A Project Report On PDF

For more Project Visit www.techshristi.
com
A project report on investor perception toward (equity &commodity market) Under taken at:
SUBMITTED TO:
K.S. SCHOOL OF BUSSINESS MANAGEMENT

UNDER THE SUPERVISION OF
MR. MUNAF KADRI
SUBMITTED BY: KOMAL PATEL KOMAL PARMAR YEAR: 2012-2013
K.S. School of Business Management
For more Project Visit www.techshristi.com
CANDIDATES STATEMENT
I hereby declare that the work incorporated in this report entitled Investors perception towards equity and commodity Market in partial fulfilment of the requirements for the award of Master of Business Administration (Sem.-2) is the outcome of original study undertaken by me and it has not been submitted earlier to any other University or Institution for the award of any Degree or Diploma.
KOMAL PATEL KOMAL PARMAR
Date: Place:
PREFACE
The following project mainly covers the origin and development of stock Market in India in brief about Sharekhan Stock Broking LTDthe company in which I did my summer internship and about the fundamental and technical analysis and the various tools used in it.
The project is intended to give the reader a fair understanding of the various aspects of the stock market and about the basis factors that investors would like to know before plunging into the vast field of shares and stocks. To excel in any field practical training is an internal part to involve theoretical studied to a practical approach. It makes the individuals to the actual practical condition, which could have been impossible to be thought in classroom. A trainee learnt dealing with the worker and management-working environment along with todays market, which is changing at incredible pace. In addition globalisation and technological changes, we are witnessing power shift from manufacturer to services rapid growth and quality consciousness among consumers, a diminishing role for mass marketing and adverting and a disconcerting of brand loyalty, these changes are throwing companies in a state of confusion regarding strategy unfortunately the general public and even many senior managers do not understand the market.
Management wants to know about the consumer perception about the newly launched product. I am thankful to the management that such type of challenging project was assigned to me for Ahmadabad region.
ACKNOWLEDGEMENT
It is my great pleasure to present this report. I thank all those people who helped me to make this project, by providing necessary information. I would like to express my gratitude towards Mr. MUNAF KANGARI of Share Khan Group who spent his most valuable time and provided with all the necessary details regarding the company. I would also like to thank Mr. Pratik Brabhatt and Mr. Jay bhojavani, who shared their knowledge and expertise. I would also like to thank Mr. Darshit Vyas for their guidance throughout the preparation of the project and for their valued suggestion. At last I would like to thank all those people who helped me bring this project to fortuitism. Date: Place: Signature
KOMAL PATEL KOMAL PARMAR
EXECUTIVE SUMMARY
The summer internship at share khan Stock broking undertaken by us has given us an exposure into the investment scenario in India. The project that we were involved with while working at share khan Stock broking includes advisory services i.e. educating the existing and potential investors about stock market as an alternative source to investment
Analysing the Sub-brokers behaviour includes understanding the concerns a person has towards Stock Market, his stages in life and wealth cycle, the effect of the investments made by the peer groups, effect of the profession he/she is in, education qualification, importance of tax benefits, the most preferred saving tools etc. and this all is analysed with the help of a schedule prepared. I got the chance to survey the process of B2B i.e...Business to Business. In my project I have surveyed the SubBrokers of other companies to know what they are offering to their sub-brokers.
The project has given me knowledge about the stock market and how it works. I got in depth and insights knowledge of services offered by Share khan Stock Broking and
its competitors of in the stock market.. I met with different Sub-brokers of different broking house offering different services to their different clients.
TABLE OF CONTENT
Chapter:-1
Stock market
1.1 STOCK MARKET

INTR0DUCTION
Security market has essentially three categories of participants, namely the issuer of the securities, investors of the securities and the intermediaries; and two categories of product, namely the services of the intermediaries and the securities including derivatives. The security market has two interdependent and inseparable segments, the new issues (primary market) and the stock (secondary market). The primary market provides the channel for sale of new securities while the secondary market deals in securities previously issued.
INTRODUCTION TO STOCK EXCHANGE

The emergence of stock market can be traced back to 1830. In Bombay, business passed in the shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank, the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta, Englishman reported the quotations of 4%, 5% and 6% loans of East India Company as well as the shares of the bank of Bengal in 1836.This list was a further broadened in 1839 when the Caicutta newspaper priented the quotations of banks like union bank and Agra bank. It also quoted the prices of business ventures like the Bengal bonded warehouse, the Docking Company and the storm tug company.
Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during the share mania of 1860-65, the number of brokers increased considerably. By 1860, the number of brokers was about 60 and during the exciting period of the American Civil war, their number increased
to about 200 to 250. The end of American Civil war brought disillusionment and many Failures and the brokers decreased in number and prosperity. It was in those trouble sometimes between 1868 and 1875 that brokers organized an informal association and finally as recited in the Indenture constituting the Articles of Association of the Exchange.
Organization structure of stock exchange are organized as public limited companies, 6 as companies limited by guarantee and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have been permanent recognition. Others have to seek recognition on annual basis. These exchange do not work of its own, rather, these are run by some persons and with the help of some persons and institution. All these are down as functionaries on stock exchange. These are:
i. ii. iii. iv.
Stock brokers Sub-broker Market makers Portfolio consultants etc.
Present scenario of Indian stock market

Realizing there is untapped market of investors who want to be able to execute their own traders when it suits them, brokers have taken their trading rooms to the internet. Known as online brokers, they allow you to buy and sell shares via Internet.
Online Trading is a service offered on the Internet for purchase and sale of shares. In the real world, you place orders on your stockbroker either verbally (personally or telephonically) or in a written form (fax). In Online Trading, you will access a stockbrokers website through your internet-enabled PC and place orders through the brokers internet-based trading engine. These orders are routed to the Stock Exchange without manual intervention and executed thereon in a matter of a few seconds.
There are 2 types of online trading service: 1. Discount brokers: Discount online brokers allow you to trade via Internet at reduced rates. Some provided quality research, other dont. 2. Full service online broker: Full services online brokerage is linked to existing brokerages. These brokers allow their clients to places online orders with the option of talking/chatting to brokers if advice is needed. Brokerage rates here are higher. Indianinfoline.com, ICICIDirect.com, IndiaBulls.coM, AngelBroking.com, Angel broking.com, HDFCSecurities.com is some of the online broking sites in India.
Equity Market
Indian Equity Market

