A

Project Report
On
Study of Investment decision of
Invester
Submitted in partial fulfillment for the
Award of degree of
Master of Business
Administration
2009-2011

Submitted By: - Submitted To:-
SEEMA A!A "AMA S#A!MA
1
MBA:- $$nd year

. Acknowed!ement
I express my sincere thanks to my project guide, Miss.Padma Sharma faculty of.,
Deptt-MB., for guiding me right form the inception till the successful completion
of the project. I sincerely ackno!ledge him"her"them for extending their #alua$le
guidance, support for literature, critical re#ie!s of project and the report and
a$o#e all the moral support he"she"they had pro#ided to me !ith all stages of this
project.
Seema dara
2
Preface
.
Though India has a very big untapped market but the players will not flourish
unless they change the way the customers are being served. Given the awareness level of
today customers every player has to treat with care and make the customer feel that he is
the king. Number of Online hare trader in India has crossed the line. !ore and more
customers are coming under this umbrella and many of the e"isting one are changing
pavilion. o customer retention and satisfaction is now more important as it was never
before. #layers keep coming with new schemes in order to attract new customers and
retain the e"isting one. This is being supplemented with increased advertising and brand
building efforts. uccess of any organi$ation depends upon its being proactive.
I am very lucky as I got an opportunity to work with %&'( )%&N *T+
which is showing phenomenal growth and success in the ecurities.
!y topic of study was ,study of capital market.- This pro.ect is an effort to do a
depth study and analysis of various known and unknown reasons for customer
satisfaction and retention. ,To err is human- and I am not an e"ception/ valuable
comments are always welcomed since it will motivate to work with greater $eal and
efficiency in the future.
0
E%E&'T$(E S'MME!)
I undersigned here by stating that the report entitled STUDY OF
INVESTMENT DECISION OF INVESTER is a genuine and bonafied work prepared
by me under a guidance of Mr. Mathul Jain (Branch Ha!" SH#RE$H#N %TD"
J#I&UR'
The empirical findings in this pro.ect report are based on the data collected by
myself. The matter presented in this report is not copied from any source.
This pro.ect report is submitted to #r(a In)itut *+ En,inrin,
-Tchn*l*,( in a partial fulfillment of the course of1.
MB# (FIN#NCE'

&%#CE. J#I&UR
2SEEM# D#R#'
3
&ontent*

4
&hapter T+"$&
1,
2
-,
.,
/,
0,
1,
2,
9,
10,
$ntrodu3tion to the $ndutry
&ompany "rofile
!e*ear3h Methodology
ata Analy*i*
$nterpretation* and di*3u**ion*
&on3lu*ion
!e3ommendation and *ugge*tion*
4imitation*
Anne5ure
Bibliography

$6T!+'&T$+6
A6

#$ST+!)
5
hare khan is the retail broking arm of )I/ an organi$ation with more than eight
decades of trust 6 credibility in the stock market.
It is India7s leading retail financial ervices 8ompany with 9e have over 1::: share
shops across 32: cities in India. 9hile our si$e and strong balance sheet allow us to
provide you with varied products and services at very attractive prices/ our over ;4:
8lient 'elationship !anagers are dedicated to serving your uni<ue needs. harekhan is
lead by a highly regarded management team that has invested crores of rupees into a
world class Infrastructure that provides our clients with real=time access to all
information and products.
Our flagship Share7han "rofe**ional 6etwor7 offers real=time prices/ detailed data and
news/ intelligent analytics/ and electronic trading capabilities/ right at your fingertips.
This powerful technology complemented by our knowledgeable and customer focused
'elationship !anagers. 9e are 8reating a world of mart Investor. harekhan offers a
full range of financial services and products ranging from (<uities to +erivatives
enhance your wealth and hence/ achieve your financial goals.
.harekhan7 8lient 'elationship !anagers are available to you to help with your financial
planning and investment needs. To provide the highest possible <uality of service/
harekhan provides full access to all our products and services through multi=channels.
hare)han*td.
;
8!+9T# +: T#E &+M"A6)
Budget 2009-10: "opuli*t yet growth oriented
Given the election year/ the finance minister 2>!? tabled a populist budget aimed
at pleasing a large section of rural population and also the salaried middle class. &part
from the substantial increase in budgetary allocation for rural and social infrastructure/
the budget has proposed huge debt waiver and relief worth 's5:/::: crore to farmers.
@ut in spite of the increased e"penditure/ the fiscal prudence has been maintained with
fiscal deficit target set at 2.4A for 2::B=1:.
MUMB#IC harekhan has upgraded their recommendation to 7buy7 from 7hold7 on
Navneet #ublications with a revised price target of 's D:/ at which the stock discounts its
2::B=1: (# of 's ;.5 by 1:.4". The companyEs Fan=!ar 2::D=:B results are ahead of
the brokerage e"pectation.
The net sales for the <uarter grew by a robust 2B.4 per cent year on year to 's
4B.1 crore/ which is ahead of their e"pectation of 's 40.1 crore. The sales growth was on
account of hefty growth in publication and stationery businesses.
The publication business witnessed a robust growth of 2D.4 per cent year on year
to 's 21.D crore. The stationery business achieved a healthy growth of 00.D per cent to 's
0D crore/ mainly on account of good domestic demand and introduction of non=paper
stationery products.
D
The operating profit margin declined by 1:2 basis points to B per cent/ mainly on
account of a higher other e"penditure/ as this/ as a percentage of the sales increased by
010 basis points to 25.2 per cent in Fan=!ar 2::;=:D
IN+GT'H OI('II(9
A Brief #i*tory of Sto37 E53hange*
+o you know that the world7s foremost marketplace New Hork tock ("change
2NH(?/ started its trading under a tree 2now known as 5D 9all treet? over 2:: years
agoJ imilarly/ India7s premier stock e"change @ombay tock ("change 2@(? can also
trace back its origin to as far as 124 years when it started
as a voluntary non=profit making association.
Hou hear about it any time it reaches a new high or a new
low/ and you also hear about it daily in statements like
7The @( ensitive Inde" rose 4A today7. Obviously/
stocks and stock markets are important. tocks of public
limited companies are bought and sold at a stock e"change. @ut what really are stock
e"changesJ )nown also as tNews on the stock market appears in different media every
day. he stock market or bourse/ a stock e"change is an organi$ed marketplace for
securities 2like stocks/ bonds/ options? featured by the centrali$ation of supply and
demand for the transaction of orders by member brokers/ for institutional and individual
investors. The e"change makes buying and selling easy.
&ll stock e"changes perform similar functions with respect to the listing/ trading/ and
clearing of securities/ differing only in their administrative machinery for handling these
B
functions. !ost stock e"changes are auction markets/ in which prices are determined by
competitive bidding. Trading may occur on a continuous auction basis/ may involve
brokers buying from and selling to dealers in certain types of stock/ or it may be
conducted through specialists dealing in a particular stock.
@ut where did it all startJ The need for stock e"changes developed out of early trading
activities in agricultural and other commodities. +uring the middle &ges/ traders found it
easier to use credit that re<uired supporting documentation of drafts/ notes and bills of
e"change.
India7s other ma.or stock e"change National tock ("change 2N(?/ promoted by leading
financial institutions/ was established in &pril 1BB0. Over the years/ several stock
e"changes have been established in the ma.or cities of India. There are now 20
recognised stock e"changes K !umbai 2@(/ N( and OT8?/ 8alcutta/ +elhi/ 8hennai/
&hmedabad/ @angalore/ @hubhaneswar/ 8oimbatore/ Guwahati/ %yderabad/ Faipur/
)ochi/ )anpur/ *udhiana/ !angalore/ #atna/ #une/ 'a.kot/ Iadodara/ Indore and !eerut.
Today/ most of the global stock e"changes have become highly efficient/ computerised
organisations. 8omputerised networks also made it possible to connect to each other and
have fostered the growth of an open/ global securities market.
IN+I&N TO8) !&')(T=& brief profile
The two main stock markets of India areC=
N(
@(
1:
In all there are 20 stock e"changes in India/ but the two most popular amongst all of them
areC=
National tock ("change2N(?
@ombay stock e"change2@(?
Now/ letEs discuss the history/ functionality and other important details about these two
important stock e"changes of India.
%istory of @( and its brief profileC=
Indian stock markets are one of the oldest in &sia. Its history dates back to a 2::
years ago. The (ast India 8ompany was the dominant institution in those days and
business in its loan securities used to be transacted towards the end of eighteenth century.
@y 1D0:Es business on corporate stocks and shares in the bank and cotton took place in
@ombay. The 1D4:Es witnessed a rapid development of commercial enterprise and the
brokerage business attracted many men into this field and by 1D5: the number of brokers
increased to 5:.
In 1D5:=51/ the &merican civil war broke out and cotton supply from Gnited
tates stoppedL and thus the ,share mania- in India begun/ due to which the share brokers
increased to about 2:: to 24:.
11
&t the end of the &merican civil war/ the brokers who thrived out of this war in
1D;3/ found a place in a street/ where they would easily assemble and transact business.
This street is nowadays/ popularly known as +&*&* T'((T.
In 1DD;/ they formally established in @ombay/ and were known as ,Native hares
and tock @rokers &ssociation-.
$n 129/; it a3<uired a premi*e in the *ame *treet and finally wa* inaugurated in 1299
with the name Bombay Sto37 E53hange=BSE>,
In this way the stock market at @ombay was consolidated.
N(C=
The N( was incorporated in 1BB2 by industrial development bank of India/
industrial credit and Investment 8orporation of India/ industrial finance corporation of
India/ all insurance corporations/ selected commercial banks and others.
N( is IndiaEs leading stock e"change covering more than 15: cities and towns
across the country. It provides the modern fully computeri$ed trading system designed to
offer investors across the country a safe and easy way to invest to li<uidate investment
and securities.
Investors in many areas of country did not have the same access and opportunity
to trade so there arise the need for setting up the national stock e"change. The N(
network has been designed to provide e<ual access to investors from anywhere in India
and to be responsive to their needs.
On its recognition as a stock e"change under the ecurities 8ontract &ct/ 1B45 in
&pril 1BB0/ N( started operations in the 9holesale +ebt !arket 29+!? segment in
12
Fune 1BB3. 8apital market 2e<uities? segment commenced operations in November 1BB3/
and operations in derivative segment started in Fune 2:::.
N( started trading in the capital market segment on November0/ 1BB3 and
within one year became the largest e"change in India/ in terms of volumes transacted.
+uring the year 2::4=:5 N( reported/ a turnover of 's 1/45B/445 crores in the e<uity
segment.
+nline trading pro3e**
The various transactions involved in online trading can be shown from the point of view
of the
8lient
@roker
tock ("change
10
13
/ the promoterEs capital and the borrowing from bank and financial institution may not be
sufficient for setting up and running the business over a long term. Therefore/ companies
invite the public to contribute toward the e<uity and issue share to individual investors.
The way to invite share capital from the public is through a M#ublic IssueE. imply stated
a public issue is an offer to the public to subscribe the share capital of a company. Once
this is done/ the company allot share to the applicants as per the prescribed rules and
regulation laid down by (@I.
#ow 3an one a3<uire e<uity *hare*?
The investors may subscribe issue made by corporate in the primary market. In
the primary market/ resources are mobili$ed by the corporate through fresh public issues
2I#OEs? or through private placements. &lternately/ investor may purchase shares from the
secondary market. To buy and sell securities you should approach a (@I registered
trading member 2broker? of a recogni$ed stock e"change.
9hy *hould one in@e*t in e<uitie* in parti3ular?
9hen an individual buy a share of a company he become a shareholder in that
company. hares are also known as (<uities. (<uities have a potential to increase in
value over time. It also provides investors portfolio with the growth necessary to reach
investorEs long=term investment goals. 'esearch studies have proved that the e<uities
have outperformed most than other forms of investments in the long term. This may be
illustrated with the help of following.
14
A@erage return on E<uitie* in $ndia:
ince 1BB:/ till date/ Indian share market has returned about 1;A to investors in
an average in terms of increase in share prices or capital appreciation annually. @eside
these stocks have paid on an average 1.4A dividend annually +ividend is a percentage of
the face value of a share that a company returns to its share holder from its annual profits.
8omposed topmost other form of investments/ investing in e<uity share offers a highest
rate of return/ if invested over a longer duration.
:a3tor* that influen3e the pri3e of *to37*
@roadly/ there are two factorsC
tock specific and
!arket specific.
The stock N specific factor is relates to peopleEs e"pectation about the company/
its future earning capacity/ financial health and management/ level of technology and
marketing skills.
The market specific factor are influence by the investorEs sentiments towards the
stock market as a whole. This factor depends on the environment rather than the
performance of any company. (vents favorable to an economy/ political or regulatory
environment like high economic growth/ friendly budget/ stable government etc. can fuel
euphoria in the investors/ resulting in a boom in the market. On the other hand/
unfavorable event like war/ economic crisis/ communal riots/ minority government etc.
depress the market irrespective of certain companies performing well.
15
INTRODUCTION OF SHAREKHAN LTD.
ABOUT SHAREKHAN LIMITED
Sharekhan Ltd. is one of the leading retail stock broking house of SSKI
Group which is running successfully since 1922 in the country. It is the
retail broking arm of the Mumbai-based SSKI Group, which has over
eight decades of experience in the stock broking business. Sharekhan
ofers its customers a wide range of equity related services including
trade execution on BSE, NSE, Derivatives, depository services, online
trading, investment advice etc.
The frms online trading and investment site - www.sharekhan.com - was
launched on Feb 8, 2000. The site gives access to superior content and
transaction facility to retail customers across the country. Known for its
jargon-free, investor friendly language and high quality research, the site
has a registered base of over one lakh customers. The content-rich and
research oriented portal has stood out among its contemporaries because
of its steadfast dedication to ofering customers best-of-breed technology
and superior market information. The objective has been to let customers
make informed decisions and to simplify the process of investing in
stocks.
On April 17, 2002 Sharekhan launched Speed Trade, a net-based
executable application that emulates the broker terminals along with
host of other information relevant to the Day Traders. This was for the
frst time that a net-based trading station of this caliber was ofered to
1;
the traders. In the last six months Speed Trade has become a de facto
standard for the Day Trading community over the net.
Sharekhans ground network includes over 640 centers in 280 cities in
India which provide a host of trading related services.
Sharekhan has always believed in investing in technology to build its
business. The company has used some of the best-known names in the
IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge
Technologies, Nexgenix, Vignette, Verisign Financial Technologies India
Ltd, Spider Software Pvt Ltd. to build its trading engine and content. The
Morakhiya family holds a majority stake in the company. HSBC, Intel &
Carlyle are the other investors.
With a legacy of more than 80 years in the stock markets, the SSKI group
ventured into institutional broking and corporate fnance 18 years ago.
Presently SSKI is one of the leading players in institutional broking and
corporate fnance activities. SSKI holds a sizeable portion of the market
in each of these segments. SSKIs institutional broking arm accounts for
7% of the market for Foreign Institutional portfolio investment and 5% of
all Domestic Institutional portfolio investment in the country. It has 60
institutional clients spread over India, Far East, UK and US. Foreign
Institutional Investors generate about 65% of the organizations revenue,
with a daily turnover of over US$ 2 million. The Corporate Finance
section has a list of very prestigious clients and has many frsts to its
credit, in terms of the size of deal, sector tapped etc. The group has
placed over US$ 1 billion in private equity deals. Some of the clients
include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison,
Planetasia, and Shoppers Stop.
PROFILE OF THE COMPANY
Name of the company: Sharekhan ltd.
Year of Establishment: 1925
1D
Headquarter : ShareKhan SSKI
A-206 Phoenix House
Phoenix Mills Compound
Lower Parel
Mumbai - Maharashtra, INDIA- 400013
Nature of Business : Service Provider
Services : Depository Services, Online Services
and
Technical Research.
Number of Employees : Over 3500
Revenue : Data Not Available
Website : www.sharekhan.com

