Sahil Report.docx

Summer Internship Project Report On “A STUDY ON CUSTOMER PERCEPTION TOWARDS ONLINE TRADING IN RETAIL BROKERAGE” At Concept Securities Pvt Ltd.

Submitted to Institute Code: 750 S.R. LUTHRA INSTITUTE OF MANAGEMENT

Under the Guidance of Ms. Esha Pandya Asst. Professor In partial Fulfilment of the Requirement of the award of the degree of Master of Business Administration (MBA)

Offered By

Gujarat Technological University

Ahmedabad Prepared by: Mr. Sahil. S. Gheewala MBA (Semester - III) July, 2018

1

Student’s Declaration

2

Institute Certificate

3

Company’s Certificate

4

Plagiarism Report

5

6

PREFACE As we know that in today’s competitive global area only theoretical knowledge can’t work anymore. Today in every sector, research is needed to understand the on-going scenario, changing situation and to go to the depth of the problems so that adequate knowledge about that area can be developed. Research work is finding the new ways of adding value to that area and giving contribution to that particular area. Further research work enhances depth knowledge of particular area and also helps to society at large. The main focus and study was on CUSTOMER PERCEPTION TOWARDS ONLINE TRADING IN RETAIL BROKERAGE at Concept Securities Pvt. Ltd in Surat City. I have put up my best efforts and enumerated every possible information after observing the activities carried over at Concept Securities, to make this report a satisfactory report. It was a great opportunity and memorable experience interacting with people working there, collecting information regarding their job and acquiring knowledge. The respondents who provided their suggestions were quite cooperative and provided valuable insights for this study.

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ACKNOWLEDGEMENT It gives me immense pleasure to acknowledge the valuable assistance and cooperation I received from the people around me for the successful completion of my project. I am thankful to Gujarat Technological University who gave me chance to undertake this research as part of my curriculum of Master degree in Business Administration. I am also thankful to S.R. Luthra Institute of Management to give me this opportunity. I deeply acknowledge support of our respected Director Dr. Jimmy Kapadia. I would like to thank Ms. Esha Pandya, Asst. Professor, SRLIM who helped and guided me throughout the development of the project. Her support and full-fledged guidance, encouragement, and valuable suggestion were instrumental in making this project. For completion of project, I would like to express my gratitude to Concept Securities Pvt Ltd for giving me the opportunity to work. I earnestly express my gratitude to Mr. Siddharth Mandlewala (Fund Manager) and other staff members of as they have helped me in completion of my project by giving their precious time and information about their organization. I am highly indebted for their guidance and consultant supervision as well as for providing necessary information regarding the project and also for their support in completing the project. Finally I would like to thank all my respondents for their time and cooperation.

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TABLE OF CONTENTS i.

Student Declaration

ii.

Institute Certificate

iii.

Company Certificate

iv.

Preface

v.

Acknowledgement

Sr. No.

Particulars

Pg. No.

1

Introduction

12

2

Industry Profile

22

3

A. Global

23

B. National

27

C. Current trends

31

D. PEST Analysis

37

E. Major Players

43

Company Profile (Concept Securities)

46

A. Company overview

47

B. Organogram

49

C. SWOT Analysis

51

D. Market position

52

4

Literature Review

53

5

Research Methodology

59

A. Research Problem

60

B. Research Objective

60

C. Research Design

60

6

Data Analysis and Interpretation

63

7

Findings

119

Conclusion

124

Recommendation

125

8

9

Bibliography

127

Annexure

129

LIST OF TABLES

Table Particulars

Sr. No.

No.

Pg. No.

1 Major players

2.6

43

2 Gender

6.1

64

3 Age

6.2

65

4 Occupation

6.3

66

5 Education

6.4

67

6 Income

6.5

68

7 Preferred type of investment

6.6

69

8 Lack of security

6.7.1

70

9 Lack of Knowledge

6.7.2

71

6.7.3

72

6.8

73

6.9

74

13 Privacy

6.10.1

75

14 Friendly & Time Saving

6.10.2

76

15 Convenience

6.10.3

77

16 Quick order execution

6.10.4

78

6.11

79

18 From where do you prefer to trade?

6.12

80

19 How often do you trade?

6.13

81

6.14

82

10 Lack of trust If you’re using offline trading, in future would 11 you like to switch to online platform? For how many years you are doing the Online 12 Share trading?

How did you come to know about online share 17

trading?

Which Brokerage Firm do you prefer for Online 20 Trading? 10

Are you satisfied about the online services of

6.15

83

22 It eliminates middleman

6.16.1

84

23 It’s cheaper

6.16.2

85

24 It offers greater investor control

6.16.3

86

25 You can monitor your investments in real time

6.15.4

87

26 Buying error due to computer missteps

6.17.1

88

27 Internet dependent

6.17.2

89

28 No personal relationship with brokers

6.17.3

90

29 Hacking of data

6.17.4

91

30 Online trading is easy to use

6.18

92

31 There are security issues in online trading

6.19

93

6.20

94

6.21

95

6.22

96

21 your existing brokers?

Online trading is efficient as compared to 32 offline trading Online trading gives me greater control over 33 offline trading Is there any change in investment proportion 34 after changing from offline to online trading?

LIST OF FIGURES

Sr. No.

Particulars

Pg. No.

1 Range of services

48

2 Organogram

49

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CHAPTER 1 INTRODUCTION OF THE TOPIC

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A STUDY ON INVESTOR’S PERCEPTION TOWARDS ONLINE TRADING  INVESTOR An investor is who makes an investment into one or more categories of assets-equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc. with the objective of making a profit.  INVESTMENT An asset or an item that is purchased with the hope that it will generate income or appreciate in the future is called an investment. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.  ONLINE TRADING Before getting in to the online trading we should know some things about the internet, e-commerce and etc. 1) What is Internet? Internet is a worldwide, self-governed network connecting several other smaller networks and millions of computers and persons, to mega sources of information. This technology shrinks vast distances, accelerating the pace of business reforms and revolutionizing the way companies are managed. It allows direct, ubiquitous links to anyone anywhere and anytime to build up interactive relationships. A combination of time and space, called the Internet promises to bring unprecedented changes in our lives and business. Internet or net is an interconnection of computer communication networks spanning the entire globe, crossing all geographical boundaries. It has re-defined the methods of communication, work study, education, business, leisure, health, trade, banking, commerce and what not it is virtually changing everything and we are living in dot.com age. Net being an interactive two way medium, through various websites, enables participation by individuals in business to business and business to consumer commerce, visit to shopping arcades, games, etc. in cyber space even the information can be copied, downloaded and retransmitted.

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The use of Internet has grown 2000 percent in last decade and is currently growing at 10 percent per month. In India, growth of Internet is of recent times. It is expected to bring changes in every functional area of business activity including management and financial services. It offers stock trading at a lower cost. Internet can change the nature and capacity of stock broking business in India. 2. E-commerce Electronic commerce is associated with buying and selling over computer communication networks. It helps conduct traditional commerce through new way of transferring and processing of information. Information is electronically transferred from computer to computer in an automated way. E-commerce refers to the paperless exchange of business information using electronic data inter change, electronic technologies. It not only reduces manual processes and paper transactions but also helps organization move to a fully electronic environment and change the way they operated. PC’s and networking attempts to introduce banks of the tools and technologies required for electronic commerce. The computers are either workstations of individual office works or serves where large databases and information reside. Network connects both categories of computers; the various operating systems are the most basis program within a computer. It manages the resources of the computer system in a fair and efficient manner. Now we can enter in to the concept known as online trading. In the past, investors had no option but to contact their broker to get real time access to market data. The net brings data to the investor on-line and net broking enables him to trade on a click of mouse. Now information has become easily accessible to both retail as well as big investor.

 ONLINE TRADING Online stock trading is models where you can enter your trades directly into your broker's system and let their computers buy and sell for you. There may not be

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another human involved. Log on to your broker's web site or use their mobile app and you're off and running.  OFFLINE TRADING Offline is when you place your trades either by calling the broker office or by personal visit to the office. It is simple. You decide to trade and tell the people handling trading there about your trade orders.  EVOLUTION OF BROKING IN INDIA: The evolution of a broking in India can be categorized in three phases •

Stockbrokers will offer on their sites features such as live portfolio manager, live quotes, market research and news, etc. to attract more investors.

•

Brokers will offer online broking and relationship management by providing and offering analysis and information to investors during broking and non-broking hours based on their profile and needs, i.e. customized services.

•

Brokers (now e-brokers) will offer value management or services like initial public offering online, on-line asset allocation, portfolio management, financial planning, tax planning, insurance services, etc. and enables the investors to take better and well considered decisions.

The actual definition of “Online Trading” is as explained below: “Online trading is a service offered on the internet for purchase and sale of shares. In the real world you place orders on your stockbroker either verbally (personally or telephonically) or in a written form (fax).” In online trading, you will access a stockbroker’s website through your internet enabled PC and place orders through the broker’s internet based trading engine. These orders are routed to the stock exchange without manual intervention and executed thereon in a matter of a few seconds. The net is used as a mode of trading in internet trading. Orders are communicated to the stock exchange through website.

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 In India Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. Under the ORS the client enters his requirements (security, quantity, price buy/sell) on broker’s site.  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.

•

Introduce flexibility in system, so as 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.

Some of the brokers offering net trading include ICICI direct, Kotak Street, etc. The net is used as a medium of trading in internet trading. Orders are communicated to the stock exchange through website. Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction.

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Under the Order Routing System the client enters his requirements (security, quantity, price, and buy/sell) in broker's site. They are checked electronically against the clients account and routed electronically to the appropriate exchange for execution by the broker. The client receives a confirmation on execution of the order. The customer's portfolio and ledger accounts get updated to reflect the transaction. The user should have the user id and password to enter into the electronic ring. He should also have demat account and bank account. The system permits only a registered client to log in using user id and password. Order can be placed using place order window of the website.  Procedure for net trading Step 1: Those investors, who are interested in doing the trading over internet system i.e. NEAT-IXS, should approach the brokers and get them self registered with the Stock Broker. Step 2: After registration, the broker will provide to them a Login name, Password and personal identification number (PIN). Step 3: Actual placement of an order. An order can then be placed by using the place order window as under: (a) First by entering the symbol and series of stock and other parameters like 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

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the bottom of the screen. At present, a time lag of about 10 seconds is there in executing the trade. Step 8: It is regarding charging payment, for which there are different mode. Some brokers will take some advance payment from the investor and will fix their trading limits. When the trade is executed, the broker will ask the investor for transfer of funds to his account. Internet trading provides total transparency between a broker and an investor in the secondary market. In the open outcry system, only the broker knew the actually transacted price. Screen based trading provides more transparency. With online trading investors can see themselves the price at which the deal takes place. The time gap has narrowed in every stage of operation. Confirmation and execution of trade reaches the investor within the least possible time, mostly within 30 seconds. Instant feedback is available about the execution. Some of the websites also offer: 

News and research report



BSE and NSE movements



Stock analysis



IPO and mutual fund centers

Step by step procedure in online trading: Following steps explain the step by step approach to on-line trading: 1) Log on to the stock broker's website. 2) Register as client/investor. 3) Fill the application form and client broker agreement form on the requisite value stamp paper. 4) Obtain user ID and pass word. 5) Log on to the broker's site using secure user ID and password. 6) Market watch page will show real time on-line market data. 7) Trade shares directly by entering the symbol or number of the security. 18

8) Broker’s server will check your limit in the on-line account and Demat account for the number of shares and execute the trade. 9) Order is executed instantly (10-30 seconds) and confirmation can be obtained. 10) Confirmation is e-mailed to investor by broker. 11) Contract note is printed and mailed in 24 hours. 12) Settlement will take place automatically on the settlement day. 13) Demat account and the bank account will get debited and credited by electronic means.  ONLINE TRADING HAS LED TO ADDITIONAL FEATURES SUCH AS: 1)

Limit / stop orders: orders that can be go unfilled, but there is an extra Charge for this leeway facility since one need to hold a price.

