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  • Presentation On Consumer Preference Towards Online Trading And Different Stock Brokerage Houses Presented By: Ridhima Bhandari MBA 2A
  • INTRODUCTION TO HSBC
    • HSBC is one of the largest banking and financial services organisations in the world.
    • Headquartered in London, registered in the UK.
    • HSBC's international network comprises around 9500 offices in 88 countries and territories
    • HSBC History Wall - image 1308
    • The Hongkong and Shanghai Banking Corporation was founded by Scotsman Thomas Sutherland in 1865.
    • The HSBC headquarters in Shanghai was built in 1923.
    • The new headquarters of HSBC Holdings at  8 Canada Square , London officially opened in April 2003.
    • As of April 2, 2008, HSBC was the fourth largest bank in the world in terms of assets (US $2,348.98 billion), the second largest in terms of sales (US $146.50 billion), the largest in terms of market value (US $180.81 billion).
    • The hexagon symbol was originally adopted by The Hongkong and Shanghai Banking Corporation as its logo in 1983.
    • The hexagon symbol was originally adopted by The Hongkong and Shanghai Banking Corporation as its logo in 1983.
    • a. Personal financial services
    • b. Commercial banking
    • c. Commercial banking
    • d. Private banking
    • Few Branch Locations Of HSBC
    • Cities:
    • Ahmedabad,Bangalore,Chandigarh,ChennaiCoimbatore,Gurgaon,Hyderabad,Indore,
    • Jaipur,Kochi,Kolkata,Ludhiana,Mumbai,New Delhi,Noida,Pune,Trivandrum,Vadodara.
    • HSBC Bank India provides Self-service banking with over 150 in-branch and off-branch ATMs and 24-hour phone banking.
    • HSBC InvestDirect (India) Limited was founded in 1997 and is based in Mumbai, India.
    • The company was formerly known as IL&FS Investsmart Limited and changed its name to HSBC InvestDirect (India) Limited in August 2009.
    • It offers retail broking services and NRI services.
  • COMPANY HISTORY
    • The company was set up as Investsmart India Limited, a wholly owned subsidiary of Infrastructure leasing & financial services.
    • The company commenced equity broking on NSE and BSE in February 1998 and August 1999 respectively.
    • In June 2000, the company commenced derivative broking on NSE and in January 2001, they launched investment advisory products.
    • IL&FS Invest Smart is now
    • IL&FS Investsmart Ltd became the part of HSBC family after it was acquired by HSBC in 2008.
    • It has 77 branches and 151 franchisees, spread across 103 cities.
    • . HSBC has completed the acquisition of 93.86 percent of IL&FS InvestSmart Ltd, a leading brokerage in India, for a total consideration of INR 1,311.0 crores (approximately
  • PRODUCT PROFILE
    • 1. Online Trading Product of HSBC InvestDirect
    • Basically HSBC InvestDirect offers three types of products to its retail customers. They are:
    • SmartStart
    • SmartInvest
    • SmartTrade
  •  
    • SmartINVEST :SmartInvest is a browser-based system designed for customers who transact occasionally.
    • SmartSTART: Smart Start is a powerful browser based trading system for those who are relatively new to online investing.
    • SmartTRADE: SmartTrade is an EXE based desktop software designed for active traders who transact frequently to capture favourable short-term price movements.
    • 2. Advisory Services
    • Mutual fund advisory services.
    • Portfolio management services.
    • IPO Advisory and Distribution Services.
    • Insurance Advisory Services.
    • Investment Advisory services
  • SWOT ANALYSIS OF HSBC InvestDirect
    • Strengths
    • Customization
    • Expertise
    • One-stop-shop for all the investment needs
    • Unbiased and objective advice
    • Brand image
    • Competitive pricing
    • Weaknesses
    • Expensive products
    • Tedious procedures
    • Fund transfer
    • Attrition
    • Unattractive offers
    • Opportunities
    • Indian economy seems to be out of recession.
    • The increasing number of management graduates helps to get sales force at trainee levels at less salaries or commission basis.
