A PROJECT REPORT ON ³Investors Perspective on Secondary Market´

Submitted in partial fulfillment of the requirement for the degree of Master of Business Administration

Research Guide: Mr. Yatin Goel Lecturer,VIMT

Submitted by: Anu Jindal M.B.A.-4th sem. Roll no.-146

Session 2008-10

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A PROJECT REPORT ON ³Investors Attitude towards Secondary Market´
A report submitted in complete fulfillment of the requirements of MBA program of INSTITUTE OF MANAGEMENT AND TEC.(VIMT), ROHTAK

SUBMITTED TO: Ms. YATIN GOEL FACULTY V.I.M.T. ROHTAK

SUBMITTED BY: ANU JINDAL M.B.A.-SEM 4TH ROLL NO: 146 E-MAIL:-ajindal_46@yahoo.in

DECLARATION
I do hereby declare that the project report is submitted as partial fulfillment of the requirement of MBA Program of INSTITUTE OF MANAGEMENT & TECHNOLOGY, ROHTAK. The Project has been done under the guidance of Mr.YATIN GOEL, Faculty of INSTITUTE OF MANAGEMENT & TECHNOLOGY, ROHTAK. No part of this report has not been published or submitted elsewhere for the fulfillment of any degree or diploma for any institute or university. And we have done it with all sincerity & honesty.

Date: Place:

ANU JINDAl

Table Contents
Acknowledgement Preface Chapter 1:- Introduction Chapter 2:- Review of Literature Chapter 3:- Research Methodology Chapter 4:- Analysis and interpretation Chapter 5:- Conclusions Findings & Suggestions Bibliography Appendix

Acknowledgement

Behind every success there are thousands. I wish to pay my gratitude to each one of them. At the outset, I wish to express my gratitude towards my lovable faculty & thankful to all whom contributed the completion of this report. I am grateful to Mr. Yatin Goel (Lecturer,VIMT ) and other faculty members, whose continuous encouragement & willing cooperation provided us a great help in the preparation of this report. Last but not least I would like to thanks all my friends and those persons who are responsible for the success of this report.

(Anu Jindal)

PREFACE

With the globalization & liberalization, business management has becomes so difficult and environment so complex that nothing less than ³The Best´ can survive in this business world. So the business manager must not only be acquainted with the latest management tools and techniques, but he or she should also know how to implement them. ³Theory without practice is sterile; practice without theory is blind´. So, no doubt, class room is important but at the same time, project is also an integral part of a future manager¶s curriculum .It gives us a chance to apply the concepts in real life situations. All M.B.A students are required to undergo project report in forth semester. I have done this project under Mr. Yatin Goel. The project given by me is ³Investors perspective on Secondry Market In Rohtak´. On the Basis of the survey conducted, I have concluded the findings and recommendations.

(Anu Jindal)

Chapter-1 Introduction
A market is any one of a variety of different systems, institutions, procedures, social relations and infrastructures whereby persons trade, and goods and services are exchanged, forming part of the economy. It is an arrangement that allows buyers and sellers to exchange things.Markets vary in size, range, geographic scale, location, types and variety of human communities, as well as the types of goods and services trade-in economics, a financial market is a mechanism that allows people to buy and sell (trade) financial securities(such as stocks and bonds), commodities (such as precious metals or agricultural goods), and other fungible items of value at low transaction costs and at prices that reflect the efficientmarket hypothesis. In mainstream economics, the concept of a market is any structure that allows buyers and sellers to exchange any type of goods, services and information. The exchange of goods or services for money is a transaction. Market participants consist of all the buyers and sellers of a good who influence its price. This influence is a major study of economics and has given rise to several theories and models concerning the basic market forces of supply and demand. There are two roles in markets, buyers and sellers. The market facilitates trade and enables the distribution and allocation of resources in a society. Markets allow any tradable item to be evaluated and priced. A market emerges more or less spontaneously or is constructed deliberately by human interaction in order to enable the exchange of rights (cf. ownership) of services and goods. In economics, a financial market is a mechanism that allows people to buy and sell (trade) financial se A market is any one of a variety of different systems, institutions, procedures, social relations and infrastructures whereby persons trade, and goods and services are exchanged, forming part of the economy. It is an arrangement that allows buyers and sellers to exchange things. Markets vary in size, range, geographic scale, location, types and variety of human communities, as well as the types of goods and services trade-in economics, a financial market is a mechanism that allows people to buy and sell (trade) financial securities(such as stocks and bonds), commodities (such as precious metals or agricultural goods), and other fungible items of value at low transaction costs and at prices that reflect the efficientmarket hypothesis. Financial markets have evolved significantly over several hundred years and are undergoing constant innovation to improve liquidity. In finance, financial markets facilitate: 


The raising of capital (in the capital markets) The transfer of risk (in the derivatives markets) 

International trade (in the currency markets)

± And are used to match those who want capital to those who have it.

Basis of Financial Market Basis of Financial Markets are the Borrowers and Lenders. Borrowers of the Financial Market can be individual persons, private companies, public corporations, government and other local authorities like municipalities. Individual persons generally take short term or long term mortgage loans from banks to buy any property. Private Companies take short term or long term loans for expansion of business or for improvement of the business infrastructure. Public Corporations like railway companies and postal services also borrow from Financial Market to collect required money. Government also borrows from Financial Market to bridge the gap between govt. revenue and govt. spending. Local authorities like municipalities sometimes borrow in their own name and sometimes govt. borrows in behalf of them from the Financial Market. Lenders in the Financial Market are actually the investors. Their invested money is used to finance the requirements of borrowers. So, there are various types of investments which generate lending activities. Some of these types of investments are depositing money in savings bank account, paying premiums to Insurance Companies, investing in shares of different companies, investing in govt. bonds and investing in pension funds and mutual funds. Financial Market is nothing but a tool which is used to raise capital. Just like any other tool, it can be beneficial and can be harmful too. So, the ultimate outcome solely lies in the hands of the people who use it to serve their purpose. The financial markets can broadly be divided into money and capital market. Money Market: Money market is a market for debt securities that pay off in the short term usually less than one year, for example the market for 90-days treasury bills. This market encompasses the trading and issuance of short term non equity debt instruments including treasury bills, commercial papers, bankers acceptance, certificates of deposits, etc. Capital Market: Capital market is a market for long-term debt and equity shares. In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges. Capital market can be further divided into primary and secondary markets. In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. A market that issues new securities on an exchange. Companies,

governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors. Also known as "new issue market" (NIM). Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors. Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, Over-the-Counter (OTC) is a part of the dealer market. The secondary market, also known as the aftermarket, is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold. The term "secondary market" is also used to refer to the market for any used goods or assets, or an alternative use for an existing product or asset where the customer base is the second market (for example, corn has been traditionally used primarily for food production and feedstock, but a "second" or "third" market has developed for use in ethanol production). Another commonly referred to usage of secondary market term is to refer to loans which are sold by a mortgage bank to investors such as Fannie Mae and Freddie Mac. The securities or the financial instruments are issued in the primary market and the investors purchase these instruments directly from the IPO or through the Private Placement. Investors who have purchased the securities or the financial instruments sell these in the secondary market to other investors. With primary issuances of securities or financial instruments, or the primary market, investors purchase these securities directly from issuers such as corporations issuing shares in an IPO or private placement, or directly from the federal government in the case of treasuries. After the initial issuance, investors can purchase from other investors in the secondary market. The secondary market for a variety of assets can vary from loans to stocks, from fragmented to centralized, and from illiquid to very liquid. The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies. Exchanges such as the New York Stock Exchange, Nasdaq and the American Stock Exchange provide a centralized, liquid secondary market for the investors who own stocks that trade on those exchanges. Most bonds and structured products trade ³over the counter,´ or by phoning the bond desk of one¶s broker-dealer. Loans sometimes trade online using a Loan Exchange. Secondary marketing is vital to an efficient and modern capital market. In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market be highly liquid (originally, the only way to create this liquidity was for investors and speculators to meet at a fixed place regularly; this is how stock exchanges originated, see History of the Stock Exchange). As a general rule, the greater the

number of investors that participate in a given marketplace, and the greater the centralization of that marketplace, the more liquid the market. Fundamentally, secondary markets mesh the investor's preference for liquidity (i.e., the investor's desire not to tie up his or her money for a long period of time, in case the investor needs it to deal with unforeseen circumstances) with the capital user's preference to be able to use the capital for an extended period of time. Accurate share price allocates scarce capital more efficiently when new projects are financed through a new primary market offering, but accuracy may also matter in the secondary market because: 1) price accuracy can reduce the agency costs of management, and make hostile takeover a less risky proposition and thus move capital into the hands of better managers, and 2) accurate share price aids the efficient allocation of debt finance whether debt offerings or institutional borrowing. A market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market. also called aftermarket.