2)

Market orders: orders can be filled at unexpected prices, but this type is much more risky, since you have to buy stock at the given price.

3)

Cash account: where funds have to be available prior to placing the order.

4)

Margin account: where orders can be placed against stocks, to increase Purchasing power.

 ADVANTAGES OF ONLINE TRADING: 1)

Online trading has made it possible for anyone to have easy and efficient access to more reports and charts than it was previously possible if one went to any brokers' office. Thus we have access to a lot more information online.

2)

Online trading has let room for smaller organizations to compete with multinational organizations since it is no longer a leg it issue. Being online does not identify the size of any particular organization, therefore, this additional power to the underdogs.

3)

Online trading has allowed companies to locate themselves where they want as physical location is not an issue anymore. Companies can establish themselves 19

according to their gains and losses, for instance where tax (sales and value added taxes) is best suited to them. 4)

Online trading gives control to individuals and they can exercise it over accounts thus comprehend what is going on when they trade. It is like going back to school and re-educating oneself on how to trade online.

5)

Individuals’ benefit by saving comparatively a lot more when trading online as the cost per trade is less.

6)

Individuals can invest in a variety of products, unlike earlier when people bought bonds, mutual funds, and stock for long-term basis and sat on them. Now they can invest in stocks, stock and index options mutual funds, government, and even insurance.

 HERE ARE THE POSSIBLE DISADVANTAGES 1)

When network crashes, there will be problems and delays due to a large influx of rapid online trading criteria.

2)

Individuals are restricted to first-hand financial guidance. This simply means that the individual is himself / herself alone to.

3)

A tax (Goods and services tax) evaluation becomes an issue, especially when you are trading internationally.

4)

One has no idea with whom he is dealing with on the other end.

5)

According to a study conducted by Mary Rowland, careful investor: is online trading bad for your portfolio, the more one trades the less returns one gets, meaning that an addicted trader gets, carried away online and begins to trade for too much which causes losses for him / her.

6)

Individuals think that they are trading with the market directly and know what they are doing, but the truth is that even though technology has taken over, the basic rules of trading are the same. It seems that the middleman has been removed, but that is not so. When the individuals click on the mouse, his trade goes through a broker. The commissions online pertain to the intermediary. 20

7)

There is a need for more effective communication links over the Internet and the ability of the server to deal with a large volume of visitors.

 TRADING SESSION 

Trading timings are from 9:55 A.M. to 3:30 P.M. on all 5 days of the trading period.



Monday to Friday is the trading period in all the stock exchanges. SEBI has stipulated that all the stock exchanges in India must have same trading period.

 Major Players in Online Trading Brokerage Houses in India

1) ICICI Securities Ltd. 2) Kotak Securities Ltd. 3) India bulls Financial Services Limited 4) India Infoline 5) IL&FS investmart Limited 6) SSKI Ltd

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CHAPTER 2 INDUSTRY PROFILE

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2.1 GLOBAL SCENARIO In 2018, steadily rising assets and diminishing volatility have become the normal, global growth remains strong, and optimism prevails across asset classes. Yet now isn’t the time for complacency. Between politics and popular trades losing luster, there are boundless risks to keeps investors on their toes. Cooling Credit Rally Sure, cries of a junk bond Armageddon have proved premature, with both high-yield and investment-grade bonds handing investors returns for the year, but plenty of risks threaten the upside in 2018. The Federal Reserve is unwinding its balance sheet, the European Central Bank is slowing purchases and forecasts show inflation may finally rise. Credit investors polled by Bank of America Merrill Lynch for a survey published in December named a bubble as the biggest risk to the asset class, followed by higher inflation and rising yields. Flows reflect some of that unease. Investors pulled money out of exchange-traded funds that track corporate credit for the first time in 14 months in December, data compiled by Bloomberg show. Ageing Business Cycle If the U.S. economy can keep chugging along through the first quarter of 2018, it will match the second-longest expansionary period in modern history, according to data compiled by the National Bureau of Economic Research and Bloomberg Intelligence. That’s helping to lift global economies, spurring optimism across markets. The Citi group economic surprise index of major economies hovers just under its highest level since 2010 after a slew of data surpassed analyst expectations. In the year ahead, investors will have to assess the sustainability of the cycle amid risks of financial overheating and corporate America’s levered balance sheets.

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Mind the Elections Rising global growth, the Fed’s cautious approach to monetary tightening and a weaker dollar helped emerging-market currencies and stocks post their biggest returns in eight years in 2017. But it might not take much to knock that equilibrium, especially with Wall Street forecasting the biggest tightening of developed-world monetary policy in a decade. Investors will also have to maneuver around elections in countries that make up more than 50 percent of a Bloomberg Barclays developing-nation local bond index. While votes in countries like Russia are predictable, tight contests are on the cards for fellow market heavyweights like Brazil and Mexico. Euro Rally Lives As the euro heads toward its best annual run against the dollar in 14 years, options markets that price probabilities on the world’s most traded currency pair point to the rally continuing in 2018. There’s a two-thirds probability that it appreciates as high as $1.229 by year end, while the odds that it rises to $1.256 are even. ‘Normal’ Swaps One of the stranger distortions created by post-crisis regulation may be poised to end. Swap rates, what companies pay to exchange their fixed interest payments for floating ones, are on track to rise back above Treasury yields across all maturities for the first time since 2014. Strategists predict Republicans’ plans to roll back post-crisis regulatory burdens will make holding Treasuries more attractive, thus pushing yields below swap rates again. The shift matters because swap rates serve as a benchmark for a variety of debt instruments purchased with borrowed funds, including mortgage-backed and autoloan securities. Volatility Return In 2017, investors were caught off guard by the near-complete absence of volatility. In 2018 they could get a wakeup call from price fluctuations roaring back to life.

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Over $2 trillion in strategies are effectively reliant on market stability to generate returns, according to October estimates from Artemis Capital’s Christopher Cole. That raises the risk of outsize losses across stock and bond markets around the world if volatility finally returns. Fed Fresh Faces Jerome Powell won’t be the only new kid in class at the U.S. central bank next year. The “Big Three” (chair, vice chair and New York Fed president) will be completely different after Janet Yellen’s stint in charge ends in February and the head of the New York Fed retires in the middle of the year. They’ll have to weigh a tight labor market and sound economic data against muted consumer prices. How will they react if inflation roars back to life? And what if it remains stubbornly weak? Yield Curve The narrowing spread between short- and long-dated Treasuries continues to grab Wall Street’s attention. A completely flat or inverted curve has the potential to roil bond trades, challenge the Fed’s tightening path, and raises the risk of a downturn in the business cycle. Six of 11 analysts surveyed by Bloomberg in early December said the Treasury yield curve will inverse at least briefly within the next 24 months, with four projecting it in 2018. Don’t Forget China Two of the more remarkable moves in 2017 were soaring U.S. stocks and tumbling Chinese government bonds, according to a global analysis of historical price patterns that veer from the norm, known as standard deviations. While the S&P 500’s valuation is endlessly analyzed, the outlook for the world’s largest emerging debt market is far less understood. Chinese bonds will come under pressure again in the first half of 2018 as the central bank tightens monetary policy and the government toughens financial regulations,

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according to Becky Liu, head of China macro strategy at Standard Chartered Plc. The rise in yields will attract domestic and foreign investors in the second half.

Crypto Craze How long can bitcoin’s parabolic increase last? It depends who you ask. Hedge fund manager Michael Novogratz thinks it will go all the way to $40,000 by the end of the first quarter. Bulls say the recent creation of futures will broaden crypto ownership because derivatives are the first step toward ETFs and other more liquid instruments. The skeptics, however points to a possible pin-prick by regulators. Crypto currencies “could be stopped in their tracks” if authorities began applying anti-money laundering laws, said Marc Ostwald, global strategist at ADM Investor Services International in London.

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2.2 NATIONAL SCENARIO 

HISTORY OF THE STOCK BROKING INDUSTRY

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as "The Stock Exchange"). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. Thus in the same way, gradually with the passage of time number of exchanges were increased and at currently it reached to the figure of 24 stock exchanges. 

Capital market

Capital market is a place where we can raise long-term capital. Again the capital market is classified in to two types and they are: 

Primary market and Secondary market.

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

E.g.: Shares, Debentures, and Loans etc.



Primary market

Primary market is generally referred to the market of new issues or market for mobilization of resources by the companies and government undertakings, for new projects as also for expansion, modernization, addition, and diversification and up gradation. Primary market is also referred to as New Issue Market. Primary market operations include new issues of shares by new and existing companies, further and right issues to existing shareholders, public offers, and issue of debt instruments such as debentures, bonds, etc. The primary market is regulated by the Securities and Exchange Board of India (SEBI a government regulated authority).



Secondary Market

The primary market deals with the new issues of securities. Outstanding securities are traded in the secondary market, which is commonly known as stock market or stock exchange. “The secondary market is a market where scrip’s are traded”. It is a market place which provides liquidity to the scrip’s issued in the primary market. Thus, the growth of secondary market depends on the primary market. More the number of companies entering the primary market, the greater are the volume of trade at the secondary market. Trading activities in the secondary market are done through the recognized stock exchanges which are 23 in number including Over the Counter Exchange of India (OTCE), National Stock Exchange of India and Interconnected Stock Exchange of India. Secondary market operations involve buying and selling of securities on the stock exchange through its members. The companies hitting the primary market are mandatory to list their shares on one or more stock exchanges in India. Listing of scrip’s provides liquidity and offers an opportunity to the investors to buy or sell the scrip’s.

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Out of these major stock exchanges were  NSE (National Stock Exchange) 

BSE(Bombay Stock Exchange)

BSE (BOMBAY STOCK EXCHANGE)

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act, 1956. The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education program and making available to them necessary informative inputs. A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one third of them retire ever year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer.

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NSE (NATIONAL STOCK EXCHANGE)

NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It started operations in June 1994, with trading on the Wholesale Debt Market Segment. Subsequently it launched the Capital Market Segment in November 1994 as a trading platform for equities and the Futures and Options Segment in June 2000 for various derivative instruments. NSE has been able to take the stock market to the doorsteps of the investors. The technology has been harnessed to deliver the services to the investors across the country at the cheapest possible cost. It provides a nation-wide, screen-based, automated trading system, with a high degree of transparency and equal access to investors irrespective of geographical location. The high level of information dissemination through on-line system has helped in integrating retail investors on a nation-wide basis. The standards set by the exchange in terms of market practices, Products, technology and service standards have become industry benchmarks and are being replicated by other market participants. Within a very short span of time, NSE has been able to achieve all the objectives for which it was set up. It has been playing a leading role as a change agent in transforming the Indian Capital Markets to its present form. The Indian Capital Markets are a far cry from what they used to be a decade ago in terms of market practices, infrastructure, technology, risk management, clearing and settlement and investor service.

