Stock Exchange.docx

I INTRODUCTION

1

OVERVIEW OF INDUSTRY AS A WHOLE EVOLUTION Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. 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.

2

OTHER LEADING CITIES IN STOCK MARKET OPERATIONS

Ahmedabad gained importance next to Bombay with respect to cotton textile industry. After 1880, many mills originated from Ahmedabad and rapidly forged ahead. As new mills were floated, the need for a Stock Exchange at Ahmedabad was realized and in 1894 the brokers formed “The Ahmedabad Share and Stock Brokers’ Association”. What the cotton textile industry was to Bombay and Ahmedabad, the jute industry was to Calcutta. Also tea and coal industries were the other major industrial groups in Calcutta. After the Share Mania in 1861-65, in the 1870’s there was a sharp boom in jute shares, which was followed by a boom in tea shares in the 1880’s and 1890’s; and a coal boom between 1904 and 1908. On June 1908, some leading brokers formed “The Calcutta Stock Exchange Association”. In the beginning of the twentieth century, the industrial revolution was on the way in India with the Swadeshi Movement; and with the inauguration of the Tata Iron and Steel Company Limited in 1907, an important stage in industrial advancement under Indian enterprise was reached. Indian cotton and jute textiles, steel, sugar, paper and flour mills and all companies generally enjoyed phenomenal prosperity, due to the First World War. In 1920, the then demure city of Madras had the maiden thrill of a stock exchange functioning in its midst, under the name and style of “The Madras Stock Exchange” with 100 members. However, when boom faded, the number of members stood reduced from 100 to 3, by 1923, and so it went out of existence. In 1935, the stock market activity improved, especially in South India where there was a rapid increase in the number of textile mills and many plantation companies were floated. In 1937, a stock exchange was once again organized in Madras – Madras Stock Exchange Association (Pvt) Limited. (In 1957 the name was changed to Madras Stock Exchange Limited). Lahore Stock Exchange was formed in 1934 and it had a brief life. It was merged with the Punjab Stock Exchange Limited, which was incorporated in 1936.

3

INDIAN STOCK EXCHANGES– AN UMBRELLA GROWTH

The Second World War broke out in 1939. It gave a sharp boom which was followed by a slump. But, in 1943, the situation changed radically, when India was fully mobilized as a supply base. On account of the restrictive controls on cotton, bullion, seeds and other commodities, those dealing in them found in the stock market as the only outlet for their activities. They were anxious to join the trade and their number was swelled by numerous others. Many new associations were constituted for the purpose and Stock Exchanges in all parts of the country were floated. The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940) and Hyderabad Stock Exchange Limited (1944) were incorporated. In Delhi two stock exchanges – Delhi Stock and Share Brokers’ Association Limited and the Delhi Stocks and Shares Exchange Limited – were floated and later in June 1947, amalgamated into the Delhi Stock Exchange Association Limited. Most of the exchanges suffered almost a total eclipse during depression. Lahore Exchange was closed during partition of the country and later migrated to Delhi and merged with Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in 1957 and recognized in 1963. Most of the other exchanges languished till 1957 when they applied to the Central Government for recognition under the Securities Contracts (Regulation) Act, 1956. Only Bombay, Calcutta, Madras, Ahmedabad, Delhi, Hyderabad and Indore, the well established exchanges, were recognized under the Act. Some of the members of the other Associations were required to be admitted by the recognized stock exchanges on a confessional basis, but acting on the principle of unitary control, all these pseudo stock exchanges were refused recognition by the Government of India and they thereupon ceased to function. Thus, during early sixties there were eight recognized stock exchanges in India (mentioned above). The number virtually remained unchanged, for nearly two decades.

4

During eighties, however, many stock exchanges were established: Cochin Stock Exchange (1980), Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982), and Pune Stock Exchange Limited (1982), Ludhiana Stock Exchange Association Limited (1983), Gauhati Stock Exchange Limited (1984), Kanara Stock Exchange Limited (at Mangalore, 1985), Magadh Stock Exchange Association (at Patna, 1986), Jaipur Stock Exchange Limited (1989), Bhubaneswar Stock Exchange Association Limited (1989), Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989), Vadodara Stock Exchange Limited (at Baroda, 1990) and recently established exchanges – Coimbatore and Meerut. Thus, at present, there are totally twenty one recognized stock exchanges in India excluding the Over the Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL). The above data portrays the overall growth pattern of Indian stock markets since independence. It is quite evident from the data that Indian stock markets have not only grown just in number of exchanges, but also in number of listed companies and in capital of listed companies. The remarkable growth after 1985 can be clearly seen and this was due to the favouring government policies towards security market industry.

NATIONAL STOCK EXCHANGE (NSE) The National Stock Exchange of India (NSE) was incorporated in November 1992 as a taxpaying company. It is recognized under Securities Contracts (Regulation) Act, 1956 in 1993 as a stock exchange. In June 1994, it commenced operations in the Wholesale Debt Market (WDM). In November, the same year, the Capital Market (Equities) segment commenced operations and the Derivatives segment in June 2000.

BOMBAY STOCK EXCHANGE (BSE) A very common name for all traders in the stock market, BSE, stands for Bombay Stock Exchange the oldest market not only in the country, but also in Asia. The early days of BSE was known as "The Native Share & Stock Brokers Association."

5

It was established in the year 1875 and became the first stock exchange in the country to be recognized by the government. In 1956, BSE obtained a permanent recognition from the Government of India under the Securities Contracts (Regulation) Act, 1956. In the past and even now, it plays a pivotal role in the development of the country's capital market. This is recognized worldwide and its index, SENSEX, is also tracked worldwide. Earlier it was an Association of Persons (AOP), but now it is a demutualised and corporatised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI).

Share market can be segmented in two parts 

Primary Market



Secondary Market

Primary Market It provides opportunity to issuers of securities government as well as corporate to raise resources to meet their requirements of investments. In this market companies issue fresh security in exchange of funds through public issues or private placements. The market design for primary market is provided in the provision of Companies Act, 1956 which deals with issues, listing and allotment of securities. The investors have to apply the shares by filling the application form issue by the company along with the application money. According to Disclosure and Investor Protection guidelines of SEBI, 1992 company has to disclose all the necessary information regarding pricing of issues, listing requirements, disclosure norms lock-in-period for promoters contribution, contents of offer documents pre and post issue obligations etc. Company can issue shares at face value, at premium or at discount. Another method of pricing which is now days common is issuing the securities through online system of the stock exchange has to comply with the section 55 to 68a of the companies Act, 1956 and SEBI guidelines 2000. The company is required to enter in to an agreement with the stock exchanges, which have the requisite system for online offer of securities.

