A STUDY ON RECENT TRENDS IN ONLINE TRADING IN SECONDARY MARKET WITH SPECIAL REFERENCE TO SHAREWEALTH SECURITIES. LTD.

THRISSUR

MAJOR PROJECT REPORT

Submitted in partial fulfilment of the requirements for the award of the degree of

Master of Business Administration (MBA) of UNIVERSITY OF CALICUT

Submitted by, SANIL-M (Reg. No; SOAKMBA024)

Under the guidance of Mr. MURALEEDHARAN Faculty member. SMS KUTTIPURAM

SCHOOL OF MANAGEMENT STUDIES UNIVERSITY OF CALICUT,KUTTIPURAM 2012

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SCHOOL OF MANAGEMENT STUDIES UNIVERSITY OF CALICUT

KUTTIPURAM

CERTIFICATE

This is to certify that the Project Report Entitled A STUDY ON RECENT TRENDS IN ONLINE TRADING IN SECONDARY MARKET WITH SPECIAL REFERENCE TO SHAREWEALTH SECURITIES

LTD.THRISSUR. is a bonafide work carried out by Mr. SANIL.M, REG NO: SOAKMBAO24 under the guidance of Mr. MURALEEDHARAN faculty in School of management studies ,Kuttipuram, University of Calicut.

C0-ORDINATOR

SCHOOL OF MANAGEMENT STUDIES UNIVERSITY OF CALICUT KUTTIPURAM

CERTIFICATE
I hereby certify that this Project Report entitled A STUDY ON RECENT TRENDS IN ONLINE TRADING IN SECONDARY MARKET WITH SPECIAL REFERENCE TO SHAREWEALTH SECURITIES

LTD.THRISSUR. is a bonafide work carried out by Mr. SANIL.M (REG NO: SOAKMBAO24) student of SCHOOL OF MANAGEMENT STUDIES ,KUTTIPURAM, UNIVERSITY OF CALICUT under my guidance and supervision. This has not been submitted to any other university or institution for the award of any other degree or diploma. PLACE: DATE: MR.MURALEEDHARAN FACULTY SMS, KUTTIPURAM.

DECLARATION
I, SANIL.M hereby declare that the Project Report entitled thatA STUDY ON RECENT TRENDS IN ONLINE TRADING IN SECONDARY MARKET WITH SPECIAL REFERENCE TO SHAREWEALTH SECURITIES

LTD.THRISSUR.. Is bonafide work carried out by me under the guidance and supervision of Mr. MURALEEDHARAN. I also declare that this report has not been submitted previously by me fully or partially, for the award of any degree, diploma or title.

Date: Place: Kuttipuram

SANIL.M

ACKNOWLEDGEMENT
I feel immense gratitude to Mrs. Shalini, (Research analyst ,Sharewealth Securities.Ltd. Thrissur) and special thanks to Mr.Subhash., Branch Head Sharewealth Securities.Ltd. Calicut, for having given the permission for doing my project work in Sharewealth Securities Ltd., at Thrissur. I express my special thanks to Dr. E.K Satheesh (co-ordinator of school of Management studies, Kuttipuram, University of Calicut) for valuable services to do this project. I would like to keep on record my heart full thanks and regard to my supervising Faculty Mr.Muraleedharan. (School of Management studies, Kuttipuram) for his encouragement, able guidance and kind co-operation, projected at various stages of this work. I express my special memory and feelings to my parents, classmates and all the teachers in the department for their inspiration and help. I take this opportunity to express my sincere and honest gratitude of all staff of various categories who have contributed in learning through this encouragement and guidance SANIL.M 5

TABLE OF CONTENTS
Chapter Contents no. Chapter-1 Introduction Scope of study Objectives of study Limitations of the study Research methodology Chapter-2 Chapter-3 Chapter-4 Chapter-5 Chapter-6 Review of literature Industry profile Company profile Data Analysis Findings/inferences suggestions & recommendations Conclusion Bibliography/annexure Page number 11 12 13 14 15-16 17-29 30-44 45-52 53-94 95-96 97-98 99 100

LIST OF TABLES
Table No. 1 2 3 4 5 6 7 8 9 10 Table contents Share price analysis of Banking Industry Share price analysis of Capital Goods Industry Share price analysis of Fast moving consumable goods( FMCG) Industry Share price analysis of Housing Related Industry Share price analysis of oil and refineries Industry Share price analysis of Metal,Metal products and mining Industry Share price analysis of Chemicals Industry Share price analysis of Information Technology Industry Share price analysis of Telecomm Industry Share price analysis of Transport Equipment Industry Page No. 55 59 63 67 71 75 79 83 87 91

LIST OF FIGURES
Fig no 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Figure contents Share price analysis of SBI Share price analysis of Federal Bank. Share price analysis of Punjab national bank Share price analysis of Suzlon Energies. Share price analysis of Bharat heavy electrical ltd. Share price analysis of L&T ltd. Share price analysis of Hindustan Uniliver ltd. Share price analysis of ITCltd. Share price analysis of Nestle India. Share price analysis of ACCcements Share price analysis of Ambuja cements Share price analysis of Ultratech.ltd Share price analysis of Hindustan petroleum ltd. Share price analysis of Oil and Natural Gas Corporation ltd.(ONGC) Share price analysis of Indian Oil ltd. Share price analysis of Steel Authority of India. Share price analysis of Tata Steels Share price analysis of Jindal steels Share price analysis of Adithya Birla Chemicals. Page number 56 57 58 60 61 62 64 65 66 68 69 70 72 73 74 76 77 78 80

20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.