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Current position of Indian Stock Market  The domestic capital markets revived in FY2017, after a year of lackluster performance, supported by market sentiment, healthy foreign institutional investment (FII) inflow, as well as growing domestic institutional investor (DII) participation in the market.  Equity turnover at the exchanges registered a robust growth of 35% in FY2017 supported by the revival in the capital markets and the base effect given the subdued performance in FY2016, which was a period of de-growth. The Average Daily Turnover (ADTO) increased to Rs. 4.05 trillion in FY2017, from Rs. 3.01 trillion in FY2016. The impact of demonetization remained limited, with the growth in the market turnover slowing down in Q3 FY2017, to again pickup in the following quarter.  Both the decline in market volumes in FY2016 as well as their improvement in FY2017 was led by the derivatives or the futures and options (F&O) segment which witnessed a 9% decline and a 36% growth in the two years respectively. The share of the derivative segment in the total market turnover increased further to 94%, from 93% during the period FY2013 to FY2016. The total turnover for the derivatives segment increased to Rs. 944 trillion in FY2017 (ADTO of 3.81 trillion) from Rs 693 trillion (ADTO of 2.80 trillion) in FY2016, registering a growth of 36%. The healthy traction continued in Q1 FY2018 with a total F&O turnover of Rs. 328 trillion.  The options segment witnessed a growth of 38% in ADTO in FY2017, surpassing the growth in both futures (24%) and cash (21%) segment, with the markets adjusting to the higher lot size requirement for derivative trading. The options growth rate remained healthy in Q1 FY2018, at 45% (over FY2017 level), as against 23% and 21% for futures and cash segment respectively.  The options segment remains the most active in the derivatives market accounting for 84% of derivative turnover in FY2017 (86% in Q1 FY 2018), with index options accounting for 77% of the derivatives turnover (79% in Q1 FY2018).  The total cash turnover in FY2017 stood at Rs. 60.54 trillion, registering a growth of 22% over Rs. 49.71 trillion in FY2016. After a healthy start to the fiscal, cash volumes dropped in Q3 FY2017 (turnover of 13 trillion in Q3 31

FY2017, 10% lower than Q2 FY2017) following the demonetization drive of the Goal. However, volumes picked up in Q4 FY2017. The large scale intrapromoter group transfer of equity shares across several listed entities in March 2017 pursuant to revision in the tax regime further fuelled the transaction volumes.  After a healthy performance in H1 FY2017, the commodities market registered a downward slide post demonetization, with the effect most pronounced in the bullion segment. The commodity markets registered a turnover of Rs. 29.07 trillion (ADTO of Rs. 0.22 trillion) in H2 FY2017, as compared to volume of Rs. 18.52 trillion (ADTO of Rs. 0.28 trillion) in Q2FY2017. The turnover further reduced to Rs. 13.57 trillion (ADTO of Rs. 0.21 trillion) in Q1 FY2018. The strong performance of the equity markets also resulted in a shift in investor preference towards equity and mutual funds as compared to commodities as asset classes.  Currency trading volumes of brokerage houses remained volatile in the past nine quarters after growing sizably in Q4 FY2015. Currency volumes in Q4 FY2016 were 11% higher than the volumes in Q4 FY2015; however, in Q4 FY2017, the volumes declined by ~17% from the volumes in Q4 FY2016. Due to demonetization, the volumes surged by 66% on a month-on-month basis in November 2016. Appreciation of the Rupee during Q4 FY2017 did not impact the volumes which declined to Rs. 19.4 trillion from Rs. 21.4 trillion in Q3 FY2017. ADTO, which spiked to Rs. 0.35 trillion during Q3 FY2016 largely on account of demonetization, declined to Rs. 0.32 trillion during Q4 FY2017. During Q1 FY2018, volumes rebounded to Rs. 22.43 trillion with ADTO spiking to Rs. 0.37 trillion, which is higher than the ADTO in the previous three quarters. INDIAN BROKERAGE INDUSTRY September 2017 ICRA.  Resource mobilization in equity markets, through a mix of channels like public issuances (including IPO follow-on public offering or FPO, and rights issues), qualified institutional placement (QIP) and preferential placement, remained healthy in FY2017, with a total quantum of Rs. 887 billion raised during the year from 561 offerings. The public issuances remain healthy, with 8% growth in the funds raised during FY2017, the aggregate amount raised

32

declined on account of dip in preferential placement and QIP which reported a de-growth of 42%, albeit on a small scale, and 12% respectively. During FY2017, Rs. 359 billion was raised through a mix of IPOs and rights issue (Rs. 333 billion in FY2016). A key characteristic of the primary market was the performance of the IPO issuances during the year with a gradual diversification in the sector mix of entities accessing capital markets.  Despite their increasing focus of the broader credit markets on consumerfinance businesses, the capital market lending space (which is largely retail) for ICRA sample of brokers picked up in FY2017, post a subdued performance in the previous fiscal. With the recent change in SEBI guidelines allowing brokers to offer margin funding facility with lower margins than those mandated by RBI to NBFCs, ICRA expects margin funding book to further increase during FY2018.  Buoyed by the healthy response to the IPOs, there has been a surge in interest in IPOs to capitalize on the listing gains. This is evidenced by the high participation of the non-institutional investor (NII) category; The median subscription level for the NII category stood at 83 times for the IPOs in FY2017, as against 2 times for FY2016. This in turn has created a market for providing funding to the HNI investors for investing in the IPOs. Pegged at Rs. 600 to Rs. 650 billion, the IPO funding market is expected to remain active in the current fiscal as well with a number of prominent IPOs lined up.  With a large number of clients opting to conduct transactions online, the relevance of brick and mortar stores has partly reduced. Furthermore, ever since their emergence in the Indian brokerage landscape, discount brokerage houses (DBH) have forced the older players to re-think the mechanics of their existing models repeatedly. Most industry players have consolidated their networks and prefer to have fewer branches per city. There nevertheless remain a large number of customer interactions through branches, and the branches also impart a level of psychological comfort to customers.  ICRA expects the broking industry revenue pool to increase to Rs. 180 billion to Rs. 190 billion in FY2018, registering a 15-20% y-o-y growth on the back of healthy volume growth coupled with rise in cash volumes. The volume growth is expected to be about 20-25% in FY2018, supported by positive

33

investor sentiment and a benign capital market outlook. The IPO pipeline for FY2018 is expected to encourage retail participation and activity levels on the exchanges. Growing retail segment would lend support to the overall blended yields in light of competitive pressure.  The recent margin trading guidelines by SEBI is expected to have an encouraging effect on cash volumes. Given the higher yields in the cash segment, this would augur well for the brokerage houses. Margin trading would also help support the income profile and shore up the profitability of full-service brokerage houses given the price based competition from discount brokerage houses. While the brokerage houses were allowed to offer margin trading earlier as well, the strict guidelines made the product uncompetitive as compared to the facilities offered by NBFCs. Margin funding, thus, was conducted out of the NBFC arms of the brokerage houses. The revised guidelines make margin funding a viable product for brokerage houses.  Supported by the resurgence in capital markets, the total revenues for the sample pool of brokerage houses analyzed by ICRA (referred to as ICRA pool) reported a healthy growth of 22% in FY2017. While the revenue stream continues to be dominated by brokerage revenues, attributing to 87% of total revenues, the depository income and distribution income reported a healthy growth in FY2017. With brokers increasingly favoring expansion through franchisees rather than branches, cost structure and operational efficiencies have improved which is likely to protect brokerage houses during challenging times. Accordingly the net profit of the ICRA pool of brokerage houses has reported a 56% growth in FY2017 to Rs 10 billion.

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2.3 STATE SCENARIO POST-INDEPENDENCE SCENARIO The depression witnessed after the Independence led to closure of a lot of exchanges in the country. Lahore stock exchange was closed down after the partition of India, and later on merged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited Was registered in 1957 and got recognition only by 1963. Most of the other Exchanges were in a miserable state till 1957 when they applied for recognition under securities contracts (Regulations) Act, 1956. The Exchanges that were recognized under the Act were:  Bombay  Calcutta  Madras  Ahmedabad  Delhi  Hyderabad  Bangalore  Indore

Many more stock exchanges were established during 1980’s namely:  Cochin stock exchange (1980)  Uttar Pradesh stock exchange association limited (at Kanpur, 1982)  Pune stock exchange limited (1982)  Ludhiana stock exchange association limited (1983)  Gauhati stock exchange limited (1984)  Magadh stock exchange association (at Patna 1986)  Jaipur stock exchange limited (1989)  Kanara stock exchange limited (at Bangalore 1985)  Bhubaneswar stock exchange association limited (1989)  Saurashtrakutch stock exchange limited (at Rajkot, 1989)  Vadodara stock exchange limited (at barida, 1990) 35

 Coimbatore stock exchange  Meerut stock exchange  Ahmadabad Stock Exchange  Calcutta Stock Exchange

Prime Minister Narendra Modi inaugurated an international exchange in Gujarat that will work 22 hours every day "starting when Japan's markets open and ending when US markets close." It aims to win market share from financial hubs such as Singapore and Hong Kong by investing in technology and offering a response time of four microseconds. The India International Exchange is located in a 16-floor building in a new finance zone, the Gujarat International Finance Tec-City or GIFT city, near capital Gandhinagar. It is a wholly-owned subsidiary of the Bombay Stock Exchange or BSE. The BSE's main rival, the National Stock Exchange, is also expected to set up a bourse in Gujarat.

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2.4 PESTEL OF SHARE MARKET PESTEL analysis stands for "Political, Economic, Social, Technological, Environmental and Legal analysis" and describes a framework of macroenvironmental factors used in the environmental scanning component of strategic management. It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro environmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.

FIGURE1.1 PESTEL analysis

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1. POLITICAL:

The Capital market of India is very vulnerable. India has been politically instable in the past but it is a little politically stable now-a-days.the political instability of the country has a very strong impact on the capital market. The share market of India changes as the political changes took place. The BSE Index, SENSEX goes up and down with any kind of small and big political news, like, if there is news that a particular political party has withdrawn its support from the ruling party, and then the capital market will go down with a bang. The capital market of India is too weak and is based on speculations. The political stability of the country is very important for the stability and growth of capital market in India. The political imbalance or balance of the country is the major factor in deciding the capital market of India. The political factors include: 

Employment laws



Tax policy



Trade restrictions and tariffs



Political stability

2. ECONOMICAL:

The economic measures taken by the government of India has a very strong relationship with the capital market. Whenever the annual budget is announced the capital market goes up and down with the economic policies of the government .If the policies are supportive to the companies then the capital market takes it positively and if there is any other policy that is not supportive and it is not welcomed then the capital market goes down. Like, in the case of allocation of 3G spectrum, those companies that got the license for 3-G, they witnessed sharp growth in their share values so the economic policies play a major part in the growth and decline of the capital market and again if there is relaxation on any 38

kind of taxes on items of automobile industry then the share of automobile sector goes up and virtually strengthen the capital market .The economic factors include: 

Inflation rate



Economic growth



Exchange rates



Interest rates

3. SOCIAL: India is a country of unity in diversity .India is socially rich but the capital market is not very attached with the social factors .Yes, there is some relation between the social factors with the capital market. If there is any big social factor then to some extent it affects the capital market but small social factors don’t impact at all. Like, there was opposition of reliance fresh in many cities and many stores were closed. The share prices of the reliance fresh went down but the impact was on and individual firm there was not much impact on the capital market on a whole the social factors have not much of impact on the capital market in India Changing Attitude towards investment, younger generation would like to invest through online platform. The social factors include: 

Emphasis on safety



Population growth rate



Age distribution

4. TECHNOLOGICAL: The technological factors have not that much effect on the capital market. India is technological backward country. Same as social factors, technological factor can have an effect on an individual form but it cannot have a big impact on a whole of 39

capital market. The technological change in India is always on a lower basis and it doesn’t effect on country as a whole. The technological factors include: 

R&D activity



Technology incentives



Rate of technological change

5. ENVIORNMENTAL FACTORS: Initially, the environmental factors don’t play a vital role in the capital market but the time has changed and people are more eco-friendly. This is really bothering them that if any firm or industry is environment friendly or not. An increasing number of people, investors and corporate executives are paying importance to these facts; the capital markets still see the environment as a liability. They belie that it is of no use for their strategy. The environmental performance is even under-valued by the markets.

