A

PROJECT REPORT

On
A Study of Online Trading in Indian stock
market

SUBMITTED IN PARTIAL FULLFILLMENT OF THE

REQUIREMENTS OF

MASTER OF BUSINESS ADMINISTRATION

Maharshi Dayanand University, Rohtak

UNDER GUIDANCE OF: SUBMITTED BY:

Dr.HIMANI AVASTHI KAMAL
HOD Roll No.
DEPARTMENT OF BUSINESS ADMINSTRATION Reg. No. 1412570482

SESSION: 2022-2024
WORLD COLLEGE OF TECHNOLOGY AND MANAGEMENT

1
 STUDENTS DECLARATION

I Kamal, Reg. No. 1412570482, M.B.A. (4th Semester) of World College of

Technology and Management, Farrukh Nagar, Gurugram, hereby declare that the
Project Report entitled “A STUDY OF ONLINE TRADING IN INDIAN STOCK
MARKET” is my original work and the same has not been submitted to any other
institute for the award of any other degree.

Kamal

Signature of Candidate

2
 WORLD COLLEGE OF TECHNOLOGY AND
MANAGEMENT
CERTIFICATE OF HOD

Kamal, Reg. No. 1412570482 a bonafide student of Masters of Business

Administration, World College of Technology & Management, Gurugram, an
affiliated Institute of Maharshi Dayanand University, Rohtak has carried out the
Project Report on “A STUDY OF ONLINE TRADING IN INDIAN STOCK
MARKET” impartial fulfillment of the requirements for the Degree of Master of
Business Administration under my supervision and guidance.

I certify that this project report is a record of the work done by the candidate herself
and that to the best of my knowledge the contents of this project did not form a
basis of award of any previous degree of anybody else.

Dr. Himani
Avasthi,HOD
Department Of Business Administration
WCTM, Gurugram

3
 WORLD COLLEGE OF TECHNOLOGY AND
MANAGEMENT
CERTIFICATE OF GUIDE

Kamal, Reg. No. 1412570482 a bonafide student of Master of Business

Administration, World College of Technology & Management, Gurugram, an
affiliated Institute of Maharshi Dayanand University, Rohtak has carried out the
Project Report on “A STUDY OF ONLINE TRADING IN INDIAN STOCK
MARKET” in partial fulfillment of the requirements for the Degree of Master of
Business Administration under my supervision and guidance.

I certify that this project report is a record of the work done by the candidate herself
and that to the best of my knowledge the contents of this project did not form a
basis of award of any previous degree of anybody else.

Dr. Himani
Avasthi,HOD
Department Of Business Administration
WCTM, Gurugram

4
 ACKNOWLEDGEMENT

A Project Report is never a sole product of one person, whose name appears on
the cover. I consider it a privilege to acknowledge the contribution of all helping
hands for their cooperation and guidance that enabled me to dedicate time and
effort in framing my analysis in conceivable system.
I extend my deepest thanks to my faculty guide Mr.Himani Avasthi, World
College of Technology and Management, for giving me the opportunity to
understand the project and for providing me the necessary information whenever
required. Without her constant guidance and feedback, I would have never been
able to complete this project. A Special thanks to all faculty members, World
College of Technology and Management, whose consistent support and
cooperation showed the way towards the successful completion of the project.

Kamal

5
 EXECUTIVE SUMMARY

This project is based on “A STUDY OF ONLINE TRADING IN STOCK MARKET” at

Sumpoorna Portfolio Limited. Further, this Project includes review of literature & the

introduction of the company wherein this project tells about the profile of Sumpoorna Portfolio

limited, Situation Review wherein it has been shown SWOT analysis of company, financial

analysis of company and finally Learning’s & Findings.

Sumpoorna Portfolio Ltd. Basically work to educate and empower the individual

investor to make better investment decisions through quality advice and superior service.

Sumpoorna is a depository participant. This means that the shares are kept in

dematerialized form in Sumpoorna.

MANSI DHINGRA

(1582070035)

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 LIST OF TABLES

S.No. Title Page No.

1. Declaration

2. Certificate

3. Acknowledgement

4. Introduction to the project (In Online Trading in Stock Market) 8 -23

5. Review of Literature 24 - 38

6. Objectives of Study 39 -40

7. Research Methodology 41 - 43

8. Data Analysis & Interpretation 44 - 63

9. Findings 64 - 65

10. Conclusion 66 -67

11. Suggestions 68 - 69

12. Limitations of the Study 70 - 71

13. References 72 -74

14. Annexure 75 - 78

7
INTRODUCTION

8
 INTRODUCTION

CONSUMER BEHAVIOUR:

Consumer behaviour is the study of individuals, groups, or organizations and the processes

they use to select, secure, use, and dispose of products, services, experiences, or ideas to

satisfy needs and the impacts that these processes have on the consumer and society.

Customer behaviour study is based on consumer buying behaviour, with the customer

playing the three distinct roles of user, payer and buyer. Research has shown that consumer

behaviour is difficult to predict, even for experts in the field.

Overview of Online Trading

Stocks

The stock or capital stock of a business entity represents the original capital paid into or

invested in the business by its founders. It serves as a security for the creditors of a business

since it cannot be withdrawn to the detriment of the creditors. Stock is distinct from the

property and the assets of a business which may fluctuate in quantity and value. Buying a

stock for the long term means that you want to own part of a company and you think that

in the future the company will be profitable. If you buy stock in a company and the company

performs well, the stock's price should rise. If the company fails, then the stock should fail

you, too and go down. The stock exchanges actually compete with each other for these

listings, since companies that attract more trading make more money for the stock

exchange that listed it. Company stocks are assigned a "ticker" or trading

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symbol by the listing exchange. You may notice some well-chosen tickers that are easy to

remember, like "DNA" for the company Genentech, a biotechnology firm. Or some

companies' ticker is the same as its name, Nike for example

Stock market

A stock market or equity market is a public market (a loose network of economic

transactions, not a physical facility or discrete entity) for the trading of company stock and

derivatives at an agreed price; these are securities listed on a stock exchange as well as

those only traded privately. The size of the world stock market was estimated at about

$36.6 trillion US at the beginning of October 2008. The total world derivatives market

has been estimated at about $791 trillion face or nominal value, 11 times the size of the

entire world economy. The value of the derivatives market, because it is stated in terms of

notional values, cannot be directly compared to a stock or a fixed income security, which

traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel'

each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable

derivative 'bet' on the event not occurring). Many such relatively illiquid securities are

valued as marked to model, rather than an actual market price. The stocks are listed and

traded on stock exchanges which are entities of a corporation or mutual organization

specialized in the business of bringing buyers and sellers of the organizations to a listing

of stocks and securities together. The largest stock market in the United States, by market

cap is the New York Stock Exchange, NYSE, while in Canada, it is the Toronto Stock

Exchange.

