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Advertising has always been criticized. The critics are very skeptical about the manipulative effect of advertising; that it can control the minds of the audience and can drive them to a particular way of thinking. However, there is another group who disagrees. It believes that advertising truly reflects a culture. People of this group believe that: You can tell the ideals of a nation by its advertisements (Norman Douglas) Thus, if one wants to have a true picture of a nation, their ads should be viewed, i.e., the ads reflect the culture. The following text is an attempt to solve this controversy. To find out whether advertising reflects the trends or creates them, a representative sample of about 150 respondents was taken. The respondents belonged to youth of age group 18-25. Their responses were recorded on a selfadministered questionnaire. The results are, however, not completely in any sides favor. The respondents have agreed that advertising has more benefits than drawbacks. They further agree that advertising has the driving power to make the audience act in a particular way, and spend in a particular pattern, i.e. advertising does have manipulative power. Thus, the ads that we view do have impact on the viewers. One particular thing that is note worthy is the type of ads that respondents like. The initial results might not clearly be on any one side, but in this regard, the results show that irrelevant, obscene, and ads that do not conform to our culture have no space in the audiences diary of likeable ads. Thus, a safe conclusion would be that the line cannot be drawn whether the advertising is inherently good or bad. It does have impact, either positive or negative, it does reflect our culture. The need of the hour is to channel the energies of ads to constructive impact.

Advertising When Semenik (2002, 10) defines advertising, he does so in a very concise fashion: A paid, mass mediated attempt to persuade A more elaborate definition of advertising states: Advertising is the structured and composed, non personal communication of information, usually paid for and usually persuasive in nature, about products (goods, services, and ideas) by identified sponsors, through various mass media. Arens (2002, 7) This detailed definition has several terms asking for an explanation, that wont go unattended.First, there is structured and composed, which means that the advertising follows a definite pattern and that all the areas in an advertisement are organized. Not only organized, they are all coordinated towards a common goal. Selling can be done in two ways: Personal, where the seller and the buyer interact face-to-face, together at the same place; Non-personal, which doesnt require a face-to-face contact between the buyer and the seller. Advertising is non-personal way of communication because both the parties are not present face-to-face together, at the same time. Rather, advertisements use mass media which is directed at a larger audience. Communication is defined by Sharma and Singh (2006, 10) as a mean by which a person can pass information, ideas or feelings to another through speech or pictures. We communicate through our five senses. But in the world of advertising, only two senses are required; Sound and Sight. Sound means words that are uttered. They can be used in a variety of media to create a theatre of the

4 mind, where the audience can imagine themselves, enjoying the advertised product. Sight is the visual display of the advertised product. A picture is still worth a thousand words and no matter how many words are used, some details will be left out that are visible at a glance, Sharma and Singh (2006, 12)Information is knowledge, facts, or views. However, the information can be complete or incomplete, biased or unbiased. The commonly held concept is that advertisers present incomplete and biased information that favor the advertisers. And, thinking from the advertisers point of view, it is quite logical. No advertiser would want the audience to know the harmful aspects of its product, at any cost. This is also discussed in the conclusions and recommendations section.The media charges the advertisers for the time and space it provides to the advertisers, thus advertising is always paid for, except for the Public Service AnnounPaintss (PSAs) that are shown free of cost and the cost is borne by the media. Being Persuasive in nature is the basic idea of advertising. All the pain that is taken to make an ad is only to differentiate the product from that of the competitors so as to convince people to act in the desired way. Advertising can be about product, service, or ideas. As already explained, the product comes in tangible goods, while the other two are intangible. When Honda advertises its automobiles, its a product, when it mentions the sales and after sales services, that is service, and finally when it advertises about the benefits of wearing seat belts while driving, thats an idea.

5 What is the advertising all about? Its all about getting people to know about the company, to identify the sponsor. Without this, the advertiser is likely to be less successful. Mass Media are used to reach the target audience. Mass media used can be of various kinds depending on the target audience and the desired result. The most commonly used media are TV, radio, newspaper, magazines, billboards. Since innovation is taking place everywhere, the advertisers have also found innovative ways to advertise. Interactive advertising, sky-writing, air balloons, and electronic hoardings are some of the recent innovations.

1.2.1 Classification of Advertising:

It depends on the marketing strategy of the company which type of advertising it wants to adopt. But generally the advertising is classified in the following heads: By Target audience: Just as marketing mix is directed towards a target market, advertising strategies are directed towards a target audience. It includes: Consumer advertising: Consumers are people who buy a product for their own personal consumption. Most of the advertisements that we see daily belong to this category. Nestle and Unilever products, Honda cars, Nokia cell phones are all consumer products. Business advertising: This advertising is targeted to audience who buy the product for all purposes other than personal or family satisfaction. It is further classified as: Trade advertising: advertising aimed at the intermediaries of the channel of distribution, i.e. the wholesalers and the retailers.

