ASUMMER INTERNSHIP PROJECTONSTUDY ON THE EFFECT OF INTERNATIONAL COMMODITY MARKET ON INDIAN COMMODITY MARKETSubmitted toS.R. LUTHRA INSTITUTE OF MANAGEMENT IN PARTIAL FULFILLMENT OF THEREQUIREMENT OF THE AWARD FOR THE DEGREE OFMASTER OF BUSINESS ADMINISTRATION

InGujarat Technological UniversityUNDER THE GUIDANCE OF

Faculty Guide: Company Guide:Mr. Pratiksinh S. VaghelaMr. Paresh Bhalani Assistant Professor, Sub broker, (Angel Broking Pvt. Ltd.)Submitted by

Mr. BRIJESH V. MARAVIYA [Batch No. 2013-15, Enrollment No.138050592047]{Mo no. 8866447610}

MBA SEMESTER III

S.R. LUTHRA INSTITUTE OF MANAGEMENT 805MBA PROGRAMMEAffiliated to Gujarat Technological UniversityAhmedabadAugust, 2014Students Declaration

I, Brijesh V. Maraviya undersigned, a student of S.R. LUTHRA Institute of Management, Surat, declare that the project report entitled Study on the effect of international commodity market on Indian commodity market. AT ANJEL Broking Pvt. Ltd. prepared and submitted to Mr. Pratiksinh S. Vaghela, Asst. Professor of S.R. LUTHRA Institute of Management, Surat.This is my own work& the report prepared there in is based on my study and experience during the tenure of my study at ANJEL Broking Pvt. Ltd..I will not use this project report in future and will not submit the same to any other university or institute or any other publisher without written permission of my guide.I further declare that the result of my findings and research in the subject is original in nature and has not been previously submitted either in part or in whole to any other institute or university for any degree. If it is found; I shall be only responsible for its consequences.

Place: Surat

Date: _____________

__________________(Brijesh V. Maraviya)

Institutes Certificate

Certified that this Summer Internship Project Report Titled Study on the effect of international commodity market on Indian commodity market is the bonafide work of Mr. Brijesh V. Maraviya (Enrollment No. 138050592047), who has carried out the research under my supervision. I also certify further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate.

Place: SuratDate: ________________

___________________(Pratiksinh S. Vaghela) Assistant Professor,

___________________(J. M. Kapadia)I/C Director

PREFACE

It is a great opportunity for management students of GTU to get exposure to the stock market industry as a part of in summer internship project (SIP) academic curriculum of MBA and get wide exposure to the real world during industrial project.

This project has been real challenging for me. It realized during training period of six weeks that stock market industry is drastically different than what I learn in theories. Thus, practical exposure to this industry is valuable for me as a management student. My practical knowledge has improved very well through meeting people and offers them an invested in commodity market.

This report gives information about commodity market linkage between Indian and international commodity market i.e. Study on the effect of international commodity market on Indian commodity market

Acknowledgement I take this opportunity to express my sincere gratitude to the following personalities without whose help and guidance successful completion of my project work would have been remained dream. I wish to extend my sincere gratitude to, Mr.Paresh P. Bhalani, Sub broker of the Angel Broking Pvt. Ltd., for providing me with all the facilities to carry on this project work efficiently. The entire team at Angel Broking Pvt. Ltd, for their co-operation and last but not the least the employees at Angel Broking Pvt. Ltd for their support and encouragement in fulfillment of this report. I would like to thanks Mr. J. M. Kapadia, I/C Director, S.R. Luthara Institute of Management, Surat for making available all facilities in fulfilling the requirement my project report.

The project would have been possible throughout the experience, guidance and supervision of Mr. Pratiksinh S. Vaghela has potentially and critically gone through the subject matter. Her constructive criticism helped me lot in presenting the project in concrete form. Finally, I would like to thank to all these people who are directly or indirectly contributed to my project work.

Executive Summery

This summer project report is prepared at ANGEL broking Pvt. Ltd. on Study on the effect of international commodity market on Indian commodity market as a part of curriculum of the MBA program. Indian futures commodities market i.e. MCX and NCDEX, and world futures commodities market i.e. CBOT US, COMEX US, LME UK AND NYMEX US. The technical analysis method widely used in relation of mostly show the daily changing price of two markets.The first part of the project includes stock market industry profile, introduction of the ANGEL broking Pvt. Ltd., product profile of the company and introduction of commodity market, introduction of commodity exchange of India.In this project the descriptive research is used. I have used Excel for statistical analysis Correlation and regression is studied to know whether there is a relationship between the international commodities market linkages of the MCX and NCDEX commodity market.For this project study, the main aim of this project is to find out correlation and regression between Indian commodities market and world commodities market. There is a co-relation between commodities i.e. gold, silver and copper (bullion), crude oil and natural gas (energy), and ncdex market i.e. soy bean and cotton (agricultural), In world futures commodities market, cbot i.e. soy bean, comex i.e. gold and silver, lme i.e. copper and nymex i.e. crude oil and natural gas. It found that there is no effect of International commodity market on Indian commodity market.There may be many factors on which a both commodities market may depend. Like, government policies, budget, bullion market, inflation, economic and political condition, of country, dollar exchange rate etc this all are variable factors may effect on commodities price but for study, have selected only two independent i.e. Indian commodities market and world commodities market.PLAGIARISM REPORTReportDigital signedAuthor: JAY SHREE KRISHNAProcessing date: Sat, 2.8.2014 14:01:28 CESTA total of 423 fragments were analysed. As a result 33 fragments (7.8%) were found in other documents. In the document preview below the fragments are marked light blue and clickable.Cross reference documentsFollowing list of found documents is grouped by document titles and ordered by found fragements. With a mouseclick on "x fragments" the relevant fragments in the document are colored blue and the window scrolls to the first location. Click on "x fragments" again resets the special marks.9 fragments were found in a text with the title: "Stock exchange", located on:http://en.wikipedia.org/wiki/Stock_exchange5 fragments were found in a text with the title: "PEST analysis", located on:http://en.wikipedia.org/wiki/PEST_analysis5 fragments were found in a text with the title: "A Review on Data Mining Applications to the Performance of Stock Marketing", located on:http://www.ijcaonline.org/journal/number3/pxc387187.pdf5 fragments were found in a text with the title: "Commercial Revolution", located on:http://en.wikipedia.org/wiki/Commercial_Revolution4 fragments were found in a text with the title: "Stock market", located on:http://en.wikipedia.org/wiki/Stock_market4 fragments were found in a text with the title: "Market entry strategy for Chinese suppliers in the Russian consumer goods market", located on:https://publications.theseus.fi/bitstream/handle/10024/28537/Shakhova_Olga.pdf?sequence=14 fragments were found in a text with the title: "National Stock Exchange of India", located on:http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India3 fragments were found in a text with the title: "Impact of Proposed Commodity Transaction Tax", located on:http://www.eSocialSciences.com/data/articles/Document1782008420.6715509.pdf3 fragments were found in a text with the title: "Rayleigh Distribution Definition", located on:http://business.fullerton.edu/Finance/jrepm/pdf/vol13n2/08.161_172.pdfhttp://www.au-kbc.org/comm/Docs/thesis/ms/Thesis_Report_Vijayalashmi.doc2 fragments were found in a text with the title: "Analysis of China's primary wood products market - sawnwood and plywood", located on:https://helda.helsinki.fi:443/bitstream/handle/10138/14804/Analysis of China's Primary Wood Products Market(Minli Wan).pdf?sequence=12 fragments were found in a text with the title: "Search algorithms for FCSR architectures and properties of the FCSR combiner generator", located on:http://crypto.au-kbc.org/patterns/thesis/anand-thesis.pdf2 fragments were found in a text with the title: "An Algebraic Framework For Classifier Development And Its Application in Face Recognition", located on:http://crypto.au-kbc.org/patterns/thesis/sujith-thesis.pdf1 fragment found in a text with the title: "Initial public offering", located on:http://en.wikipedia.org/wiki/Initial_public_offering1 fragment found in a text with the title: "UK Standard Industrial Classification of Economic Activities 2007 (SIC 2007)", located on:http://www.statistics.gov.uk/methods_quality/sic/downloads/sic2007explanatorynotes.pdf1 fragment found in a text with the title: "Long-Term Changes in Open Field Behaviour Following a Single Social Defeat in Rats Can Be Reversed by Sleep Deprivation", located on:http://cbn.eldoc.ub.rug.nl/FILES/root/1996/PhysiolBehavMeerlo2/1996PhysiolBehavMeerlo2.pdf1 fragment found in a text with the title: "Temporal responses of NDVI to precipitation and temperature in the central Great Plains, USA", located on:http://gislab.lanl.gov/docs/wang_2003_ijrs.pdf1 fragment found in a text with the title: "The motivations and investment preferences of Chinese investors who migrate to New Zealand", located on:http://aut.researchgateway.ac.nz:80/bitstream/10292/869/4/SuR.pdf1 fragment found in a text with the title: "Dunne : judge, mayor, governor /", located on:http://libsysdigi.library.illinois.edu/oca/Books2007-06/dunnejudgemayorg00dunn/dunnejudgemayorg00dunn.pdf1 fragment found in a text with the title: "Predicting Stock Trends: A Multi Agent Approach", located on:http://upcommons.upc.edu/pfc/bitstream/2099.1/7188/1/T.Mater Dolcet-IA.pdf1 fragment found in a text with the title: "Reflections on Donald Creighton and the Appeal of Biography", located on:http://www.ufv.ca/jhb/Volume_1/Volume_1_Wright.pdf1 fragment found in a text with the title: "Amsterdam Stock Exchange", located on:http://en.wikipedia.org/wiki/Amsterdam_Stock_Exchange1 fragment found in a text with the title: "A Study of Individual Investors in the Capital Market in Kerala", located on:http://dyuthi.cusat.ac.in/xmlui/bitstream/handle/purl/1629/A%20study%20of%20individual%20investors%20in%20the%20capital%20market%20in%20kerala%2c%20Chap-3.PDF?sequence=31 fragment found in a text with the title: "PENGARUH TERPAAN RUBRIK TRAX STAR PADA MAJALAH TRAX MAGAZINE TERHADAP KREATIVITAS ANGGOTA GRUP BAND INDIE(Studi pada anggota Komunitas Grup Band Indie Malang)", located on:http://eprints.umm.ac.id/873/1/PENGARUH_TERPAAN_RUBRIK_TRAX_STAR_PADA_MAJALAH_TRAXMAGAZINE_TERHADAP_KREATIVITAS_ANGGOTA_GRUP_BANDINDIE.pdf1 fragment found in a text with the title: "GENUINE PROGRESS INDEX 2 Measuring Sustainable Development EXECUTIVE SUMMARY", located on:http://www.gpiatlantic.org/pdf/health/tobacco/smoke-free-nb.pdf1 fragment found in a text with the title: "Insulin resistance and muscle wasting in non-diabetic end-stage renal disease patients", located on:http://ndt.oxfordjournals.org/content/22/9/2554.full.pdf1 fragment found in a text with the title: "Essays in Econometrics Volume 2 , Causality, Integration and Cointegration, and Long Memory", located on:http://ecsocman.edu.ru/data/390/696/1219/sampler.pdf1 fragment found in a text with the title: "Management of multiple representations in spatial DBMSs", located on:http://www.gdmc.nl/zlatanova/thesis/html/refer/ps/sz_js_wq_agile04.pdf1 fragment found in a text with the title: "Methods for structural characterisation of Quillaja saponins by electrospray ionisation ion trap multiple-stage mass spectrometry", located on:http://diss-epsilon.slu.se:8080/archive/00001764/01/Bankefors_Johan_2008_44.pdf1 fragment found in a text with the title: "Enterprises Energy Sustainability: ICT Approach", located on:https://publications.theseus.fi/bitstream/handle/10024/25161/Terekhova_Anna.pdf?sequence=11 fragment found in a text with the title: "Multi-Asset Market Dynamics*", located on:http://www.cerge-ei.cz/pdf/events/papers/030331_t.pdf1 fragment found in a text with the title: "Structural classification of Quillaja saponins by electrospray ionisation ion trap multiple-stage mass spectrometry in combination with multivariate analysis", located on:http://diss-epsilon.slu.se:8080/archive/00001227/01/06.1408_Tryckfil.pdf1 fragment found in a text with the title: "Finance and growth in the EU: New evidence from the liberalisation and harmonisation of the banking industry. 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TABLE OF CONTENTSSr. No.ParticularsPage No.

