Summer Internship Report 2014

First Capital Equities Limited (FCEL)

Internee name # Muhammad Arsalan Khan

Reg. No # 04151213035

Supervisor (QASMS) # Ma’am Humera

Supervisor (FCEL) # Mr. Faisal Kamal (Manager Finance & Accounts)

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Acknowledgement

I take this opportunity to express my gratitude and deep regards to my supervisor Miss

Humera Siddiqui for her exemplary guidance, monitoring and constant encouragement

throughout the internship. The blessing, help and guidance given by her, time to time

shall carry me a long way in the journey of corporate life.

I also take this opportunity to express my gratitude to my supervisor at First Capital

Equities Limited and thankful to all my firm’s staff for their valuable guidance in

preparing this report in a presentable fashion.

Lastly, I would like to say thanks to my parents for their constant encouragement

throughout the internship and during the preparation of this report without which this

assignment would not be possible.

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Executive Summary

This report is a thorough essence of my study which I conducted as an internee in a

period of two months in First Capital Equities ltd. Islamabad. It is also the head office

for the north region. I have exclusively studied and observed the organizational structure,

customer service, accounts & management and personnel administration of the company.

The purpose of this internship report is to overview my performance during internship as

well as to evaluate the performance of FCEL and give concrete recommendation for

further improvement. Although the brokerage firms are functioning satisfactory, even

then some drawbacks have been pointed out in the operation of the FCEL.

Two months period is too less to understand the operation of FCEL, but still it was a

great experience for me to have a feel of the practical world and keeping in view the

limitations of the study, this seems reasonable attempt.

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Abbreviations

FCEL………. First Capital Equities Limited

QASMS……. Quaid-I-Azam School of Management Sciences

ISE…………. Islamabad Stock Exchange

KSE………… Karachi Stock Exchange

JS…………… Jahangir Siddiqui group of companies

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Table of Contents

Organizational introduction………………………………… 5

Personal working…………………………………………….. 14

SWOT analysis……………………………………………….. 23

My Experience Vs. My Expectations………………………... 28

How Internship helps in future……………………………… 29

List of Competencies…………………………………………. 30

Conclusion & Recommendations……………………………. 31

References…………………………………………………….. 34

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Chapter # 1

Organizational introduction, departmental description

1.1 History of First Capital Equities Limited (FCEL):

First capital equities limited (FCEL) was incorporated in Pakistan

on January 26, 1995 as a private limited company, under the companies ordinance, 1984.

As the name suggest, FCEL is a brokerage firm and provide its services related to stock

exchange. The founder of FCEL is Mr. Salman Taseer, the late governor of Punjab. At

the time of incorporation, the company is private limited but almost two years of its

incorporation, that is on June 18, 1997, it is converted as a public limited company. It is

listed on Lahore stock exchange (Guarantee) limited. The company is a subsidiary of

First Capital Securities Limited. The whole group is now known as First Capital

Securities Corporation, which includes World Call, Business Plus network and many

other companies.

1.2 Introduction:

First Capital Equities Limited (FCEL) is also known as “The most

prominent brokerage house in Pakistan”. This is due to their vast network of branches

and brokers present all over the country and covering almost all the main cities of

Pakistan. The head office of FCEL is located in Karachi and it covers the entire province

through an extensive network of brokers sitting in interior Sindh. The registered office of

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the company is located in Lahore and it covers the Punjab province with the help of

Sargodha branch and other brokers. The Islamabad office, where I did my internship is

located in office # 221, 2nd floor, Islamabad Stock Exchange Tower, Jinnah Avenue

Islamabad. It handle and leads the entire north region, which comprises of KPK, AJK,

some cities of Punjab and the federal capital.

