History of stock broking waste


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History of stock broking waste

  1. 1. History of Stock BrokingThe history of stock brokers can be traced back to the origins of the first stock exchange in 1602 at Amsterdam. Even before that brokers are said to have existed in France dealing with government securities. The Amsterdam Stock Exchange was involved in buying and selling of shares for the Dutch East India Company. However, the first real stock exchange came up in Philadelphia in the United States during the late 18th century. Later it was the New York stock exchange which saw a rise in its popularity. Wall Street, as it was called, became the hub of brokerage activities. Earlier stock brokers were largely unorganized, but later most of themjoined hands to form institutes and organizations. Till the 1980s stock broking services were used only by the wealthy class who could afford them. Later with the advent of the Internet, stock broking became very easy. Thus, the price tag on stock brokers lowered considerably and their services became available even to the common man. The stock broking duties are nowmostly taken up by major organizations with the smaller companies being absorbed by them. In India, too with increasing globalization the major corporations are penetrating deeper into the society.History of Stock Exchanges in India:Stock markets refer to a market place where investors can buy and sell stocks. The price at which each buying and selling transaction takes is determined by the market forces (i.e. demand andsupply for a particular stock). Let us take an example for a better understanding of how market forces determine stock prices. ABC Co. Ltd. enjoys high investor confidence and there is ananticipation of an upward movement in its stock price. More and more people would want to buy this stock (i.e. high demand) and very few people will want to sell this stock at current market price (i.e. less supply). Therefore, buyers will have to bid a higher price for this stock to matchthe ask price from the seller which will increase the stock price of ABC Co. Ltd. On the contrary,if there are more sellers than buyers (i.e. high supply and low demand) for the stock of ABC Co.Ltd. in the market, its price will fall down. In earlier times, buyers and sellers used to assembleat stock exchanges to make a transaction but now with the dawn of IT, most of the operations are
  2. 2. 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 throughinternet
  3. 3. 1600 Points 1400 1200 1000 800 600 400 200 0 Points Introduction to Topic Introduction to Company Review of Literature Objectives (if possible in points!!) Methodology Findings and Interpretations Conclusion & Recommendations Annexures Methodology Findings and Interpretations Conclusion & Recommendations To study the perception of customers of demate account in Karvy Stock Broking LtdAnnexures
  4. 4. REVIEWOFLITERATURE Meaningand definition: According to Philip Kotler ―Competitor Analysis refers to the process ofidentifying key competitors, assessing their objectives, strategies, strength and weaknesses, andreaction patterns, and selecting which competitors to attack or avoid.‖ Once a companyidentifies its primary competitors, it must ascertain their strategies, objectives, strength andweaknesses. Strategies: A group of firms following the same strategy in a given target market iscalled a strategic group. Objectives: Once a company has identified its competitors and theirstrategies, it must ask; what is each competitor seeking in the marketplace? What drives eachcompetitor„s behavior? Many factors shape a competitor„s objectives, including size, history,current management, andFinancial situation. If the competitor is a division of a larger company, it is important toknow whether the parent company is running it for growth, profits, or milking it. Strengths andWeaknesses: A company needs to gather information about each competitor„sstrength and weaknesses. In general, a company should monitor three variables when analyzingcompetitors:1Share of market: the competitor„s share of the target market.2 Share of mind: the percentage of customers who named the competitor in responding to thestatement, ―Name the first company that comes to mind in this industry.‖3.Share of heart: the percentage of customers who named the competitors in responding to thestatement, ―Name of the company from which you would prefer to buy the product.IICompanies that make steady gains in mind share and heart share will inevitably make gains inmarket share and profitability. To improve market share, many companies benchmark their mostsuccessful competitors, as well as other world-class performers.Identifying competitors: Normally, identifying competitors would seem a simple task. At thenarrowest level, a company can define its competitors as other companies offering similarproducts and services to the same customers at similar prices.