Slogan : Your Guide to The Financial Jungle.
Vision
To be the best retail brokering Brand in the retail business of stock
market.
Mission
To educate and empower the individual investor to make better
investment
decisions through quality advice and superior service.
Sharekhan is infact-
1B
Among the top 3 branded retail service providers
No. 1 player in online business
Largest network of branded broking outlets in the country serving
more than 7,00,000 clients.
REASON TO CHOOSE SHAREKHAN LIMITED
Experience
SSKI has more than eight decades of trust and credibility in the Indian
stock market. In the Asia Money broker's poll held recently, SSKI won the
'India's Best Broking House for 2004 ' award. Ever since it launched
Sharekhan as its retail broking division in February 2000, it has been
providing institutional-level research and broking services to individual
investors.
Technology
With its online trading account one can buy and sell shares in an instant
from any PC with an internet connection. One can get access to its
powerful online trading tools that will help him take complete control
over his investment in shares.
Accessibility
Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION
services for investors. These services are accessible through its centers
across the country over the internet (through the website
www.sharekhan.com) as well as over the Voice Tool.
Knowledge
In a business where the right information at the right time can translate
into direct profts, one can get access to a wide range of information on
Sharekhan limiteds content-rich portal. One can also get a useful set of
knowledge-based tools that will empower him to take informed decisions.
Convenience
2:
One can call its Dial-N-Trade number to get investment advice and
execute his transactions. Sharekhan ltd. have a dedicated call-centre to
provide this service via a Toll Free Number 1800-22-7500 & 1800-22-
7050 from anywhere in India.
Customer Service
Sharekhan limiteds customer service team will assist one for any help
that one may require relating to transactions, billing, demat and other
queries. Its customer service can be contacted via a toll-free number,
email or live chat on www.sharekhan.com.
Investment Advice
Sharekhan has dedicated research teams of more than 30 people for
fundamental and technical researches. Its analysts constantly track the
pulse of the market and provide timely investment advice to its clients in
the form of daily research emails, online chat, printed reports and SMS
on their mobile phone.
SHAREKHAN LIMITEDS MANAGEMENT TEAM
Dinesh Murikya : Owner of the company
Tarun Shah : CEO of the company
Shankar Vailaya : Director (Operations)
Jaideep Arora : Director (Products & Technology)
Pathik Gandotra : Head of Research
Rishi Kohli : Vice President of Equity Derivatives
Nikhil Vora : Vice President of Research
PRODUCTS AND SERVICES OF SHAREKHAN
LIMITED
21
The diferent types of products and services ofered by Sharekhan Ltd.
are as follows:
Equity and derivatives trading
Depository services
Online services
Commodities trading
Dial-n-trade
Portfolio management
Share shops
Fundamental research
Technical research

22
TYPES OF ACCOUNT IN SHAREKHAN LIMITED
Sharekhan ofers two types of trading account for its clints
Classic Account (which include a feature known as Fast Trade Advanced
Classic Account for the online users) and
Speed Trade Account
CLASSIC ACCOUNT
This is a User Friendly Product which allows the client to trade
through website www.sharekhan.com and is suitable for the retail
investor who is risk-averse and hence prefers to invest in stocks or
who does not trade too frequently. This account allow investors to
buy and sell stocks online along with the following features like
multiple watch lists, Integrated Banking, Demat and digital
contracts, Real-time portfolio tracking with price alerts and Instant
credit & transfer.
This account comes with the following features:
a.Online trading account for investing in Equities and
Derivatives
b.Free trading through Phone (Dial-n-Trade)
I.Two dedicated numbers(1800-22-7500 and 39707500)
for placing the orders using cell phones or landline
phones
II.Automatic funds transfer with phone banking facilities
(for Citibank and HDFC bank customers)
III.Simple and Secure Interactive Voice Response based
system for authentication
20
IV.get the trusted, professional advice of Sharekhan
limiteds Tele Brokers
V.After hours order placement facility between 8.00 am
and 9.30 am
c.Integration of: Online Trading +Saving Bank + Demat
Account.
d.Instant cash transfer facility against purchase & sale of
shares.
e.IPO investments.
f.Instant order and trade confrmations by e-mail.
g.Single screen interface for cash and derivatives.
SPEED TRADE ACCOUNT
This is an internet-based software application, which enables one to buy
and sell in an instant. It is ideal for active traders and jobbers who
transact frequently during days session to capitalize on intra-day price
movement.
This account comes with the following features:
a.Instant order Execution and Confrmation.
b.Single screen trading terminal for NSE Cash, NSE F&O &
BSE.
c.Technical Studies.
d.Multiple Charting.
e.Real-time streaming quotes, tic-by-tic charts.
f.Market summary (Cost traded scrip, highest value etc.)
g.Hot keys similar to brokers terminal.
h.Alerts and reminders.
i.Back-up facility to place trades on Direct Phone lines.
j.Live market debts.
CHARGE STRUCTURE
23
Fee structure for General Individual:
Charge Classic Account Speed Trade Account
Account Opening Rs. 750/= Rs. 1000/=
Brokerage
Intra-day 0.10 %
Delivery - 0.50 %
Intra-day - 0.10%
Delivery - 0.50%
Depository Charges:
Account Opening Charges Rs. NIL
Annual Maintenance Charges
Rs. NIL frst year Rs. 300/= p.a. from
second calendar year onward
HOW TO OPEN AN ACCOUNT WITH SHARE KHAN
LIMITED?
For online trading with Sharekhan Ltd., investor has to open an account.
Following are the ways to open an account with Sharekhan Ltd.:
One need to call them at phone number provided below and asks
that he want to open an account with them.
a.One can call on the Toll Free Number: 1-800-22-7500 to
speak to a Customer Service executive
b.Or If one stays in Mumbai, he can call on 022-66621111
One can visit any one of Sharekhan Limiteds nearest branches.
Sharekhan has a huge network all over India (640 centers in 280
cities). One can also log on to
http://sharekhan.com/Locateus.aspx link to fnd out the nearest
branch.
One can send them an email at info@sharekhan.com to know
about their products and services.
24
One can also visit the site www.sharekhan.com and click on the
option Open an Account to fll a small query form which will ask
the individual to give details regarding his name, city he lives in,
his email address, phone number, pin code of the city, his nearest
Sharekhan Ltd. shop and his preferences regarding the type of
account he wants.

These information are compiled in the headquarter of the company
that is in Mumbai from where it is distributed through out the
countrys branches in the form of leads on the basis of cities and
nearest share shops. After that the executives of the respective
branches contact the prospective clients over phone or through
email and give them information regarding the various types of
accounts and the documents they need to open an account and
then fx appointment with the prospective clients to give them
demonstration and making them undergo the formalities to open
the account. After that the forms that has collected from the
clients, is scrutinized in the branch and then it is sent to Mumbai
for further processing where after a few days the clients account
are generated and activated. After the accounts are activated, a
Welcome Kit is dispatched from Mumbai to the clients address
mentioned in the documents provided by them. As soon as the
clients receive the Welcome Kit, which contains the clients Trading
ID and Trading Password, they can start trading and investing in
shares.
Generally the process of opening an account follows the following steps:
25
*(&+ !&N&G(!(NT HT(! 2*!? O '(>('(N8(
8ONT&8T T%( #('ON OI(' #%ON( O' T%'OGG% (!&I*
>IPING &N &##OINT!(NT 9IT% T%( #('ON
Apart from two passport size photographs, one needs to provide with the
following documents in order to open an account with Sharekhan
Limited.:
2;

GIIING
+(!ONT
=
'&TION
NO H(
+O8G!(NT&TION
>I**ING G# T%( >O'!
G@!IION O> T%( >O'!
*OGIN O> T%( >O'!
(N+ING &88OGNT O#(NING )IT TO T%( 8*I(NT
T'&+ING
Photocopy of the clients PAN Card which should be duly attached
Photo copy of any of the following documents duly attached which will
serve as correspondence address proof:
a.Passport (valid)
b.Voters ID Card
c.Ration Card
d.Driving License (valid)
e.Electricity Bill (should be latest and should be in the name of the
client)
f. Telephone Bill (should be latest and should be in the name of the
client)
g.Flat Maintenance Bill (should be latest and should be in the name
of the client)
h.Insurance Policy (should be latest and should be in the name of
the client)
i. Lease or Rent Agreement.
j. Saving Bank Statement** (should be latest)
Two cheques drawn in favour of Sharkhan Limited, one for the Account
Opening Fees and the other for the Margin Money (the minimum margin
money is Rs. 5000).
** A cancelled cheque should be given by the client if he provides
Saving Bank Statement as a proof for correspondence address.
NOTE: Only Saving Bank Account cheques are accepted for the
purpose of
Opening an account.
2D
AWARDS AND ACHIEVEMENTS
SSKI has been voted as the Top Domestic Brokerage House in the
research category, twice by Euromoney Survey and four times by
Asiamoney Survey.
Sharekhan Limited won the CNBC AWARD for the year 2004.
POLL RESULTS: BROKER PREFERENCE
T)"ES
+: S#A!E T!A$68
2B
5paise 119 13.45%
Sharekhan 194 21.92%
Motilal oswal 38 4.29%
ICICI Direct 192 21.69%
HDFC 46 5.2%
In!ia"#lls 121 13.6$%
%otak 59 6.6$%
&thers 116 13.11%

