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CHAPTER-1
INTRODUCTION
INTRODUCTION TO ONLINE TRADING
Online trading definition is a basic understanding of online trading processes. Since the invention of Internet people have beena able to do practically everything virtually. Due to the Internet online trading has become one of the most popular ways to trade as far as stock trading turned out to be as available to independent investors as possible. Online trading gives both beginners who've just had a single day trading course and advanced traders an opportunity to trade stocks, options, forex and futures all over the world without physical presence of a broker and with much lower commissions, because everything is done online.
Stock online trading is based on buying and selling stocks. Today stock online trading is the most popular method to trade owing to computers, because information on stocks was available only to brokers and you had to call a broker and pay brokerages for buying or selling stocks and now this information is widely available. Since this modifications occurred traders can control their investments with the help of Internet.
Stock option online trading is based on buying and selling options and very perspective financial products. This system gives traders a perfect chance to control and protect their stocks and generate their investment benefits as far as an option is an agreement to buy or to sell certain financial product. The main idea of stock option online trading is that an option you buy has its fixed price and time limitation.
Forex online trading is another speculative online business based on buying and selling foreign exchange, gaining profits due to rise and fall of currency rate, namely on the difference between the currency pairs price.
Futures online trading is another kind of online trading which is based on buying and selling financial products (commodities, labour, currency) by means of futures contracts. Such contract specifies a particular date (delivery date or final settlement date) in the future when a certain financial product should be bought or sold and this product's price.
Speaking about online trading it's necessary to say about safe online trading. It's obvious that in order to trade online you'll have to open your online account and choose online trading software. When you choose a certain website for your future account, you should search for information about a company you are going to fix upon and make sure that it has a trustworthy reputation. The same refers to choosing online trading software, platform and online trading portal.
In conclusion it's necessary to say that online trading is a perfect opportunity to trade and earn money but still it's obvious that online trading is not for everyone. That's why before you start trading, you should find out more about online trading pros and cons, online trading concepts and of course about online trading tips. Knowledge is a main key for your successful online trading, don't ever identify online trading with gambling because the results of such approach can be disastrous.
Ensure your finances are structured accordingly before you hit the trading floors online...If debt free advice is required...ensure you seek quality advice.
Internet trading commissions are clearly posted on the websites of the various services, and are typically a fixed rate charge, depending upon the type of security being traded and the size of trade. In theory, therefore, an Interest investor always knows what commission he is being charged on each trade. Internet investors can take as much time as they would like to take prior to placing a trade order. Similarly the online investor likely does not have to worry that his broker is making unauthorized trades. Since there is no individual broker making a commission, the only person who is authorized to trace in the account is the actual investor. Furthermore, the internet investor can never become a victim of excessive trading (where for the broker) since the investor maintains total control over the number of transactions which take place in the account.
All of these positive features of internet trading may lead the unwary investor to believe that Internet trading is a way to take control of their finances and save more money in the process. Unfortunately, this is not always the case. The advantages of Internet stock trading have also its weaknesses and these weaknesses present significant drawbacks for the average investor.
First and foremost, the average investor is not an expert in the financial markets. There is a danger for allowing the autonomy of online trading to hull you into the belief that you are an expert investor. An online investor sitting at home at a personal computer also foregoes proper investment advice and financial planning, perhaps among the most valuable services provided by traditional brokers.
There are, of course, additional risks relative to performing transactions over the Internet especially on a shared computer. Those people whom investors have provided their account number and password can freely trade that account while the investor will have little, if any, resource against the brokerage firm for the breach of security.
The online trading is simply defined as “dealing securities on net”. In online trading system, from a single location anywhere, can service investors across the country.
NEED FOR THE STUDY:
The present study to review the online trading procedure a case study of ONLINE TRADING at INDIA INFOLINE LTD (IIFL)., as the exchange has changed it’s trading from it and there is need to assess the performance of the capital market.
OBJECTIVES OF THE STUDY:
• It is to analyze the changes in trading after the exchange shifted from outcry to online trading system.
• It is to study the functions of INDIA INFOLINE LTD (IIFL)through various departments.
• To know the online screen based trading system adopted by INDIA INFOLINE LTD (IIFL) and about its communication facilities. The appropriate configuration to set the network, which would link the INDIA INFOLINE LTD (IIFL) to individual / members.
• To know about the latest and future development in the stock exchange trading system.
METHODOLOGY OF THE STUDY:
The data collection methods include both primary and secondary
Collection methods.
Primary method: This method includes the data collected from the personal interaction with authorized members of India infoline Securities limited.
Secondary method: The secondary data collection method includes:
➢ The lecturers delivered by the superintendents of respective departments.
➢ The brochures and material provided by India infoline Securities limited.
➢ The data collected from the magazines of the NSE, economic times, etc.
➢ Various books relating to the investments, capital market and other related topics.
LIMITATIONS OF THE STUDY:
The study confines to the past 2-3 years and present system of the trading procedure in theand the Indiainfoline study is confined to the coverage of all the related issues in brief. The data is collected from the primary and secondary sources and thus is subject to slight variation than what the study includes in reality.
The study is confined to online trading procedure only. Problems of listing are not covered due to limited time and to keep the study in manageable limits.
CHAPTER-2
INDUSTRY PROFILE
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COMPANY PROFILE
Evolution
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century.
By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850.
The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60.
In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87).
At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as " The Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.
Other leading cities in stock market operations
Ahmadabad gained importance next to Bombay with respect to cotton textile industry. After 1880, many mills originated from Ahmadabad and rapidly forged ahead. As new mills were floated, the need for a Stock Exchange at Ahmadabad was realized and in 1894 the brokers formed "The Ahmadabad Share and Stock Brokers' Association".
What the cotton textile industry was to Bombay and Ahmadabad, the jute industry was to Calcutta. Also tea and coal industries were the other major industrial groups in Calcutta. After the Share Mania in 1861-65, in the 1870's there was a sharp boom in jute shares, which was followed by a boom in tea shares in the 1880's and 1890's; and a coal boom between 1904 and 1908. On June 1908, some leading brokers formed "The Calcutta Stock Exchange Association".
In the beginning of the twentieth century, the industrial revolution was on the way in India with the Swadeshi Movement; and with the inauguration of the Tata Iron and Steel Company Limited in 1907, an important stage in industrial advancement under Indian enterprise was reached.
Indian cotton and jute textiles, steel, sugar, paper and flour mills and all companies generally enjoyed phenomenal prosperity, due to the First World War.
In 1920, the then demure city of Madras had the maiden thrill of a stock exchange functioning in its midst, under the name and style of "The Madras Stock Exchange" with 100 members. However, when boom faded, the number of members stood reduced from 100 to 3, by 1923, and so it went out of existence.
In 1935, the stock market activity improved, especially in South India where there was a rapid increase in the number of textile mills and many plantation companies were floated. In 1937, a stock exchange was once again organized in Madras - Madras Stock Exchange Association (Pvt) Limited. (In 1957 the name was changed to Madras Stock Exchange Limited).
Lahore Stock Exchange was formed in 1934 and it had a brief life. It was merged with the Punjab Stock Exchange Limited, which was incorporated in 1936.
Indian Stock Exchanges - An Umbrella Growth
The Second World War broke out in 1939. It gave a sharp boom which was followed by a slump. But, in 1943, the situation changed radically, when India was fully mobilized as a supply base.
On account of the restrictive controls on cotton, bullion, seeds and other commodities, those dealing in them found in the stock market as the only outlet for their activities. They were anxious to join the trade and their number was swelled by numerous others. Many new associations were constituted for the purpose and Stock Exchanges in all parts of the country were floated.
The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940) and Hyderabad Stock Exchange Limited (1944) were incorporated.
In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947, amalgamated into the Delhi Stock Exchnage Association Limited.
Post-independence Scenario
Most of the exchanges suffered almost a total eclipse during depression. Lahore Exchange was closed during partition of the country and later migrated to Delhi and merged with Delhi Stock Exchange.
Bangalore Stock Exchange Limited was registered in 1957 and recognized in 1963.
Most of the other exchanges languished till 1957 when they applied to the Central Government for recognition under the Securities Contracts (Regulation) Act, 1956. Only Bombay, Calcutta, Madras, Ahmadabad, Delhi, Hyderabad and Indore, the well established exchanges, were recognized under the Act. Some of the members of the other Associations were required to be admitted by the recognized stock exchanges on a concessional basis, but acting on the principle of unitary control, all these pseudo stock exchanges were refused recognition by the Government of India and they thereupon ceased to function.
Thus, during early sixties there were eight recognized stock exchanges in India (mentioned above). The number virtually remained unchanged, for nearly two decades. During eighties, however, many stock exchanges were established: Cochin Stock Exchange (1980), Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982), and Pune Stock Exchange Limited (1982), Ludhiana Stock Exchange Association Limited (1983), Gauhati Stock Exchange Limited (1984), Kanara Stock Exchange Limited (at Mangalore, 1985), Magadh Stock Exchange Association (at Patna, 1986), Jaipur Stock Exchange Limited (1989), Bhubaneswar Stock Exchange Association Limited (1989), Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989), Vadodara Stock Exchange Limited (at Baroda, 1990) and recently established exchanges - Coimbatore and Meerut. Thus, at present, there are totally twenty one recognized stock exchanges in India excluding the Over The Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).
The Table given below portrays the overall growth pattern of Indian stock markets since independence. It is quite evident from the Table that Indian stock markets have not only grown just in number of exchanges, but also in number of listed companies and in capital of listed companies. The remarkable growth after 1985 can be clearly seen from the Table, and this was due to the favouring government policies towards security market industry.
