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EXECUTIVE SUMMARY

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Executive Summary: Company Profile: Anagram Stockbroking Ltd is amongst the leading retail broking houses in India. It is engaged in
offering comprehensive personal finance solutions since 1994. The company is a part of the of the Rs 20 billion Lalbhai Group. Anagram has grown and developed steadily since 1994. Along with being one of top 5 (as per Dun & Bradstreets Survey leading Corporate Broking houses in the country) national level corporate broking house for more than a decade, they are at par with all other competitor in the Industry & matching the standards.

Title of the project: Analysis of Stock Price Movement

Objective of the Study:


To study the behavior of the stock price movement during the last bull run from the period 1st October 2003 to 31st July 2008.

Research Methodology:
Type of Research: Descriptive Research Data collection type: Secondary data. Data period: 1st October 2003 to 31st July 2008. Analytical Tool: Returns, Line Graph.

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Major Findings: Some of the sectors like Banking, Construction and Engineering sector have shown tremendous
growth in their returns during the past five years.

Some sectors have shown good returns during past few years but they have succumbed to the global
cues now.

Some sectors are emerging to be very strong in the coming future.

Suggestions:
Some sectors have been classified into high return group. These companies have yielded huge returns in the last five years. Some sectors have been classified into medium returns group. These companies yielded good and steady returns in the last five years Some sectors have been classified into average return sector. These companies may have yielded huge returns in past but the returns have decreased in the recent times due to global economy.

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INTRODUCTION TO THE STUDY

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Introduction:
The history of the Indian capital markets and the stockmarket, in particular can be traced back to 1861 when the American Civil War began. The opening of the Suez Canal during the 1860s led to a tremendous increase in exports to the United Kingdom and United States.

Several companies were formed during this period and many banks came to the fore to handle the finances relating to these trades. With many of these registered under the British Companies Act, the Stock Exchange, Mumbai, came into existence in 1875. It was an unincorporated body of stockbrokers, which started doing business in the city under a banyan tree. Business was essentially confined to company owners and brokers, with very little interest evinced by the general public. There had been much fluctuation in the stock market on account of the American war and the battles in Europe. There are many other factors which affect the Indian equity markets. In this project we will study what are the various factor that have affected the Stock markets from the period of 2006 2008.

Indian economy has steadily grown in past years. Positive tidings about the Indian economy combined with a fast-growing market have made India an attractive destination for investments, Let it be a infrastructural project, a real estate project or an investment in equity markets. The stock market went through a bullish rally from the period of 2006 2008 and then suddenly there was a bearish market. The stock markets turned out to be volatile from the mid of January 2008 till now. The study on Current Equity Market Analysis focuses on what made stock market especially Sensex made bullish from the period of 2006 to 2008 and what are the various reasons which helped the Sensex to cross the index level of 21000 points.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Recently after the bullish rally the stock markets turned to be volatile markets from mid of January 2008. This study also highlights the bearish rally of the Indian stock markets. It includes what are the various reasons which made the Indian stock markets to be volatile.

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INTRODUCTION TO THE FINANCIAL SYSTEM

Introduction to the financial system


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Financial System of any country consists of financial markets, financial intermediation and financial instruments or financial products. The term "finance" in our simple understanding it is perceived as equivalent to 'Money'. We read about Money and banking in Economics, about Monetary Theory and Practice and about "Public Finance". But finance exactly is not money, it is the source of providing funds for a particular activity. Thus public finance does not mean the money with the Government, but it refers to sources of raising revenue for the activities and functions of a Government. Here some of the definitions of the word 'finance', both as a source and as an activity i.e. as a noun and a verb. The American Heritage Dictionary of the English Language, Fourth Edition defines the term as under1:"The science of the management of money and other assets."; 2: "The management of money, banking, investments, and credit. "; 3: "finances Monetary resources; funds, especially those of a government or corporate body" 4: "The supplying of funds or capital." Another English Dictionary, "WordNet 1.6, 1997Princeton University " defines the term as under1:"the commercial activity of providing funds and capital" 2: "the branch of economics that studies the management of money and other assets" 3: "the management of money and credit and banking and investments" All definitions listed above refer to finance as a source of funding an activity. In this respect providing or securing finance by itself is a distinct activity or function, which results in Financial Management, Financial Services and Financial Institutions. Finance therefore represents the resources by way funds needed for a particular activity.

We thus speak of 'finance' only in relation to a proposed activity. Finance goes with commerce, business, banking etc. Finance is also referred to as "Funds" or "Capital", when referring to the financial Babasabpatilfreepptmba.com Page 8

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needs of a corporate body. When we study finance as a subject for generalising its profile and attributes, we distinguish between 'personal finance" and "corporate finance" i.e. resources needed personally by an individual for his family and individual needs and resources needed by a business organization to carry on its functions intended for the achievement of its corporate goals.