    • . The company can tie up with reputed B Schools for trainees and different banks are offering fund transfer services.
    • Threats
    • Stiff competition from existing players in the market.
    • Increasing awareness.
    • Changing economic scenario.
    • Many a investors burnt their figures during the bearish market conditions. It has turned many a trading accounts inoperative.
  •  
  • Ratio analysis Current Ratio 2009 2008 2007 Current Assets 3298.7 2469.43 2075.54 Current Liabilities 1794.24 1114.86 980.14 Current Ratio 1.84 2.22 2.12
  • Quick ratio QUICK ASSETS 2009 2008 2007 Total Quick Assets 1828.74 1031.8 857.36 Current Liabilities 1794.24 1114.86 980.14 QUICK RATIO 1.019228 0.925497 0.874732
  • Gross Margin Ratio 2009 2008 2007 Gross Profit 1846.1 1602.31 1505 Sales 6106.43 5208.38 4777.64 Gross Margin Ratio 30.23207 30.76408 31.50091
  • Net Profit Ratio 2009 2008 2007 Net Profit 401.52 286.5 291.12 Sales 6106.43 5208.38 4777.64 Net Profit Ratio 6.575364 5.500751 6.093385
  • Return on Assets Ratio 2009 2008 2007 Net Profit Before Tax 683.1 461.15 456.15 Total Assets 9413.18 5681.25 5274.84 Return on Total Assets Ratio 7.256846 8.117052 8.647656
  • Trend of Sales Year Net Sales Trend (%) Mar'07 4777.64 100 Mar'08 5208.38 109.02 Mar'09 6106.43 127.81
  • Trend of net Profit
  • Trend Of eps
  • Comparison of Brokerage houses in India
    • Bonanza
    • Account Opening Charge (AOC): Rs 888
    • Annual Maintenance Charge (AMC): Nil.
    • Brokerage: 25p (delivery), 5p (intra-day).
    • Enquiry: No toll-free number.
    • Canmoney
    • Account Opening Charge (AOC): Rs 500
    • Annual Maintenance Charge (AMC): 1st year free. Rs 200 2nd year on.
    • Brokerage: 0.35% (delivery‡). Buy - Nil, Sell - 0.05% (intra-day) (Min Rs 20; Max Rs 500).
    • Enquiry: 1-800-220-369
    • Geojit BNP Paribas
    • Account Opening Charge (AOC): Rs 650
    • Annual Maintenance Charge (AMC): Rs 300
    • Brokerage: 0.30% (delivery‡). 0.03% (intra-day)
    • Enquiry: 1-800-425-5501
    • HDFC Securities
    • Account Opening Charge (AOC): Rs 799
    • Annual Maintenance Charge (AMC): 1st year free. Rs 500 2nd year onwards.
    • Brokerage: Higher of Rs 25 or 0.5% of transaction value (delivery). Higher of Rs 25 or 0.1% of transaction value (intra-day).
    • Enquiry: 1-800-209-9700
    • HDFC Securities
    • Account Opening Charge (AOC): Rs 799
    • Annual Maintenance Charge (AMC): 1st year free. Rs 500 2nd year onwards.
    • Brokerage: Higher of Rs 25 or 0.5% of transaction value (delivery). Higher of Rs 25 or 0.1% of transaction value (intra-day).
    • Enquiry: 1-800-209-9700
    • ICICI Direct
    • Account Opening Charge (AOC): Rs 975
    • Annual Maintenance Charge (AMC): 1st year free; Second year on Rs 500 (paper statements), Rs 450 (email statements)
    • Brokerage: Higher of Rs 25 or 0.75% (delivery). Higher of Rs 15 or 0.05% of transaction value (intra-day).
    • Enquiry: No toll-free number
    • Indiabulls
    • Account Opening Charge (AOC): Rs 900
    • Annual Maintenance Charge (AMC): Nil
    • Brokerage: 0.35% (delivery). 0.05% (intra-day).
    • Enquiry: No toll-free number
    • Motilal Oswal
    • Account Opening Charge (AOC): Nil.
