KARVY STOCK BROKING LIMITED

A Project Report on
INDIAN CAPITAL MARKET AND ONLINE TRADING

Submitted to
Punjab Technical University Jalandhar In Partial Fulfillment of the requirement of the award of, Masters of Business Administration.

MBA SESSION: 2010-12
Project Guide :Sunil Pandey Regional Head of Karvy Stock Broking Ltd.& Submitted By:GAURAV GUPTA Roll No. 105042249861

STUDENT’S DECLARATION

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I hereby declare that the Project Report conducted at

INDIAN CAPITAL MARKET & ONLINE TRADING Under the guidance of Mr. SUNIL PANDEY

Submitted in Partial fulfillment of the requirements for the Degree of MASTERS OF BUSINESS ADMINISTRATION TO REGIONAL INSTITUTE OF MANAGEMENT & TECHNOLOGY MANDIGOBINDGARH

Is my original work and the same has not been submitted for the Award of any other Degree/diploma /fellowship or other similar titles Or prizes.

Place: Date: No……………….

--------------------Roll

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PREFACE
For management career, it is important to develop managerial skills. In order to achieve positive and concrete results, along with theoretical concepts, the exposure of real life situation existing in corporate world is very much needed. To fulfill this need, this practical training is required. I took training in KARVY STOCK BROKING LTD located at FEROZGANDHI MARKET, LUDHIANA. It was my fortune to get training in a very healthy atmosphere. I got ample opportunity to view the overall working of the stock exchange.

This report is the result of my 45 days of summer training in KARVY STOCK BROKING LTD as a part of M.B.A. The subject of my report is - INDIAN CAPITAL MARKET & ONLINE TRADING.

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I was able to complete my project. It would have been difficult to achieve the results in such a short span of time. I want to express my sincere gratitude to all the staff members of KARVY STOCK BROKING LTD for spending their precious time and sharing the value able information with me and in helping my project to be a success. I am also grateful to Mr. So I am very thankful to KARVY STOCK BROKING LTD for giving me such opportunity. Sunil Pandey (REGIONAL HEAD) under whose guidance and through their sustained efforts and encouraging attitude. First of all I thank to that Gracie god who blessed me with all kinds of facilities that had been provided to me for completion of my report. I acknowledge my deepest sense of gratitude and sincere feeling of in debtness divine all my faculty members and Mr.ACKNOWLEDGEMENT If words are considered as a symbol of approval and token of appreciation then let the words play the heralding role expressing my gratitude. SUNIL PANDEY for permitting me to take the training at KARVY STOCK BROKING LTD. TABLE OF CONTENTS Page 4 . The world of capital market war far from me but I got an opportunity to understand the capital market at KARVY STOCK BROKING LTD While training I learnt many things about capital market and its structure.

5. 1. Company Profile Research Objectives Research Methodology Review of Literature Data Analysis & Interpretation (i) Figure & Table No.6 (vii) 36 to 59 60 61 to 63 64 to 66 67 to 82 Figure & Table No.1 (ii) Figure & Table No. 6.Sr. Indian Capital Market & Online Trading 8 to 35 3.5 (vi) Figure & Table No.12 Figure & Table No.10 Figure & Table No.2 (iii) Figure & Table No.7 Figure & Table No.3 (iv) Figure & Table No. 7 2.4 (v) Figure & Table No. 7. No.11 Figure & Table No. 4. Introduction Particulars Page No.13 (viii) (ix) (x) (xi) (xii) (xiii) Page 5 .9 Figure & Table No.8 Figure & Table No.

BSE is the world’s number 1 exchange in terms of the number of listed companies and the world’s 5th in transaction number. FTSE.14 8. Findings Limitations of the Study Conclusion Recommendations Bibliography Annexure 83 to 85 86 87 to 89 90 91 to 92 93 to 96 INTRODUCTION Today. the exchange is also the oldest in Asia. Among the twenty-two Stock Exchanges recognized by the Government of India under the Securities Contracts (Regulation) Act. 10. Bombay Stock Exchange is the largest. 1956.000 stocks listed. The "Free-float Market Capitalization" methodology of BSE index construction is regarded as an industry’s best practice globally. with over 6. 12. Established in 1875. Of the 23 stock exchanges in the India. The BSE SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. STOXX.(xiv) Figure & Table No. Due to its wide acceptance Page 6 . The BSE accounts for over two thirds of the total trading volume in the country. 9. 11. 13. The index is widely reported in both domestic and international markets through print as well as electronic media. Moreover. it was the first one to be recognized and it is the only one that had the privilege of getting payments. All major index providers like MSCI. S&P and Dow Jones use the Free-float methodology.

the SENSEX has over the years become one of the most prominent brands in the country. concerns over a slowing down US economy and big role of Foreign Institutional Investors (FIIs) determines market’s situation and operate SENSEX. SENSEX is regarded to be the pulse of the Indian stock market.amongst the Indian investors. As the oldest index in the country. the sub-prime mortgage woes in US. The paper therefore emphasizes mainly on BSE SENSEX and major fluctuations related to it from time period of 2006 to 2008. investments made through participatory notes. The paper also put the light on how various factors such as inflation. rising crude oil prices. Page 7 .

Indian capital market & Online trading Page 8 .

Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage. For example. a legal document from the company or simply referred as 'stock certificates'. The price of a stock depends on the demand and supply of that particular stock. The term stock market is used for the overall stocks sold and bought at stock exchanges. the share dealing is done by a middleman. now spanning three centuries in its 133 years of existence. What is now popularly known as BSE was established as "The Native Share & Stock Brokers' Association" in 1875. in fact in 1602 Dutch East India Company listed the first share of stock on the Amsterdam Stock Exchange. The seller and buyer mutually decide the price of the trade. will entitle you to be a co-owner of that company. USA. The SENSEX is an "index". The stock market takes place on various stock exchanges the two larges exchanges are the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ).STOCK MARKET The Stock Market is either a private or public market where stock shares of the companies are sold or traded to potential investors A stock share. One of the highlighted features in investing in Stock Market is the concept of unlimited liability. It is considered as a very important sector in the market economy. An index is basically an indicator. NASDAQ and NYSE are stock exchanges. The Stock Market indeed offers a profound opportunity to be a shareholder for certain companies which in return escalates your investments provided you have opted for a reputable income generating companies. BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) Page 9 . A group of organizations can constitute a stock exchange to perform share dealings. The person is known as a share broker. In stock markets. The stock market is nothing new though. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down.

BSE launched the Directors Database and ICERS (Indian Corporate Electronic Reporting System) to facilitate information flow and increase transparency in the Indian capital market. BSE is now a corporatized and demutualised entity incorporated under the provisions of the Companies Act. It is an index of 30 stocks representing 12 major sectors.700 listed companies. S. An investor can choose from more than 4. called "SPICE" is listed on BSE.The BSE Index. and is tracked worldwide. are classified into A. BSE has always been at par with the international standards. It has a nation-wide reach with a presence in more than 359 cities and towns of India. The market capitalization as on December 31. Today. The SENSEX is constructed on a 'free-float' methodology.79 trillion . The systems and processes are designed to safeguard market integrity and enhance transparency in operations. Earlier an Association Of Persons (AOP). It brings to the investors a trading tool that can be easily used for the purposes of investment. The first Exchange Traded Fund (ETF) on SENSEX. is India's first stock market index that enjoys an iconic stature . B. BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certification. SPICE allows small investors to take a longterm view of the market. 1956. hedging and arbitrage. T and Z groups. BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. It is also the first exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-line Trading System (BOLT). BSE also has a wide range of services to empower investors and facilitate smooth transactions: Page 10 .from the Government of India under the Securities Contracts (Regulation) Act 1956. SENSEX. debt instruments and derivatives. 2007 stood at USD 1. which for easy reference. trading. and is sensitive to market sentiments and market realities. BSE provides an efficient and transparent market for trading in equity. In 2006.

 The BSE On-line Trading (BOLT): BSE On-line Trading (BOLT) facilitates on- line screen based trading in securities. Investor Services: The Department of Investor Services redresses grievances of investors. it is an amount higher than that of any exchange in the country.1 million towards the investor protection fund. BSE introduced the world's first centralized exchange-based Internet trading system. BSE launched a nationwide investor awareness programme.000 Trader Workstations located across over 359 cities in India. BOLT is currently operating in 25. More than 20.  BSE Training Institute: BTI imparts capital market training and certification.  Surveillance: BSE's On-Line Surveillance System (BOSS) monitors on a real-time basis the price movements. BSE was the first exchange in the country to provide an amount of Rs. BSEWEBX. market reconstruction and generation of cross market alerts. It offers over 40 courses on various aspects of the capital market and financial sector.com.com: In February 2001. Bombay Stock Exchange Profile: Address Phiroze Jeejeebhoy Towers.'Safe Investing in the Stock Market' under which 264 programmes were held in more than 200 cities.  BSEWEBX. This initiative enables investors anywhere in the world to trade on the BSE platform. volume positions and members' positions and real-time measurement of default risk.000 people have attended the BTI programs. in collaboration with reputed management institutes and universities. Dalal Street. Mumbai 400001 Page 11 .

Diwali (Laxmi Poojan). Independence Day.com Monday . derivatives Securities Trading System Electronic Key Staff Chairman – Jagdish Capoor. • For index based derivative products Page 12 . CEO . no other index matches the SENSEX in reflecting market movements and sentiments. Diwali (Bhaubeej). Guru Nanak Jayanti. SENSEX is widely used to describe the mood in the Indian Stock markets.bseindia. Good Friday.3:30 pm IST Bakri-Id.Telephone Web Site Trading Hours Holidays 91-22-22721233/4 www. Stocks. • Benchmark for funds performance The inclusion of blue chip companies and the wide and balanced industry representation in the SENSEX makes it the ideal benchmark for fund managers to compare the performance of their funds.Friday. Ganesh Chaturthi. 9:15 am . Ambedkar Jayanti. Republic Day.Rajnikant Patel Objectives of SENSEX • To measure market movements Given its long history and its wide acceptance. Ramzan Id. bonds. Dasera.