INDIAN FINANCIAL SYSTEM


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The economic development of a nation is reflected by the progress of the various economic units, broadly classified into corporate sector, government and household sector. While performing their activities these units will be placed in a surplus/deficit/balanced budgetary situations. There are areas or people with surplus funds and there are those with a deficit. A financial system or financial sector functions as an intermediary and facilitates the flow of funds from the areas of surplus to the areas of deficit. A Financial System is a composition of various institutions, markets, regulations and laws, practices, money manager, analysts, transactions and claims and liabilities.

FINANCIAL MARKETS
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A Financial Market can be defined as the market in which financial assets are created or transferred. As against a real transaction that involves exchange of money for real goods or services, a financial transaction involves creation or transfer of a financial asset. Financial Assets or Financial Instruments represents a claim to the payment of a sum of money sometime in the future and /or periodic payment in the form of interest or dividend.

Money Market- The money market its a wholesale debt market for low-risk, highly-liquid, shortterm instrument. Funds are available in this market for periods ranging from a single day up to a year. This market is dominated mostly by government, banks and financial institutions.

Capital Market - The capital market is designed to finance the long-term investments. The
transactions taking place in this market will be for periods over a year.

Forex Market - The Forex market deals with the multicurrency requirements, which are met by
the exchange of currencies. Depending on the exchange rate that is applicable, the transfer of funds takes place in this market. This is one of the most developed and integrated market across the globe.

Credit Market- Credit market is a place where banks, FIs and NBFCs purvey short, medium and
long-term loans to corporate and individuals.

FINANCIAL INTERMEDIATION

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Having designed the instrument, the issuer should then ensure that these financial assets reach the ultimate investor in order to garner the requisite amount. When the borrower of funds approaches the financial market to raise funds, mere issue of securities will not suffice. Adequate information of the issue, issuer and the security should be passed on to take place. There should be a proper channel within the financial system to ensure such transfer. To serve this purpose, financial intermediaries came into existence. Financial intermediation in the organized sector is conducted by a widerange of institutions functioning under the overall surveillance of the Reserve Bank of India. In the initial stages, the role of the intermediary was mostly related to ensure transfer of funds from the lender to the borrower. This service was offered by banks, FIs, brokers, and dealers. However, as the financial system widened along with the developments taking place in the financial markets, the scope of its operations also widened. Some of the important intermediaries operating ink the financial markets include; investment bankers, underwriters, stock exchanges, registrars, depositories, custodians, portfolio managers, mutual funds, financial advertisers financial consultants, primary dealers, satellite dealers, self regulatory organizations, etc. Though the markets are different, there may be a few intermediaries offering their services in move than one market e.g. underwriter. However, the services offered by them vary from one market to another.

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INDUSTRY & COMPANY PROFILE

INDUSTRY

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Financial services organizations are striving to achieve increasingly ambitious profit and growth targets against a background of heightened risk, regulation and market pressures.

Customer needs and expectations are evolving in the face of increasing personal wealth, more private funding of pensions and healthcare and the desire for ever more accessible and personalized financial products and services. In turn, intense competition has squeezed industry margins and forced organizations to cut costs while still seeking to enhance the quality of client choice and service. The battle for talent is also heating up as companies seek to enhance innovation, customer loyalty and investment returns.

The corollary of this market evolution is increasing risk as products become more complex, organizations more diffuse and the business environment ever more uncertain. Regulation is also tightening in the wake of public and government pressure for improved governance, transparency and accountability. In this environment, the winners will be companies that can turn the challenges into opportunities to build stronger and more enduring customer relationships; sharpen process efficiency; unlock talent and creativity; use improved risk management processes to deliver more sustainable returns; and use new regulatory demands as a catalyst for strengthening the business and enhancing market confidence. Organizations will also need to identify and concentrate on core competencies where they can exert maximum competitive advantage, be this particular product, service, process or geographical territory. For some this will require a strategic re-orientation towards becoming a specialist niche provider. Even larger groups will need to differentiate their offering and by implication the associated brand.

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COMPANY PROFILE

Company Profile

Anagram Stock Broking (Anagram) is amongst the leading retail broking houses in India. It is engaged in offering comprehensive personal finance solutions since 1994. The company is a part of the Rs 20 Billion Babasabpatilfreepptmba.com Page 15

Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


Lalbhai Group. The group companies in the capital and commodities market area include Anagram Stockbroking Ltd and Anagram Comtrade Ltd. Anagram offers a wide range of services for the discerning equity investor, in addition to online account access and real time trading.

Anagram has grown and developed steadily since 1994. With the vision of being the preferred destination for all financial products for investors across India they are ready to take the next leap

Along with being one of top 5 (as per Dun & Bradstreets Survey leading Corporate Broking houses in the country) national level corporate broking house for more than a decade, they are at par with all other competitor in the Industry & matching the standards.

Corporate family of Anagram consists of following 5 Companies:

Anagram Securities Limited (ASL) having memberships with National Stock Exchange of India Ltd (NSE) for Cash and F & O segment; and Ahmedabad Stock Exchange (ASE).