Share price analysis of Tata chemicals Share price analysis of Asian paints Share price analysis of Infosys Technologies ltd. Share price analysis of Wipro ltd. Share price analysis of HCL Technologies Ltd. Share price analysis of Tata communications Ltd. Share price analysis of Bharathi Airtel Ltd. Share price analysis of Idea cellular Ltd. Share price analysis of Bajaj Auto Ltd. Share price analysis of Hero Moto Corp Ltd. Share price analysis of Maruthi-Suzuki

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EXECUTIVE SUMMARY
A study on Recent Trends in online trading in secondary market was done from the Sharewealth Securities Ltd. Thrissur. The study was conducted to analyse the recent trends in share prices in secondary market.This study also analysis the risk involved in the online trading in secondary market and also compares the share price variations of companies in different sectors. This study was conducted among the share prices of various sectors in last six months. During the Research , I mainly used secondary data by the way of internet .The secondary data were also collected from the journals and company records. The results so obtained were shown in the way of different charts. The study reveals that certain facts relating to recent trends in online trading in secondary market. it also shows the level of risk involved in the online trading in secondary market. The findings of this study have help researcher and company to understand the current market position and recent trends occurring in the market in last few months.

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CHAPTER-1 INTRODUCTION

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SCOPE OF THE STUDY

The scope of the study confined to the areas where the research topic can be implemented. Here in this research to study demat and online trading in secondary market. The report is useful to the management of the company. It is an interesting and significant area for conducting research Most of the people are interested to investing in securities. Online trading become more familiar to common people

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OBJECTIVES

Primary objective:
To analyse the recent trends in online trading in secondary market in India.

Secondary objectives:
To compare the recent fluctuations in share prices of companies in different sectors . To analyze the growth and future of online trading in secondary market. To identify risk involved in online trading. .

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LIMITATIONS OF THE STUDY

1 Time constraint is one of the serious issues. Survey will be conducted within two months duration. 2 Share market faces more difficulty now. So that will affect to demat and online trading in secondary market. 3 This study will concentrate only in one company. (share wealth securities) 4 The analysis is based only on fluctuations of share prices in 3 companies each from 10 different industries.

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1. RESEARCH METHODOLOGY:

Type of study: Descriptive

Data collection
Sources of Data
The data are collected only through secondary method. .Secondary data Secondary data are collected mainly through internet, journals, and advertisements , broachers of the company.

RESEARCH DESIGN
1. TOOLS FOR DATA COLLECTION

Discussion with person in related steam of activities and view from experts will be analyzed. Secondary sources of data required for the study can be collected from secondary sources, this include library references, technical

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and subject related magazines, journals, news papers and other previous studies.

2. SAMPLE DESIGN: Sampling procedure: Sample size: 30 ( 3 samples each from 10 industries).

3. DATA ANALYSIS: Share price variation Charts are adopt to interpret the data to arrive the findings of the study. Data analysis can be done by chart analysis.

Time period of work A period of 45 days from April-1st 2012 to May -15th 2012 is used for the project work.

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CHAPTER - 2 REVIEW OF LITERATURE

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A brief explanation about Internet:-

Internet is a world wide self governed network connecting several other smaller network and million of computers and persons to merge sources of information. This technology is vast distance accelerating the pace of business forms and revolutionizing the many companies are managed, it allow direct links to anyone anywhere and any time to build up interactive relationship.A combination of time and space called the internet promises to bring un precendented changed in our lives and business Internet or net is an inter connection of computer communication network spanning the entire globe crossing all geographical boundaries it has redefined the method of communication work study education, Business leisure health trade banking commerce and what not it is virtually changing everything and we are living in dot.com age. Net being an interactive two way medium through various websites enables participation by individually in business to business to consumer commerce visit to shopping arcades, games, etc., in cyber space even the information can be copying, down loaded and retransmitted.

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The use of internet has grown 2000 percent in last decade and is correctly growing 10 percent per month in India growth of internet is of recent times. It is expected to bring changes in every functional area of business activity including marketing and financial services. It offers stock trading at a lower cost, internet can change the nature and capacity of stock broking business in India. E- COMMERCE: Electronic Commerce is associated with buying and serving over computer communication networks, it helps conduct traditional commerce through new way of transferring and processing of information. Information is electronically transferred from computer to computer in an automated way. E- Commerce refers to the paperless exchange to business information using electronic dates interchange electronic technology, it is not only reduce manual process and paper transaction but also helps organization more to a fully electronic environment and change the way they operated PCs and networking attempts to introduce banks of the tools and technologies required for electronic commerce. The computers are either workstation of individual office work or serves where large database and information resides. Networks connects both categories of computer the various operating system are the most basis programmed with is a computer it manages the resources of the computer system in a fair and efficient manner. Now we can enter into the concept known as On Line Trading. 19

ONLINE TRADING INFRASTRUCTURE

The emergence of online exchanges has facilitated faster transactions by providing online trading p o r t a l s a n d b r o k e r a g e h o u s e s e a s e a n d f l e x i b i l i t y. Th e I n t e r n e t h a s i n d e e d o p e n e d u p n e w opportunities for conducting the business. The worldwide stock exchanges has made a major shift from the traditional method of trading and now conduct a bulk of its business online through its b r o k e r s and partners. In the

d e v e l o p e d c o u n t ri e s ma j o r l y a l l t h e e x c h a n g e t r a n s a c t i o n s a r e conducted online. The trend took off slowly in India and the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) two of the largest exchanges in India have been conducting online trade successfully for some time.

