RAJASTHAN TECHNICAL UNIVERSITY, KOTA

A
SUMMER TRAINING REPORT ON

Study Of Angel Broking Company & Its work

Submitted in partial fulfillment for the Award

of degree of

Master of Business Administration

Submitted To: - Submitted By:-

Ms. Dimple Arya DEEPAK KUMAR SOLANKI

HR Manager MBA III Sem.

2009-2011

G D MEMORIAL COLLEGE OF MANAGEMENT AND TECHNOLOGY,

JODHPUR
 A
PROJECT REPORT
ON

ANGEL BROKING PVT LTD,

jodhpur
 PREFACE

Quite frequently these days’ people talk of practical knowledge,

both in academic institutions and outside. At each and every aspect in
life we require some sort of theoretical and practical knowledge too. It
means only classroom lecture may not be enough to get the proper
knowledge either in the business field or social life. Keeping all this in
view, the present report has been written for the promotion the brand
position of Angel Broking in the highly competitive environment
and to study the consumer behavior by working as a promoter and by
studying the consumer satisfaction with the help of Exploratory
survey.

I am grateful to all those who have helped me in the successful

completion of this report. I hope I have tried my level best in making
this Report. If there is any error, in this Report I want to apologies for
that.
 ACKNOWLEDGEMENT

Any work accomplishment is seldom on person achievement,

there are usually many people behind it who contribute to its
goodness in form or the other. It was my good luck that the staff of
ANGEL BROKING was supportive which ease my job by quite a
long extent. For the development of the project .I extend my heartfelt
gratitude to Mr. Dilip Singh Rathore, Branch Manager, Angel
Broking for providing excellent mentoring, encouragement &
support. I sincerely thank who despite his tight schedule spared time
for discussions and gave basic ground rules and directions, without
which completion of this project would have been impossible. I am
highly grateful to the management of ANGEL BROKING for giving
me the opportunity to work on this Project, and in the process enrich
myself with immense learning on all aspects I am grateful to all
employees of ANGEL BROKING for providing me all the
information and help I required for the completion of this project.
 Executive Summary

The summer internship at “Angel Broking” undertaken by us

has given us an exposure into the investment scenario in India. The
project that we were involved with while working at “Angel
Broking” includes advisory services i.e. educating the existing and
potential investors about stock market as an alternative source to
investment.
This involves catering to the queries of the investors about the
concept of stock market, the various options that an investor can
invest his money into, funds management of investors. Analyzing the
investors’ behavior includes understanding the concerns a person has
towards Stock Market, his stages in life and wealth cycle, the effect of
the investments made by the peer groups, effect of the profession
he/she is in, education qualification, importance of tax benefits, the
most preferred saving tool etc. and this all is analyzed with the help of
a Schedule prepared.
Through the systematic investment plan invest a specific
amount for a continuous period, at regular intervals. By doing this,
the investor get the advantage of rupee cost averaging which means
that by investing the same amount at regular intervals, the average
cost per unit remains lower than the average market price.
TABLE OF CONTENT

S.No. Name
1. Introduction of the industries
2. Introduction of the organization
3. Student Contribution to the
organization
4. Introduction about Stock Market
5. Conclusion
6. Recommendations and Suggestions
7. Appendix

8. Bibliography
 INTRODUCTION TO THE INDUSTRY
THE HISTORY OF INDIAN E-BROKING
INDUSTRY

The first publicly issued security can be tracked back to the

fourteenth century in Venice where the government made the first
known issue of bonds. These government securities were purchased
by merchants and landowners as investments. In and around 1750s in
England, traders in the shares of early companies would commonly
meet in Jonathans Coffee House to trade shares and make business
deals.

Early share bids and offers were written on the Coffee House
walls and the trading process was highly unregulated, with insider
trading forming the basis for most investment decisions. By 1773,
Trading Clubs had formed, and in 1801 a group of traders raised
20,000 pounds to build the London Stock Exchange in Capel Court.

A similar process was occurring in America. By the early 1790s

many merchants had begun trading shares. Just as in London, these
early traders often met at coffee houses in an informal environment.
In 1792, 24 Brokers who each paid $400 for a "trading seat" signed
the Buttonwood Tree Agreement.

This agreement outlined the regulations under which shares

could be bought and sold. These regulations formed the basis for
trading rules that Still exist today and led to the formation in 1817 of
the New York Stock Exchange. Much water has passed under the
bridge since then and we forward all the way to late 1990s.By late
1990s, most of the stock exchanges had been automated, and the
“open outcry” method of trading was the thing of the past.

Most stock exchanges began to use computers to replace floor

traders. Floor traders take phone and computer orders from brokers,
and negotiate a trade with stock specialists at trading stations on the
trading floor. The internet orders placed by client, first processed and
authorized through the stock brokers’ computer system before being
automatically placed on the stock Exchanges computer systems.

This period saw the rise in popularity and acceptance of online

stock broking. Angel Broking's trust with excellence in customer
relations began more than 20 years ago. Today, Angel has emerged as
a premium Indian stock-broking and wealth management house, with
an absolute focus on retail business, and a commitment to provide.

ANGEL BROKING

INTRODUCTION OF THE COMPANY

COMPANY PROFILE OF ANGEL BROKING LTD

Mr. Dinesh thakkar is the man behind the successful building of angel
broking as India’s leading retail stock broking house with his vision,
devotion, dedication, keen foresight and zeal to excel. He is among
the first generation stockbroker who is credited for conceptualizing
and the subsequently promoting angel group in 1987. He was
attracted towards the stock market due to its prospects of fast growth.
He proved his skill and abilities through efficient trading of stocks by
using advanced and innovation tools of technical analysis. He started
his operations as a sub-broker from a small office at dalal street with
a client base of just around 25 clients and total staff strength of 3
employees. With his 100% focus on the retail clientele coupled with
his expertise in investment advisory services, he has scaled much
greater height as is evident from our network strength and nation
wide presence today. The Angel Group has emerged as one of the top
5 retail stock broking houses in India, having memberships on BSE,
NSE and the two leading commodity exchanges in the country i.e.
NCDEX and MCX. Angel Broking Ltd is also registered as a
depository participant with CDSL. It is the only 100% retail stock
broking house offering a gamut of retail centric services like
Research, Investment Advisory, and Wealth Management Services, E
Broking& Commodities to individual investor.

ANGEL’S LOGO
VISION
BUSINESS PHILOSOPHY
ETHICAL PRACTICES & TRANSPARENCY IN ALL
OUR DEALINGS
CUSTOMER INTEREST ABOVE OUR OWN
ALWAYS DELIVER WHAT WE PROMISE
EFFECTIVE COST MANAGEMENT

VALUES
• INTEGRITY
• TEAMWORK
• QUALITY MINDSET
• ENTREPRENEURSHIP
• SERVICE ORIENTATION
• PASSION & COMMITMENT

ABOUT ANGEL

• We have a Pan India presence with more than 8000+

intermediaries.
We offer services like:

OUR ORGANIZATIONAL STRUCTURE

Products of Angel Broking

1. Online Trading 8. Personal loans
2. Commodities 9. Quality assurance
3. DP Services
4. PMS (Portfolio Management Services)
5. Insurance
6. IPO Advisory
7. Mutual Fund
Equity Broking
Commodities
Depository
Research
E-broking
Advisory
Portfolio Management Services
Mutual Fund Distribution

• A client base of 8, 50,000 + active Investors is serviced by our

strong team of 4600 + employees across branches.
• The above distribution makes our client servicing levels one of the
highest in the industry.
• 55 member research team doing technical, fundamental,
derivative and commodity analysis, one of the largest in the
industry.
• First broking house to start 100% retail focus research in the
industry.

