INTRODUCTION TO STOCK EXCHANGE The emergence of stock market can be traced back to 1830. In Bombay, business passed in the shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank, the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta, Englishman reported the quotations of 4%, 5%, and 6% loans of East India Company as well as the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when the Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also quoted the prices of business ventures like the Bengal bonded warehouse, the Docking Company and the storm tug company. Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during the share mania of 1860-65, the number of brokers increased considerably. By 1860, the number of brokers was about 60 and during the exciting period of the American Civil war, their number increased to about 200 to 250. The end of American Civil war brought disillusionment and many Failures and the brokers decreased in number and prosperity. It was in those troublesome times between 1868 and 1875 that brokers organized an informal association and finally as recited in the Indenture constituting the “Articles of Association of the Exchange”. On or about 9th day of July,1875, a few native brokers doing brokerage business in shares and stocks resolved upon forming in Bombay an association for protecting the character, status and interest of native share and stock brokers and providing a hall or building for the use of the Members of such association. 1
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INTRODUCTION TO STOCK EXCHANGE
The emergence of stock market can be traced back to 1830. In Bombay, business passed in the shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank, the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta, Englishman reported the quotations of 4%, 5%, and 6% loans of East India Company as well as the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when the Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also quoted the prices of business ventures like the Bengal bonded warehouse, the Docking Company and the storm tug company.
Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during the share mania of 1860-65, the number of brokers increased considerably. By 1860, the number of brokers was about 60 and during the exciting period of the American Civil war, their number increased to about 200 to 250. The end of American Civil war brought disillusionment and many Failures and the brokers decreased in number and prosperity. It was in those troublesome times between 1868 and 1875 that brokers organized an informal association and finally as recited in the Indenture constituting the “Articles of Association of the Exchange”.
On or about 9th day of July,1875, a few native brokers doing brokerage business in shares and stocks resolved upon forming in Bombay an association for protecting the character, status and interest of native share and stock brokers and providing a hall or building for the use of the Members of such association.
As a meeting held in the broker’ Hall on the 5th day of February, 1887, it was resolved to execute a formal deal of association and to constitute the first managing committee and to appoint the first trustees. Accordingly, the Articles of Association of the Exchange and the Stock Exchange was formally established in Bombay on 3rd day of December, 1887. The Association is now known as “The Stock Exchange”.
The entrance fee for new member was Re.1 and there were 318 members on the list, when the exchange was constituted. The numbers of members increased to 333 in 1896, 362 in 1916and 478 in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896, Rs.2500 in 1916 and Rs. 48,000 in 1920.
At present there are 23 recognized stock exchanges with about 6000 stock brokers. Organization structure of stock exchange varies. 14 stock exchanges are organized as public limited companies, 6 as companies limited by guarantee and 3 are non-profit
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voluntary organization. Of the total of 23, only 9 stock exchanges have been permanent recognition. Others have to seek recognition on annual basis.
These exchange do not work of its own, rather, these are run by some persons and with the help of some persons and institution. All these are down as functionaries on stock exchange. These are:
1. Stockbrokers
2. Sub-broker
3. Market makers
4. Portfolio consultants etc.
1. STOCK BROKERS: Stock brokers are the members of stock exchanges. These are the persons who buy, sell or deal in securities. A certificate of registration from SEBI is mandatory to act as a broker. SEBI can impose certain conditions while granting the certificate of registrations. It is obligatory for the person to abide by the rules, regulations and the buy-law. Stock brokers are commission broker, floor broker, arbitrageur etc.
Detail of Registered Brokers
Total no. of registered brokers as On 31.03.09
Total no. of sub-broker as on 31.03.09
9000 24,000
2. SUB-BROKER:
A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He assists the investors in buying, selling or dealing in securities through stockbroker. The broker and sub-broker should enter into an agreement in which obligations of both should be specified. Sub-broker must be registered SEBI for a dealing in securities. For getting registered with SEBI, he must fulfill certain rules and regulation.
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3. Market Makers :
Market maker is a designated specialist in the specified securities. They make both bid and offer at the same time. A market maker has to abide by byelaws, rules regulations of the concerned stock exchange. He is exempt from the margin requirements. As per the listing requirements, a company where the paid-up capital is Rs.3 Crore but not more than Rs. 5 core and having a commercial operation for less than 2 years should appoint a market maker at the time of issue of securities.
4. Portfolio Consultants:
A combination of securities such as stocks, bonds and money market instruments is collectively called as portfolio. Whereas the portfolio consultants are the persons, firms or companies who advise, direct or undertake the management or administration of securities or funds on behalf of their clients.
Traditionally stock trading is done through stockbrokers, personally or through telephones.
As number of people trading in stock market increase enormously in last few years, some issues like location constrains, busy phone lines, miss communication etc start growing in stockbroker offices. Information technology (Stock Market Software) helps stockbrokers in solving these problems with Online Stock Trading.
Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through a website without any manual intervention from Stock Broker.
INTRODUCTION TO STOCK MARKET
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There are people who had become millenaries over a mid-night; as well as there are millionaires, who had lost their shirts and pants in a day. Either side is possible in stock market. The most volatile area in business is stock market.In simple terms, 'stock market' is a place where shares are bought and sold, otherwise 'traded'.A company's share is the basic unit of its asset. That's, when you buy all the shares of a company, you end up buying the whole company itself in other hand.A company has to list its shares in any stock exchange (like BSE, NSE etc), in order to enable the public people to buy and sell it.In developing countries like India, the stock market has become modern and has grown like rockets due to number of new businesses (business enlargement) and large pool of investors.
BSE (Bombay Stock Exchange)
BSE, otherwise known as Bombay Stock exchange is one of the oldest trading exchanges in India. It is fifth biggest stock exchange in the world and operates with the market capital of R.s.33.4 billion (US $730 billion) [Oops! 7 times of Bill Gates!].
A company has to list its shares in a Stock Exchange (like BSE or NSE) to be traded. There are around 3500 companies listed their shares in BSE as of mid 2006.A company has to meet BSE's eligibility criterions in order to get listed in it. Likewise, every stock exchange in the world will have its eligibility criterions to approve the share listing of a company. In India, when a company enters into Stock Exchange, it has to get the approval of SEBI also, before listed. SEBI is the market regulator, which resolves financial related issues in Indian Stock Exchanges and in other major financial institutions.
When a company lists its share as a first time in a Stock Exchange like BSE, this first time issue is especially termed as IPO. Only the first time share-issue is called IPO and the company may list additional volume of shares in future, that's not called IPO.And, usually people call it as 'going public', when a company lists its shares at first time.
SenSex
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Every stock exchange uses an index value to measure its overall performance. This is called Market Index. This market index is generally a derivative value. That's, a Market Index is derived from biggest companies share prices who dominate the overall market. (The term 'Market Capital' is the company's worth, simply the company's size)BSE has its market index, named as SenSex (Sensitive Index). This SenSex value is derived from 30 biggest companies listed in BSE, representing every business sector. When the overall performance of these 30 companies is poor, the SenSex value comes down automatically. When these 30 companies do well, the SenSex hikes up. It's just an indicator showing how the overall market plays.The 30 companies are chosen based on their Market Capital. To name few, Wipro & Infosys (from IT Sector), HDFC, ICICI (from Banking Sector) and so on.SenSex mark was 100 at 1979, when it was formed. It has crossed many colorful milestones and now it is kissing 14000 marks. It simply means, Indian Market has grown nearly up to 14000% (or) 140 times till date! Its' an outstanding performance since, India is a developing country.BSE has been very much modernized for trading in recent days. There are number of online brokers like ICICIDirect, Kotak, HDFC and many more, who make this trading way simple through online.
NSE
NSE (National Stock Exchange) is yet another Stock Exchange in India, started after BSE. NSE is completely modernized from its inception itself, unlike BSE.Even though, it was started after BSE, NSE's market capital is much bigger than BSE. In a short span, NSE has grown to be the third biggest Stock Exchange in the world.Just like BSE has its market index as SenSex, NSE too has its market index, which is Nifty. The Nifty value is derived from 50 biggest companies from every sector, dominating the market trade.
INTRODUCTION TO FINANCIAL MARKET
The financial markets can broadly be divided into money and capital market.
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Money market:Money market is a market for debt securities that pay off in the short term usually less than one year, for example the market for 90-days treasury bills. This market encompasses the trading and issuance of short term non equity debt instruments including treasury bills, commercial papers, bankers acceptance, certificates of deposits etc.
Capital market:Capital market is a market for long-term debt and equity shares. In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges. Capital market is the barometer of the company by which you are able to study the economic conditions of the country and it enables the Government to take suitable action. The capital market can be further divided into primary and secondary markets.
