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Project Report 101
Project Report 101
ON
SHARE MARKET & FINANCIAL SYSTEM
IS SUBMITTED BY
T O WAR D S
PARTI A L F U L F I L L M E N T O F TH E PAP E R O F TH E
INTERNSHIP PROJECT
(2007-2009)
P R E FAC E
T H E C O R P O R ATE P R O G R A M o f M B A c o u r s e i s a w e l l
structured and integrated programme. The course of management
gives a practical knowledge in our study course. Industries give
us much information about the different product and services we
use in our day to day life.
It is highly said that practice makes a man perfect the summer
project training which is a part of M.B.A to get a practical
understanding and training of the business management. Thus the
industrial training which is a part of M.B.A course helps the
student to get the knowledge about the actual environment of an
organization.
Share khan securities ltd. is one of such company dealing in
Share market Derivatives, Commodities, Mutual fund IPO
distribution with almost branches in overall India.
It involved the study of finance activities of the organization. I
have under taken industrial training in Share khan securities ltd.
at Pune crossing from 1-june2008
to 31-july-2008 as a part of
my PGCP course curriculum and I thus, present a project report
on it at the best of my ability knowledge and work done.
ACKNOWLEDGEMENT
I feel pleasure for making a report which
I visited at Pune
named Share khan securities
Ltd. this yea r.
The main objective of this practical training
information about the real environment of the firm.
is
to
get
CONTENTS
1. Introduction
Stock market
History
Trading
Market participants
Importance of stock market
The behaviour of the stock market
Bombay stock exchange
BSE indices
National stock exchange
Derivatives
Financial system
Flow of fund
Main function of financial system
Financial market
Capital market
Stock exchange
Relation of the stock market with financial system
The stock market, individual investors, and financial risk
Function of stock exchange
Service of stock exchange
3. Research objective
Statement of problem
Objective of the research project
Source of data
Limitation of study
INTRODUCTION
Stock Exchange
Mumbai, India
Bombay Stock Exchange
Limited
Rajnikant Patel (CEO)
INR
~6,000
US$ 1.61 trillion (2006)
US$ 980 billion (2006)
BSE Sensex
http://www.bseindia.co m/
STOCK MARKET
A stock market, or (equity market), is a private or public market
for the trading of company stock and derivatives of company
stock at an agreed price; these are securities listed on a stock
e x c h a n g e a s w e l l a s t h o s e o n l y t r a d e d p r i v a t e l y.
The size of the world stock market is estimated at about $51
trillion. The world derivatives market has been estimated at
about $480 trillion face or nominal value, 12 times the size of
t h e e n t i r e w o r l d e c o n o m y. I t m u s t b e n o t e d t h o u g h t h a t t h e v a l u e
of the derivatives market, because it is stated in terms of
6
HISTORY
Historian Fernand Braudel suggests that in Cairo in the 11th
century Muslim and Jewish merchants had already set up every
form of trade association and had knowledge of many methods of
credit and payment, disproving the belief that these were
invented later by Italians. In 12th century France the courratiers
de change were concerned with managing and regulating the
debts of agricultural communities on behalf of the banks.
Because these men also traded with debts, they could be called
the first brokers. In late 13th century Bruges commodity traders
g a t h e r e d i n s i d e t h e h o u s e o f a m a n c a l l e d Van d e r B e u r s e , a n d i n
1309 they became the "Brugse Beurse", institutionalizing what
had been, until then, an informal meeting. The idea quickly
spread around Flanders and neighboring counties and "Beurzen"
soon opened in Ghent Antwerp and Amsterdam.
I n t h e m i d d l e o f t h e 1 3 t h c e n t u r y Ven e t i a n b a n k e r s b e g a n t o
t r a d e i n g o v e r n m e n t s e c u r i t i e s . I n 1 3 5 1 t h e Ven e t i a n g o v e r n m e n t
outlawed spreading rumors intended to lower the price of
g o v e r n m e n t f u n d s . B a n k e r s i n P i s a , Ver o n a , G e n o a a n d F l o r e n c e
also began trading in government securities during the 14th
century. This was only possible because these were independent
city states not ruled by a duke but a council of influential
citizens. The Dutch later started joint stock companies, which
let shareholders invest in business ventures and get a share of
their profits - or losses. In 1602, the Dutch East India Company
issued the first shares on the Amsterdam Stock Exchange. It was
the first company to issue stocks and bonds.
The Amsterdam Stock Exchange (or Amsterdam Beurs) is also
said to have been the first stock exchange to introduce
continuous trade in the early 17th century. The Dutch "pioneered
short selling, option trading, debt-equity swaps, merchant
banking, unit trusts and other speculative instruments, much as
we know them" (Murray Sayle, "Japan Goes Dutch", London
Review of Books XXIII.7, April 5, 2001). There are now stock
markets in virtually every developed and most developing
7
TRADING
Participants in the stock market range from small individual
stock investors to large hedge fund traders, who can be based
anywhere. Their orders usually end up with a professional at a
stock exchange, who executes the order.
Some exchanges are physical locations where transactions are
carried out on a trading floor, by a method known as open
outcry. This type of auction is used in stock exchanges and
commodity exchanges where traders may enter "verbal" bids and
o f f e r s s i m u l t a n e o u s l y. T h e o t h e r t yp e o f e x c h a n g e i s a v i r t u a l
kind, composed of a network of computers where trades are made
electronically via traders.
Actual trades are based on an auction market paradigm where a
potential buyer bids a specific price for a stock and a potential
seller asks a specific price for the stock. (Buying or selling at
market means you will accept any ask price or bid price for the
s t o c k , r e s p e c t i v e l y.) W h e n t h e b i d a n d a s k p r i c e s m a t c h , a s a l e
takes place on a first come first served basis if there are
multiple bidders or askers at a given price.
The purpose of a stock exchange is
securities between buyers and
marketplace (virtual or real). The
trading information on the listed
d i s c o v e r y.
T h e N e w Yo r k S t o c k E x c h a n g e i s a p h y s i c a l e x c h a n g e , a l s o
referred to as a listed exchange only stocks listed with the
exchange may be traded. Orders enter by way of exchange
members and flow down to a specialist, who goes to the floor
trading post to trade stock. The specialist's job is to match buy
a n d s e l l o r d e r s u s i n g o p e n o u t c r y. I f a s p r e a d e x i s t s , n o t r a d e
immediately takes place--in this case the specialist should use
his/her own resources (money or stock) to close the difference
after his/her judged time. Once a trade has been made the details
are reported on the "tape" and sent back to the brokerage firm,
which then notifies the investor who placed the order. Although
there is a significant amount of human contact in this process,
computers play an important role, especially for so-called
"program trading".
The NASDAQ is a virtual listed exchange, where all
trading is done over a computer network. The process is
t o t h e N e w Yor k S t o c k E x c h a n g e . H o w e v e r , b u y e r s a n d
are electronically matched. One or more NASDAQ market
of the
similar
sellers
makers
8
will always provide a bid and ask price at which they will
always purchase or sell 'their' stock.
The Paris Bourse, now part of Euronext, is an order-driven,
electronic stock exchange. It was automated in the late 1980s.
Prior to the 1980s, it consisted of an open outcry exchange.
Stockbrokers met on the trading floor or the Palais Brongniart.
I n 1 9 8 6 , t h e C ATS t r a d i n g s y s t e m w a s i n t r o d u c e d , a n d t h e o r d e r
matching process was fully automated.
From time to time, active trading (especially in large blocks of
securities) have moved away from the 'active' exchanges.
Securities firms , led by UBS AG, Goldman Sachs Group Inc. and
Credit Suisse Group, already steer 12 percent of U.S. security
trades away from the exchanges to their internal systems. That
share probably will increase to 18 percent by 2010 as more
investment banks bypass the NYSE and NASDAQ and pair buyers
and sellers of securities themselves, according to data compiled
by
Boston-based
Aite
Group
LLC,
a
brokerage-industry
consultant [citation needed].
