Capital Mkt[1].(Equity Investment)

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A PROJECT REPORT ON

CAPITAL MARKET(EQUITY AS AN INVESTMENT)

SUBMITTED TO

PUNJAB TECHNICAL UNIVERSITY

JALANDHAR

In partial fulfillment of the requirement for the

award of degree of

Master of Business Administration (MBA)

Submitted by: Project Guide:

Kushagra Sharma Ms. Parul Gupta

Univ. Roll No. 609240425

SESSION (2006-2009)

GNA-INSTITUTE OF MANAGEMENTAND TECHNOLOGY

PHAGWARA


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CERTIFICATE

This is to certify that the project on CAPITAL MARKET(EQUITY AS AN

INVESTMENT)carried out by kushagra Sharma under my guidance is an original

research work and has not been published and conducted before. It is based on

primary data and due care has been taken to ensure that all the sources of secondary

data and references, either from published or unpublished literature or from internet

have been duly acknowledged.

Ms. Parul Gupta

GNA-INSTITUTE OF MANAGEMENT AND TECHNOLOGY.

PHAGWARA


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PREFACE

MBA is a stepping-stone to the management carrier and to develop good manager is

necessary that the theoretical must be supplement with exposure to the real

environment. Research work in management is extremely important for a real life

business issue. For any management student who is striving to perform out

standingly, it is of paramount importance that, apart from gaining theoretical

knowledge, he/she should acquire some practical know-how. Theoretical knowledge

just provides the base and its not sufficient to produce a good manager thats why

the practical knowledge is needed Survey report deals especially with providing an

opportunity to management students to have some exposure in the real business

world. Thus practical experience acts as a Aq3supplement to the classroom studies.

It offers an exposure to practical management in various organizations. It provides a

treasure of experience to the student. Therefore the research project is an essential

requirement for the students of MBA.

Final project is an integral part of the curriculum of M.B.A. it gives one a complete

exposure into the cooperate world. The person learns to understand the business

from a realistic angle. Final project is also a kind of rehearsal of the actual an

individual actually comes to know weather he is fit in the life which he has opted.

During the period on endeavor is made to learn different skills and business

practice. A set routine has to be follower the discipline way

So keeping all these factors in mind and in accordance with requirements of MBA

course the research project on the topic CAPITAL MARKET(EQUITY AS AN

INVESTMENT) IN PHAGWARA &JALANDHAR AREA is done.


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ACKNOWLEDGEM

ENT

Acknowledging any one in mere words is a very difficult task.

It gives me a great pleasure in acknowledging the

Invaluable assistance extended to me by various formalities in the Successful

Completion of their project report at CAPITAL MARKET(EQUITY AS AN

INVESTMENT)

I would like to thank MS. Parul Gupta, the Lecturer of

GNA-INSTITUTE OF MANAGEMENT AND TECHNOLOGY, who shared

her valuable Time and guide me throughout the project.

But for the strength of their blessing and warmth of their

love. I would also like to thank my family members and friends who were

intimated the work possible for completion of the project

kushagra Sharma


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INDEX

Chapter

No.

Topic

1.

2.

CERTIFICATE

PREFACE

ACKNOWLEDGEMENT

EXECUTIVE SUMMARY

INTRODUCTION

Indian Capital Market Introduction

Intermediaries In Capital Market

Investors In Capital Market

Growth Of Capital Market In India

Scenario Of Indian Capital Market

Role Of Capital Market In India

Classification of Indian Capital Market

3. Equity marketIntroduction

Developments in Equity market

Twin Towers of Equity Market

4. Equity as an investment Introduction

Investing principles

Analysis(Fundamental,Economical.Technical )

5. Primary marketIntroductionMarketing methods

Intermediaries

6. Secondary marketIntroduction

Reasons for transacting in Secondary market

Functions

Listing

Trading

SettlementIntermediaries


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7.OBJECTIVES

REVIEW OF LITERATURE

RESEARCH METHODOLOGY

DATA PRESENTATION

ANALYSIS AND INTERPRETATION

FINDINGSSUGGESTIONS

LIMITATIONS

8. BIBLIOGRAPHY

9.. ANNEXURE


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EXECUTIVESUMMARY

The capital market in India-debt, equity, mutual funds, derivatives, commodities

etc. has changed during the decade of reforms of the nineties and is continuing to

change. Although many improvements have been effected, the outcome of these

actions has not been as far-reaching as required. The major thrust of financial

reforms commenced in 1992 coincided with the attempts of economic

liberalization. The Internet also opened up a new channel of distribution of

primary market issues by online trading and is likely to play an important role in

the future, providing a larger reach and catering to a larger base of investors.

Both from the regulatory and participatory standpoints, the changes being

brought into the Indian equity market would bring a smile even on the face of a

grave critique. Initiatives like the dematerialization of shares, introduction of

rolling settlement; online trading and introduction of derivatives are few of the

path breaking steps, which have presented the Indian markets on par with its

global counterparts. These steps have assisted the market in two ways. First, itstreamlined the capital market operations in a significant manner instilling the

much-desired confidence in the minds of the retail segment of the bazaar.

Secondly, a very strong message was transmitted to the investor across the

continents, inviting them to cultivate the virgin land and share the fruits. The

investor should bear in mind that while he takes an investment decision he

should have some idea of the company's break-even point and the company's

position in the stock exchange. It is advised to invest in growth companies and

income companies and to take shares of only those companies, which are listed,

on the stock exchange. Various sources of financial information are available in

the country. He should attempt to make some analysis of the companies in which


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he is investing every time that such information is published in these journals

and financial magazines.

REVIEW OF LITERATURE

The random walk hypothesis in the emerging

Indian stock marketYear:

Nov/Dec 2002

Abstract:

Outlines previous research on the characteristics and dynamics of stock returns

and the special features of the Bombay Stock Exchange (India); and presents a

study of 1990-1998 daily stock returns for actively traded Indian shares using a

portfolio of 100 shares and 38 individual ones. Explains the methodology and

presents the results in detail. Finds that the returns do not conform with a random

walk but display significant non-linear dependence (mostly in the form of ARCH

type conditional heteroskedasticity) which does not seem to be due to

nonstationarity of the underlying economic variables. Shows that return volatility

is time varying and persistent but does not explain expected returns. Briefly

considers consistency with other research and calls for further research.


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Risk management in Indian venture capital and private equity

firms: a comparative study

Abstract:

Purpose - To compare the risk management practices of venture capital and private

equity firms in the UK and India to identify difference due to country of origin.

Design/methodology/approach - Describes the venture capital industry in India,

only nodding at the copious previous such research on the UK scene, and from areview of the literature on risk management strategies in the industry, advances five

hypotheses regarding the differences in use of prescreening, valuation methods,standard adjustments, managing risk in existing portfolio firms and managing

portfolio risk between the two countries; tests these through a questionnaire study of

53 venture capital firms in the UK and India.

Findings - Tabulates the results of the survey relating to each hypothesis and

indicates that risk management techniques and style do differ between the two

countries, and that in general they are less well-developed in India.

Research limitations/implications - Sees a possible lack of sound investment and

portfolio theory for the industry behind the inconsistent policies identified in bothcountries, and recommends further research in this area; comments on the

limitations of the small size of the sample.

Originality/value - Highlights the need for more work in this area, given the

importance of venture capital and private equity to smaller companies, which are a

vital element of the economy particularly in emerging markets.


