“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
TABLE OF CONTENTS
Sl.No.
Topic
Page No.
1
Executive Summary
2
2
Company Profile
3
3
Investment and It’s Objectives
10
4
Indian Securities Market
18
5
Shares
20
6
Basics of Equity Investments
23
7
Dematerialization & Trading account
30
8
Money Mantras
34
9
Research Objectives
36
10
Data Analysis
39
11
Findings and Suggestions
60
12
Suggestions
61
13
Conclusion
62
14
Bibliography
63
15
Annexure
64
Babasabpatilfreepptmba.com
Page 1
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
EXECUTIVE SUMMARY This project report is the outcome of study entitled “Investment Environment For Shares in Belgaum City” at “Geerak Marketing”. The report starts with overview of Geerak Marketing Group. Then report briefly provides information about the functions of Geerak Marketing Group in brief. Then the introduction to Investment and its objectives. The project continues with the brief introduction to Indian Securities Market and Share and its advantages and disadvantages. It also deals with demat and trading account. The research is about the investment preference of individuals in Belgaum city. The segment covered are Professionals, Businessman’s, Government employees, Others. This report consist some of interesting things about the their investment preferences, Criteria they would consider while investing and their risk profile. It also covered study about their investment in shares, factors influencing them for trading with their brokers, and their satisfaction level with the broker. The project report ends with findings, suggestions and conclusion.
Babasabpatilfreepptmba.com
Page 2
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Company Profile In November 1985 Mr. Nanalal Karva started an investment consultant firm “Geerak Marketing “. With decades of working experience and business family background this firm has established with a view to bring the citizens of northern part of Karnataka in the main stream of investors at national level. Since its establishment the firm is continuously engaged in serving the investors family. In fact, given the scenario, it will be much appropriate to say thus “Geerak” is the first organization that has educated & introduced the citizen of this part of Karnataka to the Stock Exchange. Geerak marketing was first incorporated as a private limited company on 16th June 1992 subsequently converted into a public limited company on 25th October 1995. The new entity was named “Geerak Marketing” Stocks & Shares Broker Limited (GMSSBL). Mr. Nanalal Karva & his family hold majority of the shares in the company. GMSSBL of Geerak Marketing, which was in existence since 1985. Ultimately GMSSBL ahs become the flagship company of Geerak group to serve the investors. The company earns its maximum income as brokerage and for dematerialization transferring the shares etc. The company consists of a depository participant section which handles the dematerializations of the shares demat account etc. It consists of a back office which handles the account of the company. The print outs of various contract notes of the client of all the branches are taken and signed by Mr. Nanalal Karva & sent to the respected branches by courier. In the year 2000 Geerak Marketing was registered with the brokers at Cochin and through the Peninsular Capital Market Ltd. The firm has grown to reach immense height. It has withstood all odds in the market & has emerged as a true leader in the bargain. Babasabpatilfreepptmba.com
Page 3
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Geerak is widely recognized as a trustworthy organization and now it has been successful in satisfying its client’s interest and doing its best.
Scope of activities Scope of activities for Geerak has been 1. Stock and shares broking as such broker of a. National stock exchange . b. Bombay stock exchange.
2. Investment advisory service for a. Resident Indians b. Non-resident Indians.
3. Mobilizing fixing deposit for other corporate.
4. Establishment of service centers at semi – urban and rural to meet the investor’s needs.
5. Depository services which are being offered through a. Normal bang securities private Ltd. Mumbai. b. Ventura Capital market limited . Mumbai. c. Stock Holding Corporation of India Limited. Hubli. Babasabpatilfreepptmba.com
Page 4
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
d. Trading in futures and options.
Investment related other diversified services provided by Geerak. 1. New issue forms, applications for bonds, debentures and fixing deposits. 2. Investment in mutual funds of UTI, Allience, Kothari. Zurich, Kotak mahinder, LIC, GIC, Cholamandala etc. 3. Investment in government securities. 4. Investment in tax free bonds. 5. Investment of long term gains under Section 54A in the prescribed infrastructure bonds.
Some value added services provided by Geerak. 1. Investment regarding what shares to buy/sell and what are the market condition. 2. Technical analysis and arriving the trends in the market of index and individual scrip’s. Arranging investors meeting to provide information on the day-to-day changes in the stock market and investment related activities. 3. Arrangement of peens post budget meetings for the investors. 4. Transfer of shares and transmission of shares. Geeerak Branches Geerak has its branches operating at Sirsi, Dharwad, Haveri, Gadag. Sirsi branch is situated at Babasabpatilfreepptmba.com
Page 5
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Jajashri finance complex Sharadanand Street Sirsi – 581401.
Haveri branch is situated at Banashankari Complex Vidyanagar, P.B. Road, Haveri – 580001 Dharwad branch is situated at S.C. Patil complex Subhash Road, Dharwad – 580001 Gadag branch is situated at #6, Siddalingeshwar complex Station Road, Gadag – 581103.
The mjor services provided at their branches include training, in future and option buying and selling shares through NSE.
Babasabpatilfreepptmba.com
Page 6
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
CUSTOMER PROFILE. The client base of Geerak Marketing includes bank employees, business people,retiered persons, government employees, teachers and professor. Here some speculate while some others take up delivery based trading. For few their objective remains “investing” their surplus cash while some others enjoy hedging. Many clients also invest in mutual funds: company deposits and still some others invest their money in debentures of various companies. Brokerage Charges Trading : 0.075% to 0.02% on one side depending upon the volumes and margin money paid. Delivery Brokerage: Min 0.40% to 1.25% depending upon the volumes and margin money paid. Depository Charges Account opening charges : Rs 80 to Rs 310. Annual maintenance charges : varies from the services of depository. Starts from 310 onwards. Babasabpatilfreepptmba.com
Page 7
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Transaction Cost: Min Rs 10 or Max 0.015%of the market value. Minimum charges : Rs 80. Custody charges : Nil to 0.75 as per month per ISIN
Geerak Placement Services Apart from all these GEERAK also provides placement services under the banner “ Geerak Place Me” It has the database of almost 5500 candidates who are in securing a job . Free enrolment Providing right job for right person Satisfactorily placed candidates in reputed concerns for the post of Accountant, Managers, Sales Executives, Typists, Clerks, Computer operators, and Technical personnel. Basic services offered by a sub broker: 1. Online buying and selling of the shares through National Stock Exchange. 2. Online buying and selling of the shares through Bombay Stock Exchange 3. Trading in futures and options.
