Smc Global Securities Limited Online-trading Finding Future Prospect

CHAPTER I INTRODUCTION

Overview of Industry as a whole
Indian stock market have been role during the past five years,genrating an annual return of 28%(on the nifty index). till general public prefers putting it money in bank,rather than putting it in stock. !ithin Indian economy doing so "ell, return from stock market have been far higher than return from any other investment.#venue rupees $, %%,%%% invested in the nifty in #pril "ould have been "orth a little over rupees &, %%,%%% by #pril, 2%%8.'ut the top value creatures have been delivered far superior returns the same lakh invested in unitech "ould have been "orth rupees $.(2cr if it had been invested in aban aban offshare.

)ost of people are reluctant to put their money in shares,because of uncertainty of the return.#t times stock market is so volatile that it becomes very difficult for investors to decide "hether to purchase some more stocks or sell them,"hether to enter the market or book profit. "ith so much uncertainty prevailing, the case of investing in stock market is totally different from the case of investing in some other places.

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Market Parti i!ants "#$# ecurities #ppellate *ribunal $ +egulators, .epositories 2 tock /xchanges !ith /0uities *rading 2$ !ith .ebt )arket egment $ !ith .erivative *rading 2 'rokers 1,--& 3orporate 'rokers -,$$% ub4brokers 22,(-$ 5IIs 116 7ortfolio )anagers $(8 3ustodians $( hare *ransfer #gents 82 )erchant 'ankers $(2 'ankers to an Issue -2 .ebenture *rustees &% 8nder"riters -( 9enture 3apital 5unds 1% 5oreign 9enture 3apital Investors 28 )utual 5unds -% 3ollective Investment chemes % Ta%le no 1- Market Participants in Securities Market

"#$$ $ 2 $1 $ 2 1,-82 -,$1% --,%2$&$1 2%( $( 26 $(( (% 28 &( $%6 12 -% %

Market se&'ent *he securities market has t"o interdependent segments: the primary and the secondary market. *he primary market is the channel for creation of ne" securities. *hese securities are issued by public limited companies or by government agencies. In the primary market the resources are mobili;ed either through the public issue or through private placement route. It is a public issue if anybody and everybody can subscribe for it, "hereas if the issue is made available to a selected group of persons it is termed as private placement. There are two major types of issuers of securities, the corporate
entities who issue mainly debt and equity instruments and the government (central as well as state) who issue debt securities. These new securities issued in the primary market are traded in the secondary market.

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*he secondary market enables participants "ho hold securities to ad<ust their holdings in response to changes in their assessment of risks and returns. *he secondary market operates through t"o mediums, namely, the over4the4counter (=*3) market

and the exchange4traded market. =*3 markets are informal markets "here trades are negotiated. Most of the trades in the government securities are in
the OTC market. All the spot trades where securities are traded for immediate deliver y and payment take place in the OTC market. The other option is to trade using the infrastructure provided by the stock exchanges. There are 23 exchanges in India and all of them follow a systematic settlement period. All the trades taking place over a trading cycle (day=T) are settled together after a certain time (T+2 day).

The trades executed on the National Stock Exchange (NSE) are cleared and settled by a clearing corporation. The clearing corporation acts as a counterparty and guarantees settlement. Nearly 100% of the trades in capital market segment are settled through demat delivery. NSE also provides a formal trading platform for trading of a wide range of debt securities, including government securities. A variant of the secondary market is the forward market, where securities are traded for future delivery and payment. A variant of the forward market is Futures and options market. Presently only two exchanges viz., NSE and Stock Exchange, Mumbai (BSE) provides trading in the derivatives of securities.

De!enden e on (e urities Market &

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3orporate ector >overnment ?ouseholds

*he above mentioned sectors are dependent on the 3apital )arket for their financial needs. *he follo"ing table sho"s their percentage share respectively.

International s enario 5ollo"ing the implementation of reforms in the securities industry during the last decade, Indian stock markets have graduated to a better position vis4@4vis the securities market in developed and emerging markets. #s may be seen from *able $4 2, India has a turnover ratio, "hich is comparable to the other developed market, and also one of the highest in the emerging markets. #t the end of 2%%(, tandard and 7oorAs ( B7) ranked India $2th in terms of market capitali;ation ($1th in 2%%-), $6th in terms of total value traded in stock exchanges ($2th in 2%%-) and 6th in terms of turnover ratio (2th in 2%%(). India has the number one ranking in terms of listed securities on the /xchanges follo"ed by the 8 #. *hese data, though 0uite impressive, do not reflect the full Indian market, as B7 (even other international publications) does not cover the "hole market. 5or example, India has more than 1%%% listed companies at the end of )arch 2%%1, "hile B7 considers only (,6-companies. If whole market were taken into consideration, India’s position vis-à-vis other countries would be much better.

ingapore 5rance >ermany Italy 8nited Cingdom

1$.2 81.( 8&.6 1(.( 1-.&

(2.1 -2.2 --.6 ((.1 -&.6

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8nited tates India

1&.8 2(.%

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Ta%le no 2 –Growth in stock market among world

*he stock markets "orld"ide have gro"n in si;e as "ell as depth over last one decade. *he turnover on all markets taken together has gro"n from 8 D (.( trillion in
1990 to $ 38 trillion in 2005 when it reached a peak. Thereafter, it has witnessed a decline and stood at US $ 34.6 trillion in 20011. It is significant to note that US alone accounted for about 47.4% of worldwide turnover in 20011. Despite having a large number of companies listed on its stock exchanges, India accounted for a meager 2.96% in total world turnover in 20011. The market capitalization of all listed companies taken together on all markets stood at US $ 34.6 trillion in 2011 ($ 23 trillion in 2009). The share of US in worldwide market capitalization decreased from 47.24% as at end-2010 to 44.66% in end-2009, while Indian listed companies accounted for 1.87% of total market capitalization in 2009.

International and Indian s enario in online %rokin& In 8 markets, online brokerage has significantly changed the dynamics of the market place, resulting in one of the biggest shifts in the individual investorEs relationship "ith their brokers. Investors access a "ealth of financial information on the same time as do market and financial professionals including breaking ne"s, developments and market data. =nline brokerage provides investors the tools to analy;e the information such as research reports. In the 8 , 82 per cent of the deals are done on line. *he /uropean on line broking market is expected to be of D8 billions and has risen to about D(% billion today. Fet trading shall initially faced some problems relating to infrastructure and understanding of the concept. 7resently, the legal frame"ork is right in place and there are organi;ations like /'I, +'I etc. "hich provide investor guidelines to the investors for protection of their right. #lso, investor grievance handling and redressal (

system is fast and efficient. Gack of investor education and resistance from stockbrokers though has al"ays posed some problems. !ith Internet trading, investment in the stock market is <ust a click a"ay, in the comfort of office or a home. It makes it easy for anyone to access net brokers and trade in stock. /ven the smallest retail investor can access information that "as till no" restricted to big traders. Fet trading provides investors "ith seamless, real time online access to stock markets.

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Profile of the or&ani)ation
)3 >lobal is one of the largest and most reputed Investment olutions 3ompany that provides a "ide range of services to its substantial and diversified client base. 5ounded in $11%, by )r. ubhash 3hand #ggar"al and )r. )ahesh 3hand >upta, )3, is a full financial services firm catering to all classes of investors. *he company is having its corporate office in Fe" .elhi "ith regional offices in )umbai, Colkata, 3hennai, #hemdabad, 3ochin, ?yderabad, Haipur plus a gro"ing net"ork of more than $2(% offices across over &(% citiesIto"ns in India and overseas office in .ubai.
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/nabling shorter settlement cycles and book entry settlements systems, and meeting the current international standards of securities market.

