Project Report

On
“ The EFFECTS OF FINANCIAL MARKETS ON LARGE
ECONOMICS”

Towards partial fulfillment of

Master of Business Administration (MBA)

SUBMITTED TO SUBMITTED BY
Dr. Ziaul Haque Abdul Rehman Sheikh
Roll No. :1716370001
MBA IVth Semester

Dr. M.C. Saxena College of Engg. &

Technology, Lucknow
Session 2018-2019

1
 DECLARATION

I, Abdul Rehman Sheikh hereby declare that the Summer Training Project Report
work “The Effects Of Financial Markets On Large Economics” is under taken
by me to fulfilment the requirement of MBA Session 2017-2018 Under Dr. M.C.
Saxena College of Engg. & Technology, Lucknow

This work is original and all information furnished by me is correct to the best of
my knowledge.

Abdul Rehman Sheikh

Roll No. :1716370001
MBA IVth Semester

2
 ACKNOWLEDGEMENT

Research work needs hard work, keen insight and patience with scholarly vision based
on, it needs inspiration from the subject and assistance from the expert was really
fortunate.
I would like to express my sincere gratitude to all those people who helped me in
research work.
I would also like to thank Dr. Ziaul Haque for his valuable direction and all the faculty
member for helping me throughout my project work.
Lastly, I would like to thank my Parents friends for their support and help.

3
 PREFACE

A project report on stock market is being prepared in attempts to interpret in-depth

study of volatility in Indian stock market. This report helps us to understand
various terminologies in stock market. This report gave me opportunity to have
complete idea about volatility in stock market. This gave me idea about technical
and fundamental analysis in stock market and how trading is being done in stock
market. This project report helps in following aspects,

 Build understanding of central ideas and theories of stock market.

 Develop familiarity with the analysis of stock market.
 Furnish institutional material relevant for understanding the environment in
which trading decisions are taken.

This project will guide to investors for an investment in stock market. This project
Deployed a lot time for collections of information from various sources. This
project will be very helpful to know volatility from January 2006 to December
2006 and reasons for such high volatility and would be able to take decisions for
investment in volatile stock market.

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 EXCUTIVE SUMMARY

Stock market is an avenue for growth of earnings. This project includes how
broking is being done in stock market. It involves stock market analysis such as
fluctuations in Sensex reasons for fluctuations in stock market, fluctuations in
stock market and reasons for the same. Stock market has been the best avenue for
investment in securities since last 10 years. Mostly future and option trading was
the worst trading in stock market in these sessions. I have covered various sessions
for analysis from April 2006 to March 2011. In these sessions, stock market was
most volatile so that I have covered various analyses with most affected factors to
the global market. I have made analysis of Sensex which made of 30 Shares. In this
project, I have included most gainer period and most loser period with reasons for
the same. I also included comparison between Bond yields and foreign investments
by foreign investors.

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 TABLE OF CONTENT

Sr. No. Chapter

1. Introduction

2. Literature review

3. Objective of study:-

4.
Research methodology

5.
Data analysis & data interpretation

6.
Findings

7.
Limitations Of The Study

8. Suggestion& recommendation

9. Smart City

10.
Conclusion

11.
Bibliography

12. Questionnaire

6
\
INTRODUCTION

Stock exchanges to some extent play an important role as indicators,

reflecting the performance of the country's economic state of health. Stock market
is a place where securities are bought and sold. It is exposed to a high degree of
volatility; prices fluctuate within minutes and are determined by the demand and
supply of stocks at a given time. Stockbrokers are the ones who buy and sell
securities on behalf of individuals and institutions for some commission. The
Securities and Exchange Board of India (SEBI) is the authorized body, which
regulates the operations of stock exchanges, banks and other financial institutions.

The past performances in the capital markets especially the securities scam
by Harshad Mehta has led to tightening of the operations by SEBI. In addition the
international trading and investment exposure has made it imperative to better
operational efficiency. With the view to improve, discipline and bring greater
transparency in this sector, constant efforts are being made and to a certain extent
improvements have been made. As the condition of capital markets are constantly
improving, it has started drawing attention of lot more people than before. On the
career related aspects, professionals have opportunities to choose from for a wide
range of jobs available in a number of organizations in this sector and one can
expect to have good times ahead of him.

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INDIAN CAPITAL MARKET OVERVIEW

Evolution

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly
200 years ago. The earliest 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 loan securities used to be transacted towards the close of the
eighteenth century. Thus, at present, there are totally twenty-one recognized stock
exchanges in India excluding the Over The Counter Exchange of India Limited
(OTCEI) and the National Stock Exchange of India Limited (NSEIL).

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges is limited to listed securities of public limited

companies. They are broadly divided into two categories, namely, specified
securities (forward list) and non-specified securities (cash list). Equity shares of
dividend paying, growth-oriented companies with a paid-up capital of at least `50
million and a market capitalization of at least `100 million and having more than
20,000 shareholders are, normally, put in the specified group and the balance in
non-specified group. Two types of transactions can be carried out on the Indian
stock exchanges:

(a) Spot delivery transactions "for delivery and payment within the time or on the
date stipulated when entering into the contract which shall not be more than 14
days following the date of the contract”

8
(b) Forward transactions "delivery and payment can be extended by further period
of 14 days each so that the overall period does not exceed 90 days from the date of
the contract". The latter is permitted only in the case of specified shares. The
brokers who carry over the outstanding pay carry over charges (cantango or
backwardation), which are usually determined by the rates of interest prevailing. A
member broker in an Indian stock exchange can act as an agent, buy and sell
securities for his clients on a commission basis and also can act as a trader or
dealer as a principal, buy and sell securities on his own account and risk, in
contrast with the practice prevailing on New York and London Stock Exchanges,
where a member can act as a jobber or a broker only. The nature of trading on
Indian Stock Exchanges are that of age old conventional style of face-to-face
trading with bids and offers being made by open outcry. However, there is a great
amount of effort to modernize the Indian stock exchanges in the very recent times.

Over The Counter Exchange of India (OTCEI)

The traditional trading mechanism prevailed in the Indian stock markets gave way
to many functional inefficiencies, such as, absence of liquidity, lack of
transparency, unduly long settlement periods and benami transactions, which
affected the small investors to a great extent. To provide improved services to
investors, the country's first ring less, scrip less, electronic stock exchange -
OTCEI - was created in 1992 by country's premier financial institutions - Unit
Trust of India, Industrial Credit and Investment Corporation of India, Industrial
Development Bank of India, SBI Capital Markets, Industrial Finance Corporation
of India, General Insurance Corporation and its subsidiaries and Can Bank
Financial Services. Trading at OTCEI is done over the centers spread across the
country. Securities traded on the OTCEI are classified into:

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  Listed Securities - The shares and debentures of the companies listed on the
OTC can be bought or sold at any OTC counter all over the country and
they should not be listed anywhere else
 Permitted Securities - Certain shares and debentures listed on other
exchanges and units of mutual funds are allowed to be traded
 Initiated debentures - Any equity holding at least one-lakh debentures of
particular scrip can offer them for trading on the OTC.

