1
CHAPTER - 1
INTRODUCTION
1.1 INTRODUCTION TO ONLINE TRADING
Gone are the days of trading on the floor. Technology has changed the landscape of the stock markets. The look of the stock exchanges has undergone metamorphic changes in the recent years. Prior to online trading, regional stock exchange was playing a very important role in capital markets, as they were local investors.
Regional SE, which was unable to interact with other SEs started developing this own screen based trading and connecting to other scrip’s which were not available with them. This also helped in accessing the quotes and other market information from other stock exchange which proved vital in the functioning of the system as a whole.
The trading network is depicted in given below NSE has main computer which is connected through Very Small Aperture Terminal (VSAT) installed at its office. The main computer runs on a fault tolerant STRATUS mainframe computer at the Exchange. Brokers have terminals (identified as the PCs in the given picture) installed at their prem India bulls s which are connected through VSATs/ leased lines/modems. An investor informs a broker to place an order on his behalf.
The broker enters the order through his PC, which runs under Windows NT and sends signal to the satellite via VSAT/leased line/modem. The signal is directed to mainframe computer at NSE via VSAT at NSE’s office. A message relating to the order activity is broadcast to the respective member. The order confirmation message is immediately displayed on the PC of the broker. This order matches with the existing passive order(S) otherw India bulls it waits for the active orders to enter the system. On order matching, a message is broadcast to the respective member.
7
TRADING NETWORK:
HUB
ANTENNA SATELITE
NSE MAINFRAME BROKERS PREMISES
STOCK MARKET TRADING ON INTERNET
The major events that will take place in the Indian Capital Market are introduction of index-based futures trading on internet. Trading on internet means that the investor’s will actually buy and sell the stocks on-line through the net. A committee was setup by SEBI to develop regulatory parameters for use internet trading. SEBI approved the report on the committee.
SEBI decided that internet trading could take place in India within the existing legal framework through use of order routing system, which will route order from client to brokers,. For trade execution on registered stock exchanges. The broad also took note of the recommended minimum technical standards for ensuring safety and security of transaction between clients and brokers, which will be forced by the respective stock exchanges.
CORPORATE HIERARCHY:
The Trading member has the facility of defining a hierarchy amongst its users of the NEAT system.
The users of the trading system can logon as either of the user type. The significance of each type is explained below:
A. Corporate Manager: The corporate manager is a term assigned to a user placed at the highest level in a trading firm. The facility to set Branch order value limits and user order value limits is available to the corporate manager.
B. Branch Manager: The branch manager is term assigned to a user who is placed under the corporate manager. The branch manager can set user order value limits for each of his branch.
C. Dealer: Dealers are users at the lower most level of the hierarchy. A dealer can view and perform order and related activities only for oneself.
TRADING PROCEDURE BEFORE ON-LINE
THE TRADING RING:
Trading on stock exchanges is officially done in the ring for a few hours from 11.00 A.M to 2.30P.M. Trading before or after official hour is called KERB TRADING. In the trading ring space is provided for specified and non-specified sections. The members of their authorized assistants have to wear a badge or carry with them identify cards given by the exchange to enter the trading ring. They carry a Sauda book or confirmation memos duly authorized by exchange. The stock exchanges operations at floor level are highly technical in nature. Non-members are not permitted to enter into stock market. Hence, various stages have to be completed in executing a transaction at a stock exchange. The steps involved in the methods of trading have been given below:
CHOICE OF BROKER:
The prospective investor who wants to buy shares or the investor who wants to sell his shares cannot enter into hall of the exchange and transact business. They have to act through only member brokers. They can also appoint their bankers for this purpose. Since, bankers can become members of stock exchange as per the present regulations.
So, the first task in transacting business on stock exchanges is to choose a broker of repute or banker. Such people’s can ensure prompt and quick execution of a transaction at the possible price. At present there are 4500 authorized brokers in India bulls.
PLACEMENT OF ORDER:
The next step in planning of order for the purchase or sale of Securities with the broker. The order is usually 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 order, limit order, immediate or cancel order, discretionary order, limited discretionary order, open order and stop loss order.
ENTRY OF ORDER INTO THE BOOKS:
After receiving the order, the member enters them in his books and the purchase and sale orders are distributed among his assistants to handle them separately in non-specified and odd-lots.
EXECUTION OF ORDER:
Big brokers transact their business through their authorized clerk. Small ones out their business personally. Orders are executed in the trading ring of the India bulls. This works from 12:00 noon to 2:00 p.m discretionary order on all working days from Monday to Friday and a special hour session on Saturday.
The floor of the stock exchange is divided into number of markets (pits) according to the nature of security deal in. The authorized clerk/broker goes to the pit and jobbers offer two way quotes for the scrips they deal in. they act as market makers and provide liquidity to the market. The system has been designed to get the bet lids and offers from the jobber’s book as well as the best buy and sell orders from the book. If the quotation is not acceptable to the brokers, he may make a counter bid/offer
Ultimately the bargains may be closed at a price mutually acceptable to both the parties. In case the quotation is not acceptable to him, the broker may go to another dealer and make a bargain. All bargains on the stock exchanges are settled by word of mouth and there is no written contract signed immediately by the parties concerned.
Once the transaction is finalized, the deals are recorded in a Chaupri Rough notebook or transaction note or confirmation memos. Soudha block books or confirmation memos are provided by the stock exchange. The details are recorded in these books also. The prices at which different scrip are traded on a particular day published on the next day in the newspapers. An authorized representative of the stock exchange is also present in the hall to superv India bulls the trading.
PREPARATION OF CONTRACT NOTES
Usually, the authorized clerks enter the particulars of the business transacted during a particular day in ‘Kacha Sauda Book’ they are transferred to ‘Pucca Sauda Book’, which are maintained separately for the ready delivery contracts. Then the broker/authorized clerk prepares a contract note. A contract note is a written agreement between the broker and his client for the transaction executed. It contains the details of the contract made for the purchase/sale of Securities, the brokerage chargeable, name of the company, number of shares bought/sold, net rate, etc., it is prepared in a prescribed from and a copy of it is also sent to the client.
PLACING ORDER WITH THE BROKER:
The next step is placing an order for the purchase/sale of securities with the broker. The order is usually placed over telephone, fax. It can also take the form of telegram or letter or in person. The order placed may be any of the following varieties (largely classified on the basis of price limits that it imposes.).
AT BEST ORDER (OR) BEST RATE ORDER:
“Buy 1000 XYZ ltd.”, it does not specify any price. It means buy XYZ Ltd. Securities at the prevailing market price. These are executed very fast as there is no price limits.
LIMIT ORDER:
“Buy 100 XYZ Ltd. At Rs 100”, it is an order for the purchase of shares at a specified price by the client.(Rs 100)
LIMITED DISCRETIONARY ORDER:
“Buy 1000 XYZ Ltd., around Rs.100”. it gives discretion to the broker. The price can be a little above Rs 100. How much discretion is implied depends on how the broker and client define around.
OPEN ORDER:
It is an order to buy or sell without fixing any time or price limit on the execution of the order.
STOP LOSS ORDER:
“Buy 100 XYZ Ltd. @ Rs 12 to stop Rs 10”. It means buy 100 XYZ Ltd securities at the market rate of Rs. 12 but if on the same day the price falls to Rs. 10 immediately sell of the securities /shares. Thus an attempt is made to limit the loss of sudden unfavorable shift in the market.
NET RATE ORDER:
“Buy 1000 XYZ Ltd. @Rs.30 net “would mean that the client is willing to buy 1000 XYZ Ltd. For not more than Rs.30 per security inclusive of brokerage payable to the broker. Net rate is purchase or sale rate minus brokerage.
MARKET RATE ORDER:
Market rate is net rate plus brokerage for purchase and net minus brokerage for sale. So, “Buy 1000 XYZ Ltd. @Rs.30 market” would mean that the client is willing to pay Rs.30 plus brokerage for each security of XYZ Ltd.
CLEARING HOUSE
The exchange has a clearing house as a part of its Market Operations Department to collect the securities from all members and distribute to each member, all the securities that are due to him in respect of every settlement. The whole of the operations of the clearing house are computerized.
CH is like bank where all the members of India bulls maintain their accounts. CH acts as a member between the buyer and seller. It gets a record of all the transactions (buying and selling) done by a particular week and process these transactions and directs the members to deliver the shares or make payment on the pay-in day.
On the payout day, the CH gives the delivery and the payment to the members according to their respective positions. There are 5 counters in the India bulls , CH where bad deliveries, auction, odd-lot shares transaction, spot transaction etc.., are dealt in respect of all the transactions done from Monday to Friday all the shares will have to be delivered through the India bulls s CH as per the settlement program field, which is generally, a Saturday on next.
NORMAL TRANSACTION:
In case of regular transaction, shares are deposited in clearing house on Tuesday and Wednesday. Payout will be on Thursday. Deliveries will also be on Thursday.
1.2 OBJECTIVES AND NEED OF THE STUDY
OBJECTIVES:
MODIFY
1. Reduce and eliminate operational inefficiencies inherent in manual system.
2. Increased trading capacity in stock exchanges.
3. Improve market transparency, eliminate unmatched trades and delayed reporting.
4. Provides for online and offline monitoring, control and surveillance of the markets.
5. Promote fairness and speedy matching.
6. Ensure smooth market operations using technology while retaining the flexibility of conventional trading practices.
7. Setup various limits rules and controls centrally.
8. Provide brokers with their data on electronic media interface with the brokers back office system.
9. Provide public information on scrip prices, indices for all users of the system.
10. Provide analytical data for use of stock exchange in analysis and reporting
11. To face stiff competition from other stock exchange.
12. Consolidate trader’s data and interface with clearing and settlement.
NEED:
SEBI in September 1996 has issued guidelines to the stock exchanges to go for online trading procedure by the end of the year 1996. Following its direction stock exchange has installed the online trading system.
The major need for this study is to know the effectiveness of the online trading system in comparison with the outcry and mock trading to study its advantages and recommend for beneficial and effective use of this system. The study also includes the drawbacks of the system of physical transfer of the shares.
1.3 RESEARCH METHODALOGY
The data collection methods include both the primary and secondary collection methods.
➢ Primary collection methods: This method includes the data collection from the personal discussion with the authorized clerks and members of the exchange.
➢ Secondary collection methods: The secondary collection methods includes the lectures of the superintend of the department of market operations and so on., also the data collected from the news, magazines of the India bulls and different books issues of this study.
➢ Online trading activities aren’t free. They’ve a significantly high stage of danger, doubt and complexity, especially for stupid and inexperienced stock traders / investors looking for a simple way to earn money swiftly.
➢ Many full-time stock traders and stock investors possess a formal education and training in fields like economics, finance, arithmetic and computer science, which are especially topical to this occupation.
➢ Past these prices would be the break costs of money and time, currency risk, monetary threat, and net, information and stories company solutions and electrical energy consumption expenses – all of which must be account for.
1.4 LIMITATIONS OF THE STUDY
1. The study confines to the past 2-3 years and present system of the trading procedure in the India bulls and the 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.
