOPIC 1 INDUSTRY OVERVIEW  HISTORY  INTRODUCTION  PLAYERS  INDUSTRY ANALYSIS 2 COMPANY OVERVIEW  GENERAL INFORMATION  INTRODUCTION  PRODUCTS & SERVICES  ABOUT EQUITY MARKET  ABOUT DERIVATIVES  ABOUT MUTUAL FUND 3 RESEARCH METHODOLOGY  RELEVANCE TO THE STUDY  RESEARCH PROBLEM  OBJECTIVES  HYPOTHESIS  SCOPE  DATA COLLECTION  LIMITATION  ANALYSIS  FINDINGS & SUGGESTIONS 4 BIBLIOGRAPHY 2
  • 3. INDUSTRY OVERVIEW  HISTORY OF THE STOCK BROKING INDUSTRY  INTRODUCTION TO STOCK BROKING BUSINESS  MAJOR PLAYERS IN THE INDUSTRY  INDUSTRY ANALYSIS 3
  • 4.  HISTORY OF THE STOCK BROKING INDUSTRY Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. By 1830’s business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850”s witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the “Share Mania” in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay share which had touched Rs. 2850 could only be sold at Rs. 87). At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the “Native Share and Stock Brokers’ Association” (which is alternatively known as “The Stock Exchange”). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus the Stock Exchange at Bombay was consolidated. Thus in the same way, gradually with the passage of time number of exchanges were increased and at currently it reached to the figure of 24 stock exchanges.  INTRODUCTION TO STOCK BROKING BUSINESS 4
  • 5. Stock exchanges to some extent play an important role as indicators, reflecting the performance of the country’s economic state of health. Stock market is a place where securities are bought and sold. It is exposed to a high degree of volatility; prices fluctuate within minutes and are determined by the demand and supply of stocks at a given time. Stock brokers are the ones who buy and sell securities on behalf of individuals and institutions for some commission. The Securities and Exchange Board of India (SEBI) is the authorized body, which regulates the operations of stock exchanges, banks and other financial institutions. The past performances in the capital markets especially the securities scam by Harshad Mehta has led to tightening of the operations by SEBI. In addition the international trading and investment exposure has made it imperative to better operational efficiency. With the view to improve, discipline and bring greater transparency in this sector, constant efforts are being made and to a certain extent improvements have been made. 1. Stockbrokers A broker is an intermediary who arranges to buy and sell securities on behalf of the clients (the buyer and the seller). According to Rule 2 of SEBI Rules 1992, a stockbroker means a member of a recognized stock exchange or stock exchanges of which he or she is admitted as a member. Stock market transactions are carried out on computerized systems and deals are recorded for inspection at any time. • Stock brokers independently may deal with the following: o Operations for private clients and institutional clients. o Some brokers act only as dealers (client investment managers) while others are principally advisors (equity sales advisors). o Some brokers provide services for portfolio management and constantly review investments in the light of trends and developments in the market. o Financial services brokers specialize in bond issues, handling institutional accounts or mutual funds. • In large firms, stock brokers work in the following areas: o Deal with, and advise, smaller firms 5
  • 6. o Securities brokers work on behalf of firms with private clients to understand the investment plans and objectives of the client i.e. expectation for returns and interest in risk taking. They are representatives of brokerage firms and execute orsers to buy and sell securities. They are equipped with both knowledge and experience to give advice on the sale and purchase of scrips and management of financial investments. o Advise for investments. o Carry out market transactions. o The financial services in firms’ concerns pre-sales, sales and after sales services. These firms have departments to manage the sales and trading for the owners of securities, investment banking for firms and the government for the issue of securities and capital markets which form an essential arm for trading activities.  As Securities Analysts – Brokers may be required to advise on floatation of shares in conjunction with the merchant banks. They are expected to have knowledge of the market to be able to anticipate certain trends and make predictions.  As Investment Analysts – The Investment Analyst provides accurate information to investors and fund managers. There are two major roles as an analyst. o Institutional Analyst – The process of analysis involves making predictions of the company’s future based on its past and present financial status. o Stock Broking Analyst – Investment Analysts work with firms which provide advice on buying and selling of shares and also with those firms which have funds to be managed. Fund managers in merchant banks, insurance and pension funds are involved with huge investments made by millions of investors. The funds are eventually disbursed as insurance claims, pensions etc. They are specialized financial advisors who provide advise on the how and where of details concerning investment. Investment Analysts study the company’s annual report; visit the organization, interview senior executives to assess statistical information, profits and import and export figures for the industry as a whole. Institutional analysis involves studying the entire sector. 2. Transaction cycle 6
  • 7. A person holding assets (Securities/Funds), either to meet his liquidity needs or to reshuffle his holdings in response to changes in his perception about risk and return of the assets, decides to buy or sell the securities. He selects a broker and instructs him to place buy/sell order on an exchange. The order is converted to a trade as soon as it finds a matching sell/buy order. At the end of the trade cycle, the trades are netted to determine the obligations of the trading members’ securities/funds as per settlement cycle. Buyer/seller delivers funds/securities and receives securities/funds and acquires ownership of the securities. A security transaction cycle is presented above. Placing Order Funds or Securities Decision to trade Trade Execution Clearing of Trades Settlement of Trades Transaction Cycle 7
  • 8.  MAJOR PLAYERS IN THE INDUSTRY 1. ANGEL BROKING LIMITED 2. S S KANTILAL ISHWARLAL SECURITIES PVT LTD. 3. ICICI WEB TRADE LTD. (www.icicidirect.com) 4. 5 PAISA.COM (www.5paisa.com) 5. KOTAK SECURITIES LTD. (www.kotakstreet.com) 6. INDIABULLS (www.indiabulls.com) 7. MOTILAL OSWAL SECURITIES LTD. 8. HDFC SECURITIES LTD. (www.hdfcsec.com) 9. UTI SECURITIES LTD. 10. IDBI CAPITAL MARKET SERIVICES LTD. 11. REFCO SIFY SECURITIES PVT LTD. 8
  • 9. Parameters A/c Opening Fee Brokerage Interface Trading A/c Demat Delivery Square Off Banks Associated with Angel Broking Ltd. 460 0.40 0.08 HDFC, ICICI,UTI ICICI Direct 750 NIL 0.75 0.18 ICICI Bank India bulls 750 250 0.40 0.10 N.A. 5 paisa 800 NIL 0.20 0.05 Citibank, HDFC, OBC, UTI & ICICI Bank Kotak Street 500 N.A. 0.59 0.06 Kotak Bank & Citibank HDFC Securities 700 NIL 0.50 0.15 HDFC & Other 4 Banks INDUSTRY ANALYSIS USING PORTER’S FIVE FORCES MODEL 9
  • 10. 1. SUPPLIERS SUPPLIERS Web maintainers NSCL CSDL NSE BSE MCX NCDEX SUPPLIERS Web maintainers NSCL CSDL NSE BSE MCX NCDEX SUBSTITUTES Mutual Funds Insurance Bank FD SUBSTITUTES Mutual Funds Insurance Bank FD BUYERS Small Investors Franchise/Business Partners HNI’s MF Companies HUF Institutional Investors BUYERS Small Investors Franchise/Business Partners HNI’s MF Companies HUF Institutional Investors POTENTIAL ENTERANT Investmart Various Banks Geojit Cipher UTI Securities Ltd. Refco Group Ltd. IDBI Capital Mkt. Services Ltd. POTENTIAL ENTERANT Investmart Various Banks Geojit Cipher UTI Securities Ltd. Refco Group Ltd. IDBI Capital Mkt. Services Ltd. COMPETITORS ICICI Web Trade Ltd 5paisa.com Kotak Securities Ltd India Bulls Motilal Oswal Securities Ltd HDFC Securities Ltd Marwadi Finance Ltd COMPETITORS ICICI Web Trade Ltd 5paisa.com Kotak Securities Ltd India Bulls Motilal Oswal Securities Ltd HDFC Securities Ltd Marwadi Finance Ltd 10
  • 11.  NSDL & CSDL are the regulatory bodies for Depository Participants like SSKI, SHCIL, ICICIdirect.com, etc. Also these regulatory bodies have got an upper hand as the bargaining power stock broking houses like SSKI, etc. would be less.  NSE & BSE are playgrounds where common an investor trade through stock broking houses, for which they have to take permission from NSE/BSE.  NSE & BSE are under the purview of SEBI, that’s why stock broking houses like SSKI, have low bargaining power. But here there is one advantage that NSE/BSE have i.e. they cannot go for forward integration.  MCX & NCDEX are stock exchanges which trade in commodities and derivatives. Here again stock broking houses have to follow rules and regulation of the same.  Web maintainers are companies which maintain web sites & technical aspects of the same. Here stock broking houses like SSKI can have more bargaining power due to Tuff competition among web maintaining companies.  Web maintainers are companies who make and maintain software’s for stock broking houses. If say for example stock broking houses switches over to other web maintainers then that company cannot understand the mechanisms of software’s. So it is quite high switching cost. 2. BUYERS 11
  • 12.  There are various types of investors who trade through stock broking houses like SSKI, which includes investors like small investors, medium net worth investors, business partners, institutional investors and mutual fund companies.  Here the bargaining power of stock broking houses depends on how big the investor is.  So here we can say that bargaining power of stock broking houses is high in case of small investors & HUF.  While the bargaining power is moderate in case of HNI (High New Worth Investors)/ MNI’s (Medium Net Worth Investors) and business partners.  But the in case of mutual fund companies and institutional investors bargaining power is less.  There is competitive buzz in stock broking industry; competitors are offering low brokerage and best services with added feature. So switching cost is pretty much less. So the buyer can easily switch over to competitors product. 3. ENTRY BARRIERS  HUGE CAPITAL: - Capital is necessary not only for fixed facilities but also for customer’s credit and absorbing start up losses. To start a stock broking house, one needs huge capital for technology up gradation and skilled manpower. 12