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INTRODUCTION OF

INDIAN CAPITAL MARKET

The capital market deals with capital. Capital Market is generally understood

as a market for long term funds and investments in long term instruments available

in this market. However, now this market also includes short-term funds. Capital

markets mean the market for all the financial instruments, short term and long term

as so commercial industrial and government paper.

The capital market is a market where borrowing and lending of long term

funds takes place. Capital market deals in both, debt and equity. In these markets

productive capital is raised and made available to the corporate. The governments

both central and state raise money in the capital market through the issue of

government securities. Capital market refers to all the institutes and mechanisms of

raising medium and long-term funds, through various instruments available like

shares, debentures, bonds etc.

Thus the capital market plays a very important role in promoting economic

growth through the mobilization of long-term savings and the savings get invested

in the economy for productive purpose. The capital market in India is a well

integrated structure and its components include stock exchanges, developed banks

investment trusts, insurance corporations and provident fund organization. It caters

to the varied needs for capital of agriculture, industrial and trading sectors of the

economy. There are two important operations carried on in these markets. The


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raising the new capital and Trading in the securities already issued by the

companies.

With the pace of economic reforms followed in India, the importance ofcapital markets has grown in the last ten years. Corporate both in the private sector

as well as in the public sector raise thousands of crores of rupees in these markets.

The governments, through Reserve Bank of India, as well as financial institutes also

raise a lot of money from these markets. The capital market serves a very useful

purpose by pooling the savings.

The capital markets encourage capital formation in the country. The capital

markets mobilize savings of the households and of the industrial concerns. Such

savings are then invested for productive purposes. Capital markets also facilitate the

growth of the industrial sector, as well as the other sectors of the economy. The

capital markets provide funds for the projects in backward areas. Thus, Capital

markets generate employment in the country.

They also facilitate the development of stock markets. Due to capital

markets, the public has alternative sources of investment. The public can invest not

only in bank deposits, but also in shares and debentures issued by public companies.

The commercial banks and FIs provide timely financial assistance to viable sick

units to overcome their industrial sickness. The banks and FIs may also write off a

part of loan, or they re-schedule the loan, so as to offer payment flexibility to the

weak units, which in turn helps the weak units to overcome financial crisis.


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INTERMEDIARIES IN CAPITAL MARKET

Capital market requires many intermediaries who are responsible to transfer

funds from those who save to those who require these funds for investments. The

efficiency of the markets is dependent on the specialization attained by these

intermediaries. Some of them are as follows:

1. Stock Exchanges.

2. Banks.

3. Investment Trusts and Companies.

4. Specialized Financial Institutions or Development Banks.

5. Mutual Funds.

6. Non-Banking Financial Institutions.

7. International Financial Investors and Institutions.


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INVESTORS IN CAPITAL MARKET

The supply in this market comes from savings from different sectors of the

economy. These savings accrue from the following sources:

1. Individuals.

2. Corporate.

3. Governments.

4. Foreign countries.

5. Banks.

6. Provident Funds.

7. Financial Institutions.

All these entities contribute to savings in the economy part of these savings

naturally flow in the capital markets. Individuals invest in these markets directly by

investing in shares or debentures of companies through bond issues of public sector

units or through mutual funds. Corporate who have more savings than their

requirement for funds also are participants in this market.


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GROWTH OF CAPITAL MARKET IN INDIA

There has been considerable growth in the capital markets in India. The

following are the factors responsible for the growth of capital markets in India.

1. Growth of Stock Exchanges in India

2. Growth of Financial Institutions

3. Growth of Mutual Funds

4. Growth of Merchant Banking in India

5. Growth of Multinationals Growing Public Confidence

6. Growth of Entrepreneurs

7. Development of Venture Capital Funds

8. Development of Credit Rating Agencies

9. Setting up of SEBI

10. Setting up of National Securities Clearing Corporation

11. Setting up of Corporate Governance

12. Setting up of Clearing Corporation of India Limited

13. General Awareness


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SCENARIO OF INDIAN CAPITAL MARKET

Indian Stock Markets are one of the oldest in Asia. Its history dates back to

nearly 200 years ago. The earliest records of security dealings in India are meagre

and obscure. The East India Company was the dominant institution in those days

and business in its loan securities used to be transacted towards the close of the

eighteenth century. By 1830's business on corporate stocks and shares in Bank and

Cotton presses took place in Bombay. Though the trading list was broader in 1839,

there were only half a dozen brokers recognized by banks and merchants during

1840 and 1850.The 1850's witnessed a rapid development of commercial enterprise

and brokerage business attracted many men into the field and by 1860 the number of

brokers increased into 60.

In 1860-61 the American Civil War broke out and cotton supply from United

States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of

brokers increased to about 200 to 250. However, at the end of the American Civil

War, in 1865, a disastrous slump began (for example, Bank of Bombay Share,

which had touched Rs2850/-, could only be sold at Rs.87/-).

At the end of the American Civil War, the brokers who thrived out of Civil

War in 1874, found a place in a street (now appropriately called as Dalal Street)

where they would conveniently assemble and transact business. In 1887, they

formally established in Bombay, the "Native Share and Stock Brokers' Association"

(which is alternatively known as The Stock Exchange"). In 1895, the Stock

Exchange acquired a premise in the same street and it was inaugurated in 1899.

Thus, the Stock Exchange at Bombay was consolidated.


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In the era of globalization and liberalization, the capital market assumes a

greater importance. The smooth functioning of the capital market depends on the

regulators, participants and investors. The past decade has been a golden age for

capital markets in India. It is now a far more important source of finance thantraditional financial intermediaries for corporate sector. It is poised to dominate the

future of corporate finance in India. Over the past several years the capital market

has witnessed a sea change. The market has become more in terms of infrastructure,

adoption of best international practices and introduction of competition.

Reforms in the capital market, particularly the establishment

empowerment of SEBI, market determined allocation of resources, screen based

nation-trading, dematerialization and electronic transfer of securities, rolling

settlement and ban on deferral products, sophisticated risk management and

derivatives trading, have greatly improved the regulatory framework and efficiency

of trading and settlement. Indian market is now comparable to many developed

markets in terms of a number of quantitative parameters.

The process of reforms has led to a pace of growth of

markets almost unparalleled in the history of any country. Capital market in India

has grown exponentially as measured in terms of amounts raised from the market,

number of stock exchanges and intermediaries; the number of listed stocks, market

capitalization, trading volumes and turnover on stock exchanges and investors

population. Along with this, the profiles of the investors, issuers and intermediaries

have changed significantly. The market has witnessed fundamental institutional

changes resulting in drastic reduction in transaction cost and significant

improvements in efficiency, transparency and safety. Indian market is now

comparable to many developed markets. There are few countries, which have higher

turnover ratio than India, market capitalization as percentage of GNP compares

favorably even with advanced countries and is much better than emerging market.