Trading Pattern of the Indian Stock Market
Trading in Indian stock exchanges are limited to listed securities of public limited companies. They are broadly divided into two categories, namely, specified securities (forward list) and non-specified securities (cash list). Equity shares of dividend paying, growth-oriented companies with a paid-up capital of atleast Rs.50 million and a market capitalization of atleast Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified group and the balance in non-specified group.
Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery transactions "for delivery and payment within the time or on the date stipulated when entering into the contract which shall not be more than 14 days following the date of the contract" : and (b) forward transactions "delivery and payment can be extended by further period of 14 days each so that the overall period does not exceed 90 days from the date of the contract". The latter is permitted only in the case of specified shares. The brokers who carry over the outstandings pay carry over charges (cantango or backwardation) which are usually determined by the rates of interest prevailing.
A member broker in an Indian stock exchange can act as an agent, buy and sell securities for his clients on a commission basis and also can act as a trader or dealer as a principal, buy and sell securities on his own account and risk, in contrast with the practice prevailing on New York and London Stock Exchanges, where a member can act as a jobber or a broker only.
The nature of trading on Indian Stock Exchanges are that of age old conventional style of face-to-face trading with bids and offers being made by open outcry. However, there is a great amount of effort to modernize the Indian stock exchanges in the very recent times.
Over The Counter Exchange of India (OTCEI)
The traditional trading mechanism prevailed in the Indian stock markets gave way to many functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long settlement periods and benami transactions, which affected the small investors to a great extent. To provide improved services to investors, the country's first ringless, scripless, electronic stock exchange - OTCEI - was created in 1992 by country's premier financial institutions - Unit Trust of India, Industrial Credit and Investment Corporation of India, Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation of India, General Insurance Corporation and its subsidiaries and CanBank Financial Services.
Trading at OTCEI is done over the centres spread across the country. Securities traded on the OTCEI are classified into:
• Listed Securities - The shares and debentures of the companies listed on the OTC can be bought or sold at any OTC counter all over the country and they should not be listed anywhere else
• Permitted Securities - Certain shares and debentures listed on other exchanges and units of mutual funds are allowed to be traded
• Initiated debentures - Any equity holding atleast one lakh debentures of a particular scrip can offer them for trading on the OTC.
OTC has a unique feature of trading compared to other traditional exchanges. That is, certificates of listed securities and initiated debentures are not traded at OTC. The original certificate will be safely with the custodian. But, a counter receipt is generated out at the counter which substitutes the share certificate and is used for all transactions.
In the case of permitted securities, the system is similar to a traditional stock exchange. The difference is that the delivery and payment procedure will be completed within 14 days.
Compared to the traditional Exchanges, OTC Exchange network has the following advantages:
• OTCEI has widely dispersed trading mechanism across the country which provides greater liquidity and lesser risk of intermediary charges.
• Greater transparency and accuracy of prices is obtained due to the screen-based scripless trading.
• Since the exact price of the transaction is shown on the computer screen, the investor gets to know the exact price at which s/he is trading.
• Faster settlement and transfer process compared to other exchanges.
• In the case of an OTC issue (new issue), the allotment procedure is completed in a month and trading commences after a month of the issue closure, whereas it takes a longer period for the same with respect to other exchanges.
Thus, with the superior trading mechanism coupled with information transparency investors are gradually becoming aware of the manifold advantages of the OTCEI.
National Stock Exchange (NSE)
With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others.
Trading at NSE can be classified under two broad categories:
(a) Wholesale debt market and
(b) Capital market.
Wholesale debt market operations are similar to money market operations - institutions and corporate bodies enter into high value transactions in financial instruments such as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc.
There are two kinds of players in NSE:
(a) trading members and
(b) participants.
Recognized members of NSE are called trading members who trade on behalf of themselves and their clients. Participants include trading members and large players like banks who take direct settlement responsibility.
Trading at NSE takes place through a fully automated screen-based trading mechanism which adopts the principle of an order-driven market. Trading members can stay at their offices and execute the trading, since they are linked through a communication network. The prices at which the buyer and seller are willing to transact will appear on the screen. When the prices match the transaction will be completed and a confirmation slip will be printed at the office of the trading member.
NSE has several advantages over the traditional trading exchanges. They are as follows:
• NSE brings an integrated stock market trading network across the nation.
• Investors can trade at the same price from anywhere in the country since inter-market operations are streamlined coupled with the countrywide access to the securities.
• Delays in communication, late payments and the malpractice’s prevailing in the traditional trading mechanism can be done away with greater operational efficiency and informational transparency in the stock market operations, with the support of total computerized network.
Unless stock markets provide professionalized service, small investors and foreign investors will not be interested in capital market operations. And capital market being one of the major source of long-term finance for industrial projects, India cannot afford to damage the capital market path. In this regard NSE gains vital importance in the Indian capital market system.
Preamble
Often, in the economic literature we find the terms ‘development’ and ‘growth’ are used interchangeably. However, there is a difference. Economic growth refers to the sustained increase in per capita or total income, while the term economic development implies sustained structural change, including all the complex effects of economic growth. In other words, growth is associated with free enterprise, where as development requires some sort of control and regulation of the forces affecting development. Thus, economic development is a process and growth is a phenomenon.
Economic planning is very critical for a nation, especially a developing country like India to take the country in the path of economic development to attain economic growth.
Why Economic Planning for India?
One of the major objective of planning in India is to increase the rate of economic development, implying that increasing the rate of capital formation by raising the levels of income, saving and investment. However, increasing the rate of capital formation in India is beset with a number of difficulties. People are poverty ridden. Their capacity to save is extremely low due to low levels of income and high propensity to consume. Therefor, the rate of investment is low which leads to capital deficiency and low productivity. Low productivity means low income and the vicious circle continues. Thus, to break this vicious economic circle, planning is inevitable for India.
The market mechanism works imperfectly in developing nations due to the ignorance and unfamiliarity with it. Therefore, to improve and strengthen market mechanism planning is very vital. In India, a large portion of the economy is non-monitised; the product, factors of production, money and capital markets is not organized properly. Thus the prevailing price mechanism fails to bring about adjustments between aggregate demand and supply of goods and services. Thus, to improve the economy, market imperfections has to be removed; available resources has to be mobilized and utilized efficiently; and structural rigidities has to be overcome. These can be attained only through planning.
In India, capital is scarce; and unemployment and disguised unemployment is prevalent. Thus, where capital was being scarce and labour being abundant, providing useful employment opportunities to an increasing labour force is a difficult exercise. Only a centralized planning model can solve this macro problem of India.
Further, in a country like India where agricultural dependence is very high, one cannot ignore this segment in the process of economic development. Therefore, an economic development model has to consider a balanced approach to link both agriculture and industry and lead for a paralleled growth. Not to mention, both agriculture and industry cannot develop without adequate infrastructural facilities which only the state can provide and this is possible only through a well carved out planning strategy. The government’s role in providing infrastructure is unavoidable due to the fact that the role of private sector in infrastructural development of India is very minimal since these infrastructure projects are considered as unprofitable by the private sector.
Further, India is a clear case of income disparity. Thus, it is the duty of the state to reduce the prevailing income inequalities. This is possible only through planning.
Planning History of India
The development of planning in India began prior to the first Five Year Plan of independent India, long before independence even. The idea of central directions of resources to overcome persistent poverty gradually, because one of the main policies advocated by nationalists early in the century. The Congress Party worked out a program for economic advancement during the 1920’s, and 1930’s and by the 1938 they formed a National Planning Committee under the chairmanship of future Prime Minister Nehru. The Committee had little time to do anything but prepare programs and reports before the Second World War which put an end to it. But it was already more than an academic exercise remote from administration. Provisional government had been elected in 1938, and the Congress Party leaders held positions of responsibility. After the war, the Interim government of the pre-independence years appointed an Advisory Planning Board. The Board produced a number of somewhat disconnected Plans itself. But, more important in the long run, it recommended the appointment of a Planning Commission.
The Planning Commission did not start work properly until 1950. During the first three years of independent India, the state and economy scarcely had a stable structure at all, while millions of refugees crossed the newly established borders of India and Pakistan, and while ex-princely states (over 500 of them) were being merged into India or Pakistan. The Planning Commission as it now exists, was not set up until the new India had adopted its Constitution in January 1950.
Objectives of Indian Planning
The Planning Commission was set up the following Directive principles :
• To make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of these resources as are found to be deficient in relation to the nation’s requirement.
• To formulate a plan for the most effective and balanced use of the country’s resources.
• Having determined the priorities, to define the stages in which the plan should be carried out, and propose the allocation of resources for the completion of each stage.
• To indicate the factors which are tending to retard economic development, and determine the conditions which, in view of the current social and political situation, should be established for the successful execution of the Plan.
• To determine the nature of the machinery this will be necessary for securing the successful implementation of each stage of Plan in all its aspects.
• To appraise from time to time the progress achieved in the execution of each stage of the Plan and recommend the adjustments of policy and measures that such appraisals may show to be necessary.
• To make such interim or auxiliary recommendations as appear to it to be appropriate either for facilitating the discharge of the duties assigned to it or on a consideration of the prevailing economic conditions, current policies, measures and development programs; or on an examination of such specific problems as may be referred to it for advice by Central or State Governments.
The long-term general objectives of Indian Planning are as follows:
• Increasing National Income
• Reducing inequalities in the distribution of income and wealth
• Elimination of poverty
• Providing additional employment; and
• Alleviating bottlenecks in the areas of : agricultural production, manufacturing capacity for producer’s goods and balance of payments.
