Investor Behavior Factors Influencing Stock Market Decisions

Project on Investor Behavior Towards Stock Market
Introduction
A stock market is a place in which long term capital is raised by industry and commerce, the
government and local authorities and it is regarded as capital market. The money derives from
private investors, insurance companies, pension funds and banks and is usually arranged by
issuing houses and merchant banks. Stock exchanges are also part of the capital market which
provides a market for the shares and loan that represent the capital once it has been raised. Stockm
arket is a place where the securities can be sold and purchased at an agreed price. Indian stockmark
et is the oldest stock market incorporated in1875. The name of the first share trading
association in India was Native Share and Stock Broker Association which later came to beknown
as Bombay Stock Exchange.Investment has different meaning in the context of finance and econo
mics. Finance investment isputting money into something with the expectation of gain that upon th
orough analysis has ahigh degree of security for the principle amount, as well as security of return,
within an expectedperiod of time. Putting money into something with an expectation of gain witho
ut makingthorough analysis is speculation or gambling. Thus, Financial Investment involves decisi
onmaking process in order to ensure security of both the principle amount and the return oninvest
ment (ROI) within an expected period of time. In economics investment refers to thecreation of ca
pital or goods capable of producing other goods or services.The term investment refers to the com
mitment of funds at present in anticipate of some positiverate of return in future course of time. Th
ere are three types of investors namely conservativeinvestors, moderate and aggressive investors. T
here are also different avenues available to investfor investor’s namely corporate securities, equity
shares, preference share, debentures/ bonds/ADRs/ GDRs, mutual funds, etc. The investor can get
education about their investment from financial institution, financial markets, media etc.
As we know, humans are social creatures that have unique values and that tend to make decisions
in accordance with their emotions and behavior. One should not expect humans to
make decisions solely based on objective factors. It is at this point that Behavioral Finance brings a
novel perspective to analyze those areas that traditional finance failed to explain or had difficulty
in explaining. Behavioral Finance argues that behaviors and mood states of humans are
determinant factors in shaping their investment preferences and has demonstrated great progress in
the last 20 years and has been the main theme of numerous interdisciplinary studies. Individual
investor behaviour is motivated by a variety of psychological heuristics and biases. The traditional
finance theory says that the investors behave rationally, however the modern finance theory
disproved the same as the individual investors are irrational when they make investment decisions.
In this attempt the researcher conducted this research to mainly identify and prioritize those
behavioural factors that influence investors decision making process. This study is an exploratory
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in nature used the primary data collected through a structured questionnaire from 50 individual
investors based out in Mumbai city on a convenient manner. Thus, it is expected that this particular
area of finance would be researched in more detail and that research would focus on this field.
STOCK EXCHANGES IN INDIA
Stock exchanges provide an organized market for transactions in shares and other
securities. As of 2003, there are 23 stock exchanges in the country, 20 of them regional ones with
allocated areas of operation. Of the 9855 or so public companies that have listed their shares in
stock exchanges, around500 account for 99.6 per cent of the trading turnover, nearly all of which is
on the primary exchanges i.e. Bombay stock exchange and National stock exchange. The Bombay
stock exchange and National stock exchange together account for nearly 72 per cent of all capital
market activity in India. The other major exchanges are the Calcutta, Delhi, and Ahmadabad. The
remaining exchanges account for only 4 per cent of the Indian capital market activity.
ORIGINS
The National Stock Exchange of India 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. In April 1993, it was recognized as a stock exchange under the Securities Contracts
(Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations
in November 1994, while operations in the Derivatives segment commenced in June 2000.
BSE (Bombay Stock Exchange)
The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native
Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo
Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of
Persons (AOP) and is currently engaged in the process of converting itself into demutualised and
corporate entity. It has evolved over the years into its present status as the premier Stock Exchange
in the country. It is the first Stock Exchange in the Country to have obtained permanent
recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act
1956.The Exchange, while providing an efficient and transparent market for trading in securities,
debt and derivatives upholds the interests of the investors and ensures redresses of their grievances
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whether against the companies or its own member-brokers. It also strives to educate and enlighten
the investors by conducting investor education programmers.
PRIMARY MARKET
Primary stock markets are also called new issue markets. A primary market is the market in which
assets are sold for the first time. In other words, it is that market in which new shares, debentures
etc are bought and sold. The essential function of the primary market is to arrange for the raising of
new capital by corporate enterprises, whether new or old. The firms raising funds may be new
companies or old companies, planning expansion. The issues of the new firms are called “initial
issues” and those of old firms already existing are called “further issues”. Initial capital is raised by
issuing ordinary and preference shares only, whereas further capital can be raised by selling all
three types of industrial securities. The new companies need not always be entirely new
enterprises. They may be private firms already in business, but going public to explain their capital
base. Going public means becoming public limited companies to be entitled to raise funds from
general public in the open market. The volume of initial issues has mostly been smaller than that of
further issues; it has mostly accounted for 30 to 40 percent of the total issues till 1988-89, 10 to 28
percent during 1990-97, and one percent to 48 percent after 1998. Thus, the rang of fluctuations in
the share of initial (and, there of further) issues in total issues has been, as in cases of other aspects
of stock market activity, very wide indeed; this share has varied between 10 to 63 percent during
1957-97. There has been an inverse relationship between the volume of initial and further issues in
most of the years.
 Financial Instruments in New Issue: – A number of securities are issued by companies in
the new issue markets. They include:
 Equity shares: – Equity shares represent the ownership position in the company. The
holders of the equity shares are the owners of the company, and they provide permanent
capital. They have voting rights and receive dividends at discretion of the Board of
Directors.
 Preference Shares: – the holders of the preference shares have a preference over the
equity in the event of the liquidation of the company. The preference dividend rate is fixed
and known. A Company may issue preference with a maturity period (called redeemable
preference shares). A preference share may also provide for the accumulation of dividend.
It is called cumulative preference share.
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 Debentures: – Debentures represent long-term loan given by the holders of debentures to

the company. The rate of interest is specified and interest charges are treated deductible
expenses in the hands of the company. Debentures may be issued without an interest rate.
They are called zero-interest debentures. Such debentures are issued at a price much lower
than their face value. Therefore, they are also called deep-discount debentures/bonds.
 Convertible Securities: – A debenture or a preference share may be issued with the feature
o of being convertible into equity shares after a specified period of time at a given
price.Thus a convertible debenture will have features of debenture as well as equity.
 Warrants: – A company may issue equity shares or debentures attached with warrants.
Warrants entitle an investor to buy equity shares after a specified period at a given price.
 Cumulative Convertible Preference Shares (CCPS): – CCPS is an instrument giving
regular returns at 10% during the gestation period from three years to five years and equity
benefit thereafter introduced by the Government in 1984 CCPS has, however, failed to
catch the investor’s interest mainly because the rate of return was considered to be too low
in the initial years and the provision for conversion into equity was also unattractive if the
company failed to perform well.
 Zero Coupon Bonds and Convertible Warrants: – These are two new instruments that
have been floated by certain companies. Their overall impact and popularity will be known
only in the years ahead.
I.P.O.'s (Initial Public Offer)
A Company proposing to raise resources by a public issue should first select the type of securities
i.e. share and /or debentures to be issued by it. The decision regarding the issue of shares to be
made at par or premium should be decided keeping in view the SEBI guidelines.
The whole process of issue of shares can be divided into two parts:
- Pre issue activities
- Post issue activities
All activities beginning with the planning of capital issues, till the opening of the subscription list
are pre issue activities, while all activities subsequent to the opening of the subscription list may be
called post issue activities.
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SECONDARY STOCK MARKETS (STOCK EXCHANGES)
A stock exchange is an organized market for sale and purchase of listed existing shares and
other corporate securities. It is a platform for bringing together the buyers and sellers of securities.
The securities which may be bought and sold in stock exchange generally includes shares and
debentures of public companies. These may include Government securities and bonds issued by
municipalities, public corporations, utility undertakings etc. Securities held by the investors are
also traded on the stock exchange. Only listed securities are dealt in stock exchanges. The listed
securities are those securities that appear on the approved list of stock exchange.
The association or body of individuals generally organizes it. Hence it is defined as an
association or body of individuals established for the purpose of assisting and controlling business
buying, selling and dealing in securities.
The stock markets play an important role in the mobilization of financial resources for the
corporate sector. They provide an organized market for transactions in shares and other securities.
 Organization and Structure of Stock Exchanges in India: –

The number of stock exchanges in India has increased from nine in 1979-80 to 25 till now.
Presently, the stock market in India consists of twenty three regional stock exchanges and two
national exchanges, namely, the National Stock Exchange (NSE) And Over the Counter
Exchange of India (OTC)
The Bombay Stock Exchange (BSE) is the largest Stock Exchange, in the country, where
maximum transactions, in terms of money and shares take place. The other major stock exchanges
are Calcutta, Madras and Delhi Stock Exchanges. India has now the largest number of organized
and recognized stock exchanges in the world. All of them are regulated by SEBI. They are
organized either as voluntary, non-profit making associations (viz., Mumbai, Ahemdabad, Indore),
or public limited companies (viz., Calcutta, Delhi, Banglore ),or company limited by
guarantee(viz. Chennai, Hyderabad).Various stock exchanges in India are as follows:-
Name of Stock Exchange Incorporated Type of Organization

1. Bombay Stock Exchange 1875 Voluntary non profit organization
2. Calcutta Stock Exchange 1908 Public Ltd. Company
3. Madras Stock Exchange 1937 Company Ltd. by Guarantee
4. Ahmedabad Stock Exchange 1897 Voluntary non profit organization
5. Delhi Stock Exchange 1947 Public Ltd. Company
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6. Hyderabad Stock Exchange 1943 Company Ltd. by Guarantee

