A Summer Project Report On
A Summer Project Report On
A Summer Project Report On
At
BY
Balkrishan M Chauhan
Date: 23rd July 2005
-1
On-Line Share Trading Portal ___________________________________________________________________________ Why invest? If you were to open a book on economics and look up the word investing, chances are that you would find the following definition: Investing is building up to meet future consumption demands with the intention of making surpluses or profits, as they are popularly known. And after reading it, the last trace of your eagerness to invest is likely to evaporate. But investing is essential. Here is why While the life expectancy of the average human being has increased, we are productive only between the ages of 30 and 60 years. Hence the short time span that we are able to earn money needs to provide for our future when we may not be capable of earning. Everything being the same, we could keep away a part of our earnings every year (save) that will come in handy when we will not be able to earn. However inflation destroys the value of what we save. A sum of Rs10,000 saved this year will not have the same purchasing power ten years down the line. Hence we need to preserve the purchasing power of what we save. The only way to hedge inflation is to invest in shares, debentures, bonds, gold or real estate, to earn returns from these assets that compensate for the decline in our purchasing power. What is a share? Share or Equity represents part of an ownership of a business. So as a shareholder you own a piece of the action that happens in that business. Why would you want a piece of the action? For the rewards of course. As a shareholder you have a right over the profits generated by your business. Your company might pay out the profits generated every year as dividends or it may retain the profits to further grow them. Theres another way you as a shareholder can make money. If your company does well, then its shares listed on the stock market become more valuable and the stock price appreciates. On the other hand, the company might perform badly. Then not only do you not get dividends but the stock price also declines. Hence investing in shares is a risky proposition. When you invest in shares, you can expect certain returns based on the fundamentals of a business. However you have no control over it. What you have control over is managing risks associated with it.
-2
1.2 History
1850 Shares of banks and securities of East India Company traded in Mumbai under a sprawling banyan tree in front of Town Hall, which is now in the Horniman Circle Park. 1875 Brokers organized an association known as the Native Share Brokers Association, and the countrys first stock exchange the Bombay Stock Exchange (BSE), set up in Mumbai with 318 members. The membership fee gradually increased from Re 1 in 1887 to Rs 1,000 in 1896, and Rs 48,000 in 1920. 1956 Securities Contract Regulation Act passed 1957 The BSE and eight other stock exchanges registered under the Securities Trading Contract Act. 1982 The BSE classifies scripts into Group A for carry forward, and Group B for cash transactions. 1986 The BSE 30-share Sensitivity Index (a.k.a. the Sensex) compiled; updated every two minutes. 1987 Stock Holding Corporation of India set up. L.J Institute of Management Studies -3
On-Line Share Trading Portal ___________________________________________________________________________ 1992 Ordinance promulgated for granting statutory powers to the SEBI. The Over-The-Counter Exchange Of India begins operations. The National Stock Exchange incorporated. The new 9,000-sq. ft ring in the rotunda of the new annexe to Jeejeebhoy Towers inaugurated. 1994 The NSEs debt segment begins operations on June 30; and the capital market segment begins on-line script less trading on November 3. 1995 The BSE computerizes its trading operations, signaling the end of 120 years of floor-trading with open out-cry system of share-trading and the beginning of screen-based trading on the BSE. 1996 NSE 50 index launched April 22. NSDL set up as the first depository in India, and the NSE commences trading in dematerialized securities on December 26. 2000 The SEBI approves the report on Net trading brought out by the SEBI committee on Net based trading and services. Pursuant to the circular, stock exchanges are required to give permission to members to start Net-based trading after ensuring fulfillment of the minimum conditions. The NSE is the first exchange to grant provisional permission to Cochin-based Geojit Securities to commence Net-based trading.
-4
-5
CHAPTER - 2
Important Terms
2.1 Depository
What is a Depository? A Depository is a Company where the shares of an individual are held in the electronic form, at the request of the shareholder. This eliminates the physical form of holding. The National Securities Depository Limited (NSDL) was promoted by IDBI, UTI, SBI and NSE. The Central Securities Depository Limited (CDSL) was promoted by BSE . What is the Depository System? Your money may be held in the form of liquid cash at your home or may be deposited in a bank. The bank holds your funds in the electronic form and subsequently debits or credits the account. Depending on your issuance of cheques or deposit of cheques. The advantages of safety and convenience of dealing with a Bank overweigh the reasons for holding liquid cash in your home. Your financial assets such as Equity Shares may be compared to the above example. You may hold physical share certificates in your home and be exposed to the various risks of lack of safety, mutilation, loss etc. Alternatively, person may deposit your shares in an organization called a Depository, which holds your shares in the electronic form. The advantages of the Depository System can be further compared with physical shares as below: The risk of loss, mutilation is common for physical certificates and completely removed in electronic shares. Handling of a large number of physical certificates is ended in the Depository mode. In the electronic segment, there are no bad delivers as in physical segment. There is no stamp duty payable in electronic shares compared to the duty of 0.50% in the physical segment while transferring ownership. In loans against shares, banks usually charge a lower interest rate and margin money than in the physical share certificates. Settlements in the Stock Exchanges have commenced in the electronic segment and have proven to be far more efficient and convenient compared to physical shares. How can Person Deal with the Depository directly? You cannot deal with the Depository directly. However, if person have any unresolved grievances against your DP, person can make a complaint to the Depository at the below mentioned address.
-6
On-Line Share Trading Portal ___________________________________________________________________________ What are the obligations of a Depository? The Depository is obligated to maintain the Client Holdings, enable demat and remat of eligible securities, disbursement of corporate benefits, effect settlement of securities traded on the exchanges as well as Off-market trades through book entry transfers, provide for Pledging/Hypothecation of eligible securities. What is NSDL? National Securities Depositories Limited is a Depository promoted by UTI, IDBI, SBI & NSE who hold the securities in electronic form on behalf of the beneficiary holder. About the Insurance Policy by NSDL Shares in the electronic segment are 100 percent secure. The agreement between person and the DP indemnifies person against misuse of your electronic holdings by any party, in any manner whatsoever. Person may legally invoke such indemnity and be 100 percent compensated. A comprehensive Insurance Policy has been taken by NSDL which covers your DP account so as to protect person against any losses, breach of security etc. What is CDSL? Central Depositories Securities Limited is a Depository promoted by BSE. How does the Depository curtail Forgeries / Fakes in Duplicate Distinctive Numbers? Physical share certificates with duplicate distinctive numbers are essentially forged certificates. The R&T would identify and reject the certificates. The concerned Stock Exchanges are informed of the details.