Value Added Services
Babasabpatilfreepptmba.com
Page 8
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Apart from providing basic services, it also becomes vary important on the part of sub broker to guide an investor in this changing technological environment. The concept of dematerialization of shares is relatively new. Further the rolling settlement and T+3 system of settlement has recently been started. Derivative trading is also introduced. To explain to an investor all these ‘ new’ things, a broker/ sub broker plays a cruicial role. Unlesss an investor becomes familiar with all these, he won’t in a better position. There fore a broker/ sub-broker doesn’t have much option but to guide a common investor buy providing value added services. Following are the value added services provided by a broker / sub-broker. 1. Arranging investors meet, seminar etc to bring more awareness among investors about Dematerialization of Shares It’s working, It’s advantages, The different depository participants, the kind of services provided by them, their charges, further with whom it is advisable to open an account, for an investor, Scripts traded in compulsory de-mat form etc. Derivative Trading How to invest in futures and options, Settlement of system under futures and options, various profitable strategies that can be adopted while trading in derivative market, “Margin Money” to be provided while trading derivative etc T+3 System of Settlements
Babasabpatilfreepptmba.com
Page 9
“Investment environment for shares in Belgaum”conducted for Geerak Marketing 1.
[Type the document title]
It’s futures , It’s settlement system, It’s advantages , Obligations of an investor as
a buyer in this settlement system, Obligations of an investor as a seller in this settlement system. 2. Advising an investor in which stock, when to buy, sell or hold. 3. To guide an investor about the source from where he can get the market information. Future also guiding them how to analyze given information. 4. Arrangement of pre and post budget meeting for the investors. 5. Making an investor familiar with the “technical analysis” It is vary important for a broker / sub broker to make his clients understand about technical analysis, it’s importance, it’s working it’s advantages over other analysis etc. Further he should also guide his investors to take up technical analysis temselves. For this purpose he should hold the meetings and seminars on regular basis with objectives of making his clients familier with technical analysis. 6. Conducting meetings every now and then to explain the investors about the changes in SEBI guidelines and the stock exchanges guidelines. 7. Educating investors to appear for exams conducted by National Stock Exchange via National Stock Exchange’s Certificates in Financial Market (NCFM)
MAILING SERVICES We are providing mailing services for individuals, companies, exhibition arrangers, marketing companies etc.
Babasabpatilfreepptmba.com
Page 10
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
They also have the address of the clubs association (Rotary, Lions, Bar Association, Gymkhana Etc.) and mailing can be done to particular class/ category of people for which maximum response can be obtained. The mailing on behalf of the interested person, Labels are available of different categories, association etc. The Documents/Materials by post or in person depending upon the requirements. Our services charges depend on caseto-case basis.
INVESTING: Investing in various types of assets is an interesting activity that attracts people from all works of life irrespective of their, occupation, economic status, education and family background. When a person has more money than he requires for current consumption, he would be coined as a potential investor. The investor who is having extra cash could invest it in securities or in any other assets like gold or real estate or could simply deposit it in his bank account. INVESTMENT:
Investment is the employment of funds an assets with the aim of earning income or capital appreciation.
Investment has two attributes namely time and risk. Present
consumption is sacrificed to get a return in the future. The sacrifice that has to be borne is certain but return in the future may be, uncertain. This attribute of investment indicates the risk factor. The risk is undertaken with a view to reap some return from the investment. For a layman investment means some monetary commitments. A person’s commitment to buy a flat or house for his personal use may be an investment from his point of view. To the economist, investment is the net addition made to the nation’s capital stock that consists of goods and services that are based in the production process. A net addition to capital stock means an increase in the building, equipments or inventories. These capital stocks are used to produce other goods and services Babasabpatilfreepptmba.com
Page 11
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
INVESTMENT OBJECTIVES:
The main investment objective are: 1) Good rate of return 2) Reducing risk 3) Safety 4) Liquidity 5) Hedge against inflation
GOOD RATE OF RETURN Investor always expect a good rate of return from their investments. Rate of return could be defined as the total income the investor receives during the holding period stated as a percentage of the purchasing price at the beginning of the holding period. If it is a stock, the investor gets the dividend as well as the capital appreciation as return. Market return of the stock indicates the price appreciation for the particular stock, If a particular share is purchased in 2003 at Rs 100 and the dividend yield is Rs 15, then the return would be,
EXAMPLE: RATE OF RETURN Consider following information about a certain equity share: Price at beginning of the year Babasabpatilfreepptmba.com
60.00 Page 12
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Dividend paid toward the end to the year Price at the end of the year
2.40 66.00
Rate of Return = Annual Income +( Ending Price – Beginning Price) Beginning Price =
2.40+ (66.00-60.00) 60.00
=
0.14*100
=
14%
RISK Risk of holding securities is related with the probability of actual return become less than the expected return. The word risk is synonyms with the purchase variability of return. Investment risk is just as important as measuring its expected rate of return because minimizing risk and maximizing the rate of return are interrelated objectives in the investment management. An investment who’s rate of return varies widely from period to period is risky than those whose return that does not change much. Every investor likes to reduce the risk of his investment by proper combination of different securities.
SAFETY The selected investment avenue should be under the legal and regulatory frame work. Approval by law it self aids a flavor of safety. Even though approved by law, the safety Babasabpatilfreepptmba.com
Page 13
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
of the principal differs from one mode of investment to another. Investment done with the government assures more safety with the private party. LIQUIDITY: Marketability of the investment to the investment, The liquidity depends upon the marketing and trading facility. If a portion of the investment could be converted into cash without much loss of time, it would help the investor to meet the emergencies. Stocks are liquid only if they command good market by providing adequate return through dividends and capital appreciation.
HEDGE AGAINST INFLATION: Since there is inflation in almost all the economy, the rate of return should ensure a cover against the inflation. The return should be higher than the rate of inflation. Otherwise the investor will have loss in real terms. The return thus ensured should ensure the safety of the principal amount, regular flow of income and be a hedge against inflation.
INVESTMENT ALTERNATIVES As an investor you have a wide array of investment avenue available to you sacrificing some rigor, these may be classified as shown in this chart. Non Marketable Financial Assets Babasabpatilfreepptmba.com
Page 14
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
A good portion of financial assets is represented by non-marketable financial assets. These can be classified into the following broad categories. 1) BANK DEPOSITS 2) POST OFFICE DEPOSITS 3) COMPANY DEPOSITS 4) PROVIDENT FUND DEPOSITS Equity Shares Equity shares represents ownership capital. As an equity shareholder, you have an ownership stake in the company. This essentially means that you have a residual interest in income and wealth perhaps, the most romantic among various investment avenues, equity shares are classified into following broad categories by stock market analysis.
1) BLUE CHIP SHARES 2) GROWTH SHARES 3) INCOME SHARES 4) CYCLICAL SHARES 5) SPECULATIVE SHARES Bonds Bonds or debentures represents long term debt instruments. The issuer of a bond promises to pay a stipulated stream of cash flows. Bond may be classified into the following categories. 1) GOVERNMENT SECURITIES Babasabpatilfreepptmba.com
Page 15
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
2) GOVERNMENT OF INDIA RELIEF BONDS 3) GOVERNMENT AGENCY SECURITIES 4) PSU BONDS 5) DEBENTURES OF PRIVATE SECTOR COMPANIES 6) PREFERENCE SHARES.
