Awareness of DMAT & E-Broking of Bonanza

8/3/2019 Awareness of DMAT & E-Broking of Bonanza

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A

Project Study REPORT

ON

Training Undertaken at

Bonanza Pvt.ltd

Awareness of DMAT & E-Broking of Bonanza

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted By: - Submitted To: -

Jitendra Dr.

MBA Part II (Sem 4 th ) H.O.D.

Deepshikha College of Technical Education, Jaipur 2009-2011

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CERTIFICATE

JitendraVirahya

s [email protected]

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DECLARATION

xxxxxxxxxxxxxxxxx S/O Mr xxxxxxx declares that the project report

Titled awareness of dmat account and e broking of bonanza is based on

my project study. This project report is my original work and this has not

been used for any purpose anywhere.

xxxxxxxxxxxxxxxxxxxxx

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MBA 3 rd SEM

Preface/Prelude

The MBA Curriculum has been designed to provide to the future Managersample practical exposure to the business world. The training is necessary part for the

fulfillment of the MBA degree course helps the students to gain knowledge aboutvarious aspects to the industry, emphasizing on the development of skills in analyzingand interpreting practical problem through application of concept & theory. Ones aproject is selected, suitable financing arrangements have to be made. Flexibility, risk,income, control and taxes are the key business considerations that influence the capitalstructure decision and the choice of specific instruments of financing. Performancereview should be done periodically to compare actual performance with projected

performance. Mr. Jitendra Virahyas {[email protected]}help in this project. Theresearcher has undertaken her project in one such company Bonanza Pvt.ltd , JAIPUR.

My project title is Awareness of DMAT & E-Broking of Bonanza It has helpedme to enhance my knowledge about the functions of the industry.

I tried my best to explore the truth in our project for understanding practical way of working.

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Acknowledgement

I express my sincere thanks to my project guide, Mr. Jitendra Virahyas,francisee(Money Seed), of Bonaza., for guiding me right from the inception till thesuccessful completion of the project. I sincerely acknowledge him/her/them for extendingtheir valuable guidance, support for literature, critical reviews of project and the report andabove all the moral support he/she/they had provided to me with all stages of this project.

I would also like to thank the supporting staff of all the company Department,especially for the Mr. Jitendra Virahyas {[email protected]} for their help andcooperation throughout our project.

(xxxxxxxxxxxxxxxxxx

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Executive Summary

The Indian stock market have seen various stages of economic cycles if we look atmarket condition then we find that at the beginning of the year 2008 the market was oncloud nine (all time high on 10 January 2008) Sensex was 21207.83. But after reaching itsall time high it has started to show strong resistance to carry on and the result of theresistance and sharp slump in the world economy, the bull suddenly turned into bear and allexpectations of investors that market will reach 25000 just turned into dream and accordingto current situation that is for away from reality. Investors just shocked due to slump in themarket condition, they have rethink about investment alternatives risk and returns. Capitalappreciation and time value of money.

Since investment become a basic need of everyone so each and every person wantsto secure his investment and willing to get good returns and capital appreciation upon theinvestment fund. This study really gives an overview about how and when we invest invarious sectors. That how can invest money for future safety in various markets such as

primary market, secondary market, Govt. security market etc.

Thus the study is providing knowledge about investment scenario and guiding theinvestors for safe investment with the help of economic analysis, fundamental analysis, andfinancial analysis. One can analysis the market and understand the nature and movementof market for safe investment and can become wiser investor that is most challenging thingin current scenario.

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TABLE OF CONTENTS

1) Introduction to the industry..8

2) Introduction to the organization.34

3) Research methodology.....63

3.1) title of the study..63

3.2) duration of the project...63

3.3) objective of study...63

3.4) type of research .64

3.5) sample size and method of selecting sample.64

3.6) scope of study.64

3.7) LIMITATION OF THE

STUDY.65

4) Facts and findings67

5) Analysis..68

6) Swot..82

7) Conclusion..84

8) Recommendation and suggestions.86

9) Appendix..87

10) Bibliography..90

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Introduction to the industry

Broking industry is growing for last ten year with leaps & bounces to Indian economyand stock market. Brokerage houses are known as intermediaries between market andinvestor and play a key role in execute the functions to carry on the stock market. All the

brokerage houses having different sort of charges and fee according to their facilities andefficiency provided to investors. They manage the portfolio, risk management and providingguidance to investor for dealing in security market the major players of Indian brokingindustry are as follows:-

1. Motilal Oswal Securities Limited

2. Bonanza Portfolio Limited

3. Religare Limited

4. Hem Securities Limited

5. Angle Broking Limited

6. India bulls Securities Limited

7. Anand Rathi Securities Limited

8. Share khan Limited

Analysis of players in the industry

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Unicon

Unicon has been founded with the aim of providing world class investing experienceto hitherto underserved investor community. The technology today has made it possible toreach out to the last person in the financial market and give him the same level of servicewhich was available to only the selected few.

Unicon give personalized premium service with reasonable commissions on theNSE, BSE & Derivative market through our Equity broking arm Unicon Securities Pvt. Ltd.With our sophisticated technology you can trade through your computer and if you wanthuman touch you can also deal through our Relationship Managers out of our more than

100 branches spread across the nation.

Religare securities

Trading in Equities with Religare truly empowers you for your investment needs. Weensure you have a superlative trading experience through -

A highly process driven, diligent approach Powerful Research & Analytics and One of the best-in-class dealing rooms

Further, Religare also has one of the largest retail networks, with its presence inmore than 1800* locations across more than 490* cities and towns. This means, you canwalk into any of these branches and connect to our highly skilled and dedicated relationshipmanagers to get the best services.

The Religare Edge:-

Pan India footprint Powerful research and analytics supported by a pool of highly skilled

research analysts Ethical business practices Offline/Online delivery models Single window for all investment needs through your unique CRN

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Anand Rathi

Anand Rathi (AR) is a leading full service securities firm providing the entire gamut of financial services. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan Indiapresence as well as an international presence through offices in Dubai and Bangkok. ARprovides a breadth of financial and advisory services including wealth management,investment banking, corporate advisory, brokerage & distribution of equities, commodities,mutual funds and insurance, structured products all of which are supported by powerfulresearch teams.

How Bonanza differ from other in the industry

Bonanza Portfolio Ltd is an emerging leader in the high growth retail financialservices sector in India.

India set to emerge as one of the worlds largest retail financial services markets.Indias GDP growth has averaged 6.5% since 1994 and expected to continue to grow at 8+%.

Increasing sophistication of financial markets Indian consumers affinity for equity Emergence of large domestic retail brokerage houses India has nearly 10,000 brokers; most of them are small family businesses The last 5-7 years has witnessed the emergence of large institutional players

driving consolidation of the retail financial services market Global players are starting to make strategic inroads into the retail financial

services market Foreign broking houses dominate FII based institutional broking Some global majors like Citigroup are making inroads into retail by leveraging

their network E-trade has announced majority ownership of IL&FS Investment

Bonanza Portfolio Limited

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Bonanza, a leading financial services &brokerage house working diligently since1994 can be describe in a single word as a financial powerhouse. With acknowledgedindustry leadership in execution and clearing services on exchange traded derivatives andcash market products, bonanza has spread its trustworthy tentacles all over the countrywith more than 1050 outlets spread across 350 cities.

It provides an extensive range of services in equity, commodities, currencyderivatives, wealth management, distribution of third party product, etc.

Competition within the industry:

Competition within this industry is very high , there are lots of new companys comingin this business , although Bonanza Portfolio Limited has good reputation but competition isso high and due to recession all the brokerage firm are badly affected and BonanzaPortfolio Limited is also affected . This market is centre of attraction to new entrepreneur because it is already fast growing market and it is for sure that it will go further, and thereare many opportunities lying ahead in the way .but although it is successful industrycompetition affect the major players. And bonanza is one of the successful players in thisindustry. it is working very efficiently to fight back with competition and challenging itscompetitor by satisfying its customer at most level of their satisfaction.