ANGEL GROUP COMPANIES:

Milestones
Awarded with 'Broking House with Largest Distribution Network' and
'Best Retail Broking House' at Dun & Bred street Equity Broking
Awards 2009.

August, 2008 Crossed 600000 trading accounts:-

● November, 2007 ‘Major Volume Driver’ for 2007

● December, 2006 Created 2500 business associates
● October, 2006 ‘Major Volume Driver’ award for 2006
● September, 2006 Launched Mutual Fund and IPO business
● July, 2006 Launched the PMS function
● October, 2005 ‘Major Volume Driver’ award for 2005
● September, 2004 Launched Online Trading Platform
● April, 2004 Initiated Commodities Broking division
● April, 2003 First published research report
● November, 2002 Angel’s first investor seminar
● March, 2002 Developed web-enabled back office software
● November, 1998 Angel Capital and Debt Market Ltd. Incorporated
● December, 1997 Angel Broking Ltd. Incorporated

TIE UP BANK’S:-

HDFC
ICICI
AXIS
CORPORATION
ORIENTAL BANK OF COMMERCE
KARNATAKA
YES

Investment Advisory Services

To derive optimum returns from equity as an asset class requires

professional guidance and advice. Professional assistance will always
be beneficial in wealth creation. Investment decisions without expert
advice would be like treating ailment without the help of a doctor.

Expert Advice: Their expert investment advisors are based at

various branches across India to provide assistance in designing and
monitoring portfolios.

Timely Entry & Exit: Their advisors will regularly monitor

customers investments and guide customers to book timely profits.
They will also guide them in adopting switching techniques from one
stock to another during various market conditions.

De-Risking Portfolio: A diversified portfolio of stocks is always

better than concentration in a single stock. Based on their research,
They diversify the portfolio in growth oriented sectors and stocks to
minimize the risk and optimize the returns.

Commodities: A commodity is a basic good representing a

monetary value. Commodities are most often used as a inputs in the
production of other goods or services. With the advent of new online
exchange, commodities can now be traded in futures markets. When
they are traded on an exchange, Commodities must also meet
specified minimum standards known as a basic grade.

Depositary Participant Services

Angel Broking Ltd. Is a DP services provider though CDSL. We offer

depository services to create a seamless transaction platform to
execute trades through Angel group of companies and settle these
transactions through Angel Depository services.

Wide branch coverage

Personalized/attentive services of trained a dedicated staff
Centralized billing & accounting
Acceptance & execution of instruction on fax
Daily statement of transaction & holdings statement on
email.
No charges for extra transaction statement & holdings
statement.

Portfolio Management Services

Successful investing in Capital Markets demands ever more time and
expertise. Investment Management is an art and a science in itself.
Portfolio Management Services (PMS) is one such service that is fast
gaining eminence as an investment avenue of choice for High Net
worth Investors(HNI). PMS is a sophisticated investment vehicle that
offers a range of specialized investment strategies to capitalize on
opportunities in the market. The Portfolio Management Service
combined with competent fund management, dedicated research and
technology, ensures a rewarding experience for its clients .

Angel PMS brings with it years of experience, expertise, research and

the backing of India's leading stock broking house. At Angel,
experienced portfolio management is the difference. It will advise
you on a suitable product based on factors such as your investment
horizon, return expectations and risk tolerance.

PMS SCHEMES @ ANGEL

Scheme 1: Angel OYSTER
Description :

The main objective of the scheme is wealth generation by delivering

superior returns over long term through investments and equity
related instruments.

Investment Strategy :

To generate wealth on consistent basis rather than outperform by

taking higher risk.

Logic works well and thus will be given weight age along with
financials.

Early identification of stocks to ride through the entire investment

cycle.

Timing of investment is important to generate superior returns.

Bottom –up approach.

Parameters Driving Investment Decision :

Blend of growth and value stocks

Investments in companies regardless of market capitalizations
Keen selection of stocks based on potential for value unlocking
based on key events
Focus on companies which display
Scalable business potential
Large market opportunity
Beneficiary of favorable economic cycle
Valuation at steep discount to asset value

Sectoral Composition :

May include under- researched companies . Portfolio could invested

in liquid funds

Investor Profile :

Safety of capital will be of utmost importance

The scheme would be suited for investors having medium to long
term perspective (i.e. 12-18 months)

Scheme 2: Angel BLUE- CHIP

Description :
The objective of the scheme is to generate capital appreciations in the
medium to long term through investments in equities and equity
related instruments comprising predominantly large cap companies.

Investment Strategy :

The scheme will seek to achieve returns through brand based

participants in equity markets by creating a diversified equity
portfolio. The portfolio will be overweight on large cap companies.
The portfolio strives at all time to achieve an 80% allocation to large
cap companies. The allocation of sectors and stocks in the portfolio
may be dynamically structured in tune with changes in broader
market conditions Overweight on large cap stock. However quality
mid cap stocks may also be considered for investment.

Portfolio to comprise of a combination of growth & value stocks.

The portfolio strives to limit the exposure to any sector to less than
25% of the portfolio size.

The portfolio strives to limit the exposure to any stock to less than
10% of the portfolio size.

The allocation and composition of medium capitalized stocks to vary

based market Conditions.

Investor Profile :
The scheme would be suited for investors with low to moderate risk
appetite.
The scheme would be suited for investors having medium to long
term perspective.

Benefits of Angel PMS :

✔ Understanding risk : At Angel, utmost emphasis is given to

understanding the risk profile of an investor.
✔ Periodic Evaluation : Periodic evaluation of the Model Portfolio is
carried out and market movements are cashed upon.
Administrative Convenience : Angel focuses on providing hassle free
administrative / operational support and customized services.
Transparency : Regular statements and updates as well as online
access to information required for investment.
Regular Analysis and Monitoring : Investments undergo regular
monitoring and analysis to check any deviation from the structured
goal ensuring creation of wealth over a period of time.

Professional Management : PMS is provided to professional

management by experts on equity with an aim to optimize returns.

Angel PMS – Ideal For :

Portfolio Management Services from Angel are essential for investor
who needed
✔ Long term wealth generation
✔ Personalized service
✔ Investment opportunities in Indian equities
✔ Fundamental research based investment decisions
In essence, all investor who have faith and belief in the Indian growth
story and robust corporate performance would find Angel PMS most
suitable to meet their objectives.

Mutual Fund
1) To enable clients to diversify their investment in the right
direction. Angel Broking has added another product in its range
with mutual funds.
2) Access to in-depth research & proper selection from diversified
funds based on your preferred criteria.
3) Rating and rankings of all mutual funds from our in house
expert analysts
4) News and alert for your Mutual fund Portfolio and performance
tracking with watch lists
5) Current and historical performance of different funds enabling
comparisons.

Benefits
1. No risk of loss, wrong transfer, mutilation or
theft of share or certificates.
2. Hassle free automated pay-in of your sell
obligations by your clearing members
3. Reduced paper work.
4. Speedier settlement process. Because of faster
transfer and registration of securities in your
account, increased liquidity of your securities.
5. Instant disbursement of non-cash benefits like
bonus and rights into your account.
6. Efficient pledge mechanism.
7. Wide branch coverage.
8. Personalized/attentive services of trained help
desk.
9. ‘Zero’ upfront payment.