1.Introduction01

1.1) About Commodity Market01

1.2 ) Indian Commodity Market03

1.2) Multi Commodity Exchange07

2.Industry Profile13

2.1) Global Stock Market13

2.2) Indian Stock Market19

2.2.1) Bombay Stock Exchange25

2.2.2) National Stock Exchange28

2.2.3) Stock Exchanges in India33

2.3) PESTEL Analysis34

3.Company Profile38

3.1) Introduction and History38

3.2) Our Organizational Structure45

3.3) Departmental Study49

3.4) Swot Analysis57

4.Review of Literature59

5.Research Methodology62

5.1) Need For Research62

5.2) Statement of Problem62

5.3) Objective62

5.4) Research Design62

5.5) Data Collection Method63

5.6) Hypotheses63

5.7) Sample Size63

5.8) Tools & Techniques64

5.9) Limitation64

6.Data Collection and Analysis65

6.1) Research Analysis Tools65

6.2) Co-relation between Gold price of MCX AND COMEX (US)68

6.3) Regression between Gold price of MCX AND COMEX69

6.4) Co-relation between silver price of MCX AND COMEX (US)70

6.5) Regression between silver price of MCX AND COMEX71

6.6) Co-relation between copper price of MCX AND LME (UK)72

6.7) Regression between copper price of MCX AND LME (UK)72

6.8) Co-relation between crude oil price of MCX AND NYMEX (US)74

6.9) Regression between crude oil price of MCX AND NYMEX (US)74

6.10) Co-relation between natural gas price of MCX AND NYMEX (US)76

6.11) Regression between natural gas price of MCX AND NYMEX (US)76

6.12) Co-relation between soy bean price of NCDEX AND CBOT (US)78

6.13) Regression between soy bean price of NCDEX AND CBOT (US)78

6.14) Co-relation between cotton price of NCDEX AND CBOT (US)80

6.15) Regression between cotton price of NCDEX AND CBOT (US)80

7.Finding82

8.Conclusion84

Bibliography

Appendix

LIST OF TABLES

Sr. No.ParticularsTable No.Page No.

1Largest commodities exchanges in the world1.102

2Major Stock Exchanges2.117

3About Bombay Stock Exchange2.225

4About National Stock Exchange2.328

5Traded and delivery of BSE and NSE2.430

6Management of Angel Group3.141

7SWOT Analysis3.257

8Co-relation between Gold price of MCX AND COMEX (US)6.168

9Regression between Gold price of MCX AND COMEX6.269

10ANOVA for Gold price of MCX AND COMEX6.369

11Co-relation between silver price of MCX AND COMEX (US)6.470

12Regression between silver price of MCX AND COMEX6.571

13ANOVA for silver price of MCX AND COMEX6.671

14Co-relation between copper price of MCX AND LME (UK)6.772

15Regression between copper price of MCX AND LME (UK)6.873

16ANOVA for copper price of MCX AND LME (UK)6.973

17Co-relation between crude oil price of MCX AND NYMEX (US)6.1074

18Regression between crude oil price of MCX AND NYMEX (US)6.1175

19ANOVA for crude oil price of MCX AND NYMEX (US)6.1275

20Co-relation between natural gas price of MCX AND NYMEX (US)6.1376

21Regression between natural gas price of MCX AND NYMEX (US)6.1477

22ANOVA for natural gas price of MCX AND NYMEX (US)6.1577

23Co-relation between soy bean price of NCDEX AND CBOT (US)6.1678

24Regression between soy bean price of NCDEX AND CBOT (US)6.1779

25ANOVA for soy bean price of NCDEX AND CBOT (US)6.1879

26Co-relation between cotton price of NCDEX AND CBOT (US)6.1980

27Regression between cotton price of NCDEX AND CBOT (US)6.2081

28ANOVA for cotton price of NCDEX AND CBOT (US)6.2181

29Co-relation between Indian futures commodities market and world future commodities market7.183

LIST OF FIGURES

Sr. No.ParticularsFigure No.Page No.

1percentage changes in share of derivative trade on exchange1.112

2Market capitalization (USD billions)2.119

LIST OF APPENDIX

Sr. No.ParticularsFigure No.

1Gold price of MCX AND COMEX (US) for the period Apr 01, 2014 to Jul 01, 20141.1

2Silver price of MCX AND COMEX (US) for the period Apr 01, 2014 to Jul 01, 20141.2

3Copper price of MCX AND LME (UK) for the period Apr 01, 2014 to Jul 01, 20141.3

4Crude Oil price of MCX AND NYMEX (US) for the period Apr 01, 2014 to Jul 01, 20141.4

5Natural Gas price of MCX AND NYMEX (US) for the period Apr 01, 2014 to Jul 01, 20141.5

6Soy Bean price of NCDEX AND CBOT (US) for the period Apr 01, 2014 to Jul 01, 20141.6

7Cotton price of NCDEX AND CBOT (US) for the period Apr 01, 2014 to Jul 01, 20141.7

INTRODUCTION1. ABOUT COMMODITY MARKET 1. INDIAN COMMODITY MARKET

1. MULTI COMMODITY EXCHANGE

1.1 ABOUT COMMODITIES MARKET:-

What is the commodity market? Commodity market is a place where trading in commodities takes place. It is similar to an equity market, but instead of buying or selling shares one buys or sells commodities.