  • 13.  TECHNOLOGY:- Technology for stock broking houses is life saving device. Stock broking requires huge capital to make their products user friendly, which in turn requires capital to employ skilled manpower. Thus, technology could be one of the entry barriers.  Regulatory Constraints: - Obtaining a license is a tedious job for a stock broking house. It should comply with the regulation of the governing bodies like SEBI, NSDL, etc. For a stock broking houses to plunge into the stock broking industry, it needs to have some kind of financial background and expertise. Thus, regulators constraints could be an entry barrier.  Experience curve:- The core competency in this industry is the services which are provided to the end-users and the research based activities which includes “TIPS”, fundamental as well as technical script analysis. Also the most important thing which helps already established firms is-“TRUST” which people would be having on firms like SSKI , Angel, Motilal Oswal, etc. this is very difficult for new companies to imitate.  Network:- The “Reach” to the customer is the key factor in the industry. The network of the companies like Angel, Motilal Oswal, Angel Broking, and ICICI is very efficient and spreaded all over India. It will take time for a new entrant to establish such a huge network (e.g. Marwadi), which say that,” Network can come up as most difficult entry barrier to overcome.”  Expected Retaliation: - 13
  • 14. Whenever a new player comes in the industry, the old companies have an option to reduce the prices of their product. This kind of practice is called expected Retaliation which is also possible in this industry in terms of less brokerage rates and reduced account opening charges. E.g. before the entry of so many mew companies, Angel Broking was having two types of accounts viz. speed trade speed trade plus, which were costing 1000 & 1500 account opening charges respectively. But due to competition, they have come up with only one account i.e. speed trade plus with the account charges of Rs.1000. 3. COMPETITORS  The company is facing the competition from local as well as national level players. The local players provide facility for off-line trading while the national players like ICICIdirect.com and Kotakstreet.com, HDFC Security provide online trading services.  There are also other big names like Indiabulls, Motilal Oswal, 5paisa and Marwadi encircles the company form both the sides by providing online and off-line trading with competitive services. 4. POTENTIAL ENTRANTS  The potential entrants in like Investmart, Jeojit and Cipher which are coming in near future to Rajkot City. 14
  • 15.  Nationalized banks are also thinking to enter in this field by tying up with broking houses. E.g. Bank Of Baroda. 5. SUBSTITUTES  Here substitutes are such instruments which can be used instead of investing in shares.  The instruments like Bank FD, insurance, mutual funds are the substitutes.  If the use of this instruments increase this may be disadvantage for the stock broking houses.  The companies and banks which are having these instruments can plunge into this industry. 15
  • 16. BSE (THE STOCK EXCHANGE OF MUMBAI) The stock exchange, Mumbai, popularly known as “BSE” was established in 1875 as “The Native Share and Stock Broker’s Association”. It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualized and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in the country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act, 1956. The Exchange while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redressal of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education program and making available to them necessary informative inputs. A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one third of them retire ever year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer. 16
  • 17. NSE (NATIONAL STOCK EXCHANGE) NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It started operations in June1994, with trading on the Wholesale Debt Market Segment. Subsequently it launched the Capital Market Segment in November 1994 as a trading platform for equties and the Futures and Options Segment in June 2000 for various derivative instrument. NSE has been able to take the stock market to the doorsteps of the investors. The technology has been harnessed to deliver the services to the investors across the country at the cheapest possible cost. It provides a nation-wide, screen-based, automated trading system, with a high deree of transparency and equal access to investors irrespective of geographical location. The high level of information dissemination through on-line system has helped in integrating retail investors on a nation-wide basis. The standards set by exchange in terms of market practices, products, technology and service standards have bocome industry benchmarks and are being replicated by other market participants. Within a very short span of time, NSE has been able to achieve all the objectives for which it was set up. It has been playing a leading role as a change agent in transforming the Indian Capital Market to its present form. The Indian Capital Markets are a far cry from what they used to be a decade ago in terms of market practices, infrastructure, technology, risk management, clearing and settlement and investor service. 17
  • 18. COMPANY OVERVIEW  GENERAL INFORMATION  ABOUT THE GROUP,HISTORY  VISION  MISSION  CORE COMPETENCE  PRODUCTS OF ANGEL BROKING  7 P’S OF ANGEL BROKING  SWOT ANALYSIS  TRAINNING & EDUCATION  VALUE ADDED SERVICES 18
  • 19. GENERAL INFORMATION NAME : ANGEL BROKING HEAD OFFICE : G-1 AKRUTI TRADE CENTRE, ROAD NO. 7, MIDC,MAROL, ANDHERI – 400 093 PH NO : (022) 2835 8800 / 3083 7700 WEB SITE : www.angeltrade.com CHIEF EXECUTIVE OFFICER : Mr. DINESH THAKKAR BRANCH OFFICES : 21 BRANCHES 19
  • 20. ABOUT THE GROUP Angel group is engaged in various activities such as trading/advisory services in Indian capital market viz., equity, futures and options etc. and also in Indian commodities markets viz., commodities futures. The Angel Group has emerged as one of the top 5 retail stock broking houses in India, having memberships on BSE, NSE and the two leading commodity exchanges in the country i.e. NCDEX and MCX. Angel Broking Ltd is also registered as a depository participant with CDSL. It is the only 100% retail stock broking house offering a gamut of retail centric services like Research, Investment Advisory, and Wealth Management Services, E-Broking & Commodities to individual investor. The group is promoted by Mr. Dinesh Thakkar and professionally managed by a team of 1926 direct employees. It has a nation wide network comprising 12 Regional Centres, 60 branches, 2740 registered sub brokers and business associates and 6370 active trading terminals which cater to the requirements of 224441 retail clients. HISTORY The group is promoted by Mr. Dinesh Thakkar, who started this business as a small sub-broker in 1987 with a team of 3. Today the Angel group is managed by a team of 60 professionals and 200 support staff and a nation wide network comprising 21 branches, over 250 sub-brokers, 500 business associates and 600 terminals. The group is currently services approximately more then 1200 retail clients. 20
  • 21. Vision To Provide Best Value for Money To Investors Through Innovative Products, Trading / Investment Strategies, State-of-the-art Technology And Personalized Service. 21
  • 22. MISSION STATEMENT The main mission statement of angel broking ltd is to be on top in and around Rajkot and Saurashtra peninsula with the help of retail, bulk and past business within three years. For FY 06-07 focus will be on Bulk business from existing sub-brokers of competitors by giving those competitive pricing, better connectivity and Post trading Back-up software in post centralized and direct billing era. 22
  • 23. CORE COMPETENCE  Top quality research & portfolio advisory services for equities  Retail focused research products  Robust internet trading facility  Commodities research & broking services  Depository services through CDSL  Web based 24 x 7 back office software  Good understanding of the sub-broker and retail customer needs  Professional work culture with a personal touch  Cost- effective processes  State-of-the-art technology  Streaming quotes & real time charts for bse /nse [cash / derivatives]  Single connectivity and speedy execution of trades.  Private v-sat network for remote areas.  Online technical support & help desk. 23
  • 24. Business Philosophy Ethical practices & transparency in all our dealings Customer interest above our own Always deliver what we promise Effective cost management Quality Assurance Policy We are committed to being the leader In providing World Class Product & Services Which exceed the expectations of our customers Achieved by teamwork and A process of continuous improvement Our CRM Policy A Customer is the most Important Visitor On Our Premises He is not Dependent on us but We are dependant on him He is not interruption in our work, But is the Purpose of it We are not doing him a favor by serving He is doing us a favor by giving us an Opportunity to do so 24
  • 25. CHANGING TREND Remember the time when you left orders with your broker in the morning and received a confirmation fax late in the evening? You wondered whether you had acquired the shares at the best possible price for the day. Today, the picture is different. Imagine a scenario where you log on to your account, get the live quotes of scripts you are interested in, get advise from experts and research reports on your investment choice and then just click the mouse to place your order, pay the amount due (which automatically gets debited into your account with the on line brokerage firm), get your account statement, and the delivery of your shares into your Demat account. All this through just one click of a mouse. Seems like a dream? But with online trading this has become a reality. A few seconds later, you get the confirmation on your screen. And after the trade settlement, your bank and DP accounts will reflect the changes accordingly. The speed of transaction, confidentiality about the prices and ease of settlement in the paperless mode should be good reasons for retail investors to jump on to the Net. All they need is a PC, a modem, a subscription to an ISP, an account with a bank (which has a web presence) and a depository account. And they can choose from a plethora of e-trading web sites. So, finally the changing trend is known as E-trading which really means Buying and selling securities via the Internet or other electronic means such as wireless access, touch-tone telephones, and other new technologies with online trading. In most cases customers access a brokerage firm's Web Site through their regular Internet Service Provider. Once there, customers may consult information provided on the Web Site and log into their accounts to place orders and monitor account activity" 25