Money Market Instrument Debt instrument which have a maturity of less than one year at the time of issue are called money market instruments. The important money market instrument are: 1) TREASURY BILLS 2) COMMERCIAL PAPERS 3) CERTIFICATES OF DEPOSIT
Mutual Funds Instead of directly buying equity shares and or fixed income instruments, you can participate in various schemes floated by mutual funds which, in turn, invest in equity shares and fixed income securities. There are three broad types of mutual fund schemes. 1) EQUITY SCHEMES 2) DEBT SCHEMES 3) BALANCED SCHEMES Life Insurance
Babasabpatilfreepptmba.com
Page 16
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
In a broad sense, life insurance may be viewed as an investment. Insurance premium represent the sacrifice and the assumed sum the benefit. The important types of insurance policy. 1) ENDOWMENT ASSSURANCE POLICY 2) MONEY BACK POLICY 3) WHOLE LIFE POLICY 4) TERM ASSURANCE POLICY Real Estate For the bulk of the investors the most important asset in their portfolio is a residential house. In addition to a residential house, the more affluent investors are likely to be interested in the following types of real estate : 1) AGRICULTURE LAND 2) SEMI-URBAN LAND 3) TIME SHARE IN A HOLDING RESORT. Precious Objectives Precious objectives are items that are generally small in size but highly valuable in monetary terms. Some important precious objects are: 1) GOLD AND SILVER 2) PRECIOUS STONES 3) ART OBJECTIVES Financial Derivatives
Babasabpatilfreepptmba.com
Page 17
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
A financial derivative is an instrument whose value is derived from the value of an underlying asset. It may be viewed as a side bet on the asset. The most important financial derivatives from the point of view of investor are: 1) OPTIONS 2) FUTURES
Indian Securities Market National Stock Exchange The N.S.E of India was incorporated in November 1992 with an equity capital of Rs 25 crores & promoted by IDBI, ICICI, & other all financial institutions, the government in the same year recognized it & the exchange started operations in wholesale debt market or the money market segment would cater to banks, Fis, etc to encourage high value transactions in PSU, bonus, UTI, Treasury bills, Government securities & Call money. There is no trading floor or the large trading is in large volume & over the telephones, telex etc, Trading is done on Internet with the help of Pc.
Babasabpatilfreepptmba.com
Page 18
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
Benefit accrue to both issuers of securities & investors, as thios if screen based trading with a first Network, transparency & cost effectiveness is ensured besides, the investment can be spread wide in the country under the NSE Electronic Network.
Features of NSE 1) The NSE Employs a fully automated screen based trading system 2) It has two segment capital market segment & wholesale debt market segment. Capital market segment covers equities, convertible debentures & retail trade in debt instrument like non-convertible debentures, and securities of medium & large companies with nationwide investor base, including securities traded on the stock exchanges are traded in NSE through trading members. The wholesale debt market segment is a market for high value transaction in government securities, public sector bonds, commercial papers & other debt instrument.
NSE Operations The above recommendation was accepted the government areas according NSE reported set organized by the government. As earlier, it has started trading in money market, government securities & other debt instrument on OTC basis since November 1994. It has no trading floor. Each trading member will have a computer in his office anywhere in India which will be connected to the central computer system of NSE through leased lines or VSAI’s. (Very Small Aperture Terminal) for an interim period to be followed by a satellite link. The member for debt market will be different form the equity market & the same member cannot operate for both markets as originally visualized. As in May 2000, NSE terminal are located at 310 centers in the country with about 850 brokers connected through more than 2000 sats, adding up to over 6000 users.
Babasabpatilfreepptmba.com
Page 19
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Bombay Stock Exchange The Bombay stock exchange is not the official name of the stock exchange ifs official name is “The stock Exchange Mumbai” previously called “ The Stock Exchange Bomaby”. Its prestige stems from the fast that it is the oldest stock exchange in India. It was formally established as the native share & stock broker. Associations in 1875. it sis a voluntary non-profit making associations of person (AOP) and is currently engaged I the process of converting it self in to demutualise and corporate entity. It has evolved over the years in to its present status as the premise stock exchange in the country. It is the first stock exchange in the country to have obtained permanent recognition in 1956 from the government of India under the securities contract act (Regulations) Act, 1956. The exchange, while providing an efficient & transparent market for trading in securities debt & derivatives up hold the interest of the investors & ensures redressal of their grievances whether against and companies or its own
member brokers. If also
strives to educate and enlighten the investor education programmes and making available to them necessary informative inputs. The board of directors of the exchange is composed of 20 directors, 9 elected members brockers, 5 public representative, and 3 nominees of the SEBI. One nominees of the RBI., & the executive director. The president the vice president and the honorable treasure were elected from among member brockers. The executive directors as the chief executive officer is responsible for the day-today administration of the exchange and the chief operating officers and other heads of the department assist him. The exchange has insisted rule No 126A in its rules, bye laws and regulations pertaining to constitution of the executive, committee of the exchange accordingly, an executive committee, consisting of three elected directors, three SEBI nominees or public representatives, executive director and CEO and chief operating officer has been constituted. The committee considers Judicial and quasi matters in which the governing board has powers as an appellate authority matters regarding annulment of transactions admission. Continuance Babasabpatilfreepptmba.com
Page 20
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
and suspension of member-broker as defaulter norms, procedure and other matters relating and other money payable by the member broker to the exchange etc.
SHARES: “Share” or “Equity” represents part of an ownership of a business. So as a shareholder one own a piece of the action that happens in that business. ADVANTAGES OF INVESTNG IN STOCKS:
1) Stock typically outperforms all other investment options over any ten year period. Making them a must for ones long-term portfolio. So it will give higher return compared to other financial instrument. 2)
High quality stocks “Split” when the price reaches a certain level. This
means that each share is divided up into one or more new shares and the price is divided along with it. For Example, if one stock undergoes a 2 for 1 stock split, one will end up with 2 shares for every one that he held previously. Of course the price of each new share will now be ½ of what is was before, but lower period stock tend to grow faster than higher priced stocks giving investor a better chance of increasing his equity over a time.
Babasabpatilfreepptmba.com
Page 21
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
3) When one buy stocks, he take partial ownership of the company in proportion to the turnover of shares of each stock purchased. As an owner, he have an excellent opportunity to share in the financial success and growth of the company. 4) Stocks are excellent vehicles for retirement plans. One should concentrate on buying stocks preliminary when he is in his younger and middle working years.
