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ANGEL BROKING LIMITED
MOHAMMAD ALI MBA-International Business Enrolment No.: A7002008002 International Business, Finance
Under guidance of:
Industry guide: Mr. Himanshu Singh Designation: Equity Advisor Angel Broking Ltd. Faculty guide: Dr. Amit K Sinha Senior Lecturer AMITY BUSINESS SCHOOL
SUMMER INTERNSHIP REPORT IN PARTIAL FULFILLMENT OF THE AWARD OF FULL TIME MASTERS IN BUSINESS ADMINISTRATION (2008-10)
AMITY BUSINESS SCHOOL AMITY UNIVERSITY UTTAR PRADESH LUCKNOW
Certified that this report is prepared based on the dissertation report undertaken by me in Angel Broking ,under the able guidance of Dr. Amit K. Sinha in partial fulfillment of the requirement for award of degree of Master of Business Administration from Amity University Uttar Pradesh .
Signature: Name: Mohammad Ali Enrollment: A7002008002
Signature: Dr. Amit K. Sinha Faculty guide
Signature: Prof. R.P Singh Director A.B.S
Certificate of faculty Guide
This is to certify that Mr. Mohammad Ali student of MBA 3rd semester of Amity University; Uttar Pradesh has under gone a dissertation report under my guidance. The report entitled “Risk management in portfolio selection has been completed by the student to my entire satisfaction.
Date: Dr. Amit K. Sinha Faculty Guide
I here by declare that this dissertation report submitted by me to Amity Business School is my own and it has not been submitted to any other university or published at any time before.
Mohammad Ali Place: Lucknow Date:
An undertaking of work like this is never an outcome of a single person rather it bears the imprints of a number of people who directly or indirectly helped me in completing my summer training. I would be failing in my duties dissertation real, educative and pleasurable. It is very difficult to express ones feeling in words but the formality reminds that one should act to extend possible. I found no suitable words to express my profound indebtedness and heart felt sense gratitude to Dr. Amit K. Sinha, Senior Lecturer, A.B.S, Mr. Ejaz Mohyi, Branch Head, Angel Broking Ltd, Mr. Ali Asad, Senior Sales Executive, Angel Broking Ltd. and Mr. Himanshu Singh, Equity Advisor, Angel Broking Ltd for there prestigious guidance, support and supervision during that period. It was there cheerful and cooperative autonomy, regular encouragement, morale boosting and infinite assisting of every kind which made my dissertation a fruitful, pleasant and lifetime experience. At this junction I would like to express my gratitude from deepest of my heart to my parents, guardians and friends who initiates me and provide me the congenial help and atmosphere during my training period.
Investment is a term frequently used in the fields of economics, business management and finance. It can mean savings alone, or savings made through delayed consumption. Investment means buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as Gold as an investment, real estate etc. Types of financial investments include shares and other equity investments and bonds. Equity investments generally refer to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of stock rises.
To invest into stock market or other securities is quite a very critical decision every investor should note before taking a step into the stock market. The benefits and profits in the stock market is quite enormous. The stock market is the only business transaction that its resource is yet untapped, an investor stand a great chance of profiting unlimitedly in trading stock, as well as losing every thing he has worked for all his life into stock market just in a twinkle of eye. That is the reason why every investor should think twice and think very carefully before investing into stock market, to tell you the fact, the stock market is not for every body. The stock market is meant for people who are wiling to take risk, who have extra to spend, who are credit free, who are independent, who are financially free and people who are strong and willing to stand any financial risk situation. Before you invest into stock, you need to know your self and most importantly your financial status, because stock trading is very volatile, risky and that is more reason why you need to check yourself and most importantly your financial status, because stock trading is very volatile, risky and that is the more reason why you need to check yourself and your background before investing your money to avoid losing your hard earned money.
Investment Plan: Every beginner needs to have an investing plan, weather you are beginning to trade/invest into stocks, bonds, mutual funds, futures, forex, real estate, equity and much other financial market. You need to have a plan point of how much risk you are willing to take at the starting point, and the investing plan is ”How Much Are You Willing To Risk” on your starting point. You need to start investing from some where, but where it will not affect your financial status even if you lose your capital margin into the investment. Before you invest your money, make sure to start with as little as you can afford to risk, that will make you not to lose all you have and at the same time, it will prompt you more opportunity to harness on the transaction to ascertain if it actually worth investing your hard earned money into such business. Dont risk investing the amount of money you can not afford to lose, all security transactions are very profiting but at the same time you can lose so much into the transactions as well. The Beginners Target Of Investing: The target of every investor is to make profit, and by that you need to invest your money into a very lucrative and legitimate kind of transactions that will yield better interests and profits, as a beginner, you don’t know the most lucrative and legitimate transactions to invest your money yet, but before you invest, make research about the business to know certain things before you jump into such transaction, but it has been proven that security investments like stock, bonds, mutual funds, equity, futures, forex and other financial transactions yields more better profits in short time investment than other investments, which is the more reason why investors are destinating to invest into financial/securities in order to reap from the untaped profiting ventures. Because of the volatile in the security transactions, prices tend to rise over time, which gradually increasing your money to profit, in this aspect you have benefited from the investment when the prices ascends up. It can also fall over time as well as decreasing the margin of your investment; in this aspect you are losing your money into the investment when the prices descend down. Therefore, investing your money
into transactions is not only to make profits but it will also give you the opportunity to make turn over of your money, which also increases the weight and value of the money you have into more strong money. However, investments require strategies, good decisions, careful planning and patience in order to make a better return in your transactions.