  5. 5. Assessing Competitors: Having identified the main competitors, marketing management nowasks: What are competitor„s objectives—what does each seek in the marketplace? What is eachcompetitor„s strategy? What are various competitor„s strength and weaknesses, and how willeach react to actions the company might take?Determining Competitor’s Objectives: Each competitor has a mix of objectives. The companywants to know the relative importance that a competitor places on current profitability, marketshare growth, cash flow, technological leadership, service leadership, and other goals. Knowinga competitor„s mix of objectives reveals whether the competitor is satisfied with its currentsituation and how it might react to different competitive actions. For example, a company thatpursues low-cost leadership will react much more strongly to a competitor„s cost-reducingmanufacturing breakthrough than to the same competitor„s advertising increase.Identifying Competitor’s Strategies: The more that one firm„s resembles another firm„s strategy,the more the two firms complete. In most industries, the competitors can be sorted into groupsthat pursue different strategies. A strategic group is a group of firms in an industry following thesame or a similar strategy in a given target market. Assessing Competitor‟s Strength andWeaknesses: Marketers need to assess each competitor„s strength and weaknesses carefully inorder to answer the critical question: What can our competitors do? As a first step, companiescan gather data on each competitor„s goals, strategies, and performance over the past few years.Admittedly, some of this information will be hard to obtain. For example, business to businessmarketers find it hard to estimate competitors„ market shares because they do not have the samesyndicated data services that are available to consumer packaged-goods companies.Companiesnormally learn about their competitors strength and weaknesses through secondary data, personalexperience, and word of mouth. They can also conduct primary marketing research withcustomers, suppliers, and dealers. Or they can benchmark themselves against other firms,comparing the company„s products and processes to those of competitors or leading firms inother industries to find ways to improve quality and performance. Benchmarking has become apowerful tool for increasing a company„s competitiveness. Estimating Competitor‟s Reactions:next, the company wants to know: what will our competitors do? A competitor„s objectives,strategies, and strength and weaknesses go a long way toward explaining its likely actions. Theyalso suggest its likely rections to company moves such as price cuts, promotion increases, ornew-product introductions. In addition, each competitor has a certain philosophy of doing
  6. 6. business, a certain internal culture and guiding beliefs. Marketing managers need a deepunderstanding of a given competitor„s mentality if they want to anticipate how the competitorwill act or react. Selecting competitors to Attack and Avoid A company has already largelyselected its major competitors through prior decisions on customer targets, distribution channels,and marketing-mix strategy. Management now must decide which competitors to completeagainst most vigorously.. Strong or Weak Competitors: The company can focus on one of several classes of competitors.Most companies prefer to complete against weak competitors. This requires fewer resources andless time. But in the process, the firm may gain little. You could argue that the firm also shouldcomplete with strong competitors in order to sharpen its abilities. A useful tool for assessing competitor strengths and weaknesses is customer value analysis.The aim of customer value analysis is to determine the benefits that target customers value andhow customers rate the relative value of various competitor„s offers. Close or Distant Competitors: Most companies will compete with close competitors- those thatresemble them most- rather than distant competitors. Thus, Nike competes more against Adidasthan against Timberland. And target competes with WalMart rather than against Neiman Marcusor Nordstrom. “Good” or “Bad” Competitors.A company really needs and benefits from competitors. Theexistence of competitors results in several strategic benefits. Competitors may help increase totaldemand. They may share the costs of market and product development and help to legitimizenew technologies. They may serve less-attaractive segments or lead to more productdifferentiation. Finally, they lower the antitrust risk and improve bargaining power versus laboror regulators. Competitive Strategies: Having identified and evaluated its major competitors, thecompany now must design broad competitive marketing strategies by which it can gaincompetitive advantage through superior customer value. But what broad marketing strategiesmight the company use? Which ones are best for a particular company, or for the company„sdifferent divisions and products? Basic competitive Strategies Almost three decades ago,Michael Porter suggested four basic competitive positioning strategies that companies canfollow- three winning strategies and one losing one. The three winning strategies include:Overall cost leadership: Here the company works hard to achieve the lowest production
