PROJECT REPORT

(Submitted for degree of B.com. honors in accounting & finance/ marketing/ under the Calcutta University)

Title of the Project Capital markets Submitted by

Name of the candidate: Md. kashif Registration no. 016-1121-0453-10 Roll no Name of the college: syamaprasad College

Supervised by
Name of the supervisor Name of the college

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Month & Year of submission

Supervisors Certificate
This is to certify that Mr./msa student of B.com. Honors in accounting & finance /marketing / Taxation/computer Application in business of ... (Name of the college) under the university of Calcutta has worked under my supervision and guidance for his /her her project work and prepared with the title ....... The project report, which he/she is submitting, is his/her genuine and original work to the best of my knowledge. Place......................... signature: . Date: , name: Designation: Name of the college

Students Declaration
I hereby declare that the Project work with the title () Submitted by me for the Partial fulfillment of the degree of B.com. Honors in Accounting & finance/Marketing/Taxation/ computer Application in business under the University of Calcutta is my original work and has not been submitted earlier to any other University/institution for the fulfillment of the requirement for any course of study. I also declare that no chapter of this manuscript in whole or in part has been incorporated in this report from any earlier work done by me. However, extracts of any literature in the references.

Place Date: ,

signature name: Address Registration No. Roll No.

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INDEX Capital markets

Introduction

Scope Objective Other Information Finance Department.

Role of capital market in India Importance of capital market

Tools of capital market Features of capital Market

Mutual fund ADVANTAGES OF MUTUAL FUND DISADVANTAGE OF MUTUAL FUND

Impact of capital market on Indian economy

STOCK OR EQUITY MARKET

Methodology Suggestions & Recommendation Limitations Bibliography

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Introduction: Companies and governments can raise long-term funds. It is a market in Which money is lent for periods longer than a year? A nation's capital market Includes such financial institutions as banks, insurance companies, and stock Exchanges that channel long-term investment funds to commercial and industrial borrowers. Unlike the money market, on which lending is ordinarily short term, the capital market typically finances fixed investments like those In buildings and machinery. Nature and Constituents: The capital market consists of number of individuals and institutions (including the government) that canalize the supply and demand for long-term capital and claims on capital. The stock exchange, commercial banks, co-operative banks, saving banks, development banks, insurance companies, investment trust or companies, etc., are important constituents of the capital Markets. The capital market, like the money market, has three important Components, namely the suppliers of loan able funds, the borrowers and the Intermediaries who deal with the leaders on the one hand and the Borrowers on the other. Definition of capital market: capital market is one of the important markets of all financial institution. A capital market means A market where borrow money for long period and lend more money after maturity period. IDBI, ICICI, UTI, LIC etc. are come in this type market. These institutions play as a role lenders and business units or corporate are the borrower in the capital market. Capital market provides long term debt to the Government sectors as well as corporate sector. Capital market can be classified in two ways primary market, which include issue of new share and secondary market include existing securities.

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ROLE OF CAPITAL MARKET IN INDIA:

Indias growth story has important implications for the capital market, which has grown sharply with respect to several parameters amounts raised number of stock exchanges and other intermediaries, listed stocks, market capitalization, trading volumes and turnover, market instruments, investor population, issuer and intermediary profiles. The capital market consists primarily of the debt and equity markets. Historically, it contributed significantly to mobilizing funds to meet public and private companies financing requirements. The introduction of exchange-traded derivative instruments such as options and futures has enabled investors to better hedge their positions and reduce risks. Indias debt and equity markets rose from 75 per cent in 1995 to 130 per cent of GDP in 2005. But the growth relative to the US, Malaysia and South Korea remains low and largely skewed, indicating immense latent potential. Indias debt markets comprise government bonds and the corporate bond market (comprising PSUs, corporates, financial institutions and banks). India compares well with other emerging economies in terms of sophisticated market design of equity spot and derivatives market, widespread retail participation and resilient liquidity. SEBIs measures such as submission of quarterly compliance reports, and company valuation on the lines of the Sarbanes-Oxley Act have enhanced corporate governance. But enforcement continues to be a problem because of limited trained staff and companies not being subjected to Substantial fines or legal sanctions. Given the booming economy, large skilled labor force, reliable business community, continued reforms and greater global integration vindicated by the investment-grade ratings of Moodys and Fitch, the net cumulative portfolio flows from 2003-06 (bonds and equities) amounted to $35 Billion. The number of foreign institutional investors registered with SEBI rose from none in 1992-93 to 528 in 2000-01, to about 1,000 in 2006-07. Indias stock market rose five-fold since mid-2003 and outperformed world indices with returns far outstripping other emerging markets, such as Mexico (52 per cent), Brazil (43 per cent) or GCC economies such as Kuwait (26 per cent) in FY-06.