Anagram Stock Broking Limited (ASBL) having membership of Bombay Stock Exchange Ltd (BSE) for Cash and F & O segment; and DP of NSDL for Equity and Commodities

Anagram Comtrade Limited (ACL) having membership of Multi Commodity Exchange (MCX), National Commodity & Derivatives Exchange Ltd (NCDEX) and National Multi-Commodity Exchange of India Ltd (NMCE).

Enagram Securities Limited (ESL) duly registered with AMFI and Corporate Insurance Agent of MET LIFE.

Dropadi Finance Limited (DFL) an NBFC company engaged in the finance business.

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They have with us a decade of hard won experience behind us.

They are a complete service brokerage house offering the entire spectrum of services that an equity investor would need. They offer real time trading opportunities on the NSE as well as BSE. Their group Company is also a Depository Participant of the NSDL and provides online services to their clients for account accessing and information.

To cater to the ever mobile trader as well as the net savvy investor they offer state-of the art online trading through their website www.anagram.co.in. Regular updates during trading hours, and access to information, analysis and research, and a range of monitoring tools on www.anagram.co.in has made it one of the most favorite sites amongst the investors.

Shake out and consolidation is a common feature across the industries and broking is no exception to it. Despite of various phases of reforms the security business is going through, Anagram has managed to stand erect and grow rapidly.

Founded in 1993, Anagram is one of Indias leading corporate broking houses today with a very strong network. With their initial strongholds in West, they have now expanded to 150 Branches covering all major business centers of India CATERING TO OVER 1, 00,000 CLIENTS. They have over 2500 terminals across the country connected with private VPN.

The following areas give us a unique identity

Service: beyond broking

The differentiator: Research and risk management Babasabpatilfreepptmba.com Page 17

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Technology: the byte that works

Personnel: intangible asset.

Beyond Broking

With a network of more than 150 odd branches and with over 500 odd Franchises/Sub Brokers and a clientele of more than 1.00,000 Retail investors, Anagram is counted among the top 5 brokerages in the retail arena.

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If the first priority in business is reaching customers, the second is keeping him satisfied. At Anagram, they believe in building relationship with their customers and provide him with a whole palate of services. The relationship management encompasses from providing the right investment strategies based on needs and risk stances to ensuring timely payouts.

They are proud of the fact that theyve maintained a record of prompt payouts to their customers, winning a reputation for reliability and transparency that is not too common a currency in this business. And theyve done this despite the alarming- andsudden-slumps that the stock market and the economy have gone through over the last decade.

As far as product range goes, theyre steadily building up a comprehensive portfolio of products and services apart from conventional broking. High speed anywhere trading through the net, online depository services, Commodities Trading and retail debt products are increasingly areas of special emphasis for us.

While they have their hand on the pulse of the retail client, they also understand the needs of the demanding institutional clients. A separate institutional sales desk services the needs of the select institutions. They are empanelled with leading Indian Financial Institutions, Insurance Companies, Mutual Funds, Treasury of Banks, etc. and keep expanding the list.

Markets and Network

Anagram has membership in all the leading stock and commodities exchanges in the country. The firm is a member in NSE, BSE, NCDEX and MCX. It is a depository participant with NSDL. Anagram has its roots in Western India and has established nationwide presence with 169 branches, 1,360 sub-brokers, 2,556 Babasabpatilfreepptmba.com Page 19

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terminals and a professional team of 2,000 plus employees spread across major metros and states in the country. It also provides trading in futures and options through its online portal www.anagram.co.in

Areas of Expertise

Anagram offers real time trading opportunities on the BSE as well as the NSE. It also offers depository and online services to clients for account accessing and information through its online portal catering to the needs of mobile trader as well as the net savvy investor. Anagram offers state-of theart online trading through its website (www.anagram.co.in). Regular updates during trading hours, and access to information, analysis and research, and a range of monitoring tools is available. The company has steadily building up a comprehensive portfolio of products and services apart from conventional broking. High speed anywhere trading through the net, online depository services, commodities trading and retail debt products are increasingly areas of special emphasis for the company.

Research

Anagram is a research driven organization. Daily Call is its morning newsletter that takes a trading

call on the market and gives a ringside view of the overnight national and international events. Customers get real time feeds on news, comments and recommendations through instant messaging that are of utmost essence to the serious trader. The Weekly Watch delivered to all the clients every Saturday evening is the most comprehensive reports of its kind. The report summons developments over the past week, major economic talking points, summary on derivatives markets, technical outlook and trading ideas for the forthcoming week and fundamental investments with an exhaustive research report for a medium to long term horizon. On the commodities side, it releases daily and weekly reports providing outlook on international agri-commodities.

Information and research is a vital ingredient for success in an industry that relies on information flows and where the ability of its people to understand the markets and foresee trends is what sets a good firm apart.

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Research is close to their heart. Their 18 member research team is spread over two locations i.e. Ahmedabad and Mumbai. They contribute regularly to the various TV channels, newspapers and other media.

Their research reports for the institutional clients are exhaustive and in detail, where as for the retail segment the stress is on timeliness. They have a battery of products that cater to the retail investor. Chintas Call is their morning newsletter that takes a trading call on the market and gives you a ringside view of the overnight national and international events and how they would shape the days trading. While the retail investors thrive on these products, even their institutional clients find these products interesting.

