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SUMMER TRAINING PROJECT REPORT
SHARE KHAN LTD.
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT
OF BACHELOR OF BUSSINESS ADMINISTRATION (BBA)
MAHARISHIDAYANANDUNIVERSITYROHTAKROAD
A STUDYONPORTFOLIOMANAGEMENTSERVICES
Training supervisor Submitted By:
Mrs. Sonia Sharma SIDDHANT KAR
(Assistant Professor) Roll no. 1190111149
Reg no. 1130310202
ACKNOWLEDGEMENT
TheCompletionof mysummertrainingandtheproject onfeedbackof clientswhohavebought share khan’sonlinetrading account inthemonth of maywouldnothavebeenpossible without theconstant andtimelyencouragementfromallconcerned.
Iexpressmy sincerestgratitudeandthanksto Mrs. SONIASHARMA (Assistant Professor) – share khan,Delhibranchforhisguidanceandsustainedhelptomeduringthecourseofmy summertraining.
IhadthepreciousopportunityofattainingtrainingatSharekhan. Underhisbrilliantuntiring guidanceI couldcompletetheprojectbeingundertaken onthe“ASTUDYONPORTFOLIO MANAGEMENTSERVICES”successfullyintime. Hismeticulousattentionandinvaluable suggestionshavehelpedmein simplifyingtheprobleminvolved inthework. Iwouldalsoliketo thanktheoverwhelmingsupport of allthepeoplewhogavemeanopportunitytolearnand gainknowledgeaboutthevariousaspectsoftheindustry.
Blessingsof myparentshavealsobeen instrumentedtocompletethistask.
AboveallI wouldliketothank godforgivingmethiswonderfulopportunity.
SIDDHANTH KAR
EXECUTIVE SUMMARY
Investing is both Arts and science. Every individual has their own specific financial need and
expectation based on their risk taking capabilities, whereas some needs and expectation are
universal. Therefore, we find that the scenario of the Stock market is changing day by day hours
by hours and minute by minute. The evaluation of financial planning has been seen in
customers. Now a days investment have become very important part of incoming saving.
In order to keep the investor safe from market fluctuation and make the profitable, Portfolio
Management Services (PMS) is fast gaining investment option for the high net worth individual
(HNI). There is growing competition between brokerage firms in post reform India. For investor
it is always difficult to decide which brokerage to choose.
The research design is analytical in nature. A questionnaire was prepared and distributed to
investors. The investors profile is based on the results of a questionnaire that the investors
completed. The sample consists of 100 investors from various broker s premises. The ‟target customers were investors who are trading in the stock market.
In order to identify the effectiveness of Share khan PMS services this Research is carried
throughout the area of Hyderabad. At the time of investing money everyone look for the Risk
factor involve in the Investment option. The report is prepared on the basis of research work
done through the different Research Mythology the data is collected from both the source
Primary sources which consist of questionnaire and secondary data is collected from different
sources such as Company website, Magazine and other sources.
As the PMS services of Share khan Limited have the best result in its field. It has given
43050% return in Trailing stops, 94.30% return in Nifty and 38.10 in Beta Portfolio
which is the result when the Market was not doing well from last one year.
In this project I have shown the details of financial planning as well as wealth management so as to
understand about the customer s needs and wants with respect to market and how a client s‟ ‟
portfolio can be designed and what factors a portfolio manager must consider for designing a
portfolio.
I
INTRODUCTION
INTRODUCTION TO STUDY
The field of investment traditionally divided into security analysis and portfolio management.
The heart of security analysis is valuation of financial assets. Value in turn is the function of risk
and return. These two concepts are in the study of investment .Investment can be defined the
commitment of funds to one or more assets that will be held over for some future time period.
In today fast growing world many opportunities are available, so in order to move with
changes and grab the best opportunities in the field of investments a professional fund manager
is necessary.
Therefore, in the present scenario the Portfolio Management Services (PMS) is fast gaining
importance as an investment alternative for the High Networth Investors.
Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income,
debt, cash, structured products and other individual securities, managed by a professional
money manager that can potentially be tailored to meet specific investment objectives.
When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns
units of the entire fund. You have the freedom and flexibility to tailor your portfolio to address
personal preferences and financial goals. Although portfolio managers may oversee hundreds of
portfolio, your account may be unique.
Investment Management Solution in PMS can be provided in the following ways:
i. Discretionary
ii. Non Discretionary
iii. Advisory.
Discretionary: Under these services, the choice as well as the timings of the
investment decisions rest solely with the Portfolio Manager.
Non Discretionary: Under these services, the portfolio manager only suggests the investment
ideas. The choice as well as the timings of the investment decisions rest solely with the
Investor. However the execution of trade is done by the portfolio manager.
Advisory:Under these services, the portfolio manager only suggests the investment ideas. The
choice as well as the execution of the investment decisions rest solely with the Investor.
Rule 2, clause (d) of the SEBI (portfolio managers) Rules, 1993 defines the term “Portfolio”
as “total holding of securities belonging to any person”.
As a matter of fact, portfolio is combination of assets the outcomes of which cannot be
defined with certainty new assets could be physical assets, real estates, land, building, gold
etc. or financial assets like stocks, equity, debenture, deposits etc.
Portfolio management refers to managing efficiently the investment in the securities held by
professional for others.
Merchant banker and the portfolio management with a view to ensure maximum return by such
investment with minimum risk of loss of return on the money invested in securities held by
them for their clients. The aim Portfolio management is to achieve the maximum return from a
portfolio, which has been delegated to be managed by manger or financial institution.
There are lots of organization in the market on the lookout for the people like you who need
their portfolios managed for them .They have trained and skilled talent will work on your money
to make it do more for you.
Therefore, if any investors still insist on managing their own portfolio, then ensure you
build discipline into their investment. Work out their strategy and stand by it.
MYTHS ABOUT PMS
There are two most common myths found about Portfolio Management Services (PMS)
which we found among most of the Investors. They are as follows.
Myth No. 1: “PMS and Mutual Fund are Similar as the investment option”
As in the Finance Basket both the PMS and Mutual Fund are used for minimizing risk and
maximize the profit of the Investors. The objectives are similar as in both the product but they
are different from each other in certain aspects. They are as follows.
Management Side
In PMS, it s ongoing personalized access to professional money management services.‟
Whereas, in Mutual fund gives personalize access to money.
Customization
In PMS, Portfolio can be tailored to address each investor's specific needs. Whereas in
Mutual Fund Portfolio structured to meet the fund's stated investment objectives.
Ownership
In PMS, Investors directly own the individual securities in their portfolio, allowing for tax
management flexibility, whereas in Mutual Fund Shareholders own shares of the fund and cannot
influence buy and sell decisions or control their exposure to incurring tax liabilities.