Particulars Students certificate Certificate of Faculty Guide Declaration Certificate of the Company Acknowledgement Introduction Chapter I Significance and History of the study Chapter II Introduction of the company Chapter III Indian stock market over the years Survey of stock market awareness Chapter IV Findings, Conclusions and Suggestions ANNEXTURE I ANNEXTURE II ANNEXTURE III BIBLOGRAPHY 63 65 72 79 58 35 16 pages 2 3 4 5 6 7 11
SIGNIFICANCE AND HISTORY OF THE STUDY
Indian stock market
In order to appreciate the emerging role of stock exchanges in India it is apt to start with the historical perspective and a comparative picture with other stock exchanges in the world. The stock exchange is an association of member brokers for the purpose of facilitating and regulating trading in securities. It is thus, a self regulating organization, be it a company or association. As the securities trading developed in India since 1875, it was a private enterprise of an unregulated nature. The first attempt at regulation was by Securities Contracts Control Act of Bombay 1925, passed by the erstwhile Bombay Presidency. There was resistance from the stock exchanges for government control even at that time. These exchanges had a mushroom growth during the war time of forties as private clubs. There were as many as 21 exchanges in 1945. At that time securities trading were a state subject but with the adoption of Indian Constitution in 1951, it became a Central subject. It took nearly six years after that to pass the necessary central legislation in 1956 in the form of Securities Contracts (Regulations) Act. In the socialistic patter of society adopted by the government for planned development of the economy in 1951, the role of stock exchange received no significant attention and they were left with the minimum government regulation under the above Act and the rules made there under. The traditional emphasis was on self regulation by the stock exchanges themselves with the result that the government had rarely used the full range of powers bestowed on them except for one or two occasions in war time. So the history of the growth of stock market movement in India was characterized by three main features. 1. Resistance to government control and regulation. 2. Growth of stock exchanges as private associations with a modicum of government interference.
3. Emphasis on self regulation and semi-autonomous nature of these private organizations. The government and broking community worked in close coordination and occasions resulting in friction few and far between. The volume of trade and funds raised from the capital market were small and the investor interest was at ebb. Latest Phase in Stock Markets: It was only since 1985 with the entry of banks and their subsidiaries into the stock and capital marks, facilitated by the passage of the Banking Laws Amendment Act 1983 that the idea of better services in these markets arose. The Seventh Five Year Plan 1985-90 contained the first elements of a new economic policy leading to the opening up of the economy, industrial liberalization and a growing role for the private sector. These changes necessitated greater attention to the growth of capital market and protection of investors as public interest in these markets began to grow.
Indian stock market activity is regulated by a variety of laws as diverse as Companies Act of 1956, Indian Contracts Act, Stamp Act, Negotiable Instruments Act and Securities Contract (Regulation) Act etc. The first requirement of well knit reforms is to have a consolidated law incorporating all the provisions to regulate investment activity as financial Services Act of 1986 in United Kingdom. Management Perspectives: The government formed The Securities and Exchange Board of India Act in 1992. The SEBI is the statutory body that controls and regulates the functioning of stock exchanges, brokers, intermediaries, and portfolio manager’s investment advisors and obliges several rigid measures to protect the interest of investors. The era of management by lapses, mismanagement has ostensibly ended and a new concept of management by rules has started. Various Departments have been formed which perform the functions of listing, regulation of trading, provision of settlement and clearance etc basically keeping the services to be rendered to the members and the public in mind. The decisions are sometimes taken by the committees appointed by the governing board for specific purposes. The Operations Department observe that daily trading takes place, collect quotation and make them
available to members and public by the evening of every day. The Computer Department collects and compiles the corporate data quotations of scripts and turnover of trade, member-wise and script-wise for better investment decision making. The EDP work of building up the information base on companies for members and investors to make their investment decisions.
Future Role of Exchanges:
The future role of stock exchanges will be radically difference from the present, as their developmental role will be increasing much faster than their regulatory role. Not only the stock exchanges but all the players in the market namely companies, brokers, intermediaries and public would have to play a greater role in the functioning of stock market. Along with increasing self regulation and a stricter enforcement of a code of conduct on the members, the stock exchanges will have to emerge as public service institutions catering to increasing demands of investors in the country. Listed companies have also a role in this process to collaborate and extend all help for more efficient functioning of exchange. To improve the quality and efficiency of service, trained and professional category of intermediaries and brokers is also necessary. Education, training and research would be the hall mark of future stock brokers and other intermediaries.
Efficient marks require the flow of quick and correct information, an efficient communication system, a system of fair and just practices and procedures accompanied by a strict enforcement of a code of conduct on all. A national market system, if it is to be developed, would vitally depend on the efficient satellite telecommunication system in India and a proper linkage of all stock exchanges.
Investment to increase the level of explicit coordination with outside agents have generally resulted in increased risk to the firm; firms have traditionally avoided this increased risk by becoming vertically integrated or by under investing in coordination. Information Technology has the ability to lower coordination cost without increasing
the associated transactions risk, leading to more outsourcing and less vertically integrated firms. Lower association specificity of Information Technology investments and a better monitoring capability mean that firms can more safely spend in information technology for inter firm coordination than in customary investments for open coordination such as co-located facilities or specialized human resources; firms are therefore more likely to coordinate with suppliers without requiring ownership to reduce their risk. This enables them to benefit from production economies of large specialized suppliers. Moreover, rapid reduction in the cost of information technology and reduction in the transactions risk of explicit coordination makes possible substantially more use of explicit coordination with suppliers.
INTRODUCTION WITH THE COMPANY
Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has emerged as one of the most respected Stock-Broking and Wealth Management Companies in India. With its unique retail-focused stock trading business model, Angel is committed to providing ‘Real Value for Money’ to all its clients.
The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and the two leading Commodity Exchanges in the country: NCDEX & MCX. Angel is also registered as a Depository Participant with CDSL.
Angel’s Business Equity Trading Commodities Portfolio Management Services Mutual Funds Life Insurance Personal Loans IPO Depository Services Investment Advisory
PRIMARY AND SECONDARY MARKET
An issuer/company enters the Primary markets to raise capital. If the issuer is selling securities for the first time, these are referred to as INITIAL PUBLIC OFFERS (IPO’s). It means companies issue share to the general public in an initial public offering to raise capital.