DISADVANTAGE OF STOCKS. 1) Stocks are volatile. A single stock’s share price can vary widely from day to day, month to month, year to year depending on numerous factors that are beyond ones control. So there is high risk attached with the stock. If stock market crashes investors money is lost Prices are subject to market volatility world conditions, and interest rate variation. It requires time to monitor investment. The most effective way to invest in stocks is to “ buy and hold” for the long- term and “diversify” (dividing stock holding among several different stocks in various market sectors). 2) Stocks are best used only in the early and middle stages of carrier. Since stocks are so volatile in short-term as one began to reach retirement age, he should start gradually moving part of his assets into other sectors.
3) Companies and can do go out of business, at which time therein stock usually becomes worthless. But if one selects his stocks carefully he can greatly minimize the risk.
Babasabpatilfreepptmba.com
Page 22
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
4) Company can fraud the investors by manipulating the books of accounts.
5) Both buying and selling stocks cost money in the form of brokerage, commissions. So the best strategy for investing in stocks is to “buy and hold” for the long term.
BASICS OF EQUITY INVESTMENT. Equity investment generally refers to the buying and holding of shares of stocks on a stock market by individuals and funds in anticipation of income from dividends and capital gains the value of the stock raises. It also some times refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a start up (a company being created or newly created)when the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going concern situation. 1) Investing directly in shares has some advantages compared to indirect investment. 2) Investment in shares can offer high liquidity shares are generally easily traded as there is usually some one wishing trade a share in a particular company at any point in time. 3) One can control the share that he has invested in. 4) Can diversify by investing in a wide variety of companies from many different industry sectors. REASONS FOR FLUCTUATIONS IN SHARE PRICES: A share price is like a barometer of investors confidence in a company’s prospects. If everyone thinks a company is going to grow and do well, they all want to buy the shares Babasabpatilfreepptmba.com
Page 23
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
and this pushes the share price up. Obviously the reverse is also true. That company may no do as well as people had hoped and report lower than-expected profits for the year. Investors may lose confidence in the company and decide to sell. The share price falls sometimes frighteningly quickly, especially if a big institution owing millions of share decides to sell the lot in one go. This can make other investors panic and sell out as well, causing the share price to plummet even further. But then, once it’s reached a particular level other investors may think the ‘bears’ the sellers have aver reacted and that the current low share price actually represents good value for money. They pile in and buy. This stops the share price dropping further. By the end of the day the price might even be back to the level it started at after a rollercoaster ride in which millions of rupees have changed hands.
BUYING AND SELLLING OF SHARES. 1) Procedure for buying of shares. The steps involved in buying shares and debentures are described below. Locating a Broker Typically, shares are bought through a stock broker, who is a licensed member of a recognized stock exchange. So, When you want to buy shares, you should locate a broker. Ask your friends, who have experience to recommend some names and meet the suggested brokers personally
and make a first-hand assessment. Basically, satisfy
yourself that the broker you select can render prompt and efficient service and protect your interest. After you have located your broker, your broker would request you to fill in a client registration form wherein you have to furnish details like your name, address, permanent account number, passport number, latest photograph, bank account number, Babasabpatilfreepptmba.com
DP
Page 24
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
(Depository Participant) account number, etc. Once the registration formalities are over, your broker will give you a unique number called the Client Code. Which will be used in future references. Placement of Order After locating a suitable broker, place your order to buy. Your order should clearly specify the name of the company and the type of securities (equity shares ,preference share or debentures). Note that all transactions through a stock exchange are now settled through the depositories. So you must have a demat account with an authorized depository before you place an order. If you want to fix the upper limit on price (Which is exclusive of brokerage) place ‘Limit Order’. Alternatively, place a best market order which manse that you instruct your broker to buy at the best prevailing market price. You may specify the time dimension as well, indicating the time frame in which the order has to be executed. A day order remains valid only for the day when it is placed. If the order is not executed on that day, it automatically lapses. A week order is one which is valid for a week. A month order is an order which is valid for one month. An open order remains in effect until it is executed or cancelled. The nature of your order should reflect the prevailing market conditions and your faith in the judgment
and
integrity of your broker.
Depending on your relations with the broker and the size of the order, the broker may ask for an advance payment, which may be 25 to 100 percent of the expected purchase consideration. Execution of Order On receiving your order, the broker will feed the same on his terminal. Once the order is executed, the broker will inform you and send a ‘contract note’. Representing
the
documentary evidence of the transaction, the contract note contains relevant details of the transactions. Preserve it for tax and other purposes. Babasabpatilfreepptmba.com
Page 25
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
You are expected to pay for your purchase within a stipulated period specified by the broker. After you have affected the payment the broker will transfer the shares electronically to your depository participant account. Internet Trading Now investor have the facility of opening an electronic trading account with instantiations like icicidirect.com and buy and sell securities through the internet.
Procedure for Selling Once you have located a broker, the steps involved in selling shares are as follows. Placement of Order You have to place a ‘Sale Order’ with your broker. You may place a ‘Limit Order’ wherein you specify the minimum price acceptable to you or you may place a ‘market order’ which manse that you instruct your broker to sell at the best available market price. Before placing the order, make sure that the shares you want to sell are to your credit in your depository account. Execution of Order On receiving your ‘Sale Order’ your broker will feed the same in his terminal. Once the order is executed the broker will inform you and send you a ‘Contract Note’ the documentary evidence of the transaction. You will then have to issue a depository participant cheque for the shares that you have sold in favor of the broker. This cheque transfers the shares from your depository account to the broker’s depository account, just the way a bank cheque transfers money from the payer’s account to the payee’s account. You will receive payment from the broker in about a week’s time. Babasabpatilfreepptmba.com
Page 26
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Important Points to Remember When you ‘buy’ or ‘sell’ shares of a company, bear in mind the following points. 1) As per the amended guidelines for listing, a company is supposed to: A) Close its transfer books only once in a year at the time of annual general meeting and to have record dates for other purpose like bonus issues, rights issues ,etc. B) Have uniform dates of book closing and record dates either on 1 st or 16th of any month and to give to the exchange notice in advance of at least 30 days or of as many days as the exchange may from time to time reasonably prescribe; C) Accept registration for transfers that are lodged with the company up to the date of closure of the transfer books ( or when the transfer books are not closed, up to the record date) and defer, until the transfer books have re opened, registration of any transfers which may be received after the closure of the transfer books; and D) Issue letters of allotment or letters or rights within six weeks of the record date or date of reopening of the transfer books, after their closure for the purpose of making a onus or rights issue. 2) On the stock market, the shares become ex-dividend (or ex-bonus or ex-rights as the case may be) several days before the book closure date (record date). The cut off date for ‘ex-dividend’ transaction is normally fixed by the stock exchange authorities. For example, in a certain case, the share may become ex-dividend on say, August 10. This is indicated by the abbreviation ‘xd’ affixed after the price of the share. Similarly, ‘xb’ stands for ‘ex-bonus’, ‘cb’ for ‘cum bonus’ ‘xf’ for for ‘ex- rights’ and ‘cr’ for ‘cum rights’ 3) If you buy the shares ‘xd’ (or ‘xb’ or ‘xr’) you are not entitled to dividend (or bonus shares or rights ) for which the books are about to be closed. 4) If you buy the shares ‘cd’ (or ‘cb’ or ‘cr’ as the case may be ), you are entitled to the dividend for which the books are about to be closed.
