dealing in capital market”

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A

Project Study Report

On

KAYNET CAPITAL

DEALING IN CAPITAL MARKET

Submitted in the partial fulfillment for the

Award of degree of

Master Of Business Administration

Submitted By:- Submitted To:-

Meena Kabra Mrs Mini Amit

(Finance )MBA part 2 (FacultyMBA Dept)

2009-2011

ARYA COLLEGE OF ENGG. & RESEARCH CENTRE , KUKAS,JAIPUR


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Preface

As part of the course curriculum of the post graduate degree of Master in Business

Administration, the students have undergone practical training for 45 days.

The underlying object of the training is to provide the student with practical aspect of the

organizations working in an environment. Such type training helps the student to work

on real industrial environment and to gain practical knowledge and build confidence.

As the part of this curriculum, I took my training in Kaynet capital. The training covered

all the aspect of learning about unit link investment plan.

As we know that declining rate in traditional investments have created urge among the

people for new avenues of investments, unit link investment plan prove to be one such

investment which provide a combination of good return with all tax benefits that in turn

help people to get maximum returns and benefits on their savings. Unit link is the

combination of mutual funds

Practical training in any organization is must for every management student as it is

better of learning concepts and helps the student to instrument those concept in the real

corporate world.

Meena Kabra


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Acknowledgement

I wish to express my sincere gratitude to all those persons who extended their help ,

guidance and suggestions without which it would not have been possible to complete

the project report.

I am deeply indebted to my guide Mr.Devendra Singh Malviya for his valuable and

enlightened guidance and who encouraged me in completion of my project.

I am really thankful to Mr.Navneet sir( regiona headl), who has been the chief facilitator

of this project and could enhance my knowledge in the field of capital market . I am

very much thankful to Mr.Avichal Gupta (Academics) for his guidance.

Meena Kabra


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EXECUTIVE SUMMARY

This internship report consists of the overall experience of working as a part at KAY NET

CAPITAL LIMITED. This experience helped me understand the basic functioning of the

Broking House where I was inducted.

My Internship consisted of the On Job Training as A Marketing Executive. The best learning

experience was that I started from the very basics of getting to that position and not from the

position itself. This helped me get useful insight and understanding of various financial products,

the market details about them and the benefits provided by them to the customers. Emphasis was

given in analysis of the investor behavior of the clients. Another interesting fact was that all

these products were suggested to clients not just based on their market performance and returns,

but on the clients financial condition as well as their risk taking capacity.

Training sessions were held to give me insights about the various products that KAY NET

CAPITAL LIMITED deals in like: Demat accounts and Insurance. Presentations on the same

after self study and analysis were a part of this internship session.

I provided advice and suggestions to the investors for online trading and which may prove

prudent to them.


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Contents

S.No.. Detail Page No..1 Acknowledgement 3

2 Preface 4

3 Industry Profile 5

4 Company profile 8

4.1 About Investment 11

5 About Project 15

6 Mutual Funds 17

6.1 Insurance 236.2 Commodity 28

6.3 Indian stock market overview 48

6.4 Sensex and Nifty 54

6.5 Margin Trading 55

6.6 on-line Trading 58

6.7 Corporate offers 59

6.8 Competitive Analysis 60

7 Research Methodology 61

8 Market Analysis

9 Swot Analysis 66

10 Limitations 69

11 Conclusion 70

12 Suggestions 71

13 Questionnaires 72

14 Glossary 73

15 Bibliography 80


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Industy Profle

Industry profile means the industry in which we invested in our money it is the industry

of the Indian stock market is tremendous development and the new trends introduce in

this. There are the many industry in which we can invest our money and get the return.

and there is the many advantages and disadvantages of them that is the automobile

sector, real estate sector , insurance sector, textile sector , and the telecom sector so

we analysis the industry in which we can invested in our money so the share market is

evaluate the industry , the investors invested before the me analysis of the three

analysis.

Economy Analysis: Economy analysis is the analysis of the basic rules andregulation of the particular country and the lows which are announced by the

central reserve bank of particular country.

Industry Analysis : The industry analysis consists of the particular feature o

industry there are the many industry are bank sector, automobile sectors,

insurance sectors, and the bank sectors So we evaluate the industry analysis of

the past sales , current growth and the market patters and price of share.

Company Analysis: Company analysis is the last stage of the investment

process company analysis means the selection of th particular sectors and there

are the different sector and each sectors consists of the many company


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Stock market an Introduction

The origin of the stock market relates back to the year 1494, when the

Amsterdam Stock Exchange was set up.

In India it dates back to the 18th century, an era when the East India Company

was a dominant Institution in India.

The stock market of India set up in 1875 at that time there were 22 brokers who

met and established the Bombay stock exchange.

"The Bombay Stock Exchange" (BSE) was founded in the year 1875.

"The Ahmadabad Shares and Stock Association" was formed in the year 1894.

The Calcutta Stock Exchange Association was formed by about 150 brokers on

15th June 1908.

In the year 1920, one stock exchange was established in Northern India and one

in Madras called "The Madras Stock Exchange". "The Madras Stock Exchange

Association Pvt. Ltd." was established in the year 1941.

On 29th April 1959, it was reorganized as a company limited by guarantee under

the name and style of "Madras Stock Exchange" (MSE).

The Lahore Stock Exchange was formed in the year 1934. However in the year

1936 after the Punjab Stock Exchange Ltd. came into existence, the Lahore

Stock Exchange merged with it. The Hyderabad Stock Exchange Ltd. was incorporated in the year 1944.

Two stock exchanges which came into being in Delhi by the name "The Delhi

Stock & Share Brokers Association Ltd." and "The Delhi Stocks & Shares


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Exchange Association Ltd." were amalgamated into "The Delhi Stock Exchange

Association Ltd." in the year 1947.

Subsequently the Bangalore Stock Exchange was registered in the year 1957

and recognized in the year 1963. The third stock exchange in the state of Gujarat

the "Vadodara Stock Exchange Ltd." was incorporated in 1990.

The Over the Counter Exchange of India (OTCEI) broadly based on the lines of

NASDAQ (National Association of Securities Dealers Automated Quotation) of

the USA was promoted and approved on August 1989. The National Stock

Exchange of India Ltd. was incorporated in November 1992.

STOCK EXCHANGE IN INDIA

There are 23 stock exchanges in India there are mainly two stock exchange Bombay

stock exchanges [BSE] and national stock exchange [NSE] I include all the stock

exchange situated in India.

1.Bombay stock exchange

2.National stock exchange(Mumbai) 3.Banglore stock exchange

4.Utter Pradesh stock exchange(Kanpur)

5.Magadh stock exchange(Patna)

6.Ahmedabad stock exchange

7.Vadodara stock exchange(Baroda)


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8.Bhubaneswar stock exchange

9.Calcutta stock exchange(Kolkata)

10.Madras stock exchange

11.Cochin stock exchange

12.coimbatore stock exchange

13.Gauhati stock exchange

14.Hydrabad stock exchange

15.Madhya Pradesh stock exchange(Indore)

16.Jaipur stock exchange

17.Ludhina stock exchange

18.Mangalore stock exchange

19.Pune stock exchange

20. Saurashtra Kutch stock exchange

STOCK MARKET MEANING

Stock exchange is that place where trading of shares is done in terms of sale and

purchase. A stock market or equity market is a public market (a loose network of

economic transactions not a physical facility or discrete entity) for the trading of

companystock and derivatives at an agreed price; these are securities listed on a stock

exchange as well as those only traded privately.

BENEFITS OF STOCK EXCHANGE

From the view of community

It assists the economies development by providing a body of interested

investors.

It uploads the position of superior enterprises and assist them in raising further

funds.