1. Primary market The primary is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In this case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built in to the price of the security offering, though it can be found in the prospectus.
Features of primary markets are:
This is the market for new long term capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called New Issue Market (NIM).
In a primary issue, the securities are issued by the company directly to investors. The company receives the money and issues new security certificates to the
investors. Primary issues are used by companies for the purpose of setting up new business
or for expanding or modernizing the existing business. The primary market performs the crucial function of facilitating capital
formation in the economy. The new issue market does not include certain other sources of new long term
external finance, such as loans from financial institutions. Borrowers in the new
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issue market may be raising capital into public capital for converting private capital into public capital; this is known as ‘going capital’.
Methods of issuing securities in the primary market are: Initial public offerings Rights issue (for existing companies), and Preferential issue
2. SECONDARY MARKETThe secondary market is the financial market for trading of securities that have already been issued in an initial private or public offering. Alternatively, secondary market can refer to the market for any kind of used goods. The market that exists in a new security just after the new issue is often referred to as the aftermarket. Once a newly issued stock is listed on a stock exchange, investors and speculators can easily trade on the exchange, as market makers provide bids and offers in the new stock.
In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market be highly liquid (originally, the only way to create this liquidity was for investors and speculators to meet at a fixed place regularly)
Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the stock exchange. Majority of the trading is done in the primary market. Secondary market comprises of equity markets and debt markets.
For the general investor, the secondary market provides an efficient platform for trading of his securities. For the management of the company, secondary equity markets serve as a monitoring and control conduit- by facilitating value- enhancing control activities, enabling implementation of incentive-based management contracts, and aggregating information (via price discovery) that guides management decisions.
How do stock markets operate?
Stock exchanges are like market places, where stockbrokers buy and sell securities for individuals or institutions. As per the SCRA (Securities Contracts Regulation Act) 1956,
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the definition of securities includes shares, bonds, stocks, debentures, government securities, derivatives of securities, units of collective investment scheme (CIS) etc.
The securities market has two interdependent segments: the primary and secondary market. The primary market is the channel for creation of new securities issued by public limited companies or by government agencies. New securities issued in the primary market are traded in the secondary market. The secondary market operates through the over-the-counter (OTC) market and the exchange-trade market.
Advantages of Stocks Trading
Better returns
Actively trading stocks can produce better overall returns than simply buying and holding.
Huge Choice
There are thousands of stocks listed on markets around the world. There is always a stock whose price is moving - it’s just a matter of finding them.
Familiarity
The most traded stocks are in the largest companies that most of us have heard of and understand - Microsoft, IBM, and Cisco etc.
Disadvantages of Stocks Trading
Leverage
With a margined account the maximum amount of leverage available for stock trading is usually 4:1. Meaning a $25,000 could trade up to $100,000 of stock. This is pretty low compared to forex trading or futures trading.
Pattern Day Trader Rules
It requires at least $25,000 to be held in a trading account if the trader completes more than 4 trades in a 5 day period. No such rule applies to forex trading or futures trading.
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Uptick Rule on Short Selling
A trader must wait until a stock price ticks up before they can short sell it. Again there are no such rules in forex trading or futures trading where going short are as easy as going long.
Need to Borrow Stock to Short
Stocks are physical commodities and if a trader wishes to go short then the broker must have arrangements in place to borrow that stock from a shareholder until the trader closes their position. This limits the opportunities available for short selling. Contrast this to futures trading where selling is as easy as buying.
Costs
Although online trading costs for stock trading are low they still add considerably to the costs of day trading. Online futures trading are about 1/4 of the cost for the equivalent value. In the UK 0.5% stamp duty is also levied on all share purchases making trading virtually impossible, hence the popularity of spread betting.
List of Stock Brokers of India 5Paisa.com Advani Share Brokers Anand Rathi Securities Brescon Group CIL Securities CRN India Churiwala Securities DSP Merrill Lynch Dalmia Securities Gandhi Securities Gogia Capital Services Hasmukh Lalbhai ICICIDirect Idafa Investments India Market Access Investsmart India Kisan Ratilal Choksey Shares
The emergence of online exchanges has facilitated faster transaction by providingonline trading portals and brokerage house ease and flexibility. The Internet hasIndeed opened up new opportunities for conducting the business. The worldwideStock exchanges has made a major shift from the traditional method of trading andNow conduct a bulk of its business online through its brokers and partners. In theDeveloped countries majorly all the exchange transaction are conducted online. TheTrend took off slowly in India and the National Stock Exchange (NSE) and theBombay Stock Exchange (BSE) two of the largest exchanges in India have beenconducting online trades successfully for some time.
WHY ONLINE TRADING ENTERED LATER IN INDIA?
The Indian exchanges and brokering houses have been very slow in moving theirTransactions online and the major reason have been the lot government regulations.The initial delay was due to laying down the specification for creating Closed UserGroups (CUGs). This issue was resolved between the Departments ofTelecommunications (Dot) and the Finance Ministry around 1998 and after theSoon came the online trading portals like ICICIDirect.com, motilaloswal.com,Sharekhan.com and smartjones.com. Connectivity related issue was perhaps themost important technological factor.Through online trading everyday large volumes of data is being transacted. At BSEThe aware age daily turnover in 2004-05 (April- March) was Rs 1244.10 Crore andThe number of aware age daily trades was Rs 5.17 lakh.
Objectives of Present Trading System:
Reduce and eliminate operational inefficiencies inherent in manual systems
Increased trading capacity in Stock Market
Improve market transparency, eliminate unmatched trades and delayed reporting
Provide on-line and off-line monitoring, control and surveillance of the market.
Promote fairness and speedy matching
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Smooth market operations using technology while retaining the flexibility of conventional treading practices
Set up various limits, rules and controls centrally
Consolidate the trades data on electronic media to interface will the broker‘s back office system
Provide public information on scrip prices, indices for all users of the system
Provide analytical data for use of Stock Market.
MECHANISM:
The broker of stock trading gets the membership at the stock exchange after fulfilling a set of conditions. The broker is connected online with the stock exchange. On the system he constantly gets the real quotes in the market, their position, the demand and supply rates, number of buyers and sellers at various rates.The customer drops in the office of the broker or gives him a call regarding sale or purchase of particular number shares. The broker takes his order and inputs that in his online system. If a proper match regarding that price is available in that market i.e. if both the buy and sale rates match, then it implies that the deal in stuck. If the suitable match is not found, the order gets stacked in the system till a suitable counter order emerges and the transaction is closed at the point of time. The members can easily exercise the various options available to them on a trading floor and when entering the order can place limit on either the number or the higher order and accordingly the order would be matched at the best price available. The member would also have the facility of canceling all outstanding orders in one stroke if deemed necessary or he may choose the entire order to be carried out as one deal or in smaller lots. The identity of the trading members entering orders in the system will be protected and will have direct participation by the large player also without the fear of their order influencing the state of the market. There will be a book entry transfer system for securities, which will operate just like passbook system in a bank. Accounts will be maintained against each member, detailing the securities held in trading member's name. At the end of each trading day the exchange computer will generate a report of matched trades on each trading member, which in turn would be received by each trading member and the money refundable /deliverable to the clearing agency. In order to expedite the settlement process, a depository is being established where securities, as and when sold and delivered to the clearing system, would be transferred. Whenever the investor wishes to take the physical possession of the security for some reason, physical withdrawal of the security from the depository will be permitted. Thus, through this system the trade transaction have shown a tremendous increase both in value and volume. The investors get the desired and the best rates, as the markets are more transparent and convenient to trade.
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Procedure for dealing at Stock Exchanges :
Trading on a Stock Exchange is officially done in the trading ring for a few hours from 9.30 am to 3.30 PM Trading before or after official hour is called curb trading. In 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 identity cards given by the Exchange to enter the Trading ring. They carry a Souda block book or confirmation memos duly authorized by the Exchange and carry a pen will them. The stock exchange 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:
The buying and selling at stock exchange is not allowed to outsiders. They have to approach brokers who are members of the exchange and the dealings can only be through them. The following procedure is followed for dealings at exchanges:
A. Election of Broker:
The first thing to be done is to select a broker through whom the purchase or sale is to be made. The intending investor or seller may approach his bank for the purchase. The banks can appoint their own brokers at exchanges and they contact for dealings on behalf of their customers. The bank assures about the financial condition of the client.