6

The advantages for this new system are:  The investors part with money only after allotment.  It eliminates refunds except in case of direct applications.  It reduces the time taken for issue process

Secondary Market Secondary market is the place for sale and purchase of existing securities. It enables an investor to adjust his holdings of securities in response to changes in his assessment about risk and return. It enables him to sell securities for cash to meet his liquidity needs. It essentially comprises of the stock exchanges which provide platform for trading of securities and a host of intermediaries who assist in trading of securities and clearing and settlement of trades. The securities are traded, cleared and settled as per prescribed regulatory framework under the supervision of the exchanges and oversight of SEBI.

Trading Mechanism Earlier trading on stock exchanges in India used to take place through open without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency National Stock Exchange introduced a nation wide on line fully automated screen based trading system where a member can punch in to the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching sale or buy order from a counter party. Screen based trading electronically matches orders on a price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It enables market participants, irrespective of their geographical locations to trade with one another and it provides equal access to everybody. NSE has main computer which is connected through Very Small Aperture Terminal (VSAT) installed at its office. The main computer runs on a default tolerant STRATUS

7

mainframe computer at the exchange. Brokers have terminals installed at their premises, which are connected through VSATs. An investor informs a broker to place an order on his behalf.

COMPETITION INFORMATION The major brokerage firms:



Religare.in



5paisa.com



KotakStreet.com



IndiaBulls.com



ICICIDirect.com



HDFCsec.com

“R-ACE”

R-ACE stands for (RELIGARE - ADVANCED CLIENT ENGINE). It is a 360˚ online investment platform that allows users to invest in

 Equities,  F&O,  Commodities, 8

 IPO and  Mutual Funds. It not only saves a lot of time and energy, but also does away with all the tedious paper work involved with these kinds of investments. The result is a completely hassle free investing experience.

Platforms Depending on client’s requirements we have three platforms to offer for online trading:

1.

R-ACE (Basic Version): This is a browser based online trading platform with all the

basic features required to make transaction using Internet Explorer. o

Account Opening Charges: Rs. 299

o

Initial margin: Rs 5000

2.

R-ACE Lite (Applet Version): This is a browser based version with streaming

quotes facility which will help the client to monitor the market and make quick buy and sell transactions. o

Account Opening Charges: Rs. 499

o

Initial margin: Rs 5000

3.

R-ACE Pro (Application Version): This is a trading terminal with streaming

quotes, technical charting and many advanced features. The trading terminal can be downloaded from the website and can be run from any location. o

Account Opening Charges: Rs. 999

o

Initial margin: Rs. 10000

Note: The client has to maintain minimum cash margin of Rs. 500 at all times in all the three platforms. 9

Salient Features

1) Delivery: i.

Exposure in delivery would be 1 times of available cash margin;

ii.

Buying allowed in all scrips except ‘Z’ category shares and physical shares;

iii.

Selling allowed in all scrips available in DP-POA or Beneficiary. Shares would be compulsorily sent to DP-POA (in instances where the client has bought today and sold tomorrow, his scrips would lie in beneficiary);

iv.

Credit for sale would be provided to client

v.

Futures & Options Margin to be calculated on SPAN Margin

2) Intraday: i.

Exposure in intra-day would be 6 times (20 times exposure in special product offering Race MaxTrade).

ii.

Clients will get intraday exposure on their holdings in Demat account (valued after applicable haircut).

iii.

Select scrips would be allowed for intra-day trading.

iv.

Auto-square-off of all intraday orders at 3:10.pm.

3)

Online Equity, Mutual Fund1, IPO* and Commodities* in a single a/c.

4) 3% rate of interest on the margin deposited. 5) Lifetime free DP. ( No Annual maintenance charges) 6) NSE cash segment, NSE F&O and BSE on single platform. 7)

Online transfer of funds through multiple banks.(ICICI, UTI, HDFC

& CITI) 8)

Minimal Brokerage as low as 0.01% & 0.1% (Under special scheme)

10

9) Technical charting (Intraday and End Of Day ) 10)

Integrated DP, back office and trading account.

11)

Obligation selling allowed (in selected scrips).

Brokerage Schemes:

RACE Classic Scheme

This is a purely volume based brokerage plan and brokerage chargeable will be as follows:

Monthly Traded

Intraday

Delivery

Less than 1 Crore

0.05%

0.50%

1 Crore – 5 Crore

0.04%

0.40%

More than 5 Crore

0.03%

0.30%

Volume

“5 PAISA” Company Background Indiainfoline was founded in 1995 and was positioned as a research firm .In 2000 e-broking was started under the brand name of 5 paisa. Com Apart from offering online trading in stock market the company offers mutual funds online. It also acts as a distributor of various financial services i.e. Company Fixed Deposits, Insurance. Limited ground network, present in 20 Cities

Online Account Types • Investor Terminal: Investors / Students 11

• Trader Terminal: Day Traders / HNI’s

PRICING FOR RETAIL CLIENTS Investor Terminal

• Account Opening: Rs 500 • Demat 1st Yr: Rs 250 • Initial Margin: Rs 2500(Compulsory) • Min Margin Retainable: Rs 1000 •Brokerage: Intraday 0.10% each side + ST Delivery 0.50% each side + ST

PRICING FOR HNI CLIENTS Trader Terminal

• Account Opening: Rs. 500 • Demat 1st Yr: Rs. 250

• Initial Margin: Rs. 5000(Compulsory) • Min Margin Retainable: Rs. 1000

Brokerage:

Intraday 0.10% each side + ST

Delivery 0.50% each side + ST

(Negotiable to 0.05% each side & 0.25%)

12

13

Account Access Charges

Monthly Rs 800, adjustable against Brokerage

Yearly Rs 8000, adjustable against brokerage

“Kotakstreet” Company Background

Kotakstreet is the retail arm of Kotak securities. Kotak Securities limited is a joint venture between Kotak Mahindra Bank and Goldman Sachs.