6 Professional advertising: advertising aimed at specific professions that require specific needs to be fulfilled, like lawyers, doctors, engineers. Agriculture advertising: directed at agri-business, and includes mainly agricultural input/products. Pakistani media shows a lot of ads for this category. Commonly seen ads are Engro and insecticides and pesticides. Industrial advertising: these ads are directed at the manufacturers of other products, as machineries, spark plugs etc. FFC fertilizers, tractors, and other

By Geographic area:
Geography determines the type of advertising the company will devise. It includes: Local (retail) advertising: When local stores inform the local audience about the availability of products or for making any other announPaints, its called local advertising. For example, RSheen, or Servis, or Wadud Sons announcing a Sale. Regional advertising: When a product that is sold in a specific region is advertised, it will be called as regional advertising. For example Punjab has many specialties that are not available in other provinces of Pakistan. National advertising: In this type of advertising, the products are advertised throughout the country. For example, any new model of Honda or Toyota is advertised nationally in Pakistan. International advertising: It can also be called Global Advertising. A product available globally with no or minimum variations is advertised through global advertising. Pepsi and Coke use this strategy.

By Medium:
Print media: newspapers, magazines, journals. Broadcast/electronic media: TV, radio. Out-of-home advertising: billboards, transit, posters, banners, electronic billboards. Direct-mail advertising: sent through postal services or e-mails. Interactive advertising: internet, kiosks.

By purpose:
Product/Non-Product: When the company wants to advertise a product (including service), that is called product advertising. On the other hand, if the company wants to improve its image, create goodwill, wants the people to know that it exists, then its called non-product advertising. Commercial/Non-commercial: When the purpose of the advertising is to earn profit, irrespective of it being product or non-product, it is called commercial advertising. Any advertisement not for this purpose may be called as non-commercial advertising. Primary/selective demand: Advertising a whole class of products is advertising for primary demand. For example, when advertising is done for the benefits of using internet, it will be included in primary demand advertising. If the advertising is able to create a demand, the specific ads of specified company providing internet connections will be shown. Direct action/indirect action: If the advertiser is seeking an immediate response from the audience, by giving a toll free number or announcing any free gifts, lets say, for the first 100

8 customers, that is called direct action advertising. If the advertising is done just to create awareness for future transactions, that is an indirect action advertising.


Figure 1: Diagram showing the relation of Customer C with the 4 Ps of the marketing Mix. (Source: Perreault, William D. and Jerome McCarthy, 2005, 38)

The Two aspects of Advertising Advertising is the granddaddy of all the promotional tools. Its the most conspicuous, the most scrutinized, and the most controversial. Semenik (2002, 265) Just like anything else, advertising also has its opponents and proponents. But the difference of the advertising dilemma from others is that both the sides are true and nones view point can be denied. Thus, the advertising industry lies in a delicate balance of to be or not to be. The opponents of advertising say that it plays a manipulative role on its target audience. It has the power to control the choices that the consumers make. It often

9 portrays such glamorous images that aspires the audience to act in their desired way, to buy a certain brand of car, wear specific designers clothes, use a particular cell phone, join a specific fan-club, and visit the advertised location. Failure to do so can result in dire consequences, ranging from simple inferiority complex to outright rejection by the society. It is this philosophy that makes the audience think that advertisers would do whatever they want, to get a bucket full of cash, and would make the advertisers least concerned with the welfare of the audience that becomes the customers of the product. This thinking has always been haunting the advertisers, lest their advertising campaigns might be rejected on these grounds, altogether. On the far side there are the proponents of advertising who give hope to the advertisers. They believe that although the advertising has the power to attract the audience, but the real power lies with the audience. The audience can only be attracted to that image which is already embedded in their minds. Remember when the last time you saw an advertisement after which your response was pathetic! This is because probably the ad wasnt directed towards you and you didnt fall in the target audience. The advertisements then, only act as a stimulus, a catalyst. They argue that how could a person ever be induced to buy something that he/she doesnt want! The famous saying that Advertisements can sell a refrigerator to Eskimos is then an exaggeration! And answering to the other controversy, they say that since advertisers personal image, the companys reputation, and both of their futures are at stake, therefore, no advertiser and company would ever want to use dirty tricks in the bag to sell substandard, harmful products to the customers. Consequently, the buyers can be confident in buying the advertised products since the company has put its own reputation at stake.