WHY ONLINE TRADING ENTERED LATE IN INDIA?

The Indian exchanges and brokering houses have been very slow in moving their transactions online and the major reason has been the lot government regulations. The initial delay was due to laying down the 20

specifications for creating Closed User Groups (CUGs). This issue was resolved between the Department of Telecommunications (DoT) and the Finance Ministry around 1998 and a f t e r t h a t s o o n c a m e t h e online trading portals like ICICIDirect.com,

m o t i l a l o s w a l . c o m , sharekhan. com and smartjones.com. Connectivity related issue was perhaps the most important technological factor. Traditionally the cost of leased lines and VSAT links has been very high and the reliability of the links was very low. To commission the links it took a long time as one had to make an application and wait for a few weeks for the link to be up and running. Many other issues like security, backup and recovery procedural costs also acted as deterrents in the process. Now wi t h the resolution of regulatory issues India no longer have any p r e s s i n g c o n n e c t i v i t y a n d bandwidth issues. The entry of private players into the broadband scenario and the government opening up the telecom sector these issues have become almost non-existent. Security solutions and services available in the market have matured and it doesn't cost a pretty packet anymore to put a simple backup solution in place. Through online trading everyday large volumes of data is being transacted. At BSE the average daily turnover in 2001-2002 (April-March) was Rs 1244.10 crore and the number of average daily trades was Rs 5.17 lakh. To control Online Trading RBI made regulations making it mandatory for companies to store at least 7 years of transactional and financial data. 21

1. Design needs to be always-on, secure, redundant, and have adequate backup and recovery processes. 2. For such high amounts of critical data it's natural to deploy network-based storage like NASor SAN. 3. Security is a vital and integral part of the design architecture. Th e hardware and software elements should be built around layered security architecture and should be held in place with a well-documented security policy. 4. Ideally online exchanges should have 'five-nines' availability. 5.It's difficult to deploy out-of-the-box applications at exchanges as each has a unique architecture based on factors like operations flow, trading volumes, number of members, number of users, and number of locations. 6. NSE has deployed NIBIS (NSE's Internet Based Information System) for real-time dissemination of trading information over the Internet and NEAT a client-server-based application to help its operations. 7. BSE has deployed an Online Trading system (BOLT) on a Tandem platform which has two-tier architecture. It claims to be able to support up to 2 million trades a day. 22

INDIAN EXCHANGES: NSE and BSE

The NSE and BSE are among the largest exchanges in the country handling very large daily trading volumes, support large amounts of data traffic, and have a very large nationwide network. The t r a d i n g v o l u me i n ye a r 2 0 0 0 w a s h u g e wi t h t h e a v e r a g e d a i l y t u r n o v e r i n t h e c a p i t a l ma r k e t s segment at NSE is around Rs 2300 crore and in the derivatives segment, around Rs 1300 crore. The average daily traffic volume was around one million trades per day in the capital markets segment a n d a r o u n d 5 0 ,00 0 t r a d e s p e r d a y i n t h e d e r i v a t i v e s s e g me n t a n d t h e r e we r e a r o u n d 1 3 ,0 0 0 registered users in both segments and an average of around 9500 users is logged in at a time. At BSE the average daily turnover in 2001-2002 (April-March) was Rs 1244.10 crore and the number of average daily trades was Rs 5.17 lakh.

THE NETWORK DESIGN

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A n y o n l i n e e x c h a n g e s h o u l d a l wa ys b e - o n , s a f e , s e c u r e , r e d u n d a n t a n d s h o u l d h a v e a d e q u a t e backup & recovery processes. The Vice President of NSE-IT G.M Shenoy tells that the basic design objective of NSE was to provide fair, equal and transparent access across all NSE nationwide locations and to provide connectivity to the trading members as soon as possible. The telecom sector is fairly liberal nowadays but way back in 1993 the technology was maturing and was very costly. The cost of lease lines was almost ten times as much as it is today. Satellite technology was a boon since it allowed quicker deployment than leased lines. Today NSE has the country's largest VSAT network with over 3000 VSATs and expects to grow to more than 4000VSATs very soon

EVOLUTION OF ONLINE TRADING:

Online trading had its origin in the US where the first E-trading of stocks began in1983. Primarily used in the form of e-commerce to place and receive orders forcommodities; slowly it entered the financial markets as an alternative to the traditional system. By the late 1990s, most of the stock exchanges had been automated, and theopen outcry method of trading had been slowly done away with. Most stock exchanges began to use computers to replace the market makers or the floor traders who execute the trade on the floor.

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With the emergence and growth of the internet, the floor traders started taking computer orders from brokers and executed the trade. Subsequently, when the stock exchanges used software technology to interconnect brokers, depositories and banks, the internet order place by clients were firs route through the stock brokers computer systems where the matching of orders took place and the trade was executed. This gradual up scaling of technology has led to the rise in popularity and acceptance of online broking as a major way of stock trading. With the book in software technology, the online trading platform became faster and faster with a lot of sophistication and increased security. Now the thrust is on making the entire trading process completely seamless and risk free.