OTC has a unique feature of trading compared to other traditional exchanges. That
is, certificates of listed securities and initiated debentures are not traded at OTC.
The original certificate will be safely with the custodian. But, a counter receipt is
generated out at the counter, which substitutes the share certificate and is used for
all transactions. In the case of permitted securities, the system is similar to a
traditional stock exchange. The difference is that the delivery and payment
procedure will be completed within 14 days. Compared to the traditional
Exchanges, OTC Exchange network has the following advantages:

 OTCEI has widely dispersed trading mechanism across the country,

whichprovides greater liquidity and lesser risk of intermediary charges.
 Greater transparency and accuracy of prices is obtained due to the
screenbased scrip less trading.
 Since the exact price of the transaction is shown on the computer screen, the
investor gets to know the exact price at which s/he is trading.
 Faster settlement and transfer process compared to other exchanges.
 In the case of an OTC issue (new issue), the allotment procedure is
completed in a month and trading commences after a month of the issue

10
 closure, whereas it takes a longer period for the same with respect to other
exchanges.

Thus, with the superior trading mechanism coupled with information transparency
investors are gradually becoming aware of the manifold advantages of the OTCEI.

National Stock Exchange (NSE)

With the liberalization of the Indian economy, it was found inevitable to lift the
Indian stock market trading system on par with the international standards. On the
basis of the recommendations of high-powered Pherwani Committee, Industrial
Development Bank of India, Industrial Credit and Investment Corporation of India,
Industrial Finance Corporation of India, all Insurance Corporations, selected
commercial banks and others incorporated the National Stock Exchange in 1992.
Trading at NSE can be classified under two broad categories:

 Wholesale debt market and

 Capital market.

Wholesale debt market operations are similar to money market operations-

institutions and corporate bodies enter into high value transactions in financial
instruments such as government securities, treasury bills, public sector unit bonds,
commercial paper, certificate of deposit, etc.

There are two kinds of players in NSE:

 Trading members and

 Participants.

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Recognized members of NSE are called trading members who trade on behalf of
themselves and their clients. Participants include trading members and large
players like banks who take direct settlement responsibility. Trading at NSE takes
place through a fully automated screen-based trading mechanism, which adopts the
principle of an order-driven market. Trading members can stay at their offices and
execute the trading, since they are linked through a communication network. The
prices at which the buyer and seller are willing to transact will appear on the
screen. When the prices match the transaction will be completed and a
confirmation slip will be printed at the office of the trading member. NSE has
several advantages over the traditional trading exchanges. They are as follows:

 NSE brings an integrated stock market trading network across the nation.
Investors can trade at the same price from anywhere in the country since
inter-market operations are streamlined coupled with the countrywide
access to the securities.
 Delays in communication, late payments and the malpractice’s prevailing in
the traditional trading mechanism can be done away with greater operational
efficiency and informational transparency in the stock market operations,
with the support of total computerized network.

Unless stock markets provide professionals service to small investors, and foreign
investors will not be interested in capital market operations. And capital market
being one of the major sources of long-term finance for industrial projects, India
cannot afford to damage the capital market path. In this regard NSE gains vital
importance in the Indian capital market system

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.Bombay Stock Exchange(BSE) – Sensex

For the premier Stock Exchange that pioneered the stock broking activity in India,
128 years of experience seems to be a proud milestone. A lot has changed since
1875 when 318 persons became members of what today is called "The Stock
Exchange, Mumbai" by paying a princely amount of `1. Since then, the country's
capital markets have passed through both good and bad periods. The journey in the
20th century has not been an easy one. Till the decade of eighties, there was no
scale to measure the ups and downs in the Indian stock market. The Stock
Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently
became the barometer of the Indian stock market. SENSEX is not only
scientifically designed but also based on globally accepted construction and review
methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks
representing a sample of large, liquid and representative companies. The base year
of SENSEX is 1978-79 and the base value is 100. The index is widely reported in
both domestic and international markets through print as well as electronic media.

The Index was initially calculated based on the "Full Market Capitalization"
methodology but was shifted to the free-float methodology with effect from
September 1, 2003. The "Free-float Market Capitalization" methodology of index
construction is regarded as an industry best practice globally. All major index
providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Free-float
methodology. Due to is wide acceptance amongst the Indian investors; SENSEX is
regarded to be the pulse of the Indian stock market. As the oldest index in the
country, it provides the time series data over a fairly long period of time (From
1979 onwards). Small wonder, The SENSEX has over the years become one of the
most prominent brands in the country. The growth of equity markets in India has
been phenomenal in the decade gone by. Right from early nineties the stock market
13
witnessed heightened activity in terms of various bull and bear runs. The SENSEX
captured all these events in the most judicial manner. One can identify the booms
and busts of the Indian stock market through SENSEX.

14
 LITERATURE REVIEW

Nigerian Profile: After the development of the National Economic Empowerment

and Development Strategy (NEEDS), which is Nigeria’s comprehensive plan for
poverty reduction, employment generation, wealth creation and value reorientation,
it became clear that with a more robust financial sector, and as Goldman Sachs
predicted (based on Nigeria being one of the “Next 11” countries with the potential
to become like Brazil, Russia, India and China), Nigeria could become one of the
top twenty biggest economies of the world by 2025.

…the strategy for achieving the national aspirations focuses on strengthening

the domestic financial markets…

Thus the Financial System Strategy 2020 was born. It is the blueprint for
engineering Nigeria’s evolution into an international financial centre and for
developing the financial sector into a growth catalyst that will enable Nigeria’s
transformation into one of the 20 largest economies in the world by 2020.

Objectives of the FSS2020: The broad objectives of FSS2020 include:

 Developing a shared vision and an integrated strategy for the nation’s

financial system.

 Developing market and infrastructure strategies that will align fully with the
strategic intent of the overall system.

 Creating a performance management framework and building a partnership

of all key stakeholders to implement the strategy.

15
  Establishing a harmonious and collaborative environment for the
development and delivery of the strategy.

Mission: To promote sustainable economic development

Vision: To be the safest and most diversified financial system amongst emerging
markets

Strategic Objectives of the FSS2020:

 Strengthening Domestic Financial Markets

The first prong of the strategy for achieving the national aspirations focuses on
strengthening the domestic financial markets. The strengthened financial sector
shall be used as a catalyst to drive growth in the real sector

 Enhancing Integration with External Financial Markets

The second prong of the strategy focuses on enhancing integration with external
financial markets, concurrently with strengthening the domestic financial markets.
The plan is to focus on initiatives that would enable the financial sector to
reinforce the expansion of Nigeria’s export base. Simultaneously, it is also
planned to adopt initiatives that support exchange rate stability and create an
environment that attracts foreign direct investments (FDI) as well as drives
integration with external markets.

The Financial System Strategy (FSS) 2020 is a national reform program aimed at
developing and transforming Nigeria’s financial sector into a growth catalyst to
fast track the achievement of the Vision 20:2020 and engineer Nigeria’s evolution

16
into an International Financial Centre. The strategic objectives of FSS2020 are to
strengthen and deepen the domestic financial markets, enhance the integration of
domestic financial markets with the external financial markets and supporting the
real sector.