What differentiates us is their strategic advise under different circumstances, whether it is a dividend yield story, a call to embrace the PSU banks or to plugging into the power sector.

The Research Product they come out with are:

1. Sector Update Report

2. Company Research Report

3. Weekly sector outlook and investment picks

4. Weekly domestic and international market wrap up

Back Office Support

Anagram has centralized Back Office, which is based at Ahmedabad. Back Office handled by Nilesh Dakway based in Mumbai out of Bandra- Kurla Complex and supports the Back Office operation to Institutions and others from this place.

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1. Infrastructure

2. Office Network Across India

3. Office Network in Mumbai

4. Research & Market Information

5. Back Office Support

Office Network across India

They have at present more than 150 offices across India. The addresses of the various offices are given in the enclosed annexure. Besides this branch network Anagram has network of Sub-brokers, Franchisees and Remessiers. Anagram has connectivity provided through installed Vsats, lease lines and Bharti VPN (Virtual Private Network) through VSATs. The other CTCL installations are over 100 at various locations.

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Robust risk management

Risk management is at the core of their very existence. There is no margin for any error here. With the help of modern technology and some hard nuts in the risk management room they have been able to keep the risks of their business to the bare minimum. Their comfort to expand geographically comes from the fact that their risk management is clinical. Their strict adherence to systems ensures that their clients and stake holders can have their quota of the much needed peaceful sleep.

The byte that works

Like every other business, securities and Commodity broking business too has been increasingly driven by technology. They have made substantial investment and committed to make investment in information technology as it is increasingly the future business growth driver.

Their website www.anagram.co.in offer online trading which is supported by high bandwidth leased lines, secure servers and a custom-built user interface that gives the customers an international standard trading experience.

They have also invested in the state-of-the-art VPN infrastructure that gives a robust system to ease geographical expansion and build terminal network across the country. It also enables the entire business applications available cutting across geographical boundaries.

Whether it is the trading engine for their website or the VSATs based VPN they use for their connectivity or the applications that make their front office, back office and Depository service completely seamless, they have always settled for the best. They have the best of the breed technology partners complemented by some of best brains in IT and connectivity working for us. Babasabpatilfreepptmba.com Page 23

Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD Intangible assets

People, it is often said, are companys biggest resource. This is doubly true in a service industry like securities business.

Their success lies in the fact that they have been able to hire, train and then retain the desired people. They are a 1300 plus people strong team. The average age of their team is which just the right blend of youth and experience is.

Distribution Business

The Distribution Business offers advisory Services of Investments into Mutual Funds, Primary Market, Life Insurance and other small saving products. They currently operate out of 60 locations of the total 150 Anagram locations and by 31st March 2008 shall cover at least 40 locations Pan India. The distribution service adds up to their broking business and is serviced by experts at each location. The business is supported by an efficient Research & Back Office team.

Anagram provides a host of services for customers investing in mutual funds. It offers wide range of services like, rankings of different mutual fund schemes, list of new schemes issued in the market, interviews with fund managers, InstaNAV a quick search based application that enables customers to get the related information about the desired scheme, Primer a brief description about mutual funds, RBI procedural guidelines and a Risk Profiler which helps the customers in ascertaining ones own profile, thus minimizing risk.

Commodities Business

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Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.

Commodities' trading in India is on the cusp of transformation. Organized commodities trading as a professional service-oriented set-up, is a recent phenomenon in India but is growing at a tremendous pace, emerging as the largest and most exciting service sectors of this decade.

In order to match up with this phenomenal growth and pace, there is always going to be a need for passionate, trained commodities professionals. In addition, the fast changing commodities sector demands that professionals learn new skills, improve their efficiency, learn to compete and think out of the box. All this requires an education that is intensive, comprehensive and closely linked to the commodities derivatives market, through experiential learning.

Investment Banking

Investment Banking is the traditional aspect of investment banks which involves helping customers raise funds in the Capital Markets and advising on mergers and acquisitions. Investment banking may involve subscribing investors to a security issuance, coordinating with bidders, or negotiating with a merger target. Other terms for the Investment Banking Division include Mergers & Acquisitions (M&A) and Corporate Finance. The Investment Banking Division (commonly referred to as IBD) is generally divided into industry coverage and product coverage groups. Industry coverage groups focus on a specific industry such as Healthcare or Technology, and maintain relationships with corporations within the industry to bring in business for the bank. Product coverage groups focus on financial products, such as Mergers & Acquisitions, Financial Sponsors, and Leveraged Finance.

Performance

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The company registered strong growth during the first 10 months of 2007. The company added 26,460 domestic customer accounts in 2007 as compared to 25,295 in 2006. Number of terminals, sub brokers and employees almost doubled during this period.

Growth Areas

Anagram has diversified its business to other areas such as portfolio management services and is looking forward at opening overseas branches. It plans to introduce company fixed deposits and merchant banking to its current offerings. It is also aiming at increasing their institutional client base, acquiring new business/brokerage firms and also entering into joint venture operations in the near future.