& hare khan outlet offers the following servicesC
Online @( and N( e"ecutions 2through @O*T and N(&T terminals?.
>ree access to investment advice from hare )han 'esearch team.
0:
hare )han value line 2a monthly publication with reviews of recommendations/
stock to watch out for etc.?.
+aily research report and market review 2%igh Noon/ (agle (ye?.
#re !arket report 2!orning 8uppa?.
+aily trading calls are based on technical analysis.
8ool Trading products 2+aring +erivatives/ Trading 'ing and !arket trategy?.
#ersonali$ed advice.
*ive !arket information.
+epository servicesC +emat and 'emat transaction.
+erivatives trading 2>utures and options?.
B!+AE!A8E: -
8&% @'O)('&G(C = +(*II('HC :.0:A/ INT'&+&HC :.:0AQ
E%"+S'!E C = 3 TO D TI!(Q 2ON !&'GIN !ON(H?
2Q sub.ect to change or as decided by @ranch !anager?
>6O @'O)('&G(C = ON >I'T *(G R@uyS :.:3A/
&!( +&H TG&'( RellS O>>C :.:3A
01
(8ON+ *(GC :.:3A
ettlements of trades follow TU2 transaction cycle.
+T#E! :EAT'!ES:-
No +emat Transaction 8harges in case of buying and selling through
share khan.com
>or the fund transfer and withdrawal/ we have tie=up with four banks= %+>8
@ank.
If you are having bank aOc in %+>8 @ank you can transfer the funds and
withdraw the funds online from
Hour trading aOc at anytime.
@TT 2@uy today ell Tomorrow? >acility in all scripts.
DI#%/N/TR#DEC= 8all and Trade through Toll free no. >rom anywhere in India
2CUSTOMER C#RE. 15:: 22 ;4::/ T'&+INGC 1=5::=22
o =;4::/0B;:;4::?
02