It has many competitors which are providing different type of services .the brief introduction of its competitor is given below:

5paisa.com :

5paisa is the trade name of India info line securities private limited (5paisa),member of NSE and BSE. 5paisa is the wholly owned subsidiary of India info linelimited, Indias leading and most popular finance and investment portal. 5paisa hasemerged as one of leading player in e-broking space in India .their key products areinvestors terminal and trade terminal .its special feature is that it is not charging any

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kind of AMC which provides comfortable tariff card to its client. It provides the facilityof margin for intraday and delivery as well as.

Icici Direct.com:

Icici Direct.com is the most comprehensive website, which allows its client theopportunity to invest in share, mutual fund, derivative (future and option) and other financial products .they offer their clients a product for every investment need. Thisprovide the facility of cash trading, margin trading, margin plus trading, spot tradingand BTST facility to its client. It also provides the facility of margin and funding for facilitating its client to trade with more money.

Share khan:

Share khan is also one of the close competitors of bonanza. It facilitate itsclient in many ways .although it is not as big as India info line and icicidirect.com,etc, but it is still going forward speedily by winning the trust of its customers. Itsproduct range includes classic trade, speed trade, and speed trade plus. Whichfacilitate its client during trading? It has also the producer for providing the market

and funding the trade.

Anand Rathi:

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Anand rathi (AR) is a leading full service securities firm providing the entirerange of financial services. AR provides a breadth of financial and advisory servicesincluding wealth management, investment banking, corporate advisory, brokerageand distribution of equities, commodities, mutual funds and insurance all of whichare supported by powerful research team. Its product includes demate and tradingaccount. it only provides margin for intraday to its clients , it does not provide fundingfor delivery.

Religare:

Religare is driven ethical and dynamic process for wealth creation. based on

this , the company stared its Endeavour in the financial market .a company promoted, controlled and managed by the promoters of ranbaxy , religare , was founded withthe vision of providing integrated financial care driven by the relationship of trust .

Kotak security:

Kotak mahindra is one of Indias leading financial institutions, offeringcomplete financial solution that encompasses every sphere of life. From commercial

banking, to stock broking, to mutual fund, to life insurance, to investment banking,the group caters to the financial needs of individual and corporate.

Kotak institutional equities has full financial service capability , which includesderivative , facilitating market access through affiliated and the distinctive offering of corporate access to investors. The division services over 250 client including files,pension and mutual fund. The division has sales desk in Mumbai, London and NewYork, with India desk also servicing clients in Hong Kong, Singapore, Japan andAustralia.

History of stock market in India

The working of stock exchanges in India started in 1875.BSE is the oldest stock

market in India. The history of Indian stock trading starts with 318 persons taking

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membership in Native Share and Stock Brokers Association, which we now know by thename Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognitionfrom the Government of India. National Stock Exchange comes second to BSE in terms of popularity. BSE and NSE represent themselves as synonyms of Indian stock market.Thehistory of Indian stock market is almost the same as the history of BSE.

The country's capital markets have passed through both good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there wasno scale to measure the ups and downs in the Indian stock market. The Stock Exchange,Mumbai (BSE) in 1986 came out with a stock index that subsequently became thebarometer of the Indian stock market.

SENSEX is not only scientifically designed but also based on globally acceptedconstruction and review methodology. First compiled in 1986, SENSEX is a basket of 30constituent stocks representing a sample of large, liquid and representative companies. Thebase year of SENSEX is 1978-79 and the base value is 100. The index is widely reported inboth domestic and international markets through print as well as electronic media.

The Index was initially calculated based on the "Full Market Capitalization" methodology butwas shifted to the free-float methodology with effect from September 1, 2003. The "Free-float Market Capitalization" methodology of index construction is regarded as an industrybest practice globally.

Due to its wide acceptance amongst the Indian investors; SENSEX is regarded to be thepulse of the Indian stock market. As the oldest index in the country, it provides the timeseries data over a fairly long period of time (From 1979 onwards). Small wonder, the

SENSEX has over the years become one of the most prominent brands in the country.

SENSEX Calculation Methodology

SENSEX is calculated using "Free-float Market Capitalization" methodology. As per thismethodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period. The market capitalization of a company isdetermined by multiplying price of its stock by the number of shares issued by company.

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This market capitalization is further multiplied by the free-float factor to determine free-floatmarket capitalization.

The base period of SENSEX is 1978-79 and the base value is 100 index points. Thisis often indicated by the notation 1978-79=100. The calculation of SENSEX involvesdividing the Free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of theSENSEX. It keeps the Index comparable over time and is the adjustment point for all Indexadjustments arising out of corporate actions, replacement of scripts etc. During markethours, prices of the index scripts, at which latest trades are executed, are used by thetrading system to calculate SENSEX every 15 seconds and disseminated in real time.

The National Stock Exchange of India Limited (NSE) is a Mumbai-based stockexchange. It is the largest stock exchange in India in terms daily turnover and number of trades, for both equities and derivative trading.

NSE is mutually-owned by a set of leading financial institutions, banks, insurancecompanies and other financial intermediaries in India but its ownership and managementoperate as separate entities. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India.

In October 2007, the equity market capitalization of the companies listed on the NSEwas US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE isthe third largest Stock Exchange in the world in terms of the number of trades in equities. Itis the second fastest growing stock exchange in the world with a recorded growth of 16.6%.

The National Stock Exchange of India was promoted by leading financial institutionsat the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the SecuritiesContracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale DebtMarket (WDM) segment in June 1994.

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The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.

Stock Exchange organized market for buying and selling financial instrumentsknown as securities, which include stocks, bonds, options, and futures. Most stockexchanges have specific locations where the trades are completed. For the stock of acompany to be traded at these exchanges, it must be listed, and to be listed, the companymust satisfy certain requirements. But not all stocks are bought and sold at a specific site.Such stocks are referred to as unlisted. Many of these stocks are traded over the counterthat is, by telephone or by computer.

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IMPORTANCE OF STOCK EXCHANGE

Stock exchanges perform important roles in national economies. Most importantly,

they encourage investment by providing places for buyers and sellers to trade securities.This investment, in turn, enables corporations to obtain funds to expand their businesses.

Corporations issue new securities in what is known as the primary market, usually with thehelp of investment bankers. The investment bank acquires the initial issue of the newsecurities from the corporation at a negotiated price and then makes the securities availablefor its clients and other investors in an initial public offering (IPO). In this primary market,corporations receive the proceeds of security sales. After this initial offering the securitiesare bought and sold in the secondary market. The corporation is not usually involved in the

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trading of its stock in the secondary market. Stock exchanges essentially function assecondary markets. By providing investors the opportunity to trade financial instruments,the stock exchanges support the performance of the primary markets. This arrangementmakes it easier for corporations to raise the funds that they need to build and expand their businesses.

STOCK TRADING

Stocks are shares of ownership in companies. People who buy a companys stock mayreceive dividends (a portion of any profits). Stockholders are entitled to any capital gainsthat arise through their trading activitythat is, to any gain obtained when the price atwhich the stock is sold is greater than the purchase price. But stockholders also face risks.One risk is that the firm may experience losses and not be able to continue the payment of dividends. Another risk involves capital losses when the stockholder sells shares at a pricebelow the purchase price.

STOCK BROKERS

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A stockbroker is an employee of a brokerage firm. The individual investor contactshis or her stockbroker and provides the stockbroker with the details of the transaction theinvestor wants to complete. Stockbrokers, however, are more than order takers or salesrepresentatives for their firms; they frequently provide advice to the investor. They may

have their own client list and call clients when they see transactions that will fit the clientsinvestment objectives. Stockbrokers almost always have certification from, or registrationwith, a state government agency or an exchange or both. For this reason they aresometimes referred to as registered representatives.

