Report ON Client Perception about Equity, Commodity and Currency Market Submitted in partial fulfillment of the requirement for

DEGREE IN Post Graduation in Diploma Management Submitted by MOINUL HAQUE KHAN (BM-012089) Under the Guidance of Vijendra Dhayani IMS

INSTITUTE OF MANGEMENT STUDIES GHAZIABAD

CONTENTS
1. Statement of the problem. 2. Background of the study . 3. Objective of the study.. 4. Research methodology Data collection Data analysis Data interpretation Sampling Design 5. Tentative Chapterisation 1.INTRODUCTION 2.WHAT IS EQUITY MARKKET? A.FEATURES OF EQUITY SHARES. B.EQUITY INVESTMENT 3.COMMODITY MARKET A.EVOLUTION OF COMMODITY FUTURES MARKET IN INDIA. B.REGULATION C.PARTICIPATION OF THE EXCHANGES D.POTENTIAL OF THE MARKET E.INVESTMENT OPTION 4.WHAT IS CURRENCY MARKET? A.HOW DID CURRENCY TRADING DEVELOP? B.CHARACTERISTCS OF FOREX TRADING C.FACTOR EFFECTING EXCHANGE RATES.

5.OMKAM GROUP 6.COMPANY PROFILE 7.SERVICES EQUITY COMMODITY MUTUAL FUND 8. WHY TO CHOOSE OMKAM GROUP 9RESEARCH AND FINDING 10.RECOMMENDATIONS 11.GLOSSARY 12.REFRENCES

CHAPTER 1: STATEMENT OF THE PROBLEM

First of all we have to understand the business situation i.e. we have to identify the key symptoms of any case.

esearch problem is the basic statement of any research proposal according to which the researcher has to work upon. There are many process of the derivation of any research problem but the steps used here for the derivation of research problem is mentioned below: Understand the business situation identify the key symptoms Identify (isolate) the problems from symptoms Write managerial decision statement and corresponding research purpose Determine unit of analysis Determine relevant variables State research questions/objectives and/or hypothesis.
The main issues considered while defining research problem were stated below:-

The next step is to isolate the problems from symptoms. Then we have to write managerial decision statement and corresponding research purpose. Then we have to determine the unit of analysis. Then we have to determine relevant variables. Then we have to state research question or hypothesis.

P :- PAST INFORMATION (SECONDARY DATA / MIS) R :- RESOURCES AND CONSTRAINTS O :- OBJECTIVES B :- BUYER BEHAVIOUR (HUMAN OR ORGANIZATIONAL) L :- LEGAL ENVIRONMENT E :- ECONOMIC ENVIRONMENT M :- MARKETING AND TECHNOLOGICAL SKILLS

Here in the given case the main work is to find out the following things: EVOLUTION OF THE COMMODITY MARKET? PARTICIPATION OF THE EXCHANGES. HOW DID CURRENCY TRADING DEVELOP? FACTOR EFFECTING EXCAHNGE RATES.

CHAPTER 2: BACKGROUND OF THE STUDY

In 12th century France the courretiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. Because these men also traded with debts, they could be called the first brokers. A common misbelief is that in late 13th century Bruges commodity traders gathered inside the house of a man called Van der Beurze, and in 1309 they became the "Brugse Beurse", institutionalizing what had been, until then, an informal meeting, but actually, the family Van der Beurze had a building in Antwerp where those gatherings occurred; the Van der Beurze had Antwerp, as most of the merchants of that period, as their primary place for trading. The idea quickly spread around Flanders and neighboring

The main work in the given case is to identify the given things. The whole REPORT is based on the given questions.

counties and "Beurzen" soon opened in Ghent and Rotterdam. In the middle of the 13th century, Venetian bankers began to trade in government securities. In 1351 the Venetian government outlawed spreading rumors intended to lower the price of government funds Bankers in Pisa, Verona, Genoa and Florence also began trading in government securities during the 14th century. This was only possible because these were independent city states not ruled by a duke but a council of influential citizens. Italian companies were also the first to issue shares. Companies in England and the Low Countries followed in the 16th century. The Dutch East India Company (founded in 1602) was the first joint-stock company to get a fixed capital stock and as a result, continuous trade in company stock occurred on the Amsterdam Exchange. Soon thereafter, a lively trade in various derivatives, among which options and repos, emerged on the Amsterdam market. Dutch traders also pioneered short selling - a practice which was banned by the Dutch authorities as early as 1610. There are now stock markets in virtually every developed and most developing economies, with the world's largest markets being in the United States, United Kingdom, Japan, India, China, Canada, Germany (Frankfurt Stock Exchange), France, South Korea and the Netherlands.