Secondary market transaction are referred to those transaction where one investor buys shares from another investor at the prevailing market price or at whatever price both the buyer and seller agree upon. The secondary market or the stock exchanges are regulated by the regulatory that facilitates authority. In India, the secondary and primary markets are governed by the security and exchange board of India (SEBI). In other words, the secondary market is the financial market for trading of securities that have already been issued in an initial private or public offering. Alternatively, secondary market can refer to the market for any kind of used goods. The market that exists in a new security just after the new issue is often referred to as the aftermarket. Once a newly issued stock is listed on a stock exchange, investors and speculators can easily trade on the exchange, as market makers provide bids and offers in the new stock.
INTRODUCTION TO SEBI The Government of India established the Securities and Exchange Board of India, the regulatory body of stock markets in 1988. Within a short period of time, SEBI became an autonomous body through the SEBI Act passed in 1992, with defined responsibilities that cover both development & regulation of market while also giving the board independent powers. Comprehensive regulatory measures introduced by SEBI ensured that end investors benefited from safe and transparent dealings in securities. The basic objectives of the board were identified as: To protect the interests of investors in securities. To promote the development of Securities Market. To regulate the Securities Market.
SEBI has contributed to the improvement of the Securities Market by introducing measures like capitalization requirements, margining and establishment of clearing corporations that reduced the risk of credit.
STOCK EXCHANGE A stock Exchange is a place that provides facilities to stock brokers to trade company stocks and other securities. A stock may be bought or sold only if it is listed on an exchange. Thus it is the meeting place of the stock buyers and sellers. India’s premier stock exchanges are the Bombay Stock Exchange and the National Stock Exchange.
NATIONAL STOCK EXCHANGE The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a taxpaying company unlike other stock exchanges in the country.
On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.
THE BOMBAY STOCK EXCHANGE LIMITED The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalal Street, Mumbai, India. The Bombay Stock Exchange was established in 1875. There are around 4,800 Indian companies listed with the stock exchange , and has a significant trading volume. As of May 2007, the equity market capitalization of the companies listed on the BSE was about Rs. 40.7 trillion (US $ 999 billion). The BSE SENSEX (Sensitive INDEX), also called the "BSE 30", is a widely used market index in India and Asia. As of 2005, it is among the five biggest stock exchanges in the world in terms of transactions volume.
Angel Broking ltd. is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From stock broking, to mutual funds, to life insurance, to investment, the group caters to the financial needs of individuals and corporate. Angel group is leading Retail Broking service provider in the country. The group has emerged as one of the top 3 retail stock broking house offering a gamut of retail centric services like Research, investment Advisory ,wealth Management Services ,Ebroking & Commodities to the individual investor. Angel has a wide and efficient network of 21 regional hubs,150 branches and 2200+ business associates in 115 cities all over the country services more than 1.9 lac individual investors. The group is promoted by these enterprises as a sub broker in 1987. Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has emerged as one of the most respected Stock-Broking and Wealth Management Companies in India. With its unique retail-focused stock trading business model, Angel is committed to providing ‘Real Value for Money’ to all itsclients. The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and the two leading Commodity Exchanges in the country: NCDEX & MCX. Angel is also registered as a Depository Participant with CDSL. Mr. Dinesh thakar, who started
Research Strength at Angel
Angel Broking is one of the leading retail brokerage houses with a professional and qualified research team. We deploy state of the art research metrics and international news services like Bloomberg/ Reuters etc. to remain in touch with global / domestic developments. Angel’s research has a proven track record of over 5 years. Emphasis on providing best investment value for money to the retail client is the core philosophy at angel .angel principally focuses on the individual investor community and has an investment / advisory desk to give first hand information / guidance to them. Angel’s research and advisory team comprises of 80+ professionals working continuously to discover potential multi- bagger stocks for you. Angel broking Research center the special research cell where some of India’s finest financial analyst bring you intensive research reports on how the stock market is faring. When is the right time to invest, when to execute your order and more. Depending on what kink of investor you are, we bring you fundamental or basis research and technical research. As an investor with angel broking ltd., you get access to these research reports exclusively. You get access to the following reports.
These calls are provided according to changing market situations. Be it news, momentum or technical perspectives be updated with what are experts advise you to do during the market hours.
Daily Technical view
A technical view summarizing the previous day movement and what is expected to happen on the current day. This report will also provide you with technical calls for trading along with various supports and resistances of chosen stocks.
Deciding which sector to invest in, our super sector report can guide you. Know details including the effect of government policies and regulations and estimates about how the sector is expected to behave.
At last but not the least you can get these expert tips and recommendations as SMS on to your mobile phone.
Angel broking limited
The journey so far (milestones) February, 2008 Crossed the 400,000 mark in unique trading accounts
Received "Major Volume Driver" award for FY07
Crossed the 200,000 mark in unique trading accounts
Crossed the 2,500 mark in terms of business associates.
Received "Major Volume Driver" award for FY06
Commenced Mutual Fund and IPO distribution business
Formally launched the PMS function
Crossed the 100,000 mark in unique trading accounts
Received the prestigious "Major Volume Driver" award for FY05
Launch of Online Trading Platform
Services of Angel Broking Ltd.