-7
2.3 Dematerialisation
What is meant by Dematerialisation? Dematerialisation is a process in which person can convert physical share certificates into electronic shares. Shares should have been transferred in your name / joint names before sending it for Dematerialisation. Why should Person buy shares in the demat form? The single biggest reason over buying shares in the physical form is that demat shares credited to your account within 2 to 3 days after the end of the settlement. This is unlike the average 30 to 40 days taken in receiving back physical shares from the R&T Agent and sometimes with objections. Further, possibility of loss or theft of the certificates is eliminated. This is in addition to the 0.50% stamp duty savings, which works out to Rs.50 for transfer of shares worth of Rs.10, 000 How does Person benefit by selling demat shares? Brokers have no fear of bad delivery while selling demat shares. Due to this, they offer lower brokerage to you. As bad deliveries are eliminated shares are not returned due to objections, resulting in saving of costs and follow up. What is meant by Companies in compulsory Demat? Only share certificates in these companies can be dematerialized by the investor. Shares must be registered in your name to allow for Dematerialisation. Shares delivered by your Broker on Purchase (known as street name deliveries) cannot be dematerialized. What if Person hold shares of Companies not in Demat? You may approach the company and request them to sign up with NSDL Vigorously follow up as Demat is in your favor. Is it true that Demat is not compulsory? Yes. Person has the option to hold shares either in the physical OR in the dematerialized form. This is as per the Depositories Act, 1996.However, when person buy shares person may receive delivery in the demat form as per the option of the seller. Can physical AND Demat shares be held for a company? Yes. Person may dematerialize only a part of your holdings. In Demat does Person need a Transfer Deed? No, there is no need for a Transfer deed in order to get your share certificates dematerialized. L.J Institute of Management Studies -8
On-Line Share Trading Portal ___________________________________________________________________________ How does Person demat his/her Shares? In order to demat your shares/certificates, person has to fill in a Dematerialisation Request Form in triplicate along with the relevant details and submit the same to your DP along with the certificates to be dematerialized. The combination of names in the shares must be same as that in the account. What is a DRF? In order to get your shares converted from the physical to the electronic form, person has to submit your certificates along with a request form asking for the conversion. This request form is called a DRF or a Demat Request Form. What is Defacing of Shares? When the certificates are surrendered for demat they are to be canceled at the face of the certificate by putting a stamp "Surrendered for Demat" so that the certificate cannot be traded. This process of affixing the "Surrendered for Demat" stamp on the shares is known as defacing of shares. How long would it take Persons account to be credited when he/she submit shares for Dematerialisation? Your account will be credited typically in 15 days. Are there Distinctive Numbers & Certificate Nos. in Demat Shares? No. Dematerialized shares do not have any distinctive or certificate numbers. The shares are in FUNGIBLE ~ 100 shares of a company are the same as any other 100 in that company. Why dematerializing, can a sole holder add a Joint Holder? No. At this point, ownership cannot be transferred from an individual name to a joint name. To do this, person should first open a Depository Account as the sole holder and dematerialize the shares. You should open another Depository Account in the joint names (AB).Now make an off-market transaction from account A to account AB. The DP will charge a nominal amount for this transaction. As an alternate, the certificate can be sent for transfer in the joint names AB and then surrendered for demat with the DP. What are the various reasons for Rejections in Demat? Fake Certificate, Signature difference, Third Party Claim, Court Cases are the reasons as to why a demat request is rejected by R&T Agent.
-9
2.4 Rematerialisation
What is meant by rematerialisation? Rematerialisation is a process in which person can convert your electronic holding into physical share certificates Does the NSDL issue fresh certificates in Remat? In the rematerialisation process, a request goes from the DP to the R&T Agent through the NSDL for the remat. The R&T Agent will process the request, print and then dispatch the new share certificates directly to you. Thus, the NSDL does not issue or handle share certificates. What are the rules for Odd lot Rematerialisation? There is no concept, any longer, of a market lot in the electronic segment. Thus, person may remat your odd lot shares at any time. This would be done in exactly the manner as person would remat market lot shares. What are the rules for stamp duty in Remat? The Depository is the registered holder in the Companys records. In a remat, transfer from the Depository to person will NOT be liable to a levy of Stamp Duty. This is as per the Depositories Act. However, the Depository will charge nominal charges for this process. How to remat persons securities? For Remat of Securities, person have to submit a Remat Request Form (RRF)to the DP mentioning the relevant details for the rematerialisation process to take place.
- 10
On-Line Share Trading Portal ___________________________________________________________________________ Customers would face the risk of leakage of personal information.
Less Margin
Generally, company charges 25% margin while the brokers charge nearly 10%margin from the investors in case of trading in derivatives. Sometimes broker charges negligible amount and he allows trading up to his limit. This shifts the investors from trading online to the trading with the brokers. Foe example: Local Brokers like Motilal Oswal, Ratnakar, Pravin Ratilal etc. allow trading in shares with less margin and low brokerage.
Customized Advice
Normally, investors would like to take to the broker before taking an investment decision. Internet trading would lack this personal touch. As far as customization of data using data mining is concerned, that would not attract customers looking for something different. Some of the brokers are of the view that they would have to provide advisory services to the customers. But, with increased volumes they will have to balance their preferences and needs of the customers.
- 12
- 13
WHAT IS E-TRADING?
E-trading is the mechanism of buying/selling securities via the Internet. E-trading is considered as a logical extension of e-commerce. To put it simply, e-commerce is buying and selling through electronic medium. There could be not be a better place than the stock market, where tremendous volumes are traded, to exploit the opportunities of e-commerce. But, there are certain inherent characteristics of this market, which make it more vulnerable to risks associated with e-commerce. The market requires knowledge, information, ability to analyze and quick decision-making. This requires utmost care while trading on the net. A single click can make or destroy investor's wealth. E-Trading is a service offered on the Internet for purchase and sale of shares. In the real world, you place orders on your stockbroker verbally (personally or telephonically).
In Online Trading, a customer can access a stockbroker's website through his internet-enabled PC and place orders through the broker's internet-based order routing and trading engine. These orders are routed to the Stock Exchange without manual intervention and executed thereon. The order routing to the exchange will happen in a matter of seconds. The order
- 14
execution once it reaches the exchange system is similar to that of an offline transaction,
- 15
- 16
On-Line Share Trading Portal ___________________________________________________________________________ Why Online Share Trading? FAQ (Frequently Asked Questions) Is trading through the Internet safe? The safety of transactions on the Internet depends on the encryption system used. The better this transaction system, the more difficult it is for any person to hack the site. Internationally, the best system available today, is the 128-bit encryption, a system, which even the Pentagon uses. Sharekhan.com is one of the few online sharetrading sites in the country equipped with this 128-bit encryption. Secondly, you too can ensure the safety of the transactions online. You normally get a secured user id and password, the secrecy of which is to be maintained entirely by you. Thirdly, if the transaction system requires no manual intervention, you further improve the safety in the transactions. Among Indian sites, Sharekhan.com is one of the very few fully integrated online trading sites. This enables the elimination of the possibility of any manual intervention. Which means orders are directly sent to the exchange ensuring that you get the best and right price. What about security of my money, demat shares and my transaction documents? In systems where the broking, banking and demat accounts are completely integrated, your money remains in your own bank account, and does not get transferred to the broker's pool account. Is trading through the Internet a difficult and cumbersome process? The experience of trading through Internet depends a great deal on the type of product offered by the site. Say, for example, one of the issues bothering you may be tired of the paperwork involved after every trade in writing cheques or TIFDs. You would then seek a system that eliminates these processes. In online trading sites, the greater the back-end integration of the system, the greater the amount of work the sites do for you, therefore greater the convenience available to you. For example, incase of Sharekhan.com, your broking account, bank account and demat account are linked electronically. So when you punch in a buy or sell order, the system checks the funds/ shares availability and automatically credits/debits the accounts once the order is executed by the exchange.