STOXX. the journey from 20. money managers and small investors all refer to the SENSEX for their specific purposes The SENSEX is in effect the proxy for the Indian stock markets. Since September 1. It’s interesting if one sees in terms of flows. SENSEX today is widely reported in both domestic and international markets through print as well as electronic media. SENSEX entered year 2008 with rosy pictures. well-established and financially sound companies across key sectors.000.e.000 to 21. first compiled in 1986.000 to 21. On-Line Computation of the Index During trading hours. 2003. all major index providers like MSCI. So if one has to take out some pointers from this journey from 20. it is the longest journey which we have Page 13 . SENSEX is being calculated on a free-float market capitalization methodology. value of the Index is calculated and disseminated every 15 seconds. And they felt their predictions coming true when SENSEX touched the 21000 mark on 8 th January 2008. S&P and Dow Jones use the free-float methodology. The country's first derivative product i. was calculated on a "Market Capitalization-Weighted" methodology of 30 component stocks representing large. This is done automatically on the basis of prices at which trades in Index constituents are executed. brokers and even investors predicted new heights for the year. The "free-float market capitalization-weighted" methodology is a widely followed index construction methodology on which majority of global equity indices are based.000 is dominated by domestic institutional investors. The trade pundits.Institutional investors. It is scientifically designed and is based on globally accepted construction and review methodology. The base year of SENSEX was taken as 1978-79. FTSE. Index-Futures was launched on SENSEX Calculations of SENSEX SENSEX. Sensex During 2008 After scaling new heights of 20000+.

The skyrocketing SENSEX suddenly started heading south and SENSEX saw the biggest absolute fall in history.951. The underperformance can partly be attributed to the fact that Indian markets outperformed global markets in the last two months of 2007and hence we were seeing the lagged impact of that outperformance. India finished the month as the second worst emerging market.605.cap index that rose 16% and 18% respectively. It fell to a low of 16.4%. In the shorter term. Though inflation touched a high of 7. shedding 2062 points intra-day. Page 14 . It closed at 17. Fears over the solvency of major Western banks rattled stocks in Asia and Europe.4 per cent. The fall was triggered as a result of weakness in global markets. The BSE SENSEX showed a gain of 10. but the impact of the global rout was the biggest in India. After the worst January in the last 20 years for Indian equities.35 points or 7. A combination of firming global markets and technical factors like short covering were the main reasons for the up move in the markets. still emergence of retail investors was also seen.35. But the rosy picture soon turned gloomy.seen in the last 5. down 1408. Reasons for falling of SENSEX.50. The market tumbled on account of a broad based sell-off that emerged in global equity markets.5% to close at 17287 points.000 marks. developments in the US economy and US markets continued to dominate investor sentiments globally and we saw volatility move up sharply across most markets. it has been domestic institutional investors which have been really putting the money. REASONS FOR SLOW DOWN (2008-09) The first month of the financial year 08-09 proved to be a good one for investors with the month ending on a positive note. the midcaps and small caps have been outperformers and in terms of flows. a fact reinforced by the strong movement in the mid-cap and small. February turned out to be a flat month with the BSE SENSEX down 0.57% against 6.68% in march 2008 as a result RBI hiked CRR by 50 bps to take the figure to 8%.

Sometimes it surged by 600+ points. but very next day it plunged by some 800 odd points and this story is still continuing. historic crude prices.54 points or 1.14% to 15. Central banks across the globe warned that interest rates may have to rise as they look to keep inflation under control.01 on Tuesday. The SENSEX is dancing on the music of lifetime high inflation rates. despite the fact that economic growth is slowing in key nations such as the US and UK.So April was the last month to close positive.67% at 17.3 points or 4.89 points or 0. On 6 June 2008. political uncertainties and obviously the sentiments of domestic as well as FIIs. On 30th May an imminent hike in domestic retail fuel prices due to soaring crude oil prices weighed on the market last week. triggered possibility of a surge in inflation to double digit level. The 30-share BSE SENSEX declined 197. The key benchmark indices ended lower as investors resorted to profit booking due to lack of positive triggers in the market. The only relief came in the form of weakening Indian rupees which enlightened the IT sector and most recently the UPA gaining vote of confidence.80 in the week.25% to settle at 15. Every prediction. The market declined sharply as a hike in fuel prices by about 10% announced by the Union government on Wednesday. Presently it is revolving around the figures of 14000 and no one knows what next? The 30-share BSE SENSEX fell 117.18.97% to 4627. 4 June 2008.373. local benchmark indices underperformed their global peers. Page 15 . weak industrial production data. hit by rumours that the Reserve Bank of India (RBI) may hike cash reserve ratio (CRR) or interest rate later in the day to tame runaway inflation. Foreign institutional investors sold close to Rs 2204 crore in the first three trading sessions of the week which accentuated the downfall. The S&P CNX Nifty fell 242. every forecasting has failed.18 in the week ended 6 June 2008.572. 6 May 2008. tightening RBI policies.39 points or 5. The BSE SENSEX declined 843. Then after nobody saw a stable SENSEX even.572.

35 per cent on Monday to close at 13531.68 per cent. it cut the repo and reverse Page 16 . Even American International Group (AIG). Monetary Loosening continues In its last credit policy review.S. Satyam saga draws to a close with sale to Tech Mahindra The Satyam scandal which unfolded in January 2009 with the promoter admitting to manipulating accounts has now reached a conclusion. the NSE Nifty lost 155. All sect oral indices closed in the negative territory. The National stock exchange. While it left the CRR and SLR unchanged. I.S. Federal Reserve for an emergency funding before announcing a major restructuring plan. The government appointed board which has been running the company since January sold the company in an auction to another Indian IT company Tech Mahindra for close to USD 600mn. CURRENT SITUATION With major financial crisis erupting in the U..55 points or 3. joining a world equities rout as investors dumped financials on concerns about the fallout from worsening global credit turmoil.65 per cent.9 per cent to their lowest close in 15 months.27. Indian shares fell 4. asked the U. Indian Stock Market benchmark index (SENSEX) fell by 469.On July 15th 2008. II. the Reserve Bank of India (RBI) continued with its policy of facilitating liquidity. Realty stocks led the fall with a loss of 7. The government and the board did a commendable job to ensure that the sale happened within a short span of just 3 months. Lehman Brothers Holdings filed for bankruptcy and Merrill Lynch & Co’s forced sale to Bank of America. An eventful week of turmoil has begun in the global financial scenario as stock prices plunged across much of the globe on news that investment bankers.54 points or 3. Although Indian banks have no direct exposure to the US subprime mortgage sectors. the world’s largest insurance company.

and institutional investors.00 and generally to receive the proceeds that day. stock market funds achieve low cost through Page 17 . In part. carried with greater efficiency. RBI also asked banks to cut both deposit and lending rates and also indicated lower issuance.repo rates by 25bps each to 4. SWOT ANALYSIS Strengths:• • • • • All the branches are interconnected which give the unique facility of All operations are carried on with the help of computers thus transaction are High number of executives which make the work of customers very Share market funds provide “same-day” liquidity. welcome news given that agriculture is still significantly dependant on the monsoon. III. Share market funds provide a low-cost cash management vehicle for retail accounts payable and payrolls. • • • Corporate cash managers must have daily liquidity in order to manage Share market funds offer investors market-based yields.25% respectively. convenient. strong demand from rural consumers in goods like cement. anywhere investment.. A good monsoon this year will further help boost rural consumption.75% and 3. In fact. autos and consumer products has helped offset the fall in demand from urban consumers in recent times. redeem their shares. allowing investors to At a price per share of $1. Retail investors value this feature because it allows them to manage cash both for daily needs and to buy or sell securities through brokers. Normal monsoon expected – crucial for agriculture The Indian Meteorological Department has predicted that this year’s monsoon would be near normal.

India too much depend on foreign direct investment (FDI). India is facing financial pain despite healthy banks.economies of scale—pooling the investments of hundreds to thousands of retail investors. Opportunities:• • Opportunity to remind funds that purchases of illiquid securities. Page 18 . and the more stringent practices adopted by some money market funds that go beyond those regulations. • The recent market events. • We probably would change the way we manage our short-term portfolio if NAV was allowed to fluctuate. although painful. Weakness:• No guarantee is given to investors and they are explicitly warned that money market funds seek to offer investors return of principal may not always be possible. • Less awareness among general masses about the different services provided by agencies. in stock market services. Lot of black money deposit in foreign banks. afford the money market fund industry the opportunity to assess the regulations that govern its operations. • • • • • Dissatisfaction among customers due to improper and lack of after investing Inflation and Deflation rate is high. but I guess it would depend on the degree of fluctuation. sometimes with the large balances of institutional investors. This could give the Board the opportunity to question the most knowledgeable people directly and to confirm that the Adviser is dedicating sufficient resources to credit analysis.

the Indian securities market has evolved continuously to become one of the most dynamic. The origination of the Indian securities market may be traced back to 1975. the term “Share” denominates some part in the ownership of the company.Threats:• • • • • Reorganization of agencies of stock market structure. When the need was felt to sell the shares by the owner of the shares. So. These persons are called the share Brokers who find the persons who wish to buy or sell their securities. The whole process of finding the buyers and sellers of the securities by the brokers is called the Share Broking. modern international standards both in terms of structure and in terms of operating efficiency. To solve this problem. The ownership of the companies was divided into small parts and that every part was called share. it was difficult to find out the buyers of the shares who want to buy the shares at the price the seller want to sell. Page 19 . At that time a need was felt to bring the buyers and sellers on a common platform. a group of persons came into picture. Over the last 130 years. when 22 enterprise brokers under a Banyan tree established the Bombay Stock Exchange (BSE). which used to bring the buyers and sellers together for the trade of the shares. branches and its entry has taken directly solve out the problems of investors CONCEPT OF SHARE TRADING The concept of share broking emerged after the establishment of the joint stock companies. The shares are freely transferable subject to the some certain restrictions. Going beyond market Falling of market share The all agency have started to redefine their objective to attract customer’s A few stock markets have been permitted to increase their number of attention.

additional risks relative to performing transactions over the Internet especially on a shared computer. The growth of information technology has affected almost all sectors of life. There were times when man was a wanderer or a normal.Meaning of Online Trading “Change is the law of nature”. Page 20 . Similarly the online investor likely does not have to worry that his broker is making unauthorized trades. In theory. When Internet has affected all sectors he could “stock markets” the most important player of the economy. Furthermore. has remained far behind? Like all other sectors Internet has set its feet in the stock markets also. When was online trading introduced in INDIA? Online trading started in India in February 2000 when a couple of brokers started offering an online trading platform for their customers. Internet has enabled us to get every information at our doorstep. . Internet investors can take as much time as they would like to take prior to placing a trade order. resource against the brokerage firm for the breach of security. There are. therefore. if any. of course. perhaps among the most valuable services provided by traditional brokers. the only person who is authorized to trace in a the account is the actual investor. . Internet trading commissions are clearly posted on the websites of the various services. Since there is no individual broker making a commission. depending upon the type of security being traded and the size of trade. He himself had to go place to place in search of food. water and now everything is available at your doorstep just at the click of the mouse. an Interest investor always knows what commission he is being charged on each trade. An online investor sitting at home at a personal computer also foregoes proper investment advice and financial planning. and are typically a fixed rate charge. the internet investor can never become a victim of excessive trading (where for the broker) since the investor maintains total control over the number of transactions which take place in the account. Those people whom investors have provided their account number and password can freely trade that account while the investor will have little.