The Indian Equity Market is more popularly known as the Indian Stock Market. The Indian equity market has become the third biggest after China and Hong Kong in the Asian region. According to the latest report by ADB, It has a market capitalisation of nearly $600 billion. As of March 2009, the market capitalisation was around $598.3 billion (Rs 30.13 lakh crore) which is onetenth of the combined valuation of the Asia region. The market was slow since early 2007 and continued till the first quarter of 2009. A stock exchange has been defined by the Securities Contract ( Regulation) Act, 1956 as an organisation, association or body of individuals established for regulating, and controlling of securities. The Indian equity market depends on three factors:-
Funding into equity from all over the world Corporate houses performance Monsoons
The stock market in India does business with two types of fund namely private equity fund and venture capital fund. It also deals in transactions which are based on the two major indices- Bombay Stock Exchange (BSE) and National Stock Exchange of India Ltd. (NSE). The market also includes the debt market which is controlled by wholesale dealers, primary dealers and banks. The equity indexes are allied to countries beyond the border as common calamities affect markets. E.g. Indian and Bangladesh stock markets are affected by monsoons.
The equity market is also affected through trade integration policy. The country has advanced both in foreign institutional investment (FII) and trade integration since 1995. This is a very attractive field for making profit for medium and long term investors, short term swing and position traders and very intra day traders. The Indian market has 22 stock exchanges. The larger companies are enlisted with BSE and NSE. The smaller and medium companies are listed with OTCEL (over The counter Exchange of India). The functions of the Equity Market in India are supervised by SEBI (Securities Exchange Board of India).
History of India Equity Market The history of the Indian equity market goes back to the 18th century when securities of the East India Company were traded. Till the end of the 19th century, the trading of securities was unorganized and the main trading centres were Calcutta (now Kolkata) and Bombay (now Mumbai).
Trade activities prospered with an increase in share price in India with Bombay becoming the main source of cotton supply during the American Civil War (1860-61). In 1865, there was drop in share prices. The stockbroker association established the Native Shares and Stock Brokers Association in 875 to organize their activities. In 1927, the BSE recognized this association, under the Bombay Securities Contracts Control Act, 1925. The Indian Equity Market was not well organized or developed before independence. After independence, new issues
were supervised. The timing, floatation costs, pricing, interest rates were strictly controlled by the Controller of Capital Issue (CII). For four and half decades, companies were demoralized and not motivated from going public due to the rigid rules of the Government. In the 70s, the trading of badla resumed in a different form of hand delivery contract. But the Government of India passed the Dividend Restriction Ordinance on 6th July, 1974. According to the ordinance, the dividend was fixed value or 1/3 rd of the profit under section 369 of The Companies Act, 1956 whichever is lower.
This resulted in a drop by 20% in market capitalisation at BSE (Bombay Stock Exchange) overnight. The stock market was closed for nearly fortnight. Numerous multinational companies were pulled out if India public under FERA, 1973. THE 80s saw a growth in the Indian Equity Market. With liberalised policies of the government, it became lucrative for investors. The market saw an increase of stock exchanges, there stock exchanges, there was a surge in market capitalization rate and the paid up capital of the listed companies.
The 90s was the most capital in the stock markets history. Indians became aware of liberalization and globalization. In May 1992, the cap ital issues (control) Act,1947 was abolished. SEBI which was the Indian Capital Markets regulator was given the power and overlook new trading policies, entry of private sector mutual funds and private sector banks, free prices, new stock exchanges, foreign institutional investors, and market boom and bust.
In 1990, there was a major capital market scam where bankers and brokers were involved. With this, many investors left the market. Later there was a securities scam in 1991-92 which revealed the inefficiencies and inadequacies of the Indian financial system and called for reforms in the Indian Equity Market. Two new stock exchanges, NSE (National Stock Exchange of India) established in 1994 and OTCEL (Over the Counter Exchange of India) established in 1992 gave BSE a nationwide competition. In 1995-96, an amendment was made to the Securities Contracts (Regulation) Act, 1956 for introducing options trading. In April 1995, The National Securities Clearing Corporation (NSCC) and in November 1996, the National Securities Depository Limited (NSDL) were set up for demutualised trading, clearing and settlement. Information Technology
scrips were the major players in the late 90s with companies like Wipro, Satyam, and Infosys.
In the 21st century, there was the Ketan Parekh Scam. From 1st July 2001, Badla was discontinued and there was introduction of rolling settlement in all scrips. In February 2000, permission was given for internet trading and from 2000, futures trading started.
THE BOMBAY STOCK EXCHANGE (BSE)

The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai, popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalai Street, Mumbai, India.
Bombay stock exchange was established in 1875.There is around 3,500 Indian companies listed with the stock exchange, and has a significant trading volume. As of October 2006, the market capitalization of the BSE was about Rs. 33.4 trillion (US $ 730 billion). The BSE SENSEX (Sensitive index), also called the BSE 30, is a widely used market index in India and Asia. As of 2005, it is among the 5 biggest stock exchanges in the world in terms of transactions volume.
An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, each investing a (then) princely amount of rupee 1. This banyan tree still stands in the Horniman Circle Park, Mumbai. Mumbai, July 1 (Reuters) Indian shares ended higher for the second week in a row, but fell 0.44 percent on Friday as losses in Reliance Industries and Bharti Airtel and some profit-taking after six days of gains pulled down the main index. Shares in energy major Reliance fell 4.3 percent over worries of lower reserve estimates at its key gas block off Indias east coast, and after television reports that a former up
steam regulators house was searched. Top mobile operator Bharti fell 2.9 percent after brokerage CLSA downgraded the stock.
Traders and analysts said despite the odd hiccup, the positive momentum from the week is likely to continue, helped bya revival in interest from foreign institutional investors (FIIS).There is some profit taking, but positive FII inflows again is a mood changer, said K.K.Mital, chief executive for portfolio management services at Global Capital Market. Some more flows are expected in India; give the global scenario, so we should see some momentum. Foreign institutional investors net bought shares worth $1.1 billion in the last five sessions till June 30, although they have been in 2010. Greeces approval of austerity measures this week has boosted risk appetite, while an unexpected jump in business activity in the U.S Midwest helped quell fears about an economic slowdown. Investors have to transact via jobber/broker. The jobber/broker feed his buy/sell quotes in his terminal, which is linked to the main server at the BSE. Since both jobbers and brokers feed their orders, the NSE has adopted a quote-driven system and order driven system.
HOW BSE WORKS?