2. Hence accuracy and correctness can be measured only to the extend of what the sample group has furnished. Fully automated trading process with access to advanced trading tools.
3. Online trading of stock allows trading in real-time market data and multiple markets and products. Possible to indulge in faster trade execution that facilitates day traders in swing trading.
4. It is easy to open and manage an account and does not have any geographical limitations. Online trading favors active traders, who trade in bulk but demands lesser commission.
1.5 SCOPE OF STUDY
The scope of the project is to study and know about Online Trading and Clearing & Settlements dealt in Inter-Connected Stock Exchange.
By studying the Online Trading and Clearing & Settlements, a clear option of dealing in stock exchange is been Understood. Unlike olden days the concept of trading manually is been replaced for fast interaction of shares of shareholder. By this we can access anywhere and know the present dealings in shares.
1.6 IMPORTANCE OF ONLINE TRADING
➢ It will help in reducing transaction costs particularly for overseas and remote located investors.
➢ It will provide real time quotes and on-line trading facility at a much cheaper cost.
➢ Facility of transaction business from the terminal of the investors and will help him making rational judgment or decisions.
➢ It will bring down the brokerages fees and increases the trading volumes.
➢ Quick response in transaction i.e. giving the order verification and acknowledgement.
➢ It allows transparent companies of services and easy price discovery.
➢ It is easy enough to set up either as individual account for margins trading or settle transactions by credit card.
➢ It is easy for brokers to monitor and maintain online accounts and the possibility of miss-trading is less.
➢ Surveillance is easy as there is very less scope for speculation
➢ The investor is provided with best offer
➢ Trading procedure is easy and fully automated.
CHAPTER - 2
COMPANY PROFILE
2.1 COMPANY PROFILE
Introduction to India bulls
India bulls is India’s leading Financial and Real Estate Company with a wide presence throughout India. They ensure convenience and reliability in all their products and services. India bulls has over 640 branches all over India. The customers of India bulls are more than 4,50,000 which covers from a wide range of financial services and products from securities, derivatives trading, depositary services, research & advisory services, consumer secured & unsecured credit, loan against shares and mortgage & housing finance. The company employs around 4000 Relationship managers who help the clients to satisfy their customized financial goals. India bulls entered the Real Estate business in the year 2005 with its group of companies. Large scale projects worth several hundred million dollars are evaluated by them.
India bulls Financial Services Ltd is listed on the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Luxembourg Stock Exchange. The market capitalization of India bulls is around USD 2500 million (29thDecember, 2006). Consolidated net worth of the group is around USD 700 million. India bulls and its group companies have attracted USD 500 million of equity capital in Foreign Direct Investment (FDI) since March 2000. Some of the large shareholders of India bulls are the largest financial institutions of the world such as Fidelity Funds, Goldman Sachs, Merrill Lynch, Morgan Stanley and Farallon Capital.
India bulls Group is one of the top business houses in the country with business interests in Real Estate, Infrastructure, Financial Services, Retail, Multiplex and Power sectors. India bulls Group companies are listed in Indian and overseas financial markets. The Net worth of the Group exceeds USD 3 billion. India bulls has been conferred the status of a “Business Super brand” by The Brand Council, Super brands India.
India bulls Financial Services is an integrated financial services powerhouse providing Consumer Finance, Housing Finance, Commercial Loans, Life Insurance, Asset Management and Advisory services. India bulls Financial Services Ltd is amongst 68 companies constituting MSCI - Morgan Stanley India Index. India bulls Financial is also part of CLSA’s model portfolio of 30 Best Companies in Asia. India bulls Financial Services signed a joint venture agreement with Sogecap, the insurance arm of Societé Generale (SocGen) for its upcoming life insurance venture. India bulls Financial Services in partnership with MMTC Limited, the largest commodity trading company in India, has set up India’s 4th Multi-Commodities Exchange.
India bulls Real Estate Limited is India’s third largest property company with development projects spread across residential projects, commercial offices, hotels, malls, and Special Economic Zones (SEZs) infrastructure development. India bulls Real Estate partnered with Farallon Capital Management LLC of USA to bring the first FDI into real estate. India bulls Real Estate is transforming 14 million sqft in 16 cities into premium quality, high-end commercial, residential and retail spaces. India bulls Real Estate has diversified significantly in the following business verticals within the real estate space: Real Estate Development, Project Advisory & Facilities Management: Residential,Commercial (Office and Malls) and SEZ Development.
India bulls Securities Limited is India’s leading capital markets company with All-India Presence and an extensive client base. India bulls Securities possesses state of the art trading platform, best broking practices and is the pioneer in trading product innovations. Power India bulls, in-house trading platform, is one of the fastest and most efficient trading platforms in the country.. India bulls Securities Limited is the first brokerage house to be assigned the highest rating BQ – 1 by CRISIL.
Growth of India bulls
Year 2000-01:
One of India’s first trading platforms was set up by India bulls Financial Services Ltd. with the development of an in-house team.
Year 2001-03:
The service offered by India bulls was increased to include Equity, F&O, Wholesale Debt, Mutual fund, IPO Financing/Distribution and Equity Research.
Year 2003-04:
In this particular year India bulls ventured into Distribution and Commodities Trading business.
Year 2004-05:
• This was one of the most important years in the history of India bulls. In this year:
• India bulls came out with its initial public offer (IPO) in September 2004.
• India bulls started its Consumer Finance business.
• India bulls entered the Indian Real Estate market and became the first company to bring FDI in Indian Real Estate.
• India bulls won bids for landmark properties in Mumbai.
Year 2005-06:
In this year the company acquired over 115 acres of land in Sonepat for residential home site development. The world renowned investment banks like Merrill Lynch and Goldman Sachs increased their shareholding in India bulls. It also became a market leader in securities brokerage industry, with around 31% share in Online Trading. The world’s largest hedge fund, Farallon Capital and its affiliates committed Rs. 2000 million for India bulls subsidiaries Viz. India bulls Credit Services Ltd. and India bulls Housing Finance Ltd. In the same year, the Steel Tycoon Mr. L N Mittal promoted LNM India Internet venture Ltd. acquired 8.2% stake in India bulls Credit Services Ltd.
Year 2006-07:
In this year, India bulls Financial Services Ltd. was included in the prestigious Morgan Stanley Capital International Index (MSCI). India bulls Financial Services Ltd. was benefited with the Farallon Capital agreeing to invest Rs. 6,440 million in it. The company also received an “in principle approval” from Government of India for development of multi product SEZ in the state of Maharashtra. India bulls Financial Services Ltd acquired 100% of the equity share capital of Noble Realtors Pvt. Ltd. Noble Realtors is a Company engaged in the business of construction and development of real estate projects. India bulls Real Estate Business was demerged to become a separate entity called India bulls Real Estate Ltd. The Board of India bulls Financial
The Board of Directors
• Sameer Gehlaut Chairman and CEO
• Gagan Banga Executive Director
• Rajiv Rattan CEO
• Shamsher Singh Director
• Aishwarya Katoch Director
• Karan Singh Director
• Prem Prakash Mirdha Director
• Saurabh K Mittal Director
• Amit Jain Company Secretary
Organization Structure- Board of Directors:
Trading Products of India bulls Securities
India bulls Securities provide three products for trading. They are
✓ Cash Account
✓ Intraday Account
✓ Margin Trading (Mantra)
Cash Account: It provides the client to buy 4 times of cash balance in his trading account.
Intraday Product: It provides the client to buy 8 times of his cash balance in the trading account.
Mantra Account: Also called as margin trading, is a special account to buy on leverage for a longer duration
The subsidiaries of India bulls Financial Services Ltd. include:
• India bulls Capital Services Ltd.
• India bulls Commodities Pvt. Ltd.
• India bulls Credit Services Ltd.
• India bulls Finance Co. Pvt. Ltd
• India bulls Housing Finance Ltd.
• India bulls Insurance Advisors Pvt. Ltd.
• India bulls Resources Ltd.
• India bulls Securities Ltd
India bulls Financial Services Ltd:
India bulls Financial Services Ltd. was incorporated in the year 2005.The Auditors of India bulls Financial Services Ltd. are Deloitte, Haskins & Sells. The main activity of this company is in relation to securities and stock brokerage. It was also responsible for setting up one of India’s first trading platforms.
India bulls Financial Services is one of India’s leading and fastest growing private sector financial services companies. India bulls Financial Services is an integrated financial services powerhouse providing Consumer Finance, Housing Finance, Commercial Loans, Life Insurance, Asset Management and Advisory services. The company is focused on providing multiple financial services through an extensive network of consumer touch-points covering Tier 1, Tier 2 & Tier 3 cities. India bulls serves more than 500,000 customers across different financial products through its branch network, call centers & the internet. It also ranks among the top private sector financial services and banking groups in terms of net worth.
India bulls Securities Limited:
India bulls Securities Limited is India’s leading capital markets company with All-India Presence and an extensive client base. India bulls Securities is the first and only brokerage house in India to be assigned the highest rating BQ – 1 by CRISIL. India bulls Securities Ltd is listed on NSE, BSE & Luxembourg stock exchange
India bulls Real Estate Limited:
India bulls Real Estate Limited with projects covering a total land area in excess of 10,000 acres is one of the largest listed real estate companies in India and a leading national player across multiple realty and infrastructure sectors. IBREL projects include High-end Office and Commercial Spaces, Premium Residential Developments, Integrated Townships, Luxury Resorts and Special Economic Zones. IBREL is partners with internationally renowned consultants and construction companies for its developments at various stages of execution.
Store One Retail India Ltd:
Retailing in India is gradually inching its way to becoming the next booming industry. The whole concept of shopping has changed in terms of consumer buying behavior and leading to a revolution in shopping. Modern retail has entered India in the form of sprawling shopping centers, multi-storied lifestyle malls and huge complexes offer shopping, entertainment and food all under one large roof.
A retail business works on a network environment as the stores connect to one another as well as to supplier sites. This is because in the retail business quick response is the key to success. Retail is buzzing with lot of excitement and euphoria. The market is growing and government policies are becoming more favorable and emerging technologies are facilitating operations.
The next few years will be amongst the most remarkable in the evolution of modern retail in India and Store One Retail India Ltd. is amongst those that have aspired to emerge into this booming industry.
Store One Retail India Ltd. is the retail arm of India bulls Group, a business conglomerate catering to the entire Indian consumption space.
Store One Retail operates on multiple retail formats in both value and lifestyle segment of the Indian consumer market.
The company has forayed in multiple formats which include Store One (in the process of being re-branded) - a chain of lifestyle stores, “happystore” - a hyper format retail chain offering great value for money on daily needs, apparels, home and appliances. The company already has operational stores at Pune, Nagpur & Faridabad (NCR) .The Company plans to stretch its footprint across the nation with the addition of more such stores.