The firm has its roots in Western India especially Gujarat where it is the biggest player. But it has expanded considerably.

Products & Services

Equity Broking Cash & Derivatives

Commodity Broking

Margin Trading Page 26

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Depository Services

Research

Distribution of Mutual Funds, Insurance, IPOs etc

Equities:

The amount which shareholders own in a publicly quoted company

Equity is the risk-bearing part of the company's capital and contrasts with debt capital which is usually secured in some way and which has priority over shareholders if the company becomes insolvent and its assets are distributed

Anagram is a member of both the BSE and NSE. The Equity cash market can be divided into:

1. Pure Delivery: The client can purchase stocks on any exchange and pay the entire purchase value before T+2

Initial margin will or will not be required depending on the comfort level with the clien

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2. Intra-Day: The client can go for Intra-day trading on any exchange on the basis of the margin deposit. Anagram gives a intra-day exposure of 5 times the margin. It is mandatory to square off Intra-day positions on the same day.

3. NBFC Funding: Anagram currently has a list of 574 stocks under this product Revised Periodically. Initial margin of 30% will be required from the client Cash or Eligible Stocks. The client can purchase stocks from this list on any exchange and the balance 70% will be funded through the NBFC @ 18% p.a. The position will be valued at Daily Closing Price 30% margin will have to be maintained by the client. To avail the NBFC Funding, client has to complete the NBFC formalities.

4. Tatkal: Means buying stocks in the last 30 minutes of the trading session & selling the same in the first 15 minutes. Tatkal basically is meant to earn interest on funds deployed. Funds have almost multiplied 4 times in last 4 years. It is not risk free. It carries overnight risk. Risk of Short delivery. Funding facility allowed in Tatkal. Brokerage can be negotiated if amount involved is sizable

Derivative Market

Derivative: These are the financial instruments for Risk Management Derives its value from an underlying asset, index or reference rate

The Derivatives Segment can further be divided into

1. Futures

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2. Options

Futures: Future is an agreement between two parties to buy and sell an asset at a certain time in the future at a certain price. A future contract gives the holder the right and the obligation to buy or sell. Both parties of a future contract must exercise the contract (buy or sell) on or before the settlement date

Index Futures and Stock Futures

Time period 3 months Current, near and far month. All contracts expire on last Thursday of every month. Contract Size The value shall not be less than 2 lacs at the time of its introduction

Options: An option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date.

There are two types of options:

1.

Call Option.

2.

Put Option.

Call Option: An option contract that entitles the buyer to buy a fixed number of the underlying shares at a stated price on or before a fixed expiry day

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Put Option: An option contract that entitles the buyer to sell a fixed number of underlying shares at stated price on or before a fixed expiry day

On-line Trading Software

Anagram provides free On line trading software further there are two versions available Web and moneypore Express. Web version is to have limited number of scrips in the market watch Money-pore Express is .exe version (client-server application)Can be downloaded. Offer both Cash & derivatives. In cash anagram offers both NSE & BSE

Two Products Delivery & Margin

Delivery 3 times limit

Margin 5 times limit with auto square off

Derivatives as per exchange margin (span + exposure). No auto square off

Mutual Funds

Anagram provides a host of services for customers investing in mutual funds. It offers wide range of services like, rankings of different mutual fund schemes, list of new schemes issued in the market, interviews with fund managers, InstaNAV a quick search based application that enables customers to get the related information about the desired scheme, Primer a brief description about mutual funds, RBI procedural guidelines and a Risk Profiler which helps the customers in ascertaining ones own profile, thus minimizing risk.

Advisory Services
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Apart from broking business, Anagram is also engaged in offering advisory services of investments into mutual funds, primary market, life insurance and other small saving products. The distribution services add up to their broking business and are serviced by experts at each location. An efficient research and back office team support the business. Anagrams set of diligent advisors helps its customers plan and get more out of ones money. The schemes include, fixed income, bank fixed deposits, company fixed deposits, small savings schemes, tax saving schemes and NRI deposits. Anagram also provides tax planning services where a list of tax saving schemes and a forum for Q&A where the queries are answered by the tax advisors; and an NRI advisory body, where it provides information for NRIs in helping them makes judicious investment decisions.

Loan Advisory

Anagram also provides advisory services on the loan schemes of certain banks to its customers. The schemes include, home loans, adhoc loans, professional loans, educational loans, consumer loans and auto loans. Its advisory services are classified into four categories namely; Primers giving an overview about all schemes that are available, Calculators where it helps the customers with quick calculators, Jargon Buster a translator and Digital Advisors which help in making decisions easy. It has entered into partnership with many leading banks in providing this facility.

Commodities
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This exchange is promoted by ICICI Bank, NSE, LIC, NABARD, CRISIL, IFFCO, PNB & CANARA BANK. It is more or less on the lines of the NSE of the capital market.

This exchange started operations from 10th November 2003 and is promoted by Financial Technologies (India) Ltd., SBI, Union Bank of India, Corporation Bank, Bank Of India, Canara Bank etc.