1.3 Organizational Structure & Company Information:

Organizational Structure and company information of FCEL is as follow:

1.3.1 Board of Directors:

1. Mian Ehsan Ul Haq (Chairman & CEO) ---- Executive Member

2. Farooq Bin Habib ------------------------------- Executive Member

3. Ashraf Liaquat Ali Khan ----------------------- Independent Member

4. Muhammad Junaid Godil ---------------------- Executive Member

5. Ahsan Zia ---------------------------------------- Executive Member

6. Mazhar Abbas ----------------------------------- Executive Member

7. Waseem Ul Hassan ----------------------------- Executive Member

1.3.2 Chief Financial Officer:

Mazhar Abbas

1.3.3 Audit Committee:

I. Ashraf Liaquat Ali Khan (Chairman)

II. Farooq Bin Habib

III. Ahsan Zia

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1.3.4 Human Resource & Remuneration Committee:

1. Ashraf Liaquat Ali Khan (Chairman)

2. Main Ehsan Ul Haq

3. Waseem Ul Hassan

1.3.5 Company Secretary:

Arshad Ali

1.3.6 Auditors:

Aslam Malik & Co. Chartered Accountants.

1.3.7 Legal Advisors:

Tassawur Ali Hashmi Advocates, Karachi.

1.3.8 Registered Office:

2nd floor, Pace Shopping Mall, Fortress Stadium, Lahore Cantt. Lahore Pakistan.

Tel: (042) 36623005/6/8. Fax: (042) 36623121-36623122

1.3.9 Corporate Office:

4th floor B, C & D. Lakson Square Building No. 1 Sarwar Saheed Road, Karachi.

Tel: (021) 111 226 226. Fax: (021) 35656710, 35656725

1.3.10 Registrar & Shares Transfer Office:

Corpline (Pvt.) Limited, Wings Arcade, 1-K, Commercial Model Town, Lahore.

Tel: (042) 35839182

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1.3.11 Bankers:

1. Askari Bank Limited

2. Bank Alfalah Limited

3. Bank Al Habib Limited

4. Faysal Bank Limited

5. Habib Metropolitan Bank Limited

6. JS Bank Limited

7. KASB Limited

8. MCB Limited

9. NIB Limited

10. Silk Bank Limited

11. Soneri Bank Limited

12. Standard Chartered Bank (Pakistan) Limited

13. United Bank Limited

1.4 Our Mission:

To maintain our high profile and continue providing premium quality service to

our clients.

1.4.1 Dedicated to make it happen:

1.4.1.1 Clients:

We will offer every client: Fast & Friendly service, Commitment,

Cleanliness, Dedication, Excellence, & Trust.

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1.4.1.2 Associates:

We will offer every associate: Development, Loyalty, Opportunities, Open-

Door, Teamwork, Training, & Benefits.

1.4.1.3 Image:

We will operate every facility: Professionally, Helpfully, Positive, Bright,

Clean, & Consistent.

1.4.1.4 Community:

We will offer every community: Involvement, Support, Stability, Respect,

Assistance & Environmental Awareness.

1.4.1.5 Standards:

We will operate our business: Ethically, Competitively, Safely, Innovative

with high expectation, & Quality products.

1.5 Our Vision:

To be the number 1 broker for all retail, institutional and international investors

investing in Pakistan’s stock markets.

1.6 Our Strategy:

To constantly assess and monitor our client’s need and provide premium quality

services to meet their needs.

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1.7 Our Corporate Objective:

To develop and provide financial products and services with excellent front and

back office execution to all our clients and quality system automation with best of

information technology.

1.8 Services:

We offer a modern systems and a powerful platform that provides investors with a

comprehensive range of solutions. We operate in an advanced and hi-tech environment

where our experienced executive and efficient systems provide customized solutions and

access to the range of facilities including trading, underwriting and corporate finance.

1.8.1 Equity Brokerage:

Supported by an extensive experience of capital markets, FCEL is one of

the pioneers in Pakistan Equities Brokerage. We offer a modern and powerful equities

trading system that provides investors with a comprehensive range of solutions.

Execution is processed through advanced trading tools including Karachi Automated

Trading System (KATS) and broker net.

1.8.2 Corporate Finance:

Our corporate finance services encompass advising and developing

customized financial, corporate structuring and project evaluation solutions for our

valued clients. Our know-how of the local industry and ability to evaluate global impacts

on domestic parameters is our distinguishing factors.

