A MAJOR PROJECT REPORT

ON A

STUDY ONPORTFOLIO MANAGEMENT SERVICES

SUBMITTED IN THE PARTIAL FULFILLMENT OF

2009 12 DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2009--12

UNDER THE GUIDANCE OF: MR.ARVIND KUMAR SUBMITTED BY: (SANJAY SINGH ) ENROLMENT NO.05390101809 BATCH NO. ( BBA (BI) 4TH SEM_)

FAIRFIELD INSTITUTE OF MANAGEMENT AND TECHNOLOGY AFFILIATED TO GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY, DELHI. FIMT CAMPUS KAPASHERA, NEW DELHI- 110037

STUDENT DECLARATION

I SANJAY SINGHEnrollment No. 05390101809 Class BBA IVth SEM. of the F.I.M.T COLLEGE ,GGSSIPU, Delhi hereby declare that the Summer Training Project Report entitled A STUDY OF PORTFOLIO MANAGEMENT SERVICES is an original work and the same has not been submitted to any other Institute for the award of any other degree.

( ( 05390101809)

Countersigned Signature of faculty Guide

CERTIFICATE
(Whom so ever it may concern)

This is to certify that the project report entitled

PORTFOLIO MANAGEMENT
is a BONAFIDE work

SERVICES
done by

carried at

SHAREKHAN LIMITED, GURGOAN

MR.SANJAY SINGH,

bearing ID No.05390101809 student of

FIMT

KAPASHERA, GGSIPU
award of the degree of

and submitted the same in the partial FULLFILLMENT for the has

BACHALOER OF BUSINESS ADMINISTRATION

done his Summer Internship Program under my guidance from 1st June 2010 to 15th July 2010. I found him to be good in the task and activities assigned to him. I wish his success in all future endeavours.

DATE: PLACE: (FACULTY GUIDE)

ACKNOWLEDGEMENT
A project is never the work of an individual. It is moreover a combination of ideas, suggestions, review, contribution and work involving many folks. It cannot be completed without guideline. It is my pleasure to acknowledge gratefully to all those honorable personalities who helped me lot into the creation of this project and shared their experiences.

I would like to express my sincere indebtedness to Dr. CHANCHAL

VASIHSTHA (Principal) (FIMT,GGSIPU) for giving me the opportunity to work

on this project and make it a success. I would like to express my deep sense of
gratitude to my Industry guide, ARVIND KUMAR who spent his valuable time and guided

me. I have benefited a great deal from his incisive analysis and erudite suggestions. The atmosphere of a learning organization that he has created along with his peers in GURGAON BRANCH has not only helped me but all the other trainees.

Acknowledgements are also due to all the other staff members and executives in
SHAREKHAN Ltd., GURGAON BRANCH for providing information at various point

of the project, especially the discussions on the market.I am also sincerely thankful to all the faculty members of School of F.I.M.T GGSIPU New Delhi for providing their help and advice whenever it was needed. Finally I wish to extend my sincere acknowledgement to my parents for their moral and financial support.

TABLE OF C O N T E N t
Student declaration i Certificate by the guide..ii Acknowledgement...iii Chapter Schemeiv

CHAPTER-1

Page nos.

1.1 Purpose of the study....... 1.2 Research Objectives of the study... 1.3 Research Methodology of the study.. 1. 3.1 Research Design.. 1.3.2 Data Collection- Primary & Secondary data... 1.3.3 Sample Design .

1.3.3.1 Population. 1.3.3.2 Sample Size 1.3.3.3 Sampling method 1.3.4 Method of data collection

1.3.4.1 Instrument for data collection. 1.3.4.2 Drafting of a questionnaire.

1.3.5 Limitations

CHAPTER -2 SHAREKHAN LIMITED. CHAPTER -3 A STUDY ON PORTFOLIO MANAGEMENT SERVICES..

CHAPTER -4 ANALYSIS. CHAPTER-5 FINDINGS CHAPTER-6 CONCLUSIONS AND RECCOMANDATIONS.......................................................................................................

BIBLIOGRAPHY ANNEXURES

EXECUTIVE SUMMARY
Investing is both Arts and Science. Every Individual has their own specific financial need and expectation based on their risk taking capabilities, whereas some needs and expectation are universal. Therefore, we find that the scenario of the Stock Market is changing day by day hours by hours and minute by minute. The evaluation of financial planning has been increased through decades, which can be best seen in customers. Now a days investments have become very important part of income saving.

In order to keep the Investor safe from market fluctuation and make them profitable, Portfolio Management Services (PMS) is fast gaining Investment Option for the High Net worth Individual (HNI). There is growing competition between brokerage firms in post reform India. For investor it is always difficult to decide which brokerage firm to choose. The research design is analytical in nature. A questionnaire was prepared and distributed to Investors. The investors profile is based on the results of a questionnaire that the Investors completed. The Sample consists of 100 investors from various brokers premises. The target customers were Investors who are trading in the stock market.

In order to identify the effectiveness of Share khan PMS services this Research is carried throughout the area of Hyderabad. At the time of investing money everyone look for the Risk factor involve in the Investment option. The Report is prepared on the basis of Research work done through the different Research Mythology the data is collected from both the source Primary sources which consist of Questionnaire and secondary data is collected from different sources such as Company website, Magazine and other sources.

As the PMS services of Share khan Limited have the best result in its field .It has given 43.50% return in Trailing stops, 94.30%return in Nifty and 38.10% in Beta Portfolio which is the result when the Market was not doing well from last one year. In this project I have shown the details of financial planning as well as wealth management so as to understand about the customers needs and wants with respect to market and how a clients portfolio can be designed and what factors a portfolio manager must consider for designing a portfolio.