- 17
On-Line Share Trading Portal ___________________________________________________________________________ But I am not comfortable with Internet, or with finance, how can online trading be easy for me? Contrary to common perceptions, trading through Internet does not require either any expertise in working on the computer, or any special financial skills. You could try the demo (demonstration) of the online trading sites like Sharekhan.com to find out why others like you, with little or no knowledge about the Internet or finance, have switched on to online trading. Or you could attend the demonstrations sessions held by such websites in your city. Is trading through the Internet a costly affair? The convenience provided by online trading is even then worth the costs involved. And online trading sites are not that costly. For example, a trader can trade shares on margin at rates as low as 0.10%on Sharekhan.com and if one wishes to trade in cash, then the rates applicable are as low as 0.5%. However, it is important to compare various online trading sites on brokerage rates, inclusive of all sub-charges. I am pretty satisfied with my present broker who serves me offline. Why should I choose to go online to trade shares? Many of those customers who have chosen to trade shares online today, had at one point of time been trading through offline brokers, just like you are today. They took a chance to go online and trade shares. After realising the advantages of trading shares online, they have shifted to online trading now. In fact, there are many customers who have already opened an account with sharekhan.com. Just try trading shares after opening an account with any online trading site. However, before choosing an online trading site, please compare all such websites and then make a decision. How frequently is the prices updated at all these online trading sites? The tickers available at online trading sites provide instantaneous updates. Also, some websites can offer to transact in those shares instantaneously and with convenience. How can I be sure that I shall be trading at a price I want to or at a price appearing in the website? The solution to your problem could be provided in different ways by different online share trading sites. At sharekhan.com, for any trade order, the customer is asked to click "Proceed" after he has the opportunity to completely check the order verification form. L.J Institute of Management Studies - 18
On-Line Share Trading Portal ___________________________________________________________________________ Moreover, you have the option of modifying or canceling the order till the moment the order is executed at the exchange. Finally, online trade confirmations reach reaches our customers within 4 minutes, while contract notes are dispatched at the end of the day and reach within 24-36 hours. With Sharekhan, you decide what you want to buy and buy the share at the price you want to and therefore you are in total control of your trades. What other services can I get by trading shares online? Internet has brought to the retail investores what was till sometime ago the sole prerogative of large brokerage houses and high net worth individuals. For example at Sharekhan.com one can access multitude of resources to arrive at his stock picks. Reliable research with an enviable track record is available free of cost. An investor can now access sharekhan.com and do his technical analysis, know what other leading brokers think about a company and whether it is a buy or a sell, (Multex Global estimates), access live news from international news agencies such as Reuters, CNBC, read about what the leading CEOs think about the state of the economy and the capital market.
- 19
On-Line Share Trading Portal ___________________________________________________________________________ Account. You can sell your shares anytime as long as shares are there in your DEMAT Account. In order to place a buy order you need to fund your account. You can do this by depositing money in your bank account or else you can sell some shares existing in your Demat account and use the proceeds of sale to fund your purchase transaction. The amount of money required before placing a buy order would depend on the value of order and the type of einvest account you have enrolled for - whether cash or margin. In a Margin account one can use a line of credit to buy marginable securities or for overdraft protection. Such an account is opened after taking into consideration Annual income, Net worth, description of your investment objectives, as it involves lending a line of credit. In a cash account, the amount of securities bought has to be backed by the cash in the account. Then comes placing the order: For this you enter your Trading password and go to trade. From the Trading tab, select Enter Order under the Stocks heading. Select a transaction type: Buy, Sell, ShortSell. At Number of Shares', type the number of shares that you want to buy. At 'Stock Symbol or Name(s)', type the stock symbol. If you don't know the symbol click 'Find Symbol', type the company name, click 'Search' and click the symbol that you want from the list. For a market order, select 'Market'. Otherwise, select 'Limit'. 'Stop Loss' or 'Stop Limit and enter the price. 'Market Order': you just ask the broker to buy or sell your stocks at the best price available. 'Limit Order': you tell the broker to trade only when the stock hits a certain price or better. 'Stop Loss': you tell the broker to sell your shares if the stock drops below a certain price. Select either 'Good for Day' or 'Good Until Canceled'. If you want to place an 'All-or-None' order, click 'All or None'. Type your trading password and click 'Preview Order'. - 21
On-Line Share Trading Portal ___________________________________________________________________________ If you want to change your order, click 'Modify' and make your changes. To see if your order has been executed and filled as you expect, check your account balance. The 'Account Balances' page shows your account equity (the value of your account) and your buying power. To check your account balance, click the 'Accounts Services' tab, make sure the correct account number displays at 'Select Account' and click 'Go'. At Total Account Value', see your account balance. For a new price, select the appropriate option button and then enter the price (unless you're changing it to a market order). You cannot change the stock symbol or the transaction type (Buy. Sell, Sell Short, or Buy to cover). Enter your trading password and click 'Preview Change Order'. Or, if you want to cancel your changes, click 'Do Not Change'. In order to cancel a stock order, from the Trading' tab, select 'View Open Orders' under the 'Stocks' heading. Make sure you're currently in the correct account. Click 'Cancel' beside the order you want to cancel. Review the information presented to make sure this is the order you want to cancel. Click 'Cancel Order'. Enter the symbol or the name of the scrip, press "GO" or the relevant button.
The Account Opening Charge, commission rates and the minimum limit of transaction vary from site to site. Other charges can include Annual Services Charges, Custody charges, D-Mat account charges etc . Also most online traders offer a host of other tools to aid the investment decision. A full research back up in terms of reports, articles, opinions, etc., live time quotes, latest news on the scrip, technical charts to see how the stock's price has changed over time. So sitting at home one can take an investment decision at ease after having researched and read up fully about the stock. With the advent of online trading, it would seem that the markets are just a click away. Please however, do remember that currently in India the handful of online trading offers are mere order routing systems. But it will not be long enough before the entire system goes online.
- 22
No Geographical Restriction
Customers have access to site from anywhere in world. So even if customer is out of station, customer can take the advantage of market condition.
No Time Restriction
Customer can trade not only during market hours but also when market is closed. He is required to give limit as to at what price he wants to buy or sell the shares. When market will open, the shares will be purchased or sold automatically at that particular price or best favorable price.
By charging drastically lowered commissions; online brokers offer cheaper access to financial markets, consequently encouraging more investing, as is evident by the increasing number of day-traders. The latter are individuals who have tried to make a career out of buying and selling stocks very quickly, often making and closing dozens of trades in a single day.
Because online trading greatly diminishes the role of brokers. Investors have more freedom when making investment decisions and come to rely on themselves when developing strategies. The online investor is responsible for researching, making decisions, entering an order and using a computer. All this makes online investors the masters of their domain and leaves them with no one to blame. Thus, online trading promotes self-empowerment.
Online trading gives greater transparency to the investors by providing them an audit trail. This involves a complete integrated electronic chain starting from order placement, to clearing and settlement and finally ending with a credit to the depository account of the investor. Each of the above mentioned stages are subject to inspection, thus bringing in transparency into the system. Greater transparency helps in reducing the systematic risk for the investor. This is possible as the market related information affecting the stocks gets communicated to the investor on a regular basis. Due to this increased exposure, L.J Institute of Management Studies - 23
On-Line Share Trading Portal ___________________________________________________________________________ the investor can take necessary steps, which would reduce his overall market risk.