DIFFERENCE BETWEEN ONLINE AND OFFLINE TRADING • Nevertheless. • Offline trading offers many benefits as well. automatic order matching.ONLINE TRADING BY NSE & BSE The central computer located at the Exchange is connected to the workstations of the Brokers through satellite using Very Small Aperture Terminals (VSATs). Brokers. The 'A' group shares represent those. 'F' and 'Z' groups. Offline trading has lost some popularity but it is still the main form of investing. Online trading consumes less time as compare to manual trading. which are in the carry forward system (Badla). key regulator governing Stock Exchanges. The 'Z' group scrips are the blacklisted companies. It facilitates more efficient processing. Online trading is very expensive as compare to manual trading or offline trading. Page 21 . with all the convenience of online trading there are still investors who prefer the old fashion way of offline trading. faster execution of trades and transparency. Depositories. 'B1'. 'C'. The scrips traded on the BSE have been classified into 'A'. The 'F' group represents the debt market (fixed income securities) segment. Depository participants. 'B1' & 'B2' groups and Rights renunciations. The 'C' group covers the odd lot securities in 'A'. 'B2'. Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE On Line Trading) and NEAT (National Exchange Automated Trading) System. FIIs and other participants in Indian secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd. Points of difference between online trading and ofline trading are as follows: 1. Mutual Funds. 2. Orders placed at the Brokers' workstations reach the central computer and are matched by the computer based on price and time priority.

DEMATERIALISATION OF SHARES Dematerialization is the process wherein shares certificates or other securities held in physical form are converted into electronic form and credited to demat account of an investor opened with a depository participant. 4. Online trading has very helpful to finding the records easily but offline trading takes more time to finding the records. Procedure for purchasing dematerialized securities The procedure for purchasing dematerialized securities is also similar to the procedure for buying physical securities. There may be one time standing instruction or separate instruction each time to receive credits. Broker receives credit to securities in clearing account on the payout day. 2. we know the international market rate of share very easily. SEBI has made compulsory trading of shares of all the companies listed in stock exchanges in demat form with effect from 2ndJanuary 2002. Page 22 . 5.The procedure of opening a demat account with DP is similar to opening an account with a bank ELECTRONIC SETTLEMENT OF TRADE A. With the help of online trading. Broker gives instructions to DP to debit clearing account and credit client’s account. 5. 4. in offline trading there are some errors exist like barriers of communication . 3. Investor instructs DP to receive credits into his account in the prescribed form. Investor purchases securities in any of the stock exchanges linked to depository through a broker. 1. there is no chance of any errors while doing the trading. In the help of online trading.3. Broker receives payment from investor and arranges payment to clearing corporation. Investor receives shares into his account by way of book entry.

The broker receives payment from the stock exchange.B. 3. Procedure of selling dematerialized securities The procedure for selling dematerialized securities in stock exchanges is similar as selling physical securities. broker of the investor transfers the securities to clearing corporation. Market timings: Trading on the derivatives segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance). 5. the investor instructs his DP to debit his demat account with the number of securities sold by him and credit the brokers clearing account. Investor instructs his DP to debit his demat account with the number of securities sold and credit the broker’s clearing account. the investor has to fill up a remat request form (RRF) and submit it to the DP. 2. The investor receives payment from the broker for sale of securities in the same manner as received in case of sale of physical securities REMATERILISATION OF SHARES Rematerialization is the process of conversion of electronic holdings of securities into physical certificate form. Investor sells securities in any of the stock exchange linked to depository through a broker. The DP forwards the request to depository after verifying the investor’s balances. The market timings of the derivatives segment are: Page 23 . The procedure for selling dematerialized securities is given below: 1. Depository in turn initiates the registrars and transfer agent or the issuer company. Before the pay-in-day. 4. RTA/ Company prints the certificates and dispatches the same to the investor. For rematerilisation of scrips. The only major difference is that instead of delivering physical securities to the broker.

through broker web sites. Information on commission and fees. a broker offering Internet trading facility provides an electronic template for the customer to enter the name of the security. continuously update quotes while the user visits other sites. Advertise the broker dealers’ services to potential investors. Broker’s web sites may serve a variety of functions.Normal Market / Exercise Market Open time Normal market close hours Set up cut of time for Position limit/Collateral value hrs Trade modification end time / Exercise Market hours : 09:55 hours : 15:30 : till 15:30 : 16:15 Internet Based Trading through Order Routing Systems Internet based trading on conventional exchanges. Provide market summaries and commentaries. mutual funds. market indices and news. analyst reports and trading strategies and market data on currencies. whatever it is to be Page 24 . Offer real-time or delayed quote information. • • • • • Allowing the clients to directly trade through investors. or allow investors to create a personal stock ticker. In an Order Routing system. and • • • Offer investors access to portfolio management tools and analytic programs. options. These may include. uses the Internet as a medium for communicating client orders to the exchange. and Account information and research reports. Offer market information and investment tools similar to those offered by information vendor or SRO web sites.

In foreign jurisdiction. the quantity and whatever the order is a market or limit order. for disseminating the prospects in electronics form and even for receiving share applications in public issues electronically. The services offered by the service providers to the investors are generally the following: • • • • • Advertising Providing investment information and investment advice.bought or sold. Investment Advisory Services Brokers as well as other service provides such as investment firms. Private offerings. Use of Internet for making Initial Public Offerings Issues of securities of using the Internet to communicate directly with their shareholders. and for communicating with and receiving orders from potential investors. Customer orders. The Internet is also being used for fulfilling necessary disclosure requirements. and Disclosure and communication Issuers are using the Internet to market themselves to potential investors. SEBI has taken initiative in permitting use of the network of stock exchange for collection of investor applications in public offerings by the issuer companies. they are also using the Internet to communicate to the public for the following: • • • Public offerings. potential investors and analysts by disseminating corporate information. Underwriting Communicating with the investors. research outfits etc. Once the broker’s system receives this information. and Page 25 . are using the Internet for marketing and advertising purposes. for presenting information on portfolio analysis and market information. In India.

possibly argue with the broker about the order. For the first time in history. When you want to buy or sell stock. and is under your direct control. • Access to the market Page 26 . It's one of the best aspects of being a wired investor. you no longer need to call your broker on the phone. and hope that the transaction is executed instantly. hope that he is in the office to place your order. any individual with an Internet connection can: • • • • • Know the price of any stock at any time Review the price history of any stock in chart format Follow market events in-depth Receive a wealth of free commentary and analysis about stock markets and the global economy Conduct extensive financial research on any company • Control of your money One of the great appeals of using an online trading account is the fact that the account belongs to you. Some of these features are as follows: • Freedom of information The Internet can provide a new sense of control over your financial future. The amount of investment information available online is truly astounding.• Record keeping FEATURES OF ONLINE TRADING The Online Trading is having many features which make it most suitable for the investors to go for.

• Enables your account Online trading integrates your bank account. This involves a complete integrated electronic chain starting from order placement. dedicated trading platforms and sophisticated tools for accessing the markets. you will be able to get the best quote for your orders. BENEFITS OF ONLINE BROKING Page 27 . • Ensures the best price for investors Every broker house aims at providing the investor with the best price available. right from logging on to our site.At the most basic level. This is through sophisticated information streams. an online trading account gives you more agility in buying and selling stocks. This provides a level playing field for all investors in the securities market. in a very short period of time. which leads to easy and paperless trading for you. Also due to the high level of transparency with regard to display of information relating to the specific stocks and company profiles. • Allows instant trade execution You as an Investment online customer will be able to execute the entire trading transaction. gives even the smallest retail investor access to information that earlier was available only to the big traders. • Offers greatertransparency Online trading offers you greater transparency by providing you with an audit trail. to the execution and settlement of your bank account. • Provides a level palying field Trading on the net. your trading account and your de mat accounts . to clearing and settlement and finally ending with a credit into your depository account. All these stages are subject to inspection. thus bringing in transparency into the system.

Moreover even if somebody broke in and tampered with one’s account the money from the stocks he sold or the stock bought from the money in his account is in his account only. 3) Keeping Records: The site one trades on keeps a record of all transactions down to unexecuted orders and cancelled orders thus keeping one abreast of all your transactions 24 hours a day. 5. Due to the power of the Internet one has the privilege of becoming the clients of really large brokerages with the benefits of enjoying the low charges hithelio before enjoyed only by the big players. results.) Reduces the settlement risk: Page 28 . 4) Access to Information and investment Tools: Most online investing sites have a wealth of information for their registered members.1) Less Costly: The most significant advantage of the Online broking is the cost reduction in the brokerage. No paperwork means more time at one’s disposal for research and analysis. This includes research reports. As the DP account has got linked to the trading account most players do not charge a minimum transaction cost thus truly allowing one to buy a single share and achieve meaningful rupee price averaging whatever be your buying power. 6.) Unparalleled Safety: Most sites are secure using 128-bit algorithms -highest available commercially anywhere in the world. visits to the broker for handing over these slips and consequent costs. analysis and even gossip and the buzz in the market. 2) Peace of Mind: One can never have complete peace of mind but online investing does away with the hassles of filling up instruction slips.

who is assured of the delivery of the securities. Some of the online sites are providing a telephone number for use in case their sites are overloaded or their server down. He must check out the seamlessness of this interface before selecting an online brokerage. So. This problem is rare but be alive to its possibility. as in this case no Short sale is possible i.) Connectivity of the Broker with NSE: Recently ICICI Direct had a connectivity problem with the NSE for two and half hours during trading hours.) Cyber attack: In the event of a malicious attack on the systems of one’s broker he is protected only if the company is taking proper precautions against such attacks and if proper backup is regularly been taken. 3. Page 29 . his demat account is checked by the Depository Participant before executing the sale transaction.e. The faster the orders are processed the more seamless is the interface. 2. when a seller wants to sell the securities.) "Server not found": This may appear on one’s screens when he is desperately trying to get out of an unprofitable position.) Non-availability of a seamless interface: As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays.This method of trading reduces the settlement risk for the investor. This reduces the settlement risk for the buyer. In the case of a demat account (required for an online transaction). If a number of client access the server the server takes its own time sending the orders to the NSE server. 4. the seller will not be able to sell the securities unless he has their actual possession. He may like to choose a brokerage that has a stated security policy and contingency plan in place. the main problems of online trading are as follows: 1.