No charges for extra transaction statement &

holding statement. All in one combined Monthly
‘Bill-cum Transaction-cum-Holding cum-ledger’
statement.

FUNDAMENTAL SERVICES
The Sunday Weekly Report

This weekly report is ace of all the reports. It offers a comprehensive

market overview and likely trends in the week ahead. It also presents
top picks based on an in-depth analysis of technical and fundamental
factors. It gives short term and long-term outlook on these scripts,
their price targets and advice trading strategies. Another unique
feature of this report is that it provides an updated view of about 70
prominent stocks on an ongoing basis.

Stock Analysis
Angel’s stock research has performed very well over the past few years
and angel model portfolio has consistently outperformed the
benchmark indices. The fundamentals of select scripts are thoroughly
analyzed and actionable advice is provided along with investment
rationale for each scrip.

Flash News

Key developments and significant news announcement that are likely

to have an impact on market / scripts are flashed live on trading
terminals. Flash news keeps the market men updated on an online
basis and helps them to reshuffle their holdings.

TECHNICAL SERVICES
Intra-Day Calls
For day traders angel provides intraday calls with entry, exit and stop
loss levels during the market hours and our calls are flashed on our
terminals. Our analysts continuously track the calls and provide the
recommendations according to the market movements. Past
performance of these calls in terms of profit/loss is also available to
our associates to enable them to judge the success rate.

Posting Trading Calls

Angels “Position Trading Calls” are based on a through analysis of the

price movements in selected scripts and provides calls for taking
positions with a 10 - 15 days time span with stop losses and targets.
These calls are also flashed on our terminals during market hours.

Derivative Strategies

Our analyst take a view on the NIFTY and selected scripts based on
derivatives and technical tools and devise suitable “Derivative
Strategies”, which are flashed on our terminals and published in our
derivative reports.

COMMODITIES SERVICES
Agro Tech Speak
Mainly gives the investors insight into and a forecast for agro
commodities viz. pulses (urad channa etc); reports on oil complex
(soyabean castor etc.) along with spices with reports on kapas guar
seed .
Commodities Tech Speak
This report mainly equips the investors dealing in MCX segment in
commodities like gold, silver, crude oil, copper etc with the market
insight and expert recommendation on the trading strategies.

COMPETITORS
About Anand Rathi
Anand Rathi (AR) is a leading full service securities firm providing
the entire gamut of financial services. The firm, founded in 1994 by
Mr. Anand Rathi, today has a pan India presence as well as an
international presence rough offices in Dubai and Bangkok. AR
provides a breadth of financial and advisory services including
wealth management, investment banking, corporate advisory,
Brokerage & distribution of equities, commodities, mutual funds and
insurance - all of which are supported by powerful research teams.
The firm's philosophy is entirely client centric, with a clear focus on
providing long term value addition to clients, while maintaining the
highest standards of excellence, ethics and professionalism. The
entire firm activities are divided across distinct client groups:
Individuals, Private Clients, Corporate and Institutions.
About Indiabulls

Indiabulls is India’s leading Financial Services and Real Estate

company having over 640 branches all over India. Indiabulls serves
the financial needs of more than 4,50,000 customers with its wide
range of financial services and products from securities, derivative
trading, depositary services, research & advisory services, consumer
secured & unsecured credit, loan against shares and mortgage &
housing finance. With around 4000 Relationship Managers,
Indiabulls helps its clients to satisfy their customized financial goals.
Indiabulls through its group companies has entered Indian Real
Estate business in 2005. It is currently evaluating several large-scale
projects worth several hundred million dollars. “Indiabulls Financial
Services Ltd is listed on the National Stock Exchange, Bombay Stock
Exchange and Luxembourg Stock Exchange. The market
capitalization of Indiabulls is around USD6,300 million (31st
December, 2007). Consolidated net worth of the group is around USD
905 million (31st December, 2007).Indiabulls and its group
companies have attracted more than USD800 million of equity
capital in Foreign Direct Investment (FDI)since March 2000. Some of
the large shareholders of Indiabulls are the largest financial
institutions of the world such as FidelityFunds, Goldman Sachs,
Merrill Lynch, Morgan Stanley and Farallon Capital.
 Business of the company has grown in leaps and bounds since
its inception. Revenue of the company grew at a CAGR of 159%
fromFY03 to FY07. During the same period, profits of the company
grew at a CAGR of 184%.Indiabulls became the first company to bring
FDI in Indian Real Estate through a JV with Farallon Capital
Management LLC, are respected US based investment firm.
Indiabulls has demonstrated deep understanding and commitment to
Indian Real Estate market by winning competitive bids for landmark
properties in Mumbai and Delhi.”

Religare Securities Limited (RSL):-

It is a leading equity and securities firm in India. The company

currently handles sizeable volumes traded on NSE and in the realm of
online trading and investments it currently holds a reasonable share
of the market. The major activities and offerings of the company
today are Equity broking, Depository -Participant Services, Portfolio
Management Services, Institutional Brokerage & Research,
Investment Banking and Corporate Finance. To broaden the gamut of
services offered to its investors, the company has also recently
unveiled a new avatar of it's online investment portal armed with a
host of revolutionary feature. RSL is a member of the National Stock
Exchange of India, Bombay Stock Exchange of India, Depository
Participant with National Securities Depository Limited and Central
Depository Services (I) Limited, and SEBI approved Portfolio
Manager.
Religare has been constantly innovating in terms of product and
services and to offer such incisive services to specific user segments it
has also started the NRI, FII, HNI and Corporate Servicing groups.
These groups take all the portfolio investment decisions depending
upon a client’s risk / return parameter.

Religare has a very credible Research and Analysis division, which

not only caters to the need of our Institutional clientele, but also gives
their valuable inputs to investment dealers.

Religare is also providing in-house Depository services to its clientele

and is one of the leading depository service providers in the country.
 STUDENT CONTRIBUTION TO THE
ORGANIZATION

The contribution towards the organization is adding values in order

to bring business to the organization realizing the responsibilities,
bringing potential clients to the organization.
Furthermore I had to also manage various direct marketing
activities such as
• Tele-calling to clients regarding pre- meetings.

• Mailing to potential customers of the company regarding

products and services.

• The new customers who want software demonstration, we

provide live demonstration to those clients.

• Taking feedback of the services, which we were providing

because it’s a key factor for our company growth and making
long term relationships with customers.

• Bringing potential client to the organization, not only for the

purpose of trading but also for wealth management services
(wms), which includes portfolio management services, mutual
funds, IPO, angel gold was my major contribution to the
company.
 ACHIVEMENTS

In this span of 2 months I came to know the real realm of markets

and clients. This tenure with ANGEL BROKING was an eye opener
for me because every pitching every client in different way to get him
with us was really a daunting task.

Some of achievements include:

• Opening of six accounts for Angel broking which includes 5

BSE accounts and 1 Commodity account.

• I closed the 2 PMS deals of 500000 Rs each

• Training of new summer interns and made them capable to

meet the clients and to convert the deals
 SUMMARY OF LEARNING EXPERIENCE

We can summarize of our learning experience as how to behave in

Corporate world.

1. How to work under pressure.

2. How to handle team.

3. How to get worked done from team.

4. To maximize the market share of the organization and how to

interact with the customer it is known.

