SUMMER TRAINING PROJECT REPORT SMC GLOBAL SECURITIES LIMITED

SSSSSSSS

ONLINE TRADING

SESSION 2007-2010

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PREFACE
Indian stock market have been role during the past five years,genrating an annual return of 28%(on the nifty index).Still general public prefers putting it money in bank,rather than putting it in stock. Within Indian economy doing so well, return from stock market have been far higher than return from any other investment.Avenue rupees 1, 00,000 invested in the nifty in April would have been worth a little over rupees 3, 00,000 by April, 2008.But the top value creatures have been delivered far superior returns the same lakh invested in unitech would have been worth rupees 1.52cr if it had been invested in aban aban offshare. Most of people are reluctant to put their money in shares,because of uncertainty of the return.At times stock market is so volatile that it becomes very difficult for investors to decide whether to purchase some more stocks or sell them,whether to enter the market or book profit. with so much uncertainty prevailing, the case of investing in stock market is totally different from the case of investing in some other places. Lack of awareness is also holding people back to a great extent,until and unless one understands the degree of risk involved in investing in shares,the kind of return one can get from there and history of such returns and how to go about it,one will not go ahead.so making aware the public about things happing in stock market is something that should be done at war level.

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TABLE OF CONTENTS

CONTENTS CHAPTER – 1 : INTRODUCTION
1.1 1.2 1.3 1.4 1.5 Overview of Industry as a whole Profile of the organization Problems of the organization Competition Information S.W.O.T. Analysis of the Organization

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1 8 12 13 17

CHAPTER – 2 : OBJECTIVES AND METHODOLOGY
2.1 Significance of the study 2.2 Managerial usefulness of the study 2.3 Objectives of the study 2.4 Scope of the study 2.5 Methodology 20 20 21 21 23

CHAPTER – 3 : CONCEPTUAL DISCUSSION CHAPTER – 4 : DATA ANALYSIS CHAPTER – 5 : FINDINGS AND RECOMMENDATIONS ANNEXURE * Questionnaire BIBLIOGRAPHY

30 52 63

1.1 OVERVIEW OF INDUSTRY PROFILE
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1956 includes shares. security receipt or any other instruments so declared by the central government.541 996 158 15 82 152 47 30 45 90 78 40 0 2008 1 4 2 19 1 2 9. government securities.487 4. This process of mobilization of resources is carried out under the supervision and overview of the regulators. Market Participants in Securities Market Market Participants Securities Appellate Tribunal Regulators* Depositories Stock Exchanges With Equities Trading With Debt Market Segment With Derivative Trading Brokers Corporate Brokers Sub-brokers FIIs Portfolio Managers Custodians Share Transfer Agents Merchant Bankers Bankers to an Issue Debenture Trustees Underwriters Venture Capital Funds Foreign Venture Capital Investors Mutual Funds Collective Investment Schemes (Source: SEBI Bulletin. units of collective investment scheme. scrips.074 1319 205 15 76 155 50 28 35 106 97 40 0 MARKET SEGMENT The securities market has two interdependent segments: the primary and the 4 . derivatives of securities.190 44.110 27. bonds. stocks or other marketable securities of like nature in or of any incorporate company or body corporate.443 4.Mobilization of savings from surplus savers to deficit savers is most efficiently carried out by the securities market through a range of complex products called "securities".) 2007 1 4 2 21 1 2 9. The definition of securities as per the SCRA. interest and rights in securities.

Presently only two 5 . There are 23 exchanges in India and all of them follow a systematic settlement period. NSE also provides a formal trading platform for trading of a wide range of debt securities. All the trades taking place over a trading cycle (day=T) are settled together after a certain time (T+2 day). A variant of the forward market is Futures and options market. The secondary market operates through two mediums. Nearly 100% of the trades in capital market segment are settled through demat delivery. the corporate entities who issue mainly debt and equity instruments and the government (central as well as state) who issue debt securities. The other option is to trade using the infrastructure provided by the stock exchanges. There are two major types of issuers of securities. These securities are issued by public limited companies or by government agencies.secondary market. In the primary market the resources are mobilized either through the public issue or through private placement route. Most of the trades in the government securities are in the OTC market. The primary market is the channel for creation of new securities. where securities are traded for future delivery and payment. All the spot trades where securities are traded for immediate deliver y and payment take place in the OTC market. The clearing corporation acts as a counterparty and guarantees settlement. the over-the-counter (OTC) market and the exchange-traded market. including government securities. It is a public issue if anybody and everybody can subscribe for it. namely. The secondary market enables participants who hold securities to adjust their holdings in response to changes in their assessment of risks and returns. OTC markets are informal markets where trades are negotiated. These new securities issued in the primary market are traded in the secondary market. whereas if the issue is made available to a selected group of persons it is termed as private placement. The trades executed on the National Stock Exchange (NSE) are cleared and settled by a clearing corporation. A variant of the secondary market is the forward market.

75 52.3 8.05 33. Mumbai (BSE) provides trading in the derivatives of securities.9 N .5 4.23 44.0 35.0 36.39 20.5 16.69 8.9 17.78 17.98) N .73 34.63 23..6 7.16 27.8 INTERNATIONAL SCENARIO Following the implementation of reforms in the securities industry during the last decade.5 14.3 4.17 33.65 38.0 12.60 (17. 24. Dependence on Securities Market Share (%) of Securities Market in External Finance of Fiscal Deficit of Corporate Central Govt.6 64.9 30.7 9. The following table shows their percentage share respectively.58 31. 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004 -05 2005-06 2006-07 Source: CMIE & RBI. A.9 67.98 Financial Savings Number of Households 14. 6.86 22.75 Fiscal Deficit of State Govt 13.9 20.2 14.9 26. Dependence on Securities Market • • • Corporate Sector Government Households The above mentioned sectors are dependent on the Capital Market for their financial needs.38 53.7 17.8 15.5 7.9 13.2 7. A. Indian stock markets have graduated to a better position vis-à-vis the securities market in developed and emerging markets.0 5.5 16.6 17. As may be seen from Table 16 .7 18.1 7.4 77.2 48.2 19.99 21.6 14.exchanges viz.8 17.4 22.2 54.35 19.9 4.67 22.1 61.9 32.1 13.1 18.7 6.5 60.12 28.4 69. 19. NSE and Stock Exchange.

while S&P considers only 5.0 USA UK Germany 684 1.412 3. as S&P (even other international publications) does not cover the whole market.2. Standard and Poor’s (S&P) ranked India 17th in terms of market capitalization (19th in 2002).3 83.079 57.644 companies. If whole market were taken into consideration.547 2.4% in case of US.029 1.5 Share of Total Mk tCap 20.296 6268 715 681 999 426.2 7 .7 70.151 2.2 89. At the end of 2003. India has the number one ranking in terms of listed securities on the Exchanges followed by the USA. of listed Companies 5.116 Market Capitalisation ($ Bn.3 162.6 88. do not reflect the full Indian market.5 1.8%.0% whereas US index accounted for 93. though quite impressive.5% in India and 16. Market Concentration in the World Index as on End 2007 Index Stocks Share of 10 largest Index (In Percent) Share Market Japan Singapore France Total Mkt Cap 99.) 15. It is seen that the index stocks’ share of total market capitalization in India is 75.1 HongkongIndia 1.4 57.2 109. which is comparable to the other developed market.2007 A comparative study of concentration of market indices and indices stocks in different world markets is presented in the table below. The ten largest index stocks share of total market capitalization is 36.5 Source: S& P Emerging Stock Market Factbook. These data. 16th in terms of total value traded in stock exchanges (17th in 2002) and 6th in terms of turnover ratio (7th in 2002). For example.147 130.3 (%) Turnover ($ Mn. India’s position vis-à-vis other countries would be much better.8 100. and also one of the highest in the emerging markets.4 88 71.295 2. India has more than 9000 listed companies at the end of March 2004.9 42. India has a turnover ratio.266 2.2 91.273 Turnover Ratio (%) 122.041 Market Capitalisation Ratio139.311 China 3.0 Singapore 475 145 168.) 14.5 332 477 508 56.8 159.4 55. International Comparison: end December 2007 Particulars Japan No.

while Indian listed companies accounted for 1.3 93. it has witnessed a decline and stood at US $ 34.66% in end-2006. 8 . The share of US in worldwide market capitalization decreased from 47. It is significant to note that US alone accounted for about 47.5 The stock markets worldwide have grown in size as well as depth over last one decade.6 95. The market capitalization of all listed companies taken together on all markets stood at US $ 34.5 trillion in 1990 to $ 38 trillion in 2002 when it reached a peak.4% of worldwide turnover in 2006.9 43.6 16. Despite having a large number of companies listed on its stock exchanges.5 94. Thereafter.87% of total market capitalization in 2006. The turnover on all markets taken together has grown from US $ 5.4 36. India accounted for a meager 2.6 trillion in 2006 ($ 23 trillion in 2005).6 trillion in 2006.Germany Italy United Kingdom United States India 83.96% in total world turnover in 2006.0 44.8 75.24% as at end-2005 to 44.6 55.