Produ ts * (ervi es

)3 customers have the advantage of trading in all the market segments together in the same "indo", as they understand the need of transactions to be executed "ith high speed and reduced time. #t the same time they have the advantage of having all kind of Insurance B Investment #dvisory Insurance, )utual 5unds, and I7=As also. ervices for Gife Insurance, >eneral

)3 is a customer focused financial services organi;ation providing a range of investment solutions to their customers. *hey "ork "ith clients to meet their overall investment ob<ectives and achieve their financial goals. *heir clients have the opportunity to get personali;ed services depending on their investment profiles. *heir personali;ed approach enables clients to achieve their *otal Investment =b<ectives. 2

*heir key product offerings are as follo"s:

o /0uity *rading o 3ommodity *rading o .epositary ervices o 7ortfolio *racker o Gife Insurance o >eneral Insurance o )utual 5und

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History of (MC
)3 ac0uired membership of the .elhi tock /xchange in $11% and later in $11( became a trading member of F /. In 2%%% the company became a member of ' / and a depository participant of 3. G India Gtd. In the same year, the company ac0uired the *rading B 3learing )embership of F / .erivatives and the memberships of leading commodity exchanges i.e. F3./J and )3J in subse0uent years. In 2%%6, )3 expanded globally and ac0uired the *rading B 3learing

)embership of .ubai >old and 3ommodity /xchange (.>3J). In the same year, the company also started its Insurance 'roking division, I7= B )utual 5und .istribution .ivision and its )erchant 'anking division.

Mission
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/stablishing a nation4"ide trading facility for e0uities, debt instruments and hybrids,

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/nsuring e0ual access to investors all over the country through an appropriate communication net"ork,

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7roviding a fair, efficient and transparent securities market to investors using electronic trading systems,

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/nabling shorter settlement cycles and book entry settlements systems, and meeting the current international standards of securities market.

+ision • *heir vision is to be the most respected company in the financial services space.

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Co'!etition infor'ation
$, I i idire t, o' Produ ts and (ervi es # product for every need: I3I3Idirect.com is the most comprehensive "ebsite, "hich allo"s you to invest in hares, )utual funds, .erivatives (5utures and =ptions) and other financial products. imply put "e offer you a product for every investment need of yours. I3I3I !eb *rade Gimited (I!*G) maintains I3I3Idirect.com. I!*G is an #ffiliate of I3I3I 'ank Gimited and the !ebsite is o"ned by I3I3I 'ank Gimited

Produ t * (ervi esTradin& in shares- I3I3Idirect.com offers you various options "hile trading in shares. Cash Tradin&- *his is a delivery based trading system, "hich is generally done "ith the intention of taking delivery of shares or monies. Mar&in Tradin&- Kou can also do an intra4settlement trading u! to . to / ti'es your available funds, "herein you take long buyI short sell positions in stocks "ith the intention of s0uaring off the position "ithin the same day settlement cycle , 0ON12 for intraday3

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", India %ulls India bulls >roup is one of the top business houses in the country "ith business interests in +eal /state, Infrastructure, 5inancial ervices, +etail, )ultiplex and

7o"er sectors. India bulls >roup companies are listed in Indian and overseas markets and have a market capitali;ation of over 8 . 2 billion. *he Fet "orth of the >roup exceeds 8 . 2.( billion. India bulls >roup companies en<oy highest ratings from 3+I IG, a subsidiary of tandard and 7oorAs. India bulls has been conferred the status of a L'usiness uper brandM by *he 'rand 3ouncil, uper brands India. India bulls 5inancial ervices is an integrated financial services po"erhouse

providing 3onsumer 5inance, ?ousing 5inance, 3ommercial Goans, Gife Insurance, #sset )anagement and #dvisory services. India bulls 5inancial ervices Gtd is

amongst 68 companies constituting ) 3I 4 )organ tanley India Index. India bulls 5inancial is also part of 3G #As model portfolio of &% 'est 3ompanies in #sia. India bulls 5inancial ervices signed a <oint venture agreement "ith ogecap, the insurance arm of ocietN >enerale ( oc>en) for its upcoming life insurance venture. India bulls 5inancial ervices in partnership "ith ))*3 Gimited, the largest commodity trading company in India, is setting up IndiaAs -th )ulti43ommodities /xchange. ., A%hi!ra 'eginning as a 'roking ?ouse, "e gre" into 'usiness ?ouse. !e broadened our hori;ons and stepped into the field of .epository, )oney 3hanging tock 'roking, 5ull45ledged

ervices, 3ategory I +egistrar B *ransfer #gent, 3ommodity

*rading, =nline *rading (/0uity, 5B= B 3ommodity), e4+eturn Intermediary. #bhipra today commands the status of being one of the leading .epository Parti i!ants of Northern India in Private (e tor, Moreover, #bhipra has Trading
Terminal Outlets for NSE & BSE spread to almost every nook & corner of Northern India.

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!hipra "apital #imited is also empanelled as a $epository %articipant &ith one of the premier "ommodity !ourse' National "ommodities and $erivatives E(change #imited )N"$E*+. So a client no& can open "ommodity $emat ccount &ith us. t #bhipra, "e

offer our clients far more than merely a comprehensive range of financial services. ,e
offer them ideas' innovations' and solutions &ith e(tra-ordinary results. ,e feel that .uality is an essential ingredient in !uilding successful !usinesses. Not only do products and services need to !e of high .uality' !ut potential customers also need to have assurance that the products &ill !e of high .uality. This is evidenced from the fact that !hipra is a ISO /001 )2uality ssurance Systems+ 3egistered "ompany.

/, 4otak se urities Cotak ecurities Gimited, a subsidiary of Cotak )ahindra 'ank, is the stock broking and distribution arm of the Cotak )ahindra >roup. Cotak )ahindra is one of IndiaEs leading financial institutions, offering complete financial solutions that encompass every sphere of life. 5rom commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. Cotak ecurities "as set up in $11-. Cotak ecurities is a corporate member of both *he 'ombay tock /xchange and the Fational tock /xchange of India Gimited.

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*he company has four main areas of business: • • • • Institutional /0uities, +etail (e0uities and other financial products),

7ortfolio )anagement and

.epository ervices.

5, Motilal oswal

)otilal =s"al ecurities Gtd. "as founded in $182 as a small sub4broking unit, "ith <ust t"o people running the sho". It has established itself as the 'est Gocal 'rokerage ?ouse in India (#sia )oney 'rokersA 7oll 2%%(). *heir Institutional /0uity .ivision combines the efforts of the +esearch and ales B *rading departments to best serve clientsE needs. 3onsistent delivery of high 0uality advice on individual stocks, sector trends and investment strategy has established them as a reliable research unit amongst leading Indian as "ell as international investors.