Economic growth, as the primary objective has remained in focus in all Five Year Plans. Approximately, economic growth has been targeted at a rate of five per cent per annum. High priority to economic growth in Indian Plans looks very much justified in view of long period of stagnation during the British rule
COMPANY PROFILE
About IIFL
The IIFL (India Infoline) group, comprising the holding company, India Infoline Ltd (NSE: INDIAINFO, BSE: 532636) and its subsidiaries, is one of the leading players in the Indian financial services space. IIFL offers advice and execution platform for the entire range of financial services covering products ranging from Equities and derivatives, Commodities, Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, GoI bonds and other small savings instruments. IIFL recently received an in-principle approval for Securities Trading and Clearing memberships from Singapore Exchange (SGX) paving the way for IIFL to become the first Indian brokerage to get a membership of the SGX. IIFL also received membership of the Colombo Stock Exchange becoming the first foreign broker to enter Sri Lanka. IIFL owns and manages the website, , which is one of India’s leading online destinations for personal finance, stock markets, economy and business.
IIFL has been awarded the ‘Best Broker, India’ by FinanceAsia and the ‘Most improved brokerage, India’ in the AsiaMoney polls. India Infoline was also adjudged as ‘Fastest Growing Equity Broking House - Large firms’ by Dun & Bradstreet. A forerunner in the field of equity research, IIFL’s research is acknowledged by none other than Forbes as ‘Best of the Web’ and ‘…a must read for investors in Asia’. Our research is available not just over the Internet but also on international wire services like Bloomberg, Thomson First Call and Internet Securities where it is amongst one of the most read Indian brokers. A network of over 2,500 business locations spread over more than 500 cities and towns across India facilitates the smooth acquisition and servicing of a large customer base. All our offices are connected with the corporate office in Mumbai with cutting edge networking technology. The group caters to a customer base of about a million customers, over a variety of mediums viz. online, over the phone and at our branches.
History & Milestones
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|1995 |
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|Commenced operations as an Equity Research firm |
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|1997 |
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|Launched research products of leading Indian companies, key sectors and the economy Client included leading FIIs, banks and |
|companies. |
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|1999 |
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|Launched |
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|2000 |
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|Launched online trading through Started distribution of life insurance and mutual fund |
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|2003 |
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|Launched proprietary trading platform Trader Terminal for retail customers |
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|2004 |
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|Acquired commodities broking license |
|Launched Portfolio Management Service |
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|2005 |
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|Maiden IPO and listed on NSE, BSE |
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|2006 |
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|Acquired membership of DGCX |
|Commenced the lending business |
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|2007 |
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|Commenced institutional equities business under IIFL |
|Formed Singapore subsidiary, IIFL (Asia) Pte Ltd |
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|2008 |
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|Launched IIFL Wealth |
|Transitioned to insurance broking model |
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|2009 |
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|Acquired registration for Housing Finance |
|SEBI in-principle approval for Mutual Fund |
|Obtained Venture Capital license |
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|2010 |
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|Received in-principle approval for membership of the Singapore Stock Exchange |
|Received membership of the Colombo Stock Exchange |
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Board of directors
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|Mr. Nirmal Jain |
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|Chairman & Managing Director , India Infoline Ltd. |
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|Mr. Nirmal Jain is the founder and Chairman of India Infoline Ltd. He is a PGDM (Post Graduate Diploma in Management) from IIM |
|(Indian Institute of Management) Ahmedabad, a Chartered Accountant and a rank-holder Cost Accountant. His professional track |
|record is equally outstanding. He started his career in 1989 with Hindustan Lever Limited, the Indian arm of Unilever. During |
|his stint with Hindustan Lever, he handled a variety of responsibilities, including export and trading in agro-commodities. He |
|contributed immensely towards the rapid and profitable growth of Hindustan Lever’s commodity export business, which was then the|
|nation’s as well as the Company’s top priority. |
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|He founded Probity Research and Services Pvt. Ltd. (later re-christened India Infoline) in 1995; perhaps the first independent |
|equity research Company in India. His work set new standards for equity research in India. Mr. Jain was one of the first |
|entrepreneurs in India to seize the internet opportunity, with the launch of in 1999. Under his |
|leadership, India Infoline not only steered through the dotcom bust and one of the worst stock market downtrends but also grew |
|from strength to strength. |
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|Mr. R. Venkataraman |
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|Executive Director , India Infoline Ltd. |
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|Mr. R Venkataraman, Co-Promoter and Executive Director of India Infoline Ltd, is a B.Tech (electronics and electrical |
|communications engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined the India Infoline Board in July 1999. He |
|previously held senior managerial positions in ICICI Limited, including ICICI Securities Limited, their investment banking joint|
|venture with J P Morgan of US, BZW and Taib Capital Corporation Limited. He was also the Assistant Vice President with G E |
|Capital Services India Limited in their private equity division, possessing a varied experience of more than 19 years in the |
|financial services sector |
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|Mr. Nilesh Vikamsey |
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|Independent Director , India Infoline Ltd. |
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|Mr. Nilesh Vikamsey – Board Member since February 2005 - is a practicing Chartered Accountant for 25 years and Senior Partner at|
|M/s Khimji Kunverji & Co., Chartered Accountants, a member firm of HLB International, a world-wide organisation of professional |
|accounting firms and business advisers, ranked amongst the top 12 accounting groups in the world. Mr. Vikamsey headed the audit |
|department till 1990 and thereafter also handled financial services, consultancy, investigations, mergers and acquisitions, |
|valuations and due diligence, among others. He is elected member of the Central Council of Institute of Chartered Accountant of |
|India (ICAI), the Apex decision making body of the second largest accounting body in the world, 2010–2013. |
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|He is on the ICAI study group member for the introduction of the Accounting Standard — 30 on financial instruments — recognition|
|and management. Convener of the Study group Formed by ASB of ICAI to formulate comments on various Exposure Drafts, Discussion |
|Papers and other matters pertaining to IFRS originating from IASB, Representative of the Institute of Chartered Accountants of |
|India on the Committee for Improvement in Transparency, Accountability and Governance(ITAG) of South Asian Federation of |
|Accountants (SAFA), Member of Executive Committee & IFRS Implementation Committee of WIRC of Institute of Chartered Accountant |
|of India (ICAI), Accounting and Auditing Committee of Bombay Chartered Accountant Society (BCAS) and also on its Core Group, |
|member of Review, Reforms & Rationalisation Committee, IPR Committee of Bombay Chamber of Commerce and Industry (BCCI), Member |
|of Legal Affairs Committee of Bombay Chamber of Commerce and Industry(BCCI), Corporate Members Committee of The Chamber of Tax |
|Consultants (CTC), Regular Contributor to WIRC Annual Referencer on “Bank Branch Audit”, Study/ Sub Group formed by ICAI for |
|Considering Developments on Fair Value Accounting (AS 30) post Sub Prime crisis, Sub Group formed by ICAI for approaching the |
|Government and Regulatory Authorities for Convergence with IFRS. |
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|He is also a Vice Chairman of Financial Reporting Review Board Accounting Standard Board and Member of Accounting Standard Board|
|and various other Standing and Non Standing Committees. Mr. Vikamsey is also a Director of Miloni Consultants Private Limited, |
|HLB Offices and Services Private Limited, Trunil Properties Private Limited, BarKat Properties Private Limited and India |
|Infoline Investment Services Limited. |
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|Mr. Kranti Sinha |
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|Independent Director , India Infoline Ltd. |
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|Mr. Kranti Sinha — Board member since January 2005 — completed his masters from the Agra University and started his career as a |
|Class I Officer with Life Insurance Corporation of India. He served as the Director and Chief Executive of LIC Housing Finance |
|Limited from August 1998 to December 2002 and concurrently as the Managing Director of LICHFL Care Homes (a wholly-owned |
|subsidiary of LIC Housing Finance Limited). He retired from the permanent cadre of the Executive Director of LIC; served as the |
|Deputy President of the Governing Council of Insurance Institute of India and as a member of the Governing Council of National |
|Insurance Academy, Pune apart from various other such bodies. Mr. Sinha is also on the Board of Directors of Hindustan Motors |
|Limited and Cinemax (India) Limited. |
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|Mr. A. K. Purwar |
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|Independent Director , India Infoline Ltd. |
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|Mr. Purwar is currently the Chairman of IndiaVenture Advisors Pvt. Ltd., investment manager to IndiaVenture Trust – Fund I, the |
|healthcare and life sciences focussed private equity fund sponsored by the Piramal Group. He has also taken over as the Chairman|
|of IL & FS Renewable Energy Limited in March 2008 and India Infoline Investment Services Ltd in November 2009. He is working as |
|Independent Director in leading companies in Telecom, Steel, Textiles, Power, Auto components, Renewable Energy, Engineering |
|Consultancy, Financial Services and Healthcare Services. He is an Advisor to Mizuho Securities in Japan and is also a member of |
|Advisory Board for Institute of Indian Economic Studies (IIES), Waseda University, Tokyo, Japan. |
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|Mr. Purwar was the Chairman of State Bank of India, the largest bank in the country from November ‘02 to May ’06 and held |
|several important and critical positions like Managing Director of State Bank of Patiala, Chief Executive Officer of the Tokyo |
|branch covering almost the entire range of commercial banking operations in his illustrious career at the bank from 1968 to |
|2006. Mr. Purwar also worked as Chairman of Indian Bank Association during 2005 – 2006. Mr. Purwar has received the “CEO of the |
|year” Award from the Institute for Technology & Management (2004); “Outstanding Achiever of the year” Award from Indian Banks’ |
|Association (2004); “Finance Man of the Year” Award by the Bombay Management Association in 2006. |
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IIFL’s philosophy on Corporate Governance
IIFL (India Infoline) is committed to placing the Investor First, by continuously striving to increase the efficiency of the operations as well as the systems and processes for use of corporate resources in such a way so as to maximize the value to the stakeholders. The Group aims at achieving not only the highest possible standards of legal and regulatory compliances, but also of effective management.