5. What is the working process of organization?

6. How to cut down the competitors.

7. How to find out the weaknesses of competitors.

8. How to convert competitor’s client in our organization client.

9. How to analyze the need of client.

10. How to satisfy the need of client.

 Recommendations

• Proper Training for the clients is necessary so that clients can

easily do the trading online.

• HNI clients should be handle in different way which includes:

• The way limits are open for them.

• A regular visit should be made by SALES EXECUTIVE
to them so that a new business deal can be crack.
• Queries of these clients should be solve in lesser time
so that they remain with us for longer time.

• SALES EXCUTIVES should be properly train with different

alternatives of trading like: Futures, Options etc.

• Life time AMC plan is necessary to bring in.

• According to the results of survey many of the clients who are

with ANGEL from last 3 years or more are getting dissatisfied
from us, which should be taken care of with utmost importance.
OBJECTIVE OF THE STUDY

Main objective of the project is to find out the strategies of

different E-Broking firms the level of satisfaction of the
customers and analyisation of different competitors in the
market and evaluate them. Project is about to penetrate the
competitors of ANGEL BROKING LTD. Conclusion of this project can
give an idea of strategies of different companies which may be helpful
to the company. Now days all the broking companies in India are
trying to establish themselves in the competitive market. They are
introducing innovative marketing strategies to survive in the market.
Many other private companies are looking to enter in the Indian
Broking market so it is very essential to a company to innovate their
marketing strategies in terms of

Well educated and capable employee in the agency

Marketing of their products
Deployment of their products
Targeting the right and potential customers
Differentiating from other companies
Future plan of the company

This study consists of to find out the marketing strategies of different

Broking Companies which are the competitors of ANGEL BROKING
LTD.
 INTRODUCTION

Meaning of stock market

A stock market is a private or public market for the trading of

company stock and derivatives of company stock at an agreed price;
both of these are securities listed on a stock exchange as well as those
only traded privately.
Trading Participants in the stock market range from small
individual stock investors to large hedge fund traders, who can be
based anywhere. Their orders usually end up with a professional at a
stock exchange, who executes the order.
Some exchanges are physical locations where transactions are
carried out on a trading floor, by a method known as open outcry.
This type of auction is used in stock exchanges and commodity
exchanges where traders may enter "verbal" bids and offers
simultaneously.
The other type of exchange is a virtual kind, composed of a
network of computers where trades are made electronically via
traders. Actual trades are based on an auction market paradigm
where a potential buyer bids a specific price for a stock and a
potential seller asks a specific price for the stock. (Buying or selling at
market means you will accept any ask price or bid price for the stock,
respectively.) When the bid and ask prices match, a sale takes place
on a first come first served basis if there are multiple bidders or
askers at a given price.
Stock Market Index

The movements of the prices in a market or section of a market are

captured in price indices called stock market indices, of which there
are many, e.g., the S&P, the FTSE and the Euro next indices. Such
indices are usually market capitalization (the total market value of
floating capital of the company) weighted, with the weights reflecting
the contribution of the stock to the index. The constituents of the
index are reviewed frequently to include/exclude stocks in order to
reflect the changing business environment.

Derivative Instruments

Financial innovation has brought many new financial instruments

whose pay-offs or values depend on the prices of stocks. Some
examples are exchange-traded funds (ETFs), stock index and stock
options, equity swaps, single-stock futures, and stock index futures.
These last two may be traded on futures exchanges (which are distinct
from stock exchanges—their history traces back to commodities
futures exchanges), or traded over the-counter. As all of these
products are only derived from stocks, they are sometimes considered
to be traded in a (hypothetical) derivatives market, rather than the
(hypothetical) stock market.
The Bombay Stock Exchange

The Bombay Stock Exchange Limited (formerly, The Stock

Exchange, Mumbai; popularly called The Bombay Stock Exchange, or
BSE) is the oldest stock exchange in Asia. It is located at Dalal Street,
Mumbai, India.

The Bombay Stock Exchange was established in 1875. There are

around 4,800 Indian companies listed with the stock exchange, and
has a significant trading volume. As of August 2007, the equity
market capitalization of the companies listed on the BSE was US$ 1.11
trillion [2].

The BSE SENSEX (SENSITIVE INDEX), also called the "BSE 30", is a
widely used market index in India and Asia. It is located at Dalal
Street, Mumbai, India. Bombay Stock Exchange was established in
1875. There are around 4,800 Indian companies listed with the stock
exchange, and has a significant trading volume. As of August 2007,
the equity market capitalization of the companies listed on the BSE
was US$ 1.11 trillion [2]. The BSE SENSEX (SENSITIVE INDEX),
also called the "BSE 30", is a widely used market index in India and
Asia.
National Stock Exchange

The National Stock Exchange of India Limited (NSE), is a

Mumbai-based stock exchange. It is the largest stock exchange in
India and the third largest in the world in terms of volume of
transactions. 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. As of 2006, the NSE VSAT terminals, 2799 in total,
cover more than 1500 cities across India. In July 2007, the NSE had a
total market capitalization of 42,74,509 crore INR making it the
second largest stock market in South Asia in terms of market-
capitalization.

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 tax paying 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.
Hang Seng Index

Hang Seng" redirects here. For the bank with the same name, see
Hang Seng Bank. For all other uses, see Hang Seng
(disambiguation).The Hang Seng Index (abbreviated: HSI,
Chinese) is a free float-adjusted market capitalization-weighted stock
market index in Hong Kong. It is used to record and monitor daily
changes of the largest companies of the Hong Kong stock market and
is the main indicator of the overall market performance in Hong
Kong. These 40 companies represent about 65% of capitalization of
the Hong Kong Stock Exchange.

Stock Market Crash

A stock market crash is often defined as a sharp dip in share prices of

equities listed on the stock exchanges. In parallel with various
economic factors, a reason for stock market crashes is also due to
panic. Often, stock market crashes end up with speculative economic
bubbles. There have been famous stock market crashes that have
ended in the loss of billions of dollars and wealth destruction on a
massive scale.
An increasing number of people are involved in the stock market,
especially since the social security and retirement plans are being
increasingly privatized and linked to stocks and bonds and other
elements of the market.
There have been a number of famous stock market crashes like the
Wall Street Crash of 1929, the stock market crash of 1973–4, the
Black Monday of 1987, the Dotcom bubble of 2000. But those stock
market crashes did not begin in 1929, or 1987. They actually started
years or months before the crash really hit hard.

One of the most famous stock market crashes started October 24,
1929 on Black Thursday. The Dow Jones Industrial lost 50% during
this stock market crash. It was the beginning of the Great Depression.
Another famous crash took place on October 19, 1987.

Function and Purpose

The Stock Market is one of the most important sources for

companies to raise money. This allows businesses to go public, or
raise additional capital for expansion. The liquidity that an exchange
provides affords investors the ability to quickly and easily sell
securities. This is an attractive feature of investing in stocks,
compared to other less liquid investments such as real estate.