TRADING MECHANISM:
The mechanism in online trading Is the replication of trading of physical securities through the internet in a much faster and convenient way. Basic principles and logic of stock trading remain the same as before; only, the investors feel more empowered and are served with plenty of information. The diagram 1 and 2 depict both selling and buying of securities online. There are primarily 5 components in any online trading mechanism. 1. Investor 2. broker/ E-broking firm 3. DP Accounts 25

4. Bank Account 5. The Exchange The process of online trading is driven by a front-end software which the stock exchange employs through satellite (like V-SAT) connections. This software technology provides the necessary interface between the brokers, depositories and the banks. The investor is required to trade through any of the approved brokers, and brokers of trading members can only trade with the exchange.The investor places the order with the broker and the broker gets the order executed from the exchange. Each broker, who has to be a trading member, is connected to the exchange through sophisticated software. In the same way, each investor has to trade only through the broker and needs to have a demat account and a brokers account. Each investor will be given a login account and a password in the brokers site. Investors can log in and lace orders anytime that will be sent to exchange and will be compared with all the orders and executed as per the prices.

In this linear chain of investor-broker-exchange channel, there are two more important players, viz, depositories and banks. Depositories (DP) handle the holding and selling of demat securities. All brokers are embers and account holders of DPs. The depositories function in liaison with the stock exchange and act as an online store for shares and stocks. The transaction of cash is taken care of by banks. The investors money is transferred to the account with the broker 26

and used for transactions, and similarly, the credits for the investor can be directly to the investors bank account. The whole mechanism is interconnected and the speed of transaction depends on how well all these components operate in harmony with each other. The technology used for interlinking these components and the security issues play a major role in the speed of transactions. When these issues are addressed, the transactions can be executed in realtime (T+0), instead of the present T+2 days time period. Online trading started in India in February 2000: Online trading is of 2 categories: Discount online brokers and the other one is the full service online broker. Discount online brokers allow one to trade via the internet through the broker at reduced (less than offline brokerage charges) rates. Full service online brokerage is linked to existing brokerage directly through the internet. These brokers allow their clients to place online orders with the option of chatting to brokers if advice is needed.

DEMATERLIZATION: Dematerialization is the process by which physical certificates of an investor are converted to an equipment number of securities in electronic from and credited in the investor account with his DP. In order to dematerialize the certificates, an investor has to first open an account with a DP and then request for the Dematerialization Request Form, which is DP and submit the same 27

along with the share certificates. The investor has to ensure that he marks Submitted for Dematerialization on the certificates before the shares are handed over to the DP for demat. Dematerialization can only be done to those certificates, which are already registered in your name and belong to the list of securities admitted for Dematerialization at NSDL. Most of the active scrips in the market including all the scrips Most of the active scrips in the market including all the scrips of S&P CNX NIFTY and BSE SENSEX have already joined NSDL. This list is steadily increasing. Briefly, the process is as follows: after completion of transfer, the investor gets the option to dematerialize such shares. Investors willing to exercise this option sends a Demat request along with the option letter sent by the company to his DP. The company or its R&T agent would confirm the Demat request on its receipt from the DP to reduce risk of loss in transit. Dematerialized shares do not have any distinctive or certificate numbers. These shares are fungible-which means that 100 shares of a security are the same as any other 100 shares of the security. Odd lot shares certificates can also be dematerialized.

Dematerialization normally takes about fifteen to thirty days. To get back dematerialized securities in the physical form, request DP for Rematerialization of the same is made. DEMAT ACCOUNT What is Demat account and why it is required?

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Securities and Exchange Board of India (SEBI) is a board (corporate body) appointed by the Government of India in 1992 with its head office at Mumbai. Its one of the function is helping the business in stock exchanges and any other securities markets. Demat (short form of Dematerialization) is the process by which an investor can get stocks (also called as physical certificates) converted into electronic form maintained in an account with the Depository Participant (DP). DP could be organizations involved in the business of providing financial services like banks, brokers, financial institutions etc. DPs are like agents of Depository. Depository is an organization responsible to maintain investor's securities (securities can be stocks or any other form of investments) in the electronic form. In India there are two such organizations called NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services India Ltd.) Investors wishing to open Demat account has to go DP and open the account. Opening the Demat account is as simple as opening the bank account with any bank. As we need bank account to save our money, make cheque payments etc, likewise we need to open a demat account if we want to buy or sell stocks. All stocks what we possess will show in our demat account. So we don't have to possess any physical certificates. They are all held electronically in our demat account. As we buy and sell the stocks, accordingly our stocks will get adjusted in our account.

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CHAPTER - 3 INDUSTRY PROFILE

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INDUSTRY PROFILE
Following diagram gives the structure of Indian Financial System:

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FINANCIAL MARKET
Financial markets are helpful to provide liquidity in the system and for smooth functioning of the system. These markets are the centers that provide facilities for buying and selling of financial claims and services. The financial markets match the demands of investment with the supply of capital from various sources. According to functional basis financial markets are classified into two types. They are: Money markets (short-term) Capital markets (long-term) According to institutional basis again classified in to two types. They are Organized financial market Non-organized financial market. The organized market comprises of official market represented by recognized institutions, bank and government (SEBI) registered/controlled activities and intermediaries. The unorganized market is composed of indigenous bankers, moneylenders, individual professional and non-professionals. MONEY MARKET:

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Money market is a place where we can raise short-term capital. Again the money market is classified in to Inter bank call money market Bill market and Bank loan market Etc. E.g.; treasury bills, commercial papers, CD's etc. 40 CAPITAL MARKET : Capital market is a place where we can raise long-term capital. Again the capital market is classified in to two types and they are Primary market and Secondary market. E.g.: Shares, Debentures, and Loans etc. P RIMARY MARKET: Primary market is generally referred to the market of new issues or market for mobilization of resources by the companies and government undertakings, for new projects as also for expansion, modernization, addition, diversification and up gradation. Primary market is also referred to as New Issue Market. Primary market operations include new issues of shares by new and existing companies, further and right issues to existing shareholders, public offers, and issue of debt instruments such as debentures, bonds, etc. The primary market is regulated by

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the Securities and Exchange Board of India (SEBI a government regulated authority).