B. Placing an order :
After selecting the broker the client places an order for purchase or sale of securities. The broker also guides the client about the type of securities to be purchased and the proper time for it. If a client is to sell the securities then the broker tells him about the favorable time for sale. The broker is told to purchase shares, their number and price to be paid. The broker is giving some choice of bargaining. The same type of choice is given to the broker for selling the securities.
C. Making the contact:
The trading floor of the stock exchange is divided into different parts known as trading posts. Different posts deal in different types of securities. The authorized clerk of the broker goes to the concerned post and expresses his intention to buy and sell the securities. A deal is struck
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when the other party also agrees. The bargain struck by outcry mentioning the price and number of securities contracted by both the clerks. Both the parities in their notebooks note the bargain. The slop giving brief details of the bargain is put in a box for making announcement in the official price list for publicity.
D. Contract note:
The buying and selling brokers prepare notes after their mutual consent next day. The seller is sent the selling note and the buyer is sent the buying note. The details of securities traded are given, mentioning their number, price, etc.
E. Settlement:
The settlement is made and means of delivering the share certificate along with the transfer deed. The transferor duly signs the transfer deed i.e. in the seller. It bears the stamp of the selling broker. The buyer then fills up the particulars in the transfer deed. The spot dealing are settled there is full. The selling broker hands over the transfer form a share certificate to the buying broker after receiving the price. The settlement for ready delivery and forward contracts is done with a different procedure.
Settlement of ready delivery contracts: The settlement in different stock exchanges is done between 3 to 7 days of the transaction. If giving actual delivery of securities on receiving the price does the settlement it is called liquidation in full. In another method the dealings are squared by the adjusting price difference only.
Settlement of forward delivery contracts :
The forward delivery contracts are done for speculative purposes. Only the active and broad market securities are traded in forward contracts. The settlement of forward contracts can be done in any of the three ways:
a.Liquidation in fill : The securities are delivered and payment is received or vice-versa after crossing all intermediate purchases and sales.
b. Liquidation by payment of differences:
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The purchases and sales are offset at the ruling price by paying or receiving the difference amount. The securities are not delivered but only the difference of prices contracted and current prices are received or paid as the case may be.
c. Carry over to the next settlement: When the buyer does not want to settle the contract but wants to carry it to a future data then it is called carry over. The buyer will have to pay certain amount to the seller for this concession and the amount paid is known as Badla or Contango charge.
Different methods of settlement: At present, any one of the following methods can make the settlement:
Spot settlement: Under this method, the delivery of securities and payment for them are affected on the date of the contract itself or on the next working day.
Weekly settlement: Under this method, the delivery of securities and payments for them are settled within a time span of 7-14 days.
Rolling settlement: Each settlement being and conclude on the same day i.e. on daily basis, the trading is Trading day (T) + 5 i.e. Monday is the trading day next Monday Pay-in date. In case of non-delivery the securities will go for auction.
Clearing House: The exchange has set-up a clearing house to collect eh Securities from all the members and distributor to each member, all the Securities that are due to him in respect of every settlement. The whole of the operations of the clearinghouse is now computerized. Thus, trading o the Stock Exchange was officially done in the trading ring for a few hours from 9.55 am to 3.30 p.m .But now the opening bell will ring an hour earlier for Indian bourses. Trading will start at 9 am instead of the present 9.55 p.m the change in timing has become necessary as the settlement cycle will be further shortened to T+1. This means pay-in of shares and funds will take place the next day after trade. Since the back-office work of the brokering houses and clearing corporation will have to start early, to deal with the early settlement of trades, trading will also have to end earlier. The change I timing is needed to enable the exchanges to calculate the margin of each trading member and collect eh upfront margins on the value-at-risk (Vary) basis.
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Depository Act, 1996: The concept of Depository is known to the world since 1949 when the first depository was set up in Germany. There were 112 depositories in operation by the year 2001. Every depository operates under a country‘s specific law and regulation in order to ensure safety, liquidity, rights and liabilities to the security holders.
Depository: A depository is an organization where the securities of investors are held in electronic form. A depository can be compared to a bank. To avail of the services of a depository, an investor has to open an account with the depository through a depository participant, just as he opens an account with the bank. Holding shares in the account is a kin to holding money in the bank.
Depository participant: A depository participant is an agent appointed by the depository and is authorized to offer depository services to all investors. An investor cannot directly open a Demat account with the depository. An investor has to open his account through a DP only. The DP in turn opens the account with the depository. The DP in turn takes up the responsibility of maintaining the account and updating them as per the instructions given by the investor from time to time. The DP generates and provides the holdings statement from time to time as required by the investor. Thus, the DP is basically the interface between the investor and the depository.
the person who holds a Demat account is a beneficiary owner. In case of a joint account, the account holders will be beneficiary holders of that joint account.
The Demat account number of the beneficiary holder(s) is known as the BO Id.
A DP id is the number of the depository participant allotted by the depository
Depository Participants in India: At present, India has only two depositories-National Securities Depository Ltd. (NSDL) and Central Depository Services Ltd (CDSL). NSDL is the first depository in the country, which is promoted by three major financial institutions - Unit Trust of India, Industrial development Bank of India and National Stock Exchange of India Limited. The second depository of the country (CSDL) is set up in 1999 by the Mumbai Stock Exchange and Bank of India However, most of the services offered by both these depositories are similar. Today almost all the companies listed in dematerialized from with NSDL are available with CDSL.
The following can be held in the depository (electronic) form
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Shares (listed or unlisted)
Stocks
Bonds
Debentures
RBI Relief Bonds
Government Securities (through a primary Dealer)
Units of Mutual Funds
Commercial Paper
Money Market Instruments
Introduction to DEMAT Account
Demat is called Dematerialization of securities. Dematerialization is the process ofConverting the securities held in physical form (certificate) to an equivalent number ofSecurities in electronic form and crediting the same to the investor’s demat account.Dematerialized securities do not have any certificate number or distinctive numbers andAre dealt only in quantity i.e. the securities are fungible.Dematerialization of the clients holding is not mandatory. Clients can hold their securityEither in demat form or in Physical form. They can also keep part of their holdings (inThe same scrip) in demat form or in physical form. However a select list of securitiesAnnounced by SEBI can be delivered only in demat form in the stock Exchangeconnected to NSDL.A demat account can be opened with a depository participant upon paying an annual maintenance fee of Rs 250-750. Besides, they also charge Rs 30-50 for every debit entry (sell) of shares in the demat account. All public and private sector banks offer the demat facility and they charge a lower fee if the demat account holder has a savings or currentAccount with the bank concerned. Many brokerage firms also offer demat facilities. A list of this broker-cum- depository participants is available on the websites of National Securities Depository (www.nsdl.co.in) and Central Depository Services (www.cdslindia.com). These are the two central depositories in the country.
Effect on off-line Trading business:
With the emergence of e-broking, which offers many benefits like, level playing filled to all investors, comfort of the house, simplicity, low brokerage and value added services it could be possible for some of the offline trade to shift to online trade. The proportion of
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online broking business compare to off line broking is miniscule about less than 1%. The offline player would not be affected unless the figure reaches a minimum of 8-10%. More importantly on line broking is said to have brought in a whole new segment of investors. These are the hidden investors who did not have a dedicated broker. Online trade has not started to eat the volumes of, off line business till now. But at the same time it has created new set of clients for e.g., NRI‘s who were not very active in the market due to lack of transparency and information, have moved to use this facility. Housewives are another new category. Net savvy student‘s and retired persons are the next expected category. But those who get value added services from broker will continue to stay offline and those that are like any other normal retail investors, will have no hesitation to shift to online trading. The fact is that over a few years we would see more non-professionals getting to access to the market. E-broking has eaten the share of offline broking business especially into the sub broking where the same investors used to go and get whatever services he provided at rate since they would no longer be taken for a right, online trading is transparent.
BENEFITS OF ONLINE SHARE TRADING
Paperless and Hassle free In on line Share Trading There is no need to fill any Physical Form, Writing Cheques and TIFD’s for Setting the Trades.
One Window Solution Invest in about 7-8 product and get all the information on a Single screen just by using your user ID and Password
Place Any Time facility You can Place your order any time of the day even during Non Trading hours and holidays.
Speed Get the latest quotes of scripts on most of online share trading companies and place an order instantly at the same time and it will take just 4-5 seconds.
Control During trading or investing in share and others, there is order Confirmation instantly. This assures that you have indeed placed an order at the price you wanted.
Transparency
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You will get all the confirmation instantly that you have indeed placed an order at the price you wanted. So transparency is also more.
Mutual Funds Now a days you can buy and sell Mutual Funds online without filling application forms every time. And you can also take advantage of Systematic Investment Plan (SIP) and Systematic Withdrawal Plan (SWP) which allows you automatic periodic investments in any Scheme.
