new share wealth project orginal.latest.100 pages

“A STUDY ON RECENT TRENDS IN ONLINE TRADING IN SECONDARY MARKET” WITH SPECIAL REFERENCE TO SHAREWEALTH

SECURITIES. LTD. THRISSUR

MAJOR PROJECT REPORT

Submitted in partial fulfilment of the requirements for the award of the degree of

Master of Business Administration (MBA) of

UNIVERSITY OF CALICUT

Submitted by,

SANIL-M

(Reg. No; SOAKMBA024)

Under the guidance of

Mr. MURALEEDHARAN

Faculty member.

SMS KUTTIPURAM

SCHOOL OF MANAGEMENT STUDIES

UNIVERSITY OF CALICUT,KUTTIPURAM

2012

1



KUTTIPURAM

CERTIFICATE

This is to certify that the Project Report Entitled “A STUDY ON RECENT

TRENDS IN ONLINE TRADING IN SECONDARY MARKET ” WITH

SPECIAL REFERENCE TO SHAREWEALTH SECURITIES

LTD.THRISSUR. is a bonafide work carried out by Mr. SANIL.M, REG NO:

SOAKMBAO24 under the guidance of Mr. MURALEEDHARAN faculty in

School of management studies ,Kuttipuram, University of Calicut.

C0-ORDINATOR


2


KUTTIPURAM

CERTIFICATE

I hereby certify that this Project Report entitled “A STUDY ON RECENT

TRENDS IN ONLINE TRADING IN SECONDARY MARKET ” WITH

SPECIAL REFERENCE TO SHAREWEALTH SECURITIES

LTD.THRISSUR. is a bonafide work carried out by Mr. SANIL.M (REG NO:

SOAKMBAO24) student of SCHOOL OF MANAGEMENT

STUDIES ,KUTTIPURAM, UNIVERSITY OF CALICUT under my guidance

and supervision. This has not been submitted to any other university or

institution for the award of any other degree or diploma.

PLACE: MR.MURALEEDHARAN

DATE: FACULTY

SMS, KUTTIPURAM.

3

DECLARATION

I, SANIL.M hereby declare that the Project Report entitled that“A STUDY ON

RECENT TRENDS IN ONLINE TRADING IN SECONDARY MARKET ”

WITH SPECIAL REFERENCE TO SHAREWEALTH SECURITIES

LTD.THRISSUR.. ‘Is bonafide work carried out by me under the guidance and

supervision of Mr. MURALEEDHARAN.

I also declare that this report has not been submitted previously by me

fully or partially, for the award of any degree, diploma or title.

Date: SANIL.M

Place: Kuttipuram

4

ACKNOWLEDGEMENT

I feel immense gratitude to Mrs. Shalini, (Research analyst ,Sharewealth

Securities.Ltd. Thrissur) and special thanks to Mr.Subhash., Branch Head

Sharewealth Securities.Ltd. Calicut, for having given the permission for doing

my project work in Sharewealth Securities Ltd., at Thrissur. I express my

special thanks to Dr. E.K Satheesh (co-ordinator of school of Management

studies, Kuttipuram, University of Calicut) for valuable services to do this

project.

I would like to keep on record my heart full thanks and regard to my

supervising Faculty Mr.Muraleedharan. (School of Management studies,

Kuttipuram) for his encouragement, able guidance and kind co-operation,

projected at various stages of this work.

I express my special memory and feelings to my parents,

classmates and all the teachers in the department for their inspiration and help. I

take this opportunity to express my sincere and honest gratitude of all staff of

various categories who have contributed in learning through this encouragement

and guidance

SANIL.M

5

TABLE OF CONTENTS

Chapter no.

Contents Page number

Chapter-1 Introduction Scope of study Objectives of study Limitations of the study Research methodology

1112131415-16

Chapter-2 Review of literature 17-29Chapter-3 Industry profile

Company profile30-4445-52

Chapter-4 Data Analysis 53-94Chapter-5 Findings/inferences 95-96Chapter-6 suggestions &

recommendations Conclusion Bibliography/annexure

97-98

99100

LIST OF TABLES

6

Table No.

Table contents Page No.

1 Share price analysis of Banking Industry 552 Share price analysis of Capital Goods Industry 593 Share price analysis of Fast moving consumable

goods( FMCG) Industry63

4 Share price analysis of Housing Related Industry 675 Share price analysis of oil and refineries Industry 716 Share price analysis of Metal,Metal products and

mining Industry75

7 Share price analysis of Chemicals Industry 798 Share price analysis of Information Technology

Industry83

9 Share price analysis of Telecomm Industry 8710 Share price analysis of Transport Equipment

Industry91

LIST OF FIGURES

7

Fig no Figure contents Page number

1. Share price analysis of SBI 562. Share price analysis of Federal Bank. 573. Share price analysis of Punjab national

bank58

4. Share price analysis of Suzlon Energies. 605. Share price analysis of Bharat heavy

electrical ltd.61

6. Share price analysis of L&T ltd. 627. Share price analysis of Hindustan

Uniliver ltd.64

8. Share price analysis of ITCltd. 659. Share price analysis of Nestle India. 6610. Share price analysis of ACCcements 6811. Share price analysis of Ambuja cements 6912. Share price analysis of Ultratech.ltd 7013. Share price analysis of Hindustan

petroleum ltd.72

14. Share price analysis of Oil and Natural Gas Corporation ltd.(ONGC)

73

15. Share price analysis of Indian Oil ltd. 7416. Share price analysis of Steel Authority of

India.76

17. Share price analysis of Tata Steels 7718. Share price analysis of Jindal steels 7819. Share price analysis of Adithya Birla

Chemicals.80

8

20. Share price analysis of Tata chemicals 8121. Share price analysis of Asian paints 8222. Share price analysis of Infosys

Technologies ltd.84

23. Share price analysis of Wipro ltd. 8524. Share price analysis of HCL Technologies

Ltd.86

25. Share price analysis of Tata communications Ltd.

88

26. Share price analysis of Bharathi Airtel Ltd. 8927. Share price analysis of Idea cellular Ltd. 9028. Share price analysis of Bajaj Auto Ltd. 9229. Share price analysis of Hero Moto Corp Ltd. 9330. Share price analysis of Maruthi-Suzuki 94

EXECUTIVE SUMMARY

9

“A study on Recent Trends in online trading in secondary market” was done

from the Sharewealth Securities Ltd. Thrissur. The study was conducted to

analyse the recent trends in share prices in secondary market.This study also

analysis the risk involved in the online trading in secondary market and also

compares the share price variations of companies in different sectors.