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ROLE OF CAPITAL MARKET IN INDIA

1. CAPITAL FORMATION

2. ECONOMIC GROWTH

3. DEVELOPMENT OF BACKWARD AREAS

4. GENERATES EMPLOYMENT

5. LONG TERM CAPITAL TO INDUSTRIAL SECTOR

6. GENERATION OF FOREIGN CAPITAL

7. DEVELOPING ROLE OF FINANCIAL INSTITUTIONS

8. INVESTMENT OPPORTUNITIES


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CLASSIFICATION OF INDIAN CAPITAL MARKET

DEBT MARKET

COMMODITIES EQUITY MARKET

INDIAN CAPITAL MARKET

DERIVATIVES MUTUAL FUNDS


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DEBT MARKET

The debt market is one of the most critical components in the financial system of

any economy and act as the fulcrum of a modern financial system. The debt market

in most developed countries is many times bigger than the other financial markets

including the equity market. The debt markets in advanced countries are

significantly larger and deeper than equity markets. But in India, the trend is just the

opposite. The development of debt market in India has not been as remarkable as in

the equity market. However, it has undergone considerable changes in the last few

years. The debt market in India can be divided into two categories - Government

securities market consisting of Central Government and State Governmentsecurities; and Bond market consisting of FI bonds, PSU bonds and corporate

bonds/debentures. The government securities segment is the most dominant

category in the debt market.

The participants in the debt market are a small number of large players, which has

resulted in the debt market evolving into a wholesale market. Most primary debt

issues are privately placed or auctioned to the participants while secondary market

dealings are negotiated on telephone. The debt market has become more diversified

with the entry of new participants. The major participants in the debt market are as

follows:

1. Central And State Government

2. Primary Dealers

3. Public Sector Undertakings (PSUs)

4. Corporate

5. Banks

6. Mutual Funds(MF)

7. Foreign Institutional Investors (FIIs)

8. Provident Funds (PFs)

9. Charitable Institutions And Trusts


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EQUITY MARKET

In financial markets, stock is the capital raised by a corporation through the issuance

and distribution of shares. A person or organization which holds shares of stocks is

called a shareholder. The aggregate value of a corporation's issued shares is its

market capitalization. When one buys a share of a company he becomes a

shareholder in that company. Shares are also known as Equities. Equities have the

potential to increase in value over time. It also provides the portfolio with the

growth necessary to reach the long-term investment goals. Research studies have

proved that the equities have outperformed than most other forms of investments inthe long term. Equities are considered the most challenging and the rewarding, when

compared to other investment options.

Research studies have proved that investments in some shares with a longer

tenure of investment have yielded far superior returns than any other investment.

However, this does not mean all equity investments would guarantee similar high

returns. Equities are high-risk investments. One needs to study them carefully before

investing. Since 1990 till date, Indian stock market has returned about 17% to

investors on an average in terms of increase in share prices or capital appreciation

annually. Besides that on average stocks have paid 1.5 % dividend annually.

Dividend is a percentage of the face value of a share that a company returns to its

shareholders from its annual profits. Compared to most other forms of investments,

investing in equity shares offers the highest rate of return, if invested over a longer

duration.


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DERIVATIVES

Derivatives are one of the most complex instruments. The word derivative comes

from the word to derive. It indicates that it has no independent value. A derivative

is a contract whose value is derived from the value of another asset, known as the

underlying asset, which could be a share, a stock market index, an interest rate, a

commodity, or a currency. When the price of the underlying changes, the value of

the derivative also changes. Without an underlying asset, derivatives do not have

any meaning. For example, the value of a gold futures contract derives from the

value of the underlying asset i.e., gold. The prices in the derivatives market are

driven by the spot or cash market price of the underlying asset, which is gold in this

example.

DEFINITION OF DERIVATIVES :

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

basic variables, called bases (underlying asset, index, or reference rate), in a

contractual manner. The underlying asset can be equity, forex, commodity or any

other asset. According to Securities Contracts (Regulation) Act, 1956 {SC(R)A},derivatives is

A security derived from a debt instrument, share, loan, whether secured or

unsecured, risk instrument or contract for differences or any other form of security.

The main types of derivatives:-

1. futures,

2. forwards

3. options

4. swaps
http://en.wikipedia.org/wiki/Futures_contracthttp://en.wikipedia.org/wiki/Forward_contracthttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Swap_(finance)http://en.wikipedia.org/wiki/Forward_contracthttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Swap_(finance)http://en.wikipedia.org/wiki/Futures_contract


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MUTUAL FUNDS

The mutual fund industry in India has come into existence in

1963 with the formation of Unit Trust of India, at the initiative of the Government

of India and RBI. Mutual Fund is a trust that pools the savings of a number of

investors who share a common financial goal. The money thus collected is then

invested in capital market instruments such as shares, debentures and other

securities. The income earned through these investments and the capital

appreciations realized are shared by its unit holders in proportion to the number of

units owned by them. MF seems to be the most suitable vehicle of investment for

the common people as it offers opportunity to invest in a diversified, professionally

managed basket of securities at a relatively low cost.

There are number of schemes of Mutual fund and all of them have different

character and objective. It is the skill of the investor to keep in view the objective

and then take decision where to invest. For e.g. in the wake of boom in the software

sector, the Indian Mutual fund launched various sector specific schemes that

entailed investment only in software stocks for that period.

1. Debt-Oriented Schemes

2. Equity-Oriented Schemes

3. Open-Ended Vs Close-Ended Schemes

4. Pure Growth Schemes

5. Pure Income Schemes

6. Balanced Schemes

7. Tax Saving Scheme

8. Sector Funds

9. Money Market Mutual Funds


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COMMODITIES

The commodities trade in the 18th and 19th centuries was largely influenced

by the shifts in macro economic patterns, the changes in government regulations, the

advancement in technology, and other social and political transformations around

the world. The 19th century has seen the establishment of various commodity

exchanges, which paved the way for effective transportation, financing and

warehousing facilities in this arena. In a new era of trading environment,

commodities exchanges offer innumerable economic benefits by facilitating

efficient price discovery mechanisms and competent risk transfer systems.

Commodity exchange is an association, or a company or any other body

corporate organizing futures trading in commodities. Earlier, all the sellers and

buyers of a commodity used to come to a common market place for the trade. Buyer

could judge the amount of produce that year while the seller could judge the amount

of demand of the commodity. Thus they could dictate their terms and hence the

counter party was left with no choice. Thus, in order to hedge from this unfavorable

price movement, need of the commodity exchange was felt.

The National Commodity Exchanges have been recognized by the Central

Government for organizing trading in all permissible commodities which include

precious (gold & silver) and non-ferrous metals; cereals and pulses; ginned and un-

ginned cotton; oilseeds, oils and oil-cakes; raw jute and jute goods; sugar and gur;

potatoes and onions; coffee and tea; rubber and spices, etc. The MCX, NCDEX and

NMCE are large commodity exchanges in India and MCX is the biggest among

them.


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EQUITY MARKET

The first company to issue shares of stock was the Dutch East India

Company, in 1602. The innovation of joint ownership made a great deal of Europe's

economic growth possible following the Middle Ages. The technique of pooling

capital to finance the building of ships, for example, made the Netherlands a

maritime superpower. Before adoption of the joint-stock corporation, an expensive

venture such as the building of a merchant ship could only be undertaken by

governments or by very wealthy individuals or families.

Equity markets, the world over, grew at a great speed in the decade of the

nineties. After the bear markets of the late eighties, the world markets saw one of

the largest ever bull markets of more than ten years. The opening up of Indian

economy in the 1990's led to a series of financial sector reforms, prominent being

the capital market reforms. These reforms have led to the development of the Indian

equity markets to the standards of the major global equity markets. All this started

with the abolition of Controller of Capital Issues and subsequent free pricing of

shares.