INDIABULLS POWER BUSINESS:
India bulls Power Limited was established in 2007 to capitalize on emerging opportunities in the Indian power sector. It develops and intends to operate and maintain power projects in India. India bulls is currently developing Five Thermal Power Projects with an aggregate capacity of approximately 6600 MW. These projects include, Amravati Phase-I (1320 MW), Amravati Phase-II (1320 MW), Nasik (1335 MW) in Maharashtra, Bhaiyathan Thermal Power Project (1320 MW) & Chhattisgarh Power Project (1320 MW) in the State of Chhattisgarh. In addition to the above India bulls is also developing four medium size Hydro Power Projects in Arunachal Pradesh aggregating to 167 MW. India bulls has also entered into MoUs with the Govt. of Madhya Pradesh and Jharkhand for setting up of 2640 MW & 1320 MW Thermal Power Projects in each of these States respectively.
India bulls power trading ltd:
Indian Power Trading sector has come a long way since trading was recognized as a distinct activity in the Indian Electricity Act 2003. By the end of FY 2008-09 the traded volume has increased manifold since 2003. The market has matured in terms of volume traded, number of trading entities and sophistication of the trading instruments. India saw its first online exchange for trading of electricity in 2008 thus further improving the price discovery mechanism. The country today has two operational Power Exchanges which are operating on Day Ahead contracts. The electricity futures have also been introduced on an Indian Commodity Exchange.
These developments in the market open up a new dimension in the Indian energy sector for optimization of Demand and Supply by way of trading. Trading of electric power would help the entities with surplus or deficit power situations to ensure optimal utilization of their resources & create an inter-regional & intra-regional balance in respect of power.
India bulls group companies India bulls Power Trading Limited and India bulls Power Generation Limited have been awarded with Category “A” Interstate Power Trading License by the Hon’ble Central Electricity Regulatory Commission (Vide License No. 32/Trading/CERC dated 12.09.2008 and Vide License No. 33/Trading/CERC dated 12.09.2008). India bulls has also been granted a category ‘F’ trading license for intrastate trading in Maharashtra by Hon’ble MERC (Vide License No. 2 of 2008 dated 21st August 2008).
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Mutual funds:
Asset under management of mutual fund industry for the month of February 2010 augmented by meager 1.08% to Rs. 7, 66,869 crores compared to Rs. 7, 58,712 crores in the prior month. The industry has seen growth for the second consecutive month led by the strong sentiments of the investors in the market & investments by banks & corporate. The total assets of income funds stood at Rs. 4, 76,384 crores (up by 1.21%) while liquid funds went up to Rs. 73,030 crores (up by 2.14%). Mutual Funds were net sellers of Rs 697.40 crore in the equity market and net buyer of Rs 11,973.60 crore in debt market. The MF industry recorded the net inflow of Rs. 6,365 crores in February 2010 against net inflow of Rs 97,242 crore in January 2010
Investor Relations:
|For Investor/Analyst Queries |
|India bulls Financial Services Limited |
|Gagan Banga ( Chief Executive Officer ) |
|S. P. Centre, C - Wing, |
|41/44 Minoo Desai Road, |
|Near Radio Club, Colaba, |
|MUMBAI - 400 005 |
|Phone: +91 22 39895555 |
|Fax : +91 22 22812440 |
|Email:ceo.financial@ |
|India bulls Securities Limited |
|Divyesh Shah ( Chief Executive Officer ) |
|S. P. Centre, C - Wing, |
|41/44 Minoo Desai Road, |
|Near Radio Club, Colaba, |
|MUMBAI - 400 005 |
|Phone: +91 22 39895555 |
|Fax : +91 22 22812440 |
|Email :ceo.securities@ |
|India bulls Real Estate Limited |
|Vipul Bansal (Jt. Managing Director) |
|S. P. Centre, C - Wing, |
|41/44 Minoo Desai Road, |
|Near Radio Club, Colaba, |
|MUMBAI - 400 005 |
|Phone: +91 22 39805251 |
|Fax : +91 22 22812440 |
|Email : ceo.realestate@ |
| |
|Kubeir Khera |
|(Vice President) |
|Indiabulls Group, |
|S. P. Centre, C - Wing, |
|41/44 Minoo Desai Road, |
|Near Radio Club, Colaba, |
|MUMBAI - 400 005 |
|Phone: +91 22 39895555 |
|Mob: +91 99200 82745 |
|Fax : +91 22 67430989 |
|Email:khera@, |
| mediaquery@ |
The Bankers of India bulls Financial Services Ltd. are as follows:
✓ ABN-Amro Bank
✓ Andhra Bank
✓ Bank of Maharashtra
✓ Bank of Rajasthan Ltd.
✓ Canara Bank
✓ Centurion Bank of Punjab Ltd.
✓ Citibank
✓ Corporation Bank
✓ Dena Bank
✓ HDFC Bank Ltd
✓ HSBC Ltd.
✓ ICICI Bank Ltd.
✓ IDBI Ltd
✓ Industrial Bank Ltd.
✓ ING Vysya Bank Ltd
✓ Karnataka Bank
✓ Punjab National Bank
✓ State Bank Of India
✓ Syndicate Bank
✓ Union Bank Of India
✓ UTI Bank Ltd.
✓ Yes Bank Ltd.
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The Indiabulls connectivity with 256 branches and growing
India bulls Research Products
• India Daily Notes – Market Insight for the day
• Market Musing – What’s Hot and what’s not!!!
• Bullion Tracker – Analysis of trends in Gold & Silver
• Economy Pulse – Monthly overview of macro factors
• Company-Specific Reports– Detailed fundamental report subsequent to plant visit & management meet
• Pre-Quarter Result Previews – Result preview of companies under coverage
• Result Update – Post result review of companies under coverage
• Stock Stance - Management Visit Note
• Theme-Based Reports – Budget Analysis, Dividend
India bulls - Objectives of the Company:
❖ To increase its investors all over the country
❖ To provide better services to their clients
❖ To maintain good relation with the clients
❖ Increasing the profits of the company
❖ To lead their transactions under the control Act of Securities Exchange Board of India 1992
India bulls - Product / Service produced:
Here the product means service relate to the company the company Brokerage Services. It has spread across over the country with experienced and expertise in the Brokerage services rendered by the Brokers in their Branches to their Investors.
India bulls – Market Research:
Market research is one of important Methodology for finding the problem and makes analyze and interpret and solve the problem. In every area it has sharing the contribution towards succession the projects / problems.
In the India bulls company has also adopted this technique by Research analysts to these brokers utilizes and understands their researches then they will moving in a right path. The research analysts analyses the company performance and what are the company’s stocks are moving why the company’s scrips prices are fluctuating and what are the effects for this situations under the circumstances. Then the company successfully operating their activities produces of good operating Results.
India bulls – Operating Results:
The Operating Results of the India bulls company is satisfactory compare to its competitors are India Bulls, India bulls Stock Broking ltd, India info line etc., They are giving quality services to their clients and improving their retained gains. Through this they are creating new clients through adopting different strategies for attracting the clients towards its business then its future glorious.
India bulls – Future Outlook:
Its future will be Glorious because it has recently launches new service to expand its business i.e., INDIABULLS - INSURANCE it tie ups with other insurance companies like Reliance insurance and Bajaj life insurance to gather the customers towards their company to other insurance companies they will gain the profit like the company India bulls planned for the future make its fruitful.
CHAPTER - 3
REVIEW OF LITERATURE
3.1 A STUDY ON STOCK EXCHANGE
Stock exchange is an organized market place where securities are traded. These securities are issued by the government, semi-government bodies, public sector undertakings and companies for borrowing funds and raising resources. Securities are defined as any monetary claims (promissory notes or I.O.U) and also include shares, debentures, bonds and etc., if these securities are marketable as in the case of the government stock, they are transferable by endorsement and alike movable property. They are tradable on the stock exchange. So are the case shares of companies.
Under the Securities Contract Regulation Act of 1956, securities’ trading is regulated by the Central Government and such trading can take place only in stock exchanges recognized by the government under this Act. As referred to earlier there are at present 23 such recognized stock exchanges in India. Of these, major stock exchanges, like Bombay Stock Exchange National Stock Exchange, Inter-Connected Stock Exchange, Culcutta, Delhi, Chennai, Hyderabad and Bangalore etc. are permanently recognized while a few are temporarily recognized.
The above act has also laid down that trading in approved contract should be done through registered members of the exchange. As per the rules made under the above act, trading in securities permitted to be traded would be in the normal trading hours (10 A.M to 3.30 P.M) on working days in the trading ring, as specified for trading purpose. Contracts approved to be traded are the following:
Spot delivery deals are for deliveries of shares on the same day or the next day as the payment is made.
Hand deliveries deals for delivering shares within a period of 7 to 14 days from the date of contract.
Delivery through clearing for delivering shares with in a period of two months from the date of the contract, which is now reduce to 15 days.(Reduced to 2 days in demat trading)
Special Delivery deals for delivering of shares for specified longer periods as may be approved by the governing board of the stock exchange.
Except in those deals meant for delivery on spot basis, all the rest are to be put through by the registered brokers of a stock exchange. The securities contracts (Regulation) rules of 1957 laid down the condition for such trading, the trading hours, rules of trading, settlement of disputes, etc. as between the members and of the members with reference to their clients.
3.2 HISTORY OF STOCK EXCHANGE
The origin of the Stock Exchanges in India can be traced back to the later half of 19th century. After the American Civil War (1860-61) due to the share mania of the public, the number of brokers dealing in shares increased. The brokers organized an informal association in Mumbai named “The Native Stock and Share Brokers Association in 1875”.later evolved as Bombay stock exchange .
Increased activity in trade and commerce during the First World War and Second World War resulted in an increase in the stock trading. The Growth of Stock Exchanges suffered a set after the end of World War. World wide depression affected them most of the Stock Exchanges in the early stages had a speculative nature of working without technical strength.
After independence, government took keen interest to regulate the speculative nature of stock exchange working. In that direction, securities and Contract Regulation Act 1956 was passed, this gave powers to Central Government to regulate the stock exchanges. Further to develop secondary markets in the country, stock exchanges established at Mumbai, Chennai, Delhi, Hyderabad, Ahmedabad and Indore. The Bangalore Stock Exchange was recognized in 1963. At present there are 23 Stock Exchanges.
Till recent past, floor trading took place in all Stock Exchanges. In the floor trading system, the trade take place through open outcry system during the official trading hours. Trading posts are assigned for different securities where by and sell activities of securities took place. This system needs a face – to – face contact among the traders and restricts the trading volume. The speed of the new information reflected on the prices was rather than the investors.
The Setting up of NSE and OTCEI (Over the counter exchange of India with the screen based trading facility resulted in more and more Sock exchanges turning towards the computer based trading. BSE introduced the screen based trading system in 1995, which known as BOLT (Bombay on – line Trading. System).
Madras Stock Exchange introduced Automated Network Trading System (MANTRA) on October 7, 1996 Apart from Bombay Stock Exchanges have introduced screen based trading.
FUNCTIONS OF STOCK EXCHANGE
Maintain Active Trading: Shares are traded on the stock exchanges, enabling the investors to buy and sell securities. The prices may vary from transaction to transaction. A continuous trading increases the liquidity or marketability of the shares traded on the stock exchanges.
Fixation of Prices: Price is determined by the transactions that flow from investors demand and the supplier’s preferences. Usually the traded prices are made known to the public. This helps the investors to make the better decision.