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Trading

Historically, stock markets were physical locations where buyers and sellers met and

negotiated. With the improvement in communications technology in the late 20th century,

the need for a physical location became less important, as traders could transact from

remote locations. Participants in the stock market range from small individual stock

investors to large hedge fund traders, who can be based anywhere. Their orders usually end

up with a professional at a stock exchange, who executes the order. Some exchanges are

physical locations where transactions are carried out on a trading floor, by a method known

as open outcry. This type of auction is used in stock exchanges and commodity exchanges

where traders may enter "verbal" bids and offers simultaneously. The other type of stock

exchange is a virtual kind, composed of a network of computers where trades are made

electronically via traders. The shares of a company may in general be transferred from

shareholders to other parties by sale or other mechanisms, unless prohibited. Most

jurisdictions have established laws and regulations governing such transfers, particularly

if the issuer is a publicly-traded entity

The desire of stockholders to trade their shares has led to the establishment of stock

exchanges. A stock exchange is an organization that provides a marketplace for trading

shares and other derivatives and financial products. Today, investors are usually

represented by stock brokers who buy and sell shares of a wide range of companies on

the exchanges. A company may list its shares on an exchange by meeting and maintaining

the listing requirements of a particular stock exchange. Actual trades are based on an

auction market model where a potential buyer bids a specific price for a stock and a

potential seller asks a specific price for the stock. (Buying or selling at

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market means you will accept any ask price or bid price for the stock, respectively.) When

the bid and ask prices match, a sale takes place, on a first-come-first-served basis if there

are multiple bidders or askers at a given price. The purpose of a stock exchange is to

facilitate the exchange of securities between buyers and sellers, thus providing a

marketplace (virtual or real). The exchanges provide real-time trading information on the

listed securities, facilitating price discovery

History

The two main stock markets of India are:-

• Bombay stock exchange(BSE)

• National Stock Exchange(NSE)

Bombay Stock Exchange(BSE):-

Established in 1875, BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's first

& fastest Stock Exchange with the speed of 200 micro seconds and one of India's leading

exchange groups. Over the past 140 years, BSE has facilitated the growth of the Indian

corporate sector by providing it an efficient capital-raising platform. Popularly known as

BSE, the bourse was established as "The Native Share & Stock Brokers' Association" in

1875. BSE is a corporatized and demutualised entity, with a broad shareholder-base which

includes two leading global exchanges, Deutsche Bourse and Singapore Exchange as

strategic partners. BSE provides an efficient and transparent market for trading in equity,

debt instruments, derivatives, mutual funds. It also has a platform for trading in

equities of small-and-medium enterprises (SME).

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More than 5500 companies are listed on BSE making it world's No. 1 exchange in terms of

listed members. The companies listed on BSE command a total market capitalization of

USD 1.68 Trillion as of March 2015. It is also one of the world's leading exchanges (5th

largest in March 2015) for Index options trading (Source: World Federation of Exchanges).

BSE also provides a host of other services to capital market participants including risk

management, clearing, settlement, market data services and education. It has a global reach

with customers around the world and a nation-wide presence. BSE systems and processes

are designed to safeguard market integrity, drive the growth of the Indian capital market

and stimulate innovation and competition across all market segments. BSE is the first

exchange in India and second in the world to obtain an ISO 9001:2000 certification. It is

also the first Exchange in the country and second in the world to receive Information

Security Management System Standard BS 7799-2-2002 certification for its On-Line

trading System (BOLT). It operates one of the most respected capital market educational

institutes in the country (the BSE Institute Ltd.). BSE also provides depository services

through its Central Depository Services Ltd.(CDSL)arm.

BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked stock

market benchmark index. It is traded internationally on the EUREX as well as leading

exchanges of the BRCS nations (Brazil, Russia, China and South Africa).

BSE has won several awards and recognitions that acknowledge the work done and

progress made like India Innovation Award for the Big Data implementation , ICICI

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Lombard & ET Now Risk Management BFSI Company 2013, SKOCH Order of Merit

Certificate was awarded to BSE for E -Boss for qualifying amongst India's Best 2013,

The Golden Peacock Global CSR Award for its initiatives in Corporate Social

Responsibility, NASSCOM - CNBC-TV18's IT User Awards, 2010 in Financial Services

category, Skoch Virtual Corporation 2010 Award in the BSE STAR MF category and

Responsibility Award (CSR) by the World Council of Corporate Governance. Its recent

milestones include the launching of BRICSMART indices derivatives, BSE-SME

Exchange platform, S&P BSE GREENEX to promote investments in Green

Introduction to BSE

Bombay Stock Exchange is the oldest stock exchange not only in India but in entire Asia.

Its history is synonymous with that of the Indian Share Market history. BSE started

functioning with the name, The Native Share and Stock Broker's Association in 1875. It

got Government of India's recognition as a stock exchange in 1956 under Securities

Contracts (Regulation) Act, 1956. At the time of its origin it was an Association of Persons

but now it has been transformed to a corporate and demutualized entity. BSE is spread all

over India and is present in 417 towns and cities. The total number of companies listed in

BSE is around 3500.The main index of BSE is called BSE SENSEX or simply SENSEX.

It is composed of 30 financially sound company stocks, which are liable to be reviewed

and modified from time-to-time.

Launch of Other BSE Indices

• The launch of SENSEX in 1986 was later followed up in January 1989 by

introduction of BSE National Index (Base: 1983-84 = 100).

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• The BSE National Index was renamed as BSE-100 Index from October 14, 1996 and

since then it is calculated taking into consideration only the prices of stocks listed at BSE.

• The Exchange launched dollar-linked version of BSE-100 index i.e. Dollex-100 on

May 22, 2006.

• The Exchange constructed and launched on 27th May, 1994, two new index series

viz., the 'BSE-200' and the 'DOLLEX-200' indices.

• The launch of BSE-200 Index in 1994 was followed by the launch of BSE-500 Index

and 5 sector alindices in 1999. In 2001, BSE launched the BSE-PSU Index, DOLLEX-30

and the country's first free-float based index - the BSE TECK Index. The Exchange shifted

all its indices to a free-float methodology (except BSE PSU index) in a phased manner.

National Stock Exchange(NSE):-

The National Stock Exchange (NSE) is India's leading stock exchange covering various

cities and towns across the country. NSE was set up by leading institutions to provide a

modern, fully automated screen-based trading system with national reach. The Exchange

has brought about unparalleled transparency, speed & efficiency, safety and market

integrity.

NSE has played a catalytic role in reforming the Indian securities market in terms of

microstructure, market practices and trading volumes. The market today uses state-of-art

information technology to provide an efficient and transparent trading, clearing and

settlement mechanism, and has witnessed several innovations in products & services viz.

demutualization of stock exchange governance, screen based trading, compression of

settlement cycles, dematerialization and electronic transfer of securities, securities

15
lending and borrowing, professionalization of trading members, fine-tuned risk

management systems, emergence of clearing corporations to assume counterparty risks,

market of debt and derivative instruments and intensive use of information technology

Introduction to NSE:

National Stock Exchange (NSE) founded although late than BSE, is currently the leading

stock exchange in India in terms of total volume traded. It is also based in Mumbai but has

its presence in over 1500 towns and cities. In terms of market capitalization, NSE is the

second largest bourse in South Asia. National Stock Exchange got its recognition as a stock

exchange in July 1993 under Securities Contracts (Regulation) Act, 1956. The products

that can be traded in NSE are: -

• Equity or Share

• Futures (both index and stock)

• Options (Call and Put)

• Wholesale Debt Market

• Retail Debt Market

NSE's leading index is Nifty 50 or popularly Nifty and is composed of 50 diversified

benchmark Indian company stocks. Nifty is constructed on the basis of weighted average

market capitalization method.