  7. 7. and distribution costs. Low costs let it price lower than its competitors and win a large marketshare. Texas Instruments, Dell, and Wal-Mart are leading practitioners of this strategy. Differentiation: Here the company concentrates on creating a highly diffentiated product lineand marketing program so that it comes across as the class leader in the industry. Most customerswould prefer to own this brand if its price is not too high. IBM and Caterpillar follow thisstrategy in information technology and services and heavy construction equipment, respectively. Focus: Here the company focuses its effort serving a few market segments well rather thangoing after the whole market. A useful tool for assessing competitor strengths and weaknesses iscustomer value analysis. The aim of customer value analysis is to determine the benefits thattarget customers value and how customers rate the relative value of various competitor„s offers.SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,Opportunities, and Threats involved in a project or in a business venture. It involves specifyingthe objective of the business venture or project and identifying the internal and external factorsthat are favorable and unfavorable to achieving that objective. SWOT Analysis has done duringthe preparation of this project. It helps to analyses and evaluate the company„sstrength/weaknesses and opportunity and threats. Company„s strength and weakness helps tounderstand their market strategies which they apply in the marketplace in order to attract newcustomers as well as capturing the insight of existing customers also. Opportunity and threatsdetermines the company„s new upliftment and what are the barriers comes in front of thecompany which creates difficulties to enhance the market growth and increase in market share.A SWOT Analysis is designed to identify the environment in which an organization is operating.Doing so aids in the development of communication strategies. For the purpose of a swotanalysis, internal factors are those things over which and organization has some measure ofcontrol. External factors are those things over which an organization as no control. Strengths(positive internal factors): what do we see as our organization‟s present strengths, especially asthey relate to the issues we presently confronting? Weaknesses (negative internal factors): whatare our organization„s present weaknesses, especially as they relate to our competitors?Remember that a competitor, in this context, does not necessarily mean a rival company,product, service or point of view. It could be anything that competes for the attention of thepublics being targeted. Opportunities (positive external factors): what potential opportunitiesexist in the future especially as they relate to the issues we are presently confronting? Threats
  8. 8. (negative external factors): what are the threats we face in the future and, therefore, must beprepared to fact? Remember that a threat, in this context, does not necessarily mean a directthreat. It can be anything that can prevent and organization from reaching its goals.Company overview: of rs.150000. it achieved its first milestone after its first investment in technology. Karvybecame a known name during the year 1985-86 when it Karvy was established as karvy andcompany by five chartered accountants during the year 1979-80, and then its work was confinedto audit and taxation only. Later on it diversified into financial and accounting services duringthe year 1981-82 with a capital forayed into capital market as registrar. Evolution of KARVY:
  9. 9. It is well said that success is a journey not a destination and we can see it being provedby karvy. Under this section we will see that how this ―karvy and company‖ of 1980 became―karvy‖ of 2008. Karvy blossomed with the setting up of its first branch at Mumbai during theyear 1987-88. The turning point came in the year 1989 when it decided to enter into one of thenot only emerging rather potential field too i.e; stock broking. It added the feather of stockbroking into its cap. At the same time it became the member of Hyderabad Stock Exchangethrough associate firm karvy securities ltd and then karvy never looked back……..it went onadding services one after another, it entered into retail stock broking in the year 1990. Karvyinvestor service centers were set up in the year 1992. Karvy which already enjoyed a widenetwork through its investor service centers, entered into financial product distribution servicesin the year 1993. One year more and karvy was now dealing into mutual fund services too in theyear 1994 but it didn„t stopped there, it stepped into corporate finance and investment banking inthe year 1995. Karvy„s strategy has always been being the first entrant in the market. Karvyagain hit the limelight by becoming the first registrar in the country to be awarded ISO 