To attain these objectives, the key regulators of the Nigerian financial system came
together under the leadership of the Central Bank of Nigeria and crafted the vision
to make Nigeria the safest and most diversified growing economy among emerging
markets. The key institutions are: CBN, SEC, NAICOM, PENCOM, DMO,
FMBN, SMEDAN, NSE, NDIC, FIRS and FRC.
FSS2020 aims to transform Nigeria’s financial system into a catalyst for growth,
develop Nigeria into an international financial centre, and transform the economy
into one of the twenty largest economies in the world by the year 202.

17
To accomplish these objectives, the strategy is planned to concurrently strengthen
the Nigerian domestic financial markets; enhance the integration with external
financial markets; and engineer Nigeria’s evolution into an international financial
centre (IFC). The improved financial system shall thereafter be used to catalyse
growth in other parts of the economy.

FSS2020 FINANCIAL MARKETS SECTOR

The overall goals of FSS 2020 Financial Markets Sector are derived from the
Money and Foreign exchange markets and the Capital market. Money Market
refers to the segment of the Nigerian financial system comprising of both the
money market and the foreign exchange markets activities. The Central Bank of
Nigeria is the regulator of the money market. The capital market is the segment of
the financial system where medium to long term funds are mobilized. The
Securities and Exchange Commission is the apex regulatory authority of the
Nigerian capital market charged with the dual responsibilities of regulating and
developing the market. The other institutions in the market include: Nigerian
Stock Exchange and Nigeria Commodity Exchange.

The recommendations for accomplishing the FSS2020 Financial Markets sector in

the first phase of the programme are summarised below:

For the Capital Market, foster a culture of securities innovation and development;
foster and encourage liquid and efficient secondary markets for trading in
securities; establish an Internationally Competitive Market Infrastructure; and
promote a strong knowledge-based capital market.

For the Money Market, facilitate the development of a more robust, vibrant and
deep money market; increase the volume of debt instruments issued by

18
corporations, relative to government treasury bills issued in the market; ensure the
development of a robust market information infrastructure (institutional, content
and channel); and elevate the level of corporate governance.

For the Foreign Exchange Market, accelerate the process of currency

convertibility; intensify the economic diversification from oil; increase investment
flows relative to trade flows; facilitate the development of a more robust, vibrant
and deep foreign exchange market; and create a sustained macroeconomic
environment that will make exchange rate management predictable.

FINANCIAL MARKET TRANSFORMATIONAL PROGRAMMES

The key financial markets strategic objectives to be achieved 2013 to 2020 are the
seven transformational programs in the reviewed FSS2020 Strategy Document.
They are:

Long Term Financing Product Development:

The Long Term Financing Product development programme is designed to identify

and develop instruments and securities for long term financing of infrastructures.
Product consideration would include utility bonds, infrastructure bonds, sukuk
bonds, Asset Backed Securities (ABS) products, securitization, etc. Of recent is the
launching of the green bond initiative program in June 2018 where FSS2020 is a
stakeholders. These are products structured to enable Pension Fund and Insurance
fund investment, as well as attract international investors.

Payment System:

19
The purpose of this programme is to build and enhance current payments system to
make it more efficient, more transparent and more integrated to match internal
requirements and standards, both local and international. Payments system
comprises of institutions, instruments, rules, procedures, standards and technical
means established to effect the transfer of monetary value between parties
discharging mutual obligations in all trade and exchange transactions in an
economy or other trading partners.

Consumer Credit Scoring System

The objective is to develop a credible credit scoring system for individuals by

setting up an organization similar to Equifax, Call credit and Experian to assess
whether individuals are credit worthy. This organization would compile
information and have a system to send data on any Nigerian individual to a
prospective lender. The data would come in various sources and provide consumer
credit information on individual consumers for a variety of uses. Such data will
include key information on individual identity, borrowing and bill paying record,
court records, payment history with utilities companies, telecom, etc.

Nigerian International Financial Centre

The highest objective of the FSS2020 programme is to develope an international

financial center within a clearly defined geographic location. The Centre will be
designed to principally attract international financial services institutions and other
complementary businesses. The benefits include enhanced economic development
for Nigeria; deepen domestic financial markets; enhance integration with external

20
markets, Africa & Global; speed up infrastructural development; and enhance the
image, position and world relevance of Nigeria.

Framework and structure for commodities

The objective is to develope appropriate structure and products for commodities to

make Nigeria a point of reference for commodities. The passage of the legal
framework for warehouse receipts (WRS) and privatization of the Abuja
Commodity Exchange are part of this programme. The benefits include price
stability of commodities; broader market with the creation of trading instruments
for commodities (including spot, forward, WRS, OTC and
futures.); diversification of the economy; and deepen the financial system and
increased participation in the FM.

Advocacy & Incentives to Expand Capital Market Listing

This programme is for advocacy to influence fiscal and structural policies for long-
term stability of the financial system which will, in turn drive listing of both large
companies and Small and Medium Enterprises. The benefits include the
collaboration and coordination of successful execution of FM6, FM7 and FM8;
and increased listings.

Risk Based Supervision framework

This programme is designed to leverage the Risk Based Supervision framework

developed and implemented by CBN for the Banking & OFIS to other sectors such
as Insurance. The framework might need to be tailored and adopted for the various
sectors by the relevant regulator. The benefit is the cross-regulatory collaboration
and coordination for a standard approach for effective risk based supervision.

21
A SUMMARY OF THE FINANCIAL MARKET TRANSFORMATIONAL
PROGRAMMES

PROGRESS SO FAR

The following summarizes the progress so far achieved in the execution of

financial markets initiatives:

Long Term Financing Product Development

PENCOM has authorized financing options to broaden the FGN securities market
in order to sustain the development of other segments of the bond market and
support Government’s financing needs through the introduction of new products.
The investment must be fully guaranteed by Irrevocable Standing Payment Orders
(ISPOs) or external guarantees by eligible banks or development finance
institutions. Pension Fund Assets can be invested in infrastructure projects through
22
eligible bonds and debt securities. The Bonds and debt instruments issued to
finance infrastructure projects shall have a robust credit enhancement.

Payment System

The system is used for the adoption of electronic payments in agriculture,

establishment of working groups to offer opportunities in education, hotels of
entertainment, consumer bills payments, government flows, health and transport. It
is used for the introduction of SWIFT Sanction screening to improve transparency
of international payments at the point of origination.

The system issued guidelines for offshore banking operations and deployment of
new RTGS and Script less Securities Settlement System. Agent banking has been
introduced as well as the implementation of BVN to promote and strengthen Know
Your Customer programme.

Payment Card Industry Data Security Standards (PCIDSS) has been achieved. It is
a global compliance standard for entities that store, transmit or process card
payment data.

Other achievements include the review of guidelines on payment system, Mobile

Money Services, regulatory framework for licensing super-agent, Electronic
Payments Initiative Scheme (EPIS), industry-wide Anti-Fraud solution for the
payment system, and payment system securities and Risk Management Centre.

Consumer Credit Scoring System

1. Bankers committee has initiated the biometric identification of all bank

customers

23
 2. Credit scoring is undertaken by three renowned credit bureaus in Nigeria
which is already in place. They are: CRC Credit Bureau, Credit Registry
Bureau, XDS Credit Bureau.