This study was conducted among the share prices of various sectors in last six

months. During the Research , I mainly used secondary data by the way of

internet .The secondary data were also collected from the journals and company

records. The results so obtained were shown in the way of different charts.

The study reveals that certain facts relating to recent trends in online trading in

secondary market. it also shows the level of risk involved in the online trading

in secondary market. The findings of this study have help researcher and

company to understand the current market position and recent trends occurring

in the market in last few months.

10

CHAPTER-1

INTRODUCTION

SCOPE OF THE STUDY

11

The scope of the study confined to the areas where the research topic can be

implemented. Here in this research to study demat and online trading in

secondary market.

The report is useful to the management of the company.

It is an interesting and significant area for conducting research

Most of the people are interested to investing in securities.

Online trading become more familiar to common people

OBJECTIVES

12

Primary objective:

To analyse the recent trends in online trading in secondary market in

India.

Secondary objectives:

To compare the recent fluctuations in share prices of companies in

different sectors .

To analyze the growth and future of online trading in secondary

market.

To identify risk involved in online trading.

.

LIMITATIONS OF THE STUDY

1 Time constraint is one of the serious issues. Survey will be conducted

within two months duration.

13

2 Share market faces more difficulty now. So that will affect to demat and

online trading in secondary market.

3 This study will concentrate only in one company. (share wealth

securities)

4 The analysis is based only on fluctuations of share prices in 3 companies

each from 10 different industries.

1. RESEARCH METHODOLOGY:

14

Type of study: Descriptive

Data collection

Sources of Data

The data are collected only through secondary method.

.Secondary data

Secondary data are collected mainly through internet, journals, and advertisements ,

broachers of the company.

RESEARCH DESIGN

1. TOOLS FOR DATA COLLECTION

Discussion with person in related steam of activities and view from

experts will be analyzed.

Secondary sources of data required for the study can be collected

from secondary sources, this include library references, technical

and subject related magazines, journals, news papers and other

previous studies.

2. SAMPLE DESIGN:

Sampling procedure:

Sample size: 30 ( 3 samples each from 10 industries).

15

3. DATA ANALYSIS:

Share price variation Charts are adopt to interpret the data to

arrive the findings of the study.

Data analysis can be done by chart analysis.

Time period of work

A period of 45 days from April-1st 2012 to May -15th 2012 is used

for the project work.

16

CHAPTER - 2

REVIEW OF

LITERATURE

A brief explanation about Internet:-

Internet is a world wide self governed network connecting several other smaller

network and million of computers and persons to merge sources of information.

17

This technology is vast distance accelerating the pace of business forms and

revolutionizing the many companies are managed, it allow direct links to

anyone anywhere and any time to build up interactive relationship.A

combination of time and space called the internet promises to bring un

precendented changed in our lives and business Internet or net is an inter

connection of computer communication network spanning the entire globe

crossing all geographical boundaries it has redefined the method of

communication work study education, Business leisure health trade banking

commerce and what not it is virtually changing everything and we are living in

dot.com age.

Net being an interactive two way medium through various websites enables

participation by individually in business to business to consumer commerce

visit to shopping arcades, games, etc., in cyber space even the information can

be copying, down loaded and retransmitted.

The use of internet has grown 2000 percent in last decade and is correctly

growing 10 percent per month in India growth of internet is of recent times.

It is expected to bring changes in every functional area of business activity

including marketing and financial services.

It offers stock trading at a lower cost, internet can change the nature and

capacity of stock broking business in India.

E- COMMERCE:

Electronic Commerce is associated with buying and serving over computer

18

communication networks, it helps conduct traditional commerce through new

way of transferring and processing of information.

Information is electronically transferred from computer to computer in an

automated way. E- Commerce refers to the paperless exchange to business

information using electronic dates interchange electronic technology, it is not

only reduce manual process and paper transaction but also helps organization

more to a fully electronic environment and change the way they operated PCs

and networking attempts to introduce banks of the tools and technologies

required for electronic commerce. The computers are either workstation of

individual office work or serves where large database and information resides.

Networks connects both categories of computer the various operating system

are the most basis programmed with is a computer it manages the resources of

the computer system in a fair and efficient manner.

Now we can enter into the concept known as “On Line Trading”.

ONLINE TRADING INFRASTRUCTURE

The emergence of online exchanges has facilitated faster transactions

by providing online trading por ta ls and brokerage houses ease and

19

f lexib i l i ty . The In ternet has indeed opened up new opportunities

for conducting the business. The worldwide stock exchanges has made a

major shift from the traditional method of trading and now conduct a bulk of

its business online through its brokers and par tners . In the

developed countr ies major ly a l l the exchange t ransac t ions are

conducted online. The trend took off slowly in India and the National Stock

Exchange (NSE) and the Bombay Stock Exchange (BSE) two of the largest

exchanges in India have been conducting online trade successfully for some

time.

WHY ONLINE TRADING ENTERED LATE IN INDIA?

The Indian exchanges and brokering houses have been very slow in

moving their transactions online and the major reason has been the lot

government regulations. The initial delay was due to laying down the

specifications for creating Closed User Groups (CUGs). This issue was

resolved between the Department of Telecommunications (DoT) and the

Finance Ministry around 1998 and a f t e r t h a t s o o n c a m e t h e

o n l i n e t r a d i n g p o r t a l s l i k e I C I C I D i r e c t . c o m ,

m o t i l a l o s w a l . c o m , sharekhan. com and smartjones.com. Connectivity

related issue was perhaps the most important technological factor.