6. LEGAL FACTORS:

Legal factors play an important role in the development and sustain the capital market. Legal issues relating to any industry or firm decides the fate of the capital market. If the govt. of India or the parliament introduces a new law that can affect the running of the industry then the industry will be de-motivated and this demonization will lead to the demonization of the investors and will result in the fall of capital market. Like after the Hardhat Mehta scam, new rules and regulations were introduced like PAN card was made necessary for trading, if any investor was investing too much money in a small firm, then the investors were questioned etc. GST provisions are also included now.

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2.5 CURRENT TRENDS OF STOCK BROKING INDUSTRY  Technology Recent advances in technologies such as block chain, cloud computing, machine intelligence, behavioral science, and other areas provide us with the opportunity to literally rewrite tomorrow and drive our industry forward in entirely new ways. The environment in which we operate lends itself to these priorities and can best be understood by examining four key trends: 

First is the development of the marketplace economy, an evolution in the purchase and sale of non-financial assets using market mechanisms that allow for real-time negotiation on price. These mechanisms represent the backbone of our exchange business and their application outside of the capital markets is very exciting.



The second trend we see is investment banks demonstrating a real interest in working with partners like Nasdaq to develop new technologies that can drive their businesses into the future.



Third, it is impossible to overlook the explosion in available data of all types, which combined with advances in machine learning create myriad opportunities in market surveillance, data analytics and in the capital markets themselves.



Finally, investment management has become increasingly competitive with a strong focus on technology-powered areas including the shift to passive from active investing and the growth of quantitative strategies. Here, again, innovation is at a premium.  Digitization of money could be the game-changer in 2018

Demonetization may have come and gone but the one trend it has irrevocably triggered off in India is the shift to digital money. As Indian consumers discover the comfort of digital money, it will open up a big opportunity for companies that focus on the digitization process. This may include companies that are into the manufacture of POS machines, companies that create software for digital transactions and companies that enable the last mile connectivity for digital transactions. All these 41

companies could see a substantial expansion in demand and also in profits and could be the key sector to watch out for. Also, banks and retail chains that adopt the shift to digital money in a big way could be the indirect beneficiaries of this digitization trend.  Rural demand could be the silent story of 2018 Financial Budget 2018 will effectively be the penultimate full-fledged budget of this government. The 2019 budget will, in all likelihood, be a vote-on-account considering the impending central elections in 2019. The government will, therefore, leave no stone unturned to placate the rural masses. One can expect loan concessions and loan write-offs for farmers, higher levels of rural spending and investment in rural infrastructure, expansion of welfare schemes like MNREGA etc. All these measures will have a salutary impact on rural demand and rural purchasing power. Therefore, manufacturers of tractors, farm equipment, two–wheelers and marketers of rural FMCG products will be major beneficiaries of this enhanced rural spending. This will be the third major trend to watch out for in this year.

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2.6 MAJOR PLAYERS IN STOCK BROKING INDUSTRY:

NATIONAL PLAYERS

REGIONAL PLAYERS

ANGEL BROKING

R.WADIWALA SECURITIES

K.R. CHOCKSEY

JAINAM

INDIA BULLS

CONCEPT

INDIA INFOLINE

MONARCH

RELIGARE SECURITIES

RELIANCE MONEY

MOTILAL OSWAL

SHAREKHAN

ANAND RATHI SECURITIES

HDFC SECURITIES

KOTAK SECURITIES

ICICI DIRECT

Table 2.6

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2.7 MAJOR OFFERINGS: 

Equities

The securities market has two interdependent and inseparable segments, the new issues (primary) market and the stock (secondary) market. The primary market provides the channel for creation and sale of new securities, while the secondary market deals in securities previously issued. The Stock market or Equities market is where listed securities are traded in the secondary market. Currently more than 1300 securities are available for trading on the Exchange.



Currency Derivatives

A currency future,also known as FX future,is a futures contract to exchange one currency for another at a specified date in the future at a price (exchange rate) that is fixed on the purchase date. On NSE the price of a future contract is in terms of INR per unit of other currency e.g. US Dollars. Currency future contracts allow investors to hedge against foreign exchange risk. Currency Derivatives are available on four currency pairs viz. US Dollars (USD), Euro (EUR), Great Britain Pound (GBP) and Japanese Yen (JPY). Currency options are currently available on US Dollars.



Security Lending and Borrowing Scheme (SLBS)

Short Selling means selling of a stock that the seller does not own at the time of trade. Short selling can be done by borrowing the stock through Clearing Corporation/Clearing House of a stock exchange which is registered as Approved Intermediaries (AIs). Short selling can be done by retail as well as institutional investors. The Securities Lending and Borrowing mechanism allows short sellers to borrow securities for making delivery.

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

Exchange Traded Funds (ETF's)

In recent times, Exchange-traded funds (ETFs) have gained a wider acceptance as financial instruments whose unique advantages over mutual funds have caught the eye of many an investor. These instruments are beneficial for Investors that find it difficult to master the tricks of the trade of analyzing and picking stocks for their portfolio.

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CHAPTER 3 COMPANY PROFILE

46

3.1 Concept securities Pvt. Ltd. - An Overview 

On 23rd January 1995 Concept Securities Pvt. Ltd. was incorporated by Mr.Hemant Desai.



They are an investment services company.



They offer the complete range of investment services covering Equity, Debt, Mutual

Fund,

Portfolio

Management,

Equity Derivatives,

Currency

Derivatives, Commodities Derivatives, Depository and Life Insurance. 

Mr. Shaival Desai: Mr. Shaival Desai is the executive director of the companies.

THEY ARE MEMBER OF 

BSE,



NSE,



CDSL,



MCX,



SEBI approved PMS provider.

Vision To meet needs have Indian and Foreign Individual as well as Institutional Investors for their Investment in Indian Capital Market. Services for Investment are provided with the High Degree of Client Orientation, Value Addition and providing Real Good Returns on Investments.

Mission 

To build the finest investment services company with focus on becoming a

complete broking house, retail in western India, wealth management and foreign investors. 

To build the finest wealth management team to manage funds in equities,

debt and other asset classes. 

To set up a round the clock service centre for NRI’s and Foreign Investors.



To have presence at key financial centers in India and abroad.

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Objective 

Value Creation is the new "Mantra" for investors.



Their objective has been to focus on investors, understand their investment needs, provide them relevant information, help them in taking decisions, and assist in implementing that plan with an aim of "TOTAL CUSTOMER SATISFACTION".

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3.2 ORGANOGRAM

FUNCTIONS OF VARIOUS DEPARTMENTS  Account opening department  Opening demats account.  Opening Trading account.  Maintaining KYC.  Maintaining stock of forms.  Maintaining log of inflow & outflow of forms.  Operations department  Daily billing process.  To send sms/Email.  Exchange account matching. 49

 To much daily obligation with exchange.  Issue quarterly statements.  Customer Care department  Query handling of clients.  Give reports to clients.  Accounts department  Cash management.  Maintaining Financial accounts.  HR/compliance department  New recruitments.  Managing work force.  Managing discipline & code of conduct.  Employee Grievance Red Training programs.  Managing statutory regulatory requirements from exchange.  Performance management system.  Surveillance /RMS department:  Keeping an eye of client's trading activity.  Maintaining client limits.  System & Technical department:  Maintaining back office soft wares.  Designing & implementing new systems to smoothen systems.  Backups.  Demat/DP department:  Managing deliveries.  Physical Delivery maintenance.  Transfer transmission.  Dematerialization process of physical shares.  Corporate action effect.  Collateral/pledge maintenance.  Marketing department  Associating with sub-brokers.  Setting up branches.

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3.3 SWOT Analysis A SWOT analysis focuses on the internal and external environments, examining strengths and weaknesses in the internal environment and opportunities and threats in the external environment. 

Strengths

1. Innovative range of financial products. 2. Known for transparent functioning. 3. Innovative I. T solutions for customers. 4. Emphasis on building stronger bond with customers. 5. Large number of services offered. 

Weaknesses

1.

Less penetration in rural areas.

2. Lack of Branches. 3. Fees for the brokerage is high than the other company. 

Opportunities

1. High purchasing power and people looking to more investment opportunities. 2. Growing rural market. 3. Earning Urban Youth. 

Threats

1. Stringent Economic measures by Government and RBI. 2. Entry of foreign finance firms in Indian Market.

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3.4 MARKET POSITION Concept Securities Pvt Ltd is a Private incorporated on 23 January 1995. It is classified as a Non-government company and is registered at Registrar of Companies, Ahmedabad. It is one of the upcoming retail broking houses. In 23 years, the company has emerged as one of India’s fastest growing retail broking houses. Its authorized share capital is Rs. 17,500,000 and its paid up capital is Rs. 13,500,000.

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CHAPTER 4 LITERATURE REVIEW

53

Nidhi Walia and Ravinder Kumar (2007) examined the investors' preference for traditional trading and online trading, investor's perception on Online trading & comparing current usage of online trading and offline trading. This study reveals that out of every 100 investors only 28 trade online, which points out a question as why investors were not able to realize the importance of technology in stock trading. The major findings of the study are the Indian investors are more conservative, they do not change brokers for trading, whereas net traders are more comfortable with online trading for its transparency and complete control of the terminal. V. Pavithras (2017) concluded the study on Customers Perception towards online trading in Retail Brokerage. The objective is to study the impact of the Customers perception towards online trading. Primary data is collected from structured questionnaire with 100 respondents. There is no significant difference among the Occupations, Educational qualification with respect to preference of attributes of share trading company. Customers invest in mutual funds as its risk is low and returns are more rather than bonds and shares. Online trading is been preferred by customers rather than Offline trading. Major reason for customers to invest in online trading is its conveyance and user friendly. Dr. Anitha Kumari (2013) concluded that online trade share market has emerged as one of the greatest and easiest ways to invest share by the investors. This study sheds light on the how these online trade market work and how they are satisfying their investors. It aims at studying the investor’s perception of online trading in share market also helps to find out accessing the present level of service provided and identifying the areas which require attention for improving its services. Data collected from 113 respondents in Chennai indicated that the investors have referred others to online share market. The share brokers may improve services of proper response from the dealer, putting the orders without delay. Online trade markets can issue the cheque to customer earlier it would increase the customer confidence.