Commodities available for trading:

1) Agro Products:

Food Grains (Sugar, Yellow Peas, Soya Seed, Soya Meal, Soya,Gur, Chana & Maize)

Plantation ( Cotton, Rubber, Coffee , Raw Jute)

Spices (Jeera, Pepper, Red Chili & Turmeric)

By Products (Guar/ Guar Gum , Jute Bags)

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Oil & Oil Seeds ( Castor, Cotton / Kapas, CPO, Ground Nut Oil, Mustard, Soya Oil, Mentha Oil)

Non Agro Products :

Precious Metals (Gold & Silver)

Ferrous Metals (Steel Long & Flat)

Non Ferrous Metals (Aluminium, Copper, Zinc, Lead, Nickel & Tin)

Energy (Crude Oil, Natural Gas, Carbon Credit)

STOCK EXCHANGE
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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Stock exchange is an organized market place, either corporation or mutual organization, where members of the organization gather to trade company stocks or other securities. Stock exchanges also facilitates for the issue and redemption of securities and other financial instruments including the payment of income and dividends. The trade on an exchange is only by members and stock holders who have a seat on the exchange. Some of the stock exchanges are New York Stock Exchange(NYSE) National Stock Exchange (NSE) Bombay Stock Exchange (BSE) Regional Stock Exchange (RSE)

Stock exchange being a vast topic, they are focusing on Bombay Stock Exchange. National Stock Exchange. Page 34

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

BOMBAY STOCK EXCHANGE (BSE)


The Bombay stock exchange limited, (formerly the stock exchange, Mumbai; popularly called as BSE) is the oldest stock exchange in asia with a rich heritage. It is located at Dalal Street, Mumbai, India. BSE was established in 1875 as The Native Share and Stock Brokers. It was the first stock exchange in the country to obtain permanent recognition in 1956 from The Government of India under The Securities Contracts Act 1956. There are around 4700 companies listed with stock exchange and has a significant trading volume. The exchange is professionally managed under the over all directions of the board of directors. Board comprises eminent professional, representatives of trading Member and the managing directors of the exchange. The Board is inclusive & is designed to benefit from the participation of market intermediaries. Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market.

Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. The market capitalization as on December 31, 2007 stood at USD 1.79 trillion . An

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


investor can choose from more than 4,700 listed companies, which for easy reference, are classified into A, B, S, T and Z groups.

Functions of BSE The stock market is a pivotal institution in the financial system. A well ordered stock market performs several economic functions: It ensures the measure of safety and fair dealing It performs and act of magic by translating short term investments into long term funds for companies. It directs the flow of capital in the most profitable channels. It induces companies to raise their standard of performance. It offers guidance to management about the cost of capital.

NATIONAL STOCK EXCHANGE (NSE)


The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

ANALYSIS & FINDINGS


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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

The basic study on the stock price movement is conducted mainly on 8 major sectors of the economy. They are as follows:

CEMENT

REFINERIES

ELECTRICAL EQUIPMENTS

BANKING

AUTOMOBILE

COMPUTER SOFTWARE

PHARMACEUTICALS Page 38

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


CONSTRUCTION & ENGINEERING.

CEMENT SECTOR

Returns in percentage are calculated by taking the base price of the shares as 1st October 2003.and the current index as 31July.

JUL 2004 ACC 22 GRASIM 57.69

JUL 2005 93.5 61.94

JUL 2006 293 194.52

JUL 2007 370 298.79

JUL 2008 186.59 170.16

The above table can be represented in the form of graph as follows.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Interpretation:

From the above graph we observe that the Cement sector as whole has started it from the scratch and made it big in the last five years. Major highlighting points in the cement sector are:

The major cement factories like ACC and Grasim had their returns as low as 22% and 57.695 respectively in year 2004.

Due to governments focus on Infrastructure development the demand for cement and cement products increased tremendously from year 2005. So the returns also increased proportionately for these two companies.

The demand for the Cement and cement products increased as there was limit for the production of cement in India and so the prices also increased. This resulted into heavy returns for companies. It touched high points in the year 2007 when there was bullish market.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


Due to the global cues and the rising inflation the equity markets went down hampering the prices of the shares. This caused decrease in the returns to be earned by the investors. This can be seen in the graph, the returns soared down after the year 2007.

REFINERIES SECTOR

Returns in percentage are calculated by taking the base price of the shares as 1st October 2003.and the current index as 31July.

JUL 2004 BPCL -1.49 RELIANCE 0.68

JUL 2005 1.19 46.83

JUL 2006 -7.79 143.21

JUL 2007 -6.51 287.37

JUL 2008 -9.22 430.72

The above table can be represented in the form of graph as follows.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Interpretation:

From the above graph we can see that the refineries are having some diversified growth in the last five years. Some of the major points to be seen in this sector are as follows:

In the year 2004 the refinery sector had a minimal returns. Private refinery like Reliance Industries had just 0.68% growth while BPCL is in negative returns of -1.49%.

