ARTICLES

Foreign IPO capital market choice: Understanding the institutional fit of corporate governance.

Source: Strategic Management Journal; Aug2012, Vol. 33 Issue 8, p914937, 24p, 3 Charts Abstract: While product market choices have been central to strategy formulation for firms in the past, the integration of financial markets makes the choice of capital markets an equally important strategic decision. We advance a comparative institutional perspective to explain capital market choice by firms making an IPO in a foreign market. We find that internal governance characteristics (founder-CEO, executive incentives, and board independence) and external network characteristics (prestigious underwriters, degree of venture capitalist syndication, and board interlocks) are significant predictors of foreign capital market choice by foreign IPO firms. Our results suggest foreign IPO firms select a host market where the firms' governance characteristics and third party affiliations fit the host market's institutional environment.

Price Discovery in Illiquid Markets: Do Financial Asset Prices Rise Faster Than They Fall? Source: Journal of Finance; Oct2010, Vol. 65 Issue 5, p1669-1702, 34p Abstract: We study price discovery in municipal bonds, an important OTC market. As in markets for consumer goods, prices 'rise faster than they fall.' Round-trip profits to dealers on retail trades increase in rising markets but do not decrease in falling markets. Further, effective half-spreads

increase or decrease more when movements in fundamentals favor dealers. Yield spreads relative to Treasuries also adjust with asymmetric speed in rising and falling markets. Finally, intraday price dispersion is asymmetric in rising and falling markets, as consumer search theory would predict.

DEFINING AND MEASURING THE EFFECT OF SERVICE QUALITY IN SELECTION OF A MUTUAL FUND IN INDIAN CONTEXT. Source: Journal of Services Research; Oct2009, Vol. 9 Issue 2, p173-189, 17p, 1 Diagram, 1 Chart Abstract: Mutual funds are those kinds of services which have heterogeneity at maximum level. For example Reliance mutual fund has almost same tax planning features as Birla sun life mutual fund. So perceiving service quality becomes more tiresome task for customer in this industry. In present paper we have explored Parasuraman' 5 dimensions of service quality for mutual funds in India. By doing some statistical analysis we identified that high familiarity of corporate brand in mutual fund industry in India is more influential than any other factor. So advertising for increasing this awareness can help in better recall and then in adding value towards perceived service quality for mutual funds in India.

 HOW WILL YOU TRADE? Source: By Northcott, Alan. Complete Guide to Investing in Annuities: How to Earn High Rates of Return Safely. 2009, p109-115. 7p. Abstract: The Complete Guide to Investing in Short Term Trading: How to Earn High Rates of Returns Safely," by Alan Northcott, is presented. It explores ways to trade on the market which include the use of an online broker and the platform on direct-access trading. It discusses the significance of having a second trading account with an online broker for the longer-term trades.

Taking stock of opportunities abroad. Source: By Twyford, David. Futures: News, Analysis & Strategies for Futures, Options & Derivatives Traders. Aug2007, Vol. 36 Issue 10, p3235. 4p. Abstract: The article reports on stocks investments listed overseas offered by discount brokerages in the U.S. It is stated that the transaction, which can be made through online trading accounts, offers new strategies that traders can apply to trade new and existing markets. Moreover, it could also transcend stocks, U.S. dollar, bonds and commodities. E-Trade Financial, one of the first online brokerage companies to offer such strategy, said that 70 percent are interested to trade overseas stocks.

Impact of Internet Growth on the Online Stock Trading in India.

Source: By Srivastava, Sarika. Journal of Internet Banking & Commerce. Dec2011, Vol. 16 Issue 3, Special section p1-10. 10p. Abstract: Nearly two billion people are connected to the Internet. During the last twenty years, the technology revolution has had an intense and irreversible impact on the world and Indian stock market has also witnessed

these changes. From its formal inception in the 19th century, the Indian capital market has come a long way and can be said to be in a maturity stage, backed by a developed legal system. The internet has made financial products and services available to more customers and eliminated geographical barriers. Earlier investors were solely dependent on their brokers but nowadays they are participating more in buying and selling of shares with the help of internet. E-trading has saved time, energy and money as it helps to access the market from any where at any time. The primary objective of this research paper is to analyze the impact of internet growth on the stock market transactions. The paper also discusses the current state of internet trading in India and particularly the scope of online trading market available in India.