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(, 6, O, T analysis of the or&ani)ation
(tren&ths • *he Odo4it4yourselfE frame"ork of online share trading offers retail investors the three benefits of transparency, access and efficiency. 7aper"ork diminishes significantly, and no more painful trips to your broker to check if everythingEs in order. =nline trading has made it possible to universali;e access to retail investors. *his "as earlier very difficult, as the cost of servicing often4out"eighed transaction volumes. =nline brokerage ranges bet"een %.%(4%.2% per cent of the value of transactions for non4delivery4based trades, and bet"een %.2(4%.1( per cent for delivery4based trades. =nce ma<or investments in online infrastructure are over and done "ith 4 and "ith the economies of scale coming into play 4 it is expected that brokerage rates "ould head further do"n"ards. • #ccess to online trading and latest financial happenings, apart from 0uotes and unbiased investment analyses, all consolidate into a value4added product mix in tandem "ith evolving markets that are freer and fairer. *he Fet result: #n in0uisitive, informed and demanding investor. *odayEs investor is more involved in managing his or her assets and analy;ing a vast array of investment options. *echnology and todayEs enabled investor have, in turn, driven competition, resulting in reduced costs of trading, transparency in dealings, and pricing info that is accurate and real4time. )ore and more investors no" "ant to kno" ho" their trades are executed, and "hether they have received the best possible price. 3ritical components of execution 0uality include the prices at "hich orders "ere

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executed as "ell as the speed of execution. *he 0uality of execution, in turn, hinges on efficient order routing. !e o"e this to our investor fraternity. 6eakness • /very thing in the "orld has a flip side to it 4 *ransaction velocity is crucial. #nd more often than not, connections are lousy. *hereEs also a degree of investor skepticism about online payment and settlement mechanisms in spite of all the encryption and fire "alling brought into play. *ime and technology "ill soon assuage these concerns, "hich hark back to the OphysicalE days. • L*he three main technology obstacles "hich have prevented Internet broking from taking off are: $. Gack of Internet penetration 2. 'and"idth infrastructure &. 7oor 0uality of I 7 infrastructure.M O!!ortunities • Kou have some money to dabble "ith. *rading shares on ' /IF / has al"ays been your dream. !hen "ill you ever find the timeP #nd besides, the hassle of finding a broker is not easy. *his is your main opportunity. • +eali;ing there is untapped market of investors "ho "ant to be able to execute their o"n trades "hen it suits them, brokers have taken their trading rooms to the Internet. Cno"n as online brokers, they allo" you to buy and sell shares via Internet.

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*here are 2 types of online trading service: discount brokers and full service online broker, .iscount online brokers allo" you to trade via Internet at reduced rates. ome provide 0uality research, other donAt. 5ull service online brokerage is linked to existing brokerages. *hese brokers allo" their clients to place online orders "ith the option of talkingI chatting to brokers if advice is needed. 'rokerage rates here are higher. (7aisa.com, I3I3I.irect.com, India'ulls.com, harekhan.com, >eo<it securities.com, ?.53sec.com,

*atatd".com, Cotakstreet.com are some of the online broking sites in India. • #nd daily trading turnover is estimated in the vicinity of %.2( per cent of the combined ' / and F / daily turnover of about + $$,%%% croreQQQ *he point is, thereEs tremendous scope for gro"th. /specially "hen you consider the 8 , "here trading over the Fet accounts for about (( per cent of the total volumes. #nd, I believe, in some #sian markets the figures as high as 2% per cent. Threats • =n to some threat perception 4 .omestic funds, foreign institutional investors and operators comprise the three main market constituents. #nd all three include term investors as "ell as opportunists in their pecking order. ome, for instance, hitch their fate "ith "hat the 5IIs are up to. #ll this spells spurting volumes. 'ut nobody gives a damn about the resultant volatility. • #nd some, not all, offer free investment advice over the Fet to lure rookie investors "ith misleading information. 7rices of scripts can also be influenced to the advantage of vested interests, courtesy the Fet. 8nlike in the 8 , stockbrokers

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out here "illingly (or under the force of circumstance) assume the role of OadvisorsE, sans the neutral, non4vested stance.

O%7e tives of the study

'efore starting any pro<ect, "e should keep in mind the clear ob<ectives of the pro<ect because in the absence of the ob<ectives one cannot reach the conclusion or end result of the pro<ect.

o, the ob<ective of my pro<ect is to: • • • *o analy;e the market share B services of existing players. *o analy;e the facts that ho" much people are interested to invest in stocks. *o <udge the future prospects of online trading for )3 investment solutions.

tock market of India is no" been one of the fascinating market "orld"ide. Indian is among the top ten destination of the "orld to "hich global player "ant to invest.

+esearch comprises defining and redefining problems, formulating hypothesis or suggested solutionsR collecting, organi;ing and evaluating dataR making deductions and reaching conclusionsR and at last carefully testing the conclusions to determine "hether they fit the formulating hypothesis.

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In short, the search for kno"ledge through =b<ective and finding solutions to a problem is +esearch.

ystematic method of

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( o!e of the study

ince better broadband connectivity across the country and "ider a"areness of e0uity as an asset class "ill push the online trade volumes to over (%% of total *rade therefore it is relevant to the future prospects emerging in the stock market.

In order to compete "ith the online trading market leader like I3I3I the company has to "ork a lot on =nline *rading in order to get the competency "ith other players.

ince the online trading is accepted by ma<or players in the Indian tock )arket, the importance of =nline *rading has increased over the past decade therefore it is very important to consider the =nline *rading as a future of the Indian tock )arket.

*his pro<ect "ould also tell us about the "orking of the Indian tock )arket and the forces acting in the =nline *rading.

L )3M a soft"are used by )3 Investment olutions B /+9I3/ is an edge for gaining competitive advantageR therefore it is relevant to kno" the "orking of this soft"are "hich "ould be enlightened in our company.

Online Tradin& A ount and De'at A ount #fter the introduction of the online trading systems it is very easy to do online trading "ith <ust a 73 and an Internet connection. #ll you need to do is <ust open a .emat account and a trading account "ith a depository participant or .7. .7 is connecting

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.epository to investors. .epository is the people "ho stores shares in electronics form. In India there are t"o depositories, F .G and 3. G.

)ost of the banks and brokerage houses provide trading account and .emat account. *o open a .emat account you need many things like 7#F card, address proof, bank account etc.

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Methodolo&y
Marketin& Resear h Is the systematic design collection, and analysis and reporting of .ata and findings relevant to specific marketing situation facing the company. Resear h Desi&n *ypes of +esearch: 4 .escriptive research

.escriptive research includes urveys and fact4finding en0uiries of different kinds. *he ma<or purpose of descriptive research is description of the state of affairs, as it exists as the present. *he main characteristic of this method is that the researcher has no control over the variablesR he can only report "hat has happened or "hat is happening.

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$..efine the 7roblem and +esearch =b<ectives

2. .evelop the +esearch 7lan

&. 3ollect the Information

-. #naly;e the Information

(. 7resent the 5indings 8i&ure no $9 +esearch process

$, Define the Resear h Pro%le' and O%7e tive =b<ective • • *o analyse the market share B services of existing players *o <udge the future prospects of online trading for smc investment solutions.

*he respondents are stratified into offline share trading respondents and online share trading respondents. ", Develo! the Resear h Plan *he second stage of +esearch calls for developing the most efficient plan for gathering information. .esigning a research plan calls for decision on the data sources, research approaches, research instruments, sampling plan B contact methods. 22

Data (our es *here are t"o types of data. Pri'ary data- *he data that is collected first hand by someone specifically for the purpose of facilitating the study is kno"n as primary data. o in this research the data is collected from respondents through 0uestionnaire. (e ondary data- 5or the company information I had used secondary data like brochures, "ebsites of the company etc.

(urvey A!!roa h (urvey Resear h: 4 survey research is used to learn about need, perception and a"areness level of the customers for online share trading. *he method used by me is Resear h, urvey )ethod as the research done is Des ri!tive

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Resear h Instru'ents elected instrument for .ata 3ollection for survey is Suestionnaire. :uestionnaires- 9 # 0uestionnaire consists of set of 0uestions presented to respondent for their ans"ers. It can be 3losed /nded or =pen /nded. O!en Ended- 9 #llo"s respondents to ans"er in their o"n "ords B are difficult to Interpret and *abulate. Close Ended- 9 7re4specify all the possible ans"ers B are easy to Interpret and *abulate.