Now that computers have eliminated the need for trading floors
like the Big Board's, the balance of power in equity markets is
shifting. By bringing more orders in-house, where clients can
m o v e b i g b l o c k s o f s t o c k a n o n y m o u s l y, b r o k e r s p a y t h e
exchanges less in fees and capture a bigger share of the $11
billion a year that institutional investors pay in trading
commissions
M A R K E T PARTI C I PAN T S
Many years ago, worldwide, buyers and sellers were individual
investors, such as wealthy businessmen, with long family
histories (and emotional ties) to particular corporations. Over
time, markets have become more "institutionalized"; buyers and
sellers are largely institutions (e.g., pension funds, insurance
companies, mutual funds, hedge funds, investor groups, and
banks). The rise of the institutional investor has brought with it
some improvements in market operations. Thus, the government
was responsible for "fixed" (and exorbitant) fees being markedly
reduced for the 'small' investor, but only after the large
institutions had managed to break the brokers' solid front on
fees they then went to 'negotiated' fees, but only for large
institutions)[citation needed].
H o w e v e r, c o r p o r a t e g o v e r n a n c e ( a t l e a s t i n t h e Wes t ) h a s b e e n
very much adversely affected by the rise of (largely 'absentee')
institutional 'owners'
I M P O R TA N C E O F S T O C K M A R K E T
The stock market is one of the most important sources for
companies to raise money. This allows businesses to be publicly
traded, or raise additional capital for expansion by selling
shares of ownership of the company in a public market. The
liquidity that an exchange provides affords investors the ability
to quickly and easily sell securities. This is an attractive feature
of investing in stocks, compared to other less liquid investments
such as real estate.
History has shown that the price of shares and other assets is an
i m p o r t a n t p a r t o f t h e d y n a m i c s o f e c o n o m i c a c t i v i t y, a n d c a n
influence or be an indicator of social mood. Rising share prices,
for instance, tend to be associated with increased business
investment and vice versa. Share prices also affect the wealth of
households and their consumption. Therefore, central banks tend
to keep an eye on the control and behavior of the stock market
and, in general, on the smooth operation of financial system
functions. Financial stability is the raison d'tre of central
banks.
Exchanges also act as the clearinghouse for each transaction,
meaning that they collect and deliver the shares, and guarantee
p a y m e n t t o t h e s e l l e r o f a s e c u r i t y. T h i s e l i m i n a t e s t h e r i s k t o a n
individual buyer or seller that the counterparty could default on
the transaction.
The smooth functioning of all these activities facilitates
economic growth in that lower costs and enterprise risks
promote the production of goods and services as well as
employment. In this way the financial system contributes to
i n c r e a s e d p r o s p e r i t y.
10
T H E B E H AVI O R O F T H E S T O C K M A R K E T
From experience we know that investors may temporarily pull
financial prices away from their long term trend level. Overreactions may occurso that excessive optimism (euphoria) may
drive prices unduly high or excessive pessimism may drive
prices unduly low. New theoretical and empirical arguments have
been put forward against the notion that financial markets are
efficient.
According to the efficient market hypothesis (EMH), only
changes in fundamental factors, such as profits or dividends,
ought to affect share prices. (But this largely theoretic academic
viewpoint also predicts that little or no trading should take
placecontrary to factsince prices are already at or near
equilibrium, having priced in all public knowledge.) But the
efficient-market hypothesis is sorely tested by such events as
the stock market crash in 1987, when the Dow Jones index
plummeted 22.6 percentthe largest-ever one-day fall in the
United States. This event demonstrated that share prices can fall
d r a m a t i c a l l y e v e n t h o u g h , t o t h i s d a y, i t i s i m p o s s i b l e t o f i x a
definite cause: a thorough search failed to detect any specific or
unexpected development that might account for the crash. It also
seems to be the case more generally that many price movements
are not occasioned by new information; a study of the fifty
largest one-day share price movements in the United States in
the post-war period confirms this. [3] Moreover, while the EMH
predicts that all price movement (in the absence of change in
fundamental information) is random (i.e., non-trending), many
studies have shown a marked tendency for the stock market to
trend over time periods of weeks or longer.
Var i o u s e x p l a n a t i o n s f o r l a r g e p r i c e m o v e m e n t s h a v e b e e n
promulgated. For instance, some research has shown that
changes in estimated risk, and the use of certain strategies, such
a s s t o p - l o s s l i m i t s a n d Val u e a t R i s k l i m i t s , t h e o r e t i c a l l y c o u l d
cause financial markets to overreact.
Other research has shown that psychological factors may result
in exaggerated stock price movements. Psychological research
has demonstrated that people are predisposed to 'seeing'
patterns, and often will perceive a pattern in what is, in fact,
just noise. (Something like seeing familiar shapes in clouds or
ink blots.) In the present context this means that a succession of
good news items about a company may lead investors to
overreact positively (unjustifiably driving the price up). A
11
I R R A T I O N A L B E H AVI O R
Sometimes the market tends to react irrationally to economic
news, even if that news has no real effect on the technical value
of securities itself. Therefore, the stock market can be swayed
tremendously in either direction by press releases, rumors,
euphoria and mass panic.
Over the short-term, stocks and other securities can be battered
or buoyed by any number of fast market-changing events, making
the stock market difficult to predict.
Bombay Stock Exchange
T h e B o m b a y S t o c k E x c h a n g e L i m i t e d ( H i n d i :
M u m b a e y a r B j r ) ( f o r m e r l y, T h e S t o c k E x c h a n g e , M u m b a i ;
popularly called The Bombay Stock Exchange, or BSE) is the
oldest stock exchange in Asia. It is also the biggest stock
exchange in the world in terms of listed companies with 6,000
listed companies as of August 2007. [1] It is located at Dalal
Street, Mumbai, India. On 31 December 2007, the equity market
capitalization of the companies listed on the BSE was US$ 1.79
trillion , making it the largest stock exchange in South Asia and
the tenth largest in the world.[2]
The Bombay Stock Exchange was established in 1875. Around
6,000 Indian companies list on the stock exchange, [3] and it has
a significant trading volume. The BSE SENSEX (SENSitive
12
indEX), also called the "BSE 30", is a widely used market index
in India and Asia. Though many other exchanges exist, BSE and
the National Stock Exchange of India account for most of the
trading in shares in India
BSE INDICES
The BSE SENSEX (also known as the BSE 30 index) is a valueweighted index composed of thirty scrips, with the base April
1979 = 100. The set of companies which make up the index has
been changed only a few times in the last twenty years. These
companies
account
for
around
one-fifth
of
the
market
capitalization of the BSE.
Apart from BSE SENSEX, which is the most popular stock index
in India, BSE uses other stock indices as well:
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
500
100
200
PSU
MIDCAP
SMLCAP
BANKEX
Tec k
Auto
Pharma
Fast Moving Consumer Goods (FMCG)
Consumer Durables
13
BSE BROADCAST
14
2000, January 15, 1992 On January 15, 1992, the Sensex crossed
the 2,000-mark and closed at 2,020 followed by the liberal
economic policy initiatives undertaken by the then finance
minister and current Prime Minister Dr Manmohan Singh.
3000, February 29, 1992 On February 29, 1992, the Sensex
surged past the 3000 mark in the wake of the market-friendly
12,000, April 20, 2006 The Sensex on April 20, 2006 crossed the
12,000-mark and closed at a peak of 12,040 points for the first
time.
13,000, October 30, 2006 The Sensex on October 30, 2006
crossed the magical figure of 13,000 and closed at 13,024.26
points, up 117.45 points or 0.9%. It took 135 days for the
Sensex to move from 12,000 to 13,000 and 123 days to move
from 12,500 to 13,000.
last 1,000 points in just four trading days. The index touched a
fresh all-time intra-day high of 19,096, and finally ended with a
smart gain of 640 points at 19,059.The Nifty gained 242 points
to close at 5,670.