The scripts traded on BSE have been classified into the following;
A - Large capitalization, profitable, reliable, high-liquid companies B1 Mid-capitalization, reliable, high-liquid companies B2 Mid-capitalization, moderate liquid companies T Trade to trade companies (compulsory delivery of trade within a day), low liquid companies S Not reliable, low liquid companies Z Blacklist companies
BSE SENSEX
The BSE SENSEX also known as the BSE 30 is a value-weighted index composed of 30 scripts. The base year of SENSEX is 1978-79 and the base value is 100.
SENSEX is not only scientifically designed but also globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The set of companies which make up the index has been changed only a few times in the last 20 years. These companies account for around on-fifth of the market capitalization of the BSE. The index is widely reported in both domestics and international market through print as well as electronic media.
The Index was initially calculated based on the Full Market Capitalization methodology but was shifted to the free float methodology with effect from September 1, 2003. The free float market capitalization methodology of index construction is regarded as ad industry best practice globally. Due to its wide
acceptance amongst the Indian investors, SENSEX is regarded to be the pulse of the Indian stock market.
NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE)

National stock exchange (NSE), established in the mid 1990s as a demutualised electronic exchange by leading Indian financial institutions offers trading, clearing and settlement services in a range of products covering equity, debt and equity derivatives. It is Indias largest exchange and ranks third globally by number of traders in the equities market. NSE provides a modern, fully automated screen-based trading trading system, named NEAT (National Exchange Automated Trading System) with nearly 40,000 trading terminals giving it extensive reach. Its NIFTY 50 is used extensively by investors in India and around the world to take exposure to the Indian equities market.
In the fast growing Indian financial market, there are 23 stock exchange trading securities. The National Stock Exchange of India (NSE) is the largest and most advanced exchange with 1016 companies listed and 726 trading members.
NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operates as separate entities. The National Stock Exchange of India Ltd. provides its clients with a single, fully electronic trading platform that is operated through a SAT network. Unlike most world exchanges, the NSE uses the satellite communication system that connects traders from 345 Indian cities. The advanced
technologies enable up to 6 million traders to be operated daily on the NSE trading platform. In 1998, the National Stock Exchange of India launched its we-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as Best IT us age Award by computer society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1990).
How NSE Works?
The NSE has opted for an order-driven system. When an order is placed by a trading member, an order confirmation slip is generated. When a trade takes place, a trading confirmation slip is printed at the trading members workstation. It gives details like quantity, price, code number of counterparty, and so on. The identity of the trading member is not revealed to other when he places an order or when his pending orders are displayed. Hence, large orders can be placed on the NSE. On the eighty day of trading, each member gets a statement showing his net position, the amount which he has to transfer to the clearing bank, and the security he has to deliver to the clearing house. Members are required to deliver securities and cash by the thirteen and fourteen day respectively. The fifteenth day is the payout day. All traders on NSE are guaranteed by the National Securities Clearing Corporation (NSCC).This means that when A buys from B, NSCC becomes the counterparty to both eliminates counterparty risk.
Types of Trading
Delivery Intraday Short Selling Futures Futures vs. Forwards Standardization Margin settlement Option Arbitrage
DELIVERY
Delivery trading is when you want the shares that you purchased to come into your demat accounts, i.e., you when to take the delivery of shares that you have purchased. T + 2 are settlement where all the trades are settled on T+ 2 basis where T is the trade day. For example, a trade executed on Monday is mandatory settled by Wednesday (considering two working days from the trade day). The funds and securities pay-in and pay-out are carried out on T+ 2 days.
INTRADAY
Day trading refers to the practices f buying and selling financial instrument within the same trading day such that all position will usually (not necessarily always) be closed before the market close of the trading day. This is the opposite of After-hours trading. Traders that participate in day trading are called day traders. Some of the more commonly day-traded financial instruments are stocks. Stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures. Day trading used to be the financial firms and professional investors and speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, day trading has become and the popularity of the Interest. Although collectively called day trading. There are many sub trading styles within day trading. A day trader is not necessarily very active. Depending on ones trading strategy, the number of trades made in a day may very from one to dozens or more.
SHORT SELLING
Short selling is the sale of shares that the seller does not own at the time of trading. Despite being a long-standing market practice worldwide, short-sales have been the subject of considerable debate and divergent views in most securities markets. The votaries of short-selling views the practices as a desirable and essential feature of a securities market. They argue that in a weak market, short-covering of positions taken at the beginning of a downturn, would arrest the declining trend. Critics of short-selling, on the other hand, are convinced that short-selling poses potential risks and can easily destabilise the market directly or indirectly.
FUTURES
In finance, a future contract is a standardised contract, traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price. The futures date is called the delivery date or final settlement date. The pre-set price is called the futures prices. The price of the underlying asset on the delivery date is called the settlement price. A futures contract gives the holder the obligation to buy or sell, which differs from an option contract, which gives the holder the right, but not the obligation. In other words, the owner of an options contract may exercise on the settlement date. The seller delivers the commodity to the buyer, or, if it is a cash-settled future, then cash is transferred from the futures trader who sustained a loss to the one who made a profit. To exit the commitment prior to the settlement date ,the holder of a future position has to offset his/her position by either selling a long position or buying back a short position,effectivel closing out the futures position and its contract obligations. Futures contract, or simply futures, is exchange traded derivatives. The exchanges clearinghouse acts as counterparty on all contracts, sets margin requirements, and crucially also provides a mechanism for settlement.