It encourages capital formation

Government can undertake projects of national importance and social value

raising funds through the sale of its securities on the stock exchange.
http://en.wikipedia.org/wiki/Market_systemhttp://en.wikipedia.org/wiki/Tradehttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Tradehttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Market_system


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It is the stock exchanges that central bank of a country can control credit by

undertaking open market operations (purchase and sale of securities)

FROM THE COMPANY POINT OF VIEW

A company whose shares quoted on stock exchange they enjoy better reputation

and credit.

The market for the shares of such a company is naturally widened.

The market price of securities is likely to be higher in relation to its earnings,

dividends and property values. This raises the bargaining power of the company

in the event of a takeover, merger or amalgamation

FROM THE INVESTORS POINT OF VIEW

Liquidity of the investment is increased

The securities dealt on a stock exchange are good collateral security for loans.

The stock exchange safeguards interests of investors through strict enforcement

of rules and regulations.

The present net worth of investments can be easily known by the daily

quotations.

His risk is considerably less when he holds or purchases listed securities.

ROLE PLAYER IN STOCK MARKET

EXTERNAL

SHAREHOLDER

DEBENTURE HOLDER

SHAREHOLDER

Shareholders are divided into two parts

1.Preference shareholder: Preference shareholder are those which have

preferential right to the payment of dividend during the life time of the company,

and a preferential right to the return of the capital when the company is wound

up.


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CHARACTERISTICS OF PREF.SHAREHOLDER

The dividend on them is fixed by the articles of the company.

They get their fixed rate of dividend before any dividend is distributed among the

other class of shareholders.

At the time of winding up of the company, the preference shareholder must be

paid back their capital before anything is paid to the ordinary shareholders.

KINDS OF PREF.SHAREHOLDER

Cumulative shareholder: These shares are entitled to fixed dividends whether

there are profits or loss. If profits are not sufficient to pay in a particular year then

that will pay on next year.

Non cumulative pref.share: These shares cannot claim arrears of dividends of

any year (if not paid due to insufficiency of profits) out of profits of subsequent

year.

Participating pref. Shares: These shares receives a fixed rate of dividend in

priority to ordinary shares and further, the right to participate in balance of profits

in an agreed proportion together with ordinary shares.

Redeemable pref.share: These are shares which can be purchased back by the

company. The company reserves its rights to call back or purchased these

shares at any time.

EQUITY SHARES

All shares which are not preference shares are equity shares. These shares do

not have a fixed rate of dividend, they are always irredeemable and their holders

have normal voting rights.

They are also the owners of the company.

They take dividend


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INTERNAL PLAYERS

Broker: He is a commission agent who transacts business in securities on behalf

of non-members. They may have number of sub-brokers to canvass and secure

business for them.

Jobber: He is an independent dealer securities. He purchase and sells securities

in his own name. He is not allowed to deal with non-members directly. He works

for profit.

Non-members: The following categories of non members are also permitted to

enter trading hall and transact business on the behalf of members.

Authorized clerks: They are the assistant or agents. They buy or sell on the

behalf of employers. They cannot transact business on their own account.

Remisers: They are the sub-brokers. He is also called the half commission men.


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Company Profile

KAYNET CAPITALCOMPANY PROFILE

Kaynet was established in 1994 with a view to provide diversified investment

solutions to our customers

. With a blend of a dedicated team, accurate research results and high customer

focus, we are all set to expand.

To introduce innovative investment solutions based on the demands of our With

us you get a diverse range of investment options and we continuously strive

customers.

Our current businesses include securities and commodity broking and

management.

We are members of National Stock Exchange (NSE), Bombay Stock Exchange

(BSE), Multi Commodity Exchange of India Limited (MCX), National Commodity& Derivatives Exchange (NCDEX), Currency Exchange and Central Depository

Services

Our services cater to a wide range of clients like corporations, institutional

investors, retail clients and high net-worth individuals.

Mission

To be ahead of the market always.

Vision


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To become a preferred and cordial partner for retail and institutional investors by

offering comprehensive and research-based financial solutions.

Core Values

Trust comes before all transactions.

Both protection and growth are of paramount importance.

Knowledge will keep us as well as our clients ahead.

Our management comprises a diverse talent pool that brings together rich

experience from across the industry.

Why Kaynet? You need to have right expert for Investing in capital market. Kaynet provides

guidance in the exciting world of stock market with suitable trading solutions and

value-added tools and services to enhance your investment.

Research Based approach

Wide range of daily, weekly and special Research reports

Expert Sector Analysts with professional industry experience

Advisory Real-time market information with News updates

Investment Advisory services

Dedicated Relationship Managers

Portfolio Management Services

Support

24x7 Web-enabled Back Office

Centralized Help Desk

Live Chat support system


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Future & Options segment has emerged as a popular medium for trading in

financial markets. Future contracts are available on Equities, Indices, Currency

and Commodities.

Kaynet with its membership as Trading Member of NSE F&O Segment and BSE

Derivatives Segment, provides you a gateway to the exciting world of derivative market.

Career

We view human resources at one of the most vital assets. It helps us create a reliable

and hard working team which helps us serve our Customers. In return, we provide our

employees with a healthy working environment which helps them grow with us.

Our employees are exposed to the best business practices. Together with healthy

competition, we also imbibe in our employees a sense of solid work and business

ethics.

Good performances are well-rewarded with incentives and promotions.

PRODUCT SPECIFICATIONS:

We make available to you various investment options to meet your personal

investment and financial planning needs. With a Certified Investment Counselor

to assist you in making your decisions and the convenience of a One-Glance

Account Statement,

its one way to assure that your money works the hardest for you. Its a One-stopshop for Direct Equity, Mutual Funds, Govt. of India Securities,

Debentures and other fixed income investment options. A thorough due-diligence

process vets all investment options before being offered to our customers,

supported by comprehensive research


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& analysis and regular updates on performance and ongoing analysis of

investment options

KAYNET RELATIONSHIP MANAGER:

You are just a call away from your KAYNET Relationship Manager THE TRUSTED

ADVISOR for all your financial needs.

He will be responsible to maximize your returns and provide you with solutions that arespecially customized for you.

He will also advise you on how to make the most of KAYNET services, In short, help

you stretch your business dreams.

As you consolidate your relationship with us, we will present you with special

relationship pricing on the entire range of products, to give you more value for your

money. For any further information or clarifications please feel free to get in touch

with the undersigned.

1) Investment (Delivery)

2) 2) Trading (Speculation)

1) Delivery Margin: 3 times.

In this module, you can buy the shares for the Investment. Or for the Long time Position.

In this module one great facility is there if you will buy today you can sell that delivered

shares next day. But you have to Pay Delivery Brokerage= 0.5%(Per leg). But In- case

you clear your position same day then brokerage will be trading (0.10% Per Leg).

For Example: You deposited margin Rs. 10,000/- (cash) that you will get 20,000/-

investment (Means you can take position till 20, 000/-). And as you will sell those

shares your Margin will be free for the Next Position / Next Souda.


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Trading (Intraday): 10 times

In this module you Can get limit for the six time of your deposited Margin fund For

e.g. In Trading you will Deposit Rs. 10,000 Your limit will get Increase 10 times

(10,000*10 = 1,00,000/-) But In trading we Square off the all position at 3:10pm

Whatever share price will be at that time.

ADDITIONAL FACILITIES

You can transfer your fund from Investment to Trading Or Trading to

Investment.

You can see your Contract Note and Bill Online at the End of Day (EOD).

In Intra-day you can see your all position and youre pending order also.

You can see your all history from beginning till date as per Trade/Date/Symbol.

Third thing you can see your overall DP position on trading engine.

You can do short sale also over there in Trading A/c.

About Investment

Investment is wisely important part of financial securities one tries to money toinvestment early as possible so that money will grow accordingly her life time Choosing

a wise investment often is very Crucial because a balance is require to be maintained

between risk and return involvement . For examples, many people invest in private firms

which very offer very high interests rate but they may vanish after some time loosing his

invested money .

