PROJECT REPORT

ON

TO ANALYSE THE INVESTMENT BEHAVIOR OF RETAIL INVESTORS TOWARDS STOCK MARKET

Submitted in partial fulfillment for the award of degree of Master of Business Administration
Session-(2011-13)

Submitted to: Dr. Anil Kumar Asst. Professor Department of management studies

Submitted by: Mukesh

MBA 4th Sem.

ACKNOWLEDGEMENT

This report bears the imprint of many people. Right from the experienced staff of to the staff of Delhi Institute of Advanced Studies, without whose support and guidance I would have not got the unique opportunity to successfully complete my project. I am deeply gratified to Dr Anil Kumar (Project Guide) for his earnest coordination and valuable efforts. He constantly encouraged me right from the selection of the project to final preparation of my project. He has been a constant source of knowledge, information, help and motivation for me through his depth knowledge and reflections. Last but not the least, I am hugely indebted to all the faculty members of my institute, all my family members and friends for their sincere advice and cooperation which helped me to accomplish my assignments in the most efficient and effective manner.

MUKESH KUMAR

02712303911 MBA

CONTENTS S No 1 2 5 Topic Certificate (s) Acknowledgements Executive Summary Introduction About Stock Exchange Brief History of Stock Exchanges in India The Stock Exchanges Function of Stock Exchange 6 Stock Market Profile Most Commonly used Stock Exchanges Bombay Stock Exchange(BSE) National Stock Exchange(NSE) Invest Analysis Fundamental Analysis Technical Analysis Objective of study Scope of the Study Research Methodology Literature Review Analysis of data through graphical presentation Findings and Conclusions References/Bibliography Appendices 23 Page No 2 3 10

9 10 11 12

44 48 57 58

EXECUTIVE SUMMARY
According to economic theorists, investors think and behave rationally when buying and selling stocks. Generally investors are presumed to use all available information to form rational expectations in investment decision making. In reality, individual investors do not think and behave rationally. To the contrary, driven by greed and fear, investors speculate s t o c k s b e t w e e n u n r e a l i s t i c h i g h s a n d l o w s . T h e y a r e m i s l e d b y e x t r e m e s o f e m o t i o n , subjective thinking and the herd mentality. Indian stock market is considered to be highly volatile, sensitive and reactive to unanticipated shocks and news. At the same time, Indian s t o c k m a r k e t i s r e s i l i e n t a n d i t r e c o v e r s s o o n a f t e r s h o c k s . T h e r o l e a n d i m p o r t a n c e o f individual investors and their trading behavior is not properly discounted. It is believed that trading behavior of individual investors rarely influences the stock prices. The paper intends to analyze the determinants of the individual investor behavior of Indian stock market and factors affecting their investment decisions. An empirical study is conducted to analyze the investment behavior and decision making style of individual investors. Analytical Hierarchy Process (AHP) is used to find the relative importance of different behavioral traits of the investors.

ABOUT STOCK EXCHANGE

Stock Exchange is an institution evolved in industrially developed capitalist economics with free market mechanism. In typical free market, the individual investor would ideally choose to make money available to those new or existing enterprises which offer the best prospect of immediate and continuing profit. And since he is entitled to withdraw money from a less profitable enterprise by selling his shares, as long as he can find a buyer and to reinvest it, he will be continually looking for new and more profitable outlets for his money. Therefore, in theory, stock exchange was termed as institution allocator of resources par excellence. The stock exchange an institution broadly fulfilling the following objectives: Making funds available to entrepreneurs for business activity ; Ensuring maximum return on the investment made by the investors; Providing platform for saving, investment and reinvestment activity.