History of Advertising
Advertising as a discrete form is generally agreed to have begun with newspapers, in the seventeenth century, which included line or classified advertising. Simple descriptions, plus prices, of products served their purpose until the late nineteenth century, when technological advances meant that illustrations could be added to advertising, and color was also an option. An early advertising success story is that of Pears Soap. Thomas Barratt married into the famous soap making family and realized that they needed to be more aggressive about pushing their products if they were to survive. He launched the series of ads featuring cherubic children which firmly welded the brand to the values it still holds today. he took images considered as "fine art" and used them to connote his brand's quality, purity (i.e. untainted by commercialism) and simplicity (cherubic children). He is often referred to as the father of modern advertising. World War I saw some important advances in advertising as governments on all sides used ads as propaganda. The British used advertising as propaganda to convince its own citizens to fight, and also to persuade the Americans to join. No less a political commentator than Hitler concluded that Germany lost the war because it lost the propaganda battle: he did not make the same mistake when it was his turn. One of the other consequences of World War I was the increased mechanization of industry - and hence increased costs which had to be paid for somehow: hence the desire to create need in the consumer which begins to dominate advertising from the 1920s onward.


1.2. Need of the study:

This study is about advertising in Networth Stock Broking Ltd Stock Broking Ltd. These studies to know the impact of Networth Stock Broking Ltd Stock Broking Ltd advertising and the brand image created by the Networth Stock Broking Ltd among competitor. Findings of the study helps their satisfaction level at Networth Stock Broking Ltd


This study undertaken for The Networth Stock Broking Ltd aims to study and identify the potential customers. This has been done by preparing a questionnaire which contains questions put forth to the respondents which would help is analyzing advertisement management in Networth Stock Broking Ltd. All this would help in giving suggestion to The Networth Stock Broking Ltd in improving Networth Stock Broking Ltd thereby satisfying their corporate and retail clients

1.4 Objective of the study:

To study the brand image created by Networth Stock Broking Ltd among competitor.

12 To find out the reason for choosing Networth Stock Broking Ltd To Create New marketing Strategies in Broking Companies


Research methodology is a way to systematically solve the research problem is to how research is done scientifically. It consists of the different steps that are generally adopted by the researcher to the study his research problem along with logic behind them. It is necessary to the researcher to develop certain tests.


Research design is a plan to answer whom, when, where, and how the subject under investigation conceived so as to obtain answers to research questions. The type of research design involved in this study is descriptive research studies.


Descriptive research studies are those studies, which are concerned with describing the characteristics of a particular individual, or of a group, where as diagnostic research study determine the frequency with which something occurs or its association with something else. The studies concerning whether certain variables are associated are example of diagnostic research studies. As against this, study concerned individual, group or situation are all example of descriptive research studies. Most of the social research studies come under this category from the point of view of the research design.



The required data was collected by both the primary and secondary sources. The data objective are describe from the research objectives and their determination rests mainly on the research to translate what the decision marker wants into specific descriptive of the needed data.

The primary data was collected from the, Networth Stock Broking Ltd., users at HYDERABAD. The Respondents were met personally at their establishments and questionnaire has been given to them and answered questionnaires were collected back. Primary data is the data gathered for the first time by the researcher by using questionnaire. Secondary data: Secondary data, on the other hand, is those which have already been collected by someone else and which already been passed through the statistical process. Secondary data pertaining to this study was obtained from company documents, broachers, departmental informations websites etc.


Instrument Instrument Design : Questionnaires (personal administered) : Both open end enclose ended Question and used in questionnaires.

Questionnaire Design


A well structured questionnaire was used for this study. The types of questions used in the questionnaire were open-ended, multiple-choice and Dichotomous questions. 1. Open-end questions are questions, which are entitled to give a free response to their choice.

2. Multiple-choice questions are question, which contain a list of answer and permit the subject to select the best answer.

Sampling is the process of selecting a sufficient number of elements from the population, so that a study of sample and an understanding of its properties or characteristics would make it possible for us to generalize such properties or characteristics to the population elements.

Sampling technique : Cluster sample Sample size : Sample size chosen here for this study was 100 as suggested by the company

A Sample design is a definite plan for obtaining a sample from given population. It refers to the technique or the procedure the researcher would adopt in selection items for the sample. Sample may as well lay down the number of items to be included in the sample namely, the size of the sample.

Probability sampling:

15 Make a specific mention of it in the thesis. So that the conclusions would be evaluated accordingly. Probability sampling refers to the sampling process in which the samples are selected for a specific purpose with a pre-determined basis of selection. This type of samples is also required at times when random selection may not be possible. Therefore the reliability of conclusions based on this type of sampling is less. Whenever a researcher uses this type of sampling.