  • 26. Limitations of physical share Capital market reforms in India have outstripped the process of liberalization in most other sectors of the economy. However, the creation of an independent capital market regulator was the initiation of this reform process. After the formation of the Securities Market regulator, the Securities and Exchange Board of India (SEBI), attention were drawn towards the inefficiencies of the bourses and the need was felt for better regulation, discipline and accountability because Before 1996, all the transactions were done through physical form in security market. Because of physical form investors were facing so many problems. At that time the certificates were transferred to the purchase holder. An investor who wants to hold security, he must have to transfer the certificate of security in company within 3 months. But here the main problem was that the certificates may be emerged. For even a small amount of investment investors must have to pass from longer and tedious procedure. Earlier when Demat facility was not introduced the transfer of stock was done through physical movement of papers so that there was a need for physical delivery of securities. The system of transfer of ownership was grossly inefficient, as every transfer involves physical movement of paper security to the issue of registration and for any minor change in ownership, it was compulsory that it must be evidenced by an endorsement of the security certificate. The system seems to be time consuming, there was very less control as well as the procedure was Lengthy. On the other hand theft, forgery duplication of certificates and other irregularity were the common problems faced by investors. then NSE and BSE were formed with main objective to remove all the drawback faced by the public specially for online trading. UNIQUENESS OF ANGEL 26
  • 27.  100% retail focus  BSE / NSE cash, F&O & commodities on a single screen  flexible margins/ exposure limits  Personalized services through centralized help desk and 25 branches.  cost effective technology ADVANTAGES OF ANGEL TRADE  convenient and hassle-free trading  tracking of prices of various stocks & fastest access to news & results  trading from comforts of your home  easier transfer of funds & securities through electronic means  Various value added software available for all the clients. MARKET SUMMARY  Major players are Angel, SSKI, MOST, Karvi, Anagram, India Bull, Kotak in retail segment.  Marwadi and Ajay Natwarlal in sub-broker networking segment.  Market: Retail _SSKI and MOST are considered successful among rest mainly because of good research, aggressive pricing, Margin Funding and spacious and well ambient office. OPPORTUNITIES We are in the view that in bulk business major problem faced by sub- brokers of MSFPL and Ajay are connectivity and IT support, Back office support, Margin funding and research to reach end clients. Between Marwadi and Ajay there are 200 terminals operates in Rajkot and 150 kms area these SBs are our major target. Their position is more vulnerable particularly in direct billing.  Competition  Summarize competition  Outline your company’s competitive advantage 27
  • 28. GOALS AND OBJECTIVES Five-year goals  State specific measurable objectives  State market share objectives  State revenue/profitability objectives Financial Plan  High-level financial plan that defines financial model, pricing assumptions, and reviews yearly expected sales and profits for the next three years.  Use several slides to cover this material appropriately Resource Requirements  Technology requirements  Personnel requirements  Resource requirements  Financial, distribution, promotion, etc  External requirements  Products/services/technology required to be purchased outside company RISKS & REWARDS  Risks – Summarize risks of proposed project  Addressing risk – Summarize how risks will be addressed  Rewards – Estimate expected pay-off, particularly if seeking funding Key Issues  Near term – Isolate key decisions and issues that need immediate or near-term Resolution  Long term 28
  • 29. – Isolate issues needing long-term resolution. State consequences of decision postponement If you are seeking funding, state specifics PRODUCTS OF THE ANGEL BROKING Trading in securities / commodities using the internet platform is a convenient option. We provide you an opportunity to trade on BSE / NSE ( Cash and F & O ), NCDEX and MCX from the comfort of your home or office. Our internet trading platform gives you state-of-the-art trading facility, order and trade confirmation, e- contracts and 24 X 7 on-line web enabled back-office system at the click of a button. 29 ANGEL PRODUCTS ANGEL DIET ANGEL TRADE RTRTRADETRAD ANGEL ANYWHERE
  • 30. ANGEL DIET  Application based ideal for traders  User friendly & sample navigation  Robust & speedier execution of trade  BSE,NSE, F & O, MCX & NCDEX 30
  • 31. ANGEL TRADE  Browser based for investors  No installation required  Advantages of mobility  BSE, NSE, F & O, MCX & NCDEX 31
  • 32. ANGEL ANYWHERE  Application based ideal for traders using technical tools  Intra-day / Historical charts with various indicators  BSE, NSE-Cash & Derivatives 32
  • 33. 7 P’s of Angel Broking 1. PRODUCT  Product Variety Angel Broking offers 3 types of online trading accounts for its customers specially designed according to their volume in share trading. Those 3 varieties are: • Angel Diet • Angel Trade • Angel Anywhere  Quality User friendly. Attractive & colorful websites  Service Angel Broking offers its customers depository services and trade execution facilities for equities, derivatives and commodities backed with investment by decades of broking experience. 2. PRICE Parameters A/c Opening Fee Brokerage Trading A/c Demat Delivery Square Off Angel Broking Ltd. 460 0.40 0.08 33
  • 34. 3. PRAMOTION Online share trading is totally a new concept in Indian Market. Generally investor doesn’t like to come out from conventional way of share trading. Share khan has introduced this product in. The concept and Product are still new in the market. Therefore the company has undertaken extensive promotion campaign to create awareness about the product. Share khan adopts the following tools for promoting the product  Advertising Company advertises its product through TV media on channels like CNBC, Print Media-in leading dailies and outdoors media. Besides attractive and colorful brochures as well as posters are used giving full details about the product. .Mails are sent to people logging on to sites. Also, stalls are opened up now and then at places where prospective customers can be approached.  Sales Force The Company has an aggressive sales force, which is given incentives, based on their sales. The sales force is given intensive training continuously. 34
  • 35.  Seminar The Company also arranges seminar in corporate world for creating awareness about the product .  Direct Marketing Company emphasizes more on direct marketing, as many people are still not aware of this new way of smart trading. For this, the company recruits and trains sales representatives so as to explain the product and solve customer queries related to the product. This is the most effective way to communicate the three-in- one concept which company offers. 4. PLACE  Channels Angel Broking uses various channel alternatives to reach to its customers through • Internet • Tele Marketing • Retail Share Shops • Franchisee Owners • Sales Force  Coverage Access to the website from any part of the globe.  Locations Angel Broking has the largest chain of retail share shops in India. It covers cities all over India like Bandra, Thane, Ahmedabad, Amreli, Anand, Baroda, Bhavnagar, Gandhinagar, Rajkot, etc. 5. PEOPLE  Employees 35
  • 36.  Selection: Employees are selected on the basis of their experience and qualification as applicable to the job.  Training: Intensive training is provided to the employees till a week once they join and even at times required after that.  Motivation: The employees are motivated through incentives they are provided.  Research Team Angel Broking has a team of dedicated analysts who have years of working experience in the industries that they track, and a proven track record in using their knowledge of the investment science to deliver results. The heart of Angel Broking is really treated loyally like the kings. The customer care, which comprises of highly trained executives operating from 9:30 to 8:00 p.m. 6. PHYSICAL EVIDENCE  Locality of the office: In Ahmedabad, Rajkot, Bhavnagar, etc.  Office Environment: The ambience within the office is what can make the customer feel comfortable in trading. The cordial and friendly atmosphere at office is like a full time motivation for the employees.  Interiors and Infrastructure: The office is well furnished and has 24* computer terminals on which tick-by- tick price movements of the securities are displayed. 7. POCESS  In this service organization, the ways in which the customers receive delivery of the service constitutes the process. Here, the process involves adding ‘value’ or ‘utility’ so that the customers get full satisfaction for the money spent by them. 36
  • 37.  Here the process begins from the step when customer wants to open e-invest account and ends when his account is actually activated.  All Indian residents and NRI are eligible to avail this service. SWOT ANALYSIS During this training at Angel Broking, we had come to know the Strengths-Weaknesses- Opportunities-Threats for the company and it is very useful for a company to analyze them. Therefore, the SWOT analysis is presented here and the suggestions for maintaining strengths and removing weaknesses are explained.  Strengths:  Well-maintained infrastructure.  Dedicated, Intelligent and Loyal staff.  On-line trading products.  Lowest brokerage and other charges w.r.t. Competitors.  The best investment advice correct up to 70-90 % through dedicated  Research and reports.  Wide product range to enable the clients to choose the best alternative. 37
  • 38.  One of the best DPs in India.  A positive image in the existing clients.  Weaknesses:  Less awareness in the market.  Time consuming process for account opening, resolving the problems of the customers, etc.  Service quality is not maintained accordingly how they are promoted.  Opportunities:  Slope of stock market towards delivery based transaction.  Large potential market for delivery and intra-day transactions.  Open interest of the people to enter in stock market for investing.  Attract the customers who are dissatisfied with other broker & DPs.  An indirect opportunity generated by the market from its bullishness.  Large untapped market in the Saurashtra region of Gujarat.  Threats:  Decreasing rates of brokerage in the market.  Increasing competition against other brokers & DPs  Poor marketing activities for making the company known among the customers.  A threat of loosing clients for any kind of weakness of the company. 38
  • 39.  Loosing the untapped market with the entry of the competitors. TRAINING AND EDUCATION In the commodity trading strategies ,Angel provide strategies how to do trading in commodity and give guidance how to judge future prices of the commodities same as stocks, commodities also have various factors affecting prices of the commodity like monsoon etc so special researcher would be training you about it. Commodities Trading Strategies 39
  • 40. Along with guidance, seminars and workshops are held after specific interval. If we talk about workshops recently workshop of a computerized technical analysis of stocks was held specially for brokers/sub-brokers/high net worth individual investors/high volume traders/day traders etc. Special workshops for intra-day trading are held where guidance is provided to intra day trader what they have to do in previous day and put into action in the next day because in the intra day we cannot seat and analysis chart for long period of time so techniques are taught. Seminars & Workshops Intra-day trading Workshops 40
