A project on invesment patter of individusal with special reference to karvy stock broking ltd.
A<br />PROJECT REPORT <br />ON<br />“INVESMENT PATTER OF INDIVIDUSAL WITH SPECIAL REFERENCE TO MARKET”<br /> <br />FOR<br />KARVY STOCK BROKING LTD. <br />YAVATMAL<br />MASTER OF BUSINESS ADMINISTRATION <br />SUBMITTED BY<br /> <br /> <br /> <br />UNDER THE GUIDANCE OF<br /> <br /> <br />CENTRAL INSTITUTE OF BUSINESS MANAGEMENT RESEARCH & DEVELOPMENT, NAGPUR<br />ACKNOWLEDGEMENT<br />I am extremely thankful to my guide ………………………….. for supporting me in the project report on “INVESTMENT PATTERN OF INDIVIDUSAL WITH SPECIAL REFERENCE TO MARKET” without whose able guidance this project report would never have been materialized. It was their erudite talk, knowledge and practical suggestions, which inspired me to give best to this project.<br />I am very grateful to ……………….. and ……………….. for their indefatigable support and guidance at the company office, which helped me to put my mettle to accomplish the work well within time.<br /> I also acknowledge my deep gratitude to our Management faculty, teaching and non-teaching staff for extending to me his co-operation and help whenever I felt any difficulty regarding project work.<br />I am also very thankful to our esteemed director ……………… for allowing me to undertaken this project.<br /> Last but not least I am especially thanks to all friends and class for their support and knowledge about the project topic to complete the project successfully.<br />Place : <br />Date : <br />DECLARATION<br />I hereby declare that the Project entitled “INVESTMENT PATTERN OF INDIVIDUSAL WITH SPECIAL REFERENCE TO MARKET” or any part thereof has not been submitted earlier to any Institution or University for the award of any other Diploma or Degree, not the data has been derived from any thesis of the University.<br />The sources of material, data used in this study have been duly acknowledged.<br />EXECUTIVE SUMMERY<br />There is growing competition between brokerage firms in post reform India. For investor it is always difficult to decide which brokerage firm to choose.<br />Research was carried out to find which brokerage house people prefer and to figure out what people prefer while investing in stock market.<br />This study suggests that people are reluctant while investing in stock and commodity market due to lack of knowledge.<br />Main purpose of investment is returns and liquidity, commodity market is less preferred by investors due to lack of awareness. The major findings of this study are that people are interested to invest in stock market but they lack knowledge.<br />Through this report we were also able to understand, what are Company’s (KARVY Stock Broking Ltd) positive and strong points, on the basis of which we come to know what can be the basis of pitching to a potential client. We also gave suggestions to the company, what improvement can be done to our product.<br />INDEX<br />Chapter NoTitlePage No1INTRODUCTION 2COMPANY PROFILE OF KARVY3OBJECTIVE OF THE STUDY4RESEARCH METHODOLOGY5HOW STOCK MARKET WORKS6STRUCTURE OF MARKET7DATA ANALYSIS AND INTERPRETATION8FINDINGS OF THE STUDY9SUGGESSIONS 10LIMITATIONS11LEARNINGS12CONCLUSION13BIBLOGRAPHYAPPENDIX<br /> <br /> Indian Share Market<br />Introduction:-<br />The study of share market is very essential because it is very emerging sector and one can earn money very rapidly as compare to other sectors. The employment and opportunity to the new generation is also very high and we can begin in a good career. So the selection of the topic is very important and essential for finance student. <br />There are basically two markets i.e. Primary and secondary, the primary is that part of the capital markets that deals with the issuance of the new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue, it include initial Public Offerings. The secondary market is the financial market for trading of securities that have already been issued in a initial private or public offering. to protect the interests of investors in secondary market THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 has been passed and regulatory body of SEBI established, which regulates Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), The Stock Exchange, Mumbai which was established in 1875 as “The Native Share and Stockbroker Association” (a voluntary non profit making association) has evolved over the years into its presents status as the premier Stock Exchange in the country. The Exchange while providing an efficient market also 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 making available necessary information inputs. The National Stock Exchange of India Limited (NSE) is a Mumbai based stock exchange it was set up in 1993 to encourage stock exchange reform through system modernization and competition. It opened for trading in mid 1994. It was recently accorded recognition as a stock exchange by the Department of Company Affairs. The instruments traded are, treasure bills, government security and bonds issued by public sector companies.<br />Stock Market of India:-<br />Stock market refers to a market place where investors can buy and sell stocks.