Products dealt in the secondary marketsFollowing are the main financial products/instruments dealt in the secondary market: Equity: The ownership interest in a company of holders of its common and preferred stock. The various kinds of equity shares are as follows: Equity Shares: An equity share, commonly referred to as ordinary share also represents the form of fractional ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company and have voting rights. Rights Issue / Rights Shares: The issue of new securities to existing shareholders at a ratio to those already held. Bonus Shares: Shares issued by the companies to their shareholders free of cost by capitalization of accumulated reserves from the profits earned in the earlier years. Preferred Stock / Preference shares: Owners of these kinds of shares are entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before dividend

y

y

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can be paid in respect of equity share. They also enjoy priority over the equity shareholders in payment of surplus. But in the event of liquidation, their claims rank below the claims of the company¶s creditors, bondholders / debenture holders.
y

Cumulative Preference Shares: A type of preference shares on which dividend accumulates if remains unpaid. All arrears of preference dividend have to be paid out before paying dividend on equity shares. Cumulative Convertible Preference Shares: A type of preference shares where the dividend payable on the same accumulates, if not paid. After a specified date, these shares will be converted into equity capital of the company. Participating Preference Share: The right of certain preference shareholders to participate in profits after a specified fixed dividend contracted for is paid. Participation right is linked with the quantum of dividend paid on the equity shares over and above a particular specified level. Security Receipts: Security receipt means a receipt or other security, issued by a securitisation company or reconstruction company to any qualified institutional buyer pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an undivided right, title or interest in the financial asset involved in securitisation. Government securities (G-Secs): These are sovereign (credit risk-free) coupon bearing instruments which are issued by the Reserve Bank of India on behalf of Government of India, in lieu of the Central Government's market borrowing programme. These securities have a fixed coupon that is paid on specific dates on half-yearly basis. These securities are available in wide range of maturity dates, from short dated (less than one year) to long dated (up to twenty years). Debentures: Bonds issued by a company bearing a fixed rate of interest usually payable half yearly on specific dates and principal amount repayable on particular date on redemption of the debentures. Debentures are normally secured / charged against the asset of the company in favour of debenture holder. Bond: A negotiable certificate evidencing indebtedness. It is normally unsecured. A debt security is generally issued by a company, municipality or government agency. A bond investor lends money to the issuer and in exchange, the issuer promises to repay the loan amount on a specified maturity date. The issuer usually pays the bond holder periodic interest payments over the life of the loan. The various types of Bonds are as follows-

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Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No periodic interest is paid. The difference between the issue price and redemption price represents the return to the holder. The buyer of these bonds receives only one payment, at the maturity of the bond. Convertible Bond: A bond giving the investor the option to convert the bond into equity at a fixed conversion price.

Ø

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Commercial Paper: A short term promise to repay a fixed amount that is placed on the market either directly or through a specialized intermediary. It is usually issued by companies with a high credit standing in the form of a promissory note redeemable at par to the holder on maturity and therefore, doesn¶t require any guarantee. Commercial paper is a money market instrument issued normally for tenure of 90 days. Treasury Bills: Short-term (up to 91 days) bearer discount security issued by the Government as a means of financing its cash requirements.

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Principles for the Secondary Market: y y The establishment of trading systems including securities exchanges should be subject to regulatory authorization and oversight. There should be ongoing regulatory supervision of exchanges and trading systems which should aim to ensure that the integrity of trading is maintained through fair and equitable rules that strike an appropriate balance between the demands of different market participants. Regulation should promote transparency of trading. Regulation should be designed to detect and deter manipulation and other unfair trading practices. Regulation should aim to ensure the proper management of large exposures, default risk and market disruption. The system for clearing and settlement of securities transactions should be subject to regulatory oversight, and designed to ensure

y y y y

Recommendation on Derivative Trading:The L.C. Gupta Committee on Derivatives set up by SEBI recommended phased introduction of derivative products, with stock index futures as the starting point for derivatives trading in India. The SEBI Board considered the report of the Committee on regulatory framework for Derivatives Trading in India. Based on the examination by the Board, including the feedback from the Secondary Market Advisory Committee and responses from the Stock Exchanges, the major recommendations on Derivatives Trading were accepted. These included the following :

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y y y y

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Phased introduction of derivative products, with the stock index futures as starting point for equity derivative in India. Expanded definition of Securities under the Securities Contracts (Regulation) Act (SCRA) by declaring derivative contracts based on index of prices of securities and other derivatives contracts as securities. Permission to existing Stock Exchanges to trade derivatives provided they meet the eligibility conditions including adequate infrastructural facilities, online trading and surveillance system and minimum of 50 members opting for derivative trading. Initial margin requirements related to the risk of loss on the position and capital adequacy norms shall be prescribed. Annual inspection of all the members operating in the derivative segment by the Stock Exchanges. Dissemination by the exchange of information about the trades, quantities and quotes in real time over atleast two information vending networks. The clearing corporation/house to settle derivate trades should meet certain specified eligibility conditions and the clearing corporation/house must interpose itself between both legs of every trade, becoming the legal counter party to both, or alternatively provide an unconditional guarantee for settlement of all trades. Two tier membership: the trading member and clearing member, and the entry norms for the clearing member would be more stringent. The clearing member should have a minimum networth of Rs. 3 crore and shall make a deposit of Rs. 50 lakhs with the exchange/ clearing corporation in the form of liquid assets. Prescription of a model Risk Disclosure Document, and monitoring broker-dealer/client relationship by the Stock Exchange and the requirement that the sales personnel working in the broker-dealer office, should pass a certification programme. Corporate clients/financial institutions/mutual funds should be allowed to trade derivatives only if and to the extent authorised by their Board of Directors/Trustees. Mutual Funds would be required to makenecessary disclosures in their offer documents if they opt to trade derivatives. For the existing schemes, they would require the approval of their unit holders. The minimum contract value would be Rs. 1 lakh which would also apply in the case of individuals.

How does the stock market function?
In order to understand how the stock market operates, you should have knowledge about the role of following institutions / organistions:

a. Stock exchanges, b. Brokers, c. Registrars, d. Depository exchanges and their participants, and e. Securities and Exchange Board of India (Sebi) a.) Stock exchanges A stock exchange is the marketplace where companies are listed and where the trading happens. There are different stock exchanges in the country, the pre-dominant being the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). b.)Brokers A stock exchange functions through its members called brokers. If you want to buy or sell a share, you contact a broker. Each stock exchange has a limited set of brokers and these brokers contact each other using trading terminals to find out who is interested in the share you want to buy or sell. Brokers have terminals linked to the BSE or the NSE and they directly purchase or sell shares using these terminals. The entire transaction happens electronically or through websites like www.sharekhan.com. Some brokers also authorize a sub-broker to conduct the transactions on behalf of them. Since brokers are providing a service they charge you for the same. This payment is not a flat rate, but a commission of the transaction value. Brokerages normally range from 0.5% to 1% for delivery- based transactions and from 0.10% to 0.25% for intra-day transactions. c.) Registrars The registrar for each company maintains records of all the shareowners of the company and the number of shares that they own. Whenever a transaction takes place, the registrar updates the shareholders database. d.) Depository exchanges and their participants Depository exchanges are organisations that hold shares of investors, on request, in electronic form through a registered depository participant (DP). It can be compared with a bank as it holds securities in an account, transfers securities between accounts on the instruction of the account holder, facilitates the transfer of ownership without the account holder needing to handle securities and makes the safekeeping of shares easy. The agent through which a depository exchange interfaces with the investor is known as a depository participant. You can create a demat account with a DP, who will keep an account of all the shares you own. This is much like

the banking system, where you just create an account and have a passbook which updates you on the money you own and the transactions you have made. In your demat account you own shares in an electronic format and your account gets updated as you buy and sell shares. e.)SEBI The regulatory body that governs all stock market transactions is the Securities and Exchange Board of India. Sebi ensures the legality of all transactions and that the stock exchange players follow all the rules and regulations set by it and/or the government. Sebi also looks into investor complaints against companies. It is quasi-judicial and can try cases and pass judgments against companies. It also looks into mergers and acquisitions of companies. Sebi has enacted the Prohibition of Insider Trading Regulations, 2002 which is applicable to all market intermediaries.