Audit Committee
Terms of reference & Composition, Name of members and Chairman: The Audit committee comprises Mr Nilesh Vikamsey (Chairman), Mr Sat Pal Khattar, Mr Kranti Sinha, three of whom are independent Directors. The Managing Director, the Executive Director along with the Statutory and Internal Auditors are invitees to the Meeting. The Terms of reference of this committee are as under: - To investigate into any matter that may be prescribed under the provisions of Section 292A of The Companies Act, 1956 - Recommendation and removal of External Auditor and fixation of the Audit Fees. - Reviewing with the management the financial statements before submission of the same to the Board. - Overseeing of Company’s financial reporting process and disclosure of its financial information. - Reviewing the Adequacy of the Internal Audit Function.
Compensation/ Remuneration Committee
Terms of reference & Composition, Name of members and Chairman: The Compensation / Remuneration Committee comprises Mr Kranti Sinha (Chairman), Mr Nilesh Vikamsey and Mr. Sat Pal Khattar all of whom are independent Directors. The Terms of reference of this committee are as under: - To fix suitable remuneration package of all the Executive Directors and Non Executive Directors, Senior Employees and officers i.e. Salary, perquisites, bonuses, stock options, pensions etc. - Determination of the fixed component and performance linked incentives alongwith the performance criteria to all employees of the company - Service Contracts, Notice Period, Severance Fees of Directors and employees. - Stock Option details: whether to be issued at discount as well as the period over which to be accrued and over which exercisable. - To conduct discussions with the HR department and form suitable remuneration policies.
Share Transfer and Investor Grievance Committee
Details of the Members, Compliance Officer, No of Complaints received and pending and pending transfers as on close of the financial year. The committee functions under the Chairmanship of Mr Kranti Sinha, a Non-executive independent Director. The other Members of the committee are Mr. Nirmal Jain and Mr. R Venkataraman. Ms Sunil Lotke, Company Secretary is the Compliance Officer of the Company.
In line with our vision to be the ‘most respected company in the financial services space’, we recognize the importance of contributing to and sustaining social transformation. With this end in mind, we have setup the IIFL foundation, which will work for the support and upliftment of the underprivileged sections of society.
The IIFL Foundation focuses on specific areas of need such as healthcare and education, the foundation will screen and select institutions and developmental agencies which are working in these domains and will provide necessary aid to improve the lives of the underprivileged and help them in achieving their potential.
Some of the activities undertaken by the IIFL Foundation:
Barsana eye camp
The IIFL Foundation sponsored an eye and dental camp held in February, 2010 with the support of expert doctors and surgeons from the Bhaktivedanta Hospital in Barsana near Mathura. While over 2,600 people underwent eye tests and over 800 were selected for free eye surgery, a total of over 1,800 dental procedures like extraction, scaling and filling, among others, were performed.
Team IIFL provided its whole-hearted support to this noble cause and will continue to do so in the future.
Pandharpur medical camp
The IIFL Foundation sponsored the Pandharpur medical camp which was held by the Bhaktivedanta Hospital in July 2010 at Pandharpur. Free medical treatment was given at 4 camp sites, to approximately 49,815 pilgrims who had come to Pandharpur during Ashadi Ekadashi. The pilgrims were treated for fever, injuries, fractures, gastroenteritis, myalagia, headache, epilepsy, malaria, respiratory infections etc, during the camp.
Blood donation drive
IIFL regularly organizes blood donation drives via camps at its various locations across India. Over 800 employees have participated in these camps.
CHAPTER-3
REVIEW OF LITERATURE
REVIEW OF LITERATURE
ONLINE TRADING
Before getting in to the online trading we should know some things about the internet, e-commerce and etc.
1. Internet
Internet is a worldwide, self-governed network connecting several other smaller networks and millions of computers and persons, to mega sources of information. This technology shrinks vast distances, accelerating the pace of business reforms and revolutionizing the way companies are managed. It allows direct, ubiquitous links to anyone anywhere and anytime to build up interactive relationships.
A combination of time and space, called the Internet promises to bring unprecedented changes in our lives and business. Internet or net is an inter-connection of computer communication networks spanning the entire globe, crossing all geographical boundaries. It has re-defined the methods of communication, work study, education, business, leisure, health, trade, banking, commerce and what not it is virtually changing every thing and we are living in age. Net being an interactive two way medium, through various websites, enables participation by individuals in business to business and business to consumer commerce, visit to shopping arcades, games, etc. in cyber space even the information can be copied, downloaded and retransmitted.
The use of Internet has grown 2000 percent in last decade and is currently growing at 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 management and financial services. It offers stock trading at a lower cost. Internet can change the nature and capacity of stock broking business in India.
2. E-commerce
Electronic commerce is associated with buying and selling over computer 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 of business information using electronic data inter change, electronic technologies. It not only reduces manual processes and paper transactions but also helps organization move to a fully electronic environment and change the way they operated.
PC’s and networking attempts to introduce banks of the tools and technologies required for electronic commerce. The computers are either workstations of individual office works or serves where large databases and information reside. Network connects both categories of computers; the various operating systems are the most basis program within a computer. It manages the resources of the computer system in a fair and efficient manner.
Now we can enter in to the concept known as online trading.
In the past, investors had no option but to contact their broker to get real time access to market data. The net brings data to the investor on-line and net broking enables him to trade on a click of mouse. Now information has become easily accessible to both retail as well as big investor.
EVOLUTION OF BROKING IN INDIA:
The evolution of a broking in India can be categorized in three phases -
• Stockbrokers will offer on their sites features such as live portfolio manager, live quotes, market research and news, etc. to attract more investors.
• Brokers will offer online broking and relationship management by providing and offering analysis and information to investors during broking and non-broking hours based on their profile and needs, i.e. customized services.
• Brokers (now e-brokers) will offer value management or services like initial public offering online, on-line asset allocation, portfolio management, financial planning, tax planning, insurance services, etc. and enables the investors to take better and well considered decisions.
The actual definition of “Online Trading” is as explained below:
“Online trading is a service offered on the internet for purchase and sale of shares. In the real world you place orders on your stockbroker either verbally (personally or telephonically) or in a written form (fax).” In online trading, you will access a stockbroker’s website through your internet enabled PC and place orders through the broker’s internet based trading engine. These orders are routed to the stock exchange without manual intervention and executed thereon in a matter of a few seconds.The net is used as a mode of trading in internet trading. Orders are communicated to the stock exchange through website.
In India:
Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. Under the ORS the client enters his requirements (security, quantity, price buy/sell) on broker’s site.
Objectives:
Internet trading is expected to
• Increase transparency in the markets,
• Enhance market quality through improved liquidity, by increasing quote continuity and market depth,
• Reduce settlement risks due to open trades, by elimination of mismatches,
• Provide management information system,
• Introduce flexibility in system, so as to handle growing volumes easily and to support nationwide expansion of market activity.
Besides, through internet trading three fundamental objectives of securities regulation can be easily achieved, these are:
• Investor protection
• Creation of a fair and efficient market, and
• Reduction of the systematic risks.
Some of the brokers offering net trading include ICICI direct, kotakstreet, etc.
Requirements for net trading:
For investors:
1. Installation of a computer with required specification
2. Installation of a modem
3. Telephone connection
4. Registration for on-line trading with broker
5. A bank account
6. Depository account
7. Compliance with SEBI guidelines for net trading
The following should be produced to get a demat account and online trading account:
As identity proof & address proof any one of the following:
• Voter ID card
• Driving license
• PAN card( in case of to trade more than 50000)
• Ration card
• Bank pass book
• Telephone bill
Other requirements, which are necessary
• First page of the bank pass book and last 6 months statement.
• Bank manager’s signature along with bank’s seal, manager registration code on photograph.
For stock brokers:
1. Permission from stock exchange for net trading
2. Net worth of Rs. 50 lac
3. Adequate back-up system
4. Secured and reliable software system
5. Adequate, experienced and trained staff
6. Communication of order (trade confirmation to investor by e-mail)
7. Use of authentication technologies
8. Issue of contract notes within 24 hours of the trade execution
9. Setting up a website.
The net is used as a medium of trading in internet trading. Orders are communicated to the stock exchange through website. Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction.
Under the Order Routing System the client enters his requirements (security, quantity, price, and buy/sell) in broker's site. They are checked electronically against the clients account and routed electronically to the appropriate exchange for execution by the broker. The client receives a confirmation on execution of the order. The customer's portfolio and ledger accounts get updated to reflect the transaction. The user should have the user id and password to enter into the electronic ring. He should also have demat account and bank account. The system permits only a registered client to log in using user id and password. Order can be placed using place order window of the website.
Procedure for net trading
Step 1: Those investors, who are interested in doing the trading over internet system i.e. NEAT-IXS, should approach the brokers and get them self registered with the Stock Broker.
Step 2: After registration, the broker will provide to them a Login name, Password and personal identification number (PIN).
Step 3: Actual placement of an order. An order can then be placed by using the place order window as under:
(a) First by entering the symbol and series of stock and other parameters like quantity and price of the scrip on the place order window.
(b) Second, fill in the symbol, series and the default quantity.
Step 4: It is the process of review. Thus, the investor has to review the order placed by clicking the review option. He may also re-set to clear the values.
Step 5: After the review has been satisfactory, the order has to be sent by clicking on the send option.
Step 6: The investor will receive an "Order Confirmation" message along with the order number and the value of the order.
Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit, an appropriate message will appear at the bottom of the screen. At present, a time lag of about 10 seconds is there in executing the trade.
Step 8: It is regarding charging payment, for which there are different mode. Some brokers will take some advance payment from the investor and will fix their trading limits. When the trade is executed, the broker will ask the investor for transfer of funds to his account.
Internet trading provides total transparency between a broker and an investor in the secondary market. In the open outcry system, only the broker knew the actually transacted price. Screen based trading provides more transparency. With online trading investors can see themselves the price at which the deal takes place.