THE EFFECTS OF DIGITAL TRADING PLATFORMS COMMODITY PRICES IN AGRICULTURAL SUPPLY CHAINS.

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Source: By Banker, Rajiv; Mitra, Sabyasachi; Sambamurthy, V. MIS Quarterly. Sep2011, Vol. 35 Issue 3, p599-A3. 16p. 5 Charts. Abstract: Digital platforms for buying and selling agricultural commodities have generated significant interest in the trade literature as a way to link rural communities to the Internet. Yet, the extent to which these digital platforms actually translate into higher commodity prices for producers remains an open research question. We investigate this question by comparing transaction data on trading various grades of coffee from a recently implemented digital platform in India with similar transactions from a physical commodity auction held weekly, and farm-gate prices in the coffee producing regions of India. Although the digital platform prices closely track the physical commodity auction prices, producers obtain significantly higher prices when they sell the commodity through the digital platform rather than at the farm-gate through brokers who operate in their

regions. However, coffee grades with higher price volatility and premium coffee grades that require face-to-face interactions to verify quality obtain lower prices on the digital platform. Our results also indicate that market participants who control the transaction obtain better prices. We discuss the implications of our findings for governments and platform providers.

A Study on Online Trading and an analysis of Equity Share Price Movement of selected 5 IT Companies. Source: By K., Logeshwari. Advances in Management. Mar2012, Vol. 5 Issue 3, p46-53. 8p. Abstract: Financial Management is that management activity which is concerned with raising funds and creating value to the assets of the business enterprise by efficient allocation of finds. It is the study of the integration of the flow of funds in the most optimum manner to maximize the returns of a firm by taking proper decisions in utilizing the funds. It is concerned with the duties of finance manager in an organization. Finance manager usually performs financial forecasting, cash management, budgeting proper investment, credit administration and procurement of funds. Modern business trend has great opportunity for managerial finance. It has a great importance in thiety concern because it usually works as a backbone of any business. Investor can buy and sell equity as well as commodities, insurance etc from home easily during market time. Equity market is one of the emerging markets in India where the equity share prices of different IT companies are fluctuating each and every day and it is very uncertain to determined profitable share.

 Macroeconomic Fundamentals as Determinants of Equity Prices: An Empirical Analysis for India.

Source: By Trivedi, Pushpa; Behera, Samir Ranjan. IUP Journal of Applied Finance. Jul2012, Vol. 18 Issue 3, p5-30. 26p. Abstract: This study is an attempt to examine the interlinkages between equity prices of Bombay Stock Exchange Sensex (BSE Sensex) and select macroeconomic variables in India in a time series framework. In the first stage of the empirical investigation, the study tries to investigate both the long-run and short-run relationship of equity price (BSE Sensex) with macroeconomic variables, viz., Index of Industrial Production (IIP), Wholesale Price Index (WPI), interest rates (3-month T-bill rate), money supply (M3), Foreign Institutional Investments (FIIs) as well as Morgan Stanley Capital International (MSCI) world index in a cointegration and vector error-correction framework. In the next stage of the empirical investigation, the study explores the dynamic interrelationship of equity prices (BSE Sensex) with different macroeconomic indicators in a cointegrated Vector Autoregressive (VAR) framework by analyzing the impulse response functions and variance decomposition results.

Investors' Adoption of Internet Stock Trading Source: By Singh, Arwinder; Sandhu, H. S.; Kundu, S. C. Journal of Internet Banking & Commerce. Apr2010, Vol. 15 Issue 1, p1-21. 21p. 7 Charts. Abstract: The purpose of this paper was to examine whether investors who adopted Internet stock trading perceived differently from those of nonadopters. The primary data based on 299 investors (149 adopters and 150 non-adopters) were analyzed using advanced multivariate techniques like factor analysis and discriminant analysis besides percentages, means, and Z-test. Results indicated that attitude dimensions and demographic

variables contributed significantly in classifying investors as adopters or non-adopters in Internet trading. As regards attitude dimensions, 'variety of financial products and safety' contributed significantly in discriminating between adopters and non-adopters of Internet trading followed by the factor such as 'convenience and transparency'. As far as the demographics were concerned, the mature/older, experienced, and businessmen investors were less likely to use Internet stock trading as compared to young, inexperienced, and non-businessmen investors.