Traditionally the cost of leased lines and VSAT links has been very high and

the reliability of the links was very low. To commission the links it took a

20

long time as one had to make an application and wait for a few weeks for the

link to be up and running. Many other issues like security, backup and

recovery procedural costs also acted as deterrents in the process. Now wi th

the resolut ion of regula tory i ssues India no longer have any

press ing connect iv i ty and bandwidth issues. The entry of private

players into the broadband scenario and the government opening up the

telecom sector these issues have become almost non-existent. Security

solutions and services available in the market have matured and it doesn't

cost a pretty packet anymore to put a simple backup solution in place.

Through online trading everyday large volumes of data is being transacted.

At BSE the average daily turnover in 2001-2002 (April-March) was Rs

1244.10 crore and the number of average daily trades was Rs 5.17 lakh. To

control Online Trading RBI made regulations making it mandatory for

companies to store at least 7 years of transactional and financial data.

1. Design needs to be always-on, secure, redundant, and have adequate

backup and recovery processes.

2. For such high amounts of critical data it's natural to deploy network-based

storage like NASor SAN.

21

3. Security is a vital and integral part of the design architecture. The

hardware and software elements should be built around layered security

architecture and should be held in place with a well-documented security

policy.

4. Ideally online exchanges should have 'five-nines' availability.

5.It's difficult to deploy out-of-the-box applications at exchanges as

each has a unique architecture based on factors like operations flow,

trading volumes, number of members, number of users, and number of

locations.

6. NSE has deployed NIBIS (NSE's Internet Based Information

System) for real-time dissemination of trading information over the

Internet and NEAT a client-server-based application to help its operations.

7. BSE has deployed an Online Trading system (BOLT) on a

Tandem platform which has two-tier architecture. It claims to be able to

support up to 2 million trades a day.

INDIAN EXCHANGES: NSE and BSE

22

The NSE and BSE are among the largest exchanges in the country

handling very large daily trading volumes, support large amounts of data

traffic, and have a very large nationwide network. The t rading

volume in year 2000 was huge wi th the average da i ly

turnover in the capi ta l markets segment at NSE is around Rs 2300

crore and in the derivatives segment, around Rs 1300 crore. The average

daily traffic volume was around one million trades per day in the capital

markets segment and around 50,000 t rades per day in the

der iva t ives segment and there were around 13,000 registered

users in both segments and an average of around 9500 users is

logged in at a time. At BSE the average daily turnover in 2001-2002

(April-March) was Rs 1244.10 crore and the number of average daily trades

was Rs 5.17 lakh.

THE NETWORK DESIGN

Any onl ine exchange should a lways be-on, safe , secure ,

redundant and should have adequate backup & recovery processes.

The Vice President of NSE-IT G.M Shenoy tells that the basic design

objective of NSE was to provide fair, equal and transparent access

across all NSE nationwide locations and to provide connectivity to the

trading members as soon as possible. The telecom sector is fairly liberal

23

nowadays but way back in 1993 the technology was maturing and

was very costly. The cost of lease lines was almost ten times as

much as it is today. Satellite technology was a boon since it allowed

quicker deployment than leased lines. Today NSE has the country's largest

VSAT network with over 3000 VSATs and expects to grow to more

than 4000VSATs very soon

EVOLUTION OF ONLINE TRADING:

Online trading had its origin in the US where the first E-trading of stocks began

in1983. Primarily used in the form of e-commerce to place and receive orders

forcommodities; slowly it entered the financial markets as an alternative to the

traditional system. By the late 1990’s, most of the stock exchanges had been

automated, and the“open outcry” method of trading had been slowly done away

with. Most stock exchanges began to use computers to replace the market

makers or the floor traders who execute the trade on the floor.

With the emergence and growth of the internet, the floor trader’s started taking

computer orders from brokers and executed the trade. Subsequently, when the

stock exchanges used software technology to interconnect brokers, depositories

and banks, the internet order place by clients were firs route through the stock

brokers’ computer systems where the matching of orders took place and the

trade was executed. This gradual

24

up scaling of technology has led to the rise in popularity and acceptance of

online broking as a major way of stock trading. With the book in software

technology, the online trading platform became faster and faster with a lot of

sophistication and increased security. Now the thrust is on making the entire

trading process completely seamless and risk free.

TRADING MECHANISM:

The mechanism in online trading Is the replication of trading of physical

securities through the internet in a much faster and convenient way. Basic

principles and logic of stock trading remain the same as before; only, the

investors feel more empowered and are served with plenty of information. The

diagram 1 and 2 depict both selling and buying of securities online.

There are primarily 5 components in any online trading mechanism.

1. Investor

2. broker/ E-broking firm

3. DP Accounts

4. Bank Account

5. The Exchange

The process of online trading is driven by a front-end software which the stock

exchange employs through satellite (like V-SAT) connections. This software

technology provides the necessary interface between the brokers, depositories

and the banks. The investor is required to trade through any of the approved

25

brokers, and brokers of trading members can only trade with the exchange.The

investor places the order with the broker and the broker gets the order executed

from the exchange. Each broker, who has to be a trading member, is connected

to the exchange through sophisticated software. In the same way, each investor

has to trade only through the broker and needs to have a demat account and a

broker’s account. Each investor will be given a login account and a password in

the broker’s site. Investors can log in and lace orders anytime that will be sent to

exchange and will be compared with all the orders and executed as per the

prices.

In this linear chain of investor-broker-exchange channel, there are two more

important players, viz, depositories and banks. Depositories (DP) handle the

holding and selling of demat securities. All brokers are embers and account

holders of DPs. The depositories function in liaison with the stock exchange and

act as an online store for shares and stocks. The transaction of cash is taken care

of by banks. The investor’s money is transferred to the account with the broker

and used for transactions, and similarly, the credits for the investor can be

directly to the investor’s bank account.

The whole mechanism is interconnected and the speed of transaction depends

on how well all these components operate in harmony with each other. The

technology used for interlinking these components and the security issues play a

26

major role in the speed of transactions. When these issues are addressed, the

transactions can be executed in realtime

(T+0), instead of the present T+2 days time period.