Pricing For Kotak

Account Opening: Rs 500

Demat: Rs 22.5 p.m

Initial Margin: Rs 5000(Compulsory)

Min Margin Retainable: Rs 1000

Brokerage Slab wise: Higher the volume, lower the brokerage. Even older customers (on 0.25% & 0.40%) have been moved to the slab wise structure w.e.f 1/4/2004

14

“INDIABULLS”

Company Background

An India bull is a retail financial services company present in 70 locations covering 62 cities. It offers a full range of financial services and Products ranging from Equities to Insurance.450 + Relationship Managers who act as personal financial advisors.

Pricing of IB Accounts

(1) Signature Account • Account Opening: Rs 250 • Demat: Rs 200, No AMC for this DP • Initial Margin: NIL

Brokerage: (Negotiable) Intraday 0.05%+ST Delivery 0.25%+ST

(2) Power India Bulls 

Account Opening: Rs 750



Demat: Rs200



Initial Margin: NIL



Brokerage: Negotiable

15

“ICICI Direct” Company Background

ICICI Direct (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock trading and trading in derivatives in BSE and NSE, it also provides facility to invest in IPO’s, Mutual Funds and Bonds. Trading is available in BSE and NSE.

Type of Account 1.

Share Trading Account

Share Trading Account by ICICI Direct is primarily for buying and selling of stocks in BSE and NSE. This account allows Cash Trading, Margin Trading, Margin PLUS Trading, Spot Trading, Buy Today

Sell

Tomorrow

and

Call

and

Trade

on

phone.

ICICIDirect.com website is the primary trading platform for this trading account. They also provide installable application terminal based application for high volume trader. 2.

Wise Investment Account

Along with stock trading and IPO investing in BSE and NSE, Wise Investment account also provide options to invest in Mutual Funds and Bonds online. Online Mutual funds investment allows investor to invest on-line in around 19 Mutual Fund companies. ICICI Direct offers various options while investing in Mutual Funds like Purchase Mutual Fund, Redemption and switch between different schemes, Systematic Investment plans, Systematic withdrawal plan and transferring existing Mutual Funds in to electronic mode. This account also provides facility to invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. ICICIDirect.com website is the primary tool to invest in Mutual Funds, IPO’s, Bonds and stock trading.

Active Trader Account Active Trader account gives more personalized investment options to the investors. It allows investor to use online and offline stock trading. It also provides with independent market

16

expertise

and

support

through

a

dedicated

Relationship

Manager

from

ICICI.

Active Trader also provides commodity trading.

Brokerage and fees: Account opening fees: Rs 750/- (One time non-refundable) Brokerage: ICICIDirect.com brokerage varies on volume of trade and inclusive of demat transaction charges, service taxes and courier charges for contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to 0.425% for squared off trades and 0.4% to 0.85% on delivery based trades.

How to open account with ICICI Direct? For Online Stock Trading with ICICI, investor needs to open 3 accounts...ICICI Bank Account, ICICI

Direct

Trading

Account

and

ICICI

Demat

Account

(DP

Account).

Note: If you already have a bank account or demat account with ICICI, you could link it with new ICICIDirect trading account. Opening trading account with ICICI is easy. You could use one of the following options to open account with ICICIDirect. 

Visit ICICIDirect.com and fill the "Open an Account" form.



Call ICICI and tell them that you are interested in opening an account with them.

In both the cases ICICI representative contact you in a day or two and tell you about the procedure to open the account. They usually send somebody to your home to collect documents, signature and for demo if required.

“HDFC Securities” Company Background The HDFC BANK, HDFC and Chase Capital Partners and their associates promote HDFC SECURITIES LTD. They are Pioneers in setting up Dial-a-share services with the largest team of Tele-brokers 17

Pricing of HDFC Account

Account Opening: Rs 750

Brokerage: (Negotiable)

Intraday 0.10%+ST

Delivery 0.50%+ST

SWOT ANALYSIS Strength

Weakness

1. Low brokerage.

1. If a company share is listed in both the

2. Free Depository A/C.

exchange then customer can do buying or

3. On line Trading.

selling through NSE.

4. Highly Experience.

2. Customer satisfaction.

5. Instant Cash transformation

3. Branding.

6. Brand image.

4. Competition from banks

7. Better research team. etc.

Opportunity

Threats

1. They can expand his business in many 1. areas where potential customer is waited.

Government

policy,

SEBI

Depository policy may be changes.

2. Due to experienced Research report 2. New competitors. team they can enhance his business and 3. Technology based business. change the mind set of customer due to risk in share market.

18

&

II COMPANY PROFILE

19

PROFILE OF THE ORGANISATION Share khan is one of the retail brokerage firms in the country. It is the retail broking arm of the Mumbai based SSKI group, which has over eight decades of experience in the stock broking business. Share khan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, Depository services, online trading, investment advice etc.

20

Sharekhan is lead by a highly regarded management team that has invested crores of rupees into a world class Infrastructure that provides our clients with real-time service & 24/7 accesses to all information and products. Our flagship Sharekhan Professional Network offers real-time prices, detailed data and news, intelligent analytics, and electronic trading capabilities, right at your finger-tips. This powerful technology is complemented by our knowledgeable and customer focused Relationship Managers. “Your guide to the Financial Jungle” Sharekhan offers a full range of financial services and products ranging from Equities to Derivatives

enhance

your

wealth

and

hence,

achieve

your

financial

goals.

Sharekhan’s Client Relationship Managers are available to you to help with your financial planning and investment needs.

The Business Challenges • Easily access customer portfolio information in a secure contact centre environment. • Seamlessly integrate with back-end applications and streamline customer data to contact Center agents. • Easily manage upgrades and technology issues to accommodate growing customer base.

Sharekhan is the retail broking arm of SSKI, an organization with more than eight decades of trust & credibility in the stock market. • Amongst pioneers of investment research in the Indian market. • In 1984 ventured into Institutional Broking & Corporate Finance. • Leading domestic player in Indian institutional business. • `ver US$ 5 billion of private equity deals.

21

Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt Ltd. To build its trading engine and content.

COMPONENTS OF COMPANY PROFILE

1. Share khan proposal Sharekhan is one of the leading retail brokerage firms in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, Depository services, Online Trading, Investment Advice, Mutual Funds, Online IPO’s etc.

2. Innovation (a.) The firm’s online trading and investment site-www.Sharekhan.com-was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. (b.) On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net.