The time gap has narrowed in every stage of operation. Confirmation and execution of trade reaches the investor within the least possible time, mostly within 30 seconds. Instant feedback is available about the execution. Some of the websites also offer;
1. News and research report
2. BSE and NSE movements
3. Stock analysis
4. IPO and mutual fund centers
Step by step procedure in online trading:
Following steps explain the step by step approach to on-line trading:
• Log on to the stock broker's website
• Register as client/investor
• Fill the application form and client broker agreement form on the requisite value stamp paper
• Obtain user ID and pass word
• Log on to the broker's site using secure user ID and password
• Market watch page will show real time on-line market data
• Trade shares directly by entering the symbol or number of the security
• Brokers server will check your limit in the on-line account and demat account for the number of shares and execute the trade
• Order is executed instantly (10-30 seconds) and confirmation can be obtained.
• Confirmation is e-mailed to investor by broker
• Contract note is printed and mailed in 24 hours
• Settlement will take place automatically on the settlement day
• Demat account and the bank account will get debited and credited by electronic means.
ONLINE TRADING HAS LED TO ADDITIONAL FEATURES SUCH AS:
• Limit / stop orders: orders that can be go unfilled, but there is an extra Charge for this leeway facility since one need to hold a price.
• Market orders: orders can be filled at unexpected prices, but this type is much more risky, since you have to buy stock at the given price.
• Cash account: where funds have to be available prior to placing the order.
• Margin account: where orders can be placed against stocks, to increase Purchasing power.
ADVANTAGES OF ONLINE TRADING:
• Online trading has made it possible for anyone to have easy and efficient access to more reports and charts than it was previously possible if one went to any brokers' office. Thus we have access to a lot more information online.
• Online trading has let room for smaller organizations to compete with multinational organizations since it is no longer a leg it issue. Being online does not identify the size of any particular organization, therefore, this additional power to the underdogs.
• Online trading has allowed companies to locate themselves where they want as physical location is not an issue anymore. Companies can establish themselves according to their gains and losses, for instance where tax (sales and value added taxes) is best suited to them.
• Online trading gives control to individuals and they can exercise it over accounts thus comprehend what is going on when they trade. It is like going back to school and re-educating oneself on how to trade online.
• Individuals’ benefit by saving comparatively a lot more when trading online as the cost per trade is less.
• Individuals can invest in a variety of products, unlike earlier when people bought bonds, mutual funds, and stock for long-term basis and sat on them. Now they can invest in stocks, stock and index options mutual funds, government, and even insurance.
INVESTORS REASONS TO TRADE ONLINE:
• They have control over their accounts, can make their own decisions and don’t have to give reasons for their actions. They are independent.
• They have a reason to participate in the market and learn about it.
• It is interesting, cheap, easy, fast, and convenient.
• A lot of information is online so they can keep up-to-date with what is happening in the trading world.
• It will give investors a greater choice and better realization.
• The immediate impact will be competition and benefits will accrue to the investors.
• It will lead to brokerage commissions going down and brokers striving to increase business afloat.
• Investors will now go to place, which have better trading conditions and also members to offer them better facilities.
• They have access to numerous tools to invest, and can create their own portfolio.
HERE ARE THE POSSIBLE DISADVANTAGES:
• When network crashes, there will be problems and delays due to a large influx of rapid online trading criteria.
• Individuals are restricted to first-hand financial guidance. This simply means that the individual is himself / herself alone to.
• A tax (sales tax and value added tax) evaluation becomes an issue, especially when you are trading internationally.
• One has no idea with whom he is dealing with on the other end.
• According to a study conducted by Mary Rowland, careful investor: is online trading bad for your portfolio, the more one trades the less returns one gets, meaning that an addicted trader gets, carried away online and begins to trade for too much which causes losses for him / her.
• Individuals think that they are trading with the market directly and know what they are doing, but the truth is that even though technology has taken over, the basic rules of trading are the same. It seems that the middleman has been removed, but that is not so. When the individuals click on the mouse, his trade goes through a broker. The commissions online pertain to the intermediary.
• There is a need for more effective communication links over the Internet and the ability of the server to deal with a large volume of visitors.
STOCK EXCHANGES 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 non-profit-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 Bombay securities contracts (control) act of 1925 used to regulate trading in securities. Under this act, the Mumbai stock 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.
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.(Presently not working)
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
OTC Exchange of India
Pune Stock Exchange Ltd.
Saurashtra Kutch Stock Exchange Ltd.
Uttar Pradesh Stock Exchange Association
Vadodara Stock Exchange Ltd.
Out of these major stock exchanges were:
NSE
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 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
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 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-to-day 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
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 body
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 AND 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 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 non-members, public representatives and government representatives to the extent of 50% of total number of members.
• Capital adequacy norms have been 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.
TYPES OF ORDERS:
Buy and sell orders placed with members of the stock exchange by the investors. The orders are of different types.
Limit orders: Orders are limited by a fixed price. E.g. ‘buy Reliance Petroleum at Rs.50.’Here, the order has clearly indicated the price at which it has to be bought and the investor is not willing to give more than Rs.50.
Best rate order: Here, the buyer or seller gives the freedom to the broker to execute the order at the best possible rate quoted on the particular date for buying. It may be lowest rate for buying and highest rate for selling.
Discretionary order: The investor gives the range of price for purchase and sale. The broker can use his discretion to buy within the specified limit. Generally the approximation price is fixed. The order stands as this “buy BRC 100 shares around Rs.40”.
Stop loss order: The orders are given to limit the loss due to unfavorable price movement in the market. A particular limit is given for waiting. If the price falls below the limit, the broker is authorized to sell the shares to prevent further loss. E.g. Sell BRC limited at Rs.24, stop loss at Rs.22.
Buying and selling shares: To buy and sell the shares the investor has to locate register broker or sub broker who render prompt and efficient service to him. The order to buy or sell specifying the number of shares of the company of investors’ choice is placed with the broker. The order may be of any type. After receiving the order the broker tries to execute the order in his computer terminal. Once matching order is found, the order is executed. The broker then delivers the contract note to the investor. It gives the details regarding the name of the company, number of shares bought, price, brokerage, and the date of delivery of share. In this physical trading form, once the broker gets the share certificate through the clearing houses he delivers the share certificate along with transfer deed to the investor. The investor has to fill the transfer deed and stamp it. The stamp duty is one of the percentage considerations, the investor should lodge the share certificate and transfer deed to the register or transfer agent of the company. If it is bought in the DEMAT form, the broker has to give a matching instruction to his depository participant to transfer shares bought to the investors account. The investor should be account holder in any of the depository participant. In the case of sale of shares on receiving payment from the purchasing broker, the broker effects the payment to the investor.
Share groups: The scrips traded on the BSE have been classified into ‘A’,’B1’,’B2’,’C’,’F’ and ‘Z’ groups. The ‘A’ group represents those, which are in the carry forward system. The ‘F’ group represents the debt market segment (fixed income securities). The Z group scrips are of the blacklisted companies. The ‘C’ group covers the odd lot securities in ‘A’, ‘B1’&’B2’ groups.
ROLLING SETTLEMENT SYSTEM:
Under rolling settlement system, the settlement takes place n days (usually 1, 2, 3 or 5days) after the trading day. The shares bought and sold are paid in for n days after the trading day of the particular transaction. Share settlement is likely to be completed much sooner after the transaction than under the fixed settlement system.
The rolling settlement system is noted by T+N i.e. the settlement period is n days after the trading day. A rolling period which offers a large number of days negates the advantages of the system. Generally longer settlement periods are shortened gradually.
SEBI made RS compulsory for trading in 10 securities selected on the basis of the criteria that they were in compulsory demat list and had daily turnover of about Rs.1 crore or more. Then it was extended to “A” stocks in Modified Carry Forward Scheme, Automated Lending and Borrowing Mechanism (ALBM) and Borrowing and lending Securities Scheme (BELSS) with effect from Dec 31, 2001.
SEBI has introduced T+5 rolling settlement in equity market from July 2001 and subsequently shortened the cycle to T+3 from April 2002. After the T+3 rolling settlement experience it was further reduced to T+2 to reduce the risk in the market and to protect the interest of the investors from 1st April 2003.
Activities on T+1: conformation of the institutional trades by the custodian is sent to the stock exchange by 11.00 am. A provision of an exception window would be available for late confirmation. The time limit and the additional changes for the exception window are dedicated by the exchange.
The exchanges/clearing house/ clearing corporation would process and download the obligation files to the broker’s terminals late by 1.30 p.m on T+1. Depository participants accept the instructions for pay in securities by investors in physical form upto 4 p.m and in electronic form upto 6 p.m. the depositories accept from other DPs till 8p.m for same day processing.
Activities on T+2: The depository permits the download of the paying in files of securities and funds till 10.30 a.m on T+2 from the brokers’ pool accounts. The depository processes the pay in requests and transfers the consolidated pay in files to clearing House/clearing Corporation by 11.00am/on T+2. The exchange/clearing house/clearing corporation executes the pay-out of securities and funds latest by 1.30 p.m on T+2 to the depositories and clearing banks. In the demat mode net basis settlement is allowed. The buy and sale positions in the same scrip can be settled and net quantity has to be settled.
CHAPTER-4
DATA ANALYSIS&INTERPRETATION
DATA ANALYSIS&INTERPRETATION
OUTCRY SYSTEM
The broker has to buy or sell securities for which he has received the orders. For this, the broker or his authorized representatives goes to the stock exchange. This method is called the open outcry system. Basically the brokers shout while buying or selling the securities. The floor of the stock exchange is divided into a number of markets also known as ‘post pit’ or wing based on particular securities dealt there.
