Somak Das-sip Project

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A REPORT

ON

COMPARISON BETWEEN EQUITY MARKET AND COMMODITY

MARKET

By

SOMAK DAS

ISB/10/KOL/034

FINANCE

The report is submitted as partial fulfilment of the requirement of PGDM

Program of ISB-K

RELIGARE SECURITIES LIMITED

Date of Submission

8/07/2011

Indismart Leadership Centre

EN-34, Salt Lake Electronics Complex

Sector- 5, Kolkata-700091

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CERTIFICATE FROM THE FACULTY GUIDE

This is to certify that Summer Internship Project on Comparison between Equity market

and Commodity market was done by Somak Das, Roll No.ISB/10/KOL/034, student of

International School Of Business, Kolkata-700091 in partial fulfillment of the requirement

for award of Post Graduate Diploma in Management and that the Project was carried out

under my guidance.

Place: KolkataDate: 07/07/2011 JAIDEEP GUPTA

Faculty Guide,

ISB, Kolkata

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DECLARATION BY THE STUDENT

I hereby declare that the Summer Internship Project titled “Comparison between Equity

market and Commodity market” being submitted for award of Post Graduate Diploma in

Management was done independently by me under the guidance of Mr.Alok Chiraniya of

Religare Securities Limited and Mr. Jaideep Gupta of International School of Business,

Kolkata-700091.

I also declare that this project has not formed the basis for award of any other Degree,

Diploma, Associate or other similar title.

Dated: 8th July 2011Kolkata

SOMAK DAS

Roll No.: ISB/10/KOL/034

ISB, Kolkata

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CONTENTS

Chapters Page no.

Executive Summary……………………………………………………………………….1

Introduction

Equity market (NSE&BSE)…………………………………………….....2

Sensex…..............................................................................................3

Commodity market….................................................................................4

Objective of the project……………………………………………………………….......5

Company Profile….............................................................................................................6

Services offered…..................................................................................8

Group of Companies….........................................................................11

Organization structure………………..……………………………….12

Competitors ..............................................................................…...................................13

Methodology……………………………………..…………………………….…………14

Advantages and Importance of Equity market………………………...................16-19

Advantages and Importance of commodity market……………………….……….20-22

Equity vs. Commodity………………………….………………………………………..23

Top 3 stocks of Equity market……………………………………................................24

Top 3 commodities in Commodity market……………………………….…………….28

Macro-Economic views for the year 2011...............................................................…....31

Research design and Analysis…......................................................................................32

Findings…………………………………………………………………………………...44

Recommendations………………………………………………………………………..45

Conclusion………………………………………………………………………………...46

Limitations………………………………………………………………………………..47

Bibliography……………………………………………………………………………...48

Annexure……………………………………………………………………………….....49

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LIST OF ILLUSTRATIONS

1) Movement of Sensex and Nifty from April 2010 to May 2011…………….……..2

2) Movement of Sensex from 1998 to 2010…………………………………………...4

3) Figure showing various services provided by Religare…………………………...8

4) Organization chart of Religare…………………………………………………….12

5) INFOSYS price graph for last 5 years..........................................................…….25

6) SBI price graph for last 5 years……………………………………………………26

7) L&T price graph for last 5 years………………………………………....………..27

8) Graph showing Gold future trends………………………………………………..28

9) Graph showing Silver future trends……………………………………………….29

10) Graph showing Crude oil future trends………………………………………...…30

11) Column graph showing occupation of investors………...….…………………….32

12) Pie chart showing awareness about Religare……………...……………………...33

13) Pie chart showing type of investment preferred by investors……………………34

14) Column graph showing portfolio size of investors….………….…………………35

15) Column graph showing preference of market by investors…………………..….36

16) Pie chart showing stocks preferred in Equity market……………………………37

17) Pie chart showing stocks preferred in Commodity market……………………...38

18) Column graph showing source of information of investors…...…………………39

19) Bar graph showing type of trading preferred by investors………………………40

20) Pie chart showing knowledge about Hedging among investors………………….41

21) Pie chart showing preference of broking firm…………………………………….42

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22) Column graph showing services expected by investors…………………………..43

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EXECUTIVE SUMMARY

SIP is an opportunity for us to face real corporate world coming out of the books of theories.

It also provides us the opportunity to satisfy my curiosity about the real market. The entire

SIP was a great learning experience for me.

As per the fulfillment of my SIP I have to undergone 8 weeks summer training from Religare

Securities Limited during 25th April to 24th June.

This report mainly deals with the comparison between the Indian Equity market and

Commodity market. In India there is a misconception regarding trading of equities and

commodities. This project deals with the benefits and importance of stock market and

commodity market. Most of the people feel that investing in stock market leads to huge

losses. Both the markets individually have some advantages and benefits.But the fact is if weinvest in stocks and commodities by making a bit of research and study about the stocks we

can enjoy profit in most of the cases. It also shows the top three stocks and commodities in

both these markets. In order to invest in a stock or commodity of a particular company the

investor must have the knowledge about the stocks which they intend to make an investment.

For knowing the awareness of the people about equity and commodity market I have

undergone a survey in Salt lake, Sector-5. This survey helped me to understand the preference

of the customer in both these markets and their knowledge about the market and also their

awareness about Religare Securities. I also came to know about the services expected by the

investors from a good broking firm.