) Margin: If Internet trading alone is not fast and furious enough.) Increased charges: Some of the brokers are of the view that they would have to provide advisory services to the customers. the firm has the right to liquidate his securities holdings (and it can pick and choose which ones) without any notice to one if he fail to meet the margin call.5. 7. hoping to hit a home run when he discovered that he is required to make a large deposit that he cannot make. If he want advice on a particular stock in his portfolio he may not even be able to get that.) Non. but the brokerage firm has the right to change the maintenance margin requirements without any warning or notice to him. He may have forgotten what he read in the small print of his agreement. Kotak street. an Page 30 . That is where the brokerage firm lends you money by leveraging his account. India bulls. If you are already comfortable trading with your regular broker. You can trade online with ebrokerages such as ICICI Direct. here are few reasons why you may consider switching to trading online. India info line’s 5paisa. The next thing one know. 6. And there he was leveraged to the hilt. or at least another avenue of trading. WHY PEOPLE ARE BENDING TOWARDS ONLINE TRADING Several broking houses now offer online trading facilities. allowing him to buy a large amount of securities by putting up only a small amount of money.com and HDFC securities.availability of personalized advice: If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. they will have to follow the international practice of charging a little more than the normal charges from a customer looking for personal advice. the firm is selling off his securities at a point in time that is not the best for him. In fact. But with increased volumes. many people are trading on margin. These are the perils of trading on margin.

is all taken care of the minute your order is executed online. The amount of investment information available online is truly astounding.NEAT ISX (NSE). any individual with an internet connection can: • • • • • • Know the price of any stock at any time Review the price history of any stock in chart format Follow market events in-depth Receive a wealth of free commentary and analysis about stock markets and globe economy. Conduct extensive financial research on any company Talk with other investors around the world PROCESS OF ONLINE TRADING Step-I: Those investors interested in doing the trading over Internet system. password and a personal identification number (PIN). that is. or arranging for a payment in case of purchaser of shares. Its one of the best aspect of being a wired investor for the first time in history. where you have just two days to settle your transaction. The normal process of issuing of delivery note. in case of a sale. This is especially helpful in the extent T+2 settlement system. Using the place order window as under can then place an order:(a) First by entering the symbol and series of stock and other parameters Page 31 . The absence of manual intervention ensures that you are completely in control of all transaction. Your trading account would be linked to your demat and bank account. Step-2: After registration.obvious advantage of online trading is that your transaction would be virtually paperless. ensuring a smooth transaction process. should approach the brokers and register with the Stock Broker. Step-3: Actual placement of an order. the broker will provide to them a login name.

the order has to be sent by clicking on the send option. Step. Thus. Step-5: After the review has been satisfactory. The broker accepts and executes the order and places it with the exchange The exchange accepts the order after checking the share limit for the day. for which there are different modes. Step-6: The investor will receive an "Order Confirmation" 'message along with the order number and the value of the order. At present. Process: The client places order via the net by logging on to his Broker’s site. fill in the symbol. (b) Second. the broker will ask the investor for transfer of funds by the investor to his account. investors and will fix their trading limits. a time lag of about ten seconds is there in executing the trade Step-8: It is regarding charging payment.7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit. series and the default quantity. When the trade is executed. Step-4: It is the process of review.such as quantity and price of the scrip on the place order window. He may also re-set to clear the values. an appropriate message will appear at the bottom of the screen. the investor has to review the order placed by clicking the review option. Page 32 . Some brokers will take some advance payment from the.

D. The exchange receives money and completes the settlement. CLIENT BROKER STOCK EXCHANGE THE MECHANICS OF ONLINE TRADING Places an order on the net on the broker’s website through the distinctive I. code Accepts the order. The client is intimated about the execution of the deal by e-mail.The broker makes the payment either directly via the client bank account or pays through its own account and recovers it later from the client. Pays the broker pending physical Pays the Exchange though his owns account and receives it Page from the client 33 account. Receives the money and completes the settlement . The client is intimated about the settlement either through the demat or via e-mail. Checks the client’s Identity and places the order with the stock exchange Accepts the order after checking the scrip limit of the broker for the day Executes the order The settlement of the deal (buy/sell order) gets reflected in his Demat account.

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100000.50. If you buy shares worth Rs 75. which is the amount set aside by you from your Bank account for purchase is available for BSE and NSE. Your Buying Limit is Rs 50. which requires 100% of the money required to fund the purchase. As you have made the sale of shares on NSE for Rs. For arriving at the settlement day all intervening holidays. Hence your BL is simply the amount set aside by you from your bank account and the amount realized from the sale of any shares you have made less any purchases you have made. which include bank holidays.000.000. Suppose you have Rs 1.000 on Tuesday on NSE your BL will naturally reduce to Rs75. trades in rolling settlement are settled on a T+2 basis i. be available. To simplify things for ICICI Direct customers.00. The amount from sale of shares in NSE will also be available for purchase on BSE.000.e. the BL for NSE & BSE rises to 1.50. This means you can buy shares upto Rs 1.000 in your Bank A/C and you set aside Rs 50.000. we have introduced the concept of Buying Limit (BL). Buying Limit simply tells the customer what is his limit for a given settlement for the desired exchange. Your BL of Rs 50.000. Saturdays and Sundays are excluded.Rolling Settlement Cycle : In a rolling settlement. Assume that you sell shares worth Rs 1. Concept Of Buying Limit Suppose you have sold some shares on NSE and are trying to figure out that if you can use the money to buy shares on NSE in a different settlement cycle or say on BSE.000 for which you would like to make some purchase. Tuesday's trades settled on Thursday and so on.000 on the NSE on Monday. The BL therefore for the NSE at that point of time goes upto Rs 1.50.00. NSE/BSE holidays. on the 2nd working day. Assume that you have enrolled for a ICICI Direct account.000 on NSE or BSE. ICICI Direct Page 35 . At NSE and BSE. each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. Typically trades taking place on Monday are settled on Wednesday.

Corporate Finance. Today’s Karvy has access to millions of Indian shareholders. In January 1998.50. Insurance etc. T he company adds 5new offices every month to the company’s ever growing national network in every nook and corner of the country. All along.Company Profile ORIGIN OF KARVY: Karvy Consultants Limited was established in 1982 at Hyderabad. Karvy credit is defined by its mission to succeed. Investment Advisory Services. It was established by a group of Hyderabad-based practicing Chartered Accountants. Karvy became first Depository Participant in Andhra Pradesh. 180corporate and handle corporate disbursements that exceed Rs. excellent work ethics and customer centric values. At initial stage it was very small in size. it acts into the Registrar and Share transfer activities and subsequently into financial services and other services like Financial Product Distribution. Karvy has evolved as a veritable link between industry. A decade of commitment. It was started with a capital of Rs. besides companies. both corporate and retail. banks. Today. passion for professionalism. An ISO 9002Company. Later. 1. helped Karvy achieving a leadership position in its field when it handled largest number of corporate and retail that proved to WHERE KARVY STAND IN THE MARKET? KARVY is a legendary name in financial services. offering a broad spectrum of customized services to its clients. financial institutions and regulatory agencies. Karvy’s strong work ethics and professional background leveraged with Information Technology enabled it to deliver quality to the individual. Karvy’s commitment to quality and retail reach has made it an Integrated Financial Services Company. Demat Services.In starting it was only offering auditing and taxation services. finance and people. professional integrity and vision be a sound business synergy. Today KARVY is well known as a premier financial services enterprise.000 .2500 Crores. company has 230 branch offices in 164 cities all over the India. Over the past one and half decades. Services that Page 36 . The company service over 16 million individual investors.

and we aim to achieve this leadership position by building an innovative. Being one of the most techno-savvy organizations around helps company to deliver even more cost effective financial solutions in the shortest possible time. “Our Clients. Karvy’s Vision: To be pioneering financial services company. pro-activeness are the values that helps KARVY nurture enduring relationships with their clients. professional care. decade after decade. And continue to grow at a healthy pace.´ Company’s foray into IT-enabled services and internet business has provided an opportunity to explore new frontiers and business solutions. Integrity ”Everything else is secondary”Professional and personal ethics are Karvy’s bedrocks. and technology driven organization which will set the highest standards of service and business ethics ”. year after year.KARVY constantly upgrade and improve are because of company’s skill in leveraging technology. DIAGRAM OF BRANCH STRUCTURE Page 37 . Karvy’s Mission: “ Our mission is to be a leading and preferred service provider to our customers. Our Focus” “Clients are the reason for our being” Personalized service. enterprising. They take pride in building an environment that encourages honesty and opportunity to learn from failures.

Relationship officer SRM .Sub dealer Main dealer HEAD MF desk Sub back office person Tele Sales Wealth Manager Wealth Manager Tele Sales SRM SRM SRM SRM SRM SRM R O R O R O R O R O R O R O R O R O R O R O R O WHERE: Relates to Back Office RO .Service Relationship Manager PROCESS: Page 38 .

In the whole process mentioned above. who assist the segment at all times in various works. study and advices from the R&D department and closes the deal.  Next the ROs visit the client and inform them about the entire products that would cater to the customer’s needs. the Relationship Officers.  Then the SRM meets the prospective clients and catering to the need of them gathers information regarding the financial details of client.The process of the entire working of the SME segment takes place in the following manner:  First the data is collected by the ROs. Main Dealer and the Head himself. risk taking ability and gives the details to the SRM if the client is prospective.  Main Dealer – Equity Desk Page 39 . This is done at all levels so that the data is collected from all the resources available and is qualitative in terms of conversions. His work is not just confined to imparting the information to the client.e. Wealth Managers. SRMs.  The Wealth Manager then designs the portfolio for the client based on his analysis.  Then the Tele callers fix appointments and forward the details of the same to the ROs i. moreover he has to extract information from the client as well. and gives it to the Wealth Manager. He has to understand the customer’s needs. The main aim of them is to get to the right client and convince him for a meet. his past investments. future investment capability etc. there are 4 back office persons.  Once the data is acquired or sourced it is given to the Tele Marketing or Sales team. They are expected to achieve a target of 60% through their calls.

Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified.Research on mutual funds Sub Back office person – Responsible for sending reports and MIS Reports are sent weekly for Equity and Mutual Funds and monthly for futures and options. who share common financial goals and invests their money in stocks. This whole process is controlled and managed by the Segment Head. PRODUCTS & SERVICES PRODUCTS MUTUAL FUNDS: CONCEPT: A Mutual Fund is a form of collective investment that pools money from many investors.   Sub Dealer – Assistant to Main Dealer MF Research . The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. The flow chart below describes broadly the working of a mutual fund: Page 40 . bond. professionally managed basket of securities at a relatively low cost. short term money market instruments and/or other securities.

as far as the entry of individual or retail investors is concerned. midcap. The industry’s total AUM in December 2006 stood at a hefty Rs 3.31 crore depositor folios had invested in equity schemes. 23. The share of direct investors. out of the 159 diversified equity funds (includes diversified equity. as far as the entry of individual or retail investors is concerned. on the other hand. The rising Indian mutual funds industry saw its best. with a total of 2.INDIAN MUTUAL FUND INDUSTRY: The rising Indian mutual funds industry probably never had it better. has been dropping. of which 2. stating that more retail investors see mutual funds as a preferred route for investing in the markets. Existing and new market players as well as Exchange Traded Funds are likely to hit the market in the coming months with a flurry of new Mutual Funds schemes.597 crore. and equity tax saving schemes):  20 funds (13%) out-performed the SENSEX Page 41 . In 2006. An action packed first quarter of 2007 was forecasted to witness at least 20 new schemes which are waiting on the sidelines to be launched. PERFORMANCE SNAPSHOT!!! The year 2006 scored high in terms of both returns and volatility.79 crore depositor folios.