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DEVELOPMENTS IN EQUITY MARKET

The Government of India has been trying to improve market efficiency,

enhance transparency and bring the Indian Equity Market up to international

standards. Many reform measures have been initiated in the 90s. The principal ones

are the formation of Securities Exchange Board of India (SEBI), repeal of the

Capital Issues (Control) Act, 1947, introduction of screen-based trading, shortening

of trading cycle, demutualization of stock exchanges, establishment of depositories

disappearance of physical share certificates and better risk management systems in

stock exchanges.

The formation of Sebi was the first attempt towards integrated regulation ofthe securities market. Sebi regulates all market intermediaries and has the powers to

impose monetary penalties for misconduct of any intermediary. One of the major

stumbling blocks in fair pricing of capital issues has been the Capital Issues

(Control) Act, 1947. The issuers were denied the opportunity to economically raise

money from the capital market. This is now a matter of the past thanks to the repeal

of the Act itself. Sebi has also issued Disclosure and Investor Protection (DIP)

guidelines to ensure fair prices for the investors, though however, many issuers in

the 90s could unfairly price their capital issues at the cost of the poor common

investors.


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The introduction of Screen Based Trading Systems (SBTS) by NSE is a

major development in the capital market. This made the markets more efficient. The

geographical barriers to trade were dismantled resulting in increased trading

volumes. This was possible due to the great advancements in the area of informationtechnology. SBTS electronically matches orders cutting down time, cost and errors,

and minimizing the chances of fraud. Very long settlement cycle was another major

hindrance in effecting deliveries in the equity market. Often the securities were

delivered after 30 days or more due to weekly/fortnightly settlements and carry

forward transactions. Sebi has enforced the discipline to compulsorily settle trades

in T+3 days since April 2002. This is slated to reduce to T+2 days from April 2003.

All scripts are now under rolling settlement since December 2001.

The Equity Market is incomplete without products to manage risks in

portfolio values. At long last, derivatives trading appeared on Indian exchanges in

June 2000. While the product range in derivatives is still limited (futures and

options on stocks and stock indices), it is certainly a major step forward in

broadening the financial markets. NSE was established as a demutualized structure

separating the roles of ownership, management and trading to eliminate any conflict

of interest among the stakeholders to improve market efficiency and to focus on

investor interest. Another notable development in the Indian equity market has been

the introduction of depositories to dematerialize the share certificates. This avoids

physical movement of certificates, bad deliveries and quicker transfer of ownership

of shares. Presently all actively traded shares are held, traded and settled in demat

form. The setting up of National Securities Clearing Corporation Ltd., (NSCCL) in

April 1996 has been a major development in managing counterparty risks in the

equity market.. While most of the above measures have helped in reinforcing

confidence in the Indian equity market by providing more transparent and efficient

buying, selling and transfer of shares.


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TWIN TOWERS OF EQUITY MARKET

In India the main exchanges are the BSE and the NSE, which contribute to

more than 90% of the trade in the capital market. These two exchanges are themovers and shakers of the equity market in India.

NSE-NATIONAL STOCK EXCHANGE

NSE was setup in November 1992, started its trading

operation effectively from June 30, 1994. Only the debt market

segment of the NSE was put into operation initially. The capital

market segment of the NSE commenced its operation on

November 3, 1994. It provides facility for trading of equity instruments, warrants,

debentures, preference shares etc. The total turn over of capital market segment of

NSE was higher at RS.2,94,504crores/- as compared with RS.1,24,284crores/- of the

Mumbai Stock Exchange in 1996-97. NSE has adopted fully automated screen

based trading system, which allows trading members to trade from their offices

through a communication network. The exchange has opened membership to a

number of cities.

BSE-BOMBAY STOCK EXCHANGE

Bombay Stock Exchange Limited

(BSE) which was founded in 1875 with six


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brokers has now grown into a giant institution with over 874 registered Broker-

Members spread over 380 cities across the country. Today, BSE's Wide Area

Network (WAN) connecting over 8000 BSE Online Trading (BOLT) System Trader

Work Stations (TWS) is one of the largest of its kind in the country. With a view toprovide efficient and integrated services to the investing public through the

members and their associates in the operations pertaining to the Exchange, Bombay

Stock Exchange Limited (BSE) has set up a unique Member Services and

Development to attend to the problems of the Broker-Members.

EQUITY AS AN INVESTMENT

Equity is:

1. Stock or any other security representing an ownership interest.

2. On the balance sheet, the amount of the funds contributed by the owners (the

stockholders) plus the retained earnings (or losses), also referred to as "shareholder's

equity".

3. In the context of margin trading, the value of securities in a margin account minus

what has been borrowed from the brokerage.


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Equity is a term whose meaning depends very much on the context. In general, one

can think of equity as ownership in any asset after all debts associated with that

asset are paid off. For example, a car or house with no outstanding debt is

considered the owner's equity since he or she can readily sell the items for cash.Stocks are equity because they represent ownership of a company, whereas bonds

are classified as debt because they represent an obligation to pay and not ownership

of assets.

The ability of equities to deliver over longer time frames and even

outperform other investment avenues like gold, property and bonds is an often

chronicled fact. However, over shorter time frames, equities also hold the potential

to be a very risky asset class and expose the portfolio to high levels of volatility.

This is the primary reason why any fund manager worth his salt always recommends

a sufficiently long (at least 3 years) time frame for an equity-oriented investment.

Similarly financial planners advocate pruning of the equity holdings with

advancement in the investors age, when the investor is typically closer to retirement

(shorter investment horizon) and has a lower risk appetite as well.


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INVESTING PRINCIPLES

1. Invest for Real Returns

2. Keep an Open Mind

3. Never Follow the Crowd

4. Everything Changes

5. Avoid the Popular

6. Learn from your Mistakes

7. Buy During Times of Pessimism

8. Hunt for Value and Bargains

9. Search Worldwide

10. No-one Knows Everything

If you buy the same securities as other people, you will have the same results

as other people. It is impossible to produce a superior performance unless you do

something different from the majority. To buy when others are despondently selling

and to sell when others are greedily buying requires the greatest fortitude and pays

the greatest reward. Bear markets have always been temporary. And so have bull

markets. Share prices usually turn upward from one to twelve months before the

bottom of the business cycle and vice versa. If a particular industry or type of

security becomes popular with investors, that popularity will always prove

temporary and, when lost, may not return for many years.


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FUNDAMENTAL ANALYSIS

The investor while buying stock has the primary purpose of gain. If he

invests for a short period of time it is speculative but when he holds it for a fairly

long period of time the anticipation is that he would receive some return on his

investment. Fundamental analysis is a method of finding out the future price of a

stock, which an investor wishes to buy. The method for forecasting the future

behavior of investments and the rate of return on them is clearly through an analyzeof the broad economic forces in which they operate. The kind of industry to which

they belong and the analysis of the company's internal working through statements

like income statement, balance sheet and statement of changes of income.


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ECONOMIC ANALYSIS

Investors are concerned with those forces in the

economy, which affect the performance of organizations in

which they wish to participate, through purchase of stock.

A study of the economic forces would give an idea about

future corporate earnings and the payment of dividends

and interest to investors. Some of the broad forces within

which the factors of investment operate are:

1. POPULATION

2. RESEARCH AND TECHNOLOGICAL DEVELOPMENTS

3. CAPITAL FORMATION

4. NATURAL RESOURCES AND RAW MATERIALS


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INDUSTRIAL ANALYSIS

The industry has been defined as homogeneous groups of people doing a

similar kind of activity or similar work. In India, the broad classification of industry

is made according to stock exchange list, which is published. This gives a distinct

classification to industry to industry in different forms such as:

(A)Engineering,

(B)Banking and Insurance,

(C)Textiles,

(D)Cement,

(E) Steel Mills and Alloys,

(F) Chemicals and Pharmaceuticals,

(G)Retail,

(H)Sugar,

(I) Information Technology,

(J) Automobiles and Ancillary,

(K)Telecommunications,

(L) FMCG,

(M) Miscellaneous.