Trade in Equity Products In which you have a choice of trading options to match Your Trading needs.
Derivative Trading You can stabilize the return on your portfolio against Market Movement by investing in derivatives.
Online IPO’s Invest in IPO online without going through the Hassle of filling of any application form or Paperwork. On allotment, shares and Bonds are directly credited to the Demat Account.
Rich Market Intelligent Corporate Information Bank, Direct technical charts. All this is to help client to make Informed Decision.
Call and Trade Facility Call and Trade allows you to call on a Local number in your city and trade on the Telephone through Customer Sales Executive.
GOI Saving Bonds, Insurance, Loans are also available online; invest in these without any paperwork.
Trade from anywhere in the world by just sitting online
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COMPARISON OF ONLINE WITH OFFLINE TRADING
1. Money saving opportunitiesThe amount of money you save depends primarily on the online brokerage firm that youChoose. No two firms are the same. There may be different regulations, similar to bankRegulations. There are minimum deposits required that must be maintained. As mentioned Above, this will depend on the online brokerage firm.
2. Instant online accessYou can gain instant access to your account, the value of your portfolio updates immediately before your eyes.
3. Enter online trades at anytime You can enter online trades at anytime and from anywhere. This is very convenient if youLive in a different time zone than the country you are trading in. Not to mention, it isEspecially fit for investors with busy schedules.
4. With online trading you are in chargeYou are in control of your investments. No sales pitches and no hassle. You decide whereto invest your money. Nevertheless, with all the convenience of online trading there are still investors who prefer the old fashion way of offline trading. Offline trading has lost some popularity but it is still the main form of investing. Offline trading offers many benefits as well.
1. The one benefit that an investor appreciates the most is that they are not alone when they making investment decisions.
2. There are experienced and professional brokerage companies that handle theirinvestments for them.
3. Investors are not faced with the challenge of making these vital investment decisions;Especially, if they do not have the experience necessary to make the appropriateinvestments.
4. Also, there is someone there to answer any questions that may cause concerns.Not to mention, with offline trading mistakes are less likely to take place. No one wantsto throw their money away or stand by and watch someone else throw their money away.
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It may be wise to hire a professional to assist you in making the correct investmentDecision if you feel you lack the knowledge necessary.
Players Dealing in Online Share Trading
Presently there are about 30- 35 Companies that are dealing in online share trading like ICICIdirect.com, Share khan, India Bulls, India Info line, Kotak Street, HDFC, Motilal Oswal. Geojeet, IL & FS etc and many other small companies are also there. But the main Player in this Market isICICIDirect.comIndia bulls,Share khanKotak Securities,India info lineHDFC etc
ICICIdirect.com is the market leader he is sharing the maximum Market Share i.e. 55% of the trading in stock exchange is done by ICICI Direct.com.
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Sharekhan Ltd. is one of the leading retail stock broking house of SSKI Group, which is running successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advice etc.
With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKI’s institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organization’s revenue, with a daily turnover of over US$ 2 million. The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’ to its
Credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planet Asia, and Shopper’s Stop. SSKI has been voted as the Top Domestic Brokerage House in the research category by Euro Money Survey and by Asia Money Survey.
The firm is online trading and investment site - www.sharekhan.com - was launched on Feb8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over one-lakh customers. The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks.
On April17, 2002 Sharekhan launched Speed Trade, a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. In the last six months, Speed Trade has become a de facto standard for the Day Trading community over the net.
Sharekhan’s ground network includes over 640 centers in 280 cities in India, which provide a host of trading related services.
Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt. Ltd. to build its trading engine and content. The Morakhiya family holds a majority stake in the company. HSBC, Intel & Carlyle are the other investors.
These are the wide-raging services offered by the share khan to its customers. And most importantly. Share Khan is blessed with well-dedicated sales wings, who are looking after the various needs of the customers in a committed manner and which provide the customers with tremendous amount of satisfaction and happiness about their investment.
Sharekhan is infact- Among the top 3 branded retail service providers No. 1 player in online business Largest network of branded broking outlets in the country serving more
than 7, 00,000 clients.
NATURE OF BUSINESS
Sharekhan is a broking company. The company offers a complete range of pre trade, trade and post trade service on the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange). Whether the client come in to the company’s conventionally located officers and trade in a dedicated ambience or issue instructions over the phone, our highly trained team and sophisticated equipment ensure smooth transactions and prompt service.
Investment Advisory Service Facilitate Services to Retail Investors, Corporate. Depository Services Investment options includes :
Sharekhan Branches are conceptualized to be place where investors can meet investment opportunities in an atmosphere of convenience and comfort. Our services are available through our network of 510 Share Shops spanning 170 major towns and cities in the country. Professional seeks to educate clients and end their confusion by custom an Investment Plan according to the needs of clients and is today a part of company’s induction program advising employees on how to plan their investments.
FEATURES OF SHAREKHAN LTD.
1. Trading Facilities:
Sharekhan as a member of NSE & BSE provides both offline and online trading facilities nationwide for trading the securities in secondary market to its clients. The Company’s wide network of outlets spread across the country facilities to executive the orders in
secondary market.
2. Derivatives: (Futures and Options)
The company also facilitates the trading system for trading in secondary market under future and options segment of NSE and BSE. The equity dealers in the company will be eager to give insights into the new sets introduction in the Indian Capital market futures and options.
3. Depository Services:
Sharekhan is a Depository participant of National Securities Depository Limited and Central Depository and securities Limited. Sharekhan will open De-mat accounts, which will investors to convert physical certificates of shares into electronic balances in an
account maintained.
4. Margin Financing :
In the present rolling settlement scenario, Sharekhan understand investor need for additional capital availability for daily purchaser shares. It offers unique facility avail finance, for purchasing shares at very competitive interest rates.
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5. IPO’s and Mutual Funds:
Sharekhan offers the change of investing in the potentially lucrative IPO market. Sharekhan is a distribution house for all mutual funds. This is the new scheme introduced by the company and it offers schemes catering to investors with varying risk return
profiles.
6. Stock lending and Borrowing:
One can place an order of shares with Sharekhan. It is approved intermediary of the security or lending scheme. These would be sent out the borrowers, these earnings fees for all investor’s idle shares. Thus, Sharekhan fulfill the investor need for borrowing and lending of shares.
7. Equity Research :
Sharekhan has a highly rated research using involved in macroeconomic studies, industry and company specific equity research. The research team’s inputs will be available as daily trading calls, quarterly investment picks and long-term investment picks, based on the fundamentals of particular company and the industry as whole.
8. Internet Trading:
Investors can also trade their securities through this facility by logging into company’s website. The virtual world that Sharekhan offers online trading services through.
9. Portfolio Management Services:
Sharekhan securities are a registered portfolio manager with SEBI to manage portfolios on behalf of clients with discretionary and anon discretionary rights this service is a provision for those who may not have the right time to manage their stocks investment or require the service of company’s highly specialized professional team.
10. Online Trading:
Share Khan was amongst the pioneers of online trading in India and has launched Sharekhan.com in February 2000. Since then, they have been at the forefront in
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understanding customer needs, analyzing trends and brining innovation in their offerings. They have online trading products that are customized to the habits and preferences of investors as well as traders.
Features of Online Trading Products:
Live streaming quotes Instant order execution and conformation Price alerts Single Screen for equities and derivatives Multiple market watch windows Real-time portfolio tacking
11. Other Services:
a. Free access to investment advice, from Sharekhan research team. b. Sharekhan “value line “ ( A monthly publication) c. Daily research reports and market review. d. Daily trading calls based technical analysis e. Cool trading products. (Daring derivatives and market strategy) f. Personalized advice.
g. Live management information. h. Internet based online trading session. i. Online BSE and NSE executions through BOLT & NEAT terminals.
Rishi Kohli - Vice President of Equity Derivatives
Nikhil Vora - Vice President of Research
ORGANISATIONAL STRUCTURE
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VISION, MISSION & QUALITY POLICY
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VISION
Sharekhan practices customer centric approach to be leading broking Firm. The Company Vision is:
To be the top most company for providing investment advisory and financial planning services in India.
To be a leading investment intermediary for transaction through both online and offline medium.
MISSION
To educate and empower the individual investor to make better investment decisions through quality advice, innovative products and superior service.
Educate and empower
Research backed advice, which is easy to understand, retail specific, and discipline.
Total equity solutions for the entire investment process.
Relationship management
Superior service
Integrity
Transparency
Professionalism
Information – product, news, operations
Hassle free trading
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Enjoyable experience our goals is to accomplish top most position in both online and offline medium of trade and to remain a customer centric organization.