KARVY KARVY, is a premier integrated financial services provider, and ranked among the , top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of l financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments. The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company …Karvy Consultants Limited. We started with consulting and financial accounting automation, and carved inroads into the field of registry and share accounting by 1985. Since then, we have utilized our experience and superlative expertise to go from strength to strength…to better our services, to provide new ones, to innovate, diversify and in the process, evolved Karvy as one of India’s premier integrated financial service enterprise. cial
ICICI direct .com ICICI Bank Demat Services boasts of an ever growing customer base of over 11.5 ever-growing lacs account holders. In our continuous endeavor to offer best of the class services to our customers we offer the following features: E-Instructions: You can transfer securities 24 hours a day, 7 days a week through : securities Internet & Interactive Voice Response (IVR) at a lower cost. Now with "Speak to transfer", you can also transfer or pledge instructions through our customer care officer. Consolidation Demat Account Dematerialise your physical shares in various holding Account: patterns and consolidate all such scattered holdings into your primary demat account at reduced cost. Digitally Signed Statement: Receive your account statement and bill by email. Statement: Corporate Benefit Tracking Track your dividend, interest, bonus through your Tracking: account statement. Mobile Request: Access your demat account by sending SMS to enquire about : Holdings, Transactions, Bill & ISIN details. Mobile Alerts: Receive SMS alerts for all debits/credits as well as for an request : any which cannot be processed.
INDIA INFOLINE The India Infoline Group comprises the holding company, India Infoline Ltd, which has 4 wholly-owned subsidiaries engaged in distinct yet complementary businesses owned which together offer a whole bouquet of products and services to make your money grow. As on date, the Group employs 4000 plus employees, in over 60 locations, across India. The corporate structure has evolved to comply with oddities of the regulatory framework but still beautifully help attain synergy and allow flexibility to
adapt to dynamics of different businesses. The parent company, India Infoline Ltd owns and manages the web properties www.indiainfoline.com and www.5paisa.com. It also undertakes research, customized and off-the-shelf. Launched on 11 May 1999, www.indiainfoline.com is India’s leading and most comprehensive business and financial information website. The site provides quality information and analysis - earlier restricted to a few people - to the common man, absolutely free! The site has met with an overwhelming response and has been reviewed as the most comprehensive financial content website in India by BBC World - Money Watch, Business World, Business Line and others. The company also won the Golden Mouse Award in India Internet World 2000 for the "Best Finance" site. In May 2001, our website was included in the Top 200 Best of the Web list by Forbes Global under the Asia Investing category. We were the only website from India to be featured in any category. Since then it has been nominated twice to this list. In its last review, Forbes editors have said, "www.indiainfoline.com is a must read for the investors in South Asia..."
Sharekhan is a India’s leading stock broker of the retail arm SSKI (Sri Shantilal Kantiwal,Ishwarlal Pvt. Ltd.), an organization with over eighty years of experience in the stock market, With more than 240 share shops in 110 cities, and India’s premier online trading destination. Sharekhan’s customer enjoy multi channel access to the stock market, and it offers you trade execution facilities for each as well as derivatives, on the BSE and the NSE, depository services, commodities trading on the MCX and NCDEX and most importantly, It bring investment advice tempered by eighty years of broking experience.
Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay Stock Exchange, Luxembourg Stock Exchange and London Stock Exchange. The market capitalization of Indiabulls is around USD 800 million, and the consolidated net worth of the company is around USD 500 million. Indiabulls and its group companies have attracted USD 300 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 as Fidelity Funds, Capital International, Goldman Sachs, Merrill Lynch, Lloyd George and Farallon Capital.
Angel Oyster Bottom up concentrated portfolio with emphasis on Value Investing. Objective: • To generate wealth on long term basis rather than outperform by taking higher risk. • Earlier identification of stock to ride through the entire investment cycle • Stock picking is based on hidden values and not the market capitalization. Investment Strategy: • A blend of Value and growth stocks; high weightage is towards value stock. • Ensuring a balanced portfolio with a relatively medium risk profile. Investor Profile: • The scheme would be suited for investors with medium to high risk appetite having long term perspective Fees and Charges 2% Asset Management Charges 0.50% brokerage on transactions
Angel Blue-chip Bottom up concentrated portfolio with Emphasis on GARP (Growth at Reasonable Price). Objective: • The scheme will seek to achieve returns through broad based participation in equity markets by creating a diversified equity portfolio of medium to large capitalized companies • Out-performance to sensex will be the prime motive Investment Strategy: • Major proportion of large and medium capitalized stocks • Medium capitalized stocks not to exceed 25% • Sectoral exposure not to exceed 25% Investor Profile: • The scheme would be suited for investors with medium to low risk appetite, having long term perspective Fees and Charges • 2% Asset Management Fees • 0.50% Brokerage on transactions
Angel Equity Derivatives Fund Bottom up concentrated portfolio with Equities and Derivatives and Emphasis on Hedging using volatility in the Markets. Objective: • The scheme will seek to achieve returns through deployment into Equity assets and partially hedging the portfolio using options and futures. The objective is to generate moderate returns by creating margin of safety. • Also the funds lying idle would be deployed in arbitrage between cash and future and /or place in low maturity debt funds and low risk F&O Strategies. Investment Strategy: • Investments would be in fundamentally strong Large cap and Mid Cap companies having high liquidity in Options. • Partial hedging of open positions would be done by writing options Investor Profile: • The scheme would be suited for investors with low to medium risk appetite, having long term perspective. • Suitable for HNI’s and Corporates who want to park money for consistent Return from the market even if market remained flat. Fees and Charges • 1% Asset Management Charges • 0.10% on Delivery and Rs.50 flat on options, 0.03% on futures
Angel Growth Bottom up concentrated portfolio with emphasis on growth Investment. Objective: • To generate capital appreciation in the medium to long term • Investments in equities and equity related instruments comprising of predominantly Mid – Cap and Small – Cap. Investment Strategy: • Creating a Diversified portfolio with the aim to earn return through broad based participation in equity markets. • Portfolio strives to insulate an investor from cyclical themes by investing in sector offering secular growth outlook. • Allocation of sectors and stocks may be dynamically structured in tune with changes in broader market conditions. Investor Profile: • The scheme would be suited for investors with moderate risk appetite. • Recommended investment horizon is 15 to 18 months. Fees and Charges: • 2% Asset Management Charges • 0.5% brokerage on transactions
THE PMS TEAM
• ANGEL OYSTER Chief Investment Officer Mr. Rajen Shah • ANGEL BLUE-CHIP Fund Manager Mr. Phani Sekhar • ANGEL GROWTH Fund Manager Mr. Phani Sekhar • ANGEL Equity Derivative Fund Manager Mr. Siddarth Bhamre
INDIAN STOCK MARKET OVER THE YEARS WITH REFERENCE TO LONG, MID AND SHORT TERM INDEXES AND THERE COMPARISIONS BSE SENSEX (THREE YEARLY DATA) YEAR Oct 2002 Oct 2005 Oct 2008 6 August 2009 Oct 2011
SENSEX 2949. 7892.31 9788.06 15514.03 ?
