Portfolio Management Service-Product Development & Market Intelligence.

OF
First Global Stock broking Pvt Ltd
A report submitted to Lovely Professional University
In partial fulfillment of the Requirements for the award of Degree of

Master of Business Administration (MBA)

Submitted By:

DEEPAK SOOD Reg No. 10808278 Department of Management

PREFACE
On the job training in business organization infuses among students a sense of critical analysis to apply of real managerial situation, to which they are exposed. It gives them an opportunity to apply their conceptual, theoretical and imaginative skills to the real life situation and to evaluate the results there after. I was lucky to have got an opportunity to work at First Global Stock broking Pvt Ltd to get the project of my interest. I visited the concern for six weeks and prepared my project on the topic Portfolio Management Service-Product Development & Market Intelligence. I also got practical experience in the field of management. This report is a written account of what I learnt, experienced and explored during my summer training.

ACKNOWLEDGEMENT
At the very outset, I would like to take golden opportunity of thanking those persons without whose guidance, co-operation, inspiration and suggestion it would have been impossible for me to accomplish the project successfully. First of all I would like to thank Mr.Sorabh Gupta for his kind guidance and necessary support during the study. I also take this opportunity to extend my heartfelt gratitude to others who directly or indirectly helped me, by providing me necessary information required for successful completion of the project.

DEEPAK SOOD

TABLE OF CONTENTS
CHAPTER-1 INTRODUCTION OF SUBJECT

THEORATICAL FOUNDATION.... PORTFOLIO MANAGEMENT SERVICE REVIEW OF LITERATURE..........

CHAPTER-2 INTRODUCTION TO THE ORGANIZATION . INTRODUCTION OF FIRST GLOBAL STOCK BROKING HISTORY. FEATURES.. PMS PRODUCTS. ACHIEVEMENTS ..

CHAPTER-3 ABOUT STOCK EXCHANGE HISTORY OF STOCK EXCHANGE. BSE.. NSE. TOP 5 PMS COMPANIES IN INDIA AND THEIR PRODUCT. CHAPTER-4 RESEARCH METHODOLOGY & ANALYSIS RESEARCH STUDY RESEARCH DESIGN...... DATA COLLECTION. LIMITATION OF THE STUDY.... CHAPTER-5 FINDING AND ANALYSIS. CHAPTER-6 SUGGESTIONS CONCLUSION.

APPENDIX QUESTIONAIRE ABBREVATIONS.. GLOSSARY BIBLOGRAPHY.....

Executive Summary
There is growing competition between brokerage firms in post reforms India. For investors it is always difficult to decide which brokerage firm to choose. Research was carried out to find which brokerage house people prefer and to figure out what people prefer whil investing in stock market. This study suggest that people are reluctant while investing in stock and commodity market due to lack of knowledge. Main purpose of investment is returns and liquidity, commodity market is less preferred by investors due to lack of awareness. The major findings of the study are interested to invest in stock market but there is lack of awareness. Through this report we were also able to understand what our companies (FGSB) pvt ltd positive and strong points, on the basis of which we come to know that on what basis of which pitching of clients can be done. We also give suggestions to our company what improvements can be done.

Objectives of The study:

PRIMARY OBJECTIVE : Comparsion of PMS PRODUCTS of First Global stock broking Pvt Ltd with other companies and product development. The secondary objectives of the study are as follows: 1. To know about the awareness of stock brokers and share market. 2. To study about the competitive postion of various companies in competitive market. 3. TO know about the investors perception about the working, role and services provided by these pms companies . 4. To know about the problems faced by investors. 5. To know the awareness of people about PMS. 6. To study about the need of improvement in existing pms products offered by companies.

FINDINGS & RECOMMENDATION

According to the survey most of the customers of First Global stock broking Ltd says that it is pocket friendly.

Coming to the faith 70% says Sharekhan Ltd is better than other stock broking companies due to customer satisfaction.

Main purpose of investment are return and liquidity. Investor take risk as well as return into their mind while making the investment. Businessmen are more interested in investment in PMS Products. Commodity market is less preferred by investors. Share market is also less preferred by high risk taking customers. People want to invest in PMS but they havent the proper knowledge. People are not aware of hedging . People pay more emphasis on brokerage than service provided by broking house.

CHAPTER-1
INTRODUCTION TO THE SUBJECT

THEORATICAL FOUNDATION
INTRODUCTION PORTFOLIO:In finance, a portfolio is an appropriate mix of or collection of investments held by an institution or a private individual.The process of blending together the Board asset

classes so as to obtain optimum return with minium risk is called portfolio construction.In building up an investment portfolio a financial institution will typically conduct its own investment analysis, whilst a private individual may make use of the services of a financial advisor or a financial institution which offers portfolio management services. Holding a portfolio is part of an investment and risk-limiting strategy called diversification. By owning several assets, certain types of risk (in particular specific risk) can be reduced. The assets in the portfolio could include stocks, bonds, options, warrants, gold certificates, real estate, futures contracts, production facilities, or any other item that is expected to retain its value.

Portfolio Management Portfolio management involves deciding what assets to include in the portfolio, given the goals of the portfolio owner and changing economic conditions. Selection involves deciding what assets to purchase, how many to purchase, when to purchase them, and what assets to divest. These decisions always involve some sort of performance measurement, most typically expected return on the portfolio, and the risk associated with this return (i.e. the standard deviation of the return). Typically the expected return from portfolios of different asset bundles are compared. The unique goals and circumstances of the investor must also be considered. Some investors are more risk averse than others. Mutual fund have developed particular techniques to optimize their portfolio holdings The basic purpose of portfolio management is to minimise the risk and maximise the profit.

PORTFOLIO CHARACTERISTICS Portfolio Expected Return Portfolio Risk Covariance Correlation Interpreting Correlation Coefficients 10

Exponentially Weighted Co variances Weighted Statistics Worksheet Portfolio Co variances Asset Covariances with a Portfolio Marginal Risks Theories & Models Some of the financial models used in the process of Valuation, stock selection, and management of portfolios include: Traditional Theory. Modern portfolio theorya model proposed by Harry Markowitz among others. Capital asset pricing model. Arbitrage pricing theory. The Jensen Index. The Sharpe Diagonal (or Index) model. Value at risk model. Traditional Theory:Acc. To this theory investor need in terms of income and capital appreciation are evaluated and appropriate securities are selected to meet to the needs of investor .Basically this theory simply define that how to evaluate the entire financial plan of the individual This theory deals with two major decision. Determining the objective of the portfolio Selection of securities to be included in portfolio This is carried on Following steps :Analysis the investor constraints Formulating the objective Selection of portfolio Analysis of Risk and return Diversification

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Modern Portfolio Theory Modern portfolio theory is the philosophical opposite of traditional stock picking. It is the creation of economists, who try to understand the market as a whole, rather than business analysts, who look for what makes each investment opportunity unique. Investments are described statistically, in terms of their expected long-term return rate and their expected shortterm volatility. The volatility is equated with risk, measuring how much worse than average an investments bad years are likely to be. The goal is to identify your acceptable level of risk tolerance, and then to find a portfolio with the maximum expected return for that level of risk. Markowitz give more attention to the process of selecting the portfolio.His ideas can be applied in selection of common stocks

Risk and return The model assumes that investors are risk averse. This means that given two assets that offer the same expected return, investors will prefer the less risky one. Thus, an investor will take on increased risk only if compensated by higher expected returns. Conversely, an investor who wants higher returns must accept more risk. The exact trade-off will differ by investor based on individual risk aversion characteristics. The implication is that a rational investor will not invest in a portfolio if a second portfolio exists with a more favourable risk-return profile - i.e. if for that level of risk an alternative portfolio exists which has better expected returns. Mean and variance

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It is further assumed that investors risk / reward preference can be described via a quadratic utility function. The effect of this assumption is that only the expected return and the volatility (i.e. mean return and standard deviation matter to the investor. The investor is indifferent to other characteristics of the distribution of returns, such as its skew. Note that the theory uses a historical parameter, volatility, as a proxy for risk, while return is an expectation on the future .Recent innovations in portfolio theory, particularly under the rubric of Post-Modern Portfolio Theory (PMPT), have exposed many flaws in this total reliance on standard deviation as the investors risk proxy.

Portfolio Diversification An investor can reduce portfolio risk simply by holding instruments which are not perfectly correlated. In other words, investors can reduce their exposure to individual asset risk by holding a diversified portfolio of assets. Diversification will allow for the same portfolio return with reduced risk.If all the assets of a portfolio have a correlation of 1, i.e. perfect correlation, the portfolio volatility (standard deviation) will be equal to the weighted perfectly uncorrelated, the portfolio variance is the sum of the individual asset weights squared times the individual asset variance (and volatility is the square root of this sum).If correlation is less than zero, i.e. the assets are inversely correlated, the portfolio variance and hence volatility will be less than if the correlation is 0.The lowest possible portfolio variance, and hence volatility, occurs when all the assets have a correlation of -1, i.e. perfect inverse correlation. Capital allocation line The capital allocation line (CAL) is the line of expected return plotted against risk (standard deviation) that connects all portfolios that can be formed using a risky asset and a riskless asset. It can be proven that it is a straight line and that it has the following equation.