Function: The main services of the primary market are origination, underwriting, and distribution. Origination deals with the origin of the new issue. Underwriting contract make the shares predictable and remove the element of uncertainty in the subscription. Distribution refers to the sale of securities to the investors.

The following are the market intermediaries associated with the market: 1. Merchant banker/book building lead manager 2. Registrar and transfer agent 3. Underwriter/broker to the issue 4. Adviser to the issue 5. Banker to the issue 6. Depository 7. Depository participant. Investors protection in the primary market: To ensure healthy growth of primary market, the investing public should be protected. The term investor protection has a wider meaning in the primary market. The principal ingredients of investors protection are: 34

Provision of all the relevant information Provision of accurate information and Transparent allotment procedures without any bias.

SECONDARY MARKET The primary market deals with the new issues of securities. Outstanding securities are traded in the secondary market, which is commonly known as stock market or stock exchange. The secondary market is a market where scrips are traded. It is a market place which provides liquidity to the scrips issued in the primary market. Thus, the growth of secondary market depends on the primary market. More the number of companies entering the primary market, the greater are the volume of trade at the secondary market. Trading activities in the secondary market are done through the recognized stock exchanges which are 23 in number including Over The Counter Exchange of India (OTCE), National Stock Exchange of India and Interconnected Stock Exchange of India. Secondary market operations involve buying and selling of securities on the stock exchange through its members. The companies hitting the primary market are mandatory to list their shares on one or more stock exchanges in India. Listing of scrips provides liquidity and offers an opportunity to the investors to buy or sell the scrips. The following are the intermediaries in the secondary market: 1. Broker/member of stock exchange buyers broker and sellers broker 35

2. Portfolio Manager 3. Investment advisor 4. Share transfer agent 5. Depository 6. Depository participants. STOCK MARKETS IN INDIA: Stock exchanges are the perfect type of market for securities whether of government and semi-govt bodies or other public bodies as also for shares and debentures issued by the joint-stock companies. In the stock market, purchases and sales of shares are affected in conditions of free competition. Government securities are traded outside the trading ring in the form of over the counter sales or purchase. The bargains that are struck in the trading ring by the members of the stock exchanges are at the fairest prices determined by the basic laws of supply and demand. Definition of a stock exchange: Stock exchange means any body or individuals whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. The securities include: Shares of public company. Government securities,Bonds History of Stock Exchanges: The only stock exchanges operating in the 19th century were those of Mumbai 36

setup in 1875 and Ahmedabad set up in 1894. These were organized as voluntary nonprofit- marking associations of brokers to regulate and protect their interests. Before the control on securities under the constitution in 1950, it was a state subject and the Bombaysecurities contracts (control) act of 1925 used to regulate trading in securities. Under this act, the Mumbai stock exchange was recognized in 1927 and Ahmedabad in 1937. During the war boom, a number of stock exchanges were organized. Soon after it became a central subject, central legislation was proposed and a committee headed by A.D.Gorwala went into the bill for securities regulation. On the basis of the committees recommendations and public discussion, the securities contract (regulation) act became law in 1956. Functions of Stock Exchanges: Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed companies, they help trading and raise funds from the market. Over the hundred and twenty years during which the stock exchanges have existed in this country and through their medium, the central and state government have raised crores of rupees by floating public loans. Municipal corporations, trust and local bodies have obtained from the public their financial requirements, and industry, trade and commerce- the backbone of the countrys economy-have secured capital of crores or rupees through the issue of stocks, shares and debentures for financing their day-to-day activities, organizing new ventures and completing projects of expansion, diversification and modernization. By 37

obtaining the listing and trading facilities, public investment is increased and companies were able to raise more funds. The quoted companies with wide public interest have enjoyed some benefits and assets valuation has become easier for tax and other purposes.

Various Stock Exchanges in India: At present there are 23 stock exchanges recognized under the securities contracts (regulation), Act, 1956. Those are: Ahmedabad Stock Exchange Association Ltd. Bangalore Stock Exchange Bhubaneshwar Stock Exchange Association Calcutta Stock Exchange Cochin Stock Exchange Ltd. Coimbatore Stock Exchange Delhi Stock Exchange Association Guwahati Stock Exchange Ltd Hyderabad Stock Exchange Ltd. Jaipur Stock Exchange Ltd Kanara Stock Exchange Ltd Ludhiana Stock Exchange Association Ltd Madras Stock Exchange 38

Madhya Pradesh Stock Exchange Ltd. Magadh Stock Exchange Limited Meerut Stock Exchange Ltd. Mumbai Stock Exchange National Stock Exchange of India OTC Exchange of India Pune Stock Exchange Uttar Pradesh Stock Exchange Association Vadodara Stock Exchange Ltd. Out of these major stock exchanges were: NSE(NATIONAL STOCK EXCHANGE): The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The

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Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000 NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the main objectives of: Establishing a nation-wide trading facility for equities and debt instruments. Ensuring equal access to investors all over the country through an appropriate communication network. Providing a fair, efficient and transparent securities market to investors using electronic trading systems. Enabling shorter settlement cycles and book entry settlements systems, and Meeting the current international standards of securities markets. The standards set by NSE in terms of market practices and technology, have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities. BSE(BOMBAY STOCK EXCHANGE): The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. It has evolved over the years into its present status as the 40

premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act 1956.The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redresses of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programmers and making available to them necessary informative inputs. A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one third of them retire ever year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer. The Executive Director as the Chief Executive Officer is responsible for the day-today administration of the Exchange and the Chief Operating Officer and other Heads of Department assist him. The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to constitution of the Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting of three elected directors, three SEBI nominees or public representatives, Executive Director & CEO and Chief Operating Officer has been constituted. The Committee considers judicial & quasi matters in which the Governing Board has powers as an Appellate 41