VOLUME (in Crore) 3009 12950 26980 56780 ?
THREE YEARLY COMPARISION FROM THE YEAR 2002 In investing psychology of BSE-SENSEX and their depth study as shown in the above table, speaks itself, a lot of variations, but in a three year period which is said to be a long run in financial fields the market has shown steady growth over the period from 2002 to 2009. In terms of growth SENSEX pushes to 7892.31 in October 2005 from 2949 in October 2002, that’s interestingly and more astonishingly growing in Indian stock market of 4943 points in three years The growth continues till now and the investor also believes that, as the investor growth rate can suggest which has rapidly increased, during last seven years. A long run in Indian stock market with a calculative mind which will take to you and you’re investing into a different stage of returns all together. I ask you a normal question, after looking up the table, what will be your next figure, if you can’t predict, at least suggest what you will go for, with your calculative, speculative and energetic mind…?
COMPARISION (linked relation) OCTOBER 2005 WITH OCTOBER 2002 The SENSEX show a steady movement and moves to 7892.31 from 2949 in 2002 this is the increase of 4943.31 points and the percentage increase is 62.63% and to increase in volume of trade is of 76.76% that is from 3009 to 12950. This is phenomenal.
OCTOBER 2008 WITH OCTOBER 2205 During this time the SENSEX reached the height of 9788.06 from 7892.31 which the increase of 1895.75 points and percentage of 19.36, and the volume also increased to 26980 from 12950 which is 52% increase.
6th AUGUST 2009 WITH OCTOBER 2008 The SENSEX is at the height of 15514.03 from 9788.06 that’s the increase of 5725.97 points at the percentage of 36.90% and the increase in volume is 56780 from 26980.
NSE-NIFTY (THREE YEARLY DATA)
YEAR Oct 2002 Oct 2005 Oct 2008 6th August 2009 Oct 2011
NIFTY 951.4 2316.05 2885.6 4585.5 ?
VOLUME 3179.00 5180.95 12242.10 21069.95 ?
COMPARISION (linked relation) As the comparison of BSE SENSEX shows the growth in every three year period, the NSE NIFTY tables also shows that in October 2002 from 951.4 to 2316.05 in October 2005, that’s a growth of almost 1365 points. In continuation in every three year period of span the investor can grow his returns with heavy percentages. A long run investment from any date in the stock market will provide you assurance that the money invested will have a growth more than any life insurance policies or the bank rate of interest. Variation and fluctuations in the day to day business will give you a shock as well as surprise; you will loose and gain with the rapid rate in day to day activities of the share market but in the long run it will prove you steady growth of returns. OCTOBER 2005 WITH OCTOBER 2002 Here we can see that the NIFTY is showed a steady increase upwards and reached to 2316.05 from 951.4 in October 2002 this is the increase of 1364.65 points at the percentage rate of 58.92% and the volume increased to 5180.95 from 3179.00 that is 38.64%.
OCTOBER 2008 WITH OCTOBER 2005 During this time the NIFTY moved to 2885.6 from 2316.05 that’s the increase of 569.55 points and 19.73% and the volume increased from 5180.95 to 12242.10 that is 57.67%.
6th AUGUST 2009 WITH OCTOBER 2008 The NIFTY increased to 4585.5 from 2885.6 that’s the increase of 1699.9 and percentage increase of 37.07%
INDIAN STOCK MARKETS IN LAST FIVE YEARS BSE-SENSEX (YEARLY DATA) OCT 2004 OCT 2005 OCT 2006 OCT 2007 0CT 2008 6th AUGUST 2009 5627.27 7892.13 12961.9 19837.99 9788.06 15514.03 14700.00 12950.00 23690.00 46470.00 26980.00 56780.00
NSE-NIFTY (YEARLY DATA) YEAR OCT 2004 OCT 2005 OCT 2006 OCT 2007 OCT 2008 6th AUGUST 2009 NIFTY 1786.9 2316.05 3769.1 5900.65 2885.6 4585.5 VOLUME 3960 5180.95 8423.57 22675.18 12242.10 21069.95
A yearly comparison speaks a theory too, and that's its rate, you can be in positive point of view with 80% dependability on the fixed sources of SENSEX. It has a major variation in the year 2008, due to bank failures in USA and FDI reduces to Indian stock market. The period of this down fall is also known as the biggest recession in the world.
Indian stock market dips despite of taking various precautionary steps just to show that it’s collectively attached to the other markets. December 2007 to December 2008 was the extremes of limits in any given year, in the Indian stock market, as it reaches to more than 21000 points in mid January and goes to the lowest points in less than one year, it happens in the same year when the SENSEX was around 8700 points, loss of 12300 points. A major set back was on but government of India was totally in control, which helps and puts the break on vehicle, leading towards the well.