Liquidity
In PMS, managers may hold cash; they are not required to hold cash to meet
redemptions, whereas, Mutual funds generally hold some cash to meet redemptions
Minimums
PMS generally gives higher minimum investments than mutual funds. Generally, minimum
ranges from: Rs. 1 Crore + for Equity Options Rs. 5 Crore + for Fixed Income Options Rs. 20
Lacs + for Structured Products, whereas in Mutual Fund Provide ongoing, personalized access to
professional money management services.
Flexibility
PMS is generally more flexible than mutual funds. The Portfolio Manager may move to
100% cash if it required. The Portfolio Manager may take his own time in building up the
portfolio. The Portfolio Manager can also manage a portfolio with disproportionate allocation
to select compelling opportunities whereas, in Mutual Fund comparatively less flexible.
Myth No. 2: “PMS is more Risk free than other Financial Instrument”
In Financial Market Risk factor is common in all the financial products, but yes it is true that
Risk Factor vary from each other due to its nature. All investments involve a certain amount of
risk, including the possible erosion of the principal amount invested, which varies depending on
the security selected. For example, investments in small and mid-sized companies tend to
involve more risk than investments in larger companies.
INTRODUCTION TO STOCK EXCHANGE
The emergence of stock market can be traced back to 1830. In Bombay, business passed in
theshares of banks like the commercial bank, the chartered mercantile bank, the chartered
bank, theoriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta,
Englishmanreported the quotations of 4%, 5%, and 6% loans of East India Company as well as
the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when the
Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also
quoted the prices of business ventures like the Bengal bonded warehouse, the Docking
Company and the storm tug company.
Between 1840 and 1850,only half a dozen brokers existed for the limited business. But during the
share mania of 1860-65, the number of brokers increased considerably.By 1860, the number of
brokers was about 60 and during the exciting period of the AmericanCivil war, their number
increased to about 200 to 250. The end of American Civil war brought disillusionment and many
Failures and the brokers decreased in number and prosperity. It was in those troublesome times
between 1868 and 1875 that brokers organized an informal association and finally as recited in
the Indenture constituting the “Articles of Association of the Exchange”.
On or about 9th day of July,1875, a few native brokers doing brokerage business in shares
andstocks resolved upon forming in Bombay an association for protecting the character, status
and interest of native share and stock brokers and providing a hall or building for the use of
themembers of such association.
As a meeting held in the broker Hall on the 5th day of February, 1887, it was resolved to ‟execute a formal deal of association and to constitute the first managing and to appoint the first
trustees. Accordingly, the Articles of Association of the Exchange and the Stock Exchange
was formally established in Bombay on 3rd day of December, 1887. The Association is now
known as “The Stock Exchange”.
The entrance fee for new member was Re.1 and there were 318 members on the list, when the
exchange was constituted. The number of members increased to 333 in 1896, 362 in 1916and
478 in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896, Rs.2500 in
1916 and Rs. 48,000 in 1920. At present there are 23 recognized stock exchanges with about
6000 stock brokers. Organization structure of stock exchange varies.
14 stock exchanges are organized as public limited companies, 6 as companies limited by guarantee
and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have been
permanent recognition. Others have to seek recognition on annual basis. These exchange do not
work of its own, rather, these are run by some persons and with the help of some persons and
institution. All these are down as functionaries on stock exchange. These are
i. Stockbrokers
ii. Sub-broker
iii. Market makers
iv. Portfolio consultants etc.
1. Stockbrokers
Stock brokers are the members of stock exchanges. These are the persons who buy, sell or deal
in securities. A certificate of registration from SEBI is mandatory to act as a broker.SEBI can
impose certain conditions while granting the certificate of registrations. It is obligatory for the
person to abide by the rules, regulations and the buy-law. Stock brokers are commission
broker, floor broker, arbitrageur etc.
Detail of registered brokers
Total no. of registered brokers as on Total no. of sub-brokers as on 31.03.2009
31.03.2009
9000 24,000
2. Sub-broker
A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He assists
the investors in buying, selling or dealing in securities through stockbroker. The broker and sub-
broker should enter into an agreement in which obligations of both should be specified.Sub-
broker must be registered SEBI for a dealing in securities. For getting registered with SEBI,he
must fulfill certain rules and regulation.
3. Market Makers
Market maker is a designated specialist in the specified securities. They make both bid and offer
at the same time. A market maker has to abide by bye-laws, rules regulations of the concerned
stock exchange. He is exempt from the margin requirements. As per the listing requirements, a
company where the paid-up capital is Rs. 3 crore but not more than Rs. 5 crore and having a
commercial operation for less than 2 years should appoint a market maker at the time of issue of
securities.
4. Portfolio consultants
A combination of securities such as stocks, bonds and money market instruments is collectively
called as portfolio. Whereas the portfolio consultants are the persons, firms or companies who
advise, direct or undertake the management or administration of securities or funds on behalf of
their clients.
Traditionally stock trading is done through stockbrokers, personally or through telephones.
As number of people trading in stock market increase enormously in last few years,
some issues like location constrains, busy phone lines, miss communication etc start
growing in stockbroker offices. Information technology (Stock Market Software) helps
stockbrokers in solving these problems with Online Stock Trading.
Online Stock Market Trading is an internet based stock trading facility. Investor can
trade shares through a website without any manual intervention from Stock Broker.
There are two different type of trading environments available for online equity trading.
1. Installable software based Stock Trading Terminals
This trading environment requires software to be installed on investors computer. This software
are provided by the stock broker. This software require high speed internet connection. These
kind of trading terminals are used by high volume intra day equity traders.
2. Web (Internet) based trading application
This kind of trading environment doesn't require any additional software installation. They
are like other internet websites which investor can access from around the world through
normal internet connection.
Stock exchanges are like market places where stockbrokers buy and sell securities for
individuals or institutions. As per the SCRA (Securities Contracts Regulation Act) 1956, the
definition of securities includes shares, bonds, scrips, stocks, debentures, government securities,
derivatives of securities, units of collective investment scheme (CIS) etc. The securities market
has two interdependent segments: the primary and secondary market.
The primary market is the channel for creation of new securities issued by public limited
companies or by government agencies. New securities issued in the primary market are traded
in the secondary market.
The secondary market operates through the over-the-counter (OTC) market and the
exchange-trade market.
Advantages of Stocks Trading
1. Better returns.
Actively trading stocks can produce better overall returns than simply buying and holding.
2.Huge Choice.
There are thousands of stocks listed on markets in the the world. There is always a stock whose
price is moving - it's just a matter of finding them.
3.Familiarity.
The most traded stocks are in the largest companies that most of us have heard of and
understand - Microsoft, IBM, Cisco etc.