FUTURES vs. FORWARDS
While futures and forward contracts are both a contract to deliver a commodity on a future date at a prearranged price, they are different in several respects: Forwards transact only when purchased and on the settlement date. Futures, on the other hand, are rebalanced, or marked to market, everyday to the daily spot price of a forward with the same agreed-upon delivery price and underlying asset. The fact that forwards are not rebalanced daily means that, due to movements in the price of the underlying asset, a large differential can build up between the forwards delivery price and the settlement price. This means that one party will incur big loss at the time of delivery (assuming they must transact at the underlings spot price to facilitate receipt/delivery).
This in turn creates a credit risk. More generally, the risk of a forward contract is that the supplier will be unable to deliver the required commodity, or that the buyer will be unable to pay for it on the delivery day. The rebalancing of futures eliminates much of this credit risk by forcing the holders to update daily to the price of an equivalent forward purchased that day. This means that three will usually be very little additional money due on the final day to settle the futures contract. In addition, the daily futures-settlement failure risk is borne by an exchange, rather than an individual party, limiting credit risk in futures. Consider a futures contract with a $100 prices: lets say that on day 50 , a forward with a $100 delivery price (on the same underlying asset as the future) costs $88. On day 51, that forward costs $90. This means to mark-tomarket would require the holder of one side of the future to pay$2 on day 51 to track the change of the forward price. This money goes, via margin accounts, to the holder of the other side of the future.
STANDARDIZATION
Futures contracts ensure their liquidity by being highly standardized, usually by specifying; The underlying asset or instrument. This could be anything from a barrel of crude oil to a short term interest rate. The type of settlement, either cash settlement or physical settlement. The amount and units of the underlying asset per contract. This can be national amount of bonds, a fixed number of barrels of oil, units of foreign currency, the national amount of the deposit over which the short term interest rate is traded, etc. The currency in which the futures contract is quoted. The grade of the deliverable. In the case of bonds, this specifies which bonds cab be delivered. In the case of physical commodities, this specifies not only the quality of the underlying goods but also the manner and the location of delivery. For example, the NYMEX Light Sweet Crude oil contract specifies the acceptable sulphur content and API specific gravity, as well as the location where delivery must be made. The delivery month.
The last trading date. Other details such as the commodity tick, the minimum permissible price fluctuation.
MARGIN
To minimize credit risk to the exchange, traders must post margin or a performance bond, typically 5%-15% of the contracts value. Margin requirements are waived or reduced in some cases for hedgers who have physical ownership of the covered commodity or spread traders who have offsetting contracts balancing the position.
SETTLEMENT
Settlement is the act of consummating the contract, and can be done in one of two ways, as specified per type of futures contract: Physical delivery: - the amount specified of the underlying asset of the contract is delivered by the seller of the contract to the exchange, and by the exchange to the buyers of the contract. Physical delivery is common with commodities and bonds. In practice, it occurs only on a minority of contracts. Most are cancelled out by purchasing a covering position- that is, buying a contract to cancel out an earlier sale (covering a short), or selling a contract to liquidate an earlier purchase (covering a long). The Nymex crude futures contract uses this method of settlement upon expiration. Cash settlement: - a cash payment is made based on the underlying reference rate, such as a short term interest rate index such as Euribor, or the closing value of a stock market index. A futures contract might also opt to settle against an index based on trade in a related spot market. Ice Brent futures use this method.
OPTIONS:Options are financial instrument that convey the right, but not the obligation, to engage in a future transaction on some underlying security,
or in a futures contract. In other words, the holder does not have to exercise this right, unlike a forward or future. For example, buying a call option provides the right to buy a specified quantity of a security at a set strike prices at some time on or before expiration, while buying a put option provides the right to sell. Upon the option holders choice to exercise the option, the party who sold, or wrote, the option must fulfill the terms of the contract.
Contract specifications
Every financial option is a contract between the two counterparties. With the terms of the option specified in a term sheet. Option contracts may be quite complicated; however, at minimum, they usually contain the following specifications: Whether the option holder has the right to buy (a call option) or the right to sell (a put option) The quantity and class of the underlying asset(s) (e.g. 100 shares of XYZ Co. B stock). The strike prices, also known as the exercise price, which is the price at which the underlying transaction will occur upon exercise The expiration date, or expiry, which is the last date the option can be exercised The settlement terms, for instance whether the write must deliver the actual asset on exercise, or may simply tender the equivalent cash amount. The terms by which the option is quoted in the market, usually a multiplier such as 100, to convert the quoted prices in to actual premium amount.
ARBITRAGE
In economics and finance, arbitrage is the practice of taking advantage of a price differential between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any
probabilistic temporal state and positive cash in at least one state; in simple terms, a risk-free profit. A person who engages in arbitrage is called an arbitrageur. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies. If the market prices do not allow for profitable arbitrage, the prices are said to constitute an arbitrage equilibrium or arbitrage-free market. Arbitrage equilibrium is a precondition for a general economic equilibrium.
COMMODITIES MARKET
Commodities Market in India