OBJECTIVE OF THE PROJECT

 To know the concept of Portfolio Management.  To know about the schemes offered by the different insurance companies, new IPOs, Mutual Funds.  To know in depth about Insurance, Mutual Funds, Stock, Bonds etc.  To know about the awareness towards stock brokers and share market.  To study about the competitive position of Share khan Ltd in Competitive Market.  To study about the effectiveness & efficiency of Share khan Ltd in relation to its competitors  To study about whether people are satisfied with Share khan Services & Management System or not.  To study about the difficulties faced by persons while Trading in Share khan.  To study about the need of improvement in existing Trading system.

CHAPTER-1

INTRODUCTION

INTRODUCTION TO STUDY
The field of investment traditionally divided into security analysis and portfolio management. The heart of security analysis is valuation of financial assets. Value in turn is the function of risk and return. These two concepts are in the study of investment .Investment can be defined the commitment of funds to one or more assets that will be held over for some future time period. In today fast growing world many opportunities are available, so in order to move with changes and grab the best opportunities in the field of investments a professional fund manager is necessary. Therefore, in the present scenario the Portfolio Management Services (PMS) is fast gaining importance as an investment alternative for the High Net worth Investors. Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a professional money manager that can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns units of the entire fund. You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals. Although portfolio managers may oversee hundreds of portfolio, your account may be unique. Investment Management Solution in PMS can be provided in the following ways: i. ii. iii. Discretionary Non Discretionary Advisory

Discretionary: Under these services, the choice as well as the timings of the investment decisions rest solely with the Portfolio Manager.

Non Discretionary: Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the timings of the investment decisions rest solely with the Investor. However the execution of trade is done by the portfolio manager. Advisory: Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the execution of the investment decisions rest solely with the Investor. Rule 2, clause (d) of the SEBI (portfolio managers) Rules, 1993 defines the term Portfolio as total holding of securities belonging to any person. As a matter of fact, portfolio is combination of assets the outcomes of which cannot be defined with certainty new assets could be physical assets, real estates, land, building, gold etc. or financial assets like stocks, equity, debenture, deposits etc. Portfolio management refers to managing efficiently the investment in the securities held by professional for others. Merchant banker and the portfolio management with a view to ensure maximum return by such investment with minimum risk of loss of return on the money invested in securities held by them for their clients. The aim Portfolio management is to achieve the maximum return from a portfolio, which has been delegated to be managed by manger or financial institution. There are lots of organization in the market on the lookout for the people like you who need their portfolios managed for them .They have trained and skilled talent will work on your money to make it do more for you. Therefore, if any investors still insist on managing their own portfolio, then ensure you build discipline into their investment. Work out their strategy and stand by it.

MYTHS ABOUT PMS There are two most common myths found about Portfolio Management Services (PMS) which we found among most of the Investors. They are as follows. Myth No. 1: PMS and Mutual Fund are Similar as the investment option As in the Finance Basket both the PMS and Mutual Fund are used for minimizing risk and maximize the profit of the Investors. The objectives are similar as in both the product but they are different from each other in certain aspects. They are as follows. Management Side In PMS, its ongoing personalized access to professional money management services. Whereas, in Mutual fund gives personalize access to money. Customization In PMS, Portfolio can be tailored to address each investor's specific needs. Whereas in Mutual Fund Portfolio structured to meet the fund's stated investment objectives. Ownership In PMS, Investors directly own the individual securities in their portfolio, allowing for tax management flexibility, whereas in Mutual Fund Shareholders own shares of the fund and cannot influence buy and sell decisions or control their exposure to incurring tax liabilities. Liquidity In PMS, managers may hold cash; they are not required to hold cash to meet redemptions, whereas, Mutual funds generally hold some cash to meet redemptions.

Minimums PMS generally gives higher minimum investments than mutual funds. Generally, minimum ranges from: Rs. 1 Crore + for Equity Options Rs. 5 Crore + for Fixed Income Options Rs. 20 Laces + for Structured Products, whereas in Mutual Fund Provide ongoing, personalized access to professional money management services. Flexibility PMS is generally more flexible than mutual funds. The Portfolio Manager may move to 100% cash if it required. The Portfolio Manager may take his own time in building up the portfolio. The Portfolio Manager can also manage a portfolio with disproportionate allocation to select compelling opportunities whereas, in Mutual Fund comparatively less flexible.

Myth No. 2:

PMS is more Risk free than other Financial Instrument

In Financial Market Risk factor is common in all the financial products, but yes it is true that Risk Factor vary from each other due to its nature. All investments involve a certain amount of risk, including the possible erosion of the principal amount invested, which varies depending on the security selected. For example, investments in small and mid-sized companies tend to involve more risk than investments in larger companies.

Scope of the Study

The study of the Portfolio Management Services is helpful in the following areas.  In today's complex financial environment, investors have unique needs which are derived from their risk appetite and financial goals. But regardless of this, every investor seeks to maximize his returns on investments without capital erosion. Portfolio Management Services (PMS) recognize this, and manage the investments professionally to achieve specific investment objectives, and not to forget, relieving the investors from the day to day hassles which investment require.  It is offers professional management of equity investment of the investor with an aim to deliver consistent return with an eye on risk.  Identify the key Stock in each portfolio.  To look out for new prospective customers who are willing to invest in PMS.  To find out the Share khan, PMS services effectiveness in the current situation.  It also covers the scenario of the Investment Philosophy of a Fund Manager.

RESEARCH DESISGN OF THE STUDY

This report is based on primary as well secondary data, however primary data collection was given more importance since it is overhearing factor in attitude studies. One of the most important users of research methodology is that it helps in identifying the problem, collecting, analyzing the required information data and providing an alternative solution to the problem .It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones.

The study consists of analysis about Investors Perception about the Portfolio Management Services offered by Share khan Limited. For the purpose of the study 30 customers were picked up at random and their views solicited on different parameters.