BSE SENSEX (FOUR MONTHLY DATA) MONTHS/YEARS OCT 2004 FEB 2005 JUNE OCT FEB 2006 JUNE OCT FEB 2007 JUNE OCT FEB 2008 JUNE OCT FEB 2009 JUNE 6th AUGUST SENSEX 5627.27 6713.85 7193.85 7892.13 10370.24 10609.25 12961.9 12938.09 14650.51 19837.99 17578.72 13461.6 9788.06 8891.61 14493.84 15514.03 VOLUME (in Crore) 14700.00 18200.00 9700.00 12950.00 31800.00 15830.00 23690.00 33370.00 32450.00 46470.00 36200.00 28710.00 26980.00 22690.00 49940.00 56780.00
COMPARISION (linked relation) A four monthly comparison from the table suggest that it’s a rapid fire or a T-twenty. You can gain too much and loose too much, for this short period of time, your portfolio will depend on your thoughts, needs and more importantly your knowledge. A percentage gain from investing is the important tool or you can say their objective in a very short period of span. Risk is there and it’s too high in comparison to a year table, and a lot higher in terms of long term investment, but the growth rate, which involves the investors to grow their money on a fertile stock market, ignoring the climate or the actual conditions of the market.
FOUR MONTHLY COMPARISION FROM THE YEAR 2004 ON BSE SENSEX AS PER ANNEXTURES FEB 2005 WITH OCT 2004 The SENSEX grows to 6713.85 from 5627.27, that’s a growth of 16.19% and volume of shares also increase to 18200 from 14700, that’s a growth of 19.23% in four months period.
JUNE 2005 WITH FEB 2005 The BSE SENSEX increases to 7193.85 from 6713.85 that’s a growth of 480 points with a percentage of just 6.67 and the volume dips to 9700 from 18200 that’s a decrease of about 46.71%.
OCTOBER 2005 WITH JUNE 2005 The BSE SENSEX increase to 7892.13 from 7193.85 that’s a growth of 698 points with a percentage of 8.84 and the volume increase to 12950 from 9700 that’s a increase of 25.10%.
FEBRUARY 2006 WITH OCTOBER 2005 The SENSEX increase to 10370.24 from 7892.13 that’s a growth of 2478 points with a percentage of 23.89 and the volume increase to 31800 from 23690 that’s a increase of 25.50%.
JUNE 2006 WITH FEBURARY 2006 The SENSEX increase to 10609.25 from 10370.24 that’s a growth of 239.01 with a percentage of 2.25 and volume decrease to 15830 from 31800 that’s a decrease of 50.22% to February’s volume
OCTOBER 2006 WITH JUNE 2006 The SENSEX increase to 12961.9 from 10609.25 that’s a growth of 2352.65 with a percentage of 18.15 and volume increase to 23690 from 15830, that’s a increase of about 33.17% of June’s volume.
FEBRUARY 2007 WITH OCTOBER 2006 The SENSEX decrease to 12938.09 from 12961.9 that’s a dip of 23.81 points with a percentage of 0.18 and volume increase to 33370.00 from 23690.00, that’s a increase of about 29%.
FEBURARY 2007 WITH JUNE 2007 The SENSEX increase to 14650.51 from 12938.09 that’s a increase of 1712.42 points with a percentage of 11.68% and volume decreased to 32450 from 33370, that’s a decrease of 2.75% to February’s volume.
JUNE 2007 WITH OCTOBER 2007 The SENSEX increases to19837.99 from 14650.51 showing the increase of 5187.48 points with the percentage increase of 26.14, and during this time the volume increase to 46470 from 32450, that’s a increase of 30.17%.
OCTOBER 2007 WITH FEBRUARY 2008 The BSE SENSEX decreased to 17587.72 from 19837.99, that is the decrease of 2250.72 points with the percentage decrease of 11.34, and during this time the volume to trade also decreased to 36200 from 46470, which is decrease of 22.10%.
FEBRUARY 2008 WITH JUNE 2008 During this time the BSE SENSEX decreased to 13461.60 from 17578.72 which is change by 23.42% and, the volume decreased to 28710 from 36200, that’s a decrease of 20.69%. JUNE 2008 WITH OCTOBER 2008 The SENSEX decreased to 9788.06 from 13461.6 that’s a decrease of 3673.54 points with a percentage of 27.28, and the volume dips to 26980 from 28710 that’s the decrease of 6.02% of June’s volume.
OCTOBER 2008 WITH FEBRUARY 2009 The SENSEX decreased to 8891.61 from 9788.06 that’s a decrease of 896.45 points with a percentage of 9.15, and the volume dips to 22690 from 26980 that’s a decrease of 15.9%
FEBURARY 2009 TO JUNE 2009 The SENSEX increased to 14493.84 from 8891.61 which is a increase of 5602.23 with a percentage of 38.65, the volume increased to 49940 from 22690 that’s a increase of 54.56%.
JUNE 2009 TO 6th AUGUST 2009 The SENSEX increased to 15514.03 from 14493.84 which is the increase of 1020.19 with a increase of 6.56%, and the volume increased to 56780 from 49940 which is the percentage increase of 12.04%.
INDIAN STOCK MARKET IN LAST FIVE YEARS NSE NIFTY (FOUR MONTHLY DATA) MONTH/YEAR Oct 2004 Feb 2005 June Oct Feb 2006 June Oct Feb 2007 NIFTY 1786.9 2103.25 2220.6 2316.05 3074.7 3128.2 3769.1 3745.3 VOLUME 3960.00 6390.00 7170.00 5180.95 8711.93 7067.47 8423.57 12686.73
June Oct Feb 2008 June Oct Feb 2009 June 6th august
4318.3 5900.65 5223.5 4040.55 2885.6 2763.65 4291.1 4585.5
10681.49 22675.18 15816.64 11450.59 12242.10 8898.93 19339.45 21069.95
COMPARISION (linked relation) FOUR MONTHLY COMPARISION OF NSE NIFTY FROM THE YEAR 2004 AS PER GIVEN ANNEXTURE
FEBRUARY 2005 WITH OCTOBER 2004 The NIFTY grows to 2103.25 from 1786.9, that’s a growth of 316.35points with a percentage of, and the volume increases to 6390.00 from 3960.00 that’s the increase of about 38%.