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COMPANY ANALYSIS

Company analysis is a study of the variables that influence the future of a

firm both qualitatively and quantitatively. It is a method of assessing the competitive

position of a firm earning and profitability, the efficiency with which it operates its

financial position and its ful1l with respect to the earning of its shareholders. The

fundamental nature of this analysis is that each share of a company has an intrinsic

value, which is dependent on the company's financial performance, quality of

management and record of its earnings and dividend. They believe that the market

price of share in a period of time will move towards its intrinsic value. If the market

price of a share is lower than the intrinsic value, as evaluated by the fundamental

analysis, then the share is supposed to be undervalued and it should be purchased

but if the current market price shows that it is more than intrinsic value then

according to the theory the share should be sold.

This basic approach is analyzed through the financial statements of an

organization. The basic financial statements, which are required as tools of the

fundamental analyst, are the income statement, the balance sheet, and the statement

of changes in financial position. These statements are useful for investors, creditors

as well as internal management of a firm and on the basis these statements the future

course of action may be taken by the investors of the firm. While evaluating acompany, its statement must be carefully judged to find out that they are:

(a) Correct,

(b) Complete,

(c) Consistent and


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(d) Comparable

TECHNICAL ANALYSIS

Technical analysis is simply the study of prices as reflected on price charts.

Technical analysis assumes that current prices should represent all known

information about the markets. Prices not only reflect intrinsic facts, they also

represent human emotion and the pervasive mass psychology and mood of the

moment. Prices are, in the end, a function of supply and demand. However, on a

moment to moment basis, human emotionsfear, greed, panic, hysteria, elation,

etc. also dramatically effect prices. Markets may move based upon peoples

expectations, not necessarily facts. A market "technician" attempts to disregard the

emotional component of trading by making his decisions based upon chart

formations, assuming that prices reflect both facts and emotion. Analysts use their

technical research to decide whether the current market is a BULL MARKET or a

BEAR MARKET.

It can be done through :-


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STOCK CHARTS

A stock chart is a simple two-axis (X-Y)

plotted graph of price and time.. Individual data plots

for charts can be made using the CLOSING price for

each day. The plots are connected together in a single

line, creating the graph. Also, a combination of the

OPENING, CLOSING, HIGH and/or LOW prices

for that market session can be used for the data plots.

This second type of data is called a PRICE BAR.

TRENDS

The stock chart is used to identify the

current trend. A trend reflects the average rateof change in a stock's price over time. Trends

exist in all time frames and all markets. Trends

can be classified in three ways: UP, DOWN or

RANGEBOUND. In an uptrend, a stock rallies

often with intermediate periods of

consolidation or movement against the trend.

In doing so, it draws a series of higher highs and higher lows on the stock chart. In

an uptrend, there will be a POSITIVE rate of price change over time. In a

downtrend, a stock declines often with intermediate periods of consolidation or

movement against the trend. In doing


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VOLUME

Volume measures the participation of

the crowd. Stock charts display volume

through individual HISTOGRAMS below the

price pane. Often these will show green bars

for up days and red bars for down days.

Investors and traders can measure buying and

selling interest by watching how many up or

down days in a row occur and how their

volume compares with days in which price moves in the opposite direction.

PATTERNS AND INDICATORS

How can one organize the endless stream of

stock chart data into a logical format?

Charts allow investors and traders to look at

past and present price action in order to

make reasonable predictions and wise

choices. It is a highly visual medium. This

one fact separates it from the colder world

of value-based analysis. The stock chart

activates both left-brain and right-brain functions of logic and creativity. So it's


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no surprise that over the last century two forms of analysis have developed that

focus along these lines of critical examination.

MOVING AVERAGES

The most popular technical indicator

for studying stock charts is the MOVING

AVERAGE.. . Moving averages LAG price.

In other words, if price starts to move sharply

upward or downward, it will take some time

for the moving average to "catch up". Plotting

moving averages in stock charts reveals how

well current price is behaving as compared to

the past.. When it is above, conditions are "bullish". When below, conditions are

"bearish". Additionally, moving averages will slope upward or downward over time.

This adds another visual dimension to a stock analysis.

SUPPORT AND RESISTANCE

The concept of SUPPORT AND

RESISTANCE is essential to understanding

and interpreting stock charts. Resistance

defines that level where sellers are too strong

to allow price to rise further. Support and

resistance play different roles in uptrends and

downtrends. In an uptrend, support is where a

pullback from a rally should end. In a


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downtrend, resistance is where a pullback from a decline should end. Support and

resistance are created because price has memory. When price pushes above

resistance, it becomes a new support level. When price falls below support, that

level becomes resistance.

PRIMARY MARKET

The primary is that part of the capital markets

that deals with the issuance of new securities.

Companies, governments or public sector institutions

can obtainfunding through the sale of a new stock or

bond issue. This is typically done through a syndicate

of securities dealers. The process of selling new issues to investors is called

underwriting. In the case of a new stock issue, this sale is an initial public offering

(IPO). Dealers earn a commission that is built into the price of the security offering,

though it can be found in theprospectus. Features Of Primary Market are:-

1. This is the market for new long term capital. The primary market is the marketwhere the securities are sold for the first time. Therefore it is also called New Issue

Market (NIM).

2. In a primary issue, the securities are issued by the company directly to investors.

3. The company receives the money and issue new security certificates to the

investors.

4. Primary issues are used by companies for the purpose of setting up new business

or for expanding or modernizing the existing business.

5. The primary market performs the crucial function of facilitating capital formation

in the economy.

6. The new issue market does not include certain other sources of new long term

external finance, such as loans from financial institutions. Borrowers in the new
http://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Initial_public_offeringhttp://en.wikipedia.org/wiki/Prospectushttp://en.wikipedia.org/wiki/Prospectushttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Initial_public_offeringhttp://en.wikipedia.org/wiki/Prospectus


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issue market may be raising capital for converting private capital into public capital;

this is known as going public.

METHODS OF MARKETING IN PRIMARY MARKET

1. PUBLIC ISSUE

2. PRIVATE PLACEMENT

3. OFFER FOR SALE

4. BOUGHT OUT DEALS

5. INITIAL PUBLIC OFFERCheck Promoter Standing

Study Company Performance

Understand Future Prospects

Look At The Price

6. RIGHT ISSUE

7. BONUS ISSUE

8. BOOK-BUILDING

INTERMEDIARIES IN PRIMARY MARKET

1. MERCHANT BANKERS

2. UNDERWRITERS

3. BANKERS TO THE ISSUE

4. REGISTRARS AND SHARES TRANSFER AGENTS


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5. BROKERS TO AN ISSUE

SECONDARY MARKET

A market, which deals in securities that have

been already issued by companies, is called as

secondary market. It is also known as stock market. It

is the base upon which the primary market is

depending. For the efficient growth of the primary

market a sound secondary market is an essential

requirement. The secondary market offers an important facility of transfer of

securities activities of securities.

