CHAPTER- 1

1
 1.1 INTRODUCTION TO FINANCIAL MANAGEMENT

Finance in the modern business world is regarded as LIFE AND BLOOD OF

A BUSINESS ENTERPRISE .Finance function has become so important that it has
given birth to financial management as a separate subject. So this is acquiring a
universally applicability.

Financial management is the managerial activity which is concerned with the

planning and controlling of the firm ‘s financial resources. As a separates activity or
discipline is of recent origin it was a branch of economics till 1890.Still today it has
no unique body of knowledge of its own and it draws heavily on economics for its
theoretical concepts.

DEFINITIONS

According to GUTHMANN AND DOUGHAL “Business finance can broadly be

defined as the activity concerned with planning, rising, controlling, administering of funds
used in the business.”

According to BONNEVILE AND DEWEY, “Financing consists in the rising

providing and managing of all the money, capital or funds of any kind to be used in
connection with the business.”

According to Professor EZRA SOLOMAN “Financial management is concerned

with the efficient use of any important economic resources, namely capital funds.”

FINANCIAL FUNCTIONS

Functions the finance of rising funds, investing them in assets and distributing
returns earned from assets to share holders are respectively known as financing
investment and dividend decisions. While performing these functions, a firm attempts
to balance cash inflows and outflows. This is called as liquidity decisions.

The finance functions can be divided into three broad categories.

 Investment or long term asset mix decision

 Financing or capital mix decision
 Dividend or profit allocation decision
 Liquidity or short – term asset mix decision

2
Investment Decision

Investment or capital budgeting involves the decisions of cash or commitment

of funds to Long – term assets, which would yield benefits in future. It involves
measurement of future profitability, which risk, because uncertain future. Investment
proposal should therefore evaluate in terms of both expected return and risk.

Financing Decision

Financing decision is the second important function to be performed by the

firm. Broadly he must decide when, where and how to acquire funds to meet the firms
investment needs. He has to determine the proportions of debt and equity. This mix of
debt and equity is known as the firms “capital structure”. The financial management
must strive to obtain the least financing mix or the optimum capital structure.

Dividend Decision
It is the third major financial decision. The financial manager decides whether
the firm should distribute all profits, or return them or distribute a portion and return
the balance. The optimum dividend policy should be determine where is maximizes
the market value of share.

Liquidity Decision

Current assets management, which affects firm’s liquidity, is at another

finance function in the addition to the management of long term assets. Current assets
should be managed effectively safeguarding the firm against dangers of liquidity and
insolvency.

GOALS OF FINANCIAL MANAGEMENT

Maximize the value of the firm to its equity share holders. This means that the
goals of the firm should be to maximize the market value of equity shares (which
represent the value the firm to its equity share holders)

 Maximization of profit
 Maximization of earning per share
 Maximization of return on equity
 Maintenance of liquid assets in the firms

3
 Earning maximum operational efficiency through planning , directing , and
controlling of the utilities of the funds

4
 NEED FOR THE STUDY

 The main purpose this project was known about the developed & developing
country indexes and its functioning.
 This helps to know in details of country indexes right from its inspection
stage, growth and future prospects.
 Secondary market connects investors' favoritism for liquidity with the capital
users' wish of using their capital for a longer period
 Based on the performance of various countries in stock markets the economy
growth can be increased
 To know the GDP growth rate changes that depends on secondary markets

5
 OBJECTIVES OF THE STUDY
1. To understand the secondary markets in India and to study the calculations
involved in index.

2. To analyze the volatility of selected CNX nifty by standard deviation.

3. To evaluate the performance of selected developing country index and

developed country index by considering sharp ratio.

4. Based on the study to give findings and suggestions to the investors.

1. To understand the secondary markets in India and to study the calculations

involved in index.
2. To analyze the volatility of selected CNX nifty by standard deviation.
3.

6
 LIMITATIONS

There were some difficulties while abstracting the information from the
organization such as

 The project has been limited to investment analysis of secondary market

indices
 The brief study of share market has to be undertaken in this project work but it
could not cover many of the aspects.

 Data considered only of past 6 years.

 Sharp ratio and stranded deviation are used for calculating return and risk

 It is based on stock market information.

7
 RESEARCH METHODOLOGY OF THE STUDY

Research in common parlance refers to a search for knowledge. One can also
define research as a scientific and systematic research for pertinent information on a
specific topic. In fact, research is an art of scientific investigation
 Primary data source
 Secondary data source

PRIMARY DATA

 The data about the company details were taken from Angel Broking LTD
 The data has been collected from various departmental heads

SECONDARY DATA

The majority of the information, which is submitted in the report, is gathered

from the previous records of various countries indices, magazines, annual reports in
stock broking company and some of the information is taken from textbooks.

8
 SCOPE OF THE STUDY

 The study is done in M/s Angel Broking Ltd., Vijayawada. I concentrated on

the secondary markets (stock exchanges) of developed country index and
developing country index. The individual stocks are taken according to the
levels of trading done on these particular scripts.

 Data used during this time (6 weeks) and findings were done according to the
value of the stocks during the study was January 2012 to July 2017. So the
scope of the study was confined to the time of analysis and the scripts were
taken according to the levels of trading but not whole scripts

9
CHAPTER-2

Industry Analysis

10
 PROFILE OF STOCK BROKING INDUSTRY

Stock Broking industry dates back to the 2 nd century BC in Rome which was
the first time any shares were bought or sold. In India, it started formally in 1875 with
the setting up of Bombay Stock Exchange. Since then, the profession has come a long
way and to have become a $1 billion industry in this country.

Stock Brokers used to be an elite group of BSE members for a long period of
time. Becoming a broker was extremely difficult for many, mainly due to the high
capital layout involved. This changed dramatically in the past couple of decades since
NSE was setup in the 1990s and a lot of trading started moving to the online
platforms. Transparency increased and trading costs reduced which helped the trading
public in general. Introduction of Derivatives trading helped in devising hedging and
other trading strategies.

During this period, the number of brokers increased exponentially due to

relaxation of entry barriers and the increasing market size. However, over the past 5
years this industry has gone through a major consolidation phase.

There is a decline in the number of stock brokers in India. This decline can be
attributed to a number of reasons. Tightening of regulations can be seen as a major
factor, with introduction of a number of KYC and other compliance norms. SEBI and
the government are making every effort to ensure investor safety. Regulations are
important to ensure the stock markets are used in the right way as a savings and
investment avenue, as against a platform for speculation or gambling.

11
 Another reason is the advent of new discount broking players which have
taken the traditional broking houses by surprise and have put a major pricing pressure
on the old school broking players. Increasing technology costs have also affected all
the broking houses as the customers have started to demand better and swift
technology and the whole industry is inching towards automation of processes; which
is important for the growth of financial markets in India.

Also, the revenues from core broking activities have declined significantly, by
almost 7 to 8 percent in FY 16. Derivatives volumes have taken a hit as SEBI has
increased the minimum lot size of futures and options contracts to keep small
investors at bay from these arguably risky trading instruments.

The Silver Lining – Every industry, at some point in time, goes through a
consolidation phase. Stock broking is no different. The efficient players are still going
strong and are taking full advantage of the situation by acquiring new customers
aggressively. A lot of big players have diversified themselves into other businesses
like NBFC, Real Estate or Asset Management. This has given an opportunity to the
mid-sized and emerging brokers to capture the growing and untapped markets.

Of the 125-crore people in India, only 0.6crore people invest or trade in the
stock, commodity or currency markets. In China or the US, this sub-set is more than
10 percent. SEBI, stock exchanges, brokers and other market intermediaries are
burning their midnight oil for investor education and it has started to yield results.
New investors are entering the markets either by way of direct investments or through
the mutual funds route. Other assets like real estate or gold have not yielded as much
returns as the equity markets in the past 5 years and a lot of people are beginning to
understand this. Additionally, the liquidity offered by the stock markets is not
available with most of the other investment avenues. The tightening of the
compliance norms by SEBI has resulted in transparency in the markets and increased
public’s faith in the integrity of the whole industry.