20,000, October 29, 2007 The Sensex crossed the 20,000
the back of aggressive buying by funds ahead of the US
Reserve meeting. The index took only 10 trading days
1,000 points after the index crossed the 19,000-mark on
15. The major drivers of today's rally were index
mark on
Federal
to gain
October
H e a v yw e i g h t s L a r s e n a n d Tou b r o , R e l i a n c e I n d u s t r i e s , I C I C I
Bank, HDFC Bank and SBI among others. The 30-share index
spurted in the last five minutes of trade to fly-past the crucial
level and scaled a new intra-day peak at 20,024.87 points before
ending at its fresh closing high of 19,977.67, a gain of 734.50
points. The NSE Nifty rose to a record high 5,922.50 points
before ending at 5,905.90, showing a hefty gain of 203.60
points.
21,000, January 8, 2008 The sensex crossed the 21,000 mark in
intra-day trading after 49 trading sessions. This was backed by
high market confidence of increased FII investment and strong
corporate results for the third quarter. However, it later fell
back due to profit booking.
15,200, June 13, 2008 The sensex closed below 15,200 mark,
Indian market suffer with major downfall from January 21,2008
14,220, June 25, 2008 The sensex touched an intra day low of
13,731 during the early trades, then pulled back and ended up at
14,220 amidst a negative sentiment generated on the Reserve
Bank of India hiking CRR by 50 bps. FII outflow continued in
this week.
12,822, July 2, 2008 The sensex hit an intra day low of
12,822.70 on July 2nd, 2008. This is the lowest that it has ever
been in the past yea r. Six mon ths ago, on Januar y 10th, 2008,
the market had hit an all time high of 21206.70. This is a bad
time for the Indian markets, although Reliance and Infosys
continue to lead the way with mostly positive results. Bloomberg
lists them as the top two gainers for the Sensex, closely
followed by ICICI Bank and ITC Ltd
17
N ATI O N A L S TOC K E X C H A N G E L I M I T E D
Typ e
Location
Coordinates
Owner
Key people
Currency
No. of listings
MarketCap
Indexes
Web s i t e
Stock Exchange
Mumbai, India
19337N, 725135E
National Stock Exchange of India Limited
Mr. Ravi Narain Managing Director
INR
1587
US$ 1.46 trillion (2006)
S&P
CNX
Nifty
CNX
Nifty
Junior
S&P CNX 500
http://www.nse- india.com/
18
I N N O VAT I O N S
NSE has remained in the forefront of modernization of India's
capital and financial markets, and its pioneering efforts include:
Being the first national, anonymous, electronic limit order
book (LOB) exchange to trade securities in India. Since the
success of the NSE, existent market and new market structures
have followed the "NSE" model.
19
Being the first and the only exchange to trade GOLD ETFs
(exchange traded funds) in India.
MARKETS
C u r r e n t l y, N S E h a s t h e f o l l o w i n g m a j o r s e g m e n t s o f t h e c a p i t a l
market:
Equity
Futures and Options
Retail Debt Market
Wholesale Debt Market
INDICES
NSE also set up as index services firm known as India Index
Services & Products Limited (IISL) and has launched several
stock indices, including:
20
C E RTI F I C ATI O N S
NSE also conducts online examination and awards certification,
under its programmes of NSE's Certification in Financial
M a r k e t s ( N C F M ) [ 3 ] . C u r r e n t l y, c e r t i f i c a t i o n s a r e a v a i l a b l e i n 1 9
modules, covering different sectors of financial and capital
markets. Branches of the NSE are located throughout India.
D E R I VAT I V E
In finance, a security whose price is dependent upon or derived
from one or more is underlying assets. The derivative itself
is merely a contract between two or more parties. Its value
is determined by fluctuations in the underlying asset. The
most
common
underlying
assets
include stocks,
bonds, commodities, currencies, interest rates and market
indexes. Most derivatives are characterized by high
leverage.
Futures contracts, forward contracts, options and swaps are the
most common types of derivatives. Because derivatives are just
contracts, just about anything can be used as an underlying
asset. There are even derivatives based on weather data, such as
the amount of rain or the number of sunny days in a particular
region.
Derivatives are generally used to hedge risk, but can also be
used for speculative purposes. For example, a European investor
purchasing shares of an American company off of an American
exchange (using American dollars to do so) would be exposed to
e x c h a n g e - r a t e r i s k w h i l e h o l d i n g t h a t s t o c k . To h e d g e t h i s r i s k ,
the investor could purchase currency futures to lock in a
specified exchange rate for the future stock sale and currency
conversion back into euros.
T Y P E S O F T R A D E R S I N A D E R I VAT I V E S M A R K E T
Hedgers, speculators and arbitrators are the types of traders in
derivatives market.
HEDGERS:
Hedgers are those who protect themselves from the risk
associated with the price of an asset by using derivatives. A
person keeps a close watch upon the prices discovered in trading
and when the comfortable price is reflected according to his
wants, he sells futures contracts. In this way he gets an assured
fixed price of his produce.
21
S P E C U L A TO R S :
Speculators are some what like a middle man. They are never
i n t e r e s t e d i n a c t u a l o w i n g t h e c o m m o d i t y. T h e y w i l l j u s t b u y
from one end and sell it to the other in anticipation of future
price movements. They actually bet on the future movement in
the price of an asset.
They are the second major group of futures players. These
participants include independent floor traders and investors.
They handle trades for their personal clients or brokerage firms.
Buying a futures contract in anticipation of price increases is
known as going long. Selling a futures contract in anticipation
of a price decrease is known as going short. Speculative
participation in futures trading has increased with the
availability of alternative methods of participation.
Speculators have certain advantages over other investments they
are as follows:
If the traders judgment is good, he can make more money
in the futures market faster because prices tend, on average, to
change more quickly than real estate or stock prices.
22
A R B I T R A TO R S :
According to dictionary definition, a person who has been
officially chosen to make a decision between two people or
groups who do not agree is known as Arbitrator. In commodity
market Arbitrators are the person who takes the advantage of a
discrepancy between prices in two different markets. If he finds
future prices of a commodity edging out with the cash price, he
will take offsetting positions in both the markets to lock in a
profit. Move over the commodity futures investor is not charged
interest on the difference between margin and the full contract
value
FINANCIAL SYSTEM
The financial system is one of the most important inventions of
t h e m o d e r n s o c i e t y. T h e p h e n o m e n o n o f i m b a l a n c e i n t h e
distribution of capital of funds exists in every economy system.
There are areas or people with surplus funds as also those with a
deficit. A financial system functions as an intermediary and a
facilitates the flow of funds from the areas of surplus to those
of deficit. A financial system is a composition of various
i n s t i t u t i o n s , m a r k e t s , r e g u l a t i o n s a n d l a w s , p r a c t i c e s , m o n e y,
managers, analysts, transactions and claims and liabilities.
The financial system helps to determine both the cost and the
volume of credit. The system can affect a rise in the cost of
funds
which
adversely
affects
consumption,
productions,
e m p l o ym e n t a n d g r o w t h o f t h e e c o n o m y . s i m i l a r l y, l o w e r r i n g
the cost positive directions. Thus we find that a financial system
has an impact on the basic existence of an economy and its
citizens.
`The four main functions performed by a financial system are
given below:
The saving function
Liquidity function
Payment function
Risk function
23
FLOW OF FUNDS
Seekers of
funds (mainly
business
firms and
government)
Flow of funds
Flow of financial
service
Income and financial
claims
Suppliers of
funds
(mainly
household)
1 : T H E S AVI N G F U N C T I O N :
The public saving finds their way into the hands of those in
production through the financial system. Financial claims are
issued in the money and capital markets, which promise future
income flows. The funds in the hands of the producers result in
production of better goods and services, increasing societys
standard of living when saving flows decline. However the
growth of the investment and living standard begins to fall
2: LIQUIDITY FUNCTIONS:
Of all financial instruments, money is the form of deposits
offers the least risk, but its value is almost eroded by inflations.