Feature of Investment

Safety of Principle :Safety of Principle is the of most important feature of the

investment that means we should trying to safe the our investment capital through

positive balance between the Risk and Investment


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Adequate Liquidity and Collateral Value : Adequate Liquidity means the

investment should be liquid form that means the current capital investment in the

liquid assets so that we easily arrange the cash as per our the cash requirement.

Stability of Income: Stability in income means the stability of income as form of

the return invested in the investment assest By the investors . The income occur in

the regular basis and the time in which generate income is much be very long.

Capital Growth: Capital Growth means the increase the principle amount of the

capital and the capital appreciate of the income and capital of the investment of the

capital.

Tax benefit : Tax benefit means the amount invested in the tax benefit security

so that we can save the tax saving. There are several instrument available in the

market so that we can make the save of the tax.

Purchasing Power Stability : Purchasing power stability means the analysis of

the purchase power of man and increase the purchase power of the infesters so that

the man can investment his capital and money and increase the living of standard.

Increase the Standard of Living : Increase the Standard of Living means the

increase the purchase power of the investor and earn more return of his invested

amount of the capital which is invested by the investors and so that the purchase

power of the investors his increase and ultimate the increase of the standard of

living.


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Risk Associated With Investment

Business and Financial Risk : Business risk is the type of risk in Business risk

is that portion of the unsystematic risk caused by the operating environment of

the business. Business risk arise from the inability of a firm to maintain its

competitive edge and the growth or stability of t he earning. Variation that occurs

in the operating environment is reflected on the operating income and expected

dividends.

The variation in the expressed operating income indicated the business risk.

Interest Rate Risk : interest rate risk is the variation in the single period rates of

return caused by the fluctuations in the market interest interest rate .

o Most commonly interest rate risk affects the price of bonds, debentures

and stock. The fluctuations in the interest rates are caused by the

changed by the changes in the government monetary policy and the

changes that occur in the interest rates of treasury bills and the

governmenent bonds.

Social and Regulatory Risk : Social and regulatory risk is the risk occur in the

changes of the changes in the social environment of the public environment as

well as the regulatory policy changes and the commitment in the regulatory policy

means the which policy by the Indian market regulate by the


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various policy and the plans which announced by the security and exchange

board of India and the government and the Reserve bank of India.

Purchasing Power Risk. Variations in the returns are caused also by the loss

of purchasing power of currency. Inflation is the reason behind the loss of

purchasing power. The level of inflation proceeds faster than the increase in

capital value. Purchasing power risk is the probable loss in the purchasing power

of the returns to be received.

Topic Undertaken

About Project

KAYNET CAPITALKAYNET CAPITAL


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Mutual funds growth and insurance growth depends on share market growth. If

sensex get good position in share market then u gets more profit in mutual funds

and insurance.

Share market have two types of index:

o First one is Sensex

o Second one is Niffty

SENSEX AND NIFTY

CommodityEquity

Insurance

Mutual

funds


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The Sensex is an "index". What is an index? An index is basically an

indicator. It gives you a general idea about whether most of the stocks have

gone up or most of the stocks have gone downThe Sensex is an indicator of all the major companies of the BSE.

The Nifty is an indicator of all the major companies of the NSE.Nifty

includes top 50 company of N.S.E.

The Sensex goes up; it means that the prices of the stocks of most of the

major companies on the BSE have gone up.

If the Sensex goes down, this tells you that the stock price of most of the

major stocks on the BSE have gone down.

Just like the Sensex represents the top stocks of the BSE, the Nifty

represents the top stocks of the NSE.

Besides Sensex and the Nifty there are many other indexes. There is an

index that gives you an idea about whether the mid-cap stocks go up and down.

This is called the BSE Mid-cap Index.

Whether the small-cap stocks go up and down this is called BSE small-

cap index. And other indexes of BSE like BSE-100, BSE-200, BSE-500, and

BSE IPO are included.

There are many index included in NSE like S&P CNX Nifty,S&P CNX

DEFTY,S&P CNX-500,NIFTY MIDCAP-50,CNX NIFTY JUNIOR, CNX

MIDCAP,CNX IT,CNX 100,BANK NIFTY.

To show this accurately, the Sensex is calculated taking into

consideration stock prices of 30 different BSE listed companies. It is calculated

using the free-float market capitalization method. This is a worldwide accepted method as one of the best methods for

calculating a stock market index.


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BSE INDEX VALUEIndex Value:

17,349.07 Trade Time:

3:58PM IST

Change:

385.61 (2.17%)

Prev Close 17734.68

Open:

17,503.04

Day's Range: 17,309.47 - 17,526.80

CAUSES OF PRICE FLUCTUATION IN MARKET DAMAND AND SUPPLY

BANK RATE

SPECULATIVE PRESSURE

ACTIONS OF UNDERWRITERS AND OTHER FINANCIAL INSTITUTIONS

CHANGE IN COMPANYS BOARD OF DIRECTORS

FINANCIAL POSITION OF THE COMPANY

TRADE CYCLE

POLITICAL FACTORS

SYMPATHETIC FLUCTUATIONS

OTHER FACTORS:

EXPECTED MONSOON

PERSONAL HEALTH OF HEAD OF GOVERNMENT OR CHAIRMAN OF THE

COMPANY

OIL PRICES IN THE INTERNATIONAL MARKET.

CHANGES IN EXCHANGE RATE

BORDER TENSION

STOCK BROKERS SCAM LIKE HARSHAD MEHTA AND KETHAN PAREKH


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STRIKES AND LOCK-OUT OF THE COMPANY.

NEW BUDGET PROPOSALS

LIBERLIZATION AND PRIVATIZATION OF THE COMPANY.

SPECULATION

Definition: it involves the buying, holding, selling, short-term selling of stocks, bonds.

Commodities, currencies, collectibles or any valuable financial instrument to profit from

fluctuations in its price as opposed to buying it for use or for income via method like

dividends or interest.

Kinds of speculation Bull Market (Tejiwala): In case of that they purchase the shares at current

prices to sell at a higher price in the near future and make a profit if his

expectations come true. He is also called a long buyer.


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Bear Market (Mandiwala): He sells security in the hope that he will be able to

buy them back at lesser price. It is also called short selling.

Lame duck: When a bear has made contracts to sell securities, find it difficult to

meet his commitment due to non-availability of security, they always struggling...


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Stag: He is that type of speculator who applies for a large number of shares in a

new issue with the intention of selling them at a premium. He is bullish and very

cautious.

o

BOMBAY STOCK EXCHANGE

Introduction

The Bombay Stock Exchange (BSE) is located in Dalal Street, Mumbai. Established in

1875, BSE is the oldest stock exchange in Asia.

There are around 3,500 companies in the country which are listed and have a

significant trading volume.

As of July 2005, the market capitalization of the BSE is about Rs. 20 trillion (US $466

billion). The BSE `Sensex' is a widely used market index for the BSE. As of 2005, it isamong the 5 biggest stock exchanges in the world in terms of number of transactions

along with the NSE.

India's economic capital and the abode of the candy floss silver screen, the spark called

Mumbai attracts thousands of months towards itself round the year. Though it is the lure


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of the Bollywood glamour and the promise of a livelihood that make people run to

Mumbai; the Arabian sea and the Western Ghats topped up with the lip smacking Paw

Bhaji and Vada Paw along with important historical monuments like Gateway of India,

Elephanta caves, Haji Ali mosque, along with the Bombay Stock Exchange, the water

parks and shopping malls, this truly cosmopolitan city offers a heady cocktail of history

and the contemporary. Mumbai is therefore a haven for business, movie and tour buffs

alike.

Location

The Mumbai Stock Exchange is housed in the towering Phiroze Jeejeebhoy Towers,

Dalal Street in downtown Mumbai. The Phiroze Jeejeebhoy towers are located at theintersection of Bombay Samachar Marg and Hammam Street. The BSE conducts

business from Monday to Friday from 9:45 am to 3:30 pm and remains closed during

the weekend.

