Analysis of commodity and capital markets

Analysis of commodity market with capital market
PART –A
INTRODUCTION
INDUSTRY PROFILE
Introduction
Stock exchanges to some extent play an important role as indicators, reflecting the
performance of the country's economic state of health. Stock market is a place where securities
are bought and sold. It is exposed to a high degree of volatility; prices fluctuate within minutes
and are determined by the demand and supply of stocks at a given time. Stock brokers are the
ones who buys and sells securities on behalf of individuals and institutions for some commission.
The Securities and Exchange Board of India (SEBI) is the authorised body which regulates the
operations of stock exchanges, banks and other financial institutions. The past performances in
the capital markets specially the securities scam by Harshad Mehta has led to tightening of the
operations by SEBI. In addition the international trading and investment exposure has made it
imperative to better operational efficiancy.
COMPANY PROFILE
About KARVY
The Karvy group was formed in 1983 at Hyderabad, India. Karvy ranks among the top
player in almost all the fields it operates. Karvy Computer share Limited is India’s largest
Registrar and Transfer Agent with a client base of nearly 500 blue chip corporate, managing over
2 crore accounts. Karvy Stock Brokers Limited, member of National Stock Exchange of India
and the Bombay Stock Exchange, ranks among the top 5 stock brokers in India. With over 6,
00,000 active accounts, it ranks among the top 5 Depositary Participant in India, registered with
NSDL and CDSL. Karvy COM trade, Member of NCDEX and MCX ranks among the top 3
commodity brokers in the country. Karvy Insurance Brokers is registered as a Broker with IRDA
and ranks among the top 5 insurance agent in the country. Registered with AMFI as a corporate
Agent, Karvy is also among the top Mutual Fund mobilizer with over Rs. 5,000 crores under
management. Karvy Realty Services, which started in 2006, has quickly established itself as a
1
broker who adds value, in the realty sector. Karvy Global offers niche off shoring services to
clients in the US.
Karvy has 575 offices over 375 locations across India and overseas at Dubai and New York.
Over 9,000 highly qualified people staff Karvy.
Karvy – Early Days

Karvy the name comes from the names of the directors:
K - Mr. V. Kutumba Rao
A - Mr. K Ajay Kumar
R - Mr. M S Ramakrishna
V - Mr. Vikram Singh
Y - Mr. M Yugandhar
The birth of Karvy was on a modest scale in 1979. It began with the vision and enterprise of a
small group of practicing Chartered Accountants who founded the flagship company …Karvy
Consultants Limited. Karvy started with consulting and financial accounting automation, and
carved inroads into the field of registry and share accounting by 1985. Since then, Karvy have
utilized its experience and superlative expertise to go from strength to strength…to better its
services, to provide new ones, to innovate, diversify and in the process, evolved Karvy as one of
India’s premier integrated financial service enterprise.
GROWTH AND DEVELOPMENT OF KARVY

Over the last 20 years Karvy has traveled the success route, towards building a reputation as
an integrated financial services provider, offering a wide spectrum of services. And Karvy have
made this journey by taking the route of quality service, path breaking innovations in service,
versatility in service and finally…totality in service. Karvy’s highly qualified manpower,
cutting-edge technology, comprehensive infrastructure and total customer-focus has secured for
Karvy the position of an emerging financial services giant enjoying the confidence and support
of an enviable clientele across diverse fields in the financial world.
2
NATURE OF WORK
In India capital markets are experiencing radical reformation. The stricter regulatory
framework along with introduction of information and technology has added more
professionalism to the industry. The most common areas of work in the capital markets, one can
look forward to include the following.
STOCK BROKERS :
Given the present complex situation of our capital markets, stock brokers have to face
challenging tasks. The specialized knowledge and professional acumen required has made the
job of brokers highly skillful. The work of stock brokers depends upon the kind operations they
engage themselves into. Some of the brokers like to practice with individual clients while others
work for institutions. Brokers who work for institutional investors are often called securities
traders.
INVESTMENT ANALYSTS:
Investments in today’s capital markets is not something which can always fructify, based
on mere guesses. It requires thorough scientific research and analysis to make something out of
it. Investment analysts are those who carry out the very same job and help fund managers
manage their investments. They can work as stock broking analysts or as institutional analysts.
The expertise and experience, though it varies from individual to individual, in the subject of
capital markets makes them suitable to handle high value investment decisions of merchant
banks, insurance and pension funds and other financial institutions.
EQUITY ANALYSTS:
Investment markets all over the world are witnessing major changes. Indian markets
are no exception. The amount of professionalism and complexity of financial markets has led to
3
the adoption of most advanced techniques and approach while dealing in securities. Increasing
presence of both domestic and foreign players in the Indian markets has further added to the
demand for having a more systematic approach. Therefore arose the need for professionals who
can specialize in the fields of capital markets. Equity analyst is one such specialist who does
research and helps in systematic and better financial investments. Given the prevailing market
conditions, equity analysts are in for favorable times ahead. There work is quite similar to that of
investment analysts.
PERSONALITY
To deal and attend to different kinds of people is something which everybody cannot
handle with ease and tact. As brokers' job includes handling similar situations, they need to have
a well groomed personality and a knack to convince people. Patience is something; they cannot
afford to lose as it can adversely affect their clientele. Good communication skills also count
when dealing with a variety of people.
Technical aspects of the job of brokers, investment and equity analysts are almost similar
and ask for sharp memory, analytical mind, foresight and logical approach to make projections,
ability to withstand mental stress and handle complex situations as capital markets are highly
susceptible to ups and downs.
CAREER PROSPECTS
Capital markets in India are going through major reform phase. Initiatives taken by SEBI
in the direction to discipline, reform and bring greater transparency in the markets has had
positive effect on the performance. Foreign institutional investors, mutual funds and even
individuals have once again started posing confidence in the capital markets. This has enhanced
prospects for brokers, investment and equity analysts. Even otherwise also, economic growth and
liberalisation taking place in the country has opened number of opportunities in various
organisations like mutual funds, investment consultancy, broker firms, insurance companies,
merchant banks, pension funds and other financial institutions. They can also start their own
consultancies. The present scenario definitely speaks positive of the future of this industry.
4
KARVY-MILESTONES
AT PRESENT STATUS OF KARVY

Presently Karvy is a member of National Stock Exchange (NSE), the Bombay Stock
Exchange (BSE), and The Hyderabad Stock Exchange (HSE). Market analysis and market
predictions are done by professional management team.
KARVY is covering the entire spectrum of financial services such as Stock Broking Services,
Advisory Services, Stock broking, Depository Participants, Distribution of financial products -
mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal
Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs,
among others.
VISION
To achieve & sustain market leadership, Karvy shall aim for complete customer
satisfaction, by combining its human and technological resources, to provide world class quality
5
services. In the process Karvy shall strive to meet and exceed customer's satisfaction and set
industry standards
MISSION
“Our mission is to be a leading, preferred service provider to our customers, and we aim to
achieve this leadership position by building an innovative, enterprising and technology driven
organization which will set the highest standards of service and business ethics.”
QUALITY POLICY
To achieve and retain leadership, Karvy shall aim foe complete customers satisfaction, by
combining its human and Technological resources, to provide superior quality financial Services.
In the process, Karvy will strive to exceed Customer’s expectations.”
QUALITY OBJECTIVES
1. As per the Quality Policy, Karvy will:
2. Build in- house process that will ensure transparent and harmonious relationship with its
clients and investors to provide high quality of services.
3. Establish a partner relationship with its investor service agents and equip them with
adequate knowledge &skills so as to respond to customer’s need.
4. Continue to uphold the values of honesty & integrity and strive to establish unparalleled
standards in business ethics.
5. Use state –of – the art information technology in developing new and innovative financial
products and services to meet the changing needs of investors and clients.
6. Strive to be a reliable source of value-added financial products and services and

constantly guide the individuals and institutions in making a judicious choice of it. Strive to keep
all stake- holders (shareholders, clients, investors and regulatory authorities) proud and satisfied.
KARVY GROUP OF COMPANIES
6
1. Karvy Consultants Limited.
2. Karvy Investors Services Limited.
3. Karvy Stock Broking Limited
4. Karvy Commodities Broking Private Limited
5. Karvy Global Services Limited
6. Karvy Computer share Private Limited.
KARVY CONSULTANTS LIMITED

As the flagship company of he Karvy Group, Karvy Consultants Limited has always
remained at the helm of organizational affairs, pioneering business policies, work ethic and
channels of progress.
Having emerged as a leader in the registry business, the first of the businesses that we
ventured into, we have now transferred this business into a joint venture with computer share
limited of Australia, the world’s largest register, with the advent of depositories in the Indian
Capital market and the relationships that we have created in the registry business, we believe that
we were best positioned to venture into this activity as a Depository Participant. We were one of
the early entrants registered as Depository Participant with NSDL (National Services Depository
Limited), the first Depository Participant with CDSL (Central Depository Services Limited).
Today, we service over 6 lakhs customer accounts in his business spread across over 250
cities/towns in India and are ranked amongst the largest Depository Participants in the country.
With a growing secondary market presence, we have transferred this business to Karvy Stock
Broking Limited (KSBL), our associate and a member of NSE, BE and HSE.
7
Karvy
Karvy
Karvy
Karvy
Karvy
Karvy
Board
Karvy
CMD,
Regional
MD,
of & other
Computers
Consu
Commoditie
Insurance
Investor
Inc.
Stock
Global
Directors
Directors
HQs / Branches
ltants
Broking
hare
sService
Broking
Broking
Pvt.
Limite
Limited
Limited
Limited
Private
Private
Limited
Limited
d
KARVY INVESTORS SERVICES LIMITED