CHAPTER 3: OBJECTIVE OF THE STUDY

The main objective of the report is to find out and explain the following thing to the readers of this dissertation: What is equity market? What is commodity market? What is currency market? Further the objective of the study is to make understand the readers of this report about the perception of client about Equity ,Commodity and Currency market. Research design specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed The given case basically employs a CASE BASED RESEARCH DESIGN in which the researcher is required to to gather, answer and analyze the data according to the situations in the given case.

Objective of the study is the basic foundation of any research proposal. Objective of the study tells what author wants to do with the report. The main objectives of this report are mentioned below:1. What is equity market? 2. What is
commodity market? 3. What is currency market? The study is to make understand the readers of this report about the perceptionof client aboutEquity,Comm odity and Currency market.

CHAPTER 4: RESEARCH METHODOLOGY

DATA COLLECTION:There are two methods of data collection:1. Primary method of data collection 2. Secondary method of data collection

PRIMARY METHOD OF DATA COLLECTION:In the primary method of data collection information is collected for first time. The information can be used for solving the particular problem under investigation.

Research methodology is one of the main parts of any research proposal which includes the following things: Data collection:there are two ways of data collection i.e. primary method of data collection and secondary method of data collection.

ADVANTAGES OF PRIMARY METHOD OF DATA COLLECTION:-

1. Answers a specific research question 2. Data are current 3. Source of data is known 4. Secrecy can be maintained

DISADVANTAGES OF PRIMARY METHOD OF DATA COLLECTION:1. Expensive 2. Quality declines if interviews are lengthy 3. Reluctance to participate in lengthy interviews

SECONDARY METHOD OF DATA COLLECTION:In the secondary method of data collection information is already collected and is stored somewhere and the researcher just has to mine the required information and arrange the information in a desired manner.

Personal interview, field visit are the major ways of primary method of data collection. Internet, journals, magazines, library books, newspapers etc are the major ways of secondary method of data collection

ADVANTAGES OF SECONDARY METHOD OF DATA COLLECTION:-

1. Easy to get information 2. It is not expensive 3. It saves time of researcher

DISADVANTAGES OF SECONDARY METHOD OF DATA COLLECTION:-

1. The required information may not be of good quality. 2. Data is old which may lead to wrong decisions. 3. Source of data is unknown. 4. Secrecy cannot be maintained. The method used here for the collection of data is SECONDARY METHOD. The information on the prices of crude oil is already collected and is stored somewhere and the researcher has just mined the required information and arranged the information in a desired manner. The information is collected from the following sources:-

Internet Magazines Journals Library books Newspapers (times of India, Hindustan times, etc.)

DATA ANALYSIS AND INTERPRETATION:There are various types of data analysis tools available to any researcher in order to analyze the various aspects of his/her research for example:-

ANNOVA Chi-square test Likerts scale Nominal scale Ordinal scale Interval scale Ratio scale

NOMINAL SCALE:-

It is not a measure of quantity. It generally measures identity and difference. On this type of scale people either belong to a group or they do not. For example:-

1. Eye color:- blue, brown, green etc. 2. Biological sex (male or female) 3. Democrat, republican, green, libertarian, etc. 4. Married, single, divorced, widowed.

Data analysis is an important method for the forecasting of any event which includes ANNOVA, chi-square test, likerts scale, nominal scale etc.

In this sometimes numbers are used to designate category membership. For example:1. = 2. = 3. = 4. = united states mexico Canada other

Here, the numbers do not have numeric implications; they are simply convenient labels.

ORDINAL SCALE:-

It designates an ordering (greater than or less than). In this we does not assumes that the intervals between numbers are equal.

INTERVAL SCALE:-

It designates an equal interval ordering. The difference in temperature between 20 degrees F and 25 degrees F is the same as the difference between 76 degrees F and 81 degrees F. examples:temperature in Fahrenheit or Celsius is interval. Common IQ tests are assumed to use an interval metric.

Ordinal scale, interval scale, ratio scale and nominal scale are the best methods of analyzing the data.

RATIO SCALE:-

It designates an equal interval ordering with a true zero point (i.e. the zero implies an absence of the thing being measured). Examples: Temperature in kelvin (zero is the absence of heat. Cant get colder). Measurements of heights of students in this class (zero means complete lack of height)

There are two types of sampling i.e. probability sampling and non probability sampling. Probability sampling includes simple random sampling, stratified sampling, cluster sampling and systematic sampling. Non probability sampling includes convenience sampling, judgmental sampling, quota sampling and snowball sampling.