hare khan was the proud recipient of the 8N@8 &waa$ &ward for the being the
most preferred stock broking company in IndiaV 2Fuly 2::4?
00
E!$(AT$(ES
+erivative is a product whose value is derived from the value of one or more
basic variable called underlying. The underlying asset can be e<uity/ inde"/ foreign
e"change 2fore"?/ commodity or any other asset.
+erivative product initially emerged as heading devices against fluctuation
commodity prices and commodity linked derivatives remained the sole from of such
products for almost three hundred years .The financial deravatives came into spotlight in
post=1B;: period due to growing instability in the financial markets. %owever/ since their
emergence/ these products have became very popular and by 1BB:s/ they accounted for
about two=thirds of total transactions in deravatives products. The difference between a
share and deravatives is that sharesOsecurities is an asset while derivative instrument is a
contract.
'SES +: E!$(AT$(ES
#E8$68
The benefit of trading in inde" futures is to hedge your portfolio against the risk
of trading. In order to understand how one can protect his portfolio from value erosion let
us take an e"ample.
*et us try understanding how one can use hedging in a real life scenario. tocks carry
two types risk= company specific and market risk. 9hile company risk can be minimi$ed
by diversifying your portfolio/ market risk cannoy be diversified but has to be hedged. o
how does one measure the market riskJ !arket risk can be known from @eta.
@eta measures the relationship between movements of the inde"
03
to the movement of the stock. The @eta measures the percentage impact on the stock
prices for 1A change in the inde". Therefore / for portfolio whose value goes down by
11A when the inde" goes down by 1:A/ the beta would be 1.1. 9hen the inde" increase
by 1:A/ the value of the portfolio increase by 11A. The idea makes beta of your portfolio
$ero to nullify your losses.
Step* :
+etermine the beta of the portfolio. If the beta of any stock is not known/ it is
safer to assume that it is 1.
hort sell the inde" in such a <uantum that the gain on a unit decrease in the inde"
would offset the losses on the on the rest of his portfolio. This is achieved by multiplying
the relative volatility of the portfolio by the market value holdings.
Therefore in the above scenario we have to short sell 1.2 Q 1 million W 1.2 million worth
of Nifty.
Inde" Gp 1:A Inde" +own1:A
Gain2*oss? in portfolio 's 12:/::: 's12:/:::
Gain2*oss? in futures '12:/::: 's12:/:::
Net (ffect Nil Nil
&s / we see that portfolio is completed insulated from any losses arising out of a fall in
the market sentiment. %owever/ as accost/ one has to forego any gains that arise out of
the improvement in the overall sentiment. Then why does one invest in e<uities if all the
gains will be offset by losses in futures marketJ The idea is that everyone e"pects his
portfolio to outperform the market. Irrespective of whether the market goes up or not/ his
portfolio value would increase.
04
.
S"E&'4AT$+6
peculators are those who do not have any position on which they enter in futures
and option market. They only have a particular view on the market/ stock/ commodity
etc. In short/ speculators put their money at risk in the hope of profiting from an
anticipated price change. They consider various factors such as demand supply/ market
positions/ open interest/ economics fundamentals and other data to take their positions.
Illu)trati*n.
'am is a trader but has no time to track and analy$e stock. %owever he fancies his
chances in predicting the market trend. o instead of buying different stocks he buys a
ense" >utures.
On !ay1/ 2::1/ he buys 1:: ense" futures X 05:: on e"pectations that the
inde" will rise in future. On Fune 1/ 2::1/ the ense" rises to 3::: and at that time/ he
sells an e<ual number of contracts to close out his positions.
elling #riceC 3:::Q1:: W 's. 3/::/:::
*essC #urchase 8ostC 05::Q1:: W 's. 0/5:/:::
Nt ,ain W 's. 3:/:::
'am has made a profit of 's. 3:/::: by taking a call on the future value of the
ense". %owever/ the ense" had fallen he would have made loss. imilarly/ if would
have been bearish he could have ense" >utures and made a profit from a falling profit.
05
In Inde" >utures/ players can have a long=term view of the market up to at least three
months.
A!B$T!A8E
&n &rbitrageur is risk averse. %e enters into those contracts were he can earn risk
less profits. 9hen markets are imperfect/ buying in one market and simultaneously
selling in other market give risk less profit. &rbitrageurs are always in a lookout for such
imperfections.
In the >utures market one can take advantages of arbitrage opportunities by buying from
lower priced market and selling at the higher priced market. In inde" futures arbitrage is
possible between the spot market and the future market 2N( has provided special
software of buying all 4: Nifty stocks in the spot market?.
Take the case of the N( Nifty.
&ssume that Nifty is at 12:: and 0 monthEs Nifty >utures is at 10::.
The >uture price of Nifty can be worked out by taking the interest cost of 0
months into the account.
:'T'!E A6 +"T$+6
:uture
0hat ar +*r1ar! c*ntract)2
0;
+erivation as a term con.ure up vision of comple" numeric calculations/
speculative dealings and come across as an instrument/ which is the prerogative of a few
Msmart finance professionalsE. In reality it is not so. In fact/ a derivative transaction helps
cover risk/ which would arise on the trading of securities on which the derivative is based
and small investors can benefit immensely.
& derivative security can be defined as a security whose value depends on the
values of other underlying variable. Iery often/ the variables underlying the derivative
securities are the prices of traded securities.
*et us take an e"ample of a simple derivative contractC
'am buys a future contract.
%e will make a profit of 's 1::: if the price of Infosys rises by 's 1:::.
If the price is unchanged/ ram will receive nothing.
If the stock price of Infosys falls by 's D:: he will lose 's D::.
Type* of deri@ati@e* and future*
+erivatives and future are three types.
>orwards and futures
Options
waps
:orward 3ontra3t
& forward contract is simplest mode of a derivative transaction. It is an agreement
to buy or sell an asset 2of a special <uantity? at a certain future time for a certain price. No
cash is e"changed when the contract is entered into.
:uture* and Sto37 $ndi3e*
0D
>or understanding of stock inde" future/ a through knowledge of the composition
of inde"es is essential. 8hoosing the right inde" is important in choosing the right
contract for speculation or hedging. ince for speculation/ the volatility of the inde" is
important whereas for hedging the choice of inde" depends upon the relationship between
the stock being hedged and the characters of the inde".
8hoosing and understanding the right inde" in important as the movement of
stock inde" future is <uite similar to that of the underlying stock inde". Iolatility of the
futures inde"es is generally grater than spot stock inde"es.
'nder*tanding inde5 future*
& futures contract is an agreement between two parties to buy or sell an asset at a
certain time in the future at a certain price. Inde" futures are all futures contract where the
underlying is the stock inde" 2Nifty or ense"? and helps a trader to take a view on the
market as a whole.
In India/ we have inde" futures contracts based on 6# 8NP Nifty and @(
ense" and near 0 months durations contracts are available at all times. (ach contract
e"pires on the last Thursday of the e"piry month and simultaneously a new contract is
introduced for trading after the e"piry of the contract.
+ption*
&n option is a contract between two parties giving the taker 2buyer? the right/ but
not the obligation/ to buy or sell a parcel of shares at a predetermined price possibly on/
0B
or before a tock market by their very nature are fickle. 9hile fortunes can be made
in a .iffy more often than not the scenario is the reverse. Investing in stocks has two sides
to it.
Gnlimited profit potential from any upside 2remember Infosys/ %>8* etc.?
& downside which could make you a pauper.
0hat ar *3ti*n)2
ome people remain pu$$led by options. The truth is that most people have been
using options for some time because options are built into everything from mortgages to
insurance.
,&n option is a contract/ which gives the buyer the right/ but not the obligation to
buy or sell share of the underlying security at a specific price on or before a specific
date-.
MOptionE/ as the word suggests is a choice given to the investor to either honor the
contractL or if he chooses not to walk away from the contract.
9hen you buy a call option the price you pay for it called the option premium
secures your right to buy that certain stock at a specified price called the strike price.
Type* of option
There are two types of options.
8all Options
#ut Options
8all Options
3:
8all option give the taker the right/ but not the obligation/ to buy the underlying
shares at a predetermined price/ on or before a predetermined date.
Illu)trati*n
'a. purchases 1 hyam 8omputer 2&T8O!? &GG 14: 8all N premium D.
This contract allows 'a. to buy 1:: shares of &T8O! at 's 14: per share at any
time between the current date and the end of ne"t &ugust for the privilege/ 'a. pays a fee
of 's D:: 2's eight a share for 1:: shares?.
The buyer of a call has purchased the right to buy and for that/ he pays a
premium.
Call *3ti*n) 4 %*n, - Sh*rt &*)iti*n)
9hen you e"pect prices to rise/ then you take a long position by buying calls. Hou
are @ullish.
9hen you e"pect prices to fall/ then you take a short position by selling calls. Hou
are @earish.
"ut option*
& #ut Options gives the holder of the right to sell a specific number of share of an
agreed securities at a fi"ed price for a period.
Illu)trati*n
31
am purchases 1 IN>T(8 2Infosys Technologies? &GG 04:: #ut N #remium 2::.
This contract allows am to sell 1:: shares IN>T(8 at 's 04:: per share at any
time between the current date and the end of the &ugust. To have his privilege/ am pays
a premium of 's 2:/::: 2's 2:: a share for 1:: shares?.
&ut O3ti*n)/%*n, - Sh*rt &*)iti*n)
9hen you e"pect to fall/ then you take a long position by buying #uts. Hou are
beari*h,
9hen you e"pect prices to rise/ then you take a short position by selling #uts. Hou
are bulli*h,
&A44 +"T$+6S "'T +"T$+6S
If you e"pect a fall in price 2@earish? Short 4ong
If you e"pect a rise in price 2@ullish? 4ong Short
ummaryC
&A44 +"T$+6 B')E! &A44 +"T$+6 9!$TE! =Seller>
#ays premium
'ight to e"ercise and buy the shares
#rofits from rising prices
*imited losses/ #otentially
unlimited gain
'eceives premium
Obligation to sell shares if e"ercised
#rofits from falling prices or
remaining neutral
#otentially unlimited losses/ limited
gain
"'T +"T$+6 B')E! "'T +"T$+6 9!$TE! =Seller>
#ays premium
'ight to e"ercise and sell shares
#rofits from falling prices
*imited losses/ #otentially
'eceives premium
Obligation to buy shares if
e"ercised
#rofits from rising prices or
32
unlimited gain remaining neutral
#otentially unlimited losses/ limited
gain
Trading *trategie*
Bull mar7et *trategie*
8alls in a @ullish trategy.
#uts in a @ullish trategy.
@ullish 8all pread trategy.
@ullish #ut pread trategy.
Call) in a Bulli)h Strat,(
&n investor with a bullish market outlook should buy a call options. If you e"pect
the market price of the underlying asset to raise/ then you would rather have the right to
purchase at a specified price and sell later at a higher price than have a obligation to
deliver later at a higher price.
The investorEs profit potential buying a call option is limited. The investorEs profit
is the market price less the e"ercise price less the premium. The grater increase in the
price of underlying stock/ the grater the investorEs profit.
The investorEs potential loss is limited. (ven if the market takes a drastic decline
in price levels/ the holder of a call is under no obligation to e"ercise the option. %e may
let the option e"pire worthless.
The investor breaks even when the market price e<uals the e"ercise price plus the
premium.
30
&ut) in a Bulli)h Strat,(
&n investor with a bullish market outlook can also go short in a #ut option. &n
investor anticipating a bull market could write put options. If market price increases and
puts become out=of=the=money/ investor with long put positions will let their option
e"pire worthless.
@y writing #uts/ profit potential is limited. & #uts writer profits when the price of
the underlying asset increases and the option e"pires worthless. The ma"imum profit is
limited to the premium received.
&n increase in volatility will increase the value of your put nad decrease your
return. &s an option writer/ the higher price you will be forced to pay in order to buy back
the option at the later date/ lower is the return.
Bulli)h Call S3ra! Strat,i)
& vertical call spread is the simultaneous purchase and sale of identical call option
but with different e"ercise profit.
To ,buy a call spread- is to purchase a call with a lower e"ercise price and write a
call with a higher e"ercise price. The trader pays a net premium for the position.
To ,sell a call spread- is the opposite here the trader buys a call with a higher
e"ercise price and write a call with a lower e"ercise price receiving net premium for the
position.
33
&n investor with a bullish market outlook should buy a call spread. The ,@ull
8all pread- allows the investor to participate to a limited e"tent in a bull market/ while
at the same time limiting risk e"posure.
Bulli)h &ut S3ra! Strat,i)
& vertical #ut spread is the simultaneous purchase and sale of identical #ut option
but with different e"ercise prices.
To ,buy a put spread- is to purchase a #ut with a higher e"ercise price and to
write a #ut with a lower e"ercise price. The trader pays a net premium for the opposition.
To ,sell a put spread- is the oppositeC the trader buys a put with a lower e"ercise
price and writes a put with a higher e"ercise price/ receiving a net premium for the
position.
&n investor with a bullish market outlook should sell a #ut spread. The ,vertical
bull put spread- allows the investor to participate to a limit e"tent in a bull market/ while
at the same time limiting risk e"posure.
(+4AT$4$T) $6 ST+&A MA!AET
34
-THE BE#RISH VIE0 OF M#R$ET
!arket watchers/ players and investors have been rudely shaken by the volatility in the
Indian stock market. Indian stock markets were never caught in such a high volatile mode
earlier. This volatility wiped off investments worth billions affecting the >6O segments/
to which bled the most.
The @( vulnerability/ to foreign/ especially G markets again came to the fore=
around the time when the country was celebrating the 15
th
year of independence.
The @( sense" fell 54:pts on &ugust15/2::;/ marking its second biggest plunge
in the history. The fall was more pronounced on NI>TH which shed about 0::pts.
The sub=prime mass in the G market is believed/ has slowed down the 9orldEs
largest economy. This has actually hurt India/ without much direct e"posure of Indian
companies in the G.
@efore the scenario/ the analyst companies/ like tandard 6 #oorEs have come out
with their reports that the sub=prime crises would not affect the Indian economy/ but
since/ the market is sentiment driven/ that is why/ this great fall was beared.
$6$A6 ST+&A MA!AETS T#E M+ST $6S'4ATE +6EBS
9hen the market was facing highly volatile conditions/ the Indian stock market was
e"periencing/ relief rallys led by IT 6 banking stocks.
35
IT scrips soared after the Government imposed curbs on overseas borrowings by Indian
companies. &s an illustration/ #olaris led the IT rally and gained about 12A.
@anks also gained as the G >ederal 'eserve added 0D billion dollars in bid to stem the
internal mortgage crises.
Industrial production numbers for the month of Fune/ 2::; showed high growth in the
manufacturing sectors like capital goods.
Thi* i* an indi3ator of the wellne** of $ndian e3onomy,
84+BA4 MA!AETS +6 A +969A! S#$:T
-Al*o affe3ting the $ndian *to37 mar7et
3;
The global indices suddenly seem to have lost steam spooked by the rising crude
oil prices and the clouds of recession hovering over the detrimental G market. It seemed
that the Indian market will negate these short=term set backs in the long run.
On 12Nov 2::;/ ense" shed to B4:pts with a net loss of 3.BA/ while Nifty went
down to 21pts/ losing about 0.DA. the steep fall of indices wiped of wealth in crores of
rupees. This was the most hurting fall for the Indian stock market. The very ne"t day it
got somewhat stabili$ed/ while two days later i.e. 13Nov 2::;/ it e"perienced the biggest
single day rise.
&s a result of this/ crude oil and commodity market rushed upwards once again/
taking inflation figure to above 0A. It resulted in rise in price of precious commodities
owing to e"cess availability of money from the e<uity market/ which at that time was/
waiting for the sub=prime issue to get completely sorted out.
>ollowing the trend 9orldwide/ all the ma.or indices fell around 3A and even
more. +ow Fones fell by 0.;A/ losing about 4::pts. Other (uropean markets also
followed the same suit. The @ra$ilian market/ which seemed rising for sometime/ also
acted sub=missive registering a fall of 3.5A.
%owever the fall was brutal in the &sian economies. Nikkei fell ;.DA/ while
hanghai composite lost 5.BA. The biggest fall was witnessed by the )orean market/
since eoul composite shed about 11.4A. &ll other &sian markets also followed the same
suit. &s a result/ foreign money went out of the market in a fortnight/ as >IIEs sold 's0D:
crores.
Bar Mar5t Strat,i)
3D
#uts in @earish trategy
8alls in a @earish trategy
@earish #ut pread trategies
@earish 8all pread trategies.
&ut) in a Bari)h Strat,(
&n InvestorEs profit potential is practically unlimited. The higher the fall
in price of the underlying asset/ higher the profits.
The investorEs potential loss is limited. If the price of the underlying asset rises
instead of falling as the investors has anticipated/ he may let the option e"pire worthless.
&t the most/ he may lose the premium for he option.
The traderEs breakeven point is the e"ercise price minus the premium. To profit/
the market price must be below the e"ercise price. ince the trader has paid the premium/
he must recover the premium he paid for the option.
&n increase in volatility will increase the value of your put and increase your
return. &n increase in volatility will make it more likely that the price of the underlying
instrument will move. This increases the value of the option.
Call) in a Bari)h Strat,(
&nother option for the bearish investor is to go short on a call with the intent to
purchase it back in the future. @y selling a call/ you have net short position and needs to
be bought back before e"piration and cancel out your position. >or this/ an investor needs
to write a call option. If the market price falls/ long call holder will let their out=of=the=
money option options e"pire worthless/ because they could purchase the underlying asset
at the lower market price.
3B
The investorEs profit potential is limited because the traderEs ma"imum profit is
limited to the premium received for writing the option.
&n increase in volatility will increase the value of your call and decrease your
return. 9hen the option writer has to buy back the option in order to cancel out his
position he will be forced to pay a higher price due to the increased value of the calls.
Bari)h &ut S3ra! Strat,i)
& vertical out spread is simultaneous purchase and sale of identical put option but
with different e"ercise prices.
To ,buy a put spread- is to purchase a put with a higher e"ercise price to write a
put with a lower e"ercise price. The trader pays a net premium for the position.
To ,sell a put spread- is the opposite. The trader buys a put with a lower e"ercise
price and writes a put with a higher e"ercise price/ receiving a net premium for the
position.
To put on a bear put spread by you the higher strike put and sell the lower strike
put. Hou sell the lower strike and buy the higher strike of either calls or puts to set up a
bear spread.
&n investor with a bearish market outlook should buy a put spread. The ,@ear put
pread- allows the investors to participate to a limit e"tent in a bear market/ while at the
same time limiting risk e"posure.
Bari)h Call S3ra! Strat,i)
4:
& vertical call spread is the simultaneous purchase and sale of identical call option
but with different e"ercise prices.
& vertical call spread is the simultaneous purchase and sale of identical call option
but with different e"ercise profit.
To ,sell a call spread- is the opposite here the trader buys a call with a higher
e"ercise price and write a call with a lower e"ercise price receiving net premium for the
position.
To put on a bear call spread you sell the mower strike call and buy the higher
strike call. &n investor sells the lower strike and buys the higher strike of either calls or
puts to put on the bear spread.
&n investor with a bearish market outlook should sell a call spread. The ,@ear
8all pread- allows the investor to participate to a limited e"tent in a bear market/ while
at the same time limiting risk e"posure.
The investorEs profit potential is limited. 9hen the market price falls to the lower
e"ercise price both out=of=the=money option will e"pire worthless. The ma"imum profit
that the trader can reali$e is the net premiumC The premium he receives for the call at the
higher e"ercise price.
SE&'!$T$ES A6 E%&#A68E B+A! +: $6$A
The ecurities and ("change @oard of India &ct/ 1BB2 has been enacted to
provide for the establishment of a @oard to protect the investors in securities and to
promote the development and to regulate the securities market and for matters connected
there with or incidental there to. It came into force on the 0:
th
day of the Fanuary 1BB2.
41
E*tabli*hment and $n3orporated of Board
!a.or part of the liberali$ation process was the repeal of the capital issues
2control? &ct/ 1B3; in !ay 1BB2. 9ith this/ governmentEs control over issues of the
capital/ pricing the issues/ fi"ing of premium and rates of interest on debentures etc.
ceased/ and the office which administered the &ct/ was abolished.
The market was allowed to allocate resources to competing uses. %owever to
ensure effective regulation of the market/ (@I &ct 1BB2 was entered to empower (@I
with the statutory powers for 2a? #rotecting the interests of investors in securities. 2b?
#romoting the development of the securities and 2c? regulating the securities market. Its
regulatory .urisdiction e"tends over corporate in the insurance of the capital and transfer
of securities/ in addition to all intermediaries and person associated with the securities
market. (@I can specify the matters to be disclosed and the standard of disclosure
re<uired for the protection of investors in respect of issuesL can issue direction to all
intermediates and other persons associated with the securities market in the interest of the
investors or of orderly development of the securities market and can conduct en<uiries/
audits and inspection of all concerned and ad.udicate offences under the &ct. In short/ it
has been given necessary autonomy and authority to regulate and develop an orderly
serious market. & code of conduct for each intermediary has been prescribed in the
regulationsL capital ade<uacy and other norms have been specifiedL a system of
monitoring and inspiring their operations has been specified a system of monitoring and
42
inspecting their operations has been instituted to enforce compliance and disciplinary
actions are being taken against the intermediaries violating any regulation.
The 8entral Government may/ by notification appoint for the purpose of this &ct/
a @oard by the name of the securities and e"change board of India under section 0 of the
(@I &ct. The board shall be a body corporate by the name aforesaid having perpetual
succession and a common seal with proper sub.ect to the provision for this act to ac<uire
the hold and dispose of the property/ both movable and immovable and to contract/ and
shall by the said name/ sue or sued. The head office of the @oard shall be at !umbai. The
@oard may establish officers at other places in India. The (@I has offices in !umbai/
8alcutta/ New +elhi and 8hennai.
The board shall consist of the following members namelyC=
& 8hairman.
Two members from amongst the officials of the !inisters of the 8entral
Government dealing with >inance and *aw.
One member from amongst the officials of the 'eserve @ank of India constituted
under section 0 of the 'eserve @ank of India &ct/ 1B03.
Two other members/ to be appointed by the 8entral Government.
:un3tion* of the Board
The (@I shall protect the interest of the investors in securities and to promote
and development of and to regulate the securities market by such measures as it thinks fit.
The measures referred to therein may provide forC=
'egulating the business in stock e"change and any other securities markets.
'egistering and regulating the working of stock brokers/ sub=brokers/ share
transfer agents/ bankers to an issue/ trustees of trust deeds/ registrars to an issue/
40
merchant bankers/ underwriter/ portfolio managers/ investment advisers and such
other intermediates who may associated with securities markets in any manners.
'egistering and regulating in working of the depositories/ participants/ custodians
of securities/ foreign institutional investors/ credit rating agencies and such other
intermediaries as the board may/ by notification specify in this behalf.
'egistering and regulating the working of venture capital funds and collective
investments schemes including mutual funds.
#romoting and regulating self regulatory organi$ations.
#rohibiting fraudulent and unfair trade practices relating to securities markets.
#rohibiting insider training in securities.
'egulating substantial ac<uisition of shares and take over of companies.
#erforming such functions and e"ercising according to securities contract
2regulation? &ct/ 1B45/ as may be delegated to it by the 8entral Government.
*evying fees or other charges for carrying out the purpose of this section.
8onduction research for the above purpose.
#erforming such other functions as may be prescribed.
!egi*tration with SEB$
& person in the following capacity shall buy/ sell or deal in securities after
obtaining a certificate of registration from (@I/ as re<uired by ection 12.
&n application shall be made for registration in the prescribed manner with the
prescribed fee. @ut the (@I may/ by order/ suspend or cancel a certificate of registration.
tock broker.
ub N broker.
hare transfer agent.
@ank to an issue.
Trustee of trusted deed.
'egistrar to an issue.
!erchant banker.
Gnderwriter.
#ortfolio manager.
Investment adviser.
+epository.
!utual >und.
E"+S$T+!) "A!T$&$"A6T
43
& depository is an organi$ation which holds securities of investors in electronic
form at the re<uest of the investor through a registered +epository #articipant. It also
provides services related to transaction in securities.
& depository participant 2+#? is an agent of the depository through which it
interfaces with the investors. & +# can offer depository services only after it gets proper
registration from (@I. @anking and services can be availed through the branch whereas
depositary services can be availed through a +#.
&s per the available statistics at @( and N(/ BB.BA settlement takes place in
+emat mode only. Therefore/ in view of the convenience in settlement through +emat
mode it is advisable to have a beneficiary owner 2@O? account to trade the e"changes.
&t present two +epositers vi$. National securities depository limited 2N+*? and
8entral +epositary ervices 2I? *imited 28+*? are registered with (@I.
NSD%
The first depositary in India established in &ug 1BB5 and promoted by Institutions
of National tature 'esponsible for (conomic +evelopment of the country has since
established a national infrastructure of international standard that handles most of the
settlement of securities in demateriali$ed from in Indian capital market.
Gsing innovative and fle"ible technology systems/ NSD% work to support the
investors and brokers in the capital market of the country. NSD% aims at ensuring the
safety and soundness of Indian market places by developing settlement solution that
increase efficiency minimi$e risk and reduce costs. &t NSD%; we play a <uiet but central
44
role in developing products and services that will continue to nature the growing needs of
the financial industries.
CSD%
CSD% was set up with the ob.ective of providing convenient/ dependable and
secure depository services at affordable cost to all market participants. CSD% received
the certificate of commencement of business from (@I in >ebruary/ 1BBB. %onorable
Gnion >inance !inister/ hri Hashwant inha flagged off the operations of CSD% on Fuly
14/ 1BBB. ettlement of trades in the demat mode through @OI shareholding *imited/ the
clearing house of @(/ standard in Fuly 1BBB.
&ll leading stock e"changes like the National tock ("change/ 8alcutta tock
("change/ +elhi tock ("change/ the tock ("change/ &hmedabad etc. have established
connectivity with CSD%.
&t the end of +ec 2::4/ over 4::: issuers have admitted their securities units of
mutual funds/ certificate of deposits etc. into the CSD% system.
The 3ategorie* that i* eligible to be3ome "B*
&s per regulation 1B 2a? of (@I 2+epositories and #articipants? 'egulations/
following are the categories that are eligible to become +#Es.
& public financial institution as defined in section 3& of the 8ompanies &ct/ 1B45
21 of 1B45?.
& bank included for the time being in the second schedule to the 'eserve @ank of
India &ct/ 1B03. 22 of 1B03?
45
& foreign bank operating in India with the approval of 'eserve @ank of India.
& state financial corporation established under the provision of the section 0 of
the tate >inancial 8orporations &ct/ 1B41 250 of 1B41?
&n institution engaged in providing financial services promoted by any of the
institution mentioned in sub clause 2i?/ 2ii?/ 2iii?/ 2iv? .ointly or severally.
& custodian of securities who has been granted a certificate of registration by the
@oard under sub section 21&? of section 12 of the &ct.
& clearing corporation or a clearing house of a stock e"change.
& stock broker who has been granted certificate of registration by the @oard under
sub section 21? of section 12 of the &ct.
& non N banking finance company/ having a net worth of not less than rupees fifty
lakhs.
#rovided that such company shall act as a participant only on behalf of any other
person.
The 'egulations empower N+* to set its own selection criteria in the @ye *aws.
Therefore/ the applicants must also adhere to the following criteria stated in N+* bye
*aws.
The applicant should have a minimum net worth of 's 1 crore.
The applicant should not have been convicted in any of the five years
immediately preceding the filling of the application in any manner involving
misappropriation of funds and securities/ theft/ embe$$lement of funds/ fraudulent
conversion or forgery.
4;
The applicant should not have been e"pelled/ barred or suspended by (@I/ self
regulatory organi$ation or any stock e"change.
(A!$+'S E"A!TME6TS !E8'4ATE B) SEB$
The following departments of (@I take care of the activities in the secondary market.
No Name of the +epartment !a.or &ctivities
1. !arket Intermediaries
'egistration and
upervision department
2!I'+?
'egistration/ supervision/ compliance monitoring and
inspections of all market intermediaries in respect of all
segments of the markets vi$. e<uity/ e<uity derivatives/ debt
and debt related derivatives.
2. !arket 'egulation
+epartment 2!'+?
>ormulating new policies and supervising the functioning
and operations 2e"cept relating to derivatives? of securities
e"changes/ their subsidiaries/ and market institutions such as
8learing and settlement organi$ations and +epositories
28ollectively referred to as M!arket 'OsE.?
0. +erivatives and New
#roducts +epartments
2+N#+?
upervising trading at derivatives segments of stock
e"changes/ introducing new products to be traded/ and
conse<uent policy changes
ST+&A E%&#A68ES
4D
The ecurities 8ontract 2'egulation? &ct/ 1B45 28'&? defines Mtock
("changeE as anybody of individuals/ weather incorporated or not/ 8onstituted for the
purpose of the assisting/ regulating or controlling the business of buying selling or
dealing in securities. tock e"change could be a regional stock e"change whose area of
operationO.urisdiction is specified at time of its reorgani$ation or national e"changes/
which is permitted to have nationwide trading since inception. N( was incorporated as a
national stock e"change.
ecurities !arket or tock e"change is a place where buyers and sellers of
securities can enter into transaction to purchase and sell shares/ bonds/ debentures etc.
>urther/ it performs an important role of enabling corporate entrepreneur to raise
resources for their companies and business ventures through public issues.
The first organi$ed stock e"change in India was started in !umbai in 1D;4 with
the formation of the Native hare and tock @roker &ssociation. Thus the !umbai stock
e"change is the oldest one in the country with the growth of .oint stock companies/ the
stock e"change also made a steady growth and at present there are 20 recogni$ed stock
e"changes in our country with about 5::: stock brokers.
In India/ there are only two online trading stock e"changes/ one is @( and other
is N(.
Functi*nin,
tock e"change is a place where buyers and sellers of securities can enter into
transaction to purchase and sell shares/ bonds/ debentures to raise resources for their
4B
companies and their business ventures through public issues transfer of resources from
Ythose having idle resources to other who have a need for them is most effectively
achieved through a security market. tated formally/ security market provides channels
for reallocation of saving to investments and entrepreneurship. avings are linked to
investments by a variety of intermediaries/ through a range of financial products called
MecuritiesE.
S*arin, Sn)6
The stock markets are on song/ but their volatility and the rampant speculation deter
genuine investors from venturing into the market.
5:
At the Bombay Sto37 E53hange
The Indian stock markets are si$$ling. The primary measure of the mood in the markets/
the @ombay tock ("change7s 2@(? ense"/ appears to be on steroids. &nalysts and
self=appointed market pundits predict the ense" will be at 1:/::: by the end of the year.
8iting recent economic performance/ which shows that the Indian economy grew by D.4
per cent in the first <uarter of 2::;=:D/ they say international investors see India as a
promising destination for investment. keptics remain muted amid the feel=good in the
markets. Indian markets continued to remain scam=prone. On October 21/ the markets
tumbled by over 2:: points. &lthough the ense" recovered ground during the day/ it
collapsed again the following day. The attempt to get domestic financial institutions 2>I?
to prop the market failed. The media/ which have generally aided the @ull 'un in the
bourses/ reported that that the #rime !inister7s Office 2#!O? was tracking the
happenings.
The government was only investigating the sharp increase in the price of Zpenny
stocksZ = companies whose share prices have appreciated by as much as 1/::: per cent in
a matter of days in some cases. (arlier/ Gnion >inance !inister #. 8hidambaram said
Indian markets were in the Zcomfort $oneZ. %e asserted that there was Zno scam in the
offingZ.
8hidambaram said he was not particularly concerned about the movement of the
ense". %e said he would rather place emphasis on the price=earnings ratio 2#O(?/ a
51
measure of the earning potential of e<uities in relation to their prices. 8hidambaram said
that as long as #O( ratios remained in the Zcomfort $oneZ/ there was no cause for worry.
8hidambaram said the government maintained a close watch. The ecurities and
("change @oard of India 2(@I? was looking into the sharp increase in the price of penny
stocks.
&lthough the ense" recovered ground/ gaining more than 3:: points by October
2B/ several worrying issues remain unattended. >irst/ there is growing evidence that the
volatility in Indian markets has increased significantly. In fact/ it is not only increasing
but is far higher than that in most other markets worldwide.
econdly/ the stranglehold that foreign institutional investors 2>II? have
established in Indian markets in recent years not only e"poses investors to greater
volatility but also greatly destabili$es markets. There is growing concern that the si$e of
these players can have serious conse<uences for Indian markets/ investors and regulatory
52
structures. keptical analysts and market=watchers point to the fact that the huge si$e of
these funds has no matching countervailing domestic force.
The volatility in the markets and the rampant speculation that accompanies it has
been aided by a lack of regulatory oversight. The system of trading in the Indian markets
is like gambling. It also discourages investors from taking a long=range 2of at least five
to1: years? view of the companies they are investing in. Instead/ investors are primarily
interested in returns over the ne"t few days/ weeks or months.Z
50
Mumbai Sto37 E53hange
!umbai tock ("change *imited is the oldest stock e"change in &sia with a rich
heritage. #opularly known as @( it was establish as ,the Native hare and tock
@rokers &ssociation- in 1D;4. It is the first stock e"change in the country to obtain
permanent recognition in 1B45 from the government of India under the ecurities
8ontracts 2'egulation? &ct/ 1B45. The ("change pivotal and pre eminent role in the
development of Indian capital market is widely recogni$ed and its inde". (N(P is
tracked worldwide. (arlier an &ssociation of #ersons 2&O#?/ the e"change is now a
demutualised and corporati$ed entity incorporated under the provision of the 8ompanies
&ct/ 1B45/ pursuant to the @( 28orporati$ation and +emutuali$ation? cheme/ 2::4
notified by the ecurities and ("change @oard of India 2(@I?.
53
6ational Sto37 E53hange
The National tock e"change of India *imited has genesis in the %igh #owered
tudy group on establishment of New stock ("changes/ which recommended promotion
of a National tock ("change by financial institutions 2>Is? to provide access to investors
form all across the country on a e<ual footing. @ased on the recommendation/ N( was
promoted by leading >inancial Institution at the behest of the government of India and
was incorporated in November 1BB2 as a ta"paying company like other stock e"changes
in the country.
On its recognition as a stock ("change under the securities contracts 2'egulation?
act/ 1B45 in &pril 1BB0/ N( commenced operations in the whole sale +ebt !arket
29+!? segment in Fune 1BB3. The 8apital !arket segment commenced operations in
November 1BB3 and operations in +erivatives segment commenced in Fune 2:::.
N( stated trading in the e<uities segment 28apital !arket segment? on
November 0/ 1BB3 and within a short span of 1 year became the largest e"change in India
in terms of volumes transacted.
Trading volumes in the e<uity segment have grown rapidly with the average daily
turnover increasing from 's 1; crores during 1BB3=B4 to 's 5/240 crores during 2::4=:5.
+uring the year 2::4=:5/ N( reported a turnover of 's 1/45B/445 crores in the e<uities
segment.
6$:T)
54
NI>TH is the sensitivity inde" N( 2N&TION&* TO8) (P8%&NG(? NI>TH
is a basket of 4: constituent stocks. It consists of the 4: largest and most actively traded
stocks/ representative of various sectors/ on the National tock ("change.
!EAS+6S +: MA!AET '6STAB$4$T)
#ortfolio ad.ustment made by the foreign institutional investors result in
destabili$ing tendencies in the country7s system. The best policy option is to reduce the
inflow of >II investment and focus on the creation of real wealth.
The e"pected but abrupt end to the @ull 'un in India7s stock markets/ once more
focused attention on the volatility that has come to characteri$e India7s stock markets.
This volatility has been visible in the medium and long term as well.
These wild fluctuations have meant that for those who bought into the market at
the right time and e"ited at the appropriate moment/ the average return earned through
capital gains were higher despite the e"tended @ull 'un in the latter year.
55
The BSE Sen*e5 di*play board at &hur3h gate *tation in Mumbai,
!ovements in the ense" during these two years have clearly been driven by the
behavior of foreign institutional investors 2>IIs?/ who were responsible for net e<uity
purchases of as much as [5.5 and [D.4 billion respectively. In sum/ the sudden >II interest
in Indian markets in the last two years account for the two bouts of medium=term
buoyancy that the ense" recently displayed.
& recent analysis/ >IIs controlled on average 21.5 per cent of shares in ense"
companies. >urther/ if we consider only free=floating shares/ or shares normally available
5;
for trading because they are not held by promoters/ government or strategic shareholders/
the average >II holding rises to more than 05 per cent. In a third of ense" companies/
>II holding of free=floating shares e"ceeded 3: per cent of the total.
Given this presence of >IIs/ their role in determining share price movements must
be considerable. Indian stock markets are known to be narrow and shallow in the sense
that there are few companies whose shares are actively traded. Thus/ though there are
more than 3/;:: companies listed on the stock e"change/ the @( ense" incorporates
.ust 0: companies/ trading in whose shares is seen as indicative of market activity. This
shallowness would also mean that the effects of >II activity would be e"aggerated by the
influence their behavior has on other retail investors/ who/ in herd=like fashion tend to
follow the >IIs when making their investment decisions.
These features of Indian stock markets induce a high degree of volatility for four
reasonsC=
>irstly/ in as much as an increase in investment by >IIs triggers a sharp price
increase/ it would in the first instance encourage further investments so that there
is a tendency for any correction of price increases unwarranted by price earnings
ratios to be delayed. &nd when the correction begins/ it would have to be led by
an >II pull=out and can take the form of an e"tremely sharp decline in prices.
econdly/ as and when >IIs are attracted to the market by e"pectations of a price
increase that tend to be automatically reali$ed/ the inflow of foreign capital can
result in an appreciation of the rupee vis-a-vis the dollar 2say?. This increases the
return earned in foreign e"change/ when rupee assets are sold and the revenue
converted into dollars. &s a result/ the investments turn even more attractive/
5D
triggering an investment spiral that would imply a sharper fall when any
correction begins.
Thirdly/ the growing reali$ation by the >IIs of the power they wield in what are
shallow markets/ encourages speculative investment aimed at pushing the market
up and choosing an appropriate moment to e"it. This implicit manipulation of the
market/ if resorted to often enough/ would obviously imply a substantial increase
in volatility.
>inally/ in volatile markets/ domestic speculators too attempt to manipulate
markets in periods of unusually high prices. Thus/ most recently/ the ecurities
and ("change @oard of India 2(@I? is supposed to have issued show=cause
notices to four as=yet=unnamed entities/ relating to their activities on around @lack
!onday/ !ay 1;/ 2::3/ when the ense" recorded a steep decline to a low of
34:4.
MA!AETS B+'6&$68 A8A$6