42 11.772 3.412.040.931 476.658 369.810.404.Market Capitalization and Turnover for Major Markets (US $ million) Country/Region Market Capitalization Turnover (End of period) Developed Markets Australia Japan UK USA All Emerging Markets China India Indonesia Korea Malaysia Philippines Taiwan World Total US as % of World India as % of World 2003 2004 25.431 66 0 3.639 123.324 1.896.66 1.991 249.753 4 14.474 2005 2006 2007 2008 28.656.722 2.774 682.79 9.573.667 711.371.217.396 23.979 2.403 9 2.321 2.33 38.012 29.080 131.813 284.87 0.616 168.24 44.192 20.814 2.56 0.894 2.957.871.66 69.947.802 14.396.872 39.70 42.499.376 23.006 220.01 65.135 2.080.928 249.021 261.68 0.598.826.635 592.49 6 3 9 8 47.808 333.150.369 197.279 2.556.721.475 240.46 0.676.739 25.269 380.969 2.621 27.103 631.342 2.659 329.51 Source: S& P Emerging Stock Market Factbook.272.266.547.023 448.27 15.864.59 0.153 8 1 585.565 379.118 13.134 13.148 544.989 5 2.73 26.768 2.96 23.43 1.2007 9 .989 20.845 3.439.007 41.046 120.242.075 2.952 110.836 374.230 1.080 523.144 681.040.093 54.011 29.91 31.40 463.297 52.2 29.052.01 36.204 279.73 0.667 294.126.743.968 49.290.042 826.620 27.298 9.098.706 50.981 39.623 3.523 292.251.639.

resulting in one of the biggest shifts in the individual investor's relationship with their brokers. Even the smallest retail investor can access information that was till now restricted to big traders. investor grievance handling and redressal system is fast and efficient. It makes it easy for anyone to access net brokers and trade in stock. The European on line broking market is expected to be of $8 billions and has risen to about $50 billion today. the legal frame work is right in place and there are organizations like SEBI. in the comfort of office or a home. real time online access to stock markets. With Internet trading. Lack of investor education and resistance from stock brokers though has always posed some problems. Presently. online brokerage has significantly changed the dynamics of the market place. Net trading provides investors with seamless. which provide investor guidelines to the investors for protection of their right. 10 . Also. Investors access a wealth of financial information on the same time as do market and financial professionals including breaking news. RBI etc. 82 per cent of the deals are done on line. Online brokerage provides investors the tools to analyse the information such as research reports. Net trading shall initially faced some problems relating to infrastructure and understanding of the concept. In the US.INTERNATIONAL AND INDIAN SCENARIO IN ONLINE BROKING In US markets. investment in the stock market is just a click away. developments and market data.

2 PROFILE OF THE ORGANIZATION SMC Global is one of the largest and most reputed Investment Solutions Company that provides a wide range of services to its substantial and diversified client base. 11 . SMC expanded globally and acquired the Trading & Clearing Membership of Dubai Gold and Commodity Exchange (DGCX). In the same year. the company acquired the Trading & Clearing Membership of NSE Derivatives and the memberships of leading commodity exchanges i. • Enabling shorter settlement cycles and book entry settlements systems. Jaipur plus a growing network of more than 1250 offices across over 350 cities/towns in India and overseas office in Dubai. The company is having its corporate office in New Delhi with regional offices in Mumbai. Cochin. Mahesh Chand Gupta.1. IPO & Mutual Fund Distribution Division and its Merchant Banking division. is a full financial services firm catering to all classes of investors.e. SMC. the company also started its Insurance Broking division. Kolkata. In the same year. by Mr. NCDEX and MCX in subsequent years. Founded in 1990. Hyderabad. Chennai. In 2000 the company became a member of BSE and a depository participant of CDSL India Ltd. Ahemdabad. Subhash Chand Aggarwal and Mr. and meeting the current international standards of securities market. HISTORY OF SMC SMC acquired membership of the Delhi Stock Exchange in 1990 and later in 1995 became a trading member of NSE. In 2006.

charts. You can access a multitude of resources like live quotes. You can also trade through our branch network by registering with us as our client. We provide ODIN Application. and online assistance helps you to take informed decisions. • • • Vision • Their vision is to be the most respected company in the financial services space. You can now trade in the NSE and BSE simultaneously from any destination at your convenience. which is a high -end. integrated trading application for fast. efficient and reliable execution of trades. Clearing Services Being a clearing member in NSE (derivative) segment we are clearing massive volumes of trades of our trading members in this segment. advice. efficient and transparent securities market to investors using electronic trading systems. research. You can also trade through us on phone by calling our designated representatives in the branches where you are registered as a client. Ensuring equal access to investors all over the country through an appropriate communication network. 12 .Mission • Establishing a nation-wide trading facility for equities. Enabling shorter settlement cycles and book entry settlements systems. PRODUCT AND SERVICES OF SMC Equity & Derivative Trading SMC Trading Platform offers online equity & derivative trading facilities for investors who are looking for the ease and convenience and hassle free trading experience. debt instruments and hybrids. Providing a fair. and meeting the current international standards of securities market.

secure and hassle free alternative to holding the securities and commodities in 13 . To ensure easy accessibility to back office accounting reports to our clients MC Depository They are ISO 9001:2000 certified DP for shares and commodities. We are registered with AMFI as an approved distributor of Mutual Funds. We assure you a hassle free and pleasant transaction experience when you invest in mutual funds and IPOs through us. In this segment. all on a single screen. we have spread our wings globally by acquiring Membership of Dubai Gold and Commodities Exchange. place orders and watch the confirmation. i. Distribution of Mutual Funds & IPOs SMC offers distribution and collection services of various schemes of all Major Fund houses and IPOs through its mammoth network of branches across India .e National Commodity and Derivative Exchange and Multi Commodity Exchange and offers you trading platform of NCDEX and MCX.000 investors. We offer a quick.Shortly we will be providing the facility of online investment in Mutual Funds and IPOs Online back office support To provide robust back office support backed by excellent accounting standards to our branches we have ensured connectivity through FTP and Dotnet based Application. You can get Real-Time streaming quotes. Franklyn Templeton etc. We have a distinction of being leading distributors of IPOs. We use technology using ODIN application to provide you with live Trading Terminals. We are one of the leading DP and enjoy the trust of more than 40.Commodity Trading SMC is a member of two major national level commodity exchanges. We provide trading platform to trade in DGCX and also clear trades of trading members being a clearing member. We are registered with all major Fund Houses including Fidelity.

physical form. 14 . They are one of the few Depository Participants offering depository facilities for commodities. We are empanelled with both NCDEX & MCX.

SMC Research Based Advisory Services Their massive R&D facility caters to the need of Investors. We also seek your feedback on our services in these Investor meets. We offer proactive and timely world class research based advice and guidance to our clients so that they can take informed decisions. We have one of the most advanced. 15 . hitech inhouse R&D wing with some of the best people. SMC Investor Awareness Forum Their dedicated team of professionals is conducting investor meet/seminars across India. Commodities. IPOs and Mutual Funds. process and technology resources providing complete research solutions on Equity. We believe that a well-informed investor is an empowered investor. who are continuously in need of opportunities for striking rich rewards on their investment. Click on Research to unveil the treasure.

• • • • Lack of Career Opportunities Limitations of online trading Competition Technical Problem 16 . as they are quite annoyed with the phone call.1.3 PROBLEMS OF THE ORGANIZATION • Lack of Techno Savvy people and poor Internet penetration: Since most of the people are quite experienced and also they are not techno savy. • Some respondents are unwilling to talk: -. Also Internet penetration is poor in India.Some respondents either do not have time or willing does not respond.