NSE's mission is setting the agenda for change in the securities markets in India.

The NSE was set-up with the following objectives:

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• Establishing a nation-wide trading facility for equities, debt instruments and hybrids,

• Ensuring equal access to investors all over the country through an appropriate

communication network,

• Providing a fair, efficient and transparent securities market to investors using

electronic trading systems.

• Enabling shorter settlement cycles and book entry settlements systems.

• Meeting the current international standards of securities markets.

REGULATORS OF SECURITIES MARKET

The responsibility for regulating the securities market is shared by Department of

Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of India

(RBI) and Securities and Exchange Board of India (SEBI).

Securities and Exchange Board of India (SEBI)

SEBI or Securities and Exchange Board of India is entitled to protect the investors'

interests, regulate and develop securities market in India. The Securities and Exchange

Board of India (SEBI) is the regulatory authority in India established under Section 3 of

SEBI Act, 1992. SEBI Act, 1992 provides for establishment of Securities and Exchange

Board of India (SEBI) with statutory powers for (a) protecting the interests of investors

insecurities (b) promoting the development of the securities market and (c) regulating the

securities market. Its regulatory jurisdiction extends over corporates in the issuance of

capital and transfer of securities, in addition to all intermediaries and persons associated

17
with securities market. It passes laws for streamlining the Indian share market for

efficient outcomes.

Role of SEBI

SEBI has been obligated to perform the aforesaid functions by such measures as it

Thinks fit. In particular, it has powers for:

• Regulating the business in stock exchanges and any other securities markets

• Registering and regulating the working of stock brokers, sub–brokers etc.

• Promoting and regulating self-regulatory organizations

• Prohibiting fraudulent and unfair trade practices

• Calling for information from, undertaking inspection, conducting inquiries and audits

of the stock exchanges, intermediaries, self –regulatory organizations, mutual funds and

other persons associated with the securities market.

Security Measures and Operational Features of BSE and NSE :

The leading stock exchanges in India have developed itself to a large extent since its

emergence. These stock exchanges aim at offering the investors and traders better

transparency, genuine settlement cycle, honest transaction and to reduce and solve investor

grievances. The aim to describe these operational features is for better understanding of the

working of stock exchanges. This is done for the purpose of easy understanding from the

reader‘s point of view.

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 DERIVATIVES:

Derivatives are assets, which derive their values from an underlying asset. These

underlying assets are of various categories like:

• Commodities including grains, coffee beans, etc.

• Precious metals like gold and silver.

• Foreign exchange rate.

• Bonds of different types, including medium to long-term negotiable debt securities

issued by governments, companies, etc.

• Short-term debt securities such as T-bills.

• Over-The-Counter (OTC) money market products such as loans or deposits.

• Equities

For example, a dollar forward is a derivative contract, which gives the buyer a right & an

obligation to buy dollars at some future date. The prices of the derivatives are driven by the

spot prices of these underlying assets.

However, the most important use of derivatives is in transferring market risk, called

Hedging, which is a protection against losses resulting from unforeseen price or volatility

changes. Thus, derivatives are a very important tool of risk management.

There are various derivative products traded. They are;

• Forwards

• Futures

• Options

• Swaps

19
Comparative Analysis of Cash Market and Derivatives Market

Segment on NSE

TABLE NO.4

20
MARKETING STRATEGY OF SUMPOORNA

Market Positioning:

Market positioning statements of Sumpoorna are “ same level of personal attention,

respect and support each time”

So, Sumpoorna focus on the consumers who prefer almost all investment activities at same

place by providing number of various financial services. At Sumpoorna a person can

purchase or sell shares, debentures etc. and at the same place also demat it. Sumpoorna also

provides other investment option to the same person at same place like Mutual Fund, ,

Fixed Deposit, and Bonds etc. and help the person in designing his portfolio. By this way

Sumpoorna provides comfort to its customers.

Target Market:

Sumpoorna uses demographic segmentation strategy and segment people based on their

occupation. Karvy uses selective specialization strategy for market targeting. Target person

for the Sumpoorn are persons who can work as sub-broker for the companies. Companies

focus on Advisors of Insurance and post office, Tax consultants and CAs for making sub-

broker.

Marketing channel System:

Sumpoorna uses one level marketing channel for investment product distribution. Sub-

brokers work as intermediary between consumer and company. Company has both

21
forward and backward flow of activity through channel. Company distributes stationery,

brokerage, and information forward to its sub-broker. The sub-brokers send filled forms,

queries, amount of investment etc. back to the company.

PROJECT Channel Members:

Sumpoorna provides PROJECT to the sub-brokers because they will be viewed as the

company by the investors. The executives of Sumpoorna explain various new schemes of

investment to the sub-brokers with its objective, risk factors and expected return. Company

also periodically arrange seminar to guide sub-brokers.

Advertising and Promotion:

The objective of advertising of Sumpoorna is to create awareness about services of

Sumpoorna among investors and sub-brokers and increase sub-brokers of Sumpoorna.

Company doesn’t give advertisement in media like TV, Newspapers, and Magazines etc.

Sumpoorna’s advertisement is made indirectly by the companies associate with it.

Quality Objectives of Sumpoorna:

 Build in-house processes that will ensure transparent and harmonious

relationships with its clients and investors to provide high quality of services.

 Establish a partner relationship with its investor service agents and vendors that

will help in keeping up its commitments to the customers.

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 Provide high quality of work life for all its employees and equip them with

adequate knowledge & skills so as to respond to customer's needs.

 Continue to uphold the values of honesty & integrity and strive to establish

unparalleled standards in business ethics.

 Use state-of-the art information technology in developing new and innovative

financial products and services to meet the changing needs of investors and clients.

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

constantly guide the individuals and institutions in making a judicious choice of

same.

 Strive to keep all stake-holders (shareholders, clients, investors, employees,

suppliers and regulatory authorities) proud and satisfied.

23
REVIEW OF

LITERATURE

24
 REVIEW OF LITERATURE

Charles (1999) has analysed that the astonishing growth in Americans' stock portfolios in

the 1990s has been a major force behind the growth of consumer spending. This article

reviews the relationship between stock market movements and consumption. Using various

econometric techniques and specifications, the authors find that the propensity to consume

out of aggregate household wealth has exhibited instability over the postwar period. They

also show that the dynamic response of consumption growth to an unexpected change in

wealth is extremely short-lived, implying that forecasts of consumption growth one or more

quarters ahead are not typically improved by accounting for changes in existing wealth.