Cluster Sampling:
Cluster sampling method suggests, the samples are selected at different stages. In this method, the population is first divided into different stages. Then from the first stage, a few items are selected at random based on a specific feature or characteristic. From these in the second stage, a few elements are selected at random possessing, he characteristic. From which in the third stage a few are selected at random satisfying the characteristic and so on to finally make the necessary selection of samples. All the samples selected at random at different stages will posses the common characteristic or will be homogeneous on some basis.

Cluster sampling involves arranging elementary items in a population into heterogeneous subgroups that are representative of the overall population. One such group constitutes a sample for study.

The total numbers of respondents are termed as sample size. The sample size for this analysis is 100 respondents.

Percentage Analysis:

16 Percentage refers to a special kind of ratio. It is used to make comparison between two or more series of data. They can be used to compare the relative items, the distribution of two or more series of data since the percentage reduce everything as common base and allow the meaningful comparisons to be made. Percentage refers to the special kind of ratio percentage are used in making comparison between two or more series of data. Percentages are used to describe relationship.

No. of respondents Percentage (%) = _________________________ Total respondents Bar chart and Pie charts are used to explain the tabulation clearly. X 100

LIMITATIONS OF THE STUDY The study is restricted to some areas of Hyderabad city.

17 The findings of the study are based on the assumption that the respondents divulged correct information. The study is relevant only to present situation and not to future. Bias and unwillingness of certain respondents to answering some questions may hinder the study. The study is time bound, due to rapid changes in the market, expectation level of consumers, introduction of new products. The study may not be applicable over a period of time


Company Profile


Incorporated in 1993, Net worth Stock Broking Limited (NSBL) has been a listed company at Bombay Stock Exchange (BSE), Mumbai since 1995. A Member, at the National Stock Exchange of India (NSE) and Bombay Stock Exchange, Mumbai (BSE) on the Capital Market and Derivatives (Futures & Options) segment, NSBL has been traditionally servicing Institutional clients and in the recent past has forayed into retail broking, establishing branches across the country. Presence is being marked in the Middle East, Europe and the United States too, as part of our attempts to cater to global markets. We are a Depository participant at Central Depository Services India (CDSL) with plans to become one at National Securities Depository (NSDL) by the end of this quarter. We have our customers participating in the booming commodities markets with our membership at the Multi Commodity Exchange of India (MCX) and National Commodity & Derivatives Exchange (NCDEX), through Networth Stock Broking Ltd Stock.Com Ltd. With its strong support and business units of research, distribution & advisory, NSBL aims to become a one-stop solution to the broking and investment needs of its clients, globally. Strong team of professionals experienced and qualified pool of human resources drawn from top financial service & broking houses form the backbone of our sizeable infrastructure. Highly technology oriented, the companys scalability of operations and the highest level of service standards has ensured rapid growth in the number of locations & the clients serviced in a very short span of time. Networth Stock Broking Ltdians, as each one of our 400 plus and ever

20 growing team members are addressed, is a dedicated team motivated to continuously progress by imbibing the best of global practices, Indian sing such practices, and to constantly evolve a comprehensive suite of products & services trying to meet every financial / investment need of the clients. NSE CM and Derivatives Segment SEBI Regn. 1NB230638639 & 1NF230638639 BSE CM and Derivatives Segment SEBI Regn. 1NB010638634 & PMS SEBI Regn. 1NP000001371 CDSL DP SEBI Regn. IN-DP-CDSL 251-2004 Commodities Trading: MCX -10585 and NCDEX - 00011 (through Networth Stock Broking Ltd Stock.Com Ltd.) Hyderabad (Somajiguda) 401, Dega Towers, 4th Floor, Raj Bhavan Road, Somajiguda Hyderabad - 500 082 Andhra Pradesh. Phone Nos.: 040-55560708, 55562256, and 30994985 Mumbai (MF Division) 49, Au Chambers, 4th Floor, Tamarind Lane, Fort Mumbai - 400 001 Maharashtra. Phone Nos.: 022- 22650253

21 Mumbai (Registered Office) 5, Church gate House, 2nd Floor, 32/ 34 Veer Narirnan Road, Fort Mumbai - 400 001 Maharashtra. Phone No. 022-22850428 The Networth Stock Broking Ltd connectivity with 107 branches and growing

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Products and services portfolio

Retail and institutional broking Research for institutional and retail clients Distribution of financial products PMS Corporate finance Net trading Depository services Commodities Broking