Secondary market essentially comprises of stock exchanges,

which provide platform for purchase and sale of securities by investors. In India,

apart from the Regional Stock Exchanges established in different centers, there are

exchanges like the National Stock Exchange (NSE), who provide nation wide

trading facilities with terminals all over the country. The trading platform of stock

exchanges is accessible only through brokers and trading of securities is confined

only to stock exchanges.

The activities of buying and selling of securities in a market are

carried out through the mechanism of stock exchange. There are at present 24 Stock

Exchanges in India, recognized by the government. The first organized stock

exchange was established in India at Bombay in 1887. When the Securities

Contracts (Regulation) Act was passed in 1956, only 7 stock exchanges were

recognized. There are three important stock exchanges in Bombay namely the

Bombay Stock Exchange, National Stock Exchange and over the Counter Exchange


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of India. There has been a substantial growth of capital market in India during the

last 25 years.

REASONS FOR TRANSITING IN SECONDARY MARKET

There are two main reasons why individuals transact in the secondary

market:

1. Information motivated reasons

2. Liquidity motivated reasons

FUNCTIONS OF THE SECONDARY MARKET

1. To facilitate liquidity and marketability of the outstanding equity and debt

instruments.

2. To contribute to economic growth through allocation of funds to the most

efficient channel through the process of disinvestment to reinvestment.

3. To provide instant valuation of securities caused by changes in the internal

environment (that is, company-wide and industry wide factors). Such valuation

facilitates the measurement of the cost of capital and the rate of return of the

economic entities at the micro level.

4. To ensure a measure of safety and fair dealing to protect investors interest.

5. To induce companies to improve performance since the market price at the stock

exchanges reflects the performance and this market price is readily available to

investors.


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LISTING

Listing is a process involved in

listing something with some one. It is a

permission to quote shares and debentures

officially on the trading floor of the stock

exchange. The listed shares appear on the

official list of securities for the purpose of

trading security listing is a step that is

required to register and to place on record the security of a company with the

appropriate authority i.e. the recognized stock exchange. Securities are required to

be listed under Section 9 of the Securities Contract (Regulation) Act, 1956.

Its Characteristics Are:-

1. Agreement

2. Purpose

3. Investor protection

4. Restriction

TYPES OF LISTING

1. Initial Listing

2. Listing For Public Issue

3. Listing For Rights Issue

4. Listing Of Bonus Shares

5. Listing For Merger Or Amalgamation

DELISTING

The securities listed can be de-listed from the Exchange as per the SEBI

(Delisting of Securities) Guidelines, 2003 in the following manner:


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Voluntary de-listing of companies

Compulsory de-listing of companies

TRADING

The act of buying and selling of securities on a stock exchange is known as

Stock Exchange Trading. Jobbers and brokers are the two categories of dealers in

the stock exchange. A jobber is a dealer in securities while a broker is an agent or

seller of securities... they gets commission from his clients, that is fixed by the

stock exchange.

For a trading there is a need of

DEMAT

Demat is dematerialization on shares. Dematerialization is a process by which the

shares, debentures etc in the physical form get converted into the electronic form

and are stored in the computers by the depository. Demat helps in

1. Easy liquidity

2. Trading in demat segment benefits elimination of bad deliveries and all risks

associated with physical certificate such as loss, theft, mutilation, forgery, etc

3. You can also expect a lower interest charge for loans taken against demat shares

as compared to the interest for loan against physical shares. This could result in a

saving of about 0.25% to 1.5%.

4. In case of transfer of electronic shares, you save 0.5% in stamp duty.


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5. You also avoid the cost of courier/ notarization/ the need for further follow-up

with your broker for shares returned for company objection

TRADING PROCEDURE

The following are the steps involved in the trading of securities at a stock

exchange:

TYPES OF DEALINGS

1. Spot delivery contract

2. Ready delivery contract

3. Forward delivery contract

4. Margin trading

ONLINE TRADING

Online trading in shares and securities has already

been started in India. It has been made possible due to


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introduction of demat. ICICI Web Trade, HDFC Securities, Stock Holding

Corporation of India and many other institutions have started the online trading

system. The investors can carry out buying and selling of securities while sitting in

the house or office.HOW TO TRADE ONLINE

1. Log on to the Broker's website.

2. Register yourself as a client.

3. Fill in the client broker agreement on stamp paper.

4. Log on the broker's site using secure user ID and password.

5. The market watch page shows real time data.

6. Trade shares directly by entering the symbol of securities.

7. The broker's server will check the limit on-line and the demat account for the

number of shares execute the trade.

8. Usually the order is executive in about 20 seconds and you get the confirmation.

9. The broker will send one e-mail confirmation and printed contract by mail.

10.On the settlement day the demat and bank accounts will automatically get

debited and credited.

INTERMEDARIES IN SECONDARY MARKET

1. Stock Broker

2. Sub Brokers

3. Custodian

4. Jobber

5. Taraniwala

6. Odd Lot Dealer

7. Arbitrageur

8. Security Dealer

9. Depositories


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10. Portfolio Managers

11. Stock Exchanges

.

OBJECTIVES

To understand the scenario of Equities in Indian Capital Market.

To explore the functionality of Stock Exchanges.

To know about the customer perception regarding investment in capital

market.

To gain the knowledge on Trading Aspects.

To appreciate the role of Equities in India.

To create enthusiasm among academicians by, offering them with some new

areas of further research.

To familiarize the reader of this project with various concepts Equity Market.

To know the role of fundamental, technical and stock analysis.


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To apply the tools and techniques in my research in the form of charts and

diagrams.

RESEARCHMETHODOLOGY

The methodology of the entire research and survey work was defined at an

early stage so that there was minimum wastage of energy material and money.

In the process of the research and survey the entire schedule of work was decided

into steps as follows: -

1. Defining the objective.

2. Defining the population.

3. Frame the sampling units

4. Data to be collected

5. Research Tool

6. Summary& analysis

7. Preparation of the report

DEFINING THE OBJECTIVE:

It is the first step in the research and also is very crucial area of the research. The

objective of this research is to know the working in capital market as equity as an

investment & also analyze the customer perception regarding investment in capital

market(equity as an investment)..

DEFINING THE POPULATION:


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Population refers to the total of items about which information is deserted. The

attributes that are the objective of study are referred to as characteristics and the

units possessing them are called as elementary units. The aggregate of such units is

generally described as population. Thus all units in any field of inquiry constituteuniverse and all elementary units constitute population.

FRAME THE SAMPLING UNITS: The elementary units or cluster of such units may form the basis of sampling

process in which case they are called as sampling units- a list containing all such

sampling units is known as sampling frame. Thus sampling frame consists of a list

of items frame, which the sample is to be drawn. It is often impossible to draw a

sample directly from population. I randomly selected 100 clients of from Jalandhar

and Phagwara. .

DATA TO BE COLLECTED:It becomes necessary to collect data that are appropriate. There are several ways of

collecting the appropriate data, which differ considerably in context of money cost

time and other resources.

The relevant data for the research project is hybrid of primary & secondary data.

Primary Sources:-

Personal interview

Survey

Questionnaire& observation method

Secondary Sources:-

The Secondary source of information consists of:

Books

Journals


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Periodicals

Magazines

Web Sites

The major source in this category has been the publications of different

books. The information from these publications has been searched, assembled &

interpreted in the best possible manner. The report is based on the assumption that,

project success is more dependent upon preventing or working with barriers as

opposed to reinforce existing positive factors.

RESEARCH TOOL:

The instrument, which was used in the research, was questionnaire and it was, like

the questionnaire was started with open-ended questions so that the respondents get

a feel of the whole questionnaire and then questions slowly move on to the close-

ended questions.