QUALITY OBJECTIVES
Objectives represent, what needs to be an accomplished in order to reach the goals.
To increase the customer base of investors to invest in all kind of securities.
Sharekhan has one among the largest network of outlets of the either trading firms with 180 outlets.
retain the existing consumers with research backed advice and personalized care the needs of the consumer.
SERVICES OFFERED BY SHAREKHAN LTD:
1. SHAREKHAN CLASSIC ACCOUNT:
It allows investors to buy and sell stocks online along with the following features like multiple watch lists, integrated banking, demat and digital contracts, Real-time portfolio tracking with price alerts and instant credit & transfer. This is a product for the retail investor who is risk-averse and hence prefers to invest in stocks selectively or who does not trade too frequently. There is no volume commitment on the part of the client. The features of the products are as follows:
The registration charges are Rs.750/- that is a one-time payment. With the online package defaults demat a/c. would be opened with SSKI. For the 1st year no demat charges have to be paid. It is free.
The client gets exposure of up to four time of the deposit amount. For example if the client has Rs.5000/- in his/her account he/she can get the exposure up to Rs.20, 000/-
The brokerage applicable is 0.50% on delivery and 0.1 for intraday trading.
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Online trading account for investing in Equities and Derivatives
Integration of: Online trading + Bank + Demat account
Instant cash transfer facility against purchases and sale of shares
Instant order and trade confirmation by e-mail
IPO investments
Single screen interface for cash and derivatives
2. SHAREKHAN SPEED TRADE ACCOUNT:
This account is active traders who trade frequently during the day’s session. Following are few popular features of Speed Trade account.
Single screen interface for cash derivatives
Real-time streaming quotes with Instant order Execution and Confirmation
Hot keys similar to a traditional broker terminal
Alerts and reminders
Back-up facility to place trades on Direct Phone Lines
3. OTHER SERVICES:
DIAL-N -TRADE
Along with enabling access for trade online, the CLASSIC and SPEEDTRADE ACCOUNT also gives Dial-n-trade services. With this service, one can dial Share khan’s
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dedicated phone lines 1800-22-7500, 3970-7500. Beside this, Relationship Managers are always available on Office Phone and Mobile to resolve customer queries.
SHARE MOBILE
Sharekhan had introduced Share Mobile that is mobile-based software where one can watch Stock Prices, Intra Day Charts, Research & Advice and Trading Calls live on the Mobile. (As per SEBI regulations, buying-selling shares through a mobile phone are not yet permitted.)
PREPAID ACCOUNT
Customers pay Advance Brokerage on trading Account and enjoy uninterrupted trading in their Account. Beside this, great discount are also available (up to 50%) on brokerage.
Prepaid Classic Account: - Rs. 2000
Prepaid Speed trade Account: - Rs. 6000
IPO ON-LINE
Customers can apply to all the forthcoming IPOs online. This is quite hassle-free, paperless and time saving. Simply allocate fund to IPO Account, Apply for the IPO and
Sit Back & Relax.
Mutual Fund Online
Investors can apply to Mutual Funds of Reliance, Franklin Templeton Investments, ICICI Prudential, SBI, Birla, Sundaram, HDFC, DSP Merrill Lynch, PRINCIPAL and
TATA with Sharekhan.
Zero Balance ICICI Saving Account
Sharekhan had tied-up with ICICI bank for Zero Balance Account for Sharekhan’s Clients. Now their customers can have a Zero Balance Saving Account with ICICI bank after your demat account creation with sharekhan.
There is two type of account-(a) Classic A/c opening charges- Rs 750/-
(b) Speed trade A/c opening charges- Rs 1000/-
(Rs 500/- per month of speed trade A/c. If Brokerage is Rs 1500/- of 3 monththen RS 500/- will be off and if not then Rs1500/- and brokerage will charged.)
AMC Charges- Rs 300/- per annum.
BrokerageCash brokerage: - Delivery: 0.50%, Intraday: 0.10% (Negotiable)(Min. 0.05% on intraday & 0.50% on delivery)Exposure: -4 to10 times (For Intraday)2 times (For Delivery)F&O Brokerage: - Buy & Sell 0.05% (Negotiable)
Odin TerminalIn Classic A/c Terminal is waive based and it shows 5 portfolio. You can see only 26 script (shares) at a time. There is also no any graph is displays and customer have to login in every 10 minute.In Speed Trade A/c Terminal is internet based/ Software based and customer can see 500 script (shares) at a time.Trading through offline or website. (www.sharekhan.com)NSE & BSE both are online.Live applet for watching prices & trading purposes.Share Transfer:From Sharekhan Demat account to some other company Demat account thecharge per script is Rs. 22
Bank relationships
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Sharekhan has affiliation with 11 banks, which allows its customers to enjoy the facility of instant credit and transfer of funds from his savings bank account to his Sharekhan trading account. The affiliated banks are as follows:
HDFC BANK UTI BANK CITY BANK ICICI BANK OBC BANK UNION BANK INDUSAND BANK IDBI BANK CENTURION BANK AXIS BANK YES BANK
ADVANTAGES OF SHAREKHAN
Online trading is very user friendly and one does not need any software to access.
They provide good quality of services like daily SMS alerts, mail alerts, stock recommendations etc.
Sharekhan has ability to transfer funds from the most banks. Unlike ICICI Direct, HDFC Sec, etc., so investor not really needs to open an account with a particular bank as it can establish link with most modern banks.
ACHIEVEMENTS OF SHAREKHAN
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It is rated amongst the top 20-wired companies along with Reliance, HUJl, Infosys, etc by ‘Business Today’, January 2004 edition.
India has most preferred brokers within 5 years.
It has been awarded ‘Top Domestic Brokerage House’ four times by Euro money and Asia money
It is one of the pioneers of online trading in India amongst the top three online
trading websites from India.
It is the most preferred financial destination amongst online broking customers.
It has won the award for “Best Financial Website”.
It has been honored by “Awaaz customers Award 2005”.
FUTURE PLANS OF SHAREKHAN LTD.
To service 2, 00,000 plus retail customers through centralized call centers / web solutions.
To set up Branches / Semi branches servicing affluent / aggressive traders through high skill financial advisor.
To begin 250 independent investment managers/ franchisee servicing 50,000 highly valued clients.
To initiate Portfolio management Services and commodities trading in times to come.
PROBLEM OF ORGANISATION
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As it is a Mumbai based company that is why common masses are not aware properly about this, it needs more advertisement in the new region.
Sharekhan ltd. cannot reduce the brokerage rate, which is already so high in the market that is why they lose many opportunities.
Its online banking facilities is not so effective, it needs to be improved.
Some people do not respond well.
Products are very costly.
Lack of contacts
It has to face a highly competitive market to sell the products.
Lacks product training
Selling of a single product
People have less faith on the stockholders.
SWOT ANALYSIS
STRENGTHS
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End-user sales control and direction. Right products, quality and reliability. Superior product performance vs. competitors Better product life and durability Some staff has experience of end user sector. Have customer’s lists. Direct delivery capability. Product innovations ongoing. Can serve from existing sites. Products have required accreditations. Processes and IT should cope Management is committed and confident
WEAKNESSES Customers lists not tested Some gaps in range for certain sectors We would be a small player
OPPPORTUNITIES Could develop new products Local competitors’ have poor products Profit margins will be good End-users respond to new ideas Could extend to overseas New specialist applications Support core business economics Could seek better supplier deals
THREATS No direct marketing experience We cannot supply end-users abroad Need more sales people Limited budget No pilot or trail done yet Do not have a detailed plan yet Delivery-staff need training Customer service staff needs training Processes and systems, etc.
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India Info line (5 Paisa.com)
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India info line was founded in 1995 and was positioned as a research firm. In 2000 e-broking was started under the brand name of 5 paisa.com. Apart from offering online trading in stock market the company offers mutual funds online.It also acts as a distributor of various financial services i.e. GOI securities, Company Fixed Deposits, Insurance. Limited ground network, present in 20 Cities.
Online Account Types• Investor Terminal: Investors / Students
Trading 0.10% each side + STDelivery 0.50% each side + ST(Negotiable to 0.05% each side & 0.25%)
Account Access ChargesMonthly Rs 800, adjustable against BrokerageYearly Rs 8000, adjustable against brokerage
INDIABULLS
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Equity and Derivatives- Ease, Convenience
Reliability- It all starts here.
Investment services as individual as you are.