The methodology adopted includes  Questionnaire  Random sample survey of customers  Discussions with the concerned

SOURCES OF DATA
 Primary data: Questionnaire

Secondary data: Published materials of Share khan Limited. Such as periodicals, journals, news papers, and website.

Duration of Study
The Study was carried out for the period of one and half months from 29th April to 15th of June2009.

SAMPLING PLAN
 Sampling:
Since Share khan Limited has many segments I selected Portfolio Management Services (PMS) segment as per my profile to do market research. 100% coverage was difficult within the limited period of time. Hence sampling survey method was adopted for the purpose of the study.

 Population:
(Universe) customers & non consumers of Share khan limited

 Sampling size:
A sample of hundred was chosen for the purpose of the study. Sample consisted of Investor as based on their Income and Profession as well as Educational Background.

 Sampling Methods:
Probability sampling requires complete knowledge about all sampling units in the universe. Due to time constraint non-probability sampling was chosen for the study.

 Sampling procedure:
From large number of customers & non consumers sample lot were randomly picked up by me.

Field Study:
Directly approached respondents by the following strategies 

Tele-calling

 Personal Visits  Clients References  Promotional Activities  Database provided by the Share khan Limited.

LIMITATIONS
As only GURGOAN was dealt in the survey so it does not represent the view of the total Indian market.

 The sample size was restricted with hundred respondents.

 There was lack of time on the part of respondents.

 The survey was carried through questionnaire and the questions were based on perception.

 There may be biasness in information by market participant.

 Complete data was not available due to company privacy and secrecy.

 Some people were not willing to disclose the investment profile.

CHAPTER 2 INDUSTRY PROFILE & COMPANY PROFILE

INTRODUCTION TO STOCK EXCHANGE

The emergence of stock market can be traced back to 1830. In Bombay, business passed in the shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank, the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta, Englishman reported the quotations of 4%, 5%, and 6% loans of East India Company as well as the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when the Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also quoted the prices of business ventures like the Bengal bonded warehouse, the Docking Company and the storm tug company.

Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during the share mania of 1860-65, the number of brokers increased considerably. By 1860, the number of brokers was about 60 and during the exciting period of the American Civil war, their number increased to about 200 to 250. The end of American Civil war brought disillusionment and many

Failures and the brokers decreased in number and prosperity. It was in those troublesome times between 1868 and 1875 that brokers organized an informal association and finally as recited in the Indenture constituting the Articles of Association of the Exchange.

On or about 9th day of July,1875, a few native brokers doing brokerage business in shares and stocks resolved upon forming in Bombay an association for protecting the character, status and interest of native share and stock brokers and providing a hall or building for the use of the Members of such association.

As a meeting held in the broker Hall on the 5th day of February, 1887, it was resolved to execute a formal deal of association and to constitute the first managing committee and to appoint the first trustees. Accordingly, the Articles of Association of the Exchange and the Stock Exchange was formally established in Bombay on 3rd day of December, 1887. The Association is now known as The Stock Exchange.

The entrance fee for new member was Re.1 and there were 318 members on the list, when the exchange was constituted. The numbers of members increased to 333 in 1896, 362 in 1916and 478 in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896, Rs.2500 in 1916 and Rs. 48,000 in 1920. At present there are 23 recognized stock exchanges with about 6000 stock brokers. Organization structure of stock exchange varies.

14 stock exchanges are organized as public limited companies, 6 as companies limited by guarantee and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have been permanent recognition. Others have to seek recognition on annual basis. These exchange do not work of its own, rather, these are run by some persons and with the help of some persons and institution. All these are down as functionaries on stock exchange. These are:

i. ii. iii. iv.

Stockbrokers Sub-broker Market makers Portfolio consultants etc.

Stockbrokers:
Stock brokers are the members of stock exchanges. These are the persons who buy, sell or deal in securities. A certificate of registration from SEBI is mandatory to act as a broker. SEBI can impose certain conditions while granting the certificate of registrations. It is obligatory for the person to abide by the rules, regulations and the buy-law. Stock brokers are commission broker, floor broker, arbitrageur etc.

Detail of Registered Brokers

Total no. of registered brokers as on 31.03.09 9000 24,000 Total no. of sub-broker as on 31.03.09

2. Sub-broker:
A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He assists the investors in buying, selling or dealing in securities through stockbroker. The broker and sub-broker should enter into an agreement in which obligations of both should be specified. Sub-broker must be registered SEBI for a dealing in securities. For getting registered with SEBI, he must fulfill certain rules and regulation.

3. Market Makers:
Market maker is a designated specialist in the specified securities. They make both bid and offer at the same time. A market maker has to abide by bye-laws, rules regulations of the concerned stock exchange. He is exempt from the margin requirements. As per the listing requirements, a company where the paid-up capital is Rs. 3 Crore but not more than Rs. 5 core and having a commercial operation for less than 2 years should appoint a market maker at the time of issue of securities.

4. Portfolio Consultants:
A combination of securities such as stocks, bonds and money market instruments is collectively called as portfolio. Whereas the portfolio consultants are the persons, firms or companies who advise, direct or undertake the management or administration of securities or funds on behalf of their clients.

Traditionally stock trading is done through stock brokers, personally or through telephones. As number of people trading in stock market increase enormously in last few years, some issues like location constrains, busy phone lines, miss communication etc start growing in stock broker offices. Information technology (Stock Market Software) helps stock brokers in solving these problems with Online Stock Trading.

Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through a website without any manual intervention from Stock Broker. There are two different type of trading environments available for online equity trading.

.Web

(Internet) based trading application

This kind of trading environment doesn't require any additional software installation. They are like other internet websites which investor can access from around the world through normal internet connection.

Stock exchanges are like market places, where stockbrokers buy and sell securities for individuals or institutions. As per the SCRA (Securities Contracts Regulation Act) 1956, the definition of securities includes shares, bonds, stocks, debentures, government securities, derivatives of securities, units of collective investment scheme (CIS) etc. The securities market has two interdependent segments: the primary and secondary market.