 50 funds (37%) out-performed the Nifty
 The best returns generated were up to 58.3% (Tata Infrastructure Fund) and the

worst being a negative 10.6%  Infrastructure funds stole the limelight this year with the top three performers being Infrastructure Funds. TOTAL ASSET MANAGED BY VARIOUS FUND HOUSES: The amount of assets managed by AMCs varies every year. Following is the table that depicts the total amount of asset managed by the well known AMCs in India. It also shows the ranking of AMCs for the year 2007, based on the above mentioned parameter. Fund House Reliance MF UTI MF Prudential ICICI HDFC MF Franklin Templeton Birla Sun Life SBI MF DSP Merrill Lynch Tata MF Standard Chartered Kotak Mahindra LIC MF HSBC Principal Figures in Rs Crore Jan 2007 39,020 37,535 34,746 31,425 23,908 21,190 17,552 13,440 13,222 12,746 12,674 12,237 12,140 10,333 Jan 2006 16,702 25,417 22,635 18,591 18,153 13,797 10,839 8,976 8,649 9,480 7,397 6,386 6,288 6,789 Source: AMFI Dec 2006 36,928 38,109 33,305 29,635 23,403 17,054 15,086 13,517 12,177 12,629 12,062 11,599 10,450 10,522

 Reliance MF has become the top mutual fund house in the country by adding a very impressive Rs2, 092 crore to assets under management.

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 Previous Top Fund House UTI MF declined by Rs574 crore and lost its top position to Reliance MF.  Birla Sunlife was the best performer in January 2007 and added Rs4, 136 crore to its assets  SBI MF was able to acquire 7th position by an addition of Rs2, 466 crores.  Tata MF gained Rs1, 045 crore and able to secure its position in top 10

INSURANCE: CONCEPT: Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. Sum Assured: It is the amount of money an insurance policy guarantees to pay before any bonuses are added. Factors included in the calculation of sum assured are:

 Date of birth
 Gender  Duration  Health conditions  Job profile TYPES OF INSURANCE:

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Types of Insurance

Non Life/ Life Insurance -Term -Whole life -Money back Endowmen t Assurance -Pension Plan -Unit Linked Product (ULIP) General Insurance

-Property -Personal -Lifestyle -Package

Life Insurance:

All policies are not the same. Some give coverage for your lifetime and others cover you for a specific number of years. Following are the different types of life insurances:  Whole life  Term policy  Money pack  Endowment  Pension plan

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the retained earnings portion is the largest component. Following are the different types of general insurances:  Property  Personal  Lifestyle  Package EQUITIES: CONCEPT: An equity share. especially when dealing with older companies that have been in business for many years. commonly referred to as ordinary share. In most cases. and it comes from two main sources. provide payments depending on the loss from a particular financial event. represents the form of fractional ownership in a business venture.S. along with any additional investments made thereafter. accidents and homeowner’s policies. FACTORS THAT INFLUENCE THE PRICE OF THE STOCK: Broadly there are two factors: Page 45 . The second comes from retained earnings that the company is able to accumulate over time through its operations. It is called property and casualty (P&C) insurance in the U. General insurance policies. The first and original source is the money that was originally invested in the company. including automobile. Stockholders' equity is often referred to as the book value of the company. ULIP General Insurance: General insurance typically comprises any insurance that is not determined to be life insurance.

level of technology and marketing skills. price of a stock in the long run gets stabilized based on the stock specific factors. financial health and management. political or regulatory environment like high economic growth. To buy and sell securities you should approach a SEBI registered trading member (broker) of a recognized stock exchange. communal riots. ACQUIRING EQUITY SHARES: There are two methods:  You may subscribe to issues made by corporates in the primary market. Despite ups and downs. OR  You may purchase shares from the secondary market. In the primary market. The market specific factor is influenced by the investor’s sentiment towards the stock market as a whole. resources are mobilized by the corporates through fresh public issues (IPOs) or through private placements.(1) Stock specific (2) Market specific The stock-specific factor is related to people’s expectations about the company. the effect of market-specific factor is generally short-term. a prudent advice to all investors is to analyze and invest and not speculate in shares. On the other hand. resulting in a boom in the market. unfavorable events like war. However. Therefore. depress the market irrespective of certain companies performing well. economic crisis. stable government etc. its future earnings capacity. can fuel euphoria in the investors. This factor depends on the environment rather than the performance of any particular company. The documents required for opening an account with KARVY are: Page 46 . friendly budget. Events favorable to an economy. minority government etc.

Page 47 . when the bond is sold." or set. Of course. Address proof Passport size photos Cheque (initial one time investment amount) BONDS: CONCEPT: A Bond is a long term contract under which a borrower agrees to make payments of interest and principal. which are made at a predetermined rate and schedule Bonds are known as "fixed-income" securities because the amount of income the bond will generate each year is "fixed. No matter what happens or who holds the bond. The organization that sells a bond is known as the issuer. to the holders of the bond. it will generate exactly the same amount of money. The issuer of a bond must pay the investor something extra for the privilege of using his or her money. on specific dates. This "extra" comes in the form of interest payments. no one would loan his or her hard-earned money for nothing.    PAN card no.

Bills (Treasury Bills)  Designated SLR Bonds Non SLR Bonds constitute of: Public sector units bonds like:  IRFC (Indian Railway Finance Corporation)  Power Finance Corporation  NHAI  Bank Bonds  State Guarantee Bonds Rating of Bonds: Bonds are rated by various rating agencies on the basis of the balance sheet of the companies. The current SLR is 25%. macro economic factors. SLR Bonds constitute of:  Government securities/ Gilt/GOI (govt. Page 48 . Also. risk of the bonds. in SLR Banking system is very important. On the basis of these ratings. of India) Bonds  SDL( State Development Loans)  T.CLASSIFICATION OF BONDS: SLR is the percentage of deposits that has to be invested in certain designated securities.

Page 49 .(International Agencies) FITCH .Indian Credit Rating Agency CARE . derivative is a financial instrument that offers a return based on the return of some other underlying asset.Credit Analysis and Research Limited MOODYS .Credit Rating Information Services of India Limited ICRA .companies set the coupon rate.(International Agencies) DERIVATIVES: CONCEPT As the name suggests. High quality bonds have the benchmark index and if the quality of the bonds decreases the return increases because of the higher risk. its return is derived from another instrument. Following is the Bonds Rating starting from the best quality: AAA Quality AA+ AA Decreasing A- Decreasing BB BBB Rating Agencies: CRISIL . In this sense..

A derivative also has a defined and limited life: A derivative contract initiates on a certain date and terminates on a later date. Types of Derivatives • Over-the-counter (OTC) derivatives are contracts that are traded (and privately negotiated) directly between two parties. The OTC derivatives market is huge. without going through an exchange or other intermediary. • Exchange-traded derivatives are those derivatives products that are traded via specialized Derivatives exchanges or other exchanges. Products such as swaps. A derivatives exchange acts as an intermediary to all related transactions. There are 3 kinds of Derivative contracts: • • • Futures Contract Forward Contract Options Contract SERVICES. Instead KSBL provide services which are multi dimensional and multi-focused in their scope. and exotic options are almost always traded in this way. In other words. In accordance with the usual rules of law. forward rate agreements. a derivative contract is an agreement between two parties in which each does something for the other. although that is not always the case. According to the Bank for International Settlements. offer services that are beyond just a medium for buying and selling stocks and shares. and takes Initial margin from both sides of the trade to act as a guarantee. Often the derivative's payoff is determined and/or made on the expiration date. Page 50 . There are several advantages in utilizing Karvy’s Stock Broking services. the total outstanding notional amount is USD 298 trillion (as of 2005). which are the reasons why it is one of the best in the country.KSBL (KARVY STOCK BROKING LIMITED). no money need change hands up front.

To empower the investor further KSBL have made serious efforts to ensure that their research calls are disseminated systematically to all its stock broking clients through various delivery channels like: e-mails. which KSBL provides to a spectrum of investors. Their foray into commodities broking has been path breaking and KSBL is in the process of converting existing traders in commodities into the more organized mainstream of trading in commodity futures. The Mid-session Report. secure result-oriented information on market trends. where the market forecast for the rest of the day is given. Over the years KSBL have ensured that the trust of its customers is their biggest returns. through daily reports delivered thrice in a day.   The Pre-session Report. with equal dedication and competence. But this is not the final destination and just a pathway to reach there. Crucial information regarding customer individual account balances are given as a constant feedback to them. comprising of technical analysts as well as fundamental specialists. where the market and the report itself is reviewed. In the future. where market scenario for the day is predicted.  In addition. Consequentially its retail client base has expanded very fast. These services have increasingly offered customer oriented convenience. They also offer special portfolio analysis packages that provide daily technical advice on scrips for successful portfolio management and provide customized advisory services to help investors make the right financial moves that are specifically suited to their portfolio.Its highly skilled research team. SMS. high-networth or otherwise. The Post-session Report. both as a trading and risk hedging mechanism. Factors such as its success in the Electronic custody business has helped build on its tradition of trust even more. market analysis and market predictions. chat. the specific industry reports prepared by Karvy Stockbroking Limited give comprehensive information on various industries. phone calls etc. KSBL Page 51 . the final report for the day. its focus will be on the emerging businesses and to meet this objective. timed to arrive during lunch break.

A wide national network makes efficiencies accessible to all. besides being established as the leading procurer in all public issues. This has propelled this wing to grab a position among the top distributors for equity and debt issues with an estimated market share of 15% in terms of applications mobilized.has enhanced its manpower and revitalized its knowledge base with enhanced focus on Futures and Options as well as the commodities business DIPOSITORY PARTICIPANTS The onset of the technology revolution in financial services Industry saw the emergence of Karvy as an electronic custodian registered with National Securities Depository Ltd (NSDL) and Central Securities Depository Ltd (CSDL) in 1998. A team of professional and the latest technological expertise allocated exclusively to the demat division including technological enhancements like SPEED-e. With its wide portfolio offerings. KSBL has established live DPMs (Depository Participant Modules). Karvy has further set standards enabling comfort to the investor by promoting paperless trading across the country and emerged as the Top 3 Depository Participants in the country in terms of customer service. The team of 1600 highly qualified and dedicated professionals. DISTRIBUTION OF FINANCIAL PRODUCTS The paradigm shift from pure selling to knowledge based selling drives this industry today. ADVISORY SERVICES Page 52 . drawn from the best academic and professional backgrounds is committed to maintaining high levels of client service delivery. Internet access to accounts and an easier transaction process in order to offer more convenience to individual and corporate investors. Karvy occupies all segments in the retail financial services industry. makes the response time quick and delivery impeccable.