How Does Internet Stock Trading in India Work?

Source: By Goswami, Chandana. Vikalpa: The Journal for Decision Makers. Jan-Mar2003, Vol. 28 Issue 1, p91. 8p. Abstract: Internet trading started in India on 1 st April 2000 with 79 members seeking permission to do so. Geojit Securities was the first to go online. On 1st February 2000, the National Stock Exchange (NSE) opened up the internet-based trading system for its members, the first stock exchange in India to do so. However, after two years of trading, only a dozen brokers continue offering online service. The SEBI Committee on Internet-based Securities Trading and Services has allowed the net to be used as an Order Routing System (ORS) through registered stockbrokers on behalf of their clients for execution of transactions. This paper aims at understanding the needs of the customers, comparing it with the offerings of the websites, identifying the gaps, and offering possible solutions for filling up the gaps. It is revealed that: Online traders took buying decisions on their own. A few backed it up by analysts' recommendations. Those who took decisions independently claimed to go through the websites, did fundamental and technical analysis, watched the trends, and then finally made a decision. No one so]ely followed brokers' recommendations blindly. Well-educated people in their 30s and 40s, who were highly informed and also knew how to tap sources of information, took decisions

on their own and did not depend upon the broker. They were self-directed traders. The major perceived benefit of online system was its convenience. The broker's reliability followed by the execution speed was the key to logging on to a website. An analysis of the Indian sites indicated that they were mainly promotional and provisional in nature. Provisional information about stock quotes, database searches, research reports, etc. were provided in the site empowering the user to take independent decisions. Promotional activities in the form of facilities Locator, educational forums, web designs, demos, etc. had.

Hedging Efficiency of Commodity Futures Markets in India.

Source: By Hussain Yaganti, C.; Kamaiah, B. IUP Journal of Financial Risk Management. Jun2012, Vol. 9 Issue 2, p40-58. 19p. 10 Charts. Abstract: The present study investigates the hedging effectiveness of commodity futures contracts for spices and base metals by employing cointegration and error correction methodology with different maturity time horizons varying from one month to three months, i.e., maturity month, nearby month and far month. The optimal hedge ratios are calculated from Ordinary Least Squares (OLS) regression and Error Correction Model (ECM). It is found that the futures market dominates in price discovery in nearby month contracts. In far month contracts, there is no long-term relationship between spot and futures prices for turmeric and cardamom. In case of base metals, futures market leads spot market for all the three contracts. This study supports that futures price representing the collective market opinion is considered as reference price for spot market players like traders, farmers and other stakeholders in commodity trading domain. Hedging effectiveness is also measured at various maturity periods. The results suggested that only 40% of contracts are suitable for hedging. It is generally found that there is no significant difference in hedging performance between far month and nearby month maturity periods for

spices, while in the case of base metals slight variation is seen in hedging performance among different maturity periods. Further, there is not much difference in the estimates of hedging effectiveness obtained from OLS method and ECM. It is found that for far and nearby maturity periods hedging is more effective, which has some important implications for hedging strategy. These findings are helpful to risk managers, farmers, stakeholders and policy makers.