(ONLY for intraday) 17 .1. which allows you to invest in Shares.com offers you various options while trading in shares.com. wherein you take long buy/ short sell positions in stocks with the intention of squaring off the position within the same day settlement cycle.4. COMPETITION INFORMATION ICICIDIRECT. Margin Trading: You can also do an intra-settlement trading up to 3 to 4 times your available funds. IWTL is an Affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank Limited Product & Services: Trading in shares: ICICIdirect.com is the most comprehensive website. Simply put we offer you a product for every investment need of yours. ICICI Web Trade Limited (IWTL) maintains ICICIdirect.COM Products and Services A product for every need: ICICIdirect. Derivatives (Futures and Options) and other financial products. Mutual funds. Cash Trading: This is a delivery based trading system. which is generally done with the intention of taking delivery of shares or monies.

Commodity Trading. The Net worth of the Group exceeds USD 2. Moreover. Housing Finance. Stock Broking. Abhipra today commands the status of being one of the leading Depository Participants of Northern India in Private Sector. Asset Management and Advisory services. Full-Fledged Money Changing Services. India bulls Financial Services Ltd is amongst 68 companies constituting MSCI .Morgan Stanley India Index. Abhipra has Trading 18 . India bulls has been conferred the status of a “Business Super brand” by The Brand Council. India bulls Financial is also part of CLSA’s model portfolio of 30 Best Companies in Asia. is setting up India’s 4th Multi-Commodities Exchange. the insurance arm of Societé Generale (SocGen) for its upcoming life insurance venture. India bulls Group companies are listed in Indian and overseas markets and have a market capitalization of over USD 7 billion. We broadened our horizons and stepped into the field of Depository. F&O & Commodity). Commercial Loans.5 billion.INDIA BULLS India bulls Group is one of the top business houses in the country with business interests in Real Estate. Infrastructure. India bulls Financial Services is an integrated financial services powerhouse providing Consumer Finance. India bulls Group companies enjoy highest ratings from CRISIL. we grew into Business House. India bulls Financial Services in partnership with MMTC Limited. India bulls Financial Services signed a joint venture agreement with Sogecap. Super brands India. Category I Registrar & Transfer Agent. Multiplex and Power sectors. a subsidiary of Standard and Poor’s. Retail. the largest commodity trading company in India. ABHIPRA Beginning as a Broking House. Online Trading (Equity. Financial Services. e-Return Intermediary. Life Insurance.

is the stock broking and distribution arm of the Kotak Mahindra Group. From commercial banking. and solutions with extra-ordinary results. we offer our clients far more than merely a comprehensive range of financial services. Retail (equities and other financial products). Kotak Mahindra is one of India's leading financial institutions. to mutual funds. We feel that quality is an essential ingredient in building successful businesses. So a client now can open Commodity Demat Account with us At Abhipra. 19 . This is evidenced from the fact that Abhipra is a ISO 9001 (Quality Assurance Systems) Registered Company. to investment banking. National Commodities and Derivatives Exchange Limited (NCDEX). We offer them ideas. a subsidiary of Kotak Mahindra Bank. Not only do products and services need to be of high quality. but potential customers also need to have assurance that the products will be of high quality. Portfolio Management and Depository Services. The company has four main areas of business: • • • • Institutional Equities. to stock broking. KOTAK SECURITIES:- Kotak Securities Limited.Terminal Outlets for NSE & BSE spread to almost every nook & corner of Northern India. innovations. to life insurance. Kotak Securities is a corporate member of both The Bombay Stock Exchange and the National Stock Exchange of India Limited. Abhipra Capital Limited is also empanelled as a Depository Participant with one of the premier Commodity bourse. the group caters to the financial needs of individuals and corporate. offering complete financial solutions that encompass every sphere of life. Kotak Securities was set up in 1994.

was founded in 1987 as a small sub-broking unit. 20 . with just two people running the show. Their Institutional Equity Division combines the efforts of the Research and Sales & Trading departments to best serve clients' needs. It has established itself as the Best Local Brokerage House in India (Asia Money Brokers’ Poll 2005). sector trends and investment strategy has established them as a reliable research unit amongst leading Indian as well as international investors. Consistent delivery of high quality advice on individual stocks.MOTILAL OSWAL:- Motilal Oswal Securities Ltd.

• Access to online trading and latest financial happenings.25-0. hinges on efficient order routing.95 per cent for delivery-based trades. Critical components of execution quality include the prices at which orders were executed as well as the speed of execution. Online trading has made it possible to universalize access to retail investors. Once major investments in online infrastructure are over and done with . More and more investors now want to know how their trades are executed. T ANALYSIS OF THE ORGANIZATION Strengths • The `do-it-yourself' framework of online share trading offers retail investors the three benefits of transparency. as the cost of servicing often-outweighed transaction volumes. all consolidate into a value-added product mix in tandem with evolving markets that are freer and fairer. in turn.and with the economies of scale coming into play . 21 . apart from quotes and unbiased investment analyses. access and efficiency. Paperwork diminishes significantly. and pricing info that is accurate and real-time. We owe this to our investor fraternity. Today's investor is more involved in managing his or her assets and analyzing a vast array of investment options. This was earlier very difficult. and whether they have received the best possible price.05-0. in turn. The Net result: An inquisitive. and no more painful trips to your broker to check if everything's in order.5 S. transparency in dealings.1. resulting in reduced costs of trading. driven competition. and between 0.20 per cent of the value of transactions for non-delivery-based trades. W. The quality of execution.it is expected that brokerage rates would head further downwards. O. Online brokerage ranges between 0. informed and demanding investor. Technology and today's enabled investor have.

com. • Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them.75 per cent of the combined BSE and NSE daily turnover of about RS 11. And daily trading turnover is estimated in the vicinity of 0. ICICIDirect.com.com. Trading shares on BSE/NSE has always been your dream.” Opportunities • You have some money to dabble with. • There are 2 types of online trading service: discount brokers and full service online broker. This is your main opportunity.Weakness • Every thing in the world has a flip side to it . 5Paisa.com. Full service online brokerage is linked to existing brokerages. Kotakstreet. Geojit securities. other don’t. And more often than not. Brokerage rates here are higher. HDFCsec.com. • Sharekhan. Tatatdw. When will you ever find the time? And besides. IndiaBulls.com are some of the online broking sites in India.Transaction velocity is crucial. they allow you to buy and sell shares via Internet. “The three main technology obstacles which have prevented Internet broking from taking off are: • • • Lack of Internet penetration Bandwidth infrastructure Poor quality of ISP infrastructure.000 crore!!! The point 22 . Discount online brokers allow you to trade via Internet at reduced rates. connections are lousy. Known as online brokers.com. which hark back to the `physical' days.com. Some provide quality research. the hassle of finding a broker is not easy. These brokers allow their clients to place online orders with the option of talking/ chatting to brokers if advice is needed. There's also a degree of investor skepticism about online payment and settlement mechanisms in spite of all the encryption and fire walling brought into play. Time and technology will soon assuage these concerns. brokers have taken their trading rooms to the Internet.

Some. • And some.is. offer free investment advice over the Net to lure rookie investors with misleading information. 23 . in some Asian markets the figures as high as 70 per cent. All this spells spurting volumes. where trading over the Net accounts for about 55 per cent of the total volumes. sans the neutral. there's tremendous scope for growth. Prices of scripts can also be influenced to the advantage of vested interests. hitch their fate with what the FIIs are up to. courtesy the Net. Unlike in the US. Especially when you consider the US. non-vested stance. foreign institutional investors and operators comprise the three main market constituents. stockbrokers out here willingly (or under the force of circumstance) assume the role of `advisors'. And all three include term investors as well as opportunists in their pecking order.Domestic funds. And. I believe. Threats • On to some threat perception . for instance. But nobody gives a damn about the resultant volatility. not all.