KARVY STOCKBROKING LIMITED has now launched CPMS. They are continually engaged in designing the right investment portfolio for each customer according to individual needs and budget considerations with a comprehensive support system that focuses on trading customers' portfolios and providing valuable inputs. investment schemes and research-based opinions from experts in various financial fields. This specialized division is set up to cater to the high net worth individuals and institutional clients keeping in mind that they require a different kind of financial planning and management that augments not just existing finances but their life-style as well.Karvy’s retail brand ‘Karvy – the Finapolis'. PRIVATE CLIENT GROUP OR CUSTOMIZED PORFOLIO MANAGEMNET SERVICES (CPMS) Extending the expertise in personal financial advisory services. trends. Each investor is a client who has unique parameters:  Return goals and objectives  Time horizon  Liquidity constraints  A distinctive tax status Page 53 . The service is backed by a team of dedicated and expert professionals with varied experience and background of handling investment portfolios.the Finapolis'. It covers the latest market news. a discretionary portfolio management service for retail investors. Another venture towards being investor-friendly is the circulation of a monthly magazine called ‘Karvy . This is made possible by the expertise Karvy has gained in the business over the years. deliver advisory services to a cross-section of customers. monitoring and managing the portfolio through varied technological initiatives.

A hard-nosed business approach with the soft touch of dedicated customer care and personalized attention is followed here. and have proved to be very useful at the same time. constant updates on their portfolios as well as value-added advice on portfolio churning. TARGET MARKET: The main target customers for this segment are:  Small and Medium Enterprise  High Networth Individuals (HNIs) The Small and Medium Enterprises are contacted through e-mails. sector switches etc. The delivery and support modules have been fine tuned by giving the clients access to online portfolio information. The investment recommendations given by research team enjoy a high success rate in the cash market. Though these it is able to contact the concerned person and send them all Page 54 . KARVY keeps updating its database which consists of contact numbers and e-mail addresses of the Financial Heads of the corporates. MARKETING PLAN It started its operations from 1st March 2006. A comprehensive and personalized service that encompasses planning and protection of finances. Karvy’s research reports have been widely appreciated by this segment. There is also the benefit of investing in other asset classes to suit client’s needs like Mutual Funds. is provided on a one-to-one basis for this purpose. which are not commingled (pooled) with those of other investors. personalized portfolios designed to fit a specific investor’s investment parameters. Insurance and even Real Estate. Each portfolio contains individually selected securities. the primary focus of CPMS is to provide individualized portfolio management services for clients. planning of business needs and retirement needs and a host of other services. The main driving force behind setting up of this segment was the fact that the SMEs form the largest customer base for AMCs. Derivatives. Personal risk tolerances Thus. ensuring transparency and flexibility in operations.

Marketing in SME Segment: E-mails HNI SME Tele calls Company Visits This segment has performed well so far and has contributed in increasing the customer base by retaining the old ones and tapping new ones. This includes the ones who already have a fair idea of the investment options and investing as well as the new budding investors who have little knowledge.the details of the products and services which KARVY deals in and are beneficial to them. MARKETING PROBLEMS : Page 55 . It also plans Company visits occasionally wherein the Senior Relationship Managers visit the companies and gives presentations on the market updates and the best investment options available to the corporates. The High Networth Individuals are also contacted through e-mails and calls. from time to time.

The basic problem in marketing for this segment is that though it has a sound customer base it is not taking much efforts or steps to expand it with immediate effects. Followings are the list of the companies we visited: Page 56 . Few Major competitors are: 1. 8. so all the companies who offer these services are the competitors of the Karvy. 5. Mutual funds. COMPETITORS OF KARVY KARVY serves a vast range of all financial products like advisory services. 2. SSKI Ltd. 4. their charges for investments and the documents required by them. SME Segment is able to maintain its customer base but it has scope to increase it. Bonds. Insurances etc. 3. There are many competitors for KARVY on this basis and almost all of them offer the services which Karvy offers. As this is the first segment. The satisfied customers refer their peer groups an option to invest with Karvy. India bulls Motilal oswal securities IL & FS investsmart Ltd. not much people are aware of its working. 6. (Sharekhan) Bonanza securities Kotak Securities CIL Securities Eastern Financiers To get first hand details about them we visited a few stock broking houses and talked about the financial instruments available with their company. 7. According to my observation during the tenure of my internship I noticed that the major part of marketing for this segment is from the word of mouth.

 Anand Rathi Securities  IL & FS Investsmart  JRG Securities  Motilal Oswal Securities Page 57 .

455 50 PAISE 10 PAISE Rs. 900 50 PAISE 5 PAISE Rs 950 40 PAISE 4 PAISE Rs.2 2. 450 NIL 50 PAISE 5 PAISE Rs.3 3. OF BRANCHES 2.1 BROKERAGE DELIVERY BROKERAGE FUTURE DEMAT A/C & TRADING A/C OPENING CHARGE 3.2 DEMAT A/C ANNUAL MAINTENANCE CHARGE NIL NIL NIL Rs. 500 50 PAISE 5 PAISE Rs 450 5 PAISE 10 PAISE 5 PAISE 4 PAISE 5 PAISE OVER 200 OVER 640 OVER 200 INDIABULLS IL&FS INVESTSMART MOTILAL OSWAL SECURITIES LTD 1160 132 ANANDRATHI SECURITIES LTD Page 58 .1 BROKERAGE INTRADAY 2. NO BASIS KARVY STOCK BROKING LTD 1 REACH NO.Comparative Analysis S.

1 LACS Rs 5 LACS Rs 25 LACS Rs 5 LACS Rs 25 LACS Page 59 . NO BASIS KARVY STOCK BROKING LTD INDIABULLS IL&FS INVESTSMART MOTILAL OSWAL SECURITIES LTD ANANDRATHI SECURITIES LTD 4 EXPOSURE INTRADAY DELIV ERY DAYS LIMIT Depends Depends Depends 8 Times 4 Times 7 Days Depends Depends Depends 2 Times Depends Depends Depends Depends Depends 5 PMS MINIMUM INVESTMENT Rs.S.

To understand the presence of major online traders in the Indian market and looking about the features provided by them. To find mechanisms to restore liquidity and orderly functioning to the money market. Business development and revenue generation. To develop recommendations to improve the functioning of the money market and the operation and regulation of funds investing in that market.. To develop a good strategy and process that improves the business of the organization. Page 60 . To be able to compare and analyze the various Financial Products.RESEARCH OBJECTIVES OF STUDY The scope of the project during the research and study will be focused on the following parameters: • • • • • • • • • To know the customer prefrence towards the Investment Alternatives in money market. To find out the important factors which do mostly affect to the customers. To determine what type of products the customers deal while doing the online trading.

Sources of data collection are: 1) www.com 2) www. NSE.com For the successful research the manipulation of certain things.. recording and analyzing data for aid in making business decisions. Secondary Data Secondary data is previously collected and assembled for some project other than the one at hand. and • • Symbols for the purpose of generalization is inevitable.com 3) www. Page 61 . It is gathered and recorded by someone else prior to current needs of the researcher. Research is simply the pursuit of truth with the help of the study. Secondary data was collected from BSE. It is less expensive than the primary data. concepts. and some stock broking agencies like Bonanza Portfolio ltd. and Religare Data Collection: Data is collected from secondary sources. Primary Data is gathered specifically for the project at hand through personal interviews with the accounts officers. There are basically two techniques adopted for obtaining information: Primary Data.on-linetrading. Research can be defined as the systematic and objective process of gathering.bseindia.nseindia.RESEARCH METHODOLOGY The basic task of research is to generate accurate information for use in decision making.

A well structured questionnaire was prepared for the primary research and personal interviews were conducted to collect the responses of the target population. People were not willing to answer the entire questionnaire due to the less time available to them. in front of the companies. Exploratory and Descriptive Research The research is primarily both exploratory and descriptive in nature. The secondary data has been taken by referring to various magazines.Research Design: Non Probability The non –probability respondents have been researched by selecting the persons who do the stock trading. The people have been interviewed in the open market. These respondents comprise of the persons dealing in stock trading. Page 62 . Sampling Area The area of the research was Ludhiana. a rough draft was prepared a pilot study was done to check the accuracy of the Questionnaire and certain changes were done to prepare the final questionnaire to make it more judgmental. Sampling Size The sample size was restricted to only 100 respondents. The objective of the exploratory research is to gain insights and ideas. internal sources and internet to get the figures required for the research purposes. The objective of the descriptive research study is typically concerned with determining the frequency with which something occurs. telephonic interviews and through other sources also. The sources of information are both primary and secondary. newspapers. Limitations Of The Study The various limitations of the study are: 1. Sampling Unit The respondents who were asked to fill out the. Sampling Methodology Sampling Technique Initially. Those persons who do not trade in stocks have not been interviewed.

vital literature about online trading along with key concepts of different terms. Page 63 . Some of the respondents who did not do online trading were able to respond to only few questions. 6. inventory management systems. drivers of growth and the necessity of its existence will be presented so that it becomes easier to understand the research area. Internet marketing. Review of literature This chapter brings up relevant literature required to find answers and connect to our research questions. Background This section is intended to offer sufficient background of the research area that covers the general idea of e-commerce and the position of online trading as one of the major element of each economy. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle. hence not providing a true opinion of theirs. although it can encompass a wider range of technologies such as e-mail as well. online transaction processing. or e-business consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. So the people who are aware of such things were found in specific areas for survey purposes. commonly known as e-commerce or eCommerce. There is lack of awareness among people about investing in stock market. electronic data interchange (EDI). 4. and automated data collection systems. The survey was done in the some major metro cities and may not truly express the opinion of whole country. Some respondents might be hesitant to divulge personal and financial information which can affect the validity of all responses.2. The use of commerce is conducted in this way. 3. Ecommerce Electronic commerce. First. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. Most people are comfortable with traditional system in small towns and like to trade from their respective brokers. 5. supply chain management. spurring and drawing on innovations in electronic funds transfer.

the numbers of internet users' have been rapidly increasing and have widely spread into all aspects of life. With no doubt. products and services via computer networks. insiders' illegal activities and etc. traders leave the market where there is no appropriate surveillance over the activities because the unsatisfied customer will not take all the risk in stock market. But how the traders' satisfaction can be measured and how can be proved that. providing a flow trading process and accelerating the transaction settlement can create more motivation for traders to join stock trading exchange likewise cooperate and invest in companies and finally. internet creates an opportunity of reaching these goals. Online Trading and Customer Satisfaction Applying conventional trading systems in India leads to many aspects of problems like manipulation. So it is clear that if stock market as a supervision organization could not offer suitable services to the traders. lot's of paperwork. It has opened up tremendous business opportunities for its users. restructuring whole industries and re-shaping of customer and supplier relationship In order to perform one or more of the business functions Internet based e-commerce systems use World Wide Web based application solutions. may in turn directs us to lose the potential power of this market in order to integrate the traders' small capital. Based on the significant power of World Wide Web and global e-commerce. there is a dramatically gap between what traders looking for and what traders receive as a service? Page 64 . in this manner. managing and running business transaction using computer and Internet. therefore following conventional method in handling and controlling the market. In other words. it seems that providing and recovering service quality in this market may enhance traders' satisfaction and encourage investing more and more. In fact electronic commerce is a way of conducting. According to an Therefore. Stock market is growing up and the number of traders rapidly increasing.E-commerce and the Position of Online Trading "The buying and selling of information. The most common use of e-commerce is to replace or enlighten conventional transaction methods and in the last few years a substantial growth of internet-based services being experienced. It is streamlining business processes. market expansion is meaningless. These problems cause traders' dissatisfaction and the lack of technological foundations creates an inefficient market. the computer networks primarily being the Internet.