The Way Forward for Brokers – Indian stock broking industry is undergoing a shift. A
lot of existing customers are quickly moving to the newer discount broking players
which offer very cheap pricing with basic broking services coupled with excellent
trading technologies. Regular traders and investors are finding these models

12
extremely cheap and attractive. On the other hand, the traditional brick and mortar
broking houses are focusing more on developing newer markets. They are now
building better & transparent customer support systems. They have also realised that
to survive and compete in this industry, they need to gradually become more efficient
by reducing their overheads. Simpler Aadhar based account opening norms will
ensure smooth and efficient KYC adherence. Complimentary third party products like
SIPs, mutual funds and insurance are other newer products which offer diversification
options to the existing customers.

The times are very opportune for all the discount brokers as well as full
service brokers in different ways. The stock brokers who become efficient by
focusing on technology, reducing unwanted costs and improving customer support in
their domain will emerge to be the new leading players in future.

STOCK MARKET:
A stock market or equity market is the aggregation of buyers and sellers (a
loose network of economic transactions, not a physical facility or discrete entity) of
stocks (also called shares); these may include securities listed on a stock exchange as
well as those only traded privately.
Size of the market:
Stocks can be categorized in various ways. One common way is, by the
country where the company is domiciled. For example, Nestlé and Novartis are
domiciled in Switzerland, so they may be considered as part of the Swiss stock
market, although their stock may also be traded at exchanges in other countries. At
the close of 2012, the size of the world stock market (total market capitalization) was
about US$55 trillion. By country, the largest market was the United States (about
34%), followed by Japan (about 6%) and the United Kingdom (about 6%). This went
up more in 2013.
Stock Exchange:
A stock exchange is a place or organization by which stock traders (people
and companies) can trade stocks. Companies may want to get their stock listed on a
stock exchange. Other stocks may be traded "over the counter", that is, through a
dealer. A large company will usually have its stock listed on many exchanges across

13
the world. Exchanges may also cover other types of security such as fixed interest
securities or indeed derivatives.
COMPONENTS OF STOCK MARKET:
A stock market is made up of several components which are as follows:
Stock Exchanges
Stock exchanges are key companies that allow the stock market to work as
efficiently as it does. They list shares prices for thousands of companies, they list the
bid/ask prices of shares and enable quick electronic transfers of shares between
people. Some stock exchanges you might have heard of include NASDAQ, LSE
(London stock exchange) and the NYSE (New York stock exchange).
Companies
Companies are vital for a stock market to work! A company must be listed as
a PLC (public listed company) for people to trade its shares at a stock market. To be
listed as a PLC a company must meet strict financial requirements.
Brokers
Brokers are the middle men between the stock exchange and the stock buyer
(i.e. you). They fetch the buy and sell prices of stocks from the stock exchange and
relay them to the purchasers. It is a legal requirement that you open a account to buy
or sell stocks.
Traders
Without people who trade stock (buyers and sellers) a stock market would not
work. Buyers can range individuals sitting at home on their PC to huge multimillion
dollar investment funds. Find out
INDEX'S
A statistical measure of change in an economy or a securities market is known
as an index. In the case of financial markets, an index is an imaginary security
representing a particular market or a portion of it. Each index has its own calculation
methodology and is usually expressed in terms of a change from a base value. Thus,
the percentage change is more important than the actual number Stock and bond
market indexes are used to construct index mutual funds and exchange-traded funds
(ETFs) whose portfolios mirror the components of the index. Heard of the FTSE 100,
the Dow Jones 30, or the S&P 500? Well these are just indicators. Take the S&P 500

14
for example; it measures the top 500 companies in the US. If most people are selling
shares in these companies then the S&P 500 will point down and vice versa.
Fig 2.1: Stock Market Diagram

PROFILE OF ANGEL BROKING PVT. LTD.

VIJAYAWADA

ANGEL BROKING

Angel Brookings’s tryst with excellence in customer relations began in 1987.

Today, Angel has emerged as one of the most respected Stock-Broking and Wealth
Management Companies in India. With its unique retail-focused stock trading
business model, Angel is committed to providing ‘Real Value for Money’ to all its
clients.
The Angel Group is a member of the Bombay Stock Exchange (BSE),
National Stock Exchange (NSE), and the two leading Commodity Exchanges in the
country: NCDEX & MCX. Angel is also registered as a Depository Participant with
CDSL.
BUSINESS
1. Equity Trading

15
 2. Commodities
3. Portfolio Management Services
4. Mutual Funds
5. Life Insurance
6. IPO
7. Depository Services
8. Investment Advisory
ANGEL GROUP
 Angel Broking Ltd.
 Angel Commodities Broking Ltd.
 Angel Securities Ltd.

VISION
To provide best value for money to investors through innovative products,
Trading /investments strategies, state of the art technology and personalized service.

MOTTO
To have complete harmony between quality-in-process and continuous improvement
to deliver exceptional service that will delight our Customers and Clients.

CRM POLICY: CUSTOMER IS KING

“A Customer is the most Important Visitor on our premises. He is not dependent on
us, but we are dependent on him. He is not an interruption in our work. He is the
purpose of it. He is not an outsider in our business. He is part of it. We are not doing
him a favor by serving him. He is doing us a favor by giving us an opportunity to do
so.” ----------- Mahatma Gandhi

BUSINESS PHILOSOPHY
 Ethical practices & transparency in all our dealings
 Customers interest above our own
 Always deliver what we promise
 Effective cost management

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ORGANISATION CHART

QUALITY ASSURANCE POLICY

We are committed to providing world exceed the expectations of our
customers, achieved by teamwork and a process of continuous improvement.
EVOLUTION OF ANGEL GROUP
MR DINESH THAKKR, chairman and managing director, ANGEL GROUP, started
this journey as a SUB-BROKER in 1987 with three employees and twenty five
clients.
1997-2003
 Dec'97: Incorporation of Angel Broking
 July'98: Angel Research
 Mar'02: Web- Enabled back office software developed
2004
 Apr'04: Incorporation of Commodities Broking
 Sep'04: Launch of internet trading platform
2005
 Oct'05: Awarded prestigious "Major volume driver" award
2006

17
  Jul'06: PMS function launched
 Sep'06: Commences MF and IPO distribution
 Oct'06: Awarded 'Major volume driver" award
 Dec'06: Crossed 2,500 business associates
2007
 Oct'07: "Major volume driver" award for third consecutive time
 Nov'07: Crossed 1.5Lakh mark in DP account
 Dec'07: IFC acquired 12.35% stake in Angel group
2008
 Jan'08: Commences insurance distribution
 Feb'08: Ranked 1st by NSE for registered intermediaries
 May'08: Third party distribution business ramped up
 Sep'08: Ranked first on NSE for largest sub-broker network
 Dec'08: "Major volume driver" award for fourth consecutive time
2009
 jan'09: Ranked 1st on NCDEX on the basis of turnover
 May09: Awarded the "Best Retail Broking House" and the "Broking house
with largest distribution Network" by Dun & Bradstreet
 Two analysts won the ET Star mine Analyst award
 "Major volume driver" award for the 5th consecutive time
MEMBERSHIP
 Angel Group Memberships:
 BSE- Cash and F&O
 NSE- Cash and F&O
 NCDEX and MCX- Commodities and Currency futures
 Angel has the largest number of Sub-brokers registered on NSE
 Angel has the largest volume on BSE
 Angel has the highest number of Trading terminals
 Angel is also registered as depository participant with CDSL
RETAIL CENTRIC FOCUS
 Aggressive expansion (locations, products / offerings & customer base)

18
  Scalable systems and processes Leveraging technology for cost efficient high
quality service
 Effective Human Resource development

Angel Business

RESEARCH & ADVISORY REPORTS

MARKET OUTLOOK
Provide Price-sensitive information just before the opening bell and analyzes its
impact on the Market in terms of:
 Key corporate developments
 Policy announcements
 Geo-political news and views
 Technical Analysis report
 Analyzes trading patterns, and a view on the market positions of key
stocks/sectors for the next trading session
 Short term(1-5 days) & medium term (10-20 days) view