( A share of stock represents a part of the equity capital of a publicly held company. this means that a private company decided to allow the public to be part owners of the firms and sold shares of ownership through a stock offerings.) The price at which each buying and selling transaction takes is determined by the market forces. (I.e. demand and supply for a particular stock)<br />In earlier times, buyer and sellers used to assemble at stock exchange (A stock exchange, share market or bourse is a corporation or mutual organization which provides trading facilities for stock brokers and traders, to trade stocks and other securities) to make a transaction but now with the dawn of IT, most of the operation are done electronically and the stock markets have become almost paperless. Now investors don’t have to gather at the exchanges, and can trade freely from their home or office over the phone or through internet.<br />Indian Stock exchange allows a member broker to perform followings activities:-<br />•Act as an agent.<br />•Buy and sell securities for his clients and charge commission for the same.<br />•Act as a trader or dealer as a principal.<br />•Buy and sell securities on his own account and risks. <br />OVER VIEW<br />KARVY, is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments.<br />CommoditiesInsurance BrokingMembership with 2 exchanges – NCDEX / MCXDirect broker – IRDA registration received in Jan 2005Category 1 Investment Banker registered with SEBIAmong top 10 Investment bankers in IndiaIPOs, Debt placements, Corporate restructuring etc.Karvy GroupParticipant with both NSDL and CDSL640,000+ accountsAmongst the top DPs in the countryIndia’s No.1 integrated financial services groupNSE and BSE membershipEquity, Derivatives and Debt market operations600+ terminals220,000+ accountsAround 4.5% market share (NSE Cash)Stock BrokingDepositoryInvestment BankingMutual Funds IPOs – Equity, BondsDebt productsLoans – Housing, Personal, AutoDistribution<br />KARVY GROUP OF COMPANIES<br />Karvy Consultancy LtdAs the flagship company of the Karvy Group, Karvy Consultants Limited has always remained at the helm of organizational affairs, pioneering business policies, work ethic and channels of progress. <br />Having emerged as a leader in the registry business, the first of the businesses that we ventured into, we have now transferred this business into a joint venture with Computer share Limited of Australia, the world’s largest registrar. With the advent of depositories in the Indian capital market and the relationships that we have created in the registry business, we believe that we were best positioned to venture into this activity as a Depository Participant. We were one of the early entrants registered as Depository Participant with NSDL (National Securities Depository Limited), the first Depository in the country and then with CDSL (Central Depository Services Limited). Today, we service over 6 lakhs customer accounts in this business spread across over 250 cities/towns in India and are ranked amongst the largest Depository Participants in the country. With a growing secondary market presence, we have transferred this business to Karvy Stock Broking Limited (KSBL), our associate and a member of NSE & BSE. <br />IT enabled services<br />Our Technology Services division forms the ideal platform to unleash our technology initiatives and make our presence felt on the Internet. Our past achievements include many quality websites designed, developed and deployed by us. We also possess our own web hosting facilities with dedicated bandwidth and a state-of-the-art server farm (data center) with services functioning on a variety of operating platforms such as Windows, <br />DEMAT TRADING<br /> A depository holds securities in dematerialized form. It maintains ownership records of securities in a book entry form and also effects transfer of ownership through book entry. SEBI has introduced some degree of compulsion in trading and settlement of securities in dematerialized form. While the investors have a right to hold securities in either physical or demat form, SEBI has mandated compulsory trading and settlement of securities in dematerialized form. <br />This was initially introduced for institutional investors and was later extended to all investors. Starting with 12 scrip’s on January 15, 1998, all investors are required to mandatory trade in dematerialized form in respect of 2,335 securities as at end-June, 2001. <br />Since the introduction of the depository system, dematerialization has progressed at a fast pace and has gained acceptance among the participants in the market. All actively traded scripts are held, traded and settled in demat form. The details of progress in dematerialization in two depositories, viz. NSDL & CDSL are presented as below<br />In a SEBI working paper titled ‘Dematerialization: A Silent Revolution in the Indian Capital Market’ released in April 2000, it has been observed that India has achieved a very high level of dematerialization in less than three years’ time, and currently more than 99%of trades settle in demand form. <br />Depository facility has effected changes in stock market microstructure. Breadth and depth of investment culture has further got extended to interior areas of the country faster. Dematerialization substantially contributed to the increased growth in the turnover. Dematerialization growth in India is the quickest among all emerging markets and also among developed markets excepting for the U.K and Hong Kong.