India bulls Financial Services Ltd. is a public company and listed on theNational Stock Exchange, Bombay Stock Exchange, Luxembourg StockExchange and London Stock Exchange. The company ranks at 82nd position inThe list of most valuable companies in India has a market capitalization of approxUS $ 800 million. The consolidated net worth of the company is approx US $400 million.Through various types of brokerage accounts, India bulls offers the purchase andSale of securities which includes Equity, Derivatives and Commodities InstrumentListed on National Stock Exchange of India Ltd. (NSEIL), the Stock Exchange,Mumbai (BSE) and NCDEX.
Features of Power India bulls:Live Streaming QuotesFast Order EntryTic by Tic Live ChartsTechnical AnalysisLive News and AlertsExtensive Reports for Real-time Accounting
Demat+Trading account opening charges-
For Offline A/c opening- 700/-For Online A/c opening- 1450/-(An Offline Demat A/c holder cannot do online trading)
Online Account Type
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• Signature Account: Plain Vanilla Account with focus on Equity Analysis.The equity analysis is a paid service even for A/c holders• Power India bulls: Account with sophisticated trading tools, lowCommissions and priority access to R.M
CHARGESPricing of IB Accounts
Signature Account• Account Opening: Rs 250• Demat: Rs 200 if POA is signed, No AMC for this DP• Initial Margin: NIL• Brokerage: Negotiable
Power India Bulls• Account Opening: Rs 750• Demat: Rs 200 if POA is signed, No AMC for this DP• Initial Margin: NIL• Brokerage: Negotiable
PAID Research
Scheme FacilityWebBased-1-Month-500: View & Print on websiteWebBased-1-Year-6000 View & Print on websitePrintReport-1-Month-750: View & Print on website + 10 Reports DeliveredPrintReport-1-Year-9000: View & Print on website + 10 Reports Delivered
BrokerageFor intraday trading- .02 - .05%For Delivery trading- 0.25 - 0.50%(Brokerage is negotiable and it based on the volume of client)
FundingInterest rate is 19% per month for funding.
DrawbackFor delivery they are providing a limit of 27 days, for squaring-off.
Services:1. No SMS alert provide2. A trader can find out the information about share market only by to callDealers3. Account opening time- One Weak4. Online & offline trading facilities are different.
ICICI direct.com
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ICICIDirect (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock trading and trading in derivatives in BSE and NSE, it also provides facility to invest in IPOs, Mutual Funds and Funds.
CUSTOMER SERVICE FEATURES:With ‘ICICI direct Customer Tools &Updates’ you can trouble shoot all yourProblems online. It is a Market Player.
TYPES OF ACCOUNT ICICIDirect offers 3 different online trading platforms to its customers:
1. SHARE TRADING ACCOUNT:Share trading account by ICICIDirect is mainly for buying and selling of stocks in BSE and NSE. This account allows cash trading, Margin trading, Margin plus trading, spot trading, buy today sell tomorrow and Call and Trade on phone. They also provide installable application for high volume trader.
2. WISE INVESTMENT ACCOUNT: Along with stock trading and IPO investing in BSE and NSE, wise investment account also provide options to invest in Mutual Funds and Bonds online. Online Mutual Funds investments allows investor to online in around 19 mutual fund companies.ICICI Direct offers various options while investing in mutual funds like purchase mutual fund, redemption and switch between different schemes, systematic investment plans, systematic withdrawal plan and transferring existing mutual funds in to electronic mode. This account also provides facility to invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. ICICI Direct.com website is the primary tool to invest in Mutual Funds, IPOs, Bonds and stock trading.
3. ACTIVE TRADER ACCOUNT: Active trader account gives more personalized investment options to the investors. It allows investors to use online and offline stock trading. It also provides with independent market expertise and support through a Dedicated Relationship Manager from ICICI. Active Trader also provides commodity trading.
Brokerage and Fees
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1. Account opening fees: rs.750/-(one time non refundable)2. Brokerage: ICICIDirect.com brokerages vary on volume of trade and inclusive of
demat transaction charges, service taxes and courier charges for contracts notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to 0.425% for squared off trades and 0.4% to 0.85% on delivery based trades.
Trades between Rs.2, 00, 00,001/- and 5, 00, 00,000/- (Rs. 2 Crore to 5 Crores)0.30% Nil 0.15%
Trades between Rs.1, 00, 00,001/- to Rs. 2, 00, 00,000/- (Rs. 1 Crore to Rs 2 Crore)0.35% Nil 0.175%
Rs. 50, 00,001/- to Rs.1, 00, 00,000/- (Rs. 50 lacs to Rs. 1 Crore)0.45% Nil 0.225%
Rs. 25, 00,001/- to Rs.50, 00,000/- (Rs. 25 lacs to Rs. 50 lacs)0.55% Nil 0.275%
Rs. 10, 00,001/- to Rs.25, 00,000/- (Rs. 10 lacs to less than Rs. 25 lacs)0.70% Nil 0.35%
Less than Rs. 10, 00,000/- (Rs. 10 lacs)0.75% Nil 0.375%
For NSE Trades Brokerage is calculated on a per share basis and is rounded offTo the fourth decimal.For BSE Trades Brokerage is calculated on a per share basis and is rounded offTo the second decimal.
Advantages of ICICIDirect.com:
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1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI and very well integrated. This feature makes ICICI the most interesting players in online trading facility. There is absolutely no manual interfere require. This is truly online trading environment.
2. Unlike most of the online trading companies in India which require transferring money to the broker’s pool or towards deposits, at ICICIDirect you can manage your own demat and bank accounts through ICICIDirect.com. Money from selling stock is available in ICICI bank accounts as soon as the ICICIDirect receive it.
3. Investment online in IPOs, Mutual Funds, GOI Bonds and postal savings schemes all from one website. General Insurance is also available from ICICI Lombard.
4. Trading is available in both BSE and NSE.
Disadvantages of ICICIDirect.com
1. Getting access to ICICIDirect.com website during market session can be frustrating.
2. ICICIDirect brokerage is high and negotiable.3. Not all stocks are available under margin plus.
KOTAK SECURITIES LTD.
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Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, was set up in 1994. Kotak Securities is a corporate member of both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Currently, Kotak Securities is one of the largest broking houses in India with wide geographical reach.
Kotak securities online trading, is the online trading portal of the Kotak Securities Ltd, the leading stock broking house of India. The online division of Kotak Securities Limited provides services like internet broking services, online IPO and mutual fund investment
Kotak Securities Ltd. is India's leading stock broking house with a market share of around 8%. Kotak Securities Ltd. has been the largest in IPO distribution.Kotak Securities Limited manages assets over 2500 crores of Assets under Management (AUM).
Type of account:Kotak offers different account types according to user’s requirement:
1. Kotak Gateway
Kotak securities gateway account opens the gateway to a world of investing opportunities for beginners. Kotak gateway user can trade anywhere, anytime using internet. Kotak also offers call and trade facility.They provide sms alert, research report, free news and market updates. Best feature of Kotak gateway is call and trade facility. Anybody can activate Kotak securities gateway account with any amount between Rs 20,000 to 5, 00,000. This can be in form of cash deposit or the value of the shares you buy. Brokerage will be charged based on the account type. For intraday trading brokerage is .06% both sides for less than 25 lakh and .023% for more than 25 crores.
2. Kotak Privilege Circle
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This is the premium account for its users. Along with kotak gateway account benefits they provides independent market expertise and support through a dedicated relationship manager and a dedicated customer service desk which provides assistance in opening accounts, handling day-to-day problems, and more. They provides KEAT premium which is an exclusive online tool that lets you monitor what is happening in the market and view your gains and losses in real-time.
One can activate Kotak securities privilege circle account with any amount more than Rs. 10, 00,000/- as margin, by way of cash or stock. For intraday trading brokerage is .06% both sides for less than 25 lakh and .03% for more than 25 crore.
3. Kotak High Trader
This is the best offer for daily trader or intraday traders. This is an Auto Square Off product where you can enjoy the benefits of intra-day trading. Trader can get the 6 times exposure on the margin. They provide all the benefits which kotak gateway and privilege account provides. Trader can apply paper free order for IPO.
One can activate Kotak securities high trader with any amount less than Rs 5, 00,000/- as margin, by way of cash or stock. The minimum brokerage that is applicable in the Kotak high trader account is 4 paisa on delivery and 4 paisa in the cash segment.
4. Kotak Freeway
Frequent trader use this account type because freeway account enables it’s users to trade as many times as they like - at a fixed brokerage.
One can activate Kotak securities freeway with any amount less than Rs. 1, 25,000/- as margin, by way of cash or stock. They charge fixed brokerage of Rs.999/- a month and on delivery transaction brokerage is .59% on less then 1lakhs and .18% on more than 2 crores.