19
  Tracks individual scrip's, the SENSEX & NIFTY and other indices
DERIVATIVE ANALYSIS REPORT
 FII activity in the F&O Segment
 Chance in open interest
 Pull-Call ratio
 Cost of carrying stocks
 Index-based derivate products
ANGEL PRODUCTS AND SERVICES
Portfolio Management Services
 Managed by our Prominent Fund Managers who are regularly fetched by TV
media for their views on stock
 Understanding client's risk and return profile
 Offering the right blend of sector and stock exposure
 Giving dedicated Investment Advisors
 Giving a choice of different schemes to suit every individual investor
preferences
 Catering to individuals, HUF's, Corporate, NRIs, Trusts
 Angel Commodities
 Personalized service through branches and regional hubs
 Trading and relationship Management. Services in Billion, Base metals,
Energy &Agro futures
 Opportunities in hedging & portfolio diversification, speculation & arbitrage
 Training and educational seminars on commodities
 Angel Currency Futures
 Comprehensive coverage on Currencies('Rupee' to 'Euro', 'Dollar Index' to
'Yen')
 Reports covering in-depth fundamentals of the currencies
 Latest economic data releases with their likely impact, along with "Technical
levels"
 Comprehensive reports on currencies ideally suited for and investor / trader
 Angel Gold
 Personalized investment advisory

20
  Portfolio Restructuring & continuous monitoring
 Guidance from experienced Team
 Periodic group meetings with investors
 Specialized Products
MARGIN FUNDING
 Facility to allow clients to take higher exposure
 Instant liquidity for clients
 Margin is deposited in cash as well as Collaterals
 Enabling clients grab Earning Opportunity
PRE-PAID BROKERAGE
 Zero Account Opening Charges
 Attractive Brokerage Rates
 Free DP AMC for 1 year
 Easy and fast recharge
 Free Financial Investment Application with every account
 Depository Services
 No Physical instruction required for the client's sell obligations
 Lowest Transaction charges in the country
 Acceptance and execution of instruction on mobile phone and fax
 A combined mobility 'Bill-Transaction-Holding cum Ledger' statement
 Efficient pledge mechanism
 Value Added Services
NRI SERVICES
 NRI service desk for personalized assistance
 Dedicated offline desk for Personalized Equity dealing desk
 Online Equity Trading Platform
 NRI investment advisory desk
 PAN CARD assistance
 Support for banking-PIS accounts
 Portfolio management , Mutual Fund ,IPO services
M-CONNECT SERVICE

21
  Market News / Analysis & Expert Views 24x7
 Stock Updates & Market Statistics
 Real time Equity, F&O , commodi1ties and MF rates on a single screen
 Top 10 Local and Global indices
 Insurance
 Products to meet the triple objectives of risk coverage, investment and tax
planning
 Assessment of your insurance after proper risk profiling
 A wide array of individual life cover plans to meet your protection, savings,
and Retirement needs
 Mutual Funds
 Tie-ups with all major AMCs
 Dedicated relationship Manager for business partners
 Exclusive Mutual Fund Research reports by Angel
 (Daily/Weekly/Monthly Mutual Fund Reports)
 MF portfolios as per Investors Financial Goal
 Common Gateway for all Mutual Funds related queries
 Loans, IPO and Fixed Deposits
Products distributed by Angel include:
 Unsecured Loans
 Personal/Business Loans/Credit cards
 Secured Loans
 Home Loans/ Loan against Properties
 Loan against Securities / Gold
 IPO-Distribution, Advisory and Helpdesk
 Fixed Deposits
 NHB Term Deposits
List of Board of Directors of Angel Group
Founder, chairman & managing director MR. Dinesh Thakkar
Managing director- institutional broking MR. Lalit Thakkar
Chief strategy officer MR. Amit Majumdar
Executive director equity broking MR. Vinay Agarwal
Executive director- sales and marketing MR. Nikhil daxini

22
Executive director- operations MR. Santanu Syam
Associate director- information MR. Ketanshah
technology and B2B business
Associate director- commodities & MR. Naveen Mathur
currencies

23
 CHAPTER- 3

THEORITICAL FRAME WORK

24
CAPITAL MARKET

Capital markets are markets for buying and selling equity and debt instruments.
Capital markets channel savings and investment between suppliers of capital such
as retail investors and institutional investors, and users of capital like businesses,
government and individuals. Capital markets are vital to the functioning of an
economy, since capital is a critical component for generating economic output.
Capital markets include primary markets, where new stock and bond issues are sold
to investors, and secondary markets, which trade existing securities. The capital
market is divided

A) PRIMARY MARKET:
Most companies are usually started privately by their promoters. However the
promoters ‘capital and the borrowed capital from banks or financial institutions might
not be sufficient for running the business over the long term. That is when corporate
and the government looks at the primary market to raise long term funds by issuing
securities such as debt or equity. These securities may be issued at face value, at
premium or at discount. Let us understand the meaning of these terms:
 Face value: Face value is the original cost of the security as shown in the
certificate/instrument. Most equity shares have a face value of Rs. 1, Rs. 5,
Rs. 10, or Rs. 100 and do not have much bearing on the actual market price of
the stock. When issuing securities, they may be offered at a discount or at a
premium
 Premiums: When the security is offered at a price higher than the face value it
is called a premium
 Discount: When the security is offered at a price lower than the face value it
is called a discount

B) SECONDARY MARKET:

25
The secondary market provides liquidity to the investors in the primary market. Today
we would not invest in any instrument if there was no medium to liquidate our
position. The secondary markets provide an efficient platform for trading of those
securities initially offered in the primary market. Also those investors who have
applied for shares in an IPO may or may not get allotment. If they don‘t then they can
always buy the shares (sometimes at a discount or at a premium) in the secondary
market. Trading in the secondary market is done through stock exchange. The Stock
exchange is a place where the buyers and sellers meet to trade in shares in an
organized manner. The stock exchange performs the following functions:
 Provide trading platform to investors and provide liquidity
 Facilitate Listing of securities
 Registers members - Stock Brokers, sub brokers
 Make and enforce by - laws
 Manage risk in securities transactions
 Provides Indices

PRIMARY MARKET

"Primary market" may also refer to a market in art valuation.

The primary market is the part of the capital market that deals with issuing
of new securities. Primary markets create long term instruments through which
corporate entities raise funds from the capital market.

In a primary market, companies, governments or public sector institutions can

raise funds through bond issues and corporations can raise capital through the sale of
new stock through an initial public offering (IPO). This is often done through
an investment bank or finance syndicate of securities dealers. The process of selling
new shares to investors is called underwriting. Dealers earn a commission that is built
into the price of the security offering, though it can be found in the prospectus.

Instead of going through underwriters, corporations can make a primary

issue of its debt or stock, which involves the issue by a corporation of its own debt or
new stock directly to institutional investors or the public or it, can seek additional
capital from existing shareholders.

26
 Once issued the securities typically trade on a secondary market such as
a stock exchange, bond market or derivatives exchange.

Capital or equity can be raised in primary market by any of the following four ways:

1. Public Issue: As the name suggests, public issue means selling securities to public
at large, such as IPO. It is the most vital method to sell financial securities.

2. Rights Issue: Whenever a company needs to raise supplementary equity capital,

the shares have to be offered to present shareholders on a pro-rata basis, which is
known as the Rights Issue.

3. Private Placement: This is about selling securities to restricted number of classy

investors like frequent investors, venture capital funds, mutual funds and banks
comes under Private Placement.

4. Preferential Allotment: When a listed company issues equity shares to a selected

number of investors at a price that may or may not be pertaining to the market price is
known as Preferential Allotment.

The primary market is also known as the New Issue Market (NIM) as it is the
market for issuing long-term equity capital. Since the companies issue securities
directly to the investors, it is responsible to issue the security certificates too. The
creation of new securities facilitates growth within the economy.

FEATURES OF PRIMARY MARKET

The main features of primary markets are:

 This is the market for new long term equity capital. The primary market is the market
where the securities are sold for the first time. Therefore, it is also called the new issue
market (NIM).
 In a primary issue, the securities are issued by the company directly to investors.

 The company receives the money and issues new security certificates to the investors.

27
 Primary issues are used by companies for the purpose of setting up new business or for
expanding or modernizing the existing business.