Authority, matters regarding annulment of transactions, admission, continuance and suspension of member-brokers, declaration of a member-broker as defaulter, norms, procedures and other matters relating to arbitration, fees, deposits, margins and other monies payable by the member-brokers to the Exchange, etc. Regulatory Frame Work Of Stock Exchange A comprehensive legal framework was provided by the Securities Contract Regulation Act, 1956 and Securities Exchange Board of India 1952. Three tier regulatory structure comprising Ministry of finance The Securities And Exchange Board of India Governing bond Members of the stock exchange: The securities contract regulation act 1956 has provided uniform regulation for the admission of members in the stock exchanges. The qualifications for becoming a member of a recognized stock exchange are given below: The minimum age prescribed for the members is 21 years. He should be an Indian citizen. He should be neither a bankrupt nor compound with the creditors. He should not be convicted for fraud or dishonesty. He should not be engaged in any other business connected with a company. He should not be a defaulter of any other stock exchange. 42

 The minimum required education is a pass in 12th standard examination. SECURITIES EXCHANGE BOARD OF INDIA (SEBI) The securities and exchange board of India was constituted in 1988 under a resolution of government of India. It was later made statutory body by the SEBI act 1992.according to this act, the SEBI shall constitute of a chairman and four other members appointed by the central government. With the coming into effect of the securities and exchange board of India act, 1992 some of the powers and functions exercised by the central government, in respect of the regulation of stock exchange were transferred to the SEBI. OBJECTIVES AND FUNCTIONS OF SEBI To protect the interest of investors in securities. Regulating the business in stock exchanges and any other securities market. Registering and regulating the working of intermediaries associated with securities market as well as working of mutual funds. Promoting and regulating self-regulatory organizations. Prohibiting insider trading in securities. Regulating substantial acquisition of shares and take over of companies. Performing such functions and exercising such powers under the provisions of capital issues (control) act, 1947and the securities to it by the central government.

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SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES): Board of Directors of Stock Exchange has to be reconstituted so as to include nonmembers, public representatives and government representatives to the extent of 50% of total number of members. Capital adequacy norms have been laid down for the members of various stock exchanges depending upon their turnover of trade and other factors. All recognized stock exchanges will have to inform about transactions within 24 hrs.

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COMPANY PROFILE

45

COMPANY PROFILE
Sharewealth Securities Ltd. is the first corporate member of National Stock Exchange of India Ltd, Bombay Stock Exchange Ltd and MCX Stock Exchange Ltd (MCX-SX) from THRISSUR, the Cultural Capital of Kerala. Sharewealth is also a Depository Participant with CDSL (Central Depository Services (India) Ltd). Sharewealth Securities Ltd has two group companies, Share wealth Commodities Pvt Ltd (Member: MCX, NCDEX, NMCE, ICEX & NSEL) and Sharewealth Financial Services Ltd (AMFI Registered Mutual Fund Distributor). Sharewealth has a group (Overseas Joint Venture) company at Abu Dhabi, Sharewealth Financial Consultancy LLC. Registered & Corporate offices of Share wealth Group of companies are at Thrissur. Share wealth is promoted by a group of Financial Market Professionals having more than 20 years of experience in Financial Markets. Mr.T.B.Ramakrishnan (Ramki) - CEO & Managing Director is leading the core team of Sharewealth, which has a highly competent diversified Board of Directors. Mr.Ramki is a Stock Market Analyst, Ex. Treasurer & Governing Council Member of Cochin Stock Exchange Ltd (1998-2000) and former 46

Kerala Regional Head of Share khan who has got more than 20 years of experience in Financial Markets. Mr. Joseph P Antony, Mr.T.V.N Girish Kumar, Mr.N.C.Peethambaran (Group Company Director) and Mr.Mani Paul (Group Company Director) are Working Directors of the company. Mr. N.C.Chummar,Anchery Ramanathan, Dr.Saifu Kokkat, N.Nandakumar, A.A.Mathew, Advocate A.Y.Khalid, Mr.A.Unnikrishnan (Group Company Director), Mr.T.S.Rajan (Group Company Director), Mr.VincentPaliakkara (Group Company Director) are other directors. Dr.Anil Menon is the Chairman and Mr.C.G.Surendran is the Vice-Chairman of the company.

MISSION
To educate growing investing public in a simple & practical way to help them to protect their hard earned money and to make more money from financial & commodity markets", which we mean by wealth creation simplified

SERVICES
Equities The Equities section provides with an insight into the equities segment of NSE & BSE and also provides real-time quotes and statistics of the equities market. Sharewealth is the registered member of NSE, giving equities at them 47

.. Derivatives The term "Derivative" indicates that it has no independent value, i.e. its value is entirely "derived" from the value of the underlying asset. The underlying asset can be securities, commodities, bullion, currency, live stock or anything else. In other words, Derivative means a forward, future, option or any other hybrid contract of pre determined fixed duration, linked for the purpose of contract fulfillment to the value of a specified real or financial asset or to an index of securities.

Depository A depository can be compared to a bank. A depository holds securities like shares, debentures, bonds, Government Securities, units etc. of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities. At present two Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (I) Limited (CDSL) are registered with SEBI.