In India, however, the institution of stock exchange evolved and developed as an organization offering place for speculative activity, which had little to do with industrial financing and investment activity. After 1865, a number of financial failures and problems in speculative activity led brokers to form an association in 1875. It was only the disaster that followed the boom, which brought the brokers together in July, 1875 to form an association that is today called the Stock Exchange, Bombay. Stock exchange remain absolutely on the borders of industrial financing and investment activity in pre-independence economy, the primary reason being the general distrust by the public of private business. With the absence of any meaningful role in industrial financing and investment activity, the functioning, organization and management of the institution of stock exchange tended to develop as that of an organization primarily concerned with speculative activity. The organization and management of major stock exchanges formed during this period did not prove to be

positive to the developments and desirable changes later, more particularly during the period of 1980s. The recent reforms in stock markets were triggered by issues of surveillance and any developments that will have a bearing on the quality and effectiveness of the surveillance and implications on the quality of growth. This is an important aspect that should be seriously addressed to the stock markets and the regulators. While government and regulatory authorities will have a greater role to play in promoting competition, the stock exchanges at their individual level have to take keen interest and initiate measures that would promote greater inter-exchange cooperation helping each other on overcoming shortfalls and setbacks. A fair degree of cooperation is required with in the stock exchanges in the country to avoid imprudent practices and inducements that will be harmful to the health of the markets, The term Stock Market' is a concept for the mechanism that enables the trading of company stocks (collective shares), other securities and derivatives. The stock market is one of the most important sources for companies to raise money. This allows businesses to go public, or raise additional capital for expansion. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. . Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction.

The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity. Despite its expansion a very small percentage of households savings is channelized into the securities market. What worries further is the intention revealed that the majority of existing shareholders are unlikely to invest in the securities market in the coming years. It indicates lack of confidence by the existing investors in the securities market. The recent crises on the equity market has been highlighted the deficiencies of governance with broker-run exchanges. While there is a broad agreement that the governance structures of the broker-run exchanges need to be transformed.

HISTORY OF STOCK EXCHANGES IN INDIA

The origin of stock exchanges in India can be traced back to the later half of 19th century. After the American Civil War (1860-61) due to the share mania of the public, the number of brokers dealing on shares increased. The brokers organized an informal association in Mumbai named The Native Stock and Share Brokers Association in 1875. Increased activity in trade and commerce during the First World War and Second World War resulted in an increase in stock trading. Stock exchanges were established in different centers like Chennai, Delhi, Nagpur, Kanpur, Hyderabad and Bangalore. The growth of stock exchanges suffered a set back after the end of World War. Worldwide depression affected them. Most of the stock exchanges in the early stages had a speculative nature of working without technical strength. Securities and Contract Regulation Act, 1956 gave powers to the central government to regulate the stock exchanges. The stock exchanges in Mumbai, Calcutta, Chennai, Ahmedabad, Delhi, Hyderabad and Indore were recognized by the SCR Act. Till recent past, floor trading took places in all stock exchanges. In the floor trading system, the trade takes place through open outcry system during the official trading hours. Trading posts are assigned for different securities were buy and sell activities of securities took place. This system needs a face to face contact among the traders and restrict the trading volume. The speed of new information reflected on the

prices was rather slow. The deals were also not transparent and the system favored the brokers rather than the investors. The setting up of NSE and OTCEI with the screen based trading facility resulted in more and more stock exchanges turning towards the computer based trading. Bombay stock exchange introduced the screen based trading system in 1995. Madras stock exchange introduced Automated Network Trading System (MANTRA) on Oct 7th 1996. Apart from Bombay stock exchange, Vadodara, Delhi, Pune, Bangalore, Calcutta and Ahmedabad stock exchanges have introduced screen based trading. Other exchanges are also planning to shift to the screen based trading. THE STOCK EXCHANGES The names of the stock exchanges are given below: Ahmedabad Stock Exchange Bangalore Stock Exchange Bhubaneswar Stock Exchange Bombay Stock Exchange Calcutta Stock Exchange Cochin Stock Exchange Coimbatore Stock Exchange Delhi Stock Exchange Guwahati Stock Exchange Hyderabad Stock Exchange Indore Stock Exchange Jaipur Stock Exchange Kanpur Stock Exchange Ludhiana Stock Exchange Madras Stock Exchange Magadh Stock Exchange Mangalore Stock Exchange Pune Stock Exchange Saurashtra Kutch Stock Exchange NSE

 days.