History

In the mid 1850s, a group of 22 stockbrokers started business under a banyan tree

opposite the Town Hall, each investing rupee 1. These stockbrokers called themselves

The Native Share and Stockbrokers Association which came to be recognized as the

Bombay Stock Exchange (BSE) in 1875. The BSE is thus the oldest stock exchange in

Asia.

In 1899 The BSE shifted with the inauguration of the Broker's Hall by James M

Maclean. After the First World War, the BSE again shifted- this time to an old building

near Town Hall. The plot where it now stands was acquired in 1928 on which a building

was constructed which became the permanent address of the Bombay Stock Exchange.

TOP 30 COMPANY LISTED COMPANY OF BSE1. ACC2. BAJAJ3. AIRTEL4. BHEL5. CIPLA


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6. DLF7. GRASIM8. GUJRAT AMBUJA9. HDFC10. HDFC BANK

11. HERO HONDA12. HINDALCO13. HUL14. ICICI BANK15. INFOCYS16. ITC17. L&T18. MARUTI19. NTPC20. ONGC21. RANBAXY

22. RELIANCE COMMUNICATION23. RELIANCE ENERGY24. RIL25. SATYAM26. SBI27. TCS28. TATA MOT0RS29. TATA STEEL30. WIPRO


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COMMODITY

In addition, investors can gain passive exposure to the commodity markets through a

commodity price index

1.1. INTRODUCTION

A commodity is a good for which there is demand, but which is supplied withoutqualitativedifferentiation across a market.

Commodities are often substances that come out of the earth and maintainroughly a universal price.[1]

A commodity is fungible, that is, equivalent no matter who produces it. Examplesare petroleum, notebook paper, milk, and copper

.[2] The price of copper is universal, and fluctuates daily based on global supplyand demand. Stereo systems, on the other hand, have many aspects of productdifferentiation, such as the brand, the user interface, the perceived quality etc.And, the more valuable a stereo is perceived to be, the more it will cost.

In contrast, one of the characteristics of a commodity good is that its price isdetermined as a function of its market as a whole. Well-established physicalcommodities have actively traded spot and derivative markets.

Generally, these are basic resources and agricultural products such as iron ore,crude oil, coal, ethanol, salt, sugar, coffee beans, soybeans, aluminium, copper,rice, wheat, gold, silver, palladium, and platinum. Soft commodities are goodsthat are grown, while hard commodities are the ones that are extracted throughmining.

There is another important class of energy commodities which includeselectricity, gas, coal and oil. Electricity has the particular characteristic that it is
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either impossible or uneconomical to store, hence, electricity must be consumedas soon as it is produced.

Commoditization occurs as a goods or services market loses differentiationacross its supply base, often by the diffusion of the intellectual capital necessaryto acquire or produce it efficiently. As such, goods that formerly carried premium

margins formarketparticipants have become commodities, such as genericpharmaceuticals and silicon chi

Commodity trade In the original and simplified sense, commodities were things of value, of

uniform quality, that were produced in large quantities by many differentproducers; the items from each different producer were considered equivalent.

On a commodity exchange, it is the underlying standard stated in the contract

that defines the commodity, not any quality inherent in a specific producer'sproduct.

Commodities exchanges include:

Chicago Board of Trade (CBOT)

Chicago Mercantile Exchange (CME)

Dalian Commodity Exchange (DCE)

Euronext.liffe (LIFFE)

Kansas City Board of Trade (KCBT)

Kuala Lumpur Futures Exchange (KLSE)

London Metal Exchange (LME)

New York Mercantile Exchange (NYMEX) National Commodity Exchange Limited (NCEL)

Multi Commodity Exchange (MCX)

International Indonesian Forex Change Market (IIFCM)

Markets for trading commodities can be very efficient, particularly if the division intopools matches demand segments.

These markets will quickly respond to changes in supply and demand to find anequilibriumprice and quantity.
http://en.wikipedia.org/wiki/Commoditizationhttp://en.wikipedia.org/wiki/Intellectual_capitalhttp://en.wikipedia.org/wiki/Marginhttp://en.wikipedia.org/wiki/Markethttp://en.wiktionary.org/wiki/participationhttp://en.wikipedia.org/wiki/Generic_drughttp://en.wikipedia.org/wiki/Generic_drughttp://en.wikipedia.org/wiki/Silicon_chiphttp://en.wikipedia.org/wiki/Commodities_exchangehttp://en.wikipedia.org/wiki/Chicago_Board_of_Tradehttp://en.wikipedia.org/wiki/Chicago_Mercantile_Exchangehttp://en.wikipedia.org/wiki/Dalian_Commodity_Exchangehttp://en.wikipedia.org/wiki/Euronext.liffehttp://en.wikipedia.org/wiki/LIFFEhttp://en.wikipedia.org/wiki/Kansas_City_Board_of_Tradehttp://en.wikipedia.org/wiki/Bursa_Malaysiahttp://en.wikipedia.org/wiki/London_Metal_Exchangehttp://en.wikipedia.org/wiki/New_York_Mercantile_Exchangehttp://en.wikipedia.org/wiki/National_Commodity_Exchange_Limitedhttp://en.wikipedia.org/wiki/Multi_Commodity_Exchangehttp://en.wikipedia.org/w/index.php?title=International_Indonesian_Forex_Change_Market&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=International_Indonesian_Forex_Change_Market&action=edit&redlink=1http://en.wikipedia.org/wiki/Commodity_marketshttp://en.wikipedia.org/wiki/Economic_efficiencyhttp://en.wikipedia.org/wiki/Market_segmentationhttp://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Economic_equilibriumhttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Commoditizationhttp://en.wikipedia.org/wiki/Intellectual_capitalhttp://en.wikipedia.org/wiki/Marginhttp://en.wikipedia.org/wiki/Markethttp://en.wiktionary.org/wiki/participationhttp://en.wikipedia.org/wiki/Generic_drughttp://en.wikipedia.org/wiki/Generic_drughttp://en.wikipedia.org/wiki/Silicon_chiphttp://en.wikipedia.org/wiki/Commodities_exchangehttp://en.wikipedia.org/wiki/Chicago_Board_of_Tradehttp://en.wikipedia.org/wiki/Chicago_Mercantile_Exchangehttp://en.wikipedia.org/wiki/Dalian_Commodity_Exchangehttp://en.wikipedia.org/wiki/Euronext.liffehttp://en.wikipedia.org/wiki/LIFFEhttp://en.wikipedia.org/wiki/Kansas_City_Board_of_Tradehttp://en.wikipedia.org/wiki/Bursa_Malaysiahttp://en.wikipedia.org/wiki/London_Metal_Exchangehttp://en.wikipedia.org/wiki/New_York_Mercantile_Exchangehttp://en.wikipedia.org/wiki/National_Commodity_Exchange_Limitedhttp://en.wikipedia.org/wiki/Multi_Commodity_Exchangehttp://en.wikipedia.org/w/index.php?title=International_Indonesian_Forex_Change_Market&action=edit&redlink=1http://en.wikipedia.org/wiki/Commodity_marketshttp://en.wikipedia.org/wiki/Economic_efficiencyhttp://en.wikipedia.org/wiki/Market_segmentationhttp://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Economic_equilibriumhttp://en.wikipedia.org/wiki/Price


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Market capitalization

Market capitalization/capitalization (often market cap) is a measurement of size of a

business enterprise (corporation) equal to the share price times the number ofshares

outstanding of a public company. As owning stock represents ownership of the

company, including all its equity, capitalization could represent the public opinion of a

company's net worth and is a determining factor in stock valuation. Likewise, thecapitalization ofstock markets oreconomic regions may be compared to other

economic indicators. The total market capitalization of all publicly traded companies in

the world was US$51.2 trillion in January 2007and rose as high as US$57.5 trillion in

May 2008[2] before dropping below US$50 trillion in August 2008 and slightly above

US$40 trillion in September 2008.