There are: reliability.increasing the level of sophistication with well. service quality dimensions identified by different authors. believability. It may mean that the company has to adjust its language for different customers. risk or doubt. honesty. courtesy. physical representations of the service. It involves: physical safety. It involves: explaining the service itself. These dimensions are measured in order to find out the degree of satisfaction in current market and find the relationship between service qualities dimensions which online trading can provide and traders' satisfaction Leading researcher (Berry) identified ten determinant of service quality. Security is the freedom from danger. appearance of personnel. security.Different Models for Measuring Service Quality According to literature. It also means listening to customers. competence. It includes: learning the customer’s specific requirements. Credibility involves trusts worthiness. understanding and tangibles. credibility. financial security and confidentiality. responsiveness. explaining how much the service will cost and assuring the customer that a problem will be handled. providing individualized attention and recognizing the regular custom. Understanding the customer means making the effort to understand what the customer's needs are. such as a plastic credit card or bank statement. Communication means keeping customers informed in language they can understand. access. it involves having the customer's best interests at heart. other customers in the service facilities Page 65 . tools or equipment used to provide the service. Tangibles includes the physical evidence of the service: physical facilities. communication.educated customer and speaking simple and plainly with a novice.

3. 4. Reliability: Ability to perform the promised service dependably and accurately. 5. credibility and security): Knowledge and Empathy (including access. Leading researcher (Parshuraman) came up with five determinants that can be used to measure service quality. Assurance (including competence. 2. understanding the customer):.A number of research workers and others have tried to identify key determinants by which a customer assesses service quality and consequently result in satisfaction or not. courtesy of employees and their ability to inspire trust and confidence. Page 66 . Tangibles: Physical facilities. This scale named SERVQUAL and has been developed for the service sector. It has five generic dimensions or factors and is stated as follows: 1. communication. courtesy. equipment and appearance of personnel. Responsiveness: Willingness to help customers and provide prompt service.

100 Out of which 64 do not have information about stock market and 36 have information about stock market. Have you ever traded/invested in the Share Market? Page 67 .ANALYSIS & INTERPRETATION Q1:.Are you aware of the Stock Exchange? Table No.1 Parameters Yes No Stock Market Awareness 36 64 SAMPLE SIZE. Q2:. Figure No.1 According to this survey we found that only 36%of the people were fully aware about the stock market .If Yes.

Q3:.Table No.3 Parameters Online Offline Types of Trading 19 8 Page 68 .2 It was clear from this survey that 36% of people were trading/investing in the share market.If yes which type of trading you will prefer? Table No.2 Parameters Yes No Trade/Invested 36 0 Figure No.

Q4:.Both 9 Figure No.3 According to this survey we found that 19% of people preferd online trading .For how long you have been using online–trading ? Table No. of Users 12 10 Page 69 .4 Parametres (Time Period) 1 Year 2 Years No. 8% of people liked offline trading and 9 % of people were using both types of trading.

two. respectively. three and four years. Q5:.4 According to this survey we found that 12.What is your Occupation? Table No.3 Years 4 Years 4 10 Figure No. 4 &10 % of the people were using online trading for the last one. 10.5 Parameters Business Service Professionals Occupation 14 12 10 Page 70 .

6 Parameters Daily Weekly Monthly More than 1 month Frequency of Trading 11 8 7 10 Figure No.Figure No. 12% people were doing services and only 10% of the people were professional.5 It was revealed during this survey we found that 14% of people were in.6 Page 71 .How often do you trade? Table No. Q6:.

Q7:.Are you a professional trader? Table No.According to this survey we found that 11% of the people were engaged in daily trading.7 Parameters yes No Professionals 26 10 Figure No.7 Page 72 . 8% were trading weekly. 7% on monthly basis and the 10% traded after more than a month.

Where do you invest all your Savings? Table No. Q8:.According to this survey we found that 26% of people were professional traders and 10 % are ordinary traders.8 Parameters Stock market Mutual funds Government securities Insurance Investment Avenues 13 7 4 10 Page 73 .

10% of people invested in insurance & 2% of people invested in others.Others 2 Figure No. Q9:. 7% of people invested in mutual fund.9 Parameters 1000 to 50000 50000 to 100000 100000 to 150000 Above 150000 Amount invested 18 12 3 3 Page 74 . 4%of people invested in government securities.What amount of money do you invest normally? Table No.8 The survey revealed that 13% of people invested in stock market.

Figure No.150000.50000 to 100000.V.100000 to 150000 and the same percentage of people invested above RS. 18% of people were investing between RS. 3% of people invested between RS.1000 to 50000. 12% of people spared funds between RS.10 Parameters T. Newspapers/magazines Peers/friends/colleagues Internet websites Media preference for making investment 14 6 10 6 Page 75 .Which media would you prefer making your investment? Table No. Q10:.9 According to this survey.

10%of people followed the advice of peers / friends /groups and 6% of people used internet websites as media for investments.Figure No.10 The survey revealed that 14 % of people followed television as a source of media.Do you feel that there is more transparency in online trading as compared to offline trading? Table No.11 Parameters Yes No Transparency in online trading 28 8 Page 76 . Q11:. 6% of the people used newspapers/magazines.

12 Page 77 . Q12:.12 Parameters Very easy to operate Very difficult to operate Not secure Any other reason Experience with online trading 10 8 12 6 Figure No.Describe your experience with online trading till date? Table No.Figure No.11 During this survey 28% of people were of the opinion that there was more transparency in online trading where as 8% of people told that they did not believe in transparency in online trading.

8% of people told that it is very difficult to operate. Q13:. 12 % of people opined that it is not secure and 6 % could not come out with specific comments on online trading.During this survey 10% of people out of their experiences disclosed that online trading is very easy to operate. 15 like Share khan and 1prefer to have Kotak Securities Page 78 . 10 like Master Trust.Please specify. which broking house will you prefer for doing trading/investment in share market? (Open Question) Ans:In this people have different opinions about broking houses: • • • • 10 people like Karvy.

Are you satisfied with the services provided by your broking houses? Table No.Q14:.13 Page 79 .13 Parameters Yes No Investor’s satisfaction 32 4 Figure No.

Online trading 4.If yes then which type of services do you like the most? (open question specify your reasons) Ans:1. less brokerage charges 2. Facilities of purchasing shares up to 4 to 8 times in intra day Page 80 . Correct information provided by brokering houses 6. Mobile trading and SMS facilities 3. Q15:.The survey revealed that 32% of people were satisfied by the services provided by their broking houses and 4% of people were not at all satisfied by the services of their broking houses. Fair dealing 5.

14 Page 81 .14 Parameters Lack of awareness among investors Lack of technical expertise Any other reason Shortcomings of online trading 16 16 4 Figure No.7.Showing loyalty towards customer’s satisfaction .What shortcomings do you feel in Indian On-line trading? Table No. Q16:.

16% of investors were not having technical expertise and 4% investors could not express their problem Page 82 .The data collected during survey clearly indicated that 16% of the investors were not aware of online trading.

10. According to this survey we found that 19% of people preferd online trading . Q3:. Do you aware of the Stock market? Ans:. three and four years.Accord to this s ing urvey we found that 36 of people istrading % /investing in the share m arket. 12% people were doing services and only 10% of the people were professionals Q6:. Q5:.FINDINGS Q1:-.What is your occupation? Ans:. Q4:. which type of trading you will prefer? Ans:-. have you ever traded/invested in the share market? Ans:.How often do you trade? Page 83 .According to this survey we found that only 36%of the people were fully aware about the stock market. Q2:-If yes. two.If yes.According to this survey we found that 12. respectively. 8% of people liked offline trading and 9 % of people were using both types of trading.It was revealed during this survey we found that 14% of people were in.For how long you have been using on line-trading? Ans:. 4 &10 % of the people were using online trading for the last one.

Describe your experience with on-line trading till date? Ans:. 18% of people were investing between RS.15000. 10% of people invested in insurance & 2% of people invested in others. 8% were trading weekly. 4% of people invested in government securities. which broking house will you prefer for doing trading/investment in share market? (Open question) Page 84 .The survey revealed that 13% of people invested in stock market.50000 to 100000.Are you a professional trader? Ans:. Q7:.According to this survey we found that 26% of people were professional traders and 10 % are ordinary traders. 7% on monthly basis and the 10% traded after more than a month.Do you feel that there is more transparency in online share trading as compared to offline trading? Ans:. 8% of people told that it is very difficult to operate.During this survey 28% of people were of the opinion that there was more transparency in online trading where as 8% of people told that they did not believe in transparency in online trading.1000 to 50000.100000 to 150000 and the same percentage of people invested above RS. Q12:.According to this survey we found that 14 % of people are television as a source of media for investments. Q8:.Please Specify. 3% of people invested between RS. 12% of people spared funds between RS.Where do you invest your all savings? Ans:.Ans:.During this survey 10% of people out of their experiences disclosed that online trading is very easy to operate. 10%of people are using peers/friends/groups& 6% of people are using internet websites as media for investments. Q11:. 6%of people are using newspapers/magazines.What amount of money do you invest normally? Ans:. 7% of people invested in mutual fund. Q10:-Which media would you prefer the for making your investment? Ans:. Q9:. Q13:.According to this survey. 12 % of people opined that it is not secure and 6 % could not come out with specific comments on online trading.According to this survey we found that 11% of the people were engaged in daily trading.