 The primary market performs the crucial function of facilitating capital formation in the
economy.

 The new issue market does not include certain other sources of new long term external
finance, such as loans from financial institutions. Borrowers in the new issue market may
be raising capital for converting private capital into public capital; this is known as
"going public."

Its share can be issue in face value, premium value & par value

DIFFERENCE BETWEEN PRIMARY MARKET AND SECONDARY MARKET:

Primary market Subject Secondary market

i. Seller of the securities is the issuer of
the securities Holder/ i. Seller of the securities is the holder of
the security
issuer

ii. Primary securities are typically call

initial public offerings (IPOs) ii. Secondary securities are outstanding
Name
securities

iii. Primary issues of securities occur

relative infrequently
Frequency iii. Secondary securities occur frequently

iv. Primary securities previously did not

exist in the market
Existence iv. Secondary securities are outstanding

v. Gain from secondary transaction is not Gains v. Investor can gain from the secondary
possible in the primary market market

28
vi. Original issuer remains unaffected due vi. Investors will be affected by the price
Effects
to the price the changes changes

Top 10 stock brokers in India:

With the increase in number of stock broker, people have a lot of option to choose
from, but still it is not easy to choose. You need to be sure of what is that you want.
Some pointers to keep in mind before deciding on the brokers are:-

1) Full service or discount broker: The main difference among them is full
service broker would charge you brokerage as a percentage of your trade
value (for ICICI it lies between .5% – .9%). while discount broker are much
cheaper charging you based on the number of trade. Most of the discount
brokers charges between Rs15 to Rs30 per trade irrespective of the trade
volume. So if you are going to trade multiple times a month, go for a discount
broker rather than a full service one. To understand there difference better,
please have a look at the video below.

2) Online trading v/s Offline/Phone trading: Most of the brokers have started
to provide online trading services to their customers. Some of them also
provide trading on phone or even physically at their location. Decide what
would be a good fit for you. If you are comfortable trading online from your
laptop/desktop, you will find that most of the major brokers are providing that
services. There are some people who prefer to trade on broker’s terminal,
make sure that you check with your broker if he have a terminal near your
place.

3) How often do you trade: Whether you are a trader or investor? Investor is
someone who trades few times a year while trader will trade at least few times
a month. If you are an investor brokerage generally won’t make a big
difference in your returns while if you are a trader, brokerage can mean

29
 whether you end up making a profit or loss. By that I mean that brokerage
adds up for traders.

4) Will you require advice to trade: Would you need financial adviser to trade
or would you be trading on your own? If you need adviser, remember to get
some historical data of how good the adviser is and would you be comfortable
giving him your money. Full service broker generally will have research desk
which will send you a lot of recommendations for trading in stocks. Do
remember to check there historical recommendations and if it matches your
investment needs. Some of the full service broker will even provide you with
the service of Relationship manager which will call you a couple of times a
month and telling you about the new investment ideas.

5) Do you have access to internet: One more thing to keep in mind while
looking at the broker is whether or not it provides call-n-trade service?
Because even if you have a smart phone, there could be a chance that you are
not able to access your account due to slow internet speed. Then you should
be able to call you broker for closing the trade. Most of the broker provide
call-n-trade service but ask what is the extra charge for using that service if
any. Also some broker say that the provide this service but when you try to
call then, the number is always busy. Make sure that you ask them what is the
normal wait time to get call-n-trade service.

6) Internet savvy: Newer generation people are tech savvy and don’t mind to
trade completely only. If you are like then, discount brokers would be a good
fit and if you are someone who prefers to know the face of the brokers, this
list would be of little use to you as I have not included any local brokers here.
But if you do use local brokers, I would suggest that at least compare their
brokerages with some of the new discount brokers to see how much money
you are losing by way of higher brokerage.

7) Trading platform provided: One more important thing to ask is what trading
platform is provided by your broker and is there any extra charge for
accessing that. Most of the broker will provide NEST trading platform free of

30
 cost but then charge a monthly charge for access there charting platform or to
get access to real time data from there platform. So it is a good idea to get a
better understanding of what is being provided by you broker to start with.

In the last couple of years, with the increase in internet penetration and
coming of smart phone in India, I have added some of the major discount
brokers also in the top 10 list. They are not the largest but are giving full
service brokers a run for their money and increasing their market share every
quarter. I would suggest to read there reviews before finalizing your brokers.
Times are changing and I think that in next couple of years more and more
brokers would move from being a Full service broker to discount brokers. And
as far as safety of discount brokers are concerned, most of the brokers have a
robust risk management in place and follow stringent SEBI rules.

Best discount brokers in India:

1) Zerodha: They are one of the largest and oldest Discount broker in India
having more than 50,000 clients. They have a very competitive and a simple
brokerage structure (Rs 20 per trade) and good customer service. The account
opening process is also very easy and most of the work can be completed
online. They are one of the few discount broker who have their own Proprietor
trading/charting software caller Pi which allows for writing custom algorithm.
The good thing about these discount brokers is you may never have to visit
their offices. The forms can be filled online and the application can be shipped
to them. This type of discount brokers are new in India and providing tough
competition to full service brokers.

2) UPSTOX: RKSV is a discount broker operating from Mumbai. They

provide very competitive rates of Rs20 per trade irrespective of the size of the
trade. The provide NEST and ODIN platform for trading. They are coming up
with new mobile based platform called Upstox and the product look nice.
There account opening process is also very easy and most of the work can be
completed online.

31
3) Fyers: They are one of the newer discount Brokers and provide brokerage
rate of .1% for delivery and .01% for intraday. The thing to keep in mind with
them is the brokerage is capped at Rs100 per trade. They provide one the best
trading platform which is built in house completely. To open account with
them with ZERO account opening charges,

Best Full service brokers in India:

4) Angel Broking: Incorporated in 1987, Angel Broking has become one of

the most respected Stock-Broking and Wealth Management Companies in
India. They have built up a huge network of Branches and Franchises (More
than 900 cities and 8500 Franchises) thereby maintaining a great support
system for investors who prefer human interactions while trading.
Alternatively you can use their Trading platforms for the device of your
choice be it the Web, Smart phones, Tablets and Desktops. They have more
than 10lakh clients which trades with them.

5) ICICI Direct: By far the biggest and best known full service stock broker
in India. They have good service and easy to use user interface. There
brokerage varies from 0.55% to .20% depending on the value of trades you do
with them. There biggest selling point is there seamless integration with your
ICICI bank account which makes transfer/withdrawal of funds really easy and
quick. They also offer special product like valid till cancel and even T+90
trading in BSE segment.

6) Motilal Oswal : These are one of the oldest and reputed brokers operating
in India. They are also full service brokers providing gamut of financial
service to the customer. They are best known for their advisory service
provided by them. They have more than 8 lakh customer trading with them.

7) Share Khan : Incorporated in February 2000, Share khan is India’s

2nd largest stock broker as per number of customers, providing brokerage
services through its online trading website Sharekhan.com and 1950 Share

32
 shops which includes branches & Franchises in more than 575 cities across
India. They are full service broker and provide various other services like
asset management etc As of July 30th, BNP Paribas have purchased Share
Khan for Rs2,200 Crore. We don’t expect major changes due to the buyout.

8) HDFC Security: They are one of the larger broking houses in India and
with their bank branches; they have one of the largest network which is only
after ICICI. They have a vast network of bank branch in even smaller town.
Most of the investor who has a bank account ends up opening a trading/Demat
account with them. They are good full service brokers providing all major
services like research desk, mutual fund investments and portfolio
management services.

9) Kotak Securities: They are one more well know name in Financial
services and with their bank branches in big cities they are able to cater to
clients in big cities. There online service is decent but brokerage is not that
competitive.

10) Reliance Money: They came with a bang but lately have lost a lot of sheen
from their name. There have been lots of question about their business
practices Apart from this, some other notable names in brokerage industry in
India are Karvy, Axis direct and SBI cap.

