sandeep projct

8/6/2019 Sandeep projct

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1.0) INTRODUCTION

There has been an explosion in the choice of financialservices for individuals and families in India in the lastdecade. The Indian financial services market has come a longway with an exponential increase in the depth and breadthof products available to the individual to choose from.Simultaneously the levels of income have also increasedsignificantly.

In today s complex financial markets, it is becomingincreasingly difficult to select the right investment avenues.Each investment carries some risk and that it is vital tochoose wisely. While there are plenty of options available todesign your portfolio, the key is to invest in a manner thatallows you to potentially lower your investment risk andincrease your chances of meeting your varied financial goals.

Investing is a plan. The individual has to decide as to what

his goals and how he has to go from one level of comfort tothe other level.

PMS is a service offered by various banks, AMCs andbrokerage houses for professionally managing the portfolioof investments on behalf of individuals, firms, companies,trusts or societies for an agreed fee. The investor depositshis/her surplus funds with the brokerage house/AMC and

depending on the specific profile of the investor in terms of risk appetite and expectations of returns, the portfoliomanager allocates these funds for investment in variousinstruments having various degrees of risk and return. Inreturn for this service, the institution offering the PMSservice gets basic fee and in some cases a variable fee based


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on the returns generated by the portfolio over a specificperiod.

In a country where high income individuals are growing at20 to 25 percentage per year the PMS schemes make sensewhile considering the lack of time of investors and themarket knowledge. So the present study aims to draw lightto this aspect by examining the features of the schemes of various portfolio management products. Another intentionis to find the customer awareness about PMS as a productamong the various investment options. Presently manyfinancial service companies are offering PMS schemes withvarious options.

1.1) NEED FOR THE STUDY

Two important features of the current Indian financialmarket is the availability of a lot of investment avenues

and the lack of knowledge of the investors. Moreovermajority of investors are in short of time to understandregarding the various investment avenues and thepossible risk and return involved in the investmentdecisions. Portfolio Management Services came as asolution to this dilemma. But PMS also has got a lotfeatures and aspects which one should know beforeinvesting. The present study tries to focus on this

aspect and the awareness level of investors.

1.2) OBJECTIVES OF THE STUDY

The present study entitled as PORTFOLIO MANAGEMENTSERVICES- A STUDY with special reference to Geojit Financial


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Services Ltd has undertaken with the following specificobjectives.

To examine the features of portfolio Management Services

offered by financial service companies with special reference toGeojit Financial Services Ltd.

To study the investors preference towards Portfolio ManagementService.

1.3) METHODOLOGY

1.3.0 Size of sample

A sample of 100 individual investors from Cochin City wasselected for the study.

1.3.1 Type of sampling

This study utilizes the Convenience sampling method. Sample of 100 investors are selecting from various income classes starting

from Rs.10,000 and above per month the respondents are takenby giving due importance to the high earning youth, professionals,working women etc.

1.3.2 Data collection

Both primary and secondary data were collected and used for thestudy.

1.3.3 Primary data

Primary data were collected from 100 investors through interviewschedule and through interviews with the official of Geojitfinancial services Ltd.

1.3.4 Secondary data


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Secondary data were collected from the published reports,product brochure from the company, magazines, books, journalsand websites.

1.3.5 Tools used for for analysisKeeping in view of the objectives of the present study, collecteddata were analyzing with the help of statistical techniques such aspercentage and weighted scores.

1.4 Limitations of the study

The analysis of the study has mainly depended on the personal

views of the respondents and as such an element of subjectivitycannot ruled out.

Reluctance to provide specific information regarding theinvestments and the returns by some respondents may haveproduced a bias in the study.

The study was conducted in Cochin and the findings cannot begeneralized to all areas.

1.5 CHAPTERISATION

Chapter 1 : Deals with Introduction. It includes objectives of theStudy, Scope of the study, Methodolgy, Limitations andChapterisation.

Chapter 2 : Industry Profile Stock Market & PMS

Chapter 3 : Company profile PORTFOLIO MANAGEMENTSERVICES OF GOEOJIT

Chapter 4 : Theoretical review of Portfolio Management Services

Chapter 5 : Investors preference on investment avenues


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Profile of respondents Savings behavior of investors Savings Percentage Main Investment Avenues Percentage of savings in each investment avenue Best investment avenue Important factors while investing Investment objective Return Expectations Investment time frame Risk bearing capacity Professional advice Portfolio management services Sources of information

Chapter 6 : Findings, Conclusion and Suggestions.

2.0 BROKERAGE INDUSTRY

The Indian retail brokerage industry consists of companies thatprimarily act as agents for the buying and selling of securities(e.g. stocks, shares and similar financial instruments) on acommission or transaction fee basis. It has two maininterdependent segments: Primary market and the Secondarymarket. Now this market is extended to fields like currency,commodity, mutual fund, insurance etc

The Indian equity brokerage industry thrived on the back of equity markets sustained bull run during 2003-07. Although

high competitive pressure meant continuous compression of brokerage commissions and low electronic penetration keptoperating costs high, industry revenue was growing.Furthermore, the industry attracted domestic and foreigninvestment interest a high valuations of upto 45x P/Emultiples.During this time, many of the key players started


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expanding their portfolio of services to include wealthmanagement and advisory services, sale of insurance andmutual fund products, consumer financing and so on.