Online trading started in India in February 2000:

Online trading is of 2 categories: Discount online brokers and the other one is

the full service online broker. Discount online brokers allow one to trade via the

internet through the broker at reduced (less than offline brokerage charges)

rates. Full service online brokerage is linked to existing brokerage directly

through the internet. These brokers allow their clients to place online orders

with the option of chatting to brokers if advice is needed.

DEMATERLIZATION:

Dematerialization is the process by which physical certificates of an investor

are converted to an equipment number of securities in electronic from and

credited in the investor account with his DP. In order to dematerialize the

certificates, an investor has to first open an account with a DP and then request

for the Dematerialization Request Form, which is DP and submit the same

along with the share certificates. The investor has to ensure that he marks

“Submitted for Dematerialization” on the certificates before the shares are

handed over to the DP for demat. Dematerialization can only be done to those

certificates, which are already registered in your name and belong to the list of

securities admitted for Dematerialization at NSDL.

27

Most of the active scrip’s in the market including all the scrip’s Most of the

active scrip’s in the market including all the scrip’s of S&P CNX NIFTY and

BSE SENSEX have already joined NSDL. This list is steadily increasing.

Briefly, the process is as follows: after completion of transfer, the investor gets

the option to dematerialize such shares. Investor’s willing to exercise this option

sends a Demat request along with the option letter sent by the company to his

DP. The company or its R&T agent would confirm the Demat request on its

receipt from the DP to reduce risk of loss in transit. Dematerialized shares do

not have any distinctive or certificate numbers. These shares are fungible-which

means that 100 shares of a security are the same as any other 100 shares of the

security. Odd lot shares certificates can also be dematerialized.

Dematerialization normally takes about fifteen to thirty days. To get back

dematerialized securities in the physical form, request DP for Rematerialization

of the same is made.

DEMAT ACCOUNT

What is Demat account and why it is required?

Securities and Exchange Board of India (SEBI) is a board (corporate body)

appointed by the Government of India in 1992 with its head office at Mumbai.

Its one of the function is helping the business in stock exchanges and any other

securities markets. Demat (short form of Dematerialization) is the process by

which an investor can get stocks (also called as physical certificates) converted

into electronic form maintained in an account with the Depository Participant

28

(DP). DP could be organizations involved in the business of providing financial

services like banks, brokers, financial institutions etc. DP’s are like agents of

Depository. Depository is an organization responsible to maintain investor's

securities (securities can be stocks or any other form of investments) in the

electronic form. In India there are two such organizations called NSDL

(National Securities Depository Ltd.) and CDSL (Central Depository Services

India Ltd.) Investor’s wishing to open Demat account has to go DP and open the

account. Opening the Demat account is as simple as opening the bank account

with any bank. As we need bank account to save our money, make cheque

payments etc, likewise we need to open a demat account if we want to buy or

sell stocks. All stocks what we possess will show in our demat account. So we

don't have to possess any physical certificates. They are all held electronically

in our demat account. As we buy and sell the stocks, accordingly our stocks

will get adjusted in our account.

29

CHAPTER - 3

INDUSTRY PROFILE

INDUSTRY PROFILEFollowing diagram gives the structure of Indian Financial System:

30

FINANCIAL MARKET

Financial markets are helpful to provide liquidity in the system and for smooth

31

functioning of the system. These markets are the centers that provide facilities

for buying and selling of financial claims and services. The financial markets

match the demands of investment with the supply of capital from various

sources. According to functional basis financial markets are classified into two

types.

They are:

Money markets (short-term)

Capital markets (long-term)

According to institutional basis again classified in to two types. They are

Organized financial market

Non-organized financial market.

The organized market comprises of official market represented by recognized

institutions, bank and government (SEBI) registered/controlled activities and

intermediaries. The unorganized market is composed of indigenous bankers,

moneylenders, individual professional and non-professionals.

MONEY MARKET:

Money market is a place where we can raise short-term capital.

Again the money market is classified in to

Inter bank call money market

Bill market and

Bank loan market Etc.

E.g.; treasury bills, commercial papers, CD's etc.

32

40

CAPITAL MARKET :

Capital market is a place where we can raise long-term capital.

Again the capital market is classified in to two types and they are

Primary market and

Secondary market.

E.g.: Shares, Debentures, and Loans etc.

P RIMARY MARKET:

Primary market is generally referred to the market of new issues or market for

mobilization of resources by the companies and government undertakings, for

new projects as also for expansion, modernization, addition, diversification and

up gradation. Primary market is also referred to as New Issue Market. Primary

market operations include new issues of shares by new and existing companies,

further and right issues to existing shareholders, public offers, and issue of debt

instruments such as debentures, bonds, etc. The primary market is regulated by

the Securities and Exchange Board of India (SEBI a government regulated

authority).

Function:

The main services of the primary market are origination, underwriting, and

33

distribution. Origination deals with the origin of the new issue. Underwriting

contract make the shares predictable and remove the element of uncertainty in

the subscription. Distribution refers to the sale of securities to the investors.

The following are the market intermediaries associated with the market:

1. Merchant banker/book building lead manager

2. Registrar and transfer agent

3. Underwriter/broker to the issue

4. Adviser to the issue

5. Banker to the issue

6. Depository

7. Depository participant.

Investors’ protection in the primary market:

To ensure healthy growth of primary market, the investing public should be

protected. The term investor protection has a wider meaning in the primary

market. The principal ingredients of investors’ protection are:

Provision of all the relevant information

Provision of accurate information and

Transparent allotment procedures without any bias.

SECONDARY MARKET

34

The primary market deals with the new issues of securities. Outstanding

securities are traded in the secondary market, which is commonly known as

stock market or stock exchange. “The secondary market is a market where

scrip’s are traded”. It is a market place which provides liquidity to the scrip’s

issued in the primary market. Thus, the growth of secondary market depends on

the primary market. More the number of companies entering the primary

market, the greater are the volume of trade at the secondary market. Trading

activities in the secondary market are done through the recognized stock

exchanges which are 23 in number including Over The Counter Exchange of

India (OTCE), National Stock Exchange of India and Interconnected Stock

Exchange of India. Secondary market operations involve buying and selling of

securities on the stock exchange through its members. The companies hitting

the primary market are mandatory to list their shares on one or more stock

exchanges in India. Listing of scrip’s provides liquidity and offers an

opportunity to the investors to buy or sell the scrip’s.