In this formula P is the risky portfolio, F is the riskless portfolio, and C is a combination of portfolios P and F. 13

The efficient frontier

Efficient Frontier Every possible asset combination can be plotted in risk-return space, and the collection of all such possible portfolios defines a region in this space. The line along the upper edge of this region is known as the efficient frontier (sometimes the Markowitz frontier). Combinations along this line represent portfolios (explicitly excluding the risk-free alternative) for which there is lowest risk for a given level of return. Conversely, for a given amount of risk, the portfolio lying on the efficient frontier represents the combination offering the best possible return. Mathematically the Efficient Frontier is the intersection of the Set of Portfolios with Minimum Variance and the Set of Portfolios with Maximum Return. The efficient frontier will be convex this is because the risk-return characteristics of a portfolio change in a non-linear fashion as its component weightings are changed. (As described above, portfolio risk is a function of the correlation of the component assets, and thus changes in a non-linear fashion as the weighting of component assets changes.) The efficient frontier is a parabola (hyperbola) when expected return is plotted against variance (standard deviation).The region above the frontier is unachievable by holding risky assets alone. No portfolios can be constructed corresponding to the points in this region. Points below the frontier are suboptimal. A rational investor will hold a portfolio only on the frontier.

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The risk-free asset The risk-free asset is the (hypothetical) asset which pays a risk-free rate - it is usually proxied by an investment in short-dated Government securities.The return from risk free asset is certain and risk of return is nil. The relationship between the rate of return of risk free asset and risky asset is zero.These asset has fixed income securities.In private institution there is chances of default in fixed income securities. The risk free asset may be government securities, treasury bills and time deposit in banks. Portfolio leverage In leveraged portfolio, The investor is assumed to be investing only on the risky assets. Riskless assets are not included in the portfolio. In leveraged portfolio investor has to consider not only risky asset but also risk free assets. He should be able to borrow and lend money at a given rate of interest. The market portfolio The efficient frontier is a collection of portfolios, each one optimal for a given amount of risk. A quantity known as the Sharpe ratio represents a measure of the amount of additional return (above the risk-free rate) a portfolio provides compared to the risk it carries. The portfolio on the efficient frontier with the highest Sharpe Ratio is known as the market portfolio, or sometimes the super-efficient portfolio; it is the tangency-portfolio in the diagram.This portfolio has the property that any combination of it and the risk-free asset will produce a return that is above the efficient frontier - offering a larger return for a given amount of risk than a portfolio of risky assets on the frontier would. Capital market line When the market portfolio is combined with the risk-free asset, the result is the Capital Market Line. All points along the CML have superior risk-return profiles to any portfolio on the efficient frontier. (The market portfolio with zero cash weighting is on the efficient frontier; additions of cash or leverage with the risk-free asset in combination with the market portfolio are on the

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Capital Market Line. All of these portfolio represent the highest Sharpe ratios possible.) The CML is illustrated above, with return p on the y-axis, and risk p on the x-axis. One can prove that the CML is the optimal CAL and that its equation is

Asset pricing: A rational investor would not invest in an asset which does not improve the risk-return characteristics of his existing portfolio. Since a rational investor would hold the market portfolio, the asset in question will be added to the market portfolio. MPT derives the required return for a correctly priced asset in this context. Systematic risk and specific risk Specific risk is the risk associated with individual assets - within a portfolio these risks can be reduced through diversification (specific risks cancel out). Systematic risk, or market risk, refers to the risk common to all securities - except for selling short as noted below, systematic risk cannot be diversified away (within one market). Within the market portfolio, asset specific risk will be diversified away to the extent possible. Systematic risk is therefore equated with the risk (standard deviation) of the market portfolio .Since a security will be purchased only if it improves the risk / return characteristics of the market portfolio, the risk of a security will be the risk it adds to the market portfolio . In this context, the volatility of the asset, and its correlation with the market portfolio, is historically observed and is therefore a given (there are several approaches to asset pricing that attempt to price assets by modelling the stochastic properties of the moments of assets returns - these are broadly referred to as conditional asset pricing models). The (maximum) price paid for any particular asset (and hence the return it will generate) should also be determined based on its relationship with the market portfolio. Systematic risks within one market can be managed through a strategy of using both long and short positions within one portfolio, creating a market neutral portfolio.

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Security characteristic line The security characteristic line (SCL) represents the relationship between the market return (rM) and the return ri of a given asset i at a given time t. In general, it is reasonable to assume that the SCL is a straight line and can be illustrated as a statistical equation:

where i is called the assets alpha coefficient and i the assets beta coefficient. Capital asset pricing model The Capital Asset Pricing Model (CAPM) is a model that provide framework to determine the required rate of return on an asset and indicates the relationship between return and risk on an asset. In CAPM theory, the required rate return of an asset is having a liner relationship with asset beta value that undiversifiable or systematic risk. Capital Asset Pricing Model: r = Rf + beta x ( Km - Rf )

where r is the expected return rate on a security; Rf is the rate of a risk-free investment, i.e. cash; Km is the return rate of the appropriate asset class. Beta measures the volatility of the security, relative to the asset class. The equation is saying that investors require higher levels of expected returns to compensate them for higher expected risk. You can think of the formula as predicting a securitys behavior as a function of beta: CAPM says that if you know a securitys beta then you know the value of r that investors expect it to have. 17

The market portfolio:An investor might choose to invest a proportion of his or her wealth in a portfolio of risky assets with the remainder in cash - earning interest at the risk free rate (or indeed may borrow money to fund his or her purchase of risky assets in which case there is a negative cash weighting). Here, the ratio of risky assets to risk free asset does not determine overall return - this relationship is clearly linear. It is thus possible to achieve a particular return in one of two ways:By investing all of ones wealth in a risky portfolio, or by investing a proportion in a risky portfolio and the remainder in cash (either borrowed or invested). For a given level of return, however, only one of these portfolios will be optimal (in the sense of lowest risk). Since the risk free asset is, by definition, uncorrelated with any other asset, option 2 will generally have the lower variance and hence be the more efficient of the two. This relationship also holds for portfolios along the efficient frontier: a higher return portfolio plus cash is more efficient than a lower return portfolio alone for that lower level of return. For a given risk free rate, there is only one optimal portfolio which can be combined with cash to achieve the lowest level of risk for any possible return. This is the market portfolio. Assumptions of CAPM:All investors have rational expectations. There are no arbitrage opportunities.

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Returns are distributed normally. Fixed quantity of assets. Perfectly efficient capital markets. Investors are solely concerned with level and uncertainty of future wealth Separation of financial and production sectors. Thus, production plans are fixed. Risk-free rates exist with limitless borrowing capacity and universal access. The Risk-free borrowing and lending rates are equal. No inflation and no change in the level of interest rate exists. Perfect information, hence all investors have the same expectations about security returns for any given time period.

The Security Market Line Securities market line The SML essentially graphs the results from the capital asset pricing model (CAPM) formula. The x-axis represents the risk (beta), and the y-axis represents the expected return. The market risk premium is determined from the slope of the SML. The relationship between and required return is plotted on the securities market line (SML) which shows expected return as a function of . The intercept is the risk-free rate available for the market, while the slope is E(Rm Rf). The securities market line can be regarded as representing a single-factor model of the asset price, where Beta is exposure to changes in value of the Market. The equation of the SML is thus:

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It is a useful tool in determining if an asset being considered for a portfolio offers a reasonable expected return for risk. Individual securities are plotted on the SML graph. If the securitys risk versus expected return is plotted above the SML, it is undervalued since the investor can expect a greater return for the inherent risk. And a security plotted below the SML is overvalued since the investor would be accepting less return for the amount of risk assumed. Comparison with arbitrage pricing theory The SML and CAPM are often contrasted with the arbitrage pricing theory (APT), which holds that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors, where sensitivity to changes in each factor is represented by a factor specific beta coefficient. The APT is less restrictive in its assumptions: it allows for an explanatory (as opposed to statistical) model of asset returns, and assumes that each investor will hold a unique portfolio with its own particular array of betas, as opposed to the identical market portfolio. Unlike the CAPM, the APT, however, does not itself reveal the identity of its priced factors - the number and nature of these factors is likely to change over time and between economies. Super-diversification The highest degree of diversification occurs when institutional asset class funds are used to construct a financial portfolio. The term was first introduced in Wealth Without Worry by Jim Whiddon and Lance Alston (Brown Books, 2005) who apply the fundamental academic research of Eugene Fama and Professor Kenneth French. See also: diversification, efficient market hypothesis and market portfolio theory. A super-diversified, asset class portfolio holds somewhere between 10,000 and 12,000 securities through a smaller number of institutional asset class funds. Arbitrage pricing theory: It is the of the tools used by the investors and portfolio managers.Arbitrage pricing theory (APT), in finance, is a general theory of asset pricing, that has become influential in the

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pricing of shares.This explain the nature of equilibrium the asset pricing in a less complicated manner. ASSUMPTION 1) The investors have homogeneous expectations. 2) The investors are risk averse and utility maximisers. 3) Perfect competition prevails in the market and there is no transaction cost. ARBITRAGE PORTFOLIO Acc. To the APT theory an investor tries to find out the possibility to increase returns from his portfolio without increasing the funds in the portfolio. The theory was initiated by the economist Stephen Ross in 1976 APT holds that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors or theoretical market indices, where sensitivity to changes in each factor is represented by a factor-specific beta coefficient. The model-derived rate of return will then be used to price the asset correctly - the asset price should equal the expected end of period price discounted at the rate implied by model. If the price diverges, arbitrage should bring it back into line. Under the APT, an asset is mispriced if its current price diverges from the price predicted by the model. The asset price today should equal the sum of all future cash flows discounted at the APT rate, where the expected return of the asset is a linear function of various factors, and sensitivity to changes in each factor is represented by a factor-specific beta coefficient.When the investor is long the asset and short the portfolio (or vice versa) he has created a position which has a positive expected return (the difference between asset return and portfolio return) and which has a net-zero exposure to any macroeconomic factor and is therefore risk free (other than for firm specific risk). The arbitrageur is thus in a position to make a risk free profit: Where todays price is too low The implication is that at the end of the period the portfolio would have appreciated at the rate implied by the APT, whereas the mispriced asset would have appreciated at more than this rate. The arbitrageur could therefore: Today: 1 short sell the portfolio 2 buy the mispriced-asset with the proceeds. 21