Market Risk involved while investing in Stock

Risk is a complex, multidimensional concept that manifests itself in various ways.Risk is omnipresent and includes stock market crashes, corporate bankruptcies andcurrency devaluations, changes in sentiment, in inflation and interest rates, and even major changes in the tax code.

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Risk is generally defined as return volatility, or the degree of ups and downs of returns. But there's more to risk than volatility. Risk and long-term reward are generallyrelated. Risk is the chance that your actual return will be less than you expected.

People sometimes think that a good return can be achieved with little or no risk.Unfortunately, that's impossible. To achieve your objectives, you need to assumecertain risks and avoid others.

Thoughtful investment selections that meet your goals and risk profile keep individualstock and bond risks at an acceptable level.

However, other risks are inherent to investing you have no control over. Most of these risks affect the market or the economy and require investors to adjust portfolios or ride out the storm.

Major types of such risks are:

Economic Risks

One of the most obvious risks of investing is that the economy can go bad.Following the market bust in 2000 and the terrorists attacks in 2001, the economysettled into a sour spell.

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A combination of factors saw the market indexes lose significant percentages.It has taken years to return to levels close to pre-9/11 marks.

For young investors, the best strategy is often to just hunker down and rideout these downturns. If you can increase your position in good solid companies,these troughs are often good times to do so.

Foreign stocks can be a bright spot when the domestic market is in the dumpsif you do your homework. Thanks to globalization, some U.S. companies earn amajority of their profits overseas.

Older investors are in a tighter bind. If you are in or near retirement, a major downturn in stocks can be devastating if you havent shifted significant assets tobonds or fixed income securities.

Inflation

Inflation is the tax on everyone. It destroys value and creates recessions.

Although we believe inflation is under our control, the cure of higher interestrates may at some point be as bad as the problem. Investors historically haveretreated to hard assets such as real estate and precious metals, especially gold, intimes of inflation.

Inflation hurts investors on fixed incomes the most, since it erodes the valueof their income stream. Stocks are the best protection against inflation sincecompanies have the ability to adjust prices to the rate of inflation. It is not a perfectsolution, but that is why even retired investors should maintain some of their assetsin stocks.

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Market Value Risk

Market value risk refers to what happens when the market turns against or ignoresyour investment. This happens when the market goes off chasing the next hot thing andleaves many good, but unexciting companies behind. Some investors find this a good thingand view it as an opportunity to load up on great stocks at a time when the market isntbidding up the price.

On the other hand, it doesnt advance your cause to watch your investment flat-linemonth after month while other parts of the market are going up.

The lesson is dont get caught with all you investments in one sector of the economy.By spreading your investments across several sectors, you have a better chance of participating in growth of some of your stocks at any one time.

How to evaluate a company before Investing

For stock investors that favor companies with good fundamentals, a "strong" balancesheet is an important consideration for investing in a company's stock. The strength of a

company's balance sheet can be evaluated by three broad categories of investment-qualitymeasurements: working capital adequacy, asset performance and capital structure.

A company's capitalization describes the composition of a company's permanent or long-term capital, which consists of a combination of debt and equity. A healthy proportionof equity capital, as opposed to debt capital, in a company's capital structure is anindication of financial fitness.

Optimal Debt-Equity Relationship

In financial terms, debt is a good example of the proverbial two-edged sword. Theuse of leverage (debt) increases the amount of financial resources available to a company

for growth and expansion. The assumption is that management can earn more on borrowed

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funds than it pays in interest expense and fees on these funds. However, as successful asthis formula may seem, it does require that a company maintain a solid record of complyingwith its various borrowing commitments.

A company considered too highly leveraged (too much debt versus equity) may find itsfreedom of action restricted by its creditors and/or may have its profitability hurt as a resultof paying high interest costs. Of course, the worst-case scenario would be having troublemeeting operating and debt liabilities during periods of adverse economic conditions.

Unfortunately, there is no magic proportion of debt that a company can take on. The debt-equity relationship varies according to industries involved, a company's line of business and

its stage of development. However, because investors are better off putting their money intocompanies with strong balance sheets, common sense tells us that these companiesshould have, generally speaking, lower debt and higher equity levels.

Capital Ratios and Indicators

In general, analysts use three different ratios to assess the financial strength of acompany's capitalization structure. The first two, the so-called debt and debt/equity ratios,are popular measurements; however, it's the capitalization ratio that delivers the keyinsights to evaluating a companys capital position.

The debt ratio compares total liabilities to total assets. Obviously, more of the former meansless equity and, therefore, indicates a more leveraged position. The problem with thismeasurement is that it is too broad in scope, which, as a consequence, gives equal weight

to operational and debt liabilities.

The same criticism can be applied to the debt/equity ratio, which compares total liabilities tototal shareholders' equity. Current and non-current operational liabilities, particularly thelatter, represent obligations that will be with the company forever. Also, unlike debt, thereare no fixed payments of principal or interest attached to operational liabilities.

The capitalization ratio (total debt/total capitalization) compares the debt componentof a company's capital structure (the sum of obligations categorized as debt + total

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shareholders' equity) to the equity component. Expressed as a percentage, a low number isindicative of a healthy equity cushion, which is always more desirable than a highpercentage of debt.

Balance Sheet Strength

For stock investors, the balance sheet is an important consideration for investing in acompany's stock because it is a reflection of what the company owns and owes. Thestrength of a company's balance sheet can be evaluated by three broad categories of investment-quality measurements: working capital adequacy, asset performance andcapitalization structure.

Fixed Asset Turnover Ratio

Property, plant and equipment (PP&E), or fixed assets, is another of the "big"numbers in a company's balance sheet. In fact, it often represents the single largestcomponent of a company's total assets

A company's investment in fixed assets is dependent, to a large degree, on its line of

business. Some businesses are more capital intensive than others. Natural resource andlarge capital equipment producers require a large amount of fixed-asset investment.Service companies and computer software producers need a relatively small amount of fixed assets. Mainstream manufacturers generally have around 30-40% of their assets inPP&E. Accordingly, fixed asset turnover ratios will vary among different industries.

The fixed asset turnover ratio is calculated as:

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This fixed asset turnover ratio indicator, looked at over time and compared to that of competitors, gives the investor an idea of how effectively a company's management isusing this large and important asset. It is a rough measure of the productivity of acompany's fixed assets with respect to generating sales. The higher the number of timesPP&E turns over, the better. Obviously, investors should look for consistency or increasingfixed asset turnover rates as positive balance sheet investment qualities.

Return on Assets Ratio

Return on assets (ROA) is considered to be a profitability ratio - it shows how mucha company is earning on its total assets. Nevertheless, it is worthwhile to view the ROAratio as an indicator of asset performance.

The ROA ratio (percentage) is calculated as:

The ROA ratio is expressed as a percentage return by comparing net income, thebottom line of the statement of income, to average total assets. A high percentage returnimplies well-managed assets. Here again, the ROA ratio is best employed as a comparativeanalysis of a companys own historical performance and with companies in a similar line of business.

Bullish and Bearish Market

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Origin of the term

One common myth is that the terms "bull market" and "bear market" are derived fromthe way those animals attack a foe, because bears attack by swiping their paws downwardand bulls toss their horns upward.

This is a useful mnemonic, but is not the true origin of the terms.

Long ago, "bear skin jobbers" were known for selling bear skins that they did notown; i.e., the bears had not yet been caught. This was the original source of the term"bear."

This term eventually was used to describe short sellers, speculators who sold sharesthat they did not own, bought after a price drop, and then delivered the shares.

Because bull and bear baiting were once popular sports, "bulls" was understood asthe opposite of "bears." I.e., the bulls were those people who bought in the expectation thata stock price would rise, not fall.