OTCEI Inter Connected Stock Exchange

Stock exchanges normally function between 10:00 a.m. and 3:30 p.m. on the working

FUNCTIONS OF STOCK EXCHANGE

The functions of Stock Exchanges are as followed: Maintains Active Trading: Shares are traded on the stock exchanges, enabling the investors to buy and sell securities. The prices may vary from transaction to transaction. A continuous trading increases the liquidity or marketability of the shares traded on the stock exchanges. Aids In Financing The Industry: A continuous market for shares provides a favorable climate for raising capital. The negotiability and transferability of the securities helps the companies to raise long-term funds. Fixation Of Prices: Price is determined by the transactions that flow from investors demand and suppliers preferences. Usually the traded prices are made known to the public. This helps the investors to make better decisions. Ensures Safe And Fair Dealings: The rules, regulations and by-laws of the stock exchanges provide a measure of safety to the investors. Transactions are conducted under competitive conditions enabling the investors to get a fair deal. Performance Inducer: The prices of stocks reflect the performance of the traded companies. This makes the corporate more concerned with its public image and tries to maintain good performance. Dissemination of Information: Stock exchanges provide information through their various publications. They publish the share prices traded on daily basis along with the volume traded. Handouts, Handbooks and Pamphlets provide information regarding the functioning of the stock exchanges. Self Regulating Organization: The stock exchanges monitor the integrity of the members, brokers, listed companies and clients. Continuous internal audit

safeguards the investors against unfair trade practices. It settles the disputes between member brokers, investors and brokers.

MOST COMMONLY USED STOCK EXCHANGES-IN INDIA

THE BOMBAY STOCK EXCHANGE (BSE) The Indian stock market is one of the oldest markets in Asia. Its history dates back to nearly two centuries. The earlier records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loans securities was transacted towards the close of the eighteen century. By the 1830s business in corporate stocks and shares in bank and cotton presses took place in Bombay. Through the trading list was broader in 1839, there were only a half a dozen brokers recognized by the banks and merchants. In 1860-61, the American Civil War broke out and Cotton supply from the United States of America and Europe was stopped. This resulted in the Share Mania for cotton trading in India. The number of brokers increased to between 200 and 250. However, at the end of the American Civil War, 1865 a disastrous slump began- for example, a bank of Bombay share that had touched Rs. 2850 could only be sold at Rs. 87. At the same time, brokers found a place in Dalal Street, Bombay where they could conveniently assemble and transact business. In 1887, they formally established the Native Share and Stock Brokers Association. In 1895 the association acquired premises in the same street; it was inaugurated in 1899 as the Bombay Stock Exchange. The Bombay Stock Exchange is governed by a board, chaired by a non-executive chairman. The executive director is in charge of the administration of the exchange and is supported by elected directors, Securities Exchange Board of India (SEBI) nominees, and public representatives.

 THE NATIONAL STOCK EXCHANGE(NSE) The National Stock Exchange of India Limited was set up to provide access to investors from across the country on an equal footing. NSE was promoted by leading financial institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company, unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the wholesale debt market (WDM) segment in June 1994. The capital market (equities) segment commenced operations in November 1994, and operations in the derivatives segment commenced in June 2000. The organizational structure of NSE is through the link between National Securities Clearing Corporation Ltd. (NSCCL), India Index Services and Products Ltd. (IISL), National Securities Depositary Limited (NSDL), DotEx International Limited (DotEx) and MSEIT Ltd.

Clearing House NSCCL

Index Services IISL NSE

Technical Support NSEIT/DotEx

Depository NSDL

INVESTMENT ANALYSIS
This study told that when an investor decides to invest in stock market and when he decides to leave i.e. the decisions regarding buying and selling are based on some analysis. What are that factors, on the basis of which he decides to, make investment in stock market? Investors take several precautions before investing. They analyze various factors in terms of fundamental analysis as well as technical analysis. After analyzing all the factors they decided whether it is the right time to invest in market or whether it is the right time to invest in any particular company. All of their decisions are based on their analysis. FUNDAMENTAL ANALYSIS The Intrinsic value of an equity share depends on multitude factors. The fundamental school of thought appraised the intrinsic value of shares through: 1. Economic Analysis 2. Industry Analysis 3. Company Analysis