Brokerage industry is ripe for consolidation Source: The Indian Express by Sandeep Singh : Mon May 21 2012 These are certainly not the best times for a brokerage firm as the retail investor is staying away and volumes are not growing. Dinesh Thakkar, chairman and MD, Angel Broking told Sandeep Singh of The Indian Express that it is time now for the industry to go for consolidation and for retail investors to start entering into the market and invest in blue chip companies for the long term as the valuations are attractive. Excerpts: Do you think this is the worst time that you have seen in the markets? I think Harshad Mehta scam was the worst thing that happened. However, if you compare in terms of economic scenario and global issues then it is the worst. Also the duration of the volatility is a concern. How do you see the impact of a depreciating rupee? It is going to hurt us in the short run, but a depreciating rupee in the long run will adjust our current account deficit and help increase our export. So that way it will be beneficial but there will be some pain in the short-run. What would you say to retail investors now? As of now, I think it is a good time to invest for 3-5 year time horizon and investors should invest into blue chip stocks with a staggered approach. I don't

think the markets will fall much from here however the returns in the long run would be good. How are the pressures on the brokerage revenues? There is no growth but its is not very painful as people have learnt over the last few years. Everyone wants to maintain their margin, create efficiency in their cost so that they are able to serve more customers at less cost. The industry is facing some pressure because the base is high as at this base everyone requires growth to manage your talent. We are getting some business from the traders which are active but investors are not active. Do you see consolidation within the industry? I think that the industry is ripe for consolidation because it makes a lot of sense to consolidate and achieve more efficiency in terms of cost but the problem is that the industry players are stuck for various reasons. What are you looking for, merger or acquisitions? We are open to both mergers or acquisitions and are looking at medium to large players. We have 9 lakh customers and we are looking for players that have between 5-9 lakh customers. We have been talking to various players and were interested in some players we wanted to acquire or merge with us but somehow it is not happening. We continue to look around as I think it is the right time to grow, to increase the size, to merge with companies which are synergistic. Where is the problem? Since everyone is optimistic about future, people are willing to wait rather than losing their management control and that is stopping mergers and because of low valuations, no one wants to quit. Some don't want to lose management control, in some cases the company (merger target) has an investor with it who does not want to sell at this time. In other cases companies have diversified in non-core and they are unable to hive off the non-core business. So there are various issues. There is a general thinking that if they wait for two years and if there is a bull run then it may be a right time to do that.

 Smart Things To Know: Minor's Demat Account Source: Dec 20, 2010, 02.49am IST 1. Demat accounts can be opened in the name of a minor child by the natural guardian (parents) or court-appointed guardians only. 2. The guardian needs to fulfil all requirements for documents and KYC norms to open the account in the name of the minor. 3. A minor cannot be a joint holder in a demat account. The demat account can be held only in the name of the minor. 4. Date of birth of the minor is mandatorily required, with proof. The account becomes inoperative when the minor turns major. 5. On attaining major status, a new demat account needs to be opened after completing all documentation. The erstwhile holdings can then be transferred to the new account. 6. If shares are held jointly with a minor in paper form, they need to first be transferred to the minor and then to the demat account in the minor's name.

Demat accounts with CDSL rises more than 60% in 8 months

Source: PTI Sep 3, 2007, 08.37pm IST MUMBAI: With the capital market booming, investors are rushing to open demat accounts leading to a 60 per cent rise in the number of active demat account holders with the Central Depository Services (India) Ltd during the last eight months of 2007. The active demat account holders strength was 24.07 lakh as on August 31 as compared to 15.55 lakh as on December 31, 2006, leading to addition of 9.52 lakh active accounts in eight months, according to data released by CDSL here on Monday

Fortnightly statistics released by the depository showed close to one lakh demat account being added every month by CDSL. In January, the active accounts rose by more than a lakh from 15.55 lakh to 16.87 lakh while in February it rose little less than a lakh to 17.79 lakh. Last month active demat account again grew by more than a lakh to 24.07 lakh on August 31 as compared to 22.87 lakh on July 31. As per the market regulator Sebi's directive from April 1, 2006, aspiring demat account holders are required to provide their PAN Card details for opening demat accounts. Further, demat accounts which were opened prior to April 1, 2006 and which were not PAN-compliant as on December 31, 2006 were required to be suspended for debits with effect from January 1, 2007. CDSL had 4.20 lakh demat accounts frozen for lack of PAN compliance as on August 31, 2007. Of these 2.70 lakh account were without any share balance and there were 1.50 lakh accounts with balance, CDSL added.