Pratap Project Final

A PROJECT REPORT ON

WEALTHWEALTH MANAGEMENTMANAGEMENT AT

A project report submitted in partial fulfillment of the requirements

For the awardof the degree

MASTERS IN BUSINESS ADMINISTRATION

IN

(MARKETING MANAGEMENT)

BY

DUGGIREDDY PRATAP

REG.NO. 12P35H0107

UNDER THE GUIDANCE OF

PROF. Ram Powru

MANAGEMENT ACADEMY AND RESEARCH CENTER

BANNERGATTA ROAD, BANGALORE – 560076

MARC School of Business 1

CENTRE FOR PARTICIPATORY AND ONLINE PROGRAMMES

BHARATHIAR UNIVERSITY

COIMBATORE – 641 046.

SEP & OCT , 2013

DECLARATION

I hereby declare that this project report conductedat “A ORGANIZATION STUDY ON WEALTH MANAGEMENT WITHREFENCE TO ORIFIN FINCORP SERVICES (P) LTD” underthe guidance of Prof. Ram Powru, Submitted inpartially fulfillments of the requirements for theMASTERS IN BUSINESS ADMINISTRATION (BU)

TO

MANAGEMENT ACADEMY AND RESEARCH CENTER

In my original work and the same has not beensubmitted for the award of any otherDegree/Diploma/Fellowship or other similar titles orprizes.


Place: - BANGALORE

Date: - 20TH SEP. 2013

D.PRATAP


ACKNOWLEDGEMENT

Any purpose and its fulfillment require deep routed efforts for its completion. Many characters play a vital role. This is more when a project undertaken isdirectly to a cause.

Our sincere thanks to Dr. Kerron G Reddy, CEO of Leadership Institute of AIMS for giving this opportunity to us. She was introduced as one of the pillars of our Organization. It is from her that we learnt the nuance of the day-to-day affairs. She madeus to learn more processes beyond our project.

We would like to thank Prof. Ram Powru, our Project guide, not only for giving us the opportunity to work on this project, but also for providing us with sound guidance and the necessary facilities to carry out the project. He constantly insisted and helped usin learning new things. He provided us a lot of learning opportunities.

Finally we would like to thank all those who weredirectly and indirectly concerned in making my project successful. To put it in a nutshell a difficult and arduous journey was made simple and quiet enjoyable due to their support.


PREFACE

MBA program is one of the most reputed professional courses in the field of Management. Training is an integral part of MBA . As a complementary to that every trainee has to submit a report on the research work conducted in that institute.

This report is thus prepared for the project work done at Orifin Fincorp Jayanagar branch. The topic ofthe project is, “wealth management with reference to Orifin Fincorp”.

Investment means putting your money to work to earn more money. If done wisely it can help to meet one's financial goals like buying a new house, paying for acollege education, education, enjoying a comfortable retirement or whatever is important to an individual.


One needs to make decisions about how much he/she wants to invest and where to invest. To choose he needs to know current good options available and their relative risk exposures. These help are given to a client in Orifin Fincorp as to in which portfolio they can invest and what risks are related to it. They manage all the respected returns of theirclients and timely inform them for the switching to be done between funds in cases of expected downfall in returns of their Mutual Funds in future.

INDEX


NO PARTICULAR PAGE NO

1 INTRODUCTION TO WEALTH MANAGEMENT 6

INTRODUCTION OF WEALTH MANAGEMENT 7

2 COMPANY PROFILE 14

INTRODUCTION TO ORIFIN FINCORP 15

HISTORY OF INDAIINFOLINE 16

VISION 18

MISSION 18

COMPANY’S PHILOSHOPY 18

COMMITTEE 19

COMPANY STRUCTURE 20

PRODUCT & SERVICE 21

MILESTONES ACHIVED 35

MARKET SHARE OF COMPANY 37

CHALLENGE FACED BY ORIFIN FINCORP 39

MARKETING STRATGY OF ORIFIN FINCORP 40

HUMAN RESOURCES 41

3 RESEARCH METHODOLOGY 42

OBJECTIVE OF STUDY 43

DATA COLLECTION 43

FUNDAMENTAL RESEARCH SERVICE 44

TECHNICAL RESEARCH SERVICE 45

SWOT ANALYSIS 47


PORTER’S FIVE FORCE MODEL 48

4 DATA ANALYSIS 50

FINANCIAL PERFORMANCE 51

P & L ACCOUNT OF ORIFIN FINCORP 54

BALANCE SHEET OF ORIFIN FINCORP 56

COMPITITORS 57

COMPARATIVE ANALYSIS OF CHARGES & FACILITIESPROVIDED BY DIFFERENT COMPANY

60

PERFORMANCE HIGHLIGHT 2008-09 61

HIGHLIGHTS ,2008-09 INDUSTRY OPTIMISM 62

5 FINDING 64

6 RECOMMENDATION 65

7 CONCLUSION 66

8 BIBLIOGRPHY 67


INTRODUCTIONTO

WEALTH MANAGEMENT


INTRODUCTION

Wealth management Service is provided by banks, professionaltrust companies, and brokerages. For those with sizeableassets, professional wealth management can help you plan yourestate or invest your assets based on personal criteria andfinancial goals.


Wealth Management system is an integrated platform designed tosupport high demand of customer relationship businesses and acomplex portfolio management analysis. The solution providestechnology that helps private wealth institutions utilizetheir customer’s database more proficiently and moreefficiently. With Orifin Fincorp WMS sophisticated worksystem, firms will be able to enhance their services and salecapabilities throughout a comprehensive set of wealthmanagement services such as investment strategy setting,marketing event or campaign management, a high level ofportfolio management or a graphic design of a consolidatedreport.

Wealth management System offers a one-stop solution to takethe guess work out of mandatory rollovers so you can save timeand money.

Wealth management is an advanced investment advisorydiscipline that incorporates financial planning and specialistfinancial services. The key objectives are to provide high networth individuals and families with tailored retail bankingservices, estate planning, legal resources, taxation adviceand investment management, with the goal of sustaining andgrowing long-term wealth. Wealth management can be provided byindependent financial advisers or large corporate entitieswhose services are designed to focus on high-net worth retailcustomers. Such customers would be considered mass affluent orupper retail clients because of their net worth, the number ofpotential products they own from financial institutions, theirassets under management and other methods of segmentation.Large banks and brokerage houses create separate sales forces,services and other benefits to retain or attract thesecustomers who are typically more profitable than other retailbanking, brokerage, or insurance customers.


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

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

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

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

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

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

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

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

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

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

INDUSTRYPROFILE


In most industrialized countries, a substantial part offinancial wealth is not managed directly by savers, butthrough a financial intermediary, which implies the existenceof an agency contract between the investor (the principal) anda broker or portfolio manager (the agent). Therefore,delegated brokerage management is arguably one of the mostimportant agency relationships intervening in the economy,with a possible impact on financial market and economicdevelopments at a macro level.

As the per-capita-income of the city is on the higher side, soit is quite obvious that they want to invest their money inprofitable ventures. On the other hand, a number of brokeragehouses make sure the hassle free investment in stocks. Assetmanagement firms allow investors to estimate both the expectedrisks and returns, as measured statistically. There aremainly two types of Portfolio management strategies.

Passive Portfolio Strategy

Active Portfolio Strategy


Passive Portfolio Strategy: A strategy that involves minimalexpectation input, and instead relies on diversification tomatch the performance of some market index. A passivestrategy assumes that the marketplace will reflect allavailable information in the price paid for securities

Active Portfolio Strategy: A strategy that uses availableinformation and forecasting techniques to seek a betterperformance than a portfolio that is simply diversifiedbroadly.