Ensures safe and fair dealings: The rules, regulations and bylaws of the Stock Exchanges provide a measure of safety to the investors. Transactions are conducted under competitive conditions enabling the investors to get a fair deal.
Aids in financing the Industry: A continuous market for shares provides a favorable climate for raising capital. The negotiability and transferability of the securities, investors are willing to subscribe to the initial public offering (IPO). This stimulates the capital formation.
Dissemination of Information: Stock Exchanges provide information through their various publications. They publish the share prices traded on their basis along with the volume traded. Directory of Corporate Information is useful for the investor’s assessment regarding the corporate. Handouts, handbooks and pamphlets provide information regarding the functioning of the Stock Exchanges.
Performance Inducer: The prices of stocks reflect the performance of the traded companies. This makes the corporate more concerned with its public image and tries to maintain good performance.
Self-regulating organization: The Stock Exchanges monitor the integrity of the members, brokers, listed companies and clients. Continuous internal audit safeguards the investors against unfair trade practices. It settles the disputes between member brokers, investors and brokers.
REGULATORY FRAME WORK
This Securities Contract Regulation Act, 1956 and Securities and Exchange board of India (SEB1) Act, 1992, provides a comprehensive legal framework. A 3-tier regulatory structure comprising the ministry of finance, SEB1 and the Governing Boards of the Stock Exchanges regulates the functioning of Stock Exchanges.
Ministry of finance: The Stock Exchange division of the Ministry of Finance has powers related to the application of the provision of the SCR Act and licensing of dealers in the other area. According to SEBI Act, The Ministry of Finance has the appellate and the supervisory power over the SEBI. It has powered to grant recognition to the Stock Exchange and regulation of their operations. Ministry of Finance has the power to approve the appointments of executives chiefs and the nominations of the public representatives in the government Boards of the Stock Exchanges. It has the responsibility of preventing undesirable speculation.
3.3 The Securities and Exchange Board of India
The Securities and Exchange Board of India even though established in the year 1988. Received statutory powers only on 30th January 1992. Under the SEBI Act, a wide variety of powers are vested in the hands of SEBI. SEBI has the powers to regulate the business of Stock Exchanges, other security and mutual funds.
Registration and regulation of market intermediaries are also carried out by SEBI. It has responsibility to prohibit the fraudulent unfair trade practices and insider dealings. Takeovers are also monitored by the SEBI has the multi pronged duty to promote the healthy growth of the capital market and protect the investors.
The Governing Board of stock exchanges:
The Governing Board of the Stock Exchange consists of elected members of directors, government nominees and public representatives. Rules, by laws and regulations of the Stock Exchange substantial powers to the executive director for maintaining efficient and smooth day-to day functioning of Stock Exchange. The Governing Board has the responsibility to maintain and orderly and well-regulated market.
The Governing body of the Stock Exchange consists of 13 members of which
Six members of the Stock Exchange are elected by the members of the Stock Exchange.
Central Government nominates not more than three members.
The board nominates three public representatives.
SEBI nominates persona not exceeding three and
The Stock Exchange appoints one Executive Director.
One third of the elected members retire at annual general meeting (AGM). The retired member can offer himself for election if he is not elected for two consecutive years. If a member serves in the governing body for two years consecutively, he should refrain offering himself for another two years.
The members of the governing body elect the president and vice-president. It needs to approval from the Central Government or the Board. The office tenure for the president and vice-president is on year. They can offer themselves for re-election, if they have not held for two consecutive years. In that case they can offer themselves for re-election after a gap of one-year period
3.4 NATIONAL STOCK EXCHANGE
The National Stock Exchange (NSE) of India became operational in the capital market segment on third November 1994 in Mumbai. The genesis of the NSE lies in the recommendations of the pherwani committee (1991). Apart from the NSE. It had recommended for the establishment of National Stock market System also. The committee pointed out some major defects in the Indian stock market. The defects specified are.
1. Lack of liquidity in most of the markets in terms of depth and breadth.
2. Lack of ability to develop markets for debt.
3. Lack of infrastructure facilities and outdated trading system.
4. Lack of transparency in the operations that affect investors’ confidence.
5. Outdated settlement system that are inadequate to cater to the growing volume, leading to delays.
6. Lack of single market due to the inability of various stock exchanges to function cohesively with legal structure and regulatory framework.
These factors led to the establishment of the NSE.
The main objectives of NSE are as follows
1) To establish a nation wide trading facility for equities, debt and hybrid
instruments
2) To ensure equal access investors all over the country through
appropriate communication network.
3) To provide a fair, efficient and transparent securities market to
investors using an electronic communication network .
4) To enable shorter settlement cycle and book entry settlement system.
5) To meet current international standards of securities market.
Promoters of NSE: IDBI, ICICI, IFCI, LIC, GIC, SBI, Bank of Baroda. Canara Bank, Corporation Bank, Indian Bank, Oriental Bank of Commerce. Union Bank of India, Punjab National Bank, Infrastructure Leasing and Financial Services, Stock Holding Corporation to India and SBE capital market are the promoters of NSE.
MEMBERSHIP:
Membership is based on factors such as capital adequacy, corporate structure, track record, education, experience etc. Admission is a two-stage process with applicants requiring going through a written examination followed by an interview. A committee consisting of experienced people from the industry to assess the applicant’s capability to operate as an exchange member, interviews candidates. The exchange admits members separately to Wholesale Debt Market (WDM) segment and the capital market segment. Only corporate members are admitted on the debt market segment whereas individuals and firms are also eligible on the capital market segment. Eligibility criteria for trading membership on the segment of WDM are as follows.
1). The persons eligible to become trading members are bodies corporate, companies institutions including subsidiaries of banks engaged in financial services and such other persons or entities as may be permitted form time to time by RBI/SEBI.
2).The whole-time directors should possess at least two years experience in any activity related to banking or financial services or treasury.
3).The applicant must possess a minimum net worth of Rs.2 crores.
4).The applicant must be engaged solely ion the business of securities and must not be engaged in any fund-based activities.
The eligibility criteria for the capital market segment are
1). Individuals, registered firms, bodies corporate, companies and such other persons may be permitted under SCRA, 1957.
2). The applicant must be engaged in the business of securities and must not be engaged in any fund-based activities.
3). The minimum net worth requirements prescribed are as follows;
a). Individual and registered firms – Rs.100 Lacs.
b).Corporate bodies – Rs. 100 Lacs.
.4). The minimum prescribed qualification of graduation and two years experience of handling securities as broker, sub-broker, authorized assistant, etc must be fulfilled by
a) Minimum two directors in case the applicant is a corporate
b) Minimum two partners in case of partnership firms and
c) The individual in case of individual or sole proprietary concerns.
The two experienced director in a corporate applicant or trading member should hold minimum of 5% of the capital of the company.
Present Trading Mechanism
The National system provides single, nation wide Securities. It enables investors in one part of the country to trade at the best quotes with an investors located in any other part of the country through the members of the stock exchanges and subsequently clears and settles the trade in an efficient and cost effective manner.
The primary objective of the stock market is to provide clear opportunity to the investors throughout the country to trade any securities irrespective of the size of the order or the broker through whom the order is routed. This provides the facility to execute the buy out any extra cost to the investors
There will be no trading floor in the exchanges. Instead, each trading member will have a computer at his own office any where in India which will be connected to the central computer system at the NSE through leased lines or VSAT’s (Very Small Aperture Terminal), for an interim transition period of six months and subsequently by satellite link. VSAT’s are relatively smaller dishes similar to dish antenna for cable T.V and have the benefit of not being very expensive.
A satellite network makes it possible to connect almost all the parts of the nation quickly as it is easy to install, as against the ground lines
Such as dial up modems leased lines which are prone to disruptions, satellite links on other hands ensure high speed, availability and quality of the connection. This code of trading is known as “On-line Trading”.
CHAPTER - 4
ANALYSIS & INTERPITATION
4.1 INTRODUCTION
The clearing and settlement mechanism in India securities market has witnessed several innovations during the last decade. These include use of the state-of-art information technology, compression of settlement cycle, dematerialization and electronic transfer of securities, securities lending and borrowing, professionalisation of trading members, fine-tuned risk management system, emergence of clearing corporation to assume counterparty risk etc., though many these are yet to permeate the whole market.
Till recently, the stock exchanges in India were following a system of account period settlement for cash market transactions, expert for transaction in a few active securities, which were settled under t+3 rolling settlement. The rolling settlement has been introduced for all securities. With effect from April 1, 2003 T+2 rolling settlement has been introduced.
The stock exchange was also offering deferral products to provide leverage to members to postpone their settlement obligations. The transactions are not settled immediately but after 2 days after the trade day. The members receive the funds/securities in accordance with the pay-in/pay-out schedules notified by the respective exchanges. Given the growing volume of trades and market volatility, the time gap between trading and settlement gives India bulls to settlement risk. In recognition of this, the exchanges and their clearing corporation employ risk management practices to ensure timely settlement of trades.
The regulators have also prescribed elaborate margining and capital adequacy standards to secure market integrity and protect the interests of investors. The exchanges not providing counter-party guarantee have been adv India bulls d by SEBI to set up trade guarantee funds, which would honour pay-in liabilities in the event of default by a member. In pursuance to this, 16 out of 23 exchanges have set up trade/settlement guarantee funds. The trades are settled irrespective of default by a member and the exchange follows up the defaulting member subsequently for recovery of his dues to the exchange. The market has full confidence that settlements will take place in time and will be completed irrespective of possible default by isolated trading members.
Movement of securities has become almost instantaneous in the dematerialized environment. Two depositories viz., National Securities Depositories Ltd. (NSDL) and Central Depositories Services Ltd. (CDSL) provide electronic transfer securities and more then 99% of turnover is settled in dematerialized form. All actively traded scrip’s are held, traded and settled in demat form. The obligations of members are downloaded to members/custodians by the clearing agency.
The members/custodians make available the required securities in their pool accounts with Depository Participants (DPs) by the prescribed pay-in time for securities. The depository transfers the securities from the pool accounts of members/custodians to the settlement account of the clearing agency. As per the schedule determined by the depository from the settlement account of the clearing agency to the pool accounts of members/custodians. The pay-in and pay-out of securities is affected on the same day for all settlements.
4.2 TRANSACTION CYCLE
A person holding assets (securities/funds), either to meet his liquidity needs or to reshuffle his holdings in response to changes in his perception about risk and return of the assets, decides to buy or sell the securities. He finds out the right broker and instructs him to place buy/sell order on an exchange. The order is converted to a trade as soon as it finds a matching sell/buy order. The trades are cleared to determine the obligations of counterparties to deliver securities/funds as per settlement schedule. Buyer/seller delivers funds/securities and receives securities/funds and acquires ownership over them. A securities transaction cycle is presented given below.