The study also aims to highlight the possible hurdles that a prospective client faces who are interested to investing insecurities but is unaware of the system of online share trading.2. It also aims at finding out the brand image of the organization amongst the general investors and give information to the management about the new developments in the market adopted by the competitors and the areas where the company needs to improve. Helps in knowing the class in which max new SMC must concentrate. 2. 4. Help in finding the areas in which SMC will concentrate to increase its market share. It will help to estimate the level of awareness established in the market and in deciding the extent of promotion required. MANAGERIAL USEFULNESS OF THE STUDY A thorough research and a detailed study of market are very important for the management to take the right strategy suiting the market condition. 1. The study gives information regarding the market competition.OBJECTIVES AND METHODOLOGY 2. present demand of the product in the marketed.1 SIGNIFICANCE This project will accomplish to understand the problem faced by the new client with respect to online share trading and find ways to solve their queries at microscopic level. The study will help the management to understand the customer mind set and also estimating the present future market demand of the product. It will help in finding out the customer expectation about the product and also help to know the customer physiology. This study helps in finding the area in which SMC is strong and the area in which it lags behind others. innovative products offered by competitors. 5. 3. 2. The project is to study the effectiveness of the stock exchange as this is one of the best way of investment. Which class of customer mostly approaches SMC policies? 24 .

collecting.2. Stock market of India is now been one of the fascinating market worldwide. So. 3. 25 . the objective of my project is to: • To analyze the market share & services of existing players to judge the future prospects of online trading for SMC INVESTMENT SOLUTIONS. OBJECTIVES Before starting any project. Research comprises defining and redefining problems. we should keep in mind the clear objectives of the project because in the absence of the objectives one cannot reach the conclusion or end result of the project.4 SCOPE OF THE STUDY Since better broadband connectivity across the country and wider awareness of equity as an asset class will push the online trade volumes to over 50% of total Trade therefore it is relevant to the future prospects emerging in the stock market. the search for knowledge through Objective and Systematic method of finding solutions to a problem is Research. formulating hypothesis or suggested solutions. Indian is among the top ten destination of the world to which global player want to invest. In order to compete with the online trading market leader like ICICI the company has to work a lot on Online Trading in order to get the competency with other players. and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. organizing and evaluating data. 2. In short. making deductions and reaching conclusions.

the importance of Online Trading has increased over the past decade therefore it is very important to consider the Online Trading as a future of the Indian Stock Market. therefore it is relevant to know the working of this software which would be enlightened in our company.Since the online trading is accepted by major players in the Indian Stock Market. NSDL and CDSL. Most of the banks and brokerage houses provide trading account and Demat account. All you need to do is just open a Demat account and a trading account with a depository participant or DP. so as to know how is the environment in Indian trading market? We will also analyze the competitive strategies of SMC investment solutions 26 . address proof. DP is connecting Depository to investors. “SMC” a software used by SMC Investment Solutions & SERVICES is an edge for gaining competitive advantage. The research will basically present the current scenario of online trading in India. Depository is the people who stores shares in electronics form. bank account etc. In India there are two depositories. Online Trading Account and Demat Account After the introduction of the online trading systems it is very easy to do online trading with just a PC and an internet connection. The research will cover the Indian trading market and try to understand its various dimensions. the market players involved and the trading strategies followed in the market. To open a Demat account you need many things like PAN card. This project would also tell us about the working of the Indian Stock Market and the forces acting in the Online Trading. To know more about Demat account Opening a Demat Account PROBLEM FORMULATION The research focuses on the future prospects of online trading along with SMC investment solutions.

2. 27 .Therefore this research will help in understanding Indian trading market and also try to find future prospects of online trading with SMC Investment Solutions.Descriptive research Descriptive research includes Surveys and fact-finding enquiries of different kinds. The main characteristic of this method is that the researcher has no control over the variables. he can only report what has happened or what is happening. as it exists as the present. The major purpose of descriptive research is description of the state of affairs. and analysis and reporting of Data and findings relevant to specific marketing situation facing the company.5 METHODOLOGY Marketing Research Is the systematic design collection. Research Design Types of Research: .

Develop the Research Plan 3.Marketing Research Process 1.Define the Problem and Research Objectives 2. Collect the Information 4. Present the Findings 28 . Analyze the Information 5.

research approaches. perception & awareness of offline trading customers.1. The respondents are stratified into offline share trading respondents and online share trading respondents. Designing a research plan calls for decision on the data sources. 2.  To understand satisfaction. Data Sources There are two types of data. perception & awareness of online trading customers. Define the Research Problem and Objective Objective TO ANALYSE THE MARKET SHARE & SERVICES OF EXISTING PLAYERS  TO JUDGE THE FUTURE PROSPECTS OF ONLINE TRADING FOR SMC INVESTMENT SOLUTIONS. Develop the Research Plan The second stage of Research calls for developing the most efficient plan for gathering information. 29 . research instruments. sampling plan & contact methods. Hence the sub objective are:  To understand satisfaction.

survey research is used to learn about need. Open Ended: . Secondary data: For the company information I had used secondary data like brochures.Pre-specify all the possible answers & are easy to Interpret and Tabulate. It can be Closed Ended or Open Ended.Allows respondents to answer in their own words & are difficult to Interpret and Tabulate.A questionnaire consists of set of questions presented to respondent for their answers. 30 . websites of the company etc. Questionnaires: . Survey Approach Survey Research: . The method used by me is Survey Method as the research done is Descriptive Research. Research Instruments Selected instrument for Data Collection for survey is Questionnaire. So in this research the data is collected from respondents through questionnaire. Close Ended: . perception and awareness level of the customers for online share trading.Primary data: The data that is collected first hand by someone specifically for the purpose of facilitating the study is known as primary data.

My sample size is 200. Sampling Plan After deciding on the research approach and instrument. General individual customer those who trade in share market. Sample Size/ Population Size: . Rating Scale A scale that rates some attributes from “excellent” to “very poor” and “very inefficient” to “Very efficient”.Who is to be surveyed? The marketing researcher must define the target population that will be sampled. The sample Unit taken by me.How should the respondent be chosen? 31 . This includes: Sampling Unit: . the marketing researcher must Design a Sampling Plan.Types Of Question Included: Dichotomous Questions Which has only two answers “Yes” or “No”? Multiple Choice Questions Where the respondent is offered more than two choices. Sampling Procedure: .How many people should be surveyed? I have cover entire Delhi city for the survey.

32 . 3. Contact Methods Once the sampling plan had been determine. like different plans of the company etc. Generally most of the respondents had filled questionnaire themselves but some avoid filling up so at that time myself filled according to their answer. For some questions I have to explain them about company. sampling done is on basis of area sampling for the Delhi city. Collect The Information The Data collection phase of marketing research is generally the most expensive and the most prone to error. as it’s necessary to go meet the individual respondents at their place so I can collect the right information. Personal or On-line Interviews.In the Project. the marketing researcher must device how the subject should be contacted: Mail. In my project I went for personal Interviewing. I had visited all the respondents individually in the Delhi city and collected information via questionnaire. Telephone. In which convenient sampling was done. I used to talk with them and in that talk I asked them the relevant question of the questionnaire so I could get correct information from them for the objective purpose.

4. Analysis of the Information or Data Collected After the data have been collected. tabulation and statistical inferences. After collecting the data I used hand tabulation method for analysis. the researcher turns to the task of analysis then.The sample of questionnaires 1 used is in Annexure. Interpretation of survey: Based on collected information the analysis is done. 33 . The analysis of data requires a number of closely related operations such as establishment of categories. The researcher can analyze the collected data with the help of various statistical measures. The unwieldy data should necessarily be condensed into a manageable groups and tables for further analysis. then application of these categories to raw data though coding.

CONCEPTUAL DISCUSSION
INVESTOR PERCEPTION
SEBI in association with National Council of Applied Economic Research (NCAER) conducted a Survey of Indian Investors in 1998-99 and then followed it up in 200001. The survey of 2000-01 was based on a sample of 288,081 geographically dispersed rural and urban areas. The findings of this survey were released in September 2003. The survey estimated that a total of 13.1 million or 7.4 per cent of all Indian households totaling 21 million individuals directly invested in equity shares or debentures or both during 2000-01. The other findings are as listed below: 1. The number of debenture owning households and individual debenture holders far exceeds household and individual equity investors. Of the total 13.1 million investor households, 9.6 million households owned bonds or debentures, whereas only 6.5 million investor households owned equity shares. 2. The percentage of households investing in equity or debentures is more in urban areas than in rural areas. This divergence is more in case of equities compared to debentures. Of the 51 million urban households, 7.8 million households representing more than 12 million urban individual investors owned equity shares or debentures or both. Whereas, of the 125 million rural households, only 5.3 million households representing more than 8 million individual investors shows a definite migration of investors from equity market to bond market during the period between the two surveys. 3. The survey results also clearly reveal that number of non-investor households have increased from about 156 million in 1998-99 to nearly 164 million in 2001-02 constituting nearly 92.6 per cent of all households. 4. It was also observed that the investor population and town size are directly proportional. The largest city with more than 50 lakh population accounted for about 17 per cent of investor households and the next higher segment, more than 31 per cent investor households were in towns with population between 10 and 50 lakh.

34

Primary Market
An aggregate of Rs. 2,676,600 million were raised by the government and corporate sector during 2005-06 as against Rs. 2,572,201 million during the preceding year. Government raised about two third of the total resources, with central government alone raising nearly Rs. 1,476,360 million.