That is why one always prefers to store the funds in financial
instruments like stocks, bonds, debentures, etc. the compromise
one makes in such investment is (1) that the risk involved is
more and (2) the degree of liquidity conversion of the claims
into money is less. The financial markets provide the investor
the opportunity to liquidate the investments.
3 : P AYM E N T F U N C T I O N :
The financial system offers a very convenient mode of payment
for goods and services.
The cheque system and credit card system are the easiest
methods of payment in the economy .the cost and time for
transaction are drastically reduced .in India ,while the cheque
system of payment is widely practiced , the credit card system
has entered only recently into urban India and is widely used in
these areas for payments of consumption expenditure.
24
4: RISK FUNCTION:
The financial markets provide protection against life, health and
income risks. These guarantees are accomplished through the
sale of life and health insurance, and properly insurance policies
.the financial markets provide immense opportunities for the
investor to hedge himself against of reduce the possible risk
involved in various investments.
FINANCIAL MARKETS
A financial market can be defined as the market in which
financial assets are created or transferred in which financial
assets represented a claim of the payment of a sum of money
sometime in the future and periodic payment in the form of
interest or dividend. Definition.
Financial markets could mean:
1. organizations that facilitate the trade in financial securities.
i.e. Stock exchanges facilitate the trade in stocks, bonds and
warrants.
2. the coming together of buyers and sellers to trade financial
securities. i.e. stocks and shares are traded between buyers and
sellers in a number of ways including: the use of stock
exchanges; directly between buyers and sellers etc.
In academia, students of finance will use both meanings but
students of economics will only use the second meaning.
Financial markets can be domestic or they can be international.
provide
instruments
for
the
markets,
which
facilitate
the
trading
of
R A I S I N G C AP I TAL
To understand financial markets, let us look at what the y are
used for, i.e. what is their purpose?
Without financial markets, borrowers would have difficulty
finding lenders themselves. Intermediaries such as banks help in
this process. Banks take deposits from those who have money to
save. They can then lend money from this pool of deposited
money to those who seek to borrow. Banks popularly lend money
in the form of loans and mortgages.
More complex transactions than a simple bank deposit require
markets where lenders and their agents can meet borrowers and
their
agents,
and
where
existing
borrowing
or
lending
commitments can be sold on to other parties. A good example of
a financial market is a stock exchange. A company can raise
money by selling shares to investors and its existing shares can
be bought or sold.
The following table illustrates where financial markets fit in the
relationship between lenders and borrowers:
Lenders
Financial
Intermediaries
Financial
Markets
Interbank
Stock
Banks
Exchange
Individuals Insurance Companies
Money Market
Companies Pension
Funds
Bond
Market
Mutual Funds
Foreign
Exchange
Borrowers
Individuals
Companies
Central
Government
Municipalities
Public
Corporations
LENDERS
Many individuals are not aware that they are lenders, but almost
everybody does lend money in many ways. A person lends money
when he or she:
BORROWERS
Individuals borrow money via bankers' loans for short term
needs or longer term mortgages to help finance a house
purchase.
Companies borrow money to aid short term or long term cash
flows. They also borrow to fund modernisation or future
business expansion.
Governments often find their spending requirements exceed their
t a x r e v e n u e s . To m a k e u p t h i s d i f f e r e n c e , t h e y n e e d t o b o r r o w.
27
D E R I VAT I V E P R O D U C T S
During the 1980s and 1990s, a major growth sector in financial
markets is the trade in so called derivative products, or
derivatives for short.
In the financial markets, stock prices, bond prices, currency
rates, interest rates and dividends go up and down, creating risk.
Derivative products are financial products which are used to
control risk or paradoxically exploit risk. It is also called
financial economics.
CURRENCY MARKETS
Main article: Foreign exchange market
S e e m i n g l y, t h e m o s t o b v i o u s b u y e r s a n d s e l l e r s o f f o r e i g n
exchange are importers/exporters. While this may have been true
in the distant past, whereby importers/exporters created the
initial demand for currency markets, importers and exporters
now represent only 1/32 of foreign exchange dealing, according
to BIS.[1]
28
A N A LYS I S O F F I N A N C I A L M A R K E T S
Much effort has gone into the study of financial markets and
how prices vary with time. Charles Dow, one of the founders of
D o w J o n e s & C o m p a n y a n d T h e Wal l S t r e e t J o u r n a l , e n u n c i a t e d a
set of ideas on the subject which are now called Dow Theory.
This is the basis of the so-called technical analysis method of
attempting to predict future changes. One of the tenets of
"technical analysis" is that market trends give an indication of
the future, at least in the short term. The claims of the technical
analysts are disputed by many academics, who claim that the
evidence points rather to the random walk hypothesis , which
states that the next change is not correlated to the last change.
The scale of changes in price over some unit of time is called
the volatility. It was discovered by Benot Mandelbrot that
changes in prices do not follow a Gaussian distribution, but are
rather modeled better by Lvy stable distributions . The scale of
c h a n g e , o r v o l a t i l i y, d e p e n d s o n t h e l e n g t h o f t h e t i m e u n i t t o a
power a bit more than 1/2. Large changes
C A P I TAL M A R K E T
Capital market is an organized market for long term funds
required , to meet the long term needs of business enterprises .
The capital market is the market for securities, where
companies and governments can raise longterm funds. The
capital market includes the stock market and the bond market.
Financial regulators, such as the U.S. Securities and Exchange
Commission, oversee the capital markets in their designated
countries to ensure that investors are protected against fraud.
The capital markets consist of the primary market, where new
29
STOCK EXCHANGE
Stock exchange is an organized market for industrial, financial
and government market for industrial, financial and government
securities.
Stock exchange also helps the public sector undertaking and the
government in raising long term loans. In brief, a stock market
or stock exchange is a place where stocks and shares and other
term securities are bought and sold as per certain rules and
regulations.
F E ATU R E S
S ERVI C E TO C O M PAN I E S
30
and
SERVICES TO INVESTORS
Stock exchange, in fact, is a gift to the investors, who gain
confidence by providing continuous marketing facilities.
LISTING OF SECURITIES:
Listing of securities means including the name of the company
security in the official list of the stock exchange for the purpose
of trading.
A stock exchange does not deal in the securities of all the
companies .it selects certain securities for transaction; such
securities are called listed securities.
31
Certificate copies of
M/A and A/A
association and Article of Association)
Consent of SEBI
Director report
Balance sheets
Agreement with the managing director
Agreement with underwriters
Statement showing distribution of shares
(Memorandum
of
R E L ATI O N O F TH E S TOC K M A R K E T TO TH E
MODERN FINANCIAL SYSTEM
The financial system in most western countries has undergone a
remarkable transformation. One feature of this development is
disintermediation. A portion of the funds involved in saving and
financing flows directly to the financial markets instead of
being routed via banks' traditional lending and deposit
operations. The general public's heightened interest in investing
in the stock market, either directly or through mutual funds, has
been an important component of this process. Statistics show
that in recent decades shares have made up an increasingly large
proportion of households' financial assets in many countries. In
the 1970s, in Sweden, deposit accounts and other very liquid
assets with little risk made up almost 60 per cent of households'
financial wealth, compared to less than 20 per cent in the 2000s.