Ty!es Of :uestion In ludedDi hoto'ous :uestions !hich has only t"o ans"ers LKesM or LFoMP Multi!le Choi e :uestions !here the respondent is offered more than t"o choices. Ratin& ( ale # scale that rates some attributes from LexcellentM to Lvery poorM and Lvery inefficientM to L9ery efficientM. (a'!lin& Plan #fter deciding on the research approach and instrument, the marketing researcher must.esign a ampling 7lan. *his includes: (a'!lin& Unit- 9 !ho is to be surveyedP *he marketing researcher must define the target population that "ill be sampled.

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*he sample 8nit taken by meR are >eneral individual customer those "ho trade in share market. (a'!le (i)e; Po!ulation (i)e- 9 How many people should be surveyedP I have cover entire .elhi city for the survey. My sa'!le si)e is "##, (a'!lin& Pro edure- 9 ?o" should the respondent be chosenP In the 7ro<ect, sampling done is on basis of area sa'!lin& for the .elhi city. In "hich convenient sampling "as done. Conta t Methods =nce the sampling plan had been determine, the marketing researcher must device ho" the sub<ect should be contacted: )ail, *elephone, 7ersonal or =n4line Intervie"s. In my pro<ect I "ent for personal Intervie"ing, as itAs necessary to go meet the individual respondents at their place so I can collect the right information.

., Colle t The Infor'ation *he .ata collection phase of marketing research is generally the most expensive and the most prone to error. I had visited all the respondents individually in the .elhi city and collected information via 0uestionnaire. I used to talk "ith them and in that talk I asked them the relevant 0uestion of the 0uestionnaire so I could get correct information from them for the ob<ective purpose. 5or some 0uestions I have to explain them about company, like different plans of the company etc. >enerally most of the respondents had filled 0uestionnaire themselves but some avoid filling up so at that time myself filled according to their ans"er. 2(

/, Analysis of the Infor'ation or Data Colle ted #fter the data have been collected, the researcher turns to the task of analysis then. *he analysis of data re0uires a number of closely related operations such as establishment of categories, then application of these categories to ra" data though coding, tabulation and statistical inferences. *he un"ieldy data should necessarily be condensed into a manageable groups and tables for further analysis. *he researcher can analy;e the collected data "ith the help of various statistical measures. #fter collecting the data I used hand tabulation method for analysis.

5, Inter!retation of survey'ased on collected information the analysis is done. *he 0uestionnaire used by me is given belo".

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CHAPTER II CONCEPTUA1 8RAME6OR4
Investor !er e!tion
/'I in association "ith Fational 3ouncil of #pplied /conomic +esearch (F3#/+) conducted a urvey of Indian Investors in 2%%%4%$ and then follo"ed it up in 2%%-4 %(. *he survey of 2%%(4%6 "as based on a sample of 288,%8$ geographically dispersed rural and urban areas. *he findings of this survey "ere released in eptember 2%%6. *he survey estimated that a total of $&.$ million or 2.- per cent of all Indian households totaling 2$ million individuals directly invested in e0uity shares or debentures or both during 2%%24%8. *he other findings are as listed belo": $. *he number of debenture o"ning households and individual debenture holders far exceeds household and individual e0uity investors. =f the total $&.$ million investor households, 1.6 million households o"ned bonds or debentures, "hereas only 6.( million investor households o"ned e0uity shares. 2. *he percentage of households investing in e0uity or debentures is more in urban areas than in rural areas. *his divergence is more in case of e0uities compared to debentures. =f the ($ million urban households, 2.8 million households representing more than $2 million urban individual investors o"ned e0uity shares or debentures or both. !hereas, of the $2( million rural households, only (.& million households representing more than 8 million individual investors sho"s a definite migration of investors from e0uity market to bond market during the period bet"een the t"o surveys.

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*he survey results also clearly reveal that number of non4investor households have increased from about $(6 million in $118411 to nearly $6- million in 2%%24%8 constituting nearly 12.6 per cent of all households.

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It "as also observed that the investor population and to"n si;e are directly proportional. *he largest city "ith more than (% lakh population accounted for about $2 per cent of investor households and the next higher segment, more than &$ per cent investor households "ere in to"ns "ith population bet"een $% and (% lakh.

Risk Mana&e'ent (yste' *he risk management system ensures the minimi;ation of inherent kno"n risks "ith appropriate tools and timely speedy flo" of information. #n effective risk management system further ensures certain alerts by "hich unkno"n risks can be predicted B informed in due course of time.

In stock market operation, the risk is too high to imagine and one can find instant impact of every bit of information in terms of monetary gain or loss. o one has to be very careful B particular to the alerts provided time to time by +) for containing the risks.

5urther, +) canAt ensure a complete elimination of risks. It can reduce the risk B level of reduction of risk depends upon our o"n efforts. o it is advised that one should follo" set norms B put proper attentions on various alerts send by the +) during the day Iat the end of day for controlling the risks.

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*o start "ith day to day processes "hich are implemented on daily basis to eliminate +isk as much as one can "ith the stipulated tools and techni0ues. =ne should apply these tools and techni0ues according to the re0uirement of their )anagement and the )arket conditions.

Pri'ary Market
*he government and corporate sector raised an aggregate of +s. 2,626,6%% million during 2%%14$% as against +s.2,(22,2%$ million during the preceding year. >overnment raised about t"o third of the total resources, "ith central government alone raising nearly +s. $,-26,&6% million.

( ource: /'I) Ta%le no .- +esources )obili;ed from the 7rimary )arket

21

Cor!orate (e urities *he average annual capital mobili;ation from the primary market has gro"n manifold since the last t"o4three decades. It received a further boost during the first half of $11%s "ith the capital raised by non4government public companies rising sharply from +s. -&,$2% million in $11%41$ to +s. 26-,$2% million in $11-41(. *hereafter, there has been a decline due to conditions prevailing in the secondary market. ?o"ever, the year 2%%84%1 took a turnaround in its performance as compared to the previous year by mobili;ing +s. &2,$%% million. *he capital raised, "hich used to be less than $% of gross domestic saving (>. ) in the $12%s increased to about $&% in $11241& but thereafter "itnessed declines. Indian market is getting integrated "ith the global market, though in a limited "ay through /uro Issues. ince they "ere permitted access in $112, Indian companies have raised about +s. &%,18% million through #merican .epository +eceipts (#.+s)I>lobal .epository +eceipts (>.+s). 5IIs have invested heavily in Indian market in 2%%14$%. *hey had net cumulative investments of 8 D &8.2( billion as at end of )arch 2%$%. *here "ere 2-( 5IIs registered "ith /'I as of end )arch 2%$%. It appears that more and more people prefer mutual funds ()5s) as their investment vehicle. *his change in investor behavior is induced by the evolution of a regulatory frame"ork for )5s, tax concessions offered by >overnment and preference of investors for passive investing. tarting "ith an asset base of +s. 2(% million in $16-, the total assets under management at the end of )arch 2%$% have risen to +s. $,&16,$6% million. .uring the last one decade, the resources mobili;ed by the )5s are increased from +s. $$2,--% million in $11&41- to +s. -26,8-% million in 2%%14$%.

&%

(e ondary Market

Cor!orate (e urities *here are 2& exchanges in the country, "hich offer screen based trading system. *he trading system is connected using the 9 #* technology from over &(2 cities. *here "ere 1,&68 trading members registered "ith /'I as at end )arch 2%$$.