The primary market is the channel for creation of new securities issued by public limited companies or by government agencies. New securities issued in the primary market are traded in the secondary market.

The secondary market operates through the over-the-counter (OTC) market and the exchange trade market.

Advantages of Stocks Trading

1. Better

returns

Actively trading stocks can produce better overall returns than simply buying and holding.

2.

Huge Choice

There are thousands of stocks listed on markets around the world. There is always a stock whose price is moving - its just a matter of finding them.

3. Familiarity The most traded stocks are in the largest companies that most of us have heard of and understand - Microsoft, IBM, and Cisco etc.

Disadvantages of Stocks Trading

1. Leverage With a margined account the maximum amount of leverage available for stock trading is usually 4:1. Meaning a $25,000 could trade up to $100,000 of stock. This is pretty low compared to Forex trading or futures trading.

2. Pattern

Day Trader Rules

It requires at least $25,000 to be held in a trading account if the trader completes more than 4 trades in a 5 day period. No such rule applies to Forex trading or futures trading.

3. Uptick Rule

on Short Selling

A trader must wait until a stock price ticks up before they can short sell it. Again there are no such rules in Forex trading or futures trading where going short are as easy as going long.

4. Need

to Borrow Stock to Short

Stocks are physical commodities and if a trader wishes to go short then the broker must have arrangements in place to borrow that stock from a shareholder until the trader closes their position. This limits the opportunities available for short selling. Contrast this to futures trading where selling is as easy as buying.

5. Costs Although online trading costs for stock trading are low they still add considerably to the costs of day trading. Online futures trading are about 1/4 of the cost for the equivalent value. In the UK 0.5% stamp duty is also levied on all share purchases making trading virtually impossible, hence the popularity of spread betting.

COMPANYs PROFILE
Share khan is one of the leading retail brokerage of City Venture which is running successfully since 1922 in the country. Earlier it was the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Share khan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advice etc.

Earlier with a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. SSKI is one of the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKIs institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country.

It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organizations revenue, with a daily turnover of over US$ 2 million. The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks

Mission of the Share khan is

To educate and empower the individual investor to make better investment decisions through  QUALITY ADVICE  INNOVATIVE PRODUCTS and  SUPERIOR SERVICE.

WORK STRUCUTRE OF SHAREKHAN

Share khan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, VignetteVeriSigngn Financial

Technologies India Ltd, Spider Software Pvt. Ltd. to build its trading engine and content. The City Venture holds a majority stake in the company. HSBC, Intel & Carlyle are the other investors.

On April 17, 2002 Share khan launched Speed Trade and Trade Tiger, are net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net. Share khans ground network includes over 700+ Share shops in 130+ cities in India.

The firms online trading and investment site www.sharekhan.com - was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over 3 Laces customers. The number of trading members currently stands at over 7 Laces. While online trading currently accounts for just over 5 per cent of the daily trading in stocks in India, Share khan alone accounts for 27 per cent of the volumes traded online.

The Corporate Finance section has a list of very prestigious clients and has many firsts to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 5 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Papaya, Essar, Hutchison, Planetasia, and Shoppers Stop. Finally, Share khan shifted hands and City venture get holds on it.

PRODUCT AND SERVICES OFFERD BY SHAREKHAN 1- Equity Trading Platform (Online/Offline).

2- Commodities Trading Platform (Online/Offline).

3- Portfolio Management Service.

4- Mutual Fund Advisory and Distribution.

5- Insurance Distribution.

6-Forex

Share khan offers the following products:-

CLASSIC ACCOUNT
This is a User Friendly Product which allows the client to trade through website

WWW.SHAREKHAN.COM and is suitable for the retail investors who is risk-averse and hence prefers to invest in stocks or who does not trade too frequently.

Features
 Online trading account for investing in Equity and Derivatives via www.sharekhan.com  Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE.  Integration of On-line trading, Saving Bank and Demat Account.  Instant cash transfer facility against purchase & sale of shares.  Competitive transaction charges.  Instant order and trade confirmation by E-mail.  Streaming Quotes (Cash & Derivatives).  Personalized market watch.  Single screen interface for Cash and derivatives and more.  Provision to enter price trigger and view the same online in market watch.

SPEEDTRADE
SPEEDTRADE is an internet-based software application that enables you to buy and sell in an instant. It is ideal for active traders and jobbers who transact frequently during days session to capitalize on intra-day price movement.

Features
 Instant order Execution and Confirmation.  Single screen trading terminal for NSE Cash, NSE F&O & BSE.  Technical Studies.  Multiple Charting.  Real-time streaming quotes, tic-by-tic charts.  Market summary (Cost traded scrip, highest clue etc.)  Hot keys similar to brokers terminal.  Alerts and reminders.  Back-up facility to place trades on Direct Phone lines.  Live market debts.

DIAL-N-TRADE
Along with enabling access for trade online, the CLASSIC and SPEEDTRADE ACCOUNT also gives Dial-n-trade services. With this service, one can dial Share khans dedicated phone lines 1800-22-7500, 3970-7500. Beside this, Relationship Managers are always available on Office Phone and Mobile to resolve customer queries.

SHARE MOBILE
Share khan had introduced Share Mobile, mobile based software where one can watch Stock Prices, Intra Day Charts, Research & Advice and Trading Calls live on the Mobile. (As per SEBI regulations, buying-selling shares through a mobile phone are not yet permitted.)

PREPAID ACCOUNT
Customers pay Advance Brokerage on trading Account and enjoy uninterrupted trading in their Account. Beside this, great discount are also available (up to 50%) on brokerage. Prepaid Classic Account: - Rs. 2000 Prepaid Speed trade Account: - Rs. 6000

IPO ON-LINE
Customers can apply to all the forthcoming IPOs online. This is quite hassle-free, paperless and time saving. Simply allocate fund to IPO Account, Apply for the IPO and Sit Back & Relax.