JUNE 2005 WITH FEBRUARY 2005 The NIFTY grows to 2220.6 from 2103.25 which is a growth of 117.35 points with a increase of 5.28%, and the volume increases to 7170.00 percentage increase of 10.87%. from 6390.00 that’s the
OCTOBER 2005 WITH JUNE 2005 The NIFTY grows to 2316.05 from 2220.6 which is a growth of 95.45 points with a increase of 4.12%, but the volume decreased to 5180.95 from 7170.00 which is the increase of 27.74%.
FEBRUARY 2006 WITH OCTOBER 2005 The NIFTY grows to 3074.7 from 2316.05 that is a growth of 758.65 points and the increase by 24.67%, and the volume increased to 8711.93 from 5180.95 which is the percentage increase of 40.53.
JUNE 2006 WITH FEBRUARY 2006 The NINFTY shows a little growth and moves to 3128.2 from 3074.7 that’s the growth of 53.5 points which is 1.71% increase from February, and the volume decreases to 7067.47 from 8711.93 which is the percentage decrease of 18.87%.
OCTOBER 2006 WITH JUNE 20006 The NIFTY increases to 3769.1 from 3128.2 that’s the increase of 640.9 points and increase of about 17%, and the volume also increased to 8423.57 from 7067.47 which is the increase of 16.09%.
FEBRUARY 2007 WITH OCTOBER 2006 The NIFTY shows a slight decrease form 3769.1 to 3745.3 which is the difference of just 23.8 points and 0.63%, and the volume moved to 12686.73 from 8423.57 which is the percentage change of 33.60%.
JUNE 2007 WITH FEBRUARY 2007 The NIFTY increase to 4318.3 from 3745.3 that’s the change of 573 points and 13.26%, and the volume decreased to 10681.49 from 12686.73 that is the percentage decrease of 15.80%.
OCTOBER 2007 WITH JUNE 2007 The NIFTY increased to 5900.65 from 4318.3 this is the change of 1582.35 points and the percentage increase of 26.81%, the volume increased to 22675.18 from 10681.49 which is the increase of 52.89%.
FEBURARY 2008 WITH OCTOBER 2007 The NIFTY decreases, this time, to 5223.5 from 5900.65, it is the change of 677.15 points and change of 11.47%, and the volume also decreased to 15816.64 from 22675.18 which is 9.14%
JUNE 2008 WITH FEBRUARY 2008 During this time NIFTY continued decreasing and reached 4040.55 from 5223.5, that is the decrease of 1182.95 points which is 22.64%, and the volume decreased to 11450.59 from 15816.64 that is the decrease of 27.60%.
OCTOBER 2008 WITH JUNE 2008 NIFTY decreases further to 2885.6 from 4040.55 showing the decrease of 1154.95 that is 28.58% of June’s index, but the volume showed a slight increase and moved to 12242.1 from 11450.59 that’s a increase of 6.42%.
FEBRUARY 2009 WITH OCTOBER 2008 NIFTY decreases to 2763.65 from 2885.6 which is 121.95 points and decrease of 4.22%, and the volume showed a decrease of 27.30% and moved to 8898.93 from 12242.1.
SURVEY ON STOCK MARKET AWARENESS
(SAMPLE SIZE OF 100 PEOPLE) In order to know the perspective in the stock market one very important factor which can not be ignored is the “awareness level of stock market” among the common public. This was the main deriving force which generated the need to take this survey. The sample size is of 100 people and the area of research is near the Angel Broking ltd’s office, that is, Lalbagh and Hazratganj.
AREA OF WORK
35 30 25 20 15 10 5 0 GOVERNMENT PRIVATE BUSINESS SELF EMPLOYED GOVERNMENT PRIVATE BUSINESS SELF EMPLOYED
AMONG 100 SAMPLE SIZE
60 50 40 30 20 10 0 BELOW 10% 10-25% 25-50% ABOVE 50% BELOW 10% 10-25% 25-50% ABOVE 50%
AMONG 100 SAMPLE SIZE AMONG 100 PERSONS 4 RESPONDENTS DID NOT KNOW ABOUT THEIR NG SAVING. BELOW 10% 20
INSTRUMENTS FOR SAVING
FD's 70 60 50 40 30 20 10 0 FD's SHARES MUTUAL FUNDS SHARES MUTUAL FUNDS OTHERS
AMONG 100 SAMPLE SIZE After survey it was found that other investment like Insurance, SB A/C Etc are highly preferred than other instruments. Most of the persons invest more than one instrument. Investment ratio of share and mutual fund are mostly similar. strument. similar.
SHORT TERM MID TERM LONG TERM MIX
AMONG 100 SAMPLE SIZE
Mostly Respondents Invest For Long Term Than Other Option.
70 60 50 40 30 20 10 0 OWN OBSERVATION TIPS & GUIDANCE MAGAZINES BROKER OTHERS
AMONG 100 SAMPLE SIZE
TIPS & GUIDANCES
AWARENESS OF EQUITY/COMMODITY MARKET
YES YES NO NO
AMONG 100 SAMPLE SIZE Among 100 People 48 Are Not Aware About Equity & Commodity Market and 52 Are Aware.
AGE GROUP OF RESPONDENTS
20-40 40-60 70
DEMAT & TRADING A/C
30 25 20 15 10 5 0 Angel SSKI ICICI OTHERS Angel SSKI ICICI OTHERS
FACILITIES AVAILABLE FROM BROKERS
12 16 SMS CALL MAIL ALL
INTERPRETATION AMONG 100 SAMPLE SIZE Among 100 People 48 Are Not Aware About Equity & Commodity Market and 52 Are Most of the Respondent Get Sms & Call Facility. SMS Facility 12
All of the Above
FINDINGS AND CONCLUSION and SUGGESTIONS FINDINGS YEAR OCT 2004 OCT 2005 OCT 2006 OCT 2007 OCT 2008 AUGUST 2009 SENSEX 5627.27 7892.13 12961.9 19837.99 9788.06 15514.03 NIFTY 1786.9 2316.05 3769.1 5900.65 2885.6 4585.5
SENSEX NIFTY Linear (SENSEX) Linear (NIFTY)
0 2004 2005 2006 2007 2008 2009 2010
The above comparison shows that SENSEX and NIFTY both are parallel to each other but in terms of growth SENSEX is far too ahead as the top grade AAA rating
companies are listed in it. The projection for the year 2010 in the bar diagram with a straight line shows the growth in both the markets. Except in 2008 all the years of market data has increased from the past while in 2008 it was a exception to the rule of growth which is set to be recession. After analyzing the data according to my sample survey (sample size 100) I found out that among 100 people 52% are aware about stock market and 48% are not aware about this market. Only 46% people are interested to invest in the stock market and rest 6 % are not interested to invest due to different reasons such as; financial problem, unsafe market etc.