Babasabpatilfreepptmba.com
Page 27
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
5) You can obtain information about book closure dates from your broker or from the stock exchange. Financial newspapers like The Economic Times and The Financial Express and investment magazines Capital Market and Dalal Street Journal also provided this information. SHARES MAKE INVESTOR MONEY: There are two ways one can make money with shares. 1) Firstly by the capital growth. The hope that the value of shares will grow over time, mirroring the growth in the underlying company. 2) The other way one make money from shares is through dividends. These are payments taken from profits the company makes to its shareholders usually every six months. If the company is doing well and wants to reward it shareholders it may announce a big dividend. If times are hard, it may not make a dividend payment at all. The company usually gives dividend in the form of dividend per share. So the more shares one owns, the bigger the dividend payment he will receive.
DECEISION ON WHICH STOKC TO INVEST: Basic thumb rule is: “ you can afford to bet as big as you can afford to lose” There are three things to one need while selecting shares. 1) Common sense Babasabpatilfreepptmba.com
Page 28
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
2) Research 3) Luck The common sense approach should always be backed up with the second requirement for selecting shares solid research. The luck factors should always accompany both these things.
SOME BASIC QUESTIONS TO ASK ABOUT A COMPANY IS INTERESTED IN:
The answer to all these questions will help oneself o decide whether it is worth investing in the company. 1) Is it in sector which will do well ? What are my reasons for thinking this? 2) Does the company offer something unique, or are there many competitors in the same field. 3) What kind of track record does the company have to date? 4) Is the company growing? (Looking at its year on year performance figures) 5) If it is not yet in profit, is it at least increasing its revenues in a healthy way? 6) Is it showing growth in the dividends it pays out? 7) How highly valued is it? (The price earning ratios is one measure of this) 8) How volatile is the share price? (One has to study its share price shares over different periods) 9) How is the company viewed by security Analysts the press and other commentators? 10)It is considered to be a high growth, high-risk sort of company or stable and slowgrowth. PREDICTION OF STOCK PRICE
Babasabpatilfreepptmba.com
Page 29
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
In the short run, the market is a voting machine reflecting a voter registration test that requires only money, not intelligence or emotional stability –but in the log run the market is a weighing machine. Share prices track the profits of a business in the long run whereas in the short run they are determined by market sentiment and demand for the shares. Hence share prices are predictable with a higher degree of certainty in the long run whereas in the short run these are very whimsical. DEMATERIALISATION It is the process of converting securities held in physical form (Certificates) to on equivalent number of securities in electronic form and crediting the some to the investors demat account. Dematerialized Securities do not have any certificates number or distinctive numbers and are dealt only in quality that is the securities are flexible. Investor can dematerialize only those certificates which are already registered in his name and belonging to the list of securities admitted for dematerialization at NSDL/CDSL. The investor will have to maintain accounts in the respective depository should always where the scrip’s are admitted for demat. This account is known as demat account. Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, you need to open a demat account if you want to buy or sell stocks. So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account. Let's say your portfolio of shares looks like this: 40 of Infosys, 25 of Wipro, 45 of HLL and 100 of ACC. Babasabpatilfreepptmba.com
Page 30
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
All these will show in your demat account.
FEATURES OF DEMAT ACCOUNT 1) Dematerialization of securities. 2) Settlement of securities traded on the exchange as well as off market transactions. 3) Pledging and Hypothecation of dematerialized securities. 4) Electronic credit in public issue.
BENEFITS OF OPENING DEMAT ACCOUNT The benefits of opening a demat account are as follow. SEBI has made it compulsory for traders in almost all listed scrips to be settled in demat mode. 1) It is safe and convenient way to hold securities in the physical form. 2) No stamp duty is levied on transfer of securities held in demat form.
3) Instaneous transfer of securities enhances liquidity that is fast settlement cycles. 4) It eliminates delay, thefts and subsequent misuse of certificates.
Babasabpatilfreepptmba.com
Page 31
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
5) Change of name, address, mandate registration of power of attorney, transmission of power of attorney, transmission etc. Can be affected across companies by a single instruction to the DP. 6) Each share is a market lot for the purpose of transactions. Any number of securities can be transferred/delivered with one instruction. Therefore paperwork and signing of multiple transfer deeds is done away with.
7) It facilitates taking advances against securities. PROCEDURE FOR DEMATERIALIZING SECURITIES. If any body wish to dematerialize his physical securities he need to : 1) Check if the scrip is available for dematerialization or not. 2) If yes than submit the share certificate along with a Dematerialization Request Form) (“DRF”) duly signed by all the demat account holders. 3) The Certificates should be duly cancelled by writing “Surrendered for dematerialization” on them.
TRADING ACCOUNT: Trading account is the account in which a share trader can get maximum exposure to purchase the shares based on multiples of margin which he has paid. The trading limit is the maximum exposure one can have in any given time. The limit that will be granted to share trader on the basis of predetermined number of times his margin paid to the brokers. There multiple is predetermined by the broker and subject to review
Babasabpatilfreepptmba.com
Page 32
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
from time to time. There is no restriction on number of times one can rotate his limit. Hence there is no limit on turnover. For example. If an investor places Rs 7000 in his trading account and the multiple determined is 6 he can trade up to Rs 42000.
MONEY MANTRAS Listen to the money men more than anyone else, the known what they are talking about when it comes to making big bucks. 1) Keep your financial objectives short and clear. 2) Goodwill goes a long way in the creation of wealth. 3) Trust is key –without it, there’s nothing but a one-off deal. 4) Wealth should be put to productive use. 5) Financial ethics must be valued. 6) Greed alone cannot make you a millennium. 7) Money means responsibility 8) Making money is not a crime, if you use it properly. 9) Sixteen years of liberalization is not enough. 10) Once you make money respect it, and live an honorable life. “TWELVE STEPS TO INVESTING BEFORE MAKING AN INVESTMENT”. Babasabpatilfreepptmba.com
Page 33
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
1) Obtain written documents explaining the investment. 2) Read and understand such documents. 3) Verify the legitimacy of the investment. 4) Find out the costs and benefits. Associated with the investment. 5) Assess risk –return profile of the investment. 6) Know the liquidity and safety aspects of the investment.