Organized futures market evolved in India by the setting up of "Bombay Cotton Trade Association Ltd." in 1875. In 1893, following widespread discontent amongst leading cotton mill owners and merchants over the functioning of the Bombay Cotton Trade Association, a separate association by the name "Bombay Cotton Exchange Ltd." was constituted. Futures trading in oilseeds were organized in India for the first time with the setting up of Gujarati Vyapari Mandali in 1900, which carried on futures trading in groundnut, castor seed and cotton.
Before the Second World War broke out in 1939 several futures markets in oilseeds were functioning in Gujarat and Punjab. A three-pronged approach has been adopted to revive and revitalize the market.
Firstly, on policy front many legal and administrative hurdles in the functioning of the market have been removed. Forward trading was permitted in cotton and jute goods in 1998, followed by some oilseeds and their derivatives, such as groundnut, mustard seed, sesame, cottonseed etc. in 1999. A statement in the first ever National Agriculture Policy, issued in July, 2000 by the government that futures trading will be encouraged in increasing number of agricultural commodities was indicative of welcome change in the government policy towards forward trading.
Secondly, strengthening of infrastructure and institutional capabilities of the regulator and the existing exchanges received priority. Thirdly, as the existing exchanges are slow to adopt reforms due to legacy or lack of resources, new promoters with resources and profession approach were being attracted with a clear mandate to set up demutualized, technology driven exchanges with nationwide reach and adopting best international practices. Most of the existing Indian commodity exchanges are single commodity platforms; are regional in nature, run mainly by entities which trade on them resulting in substantial conflict of interests, opaque in their functioning and have not used technology to scale up their operations and reach to bring down their costs. But with the strong emergence of: National Multi-commodity Exchange Ltd., Ahmadabad (NMCE), Multi Commodity Exchange Ltd., Mumbai (MCX), National Commodities and Derivatives Exchange, Mumbai (NCDEX), and National Board of Trade, Indore (NBOT), all these shortcomings will be addressed rapidly. These exchanges are expected to be role model to other exchanges and are likely to compete for trade not only among themselves but also with the existing exchanges.
The current mindset of the people in India is that the Commodity exchanges are speculative (due to non delivery) and are not meant for actual users. One major reason being that the awareness is lacking amongst actual users. In India, Interest rate risks, exchange rate risks are actively managed, but the same does not hold true for the commodity risks. Some additional impediments are centered on the safety, transparency and taxation issues.
WHY STRUCTURED COMMODITY MARKET?

Today the business is not limited to our area only. Where the production is less but, demand is comparatively high prices of the product will go up. On the contrary where the production is high but demand is comparatively low the prices will go down. If sellers and buyers come together at a place then it will create a market. Here against one seller there will be more then one buyer. In this market buyers will come across the country for transactions.
In this market not only producer and seller are included but arbitrageur, speculator, and hedger can tread. In this way the total area of market will become broad. In our country agricultural products form 25% of GDP. Total turnover of commodity of market is nearly Rs.1, 10,000 corers. In which 60,000 corers comes from agriculture and left is coming from coal, crude, etc Today in our country most of the trade is done in unorganized market. In the market current and future contracts are done. Promissory contracts have been started science 1875. But due to some restriction it was not properly worked. Presently nearly in 122 commodities tread is being done.
Transaction in the organized market:

Organized markets have structured forms of transactions. The commodity exchanges are regulated as per rules and regulations define in The Forward Contracts (Regulation) Act, 1952 for regulating forward\future contracts. In December 2003, the National Commodity and Derivative Exchange Ltd (NCDEX) launched futures trading in nine major commodities.
MCX To begin with contacts in gold, silver, cotton, soybean, soya oil, mustered seed, rapeseed oil, crude palm oil and RBD Palmolive are being offered. Now more then 40 commodity items are included. Day by day number of commodity items is incising. The various commodities that tread on the NCDEX and look at some commodity specific issues. In this commodity market classified as agriculture products, precious metal, other metal and energy, which we discuss above.
NCDEX
NATIONAL COMMODITIES AND DERIVATIVES EXCHANGE
NCDEX started working on 15th December, 2003. This exchange provides facilities to their trading and clearing member at different 130 centers for contract. In commodity market the main participants are speculators, hedgers and arbitrageurs. Promoters of NCDEX are National Stock Exchange(NSE) ICICI bank Life Insurance Corporation(LIC) National Bank for Agricultural and Rural Development (NABARD) IFFICO Punjab National Bank (PNB) CRISIL
WHY NCDEX?
NCDEX is nationalized screen based system which is providing transparent, private and easy services. NCDEX is one of the traditional media which gives online information NCDEX is one of the Indian commodity exchange, constructed on the basis of the current national institutes the exchange has been
established with the coloration of leading institutes like NABARD, LIC, NSI etc. In India NCDEX has maximum settlement guarantee fund. NCDEX has appointed two exports for checking quality at the time of delivery
FACILITIES PROVIDED BY NCDEX

NCDEX has developed facility for checking of commodity and also provides a wear house facility By collaborating with industrial partners, industrial companies, news agencies, banks and developers of kiosk network NCDEX is able to provide current rates and contracts rate. To prepare guidelines related to special products of securitization NCDEX works with bank. To avail farmers from risk of fluctuation in prices NCDEX provides special services for agricultural. NCDEX is working with tax officer to make clear different types of sales and service taxes. NCDEX is providing attractive products like weather derivatives.
MCX
COMMODITY EXCHANGE
MULTI COMMODITY EXCHANGE of India limited is a new order
exchange with a mandate for setting up a nationwide, online multi-commodity marketplace, offering unlimited growth opportunities to commodities market participants. As a true neutral market, MCX has taken several initiatives for users In a new generation commodities futures market in the process, become the countrys premier exchange. MCX, an independent and a de-mutual zed exchange since inception, is all set up to introduce a state of the art, online digital exchange for commodities futures trading in the country and has accordingly initiated several steps to translate this vision into reality.
Market Watch:
The market watch window is used to view the market details for a particular or group of contracts and for a particular instrument type. This window displays the following details: Symbol, Expiry, price quotation unit, buy qty, buy price, sell price, sell qty, last traded price, D.P.R, volume (in 000s), value (in lac),% change, average trade price, high, low, open, close & open interest
CHAPTER: 2
Company Profile
INTRODUCTION OF SHAREKHAN
What is a share? What are futures? How do you trade in commodities? Lost in the financial jungle and need a guide? Allow share khan, Indias leading stockbroker with over eight decades of stock market experience, to help you.
What is all about Sharekhan?