<br />Demat Account<br />Demat refers to a dematerialized account. <br />Though the company is under obligation to offer the securities in both physical and demat mode, you have the choice to receive the securities in either mode. If you wish to have securities in demat mode, you need to indicate the name of the depository and also of the depository participant with whom you have depository account in your application. <br />It is, however desirable that you hold securities in demat form as physical securities carry the risk of being fake or stolen. Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, Nowadays, you need to open a demat account if you want to buy or sell stocks. <br />So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account. Let's say your portfolio of shares looks like this: 150 of Infosys, 50 of Wipro, 200 of HLL and 100 of ACC. All these will show in your demat account. So you don't have to possess any physical certificates showing that you own these shares. <br />They are all held electronically in your account. As you buy and sell the shares, they are adjusted in your account. Just like a bank passbook or statement, the DP will provide you with periodic statements of holdings and transactions. <br />Is a demat account a must? Nowadays, practically all trades have to be settled in dematerialized form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of up to 500 shares to be settled in physical form, nobody wants physical shares any more.<br />So a Demat account is a must for trading and investing. Most banks are also DP participants, as are many brokers. You can choose your very own DP. To get a list, visit the NSDL and CDSL websites and see who the registered DPs are.A broker is separate from a DP. A broker is a member of the stock exchange, who buys and sells shares on his behalf and on behalf of his clients. A DP will just give you an account to hold those shares. You do not have to take the same DP that your broker takes. You can choose your own. <br />Share Trading And Processes<br />Buying and selling of shares is called share trading. Mainly there are two ways of doing share trading<br />Online Share Trading<br />Offline Share Trading<br />Online Stock/Share Trading<br />Doing share trading with the help of computer, Internet connection and with trading /demat account is called Online Share Trading.<br /> <br />Online Share Trading; investor have to open an online trading account with any of the bank or financial trading system like eg. Karvy.com there will be nominal annual charges. <br /> <br />After successfully opening the online account investor receive the username and password with the help of investor can login in online trading system and trade their self. The trading system executive (with whom investor opened trading account) will help him initially about how to use the online trading system. Once trader gets familiar with the system then he can trade himself at his home or in the Internet café.<br /> Now days you can get Internet enabled on your cell, which is called GPRS whose speed will be sufficient to do trading, and also the charges of GPRS of vary nominal.<br />Day Activity / Settlements<br />In order to bring settlement efficiency and reduce settlement risk, in 1989, the group of 30 had recommended that all secondary markets across the globe should adopt a rolling settlement cycle on T+3 basis by 1992, i.e., the trades should be settled by delivery of securities and payment of monies within three business days after the trade day. <br />In India, due to multiple problems faced by the secondary market like the open out cry system, wide geographical coverage, settlement of securities in physical form, inadequate banking and depository infrastructure, India could not implement the G30 recommendations within the stipulated time frame.<br /> In 1999, rolling settlements were introduced in select scrip’s on a T+5 basis, which had got an effect from December 2001. After successful implementation of rolling settlement on T+5 basis, SEBI moved the settlement to T+3 basis with effect from April 2002. To carry the reforms further in this area, the Indian equity market has reduced the settlement cycle to T+2 basis w.e.f. 1st April, 2003. <br />The main advantage of this T+1 settlement cycle is that as the trades spread across all trading days, this reduces undue concentration of payment of monies and delivery of securities on a single day. As the settlement is spread across evenly, it results in efficiency utilization of infrastructure and system capacity. <br />In addition, the National Clearing Corporation guarantees trades. India Ltd. (NSCCL), and Bank of India Shareholding Ltd. (BOISL), Clearing Corporation Houses of NSE and BSE respectively.<br />The main functions of Clearing Corporation are to work out<br />(a) What counter parties owe and<br />(b) Why counter parties are due to receive on the settlement date.