In the post pit or wing, the broker using ‘open outcry’ method makes an offer or bid price. For making the necessary bargain, he quotes his purchase or sale price, also known as offer or bid price. The dealer, to whom the price is quoted, quotes his own price when the quotation of the dealer suits the broker, he may loose the bargain. If he is not satisfied with the quote price, he may turn to some other dealer. On the close of the bargain, the dealer as well as the broker makes a brief note of the particulars of the deal. Such notes are made on some pad and on it the number of shares, the price agreed upon, the name of the party, what membership number etc., are noted.
DISADVANTAGES OF OUTCRY SYSTEM:
• It lacks transparency.
• The scope of manipulation, speculation and mal practice is more.
• Signal were more important in the outcry system any member who could not interpret the buy/sell signal correctly often landed himself in disaster situation.
• In audibility was another disadvantage of the outcry system.
• Due to the above disadvantages of the outcry system the INDIA INFOLINE has shifted from outcry system to online trading from February 29th 1997.
MANUAL TRADING
Trading procedure before introduction of online trading
Trading on stock exchanges is officially done in the trading ring. In the trading ring the space is provided for specified and non-specified sections, the members and their authorized assistants have to wear a badge or carry with them an identity card given by the exchange to enter the trading ring. They carry a sauda book or confirmation memos, duly authorized by the exchange and carry a pen with them. The stock exchanges operations are floor level are technical in nature .Non-members are not permitted to enter in to stock market. Hence various stages have to be completed in executing a transaction at a stock exchange .The steps involved in this method of trading have given below:
Choice of broker:
The prospective investor who wants to buy shares or the investors, who wants to sell shares and transact business, have to act through member brokers only. They can also appoint their bankers for this purpose as per the present regulations.
Placement of order:
The next step is the placing order for the purchase or sale of securities with a broker. The order is usually placed by telegram, telephone, letter, fax etc or in person. To avoid delay, it is placed generally over the phone. The orders may take any one of the forms such as At Best Orders, Limit Order, Immediate or Cancel Order, Limited Discretionary Order, and Open Order, Stop Loss Order.
Execution of order or contract:
Orders are executed in the trading ring of the BSE. This works from 11:30 to 2.30 P.M on all working days Monday to Friday, and a special one-hour session on Saturday. The members or the authorized assistants have to wear a badge given by the exchange to enter into the trading ring. They carry a sauda Block Book or conformation memos, which are duly authorized by the exchange when the deal is struck; both broker and jobber make a note in their sauda block books. From the sauda book, the contract notes are drawn up and posted to the client. A contract note is written agreement between the broker and his clients for the transaction executed.
Drawing Up and Bills:
Both sale and purchase bills are prepared along with the contract note and it is posted on the same day or the next day. This in a purchase transaction, once the shares are delivered to the client effects payment for the purchases and pays the stamp fees for transfer, a bill is made out giving the total cost of purchase, including other expenses incurred by the broker in the price itself. With this, the process ends.
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.
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.
Rematerialization is the process of converting electronic shares in to physical shares.
Benefits of Demat:
• It reduces the risk of bad deliveries, in turn saving the cost and wastage of time associated with follow up for rectification. This has lead to reduction in brokerage to the extent of 0.5% by quite a few brokerage firms.
• In case of transfer of electronic shares, you save 0.5% in stamp duty. You avoid the cost of courier / notarization.
• You can receive your bonuses and rights issues into your DA as a direct credit, this eliminating risk of loss in transit.
• You can also expect a lower interest charge for loans taken against Demat shares as compared to loans against physical shares.
• There is no lost in transit, thus the overheads of getting a duplicate copy in such circumstances is reduced.
• RBI has also reduced the minimum margin to 25% for loans against dematerialized securities as against 50% for loans against physical securities.
TRADING AND SETTLEMENT AT SHARE KHAN
The NSE first introduced online trading in India. The Online trading system imparted a greater level of transparency and investors preferred exchanges that offered Online trading because of the following factors:
• The ease of operation from the view of the both members and the investors.
• Increase in the confidence of the investors because of higher level of transparency.
• Facilities better monitoring of the market by the exchange.
• The best price achieved in buying and selling.
All these resulted in ever-increasing volumes on the exchanges offering the online trading.
TRADING PROCEDURE AT SHARE KHAN STOCK BROCKING
Share Khan deals in buying and selling equity shares and debentures on the National Stock Exchange (NSE), the Bombay Stock Exchange (BSE) and the Over-The-Counter Exchange of India (OTCEI).
Share Khan is provided with a computer and required software from their registered stock exchanges. These centers are called “Broker Work Stations”. These computers are connected to the server at the stock exchanges through cable.
The member or broker sitting in his office can send the quotations, orders, negotiations, deals, in-house deals, auction orders etc., through the computer. The Central trading system (CTS) will accept these orders and send it for match. If there is any mistake in the order, CTS will reject the orders and send respective error message to the member concern. All these operations are in built. The main objective of CTS is to monitor the Stock Exchanges operations.
Order placed by the broker will be sent for a match and if the match is found suitable, the transaction will be executed. Otherwise, the order will be deleted automatically after completion of trading time. The carry forward transactions (Good Till cancellation) are forwarded to the next day. Even if the match is not found with in the prescribed period, the order will not cancel.
TRADING SESSION
Trading timings are from 9:55 A.M. to 3:30 P.M. on all 5 days of the trading period. Monday to Friday is the trading period in all the stock exchanges. SEBI has stipulated that all the stock exchanges in India must have same trading period.
BROKER WORK STATION:
At the broker workstation the BBO’s, the last traded price, the day‘s opening price, previous day’s closing price, highest and lowest prices, the weighted average price and total trade value will be available continuously, as the BBO for each scrip.
Other information will be available on query from the BWS. These include top gainers /losers of the day. Trader-wise, scrip wise net position, client wise net position, top scrip by the volume/value, market summary etc.
Brokers are also provided with information relating to the companies in the matter of Book closure, Dividend declarations, resolutions in board meeting, information about liquidated companies, company report etc.
ORDERS:
➢ Orders can be done one at a time or in a batch mode.
➢ The submitted order will be accepted at the CTS, after validation if it finds any invalid reason the order is return back to the BWS, with the appropriate error message.
➢ If Accepted at the CTS it will be added to the local pending order book.
➢ The order will then be taken up for matching, if it is a buy order the system tries to find a sell order, which fits the requirement of the buy order, when such match is found a trade gets executed. Each trade involves two brokers and
respective traders who sent the order. Both these traders are informed of the trade being executed at their respective BWS.
➢ At the BWS the trade is added to the local trade book.
Orders sent by the brokers are two types:
• Good for the day (GFD)
• Good till cancellation(GTC)
Good for the day:
This is also called as “market order”. For an order if the member selects the deal as good for the day, the order is treated as market order. If a “best bid” founds match with “best order” then the transaction gets executed. If the match is not found then after trade time the order gets cancelled that day. Next day he has to place a new order.
For example if a member wants to purchase 1000 shares of satyam info @ 400 each through Good for Day order. If the correct match is not found, order gets cancelled automatically and new quotation has to be placed the next day.
Good till cancellation:
This order is forwarded to the last trading day of that settlement period. This is also called as carry forward order like GFD; broker has to select the option of GTC for the order. If the order finds match with in the trading settlement period, the order is executed. If no match is found, the order is cancelled on the last day of settlement period. This order is not carried forward to the next settlement period.
For example, if a member a place purchase order of 500 shares of SBI @ 690 per share and selects the order as GTC and place an order. If the match is not found on that day it will be forwarded to the next day until trading settlement period day.
SETTLEMENT OF TRANSACTIONS:
Clearing of transaction in the form of shares and cash is called settlement. Buyers will take the delivery of shares through the depository participants like The IIFL (India Infoline) and others.
Finally, the settlement is made by means of delivering the share certificates along with the transfer deeds. The transferor (or the seller) duly signed transfer deed. It bears a stamp of the selling broker. The buyer then fills up the certificates fills up the particulars in the transfer deed. Settlement can be done in the following way.
Spot settlement: under this method, the delivery of securities and payment for them are affected on the day of the contract itself.
Rolling settlement: Under this rolling settlement the trading is on “T+2”,basis i.e. if Monday is trading day then Wednesday is the paying day . In case on non-delivery, the securities will go for auction.
DETAILS OF PROCEDURES:
Delivery in : The members who are in pay-out position delivers share certificates in to clearing house within the settlement period along with the delivery Chelan filled in with the details of share certificates which has folio numbers or distinctive numbers etc.
Delivery out: The buyer of shares who made pay in position will take delivery of shares from the clearing house.
Pay-in: The member who is in paying position shall pay for value of shares with in the trading settlement period (T+2).
Payout: The cheques paid in the clearinghouse will be paid to members who are in paying position.
All disputes arising between members regarding non-deliveries, non-payments, good and bad deliveries pertaining to the settlement will be settled by the settlement committee of the exchange.