SAMPLING DESIGN:-

There are two types of sampling techniques which can be used for conducting research:1. Probability sampling 2. Non probability sampling

PROBABILITY SAMPLING includes:A. Simple random sampling B. Stratified sampling C. Cluster sampling D. Systematic sampling NON PROBABILITY SAMPLING includes:-

CHAPTER 5: TENTATIVE CHAPTERISATION

1. INTRODUCTION 2. WHAT IS EQUITY MARKET 3. WHAT IS COMMODITY MARKET 4. WHAT IS CURRENCY MARKET 5. ABOUT OMKAM GROUP 6. COMPANY PROFILE

7. SERVICES

8. WHY TO CHOOSE OMKAM GROUP

CHAPTER 6: LIMITATIONS

The limitations incurred while conducting the dissertation are mentioned below: TIME LIMITATION:- time restriction is the major limitation incurred while conducting the REPORT. The short span of time may lead to incorrect conclusions RESOURCE LIMITATION:- the resource limitation is also a major limitation incurred while conducting the dissertation. The resources required to carry on the dissertation are very less and this may also be the reason of incorrect conclusions or incorrect decisions.

 SERIOUSNESS:- In general context, if we see the students conducting dissertation do not take their work seriously ( in other words we can say that students are not serious towards their dissertation work ).

Time limitation, resource limitation and seriousness are the major drawbacks which can be incurred by any researcher.

INTRODUCTION

The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional financial capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange affords the investors gives them the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments. Some companies actively increase liquidity by trading in their own shares. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up-andcoming economy. In fact, the stock market is often considered the primary indicator of a country's economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'tre of central banks. Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as possibly employment.

In this way the financial system is assumed to contribute to increased prosperity. Participants in the stock market range from small individual stock investors to large hedge fund traders, who can be based anywhere in the world. Their orders usually end up with a professional at a stock exchange, who executes the order of buying or selling. Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry. This type of auctionis used in stock exchanges and commodity exchanges where traders may enter "verbal" bids and offers simultaneously. The other type of stock exchange is a virtual kind, composed of a network of computers where trades are made electronically via traders.

India
The list maintained by the Securities and Exchange Board of India (SEBI) is not current as of 2010.

Bombay Stock Exchange (BSE) National Stock Exchange of India (NSE) Indian Commodity Exchange (ICEX) United Stock Exchange of India (USE) Multi Commodity Exchange (MCX) Over the Counter Exchange of India (OTCEI) Inter-connected Stock Exchange of India (ISE) Madras Stock Exchange (MSE) Coimbatore Stock Exchange (CSX) Ahmedabad Stock Exchange (ASE) Bhubaneshwar Stock Exchange (BhSE) Cochin Stock Exchange (CSE) Hyderabad Stock Exchange (HSE) Calcutta Stock Exchange (CSE)

Delhi Stock Exchange (DSE) Bangalore Stock Exchange (BgSE) Madhya Pradesh Stock Exchange, Indore Jaipur Stock Exchange (JSE) Magadh Stock Exchange, Patna UP Stock Exchange (UPSE) Vadodara Stock Exchange,Vadodara (VSE) Guwahati Stock Exchange Ltd Ludhiana Stock Exchange Association Ltd Kanara Stock Exchange Ltd Mangalore Stock Exchange Ltd Pune Stock Exchange Ltd Saurashtra Kutch Stock Exchange Ltd Meerut Stock Exchange Ltd Intrex Trade Exchange Ltd United Stock Exchange of India Mahurat trading

Commodity Exchange

Multi Commodity Exchange of India Limited (MCX) National Commodity & Derivatives Exchange Limited (NCDEX) Indian National Multi-Commodity Exchange (NMCE) Commodity Exchange Limited ICEX.

What is EQUITY MARKET

Equity shares are those shares which are ordinary in the course of company's business. They are also called as ordinary shares. These share holders do not enjoy preference regarding payment of dividend and repayment of capital. Equity shareholders are paid dividend out of the profits made by a company. Higher the profits, higher will be the dividend and lower the profits, lower will be the dividend.

Features of Equity Shares: (1) Owned capital: Equity share capital is owned capital because it is the money of the shareholders who are actually the owners of the company. (2)Fixed value or nominal value: Every share has fixed value or a nominal value. For example, the price of a share is Rs. 10/which indicates a fixed value or a nominal value.

(3) Distinctive number: Every share is given a distinct number just like a roll number for the purpose of identification. (4) Attached rights: A share gives its owner the right to receive dividend, the right to vote, the right to attend meetings, the right to inspect the books of accounts.