<br />Furthermore, each exchange has a Settlement Guarantee Fund to meet with any unpredictable situation. The Clearing Corporation of the exchanges assumes the counter party risk of each member and guarantees settlement through a fine-tuned risk management system and an innovative method of online position monitoring. It also ensures the financial settlement of trades on the appointed day and time irrespective of default by members to deliver the required funds and/or securities with the help of a settlement guarantee fund.<br />Thus, the pay-in and payout of funds and securities takes places on the 3rd working day of the execution of the trade. <br />The Information Systems Department of the Exchange generates the following statements, which can be downloaded by the members in their back offices on a daily basis. Statements giving details of the daily transactions entered into by the members.<br />Statements giving details of margins payable by the members in respect of the trades executed by them. <br />Membership <br />The trading platform of a stock exchange is accessible only to brokers. The broker enters into trades in exchanges either on his own account or on behalf of clients. The clients may place their order with them directly or a sub-broker indirectly. A broker is admitted to the membership of an exchange in terms of the provisions of the SCRA, the SEBI act 1992, the rules, circulars, notifications, guidelines, etc. prescribed there under and the byelaws, rules and regulations of the concerned exchange. No stockbroker or sub-broker is allowed to buy, sell or deal in securities, unless he or she holds a certificate of registration granted by SEBI. A broker/sub-broker compiles with the code of conduct prescribed by SEBI. <br />The stock exchanges are free to stipulate stricter requirements for its members than those stipulated by SEBI. The minimum standards stipulated by NSE for membership are in excess of the minimum norms laid down by SEBI. The standards for admission of members laid down by NSE stress on factors, such as, corporate structure, capital adequacy, track record, education, experience, etc. and reflect the conscious endeavors to ensure quality broking services. <br />Listing <br />Listing means formal admission of a security to the trading platform of a stock exchange, invariably evidenced by a listing agreement between the issuer of the security and the stock exchange. ; Listing of securities on Indian Stock Exchanges is essentially governed by the provisions in the companies act, 1956, SCRA, SCRR, rules, bye-laws and regulations of the concerned stock exchange, the listing agreement entered into by the issuer and the stock exchange and the circulars/ guidelines issued by central government and SEBI.<br />Index services<br />Stock index uses a set of stocks that are representative of the whole market, or a specified sector to measure the change in overall behavior of the markets or sector over a period of time. India Index Services & Products Limited (IISL), promoted by NSE and CRISIL, is the only specialized organization in the country to provide stock index services.<br />Objective of the Study<br />The main objectives of our project under “Karvy Stock Broking Ltd.” to study the following elements which are as follows:-<br />To understand consumer behaviors and psychology with respect to financial products.<br />Understanding the different types of products of the company-<br />- Commodity.<br />- Equity.<br /> - IPO’S<br /> - Insurance.<br />To understand the share market positioning.<br />To know the opinions and suggestions of consumer about services offered.<br />RESEARCH<br />METHODOLOGY<br />The study is based on the primary & secondary data. The primary data random sample survey method is followed for data collection. Respondents were asked to fill the feedback form. And includes personal visit, telephonic information & guidance from the company mentor while the secondary data includes books and magazines related to market and the database of existing clients of Karvy.<br />Data collected from official website of Karvy.<br />Data collected by referring to the database already existing in the company<br />Data is being collected from various sources like: -<br /> - Observation Method<br /> - Telephonic Information<br />Research Methodology: -<br />Geographical Area: Yavatmal<br />Sample Size: 100 investors<br />Data Collection<br />Primary Sources<br />(i) Questionnaires to obtain the perception of investors.<br />(ii) Interview – from investment personnel/managers/consultants.<br />Secondary Sources<br />(i) Books.<br />(ii) Data from magazines, journals and Internet<br />HOW STOCK MARKET WORKS<br />In order to understand what stocks are and how stock markets work, we need to know the history of what has come to be known as the corporation, or sometimes the limited liability company (LLC). Corporations in one form or another have been around ever since one guy convinced a few others to pool their resources for mutual benefit. <br />Privately owned corporations came into being gradually during the early 19th century in the United States, United Kingdom and Western Europe as the governments of those countries started allowing anyone to create corporations.