7. Madhya Pradesh Stock Exchange 1930 Voluntary non profit organization
(Indore)
8. Bangalore Stock Exchange 1957 Private Converted into Public Ltd.
Company
9. Cochin Stock Exchange 1978 Public Ltd. Company
10. Utter Pradesh Stock Exchange 1982 Public Ltd. Company
(Kanpur)
11. Ludhiana Stock Exchange 1983 Public Ltd. Company
12. Guahati Stock Exchange 1984 Public Ltd. Company
13. Kannar Stock Exchange 1985 Public Ltd. Company
(Mangalore)
14. Pune Stock Exchange 1982 Company Ltd. by Guarantee
15. Magadh Stock Exchange (Patna) 1986 Company Ltd. by Guarantee
16. Bhubaneshwar Stock Exchange 1989 Company Ltd. by Guarantee
17. Saurashtra Stock Exchange (Kutch) 1989 Company Ltd. by Guarantee
18. Jaipur Stock Exchange 1983 Public Ltd. Company
19. Vadodra Stock Exchange 1990 ND
20. Coimbtore Stock Exchange 1996 ND
21. Meerut Stock Exchange 1991 ND
22.National Stock Exchange 1994 ND
23.Over The Counter Exchange 1992 ND
MAIN STOCK EXCHANGES IN INDIA
In India mainly two stock exchanges:-
BSE i.e. BOMBAY STOCK EXCHANGE

NSE i.e. NATIONAL STOCK EXCHANGE
Bombay Stock Exchange Limited
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India’s economy has been one of the talks of the business world. Starting with the information
technology and moving rapidly to outsourcing, this foreign market has truly emerged in the past
two years. With globalization on the rise and a strong demand for information technology and
outsourcing, India will look attractive not only for investors but for businesses looking to go
overseas. This expansion will not only help India’s economy as money is invested into the country,
but companies will benefit due to lower operating costs and higher revenue. India is benefiting
from this shift of home front to the idea of outsourcing. With India surging, so is the Bombay
Sensex, as it reflected the state of the economy.
The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its history to the
1850s, when 4 Gujarati and 1 Parsi stockbroker would gather under banyan trees in front of
Mumbai's Town Hall. The location of these meetings changed many times, as the number of
brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875
became an official organization known as 'The Native Share & Stock Brokers Association'. Later
the name changed to Bombay Stock Exchange or the BSE. In 1930, the BSE building was
established in today’s present downtown Mumbai. Premchand Roychand was the leading
stockbroker of that time, and he assisted in setting out traditions, conventions, and procedures for
the trading of stocks at Bombay Stock Exchange. . In 1956, the Government of India recognized
the Bombay Stock Exchange as the first stock exchange in the country under the Securities
Contracts Regulation Act. The Bombay Stock Exchange changed into the E-trading system in
1995. The Bombay Stock Exchange Sensitive Index was initially composed of 30 stocks in April
1979. These 30 stocks in various sectors are one-fifth the market cap of the Sensex. Currently,
India has 10,000 listed companies on the Bombay Stock Exchange. This is the largest amount of
total companies in one exchange. The technology that is operated in the BSE is getting advanced
as stock information can be accessed in 417 cities and towns in India” (BSE Sensex).
The Sensex broke 2000 rupees on January 15, 1992 because of a liberal economic policy
proposed by the finance minister (BSE Sensex). This mark seemed important because it allowed
the economy to open up to new ideas and trade with other countries. The import and export
companies in India began trading and gaining revenue.
On December 30, 1999, the Sensex reached 5000 rupees because BJP led the coalition that
won majority in the nation’s election (BSE Sensex). This was big movement because the BJP
coalition was heavily focused on bringing the economy back to its feet. India was beginning to
grow and see a more promising future as the economy started to shift to Information Technology.
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This field not only helped India grow and develop, but it was in demand and many countries began
to utilize its attributes. India was beginning to boom and the Sensex was on the rise. On January 2,
2004, the “InfoTech” boom took place and India was the founder of this main sector. India was not
only developing the inner services in the county, but information technology began spreading
widespread around the world. Companies were beginning to come into India and establish a hub
for business. Billions of dollars were being invested not only into the country, but also into the
stock market. This strong movement made India’s economy look attractive to foreign investors.
The boom wasn’t only affecting the information technology sector, but telecom and energy
started coming around. Reliance did not only offer telecom, but energy started to develop. The
company was started by Dhirubhai Ambani in the early 1980’s but didn’t start expanding until
1999 (Reliance Industries Limited). Reliance was climbing high and hitting new targets as the
company was soaring in India and controlling the market share in energy and telecom. Dhirubhai
Ambani set out high standards and a strong vision for his company to succeed, but he couldn’t see
what the future of Reliance was going to be because he died on July 6, 2002. The company was
left in the hands of his sons: Mukesh and Anil Ambani, who wanted to follow in the footsteps of
their father and carry out his dreams. Unfortunately, Mukesh and Anil saw different visions and
parted ways. The company was split into the three groups: Reliance Infocom, Reliance Industries
Limited, and Reliance Energy on June 20, 2005 (Reliance Industries Limited). Reliance Infocomm
consists of broadband and telecommunications in India and other Asian countries. The telecom
sector is an emerging market because of the high growth in information technology and process
development. With technology in demand in India, Reliance is able to control the market share in
cellular technology and service, broadband, local phone service, and other communication
services. Mukesh Ambani heads Reliance Infocomm (Reliance Infocomm). Anil Ambani decided
go with the industrial division of the company, which includes Reliance Industries Limited.
Reliance Industries Limited is a private sector that in one of India’s leaders in conglomerates.
Other products offered by this company are petrochemicals and garments (Reliance Energy). Anil
is also the head of Reliance energy with provides electricity to many areas in India. This is vast
and growing field for the company because of the major control in providing electricity for India.
News of the split between the two brothers hit Mumbai and the Sensex exploded to 7000 rupees
(BSE Sensex). Investors sought more areas of interest in the Indian market and started buying up
shares in various sectors. The split proved very worthy because the India’s main market not only
consisted of information systems, but now it had a foot in energy and basic materials. Reliance
now had many fields to put its hands in the foreign market and grow, but the moves it made had
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the Sensex rolling and an attractive play for long-term investment.
With unstable world oil prices and interest rate hikes going on, many investors decided that
it was time to start looking abroad. This was a movement that started a particular trend to start
holding more investments aboard than in one’s country. The precious metals index that includes:
gold, copper, silver, and platinum all started to move. India was one of the main consumers and
importers of these metals. The use of the metals and world demand affected the Sensex as it
climbed above 8000 rupees on September 8, 2005 (BSE Sensex). The foreign investors saw India
as a main target of investment because the market was relatively cheap compared to the domestic
market. The growth rate in India was also more than the domestic market. Lastly, India had a
steady GPD figure. Unlike China, India’s growth rate and steady market rate made it a favorable
target for investment. The foreign investment trend continued from September to November 28,
2005, when the Sensex surpassed the 9000-rupee mark (BSE Sensex). The sector that sparked this
rally was the banking and brokerage sector.
The Sensex is continuing to grow despite interest worries and the momentum is pushing
stocks and commodities higher. On February 7, 2006, the Sensex rallies to the 10,000-rupee mark
(BSE Sensex). The momentum swing continues as it heads for the budget meetings and the
economic reports show no signs of slow growth in India’s economy. The Sensex now shares its
market capitalization with foreign and domestic investors. This move not only affected the shares
on the Sensex, but India American Depository Receipts (ADR’s) were soaring on the NASDAQ.
On March 27, 2006, the Sensex rose above 11,000 rupees on Wipro’s and Infosys’s better than
expected earnings report (BSE Sensex). Profits doubled from the previous year and the companies
were hitting new milestones. The demand for the It still continues in the world and the major
contracts are given to the best of breed in the sector. India’s rapid pace market didn’t stop from
there. All sectors traded on the Sensex started going up. Shortly after the 11,000 mark, a new breed
of foreign investors entered the Indian market. The bears of Asia started to upgrade the Sensex as
an outperform rating which to many people on Wall Street means buy. The movement hit Mumbai
and the Sensex crossed 12,000 rupees (BSE Sensex).
January 8, 2008 is considered a golden day in the history of the Indian stock markets as the
Sensex touched a record 21,077.53 in intra-day trading. It closed the day at 20,873. Analysts
expected the Sensex to touch 25,000 by the end of 2008; some even saw it touching 27,000. But
Aggarwal had warned then that "because of a sudden crisis of confidence, there would be a flight
of foreign institutional investor (FII) money out of the country".
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He pointed out that if $12 billion of FII money was to leave within a quarter, the stock
market would drop by approximately 30 per cent to the level of 14,000. By July 8, 2008,
Aggarwal's predictions came true. And then the world economy was sucked into the vortex of one
of the worst recessions in recent times.
On October 24, the Sensex plunged by 1,070.63 points (10.96 per cent) to close at
8,701.07, and sank further to a low of 8,160 on March 9, 2009. Since then it has climbed gradually
to hover very close to the 18,000-mark in April 2010.
National Stock Exchange
National Stock Exchange of India (NSE) is India's largest Stock Exchange & World's third largest
Stock Exchange in terms of transactions. Located in Mumbai, 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. In April 1993, NSE was recognized as a Stock exchange under the
Securities Contracts (Regulation) Act-1956. NSE commenced operations in the Wholesale Debt
Market (WDM) segment in June 1994. Capital Market (Equities) segment of the NSE commenced
operations in November 1994, while operations in the Derivatives segment commenced in June
2000. NSE has played a catalytic role in reforming Indian securities market in terms of
microstructure, market practices and trading volumes. NSE has set up its trading system as a
nation-wide, fully automated screen based trading system. It has written for itself the mandate to
create World-class Stock Exchange and use it as an instrument of change for the industry as a
whole through competitive pressure. NSE is set up on a demutualised model wherein the
ownership, management and trading rights are in the hands of three different sets of people. This
has completely eliminated any conflict of interest.
The Organization:
The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges, which recommended promotion of a
National Stock Exchange by financial institutions (FIs) to provide access to investors from all
across the country on an equal footing. Based on the recommendations, NSE was promoted by
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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.
.NSE Objectives:
 Establishing nationwide trading facility for all types of securities
 Ensuring equal access to investors all over the country through an appropriate
telecommunication network
 Providing fair, efficient & transparent securities market using electronic trading system
 Enabling shorter settlement cycles and book entry settlements
 Meeting International benchmarks and standards
 Within a very short span of time, NSE has been able to achieve its objectives for which it
was set up. Indian Capital Markets are a far cry from what they were 12 years back in terms
of market practices, infrastructure, technology, risk management, clearing and settlement
and investor service. To ensure continuity of business, NSE has built a full fledged BCP
site operational for last 7 years.
NSE's Markets:
NSE provides a fully automated screen-based trading system with national reach in the following
major market segments:-
 Equity OR Capital Markets {NSE's market share is over 65%}
 Futures & Options OR Derivatives Market {NSE's market share over 99.5%}
 Wholesale Debt Market (WDM)
 Mutual Funds (MF)
 Initial Public Offers
NSE Group:
NSCCL
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IISL NSE.IT
DotEx Intl. Ltd.