(5) Return on shares: Every shareholder is entitled to a return on shares which is known as dividend. Dividend depends on the profits made by a company. Higher the profits, higher will be the dividend and vice versa. (6) Transfer of shares: Equity shares are easily transferable, that is if a person buys shares of a particular company and he does not want them, he can sell them to any one, thereby transferring the shares in the name of that person. (7) Benefit of right issue: When a company makes fresh issue of shares, the equity shareholders are given certain rights in the company. The company has to offer the new shares first to the equity shareholders in the proportion to their existing share holding. In case they do not take up the shares offered to them, the same can be issue to others. Thus, equity shareholders get the benefits of the right issue. (8) Benefit of Bonus shares: Joint stock companies which make huge profits, issue bonus shares to their ordinary shareholders out of the accumulated profits. These shares are issued free of cost in proportion to the number of existing equity share holding. In case they do not take up the shares offered to them, the same can be issued to others. Thus, equity shareholders get the benefits of the right issue. (9) Irredeemable: Equity shares are always irredeemable. This means equity capital is not returnable during the life time of a company.

(10)Capital appreciation: The nominal or par value of equity shares is fixed but the market value fluctuates. The market value mainly depends upon profitability and prosperity of the company. High rate of dividend is paid with high rate of profit, the shareholders capital is appreciated through an appreciation in the market value of shares. (i.e. higher the rate of dividend, higher the market value of the shares.)

Equity investments

An equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and firms in anticipation of income from dividends and capital gains, as the value of the stock rises. Typically equity holders receive voting rights, meaning that they can vote on candidates for the board of directors (shown on a proxy statement received by the investor) as well as certain major transactions, and residual rights, meaning that they share the company's profits, as well as recover some of the company's assets in the event that it folds, although they generally have the lowest priority in recovering their investment. It may also refer to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup company. When the investment is in infant companies, it is referred to as venture capital investing and is generally regarded as a higher risk than investment in listed going-concern situations. The equities held by private individuals are often held as mutual funds or as other forms of collective investment scheme, many of which have quoted prices that are listed in financial newspapers or magazines; the mutual funds are typically managed by prominent fund management firms, such as Schroders, Fidelity Investments or The Vanguard Group. Such holdings allow individual investors to obtain the diversification of the fund(s) and to obtain the skill of the professional fund managers in charge of the fund(s). An alternative, which is usually employed by large private investors and pension funds, is to hold shares directly; in the institutional environment many clients who

own portfolios have what are called segregated funds, as opposed to or in addition to the pooled mutual fund alternatives. A calculation can be made to assess whether an equity is over or underpriced, compared with a long-term government bond. This is called the Yield Gap or Yield Ratio. It is the ratio of the dividend yield of an equity and that of the long-term bond.

Commodity Market
Evolution of the Commodity futures markets in India Commodity futures trading are an old concept and flourished in the late nineteenth century. There were several such exchanges that traded in specific commodities in certain geographies. In the 1960s the futures market ran into trouble as high inflation resulted from a series of wars and droughts in the country which lead to considerable speculation and hoarding of agricultural commodities. The government in its wisdom banned futures trading. However, trading went underground and got transformed into forward trading in the grey market. These systems have worked very well and do so even today where the rules of engagement are drawn up and adhered to. While settlement is smooth as any violation of the terms of engagement results in being ostracized, the price discovery system remains opaque and may not reflect the reality. Gradually permission was given to various regional exchanges to emerge dealing with specific commodities and regions, and came to be called regional exchanges. Here, the owners were the traders and there was considerable conflict of interest in running the operations. Meanwhile as India went in for economic reforms in 1992, there was considerable progress in the financial sector. Towards the end of the decade, there was talk of reviving futures trading in commodities, and accordingly committees were set up to evaluate these options. By 2003, it was agreed to have this business back and the concept of national level online multicommodity exchanges emerged. The idea was to have some new exchanges that were provided online trading on lines of the

NSE in the stock market across the country and dealt with all commodities. These exchanges were to be demutualized meaning thereby that traders could not be owners and the exchanges had to be professionally managed. Accordingly 3 national level exchanges emerged, NCDEX, MCX and NMCE. Recently another exchange, ICEX has commenced operations.