3. Credit Reporting Act in place

4. CBN’s Redesigned CRMS

5. Phase 1(scoping and documenting an end-to-end set of requirements) of a

credit rating regime is on-going by CBN.

Nigerian International Financial Centre

The concept note for the establishment of NIFC has been developed, designed and
choice of model recommended. A typical engineered model in Dubai, UAE has
been chosen since 2008. A local Consultant was hired to develop the initiation
document. The local Consultant developed Request for Proposal framework for
selecting appropriate location. A legal framework on NIFC was developed and
follow-up to ensure the bill is represented and cleared by NASS is being pursued.
The bill which is the legal framework has been passed by the 7th senate and was
due for presidential assent. Activities on the Request for Proposal have been
concluded and await sign off.

Framework and Structure for Commodity:

Business development approach and collaboration with CBN have been adopted.
The programme launched the electronic warehouse receipt system (e-WRS) and
built capacity for the exchange. The Secretariat created support for full take-off of
the operation of the NCX by working toward provision of infrastructure, provision
of market information services (MIS), established Quality Assurance Laboratories

24
and is working towards the provision of legal framework on the operationalization
of warehouse receipt system.

Advocacy & incentives to expand capital market listing

The Nigeria Stock Exchange is marketing companies in Oil & Gas,

telecommunications and power. Large national corporates are also being
marketed. Of recent is the Listing of MTN in the Nigerian Stock exchange.

Risk Based Supervision framework

So far, Insurance, Pension and Capital markets are adopting the CBN
framework.

FINANCIAL MARKET SECTOR KEY CHALLENGES

The following are the key challenges confronting the financial markets sector
development in Nigeria:

1. Inadequate skills for financial products development (Capital Market);

2. Inadequate collaboration of regulators and stakeholder

Unavailability of investible fund for long term financial products;

1. Weak risk management;

2. Physical insecurity and prevalence of financial fraud;

25
 3. Low level of financial literacy and inclusion;

Non-existence of sound collateral management;

1. Inadequate legal and regulatory framework for the commodities market and
the NIFC;

2. Unwillingness of Private companies to go public;

3. Inadequate Foreign Direct Investment and non-existence of an Integrated

Credit Scoring System.

Primary and secondary financial markets

Financial products, including the supply of credit, mortgages, company shares and
insurance, are bought and sold in primary and secondary financial markets.
Financial products and securities are first issued into primary financial markets,
which is where all financial products originate and where contracts are first drawn
up. Secondary markets exist to enable buyers and sellers to resell their products
and contracts to a third party. The most well know secondary financial market is
the stock exchange, which allows trading in company shares that have been issued
in the past.

All financial markets have a primary and secondary element to them. For example,
in order to purchase a car, an individual may take out a loan from a high-street
bank. At some point after this, the lending bank can sell the contract to another
bank, which will pay the first bank a fee, or rate, and then collect the repayments
from the initial borrower. Similarly, the owner of the car may insure it with a local

26
insurer, who receives an initial fee (a premium). The insurer may then sell some of
the risk to a re-insurer, who may also sell a part of this risk to another insurer.

The importance of financial markets

Financial markets are extremely important to the general health of an economy.

With effective markets for credit and capital, borrowing and investment will be
limited and the whole macro-economy can suffer. Financial markets often fail to
form in command economies and in less developed economies, causing low levels
of investment and low growth rates.

Money markets

Money markets involve the purchase and sale of very short-term debt. The main
participants are the high-street banks and the Bank of England. The main vehicle
for acquiring short-term finance is through a bank loan or overdraft, or through
trade or Treasury bills of exchange. Banks traditionally lend to each other when
they are short of funds and the Bank of England acts as lender of last resort to the
money markets.

Capital markets

Capital markets involve the purchase and sale of long-term debt, including private
sector stocks and shares, and private and public sector bonds. The primary capital
market involves the initial sale and purchase of shares and bonds, and the
secondary capital market involves the reselling of these securities. Shares and
bonds are bought, held, or sold in the hope of making a speculate gain, or avoiding
a speculative loss. Securities may also be sold to regain liquidity. Previously issued
bonds can be bought back by the Bank of England, acting for the government, to
increase liquidity in the economy through quantitative easing.

27
Mortgage markets

The mortgage market involves making long-term loans for the purpose of
buyingproperty. Once a loan is made, it can be traded on the second hand mortgage
market. Like the stock exchange, the secondary mortgage market enables the
original lenders, the banks, and building societies, to regain lost liquidity. The new
owner of the mortgage debt is entitled to receive the mortgage repayments.

Insurance markets

Insurance involves the transfer of risk from one party, the insured, to another part,
the insurer, for a fee, called a premium.

Insurance markets are often divided into general insurance and life insurance, but
the principles are the same - transferring risk from one party to another.

Because premiums are collected regularly, but claims for losses are infrequent, or
are made a long time in the future, insurance companies usually have very large
funds that are invested to generate an investment income. This means insurance
companies are important players in other financial markets, like share, bond, and
derivatives markets.

One particular feature of the 2008 - 2009 financial crisis is the financial difficulty
faced by many insurers who became involved in insuring other institutions against
credit defaults. Specifically, credit default swaps (CDSs) are bought by investors
wishing to protect themselves against defaults on mortgage-backed securities.

Financial market failures

28
Financial market failures refer to situations where financial markets fail to operate
efficiently, causing lost economic output and reductions in the value of national
wealth.

Failure of the price mechanism

When a financial market fails, it means that the price mechanism does not work
effectively. A significant function of the price mechanism is allocate goods and
services a price, but in financial markets, the prices of assets may not reflect the
full range of costs and benefits associated with owning, or trading in, those assets.
For example, failing to establish the 'risk' associated with holding a financial asset
may cause a divergence between the market (or traded) value of the asset, and the
true value. This can distort decision making and lead to a misallocation of
resources.

One feature of the financial crisis was the emergence of 'toxic' assets, where risks
were hidden, and hence market values failed to reflect the underlying value of the
asset based on accurate risk calculation.

There are several features of financial markets that suggest that within those
markets the price mechanism may fail maximise economic welfare.

Types of financial market failure

Asymmetries and information failure

The most significant market failure affecting financial markets is the failure to
provide sufficient information to make rational choices about the value of an asset.
Information failure may affect the buyer or the seller, or both parties.

29
One feature of financial markets in the period preceding the financial crash was the
emergence of new types of security, and hence new types of risk. Low interest
rates and poor yields from 'safe' government bonds meant that global investors
were looking for new assets to invest in. This demand triggered the expansion of
securitized debt, where existing debts are packaged up and sold as new assets. This
encouraged the introduction of new and innovative derivatives and other
instruments, such as CDOs (collateralized debt obligations). However, this meant
that holders of debt became increasingly unaware of the risks they were exposed
to. Consequently, they remained ignorant of the possible impact on them (or their
balance sheets) of individuals and organizations defaulting on their debts.