The following are the intermediaries in the secondary market:

1. Broker/member of stock exchange – buyers broker and sellers broker

2. Portfolio Manager

3. Investment advisor

4. Share transfer agent

5. Depository

6. Depository participants.

35

STOCK MARKETS IN INDIA:

Stock exchanges are the perfect type of market for securities whether of

government and semi-govt bodies or other public bodies as also for shares and

debentures issued by the joint-stock companies. In the stock market, purchases

and sales of shares are affected in conditions of free competition. Government

securities are traded outside the trading ring in the form of over the counter

sales or purchase. The bargains that are struck in the trading ring by the

members of the stock exchanges are at the fairest prices determined by the basic

laws of supply and demand.

Definition of a stock exchange:

“Stock exchange means any body or individuals whether incorporated or not,

constituted for the purpose of assisting, regulating or controlling the business of

buying, selling or dealing in securities.” The securities include:

Shares of public company.

Government securities,Bonds

History of Stock Exchanges:

The only stock exchanges operating in the 19th century were those of Mumbai

setup in 1875 and Ahmedabad set up in 1894. These were organized as

voluntary nonprofit- marking associations of brokers to regulate and protect

their interests. Before the control on securities under the constitution in 1950, it

was a state subject and the Bombaysecurities contracts (control) act of 1925

used to regulate trading in securities. Under this act, the Mumbai stock

36

exchange was recognized in 1927 and Ahmedabad in 1937. During the war

boom, a number of stock exchanges were organized. Soon after it became a

central subject, central legislation was proposed and a committee headed by

A.D.Gorwala went into the bill for securities regulation. On the basis of the

committee’s recommendations and public discussion, the securities contract

(regulation) act became law in 1956.

Functions of Stock Exchanges:

Stock exchanges provide liquidity to the listed companies. By giving quotations

to the listed companies, they help trading and raise funds from the market. Over

the hundred and twenty years during which the stock exchanges have existed in

this country and through their medium, the central and state government have

raised crores of rupees by floating public loans. Municipal corporations, trust

and local bodies have obtained from the public their financial requirements, and

industry, trade and commerce- the backbone of the country’s economy-have

secured capital of crores or rupees through the issue of stocks, shares and

debentures for financing their day-to-day activities, organizing new ventures

and completing projects of expansion, diversification and modernization. By

obtaining the listing and trading facilities, public investment is increased and

companies were able to raise more funds. The quoted companies with wide

public interest have enjoyed some benefits and assets valuation has become

easier for tax and other purposes.

37

Various Stock Exchanges in India:

At present there are 23 stock exchanges recognized under the securities

contracts

(regulation), Act, 1956. Those are:

Ahmedabad Stock Exchange Association Ltd.

Bangalore Stock Exchange

Bhubaneshwar Stock Exchange Association

Calcutta Stock Exchange

Cochin Stock Exchange Ltd.

Coimbatore Stock Exchange

Delhi Stock Exchange Association

Guwahati Stock Exchange Ltd

Hyderabad Stock Exchange Ltd.

Jaipur Stock Exchange Ltd

Kanara Stock Exchange Ltd

Ludhiana Stock Exchange Association Ltd

Madras Stock Exchange

Madhya Pradesh Stock Exchange Ltd.

Magadh Stock Exchange Limited

Meerut Stock Exchange Ltd.

Mumbai Stock Exchange

National Stock Exchange of India

38

OTC Exchange of India

Pune Stock Exchange

Uttar Pradesh Stock Exchange Association

Vadodara Stock Exchange Ltd.

Out of these major stock exchanges were:

NSE(NATIONAL STOCK EXCHANGE):

The National Stock Exchange of India Limited has genesis in the report of the

High Powered Study Group on Establishment of New Stock Exchanges, which

recommended promotion of a National Stock Exchange by financial institutions

(FI’s) to provide access to investors from all across the country on an equal

footing. Based on the recommendations, NSE was promoted by leading

Financial Institutions at the behest of the Government of India and was

incorporated in November 1992 as a tax-paying company unlike other stock

exchanges in the country. On its recognition as a stock exchange under the

Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced

operations in the Wholesale Debt Market (WDM) segment in June 1994. The

Capital Market (Equities) segment commenced operations in November 1994

and operations in Derivatives segment commenced in June 2000 NSE's mission

is setting the agenda for change in the securities markets in India. The NSE was

set-up with the main objectives of:

· Establishing a nation-wide trading facility for equities and debt instruments.

· Ensuring equal access to investors all over the country through an appropriate

39

communication network.

· Providing a fair, efficient and transparent securities market to investors using

electronic trading systems.

· Enabling shorter settlement cycles and book entry settlements systems, and

· Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology, have

become industry benchmarks and are being emulated by other market

participants. NSE is more than a mere market facilitator. It's that force which is

guiding the industry towards new horizons and greater opportunities.

BSE(BOMBAY STOCK EXCHANGE):

The Stock Exchange, Mumbai, popularly known as "BSE" was established in

1875 as "The Native Share and Stock Brokers Association". It is the oldest

one in Asia, even older than the Tokyo Stock Exchange, which was established

in 1878. It is a voluntary non-profit making Association of Persons (AOP) and

is currently engaged in the process of converting itself into demutualised and

corporate entity. It has evolved over the years into its present status as the

premier Stock Exchange in the country. It is the first Stock Exchange in the

Country to have obtained permanent recognition in 1956 from the Govt. of

India under the Securities Contracts (Regulation) Act 1956.The Exchange,

while providing an efficient and transparent market for trading in securities,

debt and derivatives upholds the interests of the investors and ensures redresses

of their grievances whether against the companies or its own member-brokers. It

40

also strives to educate and enlighten the investors by conducting investor

education programmers and making available to them necessary informative

inputs. A Governing Board having 20 directors is the apex body, which decides

the policies and regulates the affairs of the Exchange. The Governing Board

consists of 9 elected directors, who are from the broking community (one third

of them retire ever year by rotation), three SEBI nominees, six public

representatives and an Executive Director & Chief Executive Officer and a

Chief Operating Officer. The Executive Director as the Chief Executive Officer

is responsible for the day-today administration of the Exchange and the Chief

Operating Officer and other Heads of Department assist him.