9002 inthe year 1997. Then it stepped into the other most happening sector i.e; IT enabled services byestablishing its own BPO units and at a gap of just 1 year it took the path of e-Businessthrough its website www.karvy.com . Then it entered into insurance services in the year 2001with the launch of its retail arm ―karvy- the finapolis: your personal finance advisor‖.Then in the year 2002 it launched its PCG(Private Client Group) which looks after its HighNetworth Individuals .and maintain their portfolio and provides them with other financialservices. In the year 2003, it commenced secondary debt and WDM trading. It was a decadewhich saw many Indian companies going global…..so why the largest financial service providerof India should lag behind? Hence, karvy launched ―karvy global services limited‖ afterentering into a joint venture with Computershare, Australia in the year 2004.the year 2004 alsosaw karvy entering into commodities marketing through karvy comtrade. Year 2005 saw karvyestablishing a separate branch for its insurance services under the head ― karvy insurancebroking ltd‖ and in the same year, after being impressed with the rapid growth of karvy stockbroking limited, PCG group of Hong Kong acquired 25% stake at KSBL. In the year 2006, karvyentered into one of the hottest sector of present time i.e real estate through Karvy realty&services (India) ltd. hence , we can see now karvy being established as the lagest financialservice provider of the country.
  10. 10. CONTENTS Page no: 1. Introduction………………………………………. 1 2. Objective…………………………………………. 5 3. Company profile…………………………………. 7 4. Company background…………………………… 9 5. Achievement……………………………………… 20 6. Review of literature………............................. … .. 21 7. Methodology……………………………………... 27 8. Data projection…………………………………… 28 9. Functioning of the stock market…………………. 31 10. Stock Market and Economic Growth……………. 32 11. Indian Stock Market………………...……………. 34 12. Bombay Stock Exchange………………………… 37 13. National Stock Exchange………………………… 48 14. Market Position…………………………………... 55 15. Analysis…………………………………………... 61 16. Finding…………………………………………… 65 17. Suggestions………………………………………. 67 18. Bibliography……………………………………... 69 :
  11. 11. Stock Broking Services:terminals providing retail stock broking facilities. Our services have increasingly offered customer oriented convenience, which we provide to a spectrum of investors, high-networth or otherwise, with equal dedication and It is anundisputed fact that the stock market is unpredictable and yet enjoys a high success rate asa wealth management and wealth accumulation option. The difference between unpredictability and a safety anchor in the market is provided by in-depth knowledge of market functioning and changing trends, planning with foresight and choosin one’s options with care. This iswhat we provide in our Stock Broking services. We offer services that are beyond just a medium for buying and selling stocks and shares. Instead we provide services which are multi dimensional and multi-focused in their scope. There are several advantages in utilizing our Stock Broking services, which are the reasons why it is one of the best in the country. Weoffer trading on a vast platform ; National Stock Exchange and Bombay Stock Exchange. More importantly, we make trading safe to the maximum possible extent, by accounting for several risk factors and planning accordingly. We are assisted in this task by our in-depth research, constant feedback and sound advisory facilities. Our highly skilled research team, comprising of technical analysts as well as fundamental specialists, secure result-orientedinformation on market trends, market analysis and market predictions. This crucial information isgiven as a constant feedback to our customers, through daily reports delivered thrice daily ; ThePre-session Report, where market scenario for the day is predicted, The Mid-session Report,timed to arrive during lunch break , where the market forecast for the rest of the day is given andThe Post-session Report, the final report for the day, where the market and the report itself is reviewed. To add to this repository of information, we publish a monthly magazine“Karvy ; The Finapolis”, which analyzes the latest stock market trends and takes aclose look at the various investment options, and products available in the market, while a weekly report, called “ Karvy Bazaar Baatein”, keeps you more informed on the immediate trends in the stock market. In addition, our specific industry reports givecomprehensive information on various industries. Besides this, we also offer special portfolio analysis packages that provide daily technical advice on scrips for successful portfolio