NSDL
 NSCCL
The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of
NSE, was incorporated in August 1995. It was set up to bring and sustain confidence in clearing
and settlement of securities; to promote and maintain, short and consistent settlement cycles; to
provide counter-party risk guarantee, and to operate a tight risk containment system. NSCCL
commenced clearing operations in April 1996. NSCCL carries out the clearing and settlement of
the trades executed in the Equities and Derivatives segments and operates Subsidiary General
Ledger (SGL) for settlement of trades in government securities. It assumes the counter-party risk
of each member and guarantees financial settlement. It also undertakes settlement of transactions
on other stock exchanges like, the Over the Counter Exchange of India.NSCCL has successfully
brought about an up-gradation of the clearing and settlement procedures and has brought Indian
financial markets in line with international markets.
It was set up with the following objectives:
 To bring and sustain confidence in clearing and settlement of securities;

 To promote and maintain, short and consistent settlement cycles;
 To provide counter-party risk guarantee, and
 To operate a tight risk containment system.
NSCCL commenced clearing operations in April 1996. It has since completed more than 1800
settlements (equities segment) without delays or disruptions.
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Clearing
Clearing is the process of determination of obligations, after which the obligations are discharged
by settlement.
NSCCL has two categories of clearing members: trading members and custodian. The trading
members can pass on its obligation to the custodians if the custodian confirms the same to NSCCL.
All the trades whose obligation the trading member proposes to pass on to the custodian are
forwarded to the custodian by NSCCL for their confirmation. The custodian is required to confirm
the trade on T + 1 days basis.
Once, the above activities are completed, NSCCL starts its function of Clearing. It uses the
concept of multi-lateral netting for determining the obligations of counter parties. Accordingly, a
clearing member would have either pay-in or pay-out obligations for funds and securities
separately. Thus, members pay-in and pay-out obligations for funds and securities are determined
latest by T + 1 day and are forwarded to them so that they can settle their obligations on the
settlement day (T+2).
 IISL
India Index Services & Products Ltd. (IISL) is a joint venture between the National Stock
Exchange of India Ltd. (NSE) and CRISIL Ltd. (formerly the Credit Rating Information Services
of India Limited). IISL has been formed with the objective of providing a variety of indices and
index related services and products for the capital markets. IISL has a consulting and licensing
agreement with Standard and Poor's (S&P), the world's leading provider of investible equity
indices, for co-branding IISL's equity indices.
IISL - Products & Services
IISL offers a wide range of products and services which are key support tools for the equity
markets. We provide reliable, accurate and valuable data on indices and index related services to
cater to the needs of various segments of users. Our speciality is indices based on Indian equity
markets, which may be used for benchmarking, trading or research. Use of IISL data or name or
indices requires a license or subscription.
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 NSDL
In order to solve the myriad problems associated with trading in physical securities, NSE joined
hands with the Industrial Development Bank of India (IDBI) and the Unit Trust of India (UTI) to
promote dematerialisation of securities. Together they set up National Securities Depository
Limited (NSDL), the first depository in India.
NSDL commenced operations in November 1996 and has since established a national
infrastructure of international standard to handle trading and settlement in dematerialised form and
thus completely eliminated the risks to investors associated with fake/bad/stolen paper.
 DotEx International Limited
"The data and info-vending products of the National Stock Exchange are provided through a
separate company DotEx International Ltd., a 100% subsidiary of NSE, which is a professional
set-up dedicated solely for this purpose."
 NSE.IT Ltd.
NSE.IT, a 100% subsidiary of National Stock Exchange of India Limited (NSE), is the
information technology arm of the largest stock exchange of the country. A leading edge
technology user, NSE houses state-of-the-art infrastructure and skills. NSE.IT possesses the wealth
of expertise acquired in the last six years by running the trading and clearing infrastructure of
largest stock exchange of the country. NSE.IT is uniquely positioned to provide products, services
and solutions for the securities industry. There has been a long felt need for top-of-the-line
products, services and solutions in the area of trading, broker front-end and back-office, clearing
and settlement, web-based trading, risk management, treasury management, asset liability
management, banking, insurance etc. NSE.IT's expertise in these areas is the primary focus. The
company also plans to provide consultancy and implementation services in the areas of Data
Warehousing, Business Continuity Plans, Stratus Mainframe Facility Management, Site
Maintenance and Backups, Real Time Market Analysis & Financial News over NSE-Net, etc.
NSE.IT is an Export Oriented Unit with STP and plans to go global for various IT services in due
course. In the near future the company plans to release new products for Broker Back-office
Operations and enhance NeatXS / Neat iXS to support Straight Through Processing on the net.
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DERIVATIVES
BSE created history on June 9, 2000 by launching the first Exchange traded Index Derivative
Contract i.e. futures on the capital market benchmark index - the BSE Sensex. The inauguration of
trading was done by Prof. J.R. Varma, member of SEBI and chairman of the committee
responsible for formulation of risk containment measures for the Derivatives market. The first
historical trade of 5 contracts of June series was done on June 9, 2000 at 9:55:03 a.m. between M/s
Kaji & Maulik Securities Pvt. Ltd. and M/s Emceez Share & Stock Brokers Ltd. at the rate of
4755.
In the sequence of product innovation, the exchange commenced trading in Index Options on
Sensex on June 1, 2001. Stock options were introduced on 31 stocks on July 9, 2001 and single
stock futures were launched on November 9, 2002.
September 13, 2004 marked another milestone in the history of Indian Capital Markets, the day
on which the Bombay Stock Exchange launched Weekly Options, a unique product unparallel in
derivatives markets, both domestic and international. BSE permitted trading in weekly contracts in
options in the shares of four leading companies namely Reliance, Satyam, State Bank of India, and
Tisco in addition to the flagship index-Sensex.
Types of Products:
Index Futures
A futures contract is a standardized contract to buy or sell a specific security at a future date at an
agreed price. An index future is, as the name suggests, a future on the index i.e. the underlying is
the index itself. There is no underlying security or a stock, which is to be delivered to fulfill the
obligations as index futures are cash settled. As other derivatives, the contract derives its value
from the underlying index. The underlying indices in this case will be the various eligible indices
and as permitted by the Regulator from time to time.
Index Options
Options contract give its holder the right, but not the obligation, to buy or sell something on or
before a specified date at a stated price. Generally index options are European Style. European
Style options are those option contracts that can be exercised only on the expiration date. The
underlying indices for index options are the various eligible indices and as permitted by the
Regulator from time to time.
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 Stock Futures
A stock futures contract is a standardized contract to buy or sell a specific stock at a future date
at an agreed price. A stock future is, as the name suggests, a future on a stock i.e. the underlying is
a stock. The contract derives its value from the underlying stock. Single stock futures are cash
settled.
 Stock Options
Options on Individual Stocks are options contracts where the underlying are individual stocks.
Based on eligibility criteria and subject to the approval from the regulator, stocks are selected on
which options are introduced. These contracts are cash settled and are American style. American
Style options are those option contracts that can be exercised on or before the expiration day.
HOW DOES TRADING TAKES PLACE?
Trading of shares in a stock exchange takes place through Registered Stockbrokers, Transfer
Agent etc. Buyer gets in touch with a Broker, and gives him all the details of shares he wants to
buy. Then the broker strikes a requisite deal and receives share certificate, and transfer form. After
deducting, documents to the buyers. As for seller, he also gets in touch with a broker and gives him
details along with share certificates and transfer forms. Once the deal is struck, broker receives the
payment and deducts his commission.
Floor Trading: – Apart, from NSC, and OTC, trading takes place mainly through on open outcry
system on the trading floor of the exchange during the official trading hours. There are several
"notional" trading posts for different securities where the buyer and seller get in contact with each
other. These buyers and seller are authorized Brokers or Agents or a shareholder. Buyer make their
bids and sellers make their offers, and bargains are closed at the mutually agreed upon prices. In
stock, where jobbing is done, the "jobber", plays an important role. This is floor trading, where
buyer and seller transact face to face using a variety of signals.
Screen based Trading: – In a screen-based system, the trading ring is replaced by the computer
screen and distant participants can trade with each other through the computer network. A large
number of participants, geographically separated can trade simultaneously at high speeds. The
screen based trading systems are of two types:
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 Quote Driven System, and