*he market capitali;ation has gro"n over the period indicating more companies using the trading platform of the stock exchange. *he all India market capitali;ation is estimated at +s. $&,$82,1(& million at the end of )arch 2%$$. *he market capitali;ation ratio defined as the value of listed stocks divided by >.7 is used as a measure of stock market si;e. It is of economic significance since market is positively correlated "ith the ability to mobili;e capital and diversify risk. It increased sharply to (2.&% in 2%$%4$$ against 28.(% in the previous year. *he trading volumes on exchanges have been "itnessing phenomenal gro"th over the past decade. *he trading volume "hich peaked at +s. 28,8%1,1%% million in 2%%84%1, fell substantially to +s. 1,681,%1& million in 2%%14$%. ?o"ever, the year 2%$%4$$ sa" a turnaround in the total trading volumes on the exchanges. It registered a volume of +s. $6,2%-,122 million. *he turnover ratio, "hich reflects the volume of trading in relation to the si;e of the market, has been increasing by leaps and bounds after the advent of screen based trading system by the F /. *he turnover ratio for the year 2%$%4$$ accounted at $22.1%. *he relative importance of various stock exchanges in the market has undergone dramatic change during this decade. *he increase in turnover took place mostly at the big exchanges. &$

*he F / yet again registered as the market leader "ith more 8(% of total turnover (volumes on all segments) in 2%$%4$$ *op ( stock exchanges accounted for 11.88% of turnover, "hile the rest $8 exchange for less than %.$2% during 2%$%4$$. #bout ten exchanges reported nil trading volume during the year.

B7 3FJ Fifty is the most "idely used indicator of the market, .*he index movement have been responding to changes in the governmentAs economic policies , the increase in 5IIs inflo"s , etc. ?o"ever, the year 2%%(4%6 "itnessed a favorable movement in the Fifty, "herein it registered its all time high in Hanuary. *he movement of the B7 3FJ Fifty, the most "idely used indicator of the market. *he index movement have been responding to changes in the governmentAs economic policies , the increase in 5IIs inflo"s , etc. ?o"ever, the year 2%$%4$$ "itnessed a favorable movement in the Fifty, "herein it registered a high in Hanuary 2%$$ of 2%$-.6(. *he point4to4point return of Fifty "as 8%.$-% for 2%$%4$$.

<overn'ent (e urities *he primary issues of the 3entral >overnment have increased manifold during the decade of $11%s from +s. 81,81% million in $11%41$ to +s. $,-26,&6% million in 2%$%4 $$. *he issues by state governments have also increased over this period from +s. 2(,61% million to +s. (%(,2$% million. *he 3entral >overnment mobili;ed +s. $,2$(,%%% million through issue of dated securities and +s. 26$,&6% million through issue of *4bills. #fter meeting repayment liabilities of +s. &26,1&% million for dated securities, and redemption of *4bills of +s. 26$,26% million, net market borro"ing of 3entral >overnment amounted to +s. 888,$6% million for the year 2%$%4$$.

&2

*he net borro"ings of

tate >overnments in 2%%(4%6 amounted to +s. -6&,26%

million. *he trading in government securities exceeded the combined trading in e0uity segments of all the exchanges in the country during 2%$%4$$. *he aggregate trading in central and state government dated securities, including treasury bills, increased by manifold over a period of time. .uring 2%$%4$$ it reached a level of +s. 26,212,%1% million. *he share of !.) segment of F / in total turnover for government securities decreased marginally from (2% in 2%%-4%( to -2.6% in 2%$%4$$. ?o"ever, the share of !.) segment of F / in the total of Fon4repo government securities increased marginally from 2-.%$% in 2%%-4%( to 2-.81% in 2%$%4$$. #long "ith gro"th of the market, the investor base has also "idened. In addition to banks and insurance companies, corporate and individual investors are also investing in government securities. .ue to the soft interest rate policy pursued by the +'I, the coupon rates offered on government borro"ings have fallen sharply. *he "eighted average costs of its borro"ing have declined to (.2$% in 2%$%4$$. *he maturity structure of government debt is also changing. #bout 22% of primary issues "ere raised through securities "ith maturities above ( years and up to $% years. #s a result the "eighted average maturity of dated securities increased to $-.1- years in 2%$%4$$.

Derivative Market *he number of instruments available in derivatives has been expanded. *o begin "ith, /'I only approved trading in index futures contracts based on B7 3FJ Fifty Index and ' /4&% ( ensex) Index. *his "as follo"ed by approval for trading in options based on these t"o indices and options on individual securities and also futures on interest rates derivative instruments (1$4day Fotional *4'ills and $%4year &&

Fotional 6% coupon bearing as "ell as ;ero coupon bonds). Fo", there are futures and options based on benchmark index B7 3FJ Fifty and 3FJ I* Index as "ell as options and futures on single stocks. *he total exchange traded derivatives "itnessed a value of +s. 2$,-22,61% million during 2%$%4$$ as against +s. -,-2&,&&& million during the preceding year. !hile F / accounted for about 11.(% of total turnover, ' / accounted for less than $% in 2%$%4$$. F / has created a niche for itself in terms of derivatives trading in the global market.

&-

<overn'ent Intervention
#s result of reforms in financial and real sector ne" investment alternatives have emerged. *here "as a time "hen fe" individuals possessed ma<ority of the "ealth in the society. !ith the efforts of government our economy "itnessed significant gro"th, "hich led to uniform distribution of income in society. #s a result income of masses started rising and they started looking for suitable investment avenues, to achieve their financial goals. 5rom savings accounts, fixed deposits, post office savings schemes, several other investment alternatives have emerged such as capital markets, mutual funds, commodities market, insurance derivatives etc. *here has been a ma<or shift to"ards risky investments in order to earn higher returns. *here "ere also scams like 8 46-, ?arshad )ehtaAs scam, "hich forced investors to make changes in their portfolio. 'ut after government efforts investorsA confidence is restored in e0uity markets, "hich led to gro"th in financial services sector. #fter this period in todayEs market scenario "e find Indian economy still struggling "hile the "orld is facing massive recession. Indian economy is in such position because it is still in its developing stage and so there is so much more to explore and develop. +ecently market has faced do"ntrend but still holding on and offering ne" investment avenues to investors and still offers lucrative benefits to investors. )3 >G='#G #F. /38+I*K plays a very important role along "ith other

players in the market in current scenario by offering its financial services. Investors today are going in for saving their money instead of investing it in the market due to current market situation. >overnment of India is making constant efforts to support the economy by decreasing interest rate on loans of all types. *his sho"ed a positive gro"th in the market by investors turning back to the market.

&(

#lso constant efforts have made auto industry to lo"er do"n the rates of automotives and private banks also lo"ered their interest rates on loans to help Indian investors to come for"ard and step in the market. *hus, this study helps in understanding current market volatility and solutions to deal "ith it, so as to find future prospects for T )3 >G='#G #F. /38+I*K and ans"er 0uestions like, ho" to deal "ith recession evilsP ?o" to protect investors interestP ?o" to sustain market position and market shareP *o understand it and deal "ith it one al"ays has to go to the basics that is the investors and the reason investor invests is his motive. )otives for investment may vary from person to person, but there are some common desires. /verybody expects some return out of investment. Investors are also concerned about the safety of investment. #nd, in case of an emergency, people "ant their money back, 0uickly. ?ence, there are three criteriaAs to evaluate every investment avenue: $. 2. &. afety Gi0uidity +eturns

&6

e p S 81 0 o v N 81 1 9 a :1 ; n M a r:1 <

1 0 6 1 5 4 0 1 0 0 7 0 6 0 5 0 4 0

v e e 3 u e n ) in k h a # + s

Co'!any finan ials
Revenue
160 150 140 100 70 60 50 40 0 Sep 81 0 Nov 81 0 9an: 1 1 Mar: 1 1

Month ep U$% =ct U$% FovU$% .ecU$% HanA$$ 5ebA$$ )arA$$

0In 1akhs3 21.%( 6%.22 21.6$ $%2.1$%-.&2 $-%.-& $28.81

8i&ure no, " =3ompanyAs +evenue >ro"th.