3. Network The number of trading members currently stands at over 6 lacs. While online trading currently accounts for just over 2 per cent of the daily trading in stocks in India, Sharekhan alone accounts for 32 per cent of the volumes traded online. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks. 22

Share khan’s ground network includes over 588 centers in 148 cities in India, of which 32 are fully-owned branches.

4. Stakeholder The Morakhiya family holds a majority stake in the company. HSBC, Intel & Carlyle are the other investors.

5. Experience With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. SSKI’s institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organization’s revenue, with a daily turnover of over US$ 2 million.

6. Awards Sharekhan company has got three awards:i. Awaaz award from CNBC Channel in 2004. ii. Best Preferred Brokerage House Award from CNBC Channel in 2005. iii. Awaaz award in 2006.

7. Products offered by Share khan i.

BOLT for offline trading.

ii.

NEAT for online trading.

iii.

Portfolio Management Services.

iv.

Offline Trade in Commodities.

v.

Mutual Fund Advisory

23

8. Reasons to choose Share khan Ltd. Experience SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia money broker’s poll held. SSKI won the ‘India’s best broking house for 2004’ award. Ever since it launched Sharekhan as its retail broking division in February 2000, it has been providing institutional level research and broking service to individual investors.

Technology With their online trading account you can buy and sell shares in an instant from any PC with an Internet connection. You will get access to their powerful online trading tools that will help you take complete control over your investment in shares.

Accessibility Sharekhan provides advice, education, tools and execution service for investors. These services are accessible through their centers across the country, over the country as well as over the voice tool.

KNOWLEDGE In a business where the right information at the right time can translate into direct profits, you get access to a wide range of information on their content-rich portal, sharekhan.com. You will also get a useful set of knowledge-based tools that will empower you to take informed decisions.

Convenience You can call their Dial-N-trade number to get investment advice and execute your transactions. They have a dedicated call-center to provide this service via a toll free number from anywhere in India.

24

Customer Service Their customer service team will assist you for any help that you need relating to transactions, billing, demat and other queries. Our customer service can be contracted via a toll free number, email or live chat on sharekhan.com.

Investment Advice Sharekhan has dedicated research teams for fundamental and technical research. Their

analysis constantly track the pulse of the market and provide timely investment advice to you in the form of daily research emails, online chat, printed reports and SMS on your phone.

9. Benefits provide by the company a) Free Depository A/C, b) Secure Order by Voice Tool Dial-n-Trade, c) Instant cash transformation, d) Multiple banking option, e) Automated portfolio to keep track of the value of your actual purchases, f) 24 x 7 voice tool access to your trading account, g) Special personal inbox for order and trade confirmations, h) On line customer service via web chat, i) Buy or sell even single share, Personalized price and account alerts delivered instantly to your cell phone and e-mail address.

25

INVESTMENT AVENUES AND ALTERNATIVES Investment alternatives vary from fixed income to variable income which includes RBI bonds, government securities, fixed deposit, equity investments, property and so on.

In recent years the 6.5 percent tax-free RBI Bonds have become a very popular saving instrument -- especially amongst individuals. Till 1996, these bonds gave returns of 10 per cent. This came down to 9 per cent and then 8 percent and then in 2003 it was reduced to 6.5 per cent (tax free). Nowadays, 8 percent taxable Government of India bonds are also doing well to attract investors who want safe and higher yield.

However, with inflation at nearly 4.5%, the return offered by these instruments were still attractive. However, with the scrapping of the tax-free bonds, safe investment options for individuals have become very limited and people are now choosing to go with either post office saving schemes or equity related instruments.

Take a look at what is happening. Debt funds, which were said to be relatively risk-free, are giving very less returns. Monthly Income Plans offered by mutual funds are also not attractive as their portfolio is made up of 80 percent debt and 20 percent equity. With debt giving very less returns and returns from equity becoming stagnant, the returns from MIPs are also very attractive. The returns offered by MIPs are totally dependant upon the type of security and debt instruments held by the fund But with recent rally in the stock market, very few people are now going for MIPs and have a very positive sentiment about the market and would like to stay with the market for long. But continuously we still have a single question in mind:

So where should individuals park their money now?

"The 8 per cent taxable RBI Bonds seem to be one of the best options right now looking for a safe avenues."

26

The person in the 30 percent tax bracket, the 8 per cent RBI bonds will give returns of approximately 5.6 per cent. Though this is much lower than the previous 6.5 percent, it is still a better than most other options. If you are a senior citizen, the Senior Citizens Savings scheme offering a 9 Percent yearly interest is a good investment option. The scheme was announced in the Budget 2004-2005 and was meant for people above the age of 60. However, this scheme has a maximum deposit limit of Rs. 15 lacs while RBI Bonds do not have any limit. In this case, the term for deposit is five years with a facility for premature withdrawal. The 9 percent returns are subject to tax, so if you are in the 30 percent tax bracket, you will effectively get returns of 6.3 per cent.

Another option can be Floating Rate Bond Fund offered by mutual funds. Basically, these funds invest in floating rate instruments and therefore have a direct correlation to interest rates. If interest rates go up the returns from these funds rise and returns fall with a fall in interest rates. This is unlike debt funds, where there is a reverse relationship between interest rates and returns. A rise in interest rates results in a fall in returns. In the current scenario, these funds are likely to give returns of 5 percent to 5.5 percent. The dividends are tax-free in the hands of the investor and most importantly, there is complete liquidity. Again, there is no limit on the amount that can be deposited. Also, there is hardly any volatility making it a safe option. If you are willing to take a bit of risk, you can divide your portfolio in such a way that 60 percent is invested in floating rate bond funds and the remaining 40 percent in equity. That's like having an MIP except that instead of 80 percent in debt and 20 percent in equity, here the 60 percent is in floating rate bond funds. Such a portfolio can give you returns of aprox. 8.5 % to 9.5 %.

The NSCs and the Kisan Vikas Patras give returns of 8 percent so for those in the 30 percent tax bracket, it works out to 5.6 percent. Here too there is no limit on the amount of deposit. However, here the interest is posted only at the time of maturity. So it is not a good option if you want regular returns. On the other hand, RBI Bonds give returns every six months or half yearly. So, depending upon their risk profile and need for liquidity, one will have to decide on their portfolio. For anyone below 35 years, it is recommend that one should invest some part of there portfolio in RBI Bonds and in NSCs, KVPs as a long term investments and the remaining in combination of floating rate bond funds and equity But for those above 35, 27

It is advocate that one should look at nearly 40 percent in RBI Bonds, 30 percent in NSCs, KVPs, hence giving safe and regular income. And the remaining 30 per cent in floating rate bond funds and equity. For those above the age of 60, 40 percent must be put in the Senior Citizens Scheme (of course, this is up to a maximum limit of Rs 15 lakh), another 40 percent in RBI Bonds and the remaining 20 percent in floating rate bond funds, so that one has some liquidity.As an investor one has a wide array of investment avenues available to one.