The Basic Methods of Wealth management is….

1) Mutual funds


A Mutual Fund is a body corporate registered with SEBI(Securities Exchange Board of India) that pools money fromindividuals/corporate investors and invests the same in avariety of different financial instruments or securities suchas equity shares, Government securities, Bonds, debenturesetc. Mutual funds can thus be considered as financialintermediaries in the investment business that collect fundsfrom the public and invest on behalf of the investors. Mutualfunds issue units to the investors. The appreciation of theportfolio or securities in which the mutual fund has investedthe money leads to an appreciation in the value of the unitsheld by investors. The investment objectives outlined by aMutual Fund in its prospectus are binding on the Mutual Fundscheme. The investment objectives specify the class ofsecurities a Mutual Fund can invest in. Mutual Funds invest invarious asset classes like equity, bonds, debentures,commercial paper and government securities. The schemesoffered by mutual funds vary from fund to fund. Some are pureequity schemes; others are a mix of equity and bonds.Investors are also given the option of getting dividends,which are declared periodically by the mutual fund, or toparticipate only in the capital appreciation of the scheme

2)Equities

Equity trading is the buying and selling of company stockshares. Shares in large publicly-traded companies are boughtand sold through one of the major stock exchanges, such asthe Bombay Stock Exchange, National Stock Exchange, whichserve as managed auctions for stock trades.


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

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

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

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

Share or stock is a document issued by a company, whichentitles its holder to be one of the owners of the company. Ashare is issued by a company or can be purchased from thestock market.

Share market where dealing of securities is done is known as sharemarket. There are two ways in which investors gets share frommarket:

Primary market: markets in which new securities are issued are knownas primary market. This is part of the financial market whereenterprises issue their new shares and bonds. It is characterized bybeing the only moment when the enterprise received money in exchangefor selling its financial assets.

Secondary Market: Market in which existing securities are dealt isknown as secondary market. The market where securities are tradedafter, they are initially offered in the primary market. Mosttrading is done in the secondary market.

The Stock Market is an invisible market that trades in stocks ofvarious companies belonging to both the public and private sectors.The Indian Stock Market is often referred to as the Share Marketsince it deals primarily with shares of various companies.

A Stock Exchange is a place where the stocks are listed and traded.Such exchanges may be a corporation or mutual organization whichspecializes in the business of introducing the sellers with thebuyers of stocks and securities.

The Indian Stock Market in India comprises of two stock exchanges:

Bombay Stock Exchange (BSE)

National Stock Exchange (NSE)

3)Commodities


Do you think gold prices will go up further?

Are you sure that crude oil prices are going to fall?

Have you heard that the soya crop this year is bad and will result in soya pricesgoing up?

If you believe that these predictions have a good chance ofcoming true and are willing to bet some money on them, youcould try your hand at playing the commodity futures market.

A commodity is a basic good representing a monetary value.Commodities are most often used as inputs in the production ofother goods or services. With the advent of new onlineexchange, commodities can now be traded in futures markets.When they are traded on an exchange,

Commodities must also meet specified minimum standards knownas basic grade.

Types of Commodities

Precious Metals : Gold and Silver

Base Metals : Copper, Zinc , Steel and Aluminum

Energy : Crude Oil, Brent Crude and Natural Gas

Pulses : Chana , Urad and Tur

Spices : Black Pepper, Jeera, Turmeric , Red Chili

Others : Guar Complex, Soy Complex, Wheat and Sugar

4) Bonds


Bonds refer to debt instruments bearing interest on maturity.In simple terms, organizations may borrow funds by issuingdebt securities named bonds, having a fixed maturity period(more than one year) and pay a specified rate of interest(coupon rate) on the principal amount to the holders

It is a fixed income (debt) instrument issued for a period ofmore than one year with the purpose of raising capital. Thecentral or state government, corporations and similarinstitutions sell bonds. A bond is generally a promise torepay the principal along with a fixed rate of interest on aspecified date, called the Maturity Date.

5) Portfolio Management Service (PMS)

Portfolio management service (PMS) is a type of professionalservice offered by portfolio managers to their client to helpthem in managing their money in less time. Portfolio managersmanage the stocks, bonds, and mutual funds of clientsconsidering their personal investment goals and riskpreferences. In addition to money, the portfolio managersmanage the portfolio of stocks, bonds, and mutual funds.


Successful investing in Capital Markets demands ever more timeand expertise. Investment Management is an art and a sciencein itself. Portfolio Management Services (PMS) is one suchservice that is fast gaining eminence as an investment avenueof choice for High Net worth Investors (HNI). PMS is asophisticated investment vehicle that offers a range ofspecialized investment strategies to capitalize onopportunities in the market. The Portfolio Management Servicecombined with competent fund management, dedicated researchand technology, ensures a rewarding experience for itsclients.

Orifin Fincorp PMS brings with it years of experience,expertise, research and the backing of India's leading stockbroking house. At Angel, experienced portfolio management isthe difference. It will advise you on a suitable product basedon factors such as your investment horizon, returnexpectations and risk tolerance.

6) Loan

A loan is a type of debt. Like all debt instruments, a loanentails the redistribution of financial assets over time,between the lender and the borrower.

In a loan, the borrower initially receives or borrows anamount of money, called the principal, from the lender, and isobligated to pay back or repay an equal amount of money to thelender at a later time. Typically, the money is paid back inregular installments, or partial repayments; in an annuity,each installment is the same amount.

Acting as a provider of loans is one of the principal tasksfor financial institutions. For other institutions, issuing ofdebt contracts such as bonds is a typical source of funding.


http://en.wikipedia.org/wiki/Bond_(finance)

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

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

http://en.wikipedia.org/wiki/Annuity_(finance_theory)

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

http://en.wiktionary.org/wiki/borrower

http://en.wiktionary.org/wiki/lender

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

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

7) Insurance

Insurance is a basic form of risk management which providesprotection against possible loss to life or physical assets. Aperson who seeks protection against such loss is termed asinsured, and the company that promises to honor the claim, incase such loss is actually incurred by the insured, is termedas Insurer. In order to get the insurance, the insured isrequired to pay to the insurance company (i.e. the insurer) acertain amount, termed as premium, on a periodical basis (saymonthly, quarterly, annually, or even one-time).


http://www.appuonline.com/insurance/index.html#_blank

COMPANY PROFILE

VISION

Our vision is to be the most respected company in the financial services space.


MISSION

“To become a full-fledged financial services company known for its quality ofadvice, personalized services and cutting edge technology”


COMPANY PHILISOPHYThe Orifin Fincorp Group is committed to placing the InvestorFirst, by continuously striving to increase the efficiency ofthe operations as well as the systems and processes for use ofcorporate resources in such a way so as to maximize the valueto the stakeholders. The Group aims at achieving not only thehighest possible standards of legal and regulatorycompliances, but also of effective management.

THE ORIFIN FINCORP :

ORIFIN Fincorp . is one of India's leading financialconglomerates, offering complete financial solutions thatencompass every sphere of life. From commercial banking, tostock broking, to mutual funds, to life insurance, toinvestment banking, the . Caters to the financial needs ofindividuals and corporate.

A premier financial services provider organization dealingwith individual and corporate with customized financialsolutions. We work towards understanding your financial goalsand risk profile. Our expertise combined with thoroughunderstanding of the financial markets results in appropriateinvestment solutions for you. At ORIFIN we realize yourdreams, needs, aspirations, concerns and resources are unique.This is reflected in every move we make with and for you. Wehave deep appreciation for the Value of building aneverlasting most valuable relationship with YOU.