Online trading integrates the bank, the brokerage firm and the demat accounts which leads to easy and paperless trading for the client.
Quick Trading
The investor will be able to execute the entire trading transaction, right from logging on to the broker's site, to the execution and settlement of his bank account, in a very short period of time. Provides A Level Playing Field
Trading on the net, gives even the smallest retail investor access to information that earlier was available only to the big traders. This provides a level playing field for all investors in the securities market. Reduces The Settlement Risk
This method of trading reduces the settlement risk for the investor, as in this case no short sale is possible i.e. the seller will not be able to sell the securities unless he has actual possession of them. In the case of a demat account (which is required for an online transaction), when a seller wants to sell the securities, his demat account is checked by the Depository Participant before executing the sale transaction. This reduces the settlement risk for the buyer, who is assured of the delivery of the securities.
- 24
If customers in large number access the site at the same time, server gets overloaded, so it results into delay in process.
Security Aspect
There may be chances of hacking of password if customer is not alert. This may cause a major loss to the investor.
Lack Of Flexibility
If the customer is not alert about his position on last trading day and if he is not able to square off his position, he has to take delivery compulsory or if he doesn't have enough liquidity, the site will automatically square off his position. This action may or may not be in benefit of customer. Whereas in conventional broking, broker will inform the customer time to time or will take the decision himself in favor of the customer.
Network Crash:
There will be problems and delays due to a large influx of traffic and rapid online trading criteria as it happened on 17th May, 2004 which is referred to as Black Monday. Computer Illiteracy:
Literacy of Computers is mandatory for traders using this online trading service. So for those who are computer illiterate, using websites serves as a handicap for them.
- 25
Decision
Decision about choosing particular scrip is made by investor himself based on his knowledge and his experience about market condition. Sometimes investors seek advice from broker and they both decide about investment. Thus in conventional broking and E-broking decision parts remain same.
Execution
In execution part of broking, E-broking is completely different from conventional system. This can be explained from graph below.
Conventional Broking
Call Get Rates Give order Confirmation through phone
E-broking
Log on See the rates online Punch in order Confirmation through e-mail
- 26
House Keeping
After matching of order at a predetermined price, the question of payments and deliveries of securities /transfer of shares take place where also wide difference in terms of operation can be seen. Conventional Broking Payment through Physical Cheque Transfer of shares in paper form House keeping of materialized shares E-broking Payment through Online Banking Transfer of shares in paper less form Demat Keeping of dematerialized shares
- 28
On-Line Share Trading Portal ___________________________________________________________________________ Now, Investor will Sell (Shortsell) Reliance Shares at 440 and Buy reliance future at 400 so on the last Thursday of the month when both the prices match, investor will reverse the transaction.
Last Thursdays Price 420 480 360 20 (-40) 80 20 80 (-40) 40 40 40 Profit in Equity Profit in Futures Net Profit **
** Brokerage is not deducted in Net Profit This can be possible legally in some cases but with very large investment because futures are traded only in lot sizes. Negative Factors Risk of Defaulting Broker Illegal
- 29
- 30
On-Line Share Trading Portal ___________________________________________________________________________ SSKI named its online division as Sharekhan on February 8, 2000 coinciding with the launch of its website
Owns 56% of
Owns 50.5% of SSKI Securities Pvt. Ltd. Morakhia Family & Associates
Retail broking arm of the group Shareholding pattern 56% Morakhia family (promoters) 18.5% HSBC Private Equity Management, Mauritius 18.5% First Carlyle Ventures, Mauritius 7% Intel Pacific Inc.
Investment Banking arm of the group Shareholding pattern 50.5% SSKI Securities Pvt. Ltd. 49.5 % Morakhia family
Among the top 3 branded retail service providers (Rs. 200+crs average daily Vol- FY 03-04) Multi-channel access to clients Tailor made research and products Depository Services Derivatives Innovative products for enhanced performance
- 31
On-Line Share Trading Portal ___________________________________________________________________________ It helps the customer meet his pay-in obligations on time thereby reducing the possibility of auctions. The company believes in flexibility and therefore allows accepting late instructions without any extra charge. And execute the instruction immediately on receiving it and thereafter the customer can view his updated account statement on Internet. Sharekhan Depository Services offers demat services to individual and corporate investors. It has a team of professionals and the latest technological expertise dedicated exclusively to their demat department. A customer can avail of Demat \ Remat, Repurchase, Pledge, Transmission facilities at any of the Share khan branches and business partners outlets.
- 33
Award-Winner
Winner of
Chip
magazines
Best
Financial Website Award
- 34
ALTERNATE CHANNEL DEVELOPMENT The alternate channel was founded in December 2003. Till then only direct channel existed which aimed at targeting only HNI customers. The alternate Channel was started with an aim of targeting the retail customers who traded on small volumes. This channel was launched in Delhi, Mumbai, Gujarat, Pune and Bangalore for experiment. Ms. Jignasha Sevak acts as a Regional Product Manager of alternate channel of Gujarat zone and handles the Ahmedabad and Baroda branches. This Channel is very successful in all the five cities and Sharekhan is planning to launch it in many other cities of India. In Gujarat even they are working on starting alternate channel in Surat and Rajkot. In short span of 6 months Sharekhan has more than 600 retail customers in Gujarat.
- 35
On-Line Share Trading Portal ___________________________________________________________________________ 2. SPEED TRADE ACCOUNT This is ideal for active traders who transact frequently during days trading session to capitalize on intra-day price movements. Speed trade is an Internet-based application available on a CD, which provides everything a trader needs on one screen, thereby, reducing the time required to execute a trade. SPEEDTRADE offers a tick-by-tick update on stock price movements with market depth and intra-day chart and lets the client do his own stock/technical analysis. While the Lifetime charge for this account is Rs.1000 with a minimum brokerage of Rs.1000 to be paid monthly. 3. SPEED TRADE PLUS ACCOUNT Speed trade plus has all the above-mentioned features with an additional power to also trade in Derivatives. Speed Trade Plus extends the power of online trading from cash markets to Futures & Options. On a single screen, a customer can trade cash as well as future & option contracts. Other features include advanced Intra-Day Charting (Bar & Japanese Candlestick Charts), easy order placement and instant trade confirmations in seconds, price alerts, research calls, and derivative tool-kit to help the customer trade like the experts. While the Lifetime charge for this account is Rs.1500 with a minimum brokerage of Rs.1500 to be paid monthly. BANK AFFILIATION Share khan has affiliation with 5 banks, which allows its customers to enjoy the facility of instant credit and transfer of funds from his savings bank account to his share khan trading account. The affiliated banks are as follows: HDFC BANK UTI BANK CITY BANK GLOBAL TRUST BANK IDBI - 37
On-Line Share Trading Portal ___________________________________________________________________________ AFTER HOUR ORDERS Share khan customers also enjoy the facility of placing orders even after the trading hours, and the orders are executed as soon as the market opens. DIAL-N-TRADE It is also an exclusive service available to all Share khan customers for trading in shares via the telephone. On dialing the toll free number 1600-22-7050 and on entering the customers TPIN number, the customer will be directed to a telebroker who will buy or sell shares for him. TIMELY ADVICE Last but not the least, the USP of share khan is its timely advice that it gives to its customers 4 times in a day through e-mails. Among these e-mails sent, One is pre-market mail indicating the position of the market (i.e. either bullish or bearish trend) when it opens. The other two e-mails are the during market hours mails which indicate as to how the market will move and in which direction. The fourth e-mail that is called the post market mail or the eagle eye is the most important and valuable suggestion. In this e-mail, all the scripts that are under coverage are segregated into 5 clusters. Each cluster represents a certain profile in terms of business fundamentals as well the kind of returns the customer expects over a certain time horizon. This he3lps the customer identify the stocks that match to his objectives.