7) Ascertain it is appropriate for your specific goals. 8) Compare these details with those of other investment fits with other investments you are considering or have already made, 9) Examine if the investment fits with other investments you are considering or have already, wherever required. 10) Deal only through or authorized intermediary, wherever required. 12) Seek all clarifications about their intermediary and the investment and, 13) Explore the options available to you if something goes wrong.
Babasabpatilfreepptmba.com
Page 34
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
INVESTMENT ENVIRONMENT FOR SHARES IN BELGAUM CITY 1) RESEARCH OBJECTIVES. To know the Investment Environment for Shares in Belgaum City. SUB OBJECTIVES. B) To know the investment vehicles used by the investors. C) To study the importance criteria of investors take into consideration
while
investing. D) To know the reasons for investors trading with current share broker. E) To know the investors satisfaction level with current share broker. 2) RESEARCH METHODOLOGY
A) RESEARCH DESIGN In conformance with the study objectives, the project will be carried out in Belgaum. On the basis of findings. The study relies to a great extent on primary data, primary data consists of information collected from four segments of individuals viz, Babasabpatilfreepptmba.com
Page 35
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Businessmen, Professionals, Government employees, Others. I have adopted personal interviewing method for the study in order to collect data from respondents.
B) SAMPLING DESIGN It is a definite plan for obtaining a sample from a given population.
The
technique adopted in selection of item for the sample is “Convenience Sampling”.
C) SAMPLING UNIT The sampling unit taken in the study was the target market who will invest part of their earning in any financial investments.
D) SAMPLE SIZE A sample size of 100 individuals is taken to carry out the project.
E) RESEARCH INSTRUMENT The personal interviewing method was used to fill the questionnaire and this was the research instrument in the study to achieve the required objective the questionnaire contained 15 question based on their importance to the company. This was the research instrument in the study to obtain information about Investment Preference for shares In Belgaum City and to identify potential customers and also to know their reasons of trading with current broker and their satisfaction level if they
Babasabpatilfreepptmba.com
Page 36
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
already have the demat / trading account. The questionnaire include both close ended as well as open ended questions. It contained qualitative as well as quantitative data.
F) DATA COLLECTION The data used in the study was collected from primary sources that is the responses from individuals respondents.
3) OBJECTIVE OF THE STUDY The project on the title “ Investment Environment For Shares In Belgaum City” has provided the information about the individuals who have responded for the questionnaire. This study has helped in obtaining more specific information about the investment preference of the people. The study also aimed at providing more specific information of the potential customers and also in following up with the most potential customers to open a demat and trading account. This project would also help in creating awareness of “GEERAK MARKETING” Shares and Stock Brokers Ltd. This project also aims at providing knowledge about the share market to the individuals.
Babasabpatilfreepptmba.com
Page 37
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
Gender MALE FEMALE
96 04
GENDER
4
MALE FEMALE
96
From the above graph we can infer that out of 100 respondents interviewed 4 were females and 96 were male respondents.
Babasabpatilfreepptmba.com
Page 38
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
Respondents. Occupation Respondent
Profession 19
Govt Service 35
Business 19
Others 27
Respondents 40
35
35
27
30 25 20
19
19
Series1
15 10 5 0 Profession
Govt service
Business
Others
The above graph depicts that most of the respondents were Govt servants followed by servicemen, Businessmen, and the Professionals.
Babasabpatilfreepptmba.com
Page 39
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
Investment per Month Amount of
Less than
Rs2,000 to
Rs5,000 to
Rs10,000 to
More than
Investment Number of
Rs2,000 30
Rs5,000 46
Rs10,000 18
Rs50,000 6
Rs50,000 0
Respondents
Investment Per Month
6%
0%
18%
30%
Less than Rs. 2000 Rs. 2000- Rs. 5000 Rs. 5000- Rs. 10,000 Rs. 10,000- Rs 50,000 More than Rs. 50,000
46%
From the above graph we can infer that 46% of the respondents invested to the tune of Rs2,000 to Rs5,000 per month 30% of the respondents invested less than Rs 2,000, 18% of them invested in the range of Rs 5,000 to Rs 10,000 and the rest in Rs 10,000 to Rs 50,000, There was no respondents who invested more than Rs 50,000permonth.
Babasabpatilfreepptmba.com
Page 40
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
Investment Vehicles Used for Investment Investment RD
FD
IP
SHARES MF
B/D
OTHERS
44
67
37
9
21
Vehicles No of
43
6
Investors
Investment Vehicles
6
9
21
43
Recurring Deposit Fixed Deposit Insurance Policy
37
Shares 44
Mutual Funds Bonds/ Debentures Others
67
The inference we can draw from the above graph is that 67 of the respondents had insurance policy as their investment vehicle in their portfolio, 44 of their had fixed deposits, 43 of them had recurring deposits , 41 of them had shares, 21 of them had investment in other type of assets , 9 of them had bonds/debentures and 6 of them had investment in mutual funds. Babasabpatilfreepptmba.com
Page 41
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
Rating criteria taken into consideration while investing Criteria
Returns
Liquidity
Security
Tenure
Others
Most imp
50
12
84
6
2
MOST IMPORTANT
4% 1% 32%
Returns Liquidity Security Tenure
55%
8%
Others
The above graph shows that 55% of the respondents ranked Security as the most important criteria which investing, 32% of the respondents ranked liquidity, 4% of them ranked tenure, and 1% of them ranked other factors as most important criteria taken into consideration while investing.
Babasabpatilfreepptmba.com
Page 42
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
Preference of Investment 1. Recurring Deposits
Recurring Deposits
15, 16%
17, 19% Most Prefered More Prefered
8, 9%
Prefered Not Vary Prefered
7, 8% 26, 28%
Least Prefered Not Prefered
18, 20%
The inference we can draw from the above graph is that 17% of the respondent felt recurring deposit as the most preferred mode of investment, 26% responded as more preferred, 18% responded as preferred, 9% felt neutral about it, 7% not vary preferred, 8% least preferred and 15% responded as not preferred.
Babasabpatilfreepptmba.com
Page 43
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
2. Fixed Deposits
Fixed Deposits
15, 15%
20, 20%
More Prefered
5, 5%
Prefered
5, 5% 7, 7%
Neutral 22, 22%
26, 26%
Most Prefered
Not Vary Prefered Least Prefered Not Prefered
The above graph portraits that 20% of the respondents felt fixed deposit as the most preferred mode of investment, 22% of responded as more preferred, 26% responded as preferred, 7% felt neutral about it, 5% not vary preferred, 5% least preferred and 15% responded as not preferred. Babasabpatilfreepptmba.com
Page 44
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
3. Insurance Policies
Insurance Policies 10, 10% 5, 5% 2, 2% 1, 1%
Most Prefered More Prefered
10, 10%
Prefered
55, 55% Neutral Not Vary Prefered Least Prefered
17, 17%
Not Prefered
The inference we can draw from the above graph is that 55% of the respondents felt insurance policies as the most preferred mode of investment, 17% responded as more preferred, 10% responded as preferred, 1% felt neutral about it, 2% not vary preferred, 5% least preferred, and 10 % responded as no preferred.