The given flow chart clearly explains the process of online trading:
[pic]
COMPARATIVE ANALYSIS
Company : AXIS BANK LTD. ( 532215 )
|Period ( 12-Dec-2011 to 13-Jan-2012 ) |
|Date |Open |High |Low |Close |WAP |No. of |No. of |Total Turnover |
| |Price |Price |Price |Price | |Shares |Trades |(Rs.) |
| | | | | | | | | |
|13/01/12 |948.10 |956.00 |928.65 |939.60 |943.40 |3,06,566 |11,366 |28,92,13,799 |
|12/01/12 |934.40 |969.05 |927.15 |941.00 |946.93 |4,19,551 |16,606 |39,72,86,701 |
|11/01/12 |896.00 |947.90 |893.05 |933.40 |915.20 |4,40,626 |14,303 |40,32,59,844 |
|10/01/12 |865.00 |899.90 |865.00 |896.95 |889.17 |2,86,849 |10,300 |25,50,57,897 |
|9/01/12 |852.00 |862.00 |836.00 |855.75 |848.64 |2,15,730 |8,242 |18,30,78,066 |
|7/01/12 |852.00 |855.00 |847.40 |851.70 |852.46 |22,433 |923 |1,91,23,283 |
|6/01/12 |865.40 |865.40 |836.20 |853.65 |848.93 |4,15,770 |13,795 |35,29,60,186 |
|5/01/12 |847.20 |878.00 |846.00 |869.30 |865.89 |3,74,479 |14,573 |32,42,58,207 |
|4/01/12 |844.55 |856.30 |832.05 |847.50 |846.23 |5,23,912 |13,472 |44,33,47,556 |
|3/01/12 |808.00 |847.90 |803.45 |840.20 |824.42 |3,66,268 |14,586 |30,19,58,499 |
|2/01/12 |812.00 |815.00 |784.50 |794.25 |796.31 |3,15,580 |12,756 |25,13,00,173 |
|30/12/11 |818.80 |826.85 |803.00 |806.75 |815.48 |3,41,025 |13,984 |27,81,00,666 |
|29/12/11 |824.90 |838.00 |810.05 |816.55 |824.88 |3,27,152 |12,551 |26,98,60,241 |
|28/12/11 |838.10 |840.00 |820.80 |832.30 |828.82 |2,74,461 |11,014 |22,74,77,460 |
|27/12/11 |874.00 |874.00 |840.55 |843.75 |853.69 |2,74,884 |12,522 |23,46,64,812 |
|26/12/11 |886.00 |891.85 |866.65 |872.80 |877.81 |2,91,092 |12,452 |25,55,23,917 |
|23/12/11 |884.50 |895.00 |866.15 |878.50 |881.74 |3,74,372 |16,440 |33,00,97,148 |
|22/12/11 |849.00 |879.70 |841.20 |873.30 |862.64 |5,89,242 |21,367 |50,83,06,173 |
|21/12/11 |845.00 |860.95 |832.75 |854.25 |845.08 |3,44,024 |13,063 |29,07,26,657 |
|20/12/11 |855.00 |857.85 |810.00 |818.95 |822.40 |5,64,047 |19,916 |46,38,71,132 |
|19/12/11 |898.00 |898.00 |829.00 |848.25 |849.90 |5,85,429 |20,824 |49,75,58,208 |
|16/12/11 |956.00 |964.80 |891.10 |900.45 |924.12 |7,70,125 |25,107 |71,16,84,555 |
|15/12/11 |950.00 |953.50 |934.05 |947.65 |942.80 |4,22,073 |12,457 |39,79,32,369 |
|14/12/11 |961.00 |981.00 |951.00 |959.50 |966.08 |2,74,579 |10,535 |26,52,64,176 |
|13/12/11 |964.00 |974.90 |941.60 |961.05 |956.60 |4,26,809 |11,192 |40,82,87,263 |
INTERPRETATION:
On 2nd Jan open value has fall down to 796.31 than compare to higher value of EPS 54.21 to 59.62. Then coming to lower price from 36.25 to 52.78. Wholly the conclusion is 51.48 to 68.27 fall up.
The comings to the volume on the same dates or days volumes are increased. Because on this AXIS BANK LTD.. EPS value is fall up.
Company : BAJAJ AUTO LTD. ( 532977 )
|Period ( 12-Dec-2011 to 13-Jan-2012 ) |
|Date |Open |High |Low |Close |WAP |No. of |No. of |Total Turnover |
| |Price |Price |Price |Price | |Shares |Trades |(Rs.) |
| | | | | | | | | |
|13/01/12 |1,473.00 |1,487.05 |1,422.00 |1,429.55 |1,444.77 |51,828 |4,806 |7,48,79,451 |
|12/01/12 |1,463.00 |1,485.90 |1,456.25 |1,473.20 |1,472.45 |52,468 |3,295 |7,72,56,312 |
|11/01/12 |1,449.70 |1,462.70 |1,429.20 |1,453.00 |1,449.93 |53,911 |3,328 |7,81,67,412 |
|10/01/12 |1,426.00 |1,463.10 |1,425.00 |1,429.55 |1,436.37 |1,29,245 |4,214 |18,56,43,720 |
|9/01/12 |1,448.00 |1,448.00 |1,412.10 |1,426.45 |1,425.09 |48,478 |4,006 |6,90,85,520 |
|7/01/12 |1,468.00 |1,468.00 |1,444.00 |1,448.05 |1,453.17 |8,446 |419 |1,22,73,510 |
|6/01/12 |1,458.50 |1,472.00 |1,440.65 |1,459.20 |1,453.55 |72,776 |4,377 |10,57,83,227 |
|5/01/12 |1,425.00 |1,469.80 |1,420.00 |1,464.80 |1,453.69 |1,00,888 |7,425 |14,66,59,927 |
|4/01/12 |1,496.00 |1,505.00 |1,416.00 |1,426.30 |1,436.84 |1,79,477 |12,646 |25,78,80,045 |
|3/01/12 |1,478.00 |1,505.00 |1,451.10 |1,496.70 |1,479.95 |2,64,423 |16,182 |39,13,33,742 |
|2/01/12 |1,595.00 |1,603.95 |1,441.15 |1,475.00 |1,479.20 |2,85,450 |19,155 |42,22,38,092 |
|30/12/11 |1,602.40 |1,614.90 |1,581.25 |1,592.80 |1,592.15 |31,812 |1,983 |5,06,49,479 |
|29/12/11 |1,602.00 |1,612.00 |1,595.05 |1,602.40 |1,602.44 |41,116 |1,544 |6,58,85,824 |
|28/12/11 |1,634.90 |1,643.90 |1,601.50 |1,612.15 |1,619.89 |28,932 |2,040 |4,68,66,568 |
|27/12/11 |1,598.05 |1,635.85 |1,598.05 |1,627.90 |1,624.02 |23,787 |1,853 |3,86,30,458 |
|26/12/11 |1,615.00 |1,618.45 |1,595.05 |1,610.95 |1,609.21 |14,627 |1,068 |2,35,37,879 |
|23/12/11 |1,615.00 |1,620.00 |1,589.75 |1,600.35 |1,598.37 |23,569 |1,897 |3,76,72,084 |
|22/12/11 |1,595.50 |1,622.00 |1,590.00 |1,615.75 |1,606.75 |37,109 |2,554 |5,96,24,746 |
|21/12/11 |1,629.00 |1,629.00 |1,567.80 |1,616.05 |1,596.56 |42,861 |3,653 |6,84,30,333 |
|20/12/11 |1,655.00 |1,660.00 |1,597.30 |1,604.45 |1,621.58 |34,915 |2,436 |5,66,17,448 |
|19/12/11 |1,639.00 |1,655.60 |1,628.80 |1,644.15 |1,642.07 |27,312 |2,676 |4,48,48,139 |
|16/12/11 |1,655.00 |1,708.00 |1,637.30 |1,653.90 |1,680.32 |60,610 |5,264 |10,18,44,339 |
|15/12/11 |1,639.95 |1,665.00 |1,625.30 |1,655.95 |1,645.83 |28,214 |2,108 |4,64,35,377 |
|14/12/11 |1,655.00 |1,681.90 |1,642.05 |1,648.05 |1,659.03 |43,304 |2,622 |7,18,42,706 |
|13/12/11 |1,625.00 |1,670.00 |1,620.00 |1,660.50 |1,644.33 |55,053 |2,502 |9,05,25,134 |
[pic]
INTERPRETATION:
On 9th Jan open value has fall down to 1412.01 than compare to higher value of EPS 41.25 to 55.27. Then coming to lower price from 52.21 to 59.35. Wholly the conclusion is 57.39 to 68.27 fall up.
The comings to the volume on the same dates or days volumes are increased. Because on this BAJAJ AUTO LTD. EPS value is fall up.