Member – national stock exchange stock exchange (NSE), the Bombay stock exchange
(BSE), and the Hyderabad Stock Exchange (HSE).
Recognized as a leading merchant banker in the country, we are registered with SEBI as a
category I merchant banker. This reputation was built by capitalizing on opportunities ion
corporate consolidations, mergers and acquisitions and corporate Restricting, which have earned
us the reputation of a merchant banker, raising banker, raising resources for corporate of
Government undertaking successfully over the past two decades have given us the confidence to
8
Renew over focus in this sector Our quality professional team and our work – oriented
dedication have propelled us to offer value – added corporate financial services and act as a
professional navigator for long team growth of our clients, who include leading corporate, state
governments, goring institutional investors, public and private sector companies and banks in
Indian and global Markets. We have also emerged as trailblazer in the arena of relationships,
both at the customer and trade levels because of our unshakable integrity, seamless service and
innovative solutions that are tuned to meet varied needs. Our team of committed industry
specialists, having extensive experience ion capital markets, further nurtures relationship.
KARVY STOCK BROKING LIMITED

Karvy stock Broking Limited, one of the cornerstones of the karvy edifice, flows freely
towards attaining diverse goals of the customer through varied services. Creating a plethora of
opportunities for the customer by opening up investment vistas backed by research – based
advisory services. Here growth knows no limits and success recognizes no boundaries. Helping
the customer create waves in hi portfolio and empowering the investor completely is the ultimate
goal.
KARVY COMMODITIES BROKING PIVATE LIMITED

At Karvy commodities, we are focused on taking commodities trading to new dimensions
of reliability and profitability. We have made commodities trading, an essentially age – old,
practice into a sophisticated and specific investment option.
Here we enabled trade in all goods and products of agricultural and mineral origin that
include lucrative commodities like gold and silver and popular items like oil pulses and cotton
through a well – systematized Trading Platform. Our technological and infrastructure strengths
and especially our street – smart skills make us an ideal broker, our service matrix is holistic with
a gamut of advantages, the first and for most being our legacy of human resources, technology
and infrastructure that comes from being part of the Karvy Group.
Our wide national network spanning the length and breadth of India further supports
these advantages, Regular trading workshops and seminars are conducted to hone trading
9
strategies to perfection. Every move made is a calculated one, based on reliable research that is
coveted into Vlasic information through daily, weekly and monthly newsletters calls and
intraday alerts further personalized service is provided here by dedicated team committed to
giving hassle free service while the brokerage rates offered are extremely competitive.
Our commitment to excel in this sector stems from the immense importance those
commodities broking has to a cross – section of investors – farmer’s exporters, importers,
manufactures and the Government of India itself.
STOCK BROKING SERVICES

It is an undisputed fact that the stock markets unpredictable and yet enjoys a high success
rate as a wealth management and wealth accumulation option. The difference between
unpredictability and a safety anchor in the market is provided by in – depth knowledge of market
functioning and changing trends, planning with foresight and choosing one’s options wit care.
This is what we provide in our stock broking services.
We offer services that are beyond just a medium for buying and selling stocks and shares.
Instead we provide services, which are multi dimensional and multi-focused in their scope.
There are several advantages in utilizing our stock broking services, which are the reason why it
is one of the best in the country.
We offer trading on a vast platform – National Stock Exchange, Bombay Stock Exchange
and Hyderabad several risk factors risk factors and planning accordingly. We are assisted in this
Tasaki by our in – depth research, constant feedback and sound advisory facilities, our highly
skilled research team, comprising of technical analysis as wells as fundamental specialists,
secure result – oriented information on market trends, market analysis and market predictions,
this crucial information is given as a constant feedback to our customer through daily reports
delivered thrice daily – the pre-session report, where market scenario for the day is predicted.
The mid-session report, timed to arrive during lunch break, where the market forecast for the rest
of the day is given and the post – session report, the final report for the day, where the market
and the report of the day is reviewed. To add to the repository of information, we publish a
monthly magazine “Karvy – the Finapolis”, which analyzed the latest stock market trends and
takes a close look a the various investment options, and products available in the market, while a
10
weekly report, called “Karvy Bazaar Baatein”, keeps you more informed on the immediate
trends in the stock market. In addition, our specific industry reports give comprehensive
information on various industries, besides this, w also offer special portfolio analysis packages
that provide customized advisory services to help you make the right financial moves that are
specifically suited to your portfolio.
DEPOSITORY PARTICIPANTS
The onset of the technology revolution in financial services industry saw the emergence
of Karvy as an electronic custodian registered with National securities depository Ltd., (NSDL)
and Central securities Depository Ltd., (CSDL) in 1998. Karvy set standards enabling further
comfort to the investor by promoting paperless trading across the country and emerged as the top
3 depository particulars in the country in terms of customer serviced.
Offering a wide trading platform with a dual membership at both NSDL and CDSL We
are a powerful medium for trading and settlement of dematerialized shares. We have established
live DPM, internet access to accounts and an easier transaction process in order to offer more
convenience to offer more convenience to individual and corporate investors, a team of
professional and the latest technology expertise allocated exclusively to our demat division
including technology expertise allocated exclusively to our demat division including
technological enhancement like SPEED – e, make our response time quick and our delivery
impeccable. A wide national network makes our efficiencies accessible to all.
DISTRIBUTION OF FINANCIAL PRODUCTS

The paradigm shift from pure selling to knowledge based selling drives the business
today. With our wide portfolio offerings, we occupy all segments in the retail financial services
industry.
A 1600 team of highly qualified and dedicated professional drawn form the best of
academic and professional backgrounds are committed to maintaining high levels of client
11
service delivery. This has propelled us to a position among the top distributors for equity and
debt issues with an estimated market share of 15% in terms of application mobilized, besides
being established as the leading procure in all a public issues.
To further tap the immense growth potential in the capital markets we enhanced the scope
of our retail brand, Karvy – the Finapolis, thereby providing planning and advisory services to
the mass affluent. Here we understand the customer needs and lifestyle n the context of present
earnings and provide adequate advisory services that will necessarily help in creating wealth.
Judicious planning that is customized to meet the future needs of the customer, deliver a service
that is exemplary. The market – savvy and the ignorant investors, both find this service very
satisfactory. The edge that we have over competition is our portfolio of offerings and our
professional and our professional expertise. The investment planning for each customer is done
with an unbiased attitude so that the service is truly customized.
Our monthly magazine, Finapolis, provides up – dated market information on market

trends, investment options, opinions etc., thus empowering the investor to base every financial
move on rational thought and prudent analysis and embark on the path to wealth creation.
ADVISORY SERVICES
Under our retail brand ‘Karvy – the Finapolis, we deliver advisory services to a cross –
section of customers. The service is backed by a team of dedicated and expert professional with
varied experience and background in handling investment portfolio. They are continually
engaged in designing the right investment portfolio in handling investment portfolio for each
customer according to individual needs and budget consideration with a comprehensive support.
System that focuses on trading customer’s portfolio and providing valuable inputs,
comprehensive support system that focuses on trading customer’s portfolios and providing
valuable inputs monitoring and managing the portfolio through varied technological initiatives.
RESEARCH PRIVATE CLIENT GROUP
12
This specialized division was set up to cater to the high net worth individuals and
institutional clients keeping in mind that they require a different and kind of financial planning
and management that will augment not just existing finances but their life – style as well. Here
we follow a hard – nosed business approach with the soft touch of dedicated customer care and
personalized attention.
For this purpose we offer a comprehensive and personalized service that encompasses
planning and protection of finances, planning of business needs and retirement needs and a host
of other services, all provided on a one – to – one basis.
Our research reports have been widely appreciated by this segment. The delivery and
support modules have been fine tuned by giving our clients access to online portfolio
information, constant updates on their portfolios as well as value – added advise on portfolio
churning, sector switches etc., the investment recommendations given by our research team in
the cash market has enjoyed a high success rate.
KARVY GLOBAL SERVICES LIMITED

The Specialist Business Process outsourcing unit of the Karvy Group. The legacy of
expertise and experience in financial services of the Karvy Group serves us well as we enter the
Global arena with the confidence of being able to deliver and deliver well.
Here we offer several delivery models on the understanding that business needs are
unique and therefore only a customized service could possibly fir the bill. Our service matrix
has permutations and combinations that create several options to choose from.
Be it re-engineering and managing process or delivering new efficiencies, our service

meets up to the most stringent of international standards. Our outstanding models are designed
for the global customer and are backed by sound corporate and operations philosophies, and
domain expertise. Providing productivity improvements, operational cost control, cost savings,
improved accountability and a whole grant of other advantages.
We operate in the core market segments that have emerging requirements for specialized
services. Our wide vertical market coverage includes banking financial and insurance services
(BFIS), Retail and merchandising, leisure and Entertainment, Energy and Utility and Healthcare.
13
Our Horizontal offerings do justice to our stance as a comprehensive BPO unit and
include a variety of services in Finance and Accounting Outsourcing operations, Human
Resource Outsourcing operations, research and Analytics Outsourcing operations and insurance
Back Office Outsourcing Operations.
KARVY COMPUTER SHARE PVT.LTD.