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1.8.3 Underwriting:

If you want to expand and want to mobilize funds through public

offerings, we are always there to help you. Our underwriting facilities not only limit it to

providing conventional “throw-commitments” but also extend its help in improving your

projects feasibility and private placement of funds.

1.9 Research:

Comprehensive investment research to its institutional investors and individual

clients. FCEL has a strong research team specialized in fundamental research and

provides a complete range of services, understand local and international clients need,

and is aware of the prevalent trend and opportunities. 

The research team produces publications and studies on various sectors covered, as well

as on individual companies. FCEL’s research is published regularly and is made available

on Bloomberg, Reuters and Thomson publishers.

1.9.1 FCEL research has various products:

1.9.1.1 Research report: Comprehensive sector and stock reports provide

meticulous explanations backing our strategy and investment advice.

1.9.1.2 Morning buzz: On a daily basis, our clients receive coverage of the latest

developments in stock with their detailed analysis, market impact and our

recommendations for an optimum stock portfolio.

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1.9.1.3 Market analysis: On a daily basis, our clients receive coverage of the latest

developments in stock with their detailed analysis, market impact and our

recommendations for an optimum stock portfolio.

1.9.1.4 Flash notes: Follow whenever our analysts feel the need to convey any

significant stock information to our patrons.

1.9.1.5 Call presentations: Our research team is there to promptly service our

clients’ personalized investment queries. All this mean that our clients receives a

constant stream of information from our research facilities.

1.9.1.6 Comp sheet: A summary of valuation matrix sent to specific clients. It

illustrates various multiples on the forecasted values. Our universe represent 80% of

KSE 100 index.

1.10 Departments at FCEL:

There are five departments in FCEL. One in the front office, named as Sales

department. The other four are in back office. These are: Account & Finance department,

Settlement, Operations, and Risk management department. Here, I will explain these

departments in few sentences but explain their working and responsibilities thoroughly in

CH # 2.

1.10.1 Sales department:

This is the department which generate revenue for FCEL. It consist of four

members and all of them are traders. They help investors in buying and selling of

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shares in stock market. It directly comes under the Accounts & Finance department

and the chief of the branch (Mr. Ahsan Zia).

1.10.2 Accounts & Finance department:

It is the most important department and is headed by Mr. Faisal Kamal. This

department have full control over the company accounts and cash related activities.

1.10.3 Operations department:

It opens, control and manages the client accounts. It prepare and send the

monthly reports to all the clients. This department is headed be Mr. Muzammil.

1.10.4 Settlement department:

It deals with the central depository company (CDC) and minimize the risk

of fraud. Moreover, they also try to recover bad debts. This department is headed by

Mr. Inthikhab.

1.10.5 Risk Management department:

The main purpose of this department is to continuously monitor the future

accounts and sale the holdings of clients after the given time or the given limit. Mr.

Shafiq is the head of this department.

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Chapter # 2

Personal working & learning experience

During my internship, I worked in five different departments but in my view, the most

important department is accounts & finance department. The main reason behind this is

that the kind of work I did in this department is more relevant to my studies. Due to this,

it became easy for me to quickly understand it and after that implementing it on my own

as well. My office timings were closely linked with the trading time in KSE (Karachi

Stock Exchange). The environment at FCEL is very friendly and co-operative and helps

positively in learning at workplace. In the following lines, I will explain my personal

experience and learning outcomes as department wise.

2.1 Accounts & Finance Department:

My supervisor at FCEL, Mr. Faisal Kamal is head of this department

and he put a great effort to teach me all the functions theoretically as well as practically.

This is the most important and the busiest department and there is a variety of functions

to perform in daily routine by this department. I will illustrates all the functions which I

perform in this department in the following lines.