Bhardwaj (2003) has stated the literature on globalization, He found the pervasiveness of

the west’s perception of the world affect on Indian investors that affects the trends in

investor’s choice. They are hugely affected by the west’s views and so changes in Indian

trends occur.

Ranganathan (2003), has stated the investor behavior from the marketing world and

financial economics has brought together to the surface an exciting area for study and

research: behavioral finance. The realization that this is a serious subject is, however, barely

dawning. Analysts seem to treat financial markets as an aggregate of statistical

observations, technical and fundamental analysis. A rich view of research waits this

sophisticated understanding of how financial markets are also affected by the ‘financial

behavior’ of investors. With the reforms of industrial policy, public sector, financial sector

and the many developments in the Indian money market and capital market,

25
mutual funds that has become an important portal for the small investors, is also influenced

by their financial behavior. Hence, this study has made an attempt to examine the related

aspects of the fund selection behavior of individual investors towards Mutual funds, in the

city of Mumbai. From the researchers and academicians point of view, such a study will

help in developing and expanding knowledge in this field.

Shrotriya (2003) conducted a survey on investor preferences in which he depicted the

linkage of investment with the factor so considered while making investment. He says

“There are various factors and their linkage also. These factors help us how to ensure safety,

liquidity, capital appreciation and tax benefits along with returns.”

Dijk (2007) has conducted 25 years of research on the size effect in international equity

returns. Since Banz's (1981) original study, numerous papers have appeared on the

empirical regularity that small firms have higher risk-adjusted stock returns than large

firms. A quarter of a century after its discovery, the outlook for the size effect seems bleak.

Yet, empirical asset pricing models that incorporate a factor portfolio mimicking

underlying economic risks proxied by firm size are increasingly used by both academics

and practitioners. Applications range from event studies and mutual fund performance

measurement to computing the cost of equity capital. The aim of this paper is to review the

literature on the size effect and synthesize the extensive debate on the validity and

persistence of the size effect as an empirical phenomenon as well as the theoretical

explanations for the effect. We discuss the implications for academic research and

corporate finance and suggest a number of avenues for further research.

26
Vasudev (2007) analysed the developments in the capital markets and corporate

governance in India since the early 1990s when the government of India adopted the

economic liberalization programme. The legislative changes significantly altered the theme

of Indian Companies Act 1956, which is based on the Companies Act 1948 (UK). The

amendments, such as the permission for nonvoting shares and buybacks, carried the statute

away from the earlier “business model” and towards the 'financial model' of the Delaware

variety. Simultaneously, the government established the Securities Exchange Board of

India (SEBI), patterned on the Securities and Exchange Commission of US. Through a

number of other policy measures, the government steered greater investments in the stock

market and promoted the stock market as a central institution in the society. The article

points out that the reform effort was inspired, at least in part, by the government’s reliance

on foreign portfolio inflows into the Indian stock market to fund the country’s trade and

current account deficits.

Johnson (2008) has stated that Product quality is probably under-valued by firms because

there is little consensus about appropriate measures and methods to research quality. The

authors suggest that published ratings of a product's quality are a valid source of quality

information with important strategic and financial impact. The authors test this thesis by

an event analysis of abnormal returns to stock prices of firms whose new products are

evaluated in the Wall Street Journal. Quality has a strong immediate effect on abnormal

returns, which is substantially higher than that for other marketing events assessed in prior

studies. In dollar terms, these returns translate into an average gain of $500 million for

firms that got good reviews and an average loss of $200 million for firms that got bad

reviews. Moreover, there are some important asymmetries.

27
Rewards to small firms with good reviews of quality are greater than those to large firms

with good reviews. On the other hand, large firms are penalized more by poor reviews of

quality than they are rewarded for good reviews. The authors discuss the research,

managerial, investing, and policy implications.

Patnaik and shah (2008) has analysed on the preferences of foreign and domestic

institutional investors in Indian stock markets. Foreign and domestic institutional investors

both prefer larger, widely dispersed firms and do not chase returns. However, we and

evidence of strong differences in the behavior of foreign and domestic institutional

investors.

Bhatnagar (2009) has analysed of Corporate Governance and external finance in transition

economies like India. The problem in the Indian corporate sector is that of disciplining the

dominant shareholder and protecting the minority shareholders. Clearly, the problem of

corporate governance abuses by the dominant shareholder can be solved only by forces

outside the company itself particularly that of multilateral financial institutions in the

economic development. India has relied heavily on external finance as their domestic

saving rates have been much lower than their investment rates. The less promising

prospects for the global supply of external finance the need for an increase in the

multilateral financial institutions. India being a transition economy is changing from a

centrally planned economy to a free market. It is undergoing economic liberalization,

macroeconomic stabilization where immediate high inflation is brought under control, and

restructuring and privatization in order to create a financial sector and move from public to

private ownership of resources. These changes often may lead to increased inequality of

incomes and wealth, dramatic inflation and a fall of GDP.

28
Mayank (2009) has analysed the role of two important forces - the regulator and the capital

market as determinant of external finance in transition economies analyses the changing

pattern and future prospectus of external finance to India and reviews the role of external

finance. Under this framework, the study evaluates current Indian corporate governance

practices in light of external finance.

Rajeshwari and Moorthy has conducted the study and analysed that Mutual Fund is a

retail product designed to target small investors, salaried people and others who are

intimidated by the mysteries of stock market but, nevertheless, like to reap the benefits of

stock market investing. At the retail level, investors are unique and are a highly

heterogeneous group. Hence, their fund/scheme selection also widely differs. Investors

demand inter-temporal wealth shifting as he or she progresses through the life cycle. This

necessitates the Asset Management Companies (AMCs) to understand the fund/scheme

selection/switching behaviour of the investors to design suitable products to meet the

changing financial needs of the investors. With this background a survey was conducted

among 350 Mutual Fund Investors in 10 Urban and Semi Urban centers to study the factors

influencing the fund/scheme selection behaviour of Retail Investors. This paper discusses

the survey findings. It is hoped that it will have some useful managerial implication for the

AMCs in their product designing and marketing.

Atkinson (2000) There are several studies in the literature that attempt to discuss some of

the problems and challenges associated with online trading. The first problem discussed in

the literature is hidden costs and deceptive advertising associated with online trading.

supported this contention that buried in all the online trading hype resides the fine print.

29
This obscure data translates into a venture that is more costly than one was lead to believe.

McNamee (2000) and Patel (1999) Delayed and varied execution speeds and self serving

market makers were among the items responsible for this pitfall of online trading as was

collaborated in the studies. Internet security is also a major concern to investors. Computer

hackers and viruses plague every sector of the computer community and with certainty will

continue to do so.

(Goldberg, 1998) Internet applications are endless and e-commerce companies are

developing innovative business models and making advancements everyday. One of the

fastest growing internet ventures is online trading. The first internet securities trading

occurred in 1994. By 1997, it has been estimated that 17 percent of all trades occurred

online via the internet. Online brokerage firms emerged and the wealth of information

available to many investors.