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INTRODUCTION

EQUITY MARKET

A stock market or equity market is a public entity for the trading of company stock (shares)

and derivatives at an agreed price these are securities listed on a stock exchange as well as

those only traded privately. The stock market in India does business with two types of fund

namely private equity fund and venture capital fund. It also deals in transactions which are

based on the two major indices - Bombay Stock Exchange (BSE) and National Stock

Exchange of India Ltd. (NSE).The Indian Equity Market is more popularly known as the

Indian Stock Market. The Indian equity market has become the third biggest after China and

Hong Kong in the Asian region. The Indian market has 22 stock exchanges. The companies

are enlisted with BSE and NSE. The larger companies are enlisted with BSE and NSE. The

smaller and medium companies are listed with OTCEI (Over The counter Exchange of India).

The functions of the Equity Market in India are supervised by SEBI (Securities Exchange

Board of India).

Fig1: Movement of Sensex and Nifty for the period April 2010 to May2011

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Bombay Stock Exchange (BSE) is a stock exchange located on Dalal Street, Mumbai and is

the oldest stock exchange in Asia. The equity market capitalization of the companies listed on

the BSE was US$1.63 trillion as of December 2010, making it the 4th largest stock exchange

in Asia and the 8th largest in the world. The BSE has the largest number of listed companies

in the world. As of December 2010, there are over 5,034 listed Indian companies and over

7700 scripts on the stock exchange, the Bombay Stock Exchange has a significant trading

volume. The BSE SENSEX, also called "BSE 30", is a widely used market index in India and

Asia. Though many other exchanges exist, BSE and the National Stock Exchange of India

account for the majority of the equity trading in India. While both have similar total market

capitalization (about USD 1.6 trillion), share volume in NSE is typically two times that of

BSE.

National Stock Exchange (NSE) is a stock exchange located at Mumbai, India. It is the 9th

largest stock exchange in the world by market capitalization and largest in India by daily

turnover and number of trades, for both equities and derivative trading. NSE has a market

capitalization of around US$1.59 trillion and over 1,552 listings as of December 2010.

Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two

most significant stock exchanges in India, and are responsible for the vast majority of share

transactions. The NSE's key index is the S&P CNX Nifty, known as the NSE NIFTY

(National Stock Exchange Fifty), an index of fifty major stocks weighted by market

capitalisation.

SENSEX

Sensex first compiled in 1986, was calculated on a "Market Capitalization-Weighted"

methodology of 30 component stocks representing large, well-established and financially

sound companies across key sectors. The base year of SENSEX was taken as 1978-79.

SENSEX today is widely reported in both domestic and international markets through print as

well as electronic media. It is scientifically designed and is based on globally accepted

construction and review methodology.

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Fig2: Movement of Sensex for the period 1998 to 2010

COMMODITY MARKET

Commodity markets have organized traders' exchanges in which standardized, graded products

are bought and sold. Worldwide, there are 48 major commodity exchanges that trade over 96

commodities, ranging from wheat and cotton to silver and oil. Most trading is done in futures

contracts, that is, agreements to deliver goods at a set time in the future for a price established

at the time of the agreement. Most people are of the opinion that commodity markets are

very complex and difficult to understand. Actually they are not. A commodity future market

or exchange is, in simple terms, nothing more or less than a public market place where

commodities are contracted for purchase or sell at an agreed price for delivery at specified

date. These commodities are traded in future markets like LME, COMEX, NYMEX and

CBOT outside India and MCX and NCDEX in India.

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OBJECTIVE

A survey was done on the investors of the equity and the commodities market. The survey

was directed at certain target and the main objectives of the survey are as follows:

1) To clearly identify the awareness level among people about Religare Securities Ltd.

2) To find out the consumer perception about equity and commodity market.

3) To clearly identify the awareness level about the functioning of the equity and

commodities market.

4) To find out the expectations of the investors regarding the service provided by a

broking firm.

5) To determine whether equity or commodity market is a better place to invest.

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COMPANY PROFILE

Religare Enterprises Limited (A Ranbaxy Promoter Group Company)through Religare

Securities Limited, Religare Finvest Limited, Religare Commodities Limited and Religare

Insurance Advisory Services Limited provides integrated financial solutions to its corporate,

retail and wealth management clients. Today, It provides various financial services which

include Investment Banking, Corporate Finance, Portfolio Management Services, Equity &

Commodity Broking, Insurance and Mutual Funds. Plus, etc. Religare in recent years has

expanded its reach in health care and financial services wherein it has multiple specialty

hospital and labs which provide health care services and multiple financial services such as

secondary market equity services, portfolio management services, depository services etc.

Religare financial services group comprises of Religare Securities Limited, Religare

Commodities Limited and Religare Finvest Limited which provide services in Equity,

Commodity and Financial Services business & Religare Insurance Advisory Ltd.

RELIGARE was founded with the vision of providing integrated financial care

driven by the relationship of trust. The bouquet of services offered by RELIGARE includes

Broking (Stocks and Commodities), Depository Participant Service, Advisory on Mutual

Fund Investments and Portfolio Management Services. Religare is a pioneer in the concept of

partnership to reach multiple locations in order to effectively service its large base of

individual clients. Besides the reach of Religare, the clients of the company greatly benefit by

its strong research capability, which encompasses fundamentals as well as technical

knowledge.

• Mr. Sunil Godhwani

Chairman and Managing Director,

Religare Enterprises Limited

• Mr. Shachindra Nath

Group CEO, Religare Enterprises Limited

• Mr. Anil Saxena

Chief Financial Officer,

Religare Enterprises Limited

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http://www.religare.com/OurLeaders.aspx








Fig3:Religare has a presence in 11 countries of the world

RELIGARE Securities Ltd. (RSL) is a wholly owned subsidiary of RELIGARE Financial

Services Ltd. (RFSL), a Company promoted by the late Dr.Parvinder Singh, Ex-CMD of

Ranbaxy Laboratories Ltd.