At the end of the period: 1 sell the mispriced asset 2 use the proceeds to buy back the portfolio 3 pocket the difference. Where todays price is too high The implication is that at the end of the period the portfolio would have appreciated at the rate implied by the APT, whereas the mispriced asset would have appreciated at less than this rate. The arbitrageur could therefore: Today: 1 short sell the mispriced-asset 2 buy the portfolio with the proceeds. At the end of the period: 1 sell the portfolio 2 use the proceeds to buy back the mispriced-asset 3 pocket the difference. Identifying the factors As with the CAPM, the factor-specific Betas are found via a linear regression of historical security returns on the factor in question. Unlike the CAPM, the APT, however, does not itself reveal the identity of its priced factors - the number and nature of these factors is likely to change over time and between economies. As a result, this issue is essentially empirical in nature. Several a priori guidelines as to the characteristics required of potential factors are, however, suggested: 1) Their impact on asset prices manifests in their unexpected movements 2) They should represent un diversifiable influences (these are, clearly, more likely to be macroeconomic rather than firm-specific in nature) timely and accurate information on these variables is required

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1.

the relationship should be theoretically justifiable on economic grounds

Chen, Roll and Ross identified the following macro-economic factors as significant in explaining security returns: surprises in inflation; surprises in GNP as indicted by an industrial production index; surprises in investor confidence due to changes in default premium in corporate bonds; surprise shifts in the yield curve. As a practical matter, indices or spot or futures market prices may be used in place of macro-economic factors, which are reported at low frequency (e.g. monthly) and often with significant estimation errors. Market indices are sometimes derived by means of factor analysis. More direct indices that might be used are: short term interest rates; the difference in long-term and short term interest rates; a diversified stock index such as the S&P 500 or NYSE Composite Index; oil prices gold or other precious metal prices Currency exchange rates Jensens alpha In finance, Jensens alpha (or Jensens Performance Index, ex-post alpha) is used to determine the excess return of a stock, other security, or portfolio over the securitys required rate of return as determined by the Capital Asset Pricing Model. This model is used to adjust for the level of beta risk, so that risky securities are expected to have higher returns. The measure was first used in the evaluation of mutual fund managers by Michael Jensen in the 1970s. To calculate alpha, the following inputs are needed: the realized return (on the portfolio), the market return, the risk-free rate of return, and the beta of the portfolio. Jensens alpha = Portfolio Return - (Risk Free Rate + Portfolio Beta * (Market Return Risk Free Rate) Sharpe index

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Sharpe ratio or Sharpe index or Sharpe measure or reward-to-variability ratio is a measure of the excess return (or Risk Premium) per unit of risk in an investment asset or a trading strategy This index gives a single value to be used for the performance ranking of various funds or portfolios.it measures the risk premium of the portfolioelative to the total amount of risk in portfolio. The risk premium is the difference between portfolio average rate of return and the riskless rate of return.the standard deviation of the portfolio indicates the risk.. Sharpe Index=Portfolio average return-Risk free rate of interest/Standard deviation of the portfolio return The Sharpe ratio is used to characterize how well the return of an asset compensates the investor for the risk taken. When comparing two assets each with the expected return E[R] against the same benchmark with return Rf, the asset with the higher Sharpe ratio gives more return for the same risk. Investors are often advised to pick investments with high Sharpe ratios. Sharpe ratios, along with Treynor ratios and Jensens alphas, are often used to rank the performance of portfolio or mutual fund managers. This ratio was developed by William Forsyth Sharpe in 1966. Sharpe originally called it the reward-to-variability ratio in before it began being called the Sharpe Ratio by later academics and financial professionals. Recently, the (original) Sharpe ratio has often been challenged with regard to its appropriateness as a fund performance measure during evaluation periods of declining markets (Scholz 2007). Value at risk In economics and finance, Value at Risk (VaR) is the maximum loss not exceeded with a given probability defined as the confidence level, over a given period of time. Although VaR is a very general concept that has broad applications, it is most commonly used by security firms or investment banks to measure the market risk of their asset portfolios (market value at risk). VaR is widely applied in finance for quantitative risk management for many types of risk. VaR does not give any information about the severity of loss by which it is exceeded. Other measures of risk include volatility/standard deviation, semi variance (or downside risk) and expected shortfall. VaR has three parameters: The time horizon (period) to be analyzed may relate to the time period over which a financial institution is committed to holding its portfolio, or to the time required to liquidate assets. Typical periods using VaR are 1 day, 10 days, or 1 year. A 10 day period is used to compute capital requirements under the European Capital Adequacy

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Directive (CAD) and the Basel II Accords for market risk, whereas a 1 year period is used for credit risk. The confidence level is the interval estimate in which the VaR would not be expected to exceed the maximum loss. Commonly used confidence levels are 99% and 95%. Confidence levels are not indications of probabilities. Value at risk(VaR) is given in a unit of the currency. Asset allocation Time Horizon Your time horizon is the expected number of months, years, or decades you will be investing to achieve a particular financial goal. An investor with a longer time horizon may feel more comfortable taking on a riskier, or more volatile, investment because he or she can wait out slow economic cycles and the inevitable ups and downs of our markets. By contrast, an investor saving up for a teenagers college education would likely take on less risk because he or she has a shorter time horizon Risk Tolerance Risk tolerance is your ability and willingness to lose some or all of your original investment in exchange for greater potential returns. An aggressive investor, or one with a high-risk tolerance, is more likely to risk losing money in order to get better results. A conservative investor, or one with a low-risk tolerance, tends to favor investments that will preserve his or her original investment. In the words of the famous saying, conservative investors keep a bird in the hand, while aggressive investors seek two in the bush.

Risk versus Reward When it comes to investing, risk and reward are inextricably entwined. Youve probably heard the phrase no pain, no gain - those words come close to summing up the relationship between risk and reward. Dont let anyone tell you otherwise: All investments involve some degree of risk. If you intend to purchases securities - such as stocks, bonds, or mutual funds its important that you understand before you invest that you could lose some or all of your

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money.The reward for taking on risk is the potential for a greater investment return. If you have a financial goal with a long time horizon, you are likely to make more money by carefully investing in asset categories with greater risk, like stocks or bonds, rather than restricting your investments to assets with less risk, like cash equivalents. On the other hand, investing solely in cash investments may be appropriate for short-term financial goals. Investment Choices While the SEC cannot recommend any particular investment product, you should know that a vast array of investment products exists - including stocks and stock mutual funds, corporate and municipal bonds, bond mutual funds, lifecycle funds, exchange-traded funds, money market funds, and U.S. Treasury securities. For many financial goals, investing in a mix of stocks, bonds, and cash can be a good strategy. Lets take a closer look at the characteristics of the three major asset categories. Stocks Stocks have historically had the greatest risk and highest returns among the three major asset categories. As an asset category, stocks are a portfolios heavy hitter, offering the greatest potential for growth. Stocks hit home runs, but also strike out. The volatility of stocks makes them a very risky investment in the short term. Large company stocks as a group, for example, have lost money on average have been rewarded with strong positive returns.about one out of every three years. And sometimes the losses have been quite dramatic. But investors that have been willing to ride out the volatile returns of stocks over long periods of time generally Bonds - Bonds are generally less volatile than stocks but offer more modest returns. As a result, an investor approaching a financial goal might increase his or her bond holdings relative to his or her stock holdings because the reduced risk of holding more bonds would be attractive to the investor despite their lower potential for growth. You should keep in mind that certain categories of bonds offer high returns similar to stocks. But these bonds, known as high-yield or junk bonds, also carry higher risk Cash - Cash and cash equivalents - such as savings deposits, certificates of deposit, treasury bills, money market deposit accounts, and money market funds - are the safest investments, but 26

offer the lowest return of the three major asset categories. The chances of losing money on an investment in this asset category are generally extremely low. The federal government guarantees many investments in cash equivalents. Investment losses in non-guaranteed cash equivalents do occur, but infrequently. The principal concern for investors investing in cash equivalents is inflation risk. This is the risk that inflation will outpace and erode investment returns over time Stocks, bonds, and cash are the most common asset categories. These are the asset categories you would likely choose from when investing in a retirement savings program or a college savings plan. But other asset categories - including real estate, precious metals and other commodities, and private equity - also exist, and some investors may include these asset categories within a portfolio. Investments in these asset categories typically have categoryspecific risks. Before you make any investment, you should understand the risks of the investment and make sure the risks are appropriate for you.

Performance level Conception and performance in India The industry has steadily grown over the decade. For example, before the public sector mutual funds entry, UTI was managing around Rs 6,700 crore on its own. Public sector mutual funds also helped accelerate the growth of assets under management. UTI and its public sector counterparts were managing around Rs 47,000 crore when Kothari Pioneer, the first private sector mutual fund, set up shop in 1993. Before the US 64 fiasco, there were 33 mutual funds with total assets of Rs 1,21,805 crore as on January 2003. The UTI was way ahead of other mutual funds with Rs 44,541 crore assets under management. The industry overall has performed well over the years. Of course, there were a few funds houses, which disappointed investors. However, overall performance has been good. However, lack of awareness still impedes the growth of the mutual fund industry. Unlike developed countries, most of the household savings still go to bank deposits in India 27

Portfolio Risk and Return :- Most investors do not hold stocks in isolation. Instead, they choose to hold a portfolio of several stocks. When this is the case, a portion of an individual stocks risk can be eliminated, i.e., diversified away. This principle is presented on the Diversification page. First, the computation of the expected return, variance, and standard deviation of a portfolio must be illustrated. Once again, we will be using the probability distribution for the returns on stocks A and B.