Why ORIFIN Fincorp?

All financial services under single roof strong businessalliances customized solutions for individuals no AccountOpening charges. Flexibility of choosing slab as per yourtrading pattern.

Subscription starts from as low as Rs 1000/-

Time validity for 12 months.

Trading allowed in equity, commodity, Currency.

Free trading software.

Client has the flexibility of trading through branch, onlineor integrated dealing desk.


COMPETITIVE STRENGTH

Regional management (Regional hub and spoke topology) forretail operation Large and diverse distribution networkStrong track record of high growth and profitability Strongrisk management system Well established brand

EXISTING BUSINESS NETWORKS

ORIFIN Fincorp Services(P) Ltd, has strategically officeslocated and business partners , with various business outletsin all prime locations of India

ORIFIN Fincorp . offerings include stock broking through thebranch and Internet, Investments in IPO, Mutual funds andPortfolio management service.

ORIFIN Fincorp . is in providing many products and serviceswhich have now become industry standards. Some of them are:

Facility of Margin Finance to the customers.

Investing in IPO’s and Mutual Funds on the phone.

SMS alerts before execution of depository transactions.

Mobile application to track portfolios.

Auto Invest - A systematic investing plan in Equities andMutual funds.

Provision of margin against . automatically against shares inyour Demat account.

ORIFIN Fincorp . has a full-fledged research division involvedin Macro Economic studies, Sectoral research and CompanySpecific Equity Research combined with a strong and wellnetworked sales force which helps deliver current and up todate market information and news.


ORIFIN Fincorp . is also a depository participant withNational . Depository Limited (NSDL) and Central DepositoryServices Limited (CDSL), providing dual benefit serviceswherein the investors can avail brokerage services forexecuting the transactions and the depository services forsettling them. It process more than 600000 trades a day whichis much higher even than some of the renowned internationalbrokers.

ORIFIN Fincorp . network spans over 310 cities with 867outlets.

ORIFIN Fincorp . Limited has over Rs. 4000 crore of AssetsUnder Management (AUM) as of 31st December, 2007. Theportfolio Management Service provides top class service,catering to the high end of the market. Portfolio Managementfrom ORIFIN Fincorp . comes as an answer to those who wouldlike to grow exponentially on the crest of the stock market,with the backing of an expert.

PRODUCTSChart of the ORIFIN Services-


Products of the Company-

Equities & Equity Derivatives (NSE, BSE).

Commodity Futures (MCX, NCDEX).

Currency Futures (MCX – SX).

Depository Services (NSDL, CDSL).


Mutual Funds (AMFI).

Insurance – Life and Non Life / Group Insurance (IRDA).

IPOs, Bonds and fixed Deposits.

Loans.

EQUITY BROKING

Regional management (Regional hub and spoke topology) for retail operation Large and diverse distribution network

Strong track record of high growth and profitability Strong risk management system Well established brand

Technical Analysis

ORIFIN Fincorp has its own Equity Research team with rich experience in identifying and analyzing attractive

Investment opportunities with fundamental long-term growth potential. The team also has a division specializing in

Technical Analysis, which offers technical tips for short termand day trading.

Seamless Execution

We provide unmatched flexibility and the power of choice to the clients for executing trades through multiple

Channels, viz., through our main office or branches, at any ofour franchise centres or over telephone.

A client may use any of these secured channels to communicatehis/her orders, and he/she would be identified by his/her account code.


We have end evoked to design all our processes and systemswith a client-centric focus to provide a client the

Convenience of transacting with us through the mode andchannel of his/her preference.

Daily Analysis

Outlines the day’s market outlook, latest domestic andinternational marketdevelopments, our call on the upcoming

economic and market environment and highlights the stockswhich we expect to outperform over the months Ahead

DERIVATIVES TRADING

Outlines the day’s market outlook, latest domestic andinternational marketdevelopments, our call on the upcoming

economic and market environment and highlights the stockswhich we expect to outperform over the months Ahead

DEPOSITORY SERVICES

We provide depository participant with CDSL and NSDL. ORIFINFincorp offers a range of Services including:

FINANCIAL PRODUCTS DISTRIBUTION PRODUCT BASKET

Our Financial Products Distribution (FPD) desk handles alltypes of primary market Investments you may require. Be it a

Mutual Fund, Life Insurance, General Insurance, Healthinsurance, States. Channel across the country providingeasyaccess to our clients is dispersed over several


Mutual Funds

Our team tracks the performance of Mutual Funds across thegamut of investor options and advises investors. In additionto tracking the key performing funds and analyzing theportfolios and maturity profiles of different funds, our FPDteamis geared to advice investors on the available options /NFOs to best suit their investment needs.

Insurance

ORIFIN Fincorp is a leading intermediary in the LIFE andGeneral Insurance market licensed by Insurance RegulatoryandDevelopment Authority of India. At, ORIFIN Fincorp we analyzethe client's requirement and capacity to understandtheir riskexposure and then evaluate their insurance portfolio in termsof its adequacy to protect the same. Our focus is todevelopcost effective and near foolproof insurance package for ourclients. In the event of a claim, our team facilitatestheprocess to ensure speedy settlements. ORIFIN Fincorp hasprofessional relationships with major Life and non-lifeinsurance companies in the country and is well poised toprovide its clients a comprehensive risk management strategy.


Bonds

For investors who prefer risk-free returns without the tensionof volatile markets, the best option is the Go ForSavingsBond. These bonds have sovereign guarantee and thus give safereturns.

Corporate Fixed Deposits

ORIFIN Fincorp takes the help of its own Research Desk inorder to choose and cater Fixed Deposits of blue chipcorporate.

IPO's

In case of IPOs of Equities, PSL markets almost all the majorissues that hit the Indian Capital Market. Customized Servicesand if you are interested in any of the above investments, wewould be privileged to be of assistance to you to investyourmoney safely. All you have to do is to call your NearestORIFIN Fincorp Office and any of our team members will getintouch with you.

OTHER SERVICES


Account opening facilities.

Dematerialization of physical shares.

Re-materialization.

Redemptions.

PAN/TAN Services.

Equity and Commodity.

Loans.

Mutual Funds.

Life Insurance.

Health Insurance.

Medical Tourism.

Solution for SMEs.

Gold and Silver ETF’s.

ORGANIZATIONSTRUCTURE


BOARD OF DIRECTORS

CHIEF EXECUTIVE OFFICER

HEAD INVESTMENT

HEAD FIXED INCOME

HEAD COMMODITY

HEAD FINENCE

HEAD HUMAN RESOURCE

HEAD OF MARKETING

HEAD SALES DISTRIBUTION

FUNCTIONAL ZONE

CENTRAL ZONE HEAD

EASTERN ZONE HEAD

WESTERN ZONE HEAD

NORTHEN ZONE HAED

SOUTHERN ZONE HAED

REGIONAL HEAD

BRANCH MANAGER

RELATIONSHIP MANAGER

IT CUSOMER SUPPORT AND OPERATION

PORTFOLIO MANAGER

BUSINESS DEVELOPMENT MANAGER

EXECUTIVE ASSISTANT BDM

DEALERS


FUNCTIONALDEPARTMENT


Finance department:

Risk management services (RMS) Underwriting evaluate profit or loss of the company Portfolio management services (Assets, liabilitiesetc)

Marketing department:

Fixing appointment Review policies of customers Market survey

Human resource department:

Recruitment Performance analysis Performance appraisal Documentation Employee verification Reward and recognition Team leader

Operation department:

Tie up with companies as a business partner Maintaining the public relation Sending quotation for investment Promotion of business