Transaction cycle
SETTLEMENT PROCESS
While NSE provides a platform for trading to its trading members, the National Securities Clearing Corporation Ltd. (NSCCL) determines the funds/securities obligations of the trading members and ensures that trading members meet their obligations. The clearing banks and depositories provide the necessary interface between the custodians/clearing members (who clear for the trading members or their own transactions) for settlement of funds/securities obligations of trading members. The core functions involved in the process are:
a) Trade Recording: The key details about the trades are recorded to provide basis for settlement. These details are automatically recorded in the electronic trading system of the exchanges.
b) Trade Confirmation: The counterparties to trade agree upon the terms of trade like security, price, and settlement date, but not the counterparty which is the NSCCL. The electronic system automatically generates confirmation by direct participants. The ultimate buyers/sellers of securities also affirm the terms, as the funds-securities would flow from them, although the direct participants are responsible for settlement of trade.
c) Determination of obligation: The next step is determination of what counter-parties owe, and what counter-parties are due to receive on the settlement date. The NSCCL interposes itself as a central counterparty between the counterparties to trades and nets the positions so that a member has security India bulls net obligation to receive or deliver a security and has to either pay or receive funds.
d) Pay-in or funds and Securities: The members bring in their funds-securities to the NSCCL. They make available required prescribed pay-in time. The depositories move the securities available in the accounts of members to the account of the NSCCL. Like India bulls members with funds obligations make available required funds in the designated accounts with clearing banks by the prescribed pay-in time. The CC sends electronic instructions to the clearing banks to debit member’s accounts to the extent of payment obligations. The banks process these instructions, debit accounts or members and credit accounts of the NSCCL.
e) Pay-out of Funds and Securities: After processing for shortages of funds/securities and arranging for movement of funds from surplus banks to deficit banks through RBI clearing, the NSCCL sends electronic instructions to the depositories/clearing banks to release pay-out of securities/funds. The depositories and clearing banks debit accounts or the NSCCL and credit accounts or members. Settlement is complete upon release of pay-out of funds and securities to custodians/members. The settlement process for transactions in securities in the CM segment of NSE.
f) Risk Management: A sound risk management system is integral to an efficient settlement system. The NSCCL ensures that trading members’ obligations are commensurate with their net worth. It has put in place a comprehensive risk management system, which is constantly monitored and upgraded to pre-empt market failures. It monitors the track record and performance of members and their net worth; undertakes on-line monitoring of members’ positions and exposure in the market collects margins from members and automatically disables members if the limits are breached.
4.3 SETTLEMENT PROCESSING CM SEGMENT OF NSE
1
8 9
6 7
2 3
5 4
10 11
Explanations:
1) Trade details from Exchange to NSCCL (real-time and end of day trade file).
2) NSCCL notifies the consummated trade details to CMs/custodians who affirm back Based
on the affirmation, NSCCL applies multilateral netting and determines obligations.
3) Download of obligation and pay-in advice of funds/securities
4) Instructions to clearing banks to make funds available by pay-in time.
5) Instructions to depositories to make securities available by pay-in-time.
6) Pay-in of securities (NSCCL adv India bulls’s depository to debit pool account of
custodians. Ms and credit its account and depository does it).
7) Pay-in of funds (NSCCL adv India bulls Clearing Banks to debit account of
custodians/CMs and credit its account and clearing bank does it).
8) Pay-out of securities (NSCCL adv India bulls s depository to credit pool account of
custodians/CMs and debit its account and depository does it).
9) Pay-out of funds (NSCCL adv India bulls s clearing Banks to credit account of
custodians/CMs and debit its account and clearing bank does it).
10) Depository informs custodians/CMs through DPs.
11) Clearing Banks inform custodians/CMs.
4.4 DEMATERIALIZATION
Dematerialization is a process by which physical shares of investors are converted to an equivalent number of Securities in electronic form and credited in the investor’s account with his Depository Participant.
Dematerialized trading is now compulsory for all investors. Beginning of first week of January 1999, investor can trade in specific scripts in the Demoralization form. They can provide and receive delivery only in a Dematerialized form and share certificate will not be changed for these scripts.
A depository is an organization where Securities of shareholder are held in the electronic form at the request of the shareholder through Depository Participant (DPs). The system is comparable to that in a bank. If an investor wants services offered by a depository, he would have to open an account with it through a DP- similar to opening an account with any other branches of the bank in order to avail of its services.
Dematerialization is a process by which physical certificates of an investor are taken back by the company/registrar and actually destroyed and an equivalent number of Securities are credited in the depository account of those investors. A Depository Participant is investor’s agent in the system. He maintains investor’s Securities account and intimates the status of holdings from time to time to the investor.
BASIC TERMINOLOGIES ON DEMAT SETTLEMENT
Refers to the process whereby all those who have made purchases make a payment and all those who have made sales deliver shares. The exchanges ensure that the buyers who have paid for the shares purchased by them receive the shares. Similarly sellers who have given delivery of shares to the exchange receive payment for the same.
SETTLEMENT CYCLES:
Settlement Cycle refers to a calendar according to which all purchase and sale transactions done within the dates of the settlement cycle are settled on a net basis. NSE and BSE currently follow daily settlement cycles.
In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. At NSE and BSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day. For arriving at the settlement day all intervening holidays, which include bank holidays, NSE/BSE holidays, Saturdays and Sundays are executed. Typically trades taking place on Monday are settled on Wednesday, Tuesday’s trades settled on Thursday and so on.
PAY IN & PAY OUT:
Pay In refers to your obligations towards the exchanges and Pay Out refers to exchange obligation towards you. All Pay Ins and Pay Outs take place on a “T+2” days basis, where “T” is the trading day and plus two more trading days. So if you buy some shares on Monday, you would have to pay money which is a Pay In and you would receive shares, which is a Pay Out. Both of these would take place ion Wednesday.
LIMIT ORDER:
Limit Orders allow you to place a buy/sell order at a price defined by you. The execution can happen at a price more favorable than the price that has been defined by you. You can place limit orders during holidays & non-market hours too.
Market Orders: Market Orders can be placed only during market hours (i.e. when the exchanges is open for trading). Market Orders have different interpretations for both NSE and BSE.
SQUARE OFF:
Square Off means buying and selling, selling and buying on the same day. For example, if you have bought 100 ` shares of INFTEC today morning and later on at the end of the day, if you sell INFTEC, 100 shares, it just means that you have squared off your order.
OPENING CLEARING ACCOUNTS FOR SETTLEMENT OF TRADES:
All the trades executed at the exchanges are settled by the clearing member (CM), as in the case of Securities in the physical form. To settle trades in Demat segment each CM should open one clearing account with any of the DP.
The procedure for opening clearing accounts is:
➢ Approach a DP.
➢ Fill up an account opening form.
➢ Sign on an agreement with the DP.
➢ Application is forwarded to NSDL by DP.
➢ NSDL allots a number identified as CM-BP-ID.
➢ DP opens account and an account number is providing along with CM-BP-ID
to the clearing member.
THE CLEARING ACCOUNT CONSISTS OF THREE PARTS:
➢ Pool account
➢ Delivery account
➢ Receipt account
1. POOL ACCOUNT:
It has two roles to play in clearing of securities,
➢ Before pay in the selling client of the CM transfers Securities from his client account to
the CM pool account.
➢ The CM transfers the Securities from his pool account to the account of the buying client.
2. DELIVERY ACCOUNT:
The CM transfers the Securities in, from the pool account to the delivery account before pay in, at the time of pay- in NSDL flushes out the securities in the delivery account and transfers the same to the CC/CH.
3. RECEIPT ACCOUNT:
On pay –out day, the CC/CH transfers Securities to the pool account through the account.
CM has to ensure that before book closure or record date of any company the Securities are moved from CM pool account to a beneficiary account as holding in pool account for longer period is not allowed.
SETTLEMENT:
In the depository system, any trade that is cleared and settled through the clearing corporation (CC/CH) is called market trade.
PROCEDURE FOR PAY-IN OF SECURITIES
➢ Give Receipt instruction to the DP for transfer of Securities from client account to the
pool account or give a standing instruction for the same.
➢ Delivery to CC/CH instruction for the transfer of Securities from pool and account to
delivery account for pay-in.
Both pay-in and pay-out happens to be on 5thworking day after the trading and the instruction to transfer the Securities from the pool account to delivery account must be given before pay-in such that this transfer is affected before pay-in. the transfer instruction is taken as an authority to transfer the security irrespective of when the client gives the delivery instruction, the Securities will be parked in the delivery account till final pay-in and the facility of multiple instructions from the pool account is also provided to the investors.
In case of excess transfer of shares to the delivery account or excess delivery to CC/CH the instruction slip can be cancelled and
issued new one or the CC/CH will return the Securities at the time of pay-out respectively.
PROCEDURE FOR PAY-OUT OF SECURITIES
➢ Transfer of Securities from CC/CH to pool account through receipt in account on pay-out.
➢ Delivery instruction to transfer from pool account to client on pay-out.
On the delivery of the instruction from the client’s name, client’s DP, ID and DP name of the client must be mentioned and ensure that receipt instruction given by client to receive the Securities bears the same execution date as given in the delivery instruction. However, the broker can hold the Securities in the pool account until the client meets his obligations but before the closure of books, the balances must be transferred as the balances in the pool account, which are not entitled for any corporate benefits.
FLOW CHART TO EFFECT CLEARING AND SETTLEMENT OF MARKET TRADES
INTER-DEPOSITORY TRANSFERS
A transfer of securities from an account in one depository to an account in another depository is termed as an inter-depository transfer. This facility is quite similar to the account transfers within NSDL.
It can be done only for Securities that are available for Dematerialization on both the depositories. The account in NSDL can be either a clearing account or a beneficiary account. For debiting the clearing account or the beneficial account with NSDL, the form for “inter-depository delivery instruction” is required to be submitted by the clearing member/beneficial owner to its DP.
For crediting the clearing account or the beneficial account, the standard instruction given for automatically crediting the account is applicable. In case the standard instructions are not given, then the form for “inter-depository receipt instruction” is required to be submitted by the clearing member/beneficial owner to its DP.
As both the depositories are connected to each other, the batches to effect inter-depository transfers are presently exchanged twice on the working day.
The issuer/registrar and transfer agent is informed about the transfer by both the depositories and it amends its records accordingly.
Government Securities cannot be transferred from one depository to another using this facility.
[Reference books Prasanna Chandra, (2006), Financial Management Theory and Practice (Sixth Edition), Tata McGraw-Hill, New Delhi.]