Babasabpatilfreepptmba.com
Page 45
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
4. Shares
Shares
15, 15%
10, 10%
Most Prefered
11, 11%
More Prefered Prefered
13, 13% 10, 10%
Neutral Not Vary Prefered Least Prefered
18, 18%
23, 23%
Not Prefered
The above graph depicts that 10% of the respondents felt shares as the most preferred mode of investment, 11% responded as more preferred, 10% responded as preferred, 23%
Babasabpatilfreepptmba.com
Page 46
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
felt neutral about it, 18% not vary preferred, 13 % least preferred and 15% responded as not preferred.
5. Mutual Funds
Mutual Funds 4, 4% 4, 4%
20, 20%
10, 10%
Most Prefered More Prefered Prefered Neutral
20, 20%
19, 19%
Not Vary Prefered Least Prefered Not Prefered
23, 23%
The inference we can give from the above graph is that 4% of the respondents felt mutual funds as the most preferred mode of investment , 4% responded as more preferred, 10% responded as preferred, 20 % felt neutral about it, 23% not vary preferred, 19 % least preferred and 20 % responded as not preferred. Babasabpatilfreepptmba.com
Page 47
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
6. Bonds/Debentures
Bonds/Debentures
12 5
Most Prefered
30
19
More Prefered Prefered Neutral Not Vary Prefered Least Prefered
16
27
Not Prefered
The above graph portraits that 1% of the respondents felt bonds/debentures as the most preferred mode of investment, 2% responded as more preferred, 5% responded as
Babasabpatilfreepptmba.com
Page 48
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
preferred, 19% felt neutral about it, 27% not vary preferred, 16% least preferred, and 30% responded as not preferred.
7. Pigmy
Pigmy
04 1
11
Most Prefered More Prefered Prefered Neutral Not Vary Prefered Least Prefered
84
Babasabpatilfreepptmba.com
Not Prefered
Page 49
“Investment environment for shares in Belgaum�conducted
[Type the document title]
for Geerak Marketing
The inference we draw from the above graph is that 0% of the respondents felt pigmy as the most preferred mode of investment, 0% responded as more preferred, 0% responded as preferred, 4% felt neutral about it, 1% not vary preferred, 11% least preferred and 84% responded as not preferred.
Overall investment preference rating by respondents
Overall investment rating PIGMY 041 11 B/D 12 5
84 19
MF 4 4 10
27 20
SH 10 11 10
RD 0%
23 23
20
22
17 20%
13
17
10 12 5 10
18 40%
More preference
20
18 26
26
Most prefered
30 19
55
IP FD
16
60%
7 55 9 7 8 80%
15
Preference Neutral Not Vary Prefered
15
Least Prefered
15
Not Prefered
100%
So from the previous graph we can conclude that Most preferred mode of investment
------------------- Insurance Policy
More preferred mode of investment
------------------- Recurring Deposits
Preferred mode of investment
-------------------- Fixed Deposit
Neutral mode of investment
-------------------- Shares
Babasabpatilfreepptmba.com
Page 50
“Investment environment for shares in Belgaum�conducted for Geerak Marketing Not vary much preferred mode of
[Type the document title]
--------------------- Bonds/Debentures
investment Least preferred mode of investment
--------------------- Mutual Fund
Not preferred mode of investment
-------------------- Pigmy Deposits
Risk Profile Of the Investor
Risk Profile High Risk Investors Medium Risk Investors Low Risk Investors
No of Respondents 8 37 55
Risk Profile
8, 8%
High risk investors 55, 55%
Babasabpatilfreepptmba.com
37, 37%
Medium Risk Investors Low risk investors
Page 51
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
55% of the responded have low risk profile, 37% have medium risk profile, 8% have high risk profile.
No of Respondents who own shares
Criteria YES NO
No of Respondents 41 59
Owning Shares
41, 41% 59, 59%
Babasabpatilfreepptmba.com
YES NO
Page 52
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
From the above graph we can infer that out of 100 respondents interviewed 41% of them owned shares and 59% did not own shares
No of Investors who had Demat and Trading account.
Account Demat account Trading account D and T account No account
No of Respondents 33 2 3 3
No Of Respondents 35
33
30 25 20
Series1
15 10 5
2
3
3
Trading account
D and T account
No account
0 Demat account
Babasabpatilfreepptmba.com
Page 53
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
The above chart depicts that out of the 41 respondents who had shares 33 of them had demat account, 2 of them had trading account, other 3 of them had both Demat and Trading and 3 of them had shares but no demat account.
Transaction Value per month Transaction Value
No of Respondents 24 13 1 0 0
Less than Rs. 10,000 Rs.10,000 - Rs. 50,000 Rs. 50,000 - 1 Lack Rs. 1 Lack - 2 Lack Rs. 2 Lack above
Transaction Value 0 1
0 Less than Rs. 10,000
13
Rs.10,000 - Rs. 50,000 Rs. 50,000 - 1 Lack 24
Rs. 1 Lack - 2 Lack Rs. 2 Lack above
The above chart depicts that out of 100 respondents interviewed 24 of them had transaction value of less than Rs 10,000, 13 of them had transaction value between Rs 10,000 to Rs 50,000, and only one of them had transaction value of Rs 50,000
Babasabpatilfreepptmba.com
Page 54
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
toRs1,00,000 , there were no respondents who’s transaction value is more that Rs 1 lack to Rs 2 lack , and Rs 2 lack and above.
Current share brokers of respondents Share Brokers
No of Respondents
SHCL Karvy consultants ICICI Direct
7 10 10 3 7 1
R.B. Patil & Co Pee Pee Investments Saraf
No of Respondents 12 10 8 6 4 2 0
10
10
7
7
Series1
3
.P
at il
ar af
en ts
Series2
P
ee
P
ee
S
&
In ve st m
C
o
ire ct R .B
IC IC ID
ta nt s co ns ul
K
ar vy
S
H C L
1
The above chart portraits that out of 41 respondents who have own shares only 2 had no accounts. Out of 39 respondents 7 had account with Stock holding corporation limited, 10
Babasabpatilfreepptmba.com
Page 55
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
with Karvy, 10 with ICICI, 3 with R.B.Patil&Co, 7 with Pee Pee Investments and one with Saraf.