Religare Securities Ltd. (RSL), a wholly owned subsidiary of Religare Enterprises Limited

(REL), an emerging markets financial services group is one of the market leading securities

firm in India. The company offers equity & currency broking services to more than 7,50,000

clients using both, offline and online platforms and also offers depository participant services.

RSL is a member of the NSE, BSE, NCDEX, MCX-SX and a depository participant with

NSDL and CDSL. RSL employs more than 4800 employees and has a wide distribution reach

that spans across more than 2092 locations across 500 cities in India.

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RELIGARE SECURITIES LIMITED





DISTRIBUTION

Distribution of retail finance products – Mutual Funds and IPO’s. The group is empanelled

with all the Fund Houses in the country to sell their Mutual Fund and NFO’s using the retail

network. IPO’s selling is undertaking from all the branches of the company

FINANCIAL ADVISORY SERVICES

Investment and trading advisory services to its clients based on technical, fundamental and

market research- The Company has one of the best fundamental research and technical

analysis teams in the company. We release reports based on fundamental research of

industries, sectors, companies and individual stock to our clients on a basis. The technical

research team gives the clients recommendations using charting tools like Falcon and Meta

stock. Comprehensive reports on volume breakouts, delivery reports and F&O open interest

positions are given to all the clients.

Religare Capital offers you extensive range of Investment Banking Services for equity

related products and instruments. Our team advises you on transactions like business

Structuring and capital raising opportunities based on your corporate needs and state of

capital markets. Services we specialize in include Management of:

1) Initial Public Offering(IPOs)

2) Follow-on Offerings

3) Qualified Institutional Placements(QIPs)

4) Buyback, Delisting of Equities

5) Open Offers

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CORPORATE FINANCE ADVISORY

Religare Capital focuses on all dynamic sectors in which rapid growth is changing industry

structures rapidly. To capitalize on a given sector's robust demand, external capital often

becomes a catalyst to achieving market leadership. Religare Capital ‘focus in this process is

to assist companies in raising the necessary capital to meet their growth objectives.

DEBT ADVISORY & SYNDICATION

Religare Capital has a dedicated team focused on associating with companies pan India to

understand their requirement of funds and syndicate them at the most competitive rates.

We understand the company’s business model, the nature of requirement and the requisite

terms which would best serve their specific needs. This may entail customizing structured

products or syndicating funds for a projector expansion programme.

The array of products available to meet the specific end-use of our clients

include:-

Domestic Loan/Foreign Currency Loan

Project Financing

Equipment Financing

Securitization

Debt Swap &Loan Restructuring

Short Term Corporate Loan

Working Capital(Cash Credit, LCs&Bank Guarantee)

Inter Corporate Deposits(ICDs)

Promoter funding/Loan Against Shares

Bonds & Debentures

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GROUP OF COMPANIES:-

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ORGANIZATION STRUCTURE

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COMPETITORS OF RELIGARE:-

There are several financial security companies playing their roles in Indian equity market. But

Religare faces competitions from these few companies.

ICICI Direct.com

Edelwiss

Share Khan

Kotak Securities.com

India Bulls

HDFC Securities

Motilal Oswal

India Infoline

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METHODOLOGY

The criteria question was that whether the individual was already investing in either equity or

commodities market. Personal interviews and informal discussions were held with only the

positive respondents. Further applying simple statistical techniques, the collected data will be

processed.

Sampling size: A sample of hundred was chosen for the purpose of the survey. Sample

consisted of both small and large investors.

Field Study: Directly approached respondents (businessmen, physical commodities traders

and general people).

Collection of primary data through questionnaires:-

The data collected for the study purpose is through questionnaires. One hundred investors

were selected randomly for the study purpose and then the information revealed from the

customers is analyzed and interpreted in the study. For the purpose of the study 100

customers were picked up at random and their views solicited on different parameters. The

methodology adopted includes

Criteria question

Questionnaire

Random sample survey of customers

Discussions with the concerned

The criteria question was that whether the individual was already investing in either equity or

commodities market. Personal interviews and informal discussions were held with only the

positive respondents. Further applying simple statistical techniques, the collected data are

processed.

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SAMPLING PLAN

Population: 100 investors in Salt lake sector-5 were taken as population sample..

Sampling size: A sample of hundred was chosen for the purpose of the study. Sample

consisted of both small and large investors.

Sampling Methods: Probability sampling requires complete knowledge about all sampling

units in the universe. Due to time constraint non-probability sampling was chosen for the

study.

Sampling procedure: From large number of investors, sample lot were randomly picked up

by me.

Field Study: Directly approached respondents (businessmen, small shopkeepers, physical

commodities traders and service class people).

Sources of secondary data:-

As is the case in primary research, secondary data can be obtained from two different

research strands. The sources of secondary data are:-

1) Website

2) Journals

3) News paper

4) Magazines

EQUITY MARKET

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A market that exists between companies and financial institutions that is used to raise equity

capital for the companies. Some activities that companies operate in the equity capital

markets include: overall marketing, distribution and allocation of new issues; initial public

offerings, special warrants, and private placements. Along with stocks, the equity capital

markets deal with derivative instruments such as futures, options.The stocks are listed and

traded on stock exchanges which are entities of a corporation or mutual organization

specialized in the business of bringing buyers and sellers of the organizations to a listing of

stocks and securities together.