We have wide spaces to tie up with the world’s largest transfer agent, the leading
Australian Company, Computer share Limited. The company that services more than 75 million
share holders across 7000 corporate clients and makes its presence felt in over 12 countries
across 5 continents has entered i9nto a 50 – 50 joint venture with us.
With our management team completely transferred to this new entity, we will aim to entice the
financial services industry than before. The future holds new arenas of client servicing and
contemporary and relevant technologies as we are geared to deliver better value and foster bigger
investments in the business. The worldwide network of Computer share will hold us in good
stead as we expect to adopt international standards in addition to leveraging the best of
technologies from around the world.
Excellence has to be the order of the day when tow companies with such similar ideologies of
growth, vision and competence, get together.
MUTUAL FUND SERVICES

We have attained a position of immense strength as a provider of across – the – board
transfer agency services to AMCs, Distribution and investors.
Nearly 40% of the top – notch AMCs including prestigious clients like deutsche AMC
and UTI swear by the quality and range of services that we offer. Besides providing the entire
back office processing, we provide the link between various mutual funds and the investor,
including services to the distributor, the prime channel in this operation.
14
Carrying the ‘Limitless’ ideology forward. We have explored new dimensions in every
aspect of Mutual Fund servicing right from volume management, cost effective pricing, and
delivery in the least turnaround time, efficient back – office and from – office operations to
customized service. We have been with the AMCs every step of the way, helping them serve
their investors better by offering them a diverse and customized range of services. The ‘first to
market’ approach that is our anthem has earned us the reputation o an innovative service
provider with a visionary bent of mind.
OUR ALLIANCES
Karvy Computer share Private Limited is a 50:50 joint venture of Karvy Consultants
Limited and Computer share Limited, Australia. Computer Share Limited is World’s Largest
and only global – share registry, and a leading financial market services provider to the global
securities Industry.
The joint venture with Computer share, reckoned as the largest registrar in the world,
servicing over 60 million shareholder accounts for over 7,000 corporations across eleven
countries spread across five countries. Computer share manages more than 70 million
shareholder accounts for over 13,000 corporations around the world.
Karvy Computer share Private Limited, today, is India’s registrar and share transfer agent
servicing over 300 corporate and mutual funds and 16 million investors.
C) Karvy Services
1) IT enabled services
2) Stock Broking Services
3) Depository Participant
4) Advisory Services
5) Merchant Banking
6) Karvy As An Investment Banker
15
7) Management of Capital Issues
8) Management of Buybacks and Take-avers
9) Private Placement of Debt and Equity
10) Mergers and Amalgamations
11) Karvy in Loan Syndications
12) Karvy Insurance Broking Pvt. Ltd.,
13) Computer share Pvt Limited
14) Mutual Fund Services
15) Corporate Shareholder Services
AREA OF OPERATION:
Karvy Ltd is India’s leading online retail broking house.It has international presence
(Usa ,soudiarebia and australia) with over 1000 outlets serving 10,70,000 customers across 400
cities. Karvy offers services like Portfolio Management, trade execution in equities, futures &
options, commodities and distribution of mutual funds, insurance and structured products.Karvy
is the retail broking arm of SSKI, securities pvt ltd. SSKI owns 56% in Karvy, balance
ownership is
OWNERSHIP PATTERN:
KARVY, India‘s leading stockbrokers the real arm of SSKI, an Organization with
over eight decades of stock market experience. With more than 175 share shops in over 80 cities,
and a presence on internet through Online Share Trading Portal India, Stock
Brokers Company India, India’s premier online trading destination.
16
Competitor information:
1. Bajaj Capital
It was established in 1964 at Delhi. In 1965 it innovates a new financial instrument

‘Companies Fixed Deposits’ and becomes the first company to raise Fixed Deposits. The
objective of company is to provide professional guidance to investors on where, when and how
to invest and to assist the corporate sector in its resource raising activities. Bajaj Capital became
the first company to set up ‘Investment Centers’ all over India for this purpose. Today, Bajaj
Capital has 90 offices in over 40 important Indian Cities and has a team of around 500
employees nationwide.
2.MCS Ltd.
It is established in 1985 in Delhi. It is one of the largest Data Processing House employing
more than 600 people.
Volumes Handled
Share registry activities for over 100 corporate servicing over 10 million investors.Mutual
fund operations for 25 funds, servicing over 4.5 million investors.Billing & settlement plan for
Indian operations of IATA Geneva for 1.2 million tickets per annum covering (26 airlines & over
1200 agents).
Services Offered:
➢ Registrars and Transfer Agents
➢ Registrars to IPO’s /Right Issues
➢ Registrars to Open Offers
➢ Registrars to Mutual Funds
➢ Data Processing for Airlines
➢ Print Shop Services
17
MCS is a major player in these activities in the Country with a market share of about 25%. MCS
today provides these services to over 140 Corporate and Mutual Funds for a total investor base of
15 million.
3. N.J.India Investments Pvt. Ltd.
NJ India Invest (formerly known as NJ Capital stocks) was started in 1994 to cater to the
growing financial services sector. NJ India Invest evolved out as a client focused need based
investment advisory firm. NJ regards mutual fund as one of the best investment avenue available
to satisfy any kind of investment need.
4. ICICI Securities Ltd.
ICICI Securities Limited (i-SEC) is a wholly owned investment-banking subsidiary of

ICICI Limited. ICICI is the only non-Japanese Asian financial institution to be listed on the
New York Stock Exchange (NYSE). ICICI Securities was formed on 22nd Feb. 1993, when
ICICI's Merchant Banking Division was spun off into a new company; ICICI Securities today is
India's leading Investment Bank and one of the most significant players in the Indian capital
markets. ICICI Brokerage Services Limited (IBSL) set up in March 1995; IBSL is a 100%
subsidiary of i-SEC. It commenced its securities brokerage activities in February 1996 and is
registered with the National Stock Exchange of India Limited and The Stock Exchange,
Mumbai. ICICI has started a website ICICIdirect.com which is the most comprehensive website,
which allows you to invest in Shares, Mutual funds, Derivatives (Futures and Options) and other
financial products. ICICI has a large network of branches all over India.
Services offered:
➢ Merchant Banking
➢ Demat Service
➢ Stock Broking
5. HDFC
18
HDFC is the leading financial company in India. IT has large network of branches all over
India. HDFC Securities which is fully subsidiary of HDFC provides demat service. HDFC and
its subsidiary provides following services.
➢ Demat Service
➢ Life Insurance
➢ Banking Service
➢ Housing Finance
➢ Vehicle Finance
➢ Education Loan
➢ Personal Loan
➢ Mutual Fund
6. Kotak Securities Ltd.
Kotak Securities needs no introduction as one of the largest stock broking houses in the
country and a leading distributor of primary market offerings. Kotak Securities limited is a joint
venture between Kotak Mahindra Bank and Goldman Sachs, the international investment
banking and brokerage firm. Kotak Securities is a corporate member of both the BSE and the
NSE. It is also a depository participant with the National Securities Depository Limited (NSDL)
for trading and settlement of dematerialized shares.
Services offered:
• Stock Broking
• Financial Product Distribution
• Demat Services
• Investment Advisory Service.
INFRASTRUCTURAL FACILITY:
19
• Vehicle parking facility for client and employee
• Free statement of account through mail
• Facility of separate computer is being given each staff
• Printer and phone facility to all branches
• All branches are computerize
ACHIEVEMENTS:
• Largest mobiliser of funds as per PRIME DATABASE
• Among the top 5 stock brokers in India (4% of NSE volumes)
• India's No. 1 Registrar & Securities Transfer Agents)
• A Category- I -Merchant banker.
• Among the two top 3 Depository Participants
• Largest Network of Branches & Business Associates
• First ISO - 9002 Certified Registrar in India
• Among top 10 Investment bankers
Work flow diagram:
○ The work flow model starts with giving information to the customer regarding securities,
stock market , investing in shares, their benefits etc.
○ The applications of the investors will be screened in order to ensure the financial
efficiency and trust worthiness of the customers.
The customers who will possess all the required qualification are allowed to open an account.
The essentials to open an account are as follows
20
Bank account with check book.
Permanent account number {PAN card}
○ The investor who want to invest in stocks has to open demat account and trading account.
Demat account is the dematerialization of shares that is instead of keeping shares in the physical
form investor can have it in the electronic form.
Trading account refers to investor account opened to maintain his share holdings and his
transaction.
○ As soon as an investor open a demat account, the company will give an investor id which
will help him to carry out trading in a separate account.
The investors who are willing to trade off line, the company’s employees will trade on behalf of
them.
The investors who are willing trade by themselves will be given software which will
support trading and he will be trained by the company regarding trading.
○ The company will give regular information regarding the market movements and the
guidelines to the investors based on their preferences.
The company will be having a group of security analysts who will be having constant eye on
market and analyze each company’s performance based on
 Fundamental analysis
 Technical analysis
According to their study they will give suggestions to the investors for buying and selling of
shares.
 The securities will be bought and sold on behalf of investors in case of offline trading.
 The generally preferred method is to buy a company’s share on bad news and sell it
during good news.
 T+2 days refer to the settlement of account on trading day + 2 days. In case of purchase
of the shares the shares will be transferred to the investors account on that day, or in
case of selling of shares the amount will be transferred
21
FUTURE GROWTH AND PROSPECTUS:

• From the last decade because of globalization, liberalization Indian economy is
considerably developing and also providing new business opportunities
• Increasing client strength
• provide better client service
• Continue up gradation of skill by imparting training to the staff
• To introduce new product and service
• Enhancing the business expansion into new geographical area by setting new
Branches
• Beating the competition
FUNCTIONAL DEPARTMENTS OF KARVY

In Karvy the functions are mainly divided into two parts namely Operational Functions
and the Supporting Functions.
OPERATING FUNCTIONS:
Registry and Investor Services (RIS) in which Karvy carry out functions as Registrar
& transfer Agent (RTA), and Registrar to the Issues. Financial Product Distribution (FPD),
Here financial products include Mutual Funds, Fixed income securities, bonds, fixed deposits,
Tax-saving Products, Insurance, etc. Stock Broking Services and Depository Participant (DP),
which are explained in Service Profile of the Karvy group of companies.
22
SUPPORTING FUNCTIONS:
Administration - Purchase and Stores Department
Administrati
HOD
Assistant
onHOD
Team
Responsibilities
23
• To ensure preventive breakdown of equipment/accessories including computer hardware
• To ensure speedy breakdown maintenance
• To ensure that the maintenance status of all equipment/ accessories is entered in the
service
• To ensure that the maintenance is carried out efficiently
Maintenance includes preventive, breakdown and general maintenance. Preventive

maintenance shall be done as per the prefixed time schedule by the subcontractors for the
purpose. The administration in charge shall make necessary arrangements for this purpose.
Accounts Department
Finance operations in Karvy are centralized at the Head Office Account. Periodic fund
requirement at the regional level will be sort as and when required. But all cheques and such
instruments would be signed by the local regional manager.
System Administration Department
24
Asst.
Dy.Manager
Dy.Manager
General
Manager
In this department the functions include Trouble shooting, desktop queries, Network problems,
Software and Hardware problems, Installation of new systems, creating new networks.
Mc KINSEY’S 7S MODEL
25
STRATEGY:
In modern times the word strategy has found its way into the management field. In the
context of a business concern, strategy indicates specific program of action for achieving the
organization objectives by employing the firm’s resources efficiently and economically. It
involves preparing oneself for meeting unforeseen factor. It is also concerned with meeting the
challenges posed by the policies and actions of other competitors in the market.
STRUCTURE:
Board of Directors
Mr. C Parthasarathy (Chairman and Managing Director), Mr. M Yugandhar (Managing

Director ), Mr. M S Ramakrishna (Director ), Mr. Prasad V Potluri (Director), William Stuart
Crosby (Chairman – Karvy Computer share Pvt Ltd.), Chandra Balaraman(Director– Karvy
Computer share Pvt Ltd.), Mark Davis(Director– Karvy Computer share Pvt Ltd.), Mr. Uday
Raval(Director - Karvy Inc. )
Karvy’s organization structure can be viewed as accomplishing departments Operations

Divisions and Support Function Division.
Below the Operations Divisions there are sub divisions namely Registry and Investor Services
(RIS), Depository Participant (DP), Broking Services, Financial Product Distribution (FPD).
26
Below the Support Functions, there are sub divisions namely Accounts, System, Human
Resource Development, and Administration, Purchase & Stores.
SYSTEM:
KARVY covers the entire spectrum of financial services such as Stock broking, Depository
Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities,
Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant
Banking & Corporate Finance, placement of equity, IPOs.
A link called ‘Resource Center’, devoted solely to research. Karvy’s highly skilled research
team, comprising of technical analysts as well as fundamental specialists, secure result-oriented
information on market trends, market analysis and market predictions. This crucial information is
given as a constant feedback to its customers, through daily reports delivered thrice daily; The
Pre-session Report, where market scenario for the day is predicted, The Mid-session Report,
timed to arrive during lunch break, where the market forecast for the rest of the day is given and
The Post-session Report, the final report for the day, where the market and the report itself is
reviewed. To add to this repository of information, Karvy publish a monthly magazine The
Finapolis, which analyzes the latest stock market trends and takes a close look at the various
investment options, and products available in the market, while a weekly report, called Karvy
Bazaar Baatein, gives more information on the immediate trends in the stock market. In addition,
its specific industry reports give comprehensive information on various industries.
STYLE:
An activity like forecasting and planning are made by top level managers. Major policies
and plans are made by top management and it is implemented and administered by employees. In
the organization the style of informal communication and meetings with employees has created
workers to a friendly environment.
STAFF:
27
The term staff refers to manpower planning, recruitment, performance appraisal,

motivation and morale.
SKILLS:
The managers and workers in each department are skilled to the extent of functions they
perform. Directors of the company are skilled in every activities and disciplines of organization.
A 1600 team of highly qualified and dedicated professionals drawn from the best of academic
and professional backgrounds are committed to maintaining high levels of client service
delivery. This has propelled Karvy to a position among the top distributors for equity and debt
issues with an estimated market share of 15% in terms of applications mobilized, besides being
established as the leading procurer in all public issues.
A link called ‘Resource Center’, devoted solely to research. Karvy’s highly skilled research
team, comprising of technical analysts as well as fundamental specialists, secure result-oriented
information on market trends, market analysis and market predictions.
SHARED VALUES:
Employees at each level of organization are conscious about delivering customer value for
his money. Each and every employee understands the mission and vision of the company.
Employees of company are committed towards the quality aspects in service. The employees of
Karvy themselves put forward in fulfilling the organizational principles for betterment of
organization
SWOT ANALYSIS
STRENGTHS
1. It is located in a place where good infrastructure is available.
2. The company is concentration towards the quality of the products.
28
3. The technological standard of the company.

4. The co-operative principal, which has laid the foundation of the company.
5. Certificate like ISO9002
WEAKNESS
1. The company needs improvement and should concentrate on timely customer service.
2. The promotion procedure in the organization is too rigid.
3. The company has to focus more on sales.
OPPURTUNITIES
1. Since karvy has a well known brand, it has opportunity to diversify in to other business.
2. It has got infrastructure to expand the product and services.
THREATS
1. Stiff competition from other stock brokers
LEARNING EXPERIENCE
Karvy has a vast variety of products and services and providing good services to customers
and I came to know about commodity and capital market in detail. And how to make trading.
During the conduct of survey I have studied lot about differint market like commodity and
capital and also came to know about client’s behavior towards trading point of view.
29
So I got overall knowledge regarding commodity and securities market and I came to know
about fluctuations of different company’s shares and different commodities.
I learnt more about different commodities and securities and I came to know about
commodities which were traded at the stock exchange of market index.
Commodities market essentially represents another kind of organized market just like the
stock market and the debt market. However, commodities market, because of its unique nature
lends to the benefits of a wide spectrum of people like investors, importers, exporters, producers,
corporate, etc.,
Commodity Exchanges (MCX and NCDEX) function from 10.00 Am to 11.30 PM with a
break of 30 minutes between 5.00 PM and 5.30 PM. However some specific commodities with
strong international price linkages (such as Gold, Silver, Soy oil, Crude Oil etc) are allowed to be
traded after 8.00 PM.
Commodity prices are generally less volatile than the stocks and this has been statistically
proven. Therefore it's relatively safer to trade in commodities
The securities market has two interdependent and inseparable segments, the new issues
(primary market) and the stock (secondary) market. The primary market provides the channel for
sale of new securities while the secondary market deals in securities previously issued. The price
signals, which subsume all information about the issuer and his business including associated
risk, generated in the secondary market, help the primary market in allocation of funds. The
issuers of securities issue (create and sell) new securities in the primary market to raise funds for
investment and/or to discharge some obligation.
Stock prices change every day by market forces. By this we mean that share prices change
because of supply and demand. If more people want to buy a stock (demand) than sell it
(supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it,
there would be greater supply than demand, and the price wouldfall.
Understanding supply and demand is easy. What is difficult to comprehend is what makes people
like a particular stock and dislike another stock. This comes down to figuring out what news is
positive for a company and what news is negative
30
Investors are looking to put their money in assets which give decent returns even if the
stock markets are tumbling. For example, the value of a piece of art may rise if the inflation is on
the rise irrespective of the performance of stock markets.
PART-B
TITLE OF PROJECT
A study on Analysis of commodity market with capital market
STATEMENT OF THE PROBLEM
To know the comparisons between commodity and capital market at the trading point of
view.and also to analyise which is the best investment alternative.
31
In the past few years of the commodity and security market in India, little has been done
to educate and familiarize people with these products by the concerned institutions. With the
increase in liquidity in this market, the benefits of hedging risk using commodity and security
could be fully enjoyed by the investors, fund managers etc., resulting in a safe and secure market
place. A major need for accomplishing this at this juncture is to increase investors’ awareness
and education. The potential loss that could arise due to the volatility of securities market also
needs to be explained to those who use commodities for appreciation of the benefits of the
market.
DESIGN OF THE STUDY:
OBJECTIVE OF THE STUDY:

The objectives of this study can be divided into
Primary objective
 Comparison of commodity market with capital market
Secondary objective
 To know the risk involved in different market.
 To know the investment patterns of the investors in commodity and capital market.
 To know the awareness of customers towards commodity and capital market
SCOPE OF THE STUDY:

The problem stated by karvy is to make comparison between commodity and capital
market and investment patterns of the High Net-worth Individual investors (HNIs) in Haveri.
The study undertaken is the analysis of the different market and investment pattern of
Individuals where various independence variables are studied so as to know which variable or
variables can go a long way in explaining the investment preferences of the targeted respondents
of this high potential market. It also urges to know the current market trend and competitors
performance vis-à-vis karvy share market.
METHODOLOGY OF DATA COLLECTION
32
Primary data was collected from 100 respondents using a schedule of questions
Secondary data was collected mainly from the Internet, printed journals on the capital markets
of India and commodity market, newspaper articles and books written on the Indian stock
markets
LIMITATIONS
While completing this study, there were some constraints. They were:
 Sample size: Due to constraints on time, the sample size had to be limited at 100.
This, by and large, may not represent the entire community of the Indian investor.
 This data gives a view of investors at karvy only. The investors at other brokerage
houses have not been taken into consideration. It is assumed however that the views of online
investors would not di ffer much.Tele – calling: Most of the data collection was done by tale
calling, which caused hindrance in time and also in obtaining precise and correct information.
Tele-calling caused problems like clients questioning the authority of the caller and providing
inaccurate information.
33
COMMODITIES MARKET
Commodities' trading in India is on the cusp of transformation. Organized commodities
trading as a professional service-oriented set-up, is a recent phenomenon in India but is growing
at a tremendous pace, emerging as the largest and most exciting service sectors of this
decade.
In order to match up with this phenomenal growth and pace, there is always going to be a
need for passionate, trained commodities professionals. In addition, the fast changing
commodities sector demands that professionals learn new skills, improve their efficiency, learn
to compete and think out of the box. All this requires an education that is intensive,
comprehensive and closely linked to the commodities derivatives market, through experiment
learning. Over the last couple of years, MCX has been recognized as an exchange, which adds
immense intellectual, cultural and professional energy to the industry on a continuous basis. It
believes in innovation - innovation both in theory and practice to meet the needs of the industry
not only today but into the future.
The training department of MCX has been in the vanguard of knowledge dissemination
across a wide spectrum of participants in the commodity industry, more than 3,000 individuals
have directly benefited from the various training programs conducted by the exchange during the
year 2005-06, in line with the pace of growth of the commodity market in India.
Commodities market essentially represents another kind of organized market just like the
stock market and the debt market. However, commodities market, because of its unique nature
lends to the benefits of a wide spectrum of people like investors, importers, exporters, producers,
corporate, etc.,
What can commodities market offer?

Advantages to an investor, commodities futures represent a good form of investment
because of the following reasons.
 High Leverage – The margins in the commodity futures market are less than the
F&O section of the equity market.
 Less Manipulations - Commodities markets, as they are governed by international

price movements are less prone to rigging or price manipulations.
34
 Diversification – The returns from commodities market are free from the direct
influence of the equity and debt market, which means that they are capable of being used as
effective hedging instruments providing better diversification.
Advantages to Importer or an exporter,

Hedge against price fluctuations – Wide fluctuations in the prices of import or export products
can directly affect to Importer or an exporter bottom-line as the price at which you import/export
is fixed before-hand. Commodity futures help Importer or an exporter to procure or sell the
commodities at a price decided months before the actual transaction, thereby ironing out any
change in prices that happen subsequently.
Advantages to Producer of a commodity, futures can help as follows:
 Lock-in the price for your produce – If you are a farmer, there is every chance that
the price of your produce may come down drastically at the time of harvest. By taking positions
in commodity futures you can effectively lock-in the price at which Producer wish to sell your
produce.
 Assured demand – Any glut in the market can make Producer wait unendingly for a
buyer. Selling commodity futures contract can give Producer assured demand at the time of
harvest.
 Control your cost – If Producer is an industrialist, the raw material cost dictates the
final price of Producer output. Any sudden rise in the price of raw materials can compel
Producer to pass on the hike to Producer customers and make your products unattractive in the
market. By buying commodity futures, Producer can fix the price of their raw material.
 Ensure continuous supply – Any shortfall in the supply of raw materials can stall
Producer production and make Producer default on Producer sale obligations. Producer can
avoid this risk by buying a commodity futures contract by which Producer are assured of supply
of a fixed quantity of materials at a pre-decided price at the appointed time.
35
Trade from anywhere in India

Karvy, with its network of branches across the length and breadth of the country, is always
within customer’s reach, no matter where Producer is. This gives the facility to trade from
anywhere in India.
Personalized Services Karvy, with its wide array of personalized services from registry to
stock broking takes the pleasure of adding one more service, commodities broking with the same
personal touch.
State of Infrastructure
The strong IT backbone of Karvy helps us to provide customized direct services through
our back office system, nation-wide connectivity and website.
Round the clock operations in commodities trading

Indian commodities market, unlike stock market keeps awake till 11.30 in the night and
Karvy is all poised to offer round the clock services through its dedicated team of professionals.
To open the commodities trading account.

The account opening forms are available at at branch offices and with karvy business
associates. People are requested to kindly contact a branch nearby area and complete the account
opening formalities for commodities trading branches.
Also people can take a print out and fill out a simple account opening form from our website and
complete the necessary documentation as per the checklist enclosed in the form. The form after
duly filled up may be deposited at the nearest Karvy Branch or Associate along with a
cheque/DD favouring “Karvy Comtrade Limited” payable at Hyderabad towards initial margin.
Please remember the Member-Client agreement has to be executed on a non-judicial

stamp paper, as per the applicable by the ‘Stamp Duty Act’ of the relevant state.
36
1. Deposit Initial Margin:

You need to deposit an initial upfront margin as specified by the exchange (usually between 5-
10% of the contract value). The cheque/DD should be in favour of “Karvy Comtrade Limited”
2. Mark to Market Margin:

In addition to initial margin, you also need to keep a mark to market margin for taking care of the
adverse price movements, if any.
3. Duly filled up Client Registration form may be sent to the address below or to any
nearby Karvy branch:
Karvy Comtrade Limited

46, Avenue 4, Street No. 1,Banjara Hills,Hyderabad – 500 034.Andhra Pradesh.
Following are e the commodities traded in MCX.
Gold, Gold M, Gold HNI, Silver, Silver M, Silver HNI
Castor Seeds, Soy Seeds, Castor Oil, Refined Soy Oil, Soymeal, RBD
Palmolein, Crude Palm Oil, Groundnut Oil, Mustard Seed, Mustard Seed
Oil, Cottonseed Oilcake, Cottonseed
Pepper, Red Chilli, Jeera, Turmeric
Steel Long, Steel Flat, Copper, Nickel, Tin
Kapas, Long Staple Cotton, Medium Staple Cotton
Chana, Urad, Yellow Peas, Tur
37
Rice, Basmati Rice, Wheat, Maize, Sarbati Rice
Crude Oil
Following are the commodities traded in NCDEX
38
Agro
Products
National Commodities and Derivatives Exchange, NCDEX
COMMODITY UNIT OF UNIT OF YIELD/Re. TIC YIELD/TI

PRICE TRADING MOVEMENT SIZE C or TIC
QUOTATION or VALUE
TIC
PRECIOUS METALS
GOLD 10gm 100gm 10.00 1.00 10.00
KILO GOLD 10gm 1000gm 100.00 1.00 100.00

SILVER 1KG 5KG 5.00 1.00 5.00
39
MEGA 1KG 30KG 30.00 1.00 30.00

SILVER
\National Commodities and Derivatives Exchange, NCDEX

TIC
UNIT OF UNIT OF YIELD/TIC
YIELD/Re. SIZE
COMMODITY PRICE TRADIN or TIC
MOVEMENT or
QUOTATION G VALUE
TIC
PRECIOUS METALS
GOLD 10gm 100gm 10.00 1.00 10.00
KILO GOLD 10gm 1000gm 100.00 1.00 100.00
SILVER 1KG 5KG 5.00 1.00 5.00
MEGA
1KG 30KG 30.00 1.00 30.00
SILVER
SOYA 1QT 10MT 100.00 0.05 5.00
SOYA OIL 10KG 10MT 1000.00 0.05 50.00
CHANA 1QT 10MT 100.00 1.00 100.00
GAUR SEEDS 1QT 10MT 100.00 1.00 100.00
TUR 1QT 10MT 100.00 1.00 100
URD 1QT 10MT 100 1.00 100
CHILLI 1QT 5MT 50 1.00 50
TURMERIC 1QT 10MT 10 1.00 10
PEPPER 1QT 1MT 10.00 1.00 10.00
WHEAT 1QT 10MT 100 0.20 20
CASTOR 20KG 10MT 500 0.10 50
Multi-Commodity Exchange, MCX
COMMODITY UNIT OF UNIT OF YIELD/Re. TIC YIELD/TIC