In the absence of information, risks tended to be under-estimated, and asset values

over-estimated. This meant that many institutions made less than prudent decisions
about the assets that they held. This also encouraged them to lend to high risk, sub-
prime, borrowers, such as those in the sub-prime housing market.

Moral hazard

The failure to understand the level of risk associated with securitised assets was
compounded by the assumption by many financial institutions that they were 'too
big or too important' to fail, and hence would be bailed out should the need arise.
This encouraged further risk taking above and beyond a rational level. In this case,
the central bank - in its role of lender of last resort - was seen as an 'insurance
policy' should the financial institutions suffer excessive losses from imprudent
lending.

The theory of moral hazard suggests that whenever individuals or organisations are
insured against suffering from the losses associated with economic decisions, they
will act with less regard to the negative impact of those decisions.

30
Excessive speculation

The demand for, and supply of, financial assets is governed largely by speculative
motives - buy in anticipation of a capital gain, and sell to avoid a capital loss.
Given the absence of full information about future values and risks, the behaviour
of speculators is subject to what Keynes referred to as 'animal spirits' and the
'herding instinct'. This means that markets can experience 'bubbles', with market
values being driven up well beyond their 'true' value. Eventually, some speculators
predict that the next movement asset prices is downwards and, as a result, sell their
assets to avoid a loss. This then triggers a fall in price as the 'bubble bursts', with
the rest of the herd starting to sell.

It can be argued that while price movements are beneficial for a healthy financial
market, excessive speculation creates excessive instability, and prevents financial
markets from performing effectively.

Fall-out from externalities

Given the above failures, it is clear that, from time to time, financial markets can
fail, either in a minor or temporary way - such as failing to provide sufficient
liquidity - or in a way that creates significant macro-economic fall-out.

Financial market failures can lead to numerous negative externalities, which may
include:

1. Falling real output.

2. Rising unemployment.

31
 3. Falling real wages.

4. Rising poverty levels.

5. Falling profits and bankruptcies.

Lack of competition and market rigging

The relatively small number of financial institutions dominating particular

financial markets may encourage market players to collude and undertake cartel-
like behaviour. Collusive behaviour may extend to market 'rigging', where asset
prices, or other aspects of the market, are fixed by the dominant firms.

This is what happened in the Libor scandal (Libor is the London Interbank Offered
Rate) which involved fixing interest rates and exchange rates. A Libor rate is an
average interest rate (or exchange rate) calculated through submissions by major
global banks. In terms of interest rates, the Libor rate is then used globally to fix
rates on a variety of loans - from mortgage rates to student loan rates.

Rate submissions are supposed to be based on actual bank data, but investigations
in the USA showed that five major banks – Citicorp, JPMorgan Chase, Barclays,
the Royal Bank of Scotland and UBS AG - colluded over a number of years to set
exchange rates in their favour. Other investigations revealed widespread rate fixing
across global financial markets

Introduction to behavioural economics

Behavioural economics attempts to understand the effect of individual

psychological processes, including emotions, norms, and habits on individual
decision-making in a variety of economic contexts.

32
Homo economicus

All economic behaviour involves decision-making by individuals, and traditional

(neo-classical) theories of economic behaviour assume that economic agents apply
rational thought to each and every decision to achieve the maximisation of
personal benefit (utility) or, in the case of producers, the maximisation of profits.
The assumption of the rational individual ('economic man' or homo economicus) is
central to most micro-economic theory, and can be seen most clearly in marginal
analysis. Marginal analysis suggests that economic agents carefully weigh-up the
expected costs and benefits of alternative decisions based on accurate information,
and select the option that maximises their personal gain. In other words, individual
economic agents are driven by self-interest, and if all agents are driven by self-
interest based on all the information they have, each marginal decision will be
rational.

This idea underpins the theory of how markets work to allocate scarce resources,
and is the basis of micro-economics, yet the real world seems full of examples of
where decision making does not seem rational, nor in the individual’s self-interest.
The cases of cigarette smoking, over-eating, and failing to save enough for
retirement are just a few of the apparently irrational decisions routinely made by
individuals across the developed world. Behavioural economics challenges the
long held view in mainstream economics that individuals are ‘unemotional’
maximisers who make rational decisions – rational actors being identified as homo
economicus. It also offers suggestions as to how individuals can be ‘nudged’
towards more effective decision-making.

33
Challenging the assumptions of traditional economics

Behavioural economists identify at least three questionable assumptions contained

in traditional theory.

1. That individuals make decisions based on ‘unbounded (unlimited)

rationality’ accurately processing all the information at their disposal.

2. They the use ‘unbounded willpower’ to convert wants into actions and
consumption (or production), and have absolute self-control when
confronted with choices. In other words, they can resist making ‘poor’
choices.

3. They are driven by ‘unbound selfishness’ to achieve maximum benefit for

themselves.

ONLINE BANKING

Online banking, also known as internet banking, is an electronic payment

system that enables customers of a bank or other financial to conduct a range

of financial transactions through the financial institution's website. The online

banking system will typically connect to or be part of the core banking system

operated by a bank and is in contrast to branch banking which was the traditional

way customers accessed banking services. Some banks operate as a "direct bank"

(or “virtual bank”), where they rely completely on internet banking. Internet

banking software provides personal and corporate banking services offering

34
features such as iewing account balances, obtaining statements, checking recent

transaction and making payment.

The Importance of Internet Banking Why is Internet banking so important?

Convenience, control and cost savings are the three primary motivators that drive

consumer adoption of online banking. In 2007, 30 percent of online bankers

reported they joined to save time, according to Javelin Strategy & Research’s 2007

Online Banking and Bill Payment Report. These online bankers want to

conveniently access their financial information and conduct activity anytime,

anywhere—particularly younger customers who have grown up expecting

immediate access to information and the ability to conduct daily tasks while “on

the go.” Fifteen percent of online bankers joined for better control, which

comprises improved security, as well as the ability to manage account activity and

household budgeting, and to better organize financial records. Cost savings, the

third key usage driver, results from avoiding trips to the bank and from replacing

paper check remittance with online bill payment. For financial institutions, Internet

banking offers a myriad of direct benefits. Online bankers conduct transactions

faster and more easilywith The three main factors that 24/7 self-service

applications. This not only makes the institution more drive customer adoption

valuable to customers but also reduces operational costs. For instance, of online

banking are a face-to-face transaction with a teller costs financial institutions

35
considerably more—for labor and paper—than an online transaction. convenience,

control and Internet banking further reduces costs by decreasing lobby traffic, cost

savings customer phone calls and the need to print and mail paper statements. With

a fully integrated Internet Banking Solution, financial institutions can optimize

internal systems and processes, provide a comprehensive view of financial activity

for users and easily integrate additional capabilities. By reinforcing the online

offerings with quality service and support, financial institutions can further

improve customer relationships and benefit from an increase in overall

profitability. Sometimes referred to as “green banking,” Internet banking promotes

paperless statements and billing. In its 2007 Online Banking and Bill Payment

Report, Javelin states that the typical household sent or received an average of 26

bills, statements and checks in 2006, based on U.S. Postal Service data. This

totaled close to 700,000 tons of paper. By shifting to paperless banking and bill

pay, customers keep paper out of landfills and also cut energy and wood

consumption, net greenhouse gas emissions and toxic air pollutants. While nearly

every online banking solution offers some functionality to enhance convenience,

control and cost savings, there are a number of key features customers seek that

many older systems do not offer. Filling those gaps is critical to financial

institutions looking to remain competitive. Meeting Today’s Customer Needs in

Internet Banking Internet banking has come a long way since first-generation

36
solutions were introduced. Typically, these older solutions merely allow customers

to view their statements online, conduct transfers between accounts and pay bills to

utility providers, telephone companies and financial institutions. Over time, online

bankers have started demanding more from their Internet Banking Solution—

especially younger customers who are used to instant access to information.