- 38
On-Line Share Trading Portal ___________________________________________________________________________ Details of pending, executed and rejected orders. Online access to Customer Service. 128 - bit super safe encryption. Facility to place after market orders Online fund transfer facility from leading Banks Online intra-day technical calls. Exhaustive database of over 2000 companies Historical charts and technical analysis tools. Last but not the least, ideas that help you to make money!!! Brand Name
The company as a whole in its offline business has named itself as SSKI Securities Pvt. Ltd -Sevaklal Sevantilal Kantilal and Ishwarlal Securities Pvt. Ltd. The company has preferred to name themselves under a Blanket Family Name. But in its online division started since 1997, the company preferred to name itself as SHARE KHAN. The Brand Name SHARE KHAN itself suggests the business in which the company is dealing so that the consumer could easily identify the product or service category. Services Share khan offers its customers, depository services and trade execution facilities for equities, derivatives and commodities backed with investment advice tempered by decades of broking experience. The teams of its dedicated analysts are constantly at work to track performance and trends. Dial-n-trade is also an exclusive service available to all Sharekhan customers for trading in shares via the telephone. On dialing the toll free number 1600-22-7050 and on entering the customers TPIN number, the customer will be directed to a telebroker who will buy or sell shares for him.
- 40
2. PRICE
List Price CLASSIC One time 750 registration fee Minimum brokerage Nil Charges Quarterly SPEED TRADE 1000 1000 SPEED TRADE PLUS 1500 1500
Brokerage Share khan in its online business charges brokerage as follows: - In equity Market: On Trading: 0.1% On Delivery: 0.5% - In Derivative Market On Trading: 0.12% (Total brokerage) On Delivery: 0.1% Service Tax -8% on Brokerage. Turnover tax + Stamp duty -0.015% (Rs. 15 on every turnover of Rs. 100000) Custody Charge Re. 1 per script held per month. Discounts For investors with High Net worth, there are slabs in brokerage rates. Payment Period The transaction settlement date in the securities market is T+ 2 days i.e. the payment of the transaction taken place has to be made within two days of its occurrence. Credit terms Share khan allows its customers to trade up to 4 times i.e. by keeping 1/4th margin with them. Dematerialization charges Re. 3 per certificate or Rs.15 per requests whichever is higher.
- 41
3. PROMOTION
Online share trading is totally a new concept in Indian Market. Generally investor doesnt like to come out from conventional way of share trading. Share khan has introduced this product in. The concept and Product are still new in the market. Therefore the company has undertaken extensive promotion campaign to create awareness about the product. Share khan adopts the following tools for promoting the product Advertising Company advertises its product through TV media on channels like CNBC, Print Media-in leading dailies and outdoors media. It advertises itself as an innovative Brand with a cartoon of tiger-called SHERU. Besides attractive and colorful brochures as well as posters are used giving full details about the product. Mails are sent to people logging on to sites like moneycontrol.com and rediff.com. Also, stalls are opened up now and then at places where prospective customers can be approached. Sales Promotion The Company offers Rs.500 instead of Rs.750 for corporate accounts (more than 20 accounts). Also, it provides online trading accounts for just Rs.300 for IIM students. Sales Force The Company has an aggressive sales force, which is given incentives, based on their sales. The sales force is given intensive training continuously. Seminar The Company also arranges seminar in corporate world for creating awareness about the product. Recently, it had organized for a seminar in ONGC, IIM. Direct Marketing Company emphasizes more on direct marketing, as many people are still not aware of this new way of smart trading. For this, the company recruits and trains sales representatives so as to explain the product and solve customer queries related to the product. This is the most effective way to communicate the three-in-one concept which company offers. Telemarketing This is another promotional tool company is using to boost up its sales. For this, the company collects the database of the people belonging to different professional segments.
- 42
4. PLACE
Channels Share khan uses various channel alternatives to reach to its customers through Internet Tele Marketing Retail Share Shops Franchisee Owners Power Brokers Sales Force
Coverage Access to the website from any part of the globe. Locations Share khan has the largest chain of retail share shops in India. It has 180 share shops located in 90 cities all over India like Pune, Thane, Chennai, Kolkata, Banglore, Luckhnow, Darjleeng, Kanpur, Baroda, Midnapore, Surat, Delhi, Gaziabad, Hydrabad, Allahbad, etc.
5. PEOPLE
Employees Selection: Employees are selected on the basis of their experience and qualification as applicable to the job. Training: Intensive training is provided to the employees till a week once they join and even at times required after that. Motivation: The employees are motivated through incentives they are provided. Research Team Share khan has a team of dedicated analysts who have years of working experience in the industries that they track, and a proven track record in using their knowledge of the investment science to deliver results. Customers, the heart of sharekhan are really treated loyally like the kings. The customer care, which comprises of highly trained executives operating from 9:30 to 8:00 p.m.
- 43
6. PHYSICAL EVIDENCE
Locality of the office: In Ahmedabad, two franchise outlets are located in posh areas like Navrangpura and Maninagar. A new franchise is going to open up in Vastrapur. Office Environment: The ambience within the office is what can make the customer feel comfortable in trading. The cordial and friendly atmosphere at office is like a full time motivation for the employees. Interiors and Infrastructure: The office is well furnished and has 24 computer terminals on which tick-by-tick price movements of the securities are displayed.
7. PROCESS
In this service organization, the ways in which the customers receive delivery of the service constitutes the process. Here, the process involves adding value or utility so that the customers get full satisfaction for the money spent by them. Here the process begins from the step when customer wants to open einvest account and ends when his account is actually activated. All Indian residents and NRI are eligible to avail this service. Customers can open a sharekhan e-invest account by filling a single application form. This form includes 12 agreements like 1. Main form with customer details 2. Agreement between sharekhan and client in respect of the ONLINE-INVESTMENT SUPPORT service offered. 3. Agreement between the Depository Participant and the client for providing the transaction statement through Internet. 4. Irrevocable power of attorney 5. Agreement between the DP and the person seeking to open an account with the DP. 6. Maintenance of clients account on a running account bases by SSKI. 7. Agreement giving the right of lien on the credit balance of client in NSE trading. 8. Agreement giving the right of lien on the credit balance of client in BSE trading. 9. Risk disclosure document (cash segment) 10. Power of attorney L.J Institute of Management Studies - 44
On-Line Share Trading Portal ___________________________________________________________________________ 11. Member and client agreement. 12. Web-online agreement between member-broker and client.