<br />In order for a corporation to do business, it needs to get money from somewhere. Typically, one or more people contribute an initial investment to get the company off the ground. These entrepreneurs may commit some of their own money, but if they don't have enough, they will need to persuade other people, such as venture capital investors or banks, to invest in their business. <br />They can do this in two ways: by issuing bonds, which are basically a way of selling debt (or taking out a loan, depending on your perspective), or by issuing stock, that is, shares in the ownership of the company. Long ago stockowners realized that it would be convenient if there were a central place they could go to trade stock with one another, and the public stock exchange was born. Eventually, today's stock markets grew out of these public places. <br />What is a stock exchange?<br />The institution where this buying and selling of shares essentially takes place is the Stock Exchange. <br />In the absence of stock exchanges, i.e. Institutions where small chunks of businesses could be traded, there would be no modern business in the form of publicly held companies. Today, owing to the stock exchanges, one can be part owners of one company today and another company tomorrow. Thus by enabling the convertibility of ownership in the product market into financial assets, namely shares, stock exchanges bring together buyers and sellers (or their representatives) of fractional ownerships of companies. And for that very reason, activities relating to stock exchanges are also appropriately enough, known as stock market or security market. Also a stock exchange is distinguished by a specific locality and characteristics of its own, mostly a stock exchange is also distinguished by a physical location and characteristics of its own. <br />The stock exchanges are the exclusive centers for the trading of securities. The regulatory framework encourages this by virtually banning trading of securities outside exchanges. Until recently, the area of operation/ jurisdiction of exchange was specified at the time of its recognition, which in effect precluded competition among the exchanges. These are called regional exchanges. In order to provide an opportunity to investors to invest/ trade in the securities of local companies, it is mandatory for the companies, wishing to list their securities, to list on the regional stock exchange nearest to their registered office. <br />Equity markets<br /> Equity markets, the world over, grew at a great speed in the decade of the nineties. After the bear markets of the late eighties, the world markets saw one of the largest ever bull markets of more than ten years. The market capitalization of all the listed companies in the world markets increased from US$9,399,659 million (9.399 trillion) in 1990 to US$32,222,750 million (32.222 trillion) in 2000; the market capitalization thus increased to more than 3.4 times in 10 years. <br />The world market capitalization as a percentage of the world GDP also increased from 48 percent in 1990 to 105.1 percent in 2000. Thus, growth of equity markets has far outpaced the GDP growth of the world. However, due to the dotcom crash in 2000 and the subsequent recession in the world economy, the world market capitalization decreased to US$ 27,818,618 million (27.818 trillion) during 2001. The spectacular growth was partly due to increase in the number of listed companies, which grew from 25,424 in 1990 to 48,645 in 2001. <br />Stocks <br />A corporation is generally entitled to create as many shares as it pleases. Each share is a small piece of ownership. The more shares you own, the more of the company you own, and the more control you have over the company's operations. Companies sometimes issue different classes of shares, which have different privileges associated with them. <br />So a corporation creates some shares, and sells them to an investor for an agreed upon price, the corporation now has money. In return, the investor has a degree of ownership in the corporation, and can exercise some control over it. The corporation can continue to issue new shares, as long as it can persuade people to buy them. If the company makes a profit, it may decide to plow the money back into the business or use some of it to pay dividends on the shares. <br />Securities <br />The definition of “Securities” as per the Securities Contract Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrip’s , stocks or other marketable securities of the similar nature in the incorporate company or body corporate, govt. Securities, derivatives , units of collective investment schemes, interest and rights in securities, security receipt or any other instruments so declared by the Central Government.<br />Functions of the securities market<br />Securities market is then place where buyers and sellers of securities can enter into transactions to purchase and sale shares, bonds, debentures etc. Further, it performs an important enabling corporate to raise resources for their companies and business ventures public issue. Securities market provide channels for reallocation of savings to investments. Savings are linked to investment by a variety of intermediaries, through a range of financial products, called ‘Securities’.