Reasons for trading with current share broker Reasons
No of Respondents 2 17 24 16 1
Share Tips Convenience Service Provider Trust Other
No of respondents
1 2 16
17
Share Tips Convinence Service Provider Trust Other
24
Babasabpatilfreepptmba.com
Page 56
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
The above graph depicts that 24 of the respondents currently trading with their share broker for the reason of convenience, 17 of them trade because of service provided, 16 of them trade because of trust and 2 of them trade because of share tips.
Days Require for money realization
Money Realization
No of respondents
3 Days 3 - 5 Days 5 - 10 days 10 - 15 Days
3 5 28 3
No of respondents 28
30 25 20 15
Series1
10 5
3
5
3
0 3 Days
3 - 5 Days
Babasabpatilfreepptmba.com
5 - 10 days
10 - 15 Days
Page 57
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
The above chart portraits that only 8% of the respondents will receive consideration within the event of sales of shares 8% of them receive within 3 to 5 days, 71% of them receive within 5 to 10 days and 13% of them will receive within 10 to 15 days.
Satisfaction level of respondents with their current share broker
Satisfaction Level Vary Dissatisfid
0 1
Dissatisfied
Series2
4
Neutral
Series1 29
Satisfied 5
Vary satisfied 0
5
10
15
20
25
30
35
From the above chart we can infer that 10 % of the broker are vary satisfied with their current broker 74% of them are satisfied 13 % of are neutral 10% are dissatisfied and no one is vary dissatisfied with their current share broker. Babasabpatilfreepptmba.com
Page 58
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
FINDINGS AND SUGGESTIONS It was found that out of 100 respondents 67 have invested in insurance policies. It is because they think that investment in insurance policies is more secured compared to other types of investments. 44 of them have invested in fixed deposits the reason may be high fixed rate of interest on fixed deposits. 55 of the respondents rated security as the most important criteria they would consider while investing. This finding is also justified by the fact that out of 100 respondents 67 have invested in insurance policies which they have perceived as the most secured investment. Returns were rated as second most important criteria they would consider while selecting investment avenues.
24 of the respondents said convenience is the reason for trading with the current share broker. 17 of them told service provided and 16 of them told as trust. So it can be concluded that convenience is the important reason for trading with current broker. Service provided and trust can be termed as equally important reason for trading with their current share broker. 13% of the respondents are vary satisfied with their share broker while 74% are satisfied, 10% neutral, 3% are dissatisfied and none of them are vary dissatisfied with their brokers. 74% of their respondents are satisfied may be because of the convenience and service Babasabpatilfreepptmba.com
Page 59
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
provided by their brokers and also may be because of trust which has built up on the long term dealings.
SUGGESTIONS First of all there is need to create awareness about the stock market, its working and the transparency. It is evident from the analysis of questionnaire that only 41% of the respondents have invested in shares. So there is ample potential for investment in shares and trading in shares. Create awareness about “Geerak Marketing” based on its uniqueness compared to other competitors competing in the share broking market. It is found out from the analysis of the data that negligible percentage of people are getting share tips while dealing with shares. So “ Geerak Marketing” can get a competitive edge over others by emphasizing on giving share tips to the clients based on their risk profile. “Geerak Marketing” should approach Share Traders Association in Belgaum and should convince them how Geerak Marketing can help them in getting a healthy return on their investment. “Geerak Marketing” should aim at middle income group. It is found out from study that 64% of the people belong to middle income group who invest between Rs 2,000 to Rs Babasabpatilfreepptmba.com
Page 60
“Investment environment for shares in Belgaum�conducted for Geerak Marketing
[Type the document title]
10,000. Insurance, Recurring Deposits, Fixed Deposits are their most favored investment avenues as they view them to be more secured investment compared to shares. They must be convinced about share markets transpherency and regulations.
CONCLUSION
We can say that there is good market for investment and trading of shares in Belgaum. At the same time there is stiff competition among the brokers because of new players coming to the market. The investors perception towards share trading should be changed because even today some believe that the trading in shares is like gambling because of lack of complete knowledge and also because the markets are not completely based on the fundamentals of the companies. Also the share market in India has been prone to manipulation by a few big brokers which has further eroded the confidence of the investors. Confidence of investors can be gained only when they are convinced about the security and transpherency of their investment and about the steps taken by SEBI to protect the investors.
Babasabpatilfreepptmba.com
Page 61
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
BIBILOGRAPHY Security Analysis and Portfolio Management By : PUNITHAVATHY PANDIAN Security Analysis and Portfolio Management By: Donald E. fischer. Marketing Research By : Tull and Hawkins. Websites www.bseindia.com www.nseindia.com www.indiainfoline.com Babasabpatilfreepptmba.com
Page 62
“Investment environment for shares in Belgaum”conducted for Geerak Marketing
[Type the document title]
Dear Sir/Madam. Name
: ________________________________________________
Designation : ________________________________________________ Address
: ________________________________________________
Contact No : ________________________________________________ 1) Which of the following will best describe your occupation? Professional
Government Service
Business
Other Specify __________________
2) How much will you invest in a month? Less than Rs 2,000
Rs 2,000 – Rs 5,000
Rs 5,000 – Rs 10,000
Rs 10,000 – Rs 50,000
More than Rs 50,000 3) Which of the following investment vehicles are more suitable for your portfolio?. Recurring Deposit
Babasabpatilfreepptmba.com
Shares
Page 63
“Investment environment for shares in Belgaum”conducted for Geerak Marketing Fixed Deposit
[Type the document title]
Mutual Funds
Insurance Policies
Bonds/Debentures
Other Specify ________________________________________ 4) What are the criteria you take into consideration while investing? (1- very important)
5 least important)
Returns
Security
Liquidity
Tenure
5) Your preference of investment? (1 Most preferred 7-Not preferred) Recurring Deposit
Shares
Fixed Deposit
Mutual Funds
Insurance Policies
Bonds/Debentures
Pigmy Deposits 6) Which of the following will best describe your risk profile? High risk investor Medium risk investor Low risk investor 7) Do you own shares Yes
No
8) If yes, do you have a Demat account
Trading account
9) How much is your transaction value per month? Less than Rs10,000
Rs 10,000 – 50,000
Babasabpatilfreepptmba.com
Page 64
“Investment environment for shares in Belgaum”conducted for Geerak Marketing Rs 50,000- Rs 1,00,000
[Type the document title]
Rs 1,00,000 – Rs 2,00,000
Rs 2,00,000 and above 10) Who is your share broker Specify __________________________________________________ 11) Reasons for trading current share broker Share tips
Convenience
Service provider
Trust
Other specify __________________________________________________ 12) After how many days you will receive consideration (money) if you sell your shares? 3 - Days
3 – 5 Days
5 – Days
10 – 15 Days
Babasabpatilfreepptmba.com
Page 65