Features of the secondry market:Some common features that contribute significantly to their highly evolved and efficient characteristics. 1. Transparency - The market¶s functionality needs to be transparent both to the entity issuing the debt security, as also to the intermediary investing his money into it. Transparency also needs to exist for the regulatory bodies that oversee the capital markets. Only transactions made under a system of ³full-disclosure´ will increase the overall liquidity of the markets and provide all concerned parties with the level of confidence required for them to actively participate. Transparency also needs to exist at the corporations and other entities issuing the debt instruments. This involves a further level of legal, institutional and infrastructural change in the Indian system. The minimum requirement of course is that companies¶ financial statements should be required by law to be audited and filed for public perusal regularly, and it must be enforced rigorously. This is, however, not enough. Access to such information must be made easy and user-friendly. At present, the balance sheet libraries in India are still governed by laws and procedures which lay more emphasis on preserving the confidentiality of companies than on meeting the information needs of the investors. Regular publication of company data by independent third-party agencies is not allowed. The net result is a degree of opacity which is not conducive for investor confidence. 2. Market unification and communication - The current market fragmentation has to be reduced. Setting up more nodes for securities exchange seems like a well meaning but misplaced idea. This has led to the steady demise of regional bourses, which on the face of it may appear to be a process of consolidation. This, however, would be a misplaced view, since the listing requirements of the two major exchanges ± Bombay Stock Exchange (BSE) and the National

Stock Exchange (NSE) ± are such that they would exclude a large number of smaller companies. Consequently, extent of coverage is likely to reduce significantly as the process moves forward. Rather we should focus on setting up a communication network that can replicate the NASD type negotiated market in the US, so that everyone interested in buying a security gets a ³firm´ quote of the ³inner market´ regardless of location and information channel. The National Stock Exchange (NSE) has the potential for moving in this direction, but its present approach would have to change. 3. Regulatory Autonomy and Effectiveness ± The regulatory mechanism is key to fair pricing of securities, as it prevents colluding and intermediary pricing bias and inefficiencies. Without effective regulation, transparency will remain a pipe dream. In the Indian context, the regulatory functions are divided between two entities ± the Securities and Exchanges Board of India (SEBI) and the Department of Company Affairs of the Government of India. The primary functions of the SEBI are to over-see the public issue of new securities, including specifying the listing conditions and disclosure norms, and to supervise the operation of the stock markets in order to prevent anti-market behaviour. Thus, as far as the secondary market is concerned, the SEBI¶s role is limited to market-related developments, and not to the companies themselves. This function comes in the domain of the Department of Company Affairs, and especially the Registrar of Companies. Unfortunately, the operation of these entities leaves much to be desired. Mention has already been made of the excessive confidentiality regarding company information, but the situation is even worse than that. Indian companies routinely get away with noncompliance with the reporting requirements, and quite often companies close without the regulator even being aware of the fact. As a consequence, secondary market participation is fraught with enormous informational risk arising out of poor regulatory practices. 4. Trustworthy and transparent benchmarks - For a debt capital market to function efficiently, the existence of a credible benchmark is critical. In most markets, Government Treasury Notes play this role. It is common practice in most developing markets to use the US Treasuries as a global benchmark. Another criterion for a good benchmark is that it should be liquid and the market for it should be transparent. In the United States, monthly auctions are held to appropriately price new Government securities. Another important aspect of the US Treasuries Market is its low margin/high volume nature. The bid/ask spread is never greater than 0.25 basis points. This provides the market the ability to predict trading levels with a high degree of confidence. Historically, The US Treasury rate was fixed by the Federal Reserve till the early 1970¶s. This resulted in low liquidity. Ever since it moved to a floating rate regime, liquidity has been very high. Currently, only the Federal Interest Rate (³Fed Rate´) is fixed. While US Treasuries trade freely on a floating basis, they tend to trade within a very tight range to this Fed Rate. The question that arises in the Indian context is whether Indian Government Bonds can perform the function of such a benchmark. Although, in India, Government Bonds have been auctioned for many years, the price discovery mechanism is inefficient and heavily influenced by

Government monetary policy. The minimum transactions size, even in secondary trade, is too large to permit widely dispersed participation, and therefore the prices may not reflect µtrue¶ valuations. The main feature required of a market benchmark is that it should be a close proxy for the unrestricted ³Risk Free Rate´. Bonds issued by the GOI are backed by a Government guarantee, and since India¶s default rating is very favorable, this should not pose a problem, except that holdings are concentrated in a few hands and therefore reflect only a part of the larger market. 5. Competing and autonomous credit rating agencies - Credible professional credit rating agencies that are autonomous are required to rate corporations and their securities.14 The condition of autonomy is important for credibility purposes. Ideally, credit rating agencies should have their interest aligned with that of the investors, and not with the issuing companies, which has implications regarding their revenue sources. Further, it is advisable to have competing agencies in order to keep the pressure on any one to do a thorough and effective risk analysis. In India, there are at present three reasonably competent credit rating agencies, each of which has a tie-up with a major international agency. Thus, on the numbers and technical competence fronts, there is sufficiency. The major issues relate to the accessibility of the credit rating information and to the perceived autonomy of the agencies. For the most part, credit rating information in India becomes readily available to the public at large only when a company is about to come out with a fresh issue, and that too mainly from the company prospectuses. This is driven by the regulatory guidelines, which make credit rating mandatory for all public issues. While this is fine for fresh issues,15 it is of little help for secondary market transactions, which require a more or less continuous flow of information on the financial health of companies with listed securities. Such rating information simply does not exist, and its absence is perhaps linked to the excessive confidentiality accorded to balance sheet information.17 The net result is that rating information becomes available only when the companies¶ desire it, and not when the investors¶ need it. Although all the Indian credit rating agencies have been promoted as independent and autonomous entities by DFIs in collaboration with international agencies, their revenue streams are derived primarily from the companies that are being rated. This may raise problems of perception regarding their autonomy, although as yet no doubts have been raised. 6. Liquidity - Liquidity is perhaps one of the most important requirements for an efficient, developed capital market. This in turn requires an efficient settlement system; and the existence of multiple market makers. To some extent, the issue of an efficient settlement system has been addressed by the move to rolling settlements in the equity markets, and only needs to be duplicated in the context of the debt markets (See Appendix B). The issue of market makers, however, needs greater attention. Since the price of debt instruments, unlike that of equity, is linked closely to movements of interest rates, with a relatively small speculative element, the bid/ask spreads cannot be very large if any transaction is to result. As a result, the viability of market makers is determined largely by the volume of trade. This creates a chicken-and-egg

problem, whereby market makers need high volumes to survive and high volumes require the presence of sufficient market makers. The emergence of market makers in India has historically been constrained by two factors. First, public debt instruments, which have driven the creation of active debt markets in developed countries, have been characterized by extremely high denominations in India.20 As a result, only large institutions have been able to participate in what has been effectively a wholesale debt market. Thus no market makers at the retail level have been able to come into existence on the strength of trading in government securities. Recently, the Indian government has reduced the denominations significantly, and it now seems possible that smaller institutions and relatively high net worth individuals can participate in this market. However, further reduction in the denominations will have to be made before a viable retail debt market can come into existence. Second, the bid/ask spread in India has to accommodate not only the intermediary¶s margin but also an element of taxation through what is known as the µstamp duty¶, which is levied by state governments on all sale and transfer deeds. The stamp duty rates vary from state to state, but 200 basis points would not be uncommon. With these sorts of spreads, most debt transactions become unviable for market makers. In recent years, the government has removed the levy of stamp duty on dematerialized transactions, but this again mainly benefits institutional investors. Small investors in India still prefer to hold securities in physical form for a variety of reasons, and these continue to be subject to this duty. Thus it is unlikely that there will be sufficient market making in retail debt until the stamp duty is removed completely from all secondary transactions. We further feel that there exists the need to increase public awareness and user-friendliness of the offering mechanism by: allowing awareness advertisements to be issued prior to, and during, the offer period; and opening up new channels of application for securities including the Internet, ATM and telephone. In our view, these steps will lead to increased participation by small investors, which in turn will increase the availability to smaller transactions. These smaller, more affordable transactions, do not currently exist, and once they do, will instantly increase liquidity. 7. Natural investor base - Demand for debt is, needless to say, critical for a debt capital market to exist. For this purpose, it is necessary to develop a natural investor base that has liquid cash to invest; and, more importantly, a stated investment objective biasing them towards the debt market. Traditionally, in the United States and Europe, the largest buyers of fixed rate debt have been insurance companies and money managers i.e. mutual funds and pension funds. It would hence be prudent to develop the institutional infrastructure in India that would facilitate the creation and growth of legitimate funds and professional money managers. As has already been mentioned, insurance companies in India have been entirely public sector entities until recently, and their investment pattern has been driven by prudential guidelines which effectively limit them to public debt instruments. The case with provident/pension funds is similar. It is hoped that with the entry of private sector players in the insurance sector, and possibly in fund management as well, the natural investor base for private debt instruments will increase. Mutual funds, unfortunately, have not really been able to make their mark in India primarily due to poor

