Table of content...

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1 2 3 4 5 6 7 8 9 10 11 12 13 Abstract Acknowledgement Introduction Overview of company Services provided Product lines Organisational structure Comment on organisational structure Critical analysis- theoretical Critical analysis- practical Summary conclusion References/ bibliography Appendix

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Shree financials Financial Freedom Redefined

Abstract
Shree financials is a broking firm in partnership with Angel Broking and BMA Wealth Creators. I had joined this institution to learn and get knowledge about trading techniques and procedures .I had provided with a layout of my work that has to be done. Basically I have to learn about the trading that how we analyse and put our money at a right time in equity and commodity market to get a good amount of return on our investment that we had made because of the fact that people generally have a mentality to get a good amount of return in a shorter period of time. I had provided with a working style in which I have to seat on the terminal and have to watch that how it works and the selling and purchasing parts going on there ,we have provided with some training sessions also, then its necessary to know about the technical aspect as well so we have provided with technical analysis classes also .I was the part of the financial advisory group and have to go office as a trainee and have to take training sessions about the different investment options ,gain some technical and practical knowledge about the technical analysis of the stock market. We also get a practical exposure about the awareness of the common public about the different investment options that are available today by getting into real hard time work that is on the field by asking them about the investment options and if they need any kind of assistance or guidance.

Acknowledgement

I wish to express my gratitude to honourable project guide Mr. TV. Harinath and all the employees of shree financials for my thesis on Investment and portfolio analysis . Because of their guidance and support only, the thesis work has been meaningfully accomplished. They had always extended their valuable advices and suggestions during the thesis and had always proved to be a source of inspiration for me. I wish to put on record the same.

I also wish to express my appreciation to Mr. Vinod Krishna for his extended support throughout the thesis work. Also I would like to appreciate all the faculty and staff in MBA Programme, who were very supportive throughout the course of study.

I also acknowledge my heartfelt gratitude to my friends for their excellent efforts and encouragements, which had been provided to me throughout this thesis work.

Introduction
Overview of the Organisation
Shree Financials, a premier financial services organisation provides individual and corporate with customized financial solutions. They are the Business Partner of Angel Broking Ltd. They work towards understanding your financial goals and risk profile. There expertise combined with thorough understanding of the financial markets results in appropriate investment solutions for you. At Shree Financials we realize your dreams, needs, aspirations, concerns and resources are unique. This is reflected in every move we make with and for you. We have deep appreciation for the Value of building an everlasting relationship with YOU. Shree financials is a financial broking company incorporated in 2009. It deals with all the financial services related to its investment and tied up with angel broking and BMA Wealth Creators. This firm is new in market so doing its operations hard to get a well recognised status. Shree financials, a financial broking firm deals with the following services and give guidance and advice related with making a good portfolio:

Our Services include:

Equity & Commodities PMS Mutual Funds Life / Non Life Insurance Motor Insurance

Product lines:

Our products are:

Mutual Funds 4

Organisation structure:

Mr.TV.Harinath (Director - Sales and Marketing& Operations)

Mr. Dharma raj K P (DirectorStrategy, & Technical) Analysis Finance

Mr. Nagaraj N (Director HR & Corp)

Main office: Shree financials- No-186/17,1st floor, 14th main, hanumanthnagar Bangalore-50 Landmark: Above abhinav clinic, near maruti circle, PH: 080-32550381 E-mail id: harinathtv @gmail.com

Comment on organisational structure:

As we have seen that our organisation structure is of hierarchical nature. Mr. Harinath t.v work as a head of sales and marketing part and handles all the transactions as a senior employee.Mr.Dharmaraj k.p handles the finance and strategy part and founded shree financials with Mr.Nagaraj who take care of human resources part there. So our organisation structure consists of well experienced people who advice their clients in a proper manner and make their portfolio in a well manner to get higher returns on whatever investment they are making with a guarantee on their capital with the advice of technical experts.

Finance and accounting operation is to be handled by Mr. Dharma raj KP. He handles all financial transactions which happen in the organisation and makes proper record of transaction.

Critical analysis of the work done: theoretical

Mutual fund:
A mutual fund is a professionally managed type of collective investment that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities. Mutual funds have advantages compared to direct investing in individual securities. These include: Increased diversification Daily liquidity Professional investment management Mutual funds have disadvantages as well which are listed below: No opportunity to customize
Less control over timing of recognition of gains

Less predictable income

Types of mutual funds

There are three basic types of registered investment companies defined in the Investment Company Act of 1940: open-end funds, unit investment trusts (UITs); and closed-end funds. Exchange-traded funds (ETFs) are open-end funds or unit investment trusts that trade on an exchange.