  • 41. Same as the other work shops derivative strategies and derivative analysis are provided in the reports and along with it for more guidance to the client of Angel they held workshops. VALUE ADDED SERVICES Derivative Strategies and workshops 41
  • 42. Introduction Angel provides various services which increases the value of the firm and provides customer satisfaction through these services. These services helps customer in trading and makes the task easy, in this firm will be providing services for this special person are appointed for specific purpose who would be providing that services only .Thus personalized concentration is given to all the clients. Services offered Following are the services offered by Angel : !. E-Broking 42
  • 43.  Ebroking provides you on-line trading facilities on BSE / NSE (Cash and F&O), NCDEX and MCX through our 3 unique extruding software especially designed for traders as well as investors  Trading in securities / commodities using the internet platform is a convenient option. We provide you an opportunity to trade on BSE / NSE (Cash and F&O), NCDEX and MCX from the comfort of your home or office.  Our internet trading platform gives you state-of-the-art trading facility, order and trade confirmation, e-contracts and 24X7 on-line web enabled back-office system at the click of a button 2. BACK OFFICE  Internet based back office: 24 hours, 365 days, integrated online back office through user id and password.  Current and historical data: data, both present and historical.  customized reports : digital contracts, bills, positions, ledger, accounts segment wise- exchange wise  Queries: client queries and the feedback for the same 3. FUNDAMENTAL RESEARCH 43
  • 44. THE SUNDAY WEEKLY REPORT This weekly report is ace of all the reports. It offers a comprehensive market overview and likely trends in the week ahead. It also presents top picks based on an in-depth analysis of technical and fundamental factors. It gives short term and long term outlook on this scrip, their price targets and advice trading strategies. Another unique feature of this report is that it provides an updated view of about 70 prominent stocks on an ongoing basis. THE INDUSTRY WATCH This report provides an in-depth look at specific industries which are likely to outperform others in the economy. It analyses their strength and weaknesses and ascertains their future outlook. The final view is arrived at after thorough interaction with industry experts STOCK ANALYSIS 44
  • 45. Angel’s stock research has performed very well over the past few years and angel model portfolio has consistently outperformed the benchmark indices. The fundamentals of select scrips are thoroughly analyzed and actionable advice is provided along with investment rationale for each scrip. FLASH NEWS Key developments and significant news announcement that are likely to have an impact on market / scrips are flashed live on trading terminals. Flash news keeps the market men updated on an online basis and helps them to reshuffle their holdings 4. COMMODITIES 45
  • 46. At Angel, we provide you a platform and trade in Commodities future with both the leading Commodity Exchanges i.e. MCX & NCDEX and offer you immense benefits. 5. INVESTMENT ADVISORY  A premium service for clients who need professional guidance on long term investments.  Minimum fund / portfolio of Rs. 1 lac and maximum of Rs. 4 lac eligible for Angel Gold.  Appropriate risk profiling before taking investment decisions  Periodic group meetings and seminars in branches.  Monthly Newsletter from the desk of “Angel Gold” .  Browser based back-office software 6.PORTFOLIO ADVISORY SERVICES 46
  • 47. Angel offers discretionary PMS to investors I order to assist them in manging their funds amidst continuous changing market dynamics and increasing complexities of investing. Investing in equity markets requires in-depth knowledge and through analysis coupled with clear understanding of domestic and international economies. Investors need the services of an expert to manage their funds and deliver good returns in diverse market conditions. Continuous wealth creation with an emphasis on capital preservation is essential I today’s complex markets. In order to systematically diversify the holdings of clients across varied sectors and with an intention to give them handsome returns 7. DP Services 47
  • 48.  No risk of loss, wrong transfer, mutilation or theft of share certificates.  Hassle free automated pay-in of your sell obligations by your clearing members, ABL / ACDL (No need for physical instruction at all).  Reduced paper work.  Speedier settlement process. Because of faster transfer and registration of securities in your account, increased liquidity of your securities.  Instant disbursement of non-cash benefits like bonus and rights into your account.  Efficient pledge mechanism.  Wide branch coverage.  Personalized / attentive services of trained help desk.  ‘Zero’ upfront payment.  No charges for extra transaction statement & holding statement.  All in one combined Monthly ‘Bill-cum-Transaction-cum-Holding-cum- ledger’ statement. 8. RESEARCH REPORTS & SERVICES 48
  • 49.  Daily / weekly reports 49
  • 50.  Company / sector reports  Special reports – event based 50
  • 51.  Intra-day calls / position calls 51
  • 52. ABOUT THE EQUITY MARKET PRIMARY EQUITY MARKET 52
  • 53. There are four ways in which a company may raise equity capital in the primary market.  PUBLIC ISSUE  RIGHTS ISSUE  PRIVATE PLACEMENT  PREFERENTIAL ALLOTMENT PUBLIC ISSUE By far the most important mode of issuing securities, a public issue involves sale of securities to the public at large. The company making a public issue has to go through a fairly elaborate process which involves the following:  Approval by the board  Appointment of lead managers  Appointment of other intermediaries like co-managers, advisors, underwriters, bankers, brokers, and registrars  Preparation of the prospectus  Filing of the prospectus with the Registrar of Companies  Printing and dispatch of prospectus and application form  Filing of the initial listing application  Promotion of the issue  Statutory announcement  Collection of applications  Processing of applications  determination of the liability of underwriters  Allotments of securities  Listing of the issue STOCKINVEST SCHEME When public issues get heavily over-subscribed, a large number of investors lose interest on the subscription money locked with the company, while the issuing company enjoys 53
  • 54. the benefits of float money. To prevent this, the Securities Exchange Board of India has come out with the stock invest scheme. This is an additional facility available to investors, besides the existing instruments like cash, cheques, and drafts, to apply for public issues. The stock invest scheme works as follows:  An investors who has a savings account or current account with a bank applies, in a prescribed form, for issue of a certain number of stock invests of requisite denominations.  The bank issues the stock invests, which are properly dated, and marks a lien in the account of the investor for the amount of stock invests issued.  The investors submits the application form for a public issue along with the requisite stock invests to the collecting banker.  The collecting banker transmits the application form with stock invests to the registrar of the issue.  After the allotment is finalized, the registrar fills up the right side of the stock invest form indicating the entitlement of the investor.  The registrar presents the stock invests to the controlling branch of the colleting bank for the public issue, claiming whatever amounts are relevant according to the allotments.  The collecting bank gives credit to the company’s accounts as stock invests are guaranteed instruments.  After the company’s account is credited, the registrar proceeds with formal allotment. In case of full and partial allotment, the registrar intimates the successful applicants through allotment advice. In case of unsuccessful applicants, the registrar returns the applications form along with cancelled stock invests to the controlling bank, which in turn advise the issuing bank.  The issuing bank intimates the applicant about the release of lien on the account as sequel to non-allotment. 54
  • 55. BOOK BUILDING A company can use the process of book building to fine tune its price determination. When a company employs the book building mechanism, it does not predetermine the issue price or interest rate and invite subscription to the issue. Instead it starts with an indicative price band which is determined through a consultative process with its merchant bankers and asks its merchant bankers to invite bids from prospective investors at different prices. Those who bid are requires to pay the full amount. Based on the response received from investors the final price is selected. Investors who have bid a price equal to or more than the final price selected are given allotment at the final price selected. Those who have bid for a lower price will get refund. RIGHT ISSUE A right s issue involves selling securities in the primary market by issuing rights to the existing shareholders. When a company issues additional equity capital it has to be offered in the first instance to the existing shareholders on pro rata basis. This is required under section 81 of the Companies act 1956. The shareholders, however, may be a special resolution forfeit this right, partially or fully, to enable a company to issue additional capital to the public. PRIVATE PLACEMENT Private placement and preferential allotment involve sale of securities to a limited number of sophisticated investors such as financial institutions, mutual funds, venture capital funds, banks, and so on. What there does not seem to be a very clear-cut distinction between the two in the Indian context we find that broadly (i) Private Placement refers to sale of equity or equity related instruments of an unlisted company or sale of debentures of a listed or unlisted company, and (ii) preferential allotment refers to sale of equity or equity related instruments of a listed company. Private placement in India is mostly of equity or equity-related instruments of unlisted companies and debt instruments of listed companies. 55
  • 56. PREFERENTIAL ALLOTMENT An issue of equity by a listed company to selected investors at a price which may or may not be related to the prevailing market price is referred to as preferential allotment in the Indian capital market. A preferential allotment is not related to a public issue and certain categories of investors in a public issue. Preferential allotment in India is given mainly to promoters or friendly investors to ward off the threat of takeover. This is now a very popular means of raising fresh equity capital because: (1) The cost and uncertainty associated with the public issue is high (2) Sophisticated investors like mutual funds and private equity investors are likely to pay a higher price. The price at which a preferential allotment of share is made should not be lower than the higher of the average of the weekly high and low of the closing prices of the shares quoted on the stock exchange during the six months period before the relevant date or during the two week period before the relevant date. 56