Corporate Securities
The average annual capital mobilization from the primary market has grown manifold since the last two-three decades. It received a further boost during the first half of 1990s with the capital raised by non-government public companies rising sharply from Rs. 43,120 million in 1990-91 to Rs. 264,170 million in 1994-95. Thereafter, there has been a decline due to conditions prevailing in the secondary market. However, the year 2005-06 took a turnaround in its performance as compared to the previous year by mobilizing Rs. 32,100 million. The capital raised, which used to be less than 1% of gross domestic saving (GDS) in the 1970s increased to about 13% in 1992-93 but thereafter witnessed declines. Though there has been a considerable increase in the amount mobilized in 2005-06, when seen as a percentage of GDS, it is 1.20% (Table 1-8). Data in Table 1-9 shows that there is a high preference for raising resources in the primary market through private placement route. Private placements accounted for 89% of total resources mobilized through domestic issues by corporate sector during 2005-06. Indian market is getting integrated with the global market, though in a limited way through Euro Issues. Since they were permitted access in 1992, Indian companies have raised about Rs. 30,980 million through American Depository Receipts (ADRs)/Global Depository Receipts (GDRs). FIIs have invested heavily in Indian market in 2005-06. They had net cumulative investments of US$ 38.75 billion as at end of March 2006. There were 745 FIIs registered with SEBI as of end March 2006. It appears that more and more people prefer mutual funds (MFs) as their investment vehicle. This change in investor behavior is induced by the evolution of a regulatory framework for MFs, tax concessions offered by Government and preference of 35

investors for passive investing. Starting with an asset base of Rs. 250 million in 1964, the total assets under management at the end of March 2006 have risen to Rs. 1,396,160 million. During the last one decade, the resources mobilized by the MFs are increased from Rs. 112,440 million in 1993-94 to Rs. 476,840 million in 2005-06.

Secondary Market
Corporate Securities There are 23 exchanges in the country, which offer screen based trading system. The trading system is connected using the VSAT technology from over 357 cities. There were 9,368 trading members registered with SEBI as at end March 2006 (Table 1-10). The market capitalization has grown over the period indicating more companies using the trading platform of the stock exchange. The all India market capitalization is estimated at Rs. 13,187,953 million at the end of March 2006. The market capitalization ratio defined as the value of listed stocks divided by GDP is used as a measure of stock market size. It is of economic significance since market is positively correlated with the ability to mobilize capital and diversify risk. It increased sharply to 52.3% in 2005-06 against 28.5% in the previous year. The trading volumes on exchanges have been witnessing phenomenal growth over the past decade. The trading volume which peaked at Rs. 28,809,900 million in 2000-01, fell substantially to Rs. 9,689,093 million in 2004-05. However, the year 2005-06 saw a turnaround in the total trading volumes on the exchanges. It registered a volume of Rs. 16,204,977 million. The turnover ratio, which reflects the volume of trading in relation to the size of the market, has been increasing by leaps and bounds after the advent of screen based trading system by the NSE. The turnover ratio for the year 2005-06 accounted at 122.9%. The relative importance of various stock exchanges in the market has undergone dramatic change during this decade. The increase in turnover took place mostly at the big exchanges. The NSE yet again registered as the market leader with more 85% of total turnover (volumes on all segments) in 2005-06. Top 5 stock exchanges accounted for 99.88% of turnover, while the rest 18 exchange for less than 0.12% during 2005-06 (Table 1-11). About ten exchanges reported nil trading volume during 36

17 0.37 15.750 104. Million) Year Resources raised by non-government companies 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-04 2003-05 2004-06 43. 89.54 74.530 49.300 264. etc.476. the increase in FIIs inflows . However.030 193.800 112. the increase in FIIs inflows .27 1.430 112.840 Mobilisation By MF Government Securities The primary issues of the Central Government have increased manifold during the decade of 1990s from Rs. the year 2005-06 witnessed a favorable movement in the Nifty.40 5.930 198.350 71.20 % of GDS % of disbursement by Fis 33. the most widely used indicator of the market.532 111.924 18.32 4.100 3. The movement of the S&P CNX Nifty.59 24. The Central Government 37 .360 million in 200506 (Table 1-9). The issues by state governments have also increased over this period from Rs.70 40.890 million in 1990-91 to Rs.11 1.69 41. is presented in Chart 1-1.65.490 56.130 51.84 1. wherein it registered a high in January 2006 of 2014.74 1.30 –203. 1.59 7.170 160.85 8. etc. The point-to-point return of Nifty was 80.38 12.85 78.76 9. The index movement have been responding to changes in the government’s economic policies .100 31.98 10. 25.210 112.777 32.830 476.08 85.34 3.370 45.690 million to Rs. . S&P CNX Nifty is the most widely used indicator of the market. the year 2005-06 witnessed a favorable movement in the Nifty. wherein it registered its all time high in January.The index movement have been responding to changes in the government’s economic policies .28 0.48 5.01 1.08 750.18 18. However.51 6.750 –583.89 10.530 130.640 36.the year.380 50.14% for 2005-06. 505. Resources mobilized through public Issues (Amount in Rs.120 61.210 million.110 199.66 38.

360 million through issue of T-bills. 308.71% in 2005-06.160 million for the year 2005-06. The State Governments collectively raised Rs.760 million.210 million during 2005-06 as against Rs.215. Now. About 77% of primary issues were raised through securities with maturities above 5 years and up to 10 years. and redemption of T-bills of Rs. The weighted average costs of its borrowing have declined to 5.530 million in the preceding year. the share of WDM segment of NSE in the total of Non-repo government marginally from 74. 261.89% in 2005-06. The trading in government securities exceeded the combined trading in equity segments of all the exchanges in the country during 2005-06.000 million through issue of dated securities and Rs. 463. securities increased Derivative Market The number of instruments available in derivatives has been expanded. The maturity structure of government debt is also changing.94 years in 2005-06. In addition to banks and insurance companies. 326. However. 505. 261.930 million for dated securities. 888. net market borrowing of Central Government amounted to Rs. Along with growth of the market. the coupon rates offered on government borrowings have fallen sharply.090 million. This was followed by approval for trading in options based on these two indices and options on individual securities and also futures on interest rates derivative instruments (91-day Notional T-Bills and 10year Notional 6% coupon bearing as well as zero coupon bonds). the investor base has also widened. corporate and individual investors are also investing in government securities. Due to the soft interest rate policy pursued by the RBI. there are 38 . 1.792. 26. SEBI only approved trading in index futures contracts based on S&P CNX Nifty Index and BSE-30 (Sensex) Index.01% in 2004-05 to 74. As a result the weighted average maturity of dated securities increased to 14. The aggregate trading in central and state government dated securities. To begin with. The share of WDM segment of NSE in total turnover for government securities decreased marginally from 52% in 2004-05 to 47. increased by manifold over a period of time.mobilized Rs. The net borrowings of State Governments in 2005-06 amounted to Rs. After meeting repayment liabilities of Rs. including treasury bills. During 2005-06 it reached a level of Rs.260 million.6% in 2005-06.

422. The total exchange traded derivatives witnessed a value of Rs.690 million during 2005-06 as against Rs. 21. Rationale behind Study As result of reforms in financial and real sector new investment alternatives have emerged. 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. So it is advised that one should follow set norms & put proper attentions on various alerts send by the RMS during the day /at the end of day for controlling the risks. Risk Management System The risk management system ensures the minimization of inherent known risks with appropriate tools and timely speedy flow of information. One should apply these tools and techniques according to the requirement of their Management and the Market conditions. In stock market operation. There was a time when few individuals possessed majority of the wealth in 39 . To start with day to day processes which are implemented on daily basis to eliminate Risk as much as one can with the stipulated tools and techniques. RMS can’t ensure a complete elimination of risks. 4. Further.333 million during the preceding year. An effective risk management system further ensures certain alerts by which unknown risks can be predicted & informed in due course of time. It can reduce the risk & level of reduction of risk depends upon our own efforts.5% of total turnover. So one has to be very careful & particular to the alerts provided time to time by RMS for containing the risks. BSE accounted for less than 1% in 2005-06.423. While NSE accounted for about 99.futures and options based on benchmark index S&P CNX Nifty and CNX IT Index as well as options and futures on single stocks. NSE has created a niche for itself in terms of derivatives trading in the global market.