Open-end funds
Open-end mutual funds must be willing to buy back their shares from their investors at the end of every business day at the net asset value computed that day. Most open-end funds also sell shares to the public every business day; these shares are also priced at net asset value. A professional investment manager oversees the portfolio, buying and selling securities as appropriate. The total investment in the fund will vary based on share purchases, redemptions and fluctuation in market valuation.

Closed-end funds
Closed-end funds generally issue shares to the public only once, when they are created through an initial public offering. Their shares are then listed for trading on a stock exchange. Investors who no longer wish to invest in the fund cannot sell their shares back to the fund (as they can with an open-end fund). Instead, they must sell their shares to another investor in the market; the price they receive may be significantly different from

net asset value. It may be at a "premium" to net asset value (meaning that it is higher than net asset value) or, more commonly, at a "discount" to net asset value (meaning that it is lower than net asset value). A professional investment manager oversees the portfolio, buying and selling securities as appropriate.

Unit investment trust

Unit investment trusts or UITs issue shares to the public only once, when they are created. Investors can redeem shares directly with the fund (as with an open-end fund) or they may also be able to sell their shares in the market. Unit investment trusts do not have a professional investment manager. Their portfolio of securities is established at the creation of the UIT and does not change. UITs generally have a limited life span, established at creation.

Exchange-traded funds
A relatively recent innovation, the exchange-traded fund or ETF is often structured as an open-end investment company, though ETFs may also be structured as unit investment trusts, partnerships, investments trust, grantor trusts or bonds (as an exchange-traded note). ETFs combine characteristics of both closed-end funds and open-end funds. Like closed-end funds, ETFs are traded throughout the day on a stock exchange at a price determined by the market. However, as with open-end funds, investors normally receive a price that is close to net asset value. To keep the market price close to net asset value, ETFs issue and redeem large blocks of their shares with institutional investors.

Top five mutual funds in India

Equity Diversified
SBI Magnum Emerging Busy (G)

Returns (%)

3 months 6 months 1 yr 11.6 3.5 6.2 -0.4 19.7 9.9 13.5 5.5 8.9 6.3 5.4 -1.7

3 yr 15.7 19.7 15.2 24.8

HDFC Midcap Opportunities (G)

Birla SL India GenNext (G)

IDFC Small Midcap Eqty -G

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Technical Analysis of Trading:

Technical analysis is a financial term used to denote a security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioural economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands in contradiction to much of modern portfolio theory. The efficacy of both technical and fundamental analysis is disputed by efficient-market hypothesis which states that stock market prices are essentially unpredictable.

Principles

Stock chart showing levels of support (4, 5, 6, 7, and 8) and resistance (1, 2, and 3); levels of resistance tend to become levels of support and vice versa. Technicians say that a market's price reflects all relevant information, so their analysis looks at the history of a security's trading pattern rather than external drivers such as economic, fundamental and news events. Price action also tends to repeat itself because investors collectively tend toward patterned behaviour hence technicians' focus on identifiable trends and conditions.

Market action discounts everything

Based on the premise that all relevant information is already reflected by prices, technical analysts believe it is important to understand what investors think of that information, known and perceived; studies such as by Cutler, Poterba , and Summers titled "What Moves Stock Prices?" do not cover this aspect of investing.

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Prices move in trends

Technical analysts believe that prices trend directionally, i.e., up, down, or sideways (flat) or some combination. The basic definition of a price trend was originally put forward by Dow Theory .An example of a security that had an apparent trend is AOL from November 2001 through August 2002. A technical analyst or trend follower recognizing this trend would look for opportunities to sell this security. AOL consistently moves downward in price. Each time the stock rose, sellers would enter the market and sell the stock; hence the "zigzag" movement in the price. The series of "lower highs" and "lower lows" is a tell tale sign of a stock in a down trend. In other words, each time the stock moved lower, it fell below its previous relative low price. Each time the stock moved higher, it could not reach the level of its previous relative high price. Note that the sequence of lower lows and lower highs did not begin until August. Then AOL makes a low price that does not pierce the relative low set earlier in the month. Later in the same month, the stock makes a relative high equal to the most recent relative high. In this a technician sees strong indications that the down trend is at least pausing and possibly ending, and would likely stop actively selling the stock at that point.