ICICI:
|MOVING AVG |UPPER BAND |LOWER BAND |PRICES |
|867.19 |1023.47 |710.91 |696.55 |
|871.85 |1021.11 |722.59 |725.8 |
|876.42 |1021.34 |731.50 |743.1 |
|880.16 |1020.62 |739.70 |748.1 |
|883.55 |1019.10 |748.00 |751.7 |
|886.67 |1016.92 |756.42 |745.2 |
|889.94 |1013.74 |766.14 |747.8 |
|893.67 |1011.05 |776.29 |774.5 |
|896.17 |1008.41 |783.93 |780.15 |
|898.78 |1005.96 |791.60 |781.4 |
|900.6 |1002.61 |798.59 |789.45 |
|902.37 |999.46 |805.28 |791.6 |
|903.72 |996.28 |811.16 |785.55 |
|905.13 |992.35 |817.91 |769.65 |
|907.54 |985.67 |829.41 |797.2 |
|909.4 |980.95 |837.85 |842.45 |
|910.72 |979.62 |841.82 |856.75 |
|911.39 |978.78 |844.00 |888.05 |
|910.97 |979.21 |842.73 |880.05 |
|910.64 |979.63 |841.65 |887.95 |
|910.18 |980.10 |840.26 |852.2 |
|910.72 |979.21 |842.23 |902.15 |
|909.98 |979.65 |840.31 |889.9 |
|909.65 |979.85 |839.45 |902.35 |
|909.32 |979.83 |838.81 |916.3 |
|908.61 |979.53 |837.69 |928.05 |
|907.61 |978.83 |836.39 |937.75 |
|906.08 |977.95 |834.21 |920.45 |
|904.55 |978.40 |830.70 |939.8 |
|902.71 |977.56 |827.86 |930.45 |
|900.86 |977.43 |824.29 |934.65 |
|899 |976.74 |821.26 |943.7 |
|897.34 |974.72 |819.96 |981.15 |
|895.09 |968.99 |821.19 |968.8 |
|893.37 |964.21 |822.53 |981.6 |
|891.38 |957.54 |825.22 |991.3 |
|888.7 |948.92 |828.48 |957.7 |
|886.21 |945.05 |827.37 |943.95 |
|884.3 |941.69 |826.91 |931.65 |
|882.27 |940.00 |824.54 |887.45 |
|880.96 |941.13 |820.79 |910.8 |
|879.03 |941.46 |816.60 |906.3 |
|877.16 |941.78 |812.54 |883.5 |
|875.51 |943.62 |807.40 |902.7 |
|873.79 |943.41 |804.17 |904.9 |
|871.58 |944.13 |799.03 |870.35 |
|869.92 |946.27 |793.57 |853.25 |
|868.96 |947.35 |790.57 |860.15 |
|867.98 |948.03 |787.93 |914.2 |
|865.71 |946.83 |784.59 |928.95 |
|863 |944.56 |781.44 |929.85 |
[pic]
AXIS:
|MOVING AVG |UPPER BAND |LOWER BAND |PRICES |
|1069.59 |1332.10 |807.08 |794.8 |
|1074.51 |1329.66 |819.36 |837.55 |
|1083.24 |1335.15 |831.33 |848.15 |
|1091.12 |1337.62 |844.62 |870.65 |
|1098.03 |1338.60 |857.46 |853.5 |
|1104.94 |1336.52 |873.36 |852.2 |
|1111.64 |1332.49 |890.79 |858.2 |
|1119.03 |1329.81 |908.25 |894.75 |
|1124.67 |1325.82 |923.52 |933.65 |
|1129.58 |1323.56 |935.60 |940.5 |
|1133.28 |1319.44 |947.12 |939.7 |
|1137.31 |1314.89 |959.73 |935.25 |
|1140.92 |1308.81 |973.03 |962.25 |
|1144.12 |1304.02 |984.22 |933.25 |
|1148.37 |1296.24 |1000.50 |955.05 |
|1152.37 |1289.31 |1015.43 |1009.05 |
|1155.7 |1286.37 |1025.03 |996.95 |
|1159.09 |1281.49 |1036.69 |1032.6 |
|1161.37 |1278.28 |1044.46 |1063.65 |
|1163.16 |1276.65 |1049.67 |1073.05 |
|1164.85 |1275.34 |1054.36 |1023.45 |
|1168.31 |1271.31 |1065.31 |1075.05 |
|1170.05 |1269.50 |1070.60 |1088.1 |
|1172.23 |1269.08 |1075.38 |1075.9 |
|1174.94 |1268.32 |1081.56 |1099.35 |
|1176.88 |1267.85 |1085.91 |1110.05 |
|1178.59 |1267.63 |1089.55 |1113.6 |
|1179.86 |1266.90 |1092.82 |1127.2 |
|1180 |1266.71 |1093.29 |1134.5 |
|1179.6 |1267.38 |1091.82 |1118.05 |
|1179.13 |1268.47 |1089.79 |1116.35 |
|1178.54 |1269.96 |1087.12 |1129.65 |
|1178.02 |1270.84 |1085.20 |1221 |
|1176.03 |1269.36 |1082.70 |1224.3 |
|1173.68 |1267.96 |1079.40 |1278.2 |
|1170.18 |1261.57 |1078.79 |1287.6 |
|1165.59 |1255.93 |1075.25 |1216.05 |
|1161.47 |1260.80 |1062.14 |1217.7 |
|1157.57 |1263.03 |1052.11 |1183.45 |
|1153.57 |1269.66 |1037.48 |1114.5 |
|1150.5 |1278.32 |1022.68 |1170.55 |
|1146.71 |1283.03 |1010.39 |1177.75 |
|1143.16 |1285.31 |1001.01 |1152.9 |
|1140.06 |1288.00 |992.12 |1166.65 |
|1136.6 |1290.00 |983.20 |1172.1 |
|1132.58 |1292.55 |972.61 |1150 |
|1128.61 |1296.49 |960.73 |1147.5 |
|1124.65 |1299.90 |949.40 |1164.85 |
|1120.61 |1301.28 |939.94 |1213.4 |
|1115.66 |1299.51 |931.81 |1225 |
|1110.43 |1296.45 |924.41 |1240.6 |
KOTAK MAHINDRA:
|MOVING AVG |UPPER BAND |LOWER BAND |PRICES |
|514.92 |607.60 |422.24 |421.75 |
|517.88 |607.81 |427.95 |449.95 |
|520.33 |609.37 |431.29 |439.35 |
|522.71 |609.26 |436.16 |445.45 |
|524.59 |608.32 |440.86 |453.95 |
|526.14 |607.37 |444.91 |451.15 |
|527.89 |606.25 |449.53 |453.2 |
|529.73 |605.19 |454.27 |466.5 |
|530.75 |604.07 |457.43 |465.25 |
|531.96 |602.82 |461.10 |467.25 |
|533.23 |601.59 |464.87 |472.55 |
|534.57 |600.66 |468.48 |461.35 |
|535.76 |598.52 |473.00 |476.8 |
|536.72 |597.23 |476.21 |462.65 |
|538.37 |595.02 |481.72 |474.3 |
|540 |593.74 |486.26 |494.3 |
|541.31 |593.67 |488.95 |477.3 |
|542.78 |591.83 |493.73 |495.8 |
|543.55 |590.77 |496.33 |495.55 |
|544.58 |589.72 |499.44 |492.95 |
|545.89 |588.66 |503.12 |478.4 |
|547.67 |586.17 |509.17 |498.35 |
|549.33 |586.29 |512.37 |510.95 |
|550.79 |587.32 |514.26 |511.05 |
|552.21 |587.95 |516.47 |518.7 |
|553.43 |588.66 |518.20 |520.3 |
|554.91 |590.69 |519.13 |535.5 |
|556.05 |592.89 |519.21 |533.2 |
|557 |593.90 |520.10 |551.15 |
|557.37 |594.40 |520.34 |546.7 |
|557.74 |594.70 |520.78 |566.75 |
|558.06 |595.62 |520.50 |559.85 |
|558.53 |596.75 |520.31 |573.75 |
|558.71 |597.31 |520.11 |574.5 |
|558.88 |597.83 |519.93 |576.1 |
|559.09 |598.53 |519.65 |576.4 |
|559.2 |598.88 |519.52 |567.4 |
|559.13 |598.76 |519.50 |567.45 |
|559.33 |599.22 |519.44 |551.55 |
|559.41 |599.25 |519.57 |543.25 |
|559.21 |599.47 |518.95 |551.2 |
|559.02 |599.52 |518.52 |547.75 |
|558.91 |599.57 |518.25 |554.8 |
|558.63 |599.59 |517.67 |565.5 |
|558.21 |599.32 |517.10 |566.5 |
|557.95 |599.01 |516.89 |558.7 |
|557.62 |598.91 |516.33 |550.65 |
|557.63 |598.92 |516.34 |552.15 |
|557.86 |599.15 |516.57 |558.45 |
|557.71 |599.04 |516.38 |561.85 |
|557.13 |599.04 |515.22 |569.45 |
[pic]
INTERPRETATION:
BOLLINGER ANALYSIS FOR BANKING SECTOR:
Here we have plotted the closing prices of the 5 companies in the Banking sector with the Bollinger Bands, with 100 simple moving average and 2 as the standard deviation.
In the above chart the Average closing price of the Banking sector has been plotted with Bollinger Bands from the above graphs.
• For the above analysis I took five banks in this sector and applied the Bollinger analysis and it is found that Kotak Mahindra is the outperforming bank comparatively with the other banks.