33
34
 CHAPTER- 4
DATA ANALYSIS AND INTERPRETATION

TABLE 1: DEVELOPING COUNTRIES’S INDEX: INDIA & CHINA IN 2012

NIFTY
CLOSE NIFTY CHANGE
MONTH CHANGE
NIFTY IN %
IN POINTS
31-Jan-12 5385
29-Feb-12 5295 -90 -1.671
31-Mar-12 5248 -47 -0.888
30-Apr-12 4924 -324 -6.174
31-May-12 5278 354 7.189
30-Jun-12 5229 -49 -0.928
31-Jul-12 5258 29 0.555
31-Aug-12 5703 445 8.463
30-Sep-12 5619 -84 -1.473
31-Oct-12 5879 260 4.627
30-Nov-12 5905 26 0.442
31-Dec-12 6034 129 2.185

ANNUAL CHANGE 649 12.052

MEAN 54.083 1.027

STANDARD
340.466 4.253
DEVATION

SHARP RATIO 1.188

SHANGHAI
CLOSE SHANGHAI
MONTH CHANGE
SHANGHAI CHANGE IN %
IN POINTS
31-Jan-12 2428 - -
29-Feb-12 2262 -166 -6.837
31-Mar-12 2396 134 5.924
30-Apr-12 2372 -24 -1.002
31-May-12 2225 -147 -6.197

35
 30-Jun-12 2103 -122 -5.483
31-Jul-12 2047 -56 -2.663
31-Aug-12 2086 39 1.905
30-Sep-12 2068 -18 -0.863
31-Oct-12 1980 -88 -4.255
30-Nov-12 2269 289 14.596
31-Dec-12 2385 116 5.112

ANENUAL CHANGE -43 -1.771

MEAN -3.583 0.020

STANDARD
156.962 6.180
DEVIATION

SHARP RATIO -1.419

CHART1: RERESENTING DEVELOPING COUNTRY INDEX INDIA &

CHINA 2012

36
INTERPRETATION:

For the above year 2012 NIFTY has an annual change of 649 points and
annual change in percentage is 12.052%. Out of 12 months NIFTY was positive for
six months and negative for remaining months. Highest change in NIFTY % is seen
in month of august (8.463) and the least change in NIFTY % is seen in month of April
(-6.174). For the year 2012 standard deviation is 4.253 and sharp ratio is 1.188.

For the year 2012 SHANGHAI has an annual change of -43 points and annual
change in % is -1.771%. Out of 12 months SHANGHAI was positive for 4 months
and negative for remaining months. Highest change in SHANGHAI % is seen in
month of November (14.596) and the least change in SHANGHAI % is seen in month
of February (-6.837). For the year 2012 standard deviation is 6.180 and sharp ratio is
-1.419.

If comparing both countries indexes, Indian index is well, comparing to china

in the year 2012.

TABLE 1: DEVELOPED COUNTRY INDEX U.S & FRANCE IN 2012

MONTH CLOSE DOW JONES DOW JONES CHANGE DOW JONES

IN POINTS CHANGE

37
 IN %
1-Jan-12 12632
1-Feb-12 12952 320 2.533
1-Mar-12 13212 260 2.007
1-Apr-12 13213 1 0.008
1-May-12 12393 -820 -6.206
1-Jun-12 12880 487 3.930
1-Jul-12 13008 128 0.994
1-Aug-12 13090 82 0.630
1-Sep-12 13437 347 2.651
1-Oct-12 13096 -341 -2.538
1-Nov-12 13025 -71 -0.542
1-Dec-12 13104 79 0.607

ANNUAL
CHANGE 472 3.737

MEAN 39.333 0.339

STANDARD
DEVIATION 3616.105 2.800

SHARP RATIO -1.165

CLOSE CAC CAC 40CHANGE IN CAC 40 CHANGE IN

MONTH 40 POINTS %
31-Jan-12 3452
29-Feb-12 3423 -29 -0.840
31-Mar-12 3212 -211 -6.164
30-Apr-12 3017 -195 -6.071
31-May-12 3196 179 5.933
30-Jun-12 3291 95 2.972
31-Jul-12 3413 122 3.707
31-Aug-12 3354 -59 -1.729
30-Sep-12 3429 75 2.236
31-Oct-12 3557 128 3.733
30-Nov-12 3641 84 2.362
31-Dec-12 3732 91 2.499

ANNUAL CHANGE 280 8.111

MEAN 23.333 0.720

STANDARD
DEVIATION 198.693 3.824

38
 SHARP RATIO 0.291

CHART 1: RERESENTING DEVELOPED COUNTRY INDEX U.S &

FRANCE 2012

INTERPRETATION:

For the year 2012 DOW JONES ha an annual change of 472 points and annual
change in % is 3.737%. Out of 12 months DOE JONES was positive for 8 months
and negative for 3 months. Highest change in DOW JONES % is seen in month of
June (3.930) and the least change in DOW JONES % is seen in month of May (-
6.206). For the year 2012 standard deviation is 2.8 and sharp ratio is -1.165.

39
 For the year 2012 CAC 40 has an annual change of 280 points and annual
change in % is 8.111%. out of 12 months CAC 40 was positive for seven months and
negative for remaining months. Highest change in CAC 40 % is seen in month of
May (5.933) and the least change in CAC 40 % is seen in month of March (-6.164).
for the year 2012 standard deviation is 3.824 and sharp ratio is 0.291.

If comparing the both countries indexes, France index is well, as compared to

U.S index.

TABLE 2: DEVELOPING COUNTRY INDEX INDIA & CHINA IN 2013

CLOSE NIFTY CHANGE IN NIFTY CHANGE IN

MONTH NIFTY POINTS %
31-Dec-12 6034
31-Jan-13 5693 -341 -5.651
28-Feb-13 5682 -11 -0.193
31-Mar-13 5930 248 4.365
30-Apr-13 5985 55 0.927
31-May-13 5842 -143 -2.389
30-Jun-13 5742 -100 -1.712
31-Jul-13 5471 -271 -4.720
31-Aug-13 5735 264 4.825
30-Sep-13 6299 564 9.834
31-Oct-13 6176 -123 -1.953
30-Nov-13 6304 128 2.073
31-Dec-13 6089 -215 -3.411

ANNUAL CHANGE 396 6.956

MEAN 4.583 0.166

STANDARD
DEVIATION 264.675 4.495

SHARP RATIO -0.010

SHANGHAI
CLOSE SHANGHAI CHANGE IN CHANGE
MONTH SHANGHAI POINTS IN %
31-Dec-12 2385
31-Jan-13 2365 -20 -0.839
28-Feb-13 2236 -129 -5.455
31-Mar-13 2177 -59 -2.639
30-Apr-13 2300 123 5.650

40
 31-May-13 1979 -321 -13.957
30-Jun-13 1993 14 0.707
31-Jul-13 2098 105 5.268
31-Aug-13 2174 76 3.622
30-Sep-13 2141 -33 -1.518
31-Oct-13 2220 79 3.690
30-Nov-13 2115 -105 -4.730
31-Dec-13 2033 -82 -3.877

ANNUAL CHANGE -332 -14.038

MEAN -29.333 -1.173

STANDARD
DEVIATION 118.258 5.579

SHARP RATIO -3.771

CHART 2: RERESENTING DEVELOPING COUNTRY INDEX INDIA &

CHINA 2013

41
INTERPRETATION:

For the year 2013 NIFTY has an annual change of 396 points and annual change in %
is 6.956%. Out of 12 months NIFTY was positive for 5 months and negative for
remaining months. Highest change in NIFTY% is seen in months of September
(9.834) and the least change in NIFTY % is seen in month of January (-5.651). For
the year 2013 standard deviation is 4.495 and sharp ratio is -0.010.

For the year 2013 SHANGHAI has an annual change of -332 points and annual
change in % is -14.038. Out of 12 months SHANGHAI was positive for 5 months and
negative for remaining months. Highest change in SHANGHAI % is seen in month of
April (5.650%) and the least change in SHANGHAI % is seen in month of May (-
13.957). For the year 2013 standard deviation is 5.579 and sharp ratio is -3.771.

If comparing both indexes Indian index is better than china index.