Categorization of companies by capitalization

Traditionally, companies are divided into large-cap, mid-cap, and small-cap.

Recently people have added 'micro-cap' and 'nano-cap'. People have rules of

thumb to determine category from market capitalization. These need to be

adjusted over time due to inflation, population change, and overall market

valuation (for example, $1 billion was a large market cap in 1950 but it is not very

large now), and they may be different for different countries. A rule of thumb may

look like

Mega-cap: Over $200 billion

Large-cap: $10 billion$200 billion

Mid-cap: $2 billion$10 billion

Small-cap: $300 million$2 billion

Micro-cap: $50 million-$300 million
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Nano-cap: Below $50 million

Different numbers are used by different indexes; there is no official definition of or

general agreement about the exact cutoffs. They also may be done by

percentiles rather than fixed cutoffs.

Functions of the Stock Exchange Market

Although the stock exchange market has multiple functions, its main activities aretwo:

To promote the savings and for them to be canalized towards of carrying through

investment projects that otherwise wouldnt be possible you need that the

issuing institution of the securities to be admitted for quoting. The negotiations

will be done on the primary market.

To provide liquidity to the investors. The investor can recuperate the money

invested when needed. For it, he has to go to the stock exchange market to sell

the securities previously acquired. This function of the stock market is done on

the secondary market.


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NATIONAL STOCK EXCHANGE OF INDIA

In the fast growing Indian financial market, there are 23 stock exchanges trading

securities. The National Stock Exchange of India (NSE) situated in Mumbai - is the

largest and most advanced exchange with 1016 companies listed and 726 trading

members.

The NSE is owned by the group of leading financial institutions such as Indian Bank or

Life Insurance Corporation of India. However, in the totally de-mutualised Exchange, the

ownership as well as the management does not have a right to trade on the Exchange.

Only qualified traders can be involved in the securities. Trading companies pay variable

listing fees based on their corporate capital size.

The National Stock Exchange of India Ltd. provides its clients with a single, fully

electronic trading platform that is operated through a VSAT network. Unlike most world

exchanges, the NSE uses the satellite communication system that connects traders

from 345 Indian cities. The advanced technologies enable up to 6 million trades to be

operated daily on the NSE trading platform.

NSE MAJOR SAGEMENT IN CAPITAL MARKET

Currently, NSE has the following major segments of the capital market:

Equity

Futures and Options


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Retail Debt Market

Wholesale Debt Market

Currency futures

Derivative

Derivatives are financial contracts whose value/price is dependent on the behavior ofthe

price of one or more basic underlying asset (often simply known as underlying).These

contracts are legally binding agreements, made on trading screen of stock exchange, to

buy or sell an asset in future. The asset can be share, index, interest rate, bond ,ru

dollar exchange rate ,sugar , crude oil, soya been, coffee etc.

Everybody wants to know about them, everybody wants to talk about them. Derivatives

however remain a type of financial instrument that few of us understand and fewer still

fully appreciate, although many of us have invested indirectly in derivatives by

purchasing mutual funds or participating in a pension plan whose underlying assets

include derivative products

A simple example of derivative is curd, which is derivative of milk. The price of

curd depends upon price of milk which in turn depends upon the demand and

supply of milk.

Section 2(aa) of Securities Contract (Regulation) Act 1956 defines Derivative as:

"Derivative" includes -


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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;

a contract which derives its value from the prices, or index or prices, ofunderlying securities .

A working definition of derivative which will help to lay foundation.

A derivative can be defined as a financial instrument whose value depends on

(or derives from) the values of other, more basic underlying variables.

---John C. Hull

Derivatives are compared to insurance. Just as you pay an insurance company a

premium in order to obtain some protection against a specific event, there are

derivative products that have a payoff contingent upon the occurrence of some

event for which you must pay a premium in advance.

Example

Suppose you have a home of Rs. 50, 00,000. You insure this house for premium

of Rs 15000 (It is a very risky house!) Now you think about policy (ignoring thehouse) as an investment.

Suppose the house is fine after 1 year. You have lost the premium of Rs 15000.

Suppose your house is fully damaged and broken in one year . You receive Rs

50,00,0000 on just paying premium of Rs 15,000.If you have bought insurance of

any sort you have bought an option. Option is one type of a derivative.

Difference in share and Derivative

The difference is that while shares are assets, derivatives are usually contracts

(the major exception to this are warrants and convertible bonds, which are similar

to shares in that they are assets).


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We can define financial assets (e.g. shares, bonds) as: claims on another person

or corporation; they will usually be fairly standardised and governed by the

property or securities laws in an appropriate country.

On the other hand, a contract is merely: an agreement between two parties,

where the contract details may not be standardised.

Due to their great flexibility, many different types of investors use derivatives. A

good toolbox of derivatives allows the modern investor the full range of

investment strategy: speculation, hedging, arbitrage and all combinations thereof.

There are two basic types of options-call and put.

A call option gives an investor right to buy underlying item during specified period

of time at an agreed upon price while put option confers the right to sell it.

Before going into Call and Put Options it is necessary to understand

American options can be exercised at any time between the date of purchase

and the expiration date. Most exchange-traded options are of this type.

European options are different from American options in that they can only be

exercised at the end of their lives.

The options on the Nifty and Sensex are European style options--meaning that

the buyer of these options can exercise his options only on the expiry day.

He cannot exercise them before the expiry of the contracts as in case with

options on stocks. As such the buyer of index options needs to square up his

positions to get out of the market.

In India all stock options are American style options and index options are

European style options. The significant difference between a future and an option is that the option

provides the contracting parties only an option, not an obligation, to buy or sell a

financial instrument or security at a pre-fixed price, called the strike price.

Obviously, the option buyer will exercise the option only when he is in the

money, that is, he gains by exercising the option.
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He cannot exercise them before the expiry of the contracts as in case with

options on stocks. As such the buyer of index options needs to square up his

positions to get out of the market.

In India all stock options are American style options and index options are

European style options.

The significant difference between a future and an option is that the option

provides the contracting parties only an option, not an obligation, to buy or sell a

financial instrument or security at a pre-fixed price, called the strike price.

Obviously, the option buyer will exercise the option only when he is in the

money, that is, he gains by exercising the option.

Call Option

Put Option

Call Option

The option that gives the buyer the right to buy is called a call option.

A call option grants the holders of the contract the right, but not the obligation, to

purchase a good from the writer of the option in consideration for the payment of

cash (the option premium).

Example: Suppose you have bought a call option of 2,000 shares of Hindustan Lever

Ltd (HLL) at a strike price of Rs250 per share. This option gives you the right to buy

2,000 shares of HLL at Rs250 per share on or before March 28, 2006. The seller of this

call option who has given you the right to buy from him is under the obligation to sell


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2,000 shares of HLL at Rs250 per share on or before specified date say March 28, 2004

whenever asked.

Put Option

The option that gives the buyer the right to sell is called a put option.

A put option grants the holder the right, but not the obligation, to sell the underlying good to

the option writer.

Suppose you bought a put option of 2,000 shares of HLL at a strike price of Rs250 per share.

This option gives its buyer the right to sell 2,000 shares of HLL at Rs250 per share on or before

specified date say March 28, 2006.

The seller of this put option who has given you the right to sell to him is under obligation to buy 2,000

shares of HLL at Rs250 per share on or before March 28, 2006 whenever asked.

American options can be exercised at any time between the date of purchase and the

expiration date. Most exchange-traded options are of this type.

European options are different from American options in that they can only be exercised at

the end of their lives.