Fortunately, there are now comprehensive, secure, high-performance Internet

Banking Solutions available that meet their many financial needs—reducing the

costly risk of losing online bankers to the competition. Customers are looking for

added functionality in multiple areas. Enhancing customer access to statement

history is critical. Three of the top online banking institutions supply seven full

years of statement history access within 48 hours. Easy access to online statements

enables customers to research transaction history and also helps deliver the peace

of mind required to migrate to paper statement suppression—a key cost benefit to

banks.

37
 OBJECTIVE OF STUDY

 To study volatility in Indian stock market while taking SENSEX of Bombay

stock exchange as a source of secondary data which broadly represent Indian
stock market.
 To study the factors which are making Indian stock market volatile.
 To furnish institutional material relevant for understanding the environment
in which stock market fluctuation are occurring.

38
 RESEARCH METHODOLOGY

Sources of data:

Data used in this study is of secondary in nature. Sensex is taken as a source of

information which widely describes Indian stock market. Here monthly prices of
BSE Sensex, Inflation, IIP numbers are taken for the study purpose.

Hypothesis:

This is the exploratory research which tries to shows the factors which are making
stock market volatile.

1. Any fluctuation in foreign market has more effect on Indian stock market than
that of domestic market.
2. In the given volatile economic conditions, the market is efficient to any news
and information.
`

39
 DATA ANALYSIS & DATA INTERPRETATION

Q.1) How frequent you read financial of Large Economics?

Frequency Percentage

Regularly 138 69

Occasionally 62 31

Total 200 100

percentage

31

Regularly
Occasionally

69

Interpretation:

From the above graph we come to know that around 69% of consumer Read

financial of Large Economics regularly. While 31% of consumer read of Large

Economics Occasionally.

40
Q.2) which financial of Large Economics you read?

Of LARGE Frequency Percentage

ECONOMICS

Economic Times 102 51

Business Standard 36 18

Financial Express 28 14

Business Line 7 3.5

DNA Money 4 2

ET & BS 12 6

ET & FE 5 2.5

ET,BS & FE 6 3

Total 200 100

41
 Percentage

2.5
6 3
Economic Times
2
3.5 Business Standard
Financial Express

14 Business Line
51 DNA Money
ET & BS
ET & FE
18 ET,BS & FE

Interpretation:

It can be clearly seen in the graph that 51% of the consumer read Economics
Times. Economics Times holds more market share as compared to any other
financial of Large Economics. Business standard stands second. It holds a market
share of 18% while Financial Express stands third which holds 14% of market
share & Business line holds a market share of 3.5%

42
Q. 3 since how long have you been reading a financial daily?

Year Percentage

Below 1 year 18

1 to 4 year 20

5 to 10 year 22

10 to 15 year 26

Above 15 year 14

26
22
20
18
14

Below 1 year 1 to 4 year 5 to 10 year 10 to 15 year Above 15 year

Interpretation: 26% of the reader is since 10 to 15 years old to read financial

daily

43
Q. 4 which of the financial daily has the most understandable languages?

1) Business standard - 55% 3) Business line – 09%

2) Economic times - 25% 4) Financial express- 11%

Financial Express
11%
business line
9%

Economic Business
times standard
25% 55%

Interpretation:

In financial daily of large economics 55% of reader prefers to business standard

for easy and graphical representation.

44
Q.5) Are you satisfied with your purchase decision of a particular financial of

Large Economics?

Frequency Percentage

Very satisfied 127 63.5

Somewhat satisfied 53 26.5

Moderate 20 10

Somewhat Dissatisfied 00 00

Very Dissatisfied 00 00

Total 200 100

Percentage

Very satisfied
10 0
Some what
satisfied
26.5 Moderate

63.5 Some what

Dissatisfied
Very Dissatisfied

Interpretation:

45
Around 63.5% are highly satisfied with the purchase decision they have made.
26.5% of the readers are somewhat satisfied While 10% of consumer feel they are
moderate. Not a single consumer are Dissatisfied by the purchase decision.

Q.6) which is the factors you take in to consideration before purchasing financial

of Large Economics?

Factors Frequency Percentage

Stock information 71 35.5

News coverage 61 30.5

Price 14 7

News coverage & 43 21.5

Stock information

Discount 11 5.5

Total 200 100

46
 Percentage

Stock information
5.5
News coverage
21.5 35.5
Price

7 News coverage &

Stock information
30.5 Discount

Interpretation:

Around 35.5% of the consumer says stock information is the factor that will be

given important before purchasing financial dailies. While 30.5% of consumer said

they will be giving importance to News coverage. Around 7% of consumer told

they will be taking the factor of price before purchase decision. Around 21.5% of

consumer told they will be giving importance to both News coverage & stock

information. Here we can clearly see that price & discount is not a big factor for

the consumer.

47
Q.7) why do you refer a particular of Large Economics(s)?

Frequency Percentage

Simple language 06 3

Financial News 43 21.5

Quality 52 26

Authentic news 43 21.5

Authentic news & 23 11.5

quality

Financial news & 33 16.5

quality

Total 200 100

48
 Percentage

Authentic news

3 Quality
16.5 21.5

financial news

11.5
Authentic news &
quality
26
Financial news &
21.5 quality
simple language

Interpretation:

From the above graph it can be clearly stated that 26% of people refer a particular

financial of Large Economics due to the quality. Around 21.5% of consumer refers

a particular financial of Large Economics due to authentic news & financial news.

11.5%, 16.5%, & 3% of consumer refers a particular of Large Economics due to

authentic news & quality, financial news & quality & simple language

respectively.

49
Q.8) Do you purchase business daily at a normal price or under any scheme?

Frequency Percentage

Normal price 175 87.5

Scheme 27 13.5

Total 200 100

Percentage

13.5
Normal price
Scheme
87.5

Interpretation:

From the above table we can clearly state that 87.5% of people purchase business

daily at a normal price. While 13.5% of consumer purchase financial of LARGE

ECONOMICS under scheme.

50
Q.9) if you are given any discount on the yearly subscription of financial of large

economics then which of Large Economics you will subscribe?

Of LARGE Frequency Percentage

ECONOMICS

ET 105 52.5

BS 37 18.5

FE 28 14

BL 7 3.5

DNA 2 1

ET,FE & BS 12 6

ET & FE 9 4.5

Total 200 100

51
 percentage
4.5
6
1
ET
3.5
BS

14 FE

52.5 BL
DNA
ET,FE & BS
18.5 ET & FE

Interpretation:

Around 52.5% of people told that they will be purchasing Economics Times if they

are given discount on the yearly subscription. 18.5% & 14% is in the case of BS &

FE respectively. While around 6% of the consumer told they will be Purchasing

ET, FE & BS if they are given any discount on the of LARGE ECONOMICS.