<br />Which are the securities one can invest in?<br />Shares<br />Government Securities<br />Derivatives Product<br />Units of Mutual Funds etc.,<br />STRUCTURE OF MARKETS<br />Primary Market<br />The primary market is the part of the capital markets that deals with the issuance of the new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In the case of new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering; through it can be found in the prospectus.<br />Features of Primary Market:-<br />This is the market for new long term capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called New Issue Market.<br />In a primary issue, the securities are issued by the company directly to investors.<br />The company receives the money and issue new security certificates to the investors.<br />Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business.<br />The primary market performs the crucial function of facilitating capital formation in the economy.<br />The new issue market does not include certain other sources of the new long term external finance, such as loan from financial institution. Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known as going public.<br />7. The financial assets sold can only be redeemed by the original holder. <br />Methods of issuing securities in the Primary Market:-<br />Initial Public offer.<br />Rights Issue (For Existing Companies).<br />Preferential Issue.<br />Secondary Market<br />The Secondary Market is the financial market for trading of securities that have already been issued in an initial private or public offering. Alternatively, secondary market can refer to the market for any kind of used goods. The market that exits in a new security just after the new issue is often referred to as the aftermarket. Once a newly issued stock is listed on a stock exchange, investors and speculators can easily trade on the exchange, as market makers provide bids and offers in the new stock.<br />In the secondary market, securities are sold by and transferred from one investors or speculator to another. It is therefore important that the secondary market be highly liquid.<br />Secondary marketing is vital to an efficient a modern capital market. Fundamentally, secondary market meshes the investor’s preference for liquidity with the capital user’s preference to be able to use the capital for an extended period of time.<br />Under traditional lending and partnership arrangements, investors may be less likely to put their money into long-investments, and more likely to change a higher interest rate (or demand a greater share of the profits) if they do. With secondary markets, however, investors know that they can recoup some of their investment quickly, if their own circumstances change.<br />The secondary market for a variety of assets can vary from fragmented to centralized, and from illiquid to very liquid. The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies. Exchanges such as the-"New York Stock Exchange" and "American Stock Exchange" provide a centralized, liquid secondary market for the investors who own stocks that trade on those exchanges. Most bonds and structured products trade “over the counter,” or by phoning the bond desk of one’s broker-dealer.<br />Fundamentally, secondary markets mesh the investor's preference for liquidity (i.e., the investor's desire not to tie up his or her money for a long period of time, in case the investor needs it to deal with unforeseen circumstances) with the capital user's preference to be able to use the capital for an extended period of time.<br />Accurate share price allocates scarce capital more efficiently when new projects are financed through a new primary market offering, but accuracy may also matters in the secondary market because:-<br />1) price accuracy can reduce the agency costs of management, and make hostile takeover a less risky proposition and thus move capital into the hands of better managers, and <br />2) Accurate share price aids the efficient allocation of debt finance whether debt offerings or institutional borrowing.<br />BULL MARKET <br /> A market where the prices of a certain group of securities rising or expected to rise. Bulls are optimistic investors who expect good things to happen in the market. A long-term upward price movement is characterized by a series of peaks and intermediate highs. <br />BEAR MARKET <br /> A market where the prices of a certain group of securities are falling or expected to fall. A less publicized and a sinister version of short selling takes place in bear market known as short. These types of short sellers often use misinformation to manipulate stocks in the bear market by turning the sentiments of the investors negative.<br />AUCTION MARKET <br /> All individuals and institutions assemble to trade securities at one area and announce the prices at which they are willing to purchase or buy. The NYSE is the best example of an Auction Market. It is the largest stock exchange in the world. <br />DATA ANALYSIS & INTERPRETATION<br />Q.1 Do you invest in financial products?