How old are the commodities market? The commodities markets are one of the oldest prevailing markets in the human history. In fact, derivatives trading started off in commodities with the earliest records being traced back to the 17th century when rice futures were traded in Japan.

What are the different types of commodities that are traded in these markets? World-over one will find that a market exists for almost all the commodities known to us. These commodities can be broadly classified into the following: Precious Metals: Gold, Silver, Platinum, etc. Other Metals: Nickel, Aluminum, Copper, etc. Agro-Based Commodities: Wheat, Corn, Cotton, Oils, Oilseeds, etc. Soft Commodities: Coffee, Cocoa, Sugar, etc. Live-Stock: Live Cattle, Pork Bellies, etc. Energy: Crude Oil, Natural Gas, Gasoline, etc.

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

Worlds futures commodity exchange:- Chicago board of trade (CBOT) (COMEX) London metals exchange (LME) New York mercantile exchange (NYMEX)

Largest commodities exchanges in the world:-Exchange

Country Volume per month $M

CME Group USA 19

Tokyo Commodity Exchange Japan -

NYSE Euronext USA -

Dalian Commodity ExchangeChina -

Multi Commodity Exchange

India -

Intercontinental Exchange USA, Canada, China, UK -

TABLES 1.1

How big is the Indian commodity trading market as compared to other Asian markets? The commodity market in India clocks a daily average turnover of Rs 12,000-15,000 crore (Rs 120-150 billion). The accumulative commodities derivatives trade value is estimated to have reached the equivalent of 66 per cent of the gross domestic product and the future will only see the percentage rising, says ICICI direct.com vice-president Kadar Deshpande.

What kind of products can be listed on the commodity market? All commodities produced in the agriculture, mineral and fossil sectors have been sanctioned for futures trading. These include cereals, pulses, ginned cotton, un-ginned Cotton, oilseeds, oils, jute, jute products, sugar, gur, potatoes, onions, coffee, tea, petrochemicals, and bullion, among others.

What are the factors that influence the commodity prices in the market? The commodity market is driven by demand and supply factors and inventory, when it comes to perishable commodities such as agricultural products and high demand products such as crude oil. Like any market, the demand-supply equation influences the prices.

Variables like weather, social changes, government policies and global factors influence the balance.

What is the size of the commodities market as compared to the equity market? In the developed markets the volumes on the exchange-based commodity derivates markets are about five times more than that of the equity markets.

1.2 INDIAN COMMODITY MARKET:-

HISTORY:- Commodity futures markets largely remain underdeveloped in India. This is in spite of the countries long history of commodity derivatives trade as compared to the US and UK. A major contributor to this fact is the extensive government intervention in the agricultural sector in the post-independence era. In reality, the production and distribution of several agricultural commodities is still governed by the state and forwards as well as futures trading have only been selectively introduced with stringent regulatory controls. Free trade in many commodity items remains restricted under the Essential Commodities Act (ECA), 1955, and forwards as well as future contracts are limited to specific commodity items listed under the Forward Contracts (Regulation) Act (FCRA), 1952.

The evolution of the organized futures market in India commenced in 1875 with the setting up of the Bombay Cotton Trade Association Ltd. Following widespread discontent among leading cotton mill owners and merchants over the functioning of the Bombay Cotton Trade Association, a separate association, Bombay Cotton Exchange Ltd., was constituted in 1983. Futures trading in oilseeds originated with the setting up of the Gujarati Vyapari Mandali in 1900, which carried out futures trading in ground nuts, castor seeds and cotton. The Calcutta Hessian Exchange Ltd. and the East India Jute Association Ltd. were set up in 1919 and 1927 respectively for futures trade in raw jute. In 1921, futures in cotton were organized in Mumbai under the auspices of East India Cotton Association (EICA). Before the Second World War broke out in 1939, several futures markets in oilseeds were functioning in the states of Gujarat and Punjab. Futures markets in Bullion began in Mumbai in 1920, and later, similar markets were established in Rajkot, Jaipur, Jamnagar, Kanpur, Delhi and Calcutta. In due course, several other exchanges were established in the country, facilitating trade in diverse commodities such as pepper, turmeric, potato, sugar and jiggery.

Post independence, the Indian constitution listed the subject of Stock Exchanges and Future Markets under the union list. As a result, the regulation and development of the commodities futures markets were defined solely as the responsibility of the central government. A bill on forward contracts was referred to an expert committee headed by Prof. A.D. Shroff and selected committees of two successive parliaments and finally, in December 1952, the Forward Contracts (Regulation) Act was enacted. The Forward Contracts (Regulation) rules were notified by the central government in 1954. The futures trade in spices was first organized by the India Pepper and Spices Trade Association (IPSTA) in Cochin in 1957.

Following the introduction of economic reforms in 1991, the Government of India appointed an expert committee on forward markets under the chairmanship of Prof. K.N. Kabra in June 1993. The committee submitted its report in September 1994, championing the reintroduction of futures, which were banned in 1966, and expanding its coverage to agricultural commodities, along with silver.

In order to boost the agricultural sector, the National Agricultural Policy 2000 envisaged external and domestic market reforms and dismantling of all controls and regulations in the agricultural commodity markets. It also proposed an expansion of the coverage of futures markets to minimize the wide fluctuations in commodity prices and for hedging the risk arising from extreme price volatilities.

STRUCTURE, CONDUCT & CURRENT STATUS :-

Broadly, the commodities market exists in two distinct formsthe over-the-counter (OTC) market and the exchange based market. Further, as in equities, there exists the spot and the derivatives segments. Spot markets are essentially OTC markets and participation is restricted to People who are involved with that commodity, such as the farmer, processor, wholesaler, etc. A majority of the derivatives trading takes place through the exchange-based markets with standardized contracts, settlements, etc. The exchange-based markets are essentially derivative markets and are similar to equity derivatives in their working, that is, everything is standardized and a person can purchase a contract by paying only a percentage of the contract value. A person can also go short on these exchanges. Moreover, even though there is a provision for delivery, most contracts are squared-off before expiry and are settled in cash. As a result, one can see an active participation by people who are not associated with the commodity. The typical structure of commodity futures markets in India is as follows:

At present, there are 26 exchanges operating in India and carrying out futures trading activities in as many as 146 commodity items. As per the recommendation of the FMC, the Government of India recognized the National Multi Commodity Exchange (NMCE), Ahmadabad; Multi Commodity Exchange (MCX), National Commodity and Derivative Exchange (NCDEX), Mumbai and Indian Commodity Exchange ( ICEX) as nation-wide multi-commodity exchanges.

As compared to 59 commodities in January 2005, 94 commodities were traded in December 2006 in the commodity futures market. These commodities included major agricultural commodities such as rice, wheat, jute, cotton, coffee, major pulses (such as urad, arahar and chana), edible oilseeds (such as mustard seed, coconut oil, groundnut oil and sunflower), spices (pepper, chillies, cumin seed and turmeric), metals (aluminum, tin, nickel and copper), bullion (gold and silver), crude oil, natural gas and polymers, among others. Gold accounted for the largest share of trade in terms of value. A temporary ban was imposed on futures trading in urad and tur dal in January 2007 to ensure orderly market conditions. An efficient and well-organized commodities futures market is generally acknowledged to be helpful in price discovery for traded commodities1.3 Multi Commodity Exchange:-

ABOUT US :- Multi Commodity Exchange of India Ltd. (MCX) is a state-of-the-art demutualised multi commodity futures exchange with permanent recognition from the Government of India to facilitate nationwide online trading, clearing and settlement operations of commodities futures. History :- MCX was incorporated on April 19, 2002, and on September 26, 2003, it received permanent recognition from the Government to establish a nationwide online multicommodity exchange. MCX was launched on November 10, 2003, following the Governments initiative to revitalize the commodity exchange industry by allowing demutualised, electronic, national commodity exchanges to trade in all permitted commodities. MCX was formally inaugurated by Mr. Mukesh Ambani, Chairman of Reliance Industries Ltd, on November 18, 2003. On March 09, 2012, MCX became Indias 1 exchange to be listed. India has had a long history of organized commodity derivatives. Historically, such a commodity exchange was; established in 1875 with the derivatives market flourishing in the following years. However, it was with the Government of Indian to if ying in April 2003 the permission for futures trading in commodities that opened the entire commodity spectrum for future trading. This epoch-making step has allowed online trading, clearing and settlement operations in commodity future contracts. The incorporation of MCX on 19th April 2002 and its permanent recognition from the government on 26th September 2003 have become the real turning points in the area of commodity futures exchange. MCX, promoted by Financial Technologies (India) Limited, enjoys the confidence of investors from Indian and international financial sectors like Euro next N.V.,State Bank of India and its associates, National Bank for Agriculture and Rural Development(NABARD), SBI Life Insurance, Bank of India, Bank of Baroda, Union Bank of India, Corporation Bank, Canara Bank, HDFC Bank, FID Funds(Mauritius), Merrill Lynch and several others on one hand, and has won the hear its of commodities on the other. With an aim to seamlessly integrate with the global commodities ecosystem, MCX has forged strategic alliances with leading international exchanges. Product :- Today, MCX offers more than 40commodities across various segments such as bullion, energy, ferrous and nonferrous metals and a number of agri commodities on its platform. The futures contracts of MCX have demonstrably brought significant benefits to several sectors, not only for metals and energy but also for smaller agricultural commodities such as cardamom, menthe oil and soya oil. These futures contracts are found to be unique as they also cover currency risk, which is inherent in internationally-referred commodities.