    • Annual Maintenance Charge (AMC): 1st year free. Rs 100 2nd year on.
    • Brokerage: 0.3% (delivery). Buy - Nil, Sell - 0.05% (intra-day).
    • Enquiry: No toll-free number
    • Reliance Money Account Opening Charge (AOC): Rs 750 (waived off for employees of MNCs†)
    • Annual Maintenance Charge (AMC): Rs 200
    • Brokerage: 1p (delivery and intra-day‡).
    • Enquiry: No toll-free number
    • Religare
    • Account Opening Charge (AOC): Rs 500
    • Annual Maintenance Charge (AMC): Rs 250
    • Brokerage: 0.3% (delivery‡). 0.06% (intra-day) 0.06% (futures).
    • Enquiry: 1-860-258-8888
    • SBI
    • Account Opening Charge (AOC): Rs 400
    • Annual Maintenance Charge (AMC): Rs 400
    • Brokerage: 0.5% (delivery). 0.15% (intra-day).
    • Enquiry: 1-800-223-345
    • Sharekhan
    • Account Opening Charge (AOC): Rs 750 Online, (Rs 500 Offline, plus Rs 160 franking charge)
    • Annual Maintenance Charge (AMC): 1st year free. Rs 300 2nd year onwards.
    • Brokerage: Higher of 0.5% or 10 paise/share (delivery). Higher of 0.1% or 5 paise/share (intra-day).
    • Enquiry: 1-800-227-500
    • Angel Broking
    • Account Opening Charge (AOC): Rs 740
    • Annual Maintenance Charge (AMC): 1st year free. Rs 300 2nd year on.
    • Brokerage: 50p (delivery‡), 10p (intra-day). Rate negotiable for bulk orders.
    • Enquiry: No toll-free number
    • HSBC InvestDirect
    • Account Opening Charge (AOC): Rs 950
    • Annual Maintenance Charge (AMC): no charges.
    • Brokerage: 50p (delivery‡), 10p (intra-day). Rate negotiable for bulk orders.
    • Enquiry: No toll-free number
  • STOCK MARKET
    • A stock market typically refers to a financial market that handles the buying and selling of company stocks, derivatives and other securities. The stock markets trade the company securities that are listed in the stock exchange.
    • The stock market existence can be both real and virtual.
  • Stock Exchange
    • Stock exchange is an organized market place where securities are traded.
    • there are at present 23 such recognized stock exchanges in India.
    • The two national exchanges operating in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
    • The origin of the Stock Exchanges in India can be traced back to the later half of 19th century.
    • At present there are 24 Stock Exchanges.
    • Securities and Contract Regulation Act 1956 was passed, this gave powers to Central Government to regulate the stock exchanges. 
  • FUNCTIONS OF STOCK EXCHANGE
    • Maintain Active Trading
    • Fixation of Prices
    • Ensures safe and fair dealings
    • Aids in financing the Industry
    • Dissemination of Information
    • Performance Inducer
    • Self-regulating organization
    • List of 24 Stock Exchanges
    • » Bombay Stock Exchange » National Stock Exchange » Regional Stock Exchanges
    • » Ahmedabad » Bangalore » Bhubaneshwar » Calcutta » Cochin » Coimbatore » Delhi » Guwahati » Hyderabad » Jaipur » Ludhiana » Madhya Pradesh » Madras » Magadh » Mangalore » Meerut » OTC Exchange Of India » Pune » Saurashtra Kutch » UttarPradesh » Vadodara
  • DEMATERIALIZATION:
    • Dematerialization is the process of converting the physical form of shares into electronic form.
    • According to the Depositories Act, 1996, an investor has the option to hold shares either in physical or electronic form.
    • Dematerialized trading is now compulsory for all investors from Jan 1999.
  • Advantages of dematerialization
    • No risk
    • No signature mismatch.
    • Transaction costs are usually lower
    • Reduction in paperwork
    • Reduction in transaction cost
    • Nomination facility
    • - Automatic credit into demat account of shares
  • ONLINE TRADING
    • Online Trading is an easy way to buy and sell shares from the comfort of one’s place instead of trading through individual stockbroker and broking firms, the customer can transact with the help of mouse click and his visits to the neighbourhood broker will become a thing of the past.