State

Probability

Return Stock A 5% 10% 15% 20%

on Return Stock B 50% 30% 10% -10%

on

1 2 3 4

20% 30% 30% 20%

From the Expected Return and Measures of Risk pages we know that the expected return on Stock A is 12.5%, the expected return on Stock B is 20%, the variance on Stock A is .00263,

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the variance on Stock B is .04200, the standard deviation on Stock S is 5.12%, and the standard deviation on Stock B is 20.49%. Portfolio Expected Return The Expected Return on a Portfolio is computed as the weighted average of the expected returns on the stocks which comprise the portfolio. The weights reflect the proportion of the portfolio invested in the stocks. This can be expressed as follows:

where E[Rp] = the expected return on the portfolio, N = the number of stocks in the portfolio, wi = the proportion of the portfolio invested in stock i, and E[Ri] = the expected return on stock i. Diversification (finance):-Diversification in finance is a risk management technique, related to hedging, that mixes a wide variety of investments within a portfolio. Because the fluctuations of a single security have less impact on a diverse portfolio, diversification minimizes the risk from any one investment. There are three primary strategies used in improving diversification: 1. Spread the portfolio among multiple investment vehicles, such as stocks, mutual funds, bonds, and cash. 2. Vary the risk in the securities. A portfolio can also be diversified into different mutual fund investment strategies, including growth funds, balanced funds, index funds, small cap, and large cap funds. When a portfolio includes investments with varied risk levels, large losses in one area are offset by other areas. 3. Vary your securities by industry, or even by geography. This will minimize the impact of industry- or location-specific risks. The example portfolio above was diversified by investing in 29

both umbrellas and sunscreen. Another practical application of this kind of diversification is mixing investments between domestic and international funds. By choosing funds in many countries, events within any one countrys economy have less effect on the overall portfolio. Although diversification reduces the risk of a portfolio, it does not necessarily reduce the returns. As a result, diversification is referred to as the only free lunch in finance. Types of diversification

In the above graph, the portfolio represented by point A is inefficient. Following the horizontal line, there are other portfolios with the same returns but lower risk. Along the vertical line, there are other portfolios that have the same risk but higher returns. Horizontal diversification Horizontal diversification is when a portfolio is diversified between same-type investments. It can be a broad diversification (like investing in several NASDAQ companies) or more narrowed (investing in several stocks of the same branch or sector). In the example above, the move to invest in both umbrellas and sunscreen is an example of horizontal diversification. As usual, the broader the diversification the lower the risk from any one investment. Vertical diversification Vertical diversification is investment between different types of securities. Again, it can be a very broad diversification, like diversifying between bonds and stocks, or a more 30

narrowed diversification, like diversifying between stocks of different branches. While horizontal diversification lessens the risk of investing entirely in one security, vertical diversification goes beyond that and protects against market and/or economical changes

Review of literature
Rajesh chakrabarti (2000) Equity analysts serve an important function by bringing information
about companies to the stock market. Equity analysis and reporting by brokerage firms has increased considerably in recent years in India. We examine over 2000 analyst recommendations to study the predictive value and market impact of stock analyst forecasts in India. We find that analysts tend to be optimistic in their predictions, recommending buys considerably more often than sells. Their recommendations do have investment value at least in the near term. Clear buy recommendations appear to be the most valuable. The recommendations also seem to have some impact on stock price.

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Levine and Zervos (1998) who are among the first to ask whether stock markets are

merely burgeoning casinos or a key to economic growth and to examine this issueempirically, finding a positive and significant correlation between stock market development and long run growth. However, Levine and Zervoss use of a crosssectional approach limits the potential robustness of their findings with respects to country specific effects and time related effects. The legal liberalization of the stock market increased the importance of the stock market. It does not only link the importance of the stock market to economic growth over time, but also interpret it in relationship to the universal banking system. In a frictionless Arrow-Debreu world there is no room for financial intermediation. Explaining the role played by stock markets or banks requires building in frictions such as informational or transaction costs into the theory. Different frictions motivate different types of financial contracts, markets and institutions Yet Kyle (1984) argues that, an investor can profit by researching a firm, before the information becomes widely available and prices change. Thus investors will be more likely to research and monitor firms. To the extent that larger, more liquid stock markets increase incentives to research firms, the improved information will improve resource allocation and accelerate economic growth.

Bencivenga et al (1996) and Levine (1991) argue that stock market liquidity (the ability to trade equity easily) is crucial for growth. Although many profitable investments require a long run commitment of capital, savers do not like to relinquish control of their savings for long periods. Liquid equity markets ease this tension by providing an asset to savers that they can quickly and inexpensively sell. Simultaneously, firms have permanent access to capital raised through equity issues. From the point of view of Greenwood and Jovanovic (1990); King and Levine (1993), a new stock exchange can increase economic growth by aggregating information about firms prospects, thereby directing capital to investment with returns. These effects of a stock market opening result in a measured increase in productivity. Stock exchanges exist 32

for the purpose of trading ownership rights in firms, and a new stock exchange may increase productivity growth for this reason as well Hosein Gharavi Stockbroking firms have openly adopted information and communication technology to improve their competitiveness and responsiveness in market conditions. Changes in business practices have resulted from the widespread adoption and diffusion of information and communication technology. Changes experienced by a firm can be viewed as a process of individual adaptations running parallel to the evolution of the business environment. To examine the diffusion of information and communication technology an ecological approach is used. This paper therefore develops a conceptual framework to explore the ICT diffusion in the stockbroking industry in the context of environmental evolution and selection. It is argued that the acceptance of an innovation is affected as much by the complexity of the interactions between the stockbroking firms and technology. The proposed framework can be used to provide an ameliorated understanding about the way in which ICT-enabled innovation is diffused within a technology-oriented industry.

CHAPTER-2

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INTRODUCTION TO THE ORGANIZATION

ORGANIZATION PROFILE
First Global Stockbroking Private Limited

HISTORY
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FIRST GLOBAL is a multinational firm of Indian origin, with operations spread all over India and in major financial centres like London & New York. First Global is a composite member of Bombay Stock Exchange Ltd. (BSE), National Stock Exchange of India Ltd. (NSE), London Stock Exchange and NASDAQ. First Global is an international, full-service securities house, servicing primarily an institutional client base, across the US, UK, Continental Europe and India. It is also servicing retails clients in India through a pan India network of branches. First Global Stock broking Pvt. Ltd. is registered with Securities and Exchange Board of India and is a member of BSE and NSE. It is also registered with SEBI as Portfolio Manager. FG Markets, Inc., the First Global group company in the United States, is a registered broker-dealer, member: NASD/SIPC, with its principal office in New York. First Global (UK) Ltd., the First Global Group company in the United Kingdom, is regulated by the Financial Services Authority (FSA), and is a member of the London Stock Exchange. Through FG (UK) Ltd., we trade across UK & Europe, in diverse markets like Finland, Spain, Germany, France, etc. First Global employs some of the finest analytical minds in the business, with its people having consummate skills in financial analysis, mathematics, statistics and accounting. Within the institutional set, First Global deals primarily with Hedge Funds, and devises aggressive trading strategies for them, including long/short combinations. First Global covers stocks on a fundamental and technical basis across major markets, like India, the US and Europe. In addition to this, it tracks select commodities, and major world economies. Nearly all major sectors like Consumers, Cyclicals, Semiconductors, Software, Networking, Biotech Automobiles and Pharmaceuticals fall within the ambit of our coverage, through our analysts, numbering over 20 presently, and growing.

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First Global prides itself only on one aspect - its ability to continually make money through its research, both Technical and Fundamental, for its clients. What sets us apart is our consistent delivery of value to our clients' portfolios - we view our success as a complete securities house, through the narrow prism of our clients' portfolios. If their portfolios do well as a result of our advice, we sleep well. Otherwise, we don't.

This is the reason why investors and money managers across the world value First Global highly - we are neutral, we are completely independent, we have no conflicts like Corporate Finance, proprietary trading etc., our research is arguably the best in the business (our track-record shows it) and all put together, we help our clients make money.

Indias Only Internationally Ranked Securities Firm

First Global is the only Indian brokerage house rated by Asia Money in Asias top 10 list of best International research houses, as far back as 2000 and rated No.3 in Asia in the best buy / sell recommendation category.

Indias Best Research House

Our team of analysts research more than 150 Indian companies, apart from researching most global companies like Intel, Microsoft, Vodafone etc. which also includes field research for in-depth corporate and stock. No wonder, when it comes to making accurate investment decisions, our customers never go wrong.

The Foreign Institutional Investors (FIIs) Choice

The worlds largest FIIs trust us with their investments, thus making us one of the largest institutional brokerage houses in India.

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When we talk, People Listen

Our views on stocks and markets trigger major money flows at times giving us that leading edge to influence market trends.

Indias Truly Global Securities Company

We also have our presence in UK & US through a network of fully functional offices in these regions already keeping us ahead in the globalization race.