Mutual Fund Online

Investors can apply to Mutual Funds of Reliance, Franklin Templeton Investments, ICICI Prudential, SBI, Birla, Sundaram, HDFC, DSP Merrill Lynch, PRINCIPAL and TATA with Share khan.

Zero Balance ICICI Saving Account

Share khan had tied-up with ICICI bank for Zero Balance Account for Share khans Clients. Now their customers can have a Zero Balance Saving Account with ICICI Bank after your demat account creation with Share khan.

REASON TO CHOOSE SAHREKHAN LIMITED

Experience
SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia Money broker's poll held recently, SSKI won the 'India's best broking house for 2004' award. Ever since it launched Share khan as its retail broking division in February 2000, it has been providing institutional-level research and broking services to individual investors.

Technology
With their online trading account one can buy and sell shares in an instant from any PC with an internet connection. Customers get access to the powerful online trading tools that will help them to take complete control over their investment in shares.

Accessibility
Share khan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for investors. These services are accessible through many centers across the country (Over 650 locations in 150 cities), over the Internet (through the website www.sharekhan.com) as well as over the Voice Tool.

Knowledge
In a business where the right information at the right time can translate into direct profits, investors get access to a wide range of information on the content-rich portal, WWW.SHAREKHAN.COM. Investors will also get a useful set of knowledge-based tools that will empower them to take informed decisions.

Convenience
One can call Share khans Dial-N-Trade number to get investment advice and execute his/her transactions. They have a dedicated call-center to provide this service via a Toll Free Number 1800 22-7500 & 39707500 from anywhere in India.

Customer Service
Its customer service team assist their customer for any help that they need relating to transactions, billing, demat and other queries. Their customer service can be contacted via a tollfree number, email or live chat on www.sharekhan.com.

Investment Advice
Share khan has dedicated research teams of more than 30 people for fundamental and technical research. Their analysts constantly track the pulse of the market and provide timely investment advice to customer in the form of daily research emails, online chat, printed reports etc.

Benefits
 Free Depository A/c  Instant Cash Transfer  Multiple Bank Option.  Secure Order by Voice Tool Dial-n-Trade.  Automated Portfolio to keep track of the value of your actual purchases.  24x7 Voice Tool access to your trading account.  Personalized Price and Account Alerts delivered instantly to your Mobile Phone & Email address.  Live Chat facility with Relationship Manager on Yahoo Messenger  Special Personal Inbox for order and trade confirmations.  On-line Customer Service via Web Chat.  Enjoy Automated Portfolio.  Buy or sell even single share  Anytime Ordering.

CHAPTER-3 PORTFOLIO MANAGMENT SERVICES

PORTFOLIO MANGEMNT SERVICES (PMS)

Portfolio (finance) means a collection of investments held by an institution or a private individual. Holding a portfolio is often part of an investment and risk-limiting strategy called diversification. By owning several assets, certain types of risk (in particular specific risk) can be reduced. There are also portfolios which are aimed at taking high risks these are called concentrated portfolios.

Investment management is the professional management of various securities (shares, bonds etc) and other assets (e.g. real estate), to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds).

The term asset management is often used to refer to the investment management of collective investments, whilst the more generic fund management may refer to all forms of institutional investment as well as investment management for private investors. Investment managers who specialize in advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as wealth management or portfolio management often within the context of so-called "private banking".

The provision of 'investment management services' includes elements of financial analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Outside of the financial industry, the term "investment management" is often applied to investments other than financial instruments. Investments are often meant to include projects, brands, patents and many things other than stocks and bonds. Even in this case, the term implies that rigorous financial and economic analysis methods are used.

NEED OF PMS
As in the current scenario the effectiveness of PMS is required. As the PMS gives investors periodically review their asset allocation across different assets as the portfolio can get skewed over a period of time. This can be largely due to appreciation / depreciation in the value of the investments.

As the financial goals are diverse, the investment choices also need to be different to meet those needs. No single investment is likely to meet all the needs, so one should keep some money in bank deposits and / liquid funds to meet any urgent need for cash and keep the balance in other investment products/ schemes that would maximize the return and minimize the risk. Investment allocation can also change depending on ones risk-return profile.

OBJECTIVE OF PMS
There are the following objective which is full filled by Portfolio Management Services.

1. Safety Of Fund: The investment should be preserved, not be lost, and should remain in the returnable position in cash or kind.

2. Marketability: The investment made in securities should be marketable that means, the securities must be listed and traded in stock exchange so as to avoid difficulty in their encashment.

3. Liquidity: The portfolio must consist of such securities, which could be en-cashed without any difficulty or involvement of time to meet urgent need for funds. Marketability ensures liquidity to the portfolio.

4. Reasonable return: The investment should earn a reasonable return to upkeep the declining value of money and be compatible with opportunity cost of the money in terms of current income in the form of interest or dividend.

5.

Appreciation in Capital: The money invested in portfolio should grow and result into capital gains.

6.

Tax planning: Efficient portfolio management is concerned with composite tax planning covering income tax, capital gain tax, wealth tax and gift tax.

7.

Minimize risk: Risk avoidance and minimization of risk are important objective of portfolio management. Portfolio managers achieve these objectives by effective investment planning and periodical review of market, situation and economic environment affecting the financial market.

PORTFOLIO CONSTRUCTION
The Portfolio Construction of Rational investors wish to maximize the returns on their funds for a given level of risk. All investments possess varying degrees of risk. Returns come in the form of income, such as interest or dividends, or through growth in capital values (i.e. capital gains).

The portfolio construction process can be broadly characterized as comprising the following steps:

1. Setting

objectives.