In the year 2005 there was sufficient growth in this sector, Reliance had returns of almost 47% while BPCL had just 1.19%.

Due to ever risisng global and domestic demands and rising cude prices in recent times the Page 42

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


prices of RIL reached sky giving maximun returns to the investors.This was because, RIL is into exporting of petroleum to foreign countries. So it had a windfall profit and resulting heavy returns.

On the other hand, BPCL is government owned petrol distributor in the country. It has to abide by several laws which makes it to supply the fuels in very subsidised rates. This made company to suffer heavy losses and in return to lose its returns.

ELECTRICAL EQUIPMENT
Returns in percentage are calculated by taking the base price of the shares as 1st October 2003.and the current index as 31July.

JUL 2004 ABB 45.06 BHEL 30.11 SIEMENS 89.32

JUL 2005 174.69 112.12 329.02

JUL 2006 389.25 383.33 93.04

JUL 2007 129.26 279.47 202.24

JUL 2008 64.57 334.25 0.27

The above table can be represented in the form of graph as follows.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Interpretations:
From the above graph it can be seen that there had been rise and fall in the returns of this sector. Highlights of this sector are as follows: The growth of returns for this sector moved on almost simultaneously for all the companies. Three major players in these sectors namely ABB, BHEL and Siemens. ABB and BHEL are into production of Power generating equipments so there has been a tremendous growth in these two firms during the past five years. In the year 2005 all the companies have shown tremendous growth in their returns. Heavy equipment producer Siemens had shown more than 300% growth. Due to thrust of government on the Power sector there has been high growth in the returns of the companies like ABB, BHEL. It can be seen from the graph that the return of BHEL started from 30% in year 2004 has risen to 334% in 2008.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


The growth of this sector may increase in the near future also because of growth of various sectors such as Power and Infrastructure sectors.

BANKING SECTOR
Returns in percentage are calculated by taking the base price of the shares as 1st October 2003.and the current index as 31July.

JUL 2004 HDFCBANK 23.5 ICICIBANK 21.84 PNB 47.61

JUL 2005 117.8 106.16 103.78

JUL 2006 179.85 140.32 72.32

JUL 2007 307.06 367.8 236.33

JUL 2008 295.83 215.47 15.23

The above table can be represented in the form of graph as follows.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Interpretations:
From the above graph it can be seen that there had been rise in the returns of this sector. Highlights of this sector are as follows:

The returns during the year 2004 were almost similar due to various Reserve bank policy, it liberalized the businesses of all the banks. Accordingly the returns started increasing, as we can see, HDFC Bank had returns of 23.5%, ICICI had 22% and Punjab National Bank had highest returns among these banks with returns of 48%.

There were some government reforms during the year 2005 which helped the bank earn more incomes. The banks had more miscellaneous incomes during the year which also resulted into higher incomes. One more reason for the higher incomes would be the consolidated business made by the banks. This is why the returns increased to its peak during the year 2007.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


The rising inflation during these recent times and increase of CRR rates made by the Reserve Bank made these bank lose its business a lot. The bank increased its loan rates making people to refrain taking loans. These are the reasons for losing its returns, this can be seen in the table

AUTOMOBILE SECTOR
Returns in percentage are calculated by taking the base price of the shares as 1st October 2003.and the current index as 31July

JUL 2004 HEROHONDA M&M MARUTI TATAMOTORS 62.78 87.27 77.19 24.88

JUL 2005 88.58 140 107.45 36.5

JUL 2006 155.94 159.16 248.68 153.56

JUL 2007 123.44 204.79 240.04 116.93

JUL 2008 157.72 115 147.8 26.42

The above table can be represented in the form of graph as follows. Babasabpatilfreepptmba.com Page 47

Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Interpretations:
From the above graph we can observe that there has been good growth in the sector in the recent five years. The major highlights of this sector are:

It can be seen that almost all the automobile sector had similar earning in the year 2004. As it is said that there is null before storm, it was period before boom in automobile sector. The returns upon each share were in range of 25%- 87%.

As the spending behavior of a consumer of people changed there was heavy demand for the vehicles in country. This could be due to various reasons like High salary, high disposable income and also high standard of living.

The trend has reached its peak in the year 2007 where there were several launch of two wheelers and four wheelers in the market. Therefore there had been the highest returns earned during that particular year.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


Lately due to rising inflation and the rising prices of fuel have decreased the sales of vehicles in the markets. But two wheelers have still the wide market open for them. Tata Motors suffered decrease in the returns because of the buy out Jaguar and Landrover stable. But in long run it will be very profitable for the company.

COMPUTERS- SOFTWARE SECTOR


Returns in percentage are calculated by taking the base price of the shares as 1st October 2003.and the current index as 31July.