2.1.1 Ledgers:

As I mentioned earlier that my firm is a brokerage firm which act as a

mediator between investors and stock exchange. That is, they help in buying and selling

of shares. Due to this, there is a constant need to upgrade the ledgers of every client for

the purpose of recording and documentation of their daily transactions. No doubt, all this

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activity is done by software’s but someone is responsible to operate them. When any

client need cash, I have to check his/her ledger balance and then make payments. I also

have to attach the copy of his/her ledger so that no one can raise a question. Only that

balance is appeared in ledger, which received by selling of collateral sold two working

days ago. For example, if client sold his/her shares on Monday, then the payment is made

possible on Wednesday. We call this as T+2 (trade plus 2 days).

2.1.2 Vouchers:

When any of our client with draw their investment or increase their

investment, I have to up-grade their accounts in software. This software is oracle based. I

up grade this in the software so that our traders also come to know that which client have

how much investment and then they move accordingly. This software requires bank name

& account number, client account at FCEL and at their banks also along with other

details too. Again I draw a print just like ledgers for the purpose of maintaining

documented records.

2.1.3 Cheques:

After ledger and voucher making, finally the stage of preparing the

cheques reaches. This stage of writing the cheques is simple but one important thing is

that FCEL have two authorized signatory. If there is only one authorized signature on

cheque, the cheque become bounced from the bank. So for internal check and balance,

and to minimize the chance of fraud, company uses two authorized signatory. One is the

manager accounts &finance and other one is the chief of the branch.

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2.1.4 Bank Position:

One of my daily routine activity includes the preparation of bank

position. My branch have bank accounts in six different banks. The reason behind these

six different bank accounts is our clients. Our clients have accounts in different banks and

we have to make their payments according to their will. One more reason is that the

cheque of one bank say Askari bank is cleared more quickly in Askari bank. Thus, it help

us to save time. Our main bank is MCB, while our other banks are HBL, Askari Bank,

Summit Bank, Standard Chartered Bank, and Bank Alfalah. Bank position includes the

detail of cash receipts and cash payments completed on the previous day. It also include

the detail of company’s bank accounts. Then we sent it to Karachi head office. If they

need funds, then company online transfer funds to them, and if our branch require funds,

then they transfer it through MCB.

2.1.5 Bank Reconciliation Statements:

At the beginning of every month, there is a need to prepare bank

reconciliation statements. The purpose for preparing the statement is to check whether

there is any outstanding cheque or not. Each of our bank sent their respective bank

statements about our accounts to us. Here in the software, company also have their own

records. I compare both of the statements and then find out the presence of outstanding

cheques. If there is any outstanding cheque, then I make adjustment of this cheque in our

record.

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2.1.6 Receivables & Payables:

Receivables and payables were being upgraded at the end of each

month or at the beginning of each month. The basic theme behind the up gradation of

receivables and payables, other than for record purpose is to check the possible future

cash inflows and outflows. Here, we find out the amount which we have to receive from

the clients and the amount of liability on us. In doing all this, I also find out that this

branch have bad debts worth more than Rs. 110 million. When I ask a question from my

supervisor about these huge amount of bad debts, he replied to me that these were created

during the financial crises of 2007-08. The investors were ran away and didn’t come

back. We were unable to catch them because the laws at that time were very flexible.

2.1.7 Expense Payments:

Every company incurred expenses. Same is the case with FCEL.

Company provide different facilities to its employees like free mobile usage, free fuel,

EOBI (employee old age benefit program) etc. Despite of that there are some other

expenses too. These expenses include internet bills, telephone bills, electricity bills,

security expenses and many more. Company made all the payments through cheques and

I think this is a good step to minimize corruption because amount/money directly goes

into the accounts of other party. If they use cash, there are likely chances of corruption

and due to this the company and its credibility might suffer.

2.1.8 Protocol to our main clients:

Our brokerage house is one among the top five trading firms in

Pakistan. Only our ISE branch have thousands of clients and no other brokerage house in

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Islamabad is standing in front of us. Despite of all these facts, the major part of our profit

comes from the few main clients. These clients are less than 50 but their investment is

much high. Due to this, I as well as other members try their level best to provide special

treatment to them. Company gave them attention and respect, fulfill there all needs and

forget rule of T+2 for them. Company did all this to increase their loyalty and their

commitment and in return receive commissions from them and that commission is our

profit.