IT SECTOR:
TCS:
|MOVING AVG |UPPER BAND |LOWER BAND |PRICES |
|1176.24 |1290.86 |1061.62 |1178.6 |
|1176.6 |1291.36 |1061.84 |1197.6 |
|1175.74 |1290.51 |1060.97 |1173 |
|1175.56 |1290.38 |1060.74 |1172 |
|1175.51 |1290.33 |1060.69 |1169.4 |
|1174.56 |1290.37 |1058.75 |1172.5 |
|1173.81 |1290.16 |1057.46 |1171.35 |
|1173.9 |1290.25 |1057.55 |1165.4 |
|1173.94 |1290.28 |1057.60 |1137 |
|1174.9 |1290.78 |1059.02 |1089.5 |
|1176.34 |1289.65 |1063.03 |1085.75 |
|1178.12 |1288.38 |1067.86 |1109.4 |
|1179.23 |1287.77 |1070.69 |1103.95 |
|1179.98 |1286.91 |1073.05 |1076.15 |
|1181.83 |1284.54 |1079.12 |1075.55 |
|1184.2 |1282.27 |1086.13 |1079.5 |
|1186.17 |1279.49 |1092.85 |1077.7 |
|1188.19 |1276.15 |1100.23 |1088.7 |
|1189.7 |1273.17 |1106.23 |1098 |
|1190.86 |1270.65 |1111.07 |1108.75 |
|1191.45 |1269.18 |1113.72 |1111.75 |
|1191.85 |1268.11 |1115.59 |1132.4 |
|1190.56 |1272.81 |1108.31 |1128.7 |
|1189.39 |1276.79 |1101.99 |1148 |
|1188.24 |1279.27 |1097.21 |1171.55 |
|1186.76 |1281.24 |1092.28 |1193.85 |
|1184.94 |1282.31 |1087.57 |1198 |
|1182.75 |1283.79 |1081.71 |1219.65 |
|1179.65 |1285.50 |1073.80 |1228.6 |
|1178.96 |1283.95 |1073.97 |1233.4 |
|1177.71 |1281.54 |1073.88 |1225.7 |
|1177.09 |1280.12 |1074.06 |1220 |
|1176.77 |1279.35 |1074.19 |1241.6 |
|1175.98 |1277.12 |1074.84 |1225.35 |
|1176.4 |1278.56 |1074.24 |1228.75 |
|1177.17 |1281.49 |1072.85 |1237.05 |
|1178.02 |1284.99 |1071.05 |1252.35 |
|1178.51 |1287.08 |1069.94 |1259.8 |
|1178.78 |1288.23 |1069.33 |1270 |
|1177.39 |1283.84 |1070.94 |1252.05 |
|1176.86 |1282.05 |1071.67 |1226.55 |
|1176.98 |1282.42 |1071.54 |1221.95 |
|1177.16 |1282.93 |1071.39 |1219.6 |
|1177.28 |1283.28 |1071.28 |1217.25 |
|1177.46 |1283.76 |1071.16 |1218.4 |
|1177.56 |1284.03 |1071.09 |1207.3 |
|1177.86 |1284.75 |1070.97 |1202 |
|1178.03 |1285.10 |1070.96 |1192.85 |
|1178.36 |1285.72 |1071.00 |1208.55 |
|1178.67 |1286.47 |1070.87 |1189.05 |
|1179.39 |1287.96 |1070.82 |1197 |
[pic]
INFOSYS:
|MOVING AVG |UPPER BAND |LOWER BAND |PRICES |
|2791.2 |3003.26 |2579.14 |2808.95 |
|2792.21 |3005.10 |2579.32 |2864.3 |
|2792.5 |3005.84 |2579.16 |2854.4 |
|2793.05 |3007.18 |2578.92 |2840.15 |
|2793.55 |3008.24 |2578.86 |2832.15 |
|2793.66 |3008.43 |2578.89 |2835.2 |
|2793.58 |3008.29 |2578.87 |2836.55 |
|2794.2 |3009.59 |2578.81 |2863.6 |
|2793.49 |3008.18 |2578.80 |2826.6 |
|2794.41 |3010.08 |2578.74 |2588.25 |
|2799.26 |3006.75 |2591.77 |2584.2 |
|2805.09 |3004.13 |2606.05 |2640.15 |
|2809.14 |3002.66 |2615.62 |2662.05 |
|2811.75 |3000.64 |2622.86 |2612.05 |
|2816.84 |2997.28 |2636.40 |2594.7 |
|2821.95 |2990.82 |2653.08 |2588.8 |
|2827.34 |2982.48 |2672.20 |2600.3 |
|2832.36 |2973.09 |2691.63 |2620.8 |
|2836.4 |2963.25 |2709.55 |2665.8 |
|2838.51 |2957.01 |2720.01 |2725 |
|2840.1 |2954.45 |2725.75 |2712.3 |
|2840.86 |2952.18 |2729.54 |2746 |
|2833.99 |2998.76 |2669.22 |2742.7 |
|2826.43 |3036.73 |2616.13 |2757 |
|2818.91 |3063.49 |2574.33 |2783.25 |
|2810.67 |3085.98 |2535.36 |2777.1 |
|2803.23 |3101.37 |2505.09 |2727.5 |
|2796.83 |3114.70 |2478.96 |2769.15 |
|2787.66 |3133.94 |2441.38 |2809.9 |
|2778.46 |3146.15 |2410.77 |2790.4 |
|2769.65 |3156.76 |2382.54 |2788.4 |
|2761 |3165.32 |2356.68 |2801.05 |
|2752.8 |3170.23 |2335.37 |2864.1 |
|2743.46 |3171.57 |2315.35 |2908.95 |
|2734.5 |3167.14 |2301.86 |2947.8 |
|2724.98 |3159.40 |2290.56 |2938.25 |
|2715.88 |3151.14 |2280.62 |2952.25 |
|2705.67 |3142.24 |2269.10 |2933.15 |
|2695.76 |3133.75 |2257.77 |2948.05 |
|2684.68 |3124.65 |2244.71 |2883.35 |
|2674.33 |3119.52 |2229.14 |2872.4 |
|2663.71 |3114.75 |2212.67 |2883.45 |
|2652.33 |3109.61 |2195.05 |2856.65 |
|2641.97 |3103.78 |2180.16 |2845.7 |
|2633.36 |3095.72 |2171.00 |2858.1 |
|2623.57 |3087.24 |2159.90 |2809.85 |
|2614.78 |3080.69 |2148.87 |2852.45 |
|2605.39 |3070.68 |2140.10 |2883.85 |
|2594.52 |3058.64 |2130.40 |2855.3 |
|2584.24 |3047.57 |2120.91 |2817.4 |
|2574.86 |3037.92 |2111.80 |2859.8 |
[pic]
WIPRO:
|MOVING AVG |UPPER BAND |LOWER BAND |PRICES |
|422.89 |452.56 |393.22 |399 |
|423.52 |452.46 |394.58 |416.5 |
|423.71 |452.59 |394.83 |418.25 |
|423.9 |452.75 |395.05 |414.95 |
|424.17 |452.94 |395.40 |405.75 |
|424.62 |452.91 |396.33 |406.85 |
|425.07 |452.92 |397.22 |401.15 |
|425.6 |452.59 |398.61 |403.55 |
|425.95 |452.21 |399.69 |401.3 |
|426.43 |451.71 |401.15 |391.45 |
|427.07 |450.27 |403.87 |401 |
|427.61 |449.56 |405.66 |407.45 |
|428.06 |449.23 |406.89 |415.15 |
|428.5 |449.48 |407.52 |404.1 |
|429.22 |449.23 |409.21 |404.15 |
|429.99 |449.03 |410.95 |413.75 |
|430.65 |449.66 |411.64 |415.8 |
|431.21 |450.08 |412.34 |419.05 |
|431.61 |450.28 |412.94 |419.55 |
|432.13 |450.87 |413.39 |418 |
|432.69 |451.38 |414.00 |409.8 |
|433.27 |450.83 |415.71 |413.9 |
|433.38 |450.51 |416.25 |411.85 |
|433.56 |449.94 |417.18 |426.05 |
|433.46 |450.07 |416.85 |427.45 |
|433.46 |450.08 |416.84 |427.1 |
|433.36 |450.28 |416.44 |428.05 |
|433.27 |450.29 |416.25 |434.6 |
|433.06 |450.27 |415.85 |445.6 |
|432.99 |450.02 |415.96 |449.35 |
|432.21 |449.74 |414.68 |436.6 |
|431.53 |450.90 |412.16 |435.1 |
|430.95 |451.61 |410.29 |436.1 |
|430.36 |452.07 |408.65 |439.35 |
|429.67 |452.36 |406.98 |448.85 |
|428.78 |451.92 |405.64 |443.7 |
|428.15 |451.34 |404.96 |442.8 |
|427.6 |450.69 |404.51 |441.45 |
|427.04 |450.10 |403.98 |437.9 |
|426.36 |450.10 |402.62 |424.8 |
|425.99 |450.40 |401.58 |420.25 |
|425.76 |450.61 |400.91 |432.35 |
|425.13 |450.87 |399.39 |424.85 |
|424.7 |451.16 |398.24 |429 |
|424.21 |451.26 |397.16 |427.3 |
|423.47 |452.15 |394.79 |431.35 |
|422.66 |452.69 |392.63 |432.1 |
|421.84 |453.02 |390.66 |439.95 |
|420.7 |453.29 |388.11 |432.2 |
|419.69 |453.94 |385.44 |437.75 |
|418.63 |453.85 |383.41 |430.95 |
[pic]
HCL:
|MOVING AVG |UPPER BAND |LOWER BAND |PRICES |
|451.18 |518.91 |383.45 |393.6 |
|453.41 |520.74 |386.08 |403.2 |
|455.44 |522.72 |388.16 |418.4 |
|457 |524.38 |389.62 |414.75 |
|458.65 |525.85 |391.45 |417.55 |
|460.28 |527.36 |393.20 |415.05 |
|461.82 |528.19 |395.45 |414.95 |
|463.35 |528.84 |397.86 |419.9 |
|464.49 |528.87 |400.11 |415.3 |
|465.89 |528.93 |402.85 |405.75 |
|467.32 |527.99 |406.65 |397.75 |
|468.78 |526.03 |411.53 |405.95 |
|470.07 |524.38 |415.76 |425.4 |
|471.01 |523.76 |418.26 |417.45 |
|472.33 |522.87 |421.79 |418.95 |
|473.97 |522.74 |425.20 |417.65 |
|475.73 |522.50 |428.96 |420.25 |
|477.5 |522.38 |432.62 |428.45 |
|478.9 |521.86 |435.94 |420.8 |
|480.3 |519.97 |440.63 |428 |
|481.54 |518.30 |444.78 |429.05 |
|482.85 |516.51 |449.19 |437.65 |
|483.68 |514.74 |452.62 |437.9 |
|484.61 |512.72 |456.50 |461.45 |
|485 |512.33 |457.67 |454 |
|485.81 |511.75 |459.87 |462.75 |
|486.62 |512.16 |461.08 |460.6 |
|487.52 |512.47 |462.57 |467.2 |
|488.08 |512.42 |463.74 |463.45 |
|489.02 |513.09 |464.95 |468.7 |
|489.79 |513.69 |465.89 |468.3 |
|490.45 |513.73 |467.17 |468.25 |
|491.3 |514.39 |468.21 |469.7 |
|492.1 |514.89 |469.31 |476.05 |
|492.82 |515.81 |469.83 |492.55 |
|493.34 |517.45 |469.23 |493.75 |
|493.77 |518.66 |468.88 |492.1 |
|494.19 |519.68 |468.70 |495.4 |
|494.32 |519.90 |468.74 |492.85 |
|494.04 |519.99 |468.09 |484.6 |
|494.08 |519.98 |468.18 |482.3 |
|494.26 |519.95 |468.57 |484.95 |
|494.33 |519.93 |468.73 |482 |
|494.39 |519.89 |468.89 |481.65 |
|494.54 |519.82 |469.26 |481.85 |
|494.62 |519.76 |469.48 |480.85 |
|494.7 |519.68 |469.72 |481.4 |
|494.74 |519.64 |469.84 |494.9 |
|494.44 |519.71 |469.17 |506.9 |
|494.05 |519.13 |468.97 |506.95 |
|493.61 |518.54 |468.68 |505.1 |
[pic]
ORACLE:
|MOVING AVG |UPPER BAND |LOWER BAND |PRICES |
|2179.43 |2660.27 |1698.59 |1850.35 |
|2192.73 |2667.65 |1717.81 |1888.75 |
|2205.34 |2675.05 |1735.63 |1935.2 |
|2216.89 |2682.52 |1751.26 |1959.4 |
|2227.14 |2688.58 |1765.70 |1971.75 |
|2237.56 |2695.10 |1780.02 |1966.45 |
|2250.59 |2705.91 |1795.27 |1951.35 |
|2263.32 |2714.66 |1811.98 |2022.75 |
|2273.71 |2722.38 |1825.04 |2019.1 |
|2285.38 |2731.99 |1838.77 |2011.1 |
|2296.54 |2739.68 |1853.40 |2004.2 |
|2307.98 |2747.03 |1868.93 |2000.95 |
|2319.65 |2754.08 |1885.22 |2019.75 |
|2331.15 |2761.38 |1900.92 |2018.6 |
|2343.18 |2769.10 |1917.26 |1990.3 |
|2355.69 |2775.22 |1936.16 |1967.4 |
|2369.09 |2780.68 |1957.50 |1939.95 |
|2382.63 |2783.18 |1982.08 |1964.9 |
|2396.02 |2786.19 |2005.85 |1958.6 |
|2409.72 |2788.01 |2031.43 |1969.95 |
|2423.12 |2788.73 |2057.51 |1940.7 |
|2439.29 |2791.68 |2086.90 |1984.6 |
|2452.41 |2789.66 |2115.16 |2090.1 |
|2463.83 |2792.25 |2135.41 |2097.15 |
|2483.6 |2803.83 |2163.37 |2476.06 |
|2487.57 |2811.94 |2163.20 |2160.45 |
|2497.72 |2815.48 |2179.96 |2144.8 |
|2508.05 |2817.05 |2199.05 |2177.8 |
|2516.49 |2816.71 |2216.27 |2149.9 |
|2525.43 |2813.78 |2237.08 |2155.05 |
|2533.82 |2809.08 |2258.56 |2204.5 |
|2540.47 |2805.04 |2275.90 |2200.45 |
|2548.1 |2800.52 |2295.68 |2201.4 |
|2555.49 |2794.26 |2316.72 |2203.4 |
|2563.82 |2787.65 |2339.99 |2171.45 |
|2572.25 |2774.81 |2369.69 |2204.95 |
|2579.32 |2760.98 |2397.66 |2120.65 |
|2587.22 |2729.37 |2445.07 |2214.2 |
|2595.1 |2702.10 |2488.10 |2583.9 |
|2595.21 |2703.06 |2487.36 |2541.75 |
|2595.85 |2703.89 |2487.81 |2668.1 |
|2593.65 |2701.19 |2486.11 |2645.65 |
|2592.12 |2699.78 |2484.46 |2684.2 |
|2588.25 |2697.01 |2479.49 |2601.65 |
|2585.53 |2699.78 |2471.28 |2649.55 |
|2582.13 |2699.38 |2464.88 |2539.1 |
|2580.41 |2703.21 |2457.61 |2504.2 |
|2578.21 |2710.25 |2446.17 |2499.9 |
|2575.62 |2719.47 |2431.77 |2575.4 |
|2572.47 |2724.14 |2420.80 |2546.55 |
|2570.38 |2727.71 |2413.05 |2515.45 |
[pic]
INTERPRETATION:
Here we have plotted the closing prices of the 5 companies in the IT sector with the Bollinger Bands, with 100 simple moving average and 2 as the standard deviation.