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Jyoti Shanker Sahoo (2012) concluded that study conducted by reflects that most of the Indian investors believe offline trading as a safer and easiest way to trade in stock market. As investors appreciate the thinking of stock traders and invest according to their advice and research. Due to lack of exposure towards technology, investors consider online share trading as challenging task. Chinmaya (2010) concluded that Investors need good knowledge and experience for operating the demat account of most of the investors are unaware of online trading and they are not confident that they can do trading independently. But he also states that online trading has bright future in upcoming days because of the technological development. N. Kathirvel A. Mekala (2010) concluded that Women Investor Perception towards Online Trading in Tamil Nadu with Special Reference to Coimbatore District” shows that a good financial system provides the intermediation between savers and investors and promotes faster economic development. An investment share requires a careful evaluation of factors related to the economy, industry and the company. This analysis is called fundamental analysis. An investor is surrounded by many factors in her consideration of making investments. She is interested in liquidity of her assets. Turner T. (2007) concluded that A Beginner's Guide to Day Trading Online The stock market is the monster of all Roller Coasters, lifting traders to hair raising highs, then dropping them to the lowest lows, with no regards for their screams. Online brokers and direct access brokers have streamlined their platforms to maximum levels of speed & efficiency. Nejati. M & Nejati M. (2010) concluded that Global Business and Management Research an International Journal Share brokers offer two types of share trading. Offline Share trading-In the form of trading the customer goes to the share brokers place & sits before the share trading terminal & asks the dealer to place order in his account or rings the share broker, asks the share quotes & other related and relevant information, & accordingly places orders over the phone. Online Share Trading-The client could avail the share market & could place his order on his own from any place he wants, provided he has a computer with an internet Connection.

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Jaiswal M., Vashist D. and Kumar A. (2000) in their paper have Online trading at the speed of light, traces the growth of online trading from the year 2000 using statistics on volume of online trading, number of e- broking firms, brokerages and demographic patterns. Online trading has dramatically changed the way stock business has been conducted over the years. Goldberg, S. T. (1999) concluded that Kiplinger's Personal Finance Online Brokers Grow U The online brokerage industry is growing up. Online brokers have generally stopped lowering their prices in the past year or so, but they have added services. Every brokerage customer gets a regular account statement in the mail, but some statements are better than others. Many investors are unaware of the hidden costs of executing a stock trade, or of the ways brokers & other executors of trades can jack up the cost of trading. Kasisomayajula (2012) concluded that people are facing problems for trading in stock market due to lack of information of stock market. due to this investors are focusing towards demat account as it saves their time and brokerage With the help of online share trading, investors are able to judge their portfolio and continuously keep on upgrading it. Vaddadi Krishna Mohan & Pratima Merugu (2016) concluded that Online share trading offers investors’ and stock broking firms a new frontier of opportunities and challenges. The study examines the attitudes of online investors’ towards the adoption of online trading in Visakhapatnam city. A structured questionnaire was used to collect data from 400 respondents. The study suggests that stock broking firms in order to enhance widespread use of online trading service, need to organize relevant short term training programs and deploy user-friendly interface to encourage acceptance and quick adoption of online trading service among diversified class of investors to remove apprehensions and to form strong positive attitude in the longrun.

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Brad M. & Terrance (2002) analyzed 1,607 investors who switched from phone based to online trading during the 1990s. Those who switched to online trading perform well prior to going online, beating the market by more than 2% annually. After going online, they trade more actively, more speculatively, and less profitably than before lagging the market by more than 3% annually.

Haroun Alryalat, Yogesh Kumar Dwivedi, Jasna Kuljis, and Ray J. Paul (2006) analyzed the effect of online and traditional trading on effective market performance on the NASDAQ. The purpose of this paper was to present a critical analysis on the competition between online (ECN) and traditional (Market Maker (MM)) trading on the NASDAQ stock exchange. Online stock trading mechanisms at the exchanges are often a hybrid of dealer and auction markets. Different aspects of trading execution, which is the most commonly used market centre at present, were analyzed. This leads to a discussion on: (1) the path that executes order is organized and (2) its impact on the effective market performance, trading cost and investor behaviour. Williams, Whalley and Li (2000) concluded that a service cannot be adopted without proper infrastructure. This is also true of online trading where security, reliability, and spread are vital for consumer trust and loyalty. Many online investors are concerned about the security of internet transactions. The integrity of information, secure payment mechanisms, and communication/information free form interception and misrepresentations. Atkinson (2000) concluded that there are several studies in the literature review that attempt to discuss some of the problems and challenges associated with online trading. The first problem discussed in the literature is hidden costs and deceptive advertising associated with online trading. Supported this contentions that buried in all the online trading hype resides the fine print. Ray (2000) studied privacy identification and investors protection by using trusted third parties and privacy statements. Online brokers have tried to increase consumer confidence and loyalty. Anonymity must be guaranteed, since the investors, individual and institutional, would like to hide their action in order to buy and sell stock at the best price. Online trading companies secure transactions over the internet 57

by offering data encryption and requiring a unique user identity and password when the investor logs on. They also provide clients further safety if they fail to achieve web security. Rogers and Shoemaker (1971) conducted a study which focused on the provider of products and services, discussed the benefits and drawbacks of online trading in general form the trader’s viewpoint. But their approach did not deal with the range of investor responses to the innovation of online trading. Innovation-diffusion scholars shed light on his issue by finding that attributes of innovations could appeal differently to users at different stages of the innovation adoption process

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CHAPTER 5 RESEARCH METHODOLOGY

59

 Need for the Study Indian stock market is gaining lot of popularity in the recent years. People are aware about trading of shares in stock market. Share trading is carried out with the help of offline and online procedure. With technology up gradation, investors are shifting from offline share trading to online share trading. Online trade share market has emerged as one of the greatest and easiest ways to invest share by the investors. But still, investors are more focused towards offline share trading (SEBI Survey, 2015). As they believe offline share trading as a safer mode of investment. Hence, this study aims to investigate investors’ perception towards online trading so as to increase their usage among investors. 5.1 Problem Statement The use of online trading is low as compared to use of offline trading thus to investigate investor’s perception towards online trading so as to increase their usage among investors.

5.2 Objectives 

To study Investor’s perception towards online trading.



To find out various purposes for online trading usage.



To know the preference of investors towards conducting their online trading transactions.



To find out problems actually faced and anticipated by the Investors.

5.3 Research design 5.3.1 Type of design The research design used for the study is descriptive research design.

60

5.3.2 Sampling Sample population Investors of Surat city trading in share Market. Sampling area Surat city. Sample size Sample size is of 200 investors. Sampling method The sampling method used in research is non-probability convenience sampling.

5.3.3 Data collection tool Primary data collection Instrument: Questionnaire. Type of questionnaires: Semi-Structured: Close ended and Open ended. As per the need of this research, close ended and open ended questions will be asked. Abstract information of all types will be collected through pre-designed questions. 

Type of Scale: Rating scale Multiple choice single response & five point likert scale.

Secondary data For the secondary data, use of the available literature and other relevant publications has been made to find out the theoretical framework and also to know what early research mentioned regarding the given topic.

61

5.3.4 Tools for analysis The statistical tools analyzing this study we include: 1. Frequency distribution 2. Non parametric test - Mann-Whitney U test 3. Non parametric test - Chi square test 4. Non parametric test - Kruskal - Wallis H test Data analysis and interpretation have been conducted by using Statistical software SPSS version 21.

5.3.5 Benefits of the study  It helps in understanding the investor’s perception towards online trading.  Helps in finding out the problems faced by investors while trading online.  To find out various purposes for online trading usage.

5.3.6 Limitations of the study  Limitation of respondents: The Number of respondents is less (200 respondents) due to time limit.  As the study is limited only to Surat city, the findings of the study may not be generalized.  Many of respondents may not answer the questionnaire with complete seriousness and may discriminate while answering.  The information given by the investors may be biased due to use of questionnaire.

62

CHAPTER 6 Data Analysis & Interpretation

63

1) Gender Gender Frequency

Percent

Valid Percent

Cumulative Percent

Male Valid

Female Total

130

65.0

65.0

65.0

70

35.0

35.0

100.0

200

100.0

100.0

Figure 6.1 Interpretation: Table– 6.1 reveals that 130 (65%) respondents are male and remaining other 70 (35%) investors are female.

64

2) Age Age Frequency

Percent

Valid Percent

Cumulative Percent

Below 20

Valid

29

14.5

14.5

14.5

21-30

101

50.5

50.5

65.0

31-40

28

14.0

14.0

79.0

41 and Above

42

21.0

21.0

100.0

200

100.0

100.0

Total

Figure 6.2 Interpretation: Table– 6.2 reveals that 29 (14.5 %) respondents fall in the age group of below 20 years while 101 (50.5%) respondents fall in the age group of 21-30 years, 28 (14%) respondents fall in the age group of 31-0 and 42 (21%) fall in the 41 and above age group.

65

3) Occupation Occupation Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Service

55

27.5

27.5

27.5

Business

60

30.0

30.0

57.5

Housewife

26

13.0

13.0

70.5

Student

56

28.0

28.0

98.5

Other

3

1.5

1.5

100.0

Total

200

100.0

100.0

Figure 6.3 Interpretation: Table 6.3 reveals that most of respondents are Business men 60, students are 56, 55 belong to service sector, 26 respondents are house wife and rest 3 are others (retired).

66

4) Education Education Frequency

Percent

Valid Percent

Cumulative Percent

Under Graduate Graduate Valid

Post Graduate Diploma Total

43

21.5

21.5

21.5

124

62.0

62.0

83.5

30

15.0

15.0

98.5

3

1.5

1.5

100.0

200

100.0

100.0

Figure 6.4

Interpretation: Table-6 reveals that the 124 (62%) investors are falling in graduate category, 43 (21.5%) investors are under graduate, 30 (15%) Post graduate and 3 have done Diploma.

67

5) Income Income Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Below 150000

78

39.0

39.0

39.0

150000-300000

68

34.0

34.0

73.0

300001-500000

32

16.0

16.0

89.0

500001 and above

22

11.0

11.0

100.0

200

100.0

100.0

Total

Figure 6.5 Interpretation: Table-6.5 reveals that most of investors are having their income 1.5 lakhs (39%). there are 34% investors having income between Rs. 1.5 to 3 lakhs, while 16% investors having their income between 3 to 5 lakh and only 11% investors having their income more than 5 Lakhs.

68

6) Trading preference Which type of trading do you prefer? Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Online

141

70.5

70.5

70.5

Offline

36

18.0

18.0

88.5

Both

23

11.5

11.5

100.0

Total

200

100.0

100.0

Figure 6.6 Interpretation: Table 6.6 reveals that the 141 investors prefer online trading, 36 investors prefer offline trading, while 23 investors prefer both online and offline trading

69

7) If you are doing only offline trading then why are you not doing online trading? 7A) Lack of security Lack of Security Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Missing Total

Yes

27

12.0

42.9

42.9

NO

32

16.0

57.1

100.0

Total

59

28.0

100.0

141

72.0

200

100.0

System

Figure 6.7.1

70

7B) Lack of Knowledge Lack of Knowledge Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Missing Total

Yes

32

16.5

58.9

58.9

No

27

11.5

41.1

100.0

Total

59

28.0

100.0

141

72.0

200

100.0

System

Figure 6.7.2

71

7C) Lack of trust Lack of Trust Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Missing

Yes

20

8.5

30.4

30.4

NO

39

19.5

69.6

100.0

Total

59

28.0

100.0

141

72.0

200

100.0

System

Total

Figure 6.7.3

Interpretation: Table 6.7 reveals that the 20 Investors are not doing online trading due to lack of trust, 32 Investors are not doing online trading due to lack of knowledge and 27 Investors are not doing online trading due to lack of security.