 Economic Analysis The level of economic activity has an impact on investment in many ways. If the economy grows rapidly, the industry can also be show rapid growth and vice versa. When the level of economic activity is low, stock prices are low, and when the level of economic activity is high, stock prices are high reflecting the prosperous outlook for sales and profits of the firms. The analysis of macro economic environment is essential to understand the behavior of the stock prices. The commonly analyzed macro factors are as follows: 1. Gross Domestic Product (GDP) 2. Savings and Investments 3. Inflation 4. Interest Rates 5. Budget 6. The Tax Structure 7. The Balance of Payment (BOP) 8. Monsoon and Agriculture 9. Infrastructure Facilities 10. Demographic Factors 11. Economic Forecasting 12. Economic Indicators

Industry Analysis An Industry is a group of firms that have similar technological structure of production and produce similar products. For the convenience of investors, the broad classification of the industry is given in financial dailies and magazines. Companies are distinctly classified to give a clear picture about their manufacturing process and products. Factors that are considered under Industry Analysis are: 1. Industry Life Cycle Analysis 2. Growth of the Industry 3. Cost structure and profitability 4. Nature of the product 5. Nature of the competition 6. Government policy 7. Labour 8. Research and Development 9. Pollution standards 10. SWOT Analysis

 Company Analysis In the company analysis the investor assimilates the several bits of information related to the company and evaluates the present and future values of the stock. The risk and return associated with the purchase of the stock is analyzed to take better investment decisions. The valuation process depends upon the investors ability to elicit information from the relationship and inter- relationship among the company related variables. The present and future values are affected a number of factors and they are as follows: 1. The competitive edge of the company 2. Earnings of the company 3. Capital Structure of the company 4. Management of the company 5. Operating efficiency of the company 6. Financial Performance of the company 7. Historical price of stock 8. P/E ratio 9. Economic condition 10. Stock market condition

 TECHNICAL ANALYSIS The share price movement is analyzed broadly with two approaches. One is Fundamental Approach and other is Technical Approach. Technical Analysis is a process of identifying trend reversals at an earlier stage to formulate the buying and selling strategy. With the help of several indicators they analyze the relationship between price - volume and supply demand for the overall market and the individual stock. Volume is favorable on the upswing i.e. the number of shares traded is greater than before and on the downside the number of shares traded dwindles. If it is the other way round, trend reversals can be expected. Generally used technical tools are: 1. Dow Theory 2. Volume of Trading 3. Short Selling 4. Odd Lot Trading 5. Bars and Line Charts 6. Moving Averages 7. Oscillators

OBJECTIVES OF STUDY

The objective of the study is to know investors investment decisions in stock market. To understand the perceptions of investors towards Indian Stock Market. To know about fundamental factors like economic factors, industry analysis, company analysis which affects investment decisions. To know about technical factors like chats, trend lines, P/E ratio, moving average, oscillators etc. which affects investment decisions. To identify the problems in the working of stock exchanges. To study small investors problems with the brokers.

RESEARCH METHODOLOGY

A research design in simply a plan or framework for a study that is used as a guide in collecting & analyzing the data. It helps the researcher to conduct the study by ensuring that economical procedures are employed & probing is relevant to the problem. Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. Every researcher has to design methodology for his problem. To understand the system better and to make practical suggestions for improvement, it is imperative to think in an innovative manner and within the constraints imposed by the system. To affect this plan and to get deeper into the system, the following methodology was adopted.

Research Design: -

A research design is an arrangement of conditions for collection

and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. The Descriptive or Diagnostic Research Design is used here it is that research which has not been done earlier in-fact it is based on the new generalizations of the facts. It includes the finding of new enquires. The research design implemented in this research is Descriptive and Diagnostic. The descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual, or of a group, whereas diagnostic research studies determine the frequency with which something occur or its association with something else.