Information Technology department:

Two technology trading software ,that is online software


Lead management system

SWOT ANALYSIS


Brief about SWOT analysis

It is a tool that identifies the strengths, weaknesses,

opportunities and threats of an organization. The method of

SWOT analysis is to take the information from an environmental

analysis and separate into external (opportunities and

threats) and internal issues (strengths and weakness). Once

the identification of SWOT is done, it determines what may

assist the firm in accomplishing its objectives, and what

obstacles must be overcome or minimized to achieve desired

results

SWOT Analysis:

Strengths

• Integrated technology platform


• “One Stop” shop

• Pan - India distribution network

• “Orifin Fincorp.com” and “5paisa.com” have developed into

brands

Weaknesses

• Lack of a banking arm to complete the bank-broker-depositorychain

• Insignificant presence in institutional Segment

Opportunities

• Changing demographics with higher disposable income andincreasingly complex financial instruments will drive demand

for investment advisory services

• Rapid penetration of Internet and computers means that

technology enabled financial services will gain market share

Threats

• Economic slowdown

• Volatile movement in indices events like May 17, 2004

• Stock markets falls will have a cascading effect on our

mutual fund mobilization


• Increase/decrease in interest rate can affect our debt/

income fund mobilizations

• Future changes in personal taxation rules can impact

insurance sales

• Increasing competition from large and particularly foreign

players

Intensity of Competition: Move towards

consolidationLot of brokerage companies are moving towards consolidation

with the smaller ones becoming either franchisees for the

larger brokers or closing operations.

Increased Focus of Banks in Retail Broking:Various foreign banks like ABN Amro and others are planning to

enter the Indian retail brokerage industry.

Online Trading Competes with Traditional

Brokerage:There is an increasing demand for online trading due to

consumer’s growing preference for internet as compared to

approaching the brokers.


Threat of New EntrantsEntry of Foreign PlayersNew forms of trading including T+2 settlement system, dematerialization etc are strengthening the retail brokerage market and attracting foreign companies to enter the Indian industry.Threat of Substitutes

Alternative Investment OptionsVarious alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes toretail broking products and services.

Buyer PowerLack of Expertise Curtails Bargaining PowerRetail investors often lacks the knowledge and expertise in the financial sector that calls them to approach the broking houses.

Low Product Differentiation Proves Beneficial:The retail broking services provided by the various companies are homogeneous with very low product differentiation. This allows customers to enjoy a greater bargaining power.

Supplier Power

Increased Dependence on IPOsThere is a growing dependence of corporate on broking houses with the rising number of IPO’s coming to the market.


ETHICAL PRINCIPLES TO GUIDE BEST PRACTICES

A set of ethical best practices must address the inherenttensions and tradeoffs faced by the industry. They must begrounded in a set of ethical principles adequate to thecomplexity of the industry.

Inherent Tensions in the ORGANIZATION Industry: TheORGANIZATION industry faces a set of unavoidable andeverpresent tensions in shaping its ethical practices. Amongthe most important are:

The tension between good medical outcomes and cost control.These two primary goals of ORGANIZATIONs are at times inconflict. In some cases, increased spending might improvemedical outcomes, yet the hospitals and the ORGANIZATIONs astheir representatives are obligated simultaneously to helpcontrol medical costs.

The tension between the unit cost of goods and services andtheir total cost in use after assessing their effectiveness inuse, technological capabilities and data on medical outcomes.


The tension between standardization of medical procedures (andtherefore supplies and equipment) and the need to adoptrapidly technologies that improve medical outcomes.Standardizing equipment in operating and hospital roomsclearly saves lives. Having clinicians work on equipmentwith which they are familiar reduces errors and improvesperformance. Standardization also helps reduce inventory andmaterials handling costs. Yet, at some point, improvedtechnology or opportunities for reduced cost by switchingvendors or products warrants paying the “costs” in dollars anderrors to adopt improved products and technologies.

The tension between whether to adopt technological and otherperformance innovations based on initial information andvendor representations or to wait for performance data basedon actual use before new contracts are written and adoption isrecommended.

The tension between the cost and other advantages of workingwith “familiar vendors” and the need to direct buying tovendors with the best prices and the latest technologies.Supply chain research demonstrates the benefit of havingstable long term supply relationships in serving hospitals andthe ultimate customers, patients. Nonetheless, theseadvantages can be harder to document than the advantages ofsmall but real price breaks and incremental improvements intechnology.


The tension between being a private for-profit organizationwhich must sustain its own financial strength and being ownedby nonprofit organizations. The university, community andother nonprofit hospitals which own Premier and most otherORGANIZATIONs conduct their business with a special set ofobligations to the public which has contributed to thesenonprofit organizations and to the government which funds somuch of the medical care. These hospitals must conduct theirbusiness in a transparent manner with significant attention totheir public purpose. Though they are for-profit entities,ORGANIZATIONs are expected to adopt many of the obligations ofnonprofits as they act as representatives of thoseorganizations.

The tension between negotiating stable multi-year contractsand buying on the spot market. ORGANIZATIONs are chargedwith establishing stable and cost-advantaged supplyrelationships with vendors. It is often possible to secure atone moment a particular supply or service on the spot marketat a lower price. Vendors are also often willing to undercutthe ORGANIZATION negotiated price in a particular market or ata particular moment in time, or to secure the business of aparticular large hospital. These spot conditions, asCalifornia discovered in the energy market, do not diminishthe long-term value of the ORGANIZATION to sustain competitivepricing over an entire portfolio of product and services andover time.

The tension between being solely a ORGANIZATION and theinterest the member’s have in the ORGANIZATION taking on avariety of other functions that serve the members and improvetheir supply chain management and overall performance. Withthese other

activities comes the possibility of conflicts of interest andmore complex relationships with vendors and potential vendors.


General Ethical Principles: The best ethical practices in thenext section are constructed upon a foundation of underlyingprinciples which seek to resolve or at least balance theseinherent tensions and other dilemmas of operating efficientlyand profitably in the ORGANIZATION industry. Theseprinciples include:

A ORGANIZATION should manage its ethical practicesdeliberately and with care. Management and the Board ofDirectors should share the responsibility for maintainingan effective ethical management system.

A ORGANIZATION’s first obligation is to serve itsmembers’ interests, which includes the twin goals of goodmedical outcomes and cost containment, and through itsmembers, the ultimate customers, the patients.

ORGANIZATIONs should provide ongoing assistance to theirmembers in critical supply chain issues such as productsafety and efficacy.

A ORGANIZATION should ensure that its employees and non-employee directors and advisors do not have conflicts ofinterest that would compromise the decisions they make onbehalf of the hospitals.


A ORGANIZATION itself should avoid conflicts of interest

arising from ownership of equity in vendors or otherbusiness relationships with vendors, where theserelationships do not directly serve the members and theirinterests.

No contracting decision should be based primarily on theamount of administrative fees or fees for other servicespaid by a vendor. Total value to the members must bethe criterion.

A ORGANIZATION employee or non-employee director oradvisor should recuse himself or herself from anydecision that represents a conflict of interest or mayappear to be a conflict of interest.

A ORGANIZATION should seek broad engagement and inputfrom member hospitals and their employees, particularlyclinical staff, in contracting and technologicalassessment decisions.

No vendor should be permitted to own or control aORGANIZATION.

ORGANIZATION employees and non-employee directors andadvisors must protect the confidential information theypossess.


ORGANIZATIONs should conduct their business with maximum

practical transparency, making extensive informationabout their operations available to their members and tothe public.

ORGANIZATIONs should conduct ongoing studies on the valuethey create for their members.