Skill s
Style
STRUCTURE: Share khan is flexible in terms of making temporary structural changes to cope up with specific strategic tasks without any hassles. If need arises, the top management can assign the role to any of its employees which it considers capable and skillful. STRATEGY: Share khan believes not only in developing the strategies but also in its successful execution. SYSTEMS: This constitutes of all the training and development systems, estimating budgets and the accounting system of Share khan. STYLE: Style refers to all the symbolic actions undertaken by top managers of Share khan and its influence on the subordinates. STAFF: Share khan values its employees as its assets and therefore carefully trains and motivates them by giving them incentives at regular intervals. L.J Institute of Management Studies - 45
On-Line Share Trading Portal ___________________________________________________________________________ Talented employees are assigned as mentors and given real responsibility and moved into higher positions. SKILLS: The term skills refer to those activities organizations do best and for which they are known. Share khan is known for its timely advice (suggestions/tips), which it caters to its customers and it boasts of 70-90% strike rates in booking recommendations. SUPERORDINATE GOALS: This refers to guiding concepts, values and aspirations that unite an organization in some common purpose. It provides the customers the best service as it believes in customer satisfaction and retention.
- 46
STRENGTHS 80 years of experience in securities market Largest chain of retail share shops in India Volume based differentiated product. User friendly website. Dedicated and responsive workforce/staff.
WEAKNESSES Problems due to Network crash Unawareness among investors. Sales Promotion is not effective. Low customer satisfaction and retention.
OPPORTUNITIES To tap the untapped market To capture the Market lost to its Competitors. To focus on developing a superior and powerful portal To spread awareness of its Brand Name To increase its Market Share
THREATS Competitor develops a superior portal Prolonged depression and high volatility in the market New Entrants.
- 47
Iron CustomersClassic
PLATINUM AND GOLD CUSTOMERS Share khan pays exclusive attention to its speed trade and speed trade customers and considers them as platinum (most valuable) customers as they yield high volume to the company and earn them high income in terms of brokerage. It specially cares for its speed trade customers in terms of rendering quick response to attend to their queries and complaints, because these are the customers who once if satisfied properly would word and recommend the company and its service to other investors also. IRON CUSTOMERS Share khan recognizes its classic account holders as its iron customers as these are the retail customers who are very small players and yield income to the company in terms of small brokerage. Share khan always believed in a policy to be responsive to customers queries and complaints.
- 48
5. Agreement between the DP and the person seeking to open an account with the DP It mainly contains charges charged by Share khan as DP to its clients for various services offered by him. 6. Irrevocable power of attorney The power of attorney is irrevocable until all dues payable by client to member broker are satisfactorily settled and agreed between them.
- 49
On-Line Share Trading Portal ___________________________________________________________________________ 7. Agreement between the DP and client for providing the transaction statement through internet It contains the agreement of in what way client would be getting transaction through internet 8. Power of attorney Here Share khan is irrevocably nominated, appointed as true and lawful attorney for certain acts for Demat account. 9. Risk disclosure document Risk involved for cash segment to client,. Investors rights and obligations. This form will help him open the sharekhan trading account along with a bank account and DMAT account. There are three options available to the customer for applying: 1. Through toll free number: 1-1600-11-7050 2. Through visit to any of the sharekhan centers in the city. 3. Through filling up the application form online. Customer is required to give residential proof and an identity proof along with the application form. On submitting the application form, it will be processed at Bombay and all the required accounts will be set up. If the application is not processed because of lack of details, application will be rejected and the customer will be contacted by companys representative or by mail. Once the application is accepted the customer will be informed by mail as well as through post. Customer will be sent a login ID, membership and trading password, DP number, customer ID once the form is processed. Now the customer can login to the account from any place and start trading. In case, he faces some difficulty, he can contact the company through mail or can give a call to customer care or personally visit the center.
- 50
RESEARCH The scientific approaches that determine market direction and help you decide what stocks to buy or sell. Whether it is for the short term or the long term, there is method in this madness! Research is classified into 3 analysis: Fundamental Analysis Technical Analysis Market Analysis
- 51
Sharekhan Research
Our tigers dig meaty Stock Ideas out of the heart of the market and bring them to you. Their skill at identifying their prey--Stock Ideas-while keeping your taste for investment in mind is reflected in the depth of their research and the performance of the ideas. The Market Strategy reports, on the other hand, identify the hunting-ground for Stock Ideas, ie sectors and stock groups that are ripe for performance, discuss the state of the economy and its impact on the stock market as well as advise you on dealing with the impact of socio-political issues on the market. It is classified into two : Market Strategy Stock Ideas Market Strategy The Market Strategy reports identify the hunting-ground for Stock Ideas, ie sectors and stock groups that are ripe for performance, and discuss the state of the economy and its impact on the stock market. Market Strategy also takes a longerterm view on stocks, ie three to six months. It outlines our expectations of the broad market and defines a broad strategy. It gives a five-legged rating to a list of stocks that we think will outperform the market during the given time period. Stock Ideas
- 52
On-Line Share Trading Portal ___________________________________________________________________________ Stock Ideas is aimed at Sharekhan's trading clients. It presents our best stock picks in today's market. We categorise these companies into six clusters to help you identify the stocks that fit your time horizons and return objectives the best. Each cluster represents a certain profile in terms of business fundamentals as well as the kind of returns you can expect of it over a certain time horizon. Stock Ideas are given in form of two ways : 1. Recommendation In recommendation we give advice to clients which shares to buy, hold and sell. 2. Cluster o Evergreen: Dominant players with strong brands, robust management credentials, supernormal shareholder returns. Will steadily compound 18-20% pa for next 5 to 10 years. o Apple Green: Potentially steady compounders, but 5-10year graph is a bit unclear. Could gallop at 25-30% pa over the next 2-3 years. o Emerging Star: Young companies likely to rule chosen niches. Even better, the niches could balloon into fullblown markets. Potentially ten- baggers if youre patient. o Ugly Duckling: Trading below fair value or at huge discount to peer group. But somethings cooking. Could double in two to three years time. Swans, anybody? o Vultures Pick: Companies with valuable assets at throwaway prices. Buy and await predators. Startlingly high returns possible. Patience is vital, my dear. o Cannonball: Seasons favorites. Typically fast gainers in rising markets could return 30-50% within 6 months. Get in, cash in, and get out.
SSKI Research
Institutional Research - Each individual company is analyzed and its results are placed on our site. Here Rating is given on relative basis, in the form of underperformer, neutral and outperformer. Outperformer: This stock will outperform the market by giving a relatively higher return than a market-based index.
- 53
On-Line Share Trading Portal ___________________________________________________________________________ Neutral: This stock is expected to more or less give you the index rate of return or a return not significantly higher or lower than the market index. Underperformer: This stock is expected to lose value on a relative basis when compared to a market-based index.
Sector Watch Here each sector is analyzed thoroughly. For eg. Pharma sector, Automotive sector, and various other sectors.