5B
+uring the year ending/ the markets seemed have braced for a %appy New Hear/
with both ense" and Nifty picking up/ after a month long slump/ on the back of global
brightening. &t that time/ ense" secured 524pts/ while Nifty added 030pts. +uring that
period/ ense" also hitted the 2:=k mark/ significantly without the rallies relying much on
foreign institutional investors.
+ata gathered from reports/ reveals that/ the >IIEs net investments of 's 22:
crores was surprisingly beaten by domestic institutional investors who invested up close
to about 's 1;03 crores in the market. If comparison is made between the 4:=scrip Nifty
with the 0:=scrip ense"/ we find that the Nifty had outperformed/ that too taking two
times advanced.
&s a result/ in &sian markets/ all indices went up including/ %ang eng/ Nikkei/
eoul composite/ etc. as a matter of e"ception/ the 8hinese stock market could not
perform and fell about 3A. ome investment e"perts had the view that the 8hinese
market was over=valued. (ven the investment guru/ !r. 9arren @uffet termed it as a
,Too hot-. This situation favored India/ as it seemed better and safer destination to park
the funds. To be a in a ma.or development/ N( widened its >6O segments by
introducing 14: new scrips. It resulted in an increased turnover at N( significantly
claiming some portion of @( too. On this domestic front also/ the auto makers seemed
to rule the world as Tata motors/ !ahindra 6 !ahindra/ etc/ submitted their collective
bids for Faguar and *and 'over. This showed the strong position of Indian stock market.
ST+&A MA!AET &!AS#
Fanuary 21/ 2::D
;:
@lack !onday saw bloodbath on +alal treet as the Indian )t*c5 7ar5t)
cra)h! by over 130: points in afternoon trade (the market has since then recovered
somewhat), reminding investors that there is no one=way bet on the stock market.
MaCor 3ra*he* *in3e 2000
May 2000
On !ay 22/ 2::5/ the ense" plunged by 11:: points during intra=day trading/
leading to the suspension of trading for the first time since !ay 1;/ 2::3. The volatility
of the ense" had caused investors to lose 's 5 lakh crores 2[101 billion? within seven
trading sessions. The >inance !inister of India/ #. 8hidambaram/ made an unscheduled
press statement when trading was suspended to assure investors that nothing was wrong
with the fundamentals of the economy/ and advised retail investors to stay invested.
9hen trading resumed after the reassurances of the 'eserve @ank of India and the
ecurities and ("change @oard of India 2(@I?/ the ense" managed to move up ;::
points/ still 34: points in the red.
The ense" eventually recovered from the volatility/ and on October 15/ 2::5/ the
ense" closed at an all=time high of 12/B2D.1D with an intra=day high of 12/B40.;5. This
;1
was a result of increased confidence in the economy and reports that India7s
manufacturing sector grew by 11.1A in &ugust 2::5.
Januar( 899:
In the third week of Fanuary 2::D/ the ense" e"perienced huge falls along with
other markets around the world. On 21 Fanuary 2::D/ the ense" saw its highest ever loss
of 1/3:D points at the end of the session. The ense" recovered to close at 1;/5:4.3: after
it tumbled to the day7s low of 15/B50.B5/ on high volatility as investors panicked
following weak global cues amid fears of a recession in the G.
The ne"t day/ the @( ense" inde" went into a free fall. The inde" hit the lower
circuit breaker in barely a minute after the markets opened at 1: &!. Trading was
suspended for an hour. On reopening at 1:.44 &! IT/ the market saw its biggest intra=
day fall when it hit a low of 14/002/ down 2/2;0 points. %owever/ after reassurance from
the >inance !inister of India/ the market bounced back to close at 15/;0: with a loss of
D;4 points.
\2]
Over the course of two days/ the @( ense" in India dropped from 1B/:10 on
!onday morning to 15/;0: by Tuesday evening or a two day fall of 10.BA.
\2]
E;r( !ar5 cl*u! ha) a )il;r linin,
& G depression is on anvil. Though not confirmed but in a hush way it is
becoming the talk of the town. &ccording to many e"perts the +epression in G
(conomy has already arrived. The mess of sub=prime mortgage has become somewhat
unmanageable and is slowly taking the G towards an economic recession. The federal
@ank of &merica is trying hard to keep this situation under control. The recent reduction
;2
in interest rates and announcement of relief package are some of the steps taken in this
direction.
%owever/ this G depression is affecting the world economy in a big way. G
investors/ in fear of a deep recession/ want to li<uefy their assets and/ therefore/ are
making heavy selling of their stocks. This has affected the stock markets of entire Globe.
The Indian stock market is no e"ception. The market is very uncertain and nobody knows
e"actly where it will head in the days to come. Owing to such fluctuations in the market/
millions of small investors in India have lost their money and sleep.
The po*iti@e effe3t of thi* 'S depre**ion for $ndia
>irst positive effect of this +epression is that the Indian stock market is again
returning to its core fundamentals. >or the last few months the market was soaring at such
a high pace that it defied any business logic or commonsense. #eople were not ready to
listen the same advice and everybody was ready to ride this bandwagon of a super bullish
environment. The pace in the market was primarily due to heavy buying from big
investors 2>IIs to be precise?. %owever/ this buying was so huge that an imaginary
atmosphere of ever increasing ense" was developed.
It is common knowledge that hare prices should be determined on the basis of
the performance of the companies in their respective fields. %owever/ the stocks of these
companies were telling entirely different stories. The stocks which used to sell on a price
range of 14 to 2: #rice by earning ratio 2#O(? were being sold for a #O( ratio of 34=4:.
This price was simply an inflated price with no solid logic behind it. %owever/ people
were in a rush to buy shares even on these prices on the belief that the prices will soar
more and they will be able to make some serious cash.
;0
The recent fall in the stock market has helped in cooling off the heated share
prices and has brought a common sense in the market. The prices have come down to
their realistic value and this in fact is a very positive development for the Indian
economy. The fall in prices has given a buying opportunity to those investors who wanted
to buy stocks of companies but could not do so owing to their e"orbitant prices. In the
long run/ this price correction will greatly help the Indian companies as only long term
and serious investors will be able to get the real profit. The short term and non=serious
investors will slowly move away and stability will come in the market.
The second positive development of this G depression will come in the form of a
fall in the global prices of Oil. & G depression clearly means a fall in the demand of oil.
The lowering of demand will result in the fall of oil prices. This fall in oil prices will help
India and 8hina the most as these economies are having the fastest growth rate and a
decrease in oil prices will keep deflation in control. The end resultC more demand and
more production.
There is one scenario/ however/ which may spoil the party. If the O#(8 countries
2the group of Oil e"porterEs countries? decide to lower their oil production in view of fall
in demand from &merica/ there will again be a increase in the global oil prices. It is/
however/ believed that O#(8 can be persuaded for not doing this.
The third and final benefit from a G depression for India is that soon we may see
a fall in the interest rate here. &s G federal bank is regularly lowering itEs interest rates
to control the economy/ the investment in G is becoming less and less attractive. &s a
result/ the big investors are heading towards other profitable markets like India. This has
resulted into a big dollar inflow into India making our currency rupee very strong which
;3
is pinching the e"porters. >urther/ as interest rates are at their peak at the moment/ this/
along with a strong rupee has made many Indian companies postpone their investment
plans for future. This situation/ however/ cannot last for long as doing so will hamper the
growth rate. The only solution available is to decrease the interest rate which will make
lending easy and spur the growth in many sectors. This will increase the inflow of money
into the economy and give a boost to the demands. >urther/ a lower interest rate will also
put a break on dollar inflow as the investment in India will become less profitable.
Though/ today/ the 'eserve @ank of India has not announced any decrease in interest rate
and has asked the @anks to take a decision on their own/ it is certain that sooner or later a
reduction in interest rate is inevitable. ince IndiaEs economy is not heavily dependent on
G (conomy and it has its own huge domestic market/ a lower interest will give a boost
to the production and help the economy.
!EAS+6S +: &!AS# $6 A 6'TS#E44
The recent stock market crash was not une"pected. The market .ust re<uired a
trigger and when it got it/ it fell down like the .ack of cards.
There were a number of factors responsible for this heavy lossC=
>irstly/ during the period between &ugust and +ecember/ the ense" touched new
height which was triggered by mainly five companies/ namelyC=
'eliance Industries *imited
'eliance (nergy
;4
*arsen 6 Toubro
%+>8 @ank
I8I8I @ank
&ll these companies made an overall impact of about 44A on the market. This
was not a positive sign for a market since the trading in Indian stock market greatly
depends upon the market sentiments. &ctually/ what happened was that when the ense"
peaked up/ the midcaps and small caps also showed some rise. 9hen it was perceived
that the ense" will touch new heights then these momentum shares went to their peak
levels. There were some shares which became four times oversubscribe of their actual
value. &mong them/ some common names areC=
'eliance #etroleum
'eliance Natural
Ispaat Industries
(ssar Oil
The investors got huge profits on investing in such companies. Gradually the
serious investors turned into speculators and this speculative behavior made them to bear
heavy losses.
econdly/ the une"pected behavior of >IIs became a ma.or cause of the crash.
Generally/ during +ecember i.e. the 8hristmas time/ the >IIs do not show any market
momentum. @ut this year/ was an e"ception/ the >IIs went on buying from the Indian
market due to which there was a continuous inflow of funds in the market. This resulted
;5
in peaking up the share prices. @ut suddenly/ when >IIs drew all the money in one time
from the market/ it .ust dashed down.
Thirdly/ the international market was not in a good mood at that time. The main
issue of concern/ at that time was the G subprime crisis. This crisis was not yet solved
and a new issue raised its heads up in India/ which were the participatory notes 2#=notes?.
>ourthly/ there is a change in the global investment climate. One of the primary
triggers is the huge fear of the Gnited tateEs economy going into a recession with foreign
institutional investors trying to reallocate their funds from risky emerging markets to
stable developed markets.
>ifthly/ the current volatility is also linked to global bourses. There is a big
correlation among global markets. The presence of hedge funds across asset classes/
along with increased global movement of capital/ has increased event=related volatility.
Iolatility in commodities markets has also significantly affected e<uity markets.
Ca3ital In+l*1 int* In!ia
8urrently/ India as an emerging market is on the radar screen of investors
and fund managers worldwide.
The impressive growth story/ booming real estate and infrastructure makes
India an attractive investment destination for ample li<uidity floating
around in the world markets at the moment.
In eptember 2::;/ investments during 2::; by foreign funds crossed the
[11=billion mark/ surpassing the previous high of [1:.D billion recorded
;;
during the whole of 2::4. >oreign direct investment nearly tripled in the
past financial year to G[15 billion from G[4.4 billion a year earlier.
$M"A&T
The rise in rupee will have an adverse impact on the fortunes of sectors dependent
on earnings in dollars like IT/ te"tile/ auto component manufacturers/ @#Os and
)#Os etc.
&s the amount of 'upees per +ollar (&'N(+ will decrease/ the pressure
on margins of companies in these sectors will be immense. &lready/ these
guys have started feeling the pinch and are demanding a rescue act from
the government.
&ccording to the 8IIEs 1Bth @usiness Outlook urvey of ("porters/ ;1 A
respondents e"pect a negative impact on their bottom=lines/ while 2B A of
respondents e"pect status <uo.
The news is good for importers whose buying costs will greatly decrease as the
number of rupees per dollar GII(N goes down.
&lready we have seen a significant surge in the e"port numbers. +ata
released from '@I shows that IndiaEs import of automobiles went up by
whopping ;;.0 per cent and alcoholic beverages by 02.D percent in the
current financial year.
Overall imports have shown a rising trend/ largely due to high imports of
non=oil items. Non=oil imports have grown by 32.D4 per cent higher so far
this year/ compared with last year.
+ata on imports of sensitive items showed automobile import increased to
's 04:.42 crores from 's 1B;.;4 crores/ while that of alcoholic beverages
rose to 's 31.;D crores from 's 01.34 crores.
Imports of sensitive items from Indonesia/ G/ @ra$il/ Germany/ Fapan/
Thailand/ &ustralia/ among others have risen/ while those from &rgentina/
;D
8hina/ Ivory 8oast/ !alaysia and ri *anka have shown a decrease in
rupee terms during &pril=Fuly 2::;=:D.
India imports ;:=;4 percent of its oil re<uirement. (ven if the cost of oil
per barrel has hit a record high of [D3 in recent times/ the appreciating
rupee definitely helps to soothen the harshness of oil price increase.
&s India pays in dollars for its oil imports/ the cost lowers significantly
even as the rupee gains in strength. If at [D3 to a barrel India would pay
's 0/ 333 2assuming a dollar rupee rate of 's 31 for simplicity? for every
barrel/ at 's 0B.B1 India will have to pay only 's 0/042 for every barrel/ a
gain of 's B1.
& stronger rupee/ will also force Indian companies to become even more efficient/
which will make them more competitive in the global market/ especially as
8hinaEs currency slowly appreciates over the ne"t couple of years.
STE"S TAAE6 B) !B$
The rupee e"change rate is neither completely free=floating nor fi"ed/ but is
,managed- by the 'eserve @ank of India through buying and selling other currencies. Gp
until &pril/ the 'eserve @ank was buying lots of G.. dollars/ as much as [23 billion to
keep the rupee at around 33 to the dollar. @ut with investor sentiment so hot on India and
money pouring in from abroad/ the 'eserve @ank found itself having to spend more and
more on foreign currencies .ust to keep the rupee stable. 9hen inflation shot up to over
5A in &pril/ @ank officials appeared to decide to stop buying dollars.
Instead of going in for direct intervention/ the '@I has taken the following
indirect measures to check the rupee riseC
Overseas investment limit of corporate enhanced to 0:: per cent of net worth
from 2:: per cent.
;B
!utual funds allowed investing up to [3 billion abroad 2[0 billion now?.
8eiling on prepayments of foreign borrowing increased to [ 3:: million from [
0:: million.
No <uestions asked remittancesOinvestmentsE of individuals raised to [1::/:::
from [4:/:::.
Interest rates on >8N' deposits have been reduced below *I@O' and those on
N'I rupee deposits e<uated to *I@O' = effectively near=$ero rates given forward
premiums.
&artici3at*r( n*t) i))u
On October 15/ 2::;/ (@I 2ecurities 6 ("change @oard of India? proposed
curbs on participatory notes which accounted for roughly 4:A of >II investment in 2::;.
(@I was not happy with #=notes because it was not possible to know who owned the
underlying securities/ and hedge funds acting through #=notes might therefore cause
volatility in the Indian markets.
This was/ however not the end of the volatility. The ne"t day 2October 1D/ 2::;?/
the ense" tumbled by ;1;.30 points K 0.D0 per cent K to 1;BBD.0B. The slide
continued the ne"t day when the ense" fell 30D.31 points to settle at 1;44B.BD at the end
of the week/ after touching the lowest level of that week at 1;225.1D during the day.
:+!E&AST$68 :-
The effect of the housingOlending stocks
collapse has spread beyond housing and disrupted
D:
global financial markets. +eregulated foreign and domestic hedge funds are forced to re=
evaluate their risks and retail investors are unwinding their leveraged investments.
Together they are causing increased volatility in the fi"ed income/ e<uity and derivative
markets.
The <C*nta,i*n< effect =
&ccess to credit lines will be cut aggressively.
ub=prime lending and leveraged loan markets may shut down or at least
hibernate for some time.
&lthough the meltdown may pop up some good opportunities = the shockwaves
from the G subprime collapse will put the private e<uity deals on hold for the
ne"t few months
0h* i) ,*in, t* +ail n6t2
The situations indicate that @ear tearns has problems only with those 8+Os
issued in respect of !ortgage @acked ecurities. Those 8+Os were issued at the peak of
the G housing market/ so they have the least float. The older 8+O issues will have more
headroom before defaults become a problem for them.
D* n*t in;)t in 3nn( )t*c5)
#enny stocks and .unk scripts look attractive to the investor when the indices are
rising/ since the price of these shares usually rise faster than the rise in prices of other
D1
shares. %owever/ then the market falls/ the investor is left with .unk/ which has no value.
&s a matter of principle/ you should invest in stock of the only such companies whose
fundamentals are known to you. +o not depend on tips/ however reliable the source of tip
may be. !ost of the tips are generated by people with vested interest. (ven when the
source of the tip is genuine/ the time frame the issuer has in mind may be different. If you
are tempted to act on a tip/ study facts before you decide to go ahead.
D* n*t 3anic
This is very important. !ore money is made in stock market by remaining
inactive. It is foolish for a long=term investor to be e"cited or subdued by the market
ticker. 8N@8 channel is for the short=term traders and day=traders/ do not let the opinions
e"pressed there affect your investment decision. If you are confident your investment is
fundamentally strong/ every fall should give you an opportunity to buy rather than sell.
Of course/ while you do that keep in mind the principle I have narrated in the ne"t
paragraph.
D*n=t 3ull (*ur +l*1r) an! 1atr (*ur 1!)
This strong advice comes from 9arren @uffet/ the most successful disciple of @en
Graham. The greatest mistake most investors make is to sell the shares that have
appreciated/ and hold the ones/ which are giving a negative return. The investment
strategy should be the other way roundL you should sell the losers and let the winners
ride.
I do not mean that you should sell every share that has depreciated. The right
course is to keep pruning your field regularly to identify the weed so that they could be
D2
removed/ and to identify the flowers that should be watered as long as their fundamental
value is below the prevailing market price.
D* n*t in;)t in th c*73an( 1h*) >u)in)) (*u !* n*t un!r)tan!
If you can understand a business and you find value there/ invest. +o not be
tempted to invest in industry about which you do not have much idea. 9hile there is so
much money to be made in technology shares/ yet if you do not understand the business/
it is better you do not go into it. !y personal investment philosophy is to invest in the
business/ which I would be comfortable running on my own. I apply the same principles
even when my investment is as low as 1: shares.
D* (*ur *1n r)arch
ecurity analysis is not as difficult as it may seem. Hou do not have to be a
<ualified analyst to do the analysis. & basic book on reading the financial statements of a
company will be a great investment. 9hen I say that more money is made by being
inactive in the market/ I certainly do not mean that you should invest and forget. On the
other hand/ you should keep reviewing the performance of the company you have
invested in.
+BDE&T$(E
The ob.ective of pro.ect is to gain knowledge about how an organi$ation works and in
particular setup of a stock broking house.
the primary ob.ective of which was to obtain a feedback from the clients of
SH#RE$H#N. #articularly about their e"perience while opening the online trading
account with SH#RE$H#N.
D0
The secondary ob.ective of this pro.ect was to help out the clients with their
problems in %!' to the e"tent possib
"rimary obCe3ti@e* of the proCe3t are:-
The primary ob.ective is to know how the theoretical knowledge is applied in
practice. It is also bridges the gap between the theoretical knowledge and practical
aspects and provides professional e"posure to the candidates as well.
In addition to the above finding out the investorEs e"pectations from the stock
market that is hares and +erivatives.
Se3ondary obCe3ti@e:-
The secondary ob.ective of the study is to understand the different investment
options available in the stock market/ how the investments are beneficial to the investors/
what are the risks involved/ how the broking company operates etc.
D3
MET#++4+8)