REGULATION
Commodity futures markets are guided by the Forward Contract regulation Act (FCRA) which was formulated in 1952. Being an Act that is almost 60 years old means that there is need to revisit the Act and bring about the necessary amendments. The FCRA recognizes commodities to be those that are deliverable and hence have to be tangible. This excludes the use of indices which are very active in the securities market. Further, as the 1952 act spoke of futures only, options are not permitted and hence the sphere of activity is restricted to a single instrument. The regulator is the Forward Markets Commission, which is an arm of the Ministry of Consumer Affairs. The FMC is not an autonomous body like the SEBI (Securities Exchange Board of India) and hence has limited powers in terms of bringing about reforms in the country. Further, the Minister in charge of this Ministry is also the Minster for Agriculture. This is a unique situation since the Ministry of Agriculture would always work towards providing better incomes for farmers while the ministry of Consumer Affairs would work towards lowering prices for consumers. Therefore there is this delicate balance that has to be managed between protecting interests of farmers and consumers. Over 70 products are traded on these exchanges and the performance of the markets has been mixed. There are primarily two sets of products that are traded on exchanges. The first are farm products which are unique to the country. These products are relevant to the country and have domestic price discovery. The factors affecting these prices are local supply conditions with demand being virtually known as it does not

change radically in the short run as tastes change only over a longer period of time like say 5 years. Here price discovery has been robust and accurate signals have been received on the state of the crop. The second set of products is metals and energy where price discovery is essentially global in nature. The price of gold and silver is determined at COMEX (a wing of New York Mercantile Exchange) while that of crude oil on NYMEX and metals on LME (London Metal Exchange). Here India is a price taker and simply borrows the price on other exchanges. The prices hence reflect what happens on international exchanges. The non-farm products have almost 10 times the volumes on farm products in the country and the main reason for this has been the hasty decision to ban futures trading in certain farm products since 2007. Higher inflation in the country has led to a debate of the role of futures trading to this phenomenon which has in turn led to the government banning trading in tur, urad, rice, wheat, soy oil, rubber, chana, potatoes and sugar. Some of these contracts have been restored subsequently but the market has been set back by these bans as they mean a considerable loss for players. Further there is always apprehension on future bans on commodities which had melted the high volumes that were once there for these products.

Participation of the exchanges :

Presently participation on exchanges is purely retail in the sense that regulation does not permit institutions such as mutual funds, banks and foreign institutional investors to trade in commodities. Institutions especially mutual funds and foreign investors have proved to be very useful in the context of capital markets. They have added depth and liquidity in the system which has enabled the market to become comparable with some of the best in the world today. While the FMC has given permission to mutual funds and foreign investors to trade in non-agro commodities, the clearance from SEBI is required as they come under the purview of the Ministry of Finance with SEBI being the regulator. Mutual funds would in fact be useful for individuals to invest as presently while there are no restrictions on individuals to trade in commodity futures, the requisite knowledge and research does not reside with this constituent. Therefore, just like how individuals do invest in securities market through mutual funds, a similar approach will be useful for this market. The issue relating to foreign investors is theoretical. As commodity markets are delivery based, the question posed is as to what would happen in case these entities do end up with the physical stock. There would be export-import policy issues. Further, is the market mature enough to have full transmission of global trends to domestic markets?

While a very high degree of correlation has been observed between domestic and foreign prices for most international commodities that are widely traded in the world such as wheat, soybean, soy oil, corn, gold, metals, etc, foreign investors, with their deep research and pockets would factor in this information in the domestic market leading to price upheavals for which we may not be prepared. While these are legitimate concerns, the solution is not to disallow the same, but to create suitable regulation for their operations. They could be made to trade in non-delivery based operations only. Further, there could be limits placed on their operations to ensure that their operations do not drive the prices. Therefore, these arguments should not be limiting factors here. However, given this framework, it is only the retail brokers, processors who participate in the market and the growth witnessed so far is exclusively to their interest.

Potential of the market :

Futures always trade a multiple times the size of the underlying. As commodities are valued at around a third of our GDP, which would be around Rs 20 lakh crore (at current market prices), futures could trade at least 4-5 times this size or twice the size of the GDP. The reason is that there is a long chain of intermediaries between the producer and the consumer which can vary from 3-4 (metals) to 8-10 for agriculture. Each level would have interest in hedging. Add to this the pure investor or speculative interest, and the multiple could go beyond this number of 5. Several products trade at multiples of 30-40 in global markets on CBOT (now CME of USA) or Dalian (China). The present size of the market is around the GDP of the nation with a limited canvas of products, players and instruments. Intuitively it may be seen that any flexibility in the policy stance would bring about faster growth in the market.

Investment options :
Investors would find this market very attractive as they offer returns somewhere in between those on safe debt assets like GSecs and equities which would range between 10-20% on an average. However, these returns vary depending on volatility which in turn depends on the season and output based on product cycles. The margins to be upfrontare lower in case of commodities between 5-10%. Here the prices, are based more on fundamentals than equities, though the challenge is in tracking these factors. This knowledge is spreading gradually based on regular research reports put forth by exchanges likes NCDEX as well as some large brokers which provide valuable insights on the factors influencing the product outcome.