Infrastructure A corporate office and 3 divisional offices in CBD of Mumbai which houses state-of-the-art dealing room, research wing & management and back offices. All of 107 branches and franchisees are fully wired and connected to hub at Corporate office at Mumbai. Add on branches also will be wired and connected to central hub Web enabled connectivity and software in place for net trading. 60 operative IDs for dealing room

24 In house technology back up team to ensure un-interrupted connectivity.

1993: Networth Stock Broking Ltd Started with 300 Sq.ft. of office space & 10 employees 2006: Spread over 42 cities (around 70,000 Sq.ft of office space) with over 107 branches & employee strength over 400 Market & research Focusing on your needs
Every investor has different needs, different preferences, and different viewpoints. Whether investor prefers to make own investment decisions or desire more in-depth assistance, company committed to providing the advice and research to help you succeed.

Networth Stock Broking Ltd providing following services to their customers, Daily Morning Notes Market Musing Company Reports Theme Based Reports Weekly Notes IPOs Sector Reports Stock Stance Pre-quarter/Updates Bullion Tracker F&O Tracker


QUALITY POLICY To achieve and retain leadership, Networth Stock Broking Ltd shall aim for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. In the process, Networth Stock Broking Ltd will strive to exceed Customers expectations. As per the quality policy, Networth Stock Broking Ltd will:

Build in house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services. Establish a partner relationship with in its investor service agents and vendors that will help in keeping up its commitments to the customers. Provide high quality of work life for all its employees and equip them with adequate knowledge & skill so as to respond to customers needs. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics. Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients.

26 Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of it. Strive to keep all stake-holders (share holders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.

Key Personnel:

Mr. S P Jain CMD Networth Stock Broking Ltd Stock Broking Ltd. A qualified Chartered Accountant with over 15 years of experience the capital markets. in

Mr. Deepak Mehta Head PMS Over 12 years of experience in the capital markets and has the prior work experience of serving on the Equity desk of Reliance.

Mr.Viral Doshi Equity Strategist A qualified Chartered Accountant with experience of over a decade in technical analysis with respect to equity markets.

Mr. Vinesh Jain Asst. Fund Manager A qualified MBA graduate specializing in finance and over two years of experience in the capital markets.

Research and the Back office.


we have sought to provide premium financial services and information, so that the power of investment is vested with the client. We equip those who invest with us to make intelligent investment decisions, providing them with the flexibility to either tap into our extensive knowledge and expertise, or make their own decisions. We made our debut into the financial world by servicing Institutional clients, and proved its high scalability of operations by growing exponentially over a short period of time. Now, powered by a top-notch research team and a network of experts, we provide an array of financial products & services spanning entire India.Our strong support, technology-driven operations and business units of research, distribution, advisory, wide array of products & services coalesce to provide you with a one-stop solution to cater to all your investment needs. Our single minded objective is to help you grow your Networth Stock Broking Ltd. OUR GROUP COMPANIES Networth Stock Broking Ltd Stock Broking Ltd. [NSBL] NSBL is a member of the National Stock Exchange of India Ltd (NSE) and the Bombay Stock Exchange Ltd (BSE) in the Capital Market and Derivatives (Futures & Options) segment. NSBL has also acquired membership of the currency derivatives segment with NSE, BSE & MCX-SX. It is Depository participants with Central Depository Services India (CDSL) and National Securities Depository (India) Limited (NSDL). With a client base of over 1L loyal

28 customers, NSBL is spread across the country though its over 230+ branches. NSBL is listed on the BSE since 1994.

Networth Stock Broking Ltd Wealth Solutions Ltd. [NWSL] NWSL is into the business of delivery of Financial Planning & Advice. Its vision is to Advice & Execute money related solutions to/for our customers in the most Convenient & Consolidated manner, while making sure that their experience with us is always pleasant & memorable resulting in positive advocacy. The product & Services include Financial Planning, Life Insurance, On-line Trading Account, Mutual Funds, Debentures/Bonds, General Insurance, Loans and Depository Services.





NSCL is the commodities arm of NSBL. It is a member at the Multi Commodity Exchange of India (MCX) and National Commodity & Derivatives Exchange (NCDEX) and is backed by solid research & analytics in Commodities.





NSL is an ISO 9001:2000 Certified Company. It is into Application Development & maintenance. Building & Implementation of packaged software across various functions within the Financial Services Industry is at its core. It also provides data center services which include hosting of websites, applications & related services.