  12. 12. management and provide customized advisory services to help you make the right financial moves that are specifically suited to your portfolio. Our Stock Broking services are widely networked across India, with the number of out trading competence.But true to our spirit, this success is not our final destination, but just a platform to launch further enhanced quality services to provide you the latest in convenient, customer-friendly stock management.Over the years we have ensured that the trust of our customers is our biggest returns. Factors such as our success in the Electronic custody business has helped build on our tradition of trust even more. Consequentially our retail client base expanded very fast.To empower the investor further we have made serious efforts to ensure that our researchcalls are disseminated systematically to all our stock broking clients through various delivery channels like email, chat, SMS, phone calls etc. Our foray into commodities broking has beenpath breaking and we are in the process of converting existing traders in commodities into the more organized mainstream of trading in commodity futures, both as a trading and riskhedging mechanism. In the future, our focus will be on the emerging businesses and to meet this objective, we have enhanced out manpower and revitalized our knowledge base with enhances focus on Futures and Options as well as the commodities business.INTRODUCTION. Spectrum of services offered by Karvy: Karvy being the top registrar andtransfer agent, functions as registrar in most of the issues in the country.Talking about the mutual fund services offered by Karvy, we can get the productsof 33 AMCs over here. it deals in both closed ended funds as well as open endedtoo. Now one must be thinking why to get the mutual funds from Karvy instead ofgetting it directly from AMCs???we have great reasons for it: the first one being ;if we avail the services of Karvy then we can get the information about all theAMCs and their products at a single place along with expert recommendationswhereas at an AMC we can get information about the products of that specificAMC only. And the second being wide network of Karvy….nowadays we can find
  13. 13. Karvy offices at remote areas too Along with these, Karvy is very well handlingthe role of depository participant. Being registered with both the depositories i.e.;NSDL (national securities depository ltd) and CDSL (central depository servicesltd), Karvy can have access to both. Its wide network also facilitates it indistribution of retail financial product Karvy believes in being updated always. Soit is always ready to use latest technologies so that its clients always be in touchwith the latest happenings along with Karvy. It offers e-business through internetthrough its website: www.karvy.com . Other than it, it also provides its variousservices through SMSes. Karvy„s services are not limited to its investors onlyrather its offerings are for its corporate clients and distributors too. it is verywell aware of the fact that in this era of neck to neck competition, we cant ignoreany of the aspects of our business….so there„s a offering foreverybody…everyone„s welcome at Karvy.Along with these, Karvy is very wellhandling the role of depository participant. Being registered with both thedepositories i.e.; NSDL (national securities depository ltd) and CDSL (centraldepository services ltd), Karvy can have access to both. Its wide network alsofacilitates it in distribution of retail financial products. Karvy believes in beingupdated always. So it is always ready to use latest technologies so that its clientsalways be in touch with the latest happenings along with Karvy. It offers e-business through internet through its website: www.karvy.com . Other than it, italso provides its various services through SMSes. Karvy„s services are notlimited to its investors only rather its offerings are for its corporate clientsand distributors too. it is very well aware of the fact that in this era of neck to neckcompetition, we cant ignore any of the aspects of our business….so there„s aoffering for everybody…everyone„s welcome at Karvy.Why should investorschoose for Karvy? Excellence is next to nothing….and here at Karvy
  14. 14. everybody tries their best to offer excellent services to its clientele throughits offerings maintaining the Karvy culture which includes:1. Controlled and low cost service culture: Karvy is there to serve itsclient at the minimum possible cost. it controls cost by its various cost- cuttingtechniques and minimization of avoidable costs.2. Large volume processing capability: being the largest financial serviceprovider in the country, it has the unique distinction of operating its activities on alarge scale which benefits all the parties cordially.3. Adherence to strict time schedule: Karvy knows that time is money and tries itbest to finish the task within the stipulated time schedule.4. Expertise in coordinating multi-location responses: Karvy has got a widenetwork and hence one can find its branches at most of the places in India.Thus it enjoys its presence everywhere and coordinates among itself insolving the queries and in responding to any situation.5.Expertise in managing independent entities such as banks, post-office etc.:the work culture of Karvy and the ethics followed inside Karvy makes itsworkforce compatible with everybody, so the Karvy people establishes goodcoordination with independent entities too.