JUL 2004 HCLTECH 71.12 SATYAMCOMP 21.62 WIPRO 28.67

JUL 2005 118.96 97.91 39.31

JUL 2006 184.82 97.91 -4.32

JUL 2007 89.02 83.73 -4.32

JUL 2008 16.8 53.99 -17.78

The above table can be represented in the form of graph as follows.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Interpretation: This sector has shown tremendous growth in the last few years. This sector had even shown growth more than the GDP of the country. Some of highlighting points of this sector are as follows: The major markets for the software company were the US market and had a flourishing market in the year 2004 where returns were considerably good. The returns continued to be high even in the year 2005 but reached its peak during the year 2006 were companies like HCL and Satyam were earning returns almost 100% or even more than it. The other reason of this sector would be the government thrust on the IT sector and heavy deduction of taxes for such companies in India. Almost all the companies enjoyed tax holiday and facilities to develop IT park. But the returns started diminishing from 2007 onwards due to the change in the global environment such as recession of American economy where these companies had major contracts. This can be seen as HCL which was having returns of 89% soared down to just 17% in year 2008. While Satyam soared comparatively less from 84% to 53%. But still investing in this sector is still considered good since it is ever developing type of sector. Babasabpatilfreepptmba.com Page 50

Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

PHARMACEUTICAL SECTOR
Returns in percentage are calculated by taking the base price of the shares as 1st October 2003.and the current index as 31July

JUL 2004
DRREDDY -30.83 RANBAXY -3.68 SUNPHARMA -25.88

JUL 2005 -28.77 12.6 18.79

JUL 2006 19.49 -62.43 58.39

JUL 2007 23.9 -61.85 109.89

JUL 2008 23.24 -45.4 192.72

The above table can be represented in the form of graph as follows.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Interpretation:
From the above graph we can observe that there have been diversified returns of the companies. One company is making huge returns while the other one is making huge losses. The major highlighting factors are as follows:

All the companies were having negative returns during the year 2004. There is no particular reason why the companies were having loss. The one major reason would be of losing the business. This can be seen in the graph were Ranbaxy was the least loser with -3.68%.

Ranbaxy Lab suffered huge losses during the last five years. the reasons are several like losing the case and major failure of its products. There were also news of selling the company which finally happened in the year 2008. This is why the returns started decreasing till -45% in the year 2008

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


Dr Reddy pharmaceuticals had a similar story for the loss in the revenue. There were several losses occurred due to the failure of its major products. But it recovered during the year 2006 with a positive returns of 20% which grew steadily to almost 23.5% in the year 2008. In contrast Sun Pharmaceuticals made huge recovery during the year 2005 itself. The reasons were several like successful products and efficient management. It invested huge in research and Development which yielded huge returns. Now currently its returns are at peak with almost 193%.

CONSTRUCTION & ENGINEERING.


Returns in percentage are calculated by taking the base price of the shares as 1st October 2003.and the current index as 31July

JUL 2004 L&T 137 UNITECH 87.9

JUL 2005 268.56 848.5

JUL 2006 592.04 310.38

JUL 2007 597.04 844.89

JUL 2008 738.91 205.2

The above table can be represented in the form of graph as follows.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

Interpretation:
During the past five years there had been boom in the sector of construction and Engineering. There had been remarkable growth in returns during the last five years. Some of the highlighting points are: As the governments five year plan was development of the infrastructure there was demand for such companies in India. Unitech started with good return of 88% in the year 2004. While Engineering Company like L&T had a huge return of 137% in the year 2004. The year 2005 brought huge returns for the construction company like Unitech as there was huge development in infrastructure sector. The return was astonishing 848.5% in the year 2005. While L&T had steady increase in its returns to almost 269%. The actual boom was in the year 2007 where the returns were at the peak for both the companies. L&T had the returns of almost 597% while Unitech had the returns of 845%. It was majorly because Babasabpatilfreepptmba.com Page 54

Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


of huge development in the infrastructures. There were major plans of constructing SEZs in the country and so these companies had huge returns. But the inflation took on toll on the growth of construction company this can be seen from the fall in returns to 205% and in contrast the engineering company like L&T made growth till 739%. This may be due to the various contracts secured by the company and also due to the pending bonus on each share.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

SUGGESTIONS

SUGGESTIONS:

The rate of returns can be classified into High returns, Medium returns and Average returns. High returns include companies having huge returns but also the volatility is also high. Medium returns include companies which have high and steady return with relatively less volatility in their shares. Average returns include companies having satisfactory returns with high gestation periods. So accordingly suggestions are based upon these categories.

Investors willing to have high returns can invest in companies of Construction or Engineering sectors like Unitech an L&T. even they can invest into companies such as BHEL, ABB which are into production of Power equipments. During the recent 5 years the Banking sector has shown tremendous growth so it can be placed in high returns categories.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD


Investors willing to have a medium returns can invest in Automobile sectors, Cement companies and Refineries. These companies have a long gestation period but the returns are guaranteed with comparatively less risk involved for the investors. Investors willing to have a average returns on their investment can invest in companies such as Software sectors which were having high growth returns during past years but have slowed down due to international environment.

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

BIBLIOGRAPHY

Bibliography:

www.nseindia.com www.bseindia.com www.moneypore.com www.anagramstock.com

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

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Analysis of Stock Price Movement At ANAGRAM STOCK BROKING LTD

ANNEXURES

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