ORGANIZATIONs should make all contracting decisions basedon the interests of the members.

ORGANIZATIONs should create a process for evaluatingproducts and services that is as objective as possible.

ORGANIZATIONs should provide members with maximum choicein purchasing, consistent with capturing maximum valuefrom the contracting process and aggregation of demand.

ORGANIZATIONs should provide hospitals with a greaterrange of choice in those areas where the individualchoice of products or services by the clinician isstrongly related to good medical outcomes.

ORGANIZATIONs should write contracts of the shortestduration feasible when all economic considerations areincluded, thereby providing future opportunities to adoptbreakthrough technologies and to improve the products andterms of contracting.


RECOMMENDED BEST ETHICAL PRACTICESThe following set of 50 ethical policies and practices are

meant to cover most ethical questions specifically faced byORGANIZATIONs. They address a number of practices that arenot now, and some that have never been, practices of Premier,Inc. They are addressed here for comprehensiveness and toset guidelines for future practice. There are, in addition,a number of other general ethical practices which should beaddressed in a ORGANIZATION code of conduct such as isrecommended in #2 below. These are excluded here so that thestudy could focus on the ethical issues specific to theORGANIZATION industry.

It is clear from the industry analysis performed for thisproject that ORGANIZATIONs are only one part of a complexsupply chain for acute care facilities. Although it is veryimportant for ORGANIZATIONs to develop and address bestethical practices, it is also critically important for otherparts of this supply chain – particular the vendors and thehospitals themselves – to develop and implement best ethicalpractices. The twin social goals of good medical outcomesand cost control can be frustrated by vendors or hospitalsthat are lax in their practices, no matter what ORGANIZATIONsdo. It would be particularly unfortunate if the practices ofvendors or hospitals knowingly undercut ORGANIZATION effortsto implement best ethical practices.


Further, the ORGANIZATION trade association, Health

Industry Group Purchasing Association (HIGPA), has taken onseveral important functions regarding best ethical practices.HIGPA released its Code of Conduct on July 30, 2002. Thiscode, while not going as far as the recommendations in thisreport, is an important foundation for the ethics work of theindividual ORGANIZATIONs. HIGPA also announced that:

1) HIGPA will publish an annual report identifying thoseORGANIZATIONs in compliance its Code of Conduct.

2) HIGPA shall coordinate development and implementation ofindustry-wide educational programs on clinical innovations,patient safety, contracting processes, public policy,statutory and regulatory requirements, and best practices forcompliance with the Code.

3) Compliance will be a requirement for membership in HIGPA.

4) HIGPA will support the creation and maintenance of a Web-based directory where vendors can post product information,including information about products considered new andinnovative.

No matter how detailed a list of ethical principles andpractices might be, there will still be work adapting andapplying the principles to a specific organization. While Ihave drafted these ethical practices with Premier in mind,there are details and specifics which will require adjustmentin their implementation. During the past 30 days, the authorand Premier executives have examined the ethical practicesbelow to assure that they can be implemented in Premier.

GENERAL ETHICS POLICIES 1 1


COMMITMENT TO ITS MEMBERS AND TO THE GOALS OF QUALITY MEDICALCARE AND COST CONTAINMENT: A ORGANIZATION should emphasizein its values or mission statement that it acts first andforemost as a representative of its member hospitals, andpursues two primary goals, quality medical care and costcontrol.

CODE OF ETHICS: A ORGANIZATION should have a comprehensivecode of ethics or code of conduct covering the points in thisreport and other common ethical policies.


FINDINDS,SUGGESTIONS AND

CONCLUSION


FINDINGS:

1. www.nseindia.com

2. www.orifinfincorp.com

3. www.wikepedia.com

4. www.youtube.com

5. www.moneycontrol.com

6. www.icharts.in

7. www.bseindia.com

8. www.stock-market-strategy.com

9. www.tradingtips.com

SUGGESTIONS:

For Orifin Fincorp..


http://www.tradingtips.com/

http://www.stock-market-strategy.com/

http://www.bseindia.com/

http://www.icharts.in/

http://www.moneycontrol.com/

http://www.youtube.com/

http://www.wikepedia.com/

http://www.nseindia.com/

To increase the awareness of the company, the company

should make some extensive campaigns for increasing the

companies brand image.

As it is known that the company is providing almost all

the financial services to a single place, the company

should give the same message to the market through some

branding techniques.

The company is maintaining good relationship with several

companies which are having some good image in the market.

As I have seen it is found that people generally to the

financial service centers which are well known even

though they are costly. So it is recommended that the

company should try to bring in more customers and improve

the branding of the company in a better way.

Quick services should be increased in the companies

working culture. Instead of waiting for a bulk orders or

for group of customers the company should start working

on the customers alone even though the requirements of

the customers are individual.

A better infrastructure and a better location of the

office will attract more customers towards the company.

RECOMMENDATIONS TO THE INVESTORS

HANGING MAN: SELL

BULLISH ENGULFING: BUY


BEARISH ENGULFING: SELL

BULLISH HARAMI: BUY

BEARISH HARAMI: SELL

INVERTED HAMMER: BUY

SHOOTING STAR: SELL

MORNING STAR: BUY

PIERCING LINE: BUY

DARK CLOUD: SELL

EVENING STAR: SELL

LIMITATIONS:

Signals that are developed above are to confirmed with the

oscillators and the indicators to make sure that the entry and

the exit into the market will be profitable.

CONCLUSION

To conclude, this report consists purely about the basics of

understanding the stock markets. Some important technical

analysis techniques were given in the report which will help

the beginners to start with their trading. Even though stock


market analysis should be made along with the fundamental

analysis and the technical analysis, this report is purely

concentrated on the technical analysis. Few companies like

ACC, INFY, M&M, SBIN, ONGC, MARUTI, AXISBANK, NIFTY were taken

and analyzed for the better understanding of the technical

tools that were noted in this report. For investors sake

recent 6 months data of the stocks of the above mentioned

company are taken and analyzed so that the report will give an

updated information regarding the trend that the market is

following at present.

Tools that helped in analyzing the above mentioned companies

are..

ACC- BEARISH ENGULFING, BULLISH ENGULFING

AXISBANK- BEARISH ENGULFING, BULLISH ENGULFING

INFY- BEARISH HARAMI, MORNING STAR

M&M- BULLISH ENGULFING, BEARISH HARAMI

MARUTI- BULLISH ENGULFING, BEARISH ENGULFING

NIFTY- BULLISH ENGULFING, BEARISH ENGULFING

ONGC- MORNING STAR, EVENING STAR

SBIN- PIERCING- EVENING STAR


FINDINGS,RECOMMENDATION,CONCLUSTION


FINDINGSBrokerage of Orifin Fincorp is higher than Others brokingfirms like Religare,Motilal Oswal,Indiabulls,they are charging0 .03% for Intraday and 0 .30% for Delivery where OrifinFincorp is taking 0 .05% for Intraday and 0 .50% for Delivery.

Margin money of Orifin Fincorp is higher than other firm likeIndiabulls,Geojit,Motilal Oswal,there is no restriction ofmargin moneye.But in Orifin Fincorp,the minimum margin moneyshould be 5000/2555 rs..

Exposure is less than other firms. Orifin Fincorp offers eighttimes exposure on margin where as Religare and Indiabullsoffer twenty times exposure on margin money.

HDFC, ICICI direct provide their customer’s three types ofaccount (de-mat a/c, trading a/c, bank a/c) but Orifin Fincorpprovide only De-mat a/c and Trading a/c.

Religare takes Rs.299 for lifetime services, where as OrifinFincorp takes Rs.555.