NAME : S. S. K. I. SECURITEIS PVT. LTD. SHAREKHAN LTD. A 206, PHOENIH HOUSE, PHOENIH MILL COPUND, SENAPATI, BAPTA MARG, LOWER PAREL, MUMBAI 400013 TYPE OF COMPANY: PH NO: Pvt. Ltd.
HEAD OFFICE:
1800 - 22 7500, 3970 75 00
E-MAIL: shrinivasb@branch.sharekhan.com WEB SITE: www.sharekhan.com
CHIEF EXE.OFFICER : TARUN SHAH BRANCH OFFICES: 150+ BRANCHES
More About Sharekhan

SSKI named its online division as SHARE KHAN and it is into retail Broking The business of the company overhauled 6 years ago on February 8, 2000. It acts as a discount brokerage house to a full service investment solutions provider It has a 4000+ member strong team. It has specialized research product for the small investors and day traders Largest chain of share shops which is 150+ share shop in 450 city, 2000+ Franchisees & over 172 Branches across India. It has $25m/trades every day. Leading player today with 20% market share Over 95% online clients The site was also launched on February 8, 2000 and named it as www.sharekhan.com The Speed Trade(web based) account of share khan is the next generation technology product launched on April 17, 2002
Trade Tiger was launched on October 28, 2002 for trading in Derivatives It offers its customers with the trade execution facilities on the NSE, for cash as well as derivatives, depository services.
SHAREKHAN ORIGINS
Share khan is an equities focused organization tracing its lineage to SSKI (Shripal Sevantilal Kantilal Ishwarlal), a veteran equities solutions company with over 8 decades of experience in the Indian stock markets. Share khan is 80 years old company which is started online in the year 2000 & it is the first company who started online in 1984 they ventured into institutional broking& corporate finance.
Integrated Equity Solutions Provider

Among the top 3 branded retail service providers Multi-channel access to clients Tailor made research and products Depository Services
Derivatives Innovative products for enhanced performance Best research team in the world
Sharekhans Corporate Structure & The management team
DIRECTORS:
MR.TARUN SHAH (CEO-SHAREKHAN)
MR. JAIDEEP ARORA-PRODUCT & TECH DIRECTOR
MR. SHANKAR VAILAYA- OPERATION DIRECTOR
VISION
To empower the investor with quality advice and superior service to help him take better investment decisions. We believe that our growth depends on client satisfaction.
MISSION
To provide the best customer service and product innovation tuned to diverse needs of clientele
Continuous up-gradation with changing technology, while maintaining human values.
Respond to progressive globalization and achieving international standard.
Efficiency and effectiveness built on ethical practices.
CORE VALUE
Customer satisfaction through Providing quality service effectively and efficiently Smile, it enhances your face value is a service quality stressed on periodic customer service Audits Maximization of stakeholder value Success through Teamwork, integrity and People
ACHIEVEMENTS OF SHAREKHAN
A wired companies along with Reliance, HII, Infosys,etc by

Business Today ,January 2004 edition.
It was awarded Top Domestic Brokerage House four times by Euro and Asia money.
It was winner of Best Financial website award.

Indias most preferred brokers within 5 years. Awaaz customers Award 2005.
COMPANY PROFILE
Name Services Address
: Share khan portfolio Management
: 201-202& 302, Dynamic house, Nr. Vijay Cross Road, Navrangpura, Ahmedabad-380009.
Area Manager : Mr. Munaf Kadari Territory Manager : Mr. Riddhish Mehta Relationship Manager: 20 Sales Executives: 15
PORTERS 5 FORCES MODEL

POTENTIAL ENTERANT Invest mart Various Bank Refco Group Ltd. Geojit Cipher UTI Securities Ltd. IDBI Capital Mkt. Services Ltd.
SUPPLIERS NSDL CSDL NSE BSE MCX NCDEX
COMPETITORS ICICI Web Trade Ltd. Kotak Securities Ltd. India Bulls Motile Oswal Securities India Info line Ltd.
BUYERS Small Investors Franchises/Business partners HNIS MF Companies HUF Institutional Investors
SUBSTITUTES Mutual Funds Insurance Bank FD
SUPPLIERS
NSDL & CSDL are the regulatory bodies for Depository Participants like SSKI, SHCIL, ICICIdirect.com, etc. Also these regulatory bodies have got an upper hand as the bargaining power stock broking houses like SSKI, etc.would be less
NSE & BSE are playgrounds where common an investor trade through stock broking houses, for which they have to take permission from NSE/BSE. NSE & BSE are under the purview of SEBI, thats why stock broking houses like SSKI, have low bargaining power. But here there is one advantage that NSE/BSE have i.e. they cannot go for forward integration. MCX and NCDEX are stock exchanges, which trade in commodities and derivatives. Here again stock broking houses have to follow rules and regulation of the same.
BUYERS
There are various types of investors who trade through stock broking houses like SSKI, which includes investors like small investors, medium net worth investor, business partners, institutional investor and mutual fund. Companies. Here the bargaining power of stock broking houses depends on how big the investor is. So here we can say that bargaining power of stock broking houses is high incase of small investors & HUF.
While the bargaining power is moderate i n case of HNI (High New Worth Investors)/ MNIs (Medium Net Worth Investors) and business partners. But in the case of mutual fund companies and institution investors bargaining power is less. There is competitive buzz in stock broking industry; competitors are offering low brokerage and best services with added feature. So switching cost is pretty much less. So the buyer can easily switch over to competitors product.
COMPETITORS
The company is facing the competition from local as well as national level players. The local players provide facility for off-line trading while the national players like ICICIdirect.com and Kotakstreet.com, HDFC Security provide online trading services. There are also other big names like India bulls, Motile Oswal, 5paisa and Marwari, which encircle the company from both the sides by providing online and off-line trading with competitive services.
POTENTIAL ENTRANTS
The potential entrants like Invest mart, Jeojit and Cipher, which are coming in near future to Rajkot City. Nationalized banks are also planning to enter this field by tying up with broking houses. E.g. Bank Of Baroda.
SUBSTITUTES
Here substitutes are such instruments, which can be used instead of investing in shares. The instruments like Bank FD, insurance, mutual funds are the substitutes. If the use of this instruments increase this may be disadvantageous for the stock broking houses. The companies and banks, which are having these instruments, can plunge into this industry.
ENTRY BARRIERS
Huge capital: - Capital is necessary not only for fixed facilities but also for customers credit and absorbing start up losses. To start a stock broking house, one needs huge capital for technology up gradation and skilled manpower. TechnologyTechnology for stock broking houses is life saving device. Stock broking requires huge capital to make their products user friendly, which in turn requires capital to employ
skilled manpower. Thus, technology could be one of the entry barriers. Regulatory Constraints: - Obtaining a license is a tedious job for a stock broking house. It should comply with the regulation of the governing bodies like SEBI, NSDL, etc. For a stock broking houses to plunge into the stock broking industry, it needs to have some kind of financial background and expertise. Thus, regulators constraints could be an entry barrier. Experience curve: - The core competency in this industry is the services, which are provided to the end-users and the research, based an activity which includes TIPS, fundamental as well as technical script analysis. Also the most important thing which helps the already established firms is-TRUST which people would be having on firms like SSKI , Motilal Oswal, etc. which is very difficult for new companies to imitate. Network:- The Reach to the customer is the key factor in the industry. The network of the companies like Motilal Oswal, Share khan, and ICICI is very efficient and spread all over India. It will take time for a new entrant to establish such a huge network (e.g. Marwadi), which says, Network can come up as the most difficult entry barrier to overcome. Expected Retaliation:Whenever a new player comes in the industry, the old companies have an option to reduce the prices of their product. This kind of practice is called expected Retaliation, which is also possible in this industry in terms of less brokerage rates and reduced account opening charges. E.g. before the entry of so many new companies, Sharekhan was having two types of accounts viz. speed trade and speed trade plus, which were costing 1000 & 1500 account opening charges respectively. But due to competition, they have come up with only one account i.e. speed trade plus with the account charges of Rs.1000.
MARKET COVERGE
Ground Network Largest in India

