Presentation on Summer Training Project at HSBC Invest Direct

Presented to :Mr. Arun DuttaPCTE

Presented by :Navneet Kaur Malhi

MBA-2A

The HSBC Group serves over 100 million customers worldwide through over 8500 offices in 86 countries and territories.

HSBC is one of the world’s largest banking and financial services organisation.

HSBC is marketed worldwide as ‘the world’s local bank’.

INTRODUCTION TO HSBC GROUP

HSBC's origins in India date back to 1853, when the Mercantile Bank of India was established in Mumbai.

The acquisition in 1959 by The Hongkong and Shanghai Banking Corporation Limited of the Mercantile Bank was a decisive factor in laying the foundation for today's HSBC Group.

HSBC has given India its first ATM way back in 1987.

Historical Background of HSBC

The organisation's adaptability, resilience and commitment to its customers have further enabled it to survive through turbulent times and prosper through good times over the past 150 years.

The company serves the retail and corporate customers in India. It offers its products through its 77 branches and 151 franchise outlets.

The company was formerly known as IL&FS Invest smart Limited and changed its name to HSBC Invest Direct (India) Limited in August 2009

INTRODUCTION TO HSIL

To become the preferred long-term financial partner to a wide base of customers whilst optimizing stakeholders’ value.

Vision statement

To establish a base of 1million satisfied

customers by 2010. It will be created by being a responsible and trustworthy partner.

Mission statement

An approach to business that reflects:-ResponsibilityTransparency Ethical Behavior Respect for Employees, Clients &

Stakeholder groups.

Corporate Action

All the products of ILFS can be broadly dividedinto the following two categories:

Online Trading Products Advisory Service Other Services

Product Profile

Mutual fund advisory Services. Portfolio management Services. IPO Advisory and Distribution Services. Insurance Advisory Services. Investment Advisory services.

Advisory Services

Online Services. Research and Financial Analysis. Value Added Services.

Other Services

Strengths

• Customization

• Expertise

• One-stop-shop for all the investment needs

• Unbiased and objective advice

• Extensive reach

• Brand image

• Competitive pricing

SWOT ANALYSIS

Expensive products

Tedious procedures

Fund transfer

Attrition

Weaknesses

Right time for investors to re-enter the market.

Huge untapped market.

Increasing number of management graduates.

Increase the tie-ups for fund transfers .

Opportunities

• Stiff competition

• Increasing awareness of mutual funds and ULIPs.

• Changing economic scenario in India and changes in government policies.

• Many a investors burnt their figures during the bearish market conditions

Threats

Current Ratio

Ratio analysis

Year 2009 2008 2007

Current Assets 3298.7 2469.43

2075.54

Current Liabilities 1794.24

1114.86

980.14

Current Ratio 1.84 2.22 2.12

Quick ratio

QUICK ASSETS 2009 2008 2007

Accounts Receivable 1027.73

909.58 770.39

Cash and Cash Equivalents

792.69 121.22 86.06

Other Current Assets 8.32 1 0.91

Total Quick Assets 1828.74

1031.8 857.36

Current Liabilities 1794.24

1114.86

980.14

QUICK RATIO 1.019228

0.925497

0.874732

Gross Margin Ratio

Year 2009 2008 2007

Gross Profit 1846.1 1602.31 1505

Sales 6106.43

5208.38 4777.64

Gross Margin Ratio 30.23207

30.76408

31.50091

Net Profit Ratio

Year 2009 2008 2007

Net Profit 401.52 286.5 291.12

Sales 6106.43 5208.38 4777.64

Net Profit Ratio 6.575364

5.500751

6.093385

Operating Margin Ratio

Year 2009 2008 2007

Operating Margin 1036.44 809.69 784.68

Net Sales 6106.43 5208.38 4777.64

Operating Margin Ratio 16.97293

15.54591

16.42401

Return on Assets Ratio

Year 2009 2008 2007

Net Profit Before Tax 683.1 461.15 456.15

Total Assets 9413.18 5681.25 5274.84

Return on Total Assets Ratio 7.256846 8.117052 8.647656

Trend analysis(i) Trend of net sales

Year Net Sales

Trend (%)

Mar'07 4777.64 100

Mar'08 5208.38 109.02

Mar'09 6106.43 127.81

(ii) Trend of net Profit

(iii) Trend Of EPS

Objectives of the study

To study the change in investing pattern after the crisis.

To study the change in preference for the sector for investment.

To study the most preferred investment avenue.

Study on Effect of Recent Financial Crisis on the Investment Pattern of Investors

The study was conducted with the main aim of studying the effect of recent financial crisis on the investment pattern of the investors. The crisis of 2008 had a drastic effect on the investment pattern of the investors. The Indian real estate sector has been going through a very bad phase 2008 onwards. It was hit by one and other factors throughout the year like interest rates, high inflation rates, and subprime crisis.

Need of the Study

Result of reduction in the demand of products in the global market.

Associated with falling prices known as deflation due to lack of demand of products.

A slow down or slump or temporary collapse of a business activity.

Recession

Global Recession

IMF regards periods when global growth is less than 3% to be global recessions.

By this measure, three periods since 1985 qualify: 1990-1993, 1998 and 2001-2002.

History of Recessions

Since 1980 there have been only eight periods of negative economic growth over one fiscal quarter or more, and four periods considered recessions in the US :

1. January-July 1980 and July 1981-November 1982: 2 years total

2. July 1990-March 1991: 8 months3. March 2001-November 2001: 8 months4. December 2007-current: 15 months as of

March 2009

The US entered a recession at the end of 2007, and 2008 saw many other nations follow suit.