  • 57. SECONDARY EQUITY MARKET For buying and selling any security in the market there must be a some medium to make transaction. This medium is called secondary market. In secondary market one can buy and sell the security which would listed in stock exchange. The secondary market which represented an institutional mechanism that was inadequate, non-transparent, hardly regulated and rarely geared to investor protection till the early nineties, has also witness notable developments. Among them are the prescriptions of norms by SEBI for intermediaries like brokers/sub-brokers/dealers in trading/settlement, broad based governing boards of stock exchanges, capital adequacy norms for the intermediaries, corporate membership, transparency in trading and settlement practices, development of cash market, regulation of badla trading, introduction of future/options trading. The setting up of the Over-The Counter Exchange of India (OTCEI) and the National Stock Exchange (NSE) represents a landmark in the direction of developing vibrant, strong, matured, and equitable secondary market as an integral constituent of the emerging securities market in India. An equally significant development has been the coming into being of the National Securities Depositories Ltd (NSDL) and the system of dematerialized trading. The commencement of derivative trading has certainly added to the sophistication of the market greatly and integrates it with international markets. The corporatisation and demutualization of the stock exchanges, separating trading, ownership and management is yet another crucial factor in the same direction. TRADING Each stock exchange has certain listed securities and permitted securities which are traded on it. Members of the exchange alone are entitled to the trading privileges. Investors interested in buying or selling securities should place their orders with the members of the exchange. There are two ways of organizing the trading activity the open outcry system and the screen-based system. 57
  • 58. OPEN OUTCRY SYSTEM As the nomenclature suggests, under the open outcry system, traders shout and resort to signals on the trading floor of the exchange which consist of several ‘notional’ trading posts for different securities. A member wishing to buy or sell a certain security reaches the trading post where the security is traded. Here, he comes in contact with others interested in transacting in that security. Buyers make their bids and sellers make their offers and bargains are closed at mutually agreed-upon prices. In stocks where jobbing is done, the jobber plays an important role. He stands ready to buy or sell on his account. He quotes his bid (buying) and asks (selling) prices. He provides some stability and continuity to the market. SCREEN-BASED SYSTEM In the screen-based system the trading ring is replaced by the computer screen and distant participants can trade with each other through the computer network. A large number of participants, geographically separated, can trade simultaneously at high speeds. The screen-based trading system (a) enhances the information efficiency of the market as more participants trade at a faster speed. (b) permits the markets participants to get a full view of the market, which increases their confidence in the market, and (c) establishes transparent audit trails While computerized trading is more efficient, it decidedly lacks the vibrancy and vitality of the traditional floor trading. Technology seems to have its own way of pushing colorful traditions and practices into oblivion. Till 1994, trading on the stock market in India was based on the open outcry system with the establishment of the National Stock Exchange in 1994, India entered the era of screen-based trading. Within a short span of time, screen-based trading has supplanted the open outcry system on all the stock exchanges in the country, thanks to SEBI’s initiative in this respect. 58
  • 59.  Buyers and sellers places their orders on the computer. They can be limit orders or best market price orders.  The computer constantly tries to match mutually compatible orders on price and time priority.  The limit order book, i.e the list of unmatched limit orders is displayed on the screen. Put differently , it is open for inspection to all traders. SETTLEMENT Traditionally, trades in India were settled b physical delivery. This means that the securities had to physically move from the seller to the seller’s broker, from the seller’s broker to the buyer’s broker and from the buyer’s broker to the buyer. Further, the buyer had to lodge the securities with the transfer agents of the company and the created bed paper risk. To enable the creation of depositories to facilities dematerialized trading in India, the central government passed the Depositories Act, 1996. The highlights of this Act are as follows.  Every depository will be required to be registered with the Securities and Exchanges Board of India.  Investors will have the choice of continuing with the existing share certificates or opt for the depository mode.  Investors opting to join the depository mode are required to register with the agents for the depositories. These will be custodial agencies like banks, financial institutions, and large brokerage firms.  Shares in the depository mode will be fungible. This means that they will cease to have distinctive numbers.  Any loss caused to the beneficial owners due to the negligence of the depository or the participant will be indemnified by the depository. 59
  • 60. The National Securities Depository Limited (NSDL), India’s first depository, was set up in 1996, it was followed by the Central Securities Depositories Limited (CSDL), Both the depositories, the NSDL in particular, have recorded a significant growth in their operations. SHIFT TO ROLLING SETTLEMENT Till recently share transactions in India were settled on the basis of a weekly account period. (On the Bombay Stock Exchange the account period was Monday to Friday and on the National Stock Exchange the settlement account period was Wednesday to Tuesday.) This meant that purchase and sales during an account period could be squared up and at the end of the account period, transactions could be settled on a net basis. The weekly settlement system along with the badla system of carrying forward transaction from one account period to the next, according to many informed observers of the Indian Stock market, led to unbridled speculative activity and periodic market crisis. So, SEBI decided to introduce rolling settlement in important scripts with effect from 1st January 2002. Under a rolling system each day constitutes an account period and its trades are settled after a few days. For example, under the T+5 rolling settlement which was introduced initially, the trades were settled after 5days. With effect from April 1, 2002, the T+3 settlements system has been introduced ABOUT THE DERIVATIVES 60
  • 61. INTRODUCTION Keeping in view the experience of even strong and developed economies the world over, it is no denying the fact that financial market is extremely volatile by nature. Indian financial market is not an exception to this phenomenon. The attendant risk arising out of the volatility and complexity of the financial market is an important concern for financial analysts. As a result, the logical need is for those financial instruments which allow fund managers to better manage or reduce these risks. Out of various risks, Credit Risk and Interest Rate risk are the two core risks, which are commonly acknowledged by various categories of Financial Institutions particularly banks. Effective management of these core risks is a critical factor in comprehensive risk management and is essential for the long-term financial health of business organizations, especially banks.With gradual liberalization of Indian financial system and the growing integration among markets, the risks associated with operations of banks and All India Financial Institutions have become increasingly complex, requiring strategic management. In keeping with spirit of the guidelines on Asset-Liability Management (ALM) systems and on integrated risk management systems, it is very much required to design risk management architecture, taking into consideration the size, complexity of business, risk philosophy, market perception and the level of capital. In addition, fine- tuning the risk management system to deal with credit and market risk is also the need of the hour. For enabling the banks and the financial institutions, among others, to manage their risk effectively, the concept of derivatives comes into picture. The emergence of the market for derivative products, most notably forwards, futures and options, can be traced back to the willingness of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices. By their very nature, the financial markets are marked by a very high degree of volatility. Through the use of derivative products, it is possible to partially or fully transfer price risks by locking–in asset prices. As instruments of risk management, these generally do not influence the fluctuations in the underlying asset prices. However, by locking-in asset prices, derivative products minimize the impact of fluctuations in asset prices on the profitability and cash flow situation of risk-averse investors. 61
  • 62. MEANING A derivative is a financial instrument, which derives its value from some other financial price. This “other financial price” is called the underlying. The underlying asset can be equity, FOREX, commodity or any other asset. A wheat farmer may wish to contract to sell his harvest at a future date to eliminate the risk of a change in prices by that date. The price for such a contract would obviously depend upon the current spot price of wheat. Such a transaction could take place on a wheat forward market. Here, the wheat forward is the “derivative” and wheat on the spot market is “the underlying”. The terms “derivative contract”, “derivative product”, or “derivative” are used interchangeably. The most important derivatives are futures and options. Example: - A very simple example of derivatives is curd, which is derivative of milk. The price of curd depends upon the price of milk, which in turn depends upon the demand, and supply of milk. See it this way. American depository receipts/ global depository receipts of ICICI, Satyam and Infosys traded on stock exchanges in the USA and England have their own values? No. They draw their price from the underlying shares traded in India. Consider how the value of mutual fund units changes on a day-to-day basis. Don’t mutual fund units draw their value from the value of the portfolio of securities under the schemes? Aren’t these examples of derivatives? Yes, these are. And you know what, these examples prove that derivatives are not so new to us. Nifty options and futures, Reliance futures and options, Satyam futures and options etc are all examples of derivatives. Futures and options are the most common and popular form of derivatives. 62