Around 3.5% of consumer told that they will purchase Business Line if they are

given any yearly discount. While 4.5% of consumer will purchase ET & FE if they

are given any yearly subscription

52
Q.10) which is the most important benefits you gain from reading business dailies?

Benefit Frequency Percentage

investment 51 25.5

decisions 50 25

analytical skills 23 11.5

business Knowledge 18 9

effectiveness at work 22 11

Investment & decision 33 16.5

Business Knowledge 3 1.5

Total 200 100

53
 Percentage
Investment

Decesion
1.5
16.5
25.5 analytical skils

business knowledge
11

effectiveness at work
9
25 Investment &
11.5 Decesion

business knowledge
& investment

Interpretation:

From the above graph we can come to know that around 25.5% of consumer gets

the benefit of making investment while reading financial of LARGE

ECONOMICS. 25% of consumer told that they get the benefit of decision making.

11.5% of consumer told that they can increase their analytical skills while reading

financial of LARGE ECONOMICS. 16.5% of consumer said they get the benefit

of both investment & decision making while 1.5% of consumer told they get the

benefit of business knowledge and investment.

54
Q.11) Are you satisfied with the content of financial of LARGE ECONOMICS

you are reading?

Frequency Percentage

Very satisfied 121 60.5

Somewhat satisfied 57 28.5

Moderate 22 11

Somewhat dissatisfied 00 00

Very dissatisfied 00 00

Total 200 100

55
 Percentage

Very satisfied
11 0
Some what
satisfied
Moderate
28.5
60.5
Some what
Dissatisfied
Very Dissatisfied

Interpretation:

From the above graph we can state that 60.5% of consumers are very satisfied with
the content of financial of LARGE ECONOMICS. While 28.5% of consumers are
somewhat satisfied with the content of financial of LARGE ECONOMICS. While
11% of consumers are moderate with the content of financial of LARGE
ECONOMICS.

56
 FINDINGS
After undertaking the indepth study of stock market and various financial markets,
it was found that the several events which had most affection in fluctuation of
Sensex particular month.

2008-2009

Factors which affect heavily in the yea 2006-07 are as follows

 Fluctuation in crude oil prices.
 Expectation of good result.
 Financial Results of Indian corporate.
 FIIs positive response in Financial Results.
 Kerala and Bengal election.
 Increased Inflation rate.
 Expectation of good result.
 Rumor of resigning of our Prime Minister Dr. Manmohan Singh.
 Weak global markets concern.

2010-2011

Factors which affect heavily in the yea 2007-08 are as follows:

 Hike in the CRR and Rapo rate.
 Announcement of monetary policy.
 GDP Growth rate at 9.4 percent 18 years high.
 Higher growth in manufacturing and service sectors.
 Investment pattern of FIIs.
 Decrease in inflation rate.

 Diwali and second quarter result.

57
  Hike in CRR to 7.5 per cent.

 Higher crude oil price(crossed $ 100).

 Subprime in the US country.

 Poor Listing of Reliance Power.

 Poor industrial growth data.

 Union Budget of P.Chindambaram.

 Announcement of agriculture loan waiver `60,000 crores.

2012-2013

Factors which affect heavily in the yea 2008-09 are as follows:

 Citi Groups loss of $5.1 Billion.
 Good third quarter result.
 Higher crude oil price($127/barrel)
 Higher inflation rate(8 per cent)
 The debacle of UPA government in Karnataka assembly election.
 Ranbaxy’s acquisition with Japanese based firm Daiichi Sankyo

2014-2015

 Recovery in global market.

 FIIs investment.
 Loksabha Election.\
 GDP growths.
 Good monsoon.

58
  Union Budget make the recovery at last.

2016-2017

 Starting with good result of Indian corporate.

 Heavily investment of FIIs in Indian bourses
 Goldman Sachs controversy makes all the financial market floundering at
the end of the month.
 Crisis in European country make fall in the Sensex
 Fear of higher inflation rate(13.73 per cent).

59
 SUGGESTION& RECOMMENDATION

1. Liquidity refers to the ability of the concern to meet its current obligations as

and when these become due. The company should improve its liquidity

position.

2. The company should make the balance between liquidity and solvency position

of the company.

3. The profit ratio is decreased in current year so the company should pay

attention to this because profit making is the prime objective o every

business.

4. The cost of goods sold is high in every year so the company should do efforts to

control it.

5. The long term financial position of the company is very good but it should pay

a little attention to short term solvency of the company.

60
 IMITATIONS OF THE STUDY

 The study can be done for larger period only, lower tenure don’t give
good results
 Perfect data for the study cant captured from this sorter period
 The time Period which is given for study is very sorter.

61
62
SMART CITY

What is Smart City

The first question is what is meant by a ‘smart city’. The answer is, there is

no universally accepted definition of a smart city. It means different things

to different people. The conceptualisation of Smart City, therefore, varies

from city to city and country to country, depending on the level of

development, willingness to change and reform, resources and aspirations of

the city residents. A smart city would have a different connotation in India

than, say, Europe. Even in India, there is no one way of defining a smart

city.

Some definitional boundaries are required to guide cities in the Mission. In

the imagination of any city dweller in India, the picture of a smart city

contains a wish list of infrastructure and services that describes his or her

level of aspiration. To provide for the aspirations and needs of the citizens,

urban planners ideally aim at developing the entire urban eco-system, which

is represented by the four pillars of comprehensive development-

institutional, physical, social and economic infrastructure. This can be a long

63
term goal and cities can work towards developing such comprehensive

infrastructure incrementally, adding on layers of ‘smartness’.

In the approach of the Smart Cities Mission, the objective is to promote

cities that provide core infrastructure and give a decent quality of life to its

citizens, a clean and sustainable environment and application of ‘Smart’

Solutions. The focus is on sustainable and inclusive development and the

idea is to look at compact areas, create a replicable model which will act

like a light house to other aspiring cities. The

Smart Cities Mission of the Government is a bold, new initiative. It is meant

to set examples that can be replicated both within and outside the Smart

City, catalysing the creation of similar Smart Cities in various regions and

parts of the country.

The core infrastructure elements in a smart city would include:

i. adequate water supply,

ii. assured electricity supply,

iii. sanitation, including solid waste management, iv. efficient urban mobility

and public transport,

64
v. affordable housing, especially for the poor, vi. robust IT connectivity and

digitalization,

vii. good governance, especially e-Governance and citizen participation, viii.

sustainable environment,

ix. safety and security of citizens, particularly women, children and the

elderly, and

x. health and education.

As far as Smart Solutions are concerned, an illustrative list is given below.

This is not, however, an exhaustive list, and cities are free to add more

applicati

65
Accordingly, the purpose of the Smart Cities Mission is to drive economic growth

and improve the quality of life of people by enabling local area development and

harnessing technology, especially technology that leads to Smart outcomes. Area-

based development will transform existing areas (retrofit and redevelop), including

slums, into better planned ones, thereby improving liveability of the whole City.