The major part of this adjustment in financial portfolios has
gone directly to shares but a good deal now takes the form of
various kinds of institutional investment for groups of
individuals, e.g., pension funds, mutual funds, hedge funds,
insurance investment of premiums, etc. The trend towards forms
of saving with a higher risk has been accentuated by new rules
for most funds and insurance, permitting a higher proportion of
shares to bonds. Similar tendencies are to be found in other
industrialized countries . In all developed economic systems,
such as the European Union, the United States, Japan and other
developed nations, the trend has been the same: saving has
moved away from traditional (government insured) bank deposits
to more risky securities of one sort or another
32
T H E S TOC K M A R K E T, I N D I V I D U A L I N V E S TOR S ,
AND FINANCIAL RISK
Riskier long-term saving requires that an individual possess the
ability to manage the associated increased risks. Stock prices
f l u c t u a t e w i d e l y, i n m a r k e d c o n t r a s t t o t h e s t a b i l i t y o f
(government insured) bank deposits or bonds. This is something
that could affect not only the individual investor or household,
but also the economy on a large scale. The following deals with
some of the risks of the financial sector in general and the stock
market in particular. This is certainly more important now that
so many newcomers have entered the stock market, or have
a c q u i r e d o t h e r ' r i s k y' i n v e s t m e n t s ( s u c h a s ' i n v e s t m e n t ' p r o p e r t y,
i.e., real estate and collectables).
With each passing year, the noise level in the stock market rises.
Television comme nta tors, financia l writers, anal ysts, and mark et
strategists are all overtalking each other to get investors'
attention. At the same time, individual investors, immersed in
chat rooms and message boards, are exchanging questionable and
o f t e n m i s l e a d i n g t i p s . Yet , d e s p i t e a l l t h i s a v a i l a b l e i n f o r m a t i o n ,
investors find it increasingly difficult to profit. Stock prices
s k yr o c k e t w i t h l i t t l e r e a s o n , t h e n p l u m m e t j u s t a s q u i c k l y, a n d
people who have turned to investing for their children's
education
and
their
own
retirement
become
frightened.
Sometimes there appears to be no rhyme or reason to the market,
o n l y f o l l y.
This is a quote from the preface to a published biography about
t h e l o n g - t e r m v a l u e - o r i e n t e d s t o c k i n v e s t o r War r e n B u ffe t t . [ 2]
Buffett began his career with $100, and $105,000 from seven
33
34
Sharekhan, the retail broking arm of SSKI group and one of the
largest stock broking house in the country has won the
prestigious awaaz consumer vote awards 2005 for the most
preferred stock broking brand in India, in the investment
advisors category
Share khan equity related services include trade execution on
BSE,NSE derivatives commodities depository services online
trading and investment advice ,.sharekhan online trading and
investmen t site www.sharekhan.com was launched in 2000 .
Sharekhan Bag round network includes over 250 centres across
123 cities in India and having around 120000 customers and
equal number of demat customers.
Sharekhan won the award by vote of customer around the
c o u n t r y, a s p a r t o f I n d i a l a r g e s t c o n s u m e r s t u d y c o v e r 7 0 0 0
respondents 21 product and service across 21 major cities. the
study initiated by awaaz India first dedicated consumer channel
and member of the world wide CNBC network and ac Nielsen org
marg was aimed at understanding the brand preference of the
consumer and to decipher what are the most important loyalty
criteria for the consumer in each vertical
In order to select the award recipient spontaneous responses
rather than prompted responses were garnered with an intention
to glean unbiased preferences.
36
Softer,
preference
intangible
features
like
i m a g e r y,
equity
driving
A B O U T TH E C O MPAN Y
Share Khan Limited, a flagship broking firm in the share
market, is structured into strategic businesses Equities, Share,
Commodities and Mutual funds are in this firm. The head office
of Share Khan is in the Mumbai, this is one of the branches in
the Pune. This is only Share and Equity broking firm in India.
This is not only Share but bulk of the commodities, Mutual
funds. Share khan give to more information how to invest in the
share market, which types more earn money in the through the
share market.
Established in 1958, Share Khan commissioned its shares and
equities at Satara Road, Pune in 1962 and has today grown to
become the countr ys largest integrated share transfer and ranks
among the top quartile of low broking intra day and delivery
charges in the world.
With a strategic intent to achieve vertical integration in the
share business, Share Khan acquired two captive markets in
N i f t y, B S E a n d N S E .
MEANS OF FINANCING
Financing a company through the sale of stock in a
c o m p a n y i s k n o w n a s e q u i t y f i n a n c i n g . Al t e r n a t i v e l y, d e b t
financing (for example issuing bonds) can be done to avoid
g i v i n g u p s h a r e s o f o w n e r s h i p o f t h e c o m p a n y. U n o f f i c i a l
financing known as trade financing usually provides the major
37
M A R K E T S H A R E A N A LYS I S
1) Market capitalization.
2 ) L i q u i d i t y.
3 ) C o n t i n u i t y.
4) Industry representation.
5) Listed history
39
C O M P U T AT I O N O F S T O C K I N D E X :
A stock market may either be a price index or a wealth
index. In India most of the indices are using wealth index for
computation of stock market.
40
Company
No. of
Market
shares Price on
09/02/06
M ar k et capM ar k et
(Rs.)
Price on
18/02/06
Market cap
(Rs.)
T ATA
10
20/-
200/-
30/-
300/-
INFOSYS
20
30/-
600/-
40/-
800/-
IBM
20
100/-
2000/-
150/-
TO TAL
MARKET
CAP
2800/-
3000/4100/-
T h e I n d i a I n f o l i n e g r o u p , c o m p r i s i n g t h e h o l d i n g c o m p a n y, I n d i a
Infoline Limited and its wholly- owned subsidiaries, straddle the
entire financial services space with offerings ranging from
Equity research, Equities and derivatives trading, Commodities
trading, Portfolio Management Services, Mutual Funds, Life
Insurance, Fixed deposits, GoI bonds and other small savings
instruments to loan products and Investment banking. India
Infoline
also
owns
and
manages
the
websites
http://www.indiainfo line. com/ and http://www.5paisa.co m/
The company has a network of 758 business locations (branches
and sub-brokers) spread across 346 cities and towns. It has more
than 800,000 customers
India Infoline Limited is listed on both the leading stock
exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and
the National Stock Exchange (NSE) and is also a member of both
the exchanges. It is engaged in the businesses of Equities
b r o k i n g , Wea l t h Ad v i s o r y S e r v i c e s a n d P o r t f o l i o M a n a g e m e n t
Services. It offers broking services in the Cash and Derivatives
segments of the NSE as well as the Cash segment of the BSE. It
is registered with NSDL as well as CDSL as a depository
participant, providing a one-stop solution for clients trading in
the equities market. It has recently launched its Investment
banking
and
Institutional
Broking
business.
41
I n t e g r a t e d a n d i n n o v a t i v e u s e o f Tec h n o l o g y e n a b l i n g
clients to trade offline,online and Strategic tie-ups with latest
technology partners to facilitate trading access and direct
processing across more than 900 Branches spread over 310 cities
.
EQUITY
Being a member of the National Stock Exchange (NSE), Bombay
Stock Exchange (BSE) and dealer with Over the Counter
Exchange of India (OTCEI) we handle your trading needs,
t h r o u g h a n e t w o r k o f e x p e r i e n c e d d e a l e r s a c r o s s t h e c o u n t r y, a n d
through our comprehensive website.
people
staff
K a r v y.
A B O U T E M K AY
Emkay offers futures trading through "Emkay Corporate Services
( P ) L t d . " . We h a v e me m b e r s h i p w i t h t w o o f t h e ma j o r C o mm o d i t y
e x c h a n g e s o f t h e c o u n t r y.
Multi Commodity Exchange of India Ltd, Mumbai (MCX
National Commodity and Derivative Exchange, Mumbai (NCDEX
Large numbers across the country participate in the futures
market through Emkay's rapidly expanding online trading
terminal network extending to even remote areas. Local, national
and international agri-information is disseminated through the
company's large branch network. Seminars, free in house
literature and interactive site sessions raise awareness levels on
t h e f u t u r e s m a r k e t . C o n s e q u e n t l y, l a r g e n u m b e r s o f i n f o r m e d
participants enter the trading process resulting in increased
v o l u m e s a n d m a r k e t e f f i c i e n c y.