What is currency Market?

Trading in foreign exchange or currency exchange rates, (also known as FOREX or FX trading), essentially consists of speculating on the way one currency will move against another, and profiting if they move the way you predict. All currencies are traded in pairs, for example GBPUSD, (Great British Pound VS US Dollar). An FX pair is always priced in the form of how many of the second currency you can get for one of the first. So, if GBPUSD is at 1.55, this means one pound will get you 1.55 dollars. As with other products, when you trade an FX pair, you buy or sell. When you buy the pair you are speculating that the first currency will strengthen against the second and vice versa for when you sell. FOREX is the most widely traded product in the world. From the following chart you can see that daily FX trading turnover through main exchanges as risen from around $500billion in 1988 to over $3 trillion in 2007 and it is estimated that it is nearer $4 trillion today. It is one of the fastest growing markets for retail investors globally as it is open 24 hours a day and you can profit from both rising and falling prices.
Growth in global FX Trading

Main foreign exchange market turnover, 1998-2010, measured in trillions of USD.

How did Currency trading develop?

In 1944, the Bretton-Woods agreement was created to ensure stability of currencies by fixing gold at a rate of $35 per ounce. During this time most modern countries had gold based currencies, there was a period of stability. This system had weakness as the gold standard tended to create boom-bust economies. When an economy strengthened, the country would import heavily in order to expand. This would rapidly deplete their gold reserves and the gold was required to support their currency. The monetary supply of this country would also drop, interest rates would rise and all economic activity would dwindle or stop and threaten to put the economy into a recession. After WWII, huge construction work was needed and a massive amount of currency trading was required to raise the capital for the work. In 1971 the Bretton-Woods agreement ended because the US dollar ceased to be exchangeable for gold1. By now the forces of supply and demand controlled the currency prices of the major industrialised nations as currency was free to change hands. This encouraged larger volumes of trading and caused larger price fluctuations in a nations currency. Finally, with globalization and the development of computers and the internet, currency trading has become even easier and more accessible to both individuals and institutions, and thus the FOREX market has grown to the $4 Trillion daily turnover we see now.

What are the characteristics of Forex trading

The FOREX market is a very interesting and individual market; it is certainly quite different from the more traditional stock market or commodity futures markets. It is distinguished by the following traits:

Very high trading volumes Daily turnover of $4tn dwarfs other markets. Extremely high liquidity It can be bought or sold very easily, very low storage costs, immediate execution, and transparent pricing etc. Geographical dispersion FX can be traded from anywhere in the world with an Internet connection. Trading times FX is traded 24 hours a day, 5 days a week, all year round. There is no dependence on seasonal factors, or future contract expiry.

What are the factors that can affect exchange rates? What should I look for when trading FOREX?

There are a number of factors that can strengthen or weaken a countrys currency, short-term or long-term. The following are considered to be major the factors that will impact the price of a nations currency:

Interest Rates Typically, an increase in a countrys interest rate will increase the demand for the currency, and value of its currency because ownership of this currency will provide greater returns.

Government Budget Deficits A nations currency will usually weaken as a response to widening government budget deficits, and vice versa on narrowing deficits.

Balance of Trade The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a countrys currency to conduct trade. So an increasing balance of trade deficit will weaken the countrys currency.

Inflation Typically a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising. This is because inflation makes things more expensive and so demand for that particular currency drops. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise interest rates to combat rising inflation. Economic Growth Reports such as GDP, employment levels and retail sales detail the levels of a countrys economic growth and health. Generally, the more healthy and robust a countrys economy, the better its currency will perform, and the more demand for it there will be.

Political Factors Internal, regional and international political conditions and events can have a profound effect on currency markets. Situations such as Government upheaval, perceived fiscal behavior of the next/current ruling party, increasing tensions and risk of confrontation, either domestic or foreign, can greatly affect the strength of a nations currency.

OMKAM GROUP

OMKAM Capital market Private Limited Company Profile

Omkam holds a unique place in the Indian securities markets. Because of our business model, size and local management, our clients know they can count on us to continue to put them at the heart of everything we do. Omkam has invested in leading-edge technology to ensure we have a highly scalable business and we continue to recruit and develop the very best people in the Indian market. Relationships have always driven Omkams approach to doing business. Our clients lie at the heart of everything we do. Omkam is committed to providing the very highest quality service to our clients, whether through corporate advice, institutional sales and trading, private client services, equities research, broker dealer services or other financial Service. We also understand that choosing the right investment partner is not always easy and our clients must be satisfied that they are working with a team that has the right combination of persistence, determination, deep market knowledge, global networks and strategic thinking. Omkam works hard to be our clients partner of choice for the long term and we are committed to achieving our clients investment objectives at all times.