  • 63. HISTORY The derivatives markets has existed for centuries as a result of the need for both users and producers of natural resources to hedge against price fluctuations in the underlying commodities. India has been trading derivatives contracts in silver, gold, spices, coffee, cotton and oil etc for decades in the gray market. Trading derivatives contracts in organized market was legal before Morarji Desai’s government banned forward contracts. Derivatives on stocks were traded in the form of “Teji” and “Mandi” in unorganized markets. Recently futures contract in various commodities was allowed to trade on exchanges. In June 2000, NSE and BSE started trading in futures on Sensex and Nifty. Options trading on Sensex and Nifty commenced in June 2001. Very soon thereafter trading began on options and futures in 31 prominent stocks in the month of July and November respectively. The market lots keeps on changing from time to time. The minimum quantity you can trade in is one market lot. DERIVATIVES: AN INDIAN CONTEXT: In Indian context, the intensity of derivatives usage by institutional investors (viz. Banks, Financial Institution; Mutual Funds, Foreign Institutional Investors, Life and General Insurers) depend on their ability and willingness to use derivatives for one or more of the following purposes:  Risk containment: using derivatives for hedging and risk containment purposes  Risk Trading/Market Making: Running derivatives trading book for profits and arbitrage; and/or  Covered Intermediation: On-balance-sheet derivatives intermediation for client transaction, without retaining any net-risk on the balance sheet (except credit risks). 63
  • 64. TYPES OF DERIVATIVES Derivative as a term conjures up visions of complex numeric calculations, speculative dealings and comes across as an instrument which is the prerogative of a few ‘smart finance professionals’. In reality it is not so. In fact, a derivative transaction helps cover risk, which would arise on the trading of securities on which the derivative is based and a small investor can benefit immensely. “A derivative security can be defined as a security whose value depends on the values of other underlying variables.” Very often, the variables underlying the derivative securities are the prices of traded securities. Derivatives and futures are basically of 3 types:  Forwards and Futures  Options  Swaps 64 DERIVATIVESDERIVATIVES OptionsOptions FuturesFutures SwapsSwaps ForwardsForwards CommodityCommodity SecuritySecurity Interest RateInterest Rate CurrencyCurrencyPutPut CallCall
  • 65. FORWARDS: A forward contract is the simplest mode of a derivative transaction. It is an agreement to buy or sell an asset (of a specified quantity) at a certain future time for a certain price. No cash is exchanged when the contract is entered into. Illustration: - Shyam wants to buy a TV, which costs Rs 10,000 but he has no cash to buy it outright. He can only buy it 3 months hence. He, however, fears that prices of televisions will rise 3 months from now. So in order to protect himself from the rise in prices Shyam enters into a contract with the TV dealer that 3 months from now he will buy the TV for Rs 10,000. What Shyam is doing is that he is locking the current price of a TV for a forward contract. The forward contract is settled at maturity. The dealer will deliver the asset to Shyam at the end of three months and Shyam in turn will pay cash equivalent to the TV price on delivery. FUTURES: It is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price through exchange traded contracts. A Future represents the right to buy or sell a standard quantity and quality of an asset or security at a specified date and price. Futures are similar to Forward Contracts, but are standardized and traded on an exchange, and are valued, or "Marked to Market” daily. The Marking to Market provides both parties with a daily accounting of their financial obligations under the terms of the Future. Unlike Forward Contracts, the counterparty to a Futures contract is the clearing corporation on the appropriate exchange. Futures often are settled in cash or cash equivalents, rather than requiring physical delivery of the underlying asset. Parties to a Futures contract may buy or write Options on Futures. 65
  • 66. OPTIONS: An option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date. ‘Option’, as the word suggests, is a choice given to the investor to either honor the contract; or if he chooses not to walk away from the contract. There are two kinds of options: Call Options and Put Options. A Call Option is an option to buy a stock at a specific price on or before a certain date. When you buy a Call option, the price you pay for it, called the option premium, secures your right to buy that certain stock at a specified price called the strike price. If you decide not to use the option to buy the stock, and you are not obligated to, your only cost is the option premium. Put Options are options to sell a stock at a specific price on or before a certain date. In this way, Put options are like insurance policies. With a Put Option, you can "insure" a stock by fixing a selling price. If something happens which causes the stock price to fall, and thus, "damages" your asset, you can exercise your option and sell it at its "insured" price level. If the price of your stock goes up, and there is no "damage," then you do not need to use the insurance, and, once again, your only cost is the premium. Technically, an option is a contract between two parties. The buyer receives a privilege for which he pays a premium. The seller accepts an obligation for which he receives a fee. CALL OPTIONS 66
  • 67. Call options give the taker the right, but not the obligation, to buy the underlying shares at a predetermined price, on or before a predetermined date. Illustration: - Raj purchases 1 Satyam Computer (SATCOM) AUG 150 Call --Premium 8 This contract allows Raj to buy 100 shares of SATCOM at Rs 150 per share at any time between the current date and the end of next August. For this privilege, Raj pays a fee of Rs 800 (Rs eight a share for 100 shares). The buyer of a call has purchased the right to buy and for that he pays a premium. Now let us see how one can profit from buying an option; Sam purchases a December call option at Rs 40 for a premium of Rs 15. That is he has purchased the right to buy that share for Rs 40 in December. If the stock rises above Rs 55 (40+15) he will break even and he will start making a profit. Suppose the stock does not rise and instead falls he will choose not to exercise the option and forego the premium of Rs 15 and thus limiting his loss to Rs 15. Call Options-Long & Short Positions When you expect prices to rise, then you take a long position by buying calls. You are bullish.When you expect prices to fall, then you take a short position by selling calls. You are bearish. 67
  • 68. PUT OPTIONS A Put Option gives the holder of the right to sell a specific number of shares of an agreed security at a fixed price for a period of time. Illustration:- Raj is of the view that the a stock is overpriced and will fall in future, but he does not want to take the risk in the event of price rising so purchases a put option at Rs 70 on ‘X’. By purchasing the put option Raj has the right to sell the stock at Rs 70 but he has to pay a fee of Rs 15 (premium). So he will breakeven only after the stock falls below Rs 55 (70-15) and will start making profit if the stock falls below Rs 55. Put Options-Long & Short Positions When you expect prices to fall, then you take a long position by buying Puts. You are bearish. When you expect prices to rise, then you take a short position by selling Puts. You are bullish. CALL OPTIONS PUT OPTIONS If you expect a fall in price(Bearish) Short Long If you expect a rise in price (Bullish) Long Short 68
  • 69. IMPORTANT FACTORS IN DERIVATIVES HEDGING We have seen how one can take a view on the market with the help of index futures. The other benefit of trading in index futures is to hedge your portfolio against the risk of trading. In order to understand how one can protect his portfolio from value erosion let us take an example. Illustration: Ram enters into a contract with Shyam that six months from now he will sell to Shyam 10 dresses for Rs 4000. The cost of manufacturing for Ram is only Rs 1000 and he will make a profit of Rs 3000 if the sale is completed. Cost (Rs) Selling price Profit 1000 4000 3000 However, Ram fears that Shyam may not honor his contract 6 months from now. So he inserts a new clause in the contract that if Shyam fails to honor the contract he will have to pay a penalty of Rs 1000. And if Shyam honors the contract Ram will offer a discount of Rs 1000 as incentive. Shyam defaults Shyam honors 1000 (Initial Investment) 3000 (Initial profit) 1000 (penalty from Shyam) (-1000) discount given to Shyam - (No gain/loss) 2000 (Net gain) As we see above if Shyam defaults Ram will get a penalty of Rs 1000 but he will recover his initial investment. If Shyam honors the contract, Ram will still make a profit of Rs 2000. Thus, Ram has hedged his risk against default and protected his initial investment. The above example explains the concept of hedging. 69
  • 70. SPECULATION Speculators are those who do not have any position on which they enter in futures and options market. They only have a particular view on the market, stock, commodity etc. In short, speculators put their money at risk in the hope of profiting from an anticipated price change. They consider various factors such as demand supply, market positions, open interests, economic fundamentals and other data to take their positions. Illustration: Ram is a trader but has no time to track and analyze stocks. However, he fancies his chances in predicting the market trend. So instead of buying different stocks he buys Sensex Futures. On May 1, 2001, he buys 100 Sensex futures @ 3600 on expectations that the index will rise in future. On June 1, 2001, the Sensex rises to 4000 and at that time he sells an equal number of contracts to close out his position. Selling Price : 4000*100 = Rs 4,00,000 Less: Purchase Cost: 3600*100 = Rs 3,60,000 Net gain Rs 40,000 Ram has made a profit of Rs 40,000 by taking a call on the future value of the Sensex. However, if the Sensex had fallen he would have made a loss. Similarly, if would have been bearish he could have sold Sensex futures and made a profit from a falling profit. In index futures players can have a long-term view of the market up to atleast 3 months. 70