Reduction in brokerage by many brokers for trading in dematerialized securities

Brokers provide this benefit to investors as dealing in dematerialised securities reduces their back office cost of handling paper and also eliminates the risk of being the introducing broker. 

Reduction in handling of huge volumes of paper



Periodic status reports to investors on their holdings and transactions, leading to better controls.



Elimination of problems related to change of address of investor, transmission, etc

In case of change of address or transmission of demat shares, investors are saved from undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies, where the investor is a registered holder of securities. 

Elimination of problems related to selling securities on behalf of a minor

A natural guardian is not required to take court approval for selling demat securities on behalf of a minor.

28



Ease in portfolio monitoring

Since statement of account gives a consolidated position of investments in all instruments.

Disadvantages of Dematerialization The disadvantages of dematerialization of securities can be summarized as follows: A. Trading in securities may become uncontrolled in case of dematerialized securities.

B. It is incumbent upon the capital market regulator to keep a close watch on the trading in dematerialized securities and see to it that trading does not act as a detriment to investors. The role of key market players in case of dematerialized securities, such as stock-brokers, needs to be supervised as they have the capability of manipulating the market.

C. Multiple regulatory frameworks have to be confirmed to, including the Depositories Act, Regulations and the various Bye Laws of various depositories. Additionally, agreements are entered at various levels in the process of dematerialization. These may cause anxiety to the investor desirous of simplicity in terms of transactions in dematerialized securities.

29

SERVICES PROVIDED BY THE SHAREKHAN:--



Online Services to Suit your Needs!

With a Sharekhan online trading account, you can buy and sell shares in an instant! Anytime you like and from anywhere you like! You can choose the online trading account that suits your trading habits and preferences - the Classic Account

for most investors and Speed trade for active day traders. Your Classic Account also

comes with Dial-n-Trade completely free, which is an exclusive service for trading shares by using your telephone.



#Freedom from paperwork



#Online orders on the phone



#Instant credit and money transfer



#Timely advice and research reports



#Trade from any net enabled PC



#Real-time Portfolio tracking



#After hour orders



#Information and Price alerts

30

Get everything you need at a Sharekhan outlet! All you have to do is walk into any of share khan’s 640 share shops across 280 cities in India to get a host of trading related services - their friendly customer service staff will also help you with any accounts related queries you may have.

A Share-khan outlet offers the following services: 

Online BSE and NSE executions (through BOLT & NEAT terminals)



Free access to investment advice from Sharekhan's Research team



Sharekhan Value Line (a monthly publication with reviews of recommendations, stocks to watch out for etc)



Daily research reports and market review (High Noon & Eagle Eye)



Pre-market Report (Morning Cupper)



Daily trading calls based on Technical Analysis



Cool trading products (Daring Derivatives and Market Strategy)



Personalized Advice



Live Market Information



Depository Services: Demat & Remit Transactions



Derivatives Trading (Futures and Options)



Commodities Trading



IPO’s & Mutual Funds Distribution



Internet-based Online Trading: SpeedTrade

31

Investing in Mutual Funds through Sharekhan Invest in Mutual Funds through Sharekhan! They have started this service for a few mutual funds, and in the near future will be expanding their scope to include a whole lot more. Applying for a mutual /fund through share-khan is open to everybody, regardless of whether you are a Sharekhan customer. To invest in a fund, all you have to do is download the application form, print it out, fill it in and send it over to share-khan. They’ll do the rest for you.



Convenient, Secure and Automated Demat services

Dematerialization and trading in the demat mode is the safer and faster alternative to the physical existence of securities. Demat as a parallel solution offers freedom from delays, thefts, forgeries, settlement risks and paper work. This system works through depository participants (DPs) who offer demat services and the securities are held in the electronic form for the investor directly by the Depository. Sharekhan Depository Services offers dematerialization services to individual and corporate investors. They have a team of professionals and the latest technological expertise dedicated exclusively to their demat department, apart from a national network of franchisee, making our services quick, convenient and efficient. At Sharekhan, our commitment is to provide a complete demat solution which is simple, safe and secure.

32

CLASSIC ACCOUNT This is a User Friendly Product which allows the client to trade through website www.sharekhan.com and is suitable for the retail investor who is risk-averse and hence prefers to invest in stocks or who do not trade too frequently.

Features 

Online trading account for investing in Equity and Derivatives via www.sharekhan.com



Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE.



Integration of On-line trading, Saving Bank and Demat Account.



Instant cash transfer facility against purchase & sale of shares.



Competitive transaction charges.



Instant order and trade confirmation by E-mail.



Streaming Quotes (Cash & Derivatives).



Personalized market watch.



Single screen interface for Cash and derivatives and more.



Provision to enter price trigger and view the same online in market watch.

33

SPEED-TRADE SPEED-TRADE is an internet-based software application that enables you to buy and sell in an instant. It is ideal for active traders and jobbers who transact frequently during day’s session to capitalize on intra-day price movement.

Features 

Instant order Execution and Confirmation.



Single screen trading terminal for NSE Cash, NSE F&O & BSE.



Technical Studies.



Multiple Charting.



Real-time streaming quotes, tic-by-tic charts.



Market summary (Cost traded scrip, highest value etc.)



Hot keys similar to breakers terminal.



Alerts and reminders.



Back-up facility to place trades on Direct Phone lines.

DIAL-N-TRADE Along with enabling access for your trade online, the CLASSIC and SPEEDTRADE ACCOUNT also gives you our Dial-n trade services. With this service, all you have to do is dial our dedicated phone lines 1-800-22-7500, 3970-7500.

34

PORTFOLIO MANAGEMENT SERVICES 1. Prop rime: -

Research & Fundamental Analysis.

2. Protect: -

Technical Analysis. -Thrifty Nifty -Beta Portfolio

3. ProArbitrage: -

Exploit price analysis

IPO ON-LINE You can apply all the forthcoming IPO online hasselfree, paperless and time saving work.