IMPORTANCE OF STOCK MARKET

The stock market is one of the most important sources for companies to raise money. This

allows businesses to be publicly traded, or raise additional financial capital for expansion by

selling shares of ownership of the company in a public market. The liquidity that an exchange

provides affords investors the ability to quickly and easily sell securities. This is an attractive

feature of investing in stocks, compared to other less liquid investments such as real estate. .

An economy where the stock market is on the rise is considered to be an up-and-coming

economy. In fact, the stock market is often considered the primary indicator of a country's

economic strength and development. Exchanges also act as the clearinghouse for each

transaction, meaning that they collect and deliver the shares, and guarantee payment to the

seller of a security. This eliminates the risk to an individual buyer or seller that the

counterparty could default on the transaction.

The smooth functioning of all these activities facilitates economic growth in that lower costs

and enterprise risks promote the production of goods and services as well as employment. In

this way the financial system contributes to increased prosperity.

ADVANTAGES OF INDIAN STOCK MARKET:1) Potential for high investment returns.

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2) Tax free investment options.

3) Long term investment possible.

4) Flexible investment options.

KEY STRENGTHS OF THE INDIA STOCK/EQUITY

MARKET

The India stock market boasts of a fully automated trading system on all stock exchanges,

provides a wide range of products. It is an integrated platform to trade in both cash andderivatives and has a host of around 4,000 corporate brokers all across India. The stock

market of India has made considerable progress following its international peers and the

modern market mechanisms have helped them create a niche for themselves.

The market regular, Securities and Exchange Board of India (SEBI) plays an important role in

the management of the stock exchanges in India. The regulatory methods are sound - in terms

of intermediaries, trading mechanism, settlement cycles, risk management, derivative trading.

The usage of Information technology is to a large extent responsible for the outstanding

performance of the stock markets in India. The two main players of the India stock market -

NSE and BSE have outshone all the other exchanges and majority of the stocks are listed on

these two exchanges. The market participants are ever increasing, the volume of securities has

been growing, transaction costs are getting reduced, and there is significant improvement in

efficiency, transparency and safety.

Important elements of India stock market -

• Investors

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• Issuers

• Intermediaries

• Regulators

There are two types of trading in the Equity market - Intraday and Delivery based trading.

BENEFITS OF INTRADAY TRADING:

Leverage

• By law, day traders who maintain a minimum balance of $25,000 in their brokerage

account get access to quadruple leverage by their broker. The Financial Industry

Regulatory Authority (FINRA) set this rule, which greatly benefits those who trade on

margin. Margin is a common brokerage feature where traders may buy twice as many

shares as their cash would allow. While margin offers double leverage, day traders

double this leverage even further. However, the rule requires that the stock be sold on

the same day it is purchased.

Overnight Risks

• Anyone who follows the stock market knows that prices can open up the following

morning at substantially lower levels from where they closed the previous day.

Overnight risks can be significant. If major economic or government events occur

outside normal trading hours, this could severely affect the stock market's reaction the

following day. Intraday traders usually sell all or most of their positions by the close

of a day's trading session. Thus they are not at risk when unforeseen events influence

the market overnight. They start the next day with no position.

Daily Income

• Day traders who have developed a successful trading strategy can rely on it for their

primary income. Many work from home and aim to make earnings comparable to

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salaried jobs. This contrasts with long-term investing, where daily or monthly profits

are not usually expected. The returns from long-term investing are not often treated as

ordinary income by most investors, and they maintain jobs independent of their stock

market trading. Day traders are a special class of worker who generate consistent

income from trading as their primary job.

Rewards

Perhaps the most significant benefit to day trading is the potential for huge returns.

Successful traders who have spent years of experience developing an understanding of

the intraday markets can make extraordinary earnings. This is rare, however. Many

successful day traders earn modest livings. But the potential for wealth is always

present.

ADVANTAGES OF DELIVERY BASED TRADING:

The biggest advantage of delivery of delivery based trading is that you are not bound with

time for selling the stock. Youcan hold the stocks for long as you want. So you can always

hold a stock until you are getting a significant profit from the investment. Therefore with

delivery based trading you can always take your time to take decision and reduce the risk of

losses.With delivery based trading, you can always hold a stock till it reaches the expected

price.

The long term investment can always get you dividend. You can also benefit from split

shares, bonus stocks and other benefits that the company announces

INDIAN COMMODITY MARKET

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Investment in India has traditionally meant property, gold and bank deposits. The more risk-

taking investors choose equity trading. But commodity trading forms a part of conventional

investment instruments. As a matter of fact, future trading in commodities was banned in

India in mid-1960 due to excessive speculation. In February 2003, the government revoked

the ban and threw open futures trading in 54 commodities in bullion and agriculture. It gave

the go-ahead to four exchanges (The National Commodity and Derivative Exchange

(NCDEX), The Multi Commodity Exchange of India (MCX), The National Multi

Commodity Exchange of India (NMCE) and The National Board of Trading in Derivatives

(NBOT)) to offer online trading in commodity derivatives products. The commodities market

is one of the fastest-growing areas in the investment world. And it offers some major

advantages over stocks that you might not have considered before. . In the Indian commodity

market there are so many verities of products including agricultural products like rice, wheat,

cattle etc; energy products like coal, petroleum, kerosene, gasoline; metals like copper, gold,

silver, aluminum and many more. There are some delicate commodities also such as sugar,

cocoa, and coffee, which is perishable, so cannot be put in stock for long time.

BENEFITS OF COMMODITY TRADING

Leverage

Commodity futures operate on margin, meaning that to take a position only a fraction

of the total value needs to be available in cash in the trading account.