 Order Driven System,
Under the QUOTE DRIVEN system for trading, market makers input two way quotes in the
system. Market players, then contact the market makers over telephone, negotiable, and trace.
Under the ORDER DRIVEN system, client place their orders with the brokers, which are then
fed, into the system. These are then automatically matched according to certain rules.
INVESTOR’S BEHAVIOUR
It is a well documented empirical fact in the finance literature that there is significant heterogeneity
across individuals in investment behaviours such as the decision to invest in the stock market and
the choice of asset allocation.1Are individual investors genetically predisposed to certain
behaviours and born with a persistent set of abilities and preferences which affect their decisions in
the financial domain Or is investment behaviour to a significant extent shaped by environmental
factors, such as parenting or individual-specific experiences? These questions are fundamental for
our understanding of the behaviour of individual investors, but so far existing research has not
offered much systematic evidence on them. In this paper, we seek to fill this void by estimating the
extent to which “nature,” i.e., genetic variation across individuals, versus “nurture” or other
environmental treatments explainthe observed heterogeneity in investment decisions. To
decompose the variance of three important measures of investment behaviour – stock market
participation, the relative amount invested in equities (share of equities) and portfolio volatility –
into genetic and environmental components, we examine identical and fraternal twins. The
intuition of our identification strategy is right forward: if individuals who are more closely related
genetically (e.g., identical twins) tend to be more similar on measures of investment behaviour,
then this is Evidence for that behaviour being, at least partially, caused by a genetic factor. Using
data on twins Allows us to identify an unobservable genetic component and environmental
components that are either common (shared) or non-shared among twins. Our data on 37,504 twins
are from the Swedish Twin Registry, which maintains and manages the world’s largest database of
twins. Until the abolishment of the wealth tax in Sweden in 2006, the law required all financial
institutions to report information to the Swedish Tax Agency about assets an individual owned as
of December 31 of that year. This allows us to compile a matched data set of twins and their
complete financial portfolios.
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Investment media
The financial investment avenues are further classified with negotiable securities that the
transferable and non negotiable securities that are not transferable. The negotiable securities may
yield variable income or fixed income. These are equity shares. Bonds, debentures, government
securities and money market securities. The non negotiable securities are not transferable. They
yield only fixed income. They are deposits schemes of post offices, banks, companies and non
bankin financial institution, etc. There are tax-banefit schemes such as public provident fund, gpf,
national savings certificate etc., are also available. Mutual fund, chit fund, and venture capital etc.,
are another types of financial investment avenues. They are of recent in india. At present there are
1500 plus mf schemes in the market. In the last decade, the mf industry has grown substantially
and today mfs. Are the best suited vehicles for individual investing. The non financial investment
avenues also known as real precious assets which are also part of the portfolio. They are gold,
silver, arts, property etc.
1. Personal relationship manager
This facility is provided to the customer on opening a trading account with the
company. A personal relationship manager is provided to the customer who can be
reached 24x7 and not only for instructing him in the trading affair but also get
specialized and customized advice and tips about the market which is their
competitive advantage
2. Competitive brokerage and dp charges
The company offers a brokerage of 0.50% (negotiable) on delivery and 0.10%

(negotiable) on intraday and f&o transactions plus service tax, sst and transaction
charges.
 Only one time account opening charges and no annual maintenance

charges.
 Margin financing @ 18%
 Margin trading of 4 times the cash deposited for delivery based trade.
 Margin trading of 10 times the cash deposited for intra-day based trade
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 Buy today sell tomorrow for all securities facility

 Management of portfolio and advises
 Electronic transfer of funds can also be provided.
Products offered
 Equity
 Commodity
 Depository
 Distribution
 Nri services
 Back office
 Fixed income
 Portfolio tracker
 Mutual funds
 General insurance
 Life insurance
The snapshots of products of Investments are:
Equity
Investments facilitates trading in secondary market in equity trading & derivative

(future & options) trading through its corporate membership of premier exchange of
the country namely national stock exchange (nse), bombay stock exchange (bse).
Investments provides equity trading to the clients online as well as off-line service.
Investments offers the unique feature where the customers get to trade on nse, bse
and derivatives all on one screen.
Products offerings for trading
I. Investments plus
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It enables users to get a browser based trading terminal that can be accessed by a
unique id and password. This facility is available to all the customers of the
company the moment they get registered with it.
Ii. Investments swift
Self directed investors get an application based terminal which is replica of neat
terminal for trading actively with more speed, greater analytical features and priority
access to relationship manager to trade over the phone
Commodity
Government of india has been given the permission to the multi commodity trading
after approximate thirty years of globalization & liberalization in world. By inspiring
from the n.s.e., & b.s.e. many other stock exchange lic, icici bank, nse, central
warehousing, agriculture industries etc. Had setup the online multi-commodity
exchange. This exchange will provide the present rate of the commodity to the on
line market these exchange will control by the forward market commission which do
work under ministry of consumer affair,food & public distribution ,government of
india.
Investments are the member of the two commodity exchange at present:

NCDEX
National commodity & derivatives exchange limited (ncdex) is a professionally

managed online multi commodity exchange incorporated on april 23, 2003 under the
companies act, 1956. It obtained its certificate for commencement of business on may
9, 2003. It has commenced its operations on december 15, 2003. Ncdex currently
facilitates trading of thirty six commodities - cashew, castor seed, chana, chilli, coffee,
cotton, cotton seed oilcake, crude palm oil, expeller mustard oil, gold, guar gum, guar
seeds, gur, jeera, jute sacking bags, mild steel ingot, mulberry green cocoons, pepper,
rapeseed - mustard seed ,raw jute, rbd palmolein, refined soy oil, rice, rubber, sesame
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seeds, silk, silver, soy bean, sugar, tur, turmeric, urad (black matpe), wheat, yellow
peas, yellow red maize & yellow soybean meal. At subsequent phases trading in more
commodities would be facilitated.
MCX
MCX an independent and de-mutulised multi commodity exchange has permanent

recognition from government of india for facilitating online trading, clearing and
settlement operations for commodity futures markets across the country. Headquartered
in mumbai, mcx is led by an expert management team with deep domain knowledge of
the commodity futures markets. Inaugurated in november 2003 by shri mukesh ambani,
chairman & managing director, reliance industries ltd, mcx offers futures trading in the
following commodity categories: agri commodities, bullion, metals- ferrous & non-
ferrous, pulses, oils & oilseeds, energy, plantations, spices and other soft commodities.
Depository_
Depository offer a safe, convenient way to hold securities as compared to

holding securities in paper form. Their service provides an integrated single platform
for all the clients ensuring a risk free, efficient and prompt depository process.
Facilities provided by Investments
 De-materialization: physical shares can be converted into

electronic form through dematerialization at any of the Investments
branch.
 Re-materialization: electronic shares on request of re-materialization
enables one to convert dematerialized shares into physical form.
 Transfer: one can transfer shares through inter and intra depository
services.
 Ipo: using the demat account details one can apply for ipo and on
allotment the securities are transferred directly to the demat account.
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 Corporate actions: in case one is eligible for any bonus and right
issues while holding the stock in demat account then allotment would
be transferred to the account.
 Easi: this facility empowers the clients to view, download, print
updated holings with respective valuations over the internet though
demat account and avail host of services.
Distribution
Investments is fast emerging as a leader in the insurance and mutual funds

distribution space. Investments has over 100 branches and a huge number of
“business development executives” who help to source and service the customers
throughout the country. Investments is fast becoming the preferred “vendor
independent” distribution houses because of providing efficient service like free
pick-up of collection of cheques/dd’s, keeping track of the premiums etc to its
customers.
Mutual funds
Mutual fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is invested into a variety of
securities, including stocks, bonds, and money-market instruments. Mutual funds
issue units to the investors, which represent an equitable right in the assets of the
mutual fund. Thus a mutual fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally managed
basket of securities at a relatively low cost.
Insurance_
General insurance
Investments offers all the products of general insurance under one umbrella.
Investments comprises of a team of distinguished professionals from insurance,
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finance and other management disciplines who have vast business & managerial
experience. Investments team evaluates the client's business environment and studies
the risk profile. Based on the results of these evaluations, Investments team then
suggests the most cost effective , integrated insurance package that is perfectly
suited to the client's risk profile.
Life insurance
Investments offers you a peace of mind by offering various life insurance plans for
your unique & specific needs. For every financial problem, there is a solution also is
the philosophy of Investments. And is here to give one a complete financial
solutions. One can always have an access to their 83 branch offices situated at prime
locations of the city, or can call to their relationship manager for guide to
investments.
Following is the glimpse of life insurance plans:
- Protection plans
- Child plans
- Investment plans
- Saving plans
- Retirement and pension plans
- Nir plans
- Health plans
Property
Investments is a specialized property broking company. It offers a total solution to

the clients inclusive of market research, marketing strategy, interaction with the
professional teams and sales or leasing of the property.
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NRI Services
Investments offers a convenient and hassle-free way of investing in the indian

securities market to the people who are living outside india and wish to participate in
the indian growth story.
Procedure for nri operations in indian capital markets:
 The nri can deal with only one bank at any point of time.
 He is allowed to invest only 5% of the paid up capital of a company. The
aggregate paid up value of equity of any company purchased by all nri's and
ocbs cannot exceed 10 percent of the paid up capital of the company and in
the case of convertible debentures, the aggregate paid up value of each series
of debentures purchased by all nri's and ocbs cannot exceed 10 % of the paid
up value of each series of convertible debentures.
 He can enter only into delivery based trades, all deliveries must only be routed
through beneficiary accounts and not directly through the broker.
 Shares bought by him cannot be sold unless the payout of the same is received
from exchange.
 All purchase and sale transactions have to be reported to the rbi by the
designated bank.
 original brokers contract notes have to be submitted to the designated bank
branch, within 24 hours of the transaction.
 He will be required to make bill to bill payments/ settlements. No adjustments
of purchase against sale consideration should be done.
 Shares cannot be bought against the shares sold in the same settlement.
 All purchase and sales will be dealt separately for payments / receipts.
Backoffice
Investments through its online back-office aims to increase the transparency and
provides the link to view the details of the account online anytime and anywhere.
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The following reports can be viewed online:
1 Sauda details
2 Financial ledger
3 Net position fot the day
4 Net position detail
Fixed income
The fixed income vertical of Investments group deals in sovereign paper, money
market/ fixed income instruments and merchant banking activities. Broadly, it
undertakes the following:
a. Dealing in all types of money market instruments viz. Commercial