A stock market bull is someone who has a very optimistic view of the market; theymay be stock-holders or maybe investors who aggressively buy and sell stocks quickly.

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A bear investor, on the other hand, is pessimistic about the market and may makemore conservative stock choices. Sometimes, the terms are used to refer to specific fundsor stocks.

What Drives Bear and Bull Markets?

The stock market is affected by many economic factors. High employment levels,strong economy, and stable social and economic conditions generally build investor

confidence and encourage investors to put their money in the stock market. Often, this canbolster bull markets. Also, new technologies and companies that encourage investors to puttheir money in stocks can create bull markets. For example, in the 1990s, the dot comcraze encouraged many investors to put their money in stocks that they felt would keepincreasing. In some cases, a bullish market is simply self-perpetuating. Since the market isdoing well, it only encourages investors to invest more money or to start investing.

On the other hand, discouraging economic or social political changes in a societycan push the market down. Sudden instability or unemployment -- or even fears of unemployment caused by wars and other problems -- can start to make investors moreconservative and therefore lead to bear markets. Of course, again this becomes a self-perpetuating trend. As the economy slows down, companies begin downsizing. Increasedunemployment makes people far less willing to gamble on the stock market. Sometimes, apanic caused by dire predictions about the market can also create bearish conditions.

Investing During Bear and Bull Markets

New investors often assume that they need to avoid investing during bear markets,and invest heavily during bull markets. This is not the case. Experienced investors knowthat you need to be able to invest in any sort of market condition, provided that you do sowisely. Each investor has a different strategy for dealing with a bull market or bearishmarkets. Many investors try to take advantage of bull markets by buying stocks as soon asthe market gets bullish, and then starting to sell when prices seem to have reached their peak. The difficulty, of course, is that it is almost impossible to tell when the trend is

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beginning and when it will peak. In general, investors can take more chances with themarket during a bullish phase. Since overall prices will rise, the chances of making a profitare good.

In bearish market conditions, prices are falling and the possibility of loss is prettygood. What is worse, it is not always possible to tell when bearish conditions will end.Therefore, if you invest during such market conditions, you may have to suffer some lossesbefore bullish times return and you're able to realize a profit. For this reason, manyinvestors decide on short selling or fixed income securities and other more conservativetypes of investment. Defensive stocks are another good option that remains stable duringbearish conditions. On the other hand, some investors see bearish market conditions as an

ideal time to invest in more stocks. Since many people are selling off their stocks --including valuable blue-chip stocks -- at low prices, it is possible to set up long-terminvestments that will prove valuable during bullish times.

Now during the time of our Summer Internship Program the market trend wasBearish and the investors were not trading actively during this time. Our objective inBonanza was to approach clients and educate them that this is the best time for them toinvest in stock market. This is the time when they should do long term investments that willprove them valuable during the Bullish phase.

This in turn helped Bonanza to generate more business from inactive clients.

NUANCES IN MARKETING OF DEMAT AND TRADING A/C

Dmat is short form of dematerialization. In a Demat account, securities like shares,corporate bonds etc are kept in electronic format. The idea of a dematerialized account is toavoid the need to hold anything in physical form.

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Investors have to open a Demat account with depository through a depositoryparticipant (DP). A depository is similar to a bank which holds securities in an account,transfers securities between accounts on the instruction of the account holder, facilitatestransfer of ownership without having to handle securities and ensures safe-keeping of securities.

Currently, there are two depositories National Securities Depository Ltd (NSDL) andCentral Depository Services Ltd (CDSL) which are registered with the Securities andExchange Board of India (SEBI). These depositories operate through a number of DPs,who are agents of these depositories.

Though SEBI has allowed for transactions of less than 500 shares in physical format, notmany people accept physical shares these days as it is difficult to sell them.

Keeping Demat securities is also far more advantageous. It does away the need for paperwork, making transactions faster and more efficient. It saves investors fromdestruction or loss of securities in transit, name transfer, stamp duties etc.

Our job in Bonanza was to get such clients for the company, who not only wish to

open a Demat account but also willing to trade regularly. As the company earns throughbrokerage charged per transactions (i.e. when a client buys or sells shares) and to earn thisbrokerage, they need such clients, who trade on regular basis.

This is been done by various methods like

Cold Calls Here I collect the details of people from corporate databases, yellowpages, internet and references and try to fix an appointment with these people by callingthem.

Personal Network I also tried to make some clients based on my personalnetwork. I tried to contact my friends and family to give me prospective leads of people whoall are interested in share market.

Going on the field I also tried to get some clients by directly approaching to big

offices, multiplexes and some complexes.

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Apart from this our job in Bonanza was to also look at such clients who were not beentrading in recent times. We tried and fixed an appointment with such clients and tried tohelp them out if could be done with the help of company so that these clients can trade withease in future.

Important things one needs to keep in mind while opening a Demat

account

Zero balance : Unlike a normal bank account, one doesnt need to deposit anyshares or cash for opening a Demat account. Even after opening the account, there is noneed to hold any securities in that account. If and when you buy any share, this share willbe shown in your account electronically. The account will be adjusted to the extent of anysale/purchase of any securities as and when the transaction takes place. One ID : The DP will open the account in the system and give an account number,which is also called BOID (Beneficiary Owner Identification number). This account isenough to hold all kinds of securities like shares, debentures and other debt instrumentslike bonds and G-secs. However, there is no restriction on the number of Demat accountsthat can be held by a person.

One can open any number of Demat accounts with different DPs. Even post officeinstruments like Kisan Vikas Patra and National Savings Certificates can be held in Dematform. However, at present, the facility is available only in 35 nominated post offices in

Mumbai.

Two documents : PAN has been made compulsory for all Demat accounts witheffect from April 2006. Anyone opening a Demat account needs to produce his PAN card atthe time of opening it. The PAN card also doubles as a proof of identity document, which ismandatory.

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The other important document is proof of address. Passport, driving license, voters ID card,bank statement and electricity bills are among the various documents accepted as identityproofs.

Three accounts : A Demat account will be fully operational only if its accompaniedby two other accounts trading account and bank account. While the former is optional,the latter is a pre-requisite as it is needed for crediting any dividend warrants.

Trading account is necessary to buy/ sell securities in the market and can be opened with abroker. If one does not intend to trade but only to convert existing physical instruments intoDemat form, the trading account is not necessary. Since many banks these days have

broking and DP arms, you can open all three accounts at one place itself. Four types of charges : There are four fees usually levied on a Demat account:conversion fee, annual maintenance fee, custodian fee and transaction fee. All the chargesvary from DP to DP.

Conversion fees : The DP charges a fee for converting shares from thephysical to the electronic form or vice-versa. This fee varies for both Demat and

Remat requests. For Demat, some DPs charge a flat fee per request in addition tothe variable fee per certificate, while others charge only the variable fee.Annual maintenance fees : This is generally charged in advance.

Custodian fee : This is charged monthly and depends on the number of securitiesheld in the account. Each security is identified by a unique international securitiesidentification number (ISIN). Custodian fee is linked to this numbers and rangesbetween Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custodian fee for ISIN on which the firms have paid one-time custody charges to the depository.

Transaction fee : Transaction fee is charged for crediting/debiting securitiesto and from the account on a monthly basis. While some DPs charge a flat fee per

transaction, others peg the fee to the transaction value, subject to a minimumamount. For example, while SBI charges Rs 3 per transaction, ICICI Bank does not31


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charge buy trades, but charges 0.04% of the transaction value in case of sell trades,subject to a minimum of Rs 10.

The fee also differs on the kind of transaction (buying or selling). Some DPs charge onlyfor debiting the securities while others charge for both. The DPs also charge if your instruction to buy/sell fails or is rejected. In addition, service tax is also charged by the DPs.

SEBI has removed account opening charges, transaction charges for credit of securities,and custody charges vide circular dated January 28, 2005.