Sampling Technique: -

Every research is based on some facts and findings

and these are found or calculated through sample, so sample selection and technique used plays very vital role in any research methodology. It is of two types: a) Non-Probabilistic Sampling: - It is that type of sampling which is according to the convenience of researcher therefore it is called convenience research also.

b) Probabilistic Sampling: - Probabilistic sampling is characterized by the fact that each element of the population is known & non-zero chance of being included in the sample. The non probabilistic sampling technique is used here because the findings are based on:1. Selected Brokers Interviews 2. Selected Investors Interviews

Data Source: -

This project requires data that have

already been collected by someone else or newer one. Here the newer data has been analyzed there for primary data and secondary data is used. Research Instrument: - Research instrument is used for collecting the data. This relates to the tools used for collection of data and other information required for the purpose of the project. Research Instrument used in the project is questionnaire. Sample Size: For the purpose of analysis the

project has been taken with 50 Investors as samples. Sampling Unit: - It covers Investors as measuring unit. Rohini and Gurgaon

Sampling Area: -

RESEARCH METHODOLOGY AT A GLANCE

Research Problem: - An Analysis of Stock Market- In India Research Design: Descriptive or Diagnostic

Data Collection:Data Type: Data Collection Tools: Sampling:Sampling Unit: Sampling Area: Sample Size: Research Approach: Investors Rohini and Gurgaon 50 Investors Survey Primary and secondary data Questionnaire

Review of Literature

L.C.Gupta (1991) argues that designing portfolio for a client is much more than merely picking up securities for investment. The portfolio manager needs to understand the psyche of his client while designing his portfolio. According to Gupta, investors in India regard equity, debentures and company deposits as being in more or less the same risk category and consider including all mutual funds, including all equity funds, almost as safe as bank deposits.

K.S. Chalapati Rao, M.R. Murthy and K.V.K Ranganathan (1999) in their research article Some aspects of the Indian Stock Market in the post liberalization period evaluates that as a part of the process of economic liberalization, the stock market has been assign an important place in financing the Indian corporate sector. Besides enabling mobilizing resources for investment, directly from the investors, providing liquidity for the investors and monitoring and disciplining company management are the principal functions of the stock market. This paper examines the development in the Indian stock markets during the nineties in terms of these three roles.

Kevin James (2000), in his research article The Price of Retail Investing in the UK evaluates the financial wealth services provided by investment funds in UK, the study identifies that the retail investors largely delegate the management of their wealth to investment funds. These funds in turn charge retail investors for the portfolio and risk management services they provide, sparing retail investors the burdensome task of

performing these various services themselves. So in order to choose a sensible fund (a fund that meets his or her requirements), a retail investor must be able to ascertain the services provided and the price charged by each of the funds he or she may consider.

Dr. K Santi Swarup (2003) in her research article Measures for improving common investor confidence in Indian primary market a survey, concentrates on the decisions taken by the investors while investing in primary markets, the study indicates that the sample investors give importance to their own analysis as compared to brokers advice. They also consider market price as a better indicator than analyst recommendations. The study also identifies factors that are affecting primary market situation in India. Issue price, information availability, market price after listing and liquidity emerge as important factors. This study suggests that investors need to be assured of some return and current level of risk associated with investment in the market is very high. They have had bad experience in terms of lower market price after listing and high issue price. Accordingly number of measures in terms of regulatory, policy level and market oriented were suggested to improve the investor confidence in equity primary markets. However, this paper does not highlight the measures for improving investor confidence in secondary market.

C. S. Shylajan and Sushama Marathe (2006) in their research article A study of attitudes and trading behavior of stock market investors, identify the major factors responsible for determining the attitudes and trading behavior of stock market investors. Based on their

shared investing attitude and behavior, the stock market investors are classified into two categories i.e. aggressive investors and non aggressive investors. John Graham and Alok Kumar (2006) in their study Do dividend clienteles exist? evidence on dividend preferences of retail investors evaluates portfolio holdings of retail investors of older and low income category, this study suggests that these investors prefer dividend paying stocks, the study also highlights the trading behavior of retail investors and indicates that the investor trades around dividend events are consistent with clientele behavior. Further, it also points out that old and low income investor exhibits abnormal buying behavior following dividend announcements.

ANALYSIS OF DATA COLLECTED FROM CLIENTS/INVESTORS

1.What factor will you consider while making investment? Security & saving Tax factor High return Convenience

Interpretation: Most of the investors consider high return as an important factor for making investment decisions. While only 8% of the respondents considerconcenience as a factor.