Exchanges. Buoyed by internal economic factors and foreign capital flows, Indian markets are
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In 2006, Indian companies raised more than $6 billion on the BSE, NSE and other regional stock

Globally competitive, even in terms of pricing, efficiency and liquidity.

Importance of capital market is discussed below. 1. Link between savers and investors: The capital market create link between savers and investors. It plays important role in mobilizing the saving and use them in productive investment. This market plays important role of transferring. All surplus or wasteful resources are transfer to deficit and undeveloped areas by which productivity and prosperity of country is increase. 2. Encouragement to saving: With the development of capital market, Bank, non-Bank is developed. These institutions give more facility to saver, which encourage people more saving. In real-estate gold ,land, jewelry all conspicuous goods are consume. 3. Encouragement to saving: The capital market provide loan at very low interest to the business men and the Government. Thus encourage people to invest. It provides facilities through Bank or non bank, financial institution. Investor invests by purchasing share, securities, bonds, N.S.C etc. The development of financial institution , capital increase , interest rate falls , and investment increase. 4. Promotes economic growth: The capital market not only growth of general condition of the economy but also growth of economic. All the financial institution as like bank and non bank distribute resources rationally in accordance with development needs of the country . From proper distribution of resources trade, industry, public or private sectors, that creates balance economic growth in the country. 5. Stability in security prices: The capital market tried to reduce end the value of stock and securities and also reduce the fluctuation in price to minimum. The process of stabilization is maculated by providing capital to the borrower at lower interest rate and reducing speculative and unproductive activities. 6. Benefit to investor: the credit market helps that investor who has a fund in long period as financial assets in many ways. It brings together buyer and seller of security and thus ensures the marketability of investment.

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Tools of capital market:

Capital market instrument has responsibility for generating fund for companies, corporation and some time national government. These are used by the investor to make a profit out of their respective markets. The important tools of capital market given below Stock Bonds Debenture Treasury- bills Foreign Exchange Fixed deposited

Sometime other capital market is known as security market because long term fund are increase through trade and debt equity security. These activities control by both companies and government. This market divided in two parts I. II. Primary market is including issue of new share. Secondary market its include all existing share, security, bonds etc . There are three different market in which stock are used as the capital instrument. Bonds: Its come in separate bond market. This market is also known as debt, credit or fixed income market. Trade: In debt security is done in this market. These include the bills and debenture. These instrument more effective than others but they also provide less return than the other capital market instrument

INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS

Mutual fund is a trust that pools the savings of a number of investors who share a common Financial goal. This pool of money is invested in accordance with a stated objective. The joint Ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. The money thus Collected is then invested in capital market instruments such as shares, debentures and other Securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in
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a diversified, professionally managed basket of securities at a relatively low cost. A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities,
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bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. The funds Net Asset value (NAV) is determined each day. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders.

Other Information

the demand for capital comes mostly from agriculture, industry, trade The Government. The predominant form of industrial organization developed Capital Market becomes a necessary infrastructure for fast industrialization. Capital market not concerned solely with the issue of new claims on capital, But also with dealing in existing claims.

ADVANTAGES OF MUTUAL FUND

a. Portfolio Diversification b. Professional management c. Reduction / Diversification of Risk d. Liquidity e. Flexibility & Convenience f. Reduction in Transaction cost g. Safety of regulated environment h. Choice of schemes i. Transparency

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DISADVANTAGE OF MUTUAL FUND a. No control over Cost in the Hands of an Investor b. No tailor-made Portfolios c. Managing a Portfolio Funds d. Difficulty in selecting a Suitable Fund Scheme

Features of capital Market:

1. Capital market have include various part such as capital and money markets (primary and secondary market )its helps saver where and when he save his money. 2. Capital markets are dominated by the financial intermediaries. They make investment Decision and assume risks on behalf of their depositors. 3. Capital market is characterized by a certain volume of transaction . For transaction to be executed payment and delivery are essential. 4. Capital markets, the world over are getting integrated. This has resulted in improved efficiency and easier accessibility. 5. There is scope for adequate arbitrage among various markets and type of instruments.