timing of their launch.23 Hopefully this problem will get resolved with time. We will have more to say on this matter. 8. Macroeconomic stability - Investor confidence is guided by many factors, one of the most important of which is macroeconomic stability. This is for the Government policy makers and implementers to do. In particular, interest rate management is perhaps the most important macroeconomic factor that the Government needs to monitor. Historical and empirical evidence shows that debt markets flourish in low interest rate environments. The interest rate regime in India has been traditionally kept very high, but recently the Government has taken steps to bring it down. This should encourage increased debt issuance if coupled with stable interest rate dynamics. It is pertinent to note that while low interest rates in themselves tend to push investment rupees towards the debt markets, it is important to stabilize interest rates. Excessive interest rate fluctuations would be counter-productive as they give rise to arbitrage opportunities, and intermediaries looking for short-term gains exploit the system, and this deters from the original goal of overall development and market efficiency. 9. Legal system - A functioning legal system that all parties have faith in is another critical component. Without a viable legal infrastructure in place, it is very difficult to create investor confidence vis-à-vis the risk attributes of debt securities. Another necessary component for the debt markets to develop and flourish is the existence and development of a viable bankruptcy court that specializes in bankruptcy procedures and claims recovery for creditors. Although India does have an independent and effective judicial system, the average disposal time for cases is excessively long, which erodes investment values quite significantly. As far as bankruptcy laws and procedures are concerned, these are still in their infancy. It is only very recently that the government has passed an act for attachment of defaulter assets, but even this is really of relevance to primary institutional lenders, and offers little comfort to the secondary market players. It is, therefore, essential that the ambit of bankruptcy laws be expanded to cover the interest of relatively small debtors. 10. Efficient equity markets to compete with the debt markets - In the Indian context, this is something that has already been achieved by the thrust to develop the equity markets prior to developing the debt markets. The existence of these two markets competing for investment rupees is critical to the survival and efficient functioning of both. If both markets are well established, capital resource allocation becomes a natural phenomenon that does not need any control or active involvement by government or regulatory agencies. 11. Developing a high yield market - The development of a high yield market should be a secondary goal for Indian policy makers. It is commonplace to find debt markets in developing countries to tilt towards high yield securities owing to the existence of greater default risk. This tends to attract more capital, both domestic and foreign, on account of the incentive of higher

return. During the late 1980s, High Yield debt securities, known at the time as ³Junk Bonds´, became the major financing vehicle for corporate America. The lack of regulation and the reckless use of these instruments, given their highly risky nature, eventually led to a crisis in the U.S. markets in the early 1990s. However, with the benefit of hindsight, Indian policy makers can institute strict measures and tap the high yield market that continues to play an important role in providing financing alternatives to sub-investment grade companies throughout the world. While these characteristics help provide a broad outline and goal-set to achieve, we believe that, in the short to medium term, the salvation of the secondary debt markets, lies in removing the informational asymmetries, reducing transaction and intermediary costs, and liberalization of the insurance sector and pension funds. Making these concerns a priority and subsequently tackling them would yield the most efficient results. It is accepted that these are daunting challenges, but none of the measures discussed should give rise to any substantive political resistance.

INVESTMENTSThe dictionary meaning of investment is to commit money in order to earn a financial return or to make use of the money for future benefits or advantages. People commit money to investments with an expectation to increase their future wealth by investing money to spend in future years. For example, if you invest Rs. 1000 today and earn 10 %over the next year, you will have Rs.1100 one year from today. An investment can be described as perfect if it satisfies all the needs of all investors. So, the starting point in searching for the perfect investment would be to examine investor needs. If all those needs are met by the investment, then that investment can be termed the perfect investment. Most investors and advisors spend a great deal of time understanding the merits of the thousands of investments available in India. Little time, however, is spent understanding the needs of the investor and ensuring that the most appropriate investments are selected for him.

The Investment Needs of an Investor
By and large, most investors have eight common needs from their investments: 1. Security of Original Capital; 2. Wealth Accumulation 3. Comfort Factor; 4. Tax Efficiency; 5. Life Cover; 6. Income; 7. Simplicity;

8. Ease of Withdrawal

Types of Investment-

Fixed Deposits ± They cover the fixed deposits of varied tenors offered by the commercial banks and other non-banking financial institutions. These are generally a low risk prepositions as the commercial banks are believed to return the amount due without default. By and large these FDs are the preferred choice of risk-averse Indian investors who rate safety of capital & ease of investment above all parameters. Largely, these investments earn a marginal rate of return of 68% per annum. Government Bonds ± The Central and State Governments raise money from the market through a variety of Small Saving Schemes like national saving certificates, Kisan Vikas Patra, Post Office Deposits, Provident Funds, etc. These schemes are risk free as the government does not default in payments. But the interest rates offered by them are in the range of 7% - 9%. Money-back insurance - Insurance in India is mostly sold and bought as investment products. They are preferred because of their add-on benefits like financial life-cover, tax-savings and satisfactory returns. Even if one does not manage to save money and invest regularly in financial instruments, with insurance, the policyholder has no choice. If he does not pay his premiums on time, his insurance cover will lapse. Money-back Insurance schemes are used as investment avenues as they offer partial cash-back at certain intervals. This money can be utilized for children¶s education, marriage, etc. Endowment Insurance ± These policies are term policies. Investors have to pay the premiums for a particular term, and at maturity the accrued bonus and other benefits are returned to the policyholder if he survives at maturity. Bullion Market ± Precious metals like gold and silver had been a safe heaven for Indian investors since ages. Besides jewellery these metals are used for investment purposes also. Since last 1 year, both Gold and Silver have highly appreciated in value both in the domestic as well as the international markets. In addition to its attributes as a store of value, the case for investing in gold revolves around the role it can play as a portfolio diversifier. Stock Market ± Indian stock markets particularly the BSE and the NSE, had been a preferred destination not only for the Indian investors but also for the Foreign investors. Although Indian Markets had been through tough times due to various scams, but history shows that they recovered very fast. Many types of scrip had been value creators for the investors. People have earned fortunes from the stock markets, but there are people who have lost everything due to incorrect timings or selection of fundamentally weak companies.

Real Estate- Returns are almost guaranteed because property values are always on the rise due to a growing world population. Residential real estate is more than just an investment. There are more ways than ever before to profit from real estate investment. Mutual Funds - There is a collection of investors in Mutual funds that have professional fund managers that invest in the stock market collectively on behalf of investors. Mutual funds offer a better route to investing in equities for lay investors. A mutual fund acts like a professional fund manager, investing the money and passing the returns to its investors. All it deducts is a management fee and its expenses, which are declared in its offer document. Unit Linked Insurance Plans - ULIPs are remarkably alike to mutual funds in terms of their structure and functioning; premium payments made are converted into units and a net asset value (NAV) is declared for the same. In traditional insurance products, the sum assured is the corner stone; in ULIPs premium payments is the key character.

List of exchange:A stock exchange is an entity which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. The secondary market plays a very vital role as one of the indicators of the industrial development of a nation. Each and every country has the secondary markets some of the well known stock exchanges are Bombay Stock Exchange (BSE) of India, New York Stock Exchange (NYSE) of America, National Stock Exchange (NSE), London Stock Exchange of The Great Britain, NASDAQ etc. In the United States, there are 3 major national stock exchanges²the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX), and the NASDAQ²which list most of the major companies²and numerous local exchanges, which list smaller, local companies. The New York Stock Exchange is the largest exchange, followed closely by NASDAQ, while AMEX is a distant third. However, AMEX lists many new types of securities, such as exchange-traded funds. The local exchanges include the following:
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Boston Stock Exchange

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Philadelphia Stock Exchange National Stock Exchange (formerly the Cincinnati Stock Exchange) Chicago Stock Exchange Pacific Stock Exchange

The role of stock exchanges:Stock exchanges have multiple roles in the economy. This may include the following: Raising capital for businesses The Stock Exchange provide companies with the facility to raise capital for expansion through selling shares to the investing public. Mobilizing savings for investment When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in stronger economic growth and higher productivity levels of firms. Facilitating company growth Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion. Profit sharing Both casual and professional stock investors, through dividends and stock price increases that may result in capital gains, will share in the wealth of profitable businesses. Corporate governance By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where

shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). Creating investment opportunities for small investors As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors. Capital-raising for development projects Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature. Barometer of the economy At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.

