RAJASTHAN TECHNICAL UNIVERSITY, KOTAA 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: Ms. Dimple Arya HR Manager 2009-2011 Submitted By:DEEPAK KUMAR SOLANKI MBA III Sem. 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. 1. 2. 3. 4. 5. 6. 7. 8. Name Introduction of the industries Introduction of the organization Student Contribution to the organization Introduction about Stock Market Conclusion Recommendations and Suggestions Appendix 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 company. gold was my major contribution to the 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 marketcapitalization. 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 email 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. 2. 3. 4. 5. 6. 7. 8. Obtain written documents explaining the investment Read and understand such documents Find out the costs and benefits associated with the investment Assess the risk-return profile of the investment Know the liquidity and safety aspects of the investment Ascertain if it is appropriate for your specific goals Examine if it fits in with other investments you are considering or you have already made Seek all clarifications about the intermediary and the Investment. 9. 10. Deal only through an authorized intermediary 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 612months 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 post1970 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 www.angelbroking.com www.google.com www.angeltrade.com www.timesofindia.com www.ivcj.com