TABLE 2: DEVELOPED COUNTRY INDEX U.S & FRANCE IN 2013

CLOSE DOW DOW JONES CHANGE DOW JONES

MONTH JONES IN POINTS CHANGE IN %
1-Dec-12 13104

42
 1-Jan-13 13860 756 5.769
1-Feb-13 14054 194 1.400
1-Mar-13 14578 524 3.728
1-Apr-13 14839 261 1.790
1-May-13 15115 276 1.860
1-Jun-13 14909 -206 -1.363
1-Jul-13 15499 590 3.957
1-Aug-13 14810 -689 -4.445
1-Sep-13 15129 319 2.154
1-Oct-13 15545 416 2.750
1-Nov-13 16086 541 3.480
1-Dec-13 16576 490 3.046

ANNUAL CHANGE 2716 19.596

MEAN 226.333 1.633

STANDARD
DEVIATION 774.516 2.666

SHARP RATIO 4.725

CAC 40 CHANGE IN CAC 40 CHANGE

MONTH CLOSE CAC 40 POINTS IN %
31-Dec-12 3732
31-Jan-13 3723 -9 -0.241
28-Feb-13 3731 8 0.215
31-Mar-13 3856 125 3.350
30-Apr-13 3948 92 2.386
31-May-13 3738 -210 -5.319
30-Jun-13 3992 254 6.795
31-Jul-13 3933 -59 -1.478
31-Aug-13 4143 210 5.339
30-Sep-13 4299 156 3.765
31-Oct-13 4295 -4 -0.093
30-Nov-13 4295 0 0.000
31-Dec-13 4165 -130 -3.027

ANNUAL CHANGE 442 11.872

MEAN 36.833 0.989

STANDARD
DEVIATION 224.761 3.492

43
SHARP RATIO 1.395

CHART 2: RERESENTING DEVELOPED COUNTRY INDEX U.S &

FRANCE 2013

INTERPRETATION:

For the year 2013 DOW JONES has an annual change of 2716 points and
annual change in % is 19.596. Out of 12 months DOW JONES was positive for 10

44
months and remaining months are negative. Highest change in DOW JONES in % is
seen in month of January (5.769) and the least change in DOW JONES % is seen in
month of August (-4.445). For the year 2013 standard deviation is 2.666 and sharp
ratio is 4.725.

For the year 2013 CAC 40 has an annual change of 442 points and annual
change in % is 11.872. Out of 12 months CAC 40 was positive for 7 months and
negative for remaining months. Highest change in CAC 40 % is seen in month of
June (6.795) and the least change in CAC 40 % is seen in month of May (-5.319). For
the year 2013 standard deviation is 3.492 and sharp ratio is 1.395.

If comparing the two countries indexes U.S index is better than FRANCE
index.

TABLE 3: DEVELOPING COUNTRY INDEX INDIA & CHINA IN 2014

CHANGE NIFTY CHANGE IN NIFTY CHANGE IN

MONTH NIFTY POINTS %
31-Dec-13 6089
31-Jan-14 6276 187 3.071
28-Feb-14 6704 428 6.820
31-Mar-14 6696 -8 -0.119
30-Apr-14 7229 533 7.960
31-May-14 7611 382 5.284
30-Jun-14 7721 110 1.445
31-Jul-14 7954 233 3.018
31-Aug-14 7964 10 0.126
30-Sep-14 8322 358 4.495
31-Oct-14 8588 266 3.196
30-Nov-14 8282 -306 -3.563
31-Dec-14 8808 526 6.351

ANNUAL CHANGE 2532 40.344

MEAN 211 3.362

STANDARD
DEVIATION 805.043 3.317

SHARP RATIO 10.052

45
 CHANGE SHANGHAI CHANGE SHANGHAI CHANGE IN
MONTH SHANGHAI IN POINTS %
31-Dec-13 2033
31-Jan-14 2056 23 1.131
28-Feb-14 2033 -23 -1.119
31-Mar-14 2026 -7 -0.344
30-Apr-14 2039 13 0.642
31-May-14 2048 9 0.441
30-Jun-14 2201 153 7.471
31-Jul-14 2217 16 0.727
31-Aug-14 2363 146 6.585
30-Sep-14 2420 57 2.412
31-Oct-14 2682 262 10.826
30-Nov-14 3234 552 20.582
31-Dec-14 3210 -24 -0.742

ANNUAL
CHANGE 1154 56.128

MEAN 96.167 4.677

STANDARD
DEVIATION 441.798 6.419

SHARP RATIO 7.654

CHART-3: REPRESENTING DEVELOPING COUNTRY INDEX INDIA &

CHINA

46
INTERPRETATION:

For the year 2014 NIFTY has an annual change of 2532 points and annual change in
% is -40.344. Out of 12 months NIFTY was positive for 10 months and remaining
months are negative. Highest change in nifty in % is seen in the month of April
(7.960) and the least change in NIFTY % is seen in the month of November (-3.563).
For the year 2014 standard deviation is 3.317 and sharp ratio is 10.052.

47
For the year 2014 SHANGHAI has an annual change of 1154 points and annual
change in % is 56.128. Out of 12 months SHANGHAI was positive for 9 months and
remaining months are negative. Highest change in SHANGHAI % is seen in the
month of November (20.582) and least change in SHANGHAI % is seen in the month
of February (-1.119). For the year 2014 standard deviation is 6.419 and sharp ratio is
7.654.

TABLE 3: DEVELOPED COUNTRY INDEX U.S. & FRANCE IN 2014

CHANGE DOW DOW JONES CHANGE IN DOW JONES

MONTH JONES POINTS CHANGE IN %
1-Dec-13 16576
1-Jan-14 15698 -878 -5.297
1-Feb-14 16321 623 3.969
1-Mar-14 16457 136 0.833
1-Apr-14 16580 123 0.747
1-May-14 16717 137 0.826
1-Jun-14 16826 109 0.652
1-Jul-14 16563 -263 -1.563
1-Aug-14 17098 535 3.230
1-Sep-14 17042 -56 -0.328
1-Oct-14 17390 348 2.042
1-Nov-14 17828 438 2.519
1-Dec-14 17823 -5 -0.028

ANNUAL CHANGE 2125 13.537

MEAN 177.083 1.128

STANDARD
DEVIATION 619.854 2.428

SHARP RATIO 872.313

CHANGE CAC CAC 40 CHANGE IN CAC 40 CHANGE

MONTH 40 POINTS IN %
31-Dec-13 4165
31-Jan-14 4408 243 5.834

48
 28-Feb-14 4391 -17 -0.386
31-Mar-14 4487 96 2.186
30-Apr-14 4519 32 0.713
31-May-14 4422 -97 -2.146
30-Jun-14 4246 -176 -3.980
31-Jul-14 4381 135 3.179
31-Aug-14 4416 35 0.799
30-Sep-14 4233 -183 -4.144
31-Oct-14 4390 157 3.709
30-Nov-14 4272 -118 -2.688
31-Dec-14 4604 332 7.772

ANNUAL CHANGE 196 4.446

MEAN 16.333 0.371

STANDARD
DEVIATION 109.794 3.653

SHARP RATIO -0.699

CHART-3: REPRESENTING DEVELOPED COUNTRY INDEX U.S. &
FRANCE

49
INTERPRETATION

For the year 2014 DOWJONES has an annual change of points 2125 and annual
change in % is 13.537.Out of 12 months DOWJONES was positive for 8 months and
remaining months are negative. Highest change DOWJONES % is seen in month of
February (3.969) and the least change in DOWJONES % is seen in the month of
January (-5.297). For the year 2014 standard deviation is 2.428 and sharp ratio is
872.313.

For the year 2014 CAC40 has an annual change of points 196 and annual change % is
4.4146. Out of 12 months CAC40 was positive for 7months and remaining months
are negative. Highest change in CAC40 in % is seen in month of January (5.834) and
the least change in CAC40 % is seen in month of September (-4.144). For the year
2014 standard deviation is 3.653 and sharp ratio is -0.699.