PRICE TRADIN MOVEMENT SIZE or TIC
40
or
QUOTATION G VALUE
TIC
PRECIOUS METALS
GOLD-M 10gm 100gm 10.00 1.00 10.00
GOLD 10gm 1KG 100.00 1.00 100.00
SILVER-M 1KG 5KG 5.00 1.00 5.00
SILVER 1KG 30KG 30.00 1.00 30.00
CRUDE 1BBL 100BBL 100 1.00 100
AGRICULTURAL PRODUCTS
SOYA 1QT 10MT 100.00 0.05 5.00
SOYA 1QT 10MT 100.00 0.05 5.00
MENTHA OIL 1KG 360KG 360 0.10 36.00
POTATO 1QT 30MT 300 0.10 30.00
KAPAS
50KG 5MT 100 0.10 10.00
KHALI
CARDAMOM 1KG 500KG 500 0.50 250
INDUSTRIAL METALS
STEEL LONG 1MT 10MT 10.00 1.00 10
Eg::take a gold for trading if there is a movement of 1 rupee in the tick size there wil be yeild of
5 rupees for every 10 gm and the lot size is 100 gm i:minimum purchase of precious metal gold
is 100 gm .
Note: NCDEX introduced trading on Saturdays in all eligible contracts with effect from May 15,
2004
A commodity derivative derives its value from an underlying asset, which is necessarily a
commodity. To understand the commodity derivatives markets it’s necessary to clear about’
commodities’. Commodities, in simple words are any goods that are common and unbranded.
Gold, silver, rubber, pepper, jute, wheat, sugar, cotton etc., are some of the common
commodities. For e.g. apple juice can be a commodity whereas the ‘Real’ apple juice cannot be
called a commodity. Customers may be surprised to know that in the US commodities markets
there are futures available even on cattle. Another feature of commodities is that they are
41
commonly available. Commodity markets represent the formal system for the interplay of
demand for and supply of commodities. These markets can be broadly classified into spot market
and futures market. Commodities for immediate delivery are traded through the spot market. The
players in the spot market are the actual producers and the consumers of the commodities.
The other type of market called the ‘Futures market’ is for facilitating contracts for future
delivery. (Please go through the material on ‘Futures and Options’ to understand about futures)
These markets make available for trading, the various derivatives based on commodities. Usually
traded ones are the futures and options. However in India options on commodities are not
available and are expected to be introduced soon. The players in the futures markets are Hedgers,
Arbitragers and investors. Hedgers are those who hold simultaneous positions in the spot market
also. These are generally the actual consumers or the producers of the commodities. For eg: A
wheat farmer who expects his harvest to be over in 3 months time may sell a futures contract
with an expiry of three months, so that even if the prices happen
The large scale consumers of the products can also make use of the futures to secure their
purchase. For eg: A cool drinks can manufacturing company may buy tin futures, so that even if
the prices happen to rise later, they can be assured of the supply of raw materials at the pre-
determined price. The other major group of participants in the commodity futures market is the
importers and the exporters. Since they have confirmed obligations to /import fixed quantity of
commodities at a particular period of time, they can take opposite positions in the futures market.
Arbitrage is a process of making profits using the price differences between two markets without
exposing oneself to any risk. Arbitraging is a very profitable business. It is possible to arbitrage
between two different futures markets or between the futures market and the spot market.
However in an ‘efficient’ market arbitraging is not possible, because any price gap is closed
immediately as soon the arbitragers enter the market. Investors are those who participate in the
market for profits and are ready to face the risk involved in the market. An investor can be
anyone from an individual who has a small surplus income to the treasury desks of banks and
corporate. Most commonly traded derivatives around the world are futures, options and option
futures.
Some of the most popular commodity exchanges in the world are listed below:
42
 London Metals Exchange, London
 New York Mercantile Exchange, New York
 Chicago Mercantile Exchange, Chicago
 Chicago Board of Trade, Chicago
 London International Financial Futures and Options Exchange (LIFFE), London
 Tokyo Commodity Exchange, Tokyo
 Winnipeg Commodity Exchange, Canada
Participants
Individual investors
Policy makers
Commodity exchanges
Commodity and hedge fund managers
Consulting firms
Regulatory authorities
Research organisation
Cororate houses
What are the major commodity Exchanges?

The Government of India permitted establishment of National-level Multi-Commodity
exchanges in the year 2002 and accordingly three exchanges have come into picture. They are:
 Multi-Commodity Exchange of India Ltd, Mumbai (MCX).
 National Commodity and Derivatives Exchange of India, Mumbai (NCDEX).
 National Multi Commodity Exchange, Ahmedabad (NMCE).
43
What are the working hours for the commodity exchanges?

Commodity Exchanges (MCX and NCDEX) function from 10.00 Am to 11.30 PM with a
break of 30 minutes between 5.00 PM and 5.30 PM. However some specific commodities with
strong international price linkages (such as Gold, Silver, Soy oil, Crude Oil etc) are allowed to be
traded after 8.00 PM.
Who regulates the commodity exchanges?

Just as SEBI regulates the stock exchanges, commodity exchanges are regulated by
Forwards Market Commission (FMC); Forwards Market Commission is under the purview of the
Ministry of Food, Agriculture and Public Distribution.
How risky are these markets compared to stock & bond markets?
Commodity prices are generally less volatile than the stocks and this has been statistically
proven. Therefore it's relatively safer to trade in commodities.
Also the regulatory authorities ensure through continuous vigil that the commodity prices are
market-driven and free from manipulations.
However all investments are subject to market risk and depends on the individual decision. There
is risk of loss while trading in commodity futures like any other financial instruments.
How the deliveries are made possible?

The exchange has enlisted certain cities for specific commodities as the delivery centers.
The seller of commodity futures, upon expiry of the contract may choose to deliver physical
stock instead of settling the positions by cash, in which case he would be required to deliver the
stocks to the specified warehouses. The buyer of the commodity futures, if he is interested in
physical delivery would be matched with a seller and would be required to take delivery of the
specified quantity of stock from the designated warehouse. Worldwide commodity futures are
generally used for hedging and speculation and hence physical deliveries are negligible.
However the possibility of physical delivery has made these markets more attractive in India.
44
Both NCDEX and MCX have successfully completed physical delivery in bullions and various
agro-commodities.
In case of NCDEX it is mandatory to open a Demat account with an approved DP by the buyer
and seller if they wish to take/ give delivery of goods.
What is the date of expiry?

At NCDEX the contracts expire on 20 Th day of each month. If 20 Th happens to be a
holiday the expiry day will be the previous working day.
At MCX the expiry day is 15 Th of every month. If 15 Th happens to be a holiday the expiry day
will be the previous working day. The expiry day also differs for different commodities in both
the exchanges.
How much are the margins on these Commodity futures?

Generally commodity futures require an initial margin between 5-10% of the contract
value. The exchanges levy higher additional margin in case of excess volatility. The margin
amount varies between exchanges and commodities. Therefore they provide great benefits of
leverage in comparison to the stock and index futures trade on the stock exchanges. The
exchange also requires the daily profits and losses to be paid in/out on open positions (Mark to
Market or MTM) so that the buyers and sellers do not carry a risk of not more than one day.
Following is a table showing the details # regarding major commodities traded

on MCX & NCDEX
MCX
Commodity Initial Margin Quotation Lot Size Delivery Center
Gold 3.5% 10 Gm 1 Kg Mumbai, Ahmadabad
Silver 5% 1 KG 30 KG Ahmadabad
Crude Oil 5% 1 bl 100 bls Mumbai
Soy Oil 3% 10 KG 10 MT Indore
45
Pepper 8% 10 KG 100 KG Kochi

Soy Seed 4% 1 MT 10 MT Indore
CAPITAL MARKETS
Introduction to Capital Markets

Transfer of resources from those with idle resources to others who have a productive need
for them is perhaps most efficiently achieved through the securities markets. Stated formally,
securities markets provide channels for allocation of savings to investments and thereby
decouple these two activities. As a result, the savers and investors are not constrained by their
individual abilities, but by the economy’s abilities to invest and save respectively, which
inevitably enhances savings and investment in the economy.
Market Segments
The securities market has two interdependent and inseparable segments, the new issues
(primary market) and the stock (secondary) market. The primary market provides the channel for
sale of new securities while the secondary market deals in securities previously issued. The price
signals, which subsume all information about the issuer and his business including associated
risk, generated in the secondary market, help the primary market in allocation of funds. The
issuers of securities issue (create and sell) new securities in the primary market to raise funds for
investment and/or to discharge some obligation. They do so either through public issues or
private placement. There are two major types of issuers who issue securities. The corporate
entities issue mainly debt and equity instruments (shares, debentures, etc.), while the
governments (central and state governments) issue debt securities (dated securities, treasury
bills).
The secondary market enables participants who hold securities to adjust their holdings in
response to changes in their assessment of risk and return. They also sell securities for cash to
meet their liquidity needs. A variant of secondary market is the forward market, where securities
46
are traded for future delivery and payment. Pure forward is outside the formal market. The
versions of forward in formal market are futures and options. In futures market, standardized
securities are traded for future delivery and settlement. These futures can be on a basket of
securities like an index or an individual security.
case of options, securities are traded for conditional future delivery. There are two types of
options – a put option permits the owner to sell a security to the writer of options at a
predetermined price while a call option permits the owner to purchase a security from the writer
of the option at a predetermined price. These options can also be on individual stocks or basket
of stocks like index. Two exchanges, namely NSE and BSE provide trading of derivatives of
securities.
Products and Participants