The options on the Nifty and Sensex are European style options--meaning that the buyer of these

options can exercise his options only on the expiry day. He cannot exercise them before the expiry of

the contracts as in case with options on stocks. As such the buyer of index options needs to square

up his positions to get out of the market.

Conclusion

Indian derivatives market has been rapidly evolving in terms of variety and

sophistication of instruments, range of market participants as well as volume of

turnover.
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Adequate measures are also being put in place to try and ensure that adverse effects

from excessive leverage in derivative market do not in any way rupture normal financial

market transactions.

Market participants generally view derivatives as useful products that have allowed

businesses to become more competitive, investors to achieve superior returns, and

governments to cut financing costs by managing financial risks in ways they previously

could not.

Thus to conclude

By far the most significant event in finance during the past decade has been the

extraordinary development and expansion of financial derivatives. These instruments

enhance the ability to differentiate risk and allocate it to those investors most able and

willing to take it - a process that has undoubtedly improved national productivity growth

and standards of living.'

Working of the stock Market

A person desirous of buying/selling shares in the market has to first place his order with

a broker. When the buy order of the shares is communicated to the broker he routes the

order through his system to the exchange. The order stays in the queue exchanges

systems and gets executed when the order logs on to the system within buy limit that

has been specified. The shares purchased will be sent to the purchase by the broker

either in physical or demat format.

Rolling Settlement Cycle

In a rolling settlement, each trading day is considered as a trading period and trades

executed during the day are settled based on the net obligations for the day. At NSE

and BSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working


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day. Typically trades taking place on the Monday are settled on the Wednesday,

Tuesdays trades settled on Thursday and so on.

Primary Markets

Securities available for the first time are offered through the primary securities markets.

The issuer may be a brand-new company or one that has been in business for many,

many years, like that of MARUTI. The securities offered may be a new type for the

issuer or additional amounts of a security used frequently in past. The key is that these

securities absorb new funds for the coffers of the issuer.

Secondary Markets

Once investors have purchased new issues, they change hands in the secondary

markets. There are actually two broad segments of the secondary markets the

organized exchanges and the over-the-customer (OTC) market. The primary middlemen

in the secondary market are brokers and dealers. Broker act as an agent while dealer

as a principal in a transaction.

Organized stages are physical market place where the agent of buyers and sellers

operate through the auction process.

Depository

The organization responsible to maintain investors securities in the electronic from is

called the depository. In other words, a depository can therefore be conceived of as a

Bank for securities. In India there are two such organizations viz. NSDL and

CDSL.The depository concept is similar to the banking system with the expectation thatbank handle funds whereas a depository handles securities of the investors. An investor

wishing to utilize the services offered by a depository has to open an account with the

depository through a depository participant. Depository participant: the market


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intermediaries through whom the depository services can be availed by the investors

are called a Depository Participant (DP).

Indian online share trading

Realizing there is untapped market of investors who want to be able to execute their

own trades when it suits them, brokers have taken their trading rooms to the Internet

known as online brokers, they allow you to buy and sell shares via Internet. There are 2

types of online trading service:

iscount brokers

Discount online brokers allow you to trade via Internet at reduced rates. Some provide

quality research, other dont.

Full service online

Full service online brokerage is linked to existing brokerages. These brokers allow their

clients to place online orders with the option of talking/ chatting to brokers if advice is

needed. Brokerage rates here are higher. 5Paisa.com, ICICIDirect.com, IndiaBulls.com,

Sharekhan.com, Geojit securities.com, HDFCsec.com, Tatatdw.com, Kotakstreet.com

are some of the online broking sites in India.

Factors investors keep in mind while selecting online brokers in India

Brokerage cost

It is important to weigh up the subscription and trading costs charged by an online

broker against benefits offered by the site. All online brokers display their charges on

their sites. Some make sure you find the charges easily, while with others you will have

to search a bit.


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Security

Please make sure site has 128-bit encryption to ensure safety of transaction online. You

normally get a secured Login id and password. It is always advisable to frequently

change trading password. Ideally online trading site should be fully integrated. The

greater the backward integration, the better it is for the customer. Ideally broking

account, Demat account and bank account should be linked electronically.

Rate refresh

Rate refresh has to be real-time with no time lag. The speed and reliability comes with

huge investment in technology. It is always advisable to check rates of online broking

sites with BSE/ NSE terminal rates.

Speed of execution

System has to be fast and reliable that does just one job- executes your trades. The

last thing you need is a site that is heavily congested with the users who are

downloading heavy jpeg graphs or pulling the latest story why market is moving. The

site should be one click wonder where squaring off all your positions or canceling all

your pending orders takes one click and a confirmation of action.

Trading Exposure

For trading, all sites provide 4 times buy and sell limit against margin money put in by

customer. For delivery of shares, buying limit is equal to margin money put in by

customer. Couple of sites also provides margin funding for buying of shares.

Free trial period

Site should allow users free trial period to familiarize yourself with system before you

decide to become trading member of the site.

Intraday chart/ historical chart


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The site should provide intraday chart tick-by-tick time and price data / historical chart

for technical analysis by investors of particular scrip. Lot of people trade based on

charting packages.

Before you can trade, you need to open an account and register as a trader as with

online broking site. This involves filling up trading account form, Demat account form

and for faster transfer of money- Internet enabled bank account. Please read terms and

condition of each site before commencing to deal with them. As per SEBI rule, Photo id

proof and current address proof is a must for opening trading account.

Online share dealing on the Internet is now a way of life for thousands of investors. 80%

of South Korea and 30%-40% US trade are executed online. If you want to deal in

shares, thereto deal in shares, there is no easier way.

Sensex and Nifty

Sensex and Nifty are the two important indices that track the Indian equity market.

There are however many differences in their construction and behavior. Investors must

choose one between the two to benchmark their portfolios. It is sometimes seen that

these

An index is used to give information about the price movements of products in the

financial, Commodities or any other market. A stock index is created to provide

investors with information regarding the average share price in the stock market.

Generally the stock price of any company is vulnerable to three types of news:

Company specific

Industry specific

Economy specific

Functions of an index:

The main objective is to give all market participants an indicator of the general

movement of the stock.


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The primary function of a stock index is to serve as a barometer of the equity

market. The ups and down in the index represents the movement of the equity

market.

o Investors can have a clear picture on equity market.

Secondly, stock market indices are lead indicators of the performance of the

overall economy. Similarly, sectoral index serves as a lead indicator of the

performance of that particular sector.

o Perhaps, the most important use of an equity market index is as a

benchmark for a portfolio of stocks. The systematic risk of ones portfolio

can also be measured by comparing it to the index.

Finally, indices are useful in modern financial applications of derivatives. Indices

serve as the underlying for Future & Options products. In the Indian market, both

Sensex and Nifty are underlying for Futures and Options contracts.

Margin Trading

Margi

n Trading is nothing but borrowing money to invest in stocks, Here the investor

borrows money from his/her broker to invest in stocks through the same broker.

The margin here is the money actually borrowed from the broker. The margin

loan can be up to 50% of the total amount invested. This effectively means that

you can invest in shares worth Rs 100 by borrowing Rs 50 from your broker. This

is called buying shares on a 50% margin. If the value of the shares goes down,

the investor has to pay a maintenance margin to bring the margin up to 40% of

the market value of the shares. This margin is paid when the broker makes a

margin call to the investor, and investor has to pay the difference between

current margin and maintenance margin to take it. to 40%. If the margin falls


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below 30%, the broker has the discretion of liquidating the clients holdings and

thus recovering the loan advanced.

to 40%. If the margin falls below 30%, the broker has the discretion of liquidating

the clients holdings and thus recovering the loan advanced.

Risks in Margin Trading:

You can lose more money that you have invested

You may have to deposit additional cash or securities in your account on short

notice to cover market losses;

You may be forced to sell some or all your securities when falling stock prices

reduce the value of your securities

Your brokerage firm may sell some or all of your securities without consulting you

to pay off the loan it made to you.