Disadvantages of Stocks Trading
1. Leverage.
With a margined account the maximum amount of leverage available for stock trading is
usually 4:1. Meaning a $25,000 could trade up to $100,000 of stock. This is pretty low compared
to forex trading or futures trading.
2.Pattern Day Trader Rules.
Requires at least $25,000 to be held in a trading account if the trader completes more than
4 trades in a 5 day period. No such rule applies to forex trading or futures trading.
3.Uptick Rule on Short Selling.
A trader must wait until a stock price ticks up before they can short sell it. Again there are
no such rules in forex trading or futures trading where going short is as easy as going long.
4.Need to Borrow Stock to Short.
Stocks are physical commodities and if a trader wishes to go short then the broker must have
arrangements in place to 'borrow' that stock from a shareholder until the trader closes their
position. This limits the opportunities available for short selling. Contrast this to futures
trading where selling is as easy as buying.
5.Costs.
Although online trading costs for stock trading are low they still add considerably to the costs
of day trading. Online futures trading is about 1/4 of the cost for the equivalent value. In the UK
0.5% stamp duty is also levied on all share purchases making trading virtually impossible -
Hence the popularity of spread betting.
II
COMPANY PROFILE
COMPANY PROFILE
Sharekhan is one of the leading retail brokerage of Citi Venture which is running successfully
since 1922 in the country. Earlier it was the retail broking arm of the Mumbai-based SSKI
Group, which has over eight decades of experience in the stock broking business. Sharekhan
offers its customers a wide range of equity related services including trade execution on BSE,
NSE, Derivatives, depository services, online trading, investment advice etc.
With a legacy of more than 80 years in the stock markets, the SSKI group ventured into
institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading
players in institutional broking and corporate finance activities. SSKI holds a sizeable portion
of the market in each of these segments. SSKI s institutional broking armaccounts for 7% of ‟the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional
portfolio investment in the country.
It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional
Investors generate about 65% of the organization s revenue, with a daily turnover of over US$ 2‟
million. The Corporate Finance section has a list of very prestigious clients and has many
„firsts to its credit, in terms of the size of deal, sector tapped etc. The group has placed over ‟US$ 5 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat
Pipavav, Essar, Hutchison, Planetasia, and Shopper s Stop.‟
Mission of the Share khan is
To educate and empower the individual investor to make better investment decisions
through
QUALITY ADVICE
INNIVATIVE PRODUCTS and
SUPERIOR SERVICE
WORK STRUCTURE OF SHAREKHAN
Share khan has always believed in investing in technology to build its business. The
company has used some of the best-known names in the IT industry, like Sun
Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette,
Verisign Financial Technologies India Ltd, Spider Software Pvt Ltd. to build its trading
engine and content. The Citi Venture holds a majority stake in the company. HSBC, Intel
& Carlyle are the other investors.
On April 17, 2002 Share khan launched Speed Trade and Trade Tiger, are net-based
executable application that emulates the broker terminals along with host of other
information relevant to the Day Traders. This was for the first time that a net-based
trading station of this caliber was offered to the traders. In the last six months Speed
Trade has become a de facto standard for the Day Trading community over the net.
Share khan s ground network includes over 700+ Share shops in 130+ cities in‟
India.
The firm s online trading and investment site - ‟ www.sharekhan.com - was launched on
Feb 8, 2000. The site gives access to superior content and transaction facility to retail
customers across the country. Known for its jargon-free, investor friendly language and
high quality research, the site has a registered base of over 2 lacs customers. The number
of trading members currently stands at over 5 Lacs. While online trading currently
accounts for just over 2 per cent of the daily trading in stocks in India, Share khan alone
accounts for 27 per cent of the volumes traded online.
The Corporate Finance section has a list of very prestigious clients and has many „firsts to ‟its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 5
billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat
Pipavav, Essar, Hutchison, Planetasia, and Shopper s Stop. Finally, Share khan shifted hands ‟and City venture gets holds on it.
PRODUCTS AND SERVICES OFFERED BY SHAREKHAN
1. Equity Trading Platform (Online/Offline).
2. Commodities Trading Platform (Online/Offline).
3. Portfolio Management Service.
4. Mutual Fund Advisory and Distribution.
5. Insurance Distribution.
6. Forex
Share khan offers the following products:-
CLASSIC ACCOUNT
This is a User Friendly Product which allows the client to trade through website
www.sharekhan.com and is suitable for the retail investor who is risk-averse and hence
prefers to invest in stocks or who does not trade too frequently.
Features Online trading account for investing in Equity and Derivatives via www.sharekhan.com
Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE.
Integration of On-line trading, Saving Bank and Demat Account.
Instant cash transfer facility against purchase & sale of shares.
Competitive transaction charges.
Instant order and trade confirmation by E-mail.
Streaming Quotes (Cash & Derivatives).
Personalized market watch.
Single screen interface for Cash and derivatives and more.
Provision to enter price trigger and view the same online in market watch.
SPEEDTRADE
SPEEDTRADE is an internet-based software application that enables you to buy and sell
in an instant.
It is ideal for active traders and jobbers who transact frequently during day s session ‟to capitalize on intra-day price movement.
Features Instant order Execution and Confirmation.
Single screen trading terminal for NSE Cash, NSE F&O & BSE.
Technical Studies.
Multiple Charting.
Real-time streaming quotes, tic-by-tic charts.
Market summary (Cost traded scrip, highest calue etc.) Hot keys similar to broker s terminal. ‟ Alerts and reminders. Back-up facility to place trades on Direct Phone lines. Live market debts.
DIAL-N-TRADE
Along with enabling access for your trade online, the CLASSIC and SPEEDTRADE
ACCOUNT also gives you our Dial-n-trade services. With this service, all you have to do
is dial our dedicated phone lines 1-800-22-7500, 3970-7500. Beside this, Relationship Managers
are always available on Office Phone and Mobile to
resolve your queries.
SHARE MOBILE
Share khan had introduced Share Mobile, mobile based software where you can watch
Stock Prices, Intra Day Charts, Research & Advice and Trading Calls live on the Mobile.
PREPAID ACCOUNT
Now you can buy Prepaid Account of Share khan. Pay Advance Brokerage on your
Account and enjoy uninterrupted trading in your Account. Beside this, get great discount
(up to 50%) on Brokerage.
Prepaid Classic Account: - Rs. 2000
Prepaid Speed trade Account: - Rs. 6000
IPO ON-LINE
You can apply to all the forthcoming IPO online hassle free, paperless and time saving.
Simply allocate fund to IPO Account, Apply for the IPO and Sit Back & Relax.
MUTUAL FUND ONLINE
Investers can apply to Mutual Funds of Reliance, Franklin Templeton Investments, ICICI
Prudential, SBI, Birla, Sundaram, HDFC, DSP Merrill Lynch, PRINCIPAL, and TATA
with Share khan.
ZERO BALANCE ICICI SAVING ACCOUNT
Share khan had tied-up with ICICI bank for zero Balance Account for Share khan s Clients.‟
Now their customers can have a zero balance Saving Account with ICICI Bank after your demat
account creation with Share khan.
REASON TO CHOOSE SHAREKHAN LIMITED
Experience
SSKI has more than eight decades of trust and credibility in the Indian stock market. In
the Asia Money broker's poll held recently, SSKI won the 'India's best broking house for
2004' award. Ever since it launched Share khan as its retail broking division in February
2000, it has been providing institutional-level research and broking services to individual
investors.
Technology
With our online trading account you can buy and sell shares in an instant from any PC
with an internet connection. You will get access to our powerful online trading tools
that will help you take complete control over your investment in shares.
Accessibility
Share khan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for
investors. These services are accessible through our centers across the country (Over
650 locations in 150 cities) over the Internet (through the website www.sharekhan.com)
as well as over the Voice Tool.
Knowledge
In a business where the right information at the right time can translate into direct
profits, you get access to a wide range of information on our content-rich portal,
www.sharekhan.com. You will also get a useful set of knowledge-based tools that will
empower you to take informed decisions.
Convenience
One can call our Dial-N-Trade number to get investment advice and execute your
transactions. Share khan have a dedicated call-center to provide this service via a Toll
Free Number 1800-22-7500 & 39707500 from anywhere in India.
Customer Service
Our customer service team will assist you for any help that you need relating to
transactions, billing, demat and other queries. Our customer service can be contracted via
a toll-free number, email or live chat on www.sharekhan.com .
Investment Advice
Share khan has dedicated research teams of more than 30 people for fundamental and
technical research. Our analysts constantly track the pulse of the market and provide
timely investment advice to you in the form of daily research emails, online chat,
printed reports and SMS on your mobile phone.
Benefits Free Depository A/c
Instant Cash Transfer
Multiple Bank Option.
Secure Order by Voice Tool Dial-n-Trade.
Automated Portfolio to keep track of the value of your actual purchases.
24x7 Voice Tool access to your trading account.
Personalized Price and Account Alerts delivered instantly to your Mobile Phone & E-mail address.
Live Chat facility with Relationship Manager onYahoo Messenger Special Personal Inbox for order and trade confirmations.
On-line Customer Service via web Chat.
Enjoy Automated Portfolio.
Buy or sell even single share
Anytime Ordering.
III
CONCEPTUAL DISCUSSION
PORTFOLIO MANAGEMENT SERVICES (PMS)
Portfolio (finance) means a collection of investments held by an institution or a private
individual. Holding a portfolio is often part of an investment and risk-limiting strategy called
diversification. By owning several assets, certain types of risk (in particular specific risk) can be
reduced. There are also portfolios which are aimed at taking high risks - these are called
concentrated portfolios.
Investment management is the professional asset management of various securities (shares,
bonds and other securities) and assets (e.g., real estate) in order to meet specified investment
goals for the benefit of the investors. Investors may be institutions (insurance companies,
pension funds, corporations, charities, educational establishments etc.) or private investors
(both directly via investment contracts and more commonly via collective investment schemes
e.g. mutual funds or exchange-traded funds).
The term asset management is often used to refer to the investment management of collective
investments, while the more generic fund management may refer to all forms of institutional
investment as well as investment management for private investors. Investment managers who
specialize in advisory or discretionary management on behalf of (normally wealthy) private
investors may often refer to their services as money management or portfolio management
often within the context of so-called "private banking".
The provision of investment management services includes elements of financial statement
analysis, asset selection, stock selection, plan implementation and ongoing monitoring of
investments. Outside of the financial industry, the term “investment management” is often
applied to investments other than financial instruments. Investments are often meant to include
projects, brands, patents and many things other than stocks and bonds. Even in this case, the
term implies that rigorous financial and economic analysis methods are used.
Need of PMS
As in the current scenario the effectiveness of PMS is required. As the PMS gives investors
periodically review their asset allocation across different assets as the portfolio can get skewed
over a period of time. This can be largely due to appreciation / depreciation in the value of the
investments.
As the financial goals are diverse, the investment choices also need to be different to meet
those needs. No single investment is likely to meet all the needs, so one should keep some
money in bank deposits and / liquid funds to meet any urgent need for cash and keep the balance
in other investment products/ schemes that would maximize the return and minimize the risk.
Investment allocation can also change depending on one s risk-return profile‟
Objective of PMS
There are the following objective which is full filled by Portfolio Management Services.
1.Safety Of Fund: -
The investment should be preserved, not be lost, and should remain in the returnable
position in cash or kind.
2.Marketability: -
The investment made in securities should be marketable that means, the securities
must be listed and traded in stock exchange so as to avoid difficulty in their encashment.
3. Liquidity: -
The portfolio must consist of such securities,which could be en-cashed without any
difficulty or involvement of time to meet urgent need for funds. Marketability ensures
liquidity to the portfolio.
4. Reasonable return: -
The investment should earn a reasonable return to upkeep the declining value of money and be compatible with opportunity cost of the money in terms of current income in the form of interest or dividend.
5. Appreciation in Capital: -
The money invested in portfolio should grow and result into capital gains.
6. Tax planning: -
Efficient portfolio management is concerned with composite tax planning covering income tax, capital gain tax, wealth tax and gift tax.
7. Minimize risk: -
Risk avoidance and minimization of risk are important objective of portfolio management. Portfolio managers achieve these objectives by effective investment planning and periodical review of market, situation and economic environment affecting the financial market.
PORTFOLIO CONSTRUCTION
The Portfolio Construction of Rational investors wish to maximize the returns on their funds
for a given level of risk. All investments possess varying degrees of risk. Returns come in the
form of income, such as interest or dividends, or through growth in capital values (i.e. capital
gains).
The portfolio construction process can be broadly characterized as comprising the following
steps:
1.Setting objectives
The first step in building a portfolio is to determine the main objectives of the fund given the
constraints (i.e. tax and liquidity requirements) that may apply. Each investor has different
objectives, time horizons and attitude towards risk. Pension funds have long-term obligations
and, as a result, invest for the long term. Their objective may be to maximize total returns in
excess of the inflation rate. A charity might wish to generate the highest level of income whilst
maintaining the value of its capital received from bequests. An individual may have certain
liabilities and wish to match them at a future date. Assessing a client s risk tolerance can be‟
difficult. The concepts of efficient portfolios and diversification must also be considered when
setting up the investment objectives.
2. Defining Policy
Once the objectives have been set, a suitable investment policy must be established. The standard procedure is for the money manager to ask clients to select their preferred mix of assets, for example equities and bonds, to provide an idea of the normal mix desired. Clients are then asked to specify limits or maximum and minimum amounts they will allow to be invested in the different assets available. The main asset classes are cash, equities, gilts/bonds and other debt instruments, derivatives, property and overseas assets. Alternative investments, such as private equity, are also growing in popularity, and will be discussed in a later chapter. Attaining the optimal asset mix over time is one of the key factors of successful investing.
3. Applying portfolio strategy
At either end of the portfolio management spectrum of strategies are active and passive
strategies. An active strategy involves predicting trends and changing expectations about
thelikely future performance of the various asset classes and actively dealing in and out of
investments to seek a better performance. For example, if the manager expects interest rates to
rise, bond prices are likely to fall and so bonds should be sold, unless this expectation is already
factored into bond prices. At this stage, the active fund manager should also determine the style
of the portfolio. For example, will the fund invest primarily in companies with large market
capitalizations, in shares of companies expected to generate high growth rates, or in companies
whose valuations are low? A passive strategy usually involves buying securities to match a
preselected market index. Alternatively, a portfolio can be set up to match the investor s choice ‟
of tailor-made index. Passive strategies rely on diversification to reduce risk. Outperformance
versus the chosen index is not expected. This strategy requires minimum input from the
portfolio manager. In practice, many active funds are managed somewhere between the active
and passive extremes, the core holdings of the fund being passively managed and the balance
being actively managed
4. Asset selections .
Once the strategy is decided, the fund manager must select individual assets in which to invest.
Usually a systematic procedure known as an investment process is established, which sets
guidelines or criteria for asset selection. Active strategies require that the fund managers apply
analytical skills and judgment for asset selection in order to identify undervalued assets and to
try to generate superior performance.
5. Performance assessments
In order to assess the success of the fund manager, the performance of the fund is periodically measured against a pre-agreed benchmark – perhaps a suitable stock exchange index or against a group of similar portfolios (peer group comparison). The portfolio construction process is
Continuously iterative, reflecting changes internally and externally. For example, expected movements in exchange rates may make overseas investment more attractive, leading to changes in asset allocation. Or, if many large-scale investors simultaneously decide to switch from passive to more active strategies, pressure will be put on the fund managers to offer more active funds. Poor performance of a fund may lead to modifications in individual asset holdings or, as an extreme measure; the manager of the fund may be changed altogether.
Steps to stock selection process
Types of assets
The structure of a portfolio will depend ultimately on the investor s objectives and on the ‟
asset selection decision reached. The portfolio structure takes into account a range of factors,
including the investor s time horizon, attitude to risk, liquidity requirements, tax position and‟
availability of investments. The main asset classes are cash, bonds and other fixed income
securities, equities, derivatives, property and overseas assets.
Cash and cash instruments
Cash can be invested over any desired period, to generate interest income, in a range of highly
liquid or easily redeemable instruments, from simple bank deposits, negotiable certificates of
deposits, commercial paper (short term corporate debt) and Treasury bills (short term
government debt) to money market funds, which actively manage cash resources across a range
of domestic and foreign markets. Cash is normally held over the short term pending use
elsewhere (perhaps for paying claims by a non-life insurance company or for paying pensions),
but may be held over the longer term as well. Returns on cash are driven by the general demand
for funds in an economy, interest rates, and the expected rate of inflation. A portfolio will
normally maintain at least a small proportion of its funds in cash in order to take advantage of
buying opportunities.
Bonds
Bonds are debt instruments on which the issuer (the borrower) agrees to make interest
payments at periodic intervals over the life of the bond – this can be for two to thirty years or,
sometimes, in perpetuity. Interest payments can be fixed or variable, the latter being linked to
prevailing levels of interest rates. Bond markets are international and have grown rapidly over
recent years. The bond markets are highly liquid, with many issuers of similar standing,
including governments (sovereigns) and state-guaranteed organizations. Corporate bonds are
bonds that are issued by companies. To assist investors and to help in the efficient pricing of
bond issues, many bond issues are given ratings by specialist agencies such as Standard &
Poor s and Moody s. The highest investment grade is AAA, going all the way down to D, which‟ ‟
is graded as in default. Depending on expected movements in future interest rates, the capital
values of bonds fluctuate daily, providing investors with the potential for capital gains or losses.
Future interest rates are driven by the likely demand/ supply of money in an economy, future
inflation rates, political events and interest rates elsewhere in world markets. Investors with
short-term horizons and liquidity requirements may choose to invest in bonds because of their
relatively higher return than cash and their prospects for possible capital appreciation. Long-
term investors, such as pension funds, may acquire bonds for the higher income and may hold
them until redemption – for perhaps seven or fifteen years. Because of the greater risk, long
bonds (over ten years to maturity) tend to be more volatile in price than medium- and short-term
bonds, and have a higher yield.
Equities
Equity consists of shares in a company representing the capital originally provided by
shareholders. An ordinary shareholder owns a proportional share of the company and an
ordinary share carries the residual risk and rewards after all liabilities and costs have been paid.
Ordinary shares carry the right to receive income in the form of dividends (once declared out of
distributable profits) and any residual claim on the company s assets once its liabilities have ‟
been paid in full. Preference shares are another type of share capital. They differ from ordinary
shares in that the dividend on a preference share is usually fixed at some amount and does not
change. Also, preference shares usually do not carry voting rights and, in the event of firm
failure, preference shareholders are paid before ordinary shareholders. Returns from investing in
equities are generated in the form of dividend income and capital gain arising from the ultimate
sale of the shares. The level of dividends may vary from year to year, reflecting the changing
profitability of a company. Similarly, the market price of a share will change from day to day to
reflect all relevant available information. Although not guaranteed, equity prices generally rise
over time, reflecting general economic growth, and have been found over the long term to
generate growing levels of income in excess of the rate of inflation. Granted, there may be
periods of time, even years, when equity prices trend downwards – usually during recessionary
times. The overall long-term prospect, however, for capital appreciation makes equities an
attractive investment proposition for major institutional investors.
Derivatives
Derivative instruments are financial assets that are derived from existing primary assets as
opposed to being issued by a company or government entity. The two most popular
derivatives are futures and options. The extent to which a fund may incorporate derivatives
products in the fund will be specified in the fund rules and, depending on the type of fund
established for the client and depending on the client, may not be allowable at all.
A futures contract is an agreement in the form of a standardized contract between two
counterparties to exchange an asset at a fixed price and date in the future. The underlying asset
of the futures contract can be a commodity or a financial security. Each contract specifies the
type and amount of the asset to be exchanged, and where it is to be delivered (usually one of a
few approved locations for that particular asset). Futures contracts can be set up for the delivery
of cocoa, steel, oil or coffee. Likewise, financial futures contracts can specify the delivery of
foreign currency or a range of government bonds. The buyer of a futures contract takes a „long
position , and will make a profit if the value of the contract rises after the purchase. The seller of ‟
the futures contract takes a „short position and will, in turn, make a profit if the price of the ‟
futures contract falls. When the futures contract expires, the seller of the contract is required to
deliver the underlying asset to the buyer of the contract. Regarding financial futures contracts,
however, in the vast majority of cases no physical delivery of the underlying asset takes place as
many contracts are cash settled or closed out with the offsetting position before the expiry date.
An option contract is an agreement that gives the owner the right, but not obligation, to
buy or sell (depending on the type of option) a certain asset for a specified period of time. A call
option gives the holder the right to buy the asset. A put option gives the holder the right to sell
the asset. European options can be exercised only on the options expiry date. US options can be‟
exercised at any time before the contract s maturity date. Option contracts on stocks or stock ‟
indices are particularly popular. Buying an option involves paying a premium; selling an option
involves receiving the premium. Options have the potential for large gains or losses, and are
considered to be high-risk instruments. Sometimes, however, option contracts are used to
reduce risk. For example, fund managers can use a call option to reduce risk when they own an
asset. Only very specific funds are allowed to hold options.
Property
Property investment can be made either directly by buying properties, or indirectly by
buying shares in listed property companies. Only major institutional investors with long-term
time horizons and no liquidity pressures tend to make direct property investments. These
institutions purchase freehold and leasehold properties as part of a property portfolio held for
the long term, perhaps twenty or more years. Property sectors of interest would include prime,
quality, well-located commercial office and shop properties, modern industrial warehouses and
estates, hotels, farmland and woodland. Returns are generated from annual rents and any capital
gains on realization. These investments are often highly illiquid.
Risk and Risk Aversion
Portfolio theory also assumes that investors are basically risk averse, meaning that, given a
choice between two assets with equal rates of return they will select the asset with lower level
of risk.
For example, they purchased various type of insurance including life insurance, Health
insurance and car insurance. The Combination of risk preference and risk aversion can be
explained by an attitude toward risk that depends on the amount of money involved.
A discussion of portfolio or fund management must include some thought given to the
concept of risk. Any portfolio that is being developed will have certain risk constraints specified
in the fund rules, very often to cater to a particular segment of investor who possesses a
particular level of risk appetite. It is, therefore, important to spend some time discussing the
basic theories of quantifying the level of risk in an investment, and to attempt to explain the way
in which market values of investments are determined
Definition of Risk
Although there is a difference in the specific definitions of risk and uncertainty, for our
purpose and in most financial literature the two terms are used interchangeably. In fact, one
way to define risk is the uncertainty of future outcomes.
An alternative definition might be the probability of an adverse outcome.
Composite risks involve the different risk as explained below:-
(1). Interest rate risk: -
It occurs due to variability cause in return by changes in level of interest rate. In long runs all
interest rate move up or downwards. These changes affect the value of security. RBI, in India, is
the monitoring authority which effectalises the change in interest rate. Any upward revision in interest rate affects fixed income security, which carry old lower rate of interest and thus declining market value. Thus it establishes an inverse relationship in the prize of security.
TYPES RISK EXTENTCash equivalent Less vulnerable to interest rate riskLong term Bond More vulnerable to interest rate risk.
(2) Purchasing power risk:
It is known as inflation risk also. This risk emanates from the very fact that inflation affects the
purchasing power adversely. Purchasing power risk is more in inflationary times in bonds
and fixed income securities. It is desirable to invest in such securities during deflationary period
or a period of decelerating inflation. Purchasing power risk is less in flexible income securities
like equity shares or common stuffs where rise in dividend income offset increase in the rate of
inflation and provide advantage of capital gains.
(3) Business risk:
Business risk emanates from sale and purchase of securities affected by business cycles,
technological change etc. Business cycle affects all the type of securities viz. there is cheerful
movement in boom due to bullish trend in stock prizes where as bearish trend in depression
brings downfall in the prizes of all types of securities. Flexible income securities are nearly
affected than fix rate securities during depression due to decline n the market prize.
(4) Financial risk:
Financial risk emanates from the changes in the capital structure of the company. It is also
known as leveraged risk and expressed in term of debt equity ratio. Excess of debts against
equity in the capital structure indicates the company to be highly geared or highly levered.
Although leveraged company s earnings per share (EPS) are more but dependence on borrowing‟ exposes it to the risk of winding up. For, its inability to the honor its commitments towards the creditors are most important.
TECHNOQUES OF PORTFOLIO MANAGEMENT
Various types of portfolio require different techniques to be adopted to achieve the desired
objectives. Some of the techniques followed in India by portfolio managers are summarized
below.
(1). Equity portfolio –
Equity portfolio is affected by internal and external factors:
(a) Internal factors –(b)
Pertain to the inner working of the particular company of which equity shares are held.
These factors generally include:
(1) Market value of shares
(2) Book value of shares
(3) Price earnings ratio (P/E ratio)
(4) Dividend payout ratio
(b) External factors –
(1) Government policies
(2) Norms prescribed by institutions
(3) Business environment
(4) Trade cycles
(2). Equity stock analysis –
The basic objective behind the analysis is to determine the probable future – value of the
shares of the concerned company. It is carried out primarily fewer than two ways. :
(a) Earnings per share
(b) Price earnings ratio
(A) Trend of earning: -
➢ A higher price-earnings ratio discount expected profit growth. Conversely, a downward
trend in earning results in a low price-earnings ratio to discount anticipated decrease in
profits, price and dividend. Rising EPS causes appreciation in price of shares, which
benefits investors in lower tax brackets? Such investors have not pay tax or to give
lower rate tax on capital gains.
➢Many institutional investor like stability and growth and support high EPS.
➢Growth of EPS is diluted when a company finances internally its expansion program
and offers new stock.
➢EPS increase rapidly and result in higher P/E ratio when a company finances its
expansion program from internal sources and borrowings without offering new stock.
(B) Quality of reported earning: -
Quality of reported earnings affects P/E ratio. The factors that affect the quality of
reported earnings are as under:
➢ Depreciation allowances: -
Larger (Non Cash) deduction for depreciation provides more funds to company to
finance profitable expansion schemes internally. This builds up future earning power
of company.
➢ Research and development outlets : -
There is higher P/E ratio for a company, which carries R&D programs. R&D
enhances profit earning strength of the company through increased future sales.
➢ Inventory and other non-recurring type of profit : -
Low cost inventory may be sold at higher price due to inflationary conditions
among profit but such profit may not always occur and hence low P/E ratio.
(C) Dividend policy: -
Dividend policy is significant in affecting P/E ratio. With higher dividend ratio, equity price goes
up and thus raises P/E ratio. Dividend rates are raised to push in share prices up. Dividend cover is
calculated to find out the time the dividend is protected, In terms of earnings. It is
calculated as under:
Dividend Cover = EPS / Dividend per Share
(D) Investors demand: -
Demand from institutional investors for equity also enhances the P/E ratio.
(3) Quality of management: -
Investors decide about the ability and caliber of management and hold and dispose of equity
academy. P/E ratio is more where a company is managed by reputed entrepreneurs with
good past records of management performance.
Types of Portfolios
The different types of Portfolio which is carried by any Fund Manager to maximize profit
and minimize losses are different as per their objectives .They are as follows.
Aggressive Portfolio:
Objective:
Growth. This strategy might be appropriate for investors who seek
High growth and who can tolerate wide fluctuations in market values, over the
short term.
Growth Portfolio:
Objective:
Growth. This strategy might be appropriate for investors who have
a preference for growth and who can withstand significant fluctuations in market
value.
Balanced Portfolio
Objective:
Capital appreciation and income. This strategy might be
appropriate for investors who want the potential for capital appreciation and
some growth, and who can withstand moderate fluctuations in market values
Conservative Portfolio:
Objective :
Income and capital appreciation. This strategy may be appropriate
for investors who want to preserve their capital and minimize fluctuations in
market value.
IV
RESEARCH METHODOLOGY
a)RESEARCH OBJECTIVE
The study of the Portfolio Management Services is helpful in the following areas.
➢In today's complex financial environment, investors have unique needs which are derived
from their risk appetite and financial goals. But regardless of this, every investor seeks to
maximize his returns on investments without capital erosion. Portfolio Management
Services (PMS) recognize this, and manage the investments professionally to achieve
specific investment objectives, and not to forget, relieving the investors from the day to day
hassles which investment require.
➢It is offers professional management of equity investment of the investor with an aim to
deliver consistent return with an eye on risk.
➢Identify the key Stock in each portfolio.
➢To look out for new prospective customers who are willing to invest in PMS.
➢To find out the Sharekhan, PMS services effectiveness in the current situation.
➢It also covers the scenario of the Investment Philosophy of a Fund Manager.
RESEARCH DESISGN OF THE STUDY
This report is based on primary as well secondary data, however primary data collection was given
more importance since it is overhearing factor in attitude studies. One of the most important users
of research methodology is that it helps in identifying the problem, collecting, analyzing the
required information data and providing an alternative solution to the problem .It also helps in
collecting the vital information that is required by the top management to assist them for the better
decision making both day to day decision and critical ones.
Each research study has its own specific purpose. It is like to discover to Question through the application of scientific procedure. But the main aim of our research to find out the truth that is hidden and which has not been discovered as yet.
This report is based on primary as well secondary data, however primary data collection was
given more importance since it is overhearing factor in attitude studies. One of the most
important users of research methodology is that it helps in identifying the problem, collecting,
analyzing the required information data and providing an alternative solution to the problem .It
also helps in collecting the vital information that is required by the top management to assist
them for the better decision making both day to day decision and critical ones.
The study consists of analysis about Investors Perception about the Portfolio Management
Services offered by Sharekhan Limited. For the purpose of the study 100 customers were
picked up at random and their views solicited on different parameters.
The study consists of analysis about Investors Perception about the Portfolio Management
Services offered by Sharekhan Limited. For the purpose of the study 100 customers were picked
up at random and their views solicited on different parameters.
The methodology adopted includes
➢Questionnaire
➢Random sample survey of customers
➢Discussions with the concerned
c) SOURCES OF DATA
➢Primary data : Questionnaire
➢ Secondary data : Published materials of Sharekhan Limited. Such as periodicals,
journals, news papers, and website.
Duration of Study
The Study was carried out for the period of one and half months from 29th April to 15th
of June2009.
SAMPLING PLAN
➢Sampling : Since Sharekhan Limited has many segments I selected Portfolio Management
Services
(PMS) segment as per my profile to do market research. 100% coverage was difficult within the
limited period of time. Hence sampling survey method was adopted for the purpose of the study.
➢ Population: (Universe) customers & non consumers of Sharekhan limited
➢ Sampling size: A sample of hundred was chosen for the purpose of the study. Sample
consisted of Investor as based on their Income and Profession as well as
Educational Background.
➢Sampling Methods: Probability sampling requires complete knowledge about all sampling
units in the universe.
Due to time constraint non-probability sampling was chosen for the study.
➢ Sampling procedure: From large number of customers & non consumers sample lot were
randomly picked up by me.
Field Study : Directly approached respondents by the following strategies
➢ Tele-calling
➢ Personal Visits
➢ Clients References
➢ Promotional Activities
➢ Database provided by the Sharekhan Limited.
V
DATA ANALYSIS AND INTERPRETATION
1. Do you know about the Investment Option available?
Sales
15%
YES
NO
85%
Interpretation
As the above table shows the knowledge of Investor out of 100 respondent
carried throughout the Hyderabad Area is only 85%. The remaining 15% take
his/her residential property as an investment. According to law purpose this is
not an investment because of it is not create any profit for the owner. The main
problem is that in this time from year 2008-2009 , the recession and the Inflation
make the investor think before investing a even a Rs. 100.So , it also create the
problem for the Investor to not take interest in Investment option.
2. What is the basic purpose of your Investments?
Others
Risk covering
Tax Benefits
Capital Appreciation
Return
Liqidity
0% 5%10% 15%
20%%age 25%30%
Interpretation
As with the above analysis, it is found 75% people are interested in liquidity,
returns and tax benefits. And remaining 25% are interested in capital
appreciations, risk covering, and others. In the entire respondent it is common that
this time everyone is looking for minimizing the risk and maximizing their profit
with the short time of period.
As explaining them About the Portfolio Management Services of
Sharekhan, they were quite interested in Protech Services.
3.What is the most important factor you consider at the time of Investment?
80%
60% 65%
40%
20% 12% 23%
0%
RiskReturn
Both
%AGE
Interpretation
As the above analysis gives the clear idea that most of the Investors considered
the market factor as around 12% for Risk and 23% Return, but most important
common things in all are that they are even ready for taking both Risk and
Return in around 65% investor.
Moreover, the Market is fluctuating now days, so as it also getting
improvement. So, Investor are looking for Investment in long term and Short-term.
4.From which option you will get the best returns?
PERCENATGE OF RESPODENTS
Others 2%
Property 14%
Bonds 8%
Fixed Deposits 18%
Commodities Market 16%
Shares 22%
Mutual Funds 20%
Interpretation
Most of the respondents say they will get more returns in Share Market. Since
Share Market is said to be the best place to invest to get more returns. The risk
in the investment is also high
.
Similarly, the Investor are more Interested in Investing their money in Mutual
Fund Schemes as that is also very important financial product due to its nature
of minimizing risk and maximizing the profit. As the commodities market is
doing well from last few months so Investor also prefer to invest their money in
Commodities Market basically in GOLD nowadays.
Moreover, even who don t want to take Risk they are looking for investing in‟
Fixed Deposit for long period of time.
5. “Investing in PMS is far safer than Investing in Mutual Fund”. Do you
agree?
80
70
60
50
40 76 %
30
2010
24 %
0
YESNO
Interpretation
In the above graphs it s clear that 24% of respondent out of hundred feel that ‟
investing their money in Mutual Fund Scheme are far safer than Investing in
PMS. this is because of lack of proper information about the Portfolio
management services. As the basis is same for the mutual fund and PMS but the
investment pattern is totally different from each other and which depends upon
different risk factor available in both the Financial Products.
6.How much you carry the expectation in Rise of your Income from Investments?
Interpretation
The optimism is shown in the attitude of the respondents. The confidence was
appreciable with which they are looking forward to a rise in their investments.
Major part of the sample feels that the rise would be of around 15%. Only 8% of
the respondents were confident enough to expect a rise of upto 35%. As all the respondents were considering the Risk factor also before filling the questionnaire and they were asking about the performance report of all the PMS services offered by Sharekhan limited.
7. If you invested in Share Market, what has been your experience?
40%34% 40%
20% 20%
0% 6%
Satisfactory %Age ofBurned Fingers Respo…return received
Unsatisfactory
results
No
SatisfactoryBurned Fingers
UnsatisfactoryNoreturn received results
%Age of Respondents 20% 34% 6% 40%
Interpretation
20% of the respondents have invested in Share market and received satisfactory
returns, 40% of the respondents have not at all invested in Share Market. Some of
the investors face problems due to less knowledge about the market. Some of the
respondents don t have complete overview of the happenings and invest their ‟
money in wrong shares which result in Loss. This is the reason most of the
respondents prefer Portfolio Management Services to trade now a days, which
gives the Investor the clear idea when is the right time to buy and right time to
sell the shares which is recommended by their Fund Manger.
8. How do you trade in Share Market?
Sales
45 %55 %
Speculation
Investment
Interpretation
As we know that Share market is totally based on psychological parameters of
Investors, which changed as per the market condition, but at the same time
the around 45% investor trade on the basis of speculation and 31% depend
upon Investment option Bonds, Mutual Funds etc.
9. How do you manage your Portfolio?
Sales
43% Self
57%Depends on the company forportfolio
Interpretation
About 57% of the respondents say they themselves manage their portfolio and
43% of the respondents say they depends on the security company for portfolio
Management. 43% of the respondents prefer PMS of the company because they
don t have to keep a close eye on their investment; they get all the information ‟
time to time from their Fund Manager.
Moreover, talking about the Sharekhan PMS services they are far satisfied with the
Protech and Prop rime Performance during last year. They are satisfied with the
quick and active services of Sharekhan customer services where, they get the
updated knowledge about the scrip detail everyday from their Fund Manager.
10. If you trade with Share khan limited then why?
ResearchServices
22%35%
Investment Tipsare good
Brokerage 15%28%
Interpretation
As the above research shows the reasons and the parameters on which investor
lie on Sharekhan and they do the trade.
Among hundred respondents 35% respondents do the trade with the company due
to its research Report, 28% based on Brokerage Rate whereas 22 % are happy
with its Services.
Last but not the least, 15% respondents are depends upon the tips of Sharekhan
which gives them idea where to invest and when to invest.
At the time of research what I found is that still Share khan need to make the clients more knowledge about their PMS product
FINDINGS
OBSERVATION AND FINDING
➢About 85% Respondents knows about the Investment Option, because
remaining 15% take his /her residential property as Investment, but in actual it not
an investment philosophy carries that all the Investment does not create any profit
for the owner.
➢More than 75% Investors are investing their money for Liquidity, Return and
Tax benefits.
➢At the time of Investment the Investors basically considered the both Risk and
Return in more %age around 65%.
➢As among all Investment Option for Investor the most important area to get
more return is share around 22%after that Mutual Fund and other comes into
existence.
➢More than 76% of Investors feels that PMS is less risky than investing money in
Mutual Funds.
➢As expected return from the Market more than 48% respondents expect the rise
in Income more than 15%, 32% respondents are expecting between 15-25% return.
➢As the experience from the Market more than 34% Investor had lose their
money during the concerned year, whereas 20% respondents have got
satisfied return.
➢About 45% respondents do the Trade in the Market with Derivatives Tools
Speculation compare to 24% through Hedging .And the rest 31% trade their money
in Investments.
➢Around 57% residents manage their Portfolio through the different company
whereas 43%Investor manage their portfolio themselves.
➢The most important reasons for doing trade with Sharekhan limited is Sharekhan
Research Department than its Brokerage rate Structure.
➢Out of hundred respondents 56% respondents are using Sharekhan PMs services.
➢Investors preferred more than 45% equity Portfolio, 28%Balanceed Portfolio
and about 27% Debt Portfolio with Sharekhan PMS.
➢About 52% Respondents earned through Sharekhan PMS product, whereas 18%
investor faced loses also.
➢More than 63% Investor are happy with the Transparency system of Sharekhan
limited.
➢As based on the good and bad experience with Sharekhan limited around 86%
are ready to recommended the PMS of Sharekhan to their peers, relatives etc.
RECOMENDATIONS
RECOMMENDATIONS
➢The company should also organize seminars and similar activities to enhance the
knowledge of prospective and existing customers, so that they feel more comfortable
while investing in the stock market.
➢Investors must feel safe about their money invested.
➢Investor s accounts must be more transparent as compared to other companies.‟
➢Sharekhan limited must try to promote more its Portfolio Management Services through
Advertisements.
➢Sharekhan needs to improve more it s Customer Services‟
➢There is need to change in lock in period in all three PMS i.e.Protech, Proprime, Pro
Arbitrage.
BIBLIOGRAPHY
REFRENCES
www.sharekhan.co m www.sebi.gov.i n www.moneycontrol.co m www.karvy.co m www.valueresarchonline.co m www.yahoofinance.co m www.theeconomist.co m www.nseindia.co m www.bseindia.co m
BOOKS REFERRED
Value guide by Share khan Investors Eyes by Share khan Business world The Economist