2.What views regarding general investment period Long Term Medium Term Short Term

Interpretation: 44% of the respondents make investments for a medium term. While 36% of respondents invest for a short term.

3. What is your stock investment experience with Secondary Market? Very Good Poor Good Satisfactory Very Poor

Interpretation: 28% of the respondents rate their stock investment experience with secondary market as satisfactory. While, only 6% rate it as Very Good.

4. How much your satisfaction level with brokers? Very Good Poor Good Satisfactory

Very Poor

Interpretation: As far as satisfaction level with the services of brokers is concerned, 34 % respondents feel satisfied, 27 % Good, hence, most of the respondents are happy with their brokers services.

5. In case of any, what deficiencies have you found in your brokers services Bad execution Accounting Snafus High cost Any other

Interpretation: Among the respondents who find deficiencies in their brokerage services, most of them complaint of high brokerage cost and accounting snafus.

6. What should be ideal brokerage according to investors opinion? 0.65% 0.50% 0.35% 0.25%

Interpretation: 37% of the respondents believe 0.25% to be an ideal brokerage rate.

7.What is the reason behind dealing with sub-brokers? Sub-broker provide services at your doorstep You dont know about any stock Not the stock exchange members Any other reason

Interpretation: Most of the respondents adopt broker services rather than self-investment for the reason that sub brokers provide services at the doorstep.

8. What is the confidence level of investors on the fair dealing with their brokers? Very confident Neutral Somewhat doubtful Very doubtful Somewhat confident

Interpretation: A majority of 32% of respondents are somewhat doubtful about their confidence while making investments in the market.

9. Which one of your most favorite Stock Exchange? NSE BSE Any other

Interpretation: Most of the respondents i.e 72% prefer to make investments through National Stock Exchange.

10. On what Basis do you invest in stock market? On Fundamental Analysis Both On Technical Analysis

Interpretation: 44% of the respondents undergo both fundamental as well as technical analysis before making investment decisions. 30% of the respondents consider only fundamental analysis while only 26% go for a technical analysis.

11. In which segment do you deal? Equity Mutual Commodity Others

Interpretation: 57% of the respondents surveyed invest in commodities, while 28% invest in equity. Rest 9% and 6% invest in MFs and Others respectively.

12.Do you think adequate steps are taken to educate the investors regarding investment? Yes No

Interpretation: 56 % of the respondents agree that investors are provided with requisite information regarding investment, while 43% of respondents disagree.

FINDINGS
Most of the investors consider high return as an important factor for making investment decisions. While only 8% of the respondents consider convenience as a factor. 44% of the respondents make investments for a medium term. While 36% of respondents invest for a short term. 28% of the respondents rate their stock investment experience with secondary market as satisfactory. While, only 6% rate it as Very Good. As far as satisfaction level with the services of brokers is concerned, 34 % respondents feel satisfied, 27 % Good, hence, most of the respondents are happy with their brokers services. Among the respondents who find deficiencies in their brokerage services, most of them complaint of high brokerage cost and accounting snafus. 37% of the respondents believe 0.25% to be an ideal brokerage rate. Most of the respondents adopt broker services rather than self-investment for the reason that sub brokers provide services at the doorstep. A majority of 32% of respondents are somewhat doubtful about their confidence while making investments in the market. Most of the respondents i.e. 72% prefer to make investments through National Stock Exchange. 44% of the respondents undergo both fundamental as well as technical analysis before making investment decisions. 30% of the respondents consider only fundamental analysis while only 26% go for a technical analysis. 57% of the respondents surveyed invest in commodities, while 28% invest in equity. Rest 9% and 6% invest in MFs and Others respectively. 56 % of the respondents agree that investors are provided with requisite information regarding investment, while 43% of respondents disagree.

RECOMMENDATIONS
The stock exchange the important part of country capital market. It is the central place where industrial securities are bought and sold under a codes of rule and regulation for consideration through member as broker. The recent implementation made by SEBI leads to great impact on the stock market. The main recommendation from the study are as follow: The regional stock Exchange have been out of race because of the

technological development of NSE and BSE, so the Government should initiate and they could be development for commodity exchange which has a bright future in india ahead. There should be a complete online system which enables the investor to participate in and also the general public should be making aware of the system. Prevent exploitation of investor by the market malpractices by introducing formal market making arrangement in best possible manner. To attract more investor, the companies should introduce more service center and online share trading because investor are not satisfied till the they do not meet the dealing physically along with stock Broker/investor.