Commission Costs

It is a lot cheaper to buy/sell one futures contract than to buy/sell the underlying

instrument. For example, one full size S&P500 contract is currently worth in excess

off $250,000 and could be bought/sold for as little as $20.

Liquidity

The involvement of speculators means that futures contracts are reasonably liquid.

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However, how liquid depends on the actual contract being traded. Electronically

traded contracts, such as the e-minis tend to be the most liquid whereas the pit traded

commodities like corn, orange juice etc are not so readily available to the retail trader

and are more expensive to trade in terms of commission and spread.

Ability to go short

Futures contracts can be sold as easily as they are bought enabling a speculator to

profit from falling markets as well as rising ones. There is no uptick rule for example

like there is with stocks. No Time Decay. Options suffer from time decay because the

closer they come to expiry the less time there is for the option to come into the money.

Commodity futures do not suffer from this as they are not anticipating a particular

strike price at expiry.

Reduced Risks

As an investor your chances of risks are very less if you choose to invest in

commodity. Therefore the gains from commodity investing will be helpful for you to

balance other losses due to other financial instruments in your portfolio. The chances

of risks are lower because commodity investing primarily deals with diverse items.

Moreover when the contracts are entered for a future date at the current time you can

exercise reasonable care and see to it that the chances of risks are reduced or nil.

Commodity Price Moves Are More Predictable

Price movements in the commodity markets - whether up or down - are much more

predictable and methodical. This is because when we don't have so many sources

spewing out conflicting data, we get a better handle on the moves.

PARTICIPANTS IN COMMODITY FUTURES:--

Farmers/ Producers

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Merchandisers/ Traders

Importers

Exporters

Consumers/ Industry

Commodity Financers

DIFFERENT TYPES OF COMMODITIES TRADING

Spot trading

Spot trading is any transaction where delivery either takes place immediately, or with a

minimum lag between the trade and delivery due to technical constraints. Commodity

markets require the existence of agreed standards so that trades can be made without visual

inspection.

Forward contracts

A forward contract is an agreement between two parties to exchange at some fixed future date

a given quantity of a commodity for a price defined today. The fixed price today is known as

the forward price.

Futures contracts

A futures contract has the same general features as a forward contract but is transacted

through a futures exchange.

Hedging

Hedging, a common and sometimes mandatory practice of farming cooperatives insures

against a poor harvest by purchasing futures contracts in the same commodity.

EQUITY VS COMMODITY MARKET

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Features Equity CommodityType of Trading Cash/Delivery Trading Futures Trading

Regulator SEBI(Securities Exchange

board of India

FMC(Forward Market

Commission)

ExchangesBombay Stock Exchange,

National Stock Exchange

Multi Commodity Exchange, National Commodity and

derivative Exchange

Sales Tax Applicable Not Applicable

Settlement Cash settlement Physical/cash settlement

BrokerageBoth delivery and intraday

brokerage is charged

Only intraday brokerage is

charged

Risk Involved Low risk High risk due to future

market

Timing 9.15 A.M. to 3.30 P.M. 10 A.M. to 11.30 P.M.

Expiry No date for expiryLast Thursday of every

Month

Short selling Short selling not availableAvailability of short selling

and profit from falling prices

TOP 3 STOCKS OF EQUITY MARKET

INFOSYS LIMITED, formerly Infosys Technologies Limited,(BSE: 500209, NSE:

INFOSYSTCH, NASDAQ: INFY) is a global technology services company headquartered in

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http://en.wikipedia.org/wiki/Bombay_Stock_Exchange

http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500209

http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India

http://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=INFOSYSTCH&section=7

http://en.wikipedia.org/wiki/NASDAQ

http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=INFY&selected=INFY




http://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=INFOSYSTCH&section=7

http://en.wikipedia.org/wiki/NASDAQ

http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=INFY&selected=INFY



Bengaluru (Bangalore), India. Infosys is the second largest IT Company in India with

130,820 employees (including subsidiaries) as of March 2011. Infosys is ranked 28th

globally, in the list of IT services providing firms. It has offices in 33 countries and

development centres in India, China, Australia, UK, Canada, Brazil and Japan. The company

offers software products for the banking industry and business process management services

also provide end-to-end business solutions. Infosys went public in 1993. Interestingly, Infosys

IPO was under subscribed but it was bailed out by US investment bank Morgan Stanley

which picked up 13% of equity at the offer price of Rs. 95 per share. The share price surged

to Rs. 8,100 by 1999. By the year 2000 Infosys's shares touched Rs. 310. This, before the

catastrophic incident of September 11th, which caused share prices to suddenly fall.

Infosys was ranked India’s ‘Most Admired Company' in The Wall Street Journal Asia 200, a

listing of Asia's leading companies in 2010. Infosys has achieved this distinction for nine

years in a row. Infosys is the leader among IT service providers, according to global retailers

in the 2010 RIS IT Services Leader board survey. Infosys is among the top ten value creators

in technology and telecommunications, according to the 2010 Value Creators Report of The

Boston Consulting Group.