Major stock exchanges-

London Stock Exchange, the City of London

New York Stock Exchange, New York City

Australian Securities Exchange's Sydney Exchange Centre, Sydney

Tokyo Stock Exchange, Tokyo

Toronto Stock Exchange, Toronto

Frankfurt Stock Exchange, Frankfurt

Paris Stock Exchange, Paris

SWX Swiss Exchange, Zurich

Sao Paulo Stock Exchange, Sao Paulo

Twenty Major Stock Exchanges In The World: Market Capitalization & Year-to-date Total Turnover at the end of August 2009:
Market Value (millions USD) Total Share Turnover (millions USD)

Stock Exchange

New York Stock Exchange

10,842,001.9

12,158,620.6

Tokyo Stock Exchange

3,478,602.5

2,675,983.3

NASDAQ

2,847,535.2

19,343,868.3

Euronext

2,605,097.6

1,195,962.2

London Stock Exchange

2,560,491.1

2,321,518.5

Shanghai Stock Exchange

2,142,756.8

3,315,768.5

Hong Kong Stock Exchange

1,945,517.7

970,227.6

Toronto Stock Exchange

1,432,877.0

798,193.1

Frankfurt Stock Exchange (Deutsche Börse) 1,204,292.0

1,589,736.7

Madrid Stock Exchange (Bolsas y Mercados 1,178,525.6 Españoles)

1,040,751.1

Bombay Stock Exchange

1,082,572.0

171,176.2

Australian Securities Exchange

1,066,513.2

560,912.8

São Paulo Stock Exchange

1,032,518.4

361,959.0

National Stock Exchange of India

1,019,109.0

506,652.3

Swiss Exchange

992,356.4

520,867.5

Nordic Stock Exchange Group OMX1

781,146.3

503,049.9

Korea Exchange

727,125.3

1,050,473.8

Johannesburg Securities Exchange

690,797.5

210,180.8

Milan Stock Exchange

636,674.8

565,759.3

Shenzhen Stock Exchange

596,320.2

1,701,256.8

The main stock exchanges:
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American Stock Exchange Australian Securities Exchange Athens Stock Exchange Belgrade Stock Exchange Berliner Börse Bermuda Stock Exchange Bolsa Mexicana de Valores Bolsa de Valores de Colombia Bolsa de Valores de Lima Bombay Stock Exchange Bucharest Stock Exchange Budapest Stock Exchange Cairo & Alexandria Stock Exchange Casablanca Stock Exchange Channel Islands Stock Exchange Chicago Stock Exchange Euronext Amsterdam

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Euronext Brussels Euronext Lisbon Euronext Paris Frankfurt Stock Exchange Ghana Stock Exchange Helsinki Stock Exchange Hong Kong Stock Exchange Indonesia Stock Exchange Istanbul Stock Exchange JASDAQ JSE Securities Exchange Karachi Stock Exchange Korea Stock Exchange Kuwait Stock Exchange London Stock Exchange Madrid Stock Exchange Malaysia Stock Exchange Milan Stock Exchange Montreal Stock Exchange Nagoya Stock Exchange National Stock Exchange of India New York Stock Exchange New Zealand Exchange Nigerian Stock Exchange Osaka Securities Exchange Philippine Stock Exchange Santiago Stock Exchange São Paulo Stock Exchange (BOVESPA) Shanghai Stock Exchange Shenzhen Stock Exchange Singapore Exchange Stockholm Stock Exchange Stock Exchange of Thailand Taiwan Stock Exchange Tehran Stock Exchange Tel Aviv Stock Exchange Tokyo Stock Exchange Toronto Stock Exchange Warsaw Stock Exchange Zurich Stock Exchange

Overview of BSE (Bombay stock exchange)Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning three centuries in its 133 years of existence. What is now popularly known as BSE was established as "The Native Share & Stock Brokers' Association" in 1875. BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the Government of India under the Securities Contracts (Regulation) Act 1956. BSE's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized. It migrated from the open outcry system to an online screen-based order driven trading system in 1995. Earlier an Association Of Persons (AOP), BSE is now a corporatized and demutualised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatization and Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualization, BSE has two of world's best exchanges, Deutsche Borse and Singapore Exchange, as its strategic partners. Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market. Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. The market capitalization as on December 31, 2007 stood at USD 1.79 trillion . An investor can choose from more than 4,700 listed companies, which for easy reference, are classified into A, B, S, T and Z groups. The BSE Index, SENSEX, is India's first stock market index that enjoys an iconic stature , and is tracked worldwide. It is an index of 30 stocks representing 12 major sectors. The SENSEX is constructed on a 'free-float' methodology, and is sensitive to market sentiments and market realities. Apart from the SENSEX, BSE offers 21 indices, including 12 sectoral indices. BSE has entered into an index cooperation agreement with Deutsche Borse. This agreement has made SENSEX and other BSE indices available to investors in Europe and America. Moreover, Barclays Global Investors (BGI), the global leader in ETFs through its iSharesAR brand, has created the 'iSharesAR BSE SENSEX India Tracker' which tracks the SENSEX. The ETF enables investors in Hong Kong to take an exposure to the Indian equity market. The first Exchange Traded Fund (ETF) on SENSEX, called "SPIcE" is listed on BSE. It brings to the investors a trading tool that can be easily used for the purposes of investment, trading, hedging and arbitrage. SPIcE allows small investors to take a long-term view of the market. BSE provides an efficient and transparent market for trading in equity, debt instruments and derivatives. It has a nation-wide reach with a presence in more than 359 cities and towns of India. BSE has always been at par with the international standards. The systems and processes

are designed to safeguard market integrity and enhance transparency in operations. BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certification. It is also the first exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-line Trading System (BOLT). BSE continues to innovate. In recent times, it has become the first national level stock exchange to launch its website in Gujarati and Hindi to reach out to a larger number of investors. It has successfully launched a reporting platform for corporate bonds in India christened the ICDM or Indian Corporate Debt Market and a unique ticker-cum-screen aptly named 'BSE Broadcast' which enables information dissemination to the common man on the street. In 2006, BSE launched the Directors Database and ICERS (Indian Corporate Electronic Reporting System) to facilitate information flow and increase transparency in the Indian capital market. While the Directors Database provides a single-point access to information on the boards of directors of listed companies, the ICERS facilitates the corporate in sharing with BSE their corporate announcements. BSE also has a wide range of services to empower investors and facilitate smooth transactions:

BSE also has a wide range of services to empower investors and facilitate smooth TransactionsInvestor Services: The Department of Investor Services redresses grievances of investors. BSE was the first exchange in the country to provide an amount of Rs.1 million towards the investor protection fund; it is an amount higher than that of any exchange in the country. BSE launched a nationwide investor awareness programme- 'Safe Investing in the Stock Market' under which 264 programmes were held in more than 200 cities. The BSE On-line Trading (BOLT): BSE On-line Trading (BOLT) facilitates on-line screen based trading in securities. BOLT is currently operating in 25,000 Trader Workstations located across over 359 cities in India. BSEWEBX.com: In February 2001, BSE introduced the world's first centralized exchangebased Internet trading system, BSEWEBX.com. This initiative enables investors anywhere in the world to trade on the BSE platform. Surveillance: BSE's On-Line Surveillance System (BOSS) monitors on a real-time basis the price movements, volume positions and members' positions and real-time measurement of default risk, market reconstruction and generation of cross market alerts.

BSE Training Institute: BTI imparts capital market training and certification, in collaboration with reputed management institutes and universities. It offers over 40 courses on various aspects of the capital market and financial sector. More than 20,000 people have attended the BTI programmesThe World Council of Corporate Governance has awarded the Golden Peacock Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR). Awards· The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and March 31 2007 have been awarded the ICAI awards for excellence in financial reporting. · The Human Resource Management at BSE has won the Asia - Pacific HRM awards for its efforts in employer branding through talent management at work, health management at work and excellence in HR through technology

Vision"Emerge as the premier Indian stock exchange by establishing global benchmarks"

Logo-

The Stock Exchange, Mumbai is now Bombay Stock Exchange Limited (BSE)« a new name, and an entirely new perspective« a perspective born out of corporatisation and demutualisation. As a corporate entity, our new logo reflects our new mission« smoother, seamless, and efficient, whichever way you look at it. BSE is Asia's oldest stock exchange«carrying the depth of knowledge of capital markets acquired since its inception in 1875. Located in Mumbai, the financial capital of India, BSE has been the backbone of the country's capital markets.

Overview of NSE (National Stock Exchange)
The OrganizationThe 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 tax-paying 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. Our MissionNSE's mission is setting the agenda for change in the securities markets in India. The NSE was setup with the main objectives of: · establishing a nation-wide trading facility for equities, debt instruments and hybrids, · ensuring equal access to investors all over the country through an appropriate communication network, · providing a fair, efficient and transparent securities market to investors using electronic trading systems, · enabling shorter settlement cycles and book entry settlements systems, and · meeting the current international standards of securities markets. The standards set by NSE in terms of market practices and technology have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It's that force which is guiding the industry towards new horizons and greater Opportunities. Logo-