  • 71. ARBITRAGE An arbitrageur is basically risk averse. He enters into those contracts were he can earn riskless profits. When markets are imperfect, buying in one market and simultaneously selling in other market gives risk less profit. Arbitrageurs are always in the look out for such imperfections. In the futures market one can take advantages of arbitrage opportunities by buying from lower priced market and selling at the higher priced market. In index futures arbitrage is possible between the spot market and the futures market.  Assume that Nifty is at 1200 and 3 month’s Nifty futures is at 1300.  The futures price of Nifty futures can be worked out by taking the interest cost of 3 months into account.  If there is a difference then arbitrage opportunity exists. Let us take the example of single stock to understand the concept better. If Wipro is quoted at Rs 1000 per share and the 3 months futures of Wipro is Rs 1070 then one can purchase ITC at Rs 1000 in spot by borrowing @ 12% annum for 3 months and sell Wipro futures for 3 months at Rs 1070. Sale = 1070 Cost= 1000+30 = 1030 Arbitrage profit = 40 These kinds of imperfections continue to exist in the markets but one has to be alert to the opportunities as they tend to get exhausted very fast. 71
  • 72. MARGINS The margining system is based on the JR Verma Committee recommendations. The actual margining happens on a daily basis while online position monitoring is done on an intra-day basis. Daily margining is of two types: 1. Initial margins 2. Mark-to-market profit/loss The computation of initial margin on the futures market is done using the concept of Value-at-Risk (VaR). The initial margin amount is large enough to cover a one-day loss that can be encountered on 99% of the days. VaR methodology seeks to measure the amount of value that a portfolio may stand to lose within a certain horizon time period (one day for the clearing corporation) due to potential changes in the underlying asset market price. Initial margin amount computed using VaR is collected up-front. The daily settlement process called "mark-to-market" provides for collection of losses that have already occurred (historic losses) whereas initial margin seeks to safeguard against potential losses on outstanding positions. The mark-to-market settlement is done in cash. 72
  • 73. ABOUT MUTUAL FUNDS INTRODUCTION Mutual fund is the ideal investment vehicle for today’s complex and modern financial scenario. The sources of revenue like fix income instruments, real estate, derivatives etc... But due to less information available it can not be understood easily. A mutual fund is the answer to above all the situations. Nowadays a mutual fund is a strong tool to pull a large amount from the market. There are several schemes to invest money and get more revenue. With the help of Mutual fund an investor can invest their money indirectly in share market. Mutual fund industry was started in India with establishment of UTI (1963), which is only player in the market of mutual fund up to 1987. During that time mutual fund market refers the unit link schemes like Master Share and Master Gain. Mutual fund provides varieties of schemes for different kind of customers to suit their goals. Mutual fund have open-ended and close-ended schemes, children’s plan, diversified equity fund, balanced fund, liquid fund, income fund, short term fund, sector fund, ELSS (equity linked savings schemes) and pension plan. 73
  • 74. WHY ONE SHOULD INVEST IN MUTUAL FUND?  PROFESSIONAL INVESTMENT MANAGEMENT  DIVERSIFACATION  LOW COST  CONVENIENCE AND FLEXIBILITY  LIQUIDITY  TRANSPARENCY  VARIETY HOW TO CHOOSE A MUTUAL FUND?  PAST PERFORMANCE  KNOW THE FUND MANAGER  DOES IT SUIT YOUR RISK PROFILE?  READ THE PROSPECTUS  HOW THE FUND WILL AFFECT THE DIVERSIFICATION OF YOUR PORTFOLIO?  WHAT DOES IT COST TO THE INVESTOR? 74
  • 75. TYPES OF MUTUAL FUND BY STRUCTURE 1. OPEN ENDED SCHEMES These funds are sold at the NAV based prices, generally calculated on every business day. These schemes have unlimited capitalization, open-ended schemes do not have a fixed maturity - i.e. there is no cap on the amount you can buy from the fund and the unit capital can keep growing. These funds are not generally listed on any exchange. Open-ended funds are bringing in a revival of the mutual fund industry owing to increased liquidity, transparency and performance in the new open-ended funds promoted by the private sector and foreign players. Open-ended funds score over close-ended ones on several counts. Some of these are listed below: a) Any time exit option: The issuing company directly takes the responsibility of providing an entry and an exit. This provides ready liquidity to the investors and avoids reliance on transfer deeds, signature verifications and bad deliveries. b) Tax advantage: Though Budget 2000 proposals envisage a tax rate of 20% on dividend distribution made by the Debt funds, the funds continue to remain attractive investment vehicles. In equity plans there is no distribution tax. c) Any time entry option: An open-ended fund allows one to enter the fund at any time and even to invest at regular intervals (a systematic investment plan). The open ended funds offered by PruICICI are Liquid Plan, Income Plan, Gilt-Treasury, Gilt- Investment, Balanced Fund, Growth Fund, Tax Plan , FMCG Fund, Technology Fund, Monthly Income Plan , Fixed Maturity Plan, Child Care Plan, Power and Short Term Plan 75
  • 76. 2. CLOSE ENDED SCHEMES Schemes that have a stipulated maturity period, limited capitalization and the units are listed on the stock exchange are called close-ended schemes. These schemes have historically seen a lot of subscription. This popularity is estimated to be on account of firstly, public sector MFs having floated a lot of close-ended income schemes with guaranteed returns and secondly easy liquidity on account of listing on the stock exchanges. The closed-ended fund managed by PruICICI is ICICI Premier. BY INVESTMENT OBJECTIVE 1. GROWTH SCHEMES These funds seek to provide growth of capital with secondary emphasis on dividend. They invest in shares with a potential for growth and capital appreciation. Because they invest in well-established companies where the company itself and the industry in which it operates are thought to have good long-term growth potential, growth funds provide low current income. Growth funds generally incur higher risks than income funds in an effort to secure more pronounced growth. 2.INCOME SCHEMES Growth and income funds seek long-term growth of capital as well as current income. The investment strategies used to reach these goals vary among funds. Some invest in a dual portfolio consisting of growth stocks and income stocks, or a combination of growth stocks, stocks paying high dividends, preferred stocks, convertible securities or fixed- income securities such as corporate bonds and money market instruments. Others may invest in growth stocks and earn current income by selling covered call options on their portfolio stocks. Growth and income funds have low to moderate stability of principal and moderate potential for current income and growth. They are suitable for investors who can assume some risk to achieve growth of capital but who also want to maintain a moderate level of current income. 76
  • 77. 3.BALANCED SCHEMES The Balanced fund aims to provide both growth and income. These funds invest in both shares and fixed income securities in the proportion indicated in their offer documents. Ideal for investors who are looking for a combination of income and moderate growth. 4.MONEY MARKET SCHEMES For the cautious investor, these funds provide a very high stability of principal while seeking a moderate to high current income. They invest in highly liquid, virtually risk- free, short-term debt securities of agencies of the Indian Government, banks and corporations and Treasury Bills. Because of their short-term investments, money market mutual funds are able to keep a virtually constant unit price; only the yield fluctuates. Therefore, they are an attractive alternative to bank accounts. With yields that are generally competitive with - and usually higher than -- yields on bank savings account, they offer several advantages. Money can be withdrawn any time without penalty. Although not insured, money market funds invest only in highly liquid, short-term, top- rated money market instruments. Money market funds are suitable for investors who want high stability of principal and current income with immediate liquidity. OTHER SCHEMES These funds invest in securities of a specific industry or sector of the economy such as health care, technology, leisure, utilities or precious metals. The funds enable investors to diversify holdings among many companies within an industry, a more conservative approach than investing directly in one particular company. Sector funds offer the opportunity for sharp capital gains in cases where the fund's industry is "in favor" but also entail the risk of capital losses when the industry is out of favor. While sector funds restrict holdings to a particular industry, other specialty funds such as index funds give investors a broadly diversified portfolio and attempt to mirror the performance of various market averages. Index funds generally buy shares in all the companies composing the BSE Sensex or NSE Nifty or other broad stock market indices. They are not suitable for investors who must conserve their principal or maximize current income. 77
  • 78. LIMITATIONS OF ANGEL Although it is powerful as compared to other firms prevailing in the market it has some limitations which are seen by us during training period.  Angel is having DP of CDSL which is slow as compared to NSDL.  Marketing and Brand Building is not there in Saurashtra.  Less awareness due to starting phase  In the A/c opening form, Opening letter is not well prepared. It does’t include all details like dealing room, telephone no., relationship etc.  H.R. Department is not there in Rajkot branch  To compete, Angel should also deal with mutual fund and other products. 78
  • 79. RESEARCH METHODOLOGY  RELEVANCE OF THE STUDY  RESEARCH PROBLEM & OBJECTIVE  HYPOTHESIS, SCOPE OF THE STUDY  DATA COLLECTION, SAMPLE DESIGN  RESEARCH INSTRUMENT  LIMITATIONS OF THE STUDY  RESEARCH ANALYSIS  CONCLUSION  TESTING OF HYPOTHESIS  FINDINGS AND SUGGESTIONS  QUESTIONNAIRE 79
  • 80. RELEVANCE OF THE STUDY Any country of the world is measured by its economy. The economy indicates whether the nation is strong or weak, developed or under – developed. Financial market is one of the factors which affects the economy of any country. Stock market affects Indian economy directly or indirectly. In India stock market is fully developed but on the other side derivatives segment and commodity segment are upcoming. In the financial market, there are various instruments for investment or saving. The more investment or saving in these instruments, the more development is possible. The instrument like F.D., Equity, Debenture, Cash segment, Bond, Mutual Fund, Derivatives and commodities. There are other bullion market, Real Estate, Precious Objects, Insurance etc… are available. There are so many investors in India are not much familiar with their instruments but one fact is that there is immense scope for these instruments. Thus to know the awareness about the investment pattern in stock market particular in Rajkot city this study is undertaken. As a Angel Broking member this study is undertaken to know the investment pattern in stock market and also find out the way to attract such investor who like to trade in stock market. At last this study helps me to gain the knowledge and the company to attract new customers. 80