!ethodology pecifiesC=
The ob.ectives of the study.
The method of conducting.
The tools for collection of data.
&pproach of measurement and analysis of data.
To collect specific data from concerned persons through <uestionnaire as well as
informal decision.
Sample *iEe
4:
Sources of information"#
#rimary ourcesC=
Through Tuestionnaire.
>ace to face interview.
Normal decision.
econdary ourcesC=
'ecord maintained by the company.
Internet sites likes/ www11111..
@ookEs like >inancial !anagement and advance >inancial !anagement.
!ESEA!&# MET#++4+8)
ata Sour3e* = #rimary +ata/
= econdary +ata
ata *our3e*:
Se3ondary ata
D4
Un!r Sc*n!ar( )*urc)" 1 ta33! in+*r7ati*n +r*7 intrnal - 6trnal )*urc). 0
7a! u) *+ Intrnt ()uch a) )arch n,in www.google.com'"
www.icicidirect.com
www.indiabulls.com
an! 7i)cllan*u) )*urc) ()uch a) >r*chur)" 3a73hlt)" li>rar(' un!r 6trnal
)*urc).
"rimary ata
#rimary data is a data that is collected for the first time in the processing of the
analysis.
The researchers have adopted the contact through telephone for the purpose of
collecting #rimary data. The researchers discuss with Team !anager and employees of
the company to get information about competitors of SH#RE$H#N.c*7.
A6A4)S$S
To make our research pro.ect most effective in a given time period of 14 days
surveyed the information of the competitors. 9e undertook both ("plorative as well as
8onclusive 'esearch +esign. The data has been collected from both #rimary as well as
econdary sources and we also did the fieldwork for which utmost care has been taken to
keep pro.ect unbiased from personal opinion.
:$6$68S A6 A6A4)S$S
:inding*
D5
On surveying various people who are involved in share trading both as trader as
well as investor/ we found that brokerage is the most important factor on which people
select O opt a broking house/ followed by image / convenience in trading / customer
service/ features/ tips 6 suggestion 6 &!8.
9hat is interesting to note is the weighted contribution of these factors towards
decision making. &lthough brokerage leads the pack it has only 1BA contribution/ and is
closely followed by broking housesE image with 1DA and convenience in trade with 15A.
&!8 6 tips 6 suggestions having only 1:A contribution each towards decision making
end up the pack.
D;
On surveying %&'()%&N 8ustomer why they opted for same/ we got to know
it was because of image %&'()%&N carries in the market/ followed by its competitive
brokerage/ convenience in trade/ features/ customer service/ tips and suggestions/ and
&!8.
DD
Analy*i*
Please mark % in the appropriate $rackets&
In !hich of the follo!ing age $rackets do you fall&
'(-)* ^
)*- +, ^
+, - .* ^
.* and a$o#e ^
ge of the in#estors&- /rom the sur#ey it can $e seen that there are most
of the in#estors are under age )*-+,.
DB
B:
Please select your respecti#e occupation&
Ser#ice ^
Profession ^
Business ^
0thers ^
0ccupation of in#estors&- /rom the sur#ey I found that +*1 in#estors are
$usinessman, )*1 in#estors are ser#iceman, 2,1 are professionals and ,1 are
others.