72

8) If you’re using offline trading, in future would you like to switch to online platform? If you're using offline trading, in future would you like to switch to online platform ? Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Missing

Yes

26

13.0

46.4

46.4

No

16

8.0

28.6

75.0

Can't Say

17

7.0

25.0

100.0

Total

59

28.0

100.0

141

72.0

200

100.0

System

Total

Figure 6.8 Interpretation: Out of 59 investors, 26 investors would switch to online platform, 16 investors would not switch to online platform and remaining 17 investors can’t say about switching to online platform.

73

9) For how many years you are doing the Online Share trading? For how many years you are doing the online share trading Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Less than 2 years

45

23.5

28.0

28.0

2-3 years

69

34.5

41.1

69.0

4-5 years

27

14.0

16.7

85.7

Above 5 years

24

12.0

14.3

100.0

164

84.0

100.0

36

16.0

200

100.0

Total Missing

System

Total

Figure 6.9 Interpretation: Table 6.9 reveals that 45 investors using online trading for less than 2 years, while 69 investors are using online trading for 2-3 years, 27 investors are using online trading for 4-5 years and 24 investors are using online trading for above 5 years.

74

10) What are the reasons for online trading? 10A) Privacy Privacy Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

66

33.0

40.2

40.2

NO

98

49.0

59.8

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing Total

System

Figure 6.10.1

75

10B) Friendly & Time Saving Friendly & Time Saving Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

100

50.0

61.0

61.0

NO

64

32.0

39.0

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing Total

System

Figure 6.10.2

76

10C) Convenience Convenience Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

92

46.0

56.1

56.1

NO

72

36.0

43.9

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing Total

System

Figure 6.10.3

77

10D) Quick order execution Quick order execution Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

74

37.0

45.1

45.1

NO

90

45.0

54.9

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Figure 6.10.4 Interpretation: Table 6.10 reveals that the 100 investors use online trading friendly & Time savings, 66 investors use online trading due to privacy, 74 investors use online trading due to quick order execution and 92 investors use online trading due to Convenience.

78

11) How did you come to know about online share trading? How did you come to know about online share trading ? Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Reference by friends

43

21.5

26.2

26.2

Advertisements

33

16.5

20.1

46.3

Advice by financial consultants

42

21.0

25.6

72.0

Reference by Relatives

46

23.0

28.0

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Figure 6.11 Interpretation: Table 6.11 reveals that the 43 investors came to know about online share trading due to reference by friends, while 33 investors came to know about online share trading due to advertisement, 42 investors came to know about online share trading due to advice by financial consultants and 46 through relatives.

79

12) From where do you prefer to trade? From where you prefer to trade ? Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Missing

Home

63

31.5

38.4

38.4

Stock Broking office

58

29.0

35.4

73.8

Working Place

42

21.0

25.6

99.4

Other

1

.5

.6

100.0

Total

164

82.0

100.0

36

18.0

200

100.0

System

Total

Figure 6.12 Interpretation: Table 6.12 reveals that the 63 investors prefer trading at home, 58 investors prefer trading at stock broking office, 42 investors prefer trading at working place and 1 from other place.

80

13) How often do you trade? How often do you trade Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Daily

29

14.5

17.7

17.7

Weekly

42

21.0

25.6

43.3

Monthly

47

23.5

28.7

72.0

Occasionally

46

23.0

28.0

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Figure 6.13 Interpretation: According to survey 29 investors are trading daily to make money faster, 42 Investors are trading on weekly basis, 47 Investors are trading on monthly basis, and remaining 46 Investors trade occasionally.

81

14) Which Brokerage Firm do you prefer for Online Trading? Which Brokerage Firm do you prefer for Online Trading? Frequency

Percent

Valid Percent

Cumulative Percent

ICICI Direct

12

6.0

7.3

7.3

Angel Broking

16

8.0

9.8

17.1

8

4.0

4.9

22.0

Concept Securities

65

32.5

39.6

61.6

HDFC securities

23

11.5

14.0

75.6

Share khan

18

9.0

11.0

86.6

Motilal Oswal

15

7.5

9.1

95.7

Jainam

4

2.0

2.4

98.2

JM financial

3

1.5

1.8

100.0

164

82.0

100.0

36

18.0

200

100.0

India bulls

Valid

Total Missing

System

Total

Figure 6.14 Interpretation: Out of 164 respondents most of investors are preferring to invest through Concept Securities (65), 16 investors are preferring Angel Broking, 18 investors are preferring Share Khan , 15 investors are preferring Motilal Oswal, 12 investors are preferring ICICI securities, 23 investors are preferring HDFC securities, 8 investors are preferring India Bulls and remaining 7 investors are preferring other broking firms.

82

15) Are you satisfied about the online services of your existing brokers? Are you satisfied by the online services provided to you? Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

140

70.0

85.4

85.4

No

24

12.0

14.6

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Interpretation: Out of 164 respondents 140 Investors are satisfied with their current broking firm and remaining 24 Investors are dissatisfied with their current broking firm.

83

16) If ‘YES’ what is your reasons of satisfaction with the brokerage house? 16A) It eliminates middleman It eliminates the middleman Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

48

24.0

34.3

34.3

NO

92

46.0

65.7

100.0

140

70.0

100.0

60

30.0

200

100.0

Total Missing Total

System

Figure 6.16.1

84

16B) It’s cheaper It's cheaper Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

115

57.5

82.1

82.1

NO

25

12.5

17.9

100.0

140

70.0

100.0

60

30.0

200

100.0

Total Missing Total

System

Figure 6.16.2

85

16C) It offers greater investor control It offers greater investor control Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

90

45.0

64.3

64.3

NO

50

25.0

35.7

100.0

140

70.0

100.0

60

30.0

200

100.0

Total Missing Total

System

Figure 6.16.3

86

16D) You can monitor your investments in real time You can monitor your investments in real time Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

61

30.5

43.6

43.6

NO

79

39.5

56.4

100.0

140

70.0

100.0

60

30.0

200

100.0

Total Missing

System

Total

Figure 6.16.4 Interpretation: Out of 140 respondents, 48 respondents are satisfied because it eliminates middleman, 115 are satisfied because it’s cheaper, 90 are satisfied because it gives more control and 61 are satisfied because it helps in monitoring investments in real time.

87

17) If ‘No’ what is reason? 17A) Buying error due to computer missteps Buying errors due to computer missteps Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

15

7.5

62.5

62.5

NO

9

4.5

37.5

100.0

24

12.0

100.0

176

88.0

200

100.0

Total Missing Total

System

Figure 6.17.1

88

17B) Internet dependent Internet-dependent Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Missing Total

Yes

13

6.5

54.2

54.2

NO

11

5.5

45.8

100.0

Total

24

12.0

100.0

176

88.0

200

100.0

System

Figure 6.17.2

89

17C) No personal relationship with brokers No personal relationship with brokers Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Yes

16

8.0

66.7

66.7

NO

8

4.0

33.3

100.0

24

12.0

100.0

176

88.0

200

100.0

Total Missing Total

System

90

17D) Hacking of data Hacking of data Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Missing

Yes

14

7.0

58.3

58.3

NO

10

5.0

41.7

100.0

Total

24

12.0

100.0

176

88.0

200

100.0

System

Total

Figure 6.17.4 Interpretation: Table 6.17 reveals that the 15 investors are dissatisfied due to failure of computer, 13 investors are dissatisfied due to internet dependency, 14 investors are dissatisfied due to hacking of data and 16 investors are dissatisfied due to no personal relationship with brokers.

91

18) Online trading is easy to use Online trading is easy to use Frequency

Percent

Valid Percent

Cumulative Percent

Highly Disagree

Valid

2

1.0

1.2

1.2

Disagree

14

7.0

8.5

9.8

Neutral

33

16.5

20.1

29.9

Agree

51

25.5

31.1

61.0

Disagree

64

32.0

39.0

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Figure 6.18 Interpretation: Out of 164 respondents, 2 respondents highly disagree, 14 disagree, 33 respondents are neutral, 51 agree and 64 disagree with the statement that online trading is easy to use.

92

19) There are security issues in online trading There are security issues in online trading Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Highly Disagree

16

8.0

9.8

9.8

Disagree

39

19.5

23.8

33.5

Neutral

58

29.0

35.4

68.9

Agree

40

20.0

24.4

93.3

Disagree

11

5.5

6.7

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Figure 6.19 Interpretation: Out of 164 respondents,16 respondents highly disagree, 39 disagree, 58 respondents are neutral, 40 agree and 11 disagree with the statement that there are security issues in online trading.

93

20) Online trading is efficient as compared to offline trading Online trading is efficient as compared to offline trading Frequency

Percent

Valid Percent

Cumulative Percent

Highly Disagree

Valid

4

2.0

2.4

2.4

Disagree

17

8.5

10.4

12.8

Neutral

64

32.0

39.0

51.8

Agree

61

30.5

37.2

89.0

Disagree

18

9.0

11.0

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Figure 6.20 Interpretation: Out of 164 respondents, 4 respondents highly disagree, 17 disagree, 64 respondents are neutral, 61 agree and 18 disagree with the statement that online trading is efficient as compared to offline trading.

94

21) Online trading gives me greater control over offline trading Online trading gives me greater control over offline trading Frequency

Percent

Valid Percent

Cumulative Percent

Highly Disagree

Valid

5

2.5

3.0

3.0

Disagree

10

5.0

6.1

9.1

Neutral

68

34.0

41.5

50.6

Agree

55

27.5

33.5

84.1

Disagree

26

13.0

15.9

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Figure 6.21 Interpretation: Out of 164 respondents,5 respondents highly disagree, 10 disagree, 68 respondents are neutral, 55 agree and 26 disagree with the statement that online trading is efficient as compared to offline trading.

95

22) Is there any change in investment proportion after changing from offline to online trading? Is there any change in investment proportion after changing from 2 to 1 trading? Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Increase

83

41.5

50.6

50.6

Decrease

13

6.5

7.9

58.5

Neutral

68

34.0

41.5

100.0

164

82.0

100.0

36

18.0

200

100.0

Total Missing

System

Total

Figure 6.22

Interpretation: Table 6.22 According to study, after changing from offline to online 83 investors have increased their investment proportion, 13 have decreased and for remaining 68 investors investment level is Neutral.

96

Chi Square Test 1) Chi square test between gender and trading preference:

H0: There is no significant relationship between gender and trading preference. H1: There is a significant relationship between gender and trading preference. Level of significance

: The hypothesis to be taken of 95% confidencelevel of

significance i.e. chances of 5% occurance of error. Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

.908a

2

.635

Likelihood Ratio

.946

2

.623

Linear-by-Linear Association

.634

1

.426

N of Valid Cases

200

Interpretation: Here the chi-square value is 0.908 & asymptotic value is 0.635 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between gender and type of trading prefer.

97

2) Chi square test between age and trading preference: H0: There is no significant relationship between age and trading preference. H1: There is a significant relationship between age and trading preference.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

31.150a

6

.000

Likelihood Ratio

28.109

6

.000

3.187

1

.074

Linear-by-Linear Association N of Valid Cases

200

Interpretation: Here the chi-square value is 31.150& asymptotic value is 0.00 which is less than 0.05 so that H0 is rejected hence there is significant relationship between Age trading preference.