5. Kotak Flat
This product is best suited for the needs of the Indian retail investor who actively invests through the internet. Kotak flat introduces the international trend of charging brokerages on per trade basis. Brokerage rate works up to 0.18% on delivery trades and 0.018% for intraday trades.
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6. Kotak Assist
This account most suits to long term investors. This account provides complete assistance on all your financial investment.
Brokerage and Account opening fees:A trading account in Kotak requires you to have a minimum of Rs.1000 to start with, the bank account to have a minimum of Rs.2500.
Brokerage:
1. For Intra-day trading, Kotak brokerage is around 0.05%.2. For delivery trading, Kotak brokerage is around 0.45%.
About HDFC Securities Ltd HDFC Securities is a brand brought to you by HDFC Securities Ltd, which has been promoted by the HDFC Bank & HDFC with the objective of providing the diverse customer base of the HDFC Group and other investors a capability to transact in the Stock Exchanges & other financial market transactions.
Online trading for Resident & Non Resident Indians.
Cash-n-Carry on both NSE and BSE. Day trading on both NSE and BSE. Trade on Futures & Options on the NSE. Online IPO's. Telephone-based Broking (Equity & Derivatives). The capability to take your orders over the phone No compulsion for you to change your existing savings and demat Accounts to
any of our preferred banks A branch network that is set to quickly grow in all-India coverage, so you’re
never too far from customer service that will meet your Requirements .State-of-the-art technology backing the safety features in all Our transactions.
Online Account Type
HDFC Online Trading A/c: Plain Vanilla Account with focus on 3 in 1 Advantage.
Pricing of HDFC AccountA/c Opening: Rs 750/- for non HDFC Bank customers (AQB)
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Brokerage:Trading 0.15%* each side + STDelivery 0.50%** each side + STDemat: Nil, 1st year charges included in Account OpeningInitial Margin: Rs 5000* Rs 25 Min Brokerage per transaction** Rs 8 Min brokerage per transaction
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RELIGARE Securities Ltd
Religare Securities Limited, a Ranbaxy Promoter Group Company, was founded by late Dr. Parvinder Singh (CMD Ranbaxy Laboratories Limited), with the vision of providing integrated financial Care driven by the relationship of trust & confidence. To realize its vision the Religare group provides various financial services whichInclude broking (stocks & commodities), depository participant services, and portfolioManagement services, advisory on mutual fund investments and many more.Today, it provides various financial services which include Investment Banking,Corporate Finance, Portfolio Management Services, Equity & Commodity Broking, Insurance and Mutual Funds. Plus, there’s a lot more to come your way.
Religare Today –
An ISO 9001:2000 Company Member of National Stock Exchange (NSE) since November 1994, first deposit
Based member of BSE. Depository Participant with
- National Securities Depository Limited (NSDL) since July 2000 - Central Depository Services (India) Limited (CDSL) since Feb 2003. - SEBI Approved Portfolio Manager
Individual Client:Demat A/c opening charges- Two schemes are there:
Classic Plan :
1) R-ACE Basic Account activation charges Rs.299 Minimum margin of Rs.5000 required. Earn interest on cash margin (up to 3%)
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Trading A/c free for life time. Lifetime free DP account (No Annual Maintenance charge)
2) R-ACE Life (Advanced) Account activation charges Rs.499 Minimum margin of Rs.5000 required. Earn interest on cash margin (upto 3%) Trading A/c free for life time. Lifetime free DP account (No Annual Maintenance charge) Trading through offline or website. (www.religare.in) NSE & BSE both are online Live applet for watching prices & trading purposes.
3) R-ACE PRO (Professional) Account activation charges Rs.999 Minimum margin of Rs.10, 000 required. Earn interest on cash margin (upto 3%) Trading A/c free for life time. Traders terminal on your desktop (customization) Lifetime free Dp account (No Annual Maintenance charge) Trading through offline or website. (www.religare.in) NSE & BSE both are online Live applet for watching prices & trading purposes.
BrokerageCash brokerage: - Delivery: 0.50%, Intraday: 0.05% (Negotiable)Exposure: - 5times (upto 1 lacs, for Intraday)20 times (from 1 lacs onwards, for Intraday)2 times (For Delivery)F&O Brokerage: - Buy & Sell 0.05% (Negotiable)
Freedom PlanIt is a plan for those investors who want to pay FEE-Base Broking (PrepaidBrokerage).It involves four plans:1) 500 (Monthly)2) 1400 (Quarterly)3) 2500 (Half Yearly)4) 4000 (Yearly)
To study about the effectiveness and efficiency of sharekhan ltd in relation to its competitors
To study about whether people are satisfied with sharekhan services and management system or not
To aware the clients about the services of the Share khan.
The Broad objective of the project is to make clients and let them know about the different services offered by the Share khan. Also to convince them about how Share khan services out score their rivals and how in future they will be benefited from the services offered by Share khan. This project will accomplish to understand the problem faced by the existing client and find ways to solve their queries at your level otherwise let the above level know about their problem. We have to be in regular contacts with our clients so that we come to know about the problem they are facing. This also helps us to multiply our clients by getting the further references. By this we are able to make a chain of the customers, which expands as we satisfy their needs.
RESEARCH METHODOLOGY
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Research methodology is a way to systematically solve the research problem. The research methodology included the various methods and techniques for conducting a research. “Marketing Research is a systematic design, collection, analysis, and reporting of data and finding relevant solution to a specific marketing situation or problem.” Sciences define research as “ the manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in practice of an art.”
Research is thus, an original contribution to the existing stock of knowledge marketing for its advancement, the purpose of research is to discover answers to the questions through the application of scientific procedure.
My research project has a specified framework for collecting the data in an effective manner. Such framework is called “Research Design”. The research process which was followed by me consisted following steps.
1. Defining the problem & Research Objectives
It is said, “A problem well defined is half solved”. The step is to define the project under study and deciding the research objective.
The definition of problem includes the analysis of competitors with Sharekhan.
A. Developing the Research Plan:
The second stage of research calls for developing the efficient plan for gathering the needed information. Designing a research plan calls for decision on the data sources, research approach, research instruments, sampling plan and contacts methods. The research is descriptive in nature and is aimed at analyzing the effectiveness and efficiency of sharekhan in relation to its compititors.The development of Research plan has the following Steps:
Data Sources
Two types of data were taken into consideration i.e. Secondary data and Primary data. My major emphasis was on gathering the primary data. The secondary data has been used to make things more clear.
i. Primary Data: Direct collection of data from the source of information, technology information, technology including personal interviewing, survey etc.
ii. Secondary Data: Indirect collection of data from sources containing past
or recent information like, Annual Publications, Books, Newspaper and Magazines etc.
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B. Research Approach
Surveys are best suited for Descriptive Research. Surveys are undertaken to learn about people’s knowledge, beliefs, preferences, satisfactions and so on. Therefore I have done this Survey for the Descriptive Research Process.
C. Research instrument A close friend questionnaire was constructed for my survey. A Questionnaire consisting of a set of questions was presented to respondents for their answers.
2. Sampling Plan
Sampling Technique: The selection of the respondents was done on the basis of simple random sampling.
Sampling unit: Who is to be surveyed?
The target population must be defined that has to be sampled. It is necessary so as to develop a sampling frame so that everyone in the target population has an equal chance of being sampled. The sampling unit of this project was drawn from people having different educational qualifications, occupations and age group.
Sample Area: DEHRADUN CITY
Sample Size: How many people have to be surveyed?
Generally large sample gives more reliable results than small samples. The sample consisted of 30 respondents.
3.Contact Methods
Once the sampling plan has been determined, the question is how the subject should be contracted i.e. by telephone, mail or personal interview. Here in this survey, I have contacted the respondents through personal interviews.
4.Collecting the information
The collection of data is a tedious task. For conducting any sort of research. data was needed. So for my research, there was plenty of primary data and for increasing the validity of information collected, some books, journals, pamphlets, information about the company were studied and taken into considerations. After this, I have collected the information from the respondents with the help of questionnaire.
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a. Collection of Primary Data: Primary Data is the data collected from the original source. In my survey and study, there was optimum availability of primary data because every aspect was witnesses carefully at each point. Questionnaire and personal interviews were the main instruments, which were used for collecting primary data.
b. Collection of Secondary Data: Secondary Data is the one which has already been collected by someone else and some other person is using that information. The source of secondary data was, some related books and websites related to the company . The competent staff of the company helped me a lot in providing information about the bank.