Types of charts
Open-high-low-close chart OHLC charts, also known as bar charts, plot
the span between the high and low prices of a trading period as a vertical line segment at the trading time, and the open and close prices with horizontal tick marks on the range line, usually a tick to the left for the open price and a tick to the right for the closing price.

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Candlestick chart Of Japanese origin and similar to OHLC, candlesticks

widen and fill the interval between the open and close prices to emphasize the open/close relationship. In the West, often black or red candle bodies represent a close lower than the open, while white, green or blue candles represent a close higher than the open price.

Line chart Connects the closing price values with line segments.

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Point and figure chart a chart type employing numerical filters with only
passing references to time, and which ignores time entirely in its construction.

Price-based indicators
These indicators are generally shown below or above the main price chart. Advance decline line a popular indicator of market breadth Average Directional Index a widely used indicator of trend strength

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Commodity Channel Index identifies cyclical trends MACD moving average convergence/divergence Relative Strength Index (RSI) oscillator showing price strength Stochastic oscillator close position within recent trading range Trix an oscillator showing the slope of a triple-smoothed exponential moving average Momentum the rate of price change

Volume-based indicators
Accumulation/distribution index based on the close within the day's range Money Flow the amount of stock traded on days the price went up On-balance volume the momentum of buying and selling stocks

Futures and Option:

Futures contract:
A futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange. The party agreeing to buy the underlying asset in the future, the "buyer" of the contract, is said to be "long", and the party agreeing to sell the asset in the future, the "seller" of the contract, is said to be "short" .The terminology reflects the expectations of the parties -- the buyer hopes or expects that the asset price is going to increase, while the seller hopes or expects that it will decrease. Note that the contract itself costs nothing to enter; the buy/sell terminology is a linguistic convenience reflecting the position each party is taking (long or short). The futures contracts are standardized ones, so that The quantity of the commodity or the other asset which would be transferred or would form the basis of gain/loss on maturity of a contract. The date and the month of delivery. The units of price quotation The minimum amount by which the price would change and the price limits for days operations, and other relevant details are all specified in a futures contract. Thus, in a way it becomes a standard asset, like any other asset, to be traded.

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Future contracts are traded on commodity exchange or other future exchanges. People can buy or sell futures like other commodities. When an investor buys a future contract (so that he takes a long position) on an organized future exchange, he/she is in fact assuming the right and obligation of taking the delivery of the specified underlying item on a specified date. Similarly, when an investor sells a contract, to take a short position, one assumes the right and obligation to make the delivery of the underlying asset. There is no risk of non-performance in the case of trading in futures contracts. This is because a clearing house or a clearing corporation is associated with the future exchange, which plays a pivotal role in the trading of futures.

Option contract:
Like forward and futures, options represent another derivative instrument and provide a mechanism by which one can acquire a certain commodity or other asset, or take a position in, in order to make profit or cover risk for a price. The options are similar o the future contracts in the sense that they are also standardized but are different from them in many ways. An option is the right, but not the obligation, to buy or sell a specified amount (and quality) of a commodity, currency, index, or financial instrument, or to buy or sell a specified number of underlying futures contracts, at a specified price on or before a given date in future. Like other contracts, there are two parties in the option contract: the buyer (or the holder, or owner) who takes a long position, and seller (or writer) who takes a short position. The option contract gives the owner the right to buy /sell a particular commodity or other asset at a predetermined price and the date involved is called exercise or strike price and the date involved is known as expiration. It is important to understand that such a contract gives the holder the right, and not the obligation to buy/sell. The option writer, on the other hand, undertakes upon himself the obligation to sell/buy the underlying asset if that suits the option holder.

Options are two types: Call Options and Put Options.

A call option gives an owner the right to buy while a put option gives the owner the right to sell. Like future contracts, option contracts are also tradable on exchanges. The exchange-traded options are standardised contracts and their trading is regulated by the exchanges that ensure the honouring such contracts. The definition of options, both call and put, given above apply to the American-style options. An American option can be exercised by its owner at any time on or before expiration date. Besides the American type, there are European options as well. In case of European options, the owner can exercise his right only on expiration date, and not

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before it. It may be pointed out, however, that most of the options traded in the world, including those in Europe, are American style options.