  15. 15. History of the Indian Stock Market - The Origin One of the oldest stock markets in Asia, the Indian Stock Markets has a200 years old history.Year 1800 : East India Company was the dominant institution and by end ofthe century, business in its loan securities gained full momentum. Year 1830: Business on corporate stocks and shares in Bank and Cotton presses startedin Bombay. Trading list by the end of 1839 got broader Year 1840 :Recognition from banks and merchants to about half a dozen brokers Year1850 : Rapid development of commercial enterprise saw brokerage businessattracting more people into the business Year 1860 : The number of brokersincreased to 60 Year 1860-61 : The American Civil War broke out whichcaused a stoppage of cotton supply from United States of America; markingthe beginning of the "Share Mania" in India Year 1862-63 : The number ofbrokers increased to about 200 to 250 Year 1865 : A disastrous slump beganat the end of the American Civil War (as an example, Bank of Bombay Sharewhich had touched Rs. 2850 could only be sold at Rs. 87)Pre-Independence Scenario - Establishment of Different Stock ExchangesYear 1874 : With the rapidly developing share trading business, brokersused to gather at astreet (now well known as "Dalal Street") for the purposeof transacting business. Year 1875 : "The Native Share and Stock BrokersAssociation" (also known as "The Bombay Stock Exchange") was establishedin Bombay Year 1880 : Development of cotton mills industry and set up of
  16. 16. many others Year 1894 : Establishment of "The Ahmedabad Share andStock Brokers Association"6. Pooling of group resources: Karvy group consists of eight subsidiaries, so itcan easily pool up its resources for accomplishment of its goals, wheneverneeded. The groups can help each other whenever there are peaks and lows, andeven in the case when they have huge targets just as we saw few years back, Tatagroup pooling its resources to acquire Corus.
  17. 17. 4- Objective:Share in the market offer a high capital appreciation but the movement of the share price isalways like a wave and tide motion of the sea. Volatility in the stock return is an integral part ofstock market with the alternating bull and bear phases. In the bullish market, the share prices soarhigh and in the bearish market share prices fall down and these ups and downs determine thereturn and volatility of the stock market. Volatility is a symptom of a highly liquid stock market.Pricing of securities depends on volatility of each asset. It has an impact on business investmentspending and economic growth through a number of channels. Changes in local or globaleconomic and political environment influence the share price movements and show the state ofstock market to the general public. The issues of return and volatility have become increasinglyimportant in recent times to the Indian investors, regulators, brokers, policy makers, dealers andresearchers with the increase in the FIIs investment. Hence an analysis has been made to knowthe volatility trend in the Indian stock market and the reasons for the bear and bull trend in themarket. Nifty and Sensex are taken as representative of Indian markets.This project gave me opportunity to have an idea about volatility in stock market. This gave meidea about and fundamental analysis in stock market and how trading is being done in stockmarket.The objectives of the project can be mentioned as below:  To study volatility in Indian stock market while taking SENSEX of Bombay stock exchange as a source of secondary data which broadly represent Indian stock market along with NIFTY of National Stock Exchange.  Build understanding of central ideas of stock market.  Develop familiarity with the analysis of stock market.  Furnish institutional material relevant for understanding the environment in which trading decisions are taken.
  18. 18.  Understanding of Bull Market and Bear Market.This project will be helpful to know volatility in Indian Stock Market and reasons for such highvolatility and would be able to take decisions for investment in volatile stock market