The first step in building a portfolio is to determine the main objectives of the fund given the constraints (i.e. tax and liquidity requirements) that may apply. Each investor has different objectives, time horizons and attitude towards risk. Pension funds have long-term obligations and, as a result, invest for the long term. Their objective may be to maximize total returns in excess of the inflation rate. A charity might wish to generate the highest level of income whilst maintaining the value of its capital received from bequests. An individual may have certain liabilities and wish to match them at a future date. Assessing a clients risk tolerance can be difficult. The concepts of efficient portfolios and diversification must also be considered when setting up the investment objectives.
2. Defining

Policy.

Once the objectives have been set, a suitable investment policy must be established. The standard procedure is for the money manager to ask clients to select their preferred mix of assets, for example equities and bonds, to provide an idea of the normal mix desired. Clients are then asked to specify limits or maximum and minimum amounts they will allow to be invested in the different assets available. The main asset classes are cash, equities, gilts/bonds and other debt instruments, derivatives, property and overseas assets. Alternative investments, such as private

equity, are also growing in popularity, and will be discussed in a later chapter. Attaining the optimal asset mix over time is one of the key factors of successful investing.

3. Applying

portfolio strategy.

At either end of the portfolio management spectrum of strategies are active and passive strategies. An active strategy involves predicting trends and changing expectations about the likely future performance of the various asset classes and actively dealing in and out of investments to seek a better performance. For example, if the manager expects interest rates to rise, bond prices are likely to fall and so bonds should be sold, unless this expectation is already factored into bond prices. At this stage, the active fund manager should also determine the style of the portfolio. For example, will the fund invest primarily in companies with large market capitalizations, in shares of companies expected to generate high growth rates, or in companies whose valuations are low? A passive strategy usually involves buying securities to match a preselected market index. Alternatively, a portfolio can be set up to match the investors choice of tailor-made index. Passive strategies rely on diversification to reduce risk. Outperformance versus the chosen index is not expected. This strategy requires minimum input from the portfolio manager. In practice, many active funds are managed somewhere between the active and passive extremes, the core holdings of the fund being passively managed and the balance being actively managed.
4.

Asset selections.

Once the strategy is decided, the fund manager must select individual assets in which to invest. Usually a systematic procedure known as an investment process is established, which sets guidelines or criteria for asset selection. Active strategies require that the fund managers apply analytical skills and judgment for asset selection in order to identify undervalued assets and to try to generate superior performance.

5.

Performance assessments.

In order to assess the success of the fund manager, the performance of the fund is periodically measured against a pre-agreed benchmark perhaps a suitable stock exchange index or against a group of similar portfolios (peer group comparison). The portfolio construction process is continuously iterative, reflecting changes internally and externally. For example, expected movements in exchange rates may make overseas investment more attractive, leading to changes in asset allocation. Or, if many large-scale investors simultaneously decide to switch from passive to more active strategies, pressure will be put on the fund managers to offer more active funds. Poor performance of a fund may lead to modifications in individual asset holdings or, as an extreme measure; the manager of the fund may be changed altogether.

Steps to Stock Selection Process

Share khan Portfolio Management Services

PMS

PRO PRIME

PRO TECH DIVERSIFIED

PRO TECH

Pro Prime :Product Approach

Investment will be keeping in mind 3 investment tenets. 1. Consistent, steady and sustainable returns. 2. Margin of Safety 3. Low Volatility

Product offering
Pro Prime is the ideal for investors looking at steady and superior with low and medium risk appetite. The portfolio consists of a blend of quality blue chip and growth stocks ensuring a balanced portfolio with relatively medium risk profile. The portfolio constitutes of relatively large capitalization stocks, based on sector and themes which have medium to long term growth potential.

Product Characteristics
 Bottom up stock selection  In depth ,independent fundamental research  High quality companies with relatively large capitalization  Disciplined valuation approach applying multiple valuation measure.  Medium to long term vision, resulting in low portfolio turnover.

How to invest?  Minimum Investment : 10 Laces  Lock in : 6 months  Reporting: Access to website showing clients holding .Monthly reporting of portfolio holding /transaction.  Charges: 2.5% pa AMC (Annual Maintenances Charges) fees charged every quarter ,0.5% brokerage ,20% profit sharing after 15% hurdle is crossed chargeable at the end of fiscal year.

Pro tech Diversified :Product Approach

An opportunity lies in basis which is the difference between cash and future. Whenever basis is high we buy the stocks and sell the future to lock in difference .The difference is bound to be zero at expiry.

Product Offered Cash future arbitrage:

The product intends to spot low risk opportunities which will yield more than the normal low risk product .Whenever such opportunity is spotted stocks will be bought and to lock in the basis, future will be sold .This position will be liquated in the expiry or before that if the basis vanishes early .Similarly the scheme will move on from opportunity to opportunity.

Product Characteristics moderate Risk: This is relatively low risk product which can be compared with liquid
funds issued by mutual funds.

High return: Compared with other low risk products, this products offers an indicative
post tax return of 8 to 10% plus.

Product Details  Minimum Investment:Rs.1 Crore  Lock in :6 months  Reporting: Fortnightly for portfolio Net worth, Monthly reporting pf portfolio Holding /transaction.  Charges: 0.035% brokerage for future ,0.07% for delivery

 Pro Tech :PROTECH using the knowledge of technique analysis and the power of depravities markets to identify trading opportunities in the market .The PROTECH line of the product is designed around various risk /reward /volatility profiles for the different kind of investment needs.

Product Approach
Better performance is possible from superior market timing and from picking stocks before inflation points in their trading cycles .Linear return are possible from having hedged/ sell market positions in downtrends .Absolute return are targeted by focusing on finding trading opportunities & not out performance of an index.