Consumer Behavior while taking decisions related to his Investment in

Equities and Derivative Market

This study is based on various factors which affect consumer while taking decisionsrelated to his investment in Equities and Derivative Market. The study is based on thequestionnaire survey. Amongst the various factors outlined by experts taking up studiesrelated to consumer behavior certain factors like current market price, confidence in

brokers advice, analyst recommendation, inclination towards online trading, personalanalysis etc are found to be most important and are analyzed.

Though trading in equities and derivatives is no longer a novel concept to the Indianinvestor yet the predominant sentiment among investors is that of apprehension whileinvesting in capital markets. The main objective here is to study the Indian investor behavior that was undertaken through the analysis of primary and secondary data. The primary datacollected from investors belonging to different age group and having different professionalbackground were analyzed through SPSS to arrive at those factors that actually influencedinvestor behavior. The analysis of the secondary data involved research papers and articlesinvolving study of investor behavior published by both Indian and Foreign researchers.

Through the comprehensive use of SPSS, an attempt has been made to establish acorrelation among various factors influencing consumer behavior.

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From the analysis conducted we can see that investors appear to seek three major kinds of benefits from trading firms: Analysis (Brokers Advice and Personal Analysis),Market Condition (Analyst Recommendation and Market Price)and Online Facility

The study also includes the analysis of factors which would increase investors confidencein Equities and Derivative Market.

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Introduction to the organization

Delhi Registered Office:

4353/4, Madan Mohan Street,

Ansari Road, Darya Ganj,

New Delhi 110 002.

Tel.:011-23242022-26

Delhi Head Office:

2/2A Lakshmi Insurance Building,

1st Floor, Asaf Ali Road,

New Delhi 110 002

Tel.: 011-301412600 / 30112900Mumbai Corporate Office:

Plot No. M-2, Walbhat Road, Cama Industrial Estate, Goregoan (E),

Mumbai 400 063. Tel.: 6760 5500 / 6760 5600

COMPANY PROFILE

Bonanza is a leading Financial Services & Brokerage House with acknowledgedindustry Leadership in execution and clearing services on Exchange Traded Derivativesand cash market products.

Key elements that place Bonanza amongst the leading Brokerage Houses andmakes it the preferred service provider for value based financial services are:

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A Client-driven foundation and strategy committed to client-specific investmentneeds and objectives.

Integrated and innovative use of Technology enabling clients to trade offline,online and Strategic tie-ups with latest technology partners to facilitate trading access anddirect processing across more than 900 Branches spread over 310 cities.

Client-focused philosophy backed by memberships of all principal Indian Stockand Commodity Exchanges makes Bonanza a preferred service provider in the Industryfor value based services.

Bonanza confidently steers you through a challenging Financial and Trade Marketevery moment, whether you are present or not.

The Management

Mr. Shiv Kumar Goel is a Promoter / Director, CA by profession and aqualified Company Secretary. He has more than 25 yrs of experience in financialservice and brokerage. Prior to venturing into business he was Chief Executive

Officer (CEO) of SRF Finance Ltd., New Delhi. He has been a pioneer ininnovating technological advancements and its implementation methodologies.

Mr. S. P. Goel is a Promoter/Director, qualified CA operating from thecountry's financial capital Mumbai, is credited of having represented on the Boardof directors of OTCEIL. Mr. Goel has represented various prestigious committeesoF SEBI including that of JR Verma Committee, NSEIL (Executive Committee,Committee on Settlement of issues), NSCCL. He has also represented as a

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member of the Disinvestment and Privatisation Committee of the Indian MerchantsChamber (IMC).

Mr. S. K. Goel is a Promoter/Director, a qualified Chartered Accountant byprofession and experience of more than 25 years, has in past worked with leadingIndian industrial groups like Modi's & Oswals's. Mr. Vishnu Kumar Agarwal is a Promoter/Director, is a Bullion Dealer, realestate developers & consultant. He has been credited with setting up varioustrading & investment channels in the field of commodity futures trading for Indianresidents & investors.

Mr. Anand Prakash Goel is a Promoter/Director and a practicing CharteredAccountant with over 23 years of experience.

The management team of Bonanza comprises of Chartered Accountants, MBAs, ITProfessionals and Engineers, in addition to senior professionals in the financial field.

Bonanza Affiliation and Distribution Network :-

Proven and accredited leaders in the Financial Services business, Bonanzaprovides you the unique opportunity to trade offline and online while cutting across allgeographic barriers.

Strategic Tie-ups that provide latest technology for access and processing. Trading over 900 locations across 310 cities in India 24 hour access to Account Information via the Net or Electronic File

Transfer (FTP) facilities. Membership of all Principal Indian Stock and Commodity Exchanges National Stock Exchange of India Ltd (NSEIL) Bombay Stock Exchange (BSE)

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Futures & Option Segment of NSEIL & BSE Dubai Gold Commodities Exchange (DGCX) National Commodity & Derivatives Exchange Ltd. (NCDEX) Multi Commodity Exchange (MCX) National Multi Commodity Exchange (NMCE) OTC Exchange of India Ltd (OTCEIL) Depository Participant with NSDL &

CDSL

Corporate Agents for Life & Non-Life Insurance (both foreign / private andstate owned insurance companies)

One of the largest distributors of leading Mutual Funds in India Depository Participant with NSDL & CDSL

Group Representation

Bonanza Portfolio Ltd. Bonanza Global DMCC, Dubai Bonanza Commodity Brokers Pvt. Ltd. Bonanza Insurance Brokers Pvt. Ltd. Bonanza Online.com Ltd.

Bonanza Research Desk

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Our Research Desk Philosophy :-

Investing means laying out money today to receive money in real termsafter taking inflation into account, tommorrow Thats because were realistic,experienced, backed by research and study and most importantly, client-driven.

Empowering the Investor: -

The Bonanza Research Desk has one key objective to empower you completelywith Market Knowledge, Analysis and Advisory Services to help you prosper. Our team

provides expert and timely analysis on equity and commodity to help you maximize your trading decisions. We offer value perspectives, suggest strategy, focus on opportunitiesfor investment and growth, and endeavors to reduce risk potential. Trading Ideas

Daily Market Strategies Monthly Updates Investment Ideas Trading Calls Commodity Views

Bonanza Future Innovations: -

In an ever-evolving Market, we constantly seek value for our clients. Some of our plans include: Value-based proactive Portfolio Management Services (PMS) to Resident& Non-Resident Indians (NRI).

Significant market-share in Commodities Futures Trading Segment in India. Value based Global Portfolio & Asset Allocation access to Resident Indians. Clearing, execution & custodian services for Non-Resident Indians, Foreign

Institutional Investors & Overseas Corporate Bodies.

BONANZA PORTFOLIO MANAGEMENT SERVICES (PMS)

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This is probably the most professional and customized Portfolio ManagementService you will discover. Our key objective is your key objective Significant WealthCreation for you.

A PMS offers all the benefits of a Mutual Fund Plus other advantages that includethe Flexibility to buy stocks in a phased manner and in a conducive market. Our PMSManagers are highly experienced professionals who respond swiftly to changes, rallies,patterns and move your stocks around to capitalize on Market situations.

Value Plus! PMS levies charges only on actual performance. No profit No fee.

Highlights of the Bonanza PMS

Bonanza provides a highly professional fund management services that is yetflexible to deliver maximum returns to our clients. Here are some highlights of our process:

Professional research brings out the brightest stock and sector ideas for your portfolio.

Proactive management means monitoring the operational and stock marketperformance of all companies in your portfolio regularly.

Prudent risk management practices mean the better downside protection for

your portfolio and also help convert paper gains into real profits.

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Greater flexibility to hold cash and allocate investments across sectors andadjust for market trends.

Professional Fund Management

It is important to realize that an investment in bonanza PMS does not automaticallybecome an equity investment. The flexibility of the PMS allows us to convert cash toequity over period of time- this process can be speeded up or slowed down to adjust for market trends.