*he above sho"n graph depicts the revenue generated by )3 in 6 months starting from eptember, 2%$% to )archA2%$$. *his graph sho"s an up"ard sloping trend line. If "e look at the numbers, "e see a &-&% gro"th in the revenues from 21.%( lakhs in eptA$% to $28.81 lakhs in )archA$$. *hough, there have been a fe" slips in Hanuary and )arch but over all its presents financials of a gro"th company.

&2

Online v;s offline tradin&
Internet trading is expected to: • • Increase transparency in the markets. /nhance market 0uality through improved li0uidity, by increasing 0uote continuity and market depth. • • • +educe settlement risks due to open trades, by elimination of mismatches. 7rovide management information system ()I ). Introduce flexibility in system, to handle gro"ing volumes easily and to support nation"ide expansion of market activity. • 'esides, through Internet trading three fundamental ob<ectives of securities regulation can be easily achieved, these are: Investor protection, creation of a fair and efficient market and, reduction of the systematic risks. *he investors "ould be able to track the fluctuations in a particular stock and the market as a "hole, "hile deciding to execute the order and also "hile the order is being executed. *he confirmation of the order "ould also be real time. *he order routing system on "hich net trading "ill be done is compatible "ith screen4based trading terminals used today. Internet trading brings in total transparency bet"een a broker and an investor in case of secondary market operations. !hen the open outcry system "as prevalent, only the broker kne" the actually transacted price. *his practice diminished significantly "hen it "as taken over by screen4based trading. !ith on4line trading, investors can no" see for themselves the price at "hich the deal takes place.

&8

It "ill also reduce transaction costs, increase li0uidity in the market and ensure total transparency. It allo"s 0uick and easy access to valuable research and information to an investor and enables him execute transactions faster and more efficiently on a real time basis. *he volume of trade has also increased and has provided depth to the market. *hus, in a nut shell, "e can summari;e the difference bet"een online and offline trading as follo"s: =nline =ffline

$. In

online

trading

mechanism

the

In offline the investor has no control.

customer has full control on his .emat and trading aIc. 2. Investor in online trading can easily transfer it funds. &. 'roking houses providing online trading also provides live terminals to their clients. *he investor needs to deposit and "ithdra" fund each time of trading. Fo live terminal is provided.

-. *he broker provides investor at online trading "ith advisory facility. (. =nline investor can directly invest into I7=As and )utual funds also. 6. Investor can place order even after the market closes. 2. *he client can globally access the account and can trade any"here in the &1

=ffline investors are deprived of advices.

=ffline trader needs to open separate account. Investor cannot place #fter )arket =rder (#)=). *rader cannot trade a"ay for the place "here heIshe has opened its account. .I slips are re0uired for trading.

"orld

"here

Internet

facility

is *he .emat account cannot be linked "ith any trading account.

available. 8. Fo documents are re0uired for trading. 1. #ny .ematI.7 account can be attached "ith any companyAs trading account. $%. =nline trading is time effective $$. Fo pool account is maintained at online process

It is time consuming process. In offline pool account are maintained.

Ta%le no /9.ifference bet"een online and offline trading

-%

(E>I <uidelines for online Tradin&
#ccording to /'I guidelines on Internet trading, brokers providing e4trading must have a minimum net "orth of +s. (% lakhs, besides obtaining specific permission of the stock exchange concerned. tock exchanges should ensure that the systems used by the broker provide for security, reliability and confidentiality of data through use of the encryption technology. 5or signatures, participants should use authentication technologies and certification agencies as and "hen notified later. tock exchanges should also ensure that brokers maintain ade0uate back4up systems and data storage capacity. 'rokers should have ade0uate system capacity for handling data transfer and arrange for alternate means of communication in case of Internet failure. *he follo"ing security features are mandatory for all Internet4related trading systems: • • • • • • 8ser I.. 5irst level pass"ord.

#utomatic expiry of pass"ord at the end of reasonable duration.

#ll transaction logs "ith proper audit facilities to be maintained in the system.

ecured socket level security server for access through Internet.

uitable fire"alls bet"een trading set up directly connected to an exchange trading system and the Internet trading set up.

-$

Internet Tradin& #t the end of )arch 2%$$, 28 trading members on the 3) segment provided internet based trading facility to investors. *he members of the exchange in turn had registered 8-1,616 clients for "eb based access as on Hune &%, 2%$2. In the 3) segment about -11 lakh trades for +s.8$,%&- cores, constituting 2.$$% of total trading volume, "ere routed and executed through internet. 'y the end of .ec. 2%$$ the number of clients doing the online trading has increased to $&lacs. 1i?uidity *he li0uidity in the 3) segment, as measured by the turnover ratio, has "itnessed a steady increase and reached nearly $%.$&% during )arch 2%%2. )ore than 18.%2% of securities available for trading are being traded every month and 1(.6% of the securities "ere traded for at least $%% days during 2%%(4%6, as indicated belo": Distri%ution of Turnover *he concentration of trading among top UFA securitiesIbrokers. It is observed that the top U(A and U$%%A securities account for about 2(.88% and 8-.26% of total turnover in the 3) segment in 2%%14$%. *he details of U(%A most active securities during 2%%14$% "hich accounted for 28.-%% of turnover 'roker4"ise distribution of turnover increasing diffusion of trades among a large number of trading members over the years. .uring 2%%14$%, top U(A brokers accounted for only $&.(2% of turnover, "hile top U$%%A brokers accounted for 6(.%1% of total turnover. *he follo"ing sho"s the turnover of the trade.

-2

Ta%le no 5= .istribution of turnover

-&

Market a!itali)ation

*he total market capitali;ation of securities available for trading on the 3) segment increased from +s. &6&,&(% crore as at end )arch $11( to +s. $,(8(,(8( crore as at end )arch 2%$$. *op (% companies account for 61.2$% of total market capitali;ation as at end )arch 2%$$.

(e torial distri%ution *he share of top E(%E companies, classified according to different sectors, in terms of trading volume and market capitali;ation. # drastic change in the importance of different sectors is observed since F / commenced trading. *he share of manufacturing companies in trading volume of top E(%E companies, "hich "as more than 2&% in 2%%%4%$, had "itnessed a decline in the years 2%%24%8 and 2%%84%1, but a turnaround "as noticed in the year 2%%14$% (it accounted for &2.66%) "hich "as also maintained till 2%$%4$$ "ith the share of manufacturing companies rising to -$.8$%. #s compared to this, the share of information technology (I*) companies in trading volume, "hich had been 0uite high in the year 2%%24%8, "itnessed a considerable decline and stood at only $1.(6% in 2%%14$%. # mixed trend has been noticed in these sectors in terms of market capitali;ation. ectors like manufacturing, "hich used to dominate in terms of market capitali;ation in the year 2%%$4%2 "itnessed a dip in 2%%(4%6, ho"ever this sector has "itnessed a rebound and accounted for &$.$&% and 2&.&(% in 2%%14$% and 2%$%4$$ respectively. *he I* sector has also sho"n a turnaround this year "ith 22.(-% in the top U(%A4market capitali;ation in 2%%84%1.

--

Online tradin& with (MC
)3 launched online trading in Hune, 2%%6 in addition to the traditional offline mode of trading on F/#*J 9-. ince then )3 has managed to a fair share of client base "hich is very much visible from the company financials. )3 is doing a good <ob in the offline industry as it has established a good brand name for itself in a short span of time. 'ut looking at the competition, the company decided to launch its online trading portal in Hune, 2%%6. 'esides, being up in the line of competition, =nline trading also helps the company to cut recurring costs as it happens in offline trading. *hough, setting up online trading infrastructure re0uires one time set up cost like the cost of soft"are, band"idth charges, skilled manpo"er etc. "hich is 0uite high. 'ut the benefits are recurring as the online trading is about volumes. Garger the client base, higher the revenues.
8eatures of online tradin& # bro"ser based trading soft"are that enables clients to access their accounts from any"here using internet by a uni0ue I. and pass"ord. *his facility is available to all the online clients the moment they get registered "ith )3 investment.