2.1.9 Deposit slips:

One of my daily routine work is to fill deposit slips. It’s a simple

process. I only have to put emphasis on minor things in filling these slips like the carbon

copy is placed perfectly beneath the original slip. Place the slip on hard surface and then

write. Make sure that I have enter correct name of clients branch as well as our banks

branch. One more thing is at the end of the slip, don’t forget to write cell phone number

or the contact number of your office.

2.1.10 Statement of financial position:

I practically prepared the balance sheet or the statement of

financial position at FCEL. Here, I find out that there is no objections or limitations on

using any specific format. The company needs work and want it to be done in efficient

manner. One thing, I noted in the statement of financial position of FCEL is that their few

assets like cars are fully depreciated yet they were using them and not willing to replace

their autos.

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2.1.11 Journal Vouchers:

I entered JV (Journal Voucher) entries, when anything gets wrong.

Like when I enter some wrong entry and if we are unable to reverse it, then we go for

JV’s. We only put some of these entries during the internship, this shows the efficiency

of this department and the commitment with work.

2.1.12 Commissions:

In stock market, there are both extremes. Prices of shares are

ranging from Rs. 1.5 to Rs. 15000. Due to this we deduct commission accordingly. We

have slabs for commission deduction. It is less for the low price shares and more for the

bigger shares. We have four traders, who were selling and purchasing the shares of their

clients. We also gave incentive to them other than their pay, if they perform well. That

incentive is that if someone made commission more than 5 times of his pay, he will

receives 10% of that amount as an incentive. We done this to motivate them.

Despite of all that, I also perform some other functions in this department. These

functions are as follows:

2.1.13 Pay orders

2.1.14 Closing of accounts

2.1.15 Notes to the account

2.1.16 Photocopy

2.1.17 Print

2.1.18 Scan

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2.1.19 Envelope printing

2.1.20 Courier

2.1.21 Employee attendance

2.1.22 Explore KSE website

2.1.23 MS Excel

2.2 Risk Management Department:

As the name suggest, the duty of this department is to

minimize the level of risk associated with the clients. This department is headed by Mr.

Shafiq and I also work under his supervision. The type of risk which I have to deal while

working in this department is related to future trading. It is one dimension of stock

market or in other words a facility provided to the investors. In future trading, if investors

is earning profit, there is no problem. But if investor is facing a loss, then I have to check

and monitor those accounts and take some precautionary measures. Like, if investor is

facing continuous loss and not willing to sell his collateral. Then in order to recover our

company’s amount, company sold his collateral. For example, if person A invest Rs.

100,000/- then he can invest Rs. 300,000/- in future trading, and if he faces loss, it’s our

right to recover our money by selling his collateral. The time limit for future trading is 30

days. More profit is associated with future trading than regular. Similarly, more loss is

also associated. So, we can say that, higher the risk, higher will be the profit. This check

and balance also help firm to stop further creation of bad debts.

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2.3 Settlement Department:

This department is headed by Mr. Inthikhab. Here I learned

the relationship between trading firms and Central Depository Company (CDC). There

are some clients who also have accounts with CDC. The fee for this account is Rs. 1000.

When these clients purchase shares, those shares will go into their respective CDC

accounts. If they want to sell them, first they transfer those shares to their account at

brokerage house and then sell it. This settlement department ensures that no one can sale

more than their holdings. CDC is the branch of ISE. Its purpose is to protect investors

from any fraud. Sometimes, people at the brokerage house sold the shares of clients and

ran away. CDC prevent this. When shares of investors were recorded at CDC, then the

brokerage firms cannot sell them on their own. Hence, it helps in preventing corruption.

So in this department I learned how to transfer shares in CDC and how to call them back.

Other than that, I also paid the fee of CDC accounts of our clients. Moreover, I also

provide necessary information and documents to our clients present in the sales

department and remove their queries.

2.4Operations Department:

Mr. Muhammad Muzammil is the head of this department.

As the name indicates, this department deals with the general operations of the company.