As settlement in MCXs futures contracts is allowed in Indian rupee, traders on this platform do not need to hedge separately against foreign currency risks.

The Exchange offers a trading platform that operates continuously for more than their teen hours each day. This helps hedgers, arbitrageurs and others to discover prices of various international commodities. In addition, owing to high positive correlation between the commodity futures prices of MCX and international markets, it is possible to ascertain rends between different markets, thus offering arbitrage Opportunities.

MCXs ability to use and apply technology efficiently is a key factor in the development of its business. The robust knowledge in restructure of the Exchange, along with its rapid customization and deployment capabilities enables it to operate efficiently with fast or de-routing, immediate trade execution, trade repot ting, real-time risk management, market surveillance and market data dissemination.

Market :- In the recent past, brand MCX has taken a giant leap forward. Indias No, 1 commodity exchange is, today, the first and only Indian exchange to be listed on Indian bourses. In just over two years, the phenomenal growth has helped MCX climb the global ranking. From being the No. 6 commodity futures exchange in the world, in terms of the number of contracts traded, MCX became the No. 3 global commodity futures exchange at then of calendar year 2011.Today MCX is the worlds No. 1 commodity futures exchange in gold and silver, No. 2 in natural gas and No. 3 in crude oil in terms of the number of contracts traded (Source: FIA Annual Volume Jan-Dec 2011 and various exchange websites). The Exchange offers trading across more than 40 products including bullion, energy, ferrous and non-ferrous metals and agri-products. Prominent amongst other commodities are gold and silver and natural gas and crude oil futures. Over the last few years, Indias commodity futures market has witnessed tremendous surge in volumes. A number of repot its suggest that much of this can be attributed to increased market participation and augmented awareness levels that a commodity exchange can be both a portfolio diversifier and a risk management tool. It is believed that as more commodities are traded, commodity futures could actually surpass volumes of the stock market. A new wave of impending regulatory reforms will not only help deepen the market but also bring in professional practices and approach to Indias commodity market. It will open the doors for commodity exchanges to introduce new products and attract myriad participants with divergent needs to hedge against commodity.

Achievements :- It has been less than ten years since MCX opened its door to futures trading. So it must be an exceptional achievement that in this brief span of time it has already emerged as the third largest futures exchange in the world and its fastest growing. It is even more gratifying to know that in several individual commodities it occupies a very premium place. While its short t-haul gains are profoundly impressive, the honors of being the only commodity exchange in the world to be certified to three ISO standards - ISO9001:2008 for quality management systems, ISO14001:2004 for environmental management systems and ISO 27001:2005 for information security management systems is even more satisfying. part from MCX has several other firsts to its credit.MCX was the first exchange in India to offer futures trading in steel, crude oil and several other commodities including carbon credits. The Exchange was the first to introduce indices such as MCX COMDEX (commodities index), MCX Agro (agricultural commodities index), MCX Energy (energy commodities index) and MCX Metal (metal commodities index). It was the first exchange in India to initiate evening trading sessions that national markets. In March 2011, MCX be synchronized with the trading hours of global exchanges in London, New York and other major intern came Indias first exchange to report its sustainability performance for the financial year 2009/10. The Exchange has also been the first in India to introduce innovative products such as contracts with smaller lot sizes. These include mini contracts of metals such as zinc, lead, aluminum, copper and nickel, gold petal (one gram gold contract) and silver micro (one kilogram silver contract). On 9th March 2012, MCX achieved another feat by becoming the first exchange in India to get listed, thus placing it on par with other listed global exchanges. To strengthen its back-end operations technologically, MCX has implemented SAPECC 6.0 solutions to automate and integrate its key business processes. It has the distinction of being the first commodity futures exchange in India to deploy online proprietary technical analysis tools such as MCX ACT and MCX ACT minion its website. This enables market participants to analyze, identify and understand market conditions and behavioral patterns by allowing them to view and customize char its in terms of duration and time. With continuous improvement, it comes as no surprise that MCX has been awarded for its pioneering work. In September 2006, MCX Bagged the Best Commodity Exchange award presented by His Excellency Datuk Peter China Kui, Minister of Plantation Industries & Commodities of Malaysia, in Mumbai. In the same year it won the Number One Commodity Exchange of the Year award presented by the National Agricultural Cooperative Marketing Federation of India (NAFED).

AWARD :-

Recognition as Indias First Green Exchange by Priyadarshini Academy and was conferred the Best Bullion Exchange award by the Bombay Bullion Association. In the following year, MCX was given the Golden Peacock Special Commendation award for Corporate Social Responsibility, the Sank alp award for Agriculture and Rural Innovation and the Best Commodity Exchange award at the Sixth India International Gold Convention.

At the beginning of the present decade it was felicitated with the NASSCOM Social Innovation Honors and the FICCI Socio Economic Development Foundation CSR award. Earlier in 2011, MCX received the Financial Inclusion award from the SKOCH Foundation, the Indys award under the category of Best in Corporate Social Responsibility Practices.

Opportunity abound :- Financial Technologies promoted Multi Commodity Exchange is a market leader in Indias burgeoning commodity derivatives market. Its journey of becoming a dominant commodity exchange with 86% market share has been fascinating. Interestingly, the next largest player has only 10% market share. The domestic commodity derivatives market after being opened up in 2003 has witnessed robust 85% CAGR in turnover. MCXs strategic initiatives of Building a globally referable commodity portfolio, product innovation, global strategic alliances and cutting edge trading technology helped it garner a dominant market share. More importantly, trading depth/liquidity has substantially improved and remains a cornerstone of its dominance. Aided by increasing turnover and fixed cost leverage, MCXs OPM has seen tremendous expansion; doubling to 63% over FY0812. With further room for capacity utilization improvement, margin will most likely be sustained at elevated levels. How many percentage changes in share of derivative trade on exchange?

FIGURES 1.1 Parentage share of derivative trade on exchange, in highest traded in derivative market is korea exchange i.e. 17% and lowest traded is 3% of Russian exchange in derivative market. Mcx India is 5% traded in derivative market.

INDUSTRY PROFILE GLOBAL STOCK MARKET INDIAN STOCK MARKET BOMBAY STOCK EXCHANGE NATIONAL STOCK EXCHANGE STOCK EXCHANGE IN INDIA PESTEL ANALYSIS

Global Stock Market:-

What is the Stock Exchange?A stock exchange is a corporation or mutual organization which provides the facilities for stock brokers to trade company stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities, as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include shares issued by companies, unit trusts and other pooled investment products as well as bonds. To be able to trade a security on a certain stock exchange, it has to be listed there.

Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only; a stock broker is said to have a seat on the exchange.

A stock exchange is often the most important component of a stock market. There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that bonds are traded. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market.

Increasingly all stock exchanges are part of a global market for securities. Supply and demand in stock markets is driven by various factors which, as in all free markets, affect the price of stocks. The French word for stock exchange is bourse.

History of stock exchange:-

In 12th century France the courratiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. As these men also traded in debts, they could be called the first brokers. In the late 13th century commodity traders in Bruges gathered inside the house of a man called Van der Burse, and in 1309 they institutionalized this until now informal meeting and became the "Bruges Bourse". The idea spread quickly around Flanders and neighboring counties and "Bourses" soon opened in Ghent and Amsterdam.

In the middle of the 13th century Venetian bankers began to trade in government securities. In 1351 the Venetian Government outlawed spreading rumors intended to lower the price of government funds. There were people in Pisa, Verona, Genoa and Florence who also began trading in government securities during the 14th century.