44
OUR MISSION
To provide research driven, unbiased investment advise with the
objective of achieving sustainable superior investment returns
for our clients
To provide flawless execution support to mee t diverse client
n e e d s o n a p l a t f o r m o f p r o f e s s i o n a l i s m a n d i n t e g r i t y.
O U R VAL U E S
To be fair, empathe tic and responsive in serving our customers
To respect and reinforce our fellow emp lo ye es and the power of
teamwork
To strive relentlessl y to improve what we do and how we do it.
To always earn and be worth y of our customer's trust
THE JOURNEY
Emkays institutional clientele includes some of the largest
players in the Fund Management business. A partial list is
provided below.
1.
2.
3.
4.
5.
6.
COMMODITY MARKET
India has a deep ingrained knowledge in commodity
trading
(and
particularly
forward
trading
in
commodities), especially in the interior heartland.
For last 40 years or so, such forward (futures)
trading was banned in the country for a variety of
reasons and it is being revived now. The ban has
meant that two generations have lost touch with the
trading skills and the related knowledge levels in
the commodity space. Fortunately much of the skill
sets have migrated to stock exchanges.
In
these
intervening
years,
some
regional
exchanges specializing in specific commodities,
where the bans were lifted, have carried on the
baton. Also large informal trading, primarily by the
speculative segment of the universe of market
participants has remained. This has led to a
mindset in the common man in the country that
commodity exchanges are purely speculative in
nature. The hedging and price discovery functions
46
that
they
perform
are
largely ignored today by
the cross section of the
population.
Our endeavor is to reach
to
the
producers,
endusers, and even the retail
investors, at a grassroots
level.
Education
and
awareness has a key role
to play in achieving this
vision
WHY
COMMODITY
MARKET?
Commodity
derivatives
records high volumes in
the markets the world over
compared
to
equity
derivatives.
In
an
era
where risks to investments
are on the rise and India
being
predominantly
an
a g r a r i a n e c o n o m y, n e e d s t o
switch
to
commodity
derivatives to top the list
of developed nations.
47
U N D E R S TAN D I N G TH E
COMMODITIES MARKETS
Indian
markets
have
recently
thrown open a new avenue for
retail investors and traders to
participate:
commodity
2 4 h r s S I LVE R S p o t P r i c e
derivatives. For those who want
to
diversify
their
portfolios
beyond shares, bonds and real
estate, commodities is one of the
best
options.
Commodities
actually
offer
i m m e n s e p o t e n t i a l t o b e c o m e aL i v e Q u o t e s
s e p a r a t e a s s e t c l a s s f o r m a r k e t -G o l d a n d S i l v e r ( c u r r e n t b i d ,
s a v v y i n v e s t o r s , a r b i t r a g e u r s a n d$ c h a n g e , h i g h , l o w )
speculators.
Commodities
are
easy to understand and are based
on the fundamentals of demand
and
s u p p l y.
Retail
investors
should understand the risks and
advantages
of
trading
in
commodities
futures
before
t a k i n g a l e a p . H i s t o r i c a l l y, p r i c e s
in commodities futures have been
less
volatile
compared
with
equity and bonds, thus providing
an
efficient
portfolio
diversification
option.
Like any other market, the one
for commodity futures plays a
valuable
role
in
information
pooling and risk sharing. The
market mediates between buyers
and sellers of commodities thus
making the underlying market
more liquid.
48
Wea l t h M a n a g e me n t
Broking & Distribution
Commodity Broking
Portfolio Management Services
Institutional Equities
Private Equity
Investment Banking Services and
Principal Strategies
We h a v e a d i v e r s i f i e d c l i e n t b a s e t h a t i n c l u d e s r e t a i l c u s t o me r s
(including High Net worth Individuals), mutual funds, foreign
institutional investors, financial institutions and corporate
c l i e n t s . We a r e h e a d q u a r t e r e d i n M u m b a i a n d a s o f J u n e 3 0 ,
2008, had a network spread over 450 cities and towns comprising
1,496 Business Locations operated by our Business Partners and
us. As at June 30, 2008, we had 486,648 registered customers.
In 2006, the Company placed 9.48% of its equity with two
leading private equity investors based out of the US New
Ver n o n P r i v a t e E q u i t y L i m i t e d a n d B e s s e m e r Ven t u r e P a r t n e r s .
The company got listed on BSE and NSE on September 9, 2007.
The issue which was priced at Rs.825 per share (face value Rs.5
per share) got a overwhelming response and was subscribed
27.18 times in turbulent market conditions. The issue gave a
return
of
21%
on
the
date
of
listing.
As of end of financial year 2008, the group networth was Rs.7
bn and market capitalization as of March 31, 2008 was Rs.19 bn.
For year ended March 2008, the company showed a strong top
line growth of 91% to Rs.7 bn as compared to Rs.3.68 bn, last
year. New businesses like investment banking, asset management
and fund based activities have contributed to this growth.
Rs. Crores
FY
Growth
2 0 0 7 - 0 8 ( YoY )
49
Total
Revenues
701
91%
E B I D TA
270
97%
P AT
156
100%
Pattern
at
on
June
30,
2008
businesses
and
primary
products
and
services
are:
W E A LTH M A N A G E M E N T
Financial planning for individual, family and business wealth
creation and management needs. These are provided to customers
t h r o u g h o u r Wea l t h M a n a g e m e n t s e r v i c e c a l l e d P u r p l e
We o ffe r t h e s e s e r v i c e s t h r o u g h o u r b r a n c h e s , B us i n e s s P a r t n e r
l o c a t i o n s , t h e i n t e r n e t a n d m o b i l e c h a n n e l s . We a l s o h a v e
strategic tie-ups with State Bank of India and IDBI Bank to
offer our online trading platform to its customers.
COMMODITY BROKING
Through Motilal Oswal Commodities Broker (P) Ltd our fully
owned subsidiary; we provide commodity trading facilities and
related products and services on MCX and NCDEX. Besides
50
INSTITUTIONAL EQUITIES
We o ffe r e q u i t y b r o k i n g s e r v i c e s i n t h e c a s h a n d d e r i v a t i v e
segments to institutional clients in India and overseas. These
clients include companies, mutual funds, banks, financial
institutions, insurance companies, and FIIs. As at March 31,
2008, we were empanelled with over 300 institutional clients
i n c l u d i n g 1 9 1 F I I s . We s e r v i c e t h e s e c l i e n t s t h r o u g h d e d i c a t e d
sales teams across different time zones.
INVESTMENT BANKING
We o ffe r f i n a n c i a l a d v i s o r y s e r v i c e s r e l a t i n g t o me rg e r s a n d
acquisitions
(domestic
and
cross-border),
divestitures,
restructurings and spin-offs through Motilal Oswal Investment
51
Advisors
Private
Ltd.
(MOIAPL)
We a l s o o ffe r c a p i t a l r a i s i n g a n d o t h e r i n v e s t me n t b a n k i n g
services such as the management of public offerings, private
placements (including qualified institutional placements), rights
issues, share buybacks, open offers/delistings and syndication of
debt
and
e q u i t y.
MOIAPL has closed 23 transactions in 2007-08 worth US$ 1.8
billion and had 18 mandates in hand as at March 31, 2008.
P R I VAT E E Q U I T Y
I n 2 0 0 6 , o u r p r i v a t e e q u i t y s u b s i d i a r y, M o t i l a l O s w a l Ven t u r e
Capital Advisors Private Ltd (MOVCAPL) was appointed as the
investment manager and advisor to a private equity fund, India
Business Excellence Fund, which was launched with a target of
raising US$100 mn. The fund is aimed at providing growth
capital to small and medium enterprises in India, with
investments typically in the range of US$3 mn to US$7 mn.