SMC GLOBAL AND SECURITY plays a very important role along with 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. which led to uniform distribution of income in society. post office savings schemes. fixed deposits. this study helps in understanding current market volatility and solutions to deal with it. Recently market has faced downtrend but still holding on and offering new investment avenues to investors and still offers lucrative benefits to investors. insurance derivatives etc. After this period in today's market scenario we find Indian economy still struggling while the world is facing massive recession. commodities market. which forced investors to make changes in their portfolio.the society. so as to find future prospects for \SMC GLOBAL AND SECURITY and answer questions like. With the efforts of government our economy witnessed significant growth. Also constant efforts have made auto industry to lower down the rates of automotives and private banks also lowered their interest rates on loans to help Indian investors to come forward and step in the market. But after government efforts investors’ confidence is restored in equity markets. As a result income of masses started rising and they started looking for suitable investment avenues. which led to growth in financial services sector. This showed a positive growth in the market by investors turning back to the market. how to deal with recession evils? How to protect investors interest? How to sustain market position and market share? To understand it and deal with it one always has to go to the basics that is the investors and the reason investor invests is his motive. Harshad Mehta’s scam. There has been a major shift towards risky investments in order to earn higher returns. There were also scams like US-64. several other investment alternatives have emerged such as capital markets. mutual funds. to achieve their financial goals. Government of India is making constant efforts to support the economy by decreasing interest rate on loans of all types. 40 . From savings accounts. 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. Thus.

Motives for investment may vary from person to person.37 140. Safety Liquidity Returns Products & Services SMC customers have the advantage of trading in all the market segments together in the same window. 3. in case of an emergency. 2. General Insurance.89 41 . Everybody expects some return out of investment. SMC is a customer focused financial services organization providing a range of investment solutions to their customers. there are three criteria’s to evaluate every investment avenue: 1. At the same time they have the advantage of having all kind of Insurance & Investment Advisory Services for Life Insurance. Investors are also concerned about the safety of investment. and IPO’s also. And. Mutual Funds. but there are some common desires. quickly. as they understand the need of transactions to be executed with high speed and reduced time.43 128.61 107. Their key product offerings are as follows: o Equity Trading o Commodity Trading o Depositary Services o Portfolio Tracker o Life Insurance o General Insurance o Mutual Fund COMPANY FINANCIALS Revenue Month Sep ‘07 Oct ‘07 Nov ‘07 Dec ‘07 Jan’08 Feb’08 Mar’08 (in Lakhs) 29.05 60. Their clients have the opportunity to get personalized services depending on their investment profiles.94 104.27 79. people want their money back. They work with clients to meet their overall investment objectives and achieve their financial goals. Their personalized approach enables clients to achieve their Total Investment Objectives. Hence.

by elimination of mismatches. these are: Investor protection. Enhance market quality through improved liquidity. Though. by increasing quote continuity and market depth. Provide management information system (MIS). Reduce settlement risks due to open trades. creation of a fair and efficient market and. Introduce flexibility in system.The above shown graph depicts the revenue generated by SMC in 6 months starting from September. we see a 343% growth in the revenues from 29. reduction of the systematic risks. If we look at the numbers. to handle growing volumes easily and to support nationwide expansion of market activity. This graph shows an upward sloping trend line.05 lakhs in Sept’07 to 128. 2007 to March’2008. Besides. through Internet trading three fundamental objectives of securities regulation can be easily achieved. there have been a few slips in January and March but over all its presents financials of a growth company. 42 . ONLINE Vs OFFLINE TRADING Internet trading is expected to: • • • • • • Increase transparency in the markets.89 lakhs in March’08.

customer has full control on his Demat and trading a/c. When the open outcry system was prevalent. The broker provides investor at online trading with advisory facility. It will also reduce transaction costs. 3. Broking houses providing online trading also provides live terminals to their clients. Investor in online trading can easily transfer it funds. investors can now see for themselves the price at which the deal takes place. while deciding to execute the order and also while the order is being executed. Online investor can directly invest into IPO’s and Mutual funds also. Investor can place order even after the 43 Offline trader needs to open separate account. increase liquidity in the market and ensure total transparency. Thus. only the broker knew the actually transacted price. In online trading mechanism the OFFLINE In offline the investor has no control. Investor cannot place After Market Order Offline investors are deprived of advices. With on-line trading.The investors would be able to track the fluctuations in a particular stock and the market as a whole. Internet trading brings in total transparency between a broker and an investor in case of secondary market operations. 6. The order routing system on which net trading will be done is compatible with screen-based trading terminals used today. The investor needs to deposit and withdraw fund each time of trading. 4. we can summarize the difference between online and offline trading as follows: ONLINE 1. The confirmation of the order would also be real time. in a nut shell. . It allows quick 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. 2. No live terminal is provided. 5. This practice diminished significantly when it was taken over by screen-based trading. The volume of trade has also increased and has provided depth to the market.

 Automatic expiry of password at the end of reasonable duration.market closes. SEBI Guidelines for online Trading According to SEBI guidelines on Internet trading.  All transaction logs with proper audit facilities to be maintained in the system. The Demat account cannot be linked with any trading account. The following security features are mandatory for all Internet-related trading systems:  User ID. brokers providing e-trading must have a minimum net worth of Rs.  Secured socket level security server for access through Internet. Brokers should have adequate system capacity for handling data transfer and arrange for alternate means of communication in case of Internet failure. In offline pool account are maintained. Trader cannot trade away for the place where he/she has opened its account.  Suitable firewalls between trading set up directly connected to an exchange trading system and the internet trading set up. Stock exchanges should also ensure that brokers maintain adequate back-up systems and data storage capacity. besides obtaining specific permission of the stock exchange concerned. 7. participants should use authentication technologies and certification agencies as and when notified later. No pool account is maintained at online process (AMO). It is time consuming process. The client can globally access the account and can trade anywhere in the world where Internet facility is available. Stock exchanges should ensure that the systems used by the broker provide for security. DI slips are required for trading. 9. Any Demat/DP account can be attached with any company’s trading account. For signatures. Online trading is time effective 11. 10. 44 . reliability and confidentiality of data through use of the encryption technology. 8. No documents are required for trading.  First level password. 50 lakhs.

Internet Trading At the end of March 2007.48 3.696 clients for web based access as on March 31. were routed and executed through internet.81 15360.81 8138. In the CM segment about 499 lakh trades for Rs. 81. constituting 7.59 2.11 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 45 .45 7.11% of total trading volume. 2007. 78 trading members on the CM segment provided internet based trading facility to investors.81 % of total trading volume 0.76 37945. The members of the exchange in turn had registered 849. Crore) 7287. Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Enabled Members* 3 61 82 80 70 78 Registered Clients* 123578 231899 346420 463560 849696 900000 800000 700000 600000 500000 400000 300000 200000 100000 0 Clients 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Year Trading Volume (Rs. The following table gives the growth of internet trading.08 81033.034 crores.54 1.

It is observed that the top ‘5’ and ‘100’ securities account for about 25. as measured by the turnover ratio. top ‘5’ brokers accounted for only 13. while top ‘100’ brokers accounted for 65.90000 80000 70000 60000 50000 40000 30000 20000 10000 0 Volum e 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 (Source: .21 1234.cr) 1182. The details of ‘50’ most active securities during 200506.26 46 .11 1216.79 1326.84 1260. as indicated below: Distribution of Turnover The concentration of trading among top ‘N’ securities/brokers. During 2005-06. which accounted for 78. Trade Date 5-May-2007 4-May-2007 3-May-2007 2-May-2007 29-Apr-2007 28-Apr-2007 Settlement No. of Trades 649071 655428 680710 669625 308508 652819 Turnover (Rs.nseindia.02% of securities available for trading are being traded every month and 95. has witnessed a steady increase and reached nearly 10.6% of the securities were traded for at least 100 days during 2005-06.26% of total turnover in the CM segment in 2005-06. More than 98. 2006 the number of clients doing the online trading has increased to 13lacs.www.com) By the end of Dec. The following shows the turnover of the trade done through internet.52% of turnover.13% during March 2007.09% of total turnover.86 735.40% of turnover Broker-wise distribution of turnover increasing diffusion of trades among a large number of trading members over the years. 2007082 2007081 2007080 2007079 2007300 2007078 No. Liquidity The liquidity in the CM segment.88% and 84.