Company : BHARAT HEAVY ELECTRICALS LTD. ( 500103 )
| | |
|Period ( 12-Dec-2011 to 13-Jan-2012 ) | |
|Date |Open |High |Low |Close |WAP |No. of |No. of |Total Turnover |
| |Price |Price |Price |Price | |Shares |Trades |(Rs.) |
| | | | | | | | | |
|13/01/12 |265.50 |268.35 |263.20 |266.80 |265.79 |3,26,244 |4,873 |8,67,12,469 |
|12/01/12 |264.00 |271.90 |261.50 |262.40 |265.83 |5,12,274 |9,296 |13,61,78,088 |
|11/01/12 |263.90 |266.90 |259.30 |264.75 |263.74 |5,85,329 |6,794 |15,43,75,602 |
|10/01/12 |258.30 |267.25 |258.30 |264.90 |264.88 |4,35,558 |6,949 |11,53,68,854 |
|9/01/12 |251.00 |259.95 |246.40 |258.55 |255.40 |4,56,857 |7,769 |11,66,82,343 |
|7/01/12 |251.00 |252.50 |248.10 |250.65 |250.93 |49,876 |854 |1,25,15,226 |
|6/01/12 |253.00 |255.00 |245.25 |250.00 |248.55 |4,92,239 |7,872 |12,23,44,486 |
|5/01/12 |252.50 |260.00 |251.60 |254.80 |256.66 |5,40,536 |9,187 |13,87,32,742 |
|4/01/12 |250.00 |258.60 |249.00 |254.00 |254.28 |6,52,135 |11,987 |16,58,26,278 |
|3/01/12 |239.50 |251.35 |239.50 |247.95 |244.35 |3,55,009 |6,347 |8,67,45,556 |
|2/01/12 |239.00 |241.90 |233.50 |236.45 |236.80 |3,27,949 |6,989 |7,76,59,163 |
|30/12/11 |240.00 |240.95 |236.50 |239.00 |238.65 |4,02,607 |7,433 |9,60,80,419 |
|29/12/11 |243.45 |247.75 |233.15 |237.40 |243.21 |5,36,352 |8,805 |13,04,45,436 |
|28/12/11 |238.60 |247.60 |237.10 |246.25 |243.15 |5,07,168 |8,482 |12,33,18,265 |
|27/12/11 |245.00 |246.85 |238.00 |240.80 |242.71 |3,99,605 |5,819 |9,69,88,015 |
|26/12/11 |243.80 |247.35 |241.00 |243.60 |244.73 |2,65,973 |5,380 |6,50,91,553 |
|23/12/11 |238.50 |246.60 |238.35 |241.95 |243.49 |7,48,727 |11,578 |18,23,04,622 |
|22/12/11 |232.30 |239.25 |230.80 |237.65 |234.91 |5,47,388 |9,109 |12,85,84,902 |
|21/12/11 |238.00 |239.30 |231.50 |234.05 |235.66 |5,95,748 |10,945 |14,03,93,321 |
|20/12/11 |234.70 |236.85 |225.00 |228.75 |228.40 |9,01,361 |15,762 |20,58,69,145 |
|19/12/11 |241.45 |241.45 |228.00 |231.55 |232.29 |7,91,260 |13,404 |18,38,03,438 |
|16/12/11 |253.00 |256.00 |238.00 |240.45 |247.99 |7,78,192 |14,395 |19,29,82,046 |
|15/12/11 |252.80 |253.30 |246.20 |250.15 |250.08 |7,69,012 |13,608 |19,23,14,786 |
|14/12/11 |258.20 |265.25 |255.10 |256.50 |260.42 |5,46,293 |9,034 |14,22,66,731 |
|13/12/11 |255.00 |263.90 |251.80 |261.40 |257.81 |7,90,821 |11,932 |20,38,81,605 |
[pic]
INTERPRETATION:
On 20th December open value has fall down to 228.75 than compare to higher value of EPS 32.36 to 39.65. Then coming to lower price from 31.25 to 37.58. Wholly the conclusion is 29.68 to 34.52 fall up.
The comings to the volume on the same dates or days volumes are increased. Because on this BHARAT HEAVY ELECTRICALS LTD.. EPS value is fall up.
Company : BHARTI AIRTEL LTD. ( 532454 )
|Period ( 12-Dec-2011 to 13-Jan-2012 ) |
|Date |Open |High |Low |Close |WAP |No. of |No. of |Total Turnover |
| |Price |Price |Price |Price | |Shares |Trades |(Rs.) |
| | | | | | | | | |
|13/01/12 |329.40 |338.45 |328.50 |334.55 |334.46 |4,86,715 |7,252 |16,27,88,083 |
|12/01/12 |328.00 |329.95 |324.45 |326.05 |327.14 |1,81,666 |3,630 |5,94,29,816 |
|11/01/12 |333.50 |333.50 |323.55 |325.55 |327.05 |2,97,415 |5,525 |9,72,68,699 |
|10/01/12 |323.80 |333.00 |321.50 |330.65 |328.94 |3,43,178 |7,325 |11,28,86,559 |
|9/01/12 |330.00 |330.00 |320.55 |321.20 |322.39 |3,26,118 |6,483 |10,51,35,659 |
|7/01/12 |333.00 |333.50 |330.00 |330.90 |331.08 |30,537 |740 |1,01,10,176 |
|6/01/12 |342.90 |342.90 |328.00 |330.20 |331.92 |3,24,693 |7,114 |10,77,70,989 |
|5/01/12 |348.30 |349.00 |342.05 |344.35 |345.15 |1,45,567 |3,362 |5,02,41,976 |
|4/01/12 |356.20 |356.30 |346.25 |347.40 |350.03 |1,24,611 |3,728 |4,36,17,359 |
|3/01/12 |348.65 |359.90 |345.00 |357.95 |353.56 |2,09,630 |5,538 |7,41,15,940 |
|2/01/12 |346.00 |348.60 |341.90 |344.90 |345.24 |1,18,473 |4,008 |4,09,01,858 |
|30/12/11 |341.10 |346.20 |337.35 |342.90 |341.91 |1,92,214 |4,763 |6,57,19,147 |
|29/12/11 |341.30 |350.25 |336.35 |341.10 |343.92 |2,42,314 |5,336 |8,33,36,512 |
|28/12/11 |344.80 |345.80 |340.05 |343.50 |342.86 |1,66,141 |3,744 |5,69,62,818 |
|27/12/11 |347.00 |347.35 |340.20 |343.05 |343.22 |2,07,611 |4,673 |7,12,56,652 |
|26/12/11 |333.95 |346.00 |333.10 |344.70 |341.54 |4,22,881 |9,105 |14,44,29,068 |
|23/12/11 |335.05 |337.75 |328.05 |330.45 |331.27 |2,76,427 |5,979 |9,15,71,514 |
|22/12/11 |339.00 |342.00 |323.60 |335.45 |330.68 |4,88,397 |10,383 |16,15,03,226 |
|21/12/11 |332.00 |344.50 |327.35 |341.50 |336.16 |3,67,678 |9,243 |12,35,97,334 |
|20/12/11 |340.00 |340.00 |319.50 |322.85 |327.33 |4,42,289 |8,980 |14,47,75,127 |
|19/12/11 |334.00 |343.45 |321.45 |336.40 |333.34 |5,68,668 |11,317 |18,95,59,738 |
|16/12/11 |337.25 |352.50 |329.35 |336.30 |346.16 |5,11,561 |9,760 |17,70,84,155 |
|15/12/11 |339.00 |342.25 |332.00 |337.00 |336.39 |4,55,423 |7,720 |15,32,00,217 |
|14/12/11 |346.90 |353.50 |342.00 |348.85 |349.83 |5,33,040 |7,313 |18,64,72,251 |
|13/12/11 |340.50 |350.75 |337.10 |346.40 |344.87 |3,88,271 |7,704 |13,39,02,067 |
[pic]
INTERPRETATION:
On 20th December open value has fall down to 319.50 than compare to higher value of EPS 41.25 to 42.58. Then coming to lower price from 41.89 to 48.36. Wholly the conclusion is 39.68 to 48.57 fall up.
The comings to the volume on the same dates or days volumes are increased. Because on this BHARTI AIRTEL LTD. EPS value is fall up.
CHAPTER-5
FINDINGS
CONCLUSION
RECOMMENDATIONS
BIBLIOGRAPHY
FINDINGS
• Wholly the conclusion is 51.48 to 68.27 fall up. The comings to the volume on the same dates or days volumes are increased. Because on this AXIS BANK LTD.. EPS value is fall up.
• Wholly the conclusion is 39.68 to 48.57 fall up.The comings to the volume on the same dates or days volumes are increased. Because on this BHARTI AIRTEL LTD. EPS value is fall up.
• Wholly the conclusion is 29.68 to 34.52 fall up.The comings to the volume on the same dates or days volumes are increased. Because on this BHARAT HEAVY ELECTRICALS LTD.. EPS value is fall up.
• Wholly the conclusion is 57.39 to 68.27 fall up.The comings to the volume on the same dates or days volumes are increased. Because on this BAJAJ AUTO LTD. EPS value is fall up.
CONCLUSION
➢ The comprehensive study of capital market instrument at Inter Connected stock exchange has been an enlightening experience stressing on the positive aspects on Dematerialization.
➢ And settlement of shares, derivative market and capital instrumentshas done in whole lot of good to the issuer, investor companies and country.
➢ The depository systems has reduced the lag in delivery and settlement of securities but also supported the cause of providing more liquidity to the security holder, the need for setting up of a depository paper less trading.
➢ Through online trading system and settlement became inevitable and unavoidable for the smooth and the efficient functioning of the capital market.
➢ This system has proved its worthiness by increasing in the speed of transactions within T+3 days which are earlier T+5 days.
➢ Now there is a proposal that the settlement will be done within T+1days in near future which is in it an indication of a boon in the system of demat and capital market instruments.
➢ It has been fairly long since derivative trading started off on the Indian Indexes.
➢ Actively has failed to really take off with low figures being transacted in terms of value and volumes.
➢ The introduction of derivative trading was hailed by the punters in the capital markets but has not really brought about a wave so as to speak.
➢ There are several factors, which impede the growth of the derivative markets in India.
➢ Of these factors the absence of clear guidelines on tax-related issues and the high cost of transactions are the most prominent.
RECOMMENDATIONS
• I recommend the exchange authorities to take steps to educate Investors about their rights and duties. I suggest to the exchange authorities to increase the investors’ confidences.
• I recommend the exchange authorities to be vigilant to curb wide fluctuations of prices.
• The speculative pressures are responsible for the wide changes in the price, not attracting the genuine investors to the greater extent towards the market.
• Genuine investors are not at all interested in the speculative gain as their investment is based on the future profits, therefore the authorities of the exchange should be more vigilant to curb the speculation.
• Necessary steps should be taken by the exchange to deal with the situations arising due to break down in online trading.
BIBLIOGRAPHY
BOOKS:
• Investment management
-V.K.Bhalla
• Investment management
-Preethi Singh
• Security Analysis And Portfolio Management
-V.A.Avadhani
• Marketing of Financial Services
-V.A.Avadhani
• Indian Financial System
-M.Y.Khan
WEBSITES:
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•
•
•
•
•
MARKET WATCH WINDOWS:
BLUE COLOUR INDICATE SHARE VALUE INCREASE
RED COLOUR INDICATE SHARE VALUE DECREASE
NSE Scrip’s
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NSE & BSE Scrip’s
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(BUY Order Form)
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(Sell Order Form)
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(Market Depth)
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(Order Book)
[pic]
Client Margin
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Trade Book
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Client Activity Report
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Exercise Report
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