The logo of the NSE symbolises a single nationwide securities trading facility ensuring equal and fair access to investors, trading members and issuers all over the country. The initials of the Exchange viz., N, S and E have been etched on the logo and are distinctly visible. The logo symbolizes use of state of the art information technology and satellite connectivity to bring about the change within the securities industry. The logo symbolizes vibrancy and unleashing of creative energy to constantly bring about change through innovation. Our TechnologyAcross the globe, developments in information, communication and network technologies have created paradigm shifts in the securities market operations. Technology has enabled organizations to build new sources of competitive advantage, bring about innovations in products and services, and to provide for new business opportunities. Stock exchanges all over the world have realized the potential of IT and have moved over to electronic trading systems, which are cheaper, have wider reach and provide a better mechanism for trade and post trade execution. NSE believes that technology will continue to provide the necessary impetus for the organization to retain its competitive edge and ensure timeliness and satisfaction in customer service. In recognition of the fact that technology will continue to redefine the shape of the securities industry, NSE stresses on innovation and sustained investment in technology to remain ahead of competition. NSE's IT set-up is the largest by any company in India. It uses satellite communication technology to energize participation from around 200 cities spread all over the country. In the recent past, capacity enhancement measures were taken up in regard to the trading systems so as to effectively meet the requirements of increased users and associated trading loads. With up gradation of trading hardware, NSE today can handle up to 15 million trades per day in Capital Market segment. In order to capitalize on in-house expertise in technology, NSE set up a separate company, NSE Technology Services Ltd. which is expected to provide a platform for taking up all IT related assignments of NSE. NEAT is a state-of-the-art client server based application. At the server end, all trading information is stored in an in-memory database to achieve minimum response time and maximum system availability for users. The trading server software runs on a fault tolerant STRATUS main frame computer while the client software runs under Windows on PCs. The telecommunications network which was using X.25 protocol and is the backbone of the automated trading system is being upgraded to use the more popular and modern IP Protocol. This is a major project involving use of X.25 and IP in parallel and ensuring smooth transition to IP. Each trading member trades on the NSE with other members through a PC located in the trading member's office, anywhere in India. The trading members on the various market segments such as CM / F&O, WDM are linked to the central computer at the NSE through dedicated leased lines and VSAT terminals. The Exchange uses powerful RISC -based UNIX

servers, procured from HP for the back office processing. The latest software platforms like ORACLE 10g RDBMS, SQL/ORACLE FORMS Front - Ends, etc. have been used for the Exchange applications. The Exchange currently manages its data centre operations, system and database administration, design and development of in-house systems and design and implementation of telecommunication solutions. NSE is one of the largest interactive VSAT based stock exchanges in the world. Today it supports more than 2000 VSATs and 3000 leased lines across the country. The NSE- network is the largest private wide area network in the country and the first extended C- Band VSAT network in the world. Currently more than 9000 users are trading on the real time-online NSE application. There are over 15 large computer systems which include non-stop fault-tolerant computers and high end UNIX servers, operational under one roof to support the NSE applications. This coupled with the nation wide VSAT network makes NSE the country's largest Information Technology user.

Overview of NIFTY:Nifty Fifty was an informal term used to refer to 50 popular large cap stocks on the New York Stock Exchange in the 1960s and 1970s that were widely regarded as solid buy and hold growth stocks. The fifty are credited with propelling the bull market of the early 1970s. Most are still solid performers, although a few are now defunct or otherwise worthless. The stocks were often described as "one-decision", as they were viewed as extremely stable, even over long periods of time. The most common characteristic by the constituents were solid earnings growth for which these stocks were assigned extraordinary high price-earnings ratios. Fifty times earnings was not uncommon. ³NIFTY means National Index for Fifty´««««.. S&P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused upon the index as a core product. IISL has a Marketing and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services.

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The total traded value for the last six months of all Nifty stocks is approximately 52% of the traded value of all stocks on the NSE Nifty stocks represent about 63% of the Free Float Market Capitalization as on Dec 31, 2009. Impact cost of the S&P CNX Nifty for a portfolio size of Rs.2 crore is 0.10% S&P CNX Nifty is professionally maintained and is ideal for derivatives trading

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S&P CNX NIFTY Company Name ABB ACC Ambuja Cements Axis Bank Bharti Airtel BHEL BPCL Cairn India Cipla DLF GAIL Grasim HCL Tech HDFC HDFC Bank Hero Honda Hindalco HUL ICICI Bank Idea Cellular IDFC Infosys Industry Electric Equipment Cement - Major Cement - Major Banks - Private Sector Telecommunications - Service Engineering - Heavy Refineries Oil Drilling And Exploration Pharmaceuticals Construction & Contracting - Real Estate Oil Drilling And Exploration Diversified Computers - Software Finance - Housing Banks - Private Sector Auto - 2 & 3 Wheelers Aluminium Personal Care Banks - Private Sector Telecommunications - Service Finance - Term Lending Institutions Computers - Software Last Change % Mkt Cap Price Chg (Rs cr) 794.60 -15.15 -1.87 16,838.24 923.10 106.95 3.75 0.41 17,330.74 1.25 1.18 16,296.09

26 Feb 17:51 Weight 0.54 0.56 0.52 1.46 3.40 3.69 0.65 1.62 0.81 1.62 1.62 0.79 0.80 2.30 2.49 1.14 1.00 1.68 3.12 0.61 0.66 4.79

1,124.50 28.25 2.58 45,488.14 279.35 563.95 266.05 298.45 398.80 367.10 3.10 1.12106,076.32 -3.00 -0.53 20,389.17 8.25 3.20 50,460.85 8.95 3.09 50,657.29 -0.35 -0.09 50,586.88 -0.60 -0.16 24,793.29 2,349.30 -28.10 -1.18115,002.93

316.15 12.60 4.15 25,384.36

2,696.45 35.65 1.34 24,721.59 2,500.30 37.80 1.54 71,626.80 1,704.80 13.75 0.81 77,608.73 1,777.65 77.40 4.55 35,497.45 162.65 236.20 61.10 159.60 9.30 6.06 31,121.99 1.00 0.43 52,243.39 1.35 2.26 18,941.58 6.85 4.48 20,685.60

872.15 20.55 2.41 97,169.02

2,601.95 -15.40 -0.59149,231.00

ITC Jindal Steel Larsen

Cigarettes Steel - Sponge Iron Engineering - Heavy

232.25 -15.35 -6.20 88,357.26 132.15 632.40 2.80 2.16 27,792.16 6.25 1.00 58,891.24

2.83 0.89 1.89 3.01 0.90 1.35 5.37 7.67 0.91 1.45 0.63 0.62 10.32 1.04 0.72 1.06 2.89 4.02 0.74 2.11 1.02 0.36 1.24 0.92 1.63 4.78 0.55 3.19

Jaiprakash Asso Construction & Contracting - Civil

1,564.30 28.70 1.87 93,900.68 1,007.75 50.65 5.29 28,198.99 1,459.95 60.05 4.29 42,179.42 203.05 1,117.60 107.55 2.95 1.47167,424.15 7.75 0.70239,040.39 1.10 1.03 45,266.09

Mah and Mah Auto - Cars & Jeeps Maruti Suzuki Auto - Cars & Jeeps NTPC ONGC PNB Power Grid Corp Rel Capital Reliance Power - Generation/Distribution Oil Drilling And Exploration Banks - Public Sector Power - Generation/Distribution

901.00 23.80 2.71 28,408.76

Ranbaxy Labs Pharmaceuticals Finance - Investments Refineries

470.40 16.60 3.66 19,781.41 786.45 58.75 8.07 19,317.79 978.95 15.85 1.65321,706.86 157.55 138.10 218.50 2.85 1.84 32,518.74 1.30 0.95 33,099.81 6.10 2.87 90,249.25 1,003.45 44.85 4.68 22,604.74

Reliance Comm Telecommunications - Service Reliance Infra Power - Generation/Distribution Reliance Power Power - Generation/Distribution SAIL SBI Siemens Sterlite Ind Sun Pharma Steel - Large Banks - Public Sector Telecommunications - Equipment Metals - Non Ferrous Pharmaceuticals

1,974.30 60.65 3.17125,344.40 684.25 19.25 2.89 23,070.19 782.00 32.00 4.27 65,719.31 1,539.70 19.05 1.25 31,889.71 71.85 3.45 5.04 11,185.12

Suzlon Energy Engineering - Heavy Tata Motors Tata Power Tata Steel TCS Unitech Wipro Auto - LCVs/HCVs Power - Generation/Distribution Steel - Large Computers - Software Construction & Contracting - Civil Computers - Software

711.20 43.80 6.56 38,686.44 1,213.15 -56.20 -4.43 28,774.54 574.35 761.80 71.95 677.50 5.10 0.90 50,957.14 -4.45 -0.58149,101.10 1.55 2.20 17,187.42 8.10 1.21 99,428.01

Other stock Exchanges in IndiaThere are other stock exchanges present in India apart from BSE & NSE some of them are; ‡ Bangalore Stock Exchange ‡ Cochin Stock Exchange ‡ Hyderabad Stock Exchange ‡ Delhi Stock Exchange ‡ Pune Stock Exchange ‡ Madras Stock Exchange ‡ Bhubaneshwar Stock Exchange The trading is carried out in the secondary market and there are various people & procedures followed to carry out the trading. A pre-requisite for a company¶s securities to be traded in the secondary market is that the company should be listed in the stock exchange.

Objective of the study
Primary objectiveThe primary objective of our study is micro level analysis related share market from investor¶s point of view.

Secondary objectivesy y y y y To know the opportunities about stock investment To avoid the dangerous pitfalls Analyze and forecast the future trends of the market To make money as informed trade investor To study investor perception and investment behavior of capital market investors.