CHARGE STRUCTURE Structure for Pre Paid – Account Individuals: -

Charge

Classic Account

Speed Trade Account

Account Opening

Rs. 750/=

Rs. 1000/=

Monthly

Rs. NIL

Rs. 500/=

Intra-day – 0.07 %**

Intra-day - 0.05%**

Delivery - 0.40 %**

Delivery - 0.25%**

Commitment Brokerage

*

Refundable in case the brokerage is more than Rs. 500/= p.m.

** Condition Apply. *** Taxes as per govt.

35

Structure for Post Paid – Account Individuals: -

Charge

Classic Account

Speed Trade Account

Account Opening

Rs. 750/-

Rs. 1000/-

Monthly

Rs. NIL

Rs. 500/-

Intra-day - 0.10 %*

Intra-day - 0.10 %*

Delivery - 0. 50 %*

Delivery - 0.50 %*

Commitment Brokerage

*

Refundable in case the brokerage is more than Rs. 500/= p.m.

** Taxes as per govt.

They offer an On-line Trading Account along with the Demat A/c for the benefits to the employees of company.

Depository Charges

Account Opening Charges

Rs. NIL

Annual Maintenance Charges

Rs. NIL first year Rs. 300/= p.a. from second calendar year onward

36

PRODUCT DETAILS (A) CLASSIC ACCOUNT: A/C Opening charges: Rs. 750/DEMAT A/C free for first year and Rs.300 from 2nd year onwards (Annual Maintenance charges). Trading through website live terminal. No brokerage commitment required.NSE and BS online. Both Cash & F&O.

(B) SPEED TRADE: Account Opening Fee: Rs. 1,000/-.Both Cash & F&O. Monthly Recurring Fee: Rs 500/- per month, which is very nominal if you consider the benefits of the product. This access charges will be debited to all the new customers signed up after Sept 15, 2004. And at the end of the month if the client has contributed more than Rs. 500/- as brokerage the access charges of Rs. 500/- will be credited back to the clients account. Please note - this credit of Rs. 500/- will be given only to customers who have contributed more than Rs. 500/- as brokerage during the months.

Minimum Brokerage Intra Day Per Share: 5 Paisa each leg (buy or sell) for Intra-day Trades (For e.g. on a Rs 20 Scrip, brokerage @ 0.10% = 2 paisa, but there is a min. chargeable amount of 5 paisa).

Minimum Delivery Handling Charges: 10 Paisa for Delivery Trades (buy and sell) (For e.g. on a Rs 10 Scrip, brokerage @ 0.50% = 5 paisa, but there is a min. chargeable amount of 10 paisa). Rs 16/- per Scrip (The brokerage per Scrip will be charged for the selling of shares resulting in delivery on actual). (For e.g. if a customer sells 100 shares of SAIL, TOTAL Delivery value = 2200, brokerage @ 0.5% = Rs 11, but the min chargeable amt per scrip per day = Rs 16), so additional Rs 5/- will be charged as Min delivery handling charges).

EXPOSURE: 4 TO 6.7 TIMES (ON MARGINE MONEY)

37

PROBLEMS OF THE ORGANIZATION 1. Trading in securities may become uncontrolled in case of dematerialized securities. 2. It is incumbent upon the capital market regulator to keep a close watch on the trading in dematerialized securities and see to it that trading does not act as a detriment to investors. The role of key market players in case of dematerialized securities, such as stock-brokers, needs to be supervised as they have the capability of manipulating the market. 3. Multiple regulatory frameworks have to be confirmed to, including the Depositories Act, Regulations and the various Bye Laws of various depositories. Additionally, agreements are entered at various levels in the process of dematerialization. These may cause anxiety to the investor desirous of simplicity in terms of transactions in dematerialized securities.

Tie ups with Banks Sharekhan has tied up with ten banks to facilitate the transfer of money from saving account to Dmat account and vice –versa .and by only these banks one can transfer the money by e-banking . 

AXIS Bank



Bank of India



Citi Bank



HDFC



ICICI Bank



IDBI Bank



IndusInd Bank



Oriental Bank of Commerce {OBC}

38



Union Bank of India



Yes Bank

39

III CONCEPTUAL DISCUSSION

40

MARKETING STRATEGIES A strategy that focuses on developing a unique long-run competitive position in the market by assessing consumer needs and the firm's potential for gaining a competitive advantage. A business’ approach to marketing its products/ services expresses in broad terms, which forms the basis for developing a marketing plan. Marketing starts with market research, in which needs and attitudes and competitors' products are assessed, and continues through into advertising, promotion, distribution, and, where applicable, customer servicing and repair, packaging, and sales and distribution. The broad marketing thinking that will enable an organization to develop its products and marketing mixes in the right direction, consistent with overall corporate objectives.

MARKETING STRATEGIES OF THE COMPANY

Tele Calling: The company uses the tele calling/ phone calling to reach the customer, which are interested. This is the most important technique to save time and giving demo of the companies’ product through making call in order to know the customer interest towards the product. This is the strategy with which one can motivate customer to go for the product and etc.

LMS: It is leads management system which means leads are generated by the customers who want to purchase the product of the company. Companies provide facility to the customer on online to fill the registration form through which the companies’ executives can provide more information to the customer.

41

Yellow Pages: Yellow pages are used to gather data for making calls so that customer who did not fine time and are unaware of the product can know about the product. Customers are given freedom to ask question related to the products this is the technique used to increase the awareness of the company.

Canopy’s: This is the most important technique used by share khan securities to market its product in different areas of the city, company put their canopies and customer who are willing to know about the product come forward and provide best of their knowledge. Besides these companies executives ask customer to fill the questionnaire that tells the company about the levels of brand awareness. It also increases the product awareness because it is

generally put at the crowdies places like near main markets, cinema s, hotels, ATM or etc where people come in good numbers.

Direct Marketing: Share khan executive’s reaches to the does of the customer by fixing appointments with the interested customer, they describe the details of the product. Executive give demonstration of the products so that customer can understand better.