Product offered 1. Nifty Thirty :

Nifty futures will be bought and sold on the basis of an automated trading system generated calls to go long/short. The exposure will never exceed the value of portfolio i.e. no leveraging; but allows us to be short /hedged in Nifty in falling market therefore allowing the client to earn irrespective of the market direction.

2. Beta Portfolio :
Positional trading opportunities are identified in the future segment based on technical analysis .Inflection points in the momentum cycles are identified to go long /short on stock/index futures with 1-2 months time horizon .The idea is to generate the best possible return in the medium term irrespective of the direction of the market without really leveraging beyond the portfolio value. Risk protection is done based on stop losses on daily closing prices.

3. Star Nifty:
Swing trading technique and Dow theory is used to identify short term reversal levels for Nifty futures and ride with trend both on the long and short side .This return can be earned in bull and bear market .Stop and reverse means to reverse ones position from long to short or vice a versa at the reversal levels simultaneously .The exposure never exceeds value of portfolio i.e. there is no leveraging.

4. Trailing Stops.
Momentum trading techniques are used to spot short term momentum of 5-10 days in stocks and stocks /index futures .Trailing stop loss method of risk management or profit protection is used to lower the portfolio volatility and maximize return .Trading opportunities are exposed both on the long side and the short side as the market demands to get the best of both upward and downward trends.

Product Characteristics  Using swing based index trading systems stop and reverse .trend following and
momentum trading technique.

 Nifty based products for low impact cost and low product volatility  Both long and short strategies to earn returns even in falling market.  Trading in future market to allow for active risk protection using trailing stop losses.

How to invest?
 Minimum : Rs.10 Laces

 Lock in : 6 months  Reporting: Fortnightly reporting of portfolio Net Worth, monthly reporting of portfolio Holding /Transaction.  Charges: 0% AMC (Annual Maintenance Charges), 0.05% brokerage for derivatives, 20% profit sharing on booked profit quarterly basis

CHAPTER -5

DATA ANALYSIS AND INTERPRETATION

1. Do you know about the Investment Option available?

NO 15%

YES 85%

Interpretation As the above table shows the knowledge of Investor out of 100 respondent carried throughout the Hyderabad Area is only 85%. The remaining 15% take his/her residential property as an investment. According to law purpose this is not an investment because of it is not create any profit for the owner. The main problem is that in this time from year 2008-2009 , the recession and the Inflation make the investor think before investing a even a Rs. 100.So , it also create the problem for the Investor to not take interest in Investment option.

2. What is the basic purpose of your Investments?

Others Risk Covering Tax Benefits Capital Appreciation Return Liqidity 0% 10% %AGE

20%

30%

Interpretation

As with the above analysis, it is found 75% people are interested in liquidity, returns and tax benefits. And remaining 25% are interested in capital appreciations, risk covering, and others. In the entire respondent it is common that this time everyone is looking for minimizing the risk and maximizing their profit with the short time of period.As explaining them About the Portfolio Management Services of Share khan, they were quite interested in Protech Services.

3.What is the most important factor you consider at the time of Investment?

80% 60% 40% 20% 0% Risk Return Both 12% 23% 65%

%AGE

Interpretation As the above analysis gives the clear idea that most of the Investors considered the market factor as around 12% for Risk and 23% Return, but most important common things in all are that they are even ready for taking both Risk and Return in around 65% investor.Moreover, the Market is fluctuating now days, so as it also getting improvement. So, Investor are looking for Investment in long term and Short-term.

4.

From

which

option

you

will

get

the

best

returns?

PERCENATGE OF RESPODENTS
Others Property Bonds Fixed Deposits Commodities Market Shares Mutual Funds 8% 18% 16% 22% 20% 2% 14%

Interpretation Most of the respondents say they will get more returns in Share Market. Since Share Market is said to be the best place to invest to get more returns. The risk in the investment is also high.Moreover, even who dont want to take Risk they are looking for investing in Fixed Deposit for long period of time.

5. Investing in PMS is far safer than Investing in Mutual Fund. Do you agree?

100%
76%

0% Yes

24%

No Yes No 24%

%Age of Respodents

76%

Interpretation In the above graphs its clear that 24% of respondent out of hundred feel that investing their money in Mutual Fund Scheme are far safer than Investing in PMS. This is because of lack of proper information about the Portfolio management services. As the basis is same for the mutual fund and PMS but the investment pattern is totally different from each other and which depends upon different risk factor available in both the Financial Products.

6. How much you carry the expectation in Rise of your Income from Investments?

12% 32%

8% 48%

UPTO 15% 15-25% 25-35% Morethan 35%

Interpretation The optimism is shown in the attitude of the respondents. The confidence was appreciable with which they are looking forward to a rise in their investments. Major part of the sample feels that the rise would be of around 15%. Only 8% of the respondents were confident enough to expect a rise of up to 35%. As all the respondents were considering the Risk factor also before filling the questionnaire and they were asking about the performance report of all the PMS services offered by Share khan limited.

7. If you invested in Share Market, what has been your experience?

50% 0%

20% 34%

6%

40% %Age of Respondents

Satisfactory return received %Age of Respondents 20%

Burned Fingers 34%

Unsatisfactor y results 6%

No 40%

Interpretation

20% of the respondents have invested in Share market and received satisfactory returns, 40% of the respondents have not at all invested in Share Market. Some of the investors face problems due to less knowledge about the market. Some of the respondents dont have complete overview of the happenings and invest their money in wrong shares which result in Loss. This is the reason most of the respondents prefer Portfolio Management Services to trade now a days, which gives the Investor the clear idea when is the right time to buy and right time to sell the shares which is recommended by their Fund Manger.

8. How do you trade in Share Market?

% Respondents

45%

55%

Speculation Investment

Interpretation As we know that Share market is totally based on psychological parameters of Investors, which changed as per the market condition, but at the same time the around 45% investor trade on the basis of speculation and 31% depend upon Investment option Bonds, Mutual Funds etc.