Rock Solid Balance Sheet

With an extremely high capital adequacy, First Global is one of the best capitalized securities firm in India. In fact, we have a higher capital base than a number of foreign securities firms operating in India.

THE IS THE KING POWER OF CONVENIENCE CUSTOMER

It takes accurate research, constant investment advice and timely action to make or save money in the stock markets. Our internationally ranked research and advice comes as smooth as silk so you can make the right investment moves at the right time.

Convenience Trading Options

We offer you multiple options for executing order on Equity and F& O segments as well as Commodities. Customers can trade through a telephone call or personal visit to the nearest First Global branch or can do online trading sitting at their homes or offices through e-trading website or can call up on our toll free number from anywhere in India.

Account Executive

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At First Global, Account Executive suggests when to buy / sell, what to buy / sell and also keeps track of customer portfolio which helps in making right investment decisions. The Accounts Executives offer one window service & also keep customers updated on the latest news & view.

Demat Services
To offer our customers one stop service, we are also making an application for becoming a Depository participant.

Products offered

Equity Trading Derivative Trading Portfolio Management Services Commodity Trading Fundamental Research Reports Trading Research Reports Mutual Fund distribution Investment in IPOs Wealth Management Portfolio Advice

DETAIL OF TOP EXECUTIVES

Mr. Shankar Sharma Chief Executive officer

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Mrs. Devina Mehra Mr. Santosh Kadam Mr. Sandesh Kadem Mr. Gautam Singh

Head of Research Analyst Analyst Analyst

Functions
Few functions of first global stock broking pvt ltd.

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Securities Trading Derivatives Trading Depository Services

Securities Trading
Too long, you have tried to navigate the stock market on your own. Too many times, you have felt overwhelmed by the difficulty of making money consistently. Too many times, your broker has let you down, giving inaccurate, poorly researched and downright disastrous advice. Well, not anymore. First Global is here. Say goodbye to helplessness, nervousness and insecurity. Say a big hello to confidence, security and peace of mind. Now you have on your side, Indias pre-eminent brokerage house.

FIRST GLOBAL is an International securities house with memberships of the London Stock Exchange, NASDAQ, The National Stock Exchange of India Ltd. and the Bombay Stock Exchange Ltd. First Global offers expert investment advice based on its rich experience in the Fundamental and Technical research and its exposure to the markets world over. It has schemes designed to suit every investor right from the Corporate Investors, HNIs, Day traders, Non-resident Indians, and Small Individual Investors.

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First Global offers Online trading as well as offline trading. Online Trading The Online trading offers you the convenience of trading from your home, office or even while you are traveling with your laptop. In case you are not in a position to go online, you have the option of calling up any of our branches and place an order on phone or you can even visit our branch personally to trade through your account. First Global Online Securities trading account gives you the power to:

Trade via web, phone, or in person at a branch. Get access to internationally acclaimed buy/sell recommendations and make the

right investment decision.

Move money (pay-outs & pay-ins of funds) easily through a zero balance account Move securities easily through a demat account with First Global.

with the designated banks through the payment gateway.

Off-line Trading An Offline Securities Trading account offers you the convenience of trading from your home, office and even while you are traveling through the telephone or through SMS. You have the option of calling up any of our branches and place an order on phone or SMS or you can even visit our branch personally to trade through your account.

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First Global Offline Securities trading account gives you the advantage of:

Pan India Network of Branch offices. NSE and BSE on an integrated platform. Trade through phone, or in person at branch or through the dedicated team of

Relationship Managers.

Access to internationally acclaimed buy/sell recommendations in person, through

Phone, SMS, E-Mail, etc. and make the right investment decision.

Moving money (pay-outs & pay-ins of funds) easily through a zero balance account Moving securities easily through a demat account with First Global. An account executive keeping a track of your portfolio in the market and suggest

with the designated banks even through the web.

timely actions to help you make or save money.

Integrated online and offline trading First Global does not segregate Internet

Trading from its regular clients, it is at the absolute discretion of the client whether he want to deal Online or Offline.

Derivatives Trading

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Futures and Options FIRST GLOBAL is an International securities house with memberships of the London Stock Exchange, NASDAQ, The National Stock Exchange of India Ltd. and the Bombay Stock Exchange Ltd. First Global offers expert investment advice based on its rich experience in Fundamental and Technical research and its exposure to the markets world over. It has schemes designed to suit every investor right from the Corporates, HNIs, Day traders, Non-resident Indians, and Small Individual Investors. First Global offers Online trading as well as offline trading facilities.

Online Trading The Online trading offers you the convenience of trading from your home, office and even while you are travelling with your laptop. In case you are not in a position to go online, you have the option of calling up any of our branches and place an order on phone or you can even visit our branch personally to trade through your account. First Global Online Securities trading account gives you the power to:

Trade via web, phone, or in person at a branch. Get access to internationally acclaimed buy/sell recommendations and make the right investment decision.

Move money (pay-outs & pay-ins of funds) easily through a zero balance account with the designated banks through the payment gateway.

NSE and BSE on an integrated platform.

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Off-line Trading An Offline Securities Trading account offers you the convenience of trading from your home, office and even while you are travelling through the telephone or through SMS. You have the option of calling up any of our branches and place an order on phone or SMS or you can even visit our branch personally to trade through your account.

First Global Offline Securities trading account gives you the advantage of:

Pan India Network of Branch offices. NSE and BSE on an integrated platform. Trade through phone, or in person at branch or through the dedicated team of Relationship Managers.

ccess to internationally acclaimed buy/sell recommendations in person, through Phone, SMS, E-Mail, etc. and make the right investment decision.

Moving money (pay-outs & pay-ins of funds) easily through a zero balance account with the designated banks even through the web.

Moving securities easily through a depository account with First Global. An account executive keeping a track of your portfolio in the market and suggest timely actions to help you make or save money.

Integrated online and offline trading First Global does not segregate Internet Trading clients from its offline trading clients. It is at the absolute discretion of the client whether he wants to deal Online or Offline.

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 Depository services
Demat Account Indian Stock markets have come a long way in the last 10 years. The share certificates have been replaced with paperless-dematerialized shares. The Depository system in India has linked the issuers, the transfer agents, the brokers, the stock exchanges and the clearing-houses through one system Depositories (NSDL & CDSL) and their participants. The depositories facilitates the holding of securities in the dematerialized form and securities transactions are processed by means of account transfers through the demat slips just like the money is transferred with cheque. We are in the process of getting membership of CDSL and NSDL. Once we are registered we shall be providing the following facilities: The first Depository account for every customer will be opened free of cost along with the Securities trading account and we will be charging a concessional rate for the annual charges. For any additional depository account, the regular charges would be applicable. The securities trading & depository account opening form may be downloaded from our site and can be submitted at any of our branches or alternatively you can contact us and our account opening executive will get in touch with you.

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In case of Online trading, the depository account is integrated with the Online trading account and you can operate your depository account online through First Global online trading module. For such account First Global will charge only concessional depository charges. In case of Offline trading, the depository account is opened along with the securities trading account and provides the convenience to the investor to trade with First Global and also hold their security in an account managed by First Global. For such account First Global charges very nominal fees. First Global also offers stand alone depository account which offers professional depository participant services to investors from all its offices at very competitive price. Services offered to Depository account holders:

Online transaction facility for both NSDL and CDSL through Internet. Access to client information on Web. Online facility for depository accounts through the branch network. Periodic depository statement for clients for information on their account status.

PMS PRODUCT PROFILE

Discretionary portfolio management scheme
First Global Stockbroking Pvt Ltd individually and independently manage customer's portfolio and fund. Choice of investments will be made taking into account customer's expectation of returns and appetite for risk based on risk return portfolio.

Non-Discretionary portfolio management scheme

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First Global Stockbroking Pvt Ltd manage customer's fund as per his instructions and recommend buy /sell opportunities in the market. Initial Amount The minimum amount of investment is:
Category Minimum Amount

Resident Individuals & NRI

Rs. 25,00,000/-

Corporates & OCBs

Rs. 50,00,000/-

Customer Can Expect: a. Optimum returns b. Safety of principal/capital c. Professional advice based on comprehensive & in depth research / opinion d. complete transparency in handling your funds e. Confidentiality unbiased

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CHAPTER-3 STOCK EXCHANGE

Stock exchange
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A stock exchange, (formerly a securities exchange) is a corporation or mutual organization which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets is driven by various factors which, as in all free markets, affect the price of stocks .

Role of stock exchanges

1. Raising capital for businesses. 2. Mobilizing savings for investment. 3. Facilitating company growth. 4. Profit sharing. 5. Corporate governance. 6. Creating investment opportunities for small investors. 7. Government capital-raising for development projects.

STOCK EXCHANGE IN INDIA

Bombay Stock Exchange National Stock Exchange

Bombay Stock Exchange(BSE) The bombay stock exchange has the greatest number of listed companies in the world, with 4700 listed as of August 2007. It is located at Dalal Street, Mumbai, India. On 31 49

December 2007, the equity market capitalization of the companies listed on the BSE was US$ 1.79 trillion, making it the largest stock exchange in South Asia and the 12th largest in the world With over 4700 Indian companies list on the stock exchange, and it has a significant trading volume. The BSE SENSEX (SENSitive indEX), also called the "BSE 30", is a widely used market index in India and Asia. Hours of operation Beginning of the Day Session....8:00 - 9:00 Login Session....9:00 - 9:30 Trading Session....9:55 - 15:30

The hours of operation for the BSE quoted above are stated in terms of the local time in Mumbai, India (also known as Bombay). This translates into a standard time zone UTC/GMT +5:30.

