3 Ps of the Indian Stock Market, Past, Present & Prospective

Name: Ravi Kumar Singal (2008 -2010) Title: 3 Ps of the Indian Stock Market, Past, Present & Prospective

Executive Summary: In this project I have done study on Stock Markets position past, present & future. I have studied how the investors are entering the stock market, which factors are driving the stock market, the volatility of market, the risk which is in the stock market. In this research report I have selected the QUESTIONAIRE method for collecting information. For this purpose I have chosen the area of DELHI and NCR. The size of my sample is 100 which is divided in following segments1. 2. 3. 4. Type of investors. Different income group. Risk Factors. Participation in Index Futures activities.

After analyzing the findings I have concluded that for most of individual investors, volatility of prices is of most important concern but according to them index futures have failed in above risk curtailment. There is no doubt in individual investors mind about the importance of derivative product in India. Stock index options appear to be the derivative product, which they would like to see in Indian market. Thus overall, it appears that investors would like their risk to be curtailed but not at the expense of upside gains.

Objectives: The objective of the project is to study the movement of stock prices in the Indian Stock markets that would help us in understanding the stock markets in a better manner and hence ensuring the safety of our investments as well as maximizing returns on such investments. Factors that are taken under discussion can be enlisted as follows:

To study about the basics of Stock Market. To study about the various tools that affects the movement of stock prices. To study about the volatility of the stock exchange. To analyze the risk associated with the market. Study of market prices in short term and long term. Impact of Inflation and tool to control it.

Recommendations : In case of public issues, all issues coming to the market are screened for their quality as investors rely on rating and other information for evaluation of risk. Therefore, the market itself functions as a selfdisciplining mechanism for the corporates. Such a screening mechanism is missing in case of private placements which increases the risks involved. The foremost concern in the private placement market should therefore be quality of issues and transparency in deals. Another important point is that the absence of level playing field between public issues and private placement market reflects regulatory arbitrage and it is quite possible that public issues market is not gathering momentum as the private placement market exists as an easier alternative.

Consequently, it can be said that in order to ensure the development of the private placement market in a healthy manner, it is essential to lay down a clear policy framework for this segment. The regulatory fiat is necessary to put in place uniform practices: it is necessary to mandate greater information disclosure, regulate investments by banks, examine the validity of state guarantees, provide for mandatory credit rating, provide for mandatory listing, develop an active secondary market, and improve liquidity. It is also necessary to make trustees as well as debenture redemption reserve compulsory. Conclusion: For most of individual investors, volatility of prices is of most important concern but according to them index futures have failed in above risk curtailment. There is no doubt in individual investors mind about the importance of derivative product in India. Stock index options appear to be the derivative product, which they would like to see in Indian market. Thus overall , it appears that investors would like their risk to be curtailed but not at the expense of upside gains.

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The above article was extracted from dissertations in Marketing, Finance, Human Resources, Strategy, Information Systems by the students from Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR). For more information on Skyline College or the MBA, BBA programmes please CLICK HERE. For MBA, BBA Admission queries please CLICK HERE , & Also Skyline blog .