In this department, I learned the process of account opening for investor. I satisfy them

and answer to their questions and try to entertain them in best possible way. Account

opening fee is Rs.25, 000/- and this amount is available for you to do trading. In other

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words, we can say that, there is no fee for account opening. Other than that, individual

investor records were also being maintained by the software throughout the month. In the

beginning of month, I Sent this performance record to every client through courier, no

matter where he/she is living. Company done all this to create a good impression in

investor’s mind. Thus, customer might feel that their company is customer oriented and it

is expected that they market us through word of mouth.

2.5 Sales Department:

There is no head in this department. This department

include four traders. Their duty is just to sell and purchase shares on client’s instructions.

They generate revenue for company in the form of commission. Here, I learn to do

trading practically. Here, I find out the reasons behind the investors decision and which

factors affect their decision making. I have no work in this department. I just have to sit

there and watch the investors sitting there and making decisions.

I learn all these things during my internship including the use of oracle and java soft

wares. These are my learning outcomes. One important thing is that, they give respect to

me and really make effort and uses best ways to teach me. I also respond accordingly. As

a result, in last four weeks, my supervisor gave me his own computer system and I do all

activities on my own which are otherwise only associated with my supervisor. I think that

it’s a great achievement for me to earn their trust and respect.

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Chapter # 3

SWOT Analysis

In 1960’s Albert Humphrey is said to have developed this strategic planning tool using

data from the top companies of USA. The SWOT analysis looks at the strengths,

weaknesses, opportunities and threats that are relevant to an organization in a new

venture. A SWOT analysis is a tool which allow users to look at the direction, an

organization or company may wish to move forward in the future. A SWOT analysis is a

useful tool, which help in summarizing the current state of a company and helps to devise

an informed plan for the future. That plan must circled around the existing strengths,

redresses existing weaknesses, exploits opportunities and defends against threats. One

important thing to mention is that in SWOT analysis, strengths and weaknesses are comes

from the company’s internal environment while threats and opportunities are due to

external factors.

3.5 SWOT analysis of FCEL

First capital equities limited (FCEL) is a service business. They have no products to

manufacture or distribute, they only provide services and they must have to survive in

this short range. FCEL is a trading firm and like them, there are hundreds of brokerage

houses in Islamabad, Lahore and Karachi. Due to this, the competition is immense and

they must have to take measures to survive in this market. The complete SWOT analysis

of First Capital Equities Limited is discussed in the following lines.

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3.5.1 STRENGTHS

3.5.1.1 Talented & Experienced Staff:

FCEL Islamabad branch is equipped with an experienced staff. No

single member of the company have work experience less than 10 years at FCEL. Due to

this, an emotional attachment is established between the members and the company. They

even willing to serve the company in the days of crises, as happened during the financial

crises of 2007-08. The staff worked for almost 8 months without pay. Their four

departments except sales department are solely dependent upon the managers because

there is no other person in these departments. The managers fulfill their own

responsibilities and also work in place of subordinates. This shows their skills,

competency and emotional attachment with the company.

3.5.1.2 No. of clients:

FCEL is now almost 20 years old. During this period, the company work

hard to attract investors with their best services and competent staff. Now they have

thousands of clients. The Islamabad branch have highest number of clients than any other

trading firm in the north region. This shows the level of trust and interest of investors on

FCEL.

3.5.1.3 Low brokerage commission:

Unlike other trading firms, FCEL is offering a wide range of brokerage

commission to its clients. This commission starts from Rs. 0.05 per share and increases

according to the prices of shares.

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3.5.1.4 Resources:

Company have enough resources to meet the demands of the clients as

well as satisfy the employees. Their office is located at the ideal place in the ISE

building. Moreover, company gave cars to all its employees and bikes to office boys. Due

to this, employee satisfaction is at its optimum level and the turnover rate is negligible.

3.5.2 Weaknesses

3.5.2.1 High Expenses:

Company bear heavy expenses in their operations as well as in satisfying

employees. They provide different services like health, insurance, pension and few

others. Despite of that, other operational expenses are there, which could be minimized.