51 922. 1. which was more than 23% in 1998-99. As compared to this. had witnessed a decline in the years 2001-02 and 2002-03.18 1143.54 1143. in terms of trading volume and market capitalization.48 1263.00 1353.585 crore as at end March 2007.16 1375. which used to dominate in terms of market capitalization in the year 1999-00 witnessed a dip in 47 . witnessed a considerable decline and stood at only 19. A drastic change in the importance of different sectors is observed since NSE commenced trading. The share of manufacturing companies in trading volume of top '50' companies.40 1180. SECTORAL DISTRIBUTION The share of top '50' companies.07 MARKET CAPITALIZATION The total market capitalization of securities available for trading on the CM segment increased from Rs.68 1306.19 1238. the share of information technology (IT) companies in trading volume. Top 50 companies account for 69.66%) which was also maintained till 2006-07 with the share of manufacturing companies rising to 41. but a turnaround was noticed in the year 2003-04 (it accounted for 37.56% in 2005-06.81%.28 1052.94 1655.585.350 crore as at end March 1995 to Rs.21% of total market capitalization as at end March 2007. classified according to different sectors.46 1200.27-Apr-2007 26-Apr-2007 25-Apr-2007 24-Apr-2007 21-Apr-2007 20-Apr-2007 19-Apr-2007 18-Apr-2007 17-Apr-2007 13-Apr-2007 12-Apr-2007 10-Apr-2007 7-Apr-2007 5-Apr-2007 4-Apr-2007 3-Apr-2007 2007077 2007076 2007075 2007074 N2007073 N2007072 N2007071 N2007070 N2007069 N2007068 N2007067 N2007066 N2007065 N2007064 N2007063 N2007062 677594 565581 613816 614635 681553 585334 607168 568237 501438 686576 681800 570339 758906 633591 635877 591383 1597. 363. Sectors like manufacturing. A mixed trend has been noticed in these sectors in terms of market capitalization.89 1356.20 1284.51 1315. which had been quite high in the year 2000-01.

which is the online trading software of SMC.54% in the top ‘50’-market capitalization in 2006-07. The IT sector has also shown a turnaround this year with 22. Besides. This is screenshot of SMC. Though. the company decided to launch its online trading portal in June. Since then SMC has managed to a fair share of client base which is very much visible from the company financials. which is quite high.35% in 2005-06 and 2006-07 respectively. Larger the client base.13% and 23. skilled manpower etc. setting up online trading infrastructure requires one time set up cost like the cost of software. bandwidth charges. But looking at the competition. This facility is available to all the online clients the moment they get registered with SMC INVESTMENT SOLUTIONS & SERVICES The product has a lot of features which provides various benefits to clients: 48 . 2006 in addition to the traditional offline mode of trading on NEATXSV4.2002-03. Online trading also helps the company to cut recurring costs as it happens in offline trading. being up in the line of competition. But the benefits are recurring as the online trading is about volumes. however this sector has witnessed a rebound and accounted for 31. 2006. SMC is doing a good job in the offline industry as it has established a good brand name for itself in a short span of time. higher the revenues. Features of SMC A browser based trading software that enables clients to access their accounts from anywhere using internet by a unique ID and password. ONLINE TRADING WITH SMC SMC launched online trading in June.

The user can set a different color or an audio alarm. 5) It enables clients to transfer funds online from their bank account to SMC trading account. 9) It also provides Real time updating of exposure and portfolio while trading & Online Integration of trading a/c with two common depositories to help move clients shares to and fro with ease. time of transaction & can also get the details of entire fortnight. SMC has banking integration with PNB. which lets the TRIGGER. They also have the authority to square of the positions of the clients who don’t pay their margin money. 2) It provides a Common window for display of market watch and order execution where the client can click + (plus) for Buy and – (minus ) for Sell or Click on the scrip and Press F1 to Buy and F2 to sell which provides an easy trading facility to the client. quantity. 4) A very useful feature of the product is FIRE THE TRIGGER. The client has an option of having “live” Multiple Windows for different exchanges and his personal window where he can add the scrips of his choice and save it.AXIS Bank. which tells about Best Buy/Sell rates and Quantities etc of that security & also enables the clients to use the Stop-loss Feature to minimize their losses. type of account etc.1) The screen gives live streaming quotes from respective exchanges. Beside the rate. 8) Greater exposure for trading on the available margin & DP MARGIN STOCK with very competitive commission. 7) The client can see the Bids/Offers that are not yet executed by the Exchange and has the options to “Modify” and “Cancel” the Order. the client can watch the Market Depth. 3) Before Buying or Selling. 49 . It also provides an Offline order placement facility. client set an “Alert” for itself to indicate a certain price of the scrip. 6) It also enables the clients to view the transactions (Buy or Sell) done during the day. the client can also view the order number. HDFC.

How to do trading with our SMC Swift Model:Step 1 Install the Software provided by us and register urself on the software Step 2: Check the Current Status of the account Step 3: Check the limit assigned 50 .IT shares the responsibility of supporting the entire system so that it runs smoothly.

Step 4 Account Valuation Step 5 To Buy 51 .

To Sell ORDER BOOK 52 .

default limits will be opened in Intraday five times and Delivery Three times (Only on a Cat) on Cash market and one time on FNO market of Net Margin . 53 .TRADE BOOK Default Limit and Exposure to the Clients:1. For Liquidated Value greater than or equal to 2 LAC. For Liquidated Value less than 2 LAC. default limits will be opened in Intraday ten times and Delivery Three times (Only on a Cat) on Cash market and one time on FNO market of Net Margin. 2.

30 a. Codes which have been not uploaded in the Batch file due to any exceptions are any commitment from Branch end are done manually if commitment fails. the RMS shall block the client and square off the balance position so as to bring the client above the required margin levels. . Proper Reply here shall mean: .The reply should Specify what positions shall be squared off before that 10.It is a point where the position of the client is squared up. It is a last alert that the position of client may be squared up at any time if the Percentage of coverage goes below 25%. Sauda of a client BELOW 25% will be compulsory squared off next morning. in case no proper reply received from the concerned RM/Branch.m.Amount is being transferred to top up the margins only through a transfer Cheque or Demand draft subject to the condition that the transfer Cheque or Demand draft is reflected in the bank as having been deposited before 2:00 P. . It is a last alert that something must be done either by reducing the position or enhancing the margin .M. NORMAL SQUARE OFF (LESS THEN 25%) – This activity has been done on daily basis with the help of software driven Batch file (provided by the IT department). 54 . in case the same is not done to the extent of bringing the clients margin above the required 50% margin levels .Square Up: It is a margin status when percentage of coverage is less then 25% when comparing funding stock (A cat stock) with gross margin.

7. Consolidation of square off replies of margins from Branch end and make it considered. Making note of commitments from Branch and Regional Heads against square off codes and make follow up accordingly. Preparation of Exceptions client List. To square off we have to prepare NON LAS LEDGER DEBIT REPORT. 6. 5. 55 . 2. Preparation clients Cheque deposit details. After: .We have to make sure that the batch file has been created according to square off policy of RMS. Reconciliation of Batch File after and before it has been executed. 3. Before: .After execution of the batch file we have to check that every order of the file is properly executed or not and if there is any rejection then immediate action to be taken (Rejection to be squared manually) SQUARE OFF 5TH DAY LEDGER DEBIT CLIENTS (NON LAS):This activity is done on the Manual basis only. 4. The process of square off 5th day ledger debit is same as Normal Square off.Margin Call square off process:1. Preparation of Batch File for Automated Square off. All exceptions and necessary details has been taken into consideration or not. only difference is that it is done manually. Preparation of square off cases report.

Because of remaining 20% take his/her residential property as an investment. Do you know about investment options available? KNOWLEDGE Yes No TOTAL %AGE 80% 20% 100 Interpretation Only 80% people knows the exact meaning of investment.DATA ANALYSIS Q 1. According to law purpose this is not an investment because of it is not create any profit for the owner. 56 .

57 .Q 2. only 25% considered the risk or returns factor. Most important things you take into your mind while making investments? FACTOR Risk Returns Both TOTAL %AGE 8% 17% 75% 100 Interpretation 75% people are considered the both factors risk as well as returns but.

58 . some promotional activities are required for increasing the awareness about security market. we conclude that 17% people know nothing about the securities investments and 75% people have partial knowledge about it. so.Q 3. Awareness related to security markets KNOWLEDGE Complete Partial Nil TOTAL PERCENTAGE 8% 75% 17% 100 Interpretation On that basis.

risk covering. and others. returns and tax benefits.Q 4. And remaining 25% are interested in capital appreciations. What is the basic purpose of your investment? INVESTMENT PURPOSE Liquidity Returns Capital appreciation Tax benefits Risk covering Others TOTAL PERCENTAGE 30% 25% 10% 20% 5% 10% 100 Interpretation 75% people are interested in liquidity. 59 .

there are more stringent norms by SEBI and exchanges. Also. We know that the capital markets have picked up in past 4-5 years.Q 5: Since how long have you been investing in capital market? Time Period Frequency 80 73 47 200 %age 39 37 24 100 Less than 3 yrs 3-5 yrs More than 5 yrs Total 24% 39% 37% Interpretation Looking at the figures. we can observe that 39 % of people have been investing for less than 3 years and so on. That is the reason why people have started to pose more trust in capital markets now. 60 .