Type Location Owner Key people Currency No. of listings Market Cap Volume Indexes Website

Stock Exchange Mumbai, India Bombay/Mumbai Stock Exchange Limited Madhu Kannan (CEO) Mahesh L. Soneji (COO) INR 4,700 US$ 1.79 trillion (Dec 31, 2007) US$ 980 billion (2006) BSE Sensex www.bseindia.com

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Companies in the BSE (sensex) 1. ACC 2. BHARTI AIRTEL 3. BHEL 4. DLF Universal limited 5.Grasim Industries 6. HDFC BANK 7. Hindalco Industries 8. Hindustan lever limited 9. ICICI BANK 10. Infosys 11. ITC Limited 12. Jaiprakash Associates 13. Larsen & Toubro 14. Mahindra & Mahindra Limited 15. Maruti Udyog 16. NTPC 17. ONGC 18. Ranbaxy laboratories 19.Reliance Communication 20. Reliance Industries 21. Reliance Infrastructure 22. State bank of india 23. Sterlite Industries 24. Sun Pharmaceutical Industries 25. Tata consultancy services 26. Tata Motors 27. Tata Steels 28. Tata Power 29. Wipro

National Stock Exchange(NSE)

The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a taxpaying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.

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The National Stock Exchange of India Limited (NSE), is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading.Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India , and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalization. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities.It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.

Type Location Owner Key people Currency No. of listings Market Cap Indexes Website

Stock Exchange Mumbai, India National Stock Exchange of India Limited Mr.vinu koshy Managing Director INR 1587 US$ 1.46 trillion (2006) S&P CNX Nifty CNX Nifty Junior S&P CNX 500 www.nse-india.com

Companies in the NSE

1.Asea Brown Boveri Ltd 2.Bajaj Auto Ltd 11.Glaxosmithkline Pharmaceuticals India Ltd 12.Grasim Industries Ltd

3. Bharat Petroleum Corporation Ltd 13. Gujarat Ambuja Cement Ltd 4. Bharti Tele-ventures Ltd 52 14. HDFC Bank Ltd

5.Britannia Industries Ltd 6. Cipla Ltd 7. Colgate-Palmolive India Ltd 8. Dabur India Ltd 9. Dr Reddy's Laboratories Ltd 10.Gas Authority of India Ltd

15. HCL Technologies Ltd 16. Hero Honda Motors Ltd 17. Hindalco Industries Ltd 18. Hindustan Lever Ltd 19. Hindustan Petroleum Corporation Ltd 20. Tata Power Ltd

Many more companies are there in NSE.

Sensex and the Nifty

The Sensex is an indicator of all the major companies of the BSE.The Nifty is an indicator of all the major companies of the NSE. Besides Sensex and the Nifty there are many other indexes. There is an index that gives you an idea about whether the mid-cap stocks go up and down. This is called the ? BSE Mid-cap Index? There are many other types of indexes. There is an index for the metal stocks. There is an index for the FMCG stocks. There is an index for the automobile stocks

How the Sensex is calculated

SENSEX, first compiled in 1986, was calculated on a "Market Capitalization-Weighted" methodology of 30 component stocks representing large, well-established and financially sound companies across key sectors. The base year of SENSEX was taken as 1978-79. SENSEX today is widely reported in both domestic and international markets through

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print as well as electronic media. It is scientifically designed and is based on globally accepted construction and review methodology. The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc.

During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX every 15 seconds. The value of SENSEX is disseminated in realtime.

Dollex-30
BSE also calculates a dollar-linked version of SENSEX and historical values of this index are available since its inception.

Understanding Free-float Methodology

Free-float Methodology refers to an index construction methodology that takes into consideration only the free-float market capitalization of a company for the purpose of index calculation and assigning weight to stocks in Index. Free-float market capitalization is defined as that proportion of total shares issued by the company that are readily available for trading in the market. It generally excludes promoters' holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a Free-float index is reduced to the extent of its readily available shares market. In India, BSE pioneered the concept of Free-float by launching BSE TECk in July 2001 and Bankex in June 2003. While BSE TECk Index is a TMT benchmark, Bankex is 54

positioned as a benchmark for the banking sector stocks. Sensex becomes the third index in India to be based on the globally accepted Free-float Methodology.

Stock Exchange Trading

The term 'Stock Exchange Trading' suggests the exchange of stocks or shares, or other securities of companies that are carried forward by brokers or traders of stocks. Parties concerned with stock trading can be an individual or a company. The market for such exchanges is called Stock Exchange. A stock exchange is the chief component of a stock market. Supply and demand forces in stock markets is guided by various factors which, as in all free markets, affect the price of stocks. Stock Exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The in Stock securities involved Exchange Trading include: Shares issued by companies Unit trusts Other pooled investment products like bonds In order to indulge into Stock Exchange Trading, a company has to enlist itself under a stock exchange. Usually there is a central location at least for record keeping. However, riding the success of technology, modern markets are electronic networks have raised the speed and cost of transactions.

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Stocks and bonds are offered initially to investors is done in the primary market. Henceforth, trading is carried out in the secondary market.This is the usual way that bonds are traded. Trading at stock exchanges is gradually becoming a part of a global market for securities. Stock Exchange Trading has multiple roles in the functioning of an economy. Such diverse roles played by stock exchanges include, generation of initial capital required for starting a business, channelizing savings for further investment, facilitating growth of a company, redistributing funds of the company, and creating investment opportunities for small investors.

How to Calculate Returns ?

There are many different methods for calculating portfolio returns. A traditional method has been using quarterly or monthly money-weighted returns. A money-weighted return calculated over a period such as a month or a quarter assumes that the rate of return over that period is constant. As portfolio returns actually fluctuate daily, money-weighted returns may only provide an approximation to a portfolios actual return. These errors happen because of cashflows during the measurement period. The size of the errors depends on three variables: the size of the cashflows, the timing of the cashflows within the measurement period, and the volatility of the portfolio. A more accurate method for calculating portfolio returns is to use the true time-weighted method. This entails revaluing the portfolio on every date where a cashflow takes place (perhaps even every day), and then compounding together the daily returns.

==Attribution== Performance Attribution explains the active performance (i.e. the benchmark-relative performance) of a portfolio. For example, a particular portfolio might be benchmarked against the S&P 500 index. If the benchmark return over some period was 5%, and the portfolio return was 8%, this would leave an active return of 3% to be

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explained. This 3% active return represents the component of the portfolio's return that was generated by the investment manager (rather than by the benchmark). There are different models for performance attribution, corresponding to different investment processes. For example, one simple model explains the active return in "bottom-up" terms, as the result of stock selection only. On the other hand, sector attribution explains the active return in terms of both sector bets (for example, an overweight position in Materials, and an underweight position in Financials), and also stock selection within each sector (for example, choosing to hold more of the portfolio in one bank than another).

TOP 5 STOCK BROKING COMPANIES AND THEIR PMS PRODUCTS

India Infoline Securities Private Ltd
Portfolio Management Services RUBICON Taking decisive steps

Rubicon is a closed ended scheme investments in stocks where the current spate of bad macroeconomic news : High crude oil prices, Rising interest rates and inflation worries

57

have lead to large falls in prices and stocks are trading at a significant discount to their fair values. Rubicon will have a concentrated portfolio of 10 -15 companies with holdings across large, mid and small cap companies. The allocation would be around 20%-30% each in Banking and Capital Goods & Infrastructure and the balance in individual stock plays. Growth Portfolio

This is for those who would rather run a marathon than a sprint. They are not concerned with day-to-day price movements. The portfolio comprises the choicest of fundamentally sound companies. The focus is on medium to large capitalization blue chip companies, considered to be undervalued from the point of view of their long-term growth prospect and well placed to deliver extra-ordinary capital appreciation over the long term.

Momentum Portfolio

This is for those who want to live life in the fast lane. The main objective of this portfolio is to generate capital appreciation through short to medium term investments in equities and equity related instruments. The investment choice is primarily influenced by technical factors like price and volume indicators, RSI, MACD, and other studies. Secondary factors will be reasonable levels of market capitalization, good liquidity, competitive position in the industry, sectors with good growth prospects, etc.

NRI Portfolio

The main objective of the scheme is to generate capital appreciation through investments in equities with a long-term perspective. The scheme will invest in all equity and equity related instruments with emphasis on fundamentally sound, well-researched blue chip companies perceived to be undervalued from the point of view of their long term growth 58

prospects. The focus will be on medium to large capitalisation companies which have a proven track record or earning capability, quality management, leadership status in sectors or potential to achieve such status, etc and that have the potential to deliver growth over the long term. The scheme is aimed at medium risk taking investors willing to invest in companies over a long-term period.

Kotak Portfolio Management

Portfolio Management Services Select Portfolio

Description The scheme will seek to achieve returns through broad based participation in equity markets by constructing a concentrated portfolio of sizably capitalized companies Portfolio Style Aggressive Concentrated Portfolio consisting of 10-12 stocks Portfolio Characteristics Multi cap portfolio with companies spread across large cap, mid cap and small cap. Investment Domain & Composition Sectors expected to be beneficiaries of demographic patterns & reforms. Sectors expected to benefit from infrastructure spending.

Portfolio Tenure

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Long term (approx. 18 Months) Investor Profile An investor willing to invest for medium to long term without being perturbed about short-term returns, volatility and market momentum. Any investor with a penchant for medium to high risk taking qualifies for the portfolio.