SUMMARY AND ANALYSIS OF DATA:

After the data have been collected, it must analyze them to get the neededinformation. The analysis of data requires a number of closely related operations,

which are as establishment of categories, the application of these categories to raw

data through coding, tabulation and then drawing statistical inferences

Analysis work is generally base on the computations of various percentages,

coefficients, etc, by applying various well-defined statistical formulae. In process of

analysis, relationships should be subjected to test of significance to determine with

what validity data can be said to indicate any conclusions. In this research after

analyzing the data we find the leading brand in air conditioners and also find the

sales percentage of various brands of air conditioners in the market.

The above research report was formulated as under-


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Research : Descriptive

Data Source : Primary & Secondary

Research Instrument : Questionnaire

Type of Questionnaire : Open/Close bothSampling Size : 100 Clients

Sampling Procedure : Simple Random Sampling

DATA ANALYSIS

I prepared a questionnaire, which helped me to collect the necessary data for thissurvey. In my survey I interviewed 100 individual belonging to diversified

profession. The data I collected was in crude form, to extract the information from

that data I analyzed the data and make some tables and bar charts.


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DATA ANALYSIS ANDINTERPRETATION OF

DATA

DATA ANALYSIS AND INTERPRETATION OF DATAQUES 1. ARE YOU AN INVESTOR OR NOT ?

OPTIONS NO. OF PEOPLE (%)

YES 96

NO 4


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96%

4%

YES

NO

INTERPRETATION:-

The interpretation is that the 96% people are investing their money in

different schemes and only 4 % people are not invested due to certain

reasons.

QUES 2. IF NOT, WHAT ARE THE REASONS FOR NOT INVESTING ?


NOT APPLICABLE KNOWLEDGE 19

BCOZ OF RISK 28

RUMORS 10

LACK OF INTEREST 20

NO SAVINGS 23


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19%

28%

10%

20%

23%

NOT

APPLICABLE

KNOWLEDGE

BCOZ OF RISK

RUMORS

LACK OF

INTEREST

INTERPRETATION:-

The interpretation is that the,, the people who are not investing because 19%

people dont have knowledge ,28% do not invest due to risk.10% due to

rumors and 20% dont have interest to invest and 23% people dont have

enough saving for investment..

QUES 3. IF YES, WHERE DO YOU PREFER TO INVEST MONEY?


SHARE MKT 16

BANKING SCHEMES 25

LIFE INSURANCE 30

MUTUAL FUNDS 13

GOVT SECURITIES 16


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16%

25%

30%

13%

16% SHARE MKT

BANKING

SCHEMES

LIFE INSURANCE

MUTUAL FUNDS

GOVT

SECURITIES

INTERPRETATION:-

It is that the16% people invested in share market, 25% in banking schemes,

30% in life insurance, 13% in mutual funds and 16% in government

securities.

QUES 4. HAVE YOU EVER INVESTED IN CAPITAL MARKET?

OPTIONS NO. OF RESPONDENTS (%)

YES 44

NO 66


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40%

60%

YES

NO

INTERPRETATION:-

It is that the 44% people invested in capital market and 66% do not invest in

capital market.

QUES 5. WHICH SEGMENT OF CAPITAL MARKET USUALLY YOU

INVEST YOURE MONEY?

OPTIONS NO. OF RESPONDENTS (%)

DEBT MARKET 15

MUTUAL FUNDS 30

EQUITY MARKET 23

DERIVATIVES 17


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COMMODITY MARKET 15

15%

30%

23%

17%

15%DEBT MARKET

MUTUAL FUNDS

EQUITY MARKET

DERIVATIVES

COMMODITY

MARKET

INTERPRETATION:-

The interpretation is that the 15% invested in debt market, 30% in mutual

funds, 23% in equity market, 17% in derivatives and 15% in commodity

market.

QUES 6. IF YOU INVESTED IN EQUITY MARKET,, IN WHICH

SECTORS SHARES YOU WILL INVEST?

OPTIONS NO. OF RESPONDENTS(%)

IT 20

RETAIL 14

FMCG 15


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BANKING 22

MANUFACTURING 13

OIL N GAS 12

OTHERS 4

20%

14%

15%22%

13%

12%

4%

IT

RETAIL

FMCG

BANKING

MANUFACTURING

OIL N GAS

OTHERS

INTERPRETATION:-

It is that the most of the investor invested money in banking and IT sector

and 14% in retail sector and 13% in mfg sector and only 4% in other sector.

QUES 7. WHAT ARE THE REASONS BEHIND FOR INVESTING IN

PARTICULAR SECTOR?


GOOD RETURN 36

APPRECIATION IN CAPITAL 20

EFFICIENCY 14


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FUTURE PROSPECTS 30

36%

20%

14%

30% GOOD RETURN

APPRECIATION IN

CAPITAL

EFFICIENCY

FUTURE PROSPECTS

INTERPRETATION:-

It is that the most of the investor invest money for earning and also growth in

future prospectus,, also want to efficiency of company.

QUES 8. ARE YOU INVESTING MONEY IN EQUTY MARKET ON THE

BASIS OF TECHNICAL AND FUNDAMENTAL ANALYSIS ?


YES 55

NO 45


61/75


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43%

35%

22%

YES

NO

CANT SAY

INTERPRETATION:-

It is that the 43% say it is a good tool and 35% say no and 22% people cany

say about that,, bcoz they dont know about fundamental analysis and

technical analysis..

QUES 8. WHICH ONE WAY YOU CHOOSE FOR TRADING IN

EQUITY MARKET?


ONLINE TRADING 49

OFFLINE TRADING 51


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49%51%

ONLINE TRADING

OFFLINE

TRADING

INTERPRETATION:-

It is that the 49% do online trading and 51% do offline trading as like

through brokers agents etc

QUES 9.WHAT PRECAUTION OR CARE SHOULD TAKEN

WHILE INVESTING IN EQUITY ? GIVE RANK ..

OPTIONS (RANK)

Read And Understand

Documents

3

Cost & Benefits 5

Risk & Return 2

Liquidity 4


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Safety 1

3

52

4

1

Read And

Understand

Documents

Cost & Benefits

Risk & Return

Liquidity

Safety

INTERPRETATION:-

It is that the while investing people take precaution of safety first ofinvesting amt, then see risk and return then read documents, then want quick

liquidity..

QUES 10. FROM WHERE YOU GOT INFORMATION ABOUT

INVESTMENT AVENUES ? GIVE RANK ..

OPTIONS (RANK)

PRINT MEDIA 3

FAMILY/FRIENDS 4

INTERNET 2

TV 1


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AGENTS/REPSENTATIVES 5

3

4

2

1

5

PRINT MEDIA

FAMILY/FRIENDS

INTERNET

TV

AGENTS/REPSE

NTATIVES

INTERPRETATION:-

It is that the investor get information from most of them from tv, then

internet by seeing the websites,then print media, then family and friends thenagents of company.

QUES 11. WHAT WOULD YOU SUGGEST THAT WHETHER IT IS

BENEFICIAL TO INVEST IN EQUITY MARKET OR NOT AND WHY?


YES 43

NO 57


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43%

57%

YES

NO

INTERPRETATION:-

It is that the 43% said that people have to invest in equity mkt and 57 % said

no,, bcoz of risk ,etc.

WHY? Becoz.........