    • Online trading started in India in February 2000 when a couple of brokers started offering an online trading platform for their customers.
    • In Internet trading, the Net is used as a medium to communicate orders to the stock exchange through the broker's website.
    • E-booking sites would also provide the client with the opportunity to buy or sell securities from the client's home or office.
    • Internet trading brings in total transparency between a broker and an investor
  • Products and services of the online trading in India
    • Life insurance
    • Equities,
    • Portfolio management
    • Mutual funds
    • Loans
    • General insurance
    • Share trading
    • Commodities trading
    • Financial planning
  • FEATURES OF ONLINE TRADING
    • Features of information
    • Control of your money
    • Access to Market
    • Offers grater transparency .
  • Advantages
    • * Online trading of stock allows trading in real-time market data and multiple markets and products.
    • * Possible to indulge in faster trade execution that have any geographical limitations.
    • * Online trading favors active traders, who trade in bulk but demands lesser commission.
  • Disadvantages
    • * Fully automated trading process
    • * Online trading is risky if trading is done extensively on margin
    • * There are chances of trading loss in case of mechanical/platforms failure
    • * Online traders fall sort of constant support and suggestion
    • * The fee of online brokers vary facilitates day traders in swing trading.
  • Procedure for Internet trading:
    • Step-I:
    • Those investors interested in doing the trading over Internet system, should approach the brokers and register with the Stock Broker.
    • Step-2:
    • After registration, the broker will provide to them a login name, password and a personal identification number (PIN).
    • Step-3:
    • Actual placement of an order, Using the place order window as under can then place an order:
    • (a) First by entering the symbol and series of stock and other parameters such as quantity and price of the scrip on the place order window.
    • (b) Second, fill in the symbol, series and the default quantity.
    • Step-4:
    • It is the process of review. Thus, the investor has to review the order placed by clicking the review option. He may also re-set to clear the values.
    • Step-5:
    • After the review has been satisfactory; the order has to be sent by clicking on the send option.
    • Step-6:
    • The investor will receive an "Order Confirmation" 'message along with the order number and the value of the order.
    • Step- 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit, an appropriate message will appear at the bottom of the screen. At present, a time lag of about ten seconds is there in executing the trade.
    • Step-8:
    • It is regarding charging payment, for which there are different modes. Some brokers will take some advance payment from the, investors and will fix their trading limits. When the trade is executed, the broker will ask the investor for transfer of funds by the investor to his account.
  • The benefits of investor due to Online Investing
    • a) Independence and freedom due to enjoyed by an individual access to the markets
    • b) Elimination of the “middle man”
    • c) Elimination of Losses on account of Brokers
    • d) Inexpensive and affordable commission charges
    • e)Speed of trade execution
  • The costs borne by an Individual Investor from Online Investing
    • a) Technical Reliability
    • b) The investor is alone
  • Objectives
    • Internet trading is expected to:
    • Increase transparency in the markets.
    • Enhance market quality through improved liquidity, by increasing quote continuity and market depth.
    • Reduce settlement risks due to open trades, by elimination of mismatches.
    • Provide management information system (MIS).
    • Introduce flexibility in system, to handle growing volumes easily and to support nationwide expansion of market activity.
    • Besides, through Internet trading three fundamental objectives of securities regulation can be easily achieved, these are: Investor protection, creation of a fair and efficient market and, reduction of the systematic risks
  • Online trading environment
    • 1.Installable software based Stock Trading Terminals
    • 2. Web Internet based trading application
  • Requirements of trading
    • First of all, an investor has to open 3 Accounts to buy / sell Equity shares from the Indian stock market:
    • Savings Bank Account
    • Demat Account
    • Share Trading Account
  • TRADING PROCEDURE BEFORE ONLINE
    • THE TRADING RING
    • A.CHOICE OF BROKER
    • PLACEMENT OF ORDER
    • ENTRY OF ORDER INTO THE BOOKS
    • EXECUTION OF ORDER
    • PREPARATION OF CONTRACT NOTES
    • PLACING ORDER WITH THE BROKER
  • RESEARCH METHODOLOGY
    • TITLE OF THE STUDY
    • Consumer preference toward online trading and stock brokerage houses in Ludhiana.