Otherwise, it keep on effecting the company’s performance.

3.5.2.2 Commission other than pay:

When our traders make brokerage commission more than 5 times of

their salary, company offer them 10-12% of that amount to them. Interesting thing is that,

these brokers receive their monthly pays as well and also receives commission. So, in

order to increase profits, these practices must be minimized.

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3.5.2.3 Bad debts:

The only thing which has more worth in the statement of financial

position over assets of the company is bad debts. FCEL Islamabad branch have bad debts

more than 110 million Pak. Rupees. While overall bad debts of the company is in

billions. Company must try to cover these bad debts and take steps to stop further

creation of bad debts.

3.5.3 Opportunities

3.5.3.1 New Markets;

Each passing day attract peoples toward the world of stock exchange.

With the growing number of investors, the need of brokerage houses is also increases in

other cities of the country. The current situation indicates that the number of investors

from Peshawar and Mir Pur is increasing. So, there is a need of brokerage houses in these

cities. Though the company have their traders in both the cities but in order to fully grab

the new markets, company must have to open its branches in both the cities. Other than

that, company also took measures to facilitate and encourage the foreign investors.

Moreover, if the company make possible to monitor the trading of commodity market

(gold, crude oil, platinum etc.) all the time, it would be an extra edge.

3.5.3.2 New Technology:

Company must have to make sure that it keeps on upgrading its

technology. Make possible that their internet connections were available at every time. If

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they start providing terminals even client needs it or not, it also create an impact and

increase their reputation in the mind of clients.

3.5.4 THREATS

3.5.4.1 Competition:

Approximately there are 250,000 investors in Pakistan and there

number is increasing very slowly. On the other hand, more and more brokerage firms

start their operations in the country. Due to this, the competition between the firms to

attract new clients as well as to retain their previous ones is dramatically increased. FCEL

also analyze this danger and now they took steps to retain their customers by offering

them good offers like low brokerage commission and good customer care services.

3.5.4.2 Political Environment:

Our political environment has direct impact on stock market. When

there is any political unrest in the society, stock exchange directly seem under attack. The

investors with draw their capital from the market and not ready to invest back for few

days. When the activity from the investors become limited, the commission of the firms

also goes down. So, we can say that political environment lower down the profits of the

brokerage houses.

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My Experience Vs. My Expectations

Before joining FCEL for internship, I have many expectations about the company, its

environment and people working there. During the internship of two months, I came to

realize that in some cases my expectations were fulfilled and in some cases, it will not.

Before internship I expected that the company has a large office with a large number of

employees working there. But when I reach there I find out that their office is small with

only 11 people working there. I expecting that during internship, mostly I have to do

photocopy and become an office boy but the reality is totally different. I learned a lot

during internship, doing many different and difficult task and that feeling of office boy

couldn’t appeared in my mind even for once. I expecting that that the behavior of people

working there might not be good or friendly but the reality is totally different. Their

behavior is very much encouraging and they help me in a friendly manner even if I

commit any mistake. Other than that through experience, I learned to behave well in

formal organizational setting. I learned to defend our company as well as our selves

without offended the other person. These are the things which I can’t expected before

internship. So in concluding remarks, I would like to say that my expectations or

assumptions about FCEL are very much negative but during the internship I find out that

the reality is not which we listen from others. In fact reality is that which we observe

through experience, just like in my case, my expectations were totally changed when

working at FCEL.

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How this internship helps me in future?

This internship at FCEL is a great opportunity for me to implement my knowledge and

skills into some practical work. I think that I also succeed to a greater extent in achieving

my goal. I think that this internship help me in future in number of ways. For example,

my personal inclination is towards specialization in Finance. FCEL is also a financial

institution. When in future, I go for a job in any financial institution, this internship will

count because that company might think that this individual have some sound knowledge

regarding financial institutions. So it might benefit me there. Moreover this internship

also helps in some finance courses in later semesters. Despite of helping me in future, this

internship immediately helps me. For example, during internship my supervisor offer me

two jobs. One as his assistant at FCEL. The other one is to work on a project at KHIVA

restaurant. But I refused to take either of them because of the strict schedule at QAU. My

supervisor then says to me that after completion of degree, came here and you will might

get a reasonable job. Hence, I think that this internship provides me a great help in

present and surely it will provide help in future too.