Relationship manager changes many times, it creates problemfor the offline customers .

Securities are not so much reliable.

Orifin Fincorp has hidden charges, Customer are not much awareabout that.

Customer satisfaction of Orifin Fincorp not so good.

Most of the customers are trading offline.

Most of the customers approach towards the broking firm isthrough the relationship manager.

Most of the people are not much aware of share market and itsbenefit.


RecommendationTo increase awareness about Share Market and the name OrifinFincorp itself, the company should organize campaign. Thecampaign can be weakly, monthly, yearly, it will give a goodresult to the company to capture market in the competitiveposition.

The company should reduce the margin money. It can help toacquire more customers, if the firms bring plans for nofoundation of margin money.

The Company should increase their focus on the less marginmoney customers also .It can help to make more customers oflow margin money which can increase the revenue of the firm.The Relationship managers focus only to the high margin moneycustomer because from them they will get high brokerage thatshould not be happened from the less margin money customer.

Transaction error should be avoided .Transaction should bedone properly, taking in consideration that it is one of themost required quality of a firm. Wrong transaction or defaulttransaction may lead the prestige of the company to be down.


Brokerage rate should be reduced. Religare,MotilalOswal,Indiabulls, are charging as 0 .03% for Intraday and0 .30% for Delivery where as Orifin Fincorp is charging 0 .05%for Intraday and 0 .50% for Delivery.Though it is negotiablebut for high margin money customer not for less margin moneycustomer.

The Company should increase Exposure. It is the good tool tocapture the market.


CONCLUSION

I am much thankful to Orifin Fincorp for providing methe opportunity for doing training programme in theorganization as management trainee. While doing my sip in thereputed broking firm Orifin Fincorp I had got a chance forknowing and analyzing the share market. I was also able toknow about the business environment and business ethics of thebusiness world. I also came to know about what does a firm oran organization require or wants from a employee or a trainee.From the survey, I found that Orifin Fincorp is in the topthree position in the share market.


BIBLIOGRAPHY ANDANNEXURE


BIBLIOGRAPHY

Websites:-

www.Orifin Fincorp.com

www.5paisa.com

www.nse.com

www.moneycontrol.com

Book source:-

Financial management

- Khan & Jain.

Principal of financial management

-Prassana Chandra


http://www.moneycontrol.com/

http://www.nse.com/

http://www.5paisa.com/

http://www.indiainfoline.com/

Business Environment

- Francis Cherunilam

Annual report of Orifin Fincorp

SPECIAL TASK


INTRODUCTION


INTRODUCTION

This industry internship program which I have gone through helped mein learning some important basics of the Technical analysis of thestock markets. Technical analysis which is followed by the technicalanalysts in the industry is an art that is followed for severalyears. It is not a part of science that is developed to give theexact results, this art is just made on some assumptions and sometheories hoping that the movement of the price follows some specifictrends. The technical analysts believe that a detail study of theprice movements with the help of the charts will give us an idearegarding the trends that the price movements may follow in the nearfuture based on the analysis of the past trends. There are severalbroking companies that are present that gives the services of makinginvestments in the capital markets. The stock broking companies helpand give the services of investing in the equity markets, currencymarkets and commodity markets. There are lot of opportunitiesavailable for the investors but at the same time deciding on theportfolio upon where to invest and where not to invest is the majorproblem that most of the investors face. This could be the reasonthat most of the investment banking firms came into existence. Onemore important aspect where the investors should take care of is theexact entry point to invest. In deciding the place and the point toinvest most of the companies and the investors follow two types ofanalysis. Once is fundamental and the second is the technicalanalysis.

In the technical analysis the people may know the entry and the exitpoints so that they can invest and withdraw at the right time,whereas with the help of the fundamental analysis we may come toknow the place where to invest. It is not always possible to dependonly on one of the analysis. For a better investing it is alwaysbetter to follow both the technical analysis and the fundamentalanalysis so that the investment will be controlled against the risk.


The fundamental analysis is nothing but the general amount of theinformation that you get from the outside market through news,reports. The price movements are always the implications of theknowledge that is acquired from the companies, investors, traders,speculators and the analysts. Considering all this information onecan come to a state where they can invest and can also know theamount of return that they can get.

The technical analysis is nothing but the simple calculations on thetrends that the price movements follow. In the technical analysispeople only follow the prices and are not bothered about thefundamental analysis of the stocks. They say that the fundamentalanalysis is nothing but the implications of the human psychologicalbehavior regarding the news over a stock. Technical analysts saythat always the market will discount the prices by itself and onlythe demand and the supply of the stock implicate the movement of thestock prices.

During my internship I learnt some basic techniques of technicalanalysis which will be very helpful if practiced and followed welland at the same time I tried to get some clients into the so thatthe get company gets profitable. I have seen that the major amountof the income that a stock broking company gets is through thebrokerage charges. When a client of the particular brokerage companystarts to trade some amount of percentage is taken by the brokeragecompany over the amount the trade that he makes.


STATEMENT OF

PROBLEM


Statement of problems:

Volatile markets are characterized by wide price fluctuation

and heavy trading within a short span of time. Volatility is a

traditional worry of investors and associated with fast-

growing stocks, high P/Es, smaller companies, information

Technology (IT) firms.

Volatility of stock market is usually caused by economic

factors, like forex rates, inflation rates; interest rates

etc. share prices fluctuations affect the investor’s wealth

creation. In this context, the study of the impact of economic

indicators on the movement of share prices in stock market is

undertaken.


OBJECTIVES

Objectives of the study:

1. To study how share prices fluctuate w.r.t economic factors

2. To enable the investors in exploring the investment

opportunities using the economic indicators

Hypothesis:

Null hypothesis (H0):

Economic factors do not affect the movement of share prices.


Alternate hypothesis (H1):

Economic factors affect the movement of share prices.

Primary Objective:

To study the movement of stock prices of ten companies

during January 2012 to December 2012 with respects to

economic indicators.

Secondary Objective:

To enable the investors in exploring the investment

opportunities using the economic indicators.

To study the scope and trading mechanism of Foreign

Institution Investors in India.

To study the impact caused by Exchange Rate on stock

values SENSEX, and various companies.


RESEARCHMETHODOLOGY


METHODOLOGY Basics of Technical Analysis of Stock Markets

The Strengths and Weakness of Technical Analysis

STATEMENT OF HYPOTHESIS

The hypothesis for this study has been stated below:

NULL HYPOTHESIS

H0 : There is no significant relation between Index of industrial production and SENSEX

H0 : There is no significant relation between Consumer Price Index and SENSEX

H0 : There is no significant relation between Call Rate and SENSEX

H0 : There is no significant relation between Dollar price and SENSEX

H0 : There is no significant relation between Gold price and SENSEX

H0 : There is no significant relation between Crude oil and SENSEX

H0 : There is no significant relation between Foreign Institutional Investment and SENSEX

H0 : There is no significant relation between all these macroeconomic variables and Stock

market sector wise


NULL HYPOTHESIS

Ha : There is a significant relation between Index of industrial productionand SENSEX

Ha : There is a significant relation between Consumer Price Index and SENSEX

Ha : There is a significant relation between Call Rate and SENSEX

Ha : There is a significant relation between Dollar price and SENSEX

Ha : There is a significant relation between Gold price and SENSEX

Ha : There is a significant relation between Crude oil and SENSEX

Ha : There is a significant relation between Foreign Institutional Investment and SENSEX

Ha : There is a significant relation between all these macroeconomic variables and Stock

market sector wise


What is Technical Analysis ?