The Exchange has inserted new Rule No.126 A in its Rules, Byelaws 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 & CEO and Chief

Operating Officer has been constituted. The Committee considers judicial &

quasi matters in which the Governing Board has powers as an Appellate

Authority, matters regarding annulment of transactions, admission, continuance

and suspension of member-brokers, declaration of a member-broker as

defaulter, norms, procedures and other matters relating to arbitration, fees,

deposits, margins and other monies payable by the member-brokers to the

Exchange, etc.

Regulatory Frame Work Of Stock Exchange

41

A comprehensive legal framework was provided by the “Securities

Contract Regulation Act, 1956” and “Securities Exchange Board of India

1952”. Three tier regulatory structure comprising

Ministry of finance

The Securities And Exchange Board of India

Governing bond

Members of the stock exchange:

The securities contract regulation act 1956 has provided uniform regulation

for the admission of members in the stock exchanges. The qualifications for

becoming a member of a recognized stock exchange are given below:

· The minimum age prescribed for the members is 21 years.

· He should be an Indian citizen.

· He should be neither a bankrupt nor compound with the creditors.

· He should not be convicted for fraud or dishonesty.

· He should not be engaged in any other business connected with a company.

· He should not be a defaulter of any other stock exchange.

· The minimum required education is a pass in 12th standard examination.

SECURITIES EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a

resolution of government of India. It was later made statutory body by the SEBI

act 1992.according

42

to this act, the SEBI shall constitute of a chairman and four other members

appointed by the central government. With the coming into effect of the

securities and exchange board of India act, 1992 some of the powers and

functions exercised by the central government, in respect of the regulation of

stock exchange were transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI

· To protect the interest of investors in securities.

· Regulating the business in stock exchanges and any other securities market.

· Registering and regulating the working of intermediaries associated with

securities market as well as working of mutual funds.

· Promoting and regulating self-regulatory organizations.

· Prohibiting insider trading in securities.

· Regulating substantial acquisition of shares and take over of companies.

· Performing such functions and exercising such powers under the provisions of

capital issues (control) act, 1947and the securities to it by the central

government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK

EXCHANGES):

· Board of Directors of Stock Exchange has to be reconstituted so as to include

nonmembers, public representatives and government representatives to the

extent of 50% of total number of members. Capital adequacy norms have been

43

laid down for the members of various stock exchanges depending upon their

turnover of trade and other factors. All recognized stock exchanges will have to

inform about transactions within 24 hrs.

44

COMPANY PROFILE

45

COMPANY PROFILE

Sharewealth Securities Ltd. is the first corporate member of National Stock

Exchange of India Ltd, Bombay Stock Exchange Ltd and MCX Stock

Exchange Ltd (MCX-SX) from THRISSUR, the Cultural Capital of Kerala.

Sharewealth is also a Depository Participant with CDSL (Central Depository

Services (India) Ltd). Sharewealth Securities Ltd has two group companies,

Share wealth Commodities Pvt Ltd (Member: MCX, NCDEX, NMCE, ICEX

& NSEL) and Sharewealth Financial Services Ltd (AMFI Registered Mutual

Fund Distributor). Sharewealth has a group (Overseas Joint Venture)

company at Abu Dhabi, Sharewealth Financial Consultancy LLC. Registered

& Corporate offices of Share wealth Group of companies are at Thrissur.

Share wealth is promoted by a group of Financial Market Professionals

having more than 20 years of experience in Financial Markets.

Mr.T.B.Ramakrishnan (Ramki) - CEO & Managing Director is leading the

core team of Sharewealth, which has a highly competent diversified Board of

Directors. Mr.Ramki is a Stock Market Analyst, Ex. Treasurer & Governing

Council Member of Cochin Stock Exchange Ltd (1998-2000) and former

Kerala Regional Head of Share khan who has got more than 20 years of

experience in Financial Markets. Mr. Joseph P Antony, Mr.T.V.N Girish

Kumar, Mr.N.C.Peethambaran (Group Company Director) and Mr.Mani Paul

(Group Company Director) are Working Directors of the company. Mr.

46

N.C.Chummar,Anchery Ramanathan, Dr.Saifu Kokkat, N.Nandakumar,

A.A.Mathew, Advocate A.Y.Khalid, Mr.A.Unnikrishnan (Group Company

Director), Mr.T.S.Rajan (Group Company Director), Mr.VincentPaliakkara

(Group Company Director) are other directors. Dr.Anil Menon is the

Chairman and Mr.C.G.Surendran is the Vice-Chairman of the company.

MISSION

“To educate growing investing public in a simple & practical way to help

them to protect their hard earned money and to make more money from

financial & commodity markets", which we mean by

“wealth creation simplified”

SERVICES

Equities

The Equities section provides with an insight into the equities segment of

NSE & BSE and also provides real-time quotes and statistics of the equities

market. Sharewealth is the registered member of NSE, giving equities at them

47

.. Derivatives

The term "Derivative" indicates that it has no independent value, i.e. its value

is entirely "derived" from the value of the underlying asset. The underlying

asset can be securities, commodities, bullion, currency, live stock or anything

else. In other words, Derivative means a forward, future, option or any other

hybrid contract of pre determined fixed duration, linked for the purpose of

contract fulfillment to the value of a specified real or financial asset or to an

index of securities.

Depository

A depository can be compared to a bank. A depository holds securities like

shares, debentures, bonds, Government Securities, units etc. of investors in

electronic form. Besides holding securities, a depository also provides

services related to transactions in securities. At present two Depositories viz.