<br /> a) Yes b) No<br />102870078105<br />Data Analysis<br /> Around 70% of people invest in market products and rest 30% doesn’t invest due to lack of awareness.<br />Q.2 Which product is the major contributor of your portfolio?<br /> a) Bank Fixed Depositb) Post Office Schemes c) Mutual Funds<br />1028700294005 d) Real Estatee) Debt f) Shares<br />Data Analysis<br />Out of the total respondents, 32% said that the biggest contributor to their investment portfolio is ‘Mutual Funds’ followed by 28% for ‘Bank fixed Deposits’. ‘Post Office Scheme’ are still a major contributor for many Investors with 20% investors going for these followed by ‘Real Estate’ (12%),’Shares’ (6%) and ‘Debt’ (2%).<br />Q.3 What is the factor, which affects your investment decision?<br /> a) Safety b) Liquidityc) Returns<br />914400401320 d) Capital Appreciatione) Tax Saving Benefits<br />Data Analysis<br />The above chart depicts that ‘Returns’ (27%) and ‘Safety’ (26%) are the major considerations investors look for while making an investment decision. Other considerations include ‘Liquidity’ (21%) followed by ‘Capital Appreciation’ (12%) and ‘Tax Savings (14%)<br />Q.4 In which type of funds you would like to invest in?<br /> a) Regular Incomeb) Equity Fundc) Index Fund<br /> d) Debte) Hybrid<br />914400158115<br />Data Analysis<br />Out of the total respondents, 37% preferred ‘Equity Funds’ and 32% preferred ‘Regular Income Funds’. This shows that while investors are inclined towards ‘Equity Funds’ as a good mode of investment, at the same time they also give importance to ‘’Regular Income Funds’ to meet out their requirements of regular returns.12% of the respondents preferred ‘Hybrid Funds’, 12% for ‘Index Funds’ and 7% for ‘Debt Funds’. <br />Q.5 Which kind of investment would you like to do in financial market?<br /> a) Equity Based Mutual Funds b) Stock Market<br />1123950340360<br />Data Analysis<br />This question aimed to know the investor’s preference among ‘Direct Stock Market’ investment and ‘Equity Investment through Mutual Funds’. Out of the total respondents 88% preferred ‘Equity Fund’ as a better route for ‘Equity investments’ while 12% of the respondents preferred ‘Direct Stock Market Investment’.<br />It is because of heavy risk involved in share trading.<br />Q.6 In which type of companies you invest?<br /> a) Large capsb) Mid caps c) Small caps<br />914400115570 <br />Data Analysis<br />It is observed that out of total respondents 41% preferred mid caps companies while 32% preferred small caps and rest i.e. 27% invest in large caps.<br />Q.7 How do you rate Investment/equity funds owned by you?<br /> a) Highly Satisfactoryb) Satisfactoryc) Dissatisfactory102870017145<br />Data Analysis<br /> This question asks for the satisfaction level of the respondent with the Investments/Equity Funds possessed by them. 72% of the respondents replied that they are ‘Satisfied’ by the performance of their investments while 22% were ‘Highly Satisfied’. 6% of the respondents said that they are ‘Dissatisfied’ by their fund’s performance.<br />Q.8 Which is the most attractive feature of dealing in financial securities?<br /> a) Safety of investmentb) Appreciation of capitalc) Minimization of risk<br />1028700290830 d) Reasonable Returns<br />Data Analysis<br />39% of the respondents feel that the most attractive feature of investment is the ‘Appreciation of Capital’. 28% of the respondent feel it as a ‘Reasonable Returns. Other feature includes ‘Safety of Investment’ (20%) followed by ‘Minimization of Risk’ (13%).<br />FINDINGS<br />People want to invest their money in the security market but they haven’t the proper knowledge.<br />Main purposes of investments are returns & liquidity.<br />Investors take risk as well as returns into their mind while making the investment.<br />People pay more emphasis on brokerage than service provided by brokerage houses.<br />Customer prefers offline trading rather than online.<br />SUGGESSIONS <br />For Traders<br />Plan Your Trade <br />You must have a trading plan to succeed. A trading plan should consist of a position, why you enter, stop loss point, profit taking level, plus a sound money management strategy. A good plan will remove all the emotions from your trades.<br />The Trend Is Yours<br />Do not buck the trend. When the market is bullish, go long. On the reverse, if the market is bearish, you short. Never go against the trend.<br />Focus on Capital Preservation<br /> The most important step that you must take when you deal with your trading capital. You main goal is to preserve the capital. Do not trade more than 10% of your deposit in a single trade. <br />Know when to cut loss<br />If a trade goes against you, sell it and let go. Do not hold on to a bad trade hoping that the price will go up. Most likely, you end up losing more money. Before you enter a trade, decide your stop loss price, a price where you must sell when the trade turns sour. It depends on your risk profile as of how much you should set for the stop loss.