History has shown that the price of shares and other assets is an
important part of the dynamics of economic activity, and can
influence or be an indicator of social mood.
Rising share prices, for instance, tend to be associated with increased
business investment and vice versa. Share prices also affect the
wealth of households and their consumption. Therefore, central
banks tend to keep an eye on the control and behavior of the stock
market and, in general, on the smooth operation of financial system
functions. Financial stability is the raison d'être of central banks.
Exchanges also act as the clearinghouse for each transaction,
meaning that they collect and deliver the shares, and guarantee
payment to the seller of a security. This eliminates the risk to an
individual buyer or seller that the counterparty could default on the
transaction. The smooth functioning of all these activities facilitates
economic growth in that lower costs and enterprise risks promote the
production of goods and services as well as employment. In this way
the financial system contributes to increased prosperity.
Relation of the Stock Market to the Modern Financial System

The financial system in most western countries has undergone a

remarkable transformation. One feature of this development is
disintermediation. A portion of the funds involved in saving and
financing flows directly to the financial markets instead of being
routed via banks' traditional lending and deposit operations.
The general public's heightened interest in investing in the
stock market, either directly or through mutual funds, has been an
important component of this process. Statistics show that in recent
decades shares have made up an increasingly large proportion of
households' financial assets in many countries.

In the 1970s, in Sweden, deposit accounts and other very liquid

assets with little risk made up almost 60 per cent of households'
financial wealth, compared to less than 20 per cent in the 2000s. The
major part of this adjustment in financial portfolios has gone directly
to shares but a good deal now takes the form of various kinds of
institutional investment for groups of individuals, e.g., pension funds,
mutual funds, hedge funds, insurance investment of premiums, etc.

The trend towards forms of saving with a higher risk has been
accentuated by new rules for most funds and insurance, permitting a
higher proportion of shares to bonds. Similar tendencies are to be
found in other industrialized countries.
 In all developed economic systems, such as the European
Union, the United States, Japan and other developed nations, the
trend has been the same: saving has moved away from traditional
(government insured) bank deposits to more risky securities of one
sort or another.

The Stock Market, Individual Investors, and Financial Risk

Riskier long-term saving requires that an individual possess the

ability to manage the associated increased risks. Stock prices fluctuate
widely, in marked contrast to the stability of (government insured)
bank deposits or bonds. This is something that could affect not only
the individual investor or household, but also the economy on a large
scale.

The following deals with some of the risks of the financial sector
in general and the stock market in particular. This is certainly more
important now that so many newcomers have entered the stock
market, or have acquired other 'risky' investments (such as
'investment' property, i.e., real estate and collectables).With each
passing year, the noise level in the stock market rises. Television
commentators, financial writers, analysts, and market strategists are
all over talking each other to get investors' attention.
 At the same time, individual investors, immersed in chat rooms
and message boards, are exchanging questionable and often
misleading tips. Yet, despite all this available information, investors
find it increasingly difficult to profit. Stock prices skyrocket with little
reason, then plummet just as quickly, and people who have turned to
investing for their children's education and their own retirement
become frightened. Sometimes there appears to be no rhyme or
reason to the market, only folly.

This is a quote from the preface to a published biography about

the long-term value oriented stock investor Warren Buffett. Buffett
began his career with $100, and$105,000 from seven limited
partners consisting of Buffett's family and friends. Over the years he
has built himself a multi-billion-dollar fortune. The quote illustrates
some of what has been happening in the stock market during the end
of the 20th century and the beginning of the 21st.
The Behavior of The Stock Market

NASDAQ in Times Square, New York City.

From experience we know that investors may temporarily pull
financial prices away from their long term trend level. Over-reactions
may occur—so that excessive optimism (euphoria) may drive prices
unduly high or excessive pessimism may drive prices unduly low.
New theoretical and empirical arguments have been put forward
against the notion that financial markets are efficient.

According to the efficient market hypothesis (EMH), only

changes in fundamental factors, such as profits or dividends, ought to
affect share prices. (But this largely theoretic academic viewpoint also
predicts that little or no trading should take place—contrary to fact—
since prices are already at or near equilibrium, having priced in all
public knowledge.) But the efficient-market hypothesis is sorely
tested by such events as the stock market crash in 1987, when the
Dow Jones index plummeted 22.6 percent—the largest-ever one-day
fall in the United States.

This event demonstrated that share prices can fall dramatically

even though, to this day, it is impossible to fix a definite cause: a
thorough search failed to detect any specific or unexpected
development that might account for the crash.
 It also seems to be the case more generally that many price
movements are not occasioned by new information; a study of the
fifty largest one-days hare price movements in the United States in
the post-war period confirms this.

Moreover, while the EMH predicts that all price movement (in
the absence of change in fundamental information) is random (i.e.,
non-trending), many studies have shown a marked tendency for the
stock market to trend over time periods of weeks or longer. Various
explanations for large price movements have been promulgated. For
instance, some research has shown that changes in estimated risk,
and the use of certain strategies, such as stop-loss limits and Value at
Risk limits, theoretically could cause financial markets to over react.

Other research has shown that psychological factors may result

in exaggerated stock price movements. Psychological research has
demonstrated that people are predisposed to 'seeing' patterns, and
often will perceive a pattern in what is, in fact, just noise.(Something
like seeing familiar shapes in clouds or ink blots.) In the present
context this means that a succession of good news items about a
company may lead investors to overreact positively (unjustifiably
driving the price up). A period of good returns also boosts the
investor's self-confidence, reducing his (psychological) risk threshold.
Another phenomenon—also from psychology—that works against an
objective assessment is group thinking. As social animals, it is not
easy to stick to an opinion that differs markedly from that of a
majority of the group.
 An example with which one maybe familiar is the reluctance to
enter a restaurant that is empty; people generally prefer to have their
opinion validated by those of others in the group .In one paper the
authors draw an analogy with gambling. In normal times the market
behaves like a game of roulette; the probabilities are known and
largely independent of the investment decisions of the different
players. In times of market stress, however, the game becomes more
like poker (herding behavior takes over). The players now must give
heavy weight to the psychology of other investors and how they are
likely to react psychologically.

The stock market, as any other business, is quite unforgiving of

amateurs. In experienced investors rarely get the assistance and
support they need. In the period running up to the recent NASDAQ
crash, less than 1 per cent of the analyst's recommendations had been
to sell (and even during the 2000 - 2002 crash, the average did not
rise above 5%). The media amplified the general euphoria, with
reports of rapidly rising share prices and the notion that large sums of
money could be quickly earned in the so-called new economy stock
market. (And later amplified the gloom which descended during the
2000 - 2002crash, so that by summer of 2002, predictions of a DOW
average below 5000 were quite common.)
Irrational Behavior

Sometimes the market tends to react irrationally to economic news,

even if that news has no real effect on the technical value of securities
itself. Therefore, the stock market can be swayed tremendously in
either direction by press releases, rumors, euphoria and mass panic.
Over the short-term, stocks and other securities can be battered or
buoyed by any number of fast market-changing events, making the
stock market difficult to predict.

INDIAN STOCK MARKET

The origination of the Indian securities market may be traced back to

1875, when 22 enterprising brokers under a Banyan tree established
the Bombay Stock Exchange (BSE). Over the last 125years, the Indian
securities market has evolved continuously to become one of the most
dynamic, modern and efficient securities markets in Asia. Today,
Indian markets conform to international standards both in terms of
operating efficiency.
Structure and Size of the Markets:

Today India has two national exchanges, the Bombay Stock Exchange
(BSE) and the National Stock Exchange (NSE). Each electronic
trading platforms with around 9400 participating broking outfits.
Foreign brokers account for 29 of these. There are some 9600
companies listed on the respective exchanges with a combined
market capitalization near $125.5bn. Any market that has
experienced this sort of growth has an equally substantial demand for
highly efficient settlement procedures.