Q15:. 1 prefer to have kotak securities. Correct information provided by brokering houses 6. then which type of services do you like the most? (Open Question) Ans:1.Showing loyalty towards customer’s satisfaction. 10 people like KARVY. What shortcomings do you feel in Indian On-line trading system? Ans:.The data collected during survey clearly indicated that 16% of the investors were not aware of online trading. Q16. Q14:.Are you satisfied with the services provided by your broking houses? Ans:. Fair dealing 5. less brokerage charges 2.The survey revealed that 32% of people were satisfied by the services provided by their broking houses and 4% of people were not at all satisfied by the services of their broking houses.e. Mobile trading and SMS facilities 3.In this people have different opinions about broking houses i.Ans:. 15 persons like Share Khan. facilities of purchasing shares up to 4 to 8 times in intra day 7. 16% of investors were not having technical expertise and 4% investors could not express their problem. 10 people like MASTERTRUST.If yes. Online trading 4. LIMITATIONS OF STUDY Page 85 .

charts.  As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays  If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. Despite of the training my level best. These are: Author’s and economist’s perception is not always static. If he want advice on a particular stock in his portfolio he may not even be able to get that. journals and primary source of data. graph and comparative analysis data on the websites. They frequently change their attitude. there were still some limitation in the online trading as well which I think remains there to draw fruitful conclusion.  No available of current data. There were some practical problem which come across and could not be properly death with  The advisory services being promised by the brokers would be of little use to investors looking for an insight into the market.  Lack of magazine.Every research study has its limitations likewise this research has some limitation.  No sufficient time to collect actual data and analysis it. CONCLUSION Page 86 .  This research is based on current economic condition which is not seems to be good.  No field study and no making questionnaire.

It is indeed surprising that though the epicenter of the sub-prime crisis is the US. inflation and RBI is affecting our market to a great extent. did halt the market's progress at times. Strong economic data. concerns over a slowing down US economy and The Left parties' opposition to the Indo-US nuclear pact. 11000. 2006. if we keep aside that brief period of loss that the market witnessed from may 10. rising crude oil prices. Now the stock market is recovering from slowdown. During year 2006.41% And talking about year 2007. Still we can say that people can play safe by investing the blue-chips and undervalued shares. The loss of market cap in the US is only 14 per cent vis-À-vis 38 per cent in India. we can say that stock market touched its peak at 21000 but then crashed badly. the sub-prime mortgage woes in US. 12000. I would like to bring a couple of things into picture: Page 87 . Though the SENSEX is a barometer and after seeing such fluctuations one could be afraid of investing. The rupee's rise against the US dollar the regulator's decision to restrict investments made through participatory notes. negative public sentiments etc.After going through all the analysis regarding the stock market in last 2 years. Now it is revolving around a 14000-16000 figure. investors’ wealth seem to have grown double fold with the SENSEX touching the 10000.8412. And adding to the worries are global slowdown. But the inherent strength of the Indian economy. Presently the hike and seek being played by crude prices. political instability. the various chops and subsidies announced by the government and sustained efforts made by the market regulator to keep investor confidence in the system alive kept the momentum going. Investor wealth in terms of market capitalization has been growing in the range of 6. 13000 and 14000 levels in the same calendar year. heavy inflow of funds from FIIs towards the close of previous calendar year and decent to highly encouraging surge in earnings of top notch companies all pointed to a rosy 2007. we can summarize the happenings of year 2007 as a year which redefined the resistance levels at SENSEX. fairly buoyant results quarter after quarter. the tremors are being felt in India. 2006 to June 14. serial bomb blasts.

1. Federal Reserve (US head banking institution, like RBI in India) is looking forward to make more rate cuts (interest rate cuts) in the coming future to ease out the credit crunch that has evoked since this subprime crisis. Its effect would take 6-8 months to reflect in the global economies including markets of India: Derivatives Trading Market, Futures Trading Market, and Commodities Trading Market of India. This reflection in trading and investment sentiment could take some time to happen, but it would be definitely witnessed with an increment in local business, FII investment in India and NRI Investment Services in India. 2. Indian Shares/Stocks market are not performing great in the gone weeks, but institutions still have abundant money on the table to invest; but with the coming rate cuts, the debt market would not look any good to them either (in the US). Commodity prices have risen up real fast, not giving many investors the room or time to switch from equities or debt market into commodities market. All this brings the investors, institutions, banks & hedge funds in the land of uncertainty. They have to rethink their strategy and that is where the emerging markets look attractive to these investors (because these investors would still want to invest their money. US recession doesn’t mean people would stop investing for their future, or hedge funds/banks would stop investing/speculating money). Thus bringing such investors to look for good valuations and a very positive side for the Asian stock markets. . 3. Nothing bad is happening in the Asian markets. We look pretty strong, and all this major blood is on the street is a result of short-term panic we are witnessing. The momentum would soon pick up once the US recession worries ease a little with fed pumping in more money (bailout) into the subprime cycle. Thus we would see lot more buy orders coming into demat accounts to buy the Indian stocks. 4. India story has not changed at all. We still believe that our economy has lot of potential with great fuel to shoot up. However we still believe that this is not going to happen in short-term, and we might not see too much purchase orders coming into the Online Dmat Accounts of Indians as well as NRI, PIO or OCIs (non resident Indians). There is a lot of room for expansion in India, and there is huge demand for credit consumption. We are just waiting for the liquidity to pour-in. That liquidity is definitely on the table, but all big institutions are looking for some good indicators, and when this happens we would be crawling back on the curve.

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5. We all believe that the markets are majorly falling due to the US worries that are coming in and not because of the performances exhibited by the Indian corporates. Earning results of the company are expected to be out in April (when companies declare their quarterly/annual performances to the public). Everyone out here expects these numbers to be good, which could thus decide the turn of the market sentiments. Global sentiment is changing from what it was 3-4 months back. With EMBI bond spreads coming off, investor risk appetite is returning. However any further bad news from the US banking sector as well as the swine flu developing into a pandemic could spoil the global equity rally. Despite fears of slowdown and leverage, corporate balance sheets remain healthy. Results for Q4FY09 (Jan - Mar 09) have started off on a good note with private sector banks standing out. Against the backdrop of fears of massive deterioration in asset quality, private sector banks have had a very marginal increase in non performing assets. We continue to see some signs of resilience as auto, cement and FMCG sales continue to show strong growth. Order inflow in the infrastructure sector continues to be robust. Despite fears of a credit crunch, in April, one of the largest power projects, the $ 4 bn, 4000 MW coal fired Sasan Power plant achieved financial closure. The heartening feature of the financial closure was that this was done entirely by local lenders and at SPV levels without any recourse to the parent company clearly indicating the willingness of lenders to fund large scale infrastructure projects.

RECOMMENDATIONS
Internet has introduced a way for consumers to manage their money online. Not to mention, Internet has transformed the way investment companies operate their business and has made it easy for private investors to gain straight access to a range of different markets and online tools that were at one point only reserved by the use of investment professionals. Consumer investing and online trading has dramatically changed over the last decade. Online trading

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dynamically continues to be redefined. Services have expanded to include integrated management of additional financial accounts. Not to mention, it has subsequently expanded in conjunction with ground-breaking improvements to the traditional trading interface, such as telephone interface systems. Of course, online trading has many pros. There are several wonderful reasons to invest online and consider online trading. 1. Money saving opportunities The amount of money you save depends primarily on the online brokerage firm that you choose. No two firms are the same. There may be different regulations, similar to bank regulations. There are minimum deposits required that must be maintained. As mentioned above, this will depend on the online brokerage firm. 2. Instant online access You can gain instant access to your account, the value of your portfolio updates immediately before your eyes. 3. Enter online trades at anytime You can enter online trades at anytime and from anywhere. This is very convenient if you live in a different time zone than the country you are trading in. Not to mention, it is especially fit for investors with busy schedules. 4. With online trading you are in charge You are in control of your investments. No sales pitches and no hassle. You decide where to invest your money.

BIBLIOGRAPHY  Websites:
 www.en.wikipedia.org  www.stockinfo.com  www.scribd.com

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in   Magazines: • Technical analysis of stock & commodities • Trader’s resources • Trader’s tips • • Business World LSE’s Magazine Books: • Fundamental Analysis: A Back-To-The Basics Investment Guide to Selecting Quality Stocks.yahoo.gov.com  www.lse. Published by Dearborn Trade.com  www. www. • • Mastering Fundamental Analysis.rediff.com  www. John C.ccsindia.com  Search Engines:  www. Thomsett.com  www.in www. WHC Bassetti Page 91 . Ritchie Jr..bseindia.sebi.com  www. John Magee. Technical Analysis of Stock Trends .by Robert Davis Edwards.co.nseindia. Published by Irwin Professional Pub. Michael C.google.

Published by Probus Pub Co.• • • The New Science of Technical Analysis. Published by John Wiley & Sons. Jobman (Editor). Darrel R. KOTHARI Annexure Questionnaire: Dear respondent. Thomas R. Research Methodologyby C. The Handbook of Technical Analysis.R. Page 92 . Demark.

have you ever traded/invested in the share market? (a) Yes (b) No 3. For how long you have been using on line-trading? (a) 1 year (c) 3 years (b) 2 years (d) 4 years Page 93 . Name………………………………………………………………. Address …………………………………………………………….. If yes. Phone No…………………………………………………………… 1. which type of trading you will prefer? (a) Online trading (c) Both (b) Offline trading Q4. I am working on the project entitled “On-Line trading”. If yes. Do you aware of the Stock market? (a) Yes (b) No 2. You are requested to fill the questionnaire to enable me to undertake the study on the said Project.I am student of MBA.

What is your occupation? (a) Business (c) Professionals (b) Service Q6. What amount of money do you invest normally? (a) 1000 to 50000 (c) 100000 to 150000 (b) 50000 to 100000 (d) Above 150000 Q10. Are you a professional trader? (a) Yes (b) No Q8. Which media would you prefer the for making your investment? Page 94 .Q5. How often do you trade? (a) Daily (c) Monthly (b) Weekly (d) More than one month Q7. Securities (e) Others (b) Mutual Funds (d) Insurance Q9. Where do you invest your all savings? (a) Stock Market (c) Govt.

…………………………………………………………………………………. Are you satisfied with the services provided by your broking houses? (a) Yes (b) No Q15.V (c) Peers /friends/ colleagues (b) Newspapers/ magazines (d) Internet websites Q11. If yes. Please Specify. Describe your experience with on-line trading till date? (a) Very easy to operate (b) Very difficult to operate (c) Not secure (d) Any other reason Q13. which broking house will you prefer for doing trading/investment in share market? ( open question) ……………………………………………………………………………………………… Q14. Do you feel that there is more transparency in online share trading as compared to offline trading? (a) Yes (b) No Q12. then which type of services do you like the most? (open question) i. Page 95 .(a) T..

What shortcomings do you feel in Indian On-line trading system? (a) Lack of awareness among investors about on-line trading (b) lack of technical expertise (c)Any other Page 96 . ………………………………………………………………………………….ii iii iv v ………………………………………………………………………………….... ………………………………………………………………………………….. Q16. ………………………………………………………………………………….

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