OMKAM is a leading financial services company offering a wide range of financial products to Individuals, Families, Corporates and Institutions. The wide range on offer includes Equities, Equity Derivatives, Currency Derivatives, Commodity Derivatives, Mutual Funds, Investment Banking, Principal Strategies, IPOs. The OMKAM Group is a member of National Stock Exchange (NSE) ,the Bombay Stock Exchange (BSE), and the leading Commodity Exchange in the country: NCDEX With the rich experience of over 14 years in financial services , OMKAM is committed towards providing personalized and value added services to the clients while maintaining the highest standards of excellence, ethics and professionalism. OMKAM Group includes: OMKAM Capital Markets Pvt. Ltd. OMKAM Commodities Pvt. Ltd. OMKAM Securities Pvt Ltd. Our Philosophy Clients' interests always come first. If we serve our clients well, our own success will follow. Attaining excellence in understanding and analyzing of Market trends and investments products to add value to our work processes and client deliverable. Building trust with clients by consistently operating with the highest levels of confidentiality, integrity, business ethics and fairness.

SERVICES
EQUITY OMKAM Capital Markets Pvt. Ltd offers seamless trading services in equities and derivatives (Futures & Options). Our comprehensive software application suite provides real time trading across multiple exchanges. Salient features of OMKAM Equity trading: OMKAM Equity trading : To watch Market prices and execute buy & sell orders instantaneously. Highly integrated application enables a user to place orders in live environment with multiple exchanges (NSE & BSE) within a single order entry / viewing window. Advisory services based on Investment Research and Market Trend analysis. Fully customizable user screen displays information based on users preferences. A real time Browser based Web Application and standalone application for Desktops. A refresh based Web Site for GPRS & Java enabled Mobile devices. Facility to put orders over the phone. Walk-in Customer can trade through our branch offices. Margin based trading. Offline order placement facility (AMO). Competitive Brokerages. Orders and Trades as well as essential information can be sent to the clients through SMS or EMAIL.

Commodity
OMKAM Commodities PVT LTD. offers a wide range of flexibility in commodity market trading in NCDEX. We offers both Offline & Online trading platforms. Salient features of OMKAM Commodity trading :

Live Market Watch for commodity market (NCDEX) Advisory services based on Investment Research and Market Trend analysis. Fully customizable user screen display's information based on users preferences. A real time Browser based Web Application and standalone application for Desktops. A refresh based Web Site for GPRS & Java enabled Mobile devices. Facility to put orders over the phone. Service for Walk-in Customer to trade through our branch offices. Margin based trading.

Competitive Brokerages.

Mutual Fund

A mutual fund is a professionally managed type of collective investment scheme that pools money From many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is one of the most suitable investments for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. In November 2009 ,SEBI permitted units of Mutual Fund schemes to be transacted through registered stock brokers of recognized stock exchange. OMKAM provide a hasselfree trading in Mutual Funds listed with exchanges ( NSE & BSE )

WHY TO CHOOSE OMKAM GROUP

COMPREHENSIVE RESEARCH Research is a scientific undertaking which, by means of logical and systematized techniques aims to: o Discover new facts or verify and test old facts o Analyze their sequence, interrelationships and causal explanations The ultimate purpose of research is to: o Fill in gaps in information o Find answers to questions so far unexplained

COMPREHENSIVE OFFERINGS
Our strategic staffing offering primarily supports the technology services market by providing managed services staffing to major technology service providers and large corporate users of external IT resources. We provide technical resources for a broad range of functions including: o Project/program management, o Application maintenance and enhancement, o System implementation and integration, o Testing/quality assurance, o Design, engineering, and infrastructure support SOPHISTICATED TECHNOLOGY

Sophisticated technology leads the Clients ahead in development intellectually appealing. MULTIPLE CHANNELS This is the attempt by Marketers and Analysts to try and understand the offline impact (revenue/brand value/butts in seats/phone calls/etc) driven by online marketing and advertising TRUST AND OBJECTIVE ADVICE We are dedicated to shaping your financial future with the utmost integrity, professionalism, and discretion. Whether you're saving for college or retirement our solutions will bring you confidence and peace of mind. Trust is the bedrock of all our client relationships.