29 It combines a unique delivery model infused by a distinct culture of customer satisfaction.

Ravisha Financial Services Pvt. Ltd. [RFSL] RFSL is a RBI registered NBFC engaged in financing, primarily it provides loan against securities

Principles & Values At Net worth Stock Broking Ltd. success is built on teamwork, partnership and the diversity of the people. At the heart of our values lie diversity and inclusion. They are a fundamental part of our culture, and constitute a long-term priority in our aim to become the world's best international bank. Values

Responsive Trustworthy Creative Courageous


Participation:- Focusing on attractive, growing markets where we can leverage our relationships and expertise Competitive positioning:- Combining global capability, deep local knowledge and creativity to outperform our competitors


Management Discipline:- Continuously improving the way we work, balancing the pursuit of growth with firm control of costs and risks Commitment to stakeholders

Customers:- Passionate about our customers' success, delighting them with the quality of our service Our People:- Helping our people to grow, enabling individuals to make a difference and teams to win Communities:- Trusted and caring, dedicated to making a difference Investors:A distinctive investment delivering outstanding

performance and superior returns

Regulators: - Exemplary governance and ethics wherever we are.




The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and most advanced exchange with 1016 companies listed and 726 trading members. Capital market reforms in India and the launch of the Securities and Exchange Board of India (SEBI) accelerated the incorporation of the second Indian stock exchange called the National Stock Exchange (NSE) in 1992. After a few years of operations, the NSE has become the largest stock exchange in India. Three segments of the NSE trading platform were established one after another. The Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options segment began operating in 2000. Today the NSE takes the 14th position in the top 40 futures exchanges in the world. In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard & Poor's.

32 In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as 'Best IT Usage Award' by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999). The NSE is owned by the group of leading financial institutions such as Indian Bank or Life Insurance Corporation of India. However, in the totally demutualised Exchange, the ownership as well as the management does not have a right to trade on the Exchange. Only qualified traders can be involved in the securities trading. The NSE is one of the few exchanges in the world trading all types of securities on a single platform, which is divided into three segments: Wholesale Debt Market (WDM), Capital Market (CM), and Futures & Options (F&O) Market. Each segment has experienced a significant growth throughout a few years of their launch. While the WDM segment has accumulated the annual growth of over 36% since its opening in 1994, the CM segment has increased by even 61% during the same period. The National Stock Exchange of India has stringent requirements and criteria for the companies listed on the Exchange. Minimum capital requirements, project appraisal, and company's track record are just a few of the criteria. In addition, listed companies pay variable listing fees based on their corporate capital size.

33 The National Stock Exchange of India Ltd. provides its clients with a single, fully electronic trading platform that is operated through a VSAT network. Unlike most world exchanges, the NSE uses the satellite communication system that connects traders from 345 Indian cities. The advanced technologies enable up to 6 million trades to be operated daily on the NSE trading platform. NSE Nifty: The S&P CNX Nifty (nicknamed Nifty 50 or simply Nifty), is the leading index for large companies on the National Stock Exchange of India. S&P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. Nifty was developed by the economists Ajay Shah and Susan Thomas, then at IGIDR. Later on, it came to be owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused upon the index as a core product. IISL have a consulting and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services. CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices, to reflect the identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N' stands for NSE and X stands for Exchange or Index. The

34 S&P prefix belongs to the US-based Standard & Poor's Financial Information Services.

NSE other indices: S&P CNX Nifty CNX Nifty Junior CNX 100 S&P CNX 500 CNX Midcap S&P CNX Defty CNX Midcap 200



The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalal Street, Mumbai, India. Bombay Stock Exchange was established in 1875. There are around 5,600 Indian companies listed with the stock exchange, and has a significant trading volume. As of October2006, the market capitalization of the BSE was about Rs. 33.4 trillion (US $ 730 billion). The BSE SENSEX (SENSitive indEX), also called the BSE 30, is a widely used market index in India and Asia. As of 2005, it is among the 5 biggest stock exchanges in the world in terms of transactions volume. History: An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, 1875, was formally organized as the Bombay Stock Exchange (BSE).In January 1899, the stock exchange moved

36 into the Brokers Hall after it was inaugurated by James M MacLean. After the First World War, the BSE was shifted to an old building near the Town Hall. In 1956, the Government of India recognized the Bombay Stock Exchange as the first stock exchange in the country under the Securities Contracts (Regulation) Act.1995, when it was replaced by an electronic (eTrading) system named BOLT, or the BSE Online Trading system. In 2005, the status of the exchange changed from an Association of Persons (AoP) to a full fledged corporation under the BSE (Corporatization and Demutualization) Scheme, 2005 (and its name was changed to The Bombay Stock Exchange Limited). BSE Sensex: The BSE SENSEX (also known as the BSE 30) is a value-weighted index composed of 30 scrips, with the base April 1979 = 100. The set of companies which make up the index has been changed only a few times in the last 20 years. These companies account for around one-fifth of the market capitalization of the BSE. SENSEX, first compiled in 1986 was calculated on a "Market CapitalizationWeighted" methodology of 30 component stocks representing a sample of large, well-established and financially sound companies. The base year of SENSEX is 1978-79. The index is widely reported in both domestic and international markets through print as well as electronic media. SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. From September 2003, the SENSEX is calculated on a free-float