5. Analyze the Information
The next step is to extract the pertinent findings from the collected data. I have tabulated the collected data and developed frequency distributions. Thus the whole data and developed frequency distributions. Thus the whole data was grouped aspect wise and was presented in tabular form. Thus, frequencies and percentages were prepared to render impact of the study.
7.Presentation of findings:
This is the last and important step in the research process. The findings are presented in the form of graphs, charts, conclusions, suggestions and recommendations after data analysis.
Detail:Size of Data : 30Area : DehradunType of Data : 1. Primary 2. Secondary Industry : Stock marketRespondent : Customers
(a) Demographic classification of investors:
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Attributes No. of persons Percentage (%)
Male 18 60%
Female 12 40%
Interpretation: Out of the total sample size of 50 investors, 58% were male and 42% constituted female investors.
Interpretation: The survey shows that majority of employed professional investors are in between the age group of 20 to 25 and 25 to 30.
(c) Nature of Occupation of Business:
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Attributes No of persons Percentage (%)salaried 27 90%Self-employed 3 10%
Interpretation: The analysis made showed that more than 90% of those who are interested in online trading are employed. Among the employed sample, 90% of the individuals are salaried and the rest (10%) are self employed.
(d) Percentage of annual income reserved for investment by the investors:
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Attributes No. of Persons Percentage
Less than 5% 8 27%5%-10% 10 33%10%-15% 4 13%15%-20% 5 17%20%-25% 2 7%25% and above 1 3%
Interpretation: Majority of the investors (33%) intend to invest 5% to 10% of their income in investment channels with. This is closely followed by those (27%) who intend to invest less than 5% of their income. 17% of the investors intend to invest 15 to 20% of their income. Since majority of the investors are interested in equity shares as inquired above, and they also consider investing up to 20% of their income, it brings out the potentiality amount the investors are ready to spend on online trading and Dematerialization.
(e) Who influence the investor’s investment decision:
Interpretation:Personal choice influences the most i.e. 50% of investors to make an investment decision, which can be clearly understood from the investors profiles as most of them are salaried, holding professional jobs and residing in Dehradun. Friends and relative influence 30% of the investors. Parents influence only 10% of the investors. Lastly, personal bankers and brokers influence only 7% and 3% of the investors respectively.
(f) Awareness of Sharekhan as a Brand:
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INTERPRETATION:45% people said that they are aware about sharekhan as a brand while 55% people do not heard about sharekhan.
(g) Frequency of Share Trading by Investors:
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Attributes No. of Persons PercentageDaily 8 25%Weekly 4 15%Fortnightly 6 20%Monthly 12 40%Not much --- ----
Interpretation: This indicates that 25%% of the investors who own Demat account indulge in online trading on a yearly basis, 40% on monthly basis, 20% on fortnight basis and 15% on a weekly basis.
(f) Comparison of online share trading with offline share trading:
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INTERPRETATIONAccording to the survey conducted, I can conclude that people prefer more of doing online trading in comparison of offline trading. It is not that they have more transparency in online trading, but be they are able to see their trade being done and also can see the ups and downs of market of every minute, People of every age group is able to get
knowledge of computers also through online trading.
(J) Classification of the company in which investors have DEMAT a/c
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Interpretation: The survey shows that, investors who are aware of Demat, 27% own a Demat account at ICICI direct. 20% have their account in Sharekhan. Rest of the investors, have their account in kotak Mahindra, India bulls Religare sec and HDFC securities ltd. With 5%, 20%, 15% and 13% each.
(l) Rating of share trading companies:
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Interpretation:ICICI Direct is the market leader. Sharekhan is rated the second best broking firm by the customers then after follow indiabulls, religare, kotak mahindra, and HDFC sec
(k) Satisfaction level among Customers with Current Broker
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Interpretation:Almost, all the people(88%) satisfied with their current broker.
FINDINGS:
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There is a huge potential for online share market.
Online share trading and Demat services are considered to be a convenience factor
The brand visibility of financial institutions providing online trading and Demat services is very low.
Quality of service is the most influential aspect of a bank / broking agency that appeals the investor
Sharekhan believes in zero marketing as a result there is very less awareness about the company.
ICICI Direct is the biggest competitor of Sharekhan as well as India bulls.
Sharekhan is the fastest emerging broking firm in comparison to all.
Sharekhan is rated the second best broking firm by the customers.
SUGGESTIONS:
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Online trading is beneficial to investors but it is very expensive, so, the organizations should provide the depository services with low cost.
Since more and more companies are planning to enter into online trading, quality of service should be continuously updated
Sharekhan should be more focused on marketing: advertisement may include giving ad in newspaper as well as in television, sponsoring events held in management colleges, organizing events which involve the participation from the corporate.
Sharekhan should come out with schemes for corporate.
Openings demat account is not enough, they should follow the customer even once the sale is being done and thus retains the customer.
Sharekhan should open a bank of their own or they should go for more tie ups with other banks like central bank of India, state bank of India, etc.
They should develop a program for the checking up of the forms filled for the opening of D-MAT account.
They should go for more reliable researches so that the people are less prone to risk and they can easily invest their money in stock market.
LIMITATIONS OF THE STUDY
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Lack of awareness of Stock market: - Since the area is not known before it takes lot of time in convincing people to start investing in shares primary in IPO’s.
Mostly people comfortable with traditional brokers : - As people are doing trading from their respective brokers, they are quite comfortable to trade via phone.
Lack of Techno Savvy people and poor internet penetration : - Since most of the people are quite experienced and also they are not techno savvy. Also internet penetration is poor in India.
Some respondents are unwilling to talk: - Some respondents either do not have time or willing does not respond, as they are quite annoyed with the phone call.
Inaccurate Leads: - Sometimes leads are provided which had error in it which varies from only 5 digit phone number to wrong phone number
Time Pressure:- As the time was only 2 months, there was a pressure to prepare the report with accurate data and present it to the Assistant Manager.
Expenses not Provided – Expenses which were incurred to get the information were not provided by the company.
Finding Accurate Data– There was a pressure to present only accurate data not fake which took lots of time in proving that the data was accurate.
People do not Ready to Give Information:- People who were approached were reluctant to provide the information due their busy work.
Market Time:- There was the biggest problem as we could contact our Assistant Manager only after the share market closed and they completed their work and settlements that is after 4 P.M.
Limited Area:- The study involves only 30 employed investors chosen at random which may not be the true representative of the population. Hence cannot be generalized.
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CONCLUSIONS
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According to the survey conducted, it is concluded that people prefer online trading over offline trading. It is not that they have more transparency in online trading, but be they are able to see their trade being done and also can see the ups and downs of market every minute. People of every age group are able to get knowledge of computers also through online trading.
It keeps it process more transparent.
Investors are looking for those investments where they get maximum returns with less investment.
Market is becoming complex and its means that the individual investor will not have the time to play stock game on his own.
People are not so much aware about the investment options available in the market.
Institutions like sharekhan have playing their roles by educating customers and giving them services so that investors can manage their money profitably and also making them aware of online trading facilities.
QUESTIONNAIRERespected Sir/Madam,I am doing a research on a topic “Core Competence of Sharakhan” for the fulfillment of my B.B.A. degree. It will require few minutes of your precious time.
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Q1. Your Education?(a) High school (b) Graduate (c) Professional (d) Other
Q2. What is investment?(a) A method to propel the money.(b) A method to earn money.(c) Money appreciation against inflation.(d) Money saving.
Q3. What do you think about appropriate age of investment?
Q4. What is your occupation?(a) Salaried(b) Self-Employed
Q5. What % of your annual income do you invest?(a) 10% of annual earnings.(b) 20% of annual earnings.(c) 30% of annual earnings.(d) 40% of annual earnings.
Q6. How do you take decisions to invest?(a) According to your wish.(b) According to experts or brokers.(c) According to friends or relatives advice.(d) According to advice of personal banker(e) Inspired by advertisement
Q7. Are you aware of Share khan as a brand?(a) Yes (b) no
Q8. What mode of trading concerned you prefer?(a) Online (b) Offline
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Q9. How often do you trade?(a) Daily(b) Weekly(c) Monthly(d) Yearly
Q10. With which company do you have your DEMAT account?(a) sharekhan (c) ICICI direct(b) kotak Mahindra (d) India bulls (e) others
Q11. How do you rate these share trading companies?(a) Sharekhan (b) ICICI direct(c) India bull(d) Kotak Mahindra(e) HDFC sec(f)Religare sec.
Q12. Are you currently satisfied with your share trading company?(a) Yes (b) no
Q.13. Do you recommend Sharekhan to others? (a) Yes (b) no