OPTION PREMIUM
A glance at the rights and obligations of the buyers and sellers reveals that options contracts are skewed. The reason why the option writer has always obliged to sell/buy the asset whenever the buyer exercises it is only the up front margin which was paid by the buyer to the writer of the contract. This is known as the price of the option or the option premium. If the owner of the option decides not to exercise the option the, the option expires worthless and the amount of premium becomes the profit of the writer, if the option is exercised then the premium gets adjusted against the loss the writer incurs upon such exercise. At any time, an option may be in-the-money, at-the-money or out-of-the-money. A call option is said to be in-the-money if the price of the stock (which is assumed is the underlying asset) is greater than the exercise price, while the stock price is smaller than the exercise price, the call is said to be out-of-the-money. For the put options, the reverse holds, so that if the exercise price of a put is greater than the stock price, than put is said o be in-the-money and out-of-the-money if the former is a lower than latter. In each case, however, the option is said to be at-the-money if the stock price matches with the exercise price. These concepts are tabulated below, wherein S0 indicates the present value of the stock (i.e. the value at a given point of time) and E is the exercised price:

Condition S0 > E S0 < E S0 = E

Call Option In-the-money Out-of-the-money At-the-money

Put Option Out-of-the-money In-the-money At-the-money

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Critical analysis of the work done: practical

The work done in shree financials is very helpful in investing our money into right type of financial instruments. The knowledge of financial instruments lead you to make your career in financial advisory or the portfolio planner .the theoretical part what we have learnt is of getting knowledge about the mutual funds ,insurance and equity and commodity market which have different implications and applicability in different market scenario to use it in our practical life. like for example, to deal in the equity and commodity market, you must have to know about its technical aspects that what is the right time to enter into the market and how much money you have to invest and from this kind of training in technical aspects you come to know about the idea that when is market going up and when it can come down. Practically we can implement our knowledge regarding the trading part is to invest into the both market. Another part comes of insurances, for this a common person know only how to insure himself, but in our training period we come to know about the different kind of insurance and the benefits related to them like for older people their is one type of plan and for younger people their is another kind of plan considering their age. For rest of the things the biggest practical experience we get is the awareness among the common public about the different investment options present today by getting into the real time field work and we come to know that though the people have money but they today also dont have the knowledge of the financial options clearly so they suffer with a loss and if their portfolio should be made in a proper way then they can get a good return on their investment. For our practical exposure I can say that I get practical exposure in each and every field equally by knowing about it properly and blending that knowledge with our skills we can double our money into a very shorter span of time in comparison with the people who dont know or have a little knowledge about this kind of things.

Summary/conclusion
Doing any kind of training or internship is like putting your first step in the corporate world .you come to know about the corporate that how it actually works and what all is needed to blend your skills and ability with corporate structure and establish yourself as a successful person .now what I had learned from my internship in shree financials .basically its a franchisee of Angel Broking and BMA Wealth Creators who make portfolio of the finance of the different people who want to invest there money into 18

diversified way .they use money of the people in different investment options to make them earn more money .they deal with the stock market as well as commodity market .I have learned about the different investment options that are available today like bank deposits ,stock & commodity market ,mutual funds ,insurance plans ,futures and options etc. Then after getting a theoretical exposure we had diverted towards the practical exposure by making us seated on the live terminal that is operated online and we come to know that within a fraction of second some people loose a big amount of money and some people are gaining a big amount of money so its all about knowing the market very clearly with a simple funda of having patience and not being greedy because more greedy people used to stay in the market for a longer period of time that is flexible so profit may turn into a loss so if you have reached to your targeted goal its better to come out from the market .and patience is the key to deal successfully in a market because market is very flexible so if you are getting a loss at a certain period of time definitely you will make a profit at another part of time so be patient .by summarising my all aspects and days which I have worked I can say that it was a nice experience to know about the pros and cons of the investment market because its all about your money that is the most liquid asset and you should know about how to use it in a best way.

References/ bibliography
Investment management by R.P. Rustagi

Security analysis and portfolio management by prasanna Chandra

Technical aspects, eBooks available at goggle books.

Mr. Vinod Krishna for his classes.

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Mr. TV.Harinath for his guidance.

www.angelbroking.com

www.bmawealthcreators.com

Appendix
The following two pages contain the form filled up by me during the course of internship. This activity was done for the purpose of knowing more about the financial awareness and finding out the potential customers.

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