Cash
The cash market encompasses the entire gamut of listed stocks on Indian stock exchanges. The cash market refers to the secondary market where you may day trade or take delivery. Every product developed for the cash market can be replicated in the futures & options market (if it is listed there) by following the trading levels of the cash market for execution in the derivatives market. Braveheart: Braveheart Strategies outline the market forecast for the medium term. Braveheart uses the strategy to identify aggressive stocks to maximize gains based on trend-based position trading. The portfolio has matured from a cash product to a cash and futures product to allow investors to take advantage of the short side of the market. The risk-reward ratio is pegged at 1:3 with average targeted returns of 30% on stock recommendations. Day Traders Hit List: The hottest product in terms of penetration and usage, it is found on everyones dealing desk in the morning. The list of 15 liquid stocks that are in action identifies 2 support and resistance levels for the stocks and provides a bias for the stock to allow day traders to trade effectively. Momentum Calls: The demand for catching fast movements in stocks for a 1-7-day period has led to the emergence of this product. Momentum Calls help you make a quick buck with the use of stop losses and a risk-reward ratio of 1:2 at least. The idea is to identify momentum the moment it begins and get onto the bandwagon. But if the move does not happen we move out as fast at minimum loss rather than wait for stop losses to be triggered. This improves efficiency in trading and maximizes profits. Punters Call: A daily view on how the market and the major indices, ie the Sensex and Nifty, are expected to behave during the day. Closest support and resistance levels plus moving averages are provided to help traders take decisions.
- 54
On-Line Share Trading Portal ___________________________________________________________________________ Fortnightly View: A fortnightly recap and analysis of our market view over the short, medium and long term.
Derivatives
Derivatives are about opportunities in derivatives market. In Daring Derivatives, stock option premiums are traded to capture price movements; margin trading is carried out using the futures segment; and low-priced options of stocks that are about to make a big move in the last week before expiry of the options are identified to help you make a killing. The calls cover index futures too. Advantage Gamma: Options premiums fall at the end of the month. We spot momentum stocks to take advantage of the cheap options during this period. Idhar bhi-Udhar bhi: Expecting a large trend reversal either after a large move or before a major event. Hedge yourself by buying both a call and a put. Whichever way it goes you should make money. Quarter Delta: One should write a call option when the underlying stock is expected to stay at the same level or fall. Similarly one should write a put option when the underlying stock is expected to stay at the same level or rise. However it is less risky to write out-of-the-money options (delta = 0.25) than to write at-the-money options. Covered Calls: If you have an equities portfolio you can make consistent gains on your stocks and that too without selling them or losing delivery of them most of the time. How? Write call options against the portfolio. Derivatives Info Kit: The only exhaustive report on the derivatives market trading data including stock-wise open interest, put-call ratios, strike sizes, margins and much more than you can dream of. Futures Commentary: An end-of-day analysis of the activity observed in the futures & options segment. It discusses where the open interest has increased and if options traders are buying puts and calls.
- 55
- 56
DEMERITS:
Share khan: Absence of BSE Online Trading ICICI: 5 Paisa: HDFC: KOTAK: High Brokerage No Brand Name, Pool Account High Brokerage Deposit
- 57
HDFC sec ICICI direct India Bulls 5 Paisa Sharekhan Kotak street
Brokerage (% )
Credit Flexibility Account Opening Charts 12 Credit Flexibility 10 8 6 4 2 0 0 200 400 600 800 A/c opening Charge HDFC sec ICICI direct India Bulls 5 Paisa Sharekhan Kotak street
- 58
CHAPTER - 7
PEST Changes Affecting Share Market
POLITICAL IMPLICATIONS
Recently the political environment has affected a lot to the stocks. As the government changed against the peoples expectations, the prices of the scripts went down steeply than expected. NDA government was expected and instead Congress is the ruling one. When it wasnt yet decided who will be the next prime minister, the markets went down to the lowest in the last 8 years. There was a drop of about 800 points on 17 th May, the black Monday. The markets were closed after a 500 drop at 11:10 p.m. for two hours and were re-opened and closed again due to a constant fall in sensex. This affected the turnover highly and many investors especially those dealing with derivatives just decided to be out of this volatile and risky market. Even, new investors who wanted to start investing or had just started investing were stepped back by this fall. Some of the local brokers had to stop their business or borrow from others. Also, there was a very high lot size of 2, 50,000 shares of Reliance Industries Limited ready for sale in the market and transactions were executed every minute. Then, again when Mr. Manmohan Singh became the PM, markets gained. Right now, the markets are still volatile, suited more for intra-day trading than investments.
ECONOMIC IMPLICATIONS
The budgets affect highly to the stock markets. It has a relation to stock market as peoples income is connected to it. The tax brackets play an important part in this. If a person has high income and falls under the 30% tax bracket, he would not opt for online trading (as higher the profits, higher the tax he has to pay). In such economic environment, people prefer to trade offline, wherein their profits remain un-booked as per their wish. Mr. Chidambaram, who had given an excellent budget in 1991, which brought a change in economy, is once again the Finance Minister. The whole country has high hopes on the July 8, 2004 budget. It will have different effect on the incomes of people belonging to different income groups and hence will affect the stock markets too.
SOCIAL IMPLICATIONS
L.J Institute of Management Studies - 59
On-Line Share Trading Portal ___________________________________________________________________________ Online trading is being adapted by more and more people each day. Youngsters have started trading in large numbers too. The society as a whole is moving towards technology in this digital revolution age. Women in corporate world or housewives have started earning through this way of smart trading sitting at home or in their offices. Thus, in this changing technological scenario, e-trading clicks in peoples mind along with e-shopping, e-governance. Globalization has brought about a change in consumers who want ease and comfort in trading everywhere they move. Again, its a different story during black Mondays or at the time of losses, when the income from the main business gets lost in the stock markets. These affect the society in the sense that people have given their lives loosing in stock markets. This is an adverse implication of stock market as a whole.
TECHNOLOGICAL IMPLICATIONS
As this is online trading, one has to be constantly in touch of the latest developments in the technological field. If the competitor has a better portal due to developments in software, then there is a chance of loosing market share. Recently, applet-based software is used which is enabled by Java to get the basic portal. Even, the speed of execution and internet connection used by the company affects the customers. An internet version of 6.0 is a must for online trading. So, one has to be continuously upgraded with new technological developments in the market.
Homepage of Sharekhan.com
- 61
My Account Screen
Description of Options Available in My account is as follows 1. Trade Now : It allows the user to enter Script code, Order type(Buy, sell, Short sell),Choice of Market and Limit Order, Quantity ,limit price in case of Limit order , Trading password that is given to user by Sharekhan and finally by Pressing Place order button order will execute. 2. My Trade Portfolio: It allows the user to see the Portfolio of Trading of the day after the Market Hours. 3. Account Summary: It allows the user to see the Balance of money in mini account of Sharekhan which is allocated for the trading by the user. Yield on sale and Payable amount on purchase will be deducted from this account. 4. Track your Orders: This option allows the user to Track the order that he/she has put in the day to see what happens to those orders whether they are fully executed, halfly executed or not executed at all. 5. Check Your Trading Limits: It allows the user to check the limit of the transaction that he/she can make. 6. Check Your Open Position : It allows user to verify that which are the scripts that must be square off in Particular day incase of intraday transaction.