5 29.Q 6 : Do you trade Online? Yes No Total Frequency 141 59 200 Percentage 70. 61 . This shows a good prospect for online trading in future.5 100 141 150 100 50 0 Y es No 59 Interpretation Out of the people surveyed. 70 % people trade online.

Q. 62 . 7. COMPLICATED PROCESS Frequency 60 46 94 200 Percentage 30 23 47 100 Yes No No reply Total 30% 47 % 2 3% Ye s No No re p ly Interpretation This table shows the consolidated table of number of people voting for different factors as to why don’t they prefer to trade online.

Hence. given. The companies should also try to find and analyze the reasons as to why these customers are not trading online in spite of so many benefits the online trading offers. 8 . At the same time the companies need to trap those 30% people who are still not aware of the benefits of online trading and try to shift them towards online trading. we observe that maximum people avoid doing online trading as they perceive it to be more risky. some of them have experienced poor services from their online brokers. 63 . Out of the reasons. of People Yes No 36 20 100 75 60 21 110 75 72 46 W hy N ot O nline 120 100 80 60 40 20 0 LA CK OF MA RKET KNOWLEDGE NO COMPUTER INVESTMENT RISK POOR SERVICES COMPLICA TED PROCESS # Respondents Y es No F a c to r s Interpretation We asked the people as to why they don’t trade online. Why not online? Factors LACK OF MARKET KNOWLEDGE NO COMPUTER INVESTMENT RISK POOR SERVICES COMPLICATED PROCESS No.Q. Also. they avoid doing online trading.

SMC has only 7.IF YES Name of the company you trade with.5% share at present but is growing Ko t ak Oth e rs 64 .5 9 100 Mkt. share 60 50 40 30 20 10 Se cu r itie s ICI CI d ire ct In d ia B ull s Sh a re Un kh a ic o n n In ves tme nt.5 30 15 7. . 0 Interpretation India Bulls enjoy maximum market share of 30% followed by Kotak and ICICI direct.. Kotak Securities ICICI direct IndiaBulls Sharekhan SMC Investments Solutions Others TOTAL Frequency 42 35 60 30 15 18 200 Percentage 21 17.

Also.Q 9: Which factor is most important while choosing a broking house? F re q ue nc y 80 60 40 20 0 35 34 11 Low R e g u la r F a s t F ast B ra n d tra n s a c tio fo rm a tio Q u e ry tra n s a c tio Im a g e in 35 34 45 11 75 45 F re q u e n c y 7 5 Interpretation Out the factors that attract ant investor to online trading are the low transaction cost followed by fast processing so that their margin is not lost due to time lag. another factor that is of importance are the regular updates that the organization provides to its clients. 65 .

people prefer to invest in Mutual funds.Q 10 : Where ELSE do you invest your surplus fund? Areas Direct Equity Mutual fund Insurance Real Estate Banks Frequency 75 65 150 35 150 Other investments 16% 32% 14% 7% 31% Direct Equity Mutual fund Insurance Real Estate Banks Interpretation We also found that besides stock Market. it can also serve as a good opportunity to earn revenue for the company. Thus. 66 .

This can be done away with by going to ‘Net Position’ feature and changing it in one go.  SMCSwift gives the client a facility to put an alarm if a certain rate of a particular stock is achieved. increase its client base.  There was no feature of ‘Payment Gateway’ for fund transfer to and from the client in case of Pay-in and Payout. contains all the necessary details. we came across some good and some not so good features of this product. then he has to go to trade log and change the ‘order type’ for each of the order lots. Their were some features in SMCPlus that needed to be changed and so were suggested by us. 67 . 1. SMC needs to be more flexible with account types and brokerage structure so that it can cater to all types of client segments and hence. It should also try to collaborate with more banks so that the investor doesn’t have to go through the turmoil of opening new accounts. 3. SMC need to focus on HNI and corporate accounts more as they bring in bulk business.  The Margin report and Intra-day report though. We take this opportunity to suggest some measures in order to make improvements to the product.FINDINGS AND RECOMMENDATIONS As we worked with this project. Now. are a little complicated from the client’s end. 4. 2. if he wants to change his order type from ‘Intra-day’ to ‘Delivery’.  In case the client does some transactions for ‘Intra-day’ purpose but he gets his orders in different lots.

The company can also introduce dial and trade facility in case online system defunct. 5. This will also benefit the company n terms of revenue. we find a lot of frauds happening in this field.We suggest that a new feature should be introduced wherein an SMS facility should be provided to the clients who are on the go most of the time. it is suggested that the company should aggressively focus more on Sales and promotional activities by efficiently utilizing the manpower resource it has. This feature will be unique as no other software does it and can become the USP of this product. 68 . looking at the competitive scenario. 7. 6. 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. Thus. Also. if we look in general. As a whole.

If investors do not have these accounts. respectively. online trading has a long way to go. online trading is still in its infancy in India.70 lacs till Dec. the existing online trading system suffers from a major lacunae. entering the online ring promises exciting times ahead. 5paisa.696. 9000-10.1 cr.23. Apart from the hassles involved.com. indiabulls.CONCLUSION Facts and figure speak in itself that as from the past years analysis of capital market we could see the bullish trend of the Indian stock market. 10 crores per day from online trading compared to a combined gross turnover of around Rs. Or. icicidirect. HDFC Bank. The Online trading has grown tremendously since 2000-01 to 2007 form 7287. there may also be certain extra charges involved in this exercise that may have to be built into the overall cost of online trading.578 to 8. Compared to the Western countries. such as icicidirect. such as kotaksecurities. 2007.com currently offers online trading services only to investors who have a bank or a demat account with ICICI.18 cr. This has raised to 12. With trading turnover at around Rs. motilaloswal. investors can open an online trading account with SMC only if they open a demat account with it and have a bank account either with ICICI. investsmart. There has been a tremendous pressure on the Indian industries to perform well as the expectations of the investors are rising with bullish market sentiments.000 crores handled by the BSE and NSE together. However. The client base has also improved form 1. Geojit Securities and duttstock. and a host of brokers. With some ten dotcom players.49. they have to go through the entire rigmarole of opening up the bank and demat account again for easy operation. 69 . sharekhan.com. to 81033.

ANNEXURES 70 .

Do you know about investment options available? KNOWLEDGE Yes No Q 2.QUESTIONNAIRE Q 1. Most important things you take into your mind while making investments? FACTOR Risk Returns Both Q 3. Awareness related to security markets KNOWLEDGE Complete Partial Nil TOTAL Q 4. What is the basic purpose of your investment? INVESTMENT PURPOSE Liquidity Returns Capital appreciation Tax benefits Risk covering Others 71 .

Why not online? Factors LACK OF MARKET KNOWLEDGE NO COMPUTER INVESTMENT RISK POOR SERVICES COMPLICATED PROCESS IF YES Name of the company you trade with. 7. 8 . COMPLICATED PROCESS Yes No No reply Q.Q 5: Since how long have you been investing in capital market? Time Less than 3 yrs 3-5 yrs More than 5 yrs Total Q 6 : Do you trade Online? Yes No Q. Kotak Securities ICICI direct IndiaBulls Sharekhan SMC Investments Solutions Others 72 .

Q 9: Which factor is most important while choosing a broking house? Low transaction Regular information Fast quarry Fast transaction Brand image Q 10 : Where ELSE do you invest your surplus fund? Areas Direct Equity Mutual fund Insurance Real Estate Banks 73 .

Research Mythology Sources of Secondary Data: 1.in www. Human resource management Kothari.ask.R.in 74 .co..org.wikipedia.com www.cmie.com www.rbi.BIBLIOGRAPHY BOOKS • • • Gupta.in www. Magazines and Journals:           S & P Emerging Stock Market Factbook SEBI Bulletin The Economic Times The Mint The Hindustan Times The Times of India The Wallstreet Journal Indian Economy Magazine Financial Management (Prasanna Chandra 12th Edition) Marketing Research (TN Chabbra 4th Edition) 2.S.SMCindia.in www.google.L .gov.com www. Websites         www.sebi.B. C. C..nse-india.com www. Research Methodology Gupta .