(Padhi and Naik, 2012) Stock markets play an essential role in growing industries that

ultimately affect the economy through transferring available funds from units that have

excess funds (savings) to those who are suffering from funds deficit (borrowings) .

(Poon and Swatman, 1999) Countries all over the world have invested heavily to leverage

the Internet and transform their conventional businesses into e-businesses. E- businesses

are defined as the use of Internet based information and communication technologies (ICT)

by organizations to conduct transactions, share information and maintain relationships.

30
( Tversky, A and Kahenaman, D.) Other research has shown that psychological factors

may result in exaggerated stock price movements. Psychological research has demonstrated

that people are predisposed to seeing patterns and often will perceive a pattern in what is ,

in fact, just noise. In the present context this means that a succession of good news items

about a company may lead investors to overreact positively. A period of good returns also

boost the investor’s self-confidence , reducing his risk threshold .

Calderon-Rossell (1991) was the first to develop a partial equilibrium model of stock

market growth. To date, this model represents the most “serious” attempt to lay the

foundations of a financial theory of stock market development. However, as a partial

equilibrium model, it fails to take into account, for instance, the potential effects of

government policies and institutional factors.

Henry (2000) finds a strong relationship between the growth rate of investment and

changes in stock market valuation measured by returns on the stock market, the turnover

ratio, and the traded value as a share of GDP. On the other hand, McCauley and Remolona

(2000) and Shah and Thomas (2001) find that the size of the economy is an important

factor in the development of liquid and well functioning securities markets.

Mishkin (2001) argues that financial liberalization promotes transparency and

accountability, which reduces adverse selection and moral hazard. It thus tends to reduce

the cost of borrowing in stock markets, which eventually increases their liquidity and size.

A large pool of studies has investigated the impact of inflation on capital markets. An

important finding of these studies has been that high levels of inflation are associated

31
with less liquid and smaller financial markets as financial intermediaries tend to lend less

and allocate less efficiently.

Boyd et al. (2001) find negative effects of inflation on private credit and equity

markets.They argue that the relationship between financial development and inflation could

be nonlinear, with a particular threshold level after which the financial sector experiences

an abrupt drop in performance.

Claessens et al. (2001) find that privatization programs and foreign direct investment

contribute to stock market development.

Naceur et al. (2007) show that macroeconomic factors such as income, saving rate, and

financial intermediary development are important determinants of stock market

development for a panel of countries in the MENA region.

El-Wassal (2005) examined the relationship between stock market growth and economic

growth, financial liberalization and foreign portfolio. The findings show that economic

growth, financial liberalization and foreign portfolio investments were the leading factors

in the expansion of stock markets.

Yartey and Adjasi, (2007) found that financial intermediary sector development tended to

increase stock market development in Sub-Sharan Africa, controlling for macroeconomic

stability, economic development and the quality of legal and political institutions. In

addition, Yartey (2008) has demonstrated that stock market development has a nonlinear

relationship with banking sector development. That is, stock market development is

initially supported by banking sector development through trade intermediation.

32
North and Weingast (1989) show that improved checks and balances, credible

commitments and upgraded property rights in England during the seventeenth century led

to the development of stable capital markets.

Erb et al. (1996) show that expected returns and the magnitude of political risk are

positively related. They find that both in developing and developed countries, the lower the

level of political risk, the lower the required returns. The results suggest that political risk

plays an important role in investment decisions and decreases the cost of equity, and

consequently may have important implications for stock market development.

La Porta et al. (1997, 1998) argue that the origin of a country’s legal system affects the

level of financial development. A common law basis is more conducive to the development

of capital markets than a civil law basis, as the flexibility of the common law legal system

allows for protection of small investors. Moreover, they find that countries with a lower

quality legal regime and poorer law enforcement exhibit smaller and narrower capital

markets and that the listed companies on their stock markets are characterized by more

concentrated ownership.

La Porta et al. (2000, and 2002), Perotti and Van Oijen (2001), Galindo and Micco

(2004) and Djankov et al. (2005) argue that strengthening property rights, credit protection

and investor protection through company laws and commercial codes, as well as disclosure

of companies’ activities and proper accounting rules and practices are key determinants of

the development of corporate securities markets.

(Claessens et al, 2001) More recent empirical research emphasizes as well the important

role of access to international markets in fostering the development of local financial

33
markets. Capital account liberalization broadens the investor base, enhances efficiency by

weeding out inefficient institutions and creates pressure to reform .

Impavido et al. (2003) and Claessens et al. (2003) argue that the development and

particularly the liquidity of financial markets depend also on the existence of a diversified

class of institutional investors. Mutual funds, pension funds and insurance companies act

as a stable source of demand for equity and debt securities. They foster competitiveness

and efficiency in primary markets and create an incentive for the establishment of a robust

regulatory and supervisory framework. In this regard,, Catalan et al.(2000) examine the

determinants of stock market development for OECD countries and for some emerging

economies. Their findings suggest that, setting aside the issues of macro stability and legal

rights, contractual savings institutions positively affect stock market development.

Yartey and Adjasi (2007) shows that political risk and institutional quality are strongly

associated with growth in stock market capitalization. The results suggest that the

establishment of quality institutions can be an important factor in the development of stock

markets. Other institutional factors as well, such as law and order, democratic

accountability and bureaucratic quality are important determinants of stock market

development.

Chami et al. (2009) argue that financial markets will develop if borrowers and lenders are

willing and able to enter into contracts, and liquidity providers find conditions conducive

to trading created financial instruments. They also emphasize the importance of regulatory

structure in supporting this process by removing obstacles that render

34
potential borrowers, lenders and liquidity providers unwilling or unable to play their roles

and by creating an appropriate incentive for each agent to fulfill their end of the bargain.

(Maunder et al., 1991) It is possible for stock markets to be large relative to their

economies, but still concentrated. That is, only a few companies dominate the given market.

Consequently, market concentration may be measured by looking at the share of market

capitalization accounted for by the large companies in the market. These large companies

are seen by some analysts as being the leading three to five companies in the market.

(Goldberg, 1998) Online brokerage firms emerged and the wealth of information available

to many investors have promoted the practice of investing through the internet. The

opportunity that online investing present to investors is intriguing and returns often seem

very promising. Within these opportunities lie many problems and challenges that are

potential obstacles for the online investor. There are a variety of issues that online investors

will face today and continue to do so in the future.

A few studies have been undertaken to evaluate the effect of introduction of derivative

products on volatility of Indian spot markets. These studies have mainly concentrated on

the NSE.

Thenmozhi (2002) showed that the inception of futures trading has reduced the volatility

of spot index returns due to increased information flow.

Shenbagaraman (2003), the introduction of derivative products did not have any

significant impact on market volatility in India.

35
Raju and Karande (2003) also reported a decline in volatility of S&P CNX Nifty after

the introduction of index futures.

(Williams, Whalley, and Li 2000) A service product cannot be adopted without proper

infrastructure (Walsh and White 2000). This is also true of online trading where security,

reliability, and speed are vital for consumer trust and loyalty. Many online investors are

concerned about the security of Internet transactions: for example, the integrity of

information, secure payment mechanisms, and communication/information free from

interception and misrepresentation.