122 Franchisees and 68 branches
Covers 82 cities in 17 states across India Trade execution facility on BSE and NSE for Cash as well as Derivatives Depository/Demat account services Personalized Share khan research advice Uniform service standandard
PRODUCT & SERVICES OF SHARE KHAN
Sharekhan services delivery modules.

Share shops. Online trading. 1. Web based classic interface for investors. 2. Web based applet fast trade for investors. 3. Trade tiger exe for active traders. Dial & Trade. 1. 1800-22-7500 2. 1800-22-7050 3. City code 30307600
Segmented Customer As Per His Profile

1. Those who investing first time in the sock market :First Step. 2. Those who transact occasionally: - Classic. 3. Those who trade actively in the market: - Trade tiger. 4. Those HNIS looking for personalised & exclusive investment & portfolio management services (PMS).
OFFERING OF THE COMPANY

Share khans products are basically divided into online and offline products.
SHAREKHAN
OFF-LINE
ONLINE
OFFLINE TRADING A/C
Offline A/c is the A/c for the investors who are not familiar with the use of computer. The A/C opening charges Rs.500(One time) For 1st Year De-mat A/C is Free, On 2nd Year AMC charge is applicable.
ONLINE TRADING (95%)
The various benefits the client gets from the online trading are: Freedom from Paperwork: Integrated trading, bank and De-mat account (auto pay-in and pay-out of securities) with digital contracts removes all paperwork. Instant Credit and Transfer: Instant transfer of funds from bank accounts of client's choice to his/her Share khan trading account. Trade Anywhere: Enjoy the ease of trading from any part of the world in a completely secure environment. Dial n Trade: Call Share khan on a toll free number to place orders through share khans telebrokers. Timely Advice: Make informed decisions with expert advice, investment calls and live market commentary. Real-Time Portfolio Tracking: Benefit from real-time information of your investment and current portfolio value. After-Hour Orders: The Client can place orders after the market hours, which get executed as soon as markets open.
BRIEF INFORMATION ABOUT SHAREKHANS ONLINE TRADING A/C
Basically its a share trading account, with a new and latest concept, including live terminal of NSE/BSE/F&O/COMMODITY. Here customers are able to trade online in shares with almost no paperwork, fast and hassle free processing. Share khan provide with a 3-in-1 Account. 1) Online Trading Account 2) De-mat Account 3) Saving Bank Account
ONLINE TRADING ACCOUNT Online Trading account is an electronic account which enables customers to trade in Shares through Internet without help of your broker. 1) NSE/BSE/F&O/COMMODITY TERMINALLIVE SCREEN 2) ONLINE DAILY TIPS (4 TIPS PER DAY) 3) DIAL & TRADE FACILITY (TOLL FREE) 4) IPO ONLINE
NSE/BSE/F&O/COMMODITY Live Terminals Provide you online fluctuations rates on your computer screen. Online daily tips 1) Mails Also provide daily 4 mails (pre market before 9.15a.m,Noon session at 12p.m,post market after 3.30p.m & late evening at 8p.m) to registered customers. 2) Relationship Manager 3) Tips through SMS 4) Tips through Yahoo Messenger Online
DE-MAT ACCOUNT Its an electronic form of Share Certificates Storage Facility. Here you get a free De-mat Account. No opening charges Free De-mat account for first year,Rs.400/year from next year( year continued from the day of opening) Auto Pay-in & Auto Pay-out of Securities Waver of Pay-in and Pay-out Charges (Due to linked De-mat Account)
SAVING BANK ACCOUNT You can have a saving account for trading online with net banking facility. Share khan provide a linked saving account facility from following banks HDFC BANK CITT BANK AXIS BANK IDBI BANK INDUSIND BANK UNION BANK OBC BANK BANK OF INDIA ICICI BANK
YES BANK SBI BANK
You can allocate and transfer fund from your respective bank account to Share khan Account for trading and transfer back to link bank account when and where needed.