paper (origination & placement), certificate of deposit and treasury bills
both in primary and secondary market.
b. Dealing in government securities (including securities of oil, fertilizer
& food bonds) and other psu/ corporate bonds with counterparties like
banks, primary dealers, mutual funds, insurance companies, regional
rural banks, co operative banks, central & state psus, housing finance
companies, nbfc & corporates.
c. Retailing of central, state government securities and bonds to pf trusts,
universities & colleges.
d. Advisory services to pf trusts.
e. Arrangers for private placement of bonds & placing it with banks,
mutual funds, insurance companies & corporates.
f. Raising of capital by way of initial public offers (ipo) and follow-on
public offerings (fpo)
Portfolio tracker
The portfolio tracker is a simple yet powerful tool that lets you monitor the value of
your investments and other securities you've got your eye on. To set up your
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portfolio, all you need to do is enter the quantities of your investments in different
things, and the price you made your purchases and sales at. Portfolio tracker lets you
monitor certain securities, it is not intended to reflect your actual holdings or account
information at any broker/dealer.
Portfolio Management services (PMS)
Financial markets today offer enormous growth potential. But managing your own investments can
be an extremely challenging task. Anticipating market trends, assessing the impact of socio-
economic changes on your investments, keeping abreast of latest corporate developments and
financial analysis all adds up. Managing one’s investments can become nearly a full-time affair
that requires considerable time and expertise.
During your journey of life, you need to make numerous plans and take important decisions. Some
of these decisions have strong financial implications and can alter the course of your life and when
it comes to investing your hard earned money, you need to partner with someone you trust, one
who will make your money work hard.The idea of Portfolio management is to overcome the pace
of change in business landscape and provide investment avenues to stay ahead of the risk return
curve and generate positive returns consistently over a period of time.During times of intense
market volatility, it can be difficult to know what, if anything, you should do. Staying calm,
keeping your sense of perspective, taking a rational look at your investments, and seeking the
advice of a professional are all smart strategies you can follow.
PMS benefits investor in following ways
1. Professional Management – PMS is provided by qualified and professional investment

managers with the objective to deliver consistent long term performance while controlling
risk.
2. Continuous Monitoring – It is important to recognize that portfolios need to be constantly
monitored and periodic changes should be made to optimize the results.
3. Risk Control – The investment manager employs a qualified research team to establish the
investor's investment strategy and providing the information to the investment manager.
This also helps in reducing the investment related risks up to significant extent.
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4. Hassle Free Operation – The investment manager gives the investor a customised service.
He takes care of all the administrative aspects of the investor's portfolio with a periodic
reporting on the overall status of the portfolio and performance. The investment manager
provides various types of reports to his investors on a regular basis. These reports are
related to the transactions made on their behalf, current holdings of the investment portfolio
and realized Profits and Losses to name a few.
5. Flexibility – The Portfolio Manager has fair amount of flexibility in terms of investing
patterns and procedures. He can create a reasonable concentration in the investor portfolios
by investing disproportionate amounts in favour of compelling opportunities
6. Transparency – PMS provides comprehensive communications and performance
reporting. Investors will get regular statements and updates from the investment manager.
Interval funds combine features of both open-ended and Close ended schemes. They are
largely close-ended, but become openended at pre-specified intervals. For instance, an interval
scheme might become open-ended between January 1 to 15, and July 1 to 15, each year. The
benefit for investors is that, unlike in a purely close-ended scheme, they are not completely
dependent on the stock exchange to be able to buy or sell units of the interval fund.
Actively managed funds are funds where the fund manager has the flexibility to choose the
investment portfolio, within the broad parameters of the investment objective of the scheme. Since
this increases the role of the fund manager, the expenses for running the fund turn out to be higher.
Investors expect actively managed funds to perform better than the market.
Passive funds invest on the basis of a specified index, whose performance it seeks to track. Thus,
a passive fund tracking the BSE Sensex would buy only the shares that are part of the
composition of the BSE Sensex. The proportion of each share in the scheme’s portfolio would also
be the same as the weightage assigned to the share in the computation of the BSE Sensex. Thus,
the performance of these funds tends to mirror the concerned index. They are not designed to
perform better than the market. Such schemes are also called index schemes. Since the portfolio is
determined by the index itself, the fund manager has no role in deciding on investments.
Therefore, these schemes have low running costs.
Gilt funds invest in only treasury bills and government securities, which do not have a credit risk
(i.e. the risk that the issuer of the security defaults).
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Diversified debt funds on the other hand, invest in a mix of government and non-government debt
securities.
Junk bond schemes or high yield bond schemes invest in companies that are of poor credit
quality. Such schemes operate on the premise that the attractive returns offered by the investee
companies makes up for the losses arising out of a few companies defaulting.
Fixed maturity plans are a kind of debt fund where the investment portfolio is closely aligned to
the maturity of the scheme. AMCs tend to structure the scheme around pre-identified investments.
Further, like close-ended schemes, they do not accept moneys post-NFO. Thanks to these
characteristics, the fund manager has little ongoing role in deciding on the investment options.
Competitors
 India bulls financial services limited

 India info line
 Karvy securities
 Fortis securities ( religare)
 Share khan ltd
 Icici securities ltd
 Motilal oswal securities
 Kotak securities
 Hdfc securities
Investment avenues
Savings form an important part of the economy of any nation. With the savings
invested in various options available to the people, the money acts as the driver for
growth of the country. Indian financial scene too presents a plethora of avenues to
the investors. Though certainly not the best or deepest of markets in the world, it has
reasonable options for an ordinary man to invest his savings. The money you earn is
partly spent and the rest saved for meeting future expenses. Instead of keeping the
savings idle you may like to use savings in order to get return on it in the future, this
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is called investment. One needs to invest and earn return on your idle resoures and
generate sum of money for a specific goal in life and make a provision for an
uncertain future .one of the important reason why people needs to invest wisely is to
meet the cost of inflation. Inflation is the rate at which the cost of living increases.
The cost of living is simply what it costs to buy the goods and services you need to
live. Inflation causes money to lose value because it will not buy the same amountof
a good or service in the future as it does now or did in the past. The sooner one starts
investing the better. By investing early you allow your investments more time to
grow, whereby the concept of compounding increases your income, by accumulating
the principal and the interest or dividend earned on it, year after year. Tha three
golden rules for all investors are :
 Invest early
 Invest regularly
 Invest for long term and not for short term
Investments
The 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.
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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;
9. Communication.
Security of original capital: the chance of losing some capital has been a primary
need. This is perhaps the strongest need among investors in india, who have
suffered regularly due to failures of the financial system.
wealth accumulation: this is largely a factor of investment performance,

including both short-term performance of an investment and long-term
performance of a portfolio. Wealth accumulation is the ultimate measure of the
success of an investment decision.
comfort factor: this refers to the peace of mind associated with an investment.
Avoiding discomfort is probably a greater need than receiving comfort. Reputation
plays an important part in delivering the comfort factor.
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tax efficiency: legitimate reduction in the amount of tax payable is an important

part of the indian psyche. Every rupee saved in taxes goes towards wealth
accumulation.
life cover: many investors look for investments that offer good return with
adequate life cover to manage the situations in case of any eventualities.
Income: this refers to money distributed at intervals by an investment, which are

usually used by the investor for meeting regular expenses. Income needs tend to be
fairly constant because they are related to lifestyle and are well understood by
investors.
Ease of withdrawal: this refers to the ability to invest long term but withdraw
funds when desired. This is strongly linked to a sense of ownership. It is normally
triggered by a need to spend capital, change investments or cater to changes in
other needs. Access to a long-term investment at short notice can only be had at a
substantial cost.
Communication: this refers to informing and educating investors about the

purpose and progress of their investments. The need to communicate increases
when investments are threatened.
 Security of original capital is more important when performance falls.