<br />Take Profit when the trade is good<br />Before entering a trade, decide how much profit you are willing to take. When a trade turns out to be good, take the profit. You can take profit all at one go, or take profit in stages. When you've recovered your trading cost, you have nothing to lose. Sit tight and watch the profit run.<br />Keep trading Journal<br />When you buy a currency or stock, write down the reasons why you buy, and your feelings at that time. You do the same when you sell. Analyze and write down the mistakes you've made, as well as things that you've done right. By referring to your trading journal, you learn from your past mistakes. Improve on your mistakes, keep learning and keep improving.<br />Do not Overtrade<br /> Ideally you should have 3-5 positions at a time. No more than that. If you have too many positions, you tend to be out of control and make emotional decisions when there is a change in market. Do not trade for the sake of trading.<br />For Companies<br />Commitment should be equalized for every person.<br /> Provide the facility of free demonstrations for all.<br /> Improvement in the opening of De-mat & contract notice procedure is required.<br /> Some promotional activities are required for the awareness of the customer.<br /> There is too much papers formality while opening of Demat A/c. hence, these formalities should be less as much as possible. <br />LIMITATIONS<br />As only in Yavatmal City dealt in survey so it does not represent the view of the total Indian market.<br />There was lack of time on the part of respondents.<br />The survey was carried through questionnaire .<br />Complete data was not available due to company privacy and secrecy.<br /> Area of survey is limited.<br />LEARNINGS<br />The two months summer intership project (SIP) was a good experience for me to learn the practical aspects of Stock Markets, Trading Systems. Some of the learning of mine is as follows.<br /><ul><li>I learnt the Stock Markets basics on which market is depend.
I learnt to how handle the pressure under difficult situations.
I became aware about various aspects of working of stock exchange.
Patience was the thing I learnt the most, as I have to approach the clients who were to be explained same things again and again.</li></ul> <br /> <br />CONCLUSION<br />On the basis of the study it is found that Karvy Stock Broking Ltd. is better services provider. KSBL provides the facility of Online as well as Offline trading facility for encouragement and protects the interest of the investors. <br />It also provides the information through the Internet and mobile alerts that what IPO’s are coming in the market and it also provides its research on the future prospect of the IPO.<br />It concludes that people are not much aware of commodity market and while it’s going to be biggest market in India.<br />The company should also organize seminars and similar activities to enhance the knowledge of prospective and existing customers, so that they feel more comfortable while investing in the stock market.<br />BIBLIOGRAPHY<br /> <br /> Name of SourceDate<br /> Books Referred27-07-2010<br /> Stock Markets <br /> Manoj Publication<br /> Magazines Referred 29-07-2010<br /> Capital Market<br /> Websites Referred02-08-2010 to 05-08-2010<br /> HYPERLINK "http:// www. Karvy .com<br /> www.moneycontrol.com" www. Karvy .com<br /> www.nseindia.com<br /> www.moneycontrol.com<br /> www.capitalline.com<br /> <br />APPENDIX<br />QUESTIONNAIRE<br />NAME: <br />AGE: SEX:M/F<br />MARITAL STATUS: <br />PROFESSION: <br />ANNUAL INCOME (Rs.): <br />Up to 1.5-lakh 1.5 to 3-lakh 3 to 5 lakh Above 5 lakh <br />Contact Number: <br />Email ID: <br />----------------------------------------------------------------------------------------------------------------<br />Q.1 Do you invest in financial products?<br /> <br /> a) Yes b) No<br />Q.2 Which product is the major contributor of your portfolio?<br /> <br /> a) Bank Fixed Depositb) Post Office Schemes c) Mutual Funds<br /> d) Real Estatee) Debt f) Shares<br /> Q.3 What is the factor, which affects your investment decision?<br /> a) Safety b) Liquidityc) Returns<br /> d) Capital Appreciatione) Tax Saving Benefits<br /> Q.4 In which type of funds you would like to invest in?<br /> a) Regular Incomeb) Equity Fundc) Index Fund<br /> d) Debte) Hybrid<br /> <br />Q.5 Which kind of investment would you like to do in financial market?<br /> a) Equity Based Mutual Funds b) Stock Market<br /> Q.6 In which type of companies you invest?<br /> a) Large capsb) Mid caps c) Small caps<br /> <br /> Q.7 How do you rate Investment/equity funds owned by you?<br /> a) Highly Satisfactoryb) Satisfactoryc) Dissatisfactory<br /> <br /> Q.8 Which is the most attractive feature of dealing in financial securities?<br /> a) Safety of investment b) Appreciation of capital c) Minimization of risk <br /> d) Reasonable Returns<br />Q.9 Do you invest through any other broker? (If yes, please tick)<br /> a) Sharekhan b) India Infolinec) Religare<br /> <br /> d) Anand Rathi<br /> <br />Q.10 Rank the services provided by Karvy?<br />(1 being the highest and 4 being the lowest)<br /> <br /> • Tips by Karvy- <br /> • Brokerage charge- <br /> • Prompt market awareness- <br /> • Availability- <br /> <br />