However, post-2008, the economic downturn mutedtrading turnover, relentless competitive pressure anddecreasing margins, continued high operating costs and highmargining requirements has put the industry under pressure.Profitability is muted and the major players are under pressureto build scale. Expansion of scale and investments intotechnological systems has the potential to lead the topbrokerage firms into paths of higher growth, but the current

economic climate is clearly against heavy investments.The basic function of a brokerage firm is to execute buy and

sell orders for clients. Traditionally these firms have offered theinvestigation of the quality and the possibilities of investing in avariety of investment products. It is still accustomed forbrokerage firms to offer information about possible investmentfree of charge. This activity of bringing free of charge stock

investment reports is one of the main tools that are utilized bybrokerage houses to compete against other firms and toinvestors it continues to be an important service.

2.1 The History of Stock Brokerage Firms

Stock brokerage firms have been an established feature in thefinancial industry for nearly one thousand years. Dealing indebt securities, brokers employ a variety of systems to aid

investors with the purchase and sales of stocks and bonds in avariety of markets. The firms have changed over the years,growing to massive organizations that can affect the entirefinancial sector positively or negatively with their performance.Changing with the times, the early twenty-first century saw a


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rise of online trading that enabled the average investor to takepart in the stock market for the first time.

2.1.0 History

During the 11 th century, the French began regulating andtrading agricultural debts on behalf of the banking community,creating the first brokerage system. In the 1300s, houses beganto be set up in major cities like Flanders and Amsterdam inwhich commodity traders would hold meetings. Soon, Venetianbrokers bagan to trade in government securities, expanding theimportance of the firms. In 1602, the Dutch East India Companybecame the first publicly traded company in whichshareholders could own a portion of the business. The stocksimproved the size of companies and became the standardbearer for the modern financial system.

2.1.1 Significance

The earliest brokerage firms were established in London coffeehouses, enabling individuals to purchase stocks from a variety

of organizations. They formally founded the London StockExchange in 1801 and created regulations and memberships.The system was copied by brokerage firms across the world,most notably on Chestnut street in Philadelphia. Soon, the USexchange was moved to New York City and various frims likeMorgan Stanley and Merrill Lynch were created to assist in thebrokering of stocks and securities. The firms limited themselvesto researching and trading stocks for investment groups and

individuals.2.1.2 Considerations

During the 1900s, stock brokerage firms began to move in adirection of market makers. They adopted the policy of quotingboth the buying and selling price of a security. This allows a


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lessened the price of traders, giving access to a wider swath of people and adding liquidity to the market. The role of the stockbrokerage firm is ever-changing and proves to be a boon forthe future of the financial industry.

2.1.5 Full service v/s Discount brokerage houses

Full service brokerage firms continue to offer informative stockreports and a level of service much higher than otherbrokerage houses. Discount brokerage houses only dedicatethemselves to execute orders for clients. Full service brokersare sellers looking for purchasing and selling for clients andoffering more customer service than is available from discountbrokers. It is many times care of the buy or sell order that theyplaced.

2.1.6 Market size and characteristics

The Indian retail brokerage market is showing phenomenalgrowth. The total trading volume of brokerage companies hasincreased from US$1239.1 billion in 2004 to US$1492.1 billion

in 2005, and is expected to reach US$6535.7 billion by 2015.Some of the main characteristics of the brokerage industryinclude growth in e-broking; growing derivatives market,decline in brokerage fees etc.

Today, as per NSDL statistics, we have only 2.4 millioninvestors with demat accounts in the country. Consideringvarious investor combinations that are holding accounts, wecan presume the country has roughly 5-7.5 lakh activeinvestors now. This figure is unbelievably small compared tothe potential number of investors, which is anything between200 million and 250 million. When we take into considerationthe way transaction risk and cost in the Indian capital market iscoming down, there will be a massive surge in the number of


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investors and also in volumes. The only way to manage thiskind of potential growth is to adopt state-of-the-art tradingtechniques.

The growth of Internet-based trading as a mass tradingtechnique in the country is unstoppable, going by theindicators available and the signals for the future. When itultimately gathers momentum, the biggest beneficiary will bethe investor, who will be able to trade with greater speed andtransparency, and at lower costs .

2.2.0 INDIAN EXCHANGES

The NSE and BSE are largest stock exchanges in the country.They handle very large daily trading volumes, support largeamount of data traffic, and have a very large nationwidenetwork NSE is the third largest in the world in the number of trades after NYSE and NASDAQ India has 23 small and 2 bigexchanges. The 2 big exchanges NSE and BSE account for 90percent of trade. Bombay Stock Exchange LTD is the oldeststock exchanges in India.

Indian financial market have continuously evolved over theyears with multifold objective of transparency reducingtransportation cost of evolving efficient payment andsettlement system from dematerialization of shares to a rollingsettlement and now introduction of trading in derivativeinstruments, the focus has been the investor.

With the changing dynamics the investor are looking beyondtheir traditional relationship. They want a system which is safe,secure and transparent. They are looking for a broker whooffers the complete suite of financial products such as equityfutures and options mutual funds IPOs etc. Timely pay in and


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y Pre market report daily trading calls based on technicalanalysis

y Live market informationy Depository service Demat and Remat transactiony Internet-based online trading

2.2.2 Global prospects of online share trading industry

Stock exchange across the globe are exploring an alliance thatwill create 24 hour global equity market (GEM). The Newyorkstock stock exchanges and exchanges from three main time zonesAsia- Pacific, the Americas and Euronext plan to form a trading

mechanism that will allow trading of shares in the world s globalcountries.

Online share dealing on the internet is now a way of life forthousands of investors. In India there are about 50 onlinebrokerages but online trading stands at barely 2% of the sharetrading market today, a poor scenario when compared to 6% inChina and rapid growth in Europe 80% of South Korea and 30-40%of US trades are executed online. The segmentation of the sharetrading market in India as in most countries worldwide, consistslargely of traders and dealers along with a handful of investors.

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