 Performance is more important when investments are performing well.
 Failures engender a desire for an increase in the comfort factor.
Perfect investment would have been achieved if all the above-mentioned needs had
been met to satisfaction. But there is always a trade-off involved in making
investments. As long as the investment strategy matches the needs of investor
according to the priority assigned to them, he should be happy.
The ideal investment strategy should be a customized one for each investor
depending on his risk-return profile, his satisfaction level, his income, and his
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expectations. Accurate planning gives accurate results. And for that there must be
an efficient and trustworthy roadmap to achieve the ultimate goal of wealth
maximization.
Choosing the right investment options
After understanding the concept of investment, the investors would like to know
how to go about the task of investment, how much to invest at any moment and
when to buy or sell the securities, this depends on investment process as investment
policy, investment analysis, valuation of securities, portfolio construction and
portfolio evaluation and revision. Every investor tries to derive maximum
economic advantage from his investment activity.
For evaluating an investment avenues are based upon the rate of return, risk and
uncertainty, capital appreciation, marketability, tax advantage and convenience of
investment.
Investment options in india
Non-marketable financial assets
A good portion of the financial assets of individual investors is held in the form of
non-marketable financial assets like bank deposits, post office deposits, company
deposits, provident fund deposits. The main feature of these assets is that they
represent personal transactions between the investor and the issuer. For
Example, when you open a saving bank a/c , you deal with bank personally. In
contrast, when you buy equity shares in the stock market you do not know who is
the seller.
 Bank deposits
Bank deposit simply refers to opening a bank a/c & depositing money in it. There
are various kind of bank a/c’s: current a/c, saving a/c, fixed deposit a/c. While a
Page 32
deposit in current a/c does not earn any interest, deposits in other bank a/c earn
interest.
 Company deposits
Many companies, large and small, solicit fixed deposits from the public.fixed
deposits mobilized by manufacturing companies are regulated by rbi. Key feature of
co. Deposits are as :
1. For a manufacturing co. The term of deposits can be one to three

years, whereas for a non-banking finance co. It can vary between 25
months to 5 years.
2. The interest rate on it are higher than those on bank deposits.
3. Company deposit represent unsecured loans.
4. It offers the facility for premature withdrawal to attract deposits.
 Public provident fund scheme
Individuals & hufs can participate in this scheme. A ppf a/c may be opened at any
branch of the sbi or its subsidiaries or at specified branches of other nationalized
banks. The subscriber to a ppf a/c is required to make a min. Deposit of rs.100 per
year. The max. Permissible deposit per year is rs.70000/-.ppf currently earn a
compound interest rate of 8% p.a. Which is totally exempt from taxes.
Fixed income securities
It includes the following:
 Government securities
 Saving bonds
 Private sector debentures
 Public sector undertaking bonds
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 Government securities
Debt securities issued by the central government, state government and quasi-
government agencies are referred to as govt. Securities or gilt-edged securities.
Govt. Securities have maturities ranging from 3-20 years and carry interest rates that
usually vary between 8 and 10 %.
 Rbi savings bonds

Individuals, hufs, and nris can invest in these bonds. The minimum amount of
investment is rs.1000/-. There is no upper limit. The maturity period is 5 years from
the date of issue. The interest rate is 8% p.a., payable half-yearly. These bonds can
be offered as security to banks for availing loans.
 Private sector debenture

Akin to promissory notes, debentures are instruments meant for raising long-term
debt. The obligation of a co. Towards its debenture holders is similar to that of a
borrower who promises to pay interest and principal at specified times. When a
debenture issue is sold to the investing public, a trustee is appointed through deed.
The trustee is usually a bank or financial institution.
 Public sector undertaking bonds

Psus issue debentures that are referred to as psu bonds. There are two broad varieties
of psu bonds: taxable bonds and tax-free bonds. There is no deduction of tax at
source on the interest paid on these bonds. They are transferable by mere
endorsement and delivery. There is no stamp duty applicable on transfer. They are
traded on stock exchanges.
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Mutual funds
A mutual fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned
through these investments and the capital appreciation realized is shared by its unit
holders in proportion to the number of units owned by them. Thus a mutual fund is
the most suitable investment for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of securities at a relatively low
cost. The flow chart below describes broadly the working of a mutual fund:
Organisation of a mutual fund
There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund:
Mutual fund units are issued and redeemed by the fund management company based
on the fund's net asset value (nav), which is determined at the end of each trading
session. Nav is calculated as the value of all the shares held by the fund, minus
expenses, divided by the number of units issued. Mutual funds are usually long term
investment vehicle though there some categories of mutual funds, such as money
market mutual funds which are short term instruments.
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A) Equity funds
Equity funds are considered to be the more risky funds as compared to other fund
types, but they also provide higher returns than other funds. It is advisable that an
investor looking to invest in an equity fund should invest for long term i.e. For 3
years or more. There are different types of equity funds each falling into different
risk bracket. In the order of decreasing risk level, there are following
Types of equity funds:-
 Aggressive growth funds

 Growth funds
 Equity income /dividend yield
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 Diversified equity funds

 Equity index funds
 Value funds
B) Money market/liquid funds
Money market / liquid funds invest in short-term (maturing within one year) interest
bearing debt instruments. These securities are highly liquid and provide safety of
investment, thus making money market / liquid funds the safest investment option
when compared with other mutual fund types. However, even money market / liquid
funds are exposed to the interest rate risk. The typical investment options for liquid
funds include treasury bills (issued by governments), commercial papers (issued by
companies) and certificates of deposit (issued by banks).
C) Hybrid funds
As the name suggests, hybrid funds are those funds whose portfolio includes a blend
of equities, debts and money market securities. Hybrid funds have an equal
proportion of debt and equity in their portfolio. There are following types of hybrid
funds in india:
 Balanced funds
 Growth-and-income funds
 Asset allocation funds
Types of Hybrid Funds
Monthly Income Plan seeks to declare a dividend every month. It therefore invests largely in debt
securities. However, a small percentage is invested in equity shares to improve the scheme’s
yield. As will be discussed in Unit 8, the term ‘Monthly Income’ is a bit of a misnomer, and
investor needs to study the scheme properly, Before presuming that an income will be received
every month.
Page 37
Capital Protected Schemes are close-ended schemes, which are structured to ensure that investors
get their principal back, irrespective of what happens to the market. This is ideally done by
investing in Zero Coupon Government Securities whose maturity is aligned to the scheme’s
maturity. (Zero coupon securities are securities that do not pay a regular interest, but accumulate
the interest, and pay it along with the principal when the security matures). As detailed in the
following example, the investment is structured, such that the principal amount invested in the
zero-coupon security, together with the interest that accumulates during the period of the scheme
would grow to the amount that the investor invested at the start. Suppose an investor invested Rs
10,000 in a capital protected scheme of 5 years. If 5-year government securities yield 7% at that
time, then an amount of Rs 7,129.86 invested in 5-year zerocoupon government securities would
mature to Rs 10,000 in 5
D) Gilt funds
Also known as government securities in india, gilt funds invest in government
papers (named dated securities) having medium to long term maturity period. Issued
by the government of india, these investments have little credit risk (risk of default)
and provide safety of principal to the investors
Pros & cons of investing in mutual funds:
For investments in mutual fund, one must keep in mind about the pros and cons of
investments in mutual fund.
Advantages of investing mutual funds:
A. Professional management - the basic advantage of funds is that, they are

professional managed, by well qualified professional. Investors purchase funds
because they do not have the time or the expertise to manage their own portfolio. A
mutual fund is considered to be relatively less expensive way to make and monitor
their investments.
Page 38
B. Diversification - purchasing units in a mutual fund instead of buying individual

stocks or bonds, the investors risk is spread out and minimized up to certain extent.
The idea behind diversification is to invest in a large number of assets so that a loss
in any particular investment is minimized by gains in others.
C. Economies of scale - mutual fund buy and sell large amounts of securities at a
time, thus help to reducing transaction costs, and help to bring down the average cost
of the unit for their investors.
D. Liquidity - just like an individual stock, mutual fund also allows investors to
liquidate their holdings as and when they want.
E. Simplicity - investments in mutual fund is considered to be easy, compare to

other available instruments in the market, and the minimum investment is small.
Most amc also have automatic purchase plans whereby as little as rs. 2000, where
sip start with just rs.50 per month basis.
Equity shares
At the most basic level, stock (often referred to as shares) is ownership, or equity, in
a company. Investors buy stock in the form of shares, which represent a portion of a
company's assets (capital) and earnings(dividends). As a shareholder, the extent of
your ownership (your stake) in a company depends on the number of shares you own
in relation to the total number of shares available for example, if you buy 1000
shares of stock in a company that has issued a total of 100,000 shares, you own one
per cent of the company.
While one per cent seems like a small holding, very few private investors are able to
accumulate a shareholding of that size in publicly quoted companies, many of which
have a market value running into billions of pounds. Your stake may authorize you
to vote at the company's annual general meeting, where shareholders usually receive
one vote per share.
Page 39
In theory, every stockholder, no matter how small their stake, can exercise some
influence over company management at the annual general meeting. In reality,
however, most private investors' stakes are insignificant. Management policy is far
more likely to be influenced by the votes of large institutional investors such as
pension funds.
a) Stocks symbols
A stock symbol, or 'epic' symbol, is the standard abbreviation of a stock's name. You
can find stock symbols wherever stock performance information is published - for
example, newspaper stock listings and investment websites. Company names also
have abbreviations called ticker symbols. However, it's worth remembering that
these may vary at the different exchanges where the company is quoted.
Page 40
LITERATURE REVIEW
Sikidar and Singh (1996) carried out a survey with an objective to understand the
behavioural aspects of the investors of the north eastern region towards mutual funds
investment portfolio. The survey revealed that the salaried and self-employed formed the
major investors in mutual fund primarily due to tax concessions.
Kumar Singh (2006) analyze the investment pattern of people in Bangalore city and
Bhubaneswar analysis of the study was undertaken with the help of survey conducted. It is
concluded that in Bangalore investors are more aware about various investment avenues
and the risk associated with that. And in Bhubaneswar, investors are more conservative in
nature and they prefer to invest in those avenues where risk is less like bank deposits, small
savings, post office savings etc.
Chandra collected the data from survey to know the factors influencing Indian individual
investor behaviour in stock market. Using univariate and multivariate analysis and found
five major factors that affect the investment behaviour of individual investor in stock
market namely prudence, and precautions attitude, conservatism, under confidence,
informational asymmetry and financial addition . Finally he concluded that these are the
major psychological components seem to be influencing individual investor’s trading
behaviour in Indian stock market.
AjmiJy.A. (2008) used a questionnaire to know determinants of risk tolerance of
individual Investors and collected responses from 1500 respondents. He concluded that the
men are less riskaverse than women, less educated investors are less likely to take risk and
age factor is also important in risk tolerance and also investors are more risk tolerance than
the less wealthy investors.
Tamimi, H. A. H.indentified the factors influencing the UAE investor Behaviour. Using
questionnaire found six factors were most influencing factors on the UAE investor
behaviour namely expected corporate earnings, get rich quick, stock marketability past
performance of the firm’s stock , government holdings and the creation of the organized
financial markets
Paul Slovic (1972) discussed in his research that most of the investors who invested on
equity shares have a tendency of looking on the returns generated by equity shares of well
established companies or stock market indices returns before making their investment
decision. Though the past returns on equity shares do not give guarantee for any future
Page 41
returns, investors perceive that equity shares are giving better returns to beat the inflation
rate and hence they are committing inequity shares.
Similarly, Deacon, S. (2002) found in his research that most of the investors perceive
equity investment is suitable to achieve their long term objective and hence those investors
whose needs are arising in less than three years of investment prefer to invest on fixed
income securities
Lakshmi C. (2005) has stated that the reason for not investing inequity shares and equity
oriented securities by Indian investors is the perception that equity investments are risky.
She added that though the investors are aware of success stories of equity investment, as
they perceive that they do not understand various risk minimisation techniques, they feel it
is better to stay away from equity investment.
Koundinya. C (2010) concluded in his research that, the perception of risk
associated with equity investment made some of the Indian investors believe that
equity investment is not suitable to them especially after Indian stock market crash
due to the global economic recession of2007-08.
Elankumaran and AAAnanth. A study on behavioural finance has been done presuming
information structure and characteristics of capital market. Participants influence their own
decisions and also on market outcomes. The above studies have been conducted by using
survey method. The questionnaire with 5 Point Liker Scale designed with 15 components
for measuringbehavior and respondents were selected from Tricky District and the total
number respondents were 525. The influence of resulting factor analysis and descriptive
statistics has concluded that multiple factors have greater influence on behaviour of
commodity market investors in India. The main factor was information asymmetry,
objective knowledge, high sector and low risk
Dr. K Ravichandran. The research study was intended to find preference level of
investors on various capital market instruments and type of risk considered by investors.
The sample was collected from 100 investors in derivative markets from Chennai from a
structured questionnaire. Descriptive research type is used and convenience sampling
method was adopted to gather data. Various parametric and non-parametric techniques
have been used for analyzing data. The findings reveal that friends and relatives followed
by brokers who pull the investors into capital market. Respondents preferred short term
investments. It has been suggested by the author to develop more number of products
which it can attract more number of investors
Page 42
Society for Capital Market Research and Development, (2008 ) conducted a survey on,
“Indian Household Investors Survey-2004”, to identify the investors preferences, problems
and policy issues. The study was based on direct interviewing of a very large sample of
5,908 household heads over 90 cities across 24 states. The study states that price volatility,
price manipulation and corporate mismanagement/fraud have persistently been the
household investors’ top three worries in India.
Page 43
CHAPTER II
2.1 OBJECTIVES OF THE STUDY
 To study the concept of Money market instruments.