Page | 31

http://en.wikipedia.org/wiki/Bengaluru

http://en.wikipedia.org/wiki/India


http://en.wikipedia.org/wiki/China

http://en.wikipedia.org/wiki/Australia

http://en.wikipedia.org/wiki/United_Kingdom

http://en.wikipedia.org/wiki/Canada

http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/Japan

http://en.wikipedia.org/wiki/Initial_public_offering

http://en.wikipedia.org/wiki/Morgan_Stanley

http://en.wikipedia.org/wiki/September_11_attacks

http://en.wikipedia.org/wiki/Bengaluru



http://en.wikipedia.org/wiki/China

http://en.wikipedia.org/wiki/Australia

http://en.wikipedia.org/wiki/United_Kingdom

http://en.wikipedia.org/wiki/Canada

http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/Japan

http://en.wikipedia.org/wiki/Initial_public_offering

http://en.wikipedia.org/wiki/Morgan_Stanley

http://en.wikipedia.org/wiki/September_11_attacks



STATE BANK OF INDIA (SBI) ( NSE: SBIN, BSE: 500112, LSE: SBID) is the largest

Indian banking and financial services company (by turnover and total assets) with its

headquarters in Mumbai, India..The government of India nationalized the Imperial Bank of

India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State

Bank of India. In 2008, the government took over the stake held by the Reserve Bank of

India.SBI provides a range of banking products through its vast network of branches in India

and overseas, including products aimed at non-resident Indians (NRIs). The State Bank

Group, with over 16,000 branches, has the largest banking branch network in India. It also

has around 130 branches overseas. With an asset base of $352 billion and $285 billion in

Page | 32


http://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=SBIN&section=7



http://en.wikipedia.org/wiki/London_Stock_Exchange

http://www.londonstockexchange.com/exchange/prices-and-news/stocks/prices-search/stock-prices-search.html?nameCode=SBID


http://en.wikipedia.org/wiki/Bank

http://en.wikipedia.org/wiki/Financial_service

http://en.wikipedia.org/wiki/Mumbai,_India

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Reserve_Bank_of_India

http://en.wikipedia.org/wiki/Non-resident_Indian


http://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=SBIN&section=7



http://en.wikipedia.org/wiki/London_Stock_Exchange

http://www.londonstockexchange.com/exchange/prices-and-news/stocks/prices-search/stock-prices-search.html?nameCode=SBID


http://en.wikipedia.org/wiki/Bank

http://en.wikipedia.org/wiki/Financial_service

http://en.wikipedia.org/wiki/Mumbai,_India

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Reserve_Bank_of_India

http://en.wikipedia.org/wiki/Non-resident_Indian



deposits, it is a regional banking behemoth and is one of the largest financial institutions in

the world. It has a market share among Indian commercial banks of about 20% in deposits

and loans.

LARSEN & TOUBRO LIMITED (L&T) ( NSE: LT, BSE:

500510) is an Indian multinational conglomerate company

headquartered in Mumbai, India. The company has four main

business sectors: technology, engineering, construction and manufacturing. L&T has an

international presence, with a global spread of offices and factories, further supplemented by

a comprehensive marketing and distribution network. The firm has more than 60 units in

Page | 33


http://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=LT&section=7



http://en.wikipedia.org/wiki/Multinational_corporation

http://en.wikipedia.org/wiki/Conglomerate_(company)

http://en.wikipedia.org/wiki/Mumbai



http://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=LT&section=7



http://en.wikipedia.org/wiki/Multinational_corporation

http://en.wikipedia.org/wiki/Conglomerate_(company)

http://en.wikipedia.org/wiki/Mumbai




some 25 countries. The name is derived from its two founders, Danish citizens who settled

down in India. The evolution of L&T into the country's largest engineering and construction

organizations is among the more remarkable success stories in Indian industry. The company

was founded in (Mumbai) in 1938 by two Danish engineers, Henning Holck-Larsen and

Soren Kristian Toubro - both of whom were strongly committed to developing India's

engineering talent and enabling it to meet the demands of industry. Beginning with the import

of cement machinery from Europe, L&T rapidly took on engineering and construction

assignments of increasing sophistication Domestic business within India dominates, but the

company is steadily growing its global operations with a focus on China and the Middle East.

In January 2011, it was reported that the company will be restructured into nine virtual

companies. Each will be called an independent company, and will have a CEO, CFO and HR

head, its own profit and loss account, and a board of directors with at least three independent

directors. Each board will not have any legal or statutory standing, but will merely advise

management. This is similar in organization to the Mitsubishi Group with which L&T has

close partnerships. Larsen & Toubro Limited is India's largest engineering and construction

conglomerate, with diverse interests such as construction, hydraulic equipment, electrical and

electronic power services, fertilizer projects, medical electronics and information technology.

TOP 3 COMMODITIES IN THE COMMODITY MARKET

Page | 34



GOLD

Gold is valued in India as a savings and investment vehicle and is the second preferred

investment after bank deposits. India is the world's largest consumer of gold in jewellery as

investment. In July 1997 the RBI authorized the commercial banks to import gold for sale or

loan to jewellers and exporters. At present, 13 banks are active in the import of gold. This

reduced the disparity between international and domestic prices of gold from 57 percent

during 1986 to 1991 to 8.5 percent in 2001. India is the largest consumer of Gold in the world

accounting for nearly 25% of the total gold consumption in the world.

Factors influencing prices of gold:-

• Rise in Investor demand.

• Geo-political concerns

• US dollar movement against other currencies

•Indian rupee movement against the US dollar

• Fall in Supply

SILVER

Silver is found in native form, as an alloy with gold, and in ores. Silver imports into India for

domestic consumption in 2002 was 3,400 tons down 25 % from record 4,540 tons in 2001.

Page | 35



Around 50% of India's silver requirements last year were met through imports of Chinese

silver and other important sources of supply being UK, CIS, Australia and Dubai. Indian

industrial demand in 2002 is estimated at 1375 tons down by 13 % from 1,579 tons in 2001.

In spite of this fall, India is still one of the largest users of silver in the world, ranking

alongside Industrial giants like Japan and the United States. Indian Silver market is majorly

Silver import market.