98

3) Chi square test between occupation and trading preference: H0: There is no significant relationship between occupation and trading preference. H1: There is a significant relationship between occupation and trading preference. Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

11.164a

8

.193

Likelihood Ratio

10.203

8

.251

1.370

1

.242

Linear-by-Linear Association N of Valid Cases

200

Interpretation: Here the chi-square value is 11.164 & asymptotic value is 0.193 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between occupation and type of trading preferred.

99

4) Chi square test between education and trading preference: H0: There is no significant relationship between education and trading preference. H1: There is a significant relationship between education and trading preference. Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

13.113a

6

.041

Likelihood Ratio

17.976

6

.006

Linear-by-Linear Association

.857

1

.355

N of Valid Cases

200

Interpretation

Here the chi-square value is 13.113 & asymptotic value is 0.041 which is less than 0.05 so that H0 is rejected hence there is significant relationship between education and type of trading preferred.

100

5) Chi square test between income and trading preference: H0: There is no significant relationship between income and trading preference. H1: There is a significant relationship between income and trading preference.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

4.340a

6

.631

Likelihood Ratio

4.298

6

.636

Linear-by-Linear Association

.828

1

.363

N of Valid Cases

200

Interpretation: Here the chi-square value is 4.340 & asymptotic value is 0.631 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between income and type of trading preferred.

101

6) Chi square test between Education and duration of doing online trading: H0: There is no significant relationship between education and duration of doing online trading. H1: There is a significant relationship between education and duration of doing online trading.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

14.825a

9

.096

Likelihood Ratio

14.001

9

.122

3.788

1

.052

Linear-by-Linear Association N of Valid Cases

168

Interpretation: Here the chi-square value is 14.825& asymptotic value is 0.096 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between education and duration of online trading.

102

7) Chi square test between occupation and duration of doing online trading: H0: There is no significant relationship between occupation and duration of doing online trading. H1: There is a significant relationship between occupation and duration of doing online trading.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

35.562a

12

.000

Likelihood Ratio

36.817

12

.000

8.038

1

.005

Linear-by-Linear Association N of Valid Cases

168

Interpretation: Here the chi-square value is 35.562 & asymptotic value is 0.000 which is less than 0.05 so that H0 is rejected hence there is significant relationship between occupation and duration of doing online trading.

103

8) Chi square test between occupation and getting knowledge about online trading: H0: There is no significant relationship between occupation and getting knowledge about online trading. H1: There is a significant relationship between occupation and getting knowledge about online trading.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

29.723a

12

.003

Likelihood Ratio

31.173

12

.002

Linear-by-Linear Association

.379

1

.538

N of Valid Cases

164

Interpretation: Here the chi-square value is 29.723 & asymptotic value is 0.003 which is less than 0.05 so that H0 is rejected hence there is significant relationship between occupation and getting knowledge about online trading.

104

9) Chi square test between occupation and frequency of doing online trading: H0: There is no significant relationship between occupation and frequency of doing online trading. H1: There is a significant relationship between occupation and frequency of doing online trading.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

47.443a

12

.000

Likelihood Ratio

52.579

12

.000

Linear-by-Linear Association

15.544

1

.000

N of Valid Cases

164

Interpretation: Here the chi-square value is 47.443 & asymptotic value is 0.000 which is less than 0.05 so that H0 is rejected hence there is significant relationship between occupation and frequency of doing online trading.

105

10) Chi square test between age and frequency of doing online trading H0: There is no significant relationship between age and frequency of doing online trading. H1: There is a significant relationship between age and frequency of doing online trading.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

19.869a

9

.019

Likelihood Ratio

22.063

9

.009

Linear-by-Linear Association

11.316

1

.001

N of Valid Cases

164

Interpretation: Here the chi-square value is 19.869 & asymptotic value is 0.019 which is less than 0.05 so that H0 is rejected hence there is significant relationship between age and frequency of doing online trading.

106

11) Chi square test between occupation and preference of broking firm H0: There is no significant relationship between occupation and preference of broking firm. H1: There is a significant relationship between occupation and preference of broking firm.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

26.975a

32

.719

Likelihood Ratio

34.992

32

.328

1.108

1

.293

Linear-by-Linear Association N of Valid Cases

164

Interpretation: Here the chi-square value is 26.975& asymptotic value is 0.719 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between occupation and preference of broking firm.

107

12) Chi square test between income and preference of broking firm H0: There is no significant relationship between income and preference of broking firm. H1: There is a significant relationship between income and preference of broking firm.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

26.018a

24

.352

Likelihood Ratio

27.453

24

.284

1.288

1

.256

Linear-by-Linear Association N of Valid Cases

164

Interpretation: Here the chi-square value is 26.018& asymptotic value is 0.352 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between income and preference of broking firm.

108

13) Chi square test between education and satisfaction of online services H0: There is no significant relationship between education and satisfaction of online services. H1: There is a significant relationship between education and satisfaction of online services.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

2.779a

3

.427

Likelihood Ratio

2.874

3

.411

Linear-by-Linear Association

.884

1

.347

N of Valid Cases

164

Interpretation: Here the chi-square value is 2.779 & asymptotic value is 0.427 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between education and satisfaction of online services.

109

14) Chi square test between income and increase in investment H0: There is no significant relationship between income and change in investment pattern. H1: There is a significant relationship between income and change in investment pattern.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

7.954a

6

.242

Likelihood Ratio

10.804

6

.095

Linear-by-Linear Association

.924

1

.336

N of Valid Cases

164

Interpretation: Here the chi-square value is 7.954& asymptotic value is 0.242 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between income and change in investment pattern.

110

15) Chi square test between occupation and change in investment H0: There is no significant relationship between occupation and change in investment. H1: There is a significant relationship between occupation and change in investment.

Chi-Square Tests Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

9.263

a

6

.159

Likelihood Ratio

11.138

6

.084

Linear-by-Linear Association

.484

1

.487

N of Valid Cases

164

Interpretation: Here the chi-square value is 9.263 & asymptotic value is 0.159 which is greater than 0.05 so that H0 fails to reject hence there is no significant relationship between occupation and change in investment.

111

Mann-Whitney U test: It is used for equal sample sizes, and is used to test the median of two populations. Usually the Mann-Whitney U test is used when the data is ordinal. Wilcoxon rank sum, Kendall’s and Mann-Whitney U test are similar tests and in the case of ties, it is equivalent to the chi-square test. WHY IT IS USED? The Mann-Whitney U test is used to compare differences between two independent groups when the dependent variable is ether ordinal or continuous. But not normally distributed. 1) Mann-Whitney U test between gender and people’s opinion regarding online share trading: H0: There is no significant difference in people’s opinion in online share trading between male and female. H1: There is a significant difference in people’s opinion regarding online share trading between male and female.

Ranks Gender Male Online trading is easy to use

There are security issues in online trading

Online trading is efficient as compared to offline trading

Online trading gives me greater

Female

N

Mean Rank

Sum of Ranks

109

80.41

8765.00

55

86.64

4765.00

Total

164

Male

109

84.89

9253.50

55

77.75

4276.50

Female Total

164

Male

109

80.24

8746.50

55

86.97

4783.50

Female Total

164

Male

109

83.89

9144.00

55

79.75

4386.00

Female

control over offline trading Total

164

112

Test Statisticsa Online trading is

There are security

Online trading is

Online trading

easy to use

issues in online

efficient as

gives me greater

trading

compared to

control over

offline trading

offline trading

Mann-Whitney U

2770.000

2736.500

2751.500

2846.000

Wilcoxon W

8765.000

4276.500

8746.500

4386.000

-.834

-.944

-.910

-.560

.404

.345

.363

.575

Z Asymp. Sig. (2-tailed)

Interpretation: In case of people’s opinion on ease of online trading, security issue of online trading, efficiency and control of online trading the p values are greater than 0.05, which means that the H0 fails to reject hence there is no significant difference regarding people’s opinion on ease, security issue, efficiency and control of online trading between male and female.

113

Kruskal - Wallis H Test

1) Kruskal - Wallis H test between age and people’s opinion on online share trading: H0: There is no significant difference between people’s opinion regarding online share trading and age. H1: There is a significant difference between people’s opinion regarding online share trading and age.

Interpretation: In this case the p value being greater than 0.05, null hypothesis fails to reject and hence there is no significant difference between age group and opinion regarding ease, security issue, efficiency and control of online trading.

114

2) Kruskal - Wallis H test between occupation and people’s opinion regarding online share trading: H0: There is no significant difference between people’s opinion regarding online share trading and occupation. H1: There is a significant difference between people’s opinion regarding online share trading and occupation.

Interpretation: In this case the p value being greater than 0.05, null hypothesis fails to reject and hence there is no significant difference between occupation of people and their opinion regarding ease, security issue, efficiency and control of online trading.

115

3) Kruskal - Wallis H test between education and people’s opinion regarding online share trading: H0: There is no significant difference between people’s opinion on online share trading and education H1: There is a significant difference between people’s opinion on online share trading and education

Interpretation: In this case the p value being greater than 0.05, null hypothesis fails to reject and hence there is no significant difference between education of people and their opinion regarding ease, efficiency and control of online trading. As p-value is less than 0.05 which means that null hypothesis is rejected and there is significant difference between education of people and their opinion regarding security issues.

116

4) Kruskal - Wallis H test between income and people’s opinion regarding online share trading: H0: There is no significant difference between people’s opinion regarding online share trading and income. H1: There is a significant difference between people’s opinion regarding online share trading and income.

Interpretation: In this case the p value being greater than 0.05, null hypothesis fails to reject and hence there is no significant difference between income of people and their opinion regarding ease, security issue, efficiency and control of online trading.

117

CHAPTER 7 FINDINGS AND CONCLUSION

118

Findings  On the basis of gender group most of the Investors are male.  On the basis of Age group most of the investors fall in 21 – 30 years.  On the basis of occupation most of the investors are businessmen.  On the basis of Educational Background most of the investors fall in graduate category.  On the basis of Income most of the investors are having their income below 1.5 lakhs.  Out of 200 respondents, 141 investors prefer online trading, 36 investors prefer offline trading, while 23 investors prefer both online and offline trading.  It has been observed that 20 Investors not doing online trading due to lack of trust, 33 Investors not doing online trading due to lack of knowledge and 27 Investors not doing online trading due to lack of security.  Out of 59 investors, 26 investors having switch to online platform.16 investors do not switch to online platform. Remaining 17 investors are can’t say to switch online platform.  It has been observed that 100 investors use online trading because it’s friendly & Time savings, 92 investors use online trading due to Convenience, 74 investors use online trading due to quick order execution and 66 investors use online trading due to privacy.  It has been observed that 69 investors using online trading for 2-3 years, while 45 investors using online trading for less than 2 years, 27 investors using online trading for 4-5 years and 24 investors using online trading above 5 years.  It has been observed that 46 investors know about online share trading due to reference by relatives, 43 through friends while 33 investors know about online share trading due to advertisement and remaining 42 investors know about online share trading due to advice by financial consultants.  According to survey 47 Investors are been trading monthly basis, 46 Investors who trade in yearly basis, 42 Investors are been trading weekly basis and 29 investors are trading daily.

119

 It has been observed that 63 investors prefer trading at home, 58 investors prefer trading at stock broking office,42 investors prefer trading at working place and 1 from other place.  Out of 164 respondents most of 65 investors are been preferring to invest through Concept Securities, 16 investors been preferring Angel Broking, 18 investors been preferring Share Khan , 15 investors been preferring Motilal Oswal, 12 investors been preferring ICICI securities, 23 investors been preferring HDFC securities, 8 investors been preferring India Bulls and remaining 7 investors preferring other broking firms.  Out of 164 respondents 140 of Investors are been satisfied with their current broking firm and remaining 24 Investors are been dissatisfied with their current firms broking firm.  Out of 140 respondents, 115 are satisfied because it’s cheaper, 90 are satisfied because it gives more control and 61 are satisfied because it helps in monitoring investments in real time and 48 respondents are satisfied because it eliminates middleman. 