TABLE 4: DEVELOPING COUNTRY INDEX INDIA & CHINA IN 2015

CHANGE NIFTY CHANGE IN

MONTH NIFTY POINTS NIFTY CHANGE IN %
31-Dec-14 8808
31-Jan-15 8844 36 0.409
28-Feb-15 8491 -353 -3.991
31-Mar-15 8181 -310 -3.651

50
 30-Apr-15 8433 252 3.080
31-May-15 8368 -65 -0.771
30-Jun-15 8532 164 1.960
31-Jul-15 7948 -584 -6.845
31-Aug-15 7948 0 0.000
30-Sep-15 8065 117 1.472
31-Oct-15 7935 -130 -1.612
30-Nov-15 7946 11 0.139
31-Dec-15 7436 -510 -6.418

ANNUAL CHANGE -1408 -15.920

MEAN -117.333 -1.327

STANDARD
DEVIATION 375.375 3.223

SHARP RATIO -7.112

CHANGE SHANGHAI CHANGE SHANGHAI

MONTH SHANGHAI IN POINTS CHANGE IN %
31-Dec-14 3210
31-Jan-15 3310 100 3.115
28-Feb-15 3747 437 13.202
31-Mar-15 4441 694 18.521
30-Apr-15 4617 176 3.963
31-May-15 4277 -340 -7.364
30-Jun-15 3663 -614 -14.356
31-Jul-15 3205 -458 -12.503
31-Aug-15 3052 -153 -4.774
30-Sep-15 3382 330 10.813
31-Oct-15 3445 63 1.863
30-Nov-15 3539 94 2.729
31-Dec-15 2737 -802 -22.662

ANNUAL CHANGE -573 -17.311

MEAN -47.75 -1.443

STANDARD
DEVIATION 570.653 12.132

51
SHARP RATIO -2.004

CHART-4: REPRESENTING DEVELOPING COUNTRY INDEX INDIA &

CHINA

INTERPRETATION:

52
For the year 2015 NIFTY has an annual change of -1408 and annual change in % is
-15.920. Out of 12 months NIFTY was positive for 6 months and remaining months
are negative. Highest change in NIFTY % is seen in the month of April (3.080) and
least change in NIFTY % is seen in month of July (-6.845). For the year 2015
standard deviation is 3.223 and sharp ratio is -7.112.

For the year 2015 SHANGHAI has annual change of -573 and annual change in % is
-17.311. Out of 12 months SHANGHAI was positive for 7 months and remaining are
negative. Highest change in SHANGHAI % is seen in the month of March (18.520)
and the least change in SHANGHAI % is seen in month of December (-22.662). For
the year 2015 standard deviation is 12.132 and sharp ratio is -2.004.

TABLE 4: DEVELOPED COUNTRY INDEX U.S. & FRANCE IN 2015

CHANGE DOW US INDEX CHANGE IN US INDEX CHANGE

MONTH JONES POINTS IN %
1-Dec-14 17823
1-Jan-15 17164 -659 -3.697
1-Feb-15 18132 968 5.640
1-Mar-15 17776 -356 -1.963
1-Apr-15 17840 64 0.360
1-May-15 18010 170 0.953
1-Jun-15 17619 -391 -2.171
1-Jul-15 17689 70 0.397
1-Aug-15 16528 -1161 -6.563
1-Sep-15 16284 -244 -1.476
1-Oct-15 17663 1379 8.468
1-Nov-15 17719 56 0.317
1-Dec-15 17425 -294 -1.659

ANNUAL CHANGE 261 1.521

MEAN 21.75 0.127

STANDARD
DEVIATION 565.346 3.988

SHARP RATIO -1.374

53
 CHANGE CAC CAC 40 CHANGE IN CAC 40CHANGE
MONTH 40 POINTS IN %
31-Dec-14 4604
31-Jan-15 4951 347 7.537
28-Feb-15 5033 82 1.656
31-Mar-15 5046 13 0.258
30-Apr-15 5007 -39 -0.773
31-May-15 4790 -217 -4.334
30-Jun-15 5082 292 6.096
31-Jul-15 4652 -430 -8.461
31-Aug-15 4455 -197 -4.235
30-Sep-15 4897 442 9.921
31-Oct-15 4957 60 1.225
30-Nov-15 4637 -320 -6.456
31-Dec-15 4417 -220 -4.744

ANNUAL CHANGE -534 -10.786

MEAN -44.5 -0.899

STANDARD
DEVIATION 233.467 5.795

SHARP RATIO -3.069

CHART-4: REPRESENTING DEVELOPED COUNTRY INDEX U.S. &

FRANCE

54
INTERPRETATION:

For the year 2015 DOWJONES has an annual change of 261 and annual change in % 1.521.
Out of 12 months DOW JONES was positive for 6 months and remaining months are
negative. Highest change in DOW JONES % is seen in the month of October (8.648) and the
least change in DOWJONES % is seen in month of August (-6.563). For the year 2015
standard deviation is 3.988 and sharp ratio is -1.374.

For the year 2015 CAC 40 has an annual change of -534 and annual change in % -10.786.
Out of 12 months CAC40 was positive for 6 months and remaining months are negative.
Highest change in CAC40 % is seen in the month of September (9.921) and the least change

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in CAC 40 % is seen in the month of July (-8.461). For the year 2015 standard deviation is
5.795 and sharp ratio is -3.069.

TABLE 5: DEVELOPING COUNTRY INDEX INDIA & CHINA IN 2016

CHANGE NIFTY CHANGE NIFTY CHANGE IN

MONTH NIFTY IN POINTS %
31-Dec-15 7436
31-Jan-16 6987 -449 -6.038
29-Feb-16 7738 751 10.749
31-Mar-16 7849 111 1.434
30-Apr-16 8160 311 3.962
31-May-16 8287 127 1.556
30-Jun-16 8638 351 4.236
31-Jul-16 8786 148 1.713
31-Aug-16 8611 -175 -1.992
30-Sep-16 8638 27 0.314
31-Oct-16 8224 -414 -4.793
30-Nov-16 8185 -39 -0.474
31-Dec-16 8561 376 4.594

ANNUAL CHANGE 1574 22.528

MEAN 131.167 1.877

STANDARD DEVIATION 507.982 4.492

SHARP RATIO 3.456

SHANGHAI
CHANHE SHANGHAI CHANGE CHANGE
MONTH SHANGHAI IN POINTS IN %
31-Dec-15 2737
31-Jan-16 2687 -50 -1.827
29-Feb-16 3003 316 11.760
31-Mar-16 2938 -65 -2.165
30-Apr-16 2916 -22 -0.749
31-May-16 2929 13 0.446
30-Jun-16 2979 50 1.707
31-Jul-16 3085 106 3.558
31-Aug-16 3004 -81 -2.626
30-Sep-16 3100 96 3.196
31-Oct-16 3250 150 4.839
30-Nov-16 3103 -147 -4.523
31-Dec-16 3159 56 1.805

ANNUAL CHANGE 472 17.566

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 MEAN 39.333 1.464

STANDARD
DEVIATION 143.982 4.339

SHARP RATIO 2.435

CHART-5: REPRESENTING DEVELOPING COUNTRY INDEX INDIA &

CHINA

INTERPRETATION:

For the year 2016 NIFTY has an annual change of 1574 and annual change in % is
22.528. Out of 12 months NIFTY was positive for 8 months and remaining months

57
are negative. Highest change in NIFTY % is seen in the month of February (10.749)
and least change in NIFTY % is seen in month of January (-6.038). For the year 2016
standard deviation is 4.492 and sharp ratio is 3.456.