9. How do you manage your Portfolio?

%of Respodents
Depends on the Company for Portfolio 43%

Self 57%

Interpretation About 57% of the respondents say they themselves manage their portfolio and 43% of the respondents say they depend on the security company for portfolio Management. 43% of the respondents prefer PMS of the company because they dont have to keep a close eye on their investment; they get all the information time to time from their Fund Manager.

Moreover, talking about the Share khan PMS services they are far satisfied with the Protect and Prop rime Performance during last year. They are satisfied with the quick and active services of Share khan customer services where, they get the updated knowledge about the scrip detail everyday from their Fund Manager.

12. Which Portfolio Type you preferred?

50%
45%

40% 30% 20% 10% 0%

27% 28%

Equity %Age of Respodents 45%

Debt 27%

Balanced 28%

Interpretation The above analysis shows, in which portfolio the investor like to deal more in PMS. As 45% investor likes to go for Equity Portfolio and 28% with Balanced Portfolio, whereas around 27% investor like to, go for Debt Portfolio.

CHAPTER-6 CONCULSION AND SUGGESTIONS

OBSERVATION AND FINDING

 About 85% Respondents knows about the Investment Option, because remaining 15%
take his /her residential property as Investment, but in actual it not an investment philosophy carries that all the Investment does not create any profit for the owner.  More than 75% Investors are investing their money for Liquidity, Return and Tax benefits.  At the time of Investment the Investors basically considered the both Risk and Return in more %age around 65%.  As among all Investment Option for Investor the most important area to get more return is share around 22%after that Mutual Fund and other comes into existence.  More than 76% of Investors feels that PMS is less risky than investing money in Mutual Funds.  As expected return from the Market more than 48% respondents expect the rise in Income more than 15%, 32% respondents are expecting between 15-25% return.  As the experience from the Market more than 34% Investor had lose their money during the concerned year, whereas 20% respondents have got satisfied return.  About 45% respondents do the Trade in the Market with Derivatives Tools Speculation compare to 24% through Hedging .And the rest 31% trade their money in Investments.  Around 57% residents manage their Portfolio through the different company whereas 43%Investor manage their portfolio themselves.  The most important reasons for doing trade with Share khan limited is Share khan Research Department than its Brokerage rate Structure.

 Out of hundred respondents 56% respondents are using Share khan PMs services.  Investors preferred more than 45% equity Portfolio, 28%Balanceed Portfolio and about 27% Debt Portfolio with Share khan PMS.  About 52% Respondents earned through Share khan PMS product, whereas 18% investor faced loses also.  More than 63% Investor are happy with the Transparency system of Share khan limited.  As based on the good and bad experience with Share khan limited around 86% are ready to recommended the PMS of Share khan to their peers, relatives etc.

CONCLUSION AND SUGGESTIONS

On the basis of the study it is found that Share khan Ltd is better services provider than the other stockbrokers because of their timely research and personalized advice on what stocks to buy and sell. Share khan Ltd. provides the facility of Trade tiger as well as relationship manager facility for encouragement and protects the interest of the investors. It also provides the information through the internet and mobile alerts that what IPOs are coming in the market and it also provides its research on the future prospect of the IPO. We can conclude the following with above analysis.  Share khan Ltd has better Portfolio Management services than Other Companies  It keeps its process more transparent.  It gives more returns to its investors.  It charges are less than other portfolio Management Services  It provides daily updates about the stocks information.  Investors are looking for those investment options where they get maximum returns with less returns.  Market is becoming complex & it means that the individual investor will not have the time to play stock game on his own.  People are not so much ware aware about the Investment option available in the Market.

Suggestions

 The company should also organize seminars and similar activities to enhance the knowledge of prospective and existing customers, so that they feel more comfortable while investing in the stock market.  Investors must feel safe about their money invested.  Investors accounts must be more transparent as compared to other companies.  Share khan limited must try to promote more its Portfolio Management Services through Advertisements.  Share khan needs to improve more its Customer Services  There is need to change in lock in period in all three PMS i.e.Protech, Proprime, Pro Arbitrage.

BIBILOGRAPHY

REFERENCES  www.sharekha.com  www.sebi.gov.in  www.moneycontrol.com  www.karvy.com  www.valueresarchonline.com  www.yahoofinance.com  www.theeconomist.com  www.nseindia.com  www.bseindia.com

Book Referred

 Value guide by Share khan  Investors Eyes by Share khan  Business world.  The economist

ANNEXURE QUESTIONNAIRE
CUSTOMER NAME: CONTACT NUMBER:

Q1. Do you invest in stock market? Yes No

Q2. On what basis you take investment decisions? On your own friends and relatives

Brokers tips

Experience consultants

Q3. You are having your trading account with SHAREKHAN since how long?

0-6 months

7-12 months

13-18 months

19-24 months

Q4. How frequently you trade through SHAREKHAN in a month?

0-10 times

11-20 times

21-30 times

31-40 times

>40 times

Q5. What is the hit ratio of SHAREKHAN Research tips? 0-25% 26-50%

51-75%

76-100%

Q6. Are you satisfied with the way your trading account is handled at SHAREKHAN?

Yes

No

Q7. Out of these products, which of the products of SHAREKHAN you are aware of?

Mutual Funds

Commodities

P.M.S.

IPOs

No Idea

Q8. Are you looking forward to invest in any of the above products of SHAREKHAN?

Yes If YES then which

No

Q9. Do you have trading account in any other company?

Yes If YES then specify

No

Q10. Is SHAREKHAN better than others?

Yes

No

If NO then what are the reason

Q11. Are you satisfied with the after sale service (DEMO) of SHAREKHAN?

Yes

No

Q12. Any suggestions for SHAREKHAN to serve you better?

Thank you