 To study the working of money market instruments.
 To study the current status of money market instruments used in India.
 To study the initiative taken by banks to promote money market instruments
2.2 Hypothesis
 H0 Investor perception towards investment in money market instruments is not less
 H1 Investor perception towards investment in money market instruments is less
1.3 SCOPE OF OF THE STUDY

 The main purpose of selecting this topic was to understand and gain more knowledge about
the use of Money Market instruments and their benefits related to banking sector.
1.4 Research Methodology
2. The methodology which has been used for studying the comparison of insurance sector which
are provided by public and private companies. The present study is based on survey method.
The study is based on primary and secondary data.
2.45 SOURCES OF DATA
 PRIMARY DATA:
The first part of the study has been done using an exploratory research process and structured
questionnaire was developed for this purpose and field visit was done.
 SECONDARY DATA:
The second part of the study has been sourced from the internet and from interest rates related
books and journals.
Data collection:
Primary data:
 Consumer survey on Financial Instruments.
Secondary data:
 Study reports from internet.
Page 44
 Articles in newspaper and internet.
Data collection tools:

 Questionnaire survey.
 Internet.
 Newspapers.
Types of research:
 Explanatory research.
 Descriptive research.
Sampling:
 Sampling unit- Individual respondent.

 Sample size- 100 respondents only.
 Sampling method- Random sampling method
Page 45
CHAPTER III
3.1 Literature Review
The trading of financial derivatives has received extensive attention, while at the same time it has
led to a debate over its impact on the underlying stock market from various facets by the
academicians. The researchers all over the world have done research on derivative trading and
were able to find out various facts about derivative and its trading. In this literature review efforts
have been made to bring into the picture the research done about various issues throughout the
world by the researchers. The literature survey and review is presented in four sections: first, the
review of studies fundamental to capital market of India; second, the review of studies relating to
the testing of capital market efficiency; third, the review of studies concerning the volatility study;
last, the review of studies analyzing the causal relation between spot and index futures market.
 Barua et al (1994) undertakes a comprehensive assessment of the private corporate debt

market, the public sector bond market, the govt. securities market, the housing finance and
other debt markets in India. This provides a diagnostic study of the state of the Indian debt
market, recommending necessary measures for the development of the secondary market
for debt. It highlights the need to integrate the regulated debt market with the free debt
market, the necessity for market making for financing and hedging options and interest rate
derivatives, and tax reforms.
 Cho (1998) points out the reasons for which reforms were made in Indian capital market
stating the after reform developments. Shah (1999) describes the financial sector reforms in
India as an attempt at developing financial markets as an alternative vehicle determining
the allocation of capital in the economy.
 Shah and Thomas (2003) review the changes which took place on India’s equity and debt
markets in the decade of the 1990s. This has focused on the importance of crises as a
mechanism for obtaining reforms.
 Mohan (2004) provides the rationale of financial sector reforms in India, policy reforms in
the financial sector, and the outcomes of the financial sector reform process in some detail.
 Shirai (2004) examines the impact of financial and capital market reforms on corporate
finance in India. India’s financial and capital market reforms since the early 1990s have
had a positive impact on both the banking sector and capital markets. Nevertheless, the
Page 46
capital markets remain shallow, particularly when it comes to differentiating high-quality

firms from low-quality ones (and thus lowering capital costs for the former compared with
the latter). While some high-quality firms (e.g., large firms) have substituted bond finance
for bank loans, this has not occurred to any significant degree for many other types of firms
(e.g., old, export-oriented and commercial paper-issuing ones). This reflects the fact that
most bonds are privately placed, exempting issuers from the stringent accounting and
disclosure requirements necessary for public issues. As a result, banks remain major
financiers for both high-and low-quality firms. The paper argues that India should build an
infrastructure that will foster sound capital markets and strengthen banks’ incentives for
better risk management.
 Chakrabarti and Mohanty (2005) discuss how capital market in India is evolved in the
reform period. Thomas (2005) explains the financial sector reforms in India with stories of
success as well as failure.
 Bajpai (2006) concludes that the capital market in India has gone through various stages of
liberalization, bringing about fundamental and structural changes in the market design and
operation, resulting in broader investment choices, drastic reduction in transaction costs,
and efficiency, transparency and safety as also increased integration with the global
markets. The opening up of the economy for investment and trade, the dismantling of
administered interest and exchange rates regimes and setting up of sound regulatory
institutions have enabled time.
 Gurumurthy (2006) arrives at the conclusion that the achievements in the financial sector
indicate that the financial sector could become competitive without involving unhealthy
competition, within the constraints imposed by the macro-economic policy stance.
 Mohan (2007) reviews India’s approach to financial sector reforms that set in process
since early 1990s. Allen, Chakrabarti, and De (2007) concludes that with recent growth
rates among large countries second only to China’s, India has experienced nothing short of
an economic transformation since the liberalisation process began in the early 1990s.
 Chhaochharia (2008) arrives at the conclusion that India has a more modern financial and
banking system than China that allocates capital in a more efficient manner. However, the
study is skeptical about who would emerge with the stronger capital market, as both the
country is facing challenges regarding their capital markets.
Page 47
Page 48
CHAPTER V
Finding & Analysis
Q1) What is your age?
Age Bar
10%
40% Below 20
25% 21-40
41-50
Above 50
25%
Explanation:-
From The above pie graph,
 10% of Respondent age is Below 20.

 25% of Respondent age is 21-40.
 25% of Respondent age is 41.50
 40% of Respondent age is Above 50
Page 49
Q2) How do you get information regarding these capital markets?
Capital Market
20% 20%
Advertsiment
Company Sales Force
Friends/Relatives
20% Magazines
40%
Explanation:-
 40% of Respondent getting information by Advertisement.

 20% of Respondent getting Information by Company Sales Force.
 20% of Respondent getting Information by Friends and Relatives.
 20% of Respondent getting Information by Friends and Relatives
Page 50
Q3) what are the factors which you consider while investing in capital markets?
Investing Market
10%
10%
Return
20% Tax Saving

60%
Liquidity
Convenience Risk
Explanation:-
 60% of Respondent Consider Better Returns in Capital Market.

 20% of Respondent Considering Tax Saving investing in Capital Market.
 10% of Respondent Considering Liquidity in Capital Market.
 10% of Respondent Convenience Risk in Capital Market
Page 51
Q4) You like investing in financial products through?
Financial Products
40%
60% Primary Market

Secondary Market
Explanation:-
 60% of Respondent Investing in Primary Market.