Savings are linked to investments by a variety of intermediaries through a range of complex
financial products called “securities” which is defined in the Securities Contracts (Regulation)
Act, 1956. Which includes shares, scrip’s, stocks, bonds, debentures, debenture stock, or other
marketable securities of like nature in or of any incorporate company or body corporate,
government securities, derivatives of securities, units of collective investment scheme, security
receipts, interest and rights in securities,
Stock Basics: What Causes Prices to Change?
Stock prices change every day by market forces. By this we mean that share prices change
because of supply and demand. If more people want to buy a stock (demand) than sell it
(supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it,
there would be greater supply than demand, and the price would fall.
Understanding supply and demand is easy. What is difficult to comprehend is what makes people
like a particular stock and dislike another stock. This comes down to figuring out what news is
positive for a company and what news is negative.
The price movement of a stock indicates what investors feel a company is worth. The
value of a company is its market capitalization, which is the stock price multiplied by the number
of shares outstanding.
47
For example, a company that trades at Rs.100 per share and has 1,000,000 shares outstanding
has a lesser value than a company that trades at Rs.50 but has 5,000,000 shares outstanding
(Rs.100 x 1,000,000 = Rs.100,000,000 while Rs.50 x 5,000,000 = Rs.250,000,000). The price of
a stock doesn't only reflect a company's current value; it also reflects the growth that investors
expect in the future.
The most important factor that affects the value of a company is its earnings. Earnings are the
profit a company makes, and in the long run no company can survive without them. Public
companies are required to report their earnings four times a year (once each quarter). National
Stock Exchange watches with rabid attention at these times, which are referred to as earnings
seasons. The reason behind this is that analysts base their future value of a company on their
earnings projection. If a company's results surprise (are better than expected), the price jumps up.
If a company's results disappoint (are worse than expected), then the price will fall.
Some believe that it isn't possible to predict how stocks will change in price while others think
that by drawing charts and looking at past price movements, you can determine when to buy and
sell. The only thing we do know, as a certainty is that stocks are volatile and can change in price
extremely rapidly.
The important things to consider about stocks are the following:
At the most fundamental level, supply and demand in the market determine stock price.
Price times the number of shares outstanding (market capitalization) is the value of a company.
48
How to Read a Stock Table/Quote
Columns 1 & 2: 52-Week Hi and Low - These are the highest and lowest prices at which a
stock has traded over the previous 52 weeks (one year). This typically does not include the
previous day's trading.
Column 3: Company Name & Type of Stock - This column lists the name of the company. If
there are no special symbols or letters following the name, it is common stock. Different symbols
imply different classes of shares. For example, "pf" means the shares are
Preferred stock.
Column 4: Ticker Symbol - This is the unique alphabetic name which identifies the stock.
Column 5: Dividend per Share - This indicates the annual dividend payment per share. If this
space is blank, the company does not currently pay out dividends.
Column 6: Dividend Yield - This states the percentage return on the dividend, calculated as
annual dividends per share divided by price per share.
Column 7: Price/Earnings Ratio - This is calculated by dividing the current stock price by
earnings per share from the last four quarters.
Column 8: Trading Volume - This figure shows the total number of shares traded for the day,
listed in hundreds. To get the actual number traded, add "00" to the end of the number listed.
Column 9 & 10: Day High & Low - This indicates the price range at which the stock has traded
at throughout the day. In other words, these are the maximum and the minimum prices that
people have paid for the stock.
49
Column 11: Close - The close is the last trading price recorded when the market closed on the
day.
Column 12: Net Change - This is the Rupee value change in the stock price from the previous
day's closing price. When you hear about a stock being "up for the day," it means the net change
was positive.
or any other instruments so declared by the central government These demand for and supply of
securities and funds determine, under competitive market conditions in goods and securities
market, the prices of securities.
Securities Market and Economic Growth
A well functioning securities market is conducive to sustained economic growth. There

have been a number of studies, starting from World Bank and IMF to various scholars, which
have established robust relationship not only one way, but also the both ways, between the
development in the securities market and the economic growth.
The securities market fosters economic growth to the extent that it-
• Augments the quantities of real savings and capital formation from any given level of
national income,
• Increases net capital inflow from abroad,
• Raises the productivity of investment by improving allocation of investible funds, and (d)
Reduces the cost of capital.
A Profile of Indian Securities Market

The past decade in many ways has been remarkable for securities market in India. It has
grown exponentially as measured in terms of amount raised from the market, number of stock
50
exchanges and other intermediaries, the number of listed stocks, market capitalization, trading
volumes and turnover on stock exchanges, and investor population. The market has witnessed
fundamental institutional changes resulting in drastic reduction in transaction costs and
significant improvements in efficiency, transparency and safety.
Securities and Exchange Board of India (SEBI)
With the objectives of improving market efficiency, enhancing transparency, checking

unfair trade practices and bringing the Indian market up to international standards, a package of
reforms consisting of measures to liberalize, regulate and develop the securities market was
introduced during the 1990s. This has changed corporate securities market beyond recognition in
this decade. The practice of allocation of resources among different competing entities as well as
its terms by a central authority was discontinued. The secondary market overcame the
geographical barriers by moving to screen-based trading. Trades enjoy counterparty guarantee.
Exchanges of capital market
Bombay Stock Exchange (BSE)

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich
heritage. Popularly known as "BSE", it was established as "The Native Share & Stock Brokers
Association" in 1875. It is the first stock exchange in the country to obtain permanent
recognition in 1956 from the Government of India under the Securities Contracts (Regulation)
Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian capital
market is widely recognized and its index, SENSEX, is tracked worldwide. With
Demutualisation, the trading rights and ownership rights have been de-linked effectively
addressing concerns regarding perceived and real conflicts of interest. The Exchange is
professionally managed under the overall direction of the Board of Directors. The Board
comprises eminent professionals, representatives of Trading Members and the Managing
Director of the Exchange.
National Stock Exchange (NSE)
51
The National Stock Exchange of India Limited has genesis in the report of the High
Powered Study Group on Establishment of New Stock Exchanges, which recommended
promotion of a National Stock Exchange by financial institutions (FII’s) to provide access to
investors from all across the country on an equal footing. Based on the recommendations, NSE
was promoted by leading Financial Institutions at the behest of the Government of India and was
incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the
country
On its recognition as a stock exchange under the Securities Contracts (Regulation) Act,
1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment
in June 1994. The Capital Market (Equities) segment commenced operations in November 1994
and operations in Derivatives segment commenced in June 2000.
NSE has been promoted by leading financial institutions, banks, insurance companies and other
financial intermediaries. NSE is one of the first de-mutualised stock exchanges in the country,
where the ownership and management of the Exchange is completely divorced from the right to
trade on it. Though the impetus for its establishment came from policy makers in the country, it
has been set up as a public limited company, owned by the leading institutional investors in the
country.
The NSE model however, does not preclude, but in fact accommodates involvement,
support and contribution of trading members in a variety of ways. Its Board comprises of senior
executives from promoter institutions, eminent professionals in the fields of law, economics,
accountancy, finance, taxation, etc, public representatives.
Depository System
The Depositories Act, 1996 was passed with the objective of ensuring free transferability of
securities with speed, accuracy and security. It does so by
• Making securities of public limited companies freely transferable subject to certain

exceptions
52
• Dematerializing the securities in the depository mode
• Providing for maintenance of ownership records in a book entry form.
In order to streamline both the stages of settlement process, the Act envisages transfer
ownership of securities electronically by book entry without making the securities move from
person to person. The Act has made the securities of all public limited companies freely
transferable, restricting the company's right to use discretion in effecting the transfer of
securities, and the transfer deed and other procedural requirements under the Companies Act
have been dispensed with. Two depositories, viz., NSDL and CDSL, have come up to provide
instantaneous electronic transfer of securities.
Some of the company securities traded are as follows.