The United States housing market correction and sub prime mortgage crisis significantly contributed to a recession.

Not only have consumers watched their wealth being eroded, for 2008, an estimated 2.6 million U.S. jobs eliminated.

Current Recession in some countries

Crisis triggered by a liquidity shortfall in the United states banking system.

Caused by the overvaluation of assets.

It has resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world.

Financial crisis 2007-2010

The collapse of a global housing bubble, which peaked in the U.S. in 2006, caused the values of securities tied to real estate pricing to plummet thereafter.

Immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005–2006.

Easy credit conditions Predatory lending Deregulation Increased debt burden or over-leveraging

Background and causes

Financial innovation and complexity. Incorrect pricing of risk Boom and collapse of the shadow banking

system Commodities boom Systemic crisis Role of economic forecasting

Impact on financial institutions

Wealth Effects

Effects on global economy

Financial Market Impacts

Countries include: Portugal, Spain, France, Ireland, Belgium, The Netherlands, Luxembourg, Germany, Finland, Austria, Italy, and Greece.

On Friday, May 7, 2010 a long-desired financial aid package for Greece was constructed.

However, it was obvious that other states, because of their extremely large debts, would have - or already had - financial difficulties

2010 European sovereign debt crisis

Emergence of a new economy Expose of weaknesses in the economy Cost stabilization in real estate market Rationalization of Salary Structure in IT

Industry Performance Appraisal is gaining

ground Austerity is the targeted path Best place for outsourcing Opportunities for International trade.

POSITIVE IMPACTS ON INDIAN ECONOMY

PharmaceuticalsOil & Gas

FMCG

Power equipments & services

AutoRetail

BanksFinancial Services

Real EstateInfrastructure

IT

Impact on India: The Good, Bad & Ugly

Good Bad Ugly

Food

Railway

PSU Banks

Education

Telecom

10 Indian industries to do well during recession

IT

Health care

Luxury products

M&A & Marketing Consultants

Media and Entertainment

Scope of the studyThis research has been conducted in Ludhiana

city.

PopulationAll the investors who are investing money in

Ludhiana.

Sampling Technique:Non Probability Convenience Sampling Technique.

Research Methodology

Sample Size 100 respondents

From Feroze Gandhi market Ludhiana.

Data Collection----Primary and Secondary Sources

Primary Data : Questionnaires. Secondary Data: Websites,

Newspapers, Journals

Data Analysis

State of US Economy

Option No. of Respondents

Growing 31

Slowing Down 8

Recession 3

In Economic Depression 0

Don’t Know 8

Total 50

Option No. of Respondents

Growing 26

Slowing Down 10

In Recession 2

In Economic Depression 2

Don’t Know 10

Total 50

State of Indian Economy

Option No. of Respondents

Better Off 3

Worse Off 20

Same 26

Don’t Know 1

Total 50

Current Financial Position

Option No. of Respondents

Better Off 27

Worse Off 0

Same 8

Don’t Know 15

Total 50

Future Financial Position

Option No. of Respondents

Bonds 2

Real Estate 15

Savings Acc 15

Stocks 4

Mutual Funds 8

Others 8

Total 50

Best Long-Term Investment Option

Option No. of Respondents

Increased 8

Decreased 20

No Change 22

Total 50

Investment Increased or Decreased

Options No. of Respondents

Manufacturing 12

Industrial 14

Service 19

Agricultural 5

Total 50

Sector in which Investment was done 2 years ago

Options No. of Respondents

Manufacturing 6

Industrial 17

Service 14

Agricultural 13

Total 50

Sector for Future Investment

Option No. of Respondents

Yes 30

No 20

Total 50

Change in Portfolio

Option No. of Respondents

Yes 30

No 20

Total 50

Change in Investment Value in a Particular Sector over Past 2 Years

Option No. of Respondents

Yes 21

No 13

Don’t Know 16

Total 50

Increase in Tax Rate – Satisfactory?

Investors are optimistic about the growth of the US and Indian economy.

The financial position of the respondents either remains same or it improves to be better.

The most preferred investments are savings accounts.

The most preferred sector for investment is the service sector.

Facts & Findings

It has been proved that when US sneezes India catches the cold.

The worst affected sectors in Indian economy were banks, financial services, real estate, infrastructure, information technology.

The sectors which had mild impact were power equipments and services, auto, retail.

The sectors which were not affected were pharmaceuticals, oil and gas, FMCG.

While it is uncertain how prolonged and deep the recession will be, it can be said with certainty that demand, and subsequently growth, will return. It is therefore imperative that, when this happens, policymakers have a recovery plan in place.

This plan should act to foster growth in the short-term and lay the foundations for economic stability in the long-term.

There is currently a high level of activity amongst the business support community with a key focus on ensuring businesses survive the downturn.

A challenging and critical focus on the basics, or fundamentals of businesses, is likely to give local companies the best chance of survival over the next year.

The growth of the public sector and the narrow reliance on financial services for growth needs to change, with manufacturers and exporters having particular attention paid to them. After watching so many positive points we Indians can ourselves that we are quite in a safer place in comparison to many developed countries economy. To conclude lets hope for a stronger India by rectifying all its economic weaknesses after this so called financial crunch.

Conclusion