Chapter-2 REVIEW OF LITERATURE

The secondary debt market in India is practically non-existent. Much has been said and written about reforming capital markets in India. Much of this body of work, however, is concerned primarily with the operation of different segments of the financial sector from the perspective of the major market participants, especially the intermediaries. While this is no doubt useful, it misses out on the perspective of the possibly most important and vulnerable market participant, namely the small investor. In the Indian context, where over 70 per cent of national savings originates in the household sector, this is a serious lacuna. We begin by summarizing some of the existing work, raising the issues and then provide an investor perspective on the whole SECONDRY MARKET. The share of public investment in total investment has dropped to around 30 per cent in the late 1990s as compared to over 50 per cent even a decade and a half ago. These activities are engaged by an investor, but they are not having any control over the day to day activities of any corporates. Normally, an investor is a blind person; they do not know any activities made by the company. Investor cannot guide the fate or destiny of the money invested. An investor to that extent is quite fragile and is exposed to certain risks because the utiliser of his money can commit mistakes. Normally they are contributing the funds for productive purpose of the company, and they are exposing him to the business decisions that the company has taken or will be taking. There are no doubt laws some of which are adequate but some are not. As an investors have three objectives while investing his surplus money, namely safety of invested money, liquidity position of invested money, and return on investment in selected securities. Normally, an investor desires to have safety of his invested funds, liquidity of his investments and a good return with minimum risk. An investor can be classified as individual or professional who manages the funds on behalf of others. First there are inexperienced investor who needs to be properly advised about the intricacies of investment avenues and opportunities in corporate securities. Secondly, there are the experienced investors who understand the risks involved in the selected investment avenues and who need no advices from others, his response / order just to be executed without much time. Thirdly, there are occasional investors who seek advice and assistance once in a while with no desire to create a longterm perspective. During 1990s, there was a bearish trend in the Indian capital market. During 2000s, there is an unexpected bullish trend in the capital market. There is every uncertainty in terms of market price and rate of return. The uncertainty acts as barriers for many investors to enter into the stock

market operations. The investors fear that there is no protection for their investments and immediate return as dividend. The disclosure of information relating to the issue of securities, market operations, grievance redressal mechanism etc., is there but there is no regulator to give assurance relating to the return on investment and capital appreciation. Inspite of these legislative measures, there are fraudulent companies which are cheating the investors. The Indian capital market witnessed radical changes as a result of liberalization initiative, characterized by institutional build up, technological advancements, modernization and transparent trading practices. The change in the capital market is also reflected in the number of shareholders which has exploded everywhere for the whole country to 125 lakhs with an increase of 3-4 times between 1983 and 1992. After that it rose to 20 million shareholders. This is too small when compared to the population of India. In advanced countries, a sizable percentage of the population invests in capital market and mutual funds. Such investments culture is to be developed in India also. Inspite of the developments in the capital market, many investors continue to keep away from the market due the prevalence of unethical acts of promoters, shares brokers, high volatility in the market, poor investment knowledge of the ordinary investors and high element of uncertainty and risk added to these problems. This calls for the attention of the government and policy makers to understand the factors influencing the secondary market operations which enable them to take initiatives to decide the measures to pull them into the ambit of investors in corporate securities. This ensures individual development as well as allround development of the country's economy. So, the present study focused its attention to bring to limelight the factors influencing the secondary market operations with the following objectives: y To study the factors influencing the behaviour of investors in their Secondary market operations. To know the perception of investors towards the factors influencing secondary market operations. To analyze the behaviour of the investors under different economic conditions. To know the opportunities about stock investment To avoid the dangerous pitfalls Analyze and forecast the future trends of the market

y y y y y

Chapter-3 RESEARCH METHODOLOGY

RESEARCH DESIGN:
For any researcher the research methodology is the most important criteria to decide before the actual research process starts. There are many methods for conducting the research some of them are as under: The design of a research is a plan or a model that helps researcher to conduct a formal investigation and survey. It is an application of methods and procedures for acquiring the information needs for getting a desire out come. It decides the sources of data and methods for gathering data. A good design insures that the information obtained is relevant to the research question and that it was collected by objectives. Since, research design is simply the frame work or plan for a study. It is a blue print that of a house devised by an architect. My approach to research is descriptive and quite specific. Out of various research methods the research method, which was most suitable to my research, was Exploratory Research because it provides me all the opportunities to cover the all the aspect that I require to conduct the research and get an appropriate out come.

Data sources:
Research is based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data has been collected through various websites.

Types of Data Collection:
There are two types of data used. They are primary and secondary data. Primary data is defined as data that is collected from original sources for a specific purpose. Secondary data is data collected from indirect sources. (Source: Research Methodology, By C. R. Kothari) Primary Sources These include the survey or questionnaire method as well as the personal interview methods of data collection. y

y

Secondary Sources

These include books, the internet, websites etc, newspaper articles etc. Data collection instrument was structured schedule. Contact methods: Schedule reservation filled with data by asking questions from respondents. Sampling universe: All share market investors Sample size: 50

Limitations
y y y y Analyses mainly based on secondary data. There exist time constant. Limited resources are available to collect the information about the commodity trading. This research is dependent on the information provided by the respondents and sometimes the respondents are very reluctant in providing right information and often provide it carelessly and the result drawn out by only this information, so sometimes all efforts might not find direction and results. The study used convenient sampling method and it may not reflect the universe.

y

Chapter-4 Data Analysis & Interpretation
FACTS AND FINDINGS:(1.) DEMOGRAPHIC FINDINGS
Age groupAge Group Below 20 20-30 30-40 40-50 Above 50 No: of respondent 0 32 8 10 0

No: of respondent
35 30 25 20 15 10 5 0 Below 20 20-30 30-40 40-50 Above 50

No: of respondent

Interpretation:Above showing data and graph shows that out of 50 respondents, 32 are from 20-30 groups and 8 are from 30-40 group and only 10 are from 40-50 and none is from below 2o & above 50. It shows that age of 20-30 is more aware about secondary market dealing. Today¶ generations is having the knowledge of secondary market.

(2.) Sex Ratio:Sex Male Female No: of respondent 34 16

No: of respondent
35 30 25 20 15 10 5 0 Male Female No: of respondent

Interpretation:Above showing graph and data is showing that out of 50 respondents 34 are male & 16 are females. It reveals that males are more aware towards secondary market rather than females.

(3.) Educational backgroundQualification Under graduate Graduate Post graduate Others No; of respondents 4 8 37 1

40 35 30 25 20 15 10 5 0 1 2 3 4 5 Q No; of respondents

Interpretation:Above showing data and graph are showing that out of 50 respondents 37 are post graduate, 8 are graduate, and 4 are undergraduate. It interprets that people who are investing in secondary market mostly are post graduate i.e. well educated.

(4.)When the respondents were asked about where they are investing, the following responses were obtained.
Market Type Only cash/ capital market Only derivative market Both No: of respondents 8 13 29

No: of respondents
30 25 20 15 10 5 0 Only cash/ capital market Only derivative market Both No: of respondents

Interpretation:Above showing graph and information¶s shows that out of 50 respondent 29 respondents are having the knowledge of both market i.e. capital and derivative market, 13 knows about only derivative market, 8 knows about only capital or cash market. I t means mostly respondents are aware about the both market.

(5.) When the respondents were asked about, are they aware about particular derivative market, the following responses were obtainedAlternatives for investment Options Futures in shares Future in index All None No: of respondents 11 27 4 8 0

No: of respondents
30 25 20 15 10 5 0

No: of respondents

Interpretation:Above given graph and data shows that out of 50 respondents 27 knows about future in shares, 11 are aware about only options, 4 are aware about future in index, and

only 8 are aware about all the alternatives of the secondary markets. It shows that till now people are not much aware about the secondary market. It is still in booming stage.

(6.)When the respondents were asked about the time period, how long they are investing, the following responses were obtained.
Time period Less than 1 year 1-5 year More than 5 year No: of respondents 18 25 7

No: of respondents
25 20 15 No: of respondents 10 5 0 Less than 1 year 1-5 year More than 5 year

Interpretation:Above showing graph and data shows that out of 50 respondents 25 are investing from 1-5 years, 18 are doing this less than 1 year and only 7 are investing from more than 5 years. It means people are not very much aware about this investment centre, but now a days people are getting attract towards this market.

(7.)When the respondents were asked about proportion of income they invest in shares and securities, the following responses were obtained .
Investment proportion Upto 5% 5-10% 10-25% More than 25% No: of respondents 4 18 23 5

No: of respondents
More than 25%

10-25% No: of respondents

5-10%

Upto 5% 0 5 10 15 20 25

Interpretation:Above given graph and data interprets that out of 50 respondents 23 are investing 10-25% of their income, 18 are of 5-10%, only 4 are investing up to 5% and only 5% are investing more than 25%. It shows that mostly people do not invest a high portion of their income. They are interested in playing safe.