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Commodities Any product that can be used for commerce or an article of commerce which is traded on an authorized commodity exchange is known as commodity. The article should be movable of value, something which is bought or sold and which is produced or used as the subject or barter or sale. In short commodity includes all kinds of goods. Forward Contracts (Regulation) Act (FCRA), 1952 defines goods as every kind of movable property other than actionable claims, money and securities. Sharewealth is the registered member of MCX.

MutualFund

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders.

The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A 49

mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public. Sharewealth has the AMFI registration. IPO An initial public offer (IPO) is the selling of securities to the public in the primary market. It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuer s securities. the sale of securities can be either through book building or through normal public issue.

IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value.

Insurance

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Life insurance is a contract that pledges payment of an amount to the person assured on the happening of of the event insured against uncertainities. The Indian economy is witnessing sustained growth with economist predicting double digit target for the coming years. This boom has opened several investment opportunities. The common man has generally been investing in banks FDs, insurance, national savings certificates and gold. Indians are big savers with savings average 2.5%, this is among the highest in the world but then savings has to earn interest and the interest rate has to be higher than rate of inflation. If this is not the case, it means our savings are getting eroded. The truth is that interest rate curve in India has been falling over past 6 years, interest rate of banks and various government schemes have dropped by over 50%. It is in such a scenario that stock markets come to the rescue of savers- provided it is viewed as investments and not as a lottery. On a long term basis 15-20% annual gain is definitely feasible. Even though it is proven that return from equities are by far greater than any other investment return, the common man is still is hesitant to enter the market. This may be because of lack of knowledge, past experience or sheer ignorance. Can we completely ignore share market in the scenario where other investment opinions are less attractive the answer is simple! Invest wisely and spread OUR investments. The key to success in share market is to remain 51

as an investor and not a speculator. At sharewealth securities ltd money is hard earned and hence they take the utmost speculation to balance risk with return. Their investment advices are based on detailed analysis and come from professionals with more than 20 tears of experience in this field. They provide you with personalized support and care, irrespective of the size of investment. Right from account opening, the Sharewealth securities limited team would be there to help.

MAIN COMPETITORS

SHARE KHAN HEDGE EQUITIES

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CHAPTER-4 DATA ANALYSIS

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SHARE PRICE ANALYSIS ON VARIOUS INDUSTRIES

1. Banking Industry 2. Capital goods Industry. 3. Fast moving consumable goods (FMCG) industry 4. Housing Related Industry 5. Oil and refineries Industry 6. Metal,metal products and mining Industry 7. Chemicals Industry. 8. Information Technology Industry. 9. Telecomm Industry. 10.Transport Equipments Industry.

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SHARE PRICE ANALYSIS ON BANKING INDUSTRY 1.STATE BANK OF INDIA (SBI). 2.FEDERAL BANK. 3.PUNJAB NATIONAL BANK.

Name of company

State Bank of 1576.00 India Federal Bank 399.50 480.00 322.10 419.80 Punjab 961.35 1091.00 756.70 851.65 National Bank Table no; 1 (source-share price analysis charts from money control.com)

Opening high share price at (28-10-2011) 1922.10 2474.80

low

Closing share price at (30-4-2012) 2137.95

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SHARE PRICE ANALYSIS ON CAPITAL GOODS INDUSTRY.

1.SUZLON ENERGY LIMITED. 2.BHARAT HEAVY ELECTRICALS. 3.LARSEN & TOURBO (L&T)

Name of company

Suzlon 37.55 17.25 Energy Bharat Heavy 321.25 328.35 224.90 224.90 Electricals L&T 1383.20 1529.80 971.00 1226.30 Table no; 2 (source-share price analysis charts from money control.com)

Opening share price at (28-10-2011) 37.55

high

low

Closing share price at (30-4-2012) 22.80

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SHARE

PRICE

ANALYSIS

OF

FAST

MOVING

CONSUMABLE GOODS (FMCG) INDUSTRY. 1.HINDUSTAN UNI LIVER LTD. 2.ITC.LTD. 3.NESTLE INDIA

Name of company Hindustan Uni Liver ITC Nestle India

Opening high share price at (28-10-2011) 344.10 439.45 213.70 4349.00 252.80 5024.35

low

344.10 189.40 3930.00

Closing share price at (30-4-2012) 416.35 244.55 4671.60

Table no:3 (source-share price analysis charts from money control.com)

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SHARE PRICE ANALYSIS OF HOUSING RELATED INDUSTRY.

1.ACC CEMENTS 2.AMBUJA CEMENTS. 3.ULTRA TECH

Name of company Opening share price at (28-10-2011) 1200.25 152.10 1108.00 high low Closing share price at (30-4-2012) 1234.65 152.10 1423.00

ACC cements Ambuja Cements Ultratech

1421.95 182.00 1542.10

1083.10 139.60 1093.75

Table no:4 (source-share price analysis charts from money control.com)

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SHARE PRICE ANALYSIS OF OIL AND REFINERIES INDUSTRY. 1.HINDUSTAN PETROLEUM LTD. 2.OIL AND NATURAL GAS CORPORATION (ONGC). 3.INDIAN OIL
Name of company Opening share price at (28-10-2011) 349.50 286.00 high low Closing share price at (30-4-2012) 300.90 269.70

Hindustan Petroleum Oil and Natural Gas Corporation Indian Oil

351.50 303.90

238.75 241.90

295.00

298.81

255.10

264.65

Table no:5 (source-share price analysis charts from money control.com)