Benefits of Margin Trading:

o wants to buy more shares than the cash available.

o The main benefit of Margin Trading for the investors is that it serves as an

avenue for the investor who The investor leverages the transaction and

aim to make more money on the investment than the interest payable on

the margin loan.o It can be very effective tool in the hands of the experienced and heavy

trades, who can invest up to double his investible sum in the hope to earn

high profits.


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o Trading on Margin improves liquidity in the market. With lesser amounts of

cash with investors, they can assume higher risk and can invest in higher

value of stocks.

o The Official and structured market for Margin Trading will most likely lead

to an expansion of day trading activity in the market.

Day Trading provides the market needed liquidity to the equity

market.

Online Trading

Investors can have complete control of their stock investing actions, now that they have

the convenience of buying and selling shares on the NSE online and in real time.

Each individual has access to the latest information and tools to analyse any stock

investment decision. Plus the power to execute the sale or purchase right before them

on their personal computer screen.


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Advantages of online trading:


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The convenience of desktop investment-trade from anywhere at any time.

Not just online but real time-from placing an order to having it executed-in a few

seconds.

Continuous feedback of all transactions orders and their status.

three level security via Firewalls, data encryption using Secure Socket Layer

(SSI) technology, User IDs and Passwords i.e your personal information remains

for your eyes only.

Online access to a wealth of live information that can facilitate better investment

decisions.


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Corporate Offer

Sno Parameters Competitors offer KAYNET

1 Facilities Only offline or online Both2 A/c Opening charges Rs 250+ or 750 Rs 600(lifetime)3 Annual Maintenance

charges

Rs 250+ 250

4Brokerage-Intraday

0.15% 0.10(negotiable)

5Delivery

0.75% 0.30(negotiable)

6 Min Charges Rs 10 to Rs 25 1 Paisa

7 Margin-Intraday Generally 6 to 10 times 10 times8 Delivery No carry forward 3 times9 Equity analysis Do not have Updated analysis of

200 companies.10 Technical charts Do not provide Provided on trade

terminal11 Transparency Not so transparency Everything

provided online

RESEARCH METHODOLOGY

Objectives of the study:


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Object

ive of this study is to find out Kaynet Securities services for, Demat account,

Equity market, and Derivative market. Project is sub-divided into the following

objectives:

To find the competition of equity market especially in NSE trading and bring out

the awareness level of the investors who are trading with National Stock

Exchange.

To find the advantages of the Demat account and charges by various depository

participants.

To study the trading procedure of Kaynet Securities and comparison of the

broking firms.

To find the cost saving analysis on the brokerage charges by the Kaynet

Securities on the share and derivative trading with the other broking firms.

Positioning of Kaynet in Jaipur.

Universe

ALL TYPE OF INVESTORS

Investor is a person who invests money to earn profit or interest on the investment, it

can in the form of deposits, lending in the form of loans or investing.

Population

ALL INVESTORS DEALING IN SHARE MARKET (PRIMARY\SECONDARY) OR

DERIVATIVES

Securities available for the first time are offered through the primary securities

markets.

The issuer may be a brand-new company or one that has been in business for

long time, like that of maruti. The securities offered may be a new type for the

issuer or additional amounts of a security used frequently in past. The key is that

these securities absorb

Information Source:


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Investors from Various firms, Relationship managers, Internet, magazines, Brokers &

Sub-brokers in Jaipur, Telecalling references generated from respondents

interviewed.

Sample size

BROKERS AND SUB BROKERS IN JAIPUR

Share brokers and sub-brokers (including on-line line & off-line brokers)

On-line broking firms: Kotakstreet.com, 5Paisa.com, ICICI Direct.com, Share

khan.

Off-line broking firms: Anand Rathi, H.C.Jain & Co., Hem Securities, Eureka

Securities, Alankit Assignments and others.

SHARE TRADERS

500 share investors dealing in either primary or secondary market.

Sampling

Simple random sampling technique used to get an unbiased overview.

Data Type Primary Data And Secondary Data

Data Collection Technique Personal Interview

Data Collection Tools Schedule, Journals, Kaynet group.com

Other books and websites

Analysis of data:

Data analysis is done with the help of bar charts; pie charts, tables and certain

mathematical tools are also applied to derive the results.


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Market Analysis

Q.1 Are you aware with the term Market and Securities?

Inference:-when enquired with the 60 respondents during the process of survey we

came to know that mostly 54 respondents were aware with the term market and

securities.

Whereas 6 out of them are not aware due to some of the leckness or not properly aware

with the fact of trading in securities.

It means that theres a lot more to make educated the people at large about the hassle

free trading in the securities through Kaynet.

Q.2 If yes, Do you deal in the market.?


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Inference:- From the positive reply holders of 54 respondents, 48 agreed that they

prefer to deal in the securities market, shares and bonds.Again 6 of them told us that they dont trade in the market securities.

This led us to make them aware by defining simplest company norms and how they

can systematically deal through opening the Demat Account in and how Kaynet will

take care of their all the funds with ease and comfort.

There is a wide demand and interested investors who are keen to put their money into

risk free growing returns investments.

So that they may be able to secure their future financial wise and to beat the heat of

inflation.

Q.3 If yes, have you listen the name of KAYNET SECURITIES and traded with it?


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Inference:- out of total 48, 44 individuals are very well aware with the trading and

dealing in the securities market with Indias and are keen to open Dmat accounts with

the company.

So the total respondents have said no because they are new in the town or they are not

interested in putting their money into share market and its related activities.

As far as the name of Kaynet is concerned, people are knowing the esteemed name

and are showing their interest in joining the same for their prospective return on their

investment.

Generally, people have faced a difficulty regarding who will handle their funds but

Indiabulls has come out to remove their difficulty and to ease their dealing in the

securities as the professional are regularly eyeing on the stock market and making their

single efforts to grow the investment return and can service their customers to the best.

But to trade with Kaynet capital securities is a great experience for them and the people

are now shifting to Kaynet securities for their potential investments gains.

Q.6 Are you aware with the term Dematerialization of accounts?

Inference:- From the known respondents of 48, it has been inferred that 34 of them are

known with the term Dematerialization of the accounts as it is very important in todays

life for one to deal in the share market.


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Rest 14 individuals are quite unaware or less aware and need to be guided them

properly so that they may be to deal systematically in their securities via KAYNET

CAPITAL.

Q.7 Have you opened your De-mat account while trading with securities?

Inference:- Out of the 34 respondents who are aware with the term of Dematerialization

of the accounts, 30 individuals have already or opened their accounts with us for their

safe, secure and return growing investment trading.

Still 4 of the individuals have not opened their accounts but they will open their accounts

in a month or so since they turn to us positively.

Now what is necessary is to open the DMat account if one investor want to trade safely

and with secure funds.

There are few formalities need to be accomplished so that after that a holder of account

can deal with the securities and the fund amount will be transferred to his/her account

when so ever there is a upward trend.

Q.8 Do you wish to open Dmat account with Indiabulls securities which takescare of your all financial services to the maximum satisfaction of yours?


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Inference:- When enquired with the 48 positive respondents that they wish to open the

Dmat accounts with KAYNET CAPITAL for themselves or for their near ones who is

interested in trading and dealing in securities, We receive 29 positive individuals who

want to open their accounts with us.

13 said later because they have already opened their accounts and wishes to continue

and need not required.

6 said No., because they have opened their accounts with one or other firms dealing

in securities.

Q 9. Where do you preferably invest your money besides securities?

Inference:- Besides securities entire 60 respondents preferences to invest in the

following one or more of the financial services.

In Mutual fund = 16

In Bank = 34

In Insurance = 20

In PPF/RDs = 18


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Q.10 Do you agree that to beat inflation and present financial crisis and to sustain

in the Indian economy one has to invest his hardcore money in the high return

generating schemes or plan where he can avail many benefits in a cost of one?