Advertising: Advertising is the most important tool of increasing awareness of the product and this is the most widely used technique by the company to tell about the new features and new lunch by giving briefing of the product. Share khan use banners, distribution of pamphlets, and advertisement in newspapers, magazines

42

References: Share khan strategy is to satisfy the customer in terms of their need by providing them timely services and knowledge about the trade in equities, mutual funs by giving tips for investment advises through e-mails or toll free calls for this purpose customers are provided relationship manager who give investment advise and also make transaction on their behalf on demand. B satisfying customer executives ask their references that not only increase the awareness but also increase the good will of the company.

Competitiveness: The company is innovative and uses the latest technology to improve the product to fulfill the demands of the customers. Share khan makes it easy for the customer to make online transaction of shares. The company is competitive in terms of the product price and facilities it offers to the customer.

Internet: Company provides detailed information about the products on Internet so that customer can know about the product easily and completely.

43

IV RESEARCH METHODOLOGY

44

SIGNIFICANCE 

This project will accomplish to understand the investor preference regarding different Investment alternative.



This study will also help to know the state of mind of the investors & their expected charges, Return, and Annual maintenance charges & also to know the attitude and preference of the prospective investors regarding capital market, banking, real estate etc.

MANAGERIAL USEFULLNESS OF STUDY A thorough research and a detailed study of market are very important for the management to take the right strategy suiting the market condition. The study gives the information regarding the market completion, innovative products offered by competitors, present demand of the product in the marketed

1. The study will help the management to understand the customer mind set and also estimating the present and future market demand of the product.

2. It will help to estimate the level of awareness established in the market and in deciding the extent of promotion required.

3. Help in finding the areas in which SHAREKHAN will concentrate to increase its market share.

4. It will help in finding out the customer expectation about the product and also help to know the customer physiology. 45

5. Helps in knowing the class on which max new SHAREKHAN must concentrate.

This study helps in finding the area in which SHAREKHAN in strong and the area in which it lags behind others. Which class of customer mostly approaches SHAREKHAN polices?

a) RESEARCH OBJECTIVE



To understand the reality behind a phenomenon. It involves a systematic investigation involved to add to the available information through scientific procedures.



To focus on the investor preference to invest their money in these days.



To focus on the problem that which investment instrument they used to invest their money and what factor they consider like rate of return, liquidity, tax benefit, etc.



The Broad objective of this project is to know about the customer preference in different investment alternative. By this project I know also the time horizon for investment and what factor affect in investment decision.

I have to be in regular contacts with our clients so that we come to know about the problem they are facing.  What are the features and services that influence the investor to invest their money?  To know what are the expected return of the investors to invest their money in capital market.  Which factor they consider more while investing their money.

46

 Who influence their investing their money?

b) RESEARCH DESIGN A research design is the arrangement of conditions for collection and analysis of in a manner and aims to combine relevance to the research purpose with economy in procedure. In fact the research design is the conceptual structure within which research I conducted. Research design is needed because it facilitates the smooth sailing of the various research operations thereby making research as efficient as possible yielding maximum information with minimal expenditure of effort, time and money. I have adopted descriptive and conclusive research design. Descriptive research is those studies, which are concerned with describing the characteristics of a particular individual or a group. Since the aim is to obtain the accurate information about the customer in terms of his interest towards investment in stock sector. I have used the techniques of questioning customer in order to know their consumer behavior, their interests, their needs and etc. It is very important for the sales executive to study the mind of the customer so that the personal visit would not be a waste of time, money and efforts.

c) DATA SOURCES  PRIMARY DATA I have collected primary data through personal references; Questionairres; Customer references  SECONDARY DATA For the company information I had used secondary data like brochures, website of the company etc. The method used by me is Survey Method as the research done is Descriptive Research I had used Secondary Data 47

d) QUESTIONNAIRE DESIGN a.) Questionnaire: - A questionnaire consists of a set of questions presented to respondent for their answers. It can be Closed Ended or Open Ended b.) Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret and Tabulate. c.) Close Ended : - Pre-specify all the possible answers & are easy to Interpret and Tabulate. TYPES OF OUESTION INCLUDED: a.) DICHOTOMOUS QUESTIONS  Which has only two answers “Yes” or “No”. b.) MULTIPLE CHOICE OUESTION  Where respondent is offered more than two choices.

e.) SAMPLE DESIGN The respondents selected should be as representative of total population as possible in order to produce a miniature cross-section. The selected respondent constitute what is technically called a ‘sample’ & the selection process is called 'sampling technique'. The survey so conducted, is known as sample survey.

Sample chosen must be representative of universe to be studied & therefore, every care must be taken in size may give better results the constraints like time and money comes to limit the size of sample. So, besides, being care representative of the universe, a sample should be convenient in terms of size. It should neither be too small nor too big. It should be manageable.

48

There are various steps in Sampling Design:

a) Sample Element: In this project Sharekhan Ltd. is the sample unit.

b) Extent: Sampling area may be a geographical one as in this project New Delhi (Pitampura) is taken in to consideration.

c) Time Frame: The time consumed in this survey is 45 days

c) Sampling Technique The sampling technique used is the random sampling technique.

e) Sample Size: It refers to the number of items to be selected from the universe to constitute a sample. It is accepted that the bigger the size of the sample, the greater the representatives of whole universe. A balance is to be maintained between sample size and time cost trade off. Sample size has been restricted to 100 investors. However, it has been tried that all socio-economic perspectives are well considered in the samples.

49

V DATA ANALYSIS & INTERPRETATION

50

ANALYSIS OF FUTURE ONLINE TRADING

(1) Are people aware of stock market? (a)Yes

(b) No

29%

NO

71%

YES

Fig.1 People aware of stock market

No of respondent

NO

29

YES

71

Interpretation: - A survey was conducted on the 200 people in the market. 71% of the respondent replies that they know about the stock market other than those 29% belongs not know about that category. 51

(2)Through which sources people are aware?

(a)News paper

(b) Friends

(c) T.V

(d) other sources

5%

Newspaper/Magazine

36%

Friends/Colleagues

47%

TV Other sources

12%

Fig.2 Sources

No of respondent

Newspaper/Magazine

36

Friends/Colleagues

12

TV

47

Other sources

5

Interpretation:- The resources of the spreading awareness into the respondent as per their percentage i.e. TV- 47% is the first above all, NEWSPAPER/ MAGZINES- 36%, FRIENDS12%, OTHER SOURCES- 5%.

(3) Which brand gives the more customer value? 52

(a) ICICIDIRECT (b) INDIA BULLS © SHAREKHAN (d) RELIGARE

60 50 45 36 Series1

ICICI DIRECT

INDIA BULLS

SHAREKHAN Ltd.