In India 99.9% of the trades, according to the National Securities

Depository, are settled in dematerialized form in a T+2 rolling
settlement environments. In addition, trades are guaranteed by the
National Clearing Corporation of India Ltd. (NSCCL) and Bank of
India Shareholding Ltd. (BOISL), Clearing Corporation houses of
NSE and BSE respectively.

The main functions of the Clearing Corporation to work out.

Furthermore, each exchange has a Settlement Guarantee Fund to
meet with any unpredictable situation and a negligible trade failure of
0.003%. the Clearing Corporation of the exchanges assumes the
counter-party risk of each member and guarantees settlement
through a fine-tuned risk management system and an innovative
method of online position monitoring. It also ensures the financial
settlement of trades on the deliver the required funds and/or
securities with the help of a settlement guarantee fund.
 ONLINE TRADING

Advantages Of Online Trading :-

The first major advantage of trading online is the ability to have

total control over ones investments. Before the advent of online
trading, investors had to go through a stockbroker in order to buy and
sell their stocks. This process is tedious, can take up value able time
and is costly. In addition to that, brokers can sometimes persuade
investors to buy and sell certain stocks because of personal reasons.

When investors trades online they have total control of their

money. In addition to that, investors have the luxury of speed. They
can buy and sell stocks quickly, which can help them save money.
An example of this is if investors want to buy certain stocks at low
price, by the time they call their broker and eventually buy the stock
the price could have increased during that time period. This same
example applies to when investors want to sell a stock at a certain
time.
While the investors are calling their broker and the stock is
being sold, the price could have dropped. This could sometimes cost
investors thousands of dollars. With online trading, people can buy
and sell at the exact time they choose to do so because it is just a
mouse click away.
 Online trading is also beneficial because it reduces the cost of
transaction. Instead of paying broker, which can be very costly,
investors can trade online and pay a small fee to their company.
This saves the customers from having to pay commission to the
stockbroker. Furthermore, since” the explosion of online brokerages
has driven the cost of transactions way down, trading online is
cheaper than ever.

This is because all the companied are competing for business

continue reducing their costs to attract customers. The last major
advantage of trading stocks online is that more information is
available then ever before. Investors can get the most up to date stock
quotes and can reach any company they plan on buying stock for.
This information was previously only available to stockbrokers. With
the new technology the internet offers, it is available to everyone.
With this information the investors can become more educated and
make good decision on the stocks they want to buy and sell.

One such website that allows users to gather information is

Quote.com. Quote.com has graphic charts that updates the investors’
portfolio throughout the day and also lets investors create “watch
lists” or mock portfolios that monitor alternative investment options”.
This means that customer scan plan out different investing stratifies
and see how those compare to the ones they are already invested in.
These advantages have contributed greatly to the increase of trading
online.
Disadvantages of Online Trading :-

One major disadvantage with online trading is that there are

many security risks. The internet is a wonderful but dangerous place
to do business. Hackers have the ability to access personal
information on anyone who has ever searched the internet, which
includes credit card information. This was the main reason a
company like Charles Schwab was reluctant to start trading online.

Although the percentage is small, there is still a small chance

that hackers can access ones account (price 2) companies are taking
the most serious precautions on this matter. Another drawback to
trading online is that, while companies offer trades that are quick and
on the spot, in actuality it can take up to several hours to complete or
even not to be completed at all. According to the Securities and
Exchange Commission, “E-traders registered more than 3,300
complaints in the 12 months ended in September 1999, a 197 percent
increase over 1998 and nearly 2,000 percent higher than in 1997”.

This means that here was an increase in problems that the web
sites were having. This could have serious effects on investors because
they could think they bought a stock or sold a stock at a certain time
but in actuality the transaction registered late or not at all costing that
investor money.
 The internet is unpredictable and stable. One can never know
when a web site will fail. In situations where there is a problem like
this, investors can usually call their brokerage firm and the problem is
fixed right away. However, the problem with online trading
companies is that they are too large and are not “easily reached by e-
mail or phone”. This is the main concern for online brokerage firms
and they are trying their best to alleviate these problems.

Finally the most important problem with online trading is that

it is so quick and easy to make transaction, that money can be lost
just as quick and just as easily. Some people that invest online do not
know how the stock market words and think they can just invest in
anything and it will make them money. According into foresters
search, “two types of traders have already moved online ‘the
aggressive affluent’ and those who want to ‘get rich quick.” .

These two groups make up 70 percent of the people that want

investors trading online today. These people can make rash decisions
and lose a lot of their money. People like this generally think that
investing in the stock market is like gambling in Las Vegas. This is a
dangerous attitude and could make people lose money they cannot
afford to lose.
 ONLINE PROCESS

What is E-Broking?
Prospects for E-Broking
Benefit of E-Broking
Benefit to User
Benefit to Broker
What is E-Broking?

E-Broking means electronic broking or online trading. An

electronic market is an attempt use information and communication
technology to provide geographically dispersed traders with the
information necessary for the fair operation of the market.
The e-market is in effect, a broking service to bring together supplier
and customer in the specific market segment. These markets give the
customer easy access to comparative data on price An electronic
broker is an intermediary who :-

May take an order from customer and pass to supplier

May provide service to customer such as a comparison
between goods with respect to particular criteria such as price.

Prospects for E-Broking

E-Broking is still an evolving industry in India and the survivor

are likely to be those brokers who are integrated service and are
financially resilient. The future of e-broking industry thus largely
depends on the extent of the penetration of the internet in the near
future.
Moreover the Bombay stock exchange (BSE) and National stock
exchange (NSE) have recently developed ‘proprietary’ trading engines
called ‘WEBEX’ and ‘DOTEX’, respectively . However, a user can log
on to these engines using the website of the broker and trade
electronically. These developments are, therefore, expected to give a
strong fillip to the e-broking industry in India.
Benefit of E-Broking

In the recent year the use of internet has spread among investor
in stock and shares. The internet can make up to the minute
information available to a large number of investor that until recently
had only been available to those working in financial institution. The
use of online brokerage service automates the process of buying and
selling and hence reduction of commission charges. Also the
commodity being traded is intangible; the ownership of stocks and
shares can be recorded electronically, so there is no requirement for
physical delivery.

Transparency of fund
24*7 back office access
Privacy of there portfolio
Save time
Detail of company etc.
Benefit to User
1. Low transaction cost’s

Brokerage rate in India are in the range of 1 to 1.5%. Where the rate
for e-broking are as low as 0.1%. The Bombay stock exchange(BSE)
and national stock exchange (NSE) recently develop proprietary
trading engine called WEBEX and DOTEX respectively. This engine
will obviate the need for a broker to develop his own engine.
E-Broking in addition, not only brings down the cost of the execution
of the transaction but also speeds up the electronic transfer of
securities.
2. Transparency

E-Broking empowers the customer to transact directly on the stock

exchange and delayers the whole process thereby improving
transparency. The user does not need to rely on the broker’s ‘word of
mouth’ or ‘transaction’ slip for confirmation of the price at which his
trade was conducted.

3. Convenience

Online share trading is available merely at the click of a button ,in the
comfort of home / office. Thus, making it much more convenient for
the customer to trade anytime. Also with ‘limit based’ order being
allowed, customer can place there order even during the ‘non-trading’
hour, which are executed at the earliest trading possibility.
 Benefit to Broker

Easier Risk Management

Under the online mechanism, the system would first check the status
of funds available with the client in his bank account and only then
allow to trade to take place. This process thus substantially reduces
the exposure of the broker to client related credit and payment risk.