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SHARE PRICE ANALYSIS ANALYSIS OF METAL,METAL PRODUCTS AND MINING INDUSTRY. 1.STEEL AUTHORITY OF INDIA. 2.TATA STEELS. 3.JINDAL STEELS
Name of company Opening share price at (28-10-2011) 109.65 high low Closing share price at (30-4-2012) 94.85

Steel Authority of India Tata Steels Jindal Steels

115.90

73.00

465.00 579.25

500.90 663.40

332.35 435.55

463.65 502.70

Table no:6 (source-share price analysis charts from money control.com)

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SHARE PRICE ANALYSIS OF CHEMICALS INDUSTRY. 1. ADITHYA BIRLA CHEMICALS. 2.TATA CHEMICALS. 3.ASIAN PAINTS.
Name of company Opening share price at (28-10-2011) 92.35 328.00 3110.00 high low Closing share price at (30-4-2012) 80.05 335.50 3523.05

Adithya Birla Chemicals Tata chemicals Asian Paints

98.90 374.50 3523.05

72.10 295.00 2551.05

Table no: 7 (source-share price analysis charts from money control.com)

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SHARE PRICE ANALYSIS OF INFORMATION TECHNOLOGY INDUSTRY. 1.INFOSYS TECHNOLOGIES LTD. 2.WIPRO LTD. 3.HCL TECHNOLOGIES LTD.

Name of company

Infosys Wipro

Opening high share price at (28-10-2011) 2906.00 2990.00 375.40 452.50 523.50

low

Closing share price at (30-4-2012) 2462.60 405.10 512.00

2200.00 360.10 374.00

HCL.Technologies 437.10

Table no: 8 (source-share price analysis charts from money control.com)

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SHARE PRICE ANALYSIS OF TELECOM INDUSTRY.

1.TATA COMMUNICATIONS LTD. 2.BHARATHI AIRTEL LTD. 3.IDEA CELLULAR LTD.

Name of company Opening share price at (28-10-2011) high low Closing share price at (30-4-2012) 237.25 310.30 78.50

Tata 223.00 Communications Bharathi Airtel 399.28 Idea Cellular 98.10

263.20 401.00 102.15

176.30 289.00 71.20

Table no: 9(source-share price analysis charts from money control.com)

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SHARE

PRICE

ANALYSIS

OF

TRANSPORT

EQUIPMENTS INDUSTRY. 1.BAJAJ AUTO.LTD 2.HERO MOTO CORP.LTD. 3.MARUTHI SUZUKI .

Name of company

Opening share price at (28-10-2011)

high

low

Closing share price at (30-4-2012) 1623.10 2278.50 1369.90

Bajaj 1726.00 Automobiles Hero Moto Corp 2099.90 Maruthi Suzuki 997.00

1820.00 2278.50 1373.65

1410.00 1702.65 918.55

Table no: 10 (source-share price analysis charts from money control.com)

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CHAPTER-5 FINDINGS

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FINDINGS
In according to this research ,The Recent trend in the secondary market is bearish or declining trend. All companies in the same Industry can shows almost same trend exept some rare cases. It is highly risky to invest in shares in recent times, because share prices are highly fluctuating. IT sector is recovering slowly in now, but capital goods industry shows a Downward trend in recently. Housing related industry is accelerating in recovery from February onwards, But Metal industry is highly fluctuating, it goes low on the febraury and high on march, now it shows declining trend. FMCG industry is going at an average level, without high fluctuations, Telecom industry shows highly fluctuating and now in bearish trend. Banking sector is recovering from lower positions and in the month of February, then all companies in this sector registered their highest share price value in recent period. Automobile Industry also shows a lot of fluctuations in share prices,majority of companys registered their lower position in February and quickly reaches at peak point in the month of march 2012. Chemical Industry shows declining initially of first 2 months,then in the month of febraury it reaches peak point and now it again shows a declining trend. Oil & Refineries Industry shows its peak point in share prices at the month of October 2011 itself.then it goes to lowest point in January and now it is recovering slowly. 96

CHAPTER-6 SUGGESSIONS & RECOMMENDATIONS

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RECOMMENDATIONS
It is highly risky to invest in shares in recent times, because market shows high fluctuations in these period. So by giving proper advice and instructions to investors make their investment in a proper way. Company can improve their information providing services to the investors for investment. In India, share market is mainly concentrated in few hands, so company can conduct awareness programs and introduce new schemes for attracting the common public to this field.

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CONCLUSION
The results of the this research clearly shows the current trends occured in the online trading in secondary market.The research compares the share prices of different companies in industry wise. This helps us to understand the performance of each individual industry . The main conclusion arrived from this research is recent trend in prevailing in the secondary market is bearish trend.Bearish trend means declining the share prices due to some other factors.It is highly risky to Invest in shares in

secondary market,because of lot of fluctuations occurred in prices of shares.so,through this analysis we can understand the importance of depository participants like sharewealth securities ltd. to giving instructions and guidelines for investment process. This research clearly identifys the recent trends occurred in the secondary market by detailed analysis of its share prices through company wise and industry wise.One of the main findings is that All the companies in the same industry shows almost same trends exept in some rare occations.So, the

research was conducted for just short period of 6 months, the trend prevailing in these period was bearish trend.

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BIBILOGRAPHY

Company details Brochures of the company Company records Company websites

TEXT BOOKS L.M Bhole ; Financial Institutions and market. M.Y Khan ; Financial Services.

WEBSITES www.moneycontrol.com www.moneyrediff.com www.yourmoneysite.com www.moneysulekha.com

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