This was only possible because these were independent city states not ruled by a duke but a council of influential citizens. The Dutch later started joint stock companies, which let shareholders invest in business ventures and get a share of their profits - or losses. In 1602, the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange. It was the first company to issue stocks and bonds.

BRIEF HISTORY OF STOCK:- Do you know that the world's foremost marketplace New York Stock Exchange (NYSE), started its trading under a tree (now known as 68 Wall Street) over 200 years ago? Similarly, India's premier stock exchange Bombay Stock Exchange (BSE) can also trace back its origin to as far as 125 years when it started as a voluntary non-profit making association. News on the stock market appears in different media every day. You hear about it any time it reaches a new high or a new low, and you hear about it daily in statements like 'The BSE Sensitive Index rose 5% today'. Obviously, stocks and stock markets are important. Stocks of public limited companies are bought and sold at a stock exchange. However, what really are stock exchanges? Known also as the stock market or bourse, a stock exchange is an organized marketplace for securities (like stocks, bonds, options) featured by the centralization of supply and demand for the transaction of orders by member brokers, for institutional and individual investors. The exchange makes buying and selling easy. However, where did it all start? The need for stock exchanges developed out of early trading activities in agricultural and other commodities. During the middle Ages, traders found it easier to use credit that required supporting documentation of drafts, notes, and bills of exchange. The history of the earliest stock exchange, the French stock exchange, may be traced back to 12th century when transactions occurred in commercial bills of exchange. To control this budding market, Phillip, the Fair, of France (1268-1314) created the profession of courtier de change, which was the predecessor of the French stockbroker. At about the same time, in Bruges (a prosperous centre of the low countries of Europe), merchants began gathering in front of the house of the Van Der Buerse family to engage in trading. Soon the name of the family became identified with trading and in time, a 'bourse' came to signify a stock exchange. At the same time, stock exchanges began to materialize in other trading centre like the Netherlands (Amsterdam Bourse), Frankfurt (the Deutsche Stock Exchange, formerly the Bores) the London Stock Exchange (LSE) in England and Milan (the Boras). In 1773, London stock dealers, who had been meeting informally in coffee houses, moved into their own building to establish an exchange (see history: London Stock Exchange). Other European exchanges that opened in the 1600s and 1700s included those in Belgium, Spain, Portugal, and Sweden. From the early exchanges for commercial bills and notes, it was an easy and logical transition to establish stock exchanges for securities. Amsterdam's Bourse was the first to formally begin trading in securities. Across the Atlantic, in the United States, securities markets began speculative trading in issues of the new government. By 1791, the nation's first stock exchange was established in the city of Philadelphia. A year later, in 1792, an exchange was set up in New York City by 24 merchants and brokers, who decided to act as agents for other persons and give preference to each other in their negotiations. They did much of their trading under a tree at what is now 68 Wall Street. That stock exchange grew as the nation became industrialized and by 1863, the New York Stock Exchange (NYSE) adopted its present name (see history: New York Stock Exchange). Today, nearly three thousand companies from all over the world trade their stocks valued at trillions of dollars here. At that time, many stocks that were deemed not well enough for the NYSE were traded outside on the curbs. This so called 'curb trading' has now become the American Stock Exchange (AMEX) (see history: AMEX) . Today, the NYSE and AMEX have been joined by the NASDAQ and hundreds of local and international stock exchanges. By the mid-1800s, many countries outside of Europe (including Canada and Australia) began trading in securities. During the 19th and 20th centuries, major exchanges opened in Asia, Eastern Europe, and parts of Africa and Latin America.

Worlds top stock exchanges:-

Major Stock Exchanges: Year ended 31 December 2013

RankStock ExchangeEconomyHeadquartersMarket Capitalization(USD Billions)Year-to-date Trade Value(USD Billions)

1NYSE EuronextUnited States/Europe

New York City14,08512,693

2NASDAQ OMX GroupUnited States/Europe

New York City4,5828,914

3Tokyo Stock ExchangeJapan

Tokyo3,4782,866

4London Stock ExchangeUnited KingdomLondon3,3961,890

5Hong Kong Stock ExchangeHong KongHong Kong2,831913

6Shanghai Stock ExchangeChinaShanghai2,5472,176

7TMX GroupCanadaToronto2,0581,121

8Deutsche BrseGermanyFrankfurt1,4861,101

9Australian Securities ExchangeAustraliaSydney1,386800

10Bombay Stock ExchangeIndiaMumbai1,26393

11National Stock Exchange of IndiaIndiaMumbai1,234442

12SIX Swiss ExchangeSwitzerlandZurich1,233502

13BM&F BovespaBrazilSo Paulo1,227751

14Korea ExchangeSouth KoreaSeoul1,1791,297

15Shenzhen Stock ExchangeChinaShenzhen1,1502,007

16BME Spanish ExchangesSpainMadrid995731

17JSE LimitedSouth AfricaJohannesburg903287

18Moscow ExchangeRussiaMoscow825300

19Singapore ExchangeSingaporeSingapore765215

20Taiwan Stock ExchangeTaiwanTaipei735572

TABLE 2.1

Market capitalization (USD billions) :-

FIGURE 2.1

Asias top 5 Stock Exchange :-1-Hong Kong Exchanges and Clearing (HKEx) 2-Bombay Stock Exchange (India) 3-Tokyo Stock Exchange (Japan) 4-Osaka Securities Exchange (Japan) 5-Karachi Stock Exchange (Pakistan)

2.2 Indian Stock Market :-

The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking membership in Native Share and Stock Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. National Stock Exchange comes second to BSE in terms of popularity. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE.

The 30 stock sensitive index or Sensex was first compiled in 1986. The Sensex is compiled based on the performance of the stocks of 30 financially sound benchmark companies. In 1990 the BSE crossed the 1000 mark for the first time. It crossed 2000, 3000 and 4000 figures in 1992. The reason for such huge surge in the stock market was the liberal financial policies announced by the then financial minister Dr. Man Mohan Singh.

The up-beat mood of the market was suddenly lost with Harshad Mehta scam. It came to public knowledge that Mr. Mehta, also known as the big-bull of Indian stock market diverted huge funds from banks through fraudulent means. He played with 270 million shares of about 90 companies. Millions of small-scale investors became victims to the fraud as the Sensex fell flat shedding 570 points.

To prevent such frauds, the Government formed The Securities and Exchange Board of India, through an Act in 1992. SEBI is the statutory body that controls and regulates the functioning of stock exchanges, brokers, sub-brokers, portfolio managers investment advisors etc. SEBI oblige several rigid measures to protect the interest of investors. Now with the inception of online trading and daily settlements the chances for a fraud is nil, says top officials of SEBI.

Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005. Many foreign institutional investors (FII) are investing in Indian stock markets on a very large scale. The liberal economic policies pursued by successive Governments attracted foreign institutional investors to a large scale. Experts now believe the Sensex can soar past 14000 marks before 2010.

The unpredictable behavior of the market gave it a tag a volatile market. The factors that affected the market in the past were good monsoon, Bharatiya Janatha Partys rise to power etc. The result of a cricket match between India and Pakistan also affected.NDA was voted out of power and the Sensex recorded the biggest fall in a day amidst fears that the Congress-Communist coalition would stall economic reforms. Later prime minister Man Mohan Singhs assurance of reforms with a human face cast off the fears and market reacted sharply to touch the highest ever mark of 8500.

India, after United States hosts the largest number of listed companies. Global investors now ardently seek India as their preferred location for investment. Once viewed with skepticism, stock market now appeals to middle class Indians also. Many Indians working in foreign countries now divert their savings to stocks. This recent phenomenon is the result of opening up of online trading and diminished interest rates from banks. The stockbrokers based in India are opening offices in different countries mainly to cater the needs of Non Resident Indians. The time factor also works for the NRIs. They can buy or sell stock online after returning from their work places.

The recent incidents that led to growing interest among Indian middle class are the initial public offers announced by Tata Consultancy Services, Maruti Udyog Limited, ONGC and big names like that. Good monsoons always raise the market sentiments. A good monsoon means improved agricultural produce and more spending capacity among rural folk.The bullish run of the stock market can be associated with a steady growth of around 6% in GDP, the growth of Indian companies to MNCs, large potential of growth in the fields of telecommunication, mass media, education, tourism and IT sectors backed by economic reforms ensure that Indian stock market continues its bull runStock markets refer to a market place where investors can buy and sell stocks. The price at which each buying and selling transaction takes is determined by the market forces (i.e. demand and supply for a particular stock.