Recent Past Performance

Returns % (From Aug 13, 2004 to Nov 30, 2007)

Absolute AnnualisedBonanza PMS 327.28 % 99.22 %Sensex 277.68 % 84.18 %Nifty 260.58 % 79.00 %

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Other benefits

Dedicated portfolio manager contact Expert initial and ongoing advice Continualfund monitoring In-depth reporting on portfolio performance, including graphs & charts.

Features & fee structure:

Minimum portfolio size: Rs.10 lakhs. You can also open a PMS account by transferringyour existing portfolio of stocks or mutual funds.

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PMS Fees: 15% of profits plus government taxes. Charged quarterly -due only if theportfolio has made profits in that quarter.

Brokerage : 0.50% plus all applicable regulatory charges and government taxes. onanzaportfolio Ltd. And Bonanza Stock Broker Ltd. will be appointed as brokers Ltd. Will beappointed as brokers to the scheme.

Other charges: Depository and other charges, expenses and taxes will be on actuals.

Exit: No lock-in period. No exit charges. Exit any time with a notice of minimum 3 working

days.

BROKERAGE SERVICES

Equity

Being a member of the National Stock Exchange (NSE), Bombay Stock Exchange (BSE)and dealer with Over The Counter Exchange of India (OTCEI) we handle your tradingneeds, through a network of experienced dealers across the country, and through our comprehensive website.

Commodities

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Investors looking for a fast paced dynamic market with excellent liquidity can now trade inthe Commodity Futures Market. Bonanza is a registered trading and clearing member of NCDEX , MCX and DGCX(DUBAI). You can participate by easily opening an account withus and we shall suggest and advise you on the strategy you could employ in your investments. We will also provide you with research on your investments, and you willreceive regular portfolio valuation reports to enable you to monitor performance and viewthe progress towards the investment objective.

Derivatives

We are clearing-cum-trading members in Future & Options segment in NSE as well as

BSE and we provide this facility to our clients.

SERVICES AS DEPOSITORY PARTICIPANT

We are please to introduce you Bonanza as a Depository Participant for NSDL andCDSL and offer the whole range of depository services to its investor like:-

Account Opening :- Individual/Corporate/CM/in Equity/Commodity.

Dematerialization/Rematerilisation :- Conversion of physical shares intoElectronic from and vice versa. FacilitationRepurchase/Redemption of Units of Mutual Funds. Electronic settlement of tracks in stock Exchanges.

Pledging of dematerialized securities against loan

Nomination facility Electronic credit of securities allotted in Public Issues, right issue. 24x7 Web access form viewing of transaction for our clients throughSpeed-e

(nsdl.co.in) and Easiest (cdslindia.com) Internet based services like Speed-e and Easiest Providingbetter services at competitive rates .

Charge Structure

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44

Sr. Particulars New Charge Structure w.e.f. 1 st Aug.

2007

1 Demat Account Opening

Documentation Charges,

Including stamp agreement

Power of Attorney (POA)

FAX indemnity

Nil

Rs. 100/-

Rs. 100/-

Rs. 200/-2 Annual Maintenance : Individual

CM/Corporates/Others

Rs. 250/-

Rs. 800/-3 Account Closing Charges Nil4 Rematerialization Per certificate Rs. 15/-5 Debit Transaction :

Market Off market/Inter Depository Rs. 15/-6 Pledge : Creation Rs. 35/-

7 Demeb Rs. 31/- per certificate


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E-BROKING

You can easily in Equities, commodities and derivatives by signing up intowww.bonanzaonline.com at Bonanza online, you can choose between two products.

Bonanza Value

All beginners start somewhere and its easier with a guide. Your investments may besmall, but our experience, research base and guidance are vast. Register on to theBonanza Value module and you will find all information and processes customized tobeginners.

Bonanza Max

Bonanza Max is the ultimate module for dynamic traders and jobbers workingthrough the daily trading session. In order to clearly distinguish the two products and toencourage the use of right product by the person with right mindset, the characteristics andsystem requirements for the two products is explained in detail in the chart below.

Bonanza Opportunity

Bonanza Opportunity is targeted towards aggressive investors who prefer moreactive management of their equity portfolio. The scheme will aim to capitalize on valueopportunities thrown up by sudden price changes. It will also target event-based

opportunities. Though the scheme will position its portfolio with an aggressive stance, thisremains an investment product.45


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a) Portfolio Management Fee Nil

b) Brokerage @ 1% of the value of the transaction+ Regulatory Charges.

c) Other Costs on actuals (DP Charges/Bank Charges.)

46

Component. Bonanza-Value Bonanza-MaxAccount OpeningCharges

500/- 500/-

Minimum initial

Margin Amount

2000/- (Adjustable againstmarket exposure)

1000/- (Adjustable againstmarket exposure)

Brokerage (%)

Delivery

Intraday

F&O segment

0.40

0.05

0.05

0.30

0.04

0.04DP Charges AMC

-Transaction

First year Nil

Rs. 300/- 2nd yr. Onwards

Sale Transaction 12/-

First year Nil

Rs. 250/- 2nd yr. Onwards

Sale Transaction 10/-

Exposure 7X of Total Credit

(Including shares)

10X of Total Credit

(Including shares)Bank Tie-up for payments HDFC/UTI/ICICI HDFC/UTI/ICICIMinimum Monthly

Membership commitment

Nil 1000/- (compound onquarterly basis)

SMS charges for research on Mobile

Free Free

Software Charges Nil NilMinimum Charge per contract Note

Rs. 15/- Rs. 15/-


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There are two types of trading environment available for online trading

1. Installable software based stock trading terminals : This tradingenvironment requires software to be installed on investors computer. Thissoftware is provided by the stock broking firm. This kind of trading terminal isused by high volume intraday equity traders.

Advantages

Orders are directly sent to stock exchange rather than stock broker whichmake order execution very fast.

It provides much more information as compared to web based versionincluding stock market charts, price alerts, stock market news etc.

Disadvantages

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The most important point which investors appreciates is that they are not alonewhile taking any decisions so they can take the advice of their RelationshipManager when investing in a particular script.

They are not faced with the challenge of making these vital investmentdecisions; especially, if they do not have the experience necessary to make theappropriate investments.

The advantage of trading offline is higher exposure limit. Investors get higher Exposure while trading Offline as compared to Online.

With the ever booming share prices and the market scaling new heights more andmore people are getting attracted towards this sector but as per the SEBI norms one musthave a Demat a/c.

To sell Demat a/c to a client it is required to collect all the information regardingDemat a/c in general and demat a/c offered by Bonanza.

I also studied and compared the features of Demat a/c offered by various other

companies in the industry to get fully prepared in order to sort the queries a client could askabout the product.

I visited some of the main companies as a client and enquired about their offeringsand compared these offerings with those of Bonanza.

Some of the main companies I visited were-

India Infoline Reliance Money ICICI Direct India Bulls

Objectives

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To increase the client base of the company by targeting new clients for Bonanza.

To help the organization provide better service to customer by analyzing the

problems faced by the customer and their satisfaction level with the service of Bonanza. To understand the marketing strategies of Dmat a/c of Competitor companies

and to compare and contrast with Bonanza. To suggest strategies to Bonanza regarding marketing of Dmat and trading a/c. To study the factors affecting consumer behavior while taking decision before

investing in Equities and Derivative market.

Methodology

The methodology of the project includes a combination of both primary as well assecondary data collection.

Collected Database of the prospective clients from the company officials andmaking calls to them to explain about the offering.

We used our Personal Database and tried to create market for Demat andTrading a/c. Fixed an appointment with the Client and explained them thoroughly about the

Demat a/c of Bonanza and tried to convince them to open a/c with Bonanza. Completed the Registration Formalities with the Clients who were interested in

opening an account with Bonanza.