In the above chart the Average closing price of the IT sector has been plotted with Bollinger Bands.
• For the above analysis I took five companies in this sector and applied the Bollinger analysis and it is found that Oracle the outperforming one comparatively with the other companies.
4.5 NATIONAL SECURITIES DEPOSITORY LIMITED
NSDL was inaugurated in 1996, as the depository in the country to avoid the myriad problems in settlement.
In depository system, Securities are held in securities (depository) accounts, which is more or less similar to holding funds in the bank accounts. Transfer of ownership is done through simple account transfer. This method does away with all the risks and hassles normally associated with paper work. Consequently, the cost of transaction in depository environment is considerably lower as compared to transaction in physical certificates.
Trading in dematerialized Securities is quite similar to trading in physical Securities. The major difference is that at the time of settlement, instead of delivery/receipt of Securities in the physical form, the same is affected through account transfer. Currently dematerializes trading is available at NSE, BSE and CSE.
Exclusive Demat segment follows rolling settlement (T+2) cycle and the unified (erstwhile-physical) segment follows account period settlement cycle.
All investors, other than the institutional investors, can deliver Securities either in the physical or dematerialized form in the market.
From January 4, 1999, all categories of investors can deliver only in Dematerialized form with respect to a select list of securities. However initially this was applicable only at those exchanges, which have joined the depository, but SEBI has also specified that this list is to be expanded in a phased manner. The settlement of trades in the stock exchanges is undertaken by the clearing corporation (CC)/clearing house (CH) of the corresponding stock exchanges.
While settlement of Dematerialized Securities is effected through NSDL, the funds settlement is effected through the clearing banks. The physical Securities are settled by the clearing members directly with the CC/CH.
BENEFITS OF DEPOSITORY SYSTEM
In the depository system, the ownership and transfer of Securities takes place by means of electronic book entries. At the outset, this system rids the capital market of the danger related to handling of paper. NSDL provides numerous direct and indirect benefits, like:
➢ Elimination of bad deliveries-in the depository environment, once holding of an investor are Dematerialized, the question of bad delivery does not India bulls i.e. they cannot be hold “under objection”.
➢ Elimination of all risks associated with physical certificates-dealing in physical Securities have associates security risks of stocks, mutilation of certificates, loss of certificates during movements through and from the registrars, thus exposing the investor to the cost of obtaining duplicate certificates and averments, etc.., This problem does not India bulls in the depository environment.
➢ No stamps duty for transfer of any kind of Securities in the depository.
➢ Immediate transfer and registration of securities- in the depository environment, once the securities are credited to the investors accounts on pay-out, he becomes the legal owner of the securities. There is no further need to send it to the company’s registrar for registration.
➢ Faster settlement cycle-the exclusive Demat segment follow rolling settlement cycle of T+2 i.e. the settlement of trades will be on the 2nd working day from the trade day. This will enable faster turnover of stock and more liquidity with the investor.
➢ Reduction in brokerage by many brokers for trading in Dematerialized Securities-brokers provide this benefit to investors as dealing in Dematerialized Securities reduced their back office cost of handling paper and eliminates the risk of being the introducing broker.
➢ Faster disbursement of non-cash corporate benefits like rights, bonus, etc..,
➢ Reduction of problems related to change of address of investor, transmission, etc., in case of change of address or transmission of Demat shares, investors are saved from undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies, where the investor is a registered holder of Securities.
➢ Elimination of problems related to selling Securities on behalf of a minor- a natural guardian is not required to take court approval Demat Securities on behalf of a minor. Ease in portfolio monitoring since statement of account gives a consolidated position of investment in all instructions.
CHAPTER - 5
FINDINGS & SUGGETIONS
5.1 FINDINGS
ADD FEW POINTS
➢ All the stock exchanges in India were mechanized in the year 1994 November. That was the year when the stock exchanges introduced screen based trading across the country.
➢ While on line trading gives you speed and price advantage, there is some risk to entering orders on-line. The page alerts you to any pitfalls you should watch out for if you want to use the internet to trade stocks.
➢ If you do commit to trading online, you must be careful when you enter stock orders. It is easy to make mistakes, but the market and your brokers may not be sympathetic. Once an order is submitted, there may be nothing you can do to take it back if you made a mistake. The various types of orders you enter can be confusing.
➢ Individuals are restricted to first hand financial guidance. This simply means that the individual is himself/herself alone to make the decisions.
➢ Tax (sales tax and value added tax) evaluation becomes an issue, especially when you are trading internationally.
➢ Changes are that one has no idea who is dealing with on the other end, so it is advisable to gather all the possible information about the party one is dealing with. In short are full knowledge is to be known.
➢ Online trading as left individual open to too much information. This is harmful since it leaves brokerages wide open to sensitive data.
When network crashes there will be problems and delays due to a large influx of traffic and rapid online trading criteria. For instance on 27th Oct 1997 there was a one day crash, which caused online trading on the New York Stock Exchange to stop and brokers were unable to conduct business.
If you are going to trade online, you were obviously the one making all the trading choices. To make your trading decisions, you need to research your stocks and constantly pay attention to market news. This will require some time, as you pursue your sources of market information and use online tools
5.2 SUGGETIONS
The overall performance of India bulls, DP and ONLINE TRADING is good. Here are the suggestions for further improvements of the performance in the future.
➢ Volume of paper work is small but it is very complicated to maintain data in system so try to reduce that by regular audit and updating data.
➢ Most of DPs do not have the necessary infrastructure to handle the high workload of transactions lending to many error by DPs, so by giving full infrastructure information to every DP can avoid this problem
➢ The pool a/c does not know the true owner of the shares and hence dividends are paid to the broker instead of owners, by this broker can do any manipulations or any fraud with the owner, for this the owner can loose his dividend. Hence for this try to pay the dividend directly to the owner.
➢ If the shares are fake / forged which delivered by the broker the shareholder can loose that system and have to receive another lot of issued shares from the broker in 21 days, this system stands abused as soon as possible.
➢ The online trading is easy to work but it is costly to maintain and difficult to learn.
➢ It should increase the speed of executing the orders.
➢ Mutual funds trading for other companies have to be encouraged. If phone orders are encouraged, trading in z securities are allowed, bank account for instant transfer are provided and offline option are given then India bulls would be definitely improving in the turnover.
➢ Necessary steps should be taken by the exchanges to deal with the situation arising due to break down in online trading.
➢ Instant bank account should be provided as the other companies are providing, because this helps the India bulls in dealing directly with the investors.
➢ Another important thing, which has to be taken into considerations, is portfolio management. It should have a separate department for portfolio management and should guide the investors. If India bulls take initiative steps for portfolio valuation of the investor’s .Then investors will be attracted towards the India bulls to a greater extent.
➢ India bulls has to give more advertisement through the media stating the advantages to the investors by using India bulls Leverages should be provided to the investors till settlement. Then only it encourages the investors to take active part in online trading of the stock exchange
➢ The software or the system used in online trading should be advanced and the persons who operate should have minimum knowledge or if they are very well versed about the functioning of the system then it will be helpful in smooth functioning of online trading.
In India bulls investors cannot do their own trading on the system, every time they have to consult the DP members and has to tell to hold the shares by his name, instead of this provide the web trading facility to investors by this they can do their own trading by sitting in front of internet.
CHAPTER - 6
BIBLIOGRAPHY
6.1 BIBLIOGRAPHY
COMPANY PROFILE:
Collected from the company’s website
Introduction to the topic:
Collected from the following references
Title of the book Name of the Author
Financial Management I. M. Pandey
Financial Management Theory and Practice Prasanna Chandra
Financial Management and Policy V.K.Bhalla
3 WEB SITES:
➢ WWW..IN.
➢ WWW..
➢ WWW.
➢ WWW.
➢ WWW.ONLINE-
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Give delivery instruction for transfer of securities from pool a/c to client a/cs
Any time before or after pay-out
On payout you will receive securities from CC to your pool a/c automatically
Give delivery instruction to your DP for transfer from pool account to CC
Any time before pay-in
Send receipt instruction for transfer from client account to pool account
CLEARING
POOL
RECEIPT
DELIVERY
ACCOUNT
CLEARING
POOL
ACCOUNT
BUYING
CLIENT
SELLING
CLIENT
DELIVERY ACCOUNT
POOL ACCOUNT
RECEIPT
ACCOUNT
CLEARING ACCOUNT
CMs
NSCCL
DEPOSITORIES
CLEARING BANKS
NSE
Settlement of Trades
Clearing of Trades
Transaction cycle
Trade Execution
Funds/ Securities
Decision to Trade
Placing order
Dealer 12
Dealer 11
Dealer 1
Dealer 2
Branch 2
Branch 1
Corporate Manager
Senior Vice President
Regional Manager
Branch Manager
Senior Sales Manager
Support System
Sales Function
RM/SRM
ARM
Local Compliance
Officer
Back Office
Executive
Dealer
Indiabulls Securities
Trading Products
Cash Account
Intraday Account
Margin Trading
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