National Securities Depository Limited (NSDL) and Central Depository

Services (I) Limited (CDSL) are registered with SEBI.

Commodities

Any product that can be used for commerce or an article of commerce which

is traded on an authorized commodity exchange is known as commodity. The

article should be movable of value, something which is bought or sold and

48

which is produced or used as the subject or barter or sale. In short commodity

includes all kinds of goods. Forward Contracts (Regulation) Act (FCRA),

1952 defines goods as every kind of movable property other than actionable

claims, money and securities. Sharewealth is the registered member of MCX.

MutualFund

Mutual fund is a mechanism for pooling the resources by issuing units to the

investors and investing funds in securities in accordance with objectives as

disclosed in offer document. Investments in securities are spread across a

wide cross-section of industries and sectors and thus the risk is reduced.

Diversification reduces the risk because all stocks may not move in the same

direction in the same proportion at the same time. Mutual fund issues units to

the investors in accordance with quantum of money invested by them.

Investors of mutual funds are known as unit holders.

The profits or losses are shared by the investors in proportion to their

investments. The mutual funds normally come out with a number of schemes

with different investment objectives which are launched from time to time. A

mutual fund is required to be registered with Securities and Exchange Board

of India (SEBI) which regulates securities markets before it can collect funds

from the public. Sharewealth has the AMFI registration.

49

IPO

An initial public offer (IPO) is the selling of securities to the public in the

primary market. It is when an unlisted company makes either a fresh issue of

securities or an offer for sale of its existing securities or both for the first time

to the public. This paves way for listing and trading of the issuer s securities.

the sale of securities can be either through book building or through normal

public issue.

IPOs can be a risky investment. For the individual investor, it is tough to

predict what the stock will do on its initial day of trading and in the near

future since there is often little historical data with which to analyze the

company. Also, most IPOs are of companies going through a transitory

growth period, and they are therefore subject to additional uncertainty

regarding their future value.

Insurance

Life insurance is a contract that pledges payment of an amount to the person

assured on the happening of of the event insured against uncertainities.

The Indian economy is witnessing sustained growth with economist

predicting double digit target for the coming years. This boom has opened

50

several investment opportunities. The common man has generally been

investing in banks FDs, insurance, national savings certificates and gold.

Indians are big savers with savings average 2.5%, this is among the highest in

the world but then savings has to earn interest and the interest rate has to be

higher than rate of inflation. If this is not the case, it means our savings are

getting eroded. The truth is that interest rate curve in India has been falling

over past 6 years, interest rate of banks and various government schemes

have dropped by over 50%. It is in such a scenario that stock markets come to

the rescue of savers- provided it is viewed as investments and not as a lottery.

On a long term basis 15-20% annual gain is definitely feasible. Even though

it is proven that return from equities are by far greater than any other

investment return, the common man is still is hesitant to enter the market.

This may be because of lack of knowledge, past experience or sheer

ignorance.

Can we completely ignore share market in the scenario where other

investment opinions are less attractive… the answer is simple! Invest wisely

and spread OUR investments. The key to success in share market is to remain

as an investor and not a speculator. At sharewealth securities ltd money is

hard earned and hence they take the utmost speculation to balance risk with

return. Their investment advices are based on detailed analysis and come

from professionals with more than 20 tears of experience in this field. They

51

provide you with personalized support and care, irrespective of the size of

investment. Right from account opening, the Sharewealth securities limited

team would be there to help.

MAIN COMPETITORS

SHARE KHAN

HEDGE EQUITIES

52

CHAPTER-4

DATA ANALYSIS

53

SHARE PRICE ANALYSIS ON VARIOUS INDUSTRIES

1. Banking Industry

2. Capital goods Industry.

3. Fast moving consumable goods (FMCG) industry

4. Housing Related Industry

5. Oil and refineries Industry

6. Metal,metal products and mining Industry

7. Chemicals Industry.

8. Information Technology Industry.

9. Telecomm Industry.

10.Transport Equipments Industry.

54

SHARE PRICE ANALYSIS ON BANKING

INDUSTRY

1.STATE BANK OF INDIA (SBI).

2.FEDERAL BANK.

3.PUNJAB NATIONAL BANK.

Name of company

Opening share price at(28-10-2011)

high low Closing share price at

(30-4-2012)State Bank of India

1922.10 2474.80 1576.00 2137.95

Federal Bank 399.50 480.00 322.10 419.80Punjab National Bank

961.35 1091.00 756.70 851.65

Table no; 1 (source-share price analysis charts from money control.com)

55

SHARE PRICE ANALYSIS ON CAPITAL GOODS

INDUSTRY.

1.SUZLON ENERGY LIMITED.

2.BHARAT HEAVY ELECTRICALS.

3.LARSEN & TOURBO (L&T)

Name of company



(30-4-2012)Suzlon Energy

37.55 37.55 17.25 22.80

Bharat Heavy Electricals

321.25 328.35 224.90 224.90

L&T 1383.20 1529.80 971.00 1226.30Table no; 2 (source-share price analysis charts from money control.com)

59

SHARE PRICE ANALYSIS OF FAST MOVING

CONSUMABLE GOODS (FMCG) INDUSTRY.

1. HINDUSTAN UNI LIVER LTD.

2. ITC.LTD.

3. NESTLE INDIA

Name of company



(30-4-2012)Hindustan Uni Liver

344.10 439.45 344.10 416.35

ITC 213.70 252.80 189.40 244.55

Nestle India 4349.00 5024.35 3930.00 4671.60

Table no:3 (source-share price analysis charts from money control.com)

63

SHARE PRICE ANALYSIS OF HOUSING

RELATED INDUSTRY.

1.ACC CEMENTS

2.AMBUJA CEMENTS.

3.ULTRA TECH

Name of company

Opening share price

at(28-10-2011)


(30-4-2012)

ACC cements 1200.25 1421.95 1083.10 1234.65Ambuja Cements

152.10 182.00 139.60 152.10

Ultratech 1108.00 1542.10 1093.75 1423.00


67

SHARE PRICE ANALYSIS OF OIL AND

REFINERIES

INDUSTRY.