New areas (greenfield) will be developed around cities in order to accommodate

the expanding population in urban areas. Application of Smart Solutions will

enable cities to use technology, information and data to improve infrastructure and

services. Comprehensive development in this way will improve quality of life,

create employment and enhance incomes for all, especially the poor and the

disadvantaged, leading to inclusive Cities.

66
The current debate among investors and economists is about the extent of

slowdown in economic growth and the timing as to when a cyclical recovery is

likely to take hold. However, beyond this cyclical story, there are emerging

positives that can have an impact on the long-term growth story. Indeed, some of

these positives can be a multiplying force that will have far-reaching implications.

This will change. Digital transactions and GST leave a data footprint that lenders

can use. This will allow formal lenders to assess cash flows of smaller borrowers

and, hence, price loans better. Flow-based lending will, thus, pick up, with the

SME (smalland medium-sized enterprises) sectorbeing the key beneficiary. One

expects 300-400 basis points reduction in micro, small and medium enterprises

(MSME) loan rates.

DIGITISATION

67
The workplace ecosystem in India has witnessed unforeseen changes over the last
few years. While some of the key drivers have been the changing workforce
demographics and evolving global economic and political equations, probably the
single most critical driver has been the proliferation of digitisation at the
workplace. With some of these underlying drivers becoming more pronounced in
2019, workplaces in India will witness a continued momentum in change. Some of
these include:

OVERVIEW OF DIGITAL INDIA

A good governing body requires a good communication platform to communicate

with the stakeholders efficiently. Communicating with the citizens has been a big
challenge for the government of India with widespread geography, massive
population, and enormous linguistic & cultural diversity. The way of
communication has changed a lot from postal and telegraph era to print and
broadcasting media to the era of Digital Communication. The efficient way to
communicate with the citizens of the world’s largest democracy with a population
of 1.2 billion is only possible by connecting with everyone on a digital platform.
Though India is considered as the IT powerhouse of the world, there is a huge
digital divide. The Digital India initiative is a dream project of the Government to
transform India into a digitally empowered society and knowledge economy. It is
centered on three vision areas: • Digital Infrastructure as a Utility to Every Citizen:
The government is planning to provide high-speed internet connectivity to 250,000

68
Gram Panchayats, which will be a core utility for digital inclusion. The citizens
will be provided with a digital identity which will be unique, lifelong, online, and
valid. There will be easy access to Common Service Centers and a shareable
private space for every citizen on a public cloud. • Governance and Services on
Demand: Under this vision, all the government departments will be seamlessly
integrated with high-speed optical fiber, which will improve inter operability of
these organizations and will result in real-time service delivery from online or
mobile platform. Apart from this,the government is planning to make all citizen
entitlements portable through cloud for easy and country-wide access and to
digitally transform the services for improving ease of doing business in India. The
government also plans to use the power of Geographic Information Systems (GIS)
for decision support systems & development. • Digital Empowerment of Citizens:
This vision is to empower citizens through digital literacy and universal access to
digital resources. e.g. all documents/certificates to be available on cloud and in
Indian languages. Government also wants to provide collaborative digital
platforms for participatory governance. e.g. MyGov website for crowd sourcing
ideas. These three vision areas further encompass nine themes or ‘pillars’ of
Digital India. Some of these are discussed below: Figure 1: Nine Pillars of Digital
India Project Broadband Highways Universal Access to Phones Public Internet
Access Programme E-Governance.

69
70
 CONCLUSION

India has been witness to a four-year up and down cycle in the stock markets.
Since 1992, the Indian markets have peaked every fourth year and then dropped
35-45% during the next three years. What is surprising though is that the Dalal
Street has bucked the trend this time around. Some of the major conclusions
derived in the study are as under.

 Declaration of any financial result and other information of the company has
direct effect on its stock price.
 News related to any political and economical affair has also the direct effect
on stock market.
 Fluctuation in crude oil prices.
 Fluctuation in interest rate
 Change in monitory policy.
 Change in various rates like CRR & SLR.
 Global economy

The fluctuation in the market is the result of multi dimension impact of multiple
factors more affects are line with each other sometime directly or some time
indirectly. The present study an attempt has made to cover the major obvious
factors that could be some more factors may be note directly not related but
indirectly related can also have some bearing the phenomena of fluctuation. It is
a complete phenomenon where the permutation and combination or the factors
are constantly changes.

The analysis provides history in major which was serve as guide post
studying and forecasting the trends

71
In short, the following hypothesis have been tested and proved positive.

 Any fluctuation in foreign market has more effect on Indian stock market
than that of domestic market.
 In the given volatile economic conditions, the market is efficient to any news
and information.

72
 BIBLIOGRAPHY

Magazines

Capita market March 27-April 2006 page no. 13.

Capita market May 22-June 4 2006 page no.76-78.

Capita market July 3-July 16 2006 page no. 20

Capita market Sept 25-Oct 8 2006 page 16.

2Web Sites

http://www.sandesh.com/sandesh_article.aspx?newsid=173903

http://www.dsij.in/OnlineEditions/DSIJEnglish/archives/2008/Vol%2023,Issue
%206,16-Mar-
08/all%20pages%20issue/All%20pages%20Issue00027.html?zoomlevel=100

http://www.gov.cn/english/2010-12/14/content_1765641.htm

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1417785

http://www.bseindia.com/histdata/categorywise_turnover.asp

http://www.bankingonly.com/index.php?page=rapo_rate.php

http://www.mospi.gov.in/mospi_iip.htm

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News Papers

Business standard

. Financial express

Economic times
Dear Respondent,

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 QUESTIONNAIRE

Q.1) Do you read financial daily?

Yes No

Q.2) How frequent you read financial daily?

Regularly Occasionally

Q.3) Which Financial of large economics you read?

_______________________________________________

Q.4) Are you satisfied with your purchase decision of a particular of LARGE

ECONOMICS?

Very satisfied somewhat satisfied Moderate somewhat dissatisfied very dissatisfied

Q.5) which is the factors you take in to consideration before buying Business

Dailies?

Price News coverage Stock information Discount

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Q.6) why do you refer a particular of Large Economics?

a) Business standard: _____________________________________________

b) The Economic Times: ___________________________________________

c) Financial Express: _____________________________________________

d) Others( )____________________________________________

Q.7) Do you purchase business daily at a normal price or under any scheme?

_____________________________________________________

_____________________________________________________

Q.8) if you are given any discount on the yearly subscription of financial of Large

Economics then which of Large Economics you will subscribe?

a) Business Standard

b) Financial Express

c) Economic Times

d) Business Line

e) Other________

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Q.9) which is the most important benefits you gain from reading business dailies?

Helps in decision making

Improves my effectiveness at

work

Improves my analytical skills

Improves my business

knowledge

For investments insight

Q.10) Are you satisfied with the content of financial of Large Economics?

Very satisfied somewhat satisfied Moderate somewhat dissatisfied very

dissatisfied

Q.11) Name: ______________ Sex: Male/Female

Qualification: ______________

Company: ________________

Designation: ______________

Contact no: _____________

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