List of Competencies

Following are the list of some competencies or skill, which were being developed during

my internship.

Customer dealing

Trading

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Forecasting the future impact of government decision on stock market

Oracle & Java based soft wares

MS Excel

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Chapter # 4

Conclusion & Recommendations

During my internship at First Capital Equities Limited (FCEL), I find out an entire new

world of business. That business contain a lot of profit as well as a lot of risk. It is like a

game and investors play this game with the help of their mind. Before joining FCEL, I

think that there is no business where common sense doesn’t work. But when I join FCEL,

I simply come to know that this business of stocks require no common sense. If someone

relying on common sense, than he or she will end their day with lots of loss. I also find

out that the return associated with stock market is much larger than those of banks. Banks

offer 10-12% return to their customers after a fixed time interval but stock market gave a

return much more than that of banks. The only difference in between the two financial

institution is the level of risk.

In order to earn profit from brokerage houses and to attract investors, you must have

enough resources and a good reputation. People do not go for a company, whose

operations are limited and running capital is low. This mind set is developed after a few

incidents in which brokerage houses take the capital of investors, close their operations

and ran away. Due to this, now the investor is much more conscious. They were willing

to pay high brokerage commissions and not willing to start business with new or small

firms. As a result, new firms were remain at their position. On the other hand, the top

firms of this industry are part of the large business groups of Pakistan. People have trust

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on them and these firms are their first choice. The few top brokerage houses like Jahangir

Siddiqui, Arif Habib and FCEL are part of Jahangir Siddiqui group of companies, Arif

Habib group of companies and First Capital Securities Corporation respectively. These

are the listed groups and people have no doubt about their credibility.

In Pakistan, people have no or very little knowledge about stock exchange and the

business associated with it. As a result, new investors were not coming in the market.

There is no specific institution in the country which guide people towards it. On the other

hand, in Europe, there are institutions which guide people toward stock exchanges. Due

to this, the number of investors in these countries is very high. The benefit of more

investors is that capital is always in a moving condition. It does not remain intact with in

few hands. This in turn increases economic activity which in turn create jobs in the

market. New jobs will result in new investors and the cycle continues. In this way,

European countries took benefit from their stock exchanges.

At FCEL, our trading hall is small. It only have a seating capacity of almost 20 people at

a time. I think that the company must increase the area of trading hall. Insert more LCD’s

and use latest multimedia technology. Our clients need ledgers, daily activity and other

things on regular basis and for that they go in the back office. This activity effect the

working in the back office and also the satisfaction level of client is decreases. I

recommended that company must take steps to provide each and every thing with in the

trading hall. So that the client feel that their working cares for them.

Our company does not use advertisement to attract new customers. On the other hand,

other groups like Arif Habib group of companies use advertisements to attract new

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investors. So in order to become a market leader, FCEL must have to go for promotional

techniques to attract new customers.

I also recommended that the company must take steps to control their expenses as well as

start establishing relations with legal departments for the recovery of bad debts.

The above are some recommendations which developed in my mind during internship

and I think that company prosper quickly by working on them.

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References

1.1 http://firstcapital.com.pk/about/

1.3 http://firstcapital.com.pk/about/

1.4 http://firstcapital.com.pk/about/

1.5 http://firstcapital.com.pk/about/

1.6 http://firstcapital.com.pk/about/

1.7 http://firstcapital.com.pk/about/

1.8 http://firstcapital.com.pk/services/

1.9 http://firstcapital.com.pk/research/

http://www.slideshare.net/vikvini1604/internship-report-14223944

http://dost.gov.pk/research-repositry-details.php?ID=225&T=BS

http://projectsinmba.blogspot.com/2011/08/internship-report-on-financial.html

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