Factors influencing prices of silver:-

• Rise in Investor demand

• Robust Jewelry off take.

• Geo-political concerns

• Central Banks diversifying into bullion

• Central Bank Sales Slowing and Massive De-Hedging

• Low supply from Scrap sector

CRUDE OIL

India ranks among the top 10 largest oil-consuming countries. Oil accounts for about 30 per

cent of India's total energy consumption. The country's total oil consumption is about 2.2

million barrels per day. India imports about 70 per cent of its total oil consumption and it

Page | 36



makes no exports. India faces a large supply deficit, as domestic oil production is unlikely to

keep pace with demand. India's rough production was only 0.8 million barrels per day.The

NCDEX WTI Crude contract is based on the ICE WTI contract. The Final Settlement Price

(FSP) in Indian Rupees (INR) is determined by the Exchange on maturity of the contract. The

exchange rate to be used as the conversion factor shall be the RBI reference spot exchange

rate on that day i.e. Expiry day of contract (as obtained from Reserve Bank of India website.

There are three months contracts available for trading at any given point of time. The Lot Size

is 100 barrels and the contract is an Intention Matching. Indian government in 2002 officially

ended the Administered Pricing Mechanism (APM). Now crude price is having a high

correlation with the international market price.

Factors influencing prices of Crude oil:-

• Geopolitical Situation, particularly in the Middle East and Africa

• Economic data / indicators of USA, China and other big consuming nations

• Natural factors like Hurricanes

• Transportation / Logistical issues like Destruction of Pipelines, Shipping issues etc.

MACRO-ECONOMIC VIEWS FOR THE YEAR 2011

Indian policy makers have been boosting growth at the cost of macro stability risks, reflected

in high inflation, a widening current account deficit and tight inter-bank liquidity due to low

deposit growth.WPI headline inflation and non-food inflation have moderated to 7.5 percent

YoY and 7.9 percent YoY in November 2010 from the peaks of 11 percent YoY and 8.9

Page | 37





INTERPRETATION: On the basis of survey conducted on 100 investors it was

found that there were 52 businessmen, 31 service persons and 17 were

professionals. This shows that the majority of investors in stock market are businessmen rather than professionals or servicemen.

Q) Are you aware of Religare Securities?

a) Yes 69% b) No 31%

Page | 39



INTERPRETATION:Out of the 100 investors surveyed 69% investors were

aware of the company Religare and 31% of investors did not know about

Religare.So the company should try to improve upon its brand awareness among

the investors.

Q) Which type of investment do you prefer?

a) Stock market 30% c)Bank 45% b)Mutual funds 10% d)Business 15%

Page | 40




found that 45% were prefer in making Bank investments,15% preferred

investing in their business,10% prefer mutual funds and 30% prefer to invest in

stock market besides the other investment options. So there is scope for

increasing the customer base of Share market investors.

Q) What is your investment amount?

a) <50000 33% c) 100000 to 200000 18%

b) 50001 to 100000 43% d) >200000 6%

Page | 41



INTERPRETATION: As per the survey done on randomly picked 100 investors

the survey 33 has a portfolio of less than Rs.50000,43 investors has portfolio of

Rs.50000 to 100000, 18 investors has portfolio of Rs.100000 to 200000, 6

investors has portfolio of greater than Rs.200000.

Q) In which market do you invest?

a) Only equity 53% c) Currency 7% b) Only commodities 27% d) Equity and commodity 13%

Page | 42



INTERPRETATION: On the basis of survey it was found that out of 100

investors 53 were interested in only equity trading,27 were interested in only

commodity trading,7 were interested in currency trading and remaining 13 were

interested in both equity and commodity trading.

Q) If you trade in equity market, then where do you invest?

a) Banking & IT 22% c) Automobile & Banking 42% b) IT & Automobile 11% d) Power&Banking 16%

e) All 9%

Page | 43



INTERPRETATION:On the basis of survey it was found that 42% investors

prefer investing in automobile and banking sector,22% prefer investing in

Banking and IT sector,11% prefer IT and Automobile sector,16%prefer Power

and Banking sector and the remaining 9% prefer to invest in all the three

sectors.

Q) If you trade in commodities market, then where do you invest?

a) Metals 36% c) Agro based products 29% b) Energy products 12% d) Metals & Agro 23%

Page | 44



INTERPRETATION: As per the survey conducted investors of commodity 36%

are prefer investing in the metals,12% prefer investing in Energy,29% invest inAgro-based products and remaining 23% like to invest in both Metals and Agro

products. This shows that investors of commodity market have a strong belief

and liking for investing in Metal and Agro products.

Q) What type of source do you prefer for updating yourself about market?

a) Television& Newspaper 53% b) Internet 36%c)Business Magazine 11%

Page | 45





INTERPRETATION: As per the survey conducted on 100 investors it was

found 35% prefer to do intraday trading,47% have chosen delivery based

trading as their choice and 18% investors like to do futures trading. This shows

that the people have more faith in delivery trading than intraday or future

trading. They believe that investing in long term increases their chances of

earning profit.

Q) Are you aware of the concept of hedging in equity and commodities

market?

a) Yes 38% b)No 62%

Page | 47




found that 62% of the investors are unaware of the concept of Hedging and 32%

know the concept. The company should try to approach the clients by informingthem about Hedging in details so that they find more interest in stock and

commodity market investment.