B1
$n@e*tment E5perien3e
%ow long you have been investing 2in investment funds/ stock/ bonds or foreign
e"change trading?J
No e"perience
_ 0 years
0 to 5 years
` 5 years
B2
Financial Situation
9hat is your currently disposable income J
@elow 2::::
2:::: =4::::
4::::=D::::
&bove D::::
B0
9hat percentage of your total li<uid asset 2i.e. asset including self occupied
property/ emergency cash etc.? willOhave you investOinvestedJ
` 4:A
25A to 4:A
1:A to 24A
_ 1:A
B3
Investment Ob.ective
9hat is your investment ob.ectiveJ
To preserve the principal and earn a stable amount of regular income.
To generate a high amount of regular income.
To generate capital appreciation with regular income.
To ma"imi$e the growth potential of my assets.
9hich of these statements would best describe your attitude towards riskJ
B4
I can tolerate a very low degree of risk/ as capital preservation in crucial to
me.
I can tolerate some risk and look for some capital growth to keep pace
with inflation.
I can tolerate some risk and look for moderate capital growth above
inflation.
I can tolerate a high degree of risk and look for the highest capital growth
potential.
3o! do you prefer 4rading5
0nline ^
B5
0ffline ^
6hy do you prefer 4rading 0nline5
/aster 4ransactions ^
0nline nalysis ^
7on#enient ^
B;
8esser 7harges ^
Online Facility: /rom the sur#ey it can $e seen that there has $een an increase
in the degree of confidence an in#estor attaches to!ards online trading of shares
as the majority of the sample comprised of people !ho professionals !ho are
con#ersant !ith the internet. But the majority of the people from the $usiness
community depend on offline trading through their $roker9s
6hy do you prefer 4rading 0ffline5
Brokers d#ice ^
3igher :xposure 8imit ^
BD
Secure 4ransactions ^
;ot 7omforta$le !ith 0nline
Why Offline Trading: 0ut of 22 people !ho preferred 0ffline trading ).1 of
people preferred it $ecause of the #alua$le suggestion of Broker. 4hey carried
out their transactions $y consulting !ith their $roker. Some people also preferred
0ffline 4rading $ecause of higher exposure limit in 0ffline 4rading as compared
to 0nline 4rading.
3o! much your decision to in#est in securities depends on the
ad#ice from your $roker5
BB
8east agree ^
Some!hat agree ^
gree moderately ^
gree to a great extent ^
Strongly agree ^
.
Brokers Advice: It can $e seen that ,(1 of the sample had some!hat agreed
that their in#estment decision depended on the ad#ice of the $rokers. 4hus the
$rokerage firm9s need to concentrate on the credi$ility the in#estor9s attach to the
$roker9s ad#ice during in#estment.
1::
3o! much your decision to in#est depends on your personal
analysis"self e#aluation of the securities" deri#ati#es5
8east agree ^
Some!hat agree ^
gree moderately ^
gree to a great extent ^
Strongly agree ^
1:1
Personal Analysis: It can $e clearly seen that +,1 of the sample !ere confident
in their o!n personal analysis to arri#e at a decision related to in#estment. 4his
may $e the result of the efforts undertaken $y #arious organi<ations in impro#ing
the in#estor9s attitude to!ards the market
Do you in#est in listed companies !ith good current market price5
8east agree ^
Some!hat agree ^
gree moderately ^
gree to a great extent ^
Strongly agree ^
1:2
Market Price: 4he chart sho!s that majority =.(1> of the in#estors
strongly agree that the current market price of the e?uities is the most
dominant factor affecting their in#estment. 4his figure implies the
relati#e immaturity of the majority of the sample as most technical
analyst9s are of the opinion that historical data pertaining to the
performance of the e?uities should influence in#estor9s decisions
1:0
3o! much your decision to in#est depends on using analyst9s
recommendations =pri#ately circulated or pu$lished>5
8east agree ^
Some!hat agree ^
gree moderately ^
gree to a great extent ^
Strongly agree ^
1:3
/actors that !ould impro#e the current securities in#estment
scenario&
Better @egulations^
Market information ^
Ao#ernment ^
8esser scandals ^
Intermediaries ^
Factors to imrove !nvestors "onfidence in future: It is clearly seen
from the sur#ey that in#estor9s confidence in capital market !ould increase
if there !ould $e #esser Scandals
1:4
1:5
S#A!EA#A6
, &+M
$&$&$$!E&T
, &+M
$6$AB'44S
AF&
+"E6$68
&#A!8ES
Nil ;4:O=2waive off if trading
is more than 's. 1 lakh?
1:::2offline 6
webbased?
1;4:2software?
EMATAF&
&#A!8ES
>'(( 21
T
H(&'?
&N+ 0::O=#.&.
>'O!
2
N+
H(&'
ON9&'+
>'(( >O' 1
T
H(&'
&N+ 4::O= #.&. >'O!
2
N+
H(&'
ON9&'+
NO &!8
T)"E +:
AF&
02off line/fast trade 6
speed trade?
9eb based 9eb based6 software
T!A$68
T#!+'8#
9EBS$TE
+! S+:T-
9A!E
@OT% 9(@IT( @OT%
S#A!EA#A6
,&+M
$&$&$$!E&T
,&+M
$6$AB'44S
6SEFBSEF
E!$(A-
T$(ESF
A!B$T-
!A8EF
M'T'A4
:'6S
N(O@(O
+('II&TII(O
8O!!O+ITI(
N(O@(O
!GTG&*
>GN+O
+erivatives
N(O@(
+('II&TII(
S+:T-
9A!E
&#A!8ES
4::O=#.!.
2N(GOTI&@*(
N.&. N.&.
1:;
ON @'O)('&G(?
A$4-6-
T!AE
GN*I!IT(+ On 21
st
call 's 2:O=
per call2#.!.?
'! NG!@('
#'OII+(+
>O'
T'&+ING
EMAT
T!A6SA&-
T$+6
&#A!8ES
NI* 2T%'OGG%
%&'()%&N?
IN8*G+ING
IN @'O)('&G2's04?
'. 1;O=
#('
T'&N&8TION
2ON (**ING?
T$E '"
9$T#
BA6AS
%+>8@&N)/ I8I8I@&N) ON*H
28O!#G*O'H?
%+>8 @&N)/
B!+AE-
!A8E
.:0A2INT'&+&H?
.0A
2+(*II('H?
.:;A 2INT'&=+&H?
.;4A
2+(*II('H?
.:3A2INT'&+&H?
.3A
2+(*II('H?
1:D
1:B
.
!e3ommendation
'ecommendation for hare )han *td.
/rom the sur#ey it can $e seen that there has $een an increase in the
degree of confidence an in#estor attaches to!ards online trading of
shares as the majority of the sample comprised of people !ho
professionals !ho are con#ersant !ith the internet. But the majority of the
people from the $usiness community depend on offline trading through
their $roker9s
hare )han *td. hould try to track clients from @'OEs and software companies
as in these companies ma.orities employees fall into the age group of 0:=34 that is
young influential/ they should be the mainly targeted because these people have
disposable income and are high risk taking people so they would be interested
+emat account and Trading.
hare )han *td can also target colleges and @=schools for growth. 8ompany can
sponsor event in these places so that more and more people will get to know about
the company. The company can also organi$e small seminars.
hare )han *td has recently opened many new branches in #une area. They have
clients from various categories and for convenience of the client. hare )han *td
should make tie=ups with other banks 2I8I8I 6 %+>8 @ank?.
hare )han *td should give knowledge of derivative product. +erivatives product
concern >uture and Options for hedging positions.
11:
hare )han *td can also use the method of mass marketing by giving
advertisements on local cable network/ newspapers and can distribute pamphlets
in public places.
!e3ommendation* for in@e*tor*
ome of the most common mistakes that investors should avoid are as followsC
Bu(in, ti3).
In market/ punters and market makers use to the optimum trading. 9hat you as an
investor should do is not buy anything that you do not understand. +o your own research.
Tra!in, t** 7uch.
The trading bug is infectious and hard to get rid of. Trading reduces returns. The
most common mistake that investors should reali$e is that companies are meant as
MinvestmentsE and not as trading opportunities. Hou start making more mistakes with more
number of trading decisions.
Bu(in, int* 7ar5t trn!).
The most common mistake is that people buy according to market trends instead
of buying businesses. & bull run does not mean that a company with a bad business will
do well. Hour stock will only move up if profits surpass e"pectations.
Bu(in, ?un5 )t*c5).
111
Taking a position in a stock/ which has not business model/ can be dangerous. Hou
may be left with dud paper at the end of day. MIanishing 8ompaniesE are common place
in India.
O;r c*n+i!nc.
+o not be overconfident. !any investor fall pray to over confidence/ trading too
often and these blunders can really cost you. Never bypass the basic tenets of investing.
&anic.
>ear stops you optimi$ing profit or minimi$ing losses. *et fundamentals dictate
your decisions not emotions.
Cha)in, 3r+*r7anc.
Too many investors buy stocks when they are at their peak/ after a long run=up.
The fundamental rule is ,@uy low/ sell high-.
If investor does not want to take more risk and he is interested in investing share
market then investor can go for long term investment in share market. &s we see from the
above data that if any person can hold the share of above mentioned companies for one
year he can book the average return of 0:A.
>inally/ my opinion is that outperforming the market is difficult task. Investor
must be update himself regarding the current performances of the companies in which he
invested and willing to invest.
&on3lu*ion
112
&t the end of this report/ I would like to conclude that the Indian 8apital !arket
is a pu$$le and it is very tough call to anticipate any conclusion on it and making
suggestion to the individual investor. @ut hare )han *td has got success in solving it by
their eminent research team at an above average point.
&s per the report/ the market is likely to go up is coming years because of
development in various industrial sector and infrastructure. hare )han *td has scope to
e"pand and many areas to work on. I hope suggestion made by me will be helpful to
hare )han *td in future.
hare )han *td will go on to e"plore new heights in future. hare )han *td has to
implement its hardcore marketing effort to remain always strong in this competitive
world.
&t the end/ I would like to say that sometimes and rumors derived the capital
market rather than research/ technical and fundamental analysis.
4imitation*
110
8onversion ratio of customer is very low.
!ost of the people are having conservative thinking and do not have any idea on
capital market.
#eople are not willing to disclose their portfolio.
The focus of study is only on share market because is such a short span of time it is very
difficult to study the whole capital market and its functions
113
Anne5ure
Gue*tionnaire
Please mark % in the appropriate $rackets&
In !hich of the follo!ing age $rackets do you fall&
'(-)* ^
)*- +, ^
+, - .* ^
.* and a$o#e ^
Please select your respecti#e occupation&
Ser#ice ^
Profession ^
Business ^
0thers ^
Investment ("perience
%ow long you have been investing 2in investment funds/ stock/ bonds or foreign
e"change trading?J
No e"perience
_ 0 years
0 to 5 years
` 5 years
114
>inancial ituation
9hat is your currently disposable income J
@elow 2::::
2:::: =4::::
4::::=D::::
&bove D::::
9hat percentage of your total li<uid asset 2i.e. asset including self occupied
property/ emergency cash and any other outstanding financial commitments?
willOhave you investOinvestedJ
` 4:A
25A to 4:A
1:A to 24A
_ 1:A
Investment Ob.ective
9hat is your investment ob.ectiveJ
To preserve the principal and earn a stable amount of regular income.
To generate a high amount of regular income.
To generate capital appreciation with regular income.
To ma"imi$e the growth potential of my assets.
9hen do you e"pect to start withdrawing your investmentJ
Not now/ but with in 2 years.
In 2 to 4 years.
In 4 to 1: years.
Not for at least 1: years.
9hich of these statements would best describe your attitude towards riskJ
I can tolerate a very low degree of risk/ as capital preservation in crucial to
me.
I can tolerate some risk and look for some capital growth to keep pace
with inflation.
115
I can tolerate some risk and look for moderate capital growth above
inflation.
I can tolerate a high degree of risk and look for the highest capital growth
potential.
&ttitude to short term risk
9hich one of these statements would best describe would best describe if the
value of your portfolio decline by 14A in 0 monthsJ
IEll hold my stock.
IEll sale it partially.
3o! do you prefer 4rading5
0nline ^
0ffline ^
6hy do you prefer 4rading 0nline5
/aster 4ransactions ^
0nline nalysis ^
7on#enient ^
8esser 7harges ^
6hy do you prefer 4rading 0ffline5
11;
Brokers d#ice ^
3igher :xposure 8imit ^
Secure 4ransactions ^
;ot 7omforta$le !ith 0nline ^
3o! much your decision to in#est in securities depends on the
ad#ice from your $roker5
8east agree ^
Some!hat agree ^
gree moderately ^
gree to a great extent ^
Strongly agree ^
3o! much your decision to in#est depends on your personal
analysis"self e#aluation of the securities" deri#ati#es5
8east agree ^
Some!hat agree ^
gree moderately ^
gree to a great extent ^
Strongly agree ^
11D
Please select your le#el of confidence on online trading of shares and
deri#ati#es&
8east confidence
Some!hat confident
Moderately confident
7onfident to a great extent
$solute confidence
Do you in#est in listed companies !ith good current market price5
8east agree ^
Some!hat agree ^
gree moderately ^
gree to a great extent ^
Strongly agree ^
3o! much your decision to in#est depends on using analyst9s
recommendations =pri#ately circulated or pu$lished>5
8east agree ^
Some!hat agree ^
gree moderately ^
gree to a great extent ^
11B
Strongly agree ^
/actors that !ould impro#e the current securities in#estment
scenario&
Better @egulations^
Market information ^
Ao#ernment ^
8esser scandals ^
Intermediaries ^
Bi$io!rap%y
12:
1. www.sharekhan.com.
2. www.nse.com
0. www.ncfm.com
3. www.google.com
4. www.bse.com
5. www.msn.com
;. &dvance financial management by khan 6 Fain
D. >inancial management by I ! #anday
121