MOVCAPL will manage and advise the fund and other private
equity funds, which may be raised in the future. In its final
closing, in December 2007, the fund obtained commitments of
US$125 mn (Rs.4,875 mn) from investors in India and overseas.
The Fund has deployed/ committed $ 58 mn across 8 deals.
MOVCAPL has recently launched an INR 750 crores domestic
Real Estate Private Equity Fund called India Realty Excellence
Fund sponsored by Motilal Oswal Financial Services Ltd.
P R I N C I PAL S T R ATE G I E S G R O UP
For effective management of treasury operations and to
capitalize on market opportunities, the Group has set up a 30
member team which would be responsible for effective
deployment of funds into different trading and arbitrage
strategies.
FOCUS ON RESEARCH
Research is the solid foundation on which Motilal Oswal
Securities advice is based. Almost 10% of revenue is invested on
equity research and we hire and train the best resources to
52
53
54
Commodity Business
Investment Banking
R e l i g a r e Ven t u r e C a p i t a l P r i v a t e L i m i t e d
55
R e l i g a r e M a c q u a r i e Wea l t h M a n a g e m e n t L i m i t e d
50:
50
joint
ventures
management business
with
Macquarie
for
wealth
5 0 : 5 0 J o i n t Ven t u r e b e t w e e n
Management business in India
for Asset
L i f e I n s u r a n c e C o m p a n y, J o i n t Ven t u r e b e t w e e n
Aegon and BCCL for Life insurance business in India
REL,
E Q U I T Y & D E R I VAT I V E S
Trading in Equities with Religare truly empowers you for your
i n v e s t m e n t n e e d s . We e n s u r e y o u h a v e a s u p e r l a t i v e t r a d i n g
experience through
make
trading
easier
and
better?
INVESTMENT PHILOSOPHY
56
We b e l i e v e t h a t o u r i n v e s t o r s a r e b e t t e r s e r v e d b y a d i s c i p l i n e d
investment approach, which combines an understanding of the
goals and objectives of the investor with a fine tuned strategy
backed by research.
Stock specific selection procedure based on fundamental
research for making sound investment decisions.
Capital preservation.
Selling
v o l a t i l i t y.
discipline
and
use
of
Derivatives
to
control
OUR SCHEMES
PAN T H E R
The Panther portfolio aims to achieve higher returns by taking
aggressive positions across sectors and market capitalizations. It
is suitable for the High Risk High Return investor with a
strategy to invest across sectors and take advantage of various
market conditions.
TORTOISE
T h e Tor t o i s e p o r t f o l i o a i m s t o a c h i e v e g r o w t h i n t h e p o r t f o l i o
value over a period of time by way of careful and judicious
investment in fundamentally sound companies having good
prospects. The scheme is suitable for the Medium Risk Medium
Return investor with a strategy to invest in companies which
have consistency in earnings, growth and financial performance.
ELEPHANT
The Elephant portfolio aims to generate steady returns over a
longer period by investing in Securities selected only from BSE
100 and NSE 100 index. This plan is suitable for the Low Risk
Low Return investor with a strategy to invest in blue chip
companies, as these companies have steady performance and
reduce liquidity risk in the market.
57
C ATE R P I L L A R
The Caterpillar portfolio aims to achieve capital appreciation
over a long period of time by investing in a diversified
portfolio. This scheme is suitable for investors with a high risk
appetite. The investment strategy would be to invest in scrips
which are poised to get a re-rating either because of change in
business, potential fancy for a particular sector in the coming
years/months, business diversification leading to a better
operating performance, stocks in their early stages of an upturn
or for those which are in sectors currently ignored by the
market.
LEO
Leo is aimed at retail customers and structured to provide
medium to long-term capital appreciation by investing in stocks
across the market capitalization range. This scheme is a mix of
moderate and aggressive investment strategies. Its aim is to have
a balanced portfolio comprising selected investments from both
Tortoise and Panther. Exposure to Derivatives is taken within
permissible regulatory limits.
INVESTMENT BANKING
We p r o v i d e i n n o v a t i v e , i n t e g r a t e d a n d b e s t - f i t s o l u t i o n s t o o u r
corporate customers. It is our continuous endeavor to provide
value enhancement through diverse financial solutions on an
ongoing basis, through offerings like Corporate Debt, Private
E q u i t y,
IPO,
ECB,
FCCB,
GDR/ADR
etc.
Investment Banking with Religare offers the following services:
C O R P O R ATE F I N A N C E
We f o c us o n f i n d i n g r i g h t a n d r e l e v a n t p a r t n e r s f o r o u r c l i e n t s ,
who not only help in adding value but also improve the future
v a l u a t i o n o f t h e o r g a n i z a t i o n . We s p e c i a l i z e i n s t r u c t u r e d
financing and providing advisory services related to financial
planning, modeling and advising on financial requirements.
MERCHANT BANKING
IPO/FPO/RIGHTS
ADR/GDR/FCCB
BUY BACK OF SHARE
58
ABOUT INDIABULLS
Indiabulls is Indias leading Financial Services and Real Estate
company having over 640 branches all over India. Indiabulls
serves the financial needs of more than 4,50,000 customers with
its wide range of financial services and products from securities,
derivatives trading, depositary services, research & advisory
services, consumer secured & unsecured credit, loan against
shares and mortgage & housing finance. With around 4000
Relationship Managers, Indiabulls helps its clients to satisfy
their customized financial goals. Indiabulls through its group
companies has entered Indian Real Estate business in 2005. It is
currently evaluating several large-scale projects worth several
hundred million dollars.
Indiabulls Financial Services Ltd is listed on the National
Stock Exchange, Bombay Stock Exchange and Luxembourg Stock
Exchange. The market capitalization of Indiabulls is around USD
6,300 million (31st December, 2007). Consolidated net worth of
the group is around USD 905 million (31st December, 2007).
Indiabulls and its group companies have attracted more than
USD 800 million of equity capital in Foreign Direct Investment
(FDI) since March 2000. Some of the large shareholders of
Indiabulls are the largest financial institutions of the world such
a s F i d e l i t y F u n d s , G o l d m a n S a c h s , M e r r i l l Lyn c h , M o r g a n
Stanley and Farallon Capital.
Business of the company has grown in leaps and bounds since its
inception. Revenue of the company grew at a CAGR of 159%
from FY03 to FY07. During the same period, profits of the
company
grew
at
a
CAGR
of
184%.
Indiabulls became the first company to bring FDI in Indian Real
Estate through a JV with Farallon Capital Management LLC, a
respected US based investment firm. Indiabulls has demonstrated
deep understanding and commitment to Indian Real Estate market
by winning competitive bids for landmark properties in Mumbai
and Delhi.
Indiabulls Financial Services Ltd
59
Last traded
250.00
Change
18.55 (8.01%)
Time
29 Aug, 16:01
V ol u m e
3300365
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231.45
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255.50 - 238.00
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Close (Rs)
2,293.05
520.90
543.85
92.45
44.30
128.75
68.10
326.65
130.65
1,278.25
MUTUAL FUND
60
61
ABOUT US
AnandRathi is a leading full service securities firm providing
the entire gamut of financial services. The firm, founded in 1994
by Mr. AnandRathi, toda y has a pan India presence as well as an
international presence through offices in Dubai and Bangkok. AR
provides a breadth of financial and advisory services including
w e a l t h m a n a g e m e n t , i n v e s t m e n t b a n k i n g , c o r p o r a t e a d v i s o r y,
brokerage & distribution of equities, commodities, mutual funds
and insurance, structured products - all of which are supported
by powerful research teams.
The firm's philosophy is entirely client centric, with a clear
focus on providing long term value addition to clients, while
maintaining the highest standards of excellence, ethics and
professionalism. The entire firm activities are divided across
distinct client groups: Individuals, Private Clients, Corporates
and Institutions and was recently ranked by Asia Money 2006
poll amongst South Asia's top 5 wealth managers for the ultrarich.