RESEARCH FINDING & CONCLUSION

Commodity derivatives have a crucial role to play in the price risk management process. Especially in any agriculture dominated economy. Derivatives like forwards, futures, options, swaps etc are extensively used in many developed as well as developing countries in the world. However, they have been utilized in a very limited scale in India. 1.The production, supply and distribution of many agricultural commodites are controlled by the government and only forwards and futures trading are permitted in certain commodity items. 2.The most things I have seen are that the awareness of future commodity trading is still not there. 3.People who knows, they believe that operators and big players in the market drive this future commodity market. 4. Most of peoples feel that the qualities of the commodities are not as per the requirement. 5.For the process of taking or giving delivery in future commodity market is lengthy, costly, and required so many documents. 6.The option trading is still not allowed in commodity market so the risk management process is incomplete. Because we all know that future trading has its own limits. 7.The account opening process of future commodity trading is lengthy and requires more documents.

8.The delivery centers of commodities are very less in India compare to other developed countries. 9.People still considering that to invest in commodity market is very risky. 10.People still considering commodity market for speculation rather than business purpose.

Recommendation
The FMC should allow Option trading in commodity market in India.

The FMC has to take some steps to increase the awareness of future commodity trading India.

The FMC has to encourage the mutual fund companies and institutional investors to invest in commodity market in India.

The government has to allow FIIs to invest in commodity market in India in future market not in option.

The FMC should have concrete plan to stop Dabba trading in commodity market in India.

The FMC should increase the range of commodities in future commodities in commodity market in India.

To motivate the commodity business in India the FMC should come up with some rebate in taxes.

The FMC should increase the delivery centers of commodities in India.

 As commodity market is very potential for business, the angel co. should think about various ways to attract the customers.

GLOSSARY

Glossary
Arbitrage

The business of taking advantage of difference in price of a security traded on two or more stock exchanges, by buying in one and selling in the other (or vice versa). Quite simply it means you try to buy something cheap in one place, to make a profit selling it somewhere else.Given the speed at which the financial markets now operate, in practice the simultaneous purchase of foreign exchange, securities, commodities or any other financial instrument in one market and the sale in another at a higher price. Basis Point (BP) The smallest measure used in quoting yields on fixed income securities. One basis point is one percent of one percent, or 0.01%. Bear Market A prolonged period of falling securities prices in a stock market.
Blue Chips Blue Chips are shares of large, well established and financially sound companies with an impressive records of earnings and dividends. Generally, Blue Chip shares provide low to moderate current yield and moderate to high capital gains yield. The price volatility of such shares is moderate. Bull Market A rising market with abundance of buyers and few sellers. Basket Trading Basket trading is a facility by which investors are in a position to buy/sell all 30 scrips of Sensex in the proportion of current weights in the Sensex, in one go. Call The demand by a company or any other issuer of shares for payment. It may be the demand for full payment on the due date, such as, for example, with a rights issue. It may, alternatively, be the demand for a further payment when the total amount is payable by instalments.The calls are usually made several months apart by call letter and the shares

are said to be paid-up when the final call has been paid. A call by a company should not be confused with a call option.

Contract On any securities market this is the agreement between a buyer and a seller buy or sell securities. The written agreement between the seller and the buyer to transfer ownership of the property from the former to the latter.It is a legally binding agreement for sale.In two identical parts, one signed by seller and one by purchaser. When the two parts are exchanged (exchange of contracts) both parties are committed to the transaction. Derivatives Instruments derived from securities or physical markets. The most common types of derivatives that ordinary investors are likely to come across are futures , options , warrants and convertible bonds. Beyond this, the range of derivatives possible is only limited by the imagination of investment banks. In other words, new derivatives are being created all the time. It is likely nowadays that any person who has funds invested will unwittingly perhaps be indirectly exposed to derivatives.
Demat trading Demat trading is trading of shares that are in the electronic form or dematerialised shares. Dematerialisation is the process by which shares in the physical form are cancelled and credit in the form of electronic balances are maintained on highly secure systems at the depository

Rolling Settlement This is the system by which shares are bought, sold and paid for. Rolling Settlements is a mechanism of settling trades. in Rolling Settlements, trades done on a single day are settled separately from the trades of other day on Trade day + 5 days. As such netting of trades is done only for the day and not for multiple days. As such, in Rolling Settlement, settlement is carried out on a daily basis.

Short Sale A Short sale occurs when a person believing that the prices of shares will fall, sells shares that he does not own with the intention of purchasing the shares at lower price at the time delivery has to be made. This is also known as forward sale.

REFERENCES

www.google.com www.nseindia.com http://en.wikipedia.org/wiki/Stock_exchange#Facilitati ng_company_growth www.omkam.com http://www.karvy.com/market/glossz.htm

www.bseindia.com