Klassic Portfolio Flexi

Description The scheme will seek to achieve returns through broad based participation in equity markets by creating a diversified equity portfolio of small, medium and large capitalized companies. Investment Strategy Present market conditions hints at growth as a central premise to support valuations Scan the investment universe Identify companies with higher growth as compared to the market Scout for discount in valuations as compared to the market Select valuations which provide a case for higher returns potential as compared to the market No of Stocks are up to 20 Investor Profile

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An investor willing to invest for medium to long term without being perturbed about short term returns, volatility and market momentum. Asset Allocation Portfolio - Investguard Planlio

Description The portfolio strives for long-term capital growth as well as some amount of capital protection through the use of a quantitative risk model.

Investment Strategy Asset allocation would be based on CPPI model. CPPI is designed to give the investor the ability to limit the downside risk while allowing some participation in the upside markets. It allows the investor to recover, at maturity, a given percentage of their initial capital, in particular in falling markets. Intends to capture some upside on the equity market if and when they occur Invests across shares and fixed income products, moving from shares into fixed interest investments when the fund's value drops below a predetermined "floor". When markets start to move up, the product increases its holdings in shares, tapping into these growth opportunities Exposure: Equity: 0-100%; Debt: 0-100%.

Investment Canvass The debt portion will be invested in debt oriented schemes of mutual funds, Gilt schemes, Liquid schemes, money market instruments,

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Government securities, Corporate Bonds and deposits, securitised instruments and / or any other instruments permitted by SEBI. The equity portion would be primarily invested in large cap stocks with high liquidity and closely follows the BSE Sensex movement.

Investor Profile Any investor with a penchant for low risk taking qualifies for the portfolio. Core Portfolio

Core Portfolio aims to capture the long term upside of the India Growth Story by diversifying across the major themes. Investment Strategy The scheme will invest in all equity and equity related instruments with emphasis on companies in the business areas driven by consumerism, outsourcing, real estate and core infrastructure players. The portfolio will be a mix of small, medium and large capitalisation companies. The investments may pertain to any sector either in the private or public/state domain. Stock selection is driven by a good order visibility which mitigates the downside risk. Investment in long term appreciation and value unlocking potential stocks. The Portfolio Manager may invest in futures and options to hedge, to generate returns, or to balance the portfolio. The quantum of exposure to

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derivatives will not normally exceed 50% of the portfolio invested by the client.

Sectoral Composition Diversified across sectors and Market Capitalisation with focus on companies benefiting from: Increase in consumer spend Outsourcing Increase in infrastructure spending Real estate growth

Number of Stocks Focused portfolio of 15-20 stocks Investor Profile Core Portfolio is aimed at investors seeking to benefit from the growth in Indian economy. An investor willing to keep aside funds for at least 18 months without being perturbed about short term returns, volatility and market momentum.

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 Sharekhan
Products and Services: 1. PMS Pro Prime 2. PMS Pro Tech PMS Pro Prime The Balanced Scheme: Ideal for investors looking at steady and superior returns with low to medium risk appetite. This portfolio consists of a blend of quality bluechip and growth stocks ensuring a balanced portfolio with relat vely medium risk profile. The portfolio will mostly have large capitalization stocks based on sectors & themes who have medium to long term growth potential. Product Details Minimum Investment: Rs 10 lakhs Lock in period: 6 Months Profit withdrawal in multiples of 25000 after lock in period. Product Characteristics:

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Bottom up stock selection In-depth, independent fundamental research High quality companies with relatively large capitalization. Disciplined valuation approach applying multiple valuation measures. Medium to long term vision, resulting in low portfolio turnover.

PMS Pro Tech Nifty Thrifty: Nifty futures are bought and sold on the basis of an automated trading system that generates calls to go long/short. The exposure never exceeds value of portfolio i.e. there is no leveraging; but being short in Nifty allows you to earn even in falling markets and there by generates linear. Beta Portfolio: Positional trading opportunities are identified in the futures segment based on technical analysis. Inflection points in the momentum cycles are identified to go long/short on stock/index futures with 1-2 month time horizon. The idea is to generate the best possible returns in the medium term irrespective of the direction of the market without really leveraging beyond the portfolio value. Risk protection is done based on stop losses on daily closing prices.

Product Details Minimum Investment: Rs 5 lakhs Lock in: 6 months Profit withdrawal in multiples of 25000 after lock in period.

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Product characteristics: Using swing based index -trading systems, stop and reverse, trend following and momentum trading techniques. Nifty based products for low impact cost and low product volatity. The use of options to enchance the risk reward profile of the product and therefore offer a higher Beta. Trailing Stops: Momentum trading techniques are used to spot short term momentum of 5-10 days in stocks and stocks/index futures. Trailing stop loss method of risk management or profit protection is used to lower the portfolio volitality and maximize returns.Trading opportunities are explored both on the long and the short side as the market demands to get the best of both upwards & downward trends.

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 Motilal Oswal Securities Ltd

Products and Services Value Strategy Value Strategy is meant for investors with a Long Term investment horizon in the Indian Equity Markets. Discovering an original investment idea involves deep and meticulous analysis to discover the hidden true values. The portfolios investments philosophy revolves around finding value. As such, the investment philosophy is not dependent on the market trends but banks on the power of the intellect. A business is prudently picked for investment after a thorough study of its underlying hidden long-term potential. To purchase a piece of great business at a fraction of its true value is the discipline. Portfolio Objective: The Portfolio aims to deliver superior in good businesses run by great business managers. Portfolio Characteristics: Value based stock selection Investment Approach : Buy & Hold Investments with Long term perspective Aim to Maximize post tax return due to Low Churn

Portfolio Tenure:

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Long Term (3 5 Years) Bull's Eye Strategy Bulls Eye PMS Strategy under is designed to invest in stocks with short-medium term perspective, for a minimum 15-20% move. The investment philosophy is to find Momentum in Value. It follows an active process driven method of profit booking and is parked temporarily in the safety of liquid mutual funds/ exchanges traded liquid funds till further opportunities are identified. The stock selection lays greater emphasis on companies which good corporate governance and excellent management track record. It would participate in emerging sector and turn around stories so as to participate and capture sharp rallies.

Portfolio Objective: The Scheme aims to deliver superior returns in Low to medium term by investing in fundamentally strong stocks with momentum approach, coupled with active profit booking. Portfolio Characteristics: Investment Approach : Momentum in Value Investments with Short-Medium term perspective Regular Profit Booking Ability to sit on cash

Portfolio Tenure: Medium Term 1 Year TDOS

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The portfolio is designed to invest in themes /stocks in the small and mid cap segment which are going to be a part the NEXT TRILLION DOLLAR GDP GROWTH. The Portfolio would target to invest in Small & Mid Cap Opportunities which have the potential of delivering above-average growth over the next 2-3 years. The investment philosophy is to invest in stocks which are available at reasonable valuations and promise more than average growth. The portfolio would aim to identify emerging themes. The Portfolio would attempt to identify emerging themes early and exit when these when they are fairly discounted. We firmly believes that markets rewards consistent growth over a period of time and only after critical size has been achieved by the company. For any stock to get recognized by the Market and get a desired Valuation one has to wait for the right Trigger Point. Perception Re-rating happens due to: Portfolio Objective: The Product aims to deliver superior returns by investing in Small & Mid cap ideas that are part of the next Trillion Dollar GDP growth opportunity.

Portfolio Characteristics: Investments in Small and Mid-cap Stocks Bottom Up Stock Picking Approach Focused Theme Portfolio Buy and Hold Philosophy low portfolio churn

Portfolio Tenure:

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Long Term (3 Years) Focused Strategy Series 1 The Focused Strategy Series I has been is designed to invest in stocks that can that can benefit from growth in earnings and a higher P/E or higher valuation of assets. The strategy aims to identify investment opportunities which exhibit a re-rating potential over a 2 yearperiod.The strategy follows a concentrated portfolio approach, by limiting the number of stocks in the portfolio Portfolio Objective: The portfolio will aim to invest in fundamentally sound companies that can benefit from a re-rating. To increase the prospects for out performance, the portfolio will exhibit a preference for companies that may have been overlooked or are out of favour.

Portfolio Characteristics: Bottom-up stock selection Investment in stocks with re-rating potential Concentrated portfolio Investment horizon: long term (two years)

Portfolio Tenure: long term (two years)

Birla Sun Life

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Portfolio Management Services Growth Portfolio

1. Higher returns at moderate volatility and risk 2. Rs.25 lacs per individual account (or such other amount as decided by the Portfolio Manager at its sole discretion in each individual case) 3. Minimum two to three years 4. Invest in stocks of companies that can deliver products and services as good as the best in the world and are looking at growing through exports.

N-cash Portfolio

1. Higher returns at moderate volatility and risk 2. Rs 25 lacs per individual (or such other amount as decided by the Portfolio Manager at its sole discretion in each individual case) 3. At least one year 4. Invest in stocks available at attractive valuations (hammered) due to various factors but belonging to inherently good companies

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Value Portfolio

1. Higher returns at moderate volatility and risk 2. Rs. 25 lacs per individual account (or such other amount as decided by the Portfolio Manager at its sole discretion in each individual case) 3. Minimum of one to three years 4. Invest in stocks that are inexpensive in terms of valuation and yet offer high growth potential in terms of forword earnings.