AS BSE SENSEX and NSE NIFTY table and comparisons don’t suggest the exact value of shares, in which, a investor is trading or their earning and losses. Day to day fluctuations will increase or decrease his wealth. In terms of the period, the market variations is too high in short period, a little steady in a year period of time, and growing in 3 years period. That doesn’t mean an investor can relax, he has to use considerable strategy, a wide range of portfolio, depth knowledge of the company, whose shares are involved in his trading. The industry reports of that company and above all the governments policies. In the abnormal cases of boom or recession the market grows rapidly or falls to a bottom in a very short period of time, even in a day a growth or dip of 1000 or more points has also been registered but if the changes are more than 1000 points the SEBI guidelines provides a break of one hour to consolidate the fluctuation, after the break if the fluctuations will register more than 500 points another break will be provided, and for another 500 points changes will lead to a closure of that day trading. February 2008 to February 2009 was the period when recession in the world, banking crisis in USA and foreign investors lost their trust in Indian stock market and even in
the world markets too, it was the period when the investors and the companies lost more than 50% of there wealth. Government of India and the finance ministry had to put three packages of 20,000 crores in different period of time to control the huge losses incurred in other period even though the first package was just a dissolving factor in the recession as the news comes out from USA of bankruptcy of top financial organizations (banks). The news was too big for the Indian investors to believe in the packages of the Indian government so the market has not changed much despite of that huge amount. In every 5 year time the BSE and NSE grows thrice to its value as it suggest from the year 2004 to 2009 despite of having major fluctuations, recessions, booms and change in investor’s psychology. As major part of the investors goes for long term investment with a view of fewer returns but more protection to their savings, the Indian investors still goes for life insurance policies and bank fixed deposits as they take there their own decisions when investing their savings. Indian investor is divided in age groups when it comes to invest their savings a 20 to 40 year old person is ready to take some risk now and they are going for stock markets and mutual funds. A 40 to 60 year old person is still going for bank FD’s and life insurance policies and they just wanted to secure their savings without taking any risk.
For long term investors: A long run in Indian stock market with a calculative mind will take you and you’re investing into a different stage of (higher) returns all together. Variation and fluctuations in the day to day business will give you a shock as well as surprise; you will loose and gain with the rapid rate in day to day
activities of the share market but in the long run it will prove you steady growth of returns. A yearly comparison speaks a theory too, and that's its rate, you can be in positive point of view with 80% dependability on the fixed sources of SENSEX.
For mid-term investors A wide range of portfolio with regular investment say- monthly, will lead to a steady growth of return which will be more than the deposits in bank and the inflation rate. 2004 to 2009 data represents a growth of more than 40% every year except in the year 2008 when the recession was on. Fluctuations in a very short period should be avoided and ignored to complete the period of investment to maximize the returns which is 40% to 64% in at least one year period.
For short-term investors Speculation must be avoided as too many of the investors just wanted to insure their day to day profits but they ignored the market condition and other economic factors. A rapid growth can be registered in a very short period which excites the youth to invest more and more into the stock market but it requires a deep knowledge of the market or it can result into huge losses. Short term investors should invest the money regularly as their some investment will be on the higher value of market and their some investment will be when the market is low, so the average invested amount and the average market will be in equilibrium position.
Patience, strategy, knowledge about the market, investing policies, portfolio management, ratings of the company, government policies, etc. are some of the major factors to boom your returns despite of the fluctuations.
Security market survey - sheet Name…………………………………………. Ph. No………………………………………... Age…………… Gender: M/F
Tick out the correct option in question 1 to 12 given below: Q1. In which sector do you work? (a) Government sector (b) Self employed Q2. What % of your income do you save? (a) Below 10% (b) 10-25% (c) 25-50% (d) above 50% (c) private sector (d) business
Q3. Which instrument do you prefer for your saving? (a) FD (b) Shares Q4. Please specify the investment pattern. (a) Short-term (b) Mid-term Q5. You invest on the basis of: (a) Own observation (b) Tips & Guidance (c) Magazines (d) Brokers (c) Long-term (d) Mix (c) mutual funds (d) others…
(e) Others Q6. Are you aware of securities market? (a) Yes (b) no
Q7. Which broking company you prefer for trading? (a) Angel broking ltd. (b) Share khan Q8. Why you have selected this company (a) Good services (b) Low brokerage (c) Company background (d) other (c) ICICI direct (d) others
Q9. What is the ratio of your investment in trading? (a) 20:80 (b) 30:70 (c) 60:40 (d) 50:50
Q10. Which facility do you avail from your broker? (a) Sms facility (b) Call alert (c) mail alert (d) all of the above.
Dear respondent, I and my organization are very thankful to give your support.
Date: (signature) Place:
ANNEXTURE II BSE-SENSEX FROM 2004(four monthly)
ANNEXTURE III NSE-NIFTY FROM 2004(four monthly)
Organization journals and booklets Websites:
www.google.com www.rediff.com www.nseindia.com
www.Angeltrade.com www.icicidirect.com www.indiabulls.com www.karvy.com www.sharekhan.com