37 market capitalization methodology. The "free-float Market CapitalizationWeighted" methodology is a widely followed index construction methodology on which majority of global equity benchmarks are based. The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. More recently, the bourses in India witnessed a similar frenzy in the 'TMT' sectors. The SENSEX captured all these happenings in the most judicial manner. One can identify the booms and bust of the Indian equity market through SENSEX. The values of all BSE indices are updated every 15 seconds during the market hours and displayed through the BOLT system, BSE website and news wire agencies. SENSEX calculation: SENSEX is calculated using a "Market Capitalization-Weighted" methodology. As per this methodology, the level of index at any point of time reflects the total market value of 30 component stocks relative to a base period. (The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company). An index of a set of combined variables (such as price and number of shares) is commonly referred as a 'Composite Index' by statisticians. A single indexed number is used to represent the results of this calculation in order to make the value easier to work with and

38 track over time. It is much easier to graph a chart based on indexed values than one based on actual values. The base period of SENSEX is 1978-79. The actual total market value of the stocks in the Index during the base period has been set equal to an indexed value of 100. This is often indicated by the notation 1978-79=100. The formula used to calculate the Index is fairly straightforward. However, the calculation of the adjustments to the Index (commonly called Index maintenance) is more complex. The calculation of SENSEX involves dividing the total market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index maintenance adjustments. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX every 15 seconds and disseminated in real time.During market hours, prices of the index scrips, at which trades are executed, are automatically used by the trading computer to calculate the SENSEX every 15 seconds and continuously updated on all trading workstations connected to the BSE trading computer in real time. BSE - other Indices: Apart from BSE SENSEX, which is the most popular stock index in India, BSE uses other stock indices as well: BSE 500





In financial markets, stock is the capital raised by a corporation through the issuance and distribution of shares. A person or organization which holds shares of stocks is called a shareholder. The aggregate value of a corporation's issued shares is its market capitalization. When one buys a share of a company he becomes a shareholder in that company. Shares are also known as Equities. Equities have the potential to increase in value over time. It also provides the portfolio with the growth necessary to reach the long-term investment goals. Research studies have proved that the equities have outperformed than most other forms of investments in the long term. Equities are considered the most challenging and the rewarding, when compared to other investment options. Research studies have proved that investments in some shares with a longer tenure of investment have yielded far superior returns than any other investment. However, this does not mean all equity investments would guarantee similar high returns. Equities are high-risk investments. One needs to study them carefully before investing. Since 1990 till date, Indian stock market has returned about 17% to investors on an average in terms of increase in share prices or capital appreciation annually. Besides that on average stocks have paid 1.5 % dividend annually. Dividend is a percentage of the face value of a share that a company returns to its shareholders from its annual profits. Compared to most other forms of investments, investing in equity shares offers the highest rate of return, if invested over a longer duration. The first company to issue shares of stock was the Dutch East India Company, in 1602. The innovation of joint ownership made a great deal of Europe's economic growth possible following the Middle Ages. The technique of pooling capital to finance the building of ships, for example, made the Netherlands a maritime superpower. Before

42 adoption of the joint-stock corporation, an expensive venture such as the building of a

merchant ship could only be undertaken by governments or by very wealthy individuals or families. Equity markets, the world over, grew at a great speed in the decade of the nineties. After the bear markets of the late eighties, the world markets saw one of the largest ever bull markets of more than ten years. The opening up of Indian economy in the 1990's led to a series of financial sector reforms, prominent being the capital market reforms. These reforms have led to the development of the Indian equity markets to t standards of the major global equity markets. All this started with the abolition of Controller of Capital Issues and subsequent free pricing of shares. The introduction of dematerialization of shares, leading to faster and cheaper transactions and introduction of derivative products and compulsory rolling settlement has followed subsequently. Despite a series of stock market scams and crises beginning from 1992 Harshad Mehta's scam to the Ketan Parekh's 2001 scam, the Indian equity markets have transformed themselves from a broker dominated market to a mass market. The introduction of online trading has given a muchneeded impetus to the Indian equity markets. However, over the years, reforms in the equity markets have brought the country on par with many developed markets on several counts. Today, India boasts of a variety of products, including stock futures, an instrument launched only by select markets. The introduction of rolling settlement is the latest step in the direction of overhauling the stock market. The equity market of the country will most likely be comparable with the world's most advanced secondary markets with regard to international best practices. The market moved to compulsory rolling settlement and now

43 all settlements are executed on T+2 basis and market is gearing up for moving to T+1 settlement in 2004 while the Straight Through Processing (STP) is in place from December 2002.