Developing an Effective Sales Pitch

Based on Primary Research data collected from the Interviews with companyofficials and Faculty Members.

Factors affecting Consumer Behavior

This study is based on the questionnaire survey. Various factors such ascurrent market price, confidence in brokers advice, analyst recommendation,inclination towards online trading etc are studied and analyzed.

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The study also includes factors that would improve investors confidence incapital markets.

COMPILIATION OF DATA:

To perform Competitive Analysis of different Companies which are intoMarketing of Demat a/c

Perform an Exhaustive Strength Weakness Opportunity Threat (SWOT)analysis report of Bonanza Portfolio Ltd.

Developing an exhaustive pitch to approach the clients by interacting withcompany official and faculty guide, which would help new recruits of Bonanza inincreasing client base for the company.

Existing literature on Consumer Behavior

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Globally, there are increased evidences to suggest that investor confidence hasassumed an important role in the economic development of a country. Though researchrelating to importance of investor behavior in the Indian capital markets are yet to beundertaken there has been ample instances wherein behavioral patterns of the investor hasbe considered essential.

The Economist (1998) indicated that a lot of issues need to be addressed to makecapital markets safer. Transparency, strengthening financial system and managing crisesare the issues, which cannot be quickly fixed. But they add up to a stronger system. DavidBullard (1998) in Business Times has indicated that the private investors are the big loserson South African listings scam. Companies with no earning record and with inexperienced

directors got listed on stock exchanges.

Their only objective was profit making out of inflated market price. The net result isprivate investors lost confidence in the market. Lee Hsien Loong (2000) while addressingFinancial Institutions in Bangkok stressed the importance of rebuilding investor confidencefor prosperity of ASEAN countries. He indicated that for investor confidence, rebuilding of sound fundamentals, dealing with capital account risks, economic co-operation amongASEAN, corporate restructuring, banking sector reforms and improvement of political andsocial conditions is important. Joseph.J.Oliver (2002) in his presentation to the senatestanding committee on banking, trade and commerce, suggested that close to half of allCanadians have investments in equities and their confidence is essential to healthy anddynamic capital market.

Deep bear market, corporate scandals, insider trading, high levels of executivecompensation and in accuracy of published financial statements are cited as reasons for

lack of investor confidence in Canadian capital markets. He indicated that regulators, theaccounting professionals, analysts, brokerage firms, public companies, shareholders andGovernment must contribute to ensure good corporate governance and reduce corporatefailures.

McCall (2002) in his testimony before the committee on financial services UnitedStates house representatives, observed that integrity of the financial markets and economicwell being of the country depend on corporate accountability and investor confidence. TheHindu (2002), online edition of Indian national newspaper has indicated that the spate of

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scandals in United States were being addressed by stricter laws and strong actions againstculprits to prevent any recurrence of these events and to restore investor confidence.

The subject related to consumer behavior of investors participating in the capitalmarkets have been undertaken by many prominent researchers in the last decade. Dale W.Jorgensen, (1966) Dept. of Economics, Harvard University in his paper on capital theoryand investment behavior had cited tax policy as a determinant of investment expendituresthrough rental price of capital service.

Stiglitz and Weiss (1984) have indicated that any bunch of new entrants into theequity market contains a number of frauds. Common investors know this, but they cannot

identify the frauds. Heath and Tversky (1991) found that peoples willingness to act on their judgment is dependent on their subjective competence. They cited that people are willing tobet on their own judgment when they feel they are knowledgeable and skilful. Bumgarner and Pime (2000) have studied the capital flows to and from Hong Kong in the years prior toits reversion to Chinese sovereignty and during the transition.

They have indicated that Government policies have an impact on investor confidence and capital mobility. Fieldstein and Yitzhaki (2000) have presented evidence tosuggest that the corporate stock owned by high-income investors appreciate substantiallyfaster than stock owned by investors with lower incomes. They have indicated that high-income individuals have larger portfolios and can therefore denote more time or resourcesto their investments, thus resulting in higher returns. Dechow, Hutton and Sloan (2001)found that analysts growth forecasts are routinely over optimistic around new equityofferings, but the most over optimistic are those analysts employed by the lead underwritersof the offerings. Bloomfield, Libby and Nelson (2002) have indicated that less informed

investors are over confidant in investments.

Providing more information to professional investors only could harm the welfare of less informed investors if less informed investors are not aware of the extent of their informational disadvantage. Statman (2002) in his research compared the investors acentury ago with investors today. He concluded that todays investors are more rapidly

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informed than their predecessors, but they are neither better informed nor better behaved.Hall (2002) has conducted research on brokers recommendations.

He found that investors, who invested in the Johannesburg Securities Exchange(JSE) based on their brokers advice, were able to get risk adjusted returns superior or equal to the market. Stout (2002) has indicated that investors have adaptive and notrational expectations. Adaptive expectations result in both trust and mistrust in securitiesmarket based on past actions. Graham and Harvey (2006) in their paper had cited that thecompetence effect influenced frequency trading and home bias (tendency to overweightdomestic equities and underweight foreign equities). They had also cited in their findingsthat male investors and investors with larger portfolios or more education are likely to

perceive themselves as more competent than female investors and investors with smaller portfolios and lesser education.

In the Indian context, Gupta (1996) has indicated that from the angle of investor protection, the regulation of the primary market is important for several reasons. Thenumber of small investors in primary market is massive. Most of new investors make their first entry into equity investments via the new issue market. So retaining common investor confidence in primary markets is important. Madhusoodan (1997) has indicated that in theIndian stock market, higher risk is not commensurately well priced, hence investment inhigher risk instruments may be of no use. Gokaran (2000) has studied the financingpatterns of the corporate growth in the country.

COMPARISON TABLE REGARDING THE OFFERING FROM DIFFERENT COMPANIES

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EXHAUSTIVE SALES PITCH FLOW CHART

56

Name of

the

Company

Charges for

opening

Demat and

Trading a/c

Exposure Broker

age for

Intrada

y

Brokerag

e for

Delivery

(cash)

Ann

ual

Main

tenance

Char

ge

Minimu

m

Balanc

eRequir

ed

Indiabull

s

Rs 900 for both Up to 8 times in GeneralTrading and

Up to 2 times in Marginal

Trading

0.03 to0.05%

0.3 to

0.5 %

Nil Nil

India

Infoline

Rs 5555 inwhich Rs 5000would be usedfor Trading

Up to 8 times 0.05% 0.25% Yes Rs2000

Reliance

Money

Rs 750 for both Up to 5 times PrepaidBrokerage Card

*

PrepaidBrokerageCard *

Yes Nil

ICICI

Direct

Rs 750 for allthree types of a/c

Margin in whichexposure is 5 times and ucan convert to delivery

Margin Plus - in whichexposure is 20 times butno conversion

0.05% 0.75% Yes Nil

Bonanza

Portfolio

Limited

Rs.200 are for Trading a/c andRs. 400 are for Demat a/c

5 to 7 times 0.03% 0.3% No Nil

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EXHAUSTIVE SALES PITCH

57

Other References Personal Contacts

Telling him about theCompany Products

Making calls

Fixing an Appointment

Company Personnel

Ending the Conversation

Saving the data for future

Response

Perspective Log

Completing theFormalities and closing

the deal

Positive Negative

Positive Negative

Response

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1. Acquiring Contacts The first and the foremost thing in sales is to acquire thecontacts. The contacts can be acquired from the following sources

Company Personnel The contacts given by company personnel can be of extreme help. The leads provided by Sr. Relationship Manager are very usefulbecause they have very good experience in the industry and their contacts withpeople from other industry are also good. E.g. A Sr. Relationship Manager having contacts with a bank official can help to provide some good leads.

Personal Network The contacts can also be gathered from personal network.Contacts from families, friends and known sources are much easy to contact andconvince as compare to contacts from any other sources.