Technical analysis is an art of science of forecasting the futuresbased on the detailed examination of the historical movements of thestocks. This is not astrology of predicting the markets; it is basedon analyzing current demand-supply of commodities, futures, stocks,indices or any tradable instrument. Technical analysis involves inusing the stock information like volumes, prices on a chart andapplies various indicators to assess the price movements. The timeframe in the technical analysis may range from minutes to years.

There are actually two types of analyzing an investmentopportunities in the security market; they are fundamental analysisand technical analysis. In fundamental analysis we use theinformation like the financial and the non-financial news regardingthe company where as in technical analysis we ignore thefundamentals and focus on the price movements in the past.

Technical analysts believe that the current price reflects all therelevant information that could affect the price. The price reflectsthe mix of the knowledge of the traders, analysts, portfoliomanagers and market strategists. In technical analysis we look atthe price and also analyze the price movements in the past andassume that it will perform in the same way in the near future.

Technical analysis is completely based on assuming that the pricemovement will follow a particular trend. If suppose that the pricemovements are completely random it is impossible to depend on thetechnical analysis to get some profits from the stock. By looking atthe past analysis of the price movements analysts found that theprice movements always have some trends and if we are capable offollowing the trends of the price and able to predict the marketthen it is a great way to get some profits in the stock marketsusing the technical analysis.


It is said that the technical analysts know the price of everythingand do not know the value of anything. As the technical analystsmainly depend on the price movements of the stocks they do not mindwhy the people are willing to pay that price, whereas thefundamental analysts are bothered about why the people are willingto pay such a price.

However the basics and the principles of the technical analysis areapplicable universally. The trending range, support and theresistance and some other aspects can be applied to any stock chart.Technical analysis can be applied for any instrument like thestocks, futures, forex, fixed income securities and the commodities.

While making the portfolio of investing the technical analysts gothrough a Top-Down flow. Where in first a overlook of the market istaken that is the index. If suppose the index shows that it is inbullish mode then the sectors which are giving some promisingprofits should be taken aside. When the sectors are selected thenthe different good companies are to be filtered from the selectedsectors. Now when we have the list of the companies which look likepromising to us can be analyzed thoroughly and if required the bestof those can be filtered to have a safer investment.

Three Basic Assumptions In Techincal Analysis..

1. Price moves in trends.

2. History tends to repeat itself.

3. The market discounts everything.

Trade with the trend is the main motto of technical analysts. Whenwe see that a trend is established it is assumed that the pricemovement will follow the trend.


Technical analysis is criticized for not considering the fundamentalanalysis of a company. But as far as the technical analysts see thefundamental factors are nothing but the psychology and the pulses ofthe market. These human emotions may respond to some extent in someparticular cases and they become normal as the time goes on. Soagain the market is only driven by the demand and the supply of thestocks.

Technical analysts also believe that history repeats again. Therepetitive nature of the price movements is seen by the people allthrough the years. Hence even now it is considered that the pricemovements will follow the same as the time goes on.

Technical analysts uses the open, high , low and close of the pricesto determine the demand and supply of the prices. All these pointsshould be considered together to understand the market, using theseopen, high, low and close individually will not help in predictingthe price.

There are also two important words that we generally use in thetechnical analysis; they are support and resistance. Charting is themain important technique which we use to analyze the market. Alwaysthe trading ranges show that at some particular level the demand andthe supply of the particular instrument will go dead lock. If thesedead locks were broken by the current market then it is found thateither the supply or the demand has taken its winning place in themarket. For suppose if the upper band of the trading range iscrossed the demand is winning and if the lower band of the tradingrange is crossed the supply is winning.

NEW TERMS:

BULLS: Bulls are the kind of people who thinks that marketis a significant investment option. They are optimistic andthinks that the market is going to rise and the prices aregoing to increase so that the profits can be acquired from themarket.


BEARS: Bears are those investors who believe that the market

is going to be headed downward. These people are bitpessimistic about the market conditions and always try to getsome profit using the down trend of the market

OPEN: Every day the market prices start with a certain valueand we call that particular value of the day as open.

CLOSE: The value at which that current day trade closes iscalled as close. It is not always true that the next day openwill be at the same price that the previous day close hasoccurred. But any how the open and the close of a particularday or the month are very well used by the technical analyststo make some technical calculations to predict the market.

HIGH: This is the highest price that the market has achievedon a particular day.

LOW: This is lowest price that the market went down on aparticular day.

We generally will not use much of the High and Low values incalculating the technical analysis.

There are few important advantages that we have by using thecharts..

1. Market reactions before and after important events

2. Past and present volatility

3. Historical volume or trading levels

4. Relative strength of the stock versus the index.

Technical analysis also helps you to find the best entry point intothe market. Fundamental analysis only tells you what to buy, but thetechnical analysis will help you in saying the exact point to buy orsell. Technical analysis will spot the support and the resistancelevels easily.


There is also some weakness in the technical analysis. The first oneis the analyst bias, this where the analyst nature of trade comeinto picture. If the analyst is a perpetual bull then the anlaysiswhich he makes will tilt towards the bullish, if in the same way theanalyst is a perpetual bear then the analysis will tilt towards thebearish.

It is difficult to find the moving averages. All the stocks do nothave the same moving averages. One companies support and resistancecan be found by a 60 day moving average and others can be found byconsidering the 70 day moving average. Controlling risk is animportant factor while trading. There are some conditions where ispeople take the call for the trade and be stubborn to stay in theposition even though the trend is in the opposite favor.At the sametime it is very important to take care of the capital which we haveto invest. In the market we will have lot of opportunities to make,if we miss one opportunity we will have another in the same day orwe may have thousand opportunities in the next day, but it is verydifficult to get back the money which is lost. So it is better totry to control the risk than trying aggressively for profits.

CHARTS..

Charts are the important working tools of the technical analysts.The price movements are plotted on the charts on different timeframes. In is very difficult to analyze the price movements as aregular data. We need graphs so that we can understand the trends ofthe prices very easily. Generally the X-axis will define the timeand the Y-axis will define the price. Charts can also show us thevolume of the shares traded, generally technical analysts note boththe price trends and the volume trends in the same graph to have abetter understanding.


There are different kinds of charts that are used by the technicalanalysts.

Line Charts

Line charts are made by connecting the closing prices of a specificstock in a period of time. It provides us the trend of the stockprices and the analysts are using these line charts for a very longtime.

Bar Charts

Bar charts are also important charts that are used for a very longtime They contain the high, low, close and open of the stock pricewhich help it noting the trends. The whole bar from the top tobottom will show the range of the particular trade for the day andthe open and the close were noted with the small horizontal lines onthe either sides of the bar.

Candle Stick

Candle sticks are used as a better representation of the bar charts.They are colored according to the trade position that went on forthat particular day. The upper point will give the High price withina particular day and the lower point will give the low of theparticular day. If low and high are noted accordingly to the prices.The color of the candle stick changes according to the position ofthe open and the close price. If the close is higher than the openof the day then the candle stick will be hollow and if the close islower than the open then the candle stick will be filled. The hollowcandle stick will denote the bullish market as the close price ishigher than the open and it says that the demand is increasing. Inthe same way the filled candle stick will speak about the bearishmarket as the supply is increasing and the closing price is muchlower than the open price.

These Japanese candle sticks will give a quick psychology of theshort term trading psychology. These candle sticks are used for theshort term technical analysis where the investor can make the shortterm decisions for buying, selling or holding the investment.