The importance of equity market is increasing. Rightly, realizing the advantages of resource allocation through market, Government of India and Reserve Bank of India have been pushing reforms in equity markets. Series of steps are being taken to remove hurdles, increase market efficiency and to make it attractive for the retail investors to take part in the equity market. It may not be an exaggeration to say that the Indian markets are resourceful to put themselves on par with the markets of the developed countries. The Indian markets have assimilated in a relatively lesser time, many a developments that took long time in the developed markets.


The Government of India has been trying to improve market efficiency, enhance transparency and bring the Indian Equity Market up to international standards. Many reform measures have been initiated in the 90s. The principal ones are the formation of Securities Exchange Board of India (SEBI), repeal of the Capital Issues (Control) Act, 1947, introduction of screen-based trading, shortening of

44 trading cycle, demutualization of stock exchanges, establishment of depositories disappearance of physical share certificates and better risk management systems in stock exchanges. The formation of SEBI was the first attempt towards integrated regulation of the securities market. SEBI regulates all market intermediaries and has the powers to impose monetary penalties for misconduct of any intermediary. One of the major stumbling blocks in fair pricing of capital issues has been the Capital Issues (Control) Act, 1947. The issuers were denied the opportunity to economically raise money from the capital market. This is now a matter of the past thanks to the repeal of the Act itself. SEBI has also issued Disclosure and Investor Protection (DIP) guidelines to ensure fair prices the investors, though however, many issuers in the 90s could unfairly price their capital issues at the cost of the poor common investors. The introduction of Screen Based Trading Systems (SBTS) by NSE is a major development in the capital market. This made the markets more efficient. The geographical barriers to trade were dismantled resulting in increased trading volumes. This was possible due to the great advancements in the area of information technology. SBTS electronically matches orders cutting down time, cost and errors, and minimizing the chances of fraud. Very long settlement cycle was another major hindrance in effecting deliveries in the equity market. Often the securities were delivered after 30 days or more due to weekly/fortnightly settlements and carry forward transactions. Sebi has enforced the discipline to compulsorily settle trades in T+3 days since April 2002. This is slated to reduce to T+2 days from April 2003. All scrips are now under rolling settlement since December 2001. The Equity Market is incomplete without products to manage risks in portfolio values. At long last, derivatives trading appeared on Indian exchanges in June 2000. While the product range in derivatives is still limited (futures and options on stocks and stock indices), it is certainly a major step forward in broadening the

45 financial markets. NSE was established as a demutualized structure separating the roles of ownership, management and trading to eliminate any conflict of interest among the stakeholders to improve market efficiency and to focus on investor interest. Another notable development in the Indian equity market has been the introduction of depositories to dematerialize the share certificates. This avoids physical movement of certificates, bad deliveries and quicker transfer of ownership of shares. Presently all actively traded shares are held, traded and settled in demat form. The setting up of National Securities Clearing Corporation Ltd., (NSCCL) in April 1996 has been a major development in managing counterparty risks in the equity market. This has helped in increasing trading volumes

since traders are now more confident about default-free settlements. While most of the above measures have helped in reinforcing confidence in the Indian equity market by providing more transparent and efficient buying, selling and transfer of shares. International Scenario: Global integration, the widening and intensifying of links, between high-income and developing countries, have accelerated over the years. The correlation of global markets over a period of time is presented in (Table 1- 2). Over the past few years, the financial markets have become increasingly global. The descriptive statistics of the major markets in terms of daily returns is presented in (Table 1-3), which shows that the markets are increasingly getting interlinked. Cross border capital flows have shifted from public transfers to primarily private

46 sector flows. Indian market has gained from foreign inflows through investment of Foreign Institutional Investors (FIIs) route. During 2006-07, cumulative net investments by FIIs amounted to US $ 51,967 million. Following the implementation of reforms in the securities industry in the past years, Indian stock markets have stood out in the world ranking. As may be seen from (Table 1-4), India posted a turnover ratio of 93.1 %, which was quite comparable to the other developed markets. As per Standard and Poor's Fact Book 2007, India ranked 15th in terms of market capitalization (18th in 2004 and 17th in 2005) and 18th in terms of total value traded in stock exchanges and 21st in terms of turnover ratio as of December 2006. A comparative study of concentration of market indices and index stocks in different world markets is presented in the (Table 1-5). It is