CONCLUSION

Equity capital is a high risk-high reward, permanent source of long term

finance for corporate enterprises and short term earning for shareholders. The


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investors, who desire to share the risk, return and control associated with ownership

of companies would invest in equity capital.

Today, the Indian Equity Market is one of the most

technologically developed in the world and is on par with other developed markets

abroad. The introduction of on-line trading system, dematerialization, ban of the

badla system, and introduction of rolling settlement have facilitated quick trading

and settlements which lead to larger volumes. The setting up of the National Stock

Exchange of India Limited has revolutionized the face of the stock market. NSE is

the only stock exchange which covers majority equity investments every day.

Also equity capital market encourages capital formation in

the country. The specific factor, which influences equity market, is the investors

sentiment towards the stock market as a whole. So investor first has to analyze and

invest and not speculate in shares. The introduction of online trading has given a

much-needed impetus to the Indian equity markets. In this technological world

things are needed to move at a faster pace, and with the introduction of METHODS

OF MARKETING SECURITIES IN THE EQUITY MARKET, the stock exchange

has expanded its business at a tremendous speed.

According to economic times, the research states the major

reason behind the irregularities of market (up and down in sale and purchase, price

of share) is mainly because of FORECASTING MIND SET OF EQUITY

INVESTORS. So, the stock exchanges must disregards the emotional component of

trading by making investors decisions based upon chart formations, assuming that


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prices reflect both facts and emotion. And also by creating the awareness of

fundamental analysis (Fundamental analysis is a method of finding out the future

price of a stock, which an investor wishes to buy) among the investors to avoid the

irregularities while trading.

So to increase the volume of equity investment, the stock exchanges should

strive to increase transparency, strictly enforce corporate governance norms, provide

more value-added services to investors, and take steps to increase investor

confidence. These stock exchanges will have to plan strategic tie-ups with their

foreign counterparts to get an international platform. A developed and vibrant

secondary market can be an engine for the revival and growth of the primary

market. So, to encourage Indian investment and face international competition every

Indian stock exchange has to stress on innovation and sustained investment in

technology to remain ahead.

FINDINGS

1. Most of the people want to invest in equity market, but they dont have

enough knowledge about equity market.


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2. People dont know how to invest, when to invest, where to invest in equity

market.

3. There is a lot of risk in equity market,, therefore generally people hesitate to

invest in equity market

4. There is a greater role of technical and fundamental analysis in equity

market, so therefore due emphasis must be given to fundamental and

technical analysis

5. We find that the people want to invest in such securities who is more safe

and more liquidity

6. Some investors invest only in those securities who is in the top and whose

growth is more.

7. Middle class family people prefer to invest in banking schemes, life

insurance, and government securities.

8. There is a lot of risk in equity market,, therefore generally people hesitate to

invest in equity market

SUGGESTIONS/RECOMMENDATIONS

1. Still most of Indian population has not proper knowledge of regarding stock

markets. So focus on giving information regarding stock market.


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2. Imparting proper training to agents so that they guide their clients properly.

3. Make the system more transparent so that chances of speculation reduce.

4. Make new laws for proper functioning of market.

5. Investors should know how to make fundamental, industry and technical so

that they can better understand the position of equity market.

6. Market penetration in India is very less. If we talk about online trading than

the size of untapped market is very large. Serious efforts to bring new

investors into business should be made.

7. To increase the satisfaction level of the client more educated & well

informed Relationship Managers should be employed.

8. After sales services to the investors should be made better to retain the

existing unit holders.

LIMITATIONS

1. Time was major constraint in the study.

2. Lack of personal meetings with respondents could produce different results.


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3. Inaccessibility of respondents.

4. As it is carried out on human being who have the tendency to behave

artificially when they know that they are being analyzed.

5. Subjectivity is the main limitations of such studies. It is very difficult to

verify the research result.

6. Lack of knowledge of awareness among customers.

7. Psychology of people they think that investment in shares is not beneficial, it

is more risky.

BIBLIOGRAPHY

Books Referred

1. Investment Management-Preeti Singh

2. Indian Financial Market-T R Venkatesh


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3. Financial Market-P K Bandgar

4. Merchant Banking & Financial Services-Anil Agashe.

Magazines

1. Business Today

2. India Today

3. Business World

Websites

1. www.nseindia.com

2. www.indiainfoline.com

3. www.hdfcsec.com

4. www.equitymaster.com

5. www.bseindia.com

6. www.sify.com

7. www.sebi.gov.in

8. www.financialexpress.com

ANNEXURE

QUESTIONNAIRE

NAME:-

OCCUPATION:-

PHONE NO:-

PLZ TICK THE FOLLOWING OPTIONS

QUES 1. ARE YOU AN INVESTOR OR NOT ?
http://www.nseindia.com/http://www.hdfcsec.com/http://www.bseindia.com/http://www.sebi.gov.in/http://www.nseindia.com/http://www.hdfcsec.com/http://www.bseindia.com/http://www.sebi.gov.in/


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Yes No

QUES 2. IF NOT, WHAT ARE THE REASONS FOR NOT INVESTING ?

Not Applicable Knowledge.. because of Risk

Rumors.. Lack Of Interest.. No Savings....

QUES 3. IF YES, WHERE DO YOU PREFER TO INVEST MONEY ?

Shares .. Banking Schemes... Life Insurance .

Mutual Funds Govt. Security..

QUES 4. HAVE YOU EVER INVESTED IN CAPITAL MARKET ?

Yes No

QUES 5. WHICH SEGMENT OF CAPITAL MARKET USUALLY YOU

INVEST YOUR MONEY ?

Debt Market Mutual Funds . Equity Market

Derivatives . Commodity Market

QUES 6. IF YOU INVESTED IN EQUITY MARKET,, IN WHICH

SECTORS SHARES YOU WILL INVEST ?

I T Retail FMCG Banking.

Manufacturing Oil and Gas Others.

QUES 7. WHAT ARE THE REASONS BEHIND FOR INVESTING IN

THIS SECTOR ?


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Good Return.. Appreciation In Capital.. Efficiency ..

Future Prospectus ...... Look at Price..

QUES 8. ARE YOU INVESTING MONEY IN EQUTY MARKET ON THE

BASIS OF TECHNICAL AND FUNDAMENTAL ANALYSIS ?

Yes . No..

QUES 9. DO YOU THINK THAT FUNDAMENTAL AND TECHNICAL

ANALYSIS IS A GOOD TOOL FOR INVESTMENT ?

Yes No. Cant say.

QUES 10. WHICH ONE WAY YOU CHOOSE FOR TRADING IN

EQUITY MARKET ?

Online Trading.. Offline Trading.

QUES 11. WHAT PRECAUTION OR CARE SHOULD TAKEN

WHILE INVESTING IN EQUITY ? GIVE RANK ..?

Read And Understand Documents .

Cost & Benefits .

Risk & Return .

Liquidity .

Safety .

QUES 12. FROM WHERE YOU GET INFORMATION ABOUT

INVESTMENT AVENUES ?

Print Media ..... Family /Friends .... Internet ..

TV .. Agents/Representatives of Company ..


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QUES 13. WHAT WOULD YOU SUGGEST THAT WHETHER IT IS

BENEFICIAL TO INVEST IN EQUITY MARKET OR NOT AND WHY ?

Yes .. No ..

WHY? Because.........

DATE --------------------------

Signature

THANK YOU FOR CO-OPERATION

Capital Mkt[1].(Equity Investment)

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