Greater Business Potential

The new paradigm of e-broking which allows simple convenient and

transparent transactions may encourage more participants to trade. It
is expected that the introduction of e-broking expand the market
horizon, thus resulting in better business for brokers in the long term
Lower staff costs.
Automation of the broking processes results in reduced manpower
requirement, flexibility of time, less infrastructure cost etc. offering
significant cost saving to broker.

DESCRIPTION OF TERMINOLOGY USED IN BROKING COMPANIES

Investment
The money you earn is partly spent and the rest saved for meeting
future expenses. Instead of keeping the savings idle you may like to
use savings in order to get return on it in the future. This is called
Investment.
Why should one invest?

One needs to invest to:

Earn return on your idle resources

Generate a specified sum of money for a specific goal in life
Make a provision for an uncertain future. One of the important
reasons why one needs to invest wisely is to meet the cost of
Inflation. Inflation is the rate at which the cost of living increases.

The cost of living is simply what it costs to buy the goods and
services you need to live. Inflation causes money to lose value because
it will not buy the same amount of a good or a service in the future as
it does now or did in the past. For example, if there was a 6% inflation
rate for the next 20 years, a Rs.100 purchase today would cost Rs.321
in 20 years. This is why it is important to consider inflation as a factor
in any long-term investment strategy. Remember to look at an
investment's 'real' rate of return, which is the return after inflation.

The aim of investments should be to provide a return above the

inflation rate to ensure that the investment does not decrease in
value. For example, if the annual inflation rate is 6%, then the
investment will need to earn more than 6% to ensure it increases in
value. If the after-tax return on your investment is less than the
inflation rate, then your assets have actually decreased in value; that
is, they won't buy as much today as they did last year.
When to start Investing ?

The sooner one starts investing the better. By investing early you
allow your investments more time to grow, whereby the concept of
compounding (as we shall see later) increases your income, by
accumulating the principal and 7 the interest or dividend earned on
it, year after year. The three golden rules for all investors are :-
Invest early
Invest regularly
Invest for long term and not short term

What care should one take while investing ?

Before making any investment, one must ensure to:

1. Obtain written documents explaining the investment
2. Read and understand such documents
3. Find out the costs and benefits associated with the
investment
4. Assess the risk-return profile of the investment
5. Know the liquidity and safety aspects of the investment
6. Ascertain if it is appropriate for your specific goals
7. Examine if it fits in with other investments you are
considering or you have already made
8. Seek all clarifications about the intermediary and the
Investment.
9. Deal only through an authorized intermediary
10. Explore the options available to you if something were to go
wrong, and then, if satisfied, make the investment.

These are called the Twelve Important Steps to Investing

What is meant by Interest?

When we borrow money, we are expected to pay for using it – this is

known as Interest. Interest is an amount charged to the borrower for
the privilege of using the lender’s money. Interest is usually
calculated as a percentage of the principal balance (the amount of
money borrowed). The percentage rate may be fixed for the life of the
loan, or it may be variable, depending on the terms of the loan.

What factors determine interest rates?

When we talk of interest rates, there are different types of interest

rates - rates that banks offer to their depositors, rates that they lend
to their borrowers, the rate at which the Government borrows in the8
Bond/Government Securities market, rates offered to investors in
small savings schemes like NSC, PPF, and rates at which companies
issue fixed Deposits etc. The factors which govern these interest rates
are mostly economy related and are commonly referred to as
macroeconomic factors.
Some of these factors are:-
Demand for money
Level of Government borrowings
Supply of money
Inflation rate

The Reserve Bank of India and the Government policies which

determine some of the variables mentioned above.

What are various options available for investment?

One may invest in:
Physical assets
Like real estate, gold/ jewellery, commodities etc. and/or
Financial assets

Such as fixed deposits with banks, small saving instruments with post
offices, insurance/provident/pension fund etc. or securities market
related instruments like shares, bonds, debentures etc.

What are various Short-term financial options available for

investment ?

Broadly speaking, savings bank account, money market/liquid funds

and fixed deposits with banks may be considered as short term
financial investment options:-
Savings Bank Account

This is often the first banking product people use, which offers low
interest (4%-5% p.a.), making them only marginally better than
fixed deposits.

Money Market or Liquid Funds

They are a specialized form of mutual funds that invest in extremely

short-term fixed income instruments and thereby provide easy
liquidity. Unlike most mutual funds, money market funds are
primarily oriented towards protecting your capital and then, aim to
maximize returns. Money market funds usually yield better returns
than savings accounts, but lower than bank fixed deposits.

Fixed Deposits with Banks

They are also referred to as term deposits and minimum investment

period for bank FDs is 30 days. Fixed Deposits with banks are for
investors with low risk appetite, and may be considered for 6-
12months investment period as normally interest on less than
6months bank FDs is likely to be lower than money market fund
returns.
What are various Long-term financial options available for
investment ?

Post Office Savings Schemes, Public Provident Fund, Company Fixed

Deposits, Bonds and Debentures, Mutual Funds etc.

Post Office Savings:

Post Office Monthly Income Scheme is a low risk saving instrument,

which can be availed through any post office. It provides an interest
rate of 8% per annum, which is paid monthly. Minimum amount,
which can be invested, is Rs. 1,000/- and additional investment in
multiples of 1,000/-. Maximum amount is Rs. 3, 00,000/- (if Single)
or Rs. 6, 00,000/- (if held jointly) during a year. It has a maturity
period of 6 years. A bonus of 10% is paid at the time of maturity.
Premature withdrawal is permitted if deposit is more than one year
old. A deduction of 5% is levied from the principal amount if
withdrawn prematurely; the 10%bonus is also denied.
Public Provident Fund:

A long term savings instrument with a maturity of 15 years and

interest payable at 8% per annum compounded annually. A PPF
account can be opened through a nationalized bank at anytime during
the year and is open all through The year for depositing money. Tax
benefits can be availed for the amount invested and interest accrued
is tax-free. A withdrawal is permissible every year from the seventh
financial year of the date of opening of the account and the amount of
withdrawal will be limited to 50% of the balance at credit at the end of
the 4th year immediately preceding the year in which the amount is
withdrawn or at the end of the preceding year whichever is lower the
amount of loan if any.

Company Fixed Deposits:

These are short-term (six months) to medium-term (three to five

years) borrowings by companies at a fixed rate of interest which is
payable monthly, quarterly, semi10 annually or annually. They can
also be cumulative fixed deposits where the entire principal along
with the interest is paid at the end of the loan period. The rate of
interest varies between 6-9% per annum for company FDs. The
interest received is after deduction of taxes.
Bonds:

It is a fixed income (debt) instrument issued for a period of more than

one year with the purpose of raising capital. The central or state
government, corporations and similar institutions sell bonds. A bond
is generally a promise to repay the principal along with a fixed rate of
interest on a specified date, called the Maturity Date.

Mutual Funds:

These are funds operated by an investment company which raises

money from the public and invests in a group of assets (shares,
debentures etc.), in accordance with a stated set of objectives. It is a
substitute for those who are unable to invest directly in equities or
debt because of resource, time or knowledge constraints. Benefits
include professional money management, buying in small amounts
and diversification. Mutual fund units are issued and redeemed by
the Fund Management Company based on the fund's net asset value
(NAV), which is determined at the end of each trading session. NAV is
calculated as the value of all the shares held by the fund, minus
expenses, divided by the number of units issued. Mutual Funds are
usually long term investment vehicle though there some categories of
mutual funds, such as money market mutual funds which are short
term instruments.
What is meant by a Stock Exchange?