RELIGARE

Fig.3

Brands

ICICI

INDIA

SHAREKHAN

DIRECT

BULLS

Ltd.

50

36

60

RELIGARE OTHER

No of respondent

45

9

Interpretation:- SHARE-KHAN- 60 is the rank Ist among the other brands that is ICICI direct-50, RELIGARE – 45 and the INDIA BULLS-36 is the last in the tally. (4) AT WHAT PRICE PEOPLE WANT TO OPEN THEIR ACCOUNT? (a) Rs 750 53

(b) Rs 900 (c) Rs 999 (d) Rs 750

1200 999

1000

800

900 750

750 Series1

600 400 200 0

Fig.4 ICICI

INDIA

RELIGARE

Brands

DIRECT

BULLS

SECURITIES

No of respondent

750

900

999

SHAREKHAN LTD. 750

Interpretation: - SHARE KHAN & ICICI direct are the two broking house which are charging Rs-750 as opening of demat account. INDIA-BULLS is charging Rs-900, and the RELIGARE securities is charging Rs-999 which is the highest charges among all.

Analysis Pattern

54

Analysis can be defined as get some information from collected date i.e. get information from raw data. Collected data is of no use until some results have not been found out. And analysis serves this purpose. Analysis can be done in many ways like graphs, charts, tables, coding and statistical analysis etc. The data thus collected was edited, tabulated, analyzed and interpreted to make study meaningful.

Fig.5 Question-1

Interpretation: This shows that although the mutual funds market is on the rise yet, the most favored investment continues to be in the banks. So, with a more transparent system, investment in the mutual funds can definitely be increased.

55

Question-2

TIME HORIZON FOR INVESTMENT 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0

39%

37%

24%

less than 2 years

2-5 years

more than 5 years

Fig.6

Interpretation: This graph shows that the maximum time horizon for investment in less than 2 years is 39%. Most of the people invest their money for less than 2 years. People do not wait till more than 2 years.

56

Question-3

IDEAL RATE OF RETURN AGAINST ANY INVESTMENT

12% 25% UPTO 8%

15%

8%-15% 15%-18% MORE THAN 18%

48%

Fig.7

Interpretation: This shows that out of 200 respondent 48% of respondent want 8%-15% rate of return. Most of people expected 8%-15% rate of return.

57

Question-4

FACTOR THAT AFFECTED INVESTMENT DECISION 60%

55%

50% 40% 30%

22%

20%

10%

13%

10% 0% rate of return

security

liquidity

Series1

tax benefit

Series2

Fig.8

Interpretation: In this graph shows that most of the people consider rate of return factor while investing their money. Some people invest their money for tax benefit also.

58

Question-5

PORTFOLIO SIZE OF INVESTMENT 40% 35% 30% 25% 20% 15% 10% 5% 0% upto 50000

500000200000

200000500000

Series1

500000800000

above 800000

Series2

Fig.9

Interpretation: This shows that 40% of respondent out of 200 investment up to 50000rs. Only 6% respondent invests above 800000rs.

59

Question-6

rate of various investment alternative 38%

0.4 0.35 0.3 0.25

23%

22% Series1

17%

0.2

Series2

0.15 0.1 0.05 0 mutual funds

equity

banks

others

Fig.10

Mutual funds

1

2

3

4

Banks

1

2

3

4

Equity

1

2

3

4

Other

1

2

3

4

Interpretation: This graph shows that different investor rate according to their preference. 38% of people give 1st rank to banks then 23% of people choose mutual funds then after 22% of people prefer others and 17% of people prefer equity.

60

VI LIMITATION

61

LIMITATIONS OF THE STUDY  This project is limited in scope as the survey is conducted with a shortage of time constraint and is also based on secondary data.  The answers given by the respondents may be biased due to several reasons or could be attachment to a particular company.  Due to ignorance factor some of the respondents were not able to give correct answers.  The respondents were not disclosing their exact portfolio because they have a fear in their minds that they can come under tax slabs.

62

VII CONCLUSION / FINDINGS

63

CONCLUSIONS The most significant event in finance during the past decade has been the extraordinary development and expansion of

financial derivatives…These instruments enhances the ability to

differentiate risk and allocate it to those investors most able and willing to take it- a process that has undoubtedly improved national productivity growth and standards of livings.

The currency future gives the safe and standardized contract to its investors and individuals who are aware about the forex market or predict the movement of exchange rate so they will get the right platform for the trading in currency future. Because of exchange traded future contract and its standardized nature gives counter party risk minimized.

Initially only NSE had the permission but now BSE and MCX has also started currency future. It is shows that how currency future covers ground in the compare of other available derivatives instruments. Not only big businessmen and exporter and importers use this but individual who are interested and having knowledge about forex market they can also invest in currency future.

Exchange between USD-INR markets in India is very big and these exchange traded contract will give more awareness in market and attract the investors

64

FINDINGS OF THE RESEARCH

Findings

1.

17% people invest in equity and rest of percentage people used other investment alternative.

2.

23% people invest mutual funds, 38% people invest in banks and 22% of people invest in other like gold, bond, post office NSC etc.

3.

48% of people want 8%-15% rate of return against their investment.

4.

55% of people consider rate of return factor while investing their money.

5.

40% of people invest up to 50000.

65

VIII RECOMMENDATIONS

66

RECOMMENDATIONS TO THE ORGANISATION I suggest following measures: 

While interacting with the investors I found that most of the customers are unaware about the Mutual fund. Some of the people look upon mutual funds and equity trading as gambling. Thus a mutual fund awareness program can help to increase the penetration of mutual funds in the market.



The Stock Market has been very buoyant until now especially in the past 3 years. This particular trend is very favorable because a soaring SENSEX means higher returns, which encourages the investors to invest their money in the market. Although in the past 3 months the market has shown very unpredictable trend and has already lost over 1000 points.



In case of insurance, it requires push selling because people always associate it with emergencies and unpleasant situations like death and they don’t want to think about such situation let alone prepare for them, which means it requires a lot of conviction on part of the executives.

People have just opened up to the idea of ULIPs because till now they knew only two kinds of insurance plans, endowment and term plans so the concept of high returns with protection is very new to them and slowly and slowly these are becoming popular so there is a huge market waiting to be tapped

67