-(

(olutions * (ervi es *he product has a lot of features "hich provides various benefits to clients:

$) *he screen gives live streaming 0uotes from respective exchanges. *he client has an option of having LliveM )ultiple !indo"s for different exchanges and his personal "indo" "here he can add the scrips of his choice and save it.

2) It provides a 3ommon "indo" for display of market "atch and order execution "here the client can click @ 0!lus3 for 'uy and = 0'inus 3 for ell or 3lick on the scrip and 7ress 8$ to 'uy and 8" to sell "hich provides an easy trading facility to the client. It also provides an =ffline order placement facility.

&) 'efore 'uying or elling, the client can "atch the )arket .epth, "hich tells about 'est 'uyI ell rates and Suantities etc of that security B also enables the clients to use the top4loss 5eature to minimi;e their losses.

-) # very useful feature of the product is fire the trigger, "hich lets the client set an L#lertM for itself to indicate a certain price of the scrip. *he user can set a different color or an audio alarm.

() It enables clients to transfer funds online from their bank account to )3 trading account. )3 has banking integration "ith 7F', ?.53,#JI

'ank.

-6

6) It also enables the clients to vie" the transactions ('uy or ell) done during the day. 'eside the rate, 0uantity, type of account etc, the client can also vie" the order number, time of transaction B can also get the details of entire fortnight.

2) *he client can see the 'idsI=ffers that are not yet executed by the /xchange and has the options to L)odifyM and L3ancelM the =rder.

8) >reater exposure for trading on the available margin B .7 )#+>IF *=3C "ith very competitive commission.

1) It also provides +eal time updating of exposure and portfolio "hile trading B =nline Integration of trading aIc "ith t"o common depositories to help move clients shares to and fro "ith ease.

*hey also have the authority to s0uare of the positions of the clients "ho donAt pay their margin money. I* shares the responsibility of supporting the entire system so that it runs smoothly.

-2

Default 1i'it and EA!osure to the Clients

$. 5or Gi0uidated 9alue greater than or e0ual to 2 G#3, default limits "ill be opened in Intraday ten times and .elivery *hree times (=nly on a 3at) on 3ash market and one time on 5F= market of Fet )argin.

2. 5or Gi0uidated 9alue less than 2 G#3, default limits "ill be opened in Intraday five times and .elivery *hree times (=nly on a 3at) on 3ash market and one time on 5F= market of Fet )argin .

(?uare U! It is a margin status "hen percentage of coverage is less then 2(% "hen comparing funding stock (# cat stock) "ith gross margin. It is a last alert that the position of client may be s0uared up at any time if the 7ercentage of coverage goes belo" 2(%. It is a last alert that something must be done either by reducing the position or enhancing the margin .It is a point "here the position of the client is s0uared up.

Nor'al (?uare Off 01ess Then "5B3 *his activity has been done on daily basis "ith the help of soft"are driven 'atch file (provided by the I* department). 3odes "hich have been not uploaded in the 'atch file due to any exceptions are any commitment from 'ranch end are done manually if commitment fails. auda of a client belo" 2(% "ill be compulsory s0uared off next morning, in case no proper reply received from the concerned +)I'ranch.

-8

Pro!er Re!ly here shall 'ean-

•

#mount is being transferred to top up the margins only through a transfer 3he0ue or .emand draft sub<ect to the condition that the transfer 3he0ue or .emand draft is reflected in the bank as having been deposited before 2:%% 7.).

•

*he reply should pecify "hat positions shall be s0uared off before that $%.&% a.m. , in case the same is not done to the extent of bringing the clients margin above the re0uired (%% margin levels , the +) shall block the client and s0uare off the balance position so as to bring the client above the re0uired margin levels.

Mar&in Call s?uare off !ro ess$. 7reparation of s0uare off cases report. 2. 7reparation of 'atch 5ile for #utomated 0uare off. &. +econciliation of 'atch 5ile after and before it has been executed. -. 3onsolidation of s0uare off replies of margins from 'ranch end and make it considered. (. 6. 7reparation of /xceptions client Gist. )aking note of commitments from 'ranch and +egional ?eads against s0uare off codes and make follo" up accordingly. 2. 7reparation clients 3he0ue deposit details.

-1

>efore: 4 !e have to make sure that the batch file has been created according to s0uare off policy of +) . #ll exceptions and necessary details has been taken into consideration or not. After: 4 #fter execution of the batch file "e have to check that every order of the file is properly executed or not and if there is any re<ection then immediate action to be taken (+e<ection to be s0uared manually) (?uare Off 5th Day 1ed&er De%it Clients 0Non 1as3 *his activity is done on the )anual basis only. *he process of s0uare off (th day ledger debit is same as Formal 0uare offR only difference is that it is done manually. *o s0uare off "e have to prepare non las ledger debit report.

(%

CHAPTER III DATA ANA12(I( AND INTERPRETATION
: $, Do you know a%out invest'ent o!tions availa%leC

4nowled&e Kes Fo Total

Per enta&e 8%% 2%% $## Ta%le no 5 9Investment options

8i&ure no .9Investment options

Inter!retation
=nly 8%% people kno"s the exact meaning of investment. 'ecause of remaining 2%% take hisIher residential property as an investment. #ccording to la" purpose this is not an investment because of it is not create any profit for the o"ner.

($

: ", Most i'!ortant thin&s you take into your 'ind while 'akin& invest'entsC 8a tor +isk +eturns 'oth Total Ta%le no D9 Investments *echni0ue Per enta&e 8% $2% 2(% $##

8i&ure no /9 Investments *echni0ue

Inter!retation
2(% people are considered the both factors risk as "ell as returns but, only 2(% considered the risk or returns factor.

(2

: ., Awareness related to se urity 'arkets 4NO61ED<E 3omplete 7artial Fil TOTA1 PERCENTA<E 8% 2(% $2% $## Ta%le no E9 Investments #"areness

8i&ure no 59 Investments #"areness

Inter!retation
=n that basis, "e conclude that $2% people kno" nothing about the securities investments and 2(% people have partial kno"ledge about it, so, some promotional activities are re0uired for increasing the a"areness about security market.

(&

: /, 6hat is the %asi !ur!ose of your invest'entC IN+E(TMENT PURPO(E Gi0uidity +eturns 3apital appreciation *ax benefits +isk covering =thers TOTA1 Ta%le no F9 Investments 7urpose PERCENTA<E &%% 2(% $%% 2%% (% $%% $##

8i&ure no D9 Investments 7urpose

(-

Inter!retation
2(% people are interested in li0uidity, returns and tax benefits. #nd remaining 2(% are interested in capital appreciations, risk covering, and others.

((

: 5- (in e how lon& have you %een investin& in a!ital 'arketC

Ti'e Period Gess than & yrs

8re?uen y 8% 2&

Per enta&e &1 &2 2$%%

&4( yrs -2 )ore than ( yrs 2%% *otal Ta%le no G9 Investments 7eriod

45= ;/=

;>=

8i&ure no E9 Investments 7eriod Inter!retation Gooking at the figures, "e can observe that &1 % of people have been investing for less than & years and so on. !e kno" that the capital markets have picked up in past -4( years. #lso, there are more stringent norms by /'I and exchanges. *hat is the reason "hy people have started to pose more trust in capital markets no". (6

: D - Do you trade OnlineC

8re?uen y Kes Fo *otal $-$ (1

Per enta&e 2%.( 21.(

2%% $%% Ta%le no $#9 *rade =nline

151 1<0 100 <0 0 ?es No </

8i&ure no F9 *rade =nline Inter!retation

=ut of the people surveyed, 2% % people trade online. *his sho"s a good prospect for online trading in future.