The Securities Contract (Regulation) Act, 1956 [SCRA] defines ‘Stock

Exchange’ as any body of individuals, whether incorporated or not,
constituted for the purpose of assisting, regulating or controlling the
business of buying, selling or dealing in securities. Stock exchange
could be a regional stock exchange whose area of
operation/jurisdiction is specified at the time of its recognition or
national exchanges, which are permitted to have nation wide trading
since inception. NSE was incorporated as a national stock exchange.

What is an ‘Equity’/Share….?

Total equity capital of a company is divided into equal units of small

denominations, each called a share. For example, in a company the
total equity capital of Rs 2,00,00,000 is divided into20,00,000 units
of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the
company then is 11 said to have 20, 00,000 equity shares of Rs 10
each. The holders of such shares are members of the company and
have voting rights.
What is a ‘Debt Instrument’?

Debt instrument represents a contract whereby one party lends

money to another on pre-determined terms with regards to rate an
periodicity of interest, repayment of principal amount by the
borrower to the lender. In the Indian securities markets, the term‘
bond’ is used for debt instruments issued by the Central and State
governments and public sector organizations and the term
‘debenture’ are used for instruments issued by private corporate
sector.

What is a Derivative?

Derivative is a product whose value is derived from the value of one

or more basic variables, called underlying. The underlying asset can
be equity, index, foreign exchange (for exc.), commodity or any other
asset. Derivative products initially emerged as hedging devices
against fluctuations in commodity prices and commodity linked
derivatives remained the sole form of such products for almost three
hundred years. The financial derivatives came into spotlight in post-
1970 period due to growing instability in the financial markets.
However, since their emergence, these products have become very
popular and by 1990s, they accounted for about two thirds of total
transactions in derivative products.
What is a Mutual Fund?

A Mutual Fund is a body corporate registered with SEBI

(Securities Exchange Board of India) that pools money from
individuals/corporate investors and invests the same in a variety of
different financial instruments or securities such as equity shares,
Government securities, Bonds, debentures etc.

Mutual funds canthus be considered as financial intermediaries in the

investment business that collect funds from the public and invest on
behalf of the investors. Mutual funds issue units to the investors.
The appreciation of the portfolio or securities in which the mutual
fund has invested the money leads to an appreciation in the value of
the units held by investors. The investment objectives outlined by a
Mutual Fund in its prospectus are binding on the Mutual Fund
scheme. The investment objectives specify the class of securities a
Mutual Fund can invest in.

Mutual Funds invest in 12 various asset classes like equity, bonds,

debentures, and commercial paper and government securities. The
schemes offered by mutual funds vary from fund to fund. Some are
pure equity schemes; others are a mix of equity and bonds. Investors
are also given the option of getting dividends, which are declared
periodically by the mutual fund, or to participate only in the capital
appreciation of the scheme.
What is an Index?

An Index shows how a specified portfolio of share prices is moving in

order to give an indication of market trends. It is a basket of securities
and the average price movement of the basket of securities indicates
the index movement, whether upwards or downwards.

What is a Depository?

A depository is like a bank wherein the deposits are securities

(viz.shares, debentures, bonds, government securities, units etc.) in
electronic form.

What is Dematerialization?

Dematerialization is the process by which physical certificates of an

investor are converted to an equivalent number of securities in
electronic form and credited to the investor’s account with his
Depository Participant (DP).

SECURITIES
What is meant by ‘Securities’?

The definition of ‘Securities’ as per the Securities Contracts

Regulation Act (SCRA), 1956, includes instruments such as shares,
bonds, scrip’s, stocks or other marketable securities of similar nature
in or of any incorporate company or body corporate, government
securities, derivatives of securities, units of collective investment
scheme, interest and rights in securities, security receipt or any other
instruments so declared by the Central Government.

What is the function of Securities Market?

Securities Markets is a place where buyers and sellers of securities

can enter into transactions to purchase and sell shares, bonds
debentures etc. Further, it performs an important role of enabling
corporate, entrepreneurs to raise resources for their companies and
business ventures through public issues. Transfer of resources from
those having idle resources (investors) to others who have a need for
them (corporate) is most efficiently achieved through the securities
market. Stated formally, securities markets provide channels for
reallocation of savings to investments and entrepreneurship. Savings
are linked to investments by a variety of intermediaries, through a
range of financial products, called ‘Securities’.
Which are the securities one can invest in?

Shares
Government Securities
Derivative products
Units of Mutual Funds etc. are some of the securities
Investors in the securities market can invest in.

Regulators

Why does Securities Market need Regulators?

The absence of conditions of perfect competition in the securities

market makes the role of the Regulator extremely important. The
regulator ensures that the market participants behave in a desired
manner so that securities market continues to be a major source of
finance for corporate and government and the interest of investors
are protected.

Who regulates the Securities Market?

The responsibility for regulating the securities market is shared by

Department of Economic Affairs (DEA), Department of Company
Affairs (DCA), Reserve Bank of India (RBI) and Securities and
Exchange Board of India (SEBI).

What is SEBI and what is its role?

The Securities and Exchange Board of India (SEBI) is the regulatory
authority in India established under Section 3 of SEBI Act, 1992.
SEBI Act, 1992 provides for establishment of Securities and Exchange
Board of India (SEBI) with statutory powers for (a) protecting the
interests of investors in securities (b) promoting the development of
the securities market and (c) regulating the securities market. Its
regulatory jurisdiction extends over corporate in the issuance of
capital and transfer of securities, in addition to All intermediaries and
persons associated with securities market. SEBI has been obligated to
perform the aforesaid functions by such measures as it thinks fit. In
particular, it has powers for:
Regulating the business in stock exchanges and any other
securities markets.
Registering and regulating the working of stock brokers,
sub–brokers etc.
Promoting and regulating self-regulatory organizations
Prohibiting fraudulent and unfair trade practices
Calling for information from, undertaking inspection,
Conducting inquiries and audits of the stock exchanges,
intermediaries, self regulatory organizations, mutual funds and other
persons associated with the securities market.

Major Players in the BROKING Industry in India are :-

SHAREKHAN

ANAND RATHI

MOTILAL OSWAL

INDIABULLS

HDFC SECURITIES

INDIA INFOLINE

ANGEL BROKING

RELIGARE

RELIANCE MONEY

ICICI DIRECT

BONANZA

UTI SECURITIES

GEOJIT

JP MORGAN STANLEY
 CONCLUSION

To succeed in digital space, marketers need to engaged, excite, enable

customer, to fulfill there expectation. Marketing system is more agile
and responsive. Customer experience and trusty, security and privacy
are critical factor. E-World is unforgiving and has less patience.
Hence promise to perform to keep up promise. Internet has resulted
in consumer power shift and also marketing ability to respond and
anticipate. Still the need for creative marketing exists. Internet is
profound Impact on value changes activities. There is need to
synergies online and offline effort to offer better value. Designing
E-Business plan and measuring E-Metric is essential. Internet serves
a new business for advertising, marketing research and sales
promotion, distribution. Similar studies need to be conducted across
diverse areas in B2C and B2B domains to understand attitudes,
behavior and key success factor.

BIBLIOGRAPHY

www.angelharmony.com
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www.angelbroking.com
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www.google.com
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www.angeltrade.com
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www.timesofindia.com
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www.ivcj.com
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