High Dividend Yield Portfolio

1. Moderate returns at low volatility and risk 2. Rs 25 lacs per individual account (or such other amount as decided by the Portfolio Manager at its sole discretion in each individual case) 3. Minimum of one to three years 4. Invest in stocks of those companies which are inexpensive relative to the overall market, peers and historical standards and possess high quality managements, accelerating earnings and healthy balance sheets

Custom Portfolio

1. A tailor-made portfolio to meet your particular needs and preferences 2. Rs 250 lacs per individual (or such other amount as decided by the Portfolio Manager at its sole discretion in each individual case)

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3. Minimum of one to three years 4. Completely customised to investor's needs and orientation. Dynamic Fixed Income Portfolio

1. A portfolio of fixed income securities completely customised to meet your unique needs and preferences 2. Rs. 10 crores per account (or such other amount as decided by the Portfolio Manager at its sole discretion in each individual case) 3. At least one year or till maturity of the security 4. Completely customised to meet the balance of returns and risk that you want. Overall, superior returns through prudent portfolio structuring

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CHAPTER-4

RESEARCH METHODOLOGY & ANALYSIS

RESEARCH METHODOLOGY
Research is can be used for different studies depending upon the purpose, nature a procedure of logical and systematic application of the fundamentals of science to the general and overall questions of a study and scientific technique by which data is analyzed.

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Research Design is the method of conducting the research study. Different types of research designs and availability of the resources. The research project on Portfolio Management Service-Product Development & Market Intelligence was descriptive in nature, so the following research design has been used. 1) Data has been collected from two sources a) Primary Data: Primary data is the data, which is collected from the source for the first time. It has been collected by using questionnaire to collect information from the sample population. Interview with two experts and one in-depth interview is also conducted for the research project in hand. b) Secondary Data: Secondary data is the data, which is already available. It has been collected from the research projects and newspapers magazines and Internet.

2) SAMPLE SPECIFICATION: Random Sampling method has been used to collect information from the primary source.Some individual, investors and corporate brokers were selected at the random. 3) Data has been analyzed by keen observation with the help of tables Assumptions: The research was based on the following assumption: 1. The methodology used for this purpose is survey and questionable method. It is assumed that this method is more suitable for collection of data. 2. It is assumed that the respondent have sufficient knowledge to ensure questionable.

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3. It is assumed that the respondent have filled right and correct option according to their view. Objectives of the Research Each research study has its own specific purpose.It is likely to discover to question through the application of scientific procedure.But the main aim of our research is to find out the truth that is hidden and which has not been discovered yet. Research study has two objective.

RESEARCH DESIGN:
Research Design is the conceptual framework or structure within which research is to be conducted.

Research Type:
Research type is descriptive. Because it is concerned with knowing the current state of affairs and existing facts and not with finding any solutions. Data is collected: Within the city. Type of Data Required: Primary and secondary both. Survey Research is adopted.

SAMPLE DESIGN:
Due to time and resource contains, I used Sampling method. Sampling unit: My sampling unit was investors Sample size: 40 people were selected as sample size. 76

Sampling Method: Convenience sampling method was used in my research study.

COLLECTION OF DATA:
In collecting the primary data questionnaire method was used along with the observation and personal interview method.

Analysis of Data Collected:

The data collected is then analyzed. The weight system was designed to analyze data collected. The respondents were asked to give relative weights to various issues in the questions. Then the percentage method was used for interpretation.

Limitations of the Study:

1. Due to time and resource constraints, the area of my study was small. 2. Biasness of respondents. 3. Sample size was very small, which may not be the representative of whole the population. 4. Convenience method of sampling was used. 5. Investors have to undergo various formalities.

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COMPARATIVE ANALYSIS
After whole study, we find out the following result :

Result on the basis of Growth Of PMS Product

59% 58% 57% 56% 55% 54% 53% 52% 51% S M K I B F

3-D Colum n 1

S SHAREKHAN M MOTILAL OSWAL K KOTAK SECURITIES I INDIAINFOLINE B BIRLASUNLIFE F FIRSTGLOBAL

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COMMENT:

According to the survey indiainfoline pms product show better growth

from last 2 year as compared to other stock broking companies , on the other hand motilal oswal pms product is giving stiff competition to indiainfoline. First global pms product have better growth rate.

Result on the basis of Charges

Intra day based Delivery based

80% 70% 60% 50% 40% 30% 20% 10% 0% S M K I B F

intra based delivery based

All the figure are in paise / 100 rupee. S SHAREKHAN M MOTILAL OSWAL K KOTAK SECURITIES I INDIA INFOLINE Ltd B BIRLASUNLIFE F FIRSTGLOBAL

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COMMENT: investment.

According to the survey motilal oswal charge maximum brokerage as

compare to others whereas India Info line Ltd charge only 0.20 paise on maximum

Result on the basis of Customer Perference

BASIS difference SHAREKHAN MOTILA KOTAK INDIA BIRLA FIRST L OSWAL INFOLINE SUNLIFE GLOBAL YES YES YES YES YES YES YES YES YES YES

Share YES trading Commodity YES tading

COMMENT: 1. According to survey 70% people are satisfied with Sharekhan Ltd because of their RMs facility and power of share khan ltd softfare. 2. According to survey , sharekhan ltd open new branches for individually handle to their customer , but in motilal oswal and birla sun life there is no separate offices for this. 3. On the otherhand first global professional advice based on comprehensive & indepth research / unbiased opinion and complete transparency in handling your funds.

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4. First Global Stockbroking Ltd also provide At Account Executive suggests when to buy / sell, what to buy / sell and also keeps track of customer portfolio which helps in making right investment decisions.

CHAPTER-5

FINDING AND ANALYSIS

1: Do you know about pms investment option ?

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Knowledge YES NO TOTAL

% age 63% 37% 100

% age

Yes No

COMMENT : Only 63% people knows the exact meaning of PMS. Because remaining 37% take his / her residential property as an investment. According to law this is not investment because of it is not create any profit for owner.

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2: What is basis purpose of your investment ? Investment purpose Liquidity Return Tax benefit Risk covering Capital appreciation Other Total %age 30% 25% 20% 5% 10% 10% 100

% age

Liquidity Return Tax benefit Risk cov ering Capital apperciation Other

COMMENT : 75% people are interested in liquidity ,return and tax benefit .And remaining 25 % are interested in capital appreciation , risk covering and other.

3: What are the most important thing you take into account, while making investment ?

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Factor Risk Return Both

% age 8% 17% 75%

% age

Risk Return Both

COMMENT : 75 % people are considered the both factors risk as well as return but ,only 25% considered the risk or return factor.

4: Do you have any knowledge about pms products in market of different companies ?

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Knowledge Complete Partial NIL Total

% age 8% 75% 17% 100

% age

Complete Partial Nil

COMMENT : On that basis, we conclude that 17% people know nothing about pms products and 75% people have partial knowledge about it, so some promotional activities are required for increasing the awareness of security market.

5: On what basis you invest in particular pms product of your chosen company ?

Satisfaction Operating expenses Service 85

% age 18% 25%

Brokerage Total

57% 100

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CHAPTER-6 SUGGESTIONS & CONCLUSION

SUGGESTIONS
Provide the facility of free demonstrations for all Commitment should be equalized for every person. Their should be minimum number of clients under relationship manager. So that he can handle new as well old customer properly. Some promotional activities are required for the awareness of the customer. Seminar should be held for providing information to prospective and present customers.

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CONCLUSION
On the basis of the study it is found that First Global Stock Broking Ltd is better services provider than the other stockbrokers because of their timely research and personalized advice on what stocks to buy and sell. First global provide Discretionary portfolio management scheme and Non-Discretionary portfolio management scheme, it provide individually and independently manage customer's portfolio and fund. It also provide information that what IPOs are coming in the market and accordingly invest and prepare portfolio of the investors. Study also conclude that people are not much aware about portfolio management service and while its going to be biggest market in India.

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The companies should also organize seminars and similar activities to enhance the knowledge of prospective and existing customers. So that they feel more comfortable while investing in portfolio management service.

Appendix
Questionnaire:
Name: Age : Income per annum: Gender: Occupation: Contact No: Ques1: Do you know about pms investment option ? Ans a) Yes b) No

Ques2 : Do you have any knowledge about pms products in market of different companies ? Ans a) Partial b) Complete

Ques3: What is basis purpose of your investment ? Ans a) Liquidity b) Return

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c) Capital appreciation e) Risk Covering

d) Tax benefit

Ques4: What are the most important thing you take into account, while making investment ? Ans a) Risk c) Both b) Return

Ques5: In which company you have invested ? Ans a) First Global c) Indiainfoline e) Birla Sunlife b) Sharekhan d) Kotak f) Motilal oswal

Ques6: Are you satisfied with your stock broking company ? Ans a) Yes b) No

Ques7 What is the reason ? Please specify ? Ans a) Growth c) Service b) Brokerage d) Other

Ques8: Wheather you get expected return from your portfolio ? Ans a) Yes b) No

Ques9: On what basis you invest in particular pms product of your chosen company ? Ans a) On the basis of Growth c) Service b) Performance d) Brokerage

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Ques10: How will you describe your experience with PMS till date?

Quite Profitable

Profitable

Average

no profit no loss

losses

Ques11: What is your trading exchange preference ? Ans a) NSE c) MCX b) BSE d) NCDEX

Ques12: Do you know about First global pms products ? Ans a) Yes b) No

ANYSUGGESTION:

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Bibliography
BOOKS : MAGAZINE: INTERNET www.firstglobal.in www.sharekhan.com www.icicidirect.com www.koteksecurity.com www.motilaloswal.com www.indiainfoline.com www.capitaline.com www.moneycontrol.com http://blog.investraction.com/2007/11/sharekhans-pmsperformance.html Valueline ( sharekhan monthly research magazine) Capitalmarket The Finapoils Research methodolgy Portfolio management service (Mc Graw Hill Publishing company ltd)

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