Q) Through which broking firm do you invest?

a) Religare securities 22% c) Sharekhan 18% b) Kotak Mahindra 18% d) Edelweiss 14%e) ICICI Securities 7% e) Others 30%

Page | 48



INTERPRETATION: As per the survey conducted on 100 investors 22%

investors prefer trading through Religare securities,7% prefer ICICI

securities,18% prefer Kotak Mahindra,9% prefer Sharekhan,14% prefer

Edelweiss and the remaining 30% prefer other broking firms which include

India Infoline, Nirmal Bang, HDFC securities, etc. This shows that there is

space for increasing the customer base of Religare.

Q) What are the services that you expect from a good broking firm?

a)Calls 33% c)Research 12% b)Brokerage 17% d)All 38%

Page | 49



INTERPRETATION: On the basis of survey conducted it was found that 33%

investors expect good calls from the company,17% expect low brokerage,12%

think that the company should have a good research team and the remaining

38% prefer all the three. They said that the combination of good research, low

brokerage and appropriate calls can help them earn profit and this will also

increase the goodwill of the company.

FINDINGS:

From the project and the survey few of my important findings are

The level of awareness among the investors about Religare can be increased.

Most of the investors are businessman, the tendency of investing is much high among

the businessmen than those involved in service or professionals.

Page | 50



Most of the investors are inclined towards the equity market and some are interested

about investing in the commodities and few are interested in investing in currency

market.

The most popular source of information about the market among the investors is

television and newspaper followed by internet and business magazines.

The level of awareness among the investors about the working of the commodities

market is very low. Also very few investors are aware of the concept of hedging.

The investors provided valuable suggestions about better service of a broking firm.

The most popular suggestions are

• Good tips and calls.

• Less brokerage.

• Regular research reports.

• Educating the clients about the market.

RECOMMENDATION S:

Keeping in mind the problems and suggestions of the investors I would like to provide some

suggestion which may help Religare to provide better service to its existing clients and also to

attract new clients

Page | 51



Improve the brand awareness of Religare by increasing advertisements and

promotional activities like performing campaigning programs. This will improve the

brand of Religare which will help to attract more clients.

Introduce some programs which will help to attract more of office going clients. Most

of the investors are businessmen, and very few of the servicemen invest in these

markets.

The investors do not have much knowledge about the commodities market and the

various concepts like hedging and present in these markets. The first priority should

be to educate the investors about the market and the various techniques to invest in

these markets which will enable the investors to extract better return from these

markets.

The investors mainly follow the television and the newspapers to update themselves

about the market so it will be beneficial for Religare if they come out with weekly

article in the leading newspapers regarding market research and present market

condition.

Providing the clients better guidance to diversify their portfolio to minimize the risk

involved. The service of the company can be improved keeping in mind the

suggestions provided by the investors.

CONCLUSION

The two months summer internship project has been a learning experience for me. My first on

job experience at Religare will always serve me as a guiding map for the rest of my career.

In these two months I’ve learnt that both equity and commodity markets play a vital role in

the economic development of a nation and needs such markets for meeting planned economic

Page | 52



growth in the near future. The commodity markets are set for an exceptional growth in the

future with the adoption of technology and thereby bringing in transparency, ensuring quality

standards. The equity are sources of earning quick money through intraday or delivery

trading. Since the Indian markets are again gaining momentum it has a bright future for

making investment. Government institutions and market participants have to work towards

increasing the awareness regarding equity and commodity futures among the general

inhabitants. For diversification of portfolio beyond shares, fixed deposits and mutual funds,

commodity trading offers a good option for long-term investors and arbitrageurs and

speculators. So trading in commodity futures could be another investment heaven for

investors. And, now, with daily global volumes in commodity trading touching three times

that of equities, Indian investors cannot ignore trading in commodities.

Their entry will deepen and broad base the commodity futures market. As a matter of fact,

derivative instruments, such as futures, can help India become a global trading hub for select

commodities.

The SIP at Religare was a perfect blend of corporate and market exposure coupled

with hands on experience which will serve as an important ingredient in the recipe of success

in all future endeavors.

LIMITATIONS

Since sample size is only 100, this is not a true representation of the population as a

whole.

Level of accuracy of the results of research is restricted to the accuracy level with which

the customers have given their answers and the accuracy level of the answers cannot be

predicted.

Page | 53



As the survey was conducted in a particular area it might not match against the whole

population of investors.

The time period of survey i.e. 7 days is also a constraint towards appropriate answer.

BIBLIOGRAPHY

FOR WEB SUPPORT:

1) www.religare.com

2) www.mcxindia.com

Page | 54



3) www.answers.com

4) www.ncdex.com

5) www.businessstandard.com

6) www.wikipedia.com

7) www.askme.com

8) www.bloombergutv.com

9) www.nseindia.com

10) www.wikipedia.com

11)www.economictimes.indiatimes.com

ANNEXURE

QUESTIONNAIRE

Name:

Address:

Page | 55

http://www.businessstandard.com/

http://www.wikipedia.com/

http://www.bloombergutv.com/

http://www.nseindia.com/


http://www.economictimes.indiatimes.com/

http://www.businessstandard.com/


http://www.bloombergutv.com/

http://www.nseindia.com/


http://www.economictimes.indiatimes.com/





10) What type of trading do you prefer?

a) Intraday b) Delivery c) Futures

11)Are you aware of the concept of hedging in equity and commodities market?a) Yes b) No

12) Through which broking firm do you invest?

a)Religare securities b)Kotak Mahindra c)Sharekhan

d)Edelweiss e)ICICI securities f) Others

13) What are the services that you expect from a good broking firm?a) Calls b) Brokerage c) Education d) Research

14) From your point of view which is more risky in nature?

a) Equity market b) Commodity market c) Both

15) Do you invest in equity market futures?

a) Yes b) No

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