I n y e a r 2 0 0 7 C i t i g r o u p Ven t u r e C a p i t a l I n t e r n a t i o n a l j o i n e d t h e
group as a financial partner
62
MUTUAL FUNDS
AR is one of India's top mutual fund distribution houses. Our
success lies in our philosophy of providing consistently
superior, independent and unbiased advice to our clients backed
b y i n - d e p t h r e s e a r c h . We f i r m l y b e l i e v e i n t h e i m p o r t a n c e o f
selecting appropriate asset allocations based on the client's risk
profile.
We h a v e a d e d i c a t e d mu t u a l f u n d r e s e a r c h c e l l f o r mu t u a l f u n d s
that consistently churns out superior investment ideas, picking
best performing funds across asset classes and providing
insights into performances of select funds.
DEPOSITORY SERVICES
AR Depository Services provides you with a secure and
convenient way for holding your securities on both CDSL and
NSDL.
Our depository services include settlement, clearing and custody
o f s e c u r i t i e s , r e g i s t r a t i o n o f s h a r e s a n d d e m a t e r i a l i z a t i o n . We
offer you daily updated internet access to your holding statement
a n d t r a n s a c t i o n s u m m a r y.
CDSL
Depository
NSDL Depository
COMMODITIES
Commodities broking- A whole new opportunity to hedge
business risk and an attractive investment opportunity to deliver
superior returns for investors
.
Our commodities broking services include online futures trading
through NCDEX and MCX and depository services through
CDSL. Commodities broking is supported by a dedicated
research cell that provides both technical as well as fundamental
research. Our research covers a broad range of traded
commodities including precious and base metals, Oils and
Oilseeds, agri-commodities such as wheat, chana, guar, guar gum
and
spices
such
as
sugar,
jeera
and
cotton.
In addition to transaction execution, we provide our clients
customized advice on hedging strategies, investment ideas and
arbitrage opportunities.
63
INSURANCE BROKING
As an insurance broker, we provide to our clients comprehensive
risk management techniques, both within the business as well as
on the personal front. Risk management includes identification,
measurement and assessment of the risk and handling of the risk,
of which insurance is an integral part. The firm deals with both
life insurance and general insurance products across all
insurance
companies.
Our guiding philosophy is to manage the clients' entire risk set
by providing the optimal level of cover at the least possible
cost. The entire sales process and product selection is research
o r i e n t e d a n d c u s t o m i z e d t o t h e c l i e n t ' s n e e d s . We l a y s t r o n g
emphasis on timely claim settlement and post sales services.
Our services
Risk Management
IPOs
We a r e a l e a d i n g p r i ma r y ma r k e t d i s t r i b u t o r a c r o s s
Our strong performance in IPOs has been a result
experience in the Primary Market, a wide network
across India, strong distribution capabilities and
research
t h e c o u n t r y.
of our vast
of branches
a dedicated
team
We h a v e b e e n c o ns i s t e n t l y r a n k e d a mo n g t h e t o p 1 0 d i s t r i b u t o r s
of IPOs on all major offerings. Our IPO research team provides
clients with indepth overviews of forthcoming IPOs as well as
investment recommendations. Online filling of forms is also
available.
INVESTMENT BANKING
64
65
RESEARCH OBJECTIVE
S T AT E M E N T O F P R O B L E M
Are people really getting benefits from the various predictions
being made by the analysis?
Objective of the research project
To l e a r n t h e r o l e o f m o n e y, a n d b a n k i n g s y s t e m .
67
R E S E A R C H M E T H O D O L O G Y A N D L I M I T AT I O N
RESEARCH DESIGN
Problem is complex and real in nature, lot of efforts have
undergone for the research by meeting various people and asking
them about their experience .various people have undergone huge
losses in the stock market lot of material has been collected
from the internet.
The research methodology consisted following steps:
1. DEFINING THE OBJECTIVES:
The aim of this project as has already been mentioned was to
sales and analysis of mutual funds. For this our research
contains two partsa.
To sale the products we have to first generate database on the basis of marketing
research.
68
b.
D A TA S O U R C E S
from
primary
and
secondary
data.
The
P R I M A R Y D A TA
This type of data does not exist; it is originated by primary
sources
like
personal
interaction
or
field
back
forms,
questionnaires that act as tools for collecting data.
ii.
S E C O N D A R Y D A TA
This type of data already exists, and used to generate
i n f o r m a t i o n a s r e q u i r e d . We c o l l e c t t h e s e c o n d a r y d a t a t h r o u g h
I n t e r n e t , b o o k s , j o u r n a l s a n d m a g a z i n e s o f t h e c o m p a n y, v a r i o u s
company broachers, talking with people.
RESEARCH APPROACH
The research approach adopted here was the survey method. But
other approaches also used such as observation research.
3 . C O L L EC T I N G TH E I N F O R M ATI O N
With respect to primary and secondary data, the information is
collected. Primary data tells us present scenario of financial
market. Secondary data means that to get the data from the
internet, company magazines, talking with people and convince.
D A TA C O L L E C T I O N :
Base on the above questionnaire data are collected by survey
methods.
1. SAMPLING METHOD:
The sampling method, which is adopted, is Random Sampling.
69
2 . D A TA A N A L Y S I S :
3. The Analys is of survey has been done on % basis.
D A TA C O L L E C T I O N
P R I M A R Y D A TA
The primary data to be selected was based upon the response of
the respondents to the questionnaire designed. The questionnaire
designed was given to us from our immediate boss... The
questionnaire consists of closed ended questions.
A part of Questionnaire was targeted to know the personal
details of the respondents. Another part comprised of the selfdesigned questionnaire and will consist of closed ended
questions with every question having its own importance and
meaning.
S E C O N D A R Y D A TA
The secondary data was collected by referring through web sites,
and the final data was analyzed systematically to achieve the
desired result.
D A TA A N A L Y S I S
F o r a n a l yz i n g t h e d a t a o b t a i n e d a f t e r c o n d u c t i n g t h e s u r v e y,
percentage method was used. All the views and data obtained
were also interpreted as clearly as possible.
STUDY
SAMPLE SIZE
70
SAMPLING METHOD
C O M P A R A T I V E A N A LYS I S A N D I N T E R P R E T AT I O N S
A N A LYS I S O F M A L E S A N D F E M A L E S S U R V E Y E D :
27%
male
female
73%
71
male
female
5
0
male
female
B R I E F A N A LYS I S
The diagram helped us in judging the number and percentage of
males and females after conducting the survey; it was found that
out of customers were males and was females. Thus, we came to
know that 73% of the users were males and the remaining 27%
were females.
L I M I T AT I O N O F S T U D Y
1.
lot
of
efforts
have
been
undergone
to
improve
the
Once the people who are involved in it. They play it like
Its
difficult
to
make
people
aware
about
the
market
72
4.
73
74
QUESTIONNAIRE
1. What is a commodity?
ANS: The term 'commodity' includes all kinds of goods. FCRA
defines 'goods' as 'every kind of movable property other than
actionable claims, money and securities'
3 . W h y Tr a d e i n C o m m o d i t y E x c h a n g e s ?
ANS: 1. Hedgers
2. No counter party risks
3. Higher Leverage: Get high exposures for the margin
provided
4. Prices are pegged to international markets of NYMEX,
C BO T, CM E , L M E e t c
75
and
Derivatives
Exchange
of
India,
BIBLIOGRAPHY
Websites:
w w w.g o o g l e . c o m
w w w.w i k i p e d i a . c o m
w w w.s h a r e k h a n . c o m
w w w.r e l i g a r e . c o m
w w w.k a r v a y.c o m
w w w.i n d i a b u l l s . c o m
Indiainfoline.com
78