(2

:, E, COMP1ICATED PROCE((

Co'!li ated Pro ess 8re?uen y Per enta&e Kes 6% &% Fo -6 2& Fo reply 1-2 *otal 2%% $%% Ta%le no $$9 Investments 3omplications

;0= 5>=

4;=

?es

No

No reply

8i&ure no G9 Investments 3omplications

Inter!retation

*his table sho"s the consolidated table of number of people voting for different factors as to "hy donAt they prefer to trade online.

(8

:, F , 6hy not onlineC

8a tors

No, of Peo!le 2es No Gack of market kno"ledge &6 2$ Fo computer 2% $$% Investment risk $%% 2( 7oor services 2( 22 3omplicated process 6% -6 Ta%le no $"9 =nline *rading 5actors

8i&ure no $#9 =nline *rading 5actors

Inter!retation
!e asked the people as to "hy they donAt trade online. =ut of the reasons, given H "e observe that maximum people avoid doing online trading as they perceive it to be more risky. #lso, some of them have experienced poor services from their online brokers. ?ence, they avoid doing online trading.

#t the same time the companies need to trap those &%% people "ho are still not a"are of the benefits of online trading and try to shift them to"ards online trading. *he (1

companies should also try to find and analy;e the reasons as to "hy these customers are not trading online in spite of so many benefits the online trading offers.

6%

: G,Na'e of the o'!any you trade with,

Cotak ecurities I3I3I direct India'ulls harekhan )3 Investments olutions =thers TOTA1

8re?uen y -2 &( 6% &% $( $8 2%%

Per enta&e 2$ $2.( &% $( 2.( 1 $%%

Ta%le no $.9 3ompany mostly choose

Mkt. share
60 <0 50 ;0 40 10
Se cu r itie s I"I "I d ire ct In d ia B ull s Sh a re An kh a ico n nI nve stm en t...

0

@o t ak

8i&ure no $$9 3ompany mostly choose

Inter!retation

6$

Oth e rs

India 'ulls en<oy maximum market share of &%% follo"ed by Cotak and I3I3I direct. )3 has only 2.(% share at present but is gro"ing

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: $# - 6here E1(E do you invest your sur!lus fundC

Areas .irect /0uity )utual fund Insurance +eal /state 'anks

8re?uen y 2( 6( $(% &( $(% Ta%le no $/9 =ther Investments option

Other investments

16= ;4= 15=

>= ;1=

$irect E.uity

Mutual fund

Insurance

3eal Estate

Banks

8i&ure no $"9 =ther Investments option

6&

Inter!retation

!e also found that besides stock )arket, people prefer to invest in )utual funds. *hus, it can also serve as a good opportunity to earn revenue for the company.

6-

CHAPTER I+ (UMMAR2 AND CONC1U(ION

Results of the study
5acts and figure speak in itself that as from the past years analysis of capital market "e could see the bullish trend of the Indian stock market. *here has been a tremendous pressure on the Indian industries to perform "ell as the expectations of the investors are rising "ith bullish market sentiments. *he =nline trading has gro"n tremendously since 2%%%4%$ to 2%%2 form 2282.$8 cr. to 8$%&&.$ cr. respectively. *he client base has also improved form $,2&,(28 to 8,-1,616. *his has raised to $2.2% lacs till .ec. 2%$%. 3ompared to the !estern countries, online trading is still in its infancy in India. !ith trading turnover at around +s. $% crores per day from online trading compared to a combined gross turnover of around +s. 1%%%4$%,%%% crores handled by the ' / and F / together, online trading has a long "ay to go. !ith some ten dotcom players, such as icicidirect.com, investsmart, (paisa.com, indiabulls, and a host of brokers, such as kotaksecurities, sharekhan, motilalos"al, >eo<it entering the online ring promises exciting times ahead. ?o"ever, the existing online trading system suffers from a ma<or lacunae. icicidirect.com currently offers online trading services only to investors "ho have a bank or a demat account "ith I3I3I. =r, investors can open an online trading account "ith )3 only if they open a demat account "ith it and have a bank account either "ith I3I3I, ?.53 'ank. If investors do not have these accounts, they have to go 6( ecurities and duttstock,

through the entire rigmarole of opening up the bank and demat account again for easy operation. #part from the hassles involved, there may also be certain extra charges involved in this exercise that may have to be built into the overall cost of online trading.

66

1i'itations of the !ro7e t
# study on promotional tools used for marketing product offered by ?.53 G "as based on secondary data obtained. *herefore it had the follo"ing limitations: • :uality of Resear h: *here are some data "hich is collected from secondary research. *herefore, the secondary research used must be scrutini;ed closely since the origins of the information may be 0uestionable. )oreover, the researcher needs to take sufficient steps to critically evaluate the validity and reliability of the information provided. • (!e ifi to Resear herIs Needs: In many cases, the =rgani;ation do not provide its full information. ome informations are critical for the information "hich is not revealed. *hus may include variation due to self interpretation. • In o'!lete Infor'ation: In many cases, researchers find information that appears valuable and promising. *he researcher may not get the full version of the research to gain the full value of the study. *his is because many research suppliers offer free portions of their research and then charge expensive fees for their full reports. • Not Ti'ely: !hen using secondary research, one must exercise caution "hen using dated information from the past. !ith companies competing in fast changing industries, an out4of4date research reports many have little or no relevance to the current market situation.

62

(u&&estions * Re o''endations
#s "e "orked "ith this pro<ect, "e came across some good and some not so good features of this product. !e take this opportunity to suggest some measures in order to make improvements to the product. $. )3 needs to be more flexible "ith account types and brokerage structure so that it can cater to all types of client segments and hence, increase its client base. 2. )3 need to focus on ?FI and corporate accounts more as they bring in bulk business. &. It should also try to collaborate "ith more banks so that the investor doesnAt have to go through the turmoil of opening ne" accounts. -. *heir "ere some features in )3 7lus that needed to be changed and so "ere suggested by us. • *here "as no feature of U7ayment >ate"ayA for fund transfer to and from the client in case of 7ay4in and 7ayout. • *he )argin report and Intra4day report though, contains all the necessary details, are a little complicated from the clientAs end. • In case the client does some transactions for UIntra4dayA purpose but he gets his orders in different lots. Fo", if he "ants to change his order type from UIntra4dayA to U.eliveryA, then he has to go to trade log and change the Uorder typeA for each of the order lots.

68

*his can be done a"ay "ith by going to UFet 7ositionA feature and changing it in one go. • )3 "ift gives the client a facility to put an alarm if a certain rate of a particular stock is achieved. !e suggest that a ne" feature should be introduced "herein an ) facility

should be provided to the clients "ho are on the go most of the time. *his feature "ill be uni0ue as no other soft"are does it and can become the 8 7 of this product. *his "ill also benefit the company n terms of revenue. (. #s a "hole, if "e look in general, "e find a lot of frauds happening in this field. *hus, there should be proper compliance measures taken up by the company for investor protection like sending reports on the total trades done on their accounts. 6. #lso, looking at the competitive scenario, it is suggested that the company should aggressively focus more on ales and promotional activities by

efficiently utili;ing the manpo"er resource it has. 2. *he company can also introduce dial and trade facility in case online system defunct.

61