Other Sources - Contacts can also be gathered from various other sources.Contacts can be gathered from internet, yellow pages etc.

2. Preparing Perspective Clients Log The next step is to give preferences tocontacts gathered. Contacts should be properly sorted out for calling purpose.E.g if we are approaching the weekend then it is better to sort out those clientsfirst who are into service because they are busy to fix an appointment duringweekdays.

It is also required to call a limited number of people at a particular time and fix anappointment accordingly because too many appointments can also result ininefficiency.

3. Making Calls The next and the main step is to call the database sorted out.During this stage it is required to tell the client that we have been calling on

behalf of Bonanza and this is in relation to Demat and Trading a/c.

If the client says that he already has a Demat a/c then we need to ask that withwhich company he is having a Demat a/c and try to tell the advantages of opening a Demat a/c with Bonanza as compared to the Demat a/c he is havingat present.

If the client says that he is not having the Demat a/c then briefly telling about the

offerings and try fixing an appointment with the client.

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If the client says that neither he is having any Demat a/c nor he wishes to haveone now then ending the conversation and saving that contact in the databaseand trying to contact him again in future when market is good or is in bullishphase to see that if he is interested now to open the a/c or not.

4. Approaching the Client When the client agrees for an appointment then weneed to follow Customer Centric Approach. We need to do our homeworkbefore approaching the client. We need to collect all the basic information aboutthe industry in which the client is. E.g. if the client is in steel sector then we needto collect the basic information related to steel sector so that we can talk to himrelated to his field.

We also need to tell the client that how the customer can get good returns byinvesting in certain stocks and what is the current position of the stocks in whichhe is interested in.

Then it is required to tell the offerings which Bonanza would be giving to himwhen he opens the Demat a/c. At this stage it is also required to tell theadvantages of Bonanza in comparison to other players in the market.

Advantages of opening a Demat a/c with Bonanza

No Annual Maintenance Charges The biggest advantage of opening aDemat a/c with Bonanza is that it does not charges anything to maintain Dematand trading a/c in comparison to its competitors.

Excellent service by Relationship Mangers The service provided to clients isamongst the best when compared to competitors. The clients are not charged for making any number of calls to relationship managers in relation to managingtheir a/c or trading. The clients are also informed about the latest happenings of share prices through SMS and through online messengers.

Brokerage charges The brokerage charges charged to clients variesaccording to the clients. Normally the prices which are charged to clients in allthe companies are the same.

0.03% - Intraday

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0.3% - Delivery (cash)

But if the client is ready to invest more with Bonanza then brokerage chargesare bought to as low as

0.01% - Intraday

0.1% - Delivery (cash)

User friendly software The software Bonanza Power provided by Bonanza isvery easy to use. The advantage of such software is that it shows the pricechanges on regular basis there is no time lag. The software provided by its

competitor are neither that friendly and do not show price changes immediately ,there is always some difference which exist between the market price and priceshown by their software.

Marginal trading Bonannza not only provides general trading to its clients butalso provides marginal trading. In this, the client can take an exposure of up to 7times the amount of money he is having in his Trading a/c.

If the response of the client after all this is still negative then asking him thereason and saving that contact in the database so that if we could solve hisquery or if suppose the reason because of which he is not entering the marketdoes not exist then contacting again and approaching him.

If the response of the client is positive after knowing about the Demat a/c offeredby Bonanza then completing the formalities and closing the deal.

5. Completing the Formalities and Closing the Deal In the end when the clienthas agreed to open the a/c it is required to complete all the formalities.

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Requirements to open a Demat a/c are-

Photocopy of Pan Card Identity Proof 4 Passport size Photographs Cheque of Rs.900

After taking all these things we need to take signature of client on the kit of Bonanza and thank client for opening a/c with Bonanza.

STUDY OF CONSUMER BEHAVIOR

Sources and Methods:

Collection of Data and Methodology

This survey uses questionnaire (included in annexure A) as the medium to extractrelevant responses that would enrich the study to be undertaken.

A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Although they are oftendesigned for statistical analysis of the responses, this is not always the case. Thequestionnaire was invented by Sir Francis Galton.

Questionnaires have advantages over some other types of surveys in that they are cheap,do not require as much effort from the questioner as verbal or telephone surveys, and oftenhave standardized answers that make it simple to compile data. The questionnaire isbasically a Likert scale model. A Likert scale is a type of psychometric response scale oftenused in questionnaires, and is the most widely used scale in survey research. Whenresponding to a Likert questionnaire item, respondents specify their level of agreement to astatement. The scale is named after Rensis Likert, who published a report describing itsuse.

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The responses were expected to be received from those investors who were willing tospend their time and wished contribute to research willingly only. So it constitutes aconvenience sample which would be collected from people pursuing various occupationsand belonging to different age group. Data collection would be carried out at major businesscenters of Indore.

Depending upon the responses received, the investor preferences for the decisions incapital market issues would be graded using a favorable scale. In the first part the datacollected from the questionnaires would be analyzed using factor analysis.

The second part would consist of queries relating to measures that would improve

investors confidence in capital markets.

Factor Analysis

Factor analysis was carried out to find out the significant factors affecting investor decisions. Using data, factor analysis applies an advanced form of correlation analysis tothe responses to a number of statements. The purpose of this analysis is to determine if theresponses to statements are highly correlated.

Brokers Advice: It can be seen that 58% of the sample had somewhat agreed that their investment decision depended on the advice of the brokers. Thus the brokerage firms needto concentrate on the credibility the investors attach to the brokers advice duringinvestment.

Research Methodology62


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3.1 Title of the Study

Awareness of DMAT & E-Broking of Bonanza

3.2 Duration of the Project

Duration is 45 days training in bonanza limited.

From the date of 25 June to 10 august .

3.3 Objective of Study

The stock exchange of the country is the important part of the capital market.It provides the investors a platform to invest in different securities. The well regulatedstock exchange is in the interest of both the companys as well as the investors.

In India the stock exchange provide a good leverage to the capital market,but it is not very easy to get profit out of this market, for this knowledge is must aboutthe market. the knowledge can be obtained by knowing the security market .Knowledge of security market is very important to a management student.

As I have done my project training in Bonanza Limited ,the following are theobjective, which I kept in my mind while doing summer training:-

To know practical concept about the security market

To study the general operation of the Bonanza Limited .

Analyzing the market survey and thereby finding out the investment pattern of the consumer.

To impart knowledge about the general working of the stock exchange

Fundamental analysis of securities

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To gain in depth knowledge about up gradation made due to computer instock exchange.

3.4 Type of Research

EXPLORATORY

3.5 Sample Size and method of selecting sample

Sample size is 100 people ,and the type of sample is Stratified

Sampling.

3.6 Scope of Study

After conducting the research at Bonanza Limited at jaipur on equity research, many stages are undertaken as guidance towards appearing at conclusion likeinteraction with staff ,questionnaire survey and percentage analysis.

As the questionnaire are targeted to get filled by general public who keepsinterest in investment and have an idea about equity .so I got the opportunity to knowcertain facts about this securities market . Whatever conclusions I have drawn fromthis research part are mentioned below:

Presently in India, securities market is not so much established and popular,there is only a small portion of people who are being an active part of this market as

an investor. Most of the people invest only 20% to 40% of their saving in this marketand their basic criteria to invest in this market is achieving higher returns. Most of theinvestors want to enjoy higher returns by investing in this market.

Most of the investors, who are investing in this securities market, are choosingthe securities on the basic of goodwill of the company although they prefer andbelieve that technical analysis produces good and accurate result but still as thesetechnical analysis is not so easy to understand they choose their securities on the

basis of the reputation of the company. If we look upon those people who are using

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technical analysis then we will find that most of the people who choose the securitiesby doing technical analysis are using moving average as the most easy and suitabletool.

There are also some people who are investing

Documents

Awareness of DMAT & E-Broking of Bonanza