- 62
On-Line Share Trading Portal ___________________________________________________________________________ 7. View your Transaction: It gives the information about transaction that we have made on particular scripts at particular price and quantity as per the date criteria. 8. Enable IPO Online: It allows the user to fill up the issue Form of IPO online. Thus eliminates the Physical Form filling. 9. View Your Contracts: It Gives the information of our Contracts. 10. Cash and Securities Due: It gives reminder to user about how much cash and securities will be receivable and payable. 11. Move cash to Sharekhan: This Option allows the user to Move Cash to Sharekhan account from the saving bank account for the Trading purpose. By entering net banking Password and Userid of the user, he/she will be allow to enter Amount to be withdrawn from bank and then that amount will be added in Account summary of Sharekhan. 12. DP Summary: This option allows the user to check his/her demat balance in SSKI. 13. Receivable Summary: This option is same as Cash and Securities but adds one Extra Facility of BTST (Buy Today Sell Tomorrow). 14. Miscellaneous Links: This Covers all options in tree Structure and has facility of Withdrawing cash from Sharekhan to Saving Bank account. 15. Profile: This option allows user to change the Trading password. 16. Research: This option Allows user to search information of particular company, by the way of news, Ideas, growth charts, turnover, profit, IPO etc.
- 63
Functions 1. It gives right time fluctuation in Script price by the way of showing blue color for increased price and orange for decreased script price. 2. It also shows latest update of Trading messages, Sharekhan messages, diagnosis, news and ideas about share market. 3. Here customer can select script, order type, quantity and purchase or sale by the way of pressing Submit button. In this way order will be execute. 4. Here customer can also build his/her own group of scripts and can see it in the terminal whenever he/she opens Fast trade terminal.
- 64
Above Terminal is provided to the Speedtrade account customer. Special Software of Sharekhan needs to be installing on the customers Computer for accessing this terminal. It also includes the facilities of Graphs.
- 65
CHAPTER - 9
L.J Institute of Management Studies - 66
MY EXPERIENCE
9.1 Learning Experience
My training began from 20-May-04 and continued up to 20-july-04. Initially while joining Share khan, I was trained for 3 days about the Indian security market, about the company and the product. I was told to go to the field after 3 days of the completion of the training. An experienced executive from the organization accompanied us to corporate for initial 2 days. Thereafter I went on my own targeting corporate in various parts of the city. Also in my fourth week in the organization, I was given training about the functioning of the derivatives market. In that I was taught about how the future and options contracts are dealt with.
On-Line Share Trading Portal ___________________________________________________________________________ Share khan also gives advertisement in leading English dailies and and on channels like CNBC where the customer care toll free no. is displayed. I met people in different retailers located at Ashram road, C.G. road, Mithakali 6 roads, S.G. Highway, Paldi, Maninagar, Judges Bungalow road, Vatva, Gandhinagar, Bapunagar, Shahibaug, Jodhpur, Naroda, Sabarmati, Naranpura, Navrangpura, Gurukul etc. Others include Advertising Agencies, Chartered Accountants, Travel agencies, Exporters, Education consultants, Samsung as well as other household appliance showrooms. I met the Customer Relationship Managers, Assistant Managers, Sales Managers, Accountant officers and even the Directors of some companies. Getting entry into this big corporate was a big challenge for me. At some places, I was even offered jobs too!!! I needed to report daily in my company in the DSRs (Daily Sales Report) the information about the people I met. This DSR included: Name of the customer, Ph. Number, Time, Period, Status, Follow up and Reasons. Even, I was required to fill up a Deal-Sheet for HNIs that is the High-Network Individuals (the individuals who trade in higher volumes) that I met on a particular day. I opened up stalls with other Trainees at places like IIM, old as well as new UTI bank, Shivranjini Cross Roads, Torrent House, Hanuman Temple near Shahibaug, Maninagar, Law garden and Ankur. The response at places like UTI bank and IIM was really good. I got leads from there and through follow-ups; some of these leads got converted into my customers. Once, a customer filled up the form, I had to call him/her after 4 working days to check if he has received the login ID and password from us (Bombay office of Sharekhan). After that, I was required to show the customer how to make a transaction and how to get access to the terminal. Also, other queries which the customer faced had to be solved by me. So, it was all a very good learning experience for me. What I faced was the scorching heat of the city, be in a one area at one time and just the opposite area in other time as per customers appointment. How to speak to consumers, solving their queries, building a rapport with them was all up to me. I created my own databases which I feel is an achievement. Also, getting into the offices with the salespeople not allowed board was an achievement. The feeling after meeting a customer once and in the final meeting, and closing the deal gave me a sense of fulfillment. There were 40 signatures in the account opening form and entertaining my customers while filling-up the form was again a challenge. At Sharekhan, the atmosphere was perfectly cordial. There were senior trainees always to solve the difficulties I faced in approaching a customer, filling up the form, demonstrating the site, or solving their queries. I was supposed to be formally dressed and required to report twice daily. L.J Institute of Management Studies - 68
On-Line Share Trading Portal ___________________________________________________________________________ I faced some bad and resentful experiences like being sent out of offices without being listened. Even, I waited for hours for a customer and went to the customer again in case if a signature is left in the form or in occurrence of any proof problems. This was again a learning to increase my tolerance and be more careful while filling up the form.
CHAPTER - 10
RECOMMENDATIONS
L.J Institute of Management Studies - 69
To Share khan:
1. BSE online terminal: At present the company is offering online trading only on NSE but there are many customers who want to trade on BSE. Company should provide BSE online trading too, to attract these customers. 2. Post-sales service: Customer retention is what the company is lacking. It is more difficult to retain a customer than to form one. For this, an effective post-sales service is a must, which the company is lacking. For customer care, more professionals may be recruited to overcome this problem. 3. Effective sales promotion: Sales promotion schemes should be such to attract the prospective customers. Proper advertising may be done in order to create awareness and good schemes to attract the customers may be offered. 4. Customer convenience: Many of the customers prefer to have the portal on their desktops itself instead of getting it through the site. Direct login and password may be provided to have it on desktop, if the customer wants it. Even, the Speedtrade and Speed-trade plus version can be put in the site, so that there is no need to carry its CD wherever one moves. Also, suggestions are not available in the basic portal. The terminal speed is low and the TPIN and phone ID are not changeable. Company may provide these facilities as well. 5. Pledging: In order to attract customers, it may provide exposure not just in cash terms but also security-wise. This will enhance its sales, as customer will not have to move cash to the company every time he/she wants to trade. 6. Sales force: Company does recruit trainees, but it does lack a professional sales force, which remains with it on a permanent basis. For this, the company may offer salary on a fixed basis instead of variable one that it offers now. 7. Communication: There is a big problem in the co-ordination of work due to lack of proper communication. The middle-level management and the bottom-level management are not able to work as a team due to this.
BIBLIOGRAPHY
Books: L.J Institute of Management Studies - 70
On-Line Share Trading Portal ___________________________________________________________________________ Agarwala Kamlesh N., Agarwala Deekshah, Bulls, Bears and the Mouse An introduction to online trading, New Delhi: Macmilan India Ltd. 2000, 445pp. Patel Alpesh B., Trading Online, Delhi: Pearson Education Asia Pte. Ltd., 2001, 454pp. Vetri M. Subramanium, The World of online investing, Investors year book, The ET knowledge seies, 2000-01. 62pp.
Magazines: Share khan value line Websites: http://www.sharekhan.com http://www.nseindia.com http://www.bseindia.com http://www.hdfcsec.com http://www.indiabulls.com http://www.5paisa.com http://www.icicidirect.com http://www.kotakstreet.com hhtp://www.google.com
- 71