Inference:- It has been a group positive reply regarding if to sustain in the world of

inflation and global financial crisis one has to make investment which gives high return

so that they can be able to meet their future requirements of their near ones with ease

and comfort.

People are now more inflation conscious and feeling that to beat the inflation one has to

secure his future funds and to get potentially higher returns to sustain wealthy.

Swot Analysis of The Indiabulls

Swot Analysis Means the Analysis of the Particular Topic in the Four Following

Basis There Is the Swot Analysis Means The

o Strength

o Weakness

o Opportunities

o Threats

o Strength :

Strength Means The Strength Of the Company That is the KAYNET CAPITAL

is the most famous and biggest company of the share broking company in


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India there is the lot of the branch and the online share company brooking in

the all those particular branch .

In Indian share market is the fastest growth market of the world there is the 95

branch in the Indian share market.

o Trading via Branch network, telephones and internet. You can place

orders after market hours also.

o Buy today sell tomorrow facility that other company is not lproviding.

o Personal relationship with the client.

o Exposure of 10 Times on intraday trading and times delivery

o Insurance of customer through Birla insurance.

Wea

kness:

Weakness is the most week part of the company in the company so that is notright by the company in the Indian share marke the very limitation and that is

the two of the weakness are controllable and uncontrollable. There are the

limitation and weaknesses of the KAYNETas follows.

o Finding can not be generalized all over India.

o The research undertaken is strictly with in the time frame of 15 may till 30

June 2006

o Several Branches are closed in India in last few months.

o Several suggestions could not be included in the report because more of

research works are required for them.

o The finding of the research are directly in accordance with above

mentioned time period and are directly proportional to market condition.


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o Opportunities :

opportunities are the most findable part of the new market by the company the

opportunities of the sharmearkerts are the may are in the India and the world

wide so the opportunities of the Indian stock market in the India bulls are as

follows.

Opportunities are lots of hare in the India of the share market are here because

the Indian stock markets tremendous growth in the last few years .

share market is the most famous in the among the people because everyone of

the people wants to investment so that he get receive more return.

in will introduce in the several medium and small city so that every one can

investment in these sharebroaking company.

4

Threats

Threats means the opportunists will lost by the company the recent few issues

in the Indian market is that it is highly crisis of the world wide economy because

in the last months the world economy is the highly facing the receas tion

so that in presents the company was closed the many branch in through out

the country . and the banking operation are also included in this point .

Limitations:

o Findings cannot be generalized all over India

The research undertaken is strictly with

in the time frame of 15 May till 30 June

2004


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Several suggestions could not be

included in the report because more of

research works are required for them.

The findings of the research are directly

in accordance with above mentioned

time period and are directly proportional

to market conditions

The result is just an instantaneous view

of the equity market scenario.

Although every care has been taken to

make sure that the research is accurate

to the highest degree of significance but

still a slight possibility of errors cannot

be ruled out.

Conclusion


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Over all Kaynet is providing better deal to investors in Jaipur city and the products of

Kaynet are updated, monthly wise for customers convenience. There are no

hidden costs charged from investors till today. The Turnover of the company ishigh (40 crore) and acted as one of the largest retail financing company (33%

market share) and the company is providing convenience of buying and selling

shares on NSE online.

Suggestions

o Interest rate on Funds Provided to investors on margin trading have to

be reduced

o From the survey conducted, I found that interest rate on funds provided to

investors is more than other competitive firms. so company should takecare of this issue and try to have solution on this aspect which I felt more

important.

Brokerage rate on trading have to be reduced.

Even this one of the major factor that has to be

taken care of, because competitors are

providing lesser brokerage both Intraday and

Delivery trading which satisfies customer who

are investing and trading frequently.

Tapping the high income groups


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o Company should focus on High-income groups and Level to be

maintained. They can better profit to the company and can increase the

turnover of the company.

Question About Investment

What is the Beta Factor?

What is the Buy Back Share?

What is The Security Pricing?

What is the portfolio and how it is Management?

What is the Demet?

How can find that the security is risk?

Why we open a Demit Account?

What is the Portfolio?

What is the India bulls Future?

10.What is the Right Issue?

What is the Short Selling?

What is the spot Market?

GLOSSARY\TERMINOLOGY

Arbitrage- Profiting from differences in price of the same share traded on two

or more stock exchanges.


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Automated Screen Trading- Electronic trading in stocks through Visual

Display Units (VDU). The associated computer enters, matches, and executes

the deal. It makes possible a floorless exchange and brings transparency to

deals.

Bears- Those who sell shares anticipating a fall in prices.

Bear Hammering- Persistent selling pressure by bears, bringing the prices

down.

Beta Shares-Listed, but infrequently traded, shares of companies with a

generally low equity capital.

Blank Sales- Sale of securities by BEARSwho do not possess the securities at

the moment of selling, but hope to buy them at a lower price when the market

has fallen.

Book Closure-Before a company declares a dividend or issues bonus or rights

shares, it closes its register of members for a certain period, from one week to a

month, during which no transfer of shares is registered.

Brokers- are intermediaries who compete for the right to help people buy or sell

something of value on his clients behalf.

Bulls-Those who buy shares in anticipation of increase in price.

Call Option- Right to buy at fixed price.

Capital Market-includes primary market, securities market term lending

institutions, banks, investors engaged in providing long-term capital (whether

equity capital or debt capital) to the Industrial Sector.


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Commodities Market-Market for trading bulk & basic goods like grain, edible

oils, rubber, cotton, metals, etc. Certain special items like tea & coffee are traded

in auctions with inspection facilities for the goods.

Day Trading-Buying and selling the same share during a single day, hoping to

make a profit from price fluctuations.

Derivatives- is a product whose value is derived from the value of underlying

asset, index etc. The underlying assets can be equity, forex commodity, or any

other asset.

Government Securities- means a security created & issued by the Central

Government or State Government for the purpose of raising a public loan.

Equity Market- Ownership of tangible assets are bought & sold in Equity Market.

Floor Broker-A person who actually does the buying & selling of shares on

behalf of a member of the stock exchange for a small share of the commission

charged by a broker.

Forward Dealing/Trading-Contracts to buy or sell specific quantities of goods,

currency, or freight at a stated price and a stated time in the future. Forward

contracts are bought & sold in the FUTURES MARKET.


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Futures-Shares or commodities bought or sold for delivery at a future date.

These can be sold at a profit before delivery if prices in the market have

changed.

Hot Shares- 1. Shares in great demand. 2. Stolen shares.

IPO- Initial Public Offering. New shares offered to public in the Primary Market.

Jobbers- Brokers broker. One who specializes in specific securities catering to

the needs of other brokers.

Liquid Market- One where the size of an order creates minimal affects on the

transactions price.

Lot-A fixed number in which shares are bought & sold.

Low-The lowest price paid for a share in the last twelve months.

Market Capitalization- The total market value, at the current stock exchange list

price, of the total number of equity shares issued by a company.

Market Price- The last reported price of a share at which it was sold on the stock

exchange.

Market Lot- Each Company specifies the minimum number of securities, which

makes an even or market lot.

Maturity-Day on which option is exercised.

Meltdown- The phenomenon of fast, uncontrolled fall in share prices.


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Member Code- A unique code given to each member of the stock exchange to

enable the clearing house to check his payment or delivery position.

Nave Buy-and-Hold Strategy- Selecting shares randomly, buying them, and

holding them regardless of any information available in the market.

One Way Market- A market dominated by only buyers or sellers.

Over the Counter Market or OTC Market- A market where shares which are not

listed on the stock exchange are traded.

Panic Selling- A condition of the stock market in which not only inexperienced

investors, but also sturdy bulls, take fright and start selling.

Portfolio- Combined holding of many kinds of financial secu

dealing in capital market”

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