 40% of Respondent Investing in Secondary Market.
Page 52
Q5) How will you invest your money in any secondary market?
Invest in Secondary Market
40%
Through Stock
60%
Through Banks
Explanation:-
 60% of Respondent Investing Money Through Stocks

 40% of Respondent Investing Money Through Banks.
Page 53
Q6) How long you prefer to keep your money when invested through secondary market?
Invested money
40% 40% Less than 6 Months

6 to 1 Year
1 to 3 Years
More than 3 Years
10% 10%
Explanation:-
 40% of Respondent Kept Money for Investing in Less than 6 Months

 40% of Respondent Kept Money for Investing in 6 to 1 Year.
 10% of Respondent Kept Money for Investing in 1 to 3 Year.
 10% of Respondent Kept Money for Investing More than 3 Years.
Page 54
Q7) How much return you expect from secondary market investment?
Investment
10%
10%
10 to 20%
20% 20 to 30 %
60%
30 to 50%
More than 50%
Explanation:-
 60% of Respondent Expecting 10 to 20 % for Secondary Market.

 20% of Respondent Expecting 20 to 30 % for Secondary Market.
 10% of Respondent Expecting 30 to 50% for Secondary Market.
 10% of Respondent Expecting More than 50% for Secondary Market.
Page 55
Q8) For how much period would you like to you invest in Bond?
Invest in Bond
30%
50%
Short Term
Medium Term
Long Term
20%
Explanation:-
 30% of Respondent Investing for Short Term Period

 20% of Respondent Investing for Medium Term.
 50% of Respondent Investing for Long Term.
Page 56
Q9) How will you invest your money in any secondary Market ?
Invest in Secondary Market
20%
Through any Stock Broking

Throgh Banks
80%
Explanation:-
 80% of Respondent Investing by Stock Broking

 20% of Respondent Investing Through Banks.
Page 57
Q10) Would you like to add Bond in Portfolio for the Purpose of Diversification?
Bond Portfolio
40%
Yes
No
60%
Explanation:-
 60% of Respondent like to add Bonds in Portfolio.

 40% of Respondent not like to add Bonds in Portfolio.
Page 58
CHAPTER VI
Recommendations & Conclusion
 Prefer investment for long term investment strategy that provides you moderate return with
liquidity.
 Investors should not invest in only Bond market but, also invest in other Safe Securities
Like- Fixed Deposits, Government Securities, Equity, Mutual fund and Insurance etc.
which also provides moderate return.
For Example: One should prefer
o Equity – 50%
o Other Safe Securities – 50%
So, one can get moderate return with liquidity.
 Investors should invest money at lower level price and sale the stock at higher price.
 Investors should select company on the basis of PE ratio, EPS, Current Growth of
Company and Market capitalization and many more. So, investors can get higher return on
their investment.
 Always invest extra money in stock market. Do not invest by taking loan from banks or
other resources
Page 59
Conclusion
A strong and vibrant cash market is a pre-condition for a successful and transparent futures market.
As funds seamlessly flow from one market to the other and the Indian Bond market begins to
integrate with the global market, the risk perception is beginning to heighten. Adoption of risk
management or risk mitigation tools is now sine qua non for success in businesses with exposure
to Bond. A serious look at futures trading as a tool for price discovery and price risk management
is inevitable. Before we examine Bond futures trading — its principles and benefits — it may be
worthwhile to crystal gaze into the future of this market. Some features of the emerging scenario in
India as far as the Bond market is concerned: Expansion of Bond trade: Very clearly, trade
volumes are set to expand rapidly. Demand for a wide variety of Bond covering food, fibre, metals
and energy is certain to expand. India is likely to produce many of the aforesaid Bond, as
investment in production facility expands. If demand growth outstrips domestic supply growth,
imports will become inevitable. The possibility exporting certain Bond also exists. In Bond
production, consumption and trade, India will become an important player in the international
market. This will lead to a massive expansion in Bond trade volumes over the next, say, 15-20
years. Competition from imports: Whether or not domestic producers like it, the competition from
imported Bond is inevitable. This could be true in case of food crops, metals and energy. In the
short/medium-term, indigenous output will trail consumption demand because of the lagged effect
of investment. To fuel growth and rein in inflation, the government and the business houses will
have to resort to imports. As imports are unrestricted (Quantitative Restrictions have been
abolished), there will be liberal inflow of goods from abroad. Often, imports from developed
countries are low-priced and subsidised. Such competition will result in inefficient domestic units
falling by the wayside, but will eventually lead to greater efficiency among domestic producers.
Page 60
CHAPTER VII
Bibliography
www,bsestock.com
www.nse.com
www.sipnsurf.com
www.project.com
www.medial.com
References
http://www.slashdocs.com/kvuttx/fem.htm
http://www.travelspk.com/forex/Forex-Development-History.htm
http://www.global-view.com/forex-education/forex-learning/gftfxhist.html
http://en.wikipedia.org/wiki/Foreign_exchange_risk
Page 61
Questioner
Name :
Age :
Address :
Phone No. : .
1. Occupation
(a) Service (b) Business
(c) Retd. Person (d) Agriculture (e) Others
2. Monthly Family Income?
(a) Upto Rs. 10,000/- (b) Rs. 10,000/- to 20,000/-
(c) Rs. 20,000/- to 30,000/- (d) Above Rs. 30,000/-
1. Age of Respondent?
(a) 20-25 Years (b) 26-30 Years
(c) 31-35 Year (d) 36-40 Year
4. Gender of Respondent?
(a) Male (b) Female
5. Martial Status
(a) Married (b) Unmarried
(c) Other
6. Educational Qualification of Respondent ?
(a) Under Graduate (b) Graduate
(c) Post Graduate
Page 62
4. Educational Qualification: a) Illiterate □ b) School □ c) UG □ d) PG □
e) Professional Course □ f) Others □
5. Occupation: a) House wife □ b) Students □ c) Salaried person □
d) Business man □ e) Professionals □ f) Supervisor □
g) Managerial □ h) pensioner □
6. Income level:
a) Rs.5,000 – Rs.15,000 b) Rs.15,001-Rs.25,000
c) Rs.25,001- Rs.35,000 d) Rs.35,001-Rs.45,000
e) Above Rs. 45,000
Q1) What is your age?
Factors No of Respondents
Below 20
21-40
41-50
Above 50
Q2) How do you get information regarding these capital markets?
Advertisment
Company Sales Force
Friends/Relatives
Magazines / Newspapers
Page 63
Q3) What are the factors which you consider while investing in capital markets?
Return (Capital appreciation)
Tax Saving
Convenience Risk
Q4) You like investing in financial products through?
Factors No of Repsondents
Primary Data
Secondary Data
Q5) How will you invest your money in any secondary market?
Through any Stock Broking Company
Through Banks
Q6) How long you prefer to keep your money when invested through secondary market?
Less than 6 Months
6 Months to 1 Year
1 Year to 3 Year
More than 10 Years
Page 64
Q7) How much return you expect from secondary market investment?
10% to 20%
20% to 30%
30% to 50%
More than 50%
Q8) For how much period would you like to you invest in Bond?
Factors No of Respondnets
Short Term
Medium Term
Long Term
Q9) How will you invest your money in any Secondary Marekt?
Factors No of Repsondents
Through any Stock Broking
Through Banks
Q10) Would you like to add Bond in Portfolio for the Purpose of Diversification?
Yes
Page 65
No
Page 66

Investor Behavior Factors Influencing Stock Market Decisions

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Investor Behavior Factors Influencing Stock Market Decisions

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Project on Investor Behavior Towards Stock Market

STOCK EXCHANGES IN INDIA

BSE (Bombay Stock Exchange)

 Debentures: – Debentures represent long-term loan given by the holders of debentures to

I.P.O.'s (Initial Public Offer)

SECONDARY STOCK MARKETS (STOCK EXCHANGES)

 Organization and Structure of Stock Exchanges in India: –

Name of Stock Exchange Incorporated Type of Organization

6. Hyderabad Stock Exchange 1943 Company Ltd. by Guarantee

In India mainly two stock exchanges:-

BSE i.e. BOMBAY STOCK EXCHANGE

Bombay Stock Exchange Limited

the Sensex rolling and an attractive play for long-term investment.

National Stock Exchange

DotEx Intl. Ltd.

It was set up with the following objectives:

 To bring and sustain confidence in clearing and settlement of securities;

IISL - Products & Services

 DotEx International Limited

HOW DOES TRADING TAKES PLACE?

 Quote Driven System, and

1. Personal relationship manager

2. Competitive brokerage and dp charges

The company offers a brokerage of 0.50% (negotiable) on delivery and 0.10%

 Only one time account opening charges and no annual maintenance

 Buy today sell tomorrow for all securities facility

The snapshots of products of Investments are:

Investments facilitates trading in secondary market in equity trading & derivative

Products offerings for trading

Ii. Investments swift

Investments are the member of the two commodity exchange at present:

National commodity & derivatives exchange limited (ncdex) is a professionally

MCX an independent and de-mutulised multi commodity exchange has permanent

Depository offer a safe, convenient way to hold securities as compared to

Facilities provided by Investments

 De-materialization: physical shares can be converted into

Investments is fast emerging as a leader in the insurance and mutual funds

Following is the glimpse of life insurance plans:

- Retirement and pension plans

Investments is a specialized property broking company. It offers a total solution to

Investments offers a convenient and hassle-free way of investing in the indian

Procedure for nri operations in indian capital markets:

The following reports can be viewed online:

a. Dealing in all types of money market instruments viz. Commercial

Portfolio Management services (PMS)

1. Professional Management – PMS is provided by qualified and professional investment

 India bulls financial services limited

The dictionary meaning of investment is to commit money in order to earn a

The investment needs of an investor

1. Security of original capital;

wealth accumulation: this is largely a factor of investment performance,

tax efficiency: legitimate reduction in the amount of tax payable is an important

Income: this refers to money distributed at intervals by an investment, which are

Communication: this refers to informing and educating investors about the

 Security of original capital is more important when performance falls.

Choosing the right investment options

Investment options in india

Non-marketable financial assets

1. For a manufacturing co. The term of deposits can be one to three

Fixed income securities

It includes the following:

 Rbi savings bonds