(Greenwald et al. 1998) Investor concerns could be alleviated with development of new

technology that would bring not only more security but enhanced network reliability and

speed as well .

The speed of stock transactions on the Internet is improved over that through traditional

channels, not only because of faster networks, but also because there are fewer individuals

between the investor and the final site where bids and offers meet to complete a transaction.

Further automation could also lower the transaction cost (Sarkar, Butler, and Steinfield

1996). In an effort to earn client trust, Datek offers free real-time stock quotes and promises

to execute trades within 1 minute or refund the commission (Greenwald et al. 1998).

(Sindell 1999, Ch. 16) Many online portfolio-tracking services are available on the Internet

or are offered as computer software programs. In response to services available to online

investors, full-service brokers contend that they can provide expert advice and personal

service (Emerson 1999).

36
(Jurek 1999) Other related services, such as advice on how to deal with the quick build up

of tax liabilities generated by short-term trades are offered.They argue that the biggest

hazard of e trading is trading itself, and the ability to buy and sell instantly should not be

confused with investing. Some people have neither the time nor the confidence to manage

their portfolios because being a skilled investor is a fulltime job (Online Investing 1999).

The brokers recommend that investors who fear new technology “talk to a live body” .

Ray (2000) and Turner (2000) Privacy, identification, and investor protection by using

trusted third parties and/or privacy statements, online brokers have tried to increase

consumer confidence and loyalty. Anonymity must be guaranteed, since investors,

individual and institutional, would like to hide their actions in order to buy and sell stock

at the best price. Online trading companies secure transactions over the Internet by offering

data encryption and requiring a unique user identity and password when the investor logs

on. They also provide clients further safety if they fail to achieve web security.

Rogers and Shoemaker wrote (1971, 138), which focused on the provider of products

and services, discussed the benefits and drawbacks of online trading in general from the

traders‟ viewpoint. But their approach did not deal with the range of investor responses to

the innovation of online trading. Innovation-diffusion scholars shed light on this issue by

finding that attributes of innovations could appeal differently to users at different stages of

the innovation adoption process.

Rogers (1995, Ch. 5), an individual progresses through 5 different stages in the innovation-

decision process model: (1) From first knowledge (awareness) of an

37
innovation (2) to the persuasion (attitude formation and change) stage, (3) to a decision to

adopt or reject the innovation, (4) to implementation of the new idea, (5) to the confirmation

(reinforcement for the adoption or rejection of a prior decision) stage.

38
OBJECTIVES OF

THE STUDY

39
 OBJECTIVES OF THE STUDY

The Objective is to review the study of ONLINE TRADING at Sumpoorna Portfolio Ltd

as the exchange has changed it’s trading from the outcry mode to online trading on 20th

December 2010.

• To know the awareness level of customers regarding online trading.

• To study the attitude of the investor.

• To know the factors influencing investment decision.

• To make a comparative study of competitors of Sumpoorna Portfolio Ltd.

• To know the online screen based trading system adopted by Sumpoorna .

40
 RESEARCH

METHODOLOGY

41
 RESEARCH METHODOLOGY

The research methodology defines what the activity of research is, how to proceed, how to

measure progress, and what constitutes success. It provides us an advancement of wealth

of human knowledge, tools of the trade to carry out research, tools to look at things in life

objectively; develops a critical and scientific attitude, disciplined thinking to observe

objectively (scientific deduction and inductive thinking); skills of research particularly in

the ‘age of information’. Also it defines the way in which the data are collected in a research

project. In this paper it presents one components of the research methodology from a real

project; the theoretical design and framework respectively.

Sources of Data:- Data, facts ,figures, other relevant material of past and present and

surveying are the basis for study and analysis. Without an analysis of factual data no

specific inferences can be drawn on the questions under study. Inferences based on

imagination or guesses cannot provide correct answer to research questions. The relevance

adequacy and reliability of data determine the quality of the findings of a study.

For the purpose of the present study, data from two sources has been collected, namely

primary data and secondary data.

 PRIMARY DATA: Primary data is source from which the researcher collects the

data. It is a first hand data, which is used directly for the analysis purposes. Primary

data always gives a researcher a fairer picture. In the present study primary data has

been collected using questionnaires. For the purpose of collecting the same, 50

respondents have been randomly selected. Even the

42
 response of the respondents was taken into consideration. In this study, primary

data plays a vital role for analysis, interpretation, conclusion and suggestions.

 SECONDARY DATA: Secondary data is data which is collected and compiled for

other purposes. Secondary data also plays a key factor in providing more

information which will influence the analysis. Few of the main sources of secondary

data include newspapers, magazines, business journals, internet .

 Research Design: Exploratory research design is been taken.

 Exploratory research design: Exploratory research is research conducted for

a problem that has not been clearly defined. It often occurs before we know enough

to make conceptual distinctions or posit an exploratory relationship. Exploratory

research helps determine the best research design, data collection method and

selection of subjects.

 Sample Area : Noida city is being taken as a sample area for study.

 Sample Size : The research made use of primary data, which was collected by

the 50 respondents but out of which only 40 has responded to the questions that’s

why the research has been carried on 40 respondents.

 Data Collection Instrument: Structured Questionnaire

 Sampling Procedure : We have used a Non Probabilistic Sampling Technique

that is, Convenience Sampling.

43
DATA ANALYSIS

&

INTERPRETATION

44
 DATA ANALYSIS & INTERPRETATION

The data has been analyzed by using the SPSS software. Originally SPSS is an acronym

of Statistical Package for Social Science but now it stands for Statistical Product & Service

Solutions. It is one of the most popular Statistical Package which can perform highly

complex data manipulation & analysis with simple instruction.

It is used for quick analysis of high volume of Social Science data, collected from different

methods of research. SPSS is a computer program that is basically used for survey,

authoring & deployment, data mining, text analytics, statistical analysis & collaboration.

Major functions of SPSS are:

• It summarizes the data.

• It determine, whether there are significant differences between groups or not.

• Inspect the relationships among variables and graph result.

We have tried to establish relationship between two factors i.e. satisfaction level of services

provided by the company and success of Sumpoorna in online trading of stock by using

correlation method of Karl Pearson applying two tailed test with the help of SPSS Software.

45
 Table : 5
Correlations

Do you Are the stock

believe that broking
your services
trader/broker provided by
is very Sumpoorna is
successful in satisfactory ?
online
trading?
Pearson Correlation 1 .804**
Do you believe that your trader/broker is very
Sig. (2-tailed) .000
successful in online trading?
N 40 40
Pearson Correlation .804** 1
Are the stock broking services provided by
Sig. (2-tailed) .000
Sumpoorna is satisfactory?
N 40 40

**. Correlation is significant at the 0.01 level (2-tailed).

INTERPRETATION:

The analysis was done by performing a two tail test on Pearson correlation. It has been

found that there is high positive correlation of 0.804 at 1% level of significance between

two factors i.e. satisfaction level of services provided by the company and success of

Sumpoorna in online trading of stock.

46
 TABLE:6

Q1.Do you know about online trading?

Frequency Percent Valid Percent Cumulative Percent

Yes 35 87.5 87.5 87.5

Valid No 5 12.5 12.5 100.0

Total 40 100.0 100.0

(Figure:1)

INTERPRETATION:

In my study,87% of the respondents are aware about online trading in stock market.

47
 Table:7

Q 2. Do you have a DMAT Account ?

Frequency Percent Valid Percent Cumulative Percent

Yes 16 40.0 40.0 40.0

Valid No 24 60.0 60.0 100.0

Total 40 100.0 100.0

( Figure-2)

INTERPRETATION: 60% of respondents do not have demat account.

48
 TABLE: 8

Q 3. Do you feel safe while trading online?

Frequency Percent Valid Percent Cumulative Percent

Yes 22 55.0 55.0 55.0

Valid No 18 45.0 45.0 100.0

Total 40 100.0 100.0

(Figure-3)

INTERPRETATION: 55% of respondents feel safe while trading, whereas others

are not.

49
 TABLE: 9

Q4. In which stock you most trade online?

Frequency Percent Valid Percent Cumulative Percent

Mutual Funds 10 25.0 25.0 25.0

F&O Equities 2 5.0 5.0 30.0

Others 13 32.5 32.5 62.5

Valid
Equity 11 27.5 27.5 90.0

Commodities 4 10.0 10.0 100.0

Total 40 100.0 100.0

(Figure-4)

INTERPRETATION: 28% of respondents invests in Equities, 25% trade in

MutualFunds, 10% trade in Commodities, 5% in F&O Equities and 32% in Others.

50
 TABLE: 10

Q 5. Do you receive updated online information regarding the stock market

from your dealer/broker?

Frequency Percent Valid Percent Cumulative Percent

Yes 25 62.5 62.5 62.5

Valid No 15 37.5 37.5 100.0

Total 40 100.0 100.0

(Figure-5)

INTERPRETATION: 62% of respondents receive updated online information.

51
 TABLE: 11

Q 6. Do you believe that your trader/broker is very successful in online trading?

Frequency Percent Valid Percent Cumulative Percent

Strongly Agree 6 15.0 15.0 15.0

Agree 16 40.0 40.0 55.0

Moderate 12 30.0 30.0 85.0

Valid
Disagree 2 5.0 5.0 90.0

Strongly Disagree 4 10.0 10.0 100.0

Total 40 100.0 100.0

(Figure:6)

INTERPRETATION: 40% of respondents are agree that their trader is very

successful in online trading, whereas 15% are strongly agree, 5% are disagree ,10% are

strongly disagree and 30% are moderate views

52
 TABLE: 12

Q 7.Are the stock broking services provided by Sumpoorna is

Frequency Percent Valid Percent Cumulative Percent

Strongly Agree 6 15.0 15.0 15.0

Agree 15 37.5 37.5 52.5

Moderate 12 30.0 30.0 82.5

Valid
Disagree 3 7.5 7.5 90.0

Strongly Disagree 4 10.0 10.0 100.0

Total 40 100.0 100.0

(Figure7)

INTERPRETATION: 38% of respondents are agree that stock broking services

provided by Sumpoorna is satisfactory, whereas 15% are strongly agree, 7% are disagree

,10% are strongly disagree and 30% are moderate views.

53
 TABLE: 13

Q8.What percentage of your annual income do you invest in share market ?

Frequency Percent Valid Percent Cumulative Percent

More than 20% 3 7.5 7.5 7.5

10-15% 9 22.5 22.5 30.0

Valid
Upto 10% 28 70.0 70.0 100.0

Total 40 100.0 100.0

(Figure-8)

INTERPRETATION: 70% of people invest only upto 10% of their annual income

in share market

54
 TABLE: 14

Q9.No. of years of online trading experience in stocks at this firm?

Frequency Percent Valid Percent Cumulative

Percent

5-10 years 11 27.5 27.5 27.5

Valid Below 5 years 29 72.5 72.5 100.0

Total 40 100.0 100.0

(Figure-9)

INTERPRETATION: 72% of respondents have experience of Below 5 years and

remaining have experience of 5-10 years.

55
 TABLE: 15

Q 10. How was your DMAT Account opened ?

Frequency Percent Valid Percent Cumulative

Percent

Referral- Clients 7 17.5 17.5 17.5

Personal Acquaintance 9 22.5 22.5 40.0

Valid Others 19 47.5 47.5 87.5

Call/ Walk-in 5 12.5 12.5 100.0

Total 40 100.0 100.0

(Figure-10)

INTERPRETATION: 17% of respondents says that their account was opened

through referral clients, 22% through personal acquaintance, 13% through call/walk in,

and 48% through others.

56
 TABLE: 16

Q 11. What is your opinion relating to the rate of interest of margin funding

facility of Sumpoorna ?

Frequency Percent Valid Percent Cumulative Percent

Excellent 6 15.0 15.0 15.0

Average 14 35.0 35.0 50.0

Valid Poor 4 10.0 10.0 60.0

Good 16 40.0 40.0 100.0

Total 40 100.0 100.0

(Figure-11)

INTERPRETATION: 40% of respondents say that the margin funding facility of

Sumpoorna is good ,35% of respondents say average,15% says excellent and other

remaining say poor.

57
 TABLE: 17

Q12. Are you aware of T+2 method of trading?

Frequency Percent Valid Percent Cumulative Percent

Yes 18 45.0 45.0 45.0

Valid No 22 55.0 55.0 100.0

Total 40 100.0 100.0

(Figure-12)

INTERPRETATION: 55% of respondents are aware of T+2 method of trading

whereas others are not.

58
 TABLE: 18

Q 13.Do you feel that there is more transparency in online trading?

Frequency Percent Valid Percent Cumulative Percent

Yes 21 52.5 52.5 52.5

Valid No 19 47.5 47.5 100.0

Total 40 100.0 100.0

(Figure-13)

INTERPRETATION: 52% of respondents feel that there is transparency in online

trading whereas 48% of respondents feel that there is no transparency.

59
 TABLE: 19

Q 14. Any other company whose service you like?

Frequency Percent Valid Percent Cumulative Percent

Indian Bulls 13 32.5 32.5 32.5

Sumpoorna 9 22.5 22.5 55.0

Sharekhan 4 10.0 10.0 65.0

Valid
Angel Broking 7 17.5 17.5 82.5

Karvy 7 17.5 17.5 100.0

Total 40 100.0 100.0

(Figure-14)

INTERPRETATION: Majority of respondents feel that the service of Indian Bulls

is good than other companies including Sumpoorna.

60
 TABLE: 20

Q 15. AGE

Frequency Percent Valid Percent Cumulative Percent

15-30 23 57.5 57.5 57.5

31-45 8 20.0 20.0 77.5

Valid
45-60 9 22.5 22.5 100.0

Total 40 100.0 100.0

(Figure-15)

INTERPRETATION: In my research 57% of respondents are between the age

group of 15-30 , 20% are of 31-45 and 23% are of 46-60.

61
 TABLE:21

Q 16. Income per month

Frequency Percent Valid Percent Cumulative Percent

Below 15000 18 45.0 45.0 45.0

15000-30000 4 10.0 10.0 55.0

Valid 30000-45000 9 22.5 22.5 77.5

Above 45000 9 22.5 22.5 100.0

Total 40 100.0 100.0

(Figure-16)

INTERPRETATION: 45% of respondents have income Below 15000, 10% have

15000-30000, 23% have Above 45000 and 22% have 30000-45000

62
 TABLE: 22

Q 17. Educational Qualification

Frequency Percent Valid Percent Cumulative

Percent

Post Graduation 22 55.0 55.0 55.0

Graduation 11 27.5 27.5 82.5

Valid
Others 7 17.5 17.5 100.0

Total 40 100.0 100.0

(Figure-17)

INTERPRETATION: 55% respondents are Post Graduated, 27% are Graduated and

18% are of other categories.

63
FINDINGS

64
 FINDINGS

 The investment decision of investors is influenced by their own decision and

through friends & relatives.

 Majority of investors invest only upto 10% of their annual income in share market.

 Sumpoorna Portfolio Ltd has a great competition with other broking agencies like
Kodak, Angel etc. because they are also using new technologies to retain customers.

 The number of players is increasing at a steady rate and today there are over a dozen
of brokerage houses who have opted to offer net trading to their customer and
prominent among them are Sumpoorna, India bulls, Kotak street, Karvy.

 Investors perception changes with the fluctuations in share market.

 On applying correlation analysis (using SPSS) on the primary data collected, it has

been found that there exists a positive relationship between the two factors viz. the

satisfaction level of services provided by Sumpoorna and its success in online

trading.

65
CONCLUSION

66
 CONCLUSION

In today’s scenario when a l services are going to be online or in electronic form Sumpoorna

Portfolio Ltd. Is creating awareness of online trading so that the client can trade from

anywhere from the World. Sumpoorna Portfolio Ltd. takes care of client portfolio and

whenever the value of his/her portfolio will decrease by 30% then that client is always

informed by his/her relationship Manager. Sumpoorna is a company that has helped in

handling a vast amount of transactions and this can be an efficient trading, delivering,

settlement system with adequate protection to investors.

The introduction of on-line trading would influence the investors resulting in an increase

in the business of the exchange. Due to invention of online trading there has been greater

benefit to the investors as they could sell / buy shares as and when required and that to with

online trading.

The broker’s has a greater scope than compared to the earlier times because of invention

of online trading.

67
SUGGESTIONS

68
 SUGGESTIONS & RECOMMENDATIONS

• Allocation of news in such a way that Sumpoorna Portfolio Ltd maintain a consistency

level throughout the month.

• Can improve in that areas where service provide by other major competitors is very

strong in this area.

• To increase the awareness level of the company among the public.

• 24*7 customer support can increase its value.

• The company must spread the awareness to its clients for the service like F&O Equities

to increase the satisfaction level of clients as we have find that there is positive aspect

between the satisfaction level of services provided by Sumpoorna success in online

trading.

69
LIMITATIONS OF

THE STUDY

70
 LIMITATIONS OF THE STUDY

 It is always a problem to get an enthusiastic response. There were not many willing

participants; lack of cooperation remains an aberration in most of the survey based

researches.

 The respondents’ behavior changes according to stock market fluctuations.

 The study is only restricted to the Noida city.

 Time constraint is also one of the factor.

71
REFERENCES

72
 REFERENCES

WEBSITES :

 www.sumpoornaonline.com

 www.investopedia.com

 www.bseindia.com

 www.nseindia.com

 www.moneycontrol.com

NEWSPAPER :

 The Times of India

 The Economic Times

RESEARCH PAPERS:

 Bae, K., Bailey, W., Mao, C.X. (2006), Stock Market Liberalization and the

Information Environment, Journal of International Money and Finance, 25, 404-

428.

 Baker, H.K. (1996), Trading Location and Liquidity: An analysis of U.S. Dealer

and Agency Markets for Common Stocks. Financial Markets, Institutions &

Instruments, 5(4), 1-51.

 Money and Capital in Economic Development, Washington: Brookings Institution.

International Journal of Economics and Financial Issues, Vol. 3, No. 3.

73
  Dijk (2007). Economic Policy, The Size Effect in Equity Returns. Empirical
Research Findings. Journal of Financial Management and Analysis, 21(1).Available
at http://papers.ssrn.com/sol3/results.cfm last accessed on July5, 2009.
 Charles (1999). Economic Policy, Astonishing growth in Americans' stock
portfolios. The Icfai Journal of Stock Market, 6 (3): 43-60. Available at
http://papers.ssrn.com/sol3/results.cfm last accessed on July5, 2009.

BOOKS:

 Beri G.C, Marketing Research

 Gupta C.B. , Marketing Management

74
ANNEXURE

75
 ANNEXURE

Dear respondent,

I am a student of MBA, is conducting a research on A Study of Online Trading in

Indian Stock Market”. I would be extremely thankful if you spare some time to answer

the following questions. All the facts disclosed by you will be used for academic purpose

only.

1. Do you know about online trading?

□ Yes □ No

2. Do you have a DMAT Account ?

□ Yes □ No

3. Do you feel safe while trading online?

□ Yes □ No

4. In which stock you most trade online?

□ Equity □ Mutual Funds

□ Commodities □ F&O Equities

□ Other

5. Do you receive updated online information regarding the stock market from your

dealer/broker?

□Yes □No

6. . Do you believe that your trader/broker is very successful in online trading?

□ Strongly Agree □Agree □Moderate

□Disagree □Strongly Disagree

76
7. Are the stock broking services provided by Sumpoorna is satisfactory ?

□ Strongly Agree □Agree □Moderate

□Disagree □Strongly Disagree

8. . What percentage of your annual income do you invest in share market ?

□ Up to 10% □□ 10-15% □

□ 15-20% □□ More than 20% □

9. . No. of years of online trading experience in stocks at this firm?

□ Below 5 years □ 5 to 10

10. How was your DMAT Account opened ?

□ Personal acquaintance □ Referral-Clients

□ Ca l/Walk in □ Others

11. What is your opinion relating to the rate of interest of margin funding facility of

Sumpoorna ?

□Excellent □Good

□ Average □ Poor

12. Are you aware of T+2 method of trading?

□Yes □No

13. Do you feel that there is more transparency in online trading?

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□Yes □No

14. Any other company whose service you like?

□ Karvy □ Angel Broking □ Indian bu ls

□ Share khan □ Sumpoorna

15. Name………………………

16. Age

□ 15 to 30 □ 31 to 45

□ 46 to 60 □ above 60

17. Income per month

□ Below 15,000 □ 15000 to 30,000

□ 30,000 to 45,000 □ above 45,000

18. Education qualification

□ Graduation □ Post graduation

□ Others

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