  • OBLECTIVES OF THE STUDY
    • To collect the information about consumer preference towards online trading. and stock brokerage houses in Ludhiana.
    • To find out the investment destinations of people of people of different professions.
    • To find out the most likely stock brokerage house among all.
    • Sample Size & Techniques
    • Data source Primary
    • Research Approaches Survey
    • Research inst. Questionnaire
    • Sampling Convenience Sample Size 50investors
    • Contact Method Personal
    • Area covered Ludhiana
    • UNIVERSE AND SURVEY POPULATION
    • Universe is the total number of all investors in Feroze Gandhi Market, Ludhiana city.
    • Profession the respondent
    • Income level of the respondents
    • Respondents Investing hard earned money
    • Duration of investing
    • Financial Instruments being invested into by the respondents
    • Brokerage House if investing in equity
    • Percentage of the income spent in stock market
    • Source of information about brokerage house
    • Mode of trading in stock market
    • Analysis of the other stock brokerage houses with respect to the following parameters
    • Service
    • Research engine
    • Customer support
    • Office Infrastructure
    • After sale services
    • Technology
    • Brokerage
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    • Satisfaction from the research engine
    • Satisfaction from the Customer Support
    • Satisfaction from the office infrastructure
    • Satisfaction from the After Sales Services
    • Satisfaction from the Technology
    • Satisfaction from the Brokerage
    • Respondents who want to shift from their brokerage house
  • LIMITATIONS OF THE STUDY
    • The response given by the respondents may not be 100% accurate and may be biased.
    • Very small sample size, cannot be a true representative of the whole population.
    • Surveyed at limited places only.
    • Most of the respondents were from the financial market only i.e. Feroze Gandhi market.
    • Could not take much of female respondents.
    • Due to time constraint only 50 respondents were interviewed for the research.
  • MAJOR FINDINGS
    • Educated peoples are more indulging in online trading in India.
    • Middle class peoples are more indulging in online trading in India.
    • Online trading is becoming more popular in recent years.
    • Major problem faced by the online traders doing online trading is the inability to continuous access to broker website due to sudden breakdown of web server or connection.
    • There is lack of personal touch while doing stock trading through net.
    • Investors doing online trading feel that there are no such problems of leakage of personal information while trading through net.
    • Accounts information of the investors doing online trading is timely updated.
    • Investors also feel that the stock quotations are shown are much more faster while doing trading online then screen based trading.
    • Investors agree that sometime inaccurate posting has been done in the clients account.
    • The most demanding feature in a stock brokerage house is to support customers and brokerage
  • SUGGESTIONS
    • There is heavy rush on any site the site hangs, so there must some improvements must be done in the online trading system so that the investors have continuous access to the net.
    • There must be some strict legal actions must be taken by SEBI against those brokers who leaks accounts information of his client.
    • Trading system must to be more transparent and effective.
    • Safer instruments are to be used for doing online trading so that the problem of system failure is solved.
    • To sustain and survive in this competitive time all they need is to device new innovative ways with which they can surpass their competitors.
  • CONCLUSION
    • Having the look at the findings of my project I would like to conclude that online share trading has passed its stages of infancy. Nowadays it is becoming a part of life of all those who invest money into equities. There is a huge unexplored market standing in front of the financial sector which can be targeted to increase the industry’s revenue all the more. In the arena of cut throat competition the various stock brokerage houses are doing good business. To sustain and survive in this competitive time all they need is to device new innovative ways with which they can surpass their competitors. The most demanding feature in a stock brokerage house is to support customers and brokerage. So it is advisable to HSBC Invest Direct to try to be no. 1 in the art of satisfying people and keeping them happy.
    • THANKYOU………………