ANALYSIS ANDINTERPRETATION

OF DATAMARC School of Business 81

Theoretical FrameworkWith a view to accomplish the pre-determined set of objectives ofour research, different set of techniques and tests have beenadopted. First and foremost, to fulfill the research objectives,descriptive statistics technique like mean, standard deviation,variance, etc are carried to show the nature and basiccharacteristics of the variables used in the analysis. ADF test isused to find the stationarity or non stationarity variables of dataseries. Inferential statistics technique is used to inference aboutthe results by using different ways of inferential statistics likeCorrelation matrix analysis which finds any strength of associationbetween Bombay stock exchange indices (share price) and selectedmacroeconomic variables. Then the second type of inferentialstatistics is used that is linear regression analysis which create amathematical model that can be used to predict the values of a stockprice of Bombay stock exchange indices based upon the values of anmacroeconomic variables. In other words, we use the model to predictthe value of Y when we know the value of X. Here, we used the sign-fto analysis the overall significance of the sample regressions andt- test and p-value to check the individual significance of themacroeconomic variables. Then, finally we see the two wayrelationship between variables by using granger causality test.

Descriptive statistics technique

Descriptive statistics is the discipline of quantitativelydescribing the patterns and general trends of a dataset andsummarize it in single value. It enables a reader to quicklyunderstand and interpret the set of data that has been collected.In our study, descriptive statistics provide a useful quantitativesummary of macroeconomics variables and BSE indices. Here,descriptive statistics provide a historical account of variablesbehavior and convey some future aspects of the distribution ofdataset. We used measures of central tendency (mean) and measures ofVariability (standard deviation, range, minimum and maximum) toexplain the dataset.


Inferential statistics technique

Inferential statistics is defined as the branch of statistics thatis used to make inferences/ valid judgments about thecharacteristics of a populations based on sample data. Thesestatistics are ways of analyzing data that allow the researcher tomake conclusions about whether a hypothesis was supported by theresults. A hypothesis is an educated guess about a trend, groupdifference or association believed to exist.

A null hypothesis states that the results will be due to chancewhereas an alternate hypothesis tells that the results are due tothe manipulation of the independent variable. Here in our study,null hypothesis (H0) is there is no relationship between Bombaystock exchange indices and selected macroeconomics variables whilealternate hypothesis (Ha) is that there is relationship between


Bombay stock exchange indices and selected macroeconomics variables.There are different ways to inference the results. Here, we usedcorrelation matrix analysis and linear regression analysis (tratio,f-sign, p- value, r-square) which allows us to make a conclusionrelated to our hypothesis. We have used 5% of level of significanceand two tailed test so as to accept or reject our null hypothesisaccording. Regression analyses are typically done using statisticssoftware and here we used SPSS.

ADF Test

As already stated stationarity of a data series is a prerequisitefor drawing meaningful inferences in a time series analysis. Itenhances the accuracy and reliability of the models constructed.Reason being that if the variable is not stationary it might lead tospurious result in the analysis. The first and simplest type of testone can apply to check for stationarity is to actually plot the timeseries and may look for possibility of trend in mean and variance,evidence of autocorrelation and seasonality in the data. If thesepatterns are found in the series then the series can be regarded asnon stationary. The eighteen time series displayed in figure:dataset graph exhibit different such patterns. BSE FMCG, IIP, IIPMetals, IIP CG, IIP FMCG, IIP CD, CPI, and gold prices seem toexhibit a trend in the mean since they have a clear upward slope. Infact, sustained upward or downward sloping patterns (linear ornonlinear) are signs of a non-constant mean. This is a sign of non-stationarity.


FINDING,SUGGESTIONS ANDCONCLUSIONS


CONCLUSION

In this paper, the study performed necessary analyses to answer theresearch question of whether some of the identified macroeconomicfactors can influence the Indian stock market. The macroeconomicvariables are represented by the industrial production index,consumer price index, interest rate (call rate), exchange rate, goldprice, oil price, foreign institutional investment. Indian stockmarket is represented by BSE SENSEX. The paper also includessectoral analysis of five sectors (metal, auto, capital goods, FMCG,consumer durables). Monthly data for a time span of 7 years (fromApril 2005 – March 2012) was considered. The paper employedGranger causality test, regression analysis and correlationanalysis to examine such relationships. The results are interestingand useful in understanding the Indian stock market pricingmechanism as well as its return generating process.

On the basis of overall analysis and sectoral analysis it can beconcluded that three out of seven variables are relatively moresignificant and likely to influence Indian stock market. Thesefactors are exchange rate, foreign institutional investment and callrate. There is a positive relation between FII and Sensex, call rateand Sensex whereas exchange rate and Sensex shows a negativerelation. The result has been concluded on the bases of the grangercausality test in which call rate has been seen as affecting BSE inalmost all the sectors (except FMCG sector) and regression analysisin which exchange rate and FII is affecting all the sector. Thissimply concludes that in long term the Indian stock market is moredriven by domestic macroeconomic factors rather than global factors.

The results of this analysis should not be treated as conclusive foran investment. Apart from understanding Indian stock market based onthe contributions of the significant variables, there remain otherimportant issues that affect the return generating process. Theseissues are the cost of equity capital, asset valuation, industryanalysis, a firm's management and operational efficiency analysis,and so on. Any investor should consider all relevant sources ofinformation when making an investment decision.


REFERENCES

Abdalla, I. S. A. and Murinde, V. (1997). “Exchange rate andstock price interactions in emerging financial markets:Evidence on India, Korea, Pakistan, and Philippines”, AppliedFinancial Economics, 7: 25–35.

Abdullah, D. A. and S. C. Hayworth. (1993). “Macroeconometricsof Stock Price Fluctuations”

Quarterly Journal of Business and Economics 32, 50–67.

Aggarwal, R. (1981). Exchange Rates and Stock Prices: A studyof U.S Capital Market under

Floating Exchange Rates, Akron Business and Economic review,7-12.

Ahmed, S. (2008). “Aggregate Economic Variables and StockMarkets In India”, International

Research Journal of Finance and Economics, 14.

Ajayi, R.A. and Mougoue, M. (1996). “On the Dynamic Relationbetween Stock Prices and

Exchange rates”, Journal of Financial Research 19, pp 193-207.

Bahmani-Oskooee, M. and Sohrabian, A. (1992), “Stock pricesand the effective exchange rate of

the dollar”, Applied Economics, 24 (4): 459-64.

Barro, R. J. (1990). “The Stock Market and Investment”, Reviewof Financial Studies 3, 115–131.

Barro, R. J. (1974). “Are Government Bonds Net Worth?”,Journal of Political Economy 82, pp.

1095-1117.

Bhattacharya, B, Mukherjee, J. (2002). “The Nature of TheCasual Relationship between Stock


Market and Macroeconomic Aggregates in India: An Empirical

Analysis”, Paper presented in the

4

th

Annual Conference on Money and Finance, Mumbai, India.

Bulmash, S.B., Trivoli, G.W. (1991). Time-lagged interactionsbetween stock prices and selected

economic variables, Journal of Portfolio Management 17 (4),61-67.

Cooper, R.V. (1974). “Efficient Capital Markets and theQuantity Theory of Money”, Journal of

Finance, 24, pp. 887-921.

Chen, Nai-Fu, Richard Roll and Stephen A. Ross. (1986).Economic Forces and the Stock Market.

Journal of Business, 59, pp. 383-403.

Darat, A.F. and Mukherjee. T.K. (1987). “The Behaviour of aStock Market in a Developing

Economy”, Economic Letters, 22, 273-278.

Darrat, A. F. (1990a). “Stock Returns, Money and FiscalDeficits”, Journal of Financial and

Quantitative Analysis 25, 387-398.


Pratap Project Final

Documents

Transcript of Pratap Project Final