DOCUMENTATION FOR OPENING AN ACCOUNT 2 Passport size Photograph Identity proof of each holder(PAN CARD is compulsory) Residence proof of holder 2 cheque of Rs.750 &Rs.10000 separate in favor of SHARE KHAN LTD (if cheque leaf do not contain holders name then please provide photocopy of following) 1) First page of passbook 2) Last page of transaction details 3) Latest bank statement
OR
Identity Proof Residence Proof 1. PAN card 2. Driving license premium 3. Passport bill 4. Voters ID card 1. Ration card 2. Latest receipt of LIC 3. Latest Telephoto/Electricity
If following photocopy of proof are provided are valid for identity and residential both. 1. Photo copy of valid Driving license 2. Photo copy of valid Passport 3. Photo copy voters ID card
NOTE: Registration numbers of each proof, date of issue, date of expiry should be in validity period and be easily legible in provided photocopy. All documents should be self attested.
OTHER FACILITY Dial-n-Trade

Provide you complete trading facility through phone. Toll free numbers for the phone trading facility as an alternative of Net Trading where you can call N number of times. TOLL FREE NO: 1800 22 7500(both only for BSNL &MTNL) 1800 22 7050 LOCAL NO : 079-30307600(Chargeable)
Exposure
Provide you 10 times exposure (Intraday) on your cash balance in share khan Trading Account, and 4times on Delivery. Also provide you margin on your (shares) DP balance.
BROKERAGE STRUCTURE
SCHEME A/C CHARGE MARGIN VALIDITY PREPAID CASH BROKERAGE F&O BROKERAGE same leg next day
Prepaid
1st leg
2nd leg
Delivery
1st leg
options WEH 2.50%0R 100 2.25%0R 95 2.00%0R 90 1.50%0R 75 1.25%0R 60 1.00%0R 50 0.50%0R 40 0.50%0R 30 0.50%0R 25
A B C D E F G H I
750 1000 NIL NIL NIL NIL NIL NIL NIL
5000 5000 10000 10000+ 10000+ 10000+ 10000+ 10000+ 10000+
6 Month 6 Month 1 year 1 year 1 year 1 year 1 year 1 year 1 year 2000 6000 10000 18000 30000 60000 100000
0.05 0.045 0.035 0.025 0.0225 0.02 0.015 0.01 0.0075
0.05 0.045 0.035 0.025 0.0225 0.02 0.015 0.01 0.0075
0.50% 0.45% 0.40% 0.25% 0.22% 0.20% 0.18% 0.15% 0.10%
0.05 0.045 0.04 0.025 0.0225 0.02 0.015 0.01 0.0075
0.05 0.045 0.04 0.025 0.0225 0.02 0.015 0.01 0.0075
0.1 0.09 0.08 0.05 0.045 0.04 0.03 0.02 0.015
MARGIN 2.25%0R 95 2.00%0R 90 1.50%0R 75
J K L
NIL NIL NIL
25000 50000 100000
0.03 0.025 0.02
0.03 0.025 0.02
0.30% 0.25% 0.20%
0.03 0.025 0.02
0.03 0.025 0.02
0.06 0.05 0.04
COMMODITY M
CURRENCY NIL
SPOT 25000+ 0.03 0.03 0.30% 0.03 0.03 0.6 2.25%0R 95
Other charges stamp duty + turn over tax+ service tax, IPO/MF Online , you can fill the new IPO through this account ,without any paper work. Only you need to do is provide the quantity of number of shares you are interested to apply for.
SWOT Analysis
During this training at Share khan, we had come to know the Strengths Weaknesses Opportunities Threats for the company and it is very useful for a company to analyze them. Therefore, the SWOT analysis is presented here and the suggestions for maintaining strengths and removing weaknesses are explained. Strengths: Well-maintained infrastructure. Dedicated, Intelligent and Loyal staff. On-line trading products. Lowest brokerage and other charges w.r.t. Competitors. The best investment advice correct up to 70-90 % through dedicated Research and reports. Wide product range to enable the clients to choose the best alternative. One of the best DPs in India. A positive image in the existing clients.
Weaknesses: Less awareness in the market. Time consuming process for account opening, resolving the problems of the customers, etc. Service quality is not maintained accordingly how they are promoted.
Opportunities:
Large primary market to sit as a book runner for the other companies just like Kotak securities ltd. that runs the books of share holdings for many companies Slope of stock market towards delivery based transactions. Large potential market for delivery and intra-day transactions. Open interest of the people to enter in stock market for investing. Attract the customers who are dissatisfied with other brokers & DPs. An indirect opportunity generated by the market from its bullishness. Threats:
Decreasing rates of brokerage in the market. Increasing competition against other brokers & DPs.
Poor marketing activities for making the company known among the customers. A threat of losing clients for any kind of weakness of the company. Indirect threat from instable stock market, i.e., low/no profit of Share khans clients would lead them to go for other broker/DP.

A Project Report On PDF

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

A Project Report On PDF

Caricato da

Copyright:

Formati disponibili

For more Project Visit www.techshristi.

K.S. SCHOOL OF BUSSINESS MANAGEMENT

MR. MUNAF KADRI

SUBMITTED BY: KOMAL PATEL KOMAL PARMAR YEAR: 2012-2013

K.S. School of Business Management

For more Project Visit www.techshristi.com

KOMAL PATEL KOMAL PARMAR

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

1.1 STOCK MARKET

INTRODUCTION TO STOCK EXCHANGE

K.S. School of Business Management

For more Project Visit www.techshristi.com

i. ii. iii. iv.

Stock brokers Sub-broker Market makers Portfolio consultants etc.

Present scenario of Indian stock market

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

Indian Equity Market

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

THE BOMBAY STOCK EXCHANGE (BSE)

K.S. School of Business Management

For more Project Visit www.techshristi.com

HOW BSE WORKS?

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE)

K.S. School of Business Management

For more Project Visit www.techshristi.com

How NSE Works?

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com

FUTURES vs. FORWARDS

K.S. School of Business Management

For more Project Visit www.techshristi.com

For more Project Visit www.techshristi.com

K.S. School of Business Management

For more Project Visit www.techshristi.com