1.HINDUSTAN PETROLEUM LTD.

2.OIL AND NATURAL GAS CORPORATION

(ONGC).

3.INDIAN OIL

Name of company

Opening share price at

(28-10-2011)


(30-4-2012)

Hindustan Petroleum

349.50 351.50 238.75 300.90

Oil and Natural Gas Corporation

286.00 303.90 241.90 269.70

Indian Oil 295.00 298.81 255.10 264.65


71

SHARE PRICE ANALYSIS ANALYSIS OF

METAL,METAL PRODUCTS AND MINING

INDUSTRY.

1.STEEL AUTHORITY OF INDIA.

2.TATA STEELS.

3.JINDAL STEELS

Name of company


(28-10-2011)


(30-4-2012)

Steel Authority of India

109.65 115.90 73.00 94.85

Tata Steels 465.00 500.90 332.35 463.65

Jindal Steels 579.25 663.40 435.55 502.70


75

SHARE PRICE ANALYSIS OF CHEMICALS

INDUSTRY.

1. ADITHYA BIRLA CHEMICALS.

2.TATA CHEMICALS.

3.ASIAN PAINTS.

Name of company


(28-10-2011)


(30-4-2012)

Adithya Birla Chemicals

92.35 98.90 72.10 80.05

Tata chemicals

328.00 374.50 295.00 335.50

Asian Paints 3110.00 3523.05 2551.05 3523.05

Table no: 7 (source-share price analysis charts from money control.com)

79

SHARE PRICE ANALYSIS OF INFORMATION

TECHNOLOGY INDUSTRY.

1.INFOSYS TECHNOLOGIES LTD.

2.WIPRO LTD.

3.HCL TECHNOLOGIES LTD.

Name of company

Opening share price

at(28-10-2011)


(30-4-2012)

Infosys 2906.00 2990.00 2200.00 2462.60

Wipro 375.40 452.50 360.10 405.10

HCL.Technologies

437.10 523.50 374.00 512.00


83

SHARE PRICE ANALYSIS OF TELECOM

INDUSTRY.

1.TATA COMMUNICATIONS LTD.

2.BHARATHI AIRTEL LTD.

3.IDEA CELLULAR LTD.

Name of company


(28-10-2011)


(30-4-2012)

Tata Communications

223.00 263.20 176.30 237.25

Bharathi Airtel 399.28 401.00 289.00 310.30

Idea Cellular 98.10 102.15 71.20 78.50

Table no: 9(source-share price analysis charts from money control.com)

87

SHARE PRICE ANALYSIS OF TRANSPORT

EQUIPMENTS INDUSTRY.

1. BAJAJ AUTO.LTD

2. HERO MOTO CORP.LTD.

3. MARUTHI SUZUKI .

Name of company


(28-10-2011)


(30-4-2012)

Bajaj Automobiles

1726.00 1820.00 1410.00 1623.10

Hero Moto Corp 2099.90 2278.50 1702.65 2278.50

Maruthi Suzuki 997.00 1373.65 918.55 1369.90


91

CHAPTER-5

FINDINGS

95

FINDINGS

In according to this research ,The Recent trend in the secondary market

is bearish or declining trend.

All companies in the same Industry can shows almost same trend exept

some rare cases.

It is highly risky to invest in shares in recent times, because share prices

are highly fluctuating.

IT sector is recovering slowly in now, but capital goods industry shows a

Downward trend in recently.

Housing related industry is accelerating in recovery from February

onwards, But Metal industry is highly fluctuating, it goes low on

the febraury and high on march, now it shows declining trend.

FMCG industry is going at an average level, without high

fluctuations, Telecom industry shows highly fluctuating and now in

bearish trend.

Banking sector is recovering from lower positions and in the month

of February, then all companies in this sector registered their

highest share price value in recent period.

Automobile Industry also shows a lot of fluctuations in share

prices,majority of company’s registered their lower position in

February and quickly reaches at peak point in the month of march

2012.

Chemical Industry shows declining initially of first 2 months,then

in the month of febraury it reaches peak point and now it again

shows a declining trend.

Oil & Refineries Industry shows its peak point in share prices at the

month of October 2011 itself.then it goes to lowest point in January

and now it is recovering slowly.

96

CHAPTER-6

SUGGESSIONS & RECOMMENDATIONS

97

RECOMMENDATIONS

It is highly risky to invest in shares in recent times, because market shows

high fluctuations in these period. So by giving proper advice and

instructions to investors make their investment in a proper way.

Company can improve their information providing services to the

investors for investment.

In India, share market is mainly concentrated in few hands, so company

can conduct awareness programs and introduce new schemes for

attracting the common public to this field.

98

CONCLUSION

The results of the this research clearly shows the current trends occured in the

online trading in secondary market.The research compares the share prices of

different companies in industry wise. This helps us to understand the

performance of each individual industry .

The main conclusion arrived from this research is recent trend in prevailing in

the secondary market is bearish trend.Bearish trend means declining the share

prices due to some other factors.It is highly risky to Invest in shares in

secondary market,because of lot of fluctuations occurred in prices of

shares.so,through this analysis we can understand the importance of depository

participants like sharewealth securities ltd. to giving instructions and guidelines

for investment process.

This research clearly identifys the recent trends occurred in the secondary

market by detailed analysis of its share prices through company wise and

industry wise.One of the main findings is that All the companies in the same

industry shows almost same trends exept in some rare occations.So, the

research was conducted for just short period of 6 months, the trend prevailing in

these period was bearish trend.

99

BIBILOGRAPHY

Company details

Brochures of the company Company records Company websites

TEXT BOOKS

L.M Bhole ; Financial Institutions and market.

M.Y Khan ; Financial Services.

WEBSITES

www.moneycontrol.com

www.moneyrediff.com

www.yourmoneysite.com

www.moneysulekha.com

100

http://www.moneysulekha.com/

http://www.yourmoneysite.com/

http://www.moneyrediff.com/

http://www.moneycontrol.com/

new share wealth project orginal.latest.100 pages

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