Out of 24 respondents, 16 investors are dissatisfied due to no personal relationship with brokers 15 investors are dissatisfied due to failure of computer, 13 investors are dissatisfied due to internet dependent and 14 investors are dissatisfied due to hacking of data and placing.



Out of 164 respondents, 64 disagree, 51 agree, 33 respondents are neutral, 14 disagree and 2 respondents highly disagree with the statement that online trading is easy to use.

 Out of 164 respondents, 58 respondents are neutral, 40 agree, 39 disagree, 16 respondents highly disagree and 11 disagree with the statement that there are security issues in online trading.  Out of 164 respondents, 64 respondents are neutral, 61 agree, 18 disagree, 17 disagree and 4 respondents highly disagree with the statement that online trading is efficient as compared to offline trading.  Out of 164 respondents, 68 respondents are neutral, 55 agree and 26 disagree, 10 disagree and 5 respondents highly disagree with the statement that online trading is efficient as compared to offline trading.

120



According to study, after changing from offline to online 83 investors has increases their investment proportion, 68 investor’s investment level has remained neutral and 13 have decreased their investment.

 Findings from Chi-Square test.

Demographics

Factors

Chi-

Significance

Conclusion

Square(p - value value) Gender

Trading preference

0.0635

0.05

H0 failed to reject

Age

Trading preference

0.000

0.05

H0 rejected

Occupation

Trading preference

0.193

0.05

H0 failed to reject

Education

Trading preference

0.041

0.05

H0 is rejected

Income

Trading preference

0.631

0.05

H0 failed to reject

Education

Duration

of

online

0.096

0.05

H0 failed to reject

of

online

0.000

0.05

H0 is rejected

knowledge

0.030

0.05

H0 is rejected

trading Occupation

Duration trading

Occupation

Getting

about online trading

Occupation

Frequency

of

doing

0.00

0.05

H0 is rejected

of

doing

0.019

0.05

H0 is rejected

Preference of broking

0.719

0.05

H0 failed to reject

online trading

Age

Frequency online trading

Occupation

121

firm

Income

Preference of broking

0.031

0.352

H0 failed to reject

0.427

0.05

H0 failed to reject

firm Education

satisfaction

of

online

services

Income

change in investment

0.242

0.05

H0 failed to reject

Occupation

change in investment

0.159

0.05

H0 failed to reject

 Findings from Kruskal-Wallis H test.

Demographics

Investor’s

opinion Kruskal-

regarding

online Wallis H

trading

Significant

Conclusion

value

(p -value)

Age

Ease of trade

0.124

0.05

H0 failed to reject

Age

Security issue in trading

0.911

0.05

H0 failed to reject

Age

Efficiency of online

0.304

0.05

H0 failed to reject

trading Age

Control of online trading

0.389

0.05

H0 failed to reject

Occupation

Ease of trade

0.400

0.05

H0 failed to reject

Occupation

Security issue in trading

0.373

0.05

H0 failed to reject

Occupation

Efficiency of online

0.475

0.05

H0 failed to reject

122

trading Occupation

Control of online trading

0.961

0.05

H0 failed to reject

Education

Ease of trade

0.694

0.05

H0 failed to reject

Education

Security issue in trading

0.027

0.05

H0 rejected

Education

Efficiency of online

0.334

0.05

H0 failed to reject

trading Education

Control of online trading

0.683

0.05

H0 failed to reject

Income

Ease of trade

0.750

0.05

H0 failed to reject

Income

Security issue in trading

0.321

0.05

H0 failed to reject

Income

Efficiency of online

0.714

0.05

H0 failed to reject

0.177

0.05

H0 failed to reject

trading Income

Control of online trading

 Findings from Mann-Whitney U test H test.

Demographics

Investor’s regarding

opinion Mann-

Significant

Conclusion

online Whitney U value

trading

test

(p -

value) Gender

Ease of trade

0.834

0.05

H0 failed to reject

Gender

Security issue in trading

0.994

0.05

H0 failed to reject

Gender

Efficiency of online

0.910

0.05

H0 failed to reject

0.560

0.05

H0 failed to reject

trading Gender

Control of online trading

123

Conclusion:  From the above analysis and findings, it can be concluded that most of investors give preference to online share trading due to factors like friendly and time saving, convenience, cheaper rate and more control. 

After changing from offline to online share trading to investor’s proportion of investment increases.



People between 21-30 are mostly using online share trading services



From the above analysis and findings, it can be concluded that few of investors do not give preference to online share trading due to factors like lack of knowledge and lack of security



From the above analysis and findings, it can be concluded that all the retired respondents prefer offline share trading.

124

CHAPTER 8 Recommendations

125

Recommendation

Based on the observation made during the study the following suggestions are submitted for the betterment of the mutual funds companies:  Young investors are preferring online platform for trading the so companies should improve their online facilities to make it more user friendly.  Marketing policies can help companies to improve their brand reputation among the investors, which will help them to gain trust from the investors.  Many investors hesitate to use online platform because of lack of knowledge thus company must provide adequate knowledge to it’s customers regarding the use of online platform.

126

BIBLIOGRAPHY Websites http://www.conceptsecurities.com https://docuri.com/download/online-share-trading http://www.managementparadise.com/subadhra.krishnan.3/documents/9032/investors -perception-towards--online-share-trading/ http://www.stockedge.com http://www.investopedia.com/terms/c/capitalmarkets.asp https://www.sebi.gov.in/

Journals Walia N, Kumar R (2007) Online Stock Trading in India: An Empirical Investigation. Indian Journal at Marketing 37. Natalie Y OH, Parwada JT, Walter TS, (1997) online investors trading behaviour and performance: Evidence from the Korean equity market. JEL classification: G10; G20; O33. D. Anitha Kumari (2013) Problems and prospects of online share trading practices in India.Qualitative Research in Financial Markets, Vol. 4 Issue: 1, pp.84 – 122. Chinmaya H. P. (2010). Study on the attitude of investors towards online trading International journal of bank marketing, 23(5), VaddadiKrishna Mohan; PratimaMerugu (2016)"Measuring online stock broking performance", Industrial Management & Data Systems, Vol. 108 Issue: 7, pp.988 – 1004.

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Sahoo, J. S (2012). Customer perception towards online trading in India. International journal of business management 1-10. Haroun Alryalat, Yogesh Kumar Dwivedi, Jasna Kuljis, and Ray J. Paul (2006) analyzed the effect of online and traditional trading on effective market performance on the NASDAQ. A, Jaiswal M Vashist D and Kumar. "women perception towards online trading." (2000). Atkinson. "customer perception towards online trading in tamilnadu district." (2000). Kasisomayajula. "study on problem facing in stock market." (2012). LI, Williams Whalley and. "customer perception towards online trading." (2000). M, Nejati M Anejati. "customer erception towards retail brokerage." International journal (2010). Mekala, N Kathirvel a. "women trading investor perception towards online trading in tamilnaduwith special reference to coimbtore district." (2010). pavithras, v. "customer perception towards online trading in retail brokerage ." (2017). Ray. "study on privacy identification and investor protection towards online trading ." (2000). Shoemaker, Rogers and. "study on perception towards retail trading." (1971). T, Goldberg S. "customer perception towards online retail trading ." (1999). T, Turner. "A be ginner guide to day trading online stock market." (2007). Terrance, Brad M. "study on customer swiching on towards online trading." (2002).

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ANNEXURE I, Gheewala Sahil, a management student of “S.R Luthra Institute of Management” is conducting a study on “A STUDY ON INVESTORS PERCEPTION TOWARDS ONLINE TRADING IN RETAIL BROKERAGE”. This exercise is a part of research work towards fulfilling the requirement of the management course. I would be glad if you could spare your valuable time to answer few questions. I assure you that the views conveyed by you will be used for academic purpose only and secrecy would be maintained. Name: _____________________________ Gender: Male

[

]

Female [

]

Age Below 20

[

]

21 – 30

[

]

31 – 40

[

]

41 and above [

]

Occupation Services

[

]

Business

[

]

Student

[

]

Housewife

[

]

Other (Specify) ______

129

Educational Background Under graduate [

]

Graduate

[

]

Post graduate

[

]

Diploma

[

]

Other (Specify) _______

Income Below 1, 50,000

[

]

1,50,000 – 3,00,000

[

]

3,00,000 – 5,00,000

[

]

5,00,000 & Above

[

]

130

Q1. Which type of trading do you prefer? (a) Online

[

]

(b) Offline

[

]

(c) Both

[

]

For those who are doing offline trading Q2. If you are doing only offline trading then why are you not doing online trading? (a) Lack of Security

[

]

(b) Lack of knowledge

[

]

(c) Lack of trust

[

]

(d) Others_____

Q3. If you’re using offline trading, in future would you like to switch to online platform? (a) Yes

[

]

(b) No (c) Can’t say

[ [

] ]

For those who are doing online trading Q4. For how many years you are doing the Online Share trading? (a) Less than 2 years [

]

(b) 2-3 years

[

]

(c) 4-5 years

[

]

(d) Above 5 years

[

] 131

Q5. What are the reasons for online trading? (a) Privacy

[

]

(b) Friendly & Time Saving

[

]

(c) Convenience

[

]

(d) Quick order execution

[

]

(e) Others ___________________ Q.6 How did you come to know about online share trading? (a) Reference by friends

[

]

(b) Advertisements

[

]

(c) Advice by financial consultants

[

]

(d) Others______________ Q7. From where do you trade? (a) Home (b) Stock broking office (c) Working place (d) Others ________ Q.8 How often you trade? (a) Daily

[

]

(b) Weekly

[

]

(c) Monthly

[

]

(d) Occasionally [

]

132

Q.9 Which Brokerage Firm do you prefer for Online Trading? (a) ICICI Direct

[

]

(b) Angel Broking

[

]

(c) India bulls

[

]

(d) Concept Securities

[

]

(e) HDFC securities

[

]

(f) Share khan

[

]

(g) Motilal Oswal

[

]

(h) Others __________ Q.10 Are you satisfied about the online services of your existing brokers (a) Yes

[

]

(b) No

[

]

Q.11 If ‘YES’ what is your level of satisfaction with the brokerage house? (a) It eliminates the middleman [

]

(b) It’s cheaper

[

]

(c) It offers greater control

[

]

(d) You can monitor your investments in real time

[

]

133

12) If ‘No’ what is reason? (a) Buying errors due to computer missteps [

]

(b) Internet dependent

]

[

(c) No personal relationship with broker

[

]

(d) Hacking of data

[

]

(e) Other _________ Q13. Please rate the following (Please indicate your opinion on given statement on a 5 point sale 1=Highly Disagree 5 =Highly Agree) 1. Online trading is easy to use ___ 2. There are security issues in online trading ___ 3. Online trading is efficient as compared to offline trading ___ 4. Online trading gives me greater control over offline trading ___ Q14. Is there any change in investment proportion after changing from offline to online trading? (a) Increase

[

]

(b) Decrease

[

]

(c) Neutral

[

]

Q15. Give your suggestion to improve the online share trading in Surat _________________________________________________________

134

135