Advantage of capital market:

I. Capital market is so helpful to create a relationship between savers and investors. By which savers and investor get maximum remuneration. II. III. IV. Capital market s gives different facility to investors as like loan. Capital market also helps in the development of our economic. Government and businessmen can secure long term investments that allow for ambitious project to take place with goods services provided that wouldnt have been possible without capital market. V. Capital market helps to stability of value of stock and security and also reduces fluctuation in price. It gives capital facility to borrower at lower interest rate. VI. The resulting advantage include that innovation is driven forward in free capitalist economy with investors receiving dividends from successful venture . This money
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about.
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project that used in other project that an investors might be passionate and enthusiastic

Impact of capital market on Indian economy:

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1. Long term finance for corporate and government: The capital market is the market of securities where companies and government increase their fund for long term .capital and long term debt are generated by the selling of stock and Bonds . Its only one way to raise their fund. 2. Helps to bridge investment saving gap: The capital market spreads the investment option in the country. Which attracts s portfolio investment as well as domestic saving , are maculated by the availability of additional investment option ? Its filling to bridge gap between investment and saving and show the ways of economic development. 3. Cost effective mode of raising finance: capital market in any country provides the corporate and government to raise long term finance at low cost as compared to other modes of raising finance. Therefore capital market is important more so your India as it goes on the path of becoming a developed country 4. Provides an avenue for investors to park their surplus fund: capital market provides to domestic as well as foreigner various instrument to invest their surplus fund. Its help to surplus fund but it also helps .those person who save less money. This realization has resulted increase investment in capital market both from domestic as well as foreigner investor in India. 5. Conductive to implementation of monetary policy : since RBI controls the movement and capacity of money in the economy .when RBI follow expenses Policy, it purchase government security from credit market and sells the some change on the interest rates RBI also help in applying monetary policy 6. Indicate the state of economy: capital market is said to be the face of the economy .this is because when capital market is stable investment flow into capital market from within as well as our site of the country, which indicates That the future prospects of the economy are good .

STOCK OR EQUITY MARKET

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A stock market or equity market is a public market (a loose network of economic transactions, not a physical facility or discrete entity) for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

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The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price. The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a Listing of stocks and securities together. The largest stock market in the United States, by market cap is the New York Stock Exchange, NYSE, while in Canada, it is the Toronto Stock Exchange. Major European examples of stock exchanges include the London Stock Exchange, Paris Bourse, and the Deutsche Bores. Asian examples include the Tokyo Stock Exchange, the Hong Kong Stock Exchange, the Shanghai Stock Exchange, and the Bombay Stock Exchange. In Latin America, there are such exchanges as the BM&F Bovespa and the BMV.

Methodology
This report is based on primary as well secondary data, however primary data collection was given more importance since it is overhearing factor in attitude studies. One of the most important users of research methodology is that it helps in identifying the problem, collecting, analyzing the required information data and providing an alternative solution to the problem .It also helps in collecting the vital information that is required by the top Management to assist them for the better decision making both day to day decision and

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Critical ones.

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Limitation:
Some of the persons were not so responsive. Possibility of error in data collection because many of investors may have not given actual answers of my questionnaire Sample size is limited to 200 visitors of reliance mutual funds Branch, Ludhiana out of these only 120 had invested in Mutual Fund. The Sample. Size may not adequately represent the whole market.

Some respondents were reluctant to divulge personal information which can Affect the validity of all responses. The research is confined to a certain part of Ludhiana.

NEWS PAPERS OUTLOOK MONEY TELEVISION CHANNEL (CNBC AAWAJ) MUTUAL FUND HAND BOOK FACT SHEET AND STATEMENT

BIBLIOGRAPHY

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