(8.) When the respondents were asked trading frequency, the following responses were obtained.
Frequency of trading Daily Weekly Monthly According to the market No: of respondents 2 24 5 18

No: of respondents
25 20 15 10 5 0 Daily Weekly Monthly According to the market No: of respondents

Interpretation:Above given data and graph explains that out of 50 respondents 24 are investing weekly, 18 are investing according to the market, 5 are doing monthly trading and only 2 are doing daily trading in secondary market in ROHTAK. It shows that still people are not very much aware about derivative market or they still think it very risky.

(9.)When the respondents were asked about trading advice , the following responses were obtained.
Individual opinion On your own idea Expert opinion On friends/family members advice Brokers advice Other source No: of respondent 5 24 6 25 0

No: of respondent
30 25 20 15 10 5 0 No: of respondent

Interpretation:Above given graph and information shows that out of 50 respondents 25 are getting brokers advice, 24 are using experts advice, 6 r using only friends and family advice for

investment and only 5 are using their own ideas. It shows that investors mostly take second opinion for investment.

(10.)When the respondents asked whether any professional advice is available to them when required, the following responses were obtained.
Uses of advice Yes No sometime No: of respondents 32 5 13

No: of respondents
35 30 25 20 15 10 5 0 Yes No sometime No: of respondents

Interpretation:Above given graph and data is showing that out of 50 respondents, 32 agree that they are using professional advice while investing, 13 use sometimes and 5 said no to professional advice. It shows that investors are dependent on the professional advice for investment decision.

(11.) When the respondents were asked about the motive for making investment in capital market, the following responses were obtained.
Motive behind investment Risk management High volume transaction with fewer margins Low brokerage as compared to cash delivery segment Portfolio/index/basket trading More opportunity for speculation No: of respondents 26 20 0 3 1

No: of respondents
30 25 20 15 10 5 0

No: of respondents

Interpretation:Above given graph and data shows that out of 50 respondents 26 are having risk management motive behind investment, 20 have high volume transactions with fewer margins, 3 have portfolio trading and 1 has motive of more opportunity for speculations. In short investors are investing in market for risk management not speculations.

(12.)When the Respondents were asked about the factors they consider while trading, the following responses were obtained:

Factors considered Brokerage Frequent payment Less advance margin Credit limits Personal relations

No: of respondents 15 6 8 20 1

No: of respondents
25 20 15 10 5 0 Brokerage Frequent payment Less advance Credit limits margin Personal relations No: of respondents

Interpretation:Above given graph & data is showing that out of 50 respondents 20 are influenced by the credit limit factor, 15 are from brokerage charges, 8 are considering less advance margin, 6 are considering frequent payment and only 1 respondent considers important personal relations while trading. As a whole investors are more depending on the credit limits for investment purpose.

(13.)When the respondents were asked whether they are satisfied with the different investment pattern, the following responses were obtained
Level of satisfaction Satisfied Dissatisfied Neutral No: of respondents 28 4 18

No: of respondents
30 25 20 15 10 5 0 Satisfied Dissatisfied Neutral No: of respondents

Interpretation:Above given graph & data is showing that out of 50 candidate 28 are satisfied with the different pattern of the secondary market, 18 are neutral about it and only 4 are dissatisfied with the investment pattern. It shows that mostly investors are satisfied with the system.

(14.)When the respondents were asked about future trend expectation, the following responses were obtained.
Future expectations High Low Neutral No comments No: of respondents 29 4 14 3

No: of respondents
30 25 20 15 10 5 0 High Low No: of respondents

Neutral No comments

Interpretation:Above given graph & data interprets that out of 50 respondents 29 are having high expectation from the future trend of the market,14 are neutral about this matter, only 4 are having low expectation, and 3 are silent on it. It shows that investors are expecting boom in this market .They are optimistic about the secondary market trend.

(15.) When the respondents were asked about problems they faced while investing, the following responses were obtained.
Types of problems Depending on the initial amount of investment To trade where to invest Brokers do not deal all the investors in same respect Delay in payment Lack of knowledge about the rules & regulations of SEBI No; of respondents 5 1 8 15 21

No; of repondents
25 20 15 10 5 0 Depending on the initial amount of investment To trade where to invest Brokers do not deal all the investors in same respect Delay in payment Lack of knowledge about the rules & regulations of SEBI No; of repondents

Interpretation:Above given graph and data interprets that out of 50 respondents 21 are facing the problem due to lack of knowledge about the rules & regulations of SEBI, 15 are facing problem of delay in payment, 8 find that brokers do not deal all the investors in same respect, and 5 said that investment depends upon the initial amount of investment. It shows that most of people are not aware about the rules and regulations of SEBI.

Chapter-5 Findings & Suggestions
Findings  Males are having more knowledge and interest in secondary market rather than females.  Most of the investors who invest in secondary market are post graduate. But even well educated respondents are not fully aware about secondary market in ROHTAK.  Investors are investing a small portion of their income because its highly risky.  Investors are mainly investing for risk management.  Investors are still not aware about SEBI rules & regulations. Due to that they are facing problems.  Investors are having high expectations in future from secondary market.  Investors are still dependent upon their professional advice for investment decision.  Investors are influenced mainly due to credit limits.

Suggestions:1. After study it is clear that Derivative influence our Indian Economy up to much extent. So, SEBI should take necessary steps for improvement in Derivative Market so that more investors can invest in Derivative market. 2. SEBI should make some more strict steps regarding brokers because people are facing problems mainly due to brokers. 3. There must be more derivative instruments aimed at individual investors. 4. SEBI should conduct seminars regarding the use of derivatives to educate individual investors. 5. There is a need of more innovation in Derivative Market because in today scenario even educated people also fear for investing in Derivative Market Because of high risk involved in Derivatives.

6. A knowledge need to be spread concerning the risk and return of the derivative market. 7. Procedure of investing should be simpler. 8. People should not use secondary market for speculations. 9. People should invest in long term. 10. RBI should help derivative market for better enhancement

BIBILIOGRAPHY

y y y y y y y

www.Google.com www.scribd.com www.en.wikipedia.org www.rbi.org.in www.bis.org/publ/bcbs69.pdf www.wfhummel.cnchost.com www.sbp.org.pk

Appendix
QUESTIONNAIRE

NAME-------------------------------------------------------------------------------------

AGE------------------------------------ SEX: MALE/FEMALE -----------------ADDRESS: ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------CITY -------------------------------------PIN CODE-----------------------------------CONTACT NO. -------------------------------------------------------------------------Qualification: y Under Graduate y Graduate y Post Graduate y Others (1) Where do you invest your funds? (a) Only Cash/Capital Market (c) Both

( ) ( ) ( ) ( )

(b) Only Derivative Market

(2) How much share or your income do you invest? (a) Up to 5% (b) 5-10% (c) 10-25% (d) More than 25% (3) For long you have been dealing in derivatives market? (a) Less than 1 year (b) 1-5 year (c) More than 5 year (4) Are you aware of Derivatives like? (a) Options (b) Future in shares (c) Future in Index (d) None

(e) All

(5) Where do you invest in derivative market? (a) Options (Call Option, Put Option) (b) Future in shares and Index (c) Both (6) Whom do you consult before taking decision about the investment? (a) On your own idea (b) Expert¶s Opinion (c) On Friend¶s/Family member¶s advice (d) Broker¶s advice (e) Other source (7) How often do you trade? (a) Daily (b) Weekly (c)Monthly (d) According to Market (8) Whether the professional advice is available to you? (a) Yes (b) No (c) Sometimes (9) What are your motives for making investment in shares and securities in Derivatives Market? (a) Risk Management (b) High Volume transaction with fewer margins (c) Low Brokerage as compared to cash delivery segment (d) Portfolio/Index/Basket Trading (e) More Opportunity for speculation (10) Which factors influence you while trading? (a) Brokerage (b) Frequent Payment (c) Less advance margin (d) Credit Limits (e) Personal Relations (11) What type of risk, investors are facing in the market? (a) Inflation risk (b) Purchasing power risk (c) Interest risk (d) others

(12) What is your satisfaction level pertaining to different investment? (a) Satisfied (b) Neutral (c) Dissatisfied (13) What are the benefits of trading in derivative segment over the cash segment? (a) Basket trading (b) Low Brokerage (c) Short-Sale for a longer period (d) Option (CA, PA) available which provides calculation risk (14) What you are expecting towards increasing volume of trading in near future? (a) High (b) Low (c) Neutral (d) No comments (15) Tick the problems faced by you? (a) Depending the initial amount of investment (b) To trade where to invest (c) To Complete Paper Work (d) Delay in Payment (e) Brokers do not deal all the investors in same respect (f) Lack of knowledge about the rules and regulation of SEBI (16) Any other problems faced by you: ««««««««««««««««««««««««««««««««««««««« «««..«««««««««««««««««««««««««««««««««««. ««««««««««««««««««««««««««««««««««««««« ««««««««««««««««««««««««««««««««««««««« «««««««««««« Suggestion, if any:««««««««««««««««««««««««««««««««««««««« ««««««««««««««««««««««««««««««««««««««« ««««««««««««

(Thanks)