For the year 2016 SHANGHAI has annual change of 472 and annual change in % is
17.566. Out of 12 months SHANGHAI was positive for 7 months and remaining are
negative. Highest change in SHANGHAI % is seen in the month of February (11.760)
and the least change in SHANGHAI % is seen in month of November (-4.523). For
the year 2016 standard deviation is 4.339 and sharp ratio is 2.435

TABLE 5: DEVELOPED COUNTRY INDEX U.S. & FRANCE IN 2016

CHANGE DOW DOW JONES DOW JONES

MONTH JONES CHANGE IN POINTS CHANGE IN %
1-Dec-15 17425
1-Jan-16 16466 -959 -5.504
1-Feb-16 16516 50 0.304
1-Mar-16 17685 1169 7.078
1-Apr-16 17773 88 0.498
1-May-16 17787 14 0.079
1-Jun-16 17929 142 0.798
1-Jul-16 18432 503 2.806
1-Aug-16 18400 -32 -0.174
1-Sep-16 18308 -92 -0.500
1-Oct-16 18142 -166 -0.907
1-Nov-16 19123 981 5.407
1-Dec-16 19762 639 3.342

ANNUAL CHANGE 3296 20.017

MEAN 274.667 1.668

STANDARD DEVIATION 932.996 3.250

SHARP RATIO 4.006

CAC 40 CHANGE IN CAC 40 CHANGE IN

MONTH CHANGE CAC 40 POINTS %
31-Dec-15 4417
31-Jan-16 4353 -64 -1.449
29-Feb-16 4385 32 0.735
31-Mar-16 4428 43 0.981
30-Apr-16 4505 77 1.739
31-May-16 4237 -268 -5.949

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 30-Jun-16 4439 202 4.768
31-Jul-16 4438 -1 -0.023
31-Aug-16 4448 10 0.225
30-Sep-16 4509 61 1.371
31-Oct-16 4578 69 1.530
30-Nov-16 4862 284 6.204
31-Dec-16 4748 -114 -2.345

ANNUAL CHANGE 395 9.074

MEAN 32.917 0.756

STANDARD
DEVIATION 1257.036 3.133

SHARP RATIO 0.662

CHART-5: REPRESENTING DEVELOPED COUNTRY INDEX U.S. &

FRANCE.

59
INTERPRETATION:

For the year 2016 DOWJONES has an annual change of3296 and annual change in %
20.017. Out of 12 months DOW JONES was positive for 8 months and remaining
months are negative. Highest change in DOW JONES % is seen in the month of
March (7.078) and the least change in DOWJONES % is seen in month of January (-
5.504). For the year 2016 standard deviation is 3.250 and sharp ratio is 4.006.

For the year 2016 CAC 40 has an annual change of 395 and annual change in %
9.074. Out of 12 months CAC40 was positive for 8 months and remaining months are
negative. Highest change in CAC40 % is seen in the month of November (6.204) and
the least change in CAC 40 % is seen in the month of May (-5.949). For the year
2016 standard deviation is 3.133 and sharp ratio is 0.662.

TABLE 6: DEVELOPING COUNTRY INDEX INDIA & CHINA IN 2017

CHANGE NIFTY CHANGE IN

MONTH NIFTY POINTS NIFTY CHANGE IN %
31-Dec-16 8561
31-Jan-17 8879 318 3.715
28-Feb-17 9173 294 3.311
31-Mar-17 9304 131 1.428
30-Apr-17 9621 317 3.407
31-May-17 9504 -117 -1.216
30-Jun-17 9615 111 1.168

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ANNUAL CHANGE 736 8.289

MEAN 61.333 0.691

STANDARD
DEVIATION 290.746 1.885

SHARP RATIO 0.684

CHANGE SHANGHAI CHANGE IN SHANGHAI

MONTH SHANGHAI POINTS CHANGE IN %
31-Dec-16 3159
31-Jan-17 3241 82 2.596
28-Feb-17 3222 -19 -0.586
31-Mar-17 3154 -68 -2.110
30-Apr-17 3117 -37 -1.173
31-May-17 3192 75 2.406
30-Jun-17 3195 3 0.094

ANNUAL CHANGE -46 -1.419

MEAN -3.833 -0.118

STANDARD
DEVIATION 45.208 1.921

SHARP RATIO -4.382

CHART-6: REPRESENTING DEVELOPING COUNTRY INDEX INDIA &

CHINA.

61
INTERPRETATION:

For the year 2017 NIFTY has an annual change of 736 and annual change in % is
8.289. Out of 6 months NIFTY was positive for 5 months and remaining months are
negative. Highest change in NIFTY % is seen in the month of January (3.715) and
least change in NIFTY % is seen in month of May (-1.216). For the year 2017
standard deviation is 1.885 and sharp ratio is 0.684.

For the year 2017 SHANGHAI has annual change of -48 and annual change in % is
-1.414. Out of 6 months SHANGHAI was positive for 3 months and remaining are
negative. Highest change in SHANGHAI % is seen in the month of January (2.596)
and the least change in SHANGHAI % is seen in month of March (-2.110). For the
year 2017 standard deviation is 1.921 and sharp ratio is -4.382

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TABLE 6: DEVELOPED COUNTRY INDEX U.S. & FRANCE IN 2017

DOW JONES
CHANGE DOW DOW JONESCHANGE CHANGE
MONTH JONES IN POINTS IN %
1-Dec-16 19762
1-Jan-17 19864 102 0.516
1-Feb-17 20812 948 4.772
1-Mar-17 20663 -149 -0.716
1-Apr-17 20940 277 1.341
1-May-17 21008 68 0.325
1-Jun-17 21287 279 1.328
1-Jul-17 21479 192 0.902

ANNUAL CHANGE 1615 8.130

MEAN 134.583 0.678

STANDARD
DEVIATION 520.699 1.722

SHARP RATIO 0.656

CAC 40 CHANGE IN CAC 40 CHANGE

MONTH CHANGE CAC 40 POINTS IN %
31-Dec-16 4748
31-Jan-17 4858 110 2.317
28-Feb-17 5122 264 5.434
31-Mar-17 5267 145 2.831
30-Apr-17 5283 16 0.304
31-May-17 5154 -129 -2.442
30-Jun-17 5195 41 0.795

ANNUAL CHANGE 337 6.937

MEAN 28.083 0.578

STANDARD
DEVIATION 154.527 2.660

SHARP RATIO -0.024

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CHART-6: REPRESENTING DEVELOPED COUNTRY INDEX U.S. &
FRANCE.

INTERPRETATION:

For the year 2017 DOWJONES has an annual change of 1615 and annual change in
% 8.130. Out of 7 months DOW JONES was positive for 6 months and remaining
months are negative. Highest change in DOW JONES % is seen in the month of
February (4.772) and the least change in DOWJONES % is seen in month of March
(0.716). For the year 2017standard deviation is 1.722 and sharp ratio is 0.656.

For the year 2017 CAC 40 has an annual change of 537 and annual change in %
6.937. Out of 6 months CAC40 was positive for 5 months and remaining months are

64
negative. Highest change in CAC40 % is seen in the month of February (5.431) and
the least change in CAC 40 % is seen in the month of May (-2.442). For the year
2017 standard deviation is 2.660 and sharp ratio is -0.024

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 CHAPTER-5

FINDINGS AND SUGGESTIONS

FINDINGS

1. Fluctuations are more in stock market than any other market.

2. From the data analysis indexes are, it was found that the highest annual return
was found in the year 2016 and lowest in the year 2015.

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SUGGESTIONS

67
 It is suggested that investors are advised to invest their money in the stock
market according to the fundamentals of the company.
 Investors are advised to observe the markets sentiments and global conditions.
 Speculation is always risk, it attracts with abnormal profits but it is not always
possible to gain profits.
 It is suggested that investment made only in stock reaches a minimum price.
 An investor is suggested to invest for a long period of time to get profitable
returns i.e., long term investment is preferable.
 Invest in a best index what you are like and trust.

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 BIBLIOGRAPHY

Text books:

 Bhalla. V.K. “Investment Management: Security Analysis and Portfolio

Management”, Sultan Chand, New Delhi.
 Prasanna Chandra, “Investment analysis and portfolio management”, Second
Edition, Tata McGraw Hill.

 Bhat S, “Security Analysis & Portfolio Management”, Excel Books.

 Fischer, Donald E. and Ronald J. Jordan, “Security Analysis and Portfolio

Management”, Prentice Hall of India, New Delhi

 Kevin S. “Security Analysis and Portfolio Management”, prentice hall of

India

 Punithavathy Pandian, “Security Analysis and Portfolio Management”, Vikas

 Sharpe, William, F. G. Alexander, F. Bailey, and W. C. Sharpe, “Investments”,

New Delhi, Prentice Hall of India

Websites:

 www.moneycontrol.com
 www.businessstandard.com
 www.yahoofinance.com
 www.angel.com
 www.nseindia.com
 www.ssechina.com
 https://en.wikipedia.org/wiki/Stock_market

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