  • 81. RESEARCH PROBLEM In the Rajkot city, many people invest in stock market but most of the investor trading on equity while the other segments are remains inaccessible. Very few people in the Rajkot who are trading in derivatives and commodity while there is immense opportunities for developing of these segments. Angel Broking as a stock broking company needs to focus on increasing interest in stock market investment because if trading on these instruments increase Angel Broking will be benefited by earning revenue in terms of brokerage. So that this study is undertaken. OBJECTIVES The main objective of the study is to know the investment pattern in stock market and the potential market among the people of Rajkot City. Some other secondary objectives are as under: 1. To know the awareness of Investment Pattern of Equity Market. 2. To know the scope for the Investment Pattern of Equity Market. 3. To know the purpose of investing in Equity Market. 4. To know the influencing force behind the decision making while trading in Equity Market. 5. To find out the best pattern to educate about Equity Market. 6. To find out the medium which is the best suitable for trading on Equity Market. 81
  • 82. HYPOTHESIS H0: “There is no significant difference of investment pattern in stock market among the people of Rajkot City.” H1: “There is significant difference of investment pattern in stock market among the people of Rajkot City.” SCOPE OF THE STUDY The research that is being conducted by us will be useful in the following respect.  This will help the company, how to make people aware about Equity Market by imparting best education.  This will help the company to know the taste of masses and turn it towards Equity Market.  This will help the company to frame effective Marketing Strategy.  This will also help to select the right media for advertising to create brand awareness as well as to give knowledge of the products.  Mind share of Angel Broking can be known.  This will also help to select right medium for trading in Equity Market segment.  This will help the company to reduce the obstacles which come in the way for the development of Equity Market segment. 82
  • 83. DATA COLLECTION SECONDARY DATA When data are collected and compelled from the published nature or any other’s primary data is called secondary data. So far as our research is concerned, we have not collected any information from any sources. So, we have not used secondary data for our research PRIMARY DATA The data which is collected directly from the respondent to the base of knowledge and belief of such research are called primary data. SAMPLING DESIGN Sample design is definite plan for obtaining a sample from a given population. It refers to the technique or procedure the researcher would adopt selecting items for the sample. Sample design may as well as lay down the no. of item to be included in the sample i.e. the size of sample.Sample design is determined before the data are collected. It is very true that it’s very difficult to do the research with the whole universe. As we know that it is not feasible to go for population survey because of the numerous customers and their scattered location. So for this purpose sample size has to be determined well in advance and selection of sample also must be scientific so that it represents the whole universe.So far as our research is concerned, we have taken sample size of 100 respondents. We have selected Income Earners with savings to invest in Rajkot city. RESEARCH INSTRUMENT We have collected the data through QUESTIONNAIRE by personal meeting and tale – calling with people. 83
  • 84. LIMITATION OF THE STUDY 1. Personal Bias: People may have personal bias towards particular investment option so they may not give correct information and due to which conclusion may be derived. 2. Time Limit: The time duration of the research is short that’s why the information is not covered fully. 3. Area: The area was limited to Rajkot city only, so we can not know the degree of the literacy outside the city. 4. Sample Size: The last limitation is Sample size, taken by us is of 100 only; due to which we may not get the proper results. 84
  • 85. ANALYSIS OF DATA 1. GENDER RATIO : 70 30 MALE FEMALE 2. AGE GROUP PARTICULARS NO.OF PERSONS BELOW 35 25 36-50 50 51-65 15 ABOVE 65 10 AGE GROUP 25 50 15 10 0 10 20 30 40 50 60 BELOW 35 36-50 51-65 ABOVE 65 NO.OF PERSONS MALE FEMALE 70 30 85
  • 86. 3.EDUCATION PARTICULARS NO.OF PERSONS UNDER GRADUATE 25 GRADUATE 60 POST GRADUATE 15 EDUCATION 25 60 15 0 10 20 30 40 50 60 70 UNDER GRADUATE GRADUATE POST GRADUATE NO.OF PERSONS 86
  • 87. 4. OCCUPATION PARTICULARS NO.OF PERSONS PROFESSIONAL 10 EMPLOYEE WORKING IN PVT. FIRMS 30 BUSINESSMEN 40 GOVT. EMPLOYEE 20 OCCUPATION 10 30 40 20 PROFESSIONAL EMPLOYEE WORKING IN PVT. FIRMS BUSINESSMEN GOVT. EMPLOYEE 87
  • 88. 5. OF THIS INVESTMENT OPTION WHERE DO YOU INVEST YOUR SAVINGS? AVENUES NO. OF PERSONS BANK FD 90 MUTUAL FUND 10 SHARES/EQUITY 30 POSTAL SCHEME 40 INSURANCE 20 REAL ESTATE 35 INVESTMENT PATTERN 90 10 30 40 20 35 0 10 20 30 40 50 60 70 80 90 100 BAN K FD M UTU AL FUN D SHARES/EQ UITY PO STAL SCHEM EIN SURAN CE REAL ESTATE NO. OF PERSONS 88
  • 89. 6. IF YOU INVEST IN STOCK MARKET, WHICH WOULD BE YOUR PREFERENCE FROM BELOW? PARTICULARS NO. OF PERSONS EQUITY 60 DERIVATIVES 25 COMMODITY 15 60 25 15 EQUITY DERIVATIVES COMMODITY 89
  • 90. 7.WHEN YOU MAKE A DECISION TO INVEST IN STOCK MARKET, WHICH FACTOR WILL YOU GIVE IMPORTANCE? PARTICULARS NO.OF PERSONS RANK RISK REDUCTION 25 2 INVESTMENT 30 1 SPECULATION 10 5 ARBITRAGE 20 3 TO INCREASE THE LEVERAGE 15 4 25 30 10 20 15 2 1 4 3 5 0 5 10 15 20 25 30 35 RISK REDUCTION SPECULATION TOINCREASE THE RANK NO.OF PERSONS 90
  • 91. 8.WHICH STOCK EXCHANGE WOULD YOU PREFER TO CARRY OUT YOUR TRANSACTION? EXCHANGES NO. OF PERSONS BSE 45 NSE 30 MCX 10 NCDEX 15 45 30 10 15 0 5 10 15 20 25 30 35 40 45 50 BSE NSE MCX NCDEX NO. OF PERSONS 91
  • 92. 9. DO YOU CONSIDER INVESTMENT IN STOCK MARKET ARE SAFER THAN OTHER INVESTMENT AVENUES? PARTICULARS NO.OF PERSONS YES 60 NO 40 60 40 YES NO 92
  • 93. 10. IF NO, THAN WHICH CONSTRAINTS THAT HOLDING YOU BACK? PARTICULARS NO. OF PERSONS RISK TAKING ABILITY 40 FUND FACILITY 15 LACK OF KNOWLEDGE 25 LACK OF GUIDANCE 20 20 25 15 40 0 5 10 15 20 25 30 35 40 45 RISK TAKING ABILITY FUN D FAC ILITY LACK O F KNO W LEDG E LACK O F G U ID AN CE NO. OF PERSONS 93
  • 94. 11. HOW MUCH TIME WILL YOU BE ABLE TO DEVOTE FOR LEARNING STOCK MARKET? PARTICULARS NO.OF PERSONS 1 DAY 5 2 DAYS 10 3 DAYS 20 2 HRS PER DAY OVER 1 MONTH 25 CAN'T SAY 40 5 10 20 25 40 1 DAY 2 DAYS 3 DAYS 2 HRS PER DAY OVER 1 MONTH CAN'T SAY 94
  • 95. 12. ACCORDING TO YOU WHICH MEDIUM IS THE MOST RELIABLE FOR TRADING IN STOCK MARKET? PARTICULARS NO.OF PERSONS STOCK BROKING COS. 40 FRANCHISEES 20 BROKERS 30 ONLINE 10 40 20 30 10 0 5 10 15 20 25 30 35 40 45 STOCK BROKING COS. BROKERS NO.OF PERSONS 95
  • 96. CONCLUSION  Most of the people in Rajkot City are investing in fixed return Instruments.  But there are investors who use Equity as an investment tool.  Those people who want to invest in Derivatives & Commodities are investing mainly for reducing risk and they consider them as investment tool.  People generally want to take trading decisions independently or under the guidance of Friends or Well Known Stock Broking Houses.  Literature and Self Experience can be taken as the best method to impart education about stock market.  More than 40% of the respondents are interested to invest into the stock market. TESTING OF HYPOTHESIS TESTING OF HYPOTHESIS USING Z TEST (TWO TAILED): 1) The Null Hypothesis (H0) “There is no significant difference of 96
  • 97. investment pattern in stock market among the people of Rajkot City.” Therefore, H0 : u = 50% H1: u ≠ 50% 2) Level of Significance : σ The Level of significance should be set at α = 0.05 3) The Statistical Test : Z = X – u / σx Where, Z = No. of standard deviations for the desired level of confidence. X = Mean of the sample U = Mean of the population or hypothetical mean σx = Estimate for the standard error or the mean 4) The Decision Rule 1.000 (1-0.025) = 0.975 1.9+ 0.6 = 1.96 & - 1.96 (the result will be between two) σx = 5 / root of 300 - 1 = 15/17.29 = 0.8676 Z = 55 – 50 / 0.8676 = 5.763 5.) Draw a statistical conclusion The absolute value of the computerized Z statistic (5.763) is larger than 1.96, therefore null hypothesis is rejected. So, Alternate Hypothesis is accepted. H1: “There is significant difference of investment pattern in stock market among the people of Rajkot City.” 97
  • 98. FINDINGS AND SUGGESTIONS  Angel Broking needs to make its marketing team strong and also it should increase marketing activities such as promotional campaigns.  Angel Broking should educate the investors about Derivatives & Commodities by organizing classes, corporate presentations, taking part in consumer fairs, organizing events.  Company should show the benefits of trading on Derivatives & Commodities  Angel Broking can also use Newspapers and Local New Channels as a medium of advertising.  Angel Broking may also use its helpline number for giving education on stock market.  Company may appoint special team for giving education & attracting people towards trading in stock market. 98
  • 99. QUESTIONNAIRE THE INVESTMENT PATTERN IN THE STOCK MARKET AMONG THE PEOPLE OF RAJKOT CITY 1. Gender: Male Female 2. Age: Below 30 31-45 46-60 Above 60 3. Education: Undergraduate Graduate Post graduate 4. Occupation: Professional Businessmen Employees working Govt. Employee in Pvt. Firms 5. Of this investment options, where do you invest your savings? Bank FD Postal Scheme Jewellary Mutual Funds Insurance Shares/Equity Real Estate 6. If you Invest in stock market which would be your preference from below? Equity Derivatives (F&O) Commodity 7. Which factor plays crucial role when you make a decision to invest in stock market? Risk Reduction Speculative Motive Leverage Benefit Investment Arbitrage Benefit 99
  • 100. 8. Which Stock exchange would you prefer to carry out your transactions BSE NCDEX NSE MCX 9. Do you consider investment in stock market are safer than other investment avenues ? YES NO 10. If no than which constraints that are holding you back. Lack of knowledge Lack of guidance from broker Lack of fund availability Lack of Risk Taking ability 11. How much time will you be able to devote for learning Stock Market. 1 day 2 days 3 days 2 hrs per day over 1 week Can’t say 12. According to you, which medium is the most reliable for trading in Stock Market? (Give Rank) Stock broking cos. (Branded) Brokers Franchisees Online 100
  • 101. BIBLIOGRAPHY  Kothari C.R., Research Methodology, New Delhi, Vikas Publishing House pvt.Ltd. 1978  Pathak Bharti v.,Indian Financial System,Delhi,Person Education(Singapore) pvt.Ltd. WEBSITES:  www.Google.com  www.bseindia.com  www.nseindia.com  www.angel trade.com  www.ncdex.com.  www.mcx.com 101
  • 102. 102

×