ACC Ltd
BHEL
Bharti Airtel Ltd
DLF Ltd
Grasim Industries Ltd
Hdfc Bank Ltd
Hindalco Industries Ltd
Housing Development Financial Corporation Ltd
Icici Bank Ltd
Infosys Technologies Ltd
ITC Ltd
Jaiprakash Associates Ltd
Larsen and Toubro Ltd
Mahindra and Mahindra Ltd
53
Maruti Suzuki Ltd
NTPC Ltd
Oil and Natural Gas Corporation Ltd
Ranbaxy Laboratories Ltd
Reliance Communication Ltd
Reliance Industries Ltd
Relaince Infracture Ltd
SBI
Sun Pharmaceuticals Ltd
Sterlite Industries India Ltd
TCS Ltd
Tata Motors Ltd
Tata Power Company Company Ltd
Tata Steel Ltd
Wipro Ltd
Capital Market Intermediaries

There are several institutions, which facilitate the smooth functioning of the securities
market. They enable the issuers of securities to interact with the investors in the primary as well
as the secondary arena.
• Merchant Bankers
• Credit Rating Agencies
54
• R& T Agents - Registrars to Issue
• Stock Brokers
• Custodians
• Mutual Funds
• Depositories
• Depository Participants
Players (investors) in securities market

• Individual investors
• Institutional investors
• FII’s
• Mutual fund investor
Capital Market Instruments

The changes in the regulatory framework of the capital market and fiscal policies have also
resulted in newer kinds of financial instruments (securities) being introduced in the market. Also,
a lot of financial innovation by companies who are now permitted to undertake treasury
operations, has resulted in newer kinds of instruments - all of which can be traded – being
introduced. The variations in all these instruments depend on the
Tenure, the nature of security, the interest rate, and the collateral security offered and the trading
features, etc.
• Debentures
• Bonds
• Preference Shares
• Equity Shares
• Government securities
55
Working hours for capital market

Generally trading in securities market commences from 9am and market closes on 3.30pm.
Capital Market Processes

There are various processes that Issuers of securities follow or utilize in order to tap the
savers for raising resources. Some of the commonly used processes and methods are described
below.
Initial Public Offering (IPO)
Private Placement
Preferential Offer/Rights Issue
Internet Broking
ANALYSIS AND INTREPRETATION
a). Sample size selected: 100
Total Number of customer available for survey: 100
56
Interpretation
The above table shows that total 100 respondents are taken in to consideration for survey and
opinion of each respondent is collected of the services provided by KARVY STOCK BROKING
LTD
b). Customer came to know about “KARVY FINANCIAL CONSULTANT “
Total no. Of sample taken: 100
1 2 3 4 5
News Papers/
Friends Business Magazines Online Agent/Financial Others

47 18 10 14 11
Analysis
The above table shows the respondents know KARVY FINANCIAL CONSULTANT is from
the friends is more. Nearly 47.00% of respondent will know. 18% of Customer through News
paper ,10% of Customer through online ,14% of Customer through Agent and financial
consultant and 11% of Customer know through. Other
57
Graph showing customer awareness about karvy financial consultant
Interpretation
From the above chart it is clear that highest percentage of customers came to know
about karyy consultant is through their friends.
c). Settlement (Selling/ Buying in commodities as well as securities)
58
Extremely Neither satisfied/nor Extremely

Satisfied Satisfied Unsatisfied Unsatisfied unsatisfied
25 49 26 0 0
Analysis
The above table shows that service offered is Extremely Satisfied for25% of the
respondents; 49% of respondent are satisfied and 26% of respondent are having neutral opinion
of the settlement service.
Graph showing settlement of shares
59
Interpretation
From the above it is clear that none of the respondent is unsatisfied with the settlement
system of karvy stock broking ltd.
d)... Demat
Neither satisfied/nor Extremely

Extremely satisfied Satisfied Unsatisfied Unsatisfied unsatisfied
38 46 16 0 0
Analysis
60
The above table shows demat services offered is satisfied.38% of the customers are
extremely satisfied, 46% Satisfied, 16%of of customer neither satisfied/nor
Graph showing demat services
Interpretation
There is no any customer who is not satisfied but everyone reaches the services of demat
facility provided by karvy
61
e).Awareness level: Awareness of commodity market and capital market

provided by karvy.
Mode of respondents percentage

investment
Securities 100 68
Commoditie 100 32
s
Analysis
The above table is indicating that about 68%of the customers are aware about
securities trading and 32%of clients are aware of commodity trading so this shows
more number of people making their investment in securities rather than
commodities.
62
Graph showing awareness of the clients of different market
Interpretation
From the above chart we can conclude that limited client’s opened the karvy comtrade
account and so limited people are aware of that.
f).Risk involved in trading of commodity and security market
Modeof percentage
investment
Commodity 55%
security 45%
63
Analysis
Risk involves in both commodity and security but 45%of risk is in as we can buy and hold for
a long period of time on delivery basis.as55% of risk is there commodity as because
commodities are purchased on the basis of minimum lot size and on contract basis.
Graph showing risks in investment
64
Interpretation
The above graph shows that the clients have to bear more risk while making investment in
commodity market rather than security market.
g).Investment pattern of individuals in commodity and security market
Mode of percentage
investment
Commodity 30%
security 70%
Analysis
The above table shows that any individual who prefer to invest more in security I’e 70%
rather than commodity which is only 30%
65
Graph showing investment pattern of individuals in commodity and capital

market
INTREPRETATION
From the above chart we can conclude that more individual prefer to invest in security
because as customer can purchase any amount of shares as compared that in commodity an
individual have to purchase the commodity on lot wise which incurs huge amount.
66
h). Table showing Time period of trading of commodity and securities
Mode of Time schedule(in

investment hours)
Commodity (10am 13
to night 11.30pm)
Security(9am to 6.5
3.30 pm)
Analysis
The above table shows that for 13 hours commodity was traded but security is
traded only 6 hours
67
Chart showing time schedule for commodity and security trading
Interpretation
The above chart shows that for more hours trading on commodity facilitates the exchange rather
than security
FINDINGS, AND SUGGESTION
Findings
After analyzing the data, the following points were highlighted
 Almost 32% of the clients trading commodity
 Approximately 68% of the clients trading in capital market.
 On the whole, employees and businessmen have totally agreed that the services offered by
karvy Comtrade. Ltd is hassle free.
68
 The study shows that more than 50% of the clients came to know about karvy through friends
and rest is from online, newspapers and others agents.
 It is found that maximum number of client is satisfied with settlement service and d-mat
services provided by karvy.
 And also it is found that maximum risk is involved in commodity trading.
Suggestions
 Increase the number of scripts in the normal trading screen.
 Provide details on commodity, stock, Insurance and Mutual Funds to all existing client.
 Provide the values of other Asian stock markets.
 The Relationship Managers have to keep in touch with the clients at a regular basis
Conclusion
Diversification and investment in alternative forms of investments have become more
important in recent times when the stock markets have proven to be more volatile and the
government bonds are barely able to match the inflation rate.
Investors are looking to put their money in assets which give decent returns even if the stock
markets are tumbling. For example, the value of a piece of art may rise if the inflation is on the
rise irrespective of the performance of stock markets.
Similarly, gold does well in time of global tension. In this way, even if the investor loses
money in the stock market, it is offset by the gains in his alternative investments.
A lot of these alternative investments have consistently given a higher return than the
traditional investment securities.
For example, the real estate investments in the National Capital Region of Delhi have
consistently provided a return of more than 10% over the last three years, in both the commercial
and residential segments.
This is much more than the 5-6% return provided by government bonds and fixed deposits. At
the same time, the returns are not as volatile as that witnessed in the stock markets.
69
But many of these investment types still remain a mystery to the investors. This is a first in a
series of articles through which we hope to explain the nature of various forms of such
alternative investments that are available to the investors.
70

Analysis of commodity and capital markets

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Analysis of commodity and capital markets

Загружено:

Авторское право:

Доступные форматы

Analysis of commodity market with capital market

Karvy – Early Days

K - Mr. V. Kutumba Rao

A - Mr. K Ajay Kumar

V - Mr. Vikram Singh

GROWTH AND DEVELOPMENT OF KARVY

AT PRESENT STATUS OF KARVY

6. Strive to be a reliable source of value-added financial products and services and

KARVY GROUP OF COMPANIES

1. Karvy Consultants Limited.

2. Karvy Investors Services Limited.

3. Karvy Stock Broking Limited

4. Karvy Commodities Broking Private Limited

5. Karvy Global Services Limited

6. Karvy Computer share Private Limited.

KARVY CONSULTANTS LIMITED

KARVY INVESTORS SERVICES LIMITED

KARVY STOCK BROKING LIMITED

KARVY COMMODITIES BROKING PIVATE LIMITED

STOCK BROKING SERVICES

DISTRIBUTION OF FINANCIAL PRODUCTS

Our monthly magazine, Finapolis, provides up – dated market information on market

RESEARCH PRIVATE CLIENT GROUP

KARVY GLOBAL SERVICES LIMITED

Be it re-engineering and managing process or delivering new efficiencies, our service

KARVY COMPUTER SHARE PVT.LTD.

MUTUAL FUND SERVICES

2) Stock Broking Services

6) Karvy As An Investment Banker

7) Management of Capital Issues

8) Management of Buybacks and Take-avers

9) Private Placement of Debt and Equity

10) Mergers and Amalgamations

11) Karvy in Loan Syndications

12) Karvy Insurance Broking Pvt. Ltd.,

13) Computer share Pvt Limited

14) Mutual Fund Services

15) Corporate Shareholder Services

Brokers Company India, India’s premier online trading destination.

It was established in 1964 at Delhi. In 1965 it innovates a new financial instrument

➢ Registrars and Transfer Agents

➢ Registrars to IPO’s /Right Issues

➢ Registrars to Open Offers

➢ Registrars to Mutual Funds

➢ Data Processing for Airlines

➢ Print Shop Services

3. N.J.India Investments Pvt. Ltd.

4. ICICI Securities Ltd.

ICICI Securities Limited (i-SEC) is a wholly owned investment-banking subsidiary of

6. Kotak Securities Ltd.

• Financial Product Distribution

• Investment Advisory Service.

• Vehicle parking facility for client and employee

• Free statement of account through mail

• Facility of separate computer is being given each staff

• Printer and phone facility to all branches

• All branches are computerize

• Among the top 5 stock brokers in India (4% of NSE volumes)

• India's No. 1 Registrar & Securities Transfer Agents)

• A Category- I -Merchant banker.

• Among the two top 3 Depository Participants

• Largest Network of Branches & Business Associates