Let us take an example for a better understanding of how market forces determine stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of an upward movement in its stock price. Therefore, buyers will have to bid a higher price for this stock to match the ask price from the seller which will increase the stock price of ABC Co. Ltd. On the contrary, if there are more sellers than buyers (i.e. high supply and low demand) for the stock of ABC Co. Ltd. in the market, its price will fall down.In earlier times, buyers and sellers used to assemble at stock exchanges to make a transaction but now with the dawn of IT, most of the operations are done electronically and the stock markets have become almost paperless. Now investors dont have to gather at the Exchanges, and can trade freely from their home or office over the phone or through Internet.

One of the oldest stock markets in Asia, the Indian Stock Markets has a 200 years old history.

ACHIEVEMENTS AND MILESTONES:- 1874 With the rapidly developing share trading business, brokers used to gather at a street (now well known as "Dalal Street") for the purpose of transacting business. 1875 "The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock Exchange") was established in Bombay 1880's Development of cotton mills industry and set up of many others 1894 Establishment of "The Ahmadabad Share and Stock Brokers' Association" 1880 - 90's Sharp increase in share prices of jute industries in 1870's was followed by a boom in tea stocks and coal 1908 "The Calcutta Stock Exchange Association" was formed 1920 Madras witnessed boom and business at "The Madras Stock Exchange" was transacted with 100 brokers. 1923 When recession followed, number of brokers came down to 3 and the Exchange was closed down 1934 Establishment of the Lahore Stock Exchange 1936 Merger of the Lahore Stock Exchange with the Punjab Stock Exchange 1937 Re-organization and set up of the Madras Stock Exchange Limited (Pvt.) Limited led by improvement in stock market activities in South India with establishment of new textile mills and plantation companies 1940 Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was established 1944 Establishment of "The Hyderabad Stock Exchange Limited" 1947 "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and Shares Exchange Limited" were established and later on merged into "The Delhi Stock Exchange Association Limited"

Post Independence Scenario:-The depression witnessed after the Independence led to closure of a lot of exchanges in the country. Lahore Stock Exchange was closed down after the partition of India, and later on merged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in 1957 and got recognition only by 1963. Most of the other Exchanges were in a miserable state till 1957 when they applied for recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that were recognized under the Act were:1. Bombay2. Calcutta3. Madras4. Ahmadabad5. Delhi6. Hyderabad7. Bangalore8. Bombay9. Calcutta10. Madras11. Ahmadabad12. Delhi13. Hyderabad14. Bangalore15. Indore The stock trading history in India is obscured in the mists of time. Historical records, as and where they exist, rarely speak about business and speculative activity except in passing. However, the origin of stock broking in the country may go back to a time, when shares, debentures, and bonds representing titles to property were first issued on the condition of transfer from one person to another and the earliest record of dealings in securities in India is the East India Company's loan securities, back in the 18th century. The first stock exchange in India, Bombay Stock Exchange was established in 1875 as 'The Native Share and Stockbrokers Association' and has evolved over the years into its present status as the premier stock exchange in the country. It may be noted that BSE is the oldest stock exchange in Asia, even older than the Tokyo Stock Exchange, which was founded in 1878. The country's second stock exchange was established in Ahmadabad in 1894, followed by the Calcutta Stock Exchange (CSE). CSE can also trace its origin back to 19th century. From a get together under a 'neem tree' way back in the 1830s, the CSE was formally established in May 1908. India's other major stock exchange National Stock Exchange (NSE), promoted by leading financial institutions, and was established in April 1993. Over the years, several stock exchanges have been established in the major cities of India. There are now 23 recognized stock exchanges Mumbai (BSE, NSE and OTC), Calcutta, Delhi, Chennai, Ahmadabad, Bangalore, Bhubhaneswar, Coimbatore, Guwahati, Hyderabad, Jaipur, Kochi, Kanpur, Ludhiana, Mangalore, Patna, Pune, Rajkot, Vadodara, Indore and Meerut.

2.2.1 Bombay Stock Exchange:

(Source: Bombay Stock Exchange) OwnerBombay Stock Exchange Limited

Keypeople Rajnikant Patel (CEO)

Currency INR

No.oflistings 4,800

MarketCapUS$ 1.61 trillion (2006) Volume US$ 980 billion (2006)

IndexesBSE sensex

TABLES 2.2The Bombay Stock Exchange Limited is the oldest stock exchange in Asia. It is also the biggest stock exchange in the world in terms of listed companies with 4,800 listed companies as of August 2007. It is located at Dalal Street, Mumbai, India. On 31 December 2007, the equity market capitalization of the companies listed on the BSE was US$ 1.79 trillion, making it the largest stock exchange in South Asia and the tenth largest in the world. The Bombay Stock Exchange was established in 1875. Around 4,800 Indian companies list on the stock exchange, and it has a significant trading volume. The BSE SENSEX (SENSitive indEX), also called the "BSE 30", is a widely used market index in India and Asia. Though many other exchanges exist, BSE and the National Stock Exchange of India account for most of the trading in shares in India.The BSE Broadcast is a large ticker on the wall of the BSE, which continuously displays the latest stock quotes from the market. It also displays on what is described as India's and South Asia's largest video screen one of the leading business-news channels in India: NDTV Profit.This new system was unveiled on December 15, 2006, when Dr Prannoy Roy, the Managing Director of New Delhi Television (NDTV) Ltd, struck the BSE's opening bell. Mr. Damodaran, the Chairman of the Securities and Exchange Board of India (SEBI), said that the ticker would provide information and analysis of the financial world. The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity.

The Exchange, while providing an efficient and transparent market for trading in securities, debt, and derivatives upholds the interests of the Investors and ensures redressed of their grievances whether against the Companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programmed and making available to them necessary informative inputs. A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day administration of the Exchange and he is assisted by the Chief Operating Officer and other Heads of Departments. The Exchange has inserted new Rule No.126 A in its Rules, Bye-laws & Regulations pertaining to constitution of the Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting of three elected directors, three SEBI nominees, or public representatives, Executive Director & CEO and Chief Operating Officer has been constituted. The Committee considers judicial & quasi matters in which the Governing Board has powers as an Appellate Authority, matters regarding annulment of transactions, admission, continuance and suspension of member-brokers, declaration of a member-broker as defaulter, norms, procedures and other matters relating to arbitration, fees, deposits, margins and other monies payable by the member-brokers to the Exchange, etc.

Turnover on the Exchange The average daily turnover of the Exchange during the financial year 2000-2001 (April-March), was Rs.3984.19 crores and the average number of daily trades was 5.69 lakhs. The average daily turnover of the Exchange in the subsequent two financial years, i.e., 2001-02 & 2002-03, has declined considerably to Rs. 1248.15 crores and Rs. 1251.29 crores respectively. The average number of daily trades recorded during 2001-02 and 2002-03 numbered 5.17 lakhs and 5.63 lakhs respectively. The average daily turnover and average number of daily trades during the quarter April-June 2003 were Rs. 1101.05 crores and 5.70 lakhs respectively. The ban on all deferral products like Borrowing & Lending of Securities Scheme (BLESS) and Automated Lending & Borrowing Mechanism (ALBM) in the Indian capital markets by SEBI w.e.f. July 2, 2001, abolition of account period settlements, introduction of Compulsory Rolling Settlements in all scrips traded on the Exchanges w.e.f. December 31, 2001, etc. have adversely impacted the liquidity in the market and consequently there is a considerable decline in the average daily turnover at the Exchange as reflected in above statistics

2.2.2 National Stock Exchange:

(Source: National Stock Exchange) TypeStock Exchange

LocationMumbai, India

OwnerNational Stock Exchange of India Limited

KeypeopleAbhinay dutta Managing Director

CurrencyINR

No.oflistings1587

MarketCapUS$ 1.46 trillion (2006)

IndexesS&P CNX NiftyCNX Nifty JuniorS&P CNX 500

Websitewww.nse-india.com

TABLES 2.3

The National Stock Exchange of India Limited (NSE), is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalization.NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%. The National Stock Exchange of India (NSE), located in Bombay, is Indias first debt market. NSE was promoted by leading financial institutions at the behalf of the government of India and was incorporate in November 1992 as a tax- paying company. In April 1993, it was recognized as a stock exchange under the securities contracts (regulation) Act, 1956. The NSE of India becomes operational in capital market segment on 3rd November 1994 in Mumbai. Largest in India by daily turnover and number of trades, for both equities and derivatives trading. NSE has a market capitalization of around US$ 1.59 trillion and over 1,552 listings as if December 2010. The NSE vast terminals, 2799 in total, cover more than 1500 cities across India; NSE is the third largest Stock Exchange in the world in term of the number of treads in equities.

NSE Indices: S&P CNX NIFTY S&P CNX DEFTY S&P CNX 500 NIFTY Mid-Cap 50 CNX NIFTY JUNIOR CNX MIDCAP CNX IT CNX 100 BANK NIFTY

Traded and delivery of BSE and NSE:-

TABLE 2.4

Technology at NSE and BSE:-

NSETata Consultancy Services, a division of Tata Sons Ltd., was selected as the prime contractor and system integrator by the NSE to provide a total turnkey solution for the money market and capital market's floorless trading system. The aim was to enable NSE to provide nation-wide electronic trading with highest transparency in the market place. Using the client-server architecture, fault-tolerant computing and in-memory database, Tata Consultancy Services' solution gave NSE high visibility and impact. BSEBOLT i.e., BSE's online trading system, is designed and developed by CMC LTD, now a Tata Group company. This screen-based trading system replaced the manual out-cry method of trading in the ring and went live on March 1995.This enabled BSE to provide floorless and fully automated screen-based trading facilities in capital market (CM) instruments with equal access to investors all over the country.Currently, BSE with around 685 members has seen an average daily turnover of Rs 1,162 crore in July 2002. For further expansion of its activities, BSE decided to provide web-based trading facility to the members as it was felt that Internet trading would fundamentally change the way exchange and brokers interact with their customers. Tata Consultancy Services developed the system (BSE WebX) with the objective of enabling the exchange to service its members and the customers of the members in an efficient and cost-effective manner using the Internet..

The importance of BSE and NSE to Mumbai All over the world, in most major industrial cities where businesses were starting up, requiring investment capital to grow and thrive, stock exchanges act as the interface between suppliers and consumers of capital. Mumbai being a major industrial centre is no exception, and the BSE has made a major contribution to the industrial and economic development of Mumbai. The impacts the exchanges have had on Mumbai are:-1. Taxes and other statutory charges paid by NSE and BSE are substantial and make a sizeable contribution to the exchequer. For example, transactions on the stock exchanges are subject to stamp duty, which is paid to the Government of Maharashtra. The annual revenue from this ranges from Rs 75-100 crore.

2. The employment generation is significant. Brokers used to employ a large number of Mumbai's citizens in their offices, especially for settlement work as large quantities of share certificates and other documents had to be physically counted, stored, sorted and delivered. Before electronic trading, a number of sub-brokers executed orders on the trading floor and hordes of investors used to visit the exchange.

3. Another example of employment generation is the evolution of simple homegrown service providers, like the Angadia service, (a courier service peculiar to Mumbai and Gujarat), which was in existence decades before the advent of the modern-day courier service. Stockbrokers routinely utilize (yes this is very much in vogue even today).

4. Considering the primary importance of Mumbai, both the leading stock exchanges are headquartered in the city. The nation's regulatory body, the Securities and Exchange Board of India (Sebi), modeled on the lines of the SEC in the USA, is also headquartered in Mumbai. Both the National Securities Depository Ltd (NSDL) and the Central Securities Depository Ltd. (CDSL) have their head offices in Mumbai.

5.

With the opening up of the financial markets to foreign investors, a number of foreign investors and brokers have established a sizeable presence in the city of Mumbai, contributing significantly to its economic development.

2.2.3 Stock Exchanges in India :-The list maintained by the Securities and Exchange Board of India (SEBI) is not current as of 2010. Bombay Stock Exchange (BSE) National Stock Exchange of India (NSE) United Stock Exchange of India (USE) Multi Commodity Exchange (MCX) MCX Stock Exchange (MCX-SX) Over the Counter Exchange of India (OTCEI) Inter-connected Stock Exchange of India (ISE) Madras Stock Exchange (MSE) Ahmadabad Stock Exchange (ASE) Bhubaneswar Stock Exchange (BhSE) Cochin Stock Exchange (CSE) Hyderabad Stock Exchange (HSE) Calcutta Stock Exchange (CSE) Delhi Stock Exchange (DSE) Bangalore Stock Exchange Madhya Pradesh Stock Exchange, Indore Jaipur Stock Exchange (JSE) Magadha Stock Exchange, Patna UP Stock Exchange (UPSE)

2.3 PESTEL ANALYSIS:- PESTEL analysis stands for "Political, Economic, Social, Technological, Environmental and Legal analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro environmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.

PESTLE analysis in order to see the bigger picture, can be a simple or a rather complex task, depending on how much detail is gathered and also how many people are involved as people see things differently. The six elements form detailed below form a helpful tool for firms for example HR can use this when reviewing a strategy.

The PESTLE analysis can be used for business planning, organisational changes, strategic decision making or marketing purposes from a departmental or an individual perspective to assist organisations to identify trends, in potential opportunities and threats before their competitors or to simply ensure that the basic factors are not overlooked.

Political factors:- Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. The government plays a big part within the operation of financial services in terms of specific policy formulation, regulation/legislation and decisions on government spending. The tax changes have caused concern in the private equity business within that these changes will drive investors out of the market and reduce the competitiveness and attractiveness of the market for the private equity investor. The tax has been deferred due to higher inflation but when the changes take place at a later stage this will have a knock on effect on terms of increased costs like VAT, corporation tax and national insurance tax. There is also the threat of challenge from the Conservative party and if they beat Labour in the next election. This would question the effect their policies would have on the anagal broking for example like their plan to improve maternity and paternity pay for individuals, which will increase company costs. Economic factors:- Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. A stable financial system plays a key role for a healthy and successful economy. The current turmoil in the financial sector is significant to the period immediately before the Great Depression of the 1930s. Unemployment is at an all time high which should in theory make it easier for to recruit but instead people in the city do not want to leave their current positions to move elsewhere which has a knock on effect for recruitment. review budgets and some departments have felt a recruitment freeze and others are forced to downsize. However downsizing may not be the short term answer, they may need to consider developing their current workforce and increase retention rates. Social factors:- Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. Having such schemes in place may incur additional costs but there are long term benefits which include higher productivity, raised morale, motivation, engagement and achieving strategic objectives. The work life balance is also an important issue as many find that work demands get in the way of other commitments so being aware of different demands on time and energy has become increasingly difficult to manage within the HR function. It has become increasingly important to have family friendly policies and flexible work patterns to help employees with other commitments such as community commitments or studying. Technological factors:- Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality and lead to innovation. As Internet usage becomes more widespread, this has encouraged to support the introduction of a new Human Resources Information System (HRIS) and an online portal particularly used for recording CPD. There is a selection of videos, pod casts and questionnaires available to enhance the skills of employees which in turn increases productivity. HR monitor the usage and approach staff who have not accessed the portal in order to encourage them to maximise their potential without much resistance to change. Legal operate within a complex legal and regulatory environment in which they aim to adhere to best practice at all times. They seek to maintain the highest business and ethical standards and to mitigate and risks to their stakeholders. To help them carry out this policy, they have a framework in place to monitor and report risk throughout the company. Environmental factors:- Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. People in general are much more aware of environmental issues and want to make sure that companies that they work for are ethical. Therefore they need to have increased measures in place such as CSR policies to satisfy employee needs. Legal factors:- Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law.

COMPANY PROFILE INTROUCTION AND HISTORY OUR ORAGANIZATIONAL STRUCTURE DEPARTMENTAL STUDY SWOT ANALYSIS

INTRODUCTION AND HISTORY :-

Angel Broking is the retail broking arm of SSKI, an organization with more than eight decades of trust & credibility in the stock market. It is India's leading retail financial Services Company with We have over 250 share shops across 115 cities in India.

While our size and strong balance sheet allow us to provide you with varied products and services at very attractive prices, our over 750 Client Relationship Managers are dedicated to serving your unique needs.

Angel Broking is lead by a highly regarded management team that has invested crores of rupees into a world class Infrastructure that provides our clients with real-time service & 24/7 access to all information and products.

Our flagship Angel Broking Professional Network offers real-time prices, detailed data and news, intelligent analytics, and electronic trading capabilities, right at your fingertips. This powerful technology complemented by our knowledgeable and customer focused Relationship Managers. We are creating a world of Smart Investor.

Angel Broking offers a full range of financial services and products ranging from Equities to Derivatives enhance your wealth and hence, achieve your financial goals. Angel Broking' Client Relationship Managers are available to you to help with your financial planning and investment needs. To provide the highest possible quality of service, Angel Broking provides full access to all our products and services through multi-channels.

INTRODUCTION TO ANGEL

In a shot span of 22 years since inception, the Angel Group has emerged as one of the top five retail stock broking houses in India, having membership of BSE, NSE and the two leading Commodity Exchanges in the country i.e. NCDEX & MCX. Angel Broking is also registered as a Depository Participant with CDSL. The group is promoted by Mr. Dinesh Thakkar, who started this business as a sub-broker in 1987 with a team of 3. Today the angel group is managed by a team of 1937 direct employees and has a nationwide network comprising of 21 Regional hubs, 124 branches and 6810 sub brokers & business associates. Angel is 100% focused on retail stock broking business unlike any other larger national broking house. The group currently services more than 5.9 thousand retail clients. Angel habitually generates value added features without the cost burden being passed on to the clients as they strongly believe that better understanding of clients needs and wants is their top priority. Their e-broking facility is one such effort, which gives the client a platform to access state of the art trading facility at the click of a button. Angel has always strived for delivering customer delight and developing strong long term bonds with its clients as well as channel partners. Angel thrives on a vision to introduce new and innovative products and services constantly. Moreover, Angel has been among the pioneers to introduce the latest technological innovations and integrate them efficiently within its business.

About the Angel Angel Bookings tryst with excellence in customer relations began more than 20 years ago. Angel Group has emerged as one of the top 3 retail broking houses in India and incorporated in 1987. Today, Angel has emerged as a premium Indian stock-broking and wealth management house, with an absolute focus on retail business and a commitment to provide "Real Value for Money" to all its clients. It has memberships on BSE, NSE and the leading commodity exchanges in India NCDEX & MCX. Angel is also registered as a depository participant with CDSL.Angel Group Companies

Angel Broking Ltd. Member on the BSE and Depository Participant with CDSL

Angel Capital & Debt Market Ltd. Membership on the NSE Cash and Futures & Options Segment

Angel Commodities Broking Ltd.Member on the NCDEX & MCX

Angel Securities Ltd.Member on the BSE

Incorporated:1997 BSE Membership:1997 NSE membership:1998 Member of NCDEX and MCX Depository Participants with CDSL

Angels presence :-

Nation- wide network of 21 regional hubs Presence 124 cities 6800 + sub brokers & business associates 5.9 lakh + clients

Management S.No Name Designation & Department

1. Mr. Dinesh Thakkar :Founder Chairman & Managing Director

2. Mr. Lalit Thakkar : Director Research

3. Mr. Amit Majumdar :Executive Director Strategy and Finance

4. Mr. Rajiv Phadke :Executive Director HR & Corp

5. Mr. Vinay Agrawal :Executive Director Equity Broking

6. Mr. Nikhil Daxini :Executive Director - Sales and Marketing

7 Mr. Hitungshu Debnath :Executive Director - Distribution & Wealth Management

8. Mr. Mudit Kulshreshtha : Executive Director Operations

TABLE 3.1 Milestones:- Awarded with 'Broking House with Largest Distribution Network' and 'Best Retail Broking House' at Dun & Bred street Equity Broking Awards 2009 August, 2008 Crossed 500000 trading accounts November, 2007 Major Volume Driver for 2007 December, 2006 Created 2500 business associates October, 2006 Major Volume Driver award for 2006 September, 2006 Launched Mutual Fund and IPO business July, 2006 Launched the PMS function October, 2005 Major Volume Driver award for 2005 September, 2004 Launched Online Trading Platform April, 2004 Initiated Commodities Broking division April, 2003 First published research report November, 2002 Angels first investor seminar March, 2002 Developed web-enabled back office software November, 1998 Angel Capital and Debt Market Ltd. Incorporated December, 1997 Angel Broking Ltd. Incorporated

ANGELS LOGO

ANGELS VISIONTop of FormBottom of Form

ANGELS BUSINESS PHILOSOPHY

3.2 OUR ORGANIZATIONAL STRUCTURE:-

Products of Angel Broking1. Online Trading 2. Commodities 3. DP Services4. PMS (Portfolio Management Services)5. Insurance6. IPO Advisory7. Mutual Fund8. Personal loans9. Quality assurance Online- Trading

Specially designed for the net savvy traders and investors who prefer operating from their home or office through the internet. The investor can access state of the art Technology with three different e-broking products and voila trading on BSE, NSE, F & O, MCX and NCDEX. ANGEL DIET Application based product for Traders. Application based ideal for traders. Multiple exchanges on single screen Online fund transfer facility User friendly & simple navigation BSC, NSC, F&O, MCX & NCDEX ANGEL ANYWHERE Application based product for Traders with Charts. Application-based platform for day traders Intra-day/historical charts with various indicators Online fund transfer facility BSC, NSC, Cash & Derivatives

ANGELTRADE Browser based product for Active Investors. Browser based for investor No installation required Advantage of mobility Trading as simple as internet surfing BSC, NSC, F&O, MCX & NCDEX

ANGEL INVESTOR User-friendly browser for investors Easy online trading platform Works in proxy and firewall system set up Integrated Back office: Access account information anytime, anywhere Streaming quotes Refresh static rates when required Multiple exchanges on single screen Online fund transfer facility Investment Advisory Services To derive optimum returns from equity as an asset class requires professional guidance and advice. Professional assistance will always be beneficial in wealth creation. Investment decisions without expert advice would be like treating ailment without the help of a doctor. Expert Advice: Their expert investment advisors are based at various branches across India to provide assistance in designing and monitoring portfolios. Timely Entry & Exit: Their advisors will regularly monitor customers investments and guide customers to book timely profits. They will also guide them in adopting switching techniques from one stock to another during various market conditions. De-Risking Portfolio: A diversified portfolio of stocks is always better than concentration in a single stock. Based on their research, They diversify the portfolio in growth oriented sectors and stocks to minimize the risk and optimize the returns.

Commodities A commodity is a basic good representing a monetary value. Commodities are most often used as inputs in the production of other goods or services. With the advent of new online exchange, commodities can now be traded in futures markets. When they are traded on an exchange, Commodities must also meet specified minimum standards known as basic grade. Types of Commodities Precious Metals: Gold and Silver Base Metals: Copper, Zinc , Steel and Aluminum Energy: Crude Oil, Brent Crude and Natural Gas Pulses: Chana , Urad and Tur Spices : Black Pepper, Jeera, Turmeric , Red Chili Others : Guar Complex, Soy Complex, Wheat and Sugar

Benefits at Angel Three different online products tailored for traders & investors. Single Screen customized market-watch for MCX / NCDEX with BSE / NSE. Streaming Quotes and real time Rates. Intra-day trading calls. Research on 25 Agro Commodities, Precious and Base Metals, Energy products and Polymers. An array of daily, weekly and special research reports. Highly skilled analysts with professional industry experience. Active relationship management desk. Seminars, workshops and investment camps for investors Depositary Participant Services Angel Broking Ltd. is a DP services provider though CDSL. We offer depository services to create a seamless transaction platform to execute trades through Angel group of companies and settle these transactions through Angel Depository services. Wide branch coverage Personalized/attentive services of trained a dedicated staff Centralized billing & accounting Acceptance & execution of instruction on fax Daily statement of transaction & holdings statement on e-mail No charges for extra transaction statement & holdings statement3.3 DEPARTMENT STUDY PRODUCT & SERVICE DETAILS AND PORTFOLIO REPORTS : Market Outlook at 9:15 a.m. Technical Report at 6:00 p.m. Derivative Analysis Report at 9:15 a.m.

FUNDAMENTAL RESEARCH SERVICES: The Sunday Weekly Report :This weekly report is the ace of all reports. It offers a comprehensive market overview and likely trends in the week ahead. It also presents few top picks based on an in-depth analysis of technical and fundamental factors. It gives short term and long term outlook on these scrips, their price targets and trading strategies. Another unique feature of this report is that it provides an updated view of about 70 prominent stocks on an ongoing basis The Industry Watch :This report provides an in-depth analysis of specific industries which are likely to outperform others in the economy. It analyzes their strengths and weaknesses and ascertains their future outlook. The final view is arrived at after thorough interaction with industry experts. Also comparative performances of various companies in the sector are evaluated and top picks are recommended. Stock Analysis :Angels stock research has performed very well over the past few years and the Angel Model Portfolio has consistently outperformed the benchmark indices. The fundamentals of select scrip are thoroughly analyzed and an actionable advice is provided along with investment rationale for each scrip. Flash News :Key developments and significant news announcements that are likely to have an impact on markets / scrip are flashed live on trading terminals. Flash news keeps the market participants updated on an online basis and helps them to reshuffle on their holdings.

TECHNICAL RESEARCH SERVICE :

Nifty Tracker :Nifty Futures is the most traded instrument with highest volumes in F & O and excellent liquidity. The team tracks the Nifty Future and generates calls based on unique trading system which is a result of their focused research over the past few years. The objective is to generate positive returns for traders who are looking for a high risk / high reward product. Online Chart :An online forum to help clients, specifically day traders in judging the directions of the market and stocks which are in the limelight. Intraday Calls :For day traders, Angel provides intra-day calls with entry, exit and stop loss levels during market hours. These calls are flashed on their terminals. Their analysts continuously track the calls and provide recommendations according to the market movements Position Calls :Angels Position Trading Calls are based on thorough analysis of the price movement in select scrips. These calls are for a 10-15 day time