CONCLUSIONS

There are some suggestions which may be helpful for brokers and Investors regarding analyzing stock market which increased confidence among investors regarding stock market. These are: 1. A uniform organizational structure among all the stock exchanges having democratic representation of different interest groups would be proposed. It would facilitate in dealing with crises situation promptly, firmly and impartially. 2. Steps to be taken towards improvement of operational efficiency includes enhancement of trading hours, strict vigilance on the price manipulation, advancement of computerized trading and development of communication system in the remote areas of the country. 3. Prudent use of available mechanism like imposition of margin money, volume restrictions, and circuit breakers to control the temporal disequilibrium of the market. 4. To increase investors confidence in stock market must be regained in order to encourage capital mobilization through primary market issues. 5. The investor forum as well other authorities should have power to dispose off the cases summarily and to award compensation to the investors. 6. The detail information regarding investments which investors wants may include the form of organization, management, capital adequacy, liabilities, defaults and penal actions taken by the regulator and self regulatory organizations against the broker in the past and other relevant information, must provides them.

7. The stock market is integrated with banking sector so that the effective and efficient payment, settlement and clearing systems are developed. 8. Further expansion of banking activities in conjunction with further efforts to liberalize the banking system. 9. The culprit needs to be punished in an exemplary manner so that it becomes a lesson for others. The investors should have means to recover their loss caused by the culprit.

BIBLIOGRAPHY
1. Avadhani V A (1992), Investment and Securities Market in India: Investment Management, Himalaya Publishing, Bombay. 2. Bhole L M (1982), Financial Markets and Institutions: Growth Structure and Innovations, Tat MacGraw Hill, New Delhi 1st edition. 3. Achils, Steven B. Technical Analysis from A to Z, McGraw-Hill, 2000. 4. Engerman, M. Using Fundamental and Economic Factors to Explain Stock Returns, Barra Newsletter, Fall 2005. 5. Greig, A.C. Fundamental Analysis and Subsequent Stock Returns, Journal of Accounting and Economics, 15, 2004, pp.413-442. 6. M. Ranganatham and R. Madhumathi. Investment Analysis and Portfolio Management, Pearson Education, 2005, pp. 206-410. 7. Punithavathy Pandian. Security Analysis and Portfolio Management, Vikas Publishing House Pvt. Ltd., 2001, pp. 215-278. 8. Khan Javaid (2005), Operating of stock exchange in India, Vista International Publishing House, Delhi.

Questionnaire
On

To Analyse The Investment Behavior Of

Retail Investors Towards Stock Market

1.What factor will you consider while making investment? Security & saving Tax factor High return Convenience

2.What views regarding general investment period? Long Term Medium Term Short Term

3. What is your stock investment experience with Secondary Market? Very Satisfactory and Rewarding Unsatisfactory Reasonably Unsatisfactory Very Unsatisfactory

4. How much your satisfaction level with brokers? Very satisfied Somewhat dissatisfied Somewhat satisfied Very dissatisfied

5. In case of any, what deficiencies have you found in your brokers services? Bad execution Accounting Snafus High cost Any other

6. What should be ideal brokerage according to investors opinion? 0.35% 0.65% 0.25% 0.50%

7. What is the reason behind dealing with sub-brokers? Sub-broker provide services at your doorstep You dont know about any stock Not the stock exchange members Any other reason 8. What is the confidence level of investors on the fair dealing with their brokers? Very confident Somewhat doubtful Somewhat confident Very doubtful

9. Which one of your most favorite Stock Exchange? NSE BSE Any other

10. On what Basis do you invest in stock market? On Fundamental Analysis Both 11. In which segment do you deal? Equity Mutual Commodity Others On Technical Analysis

12.Do you think adequate steps are taken to educate the investors regarding investment? Yes No

Name of the Investor Age Sex Email address

____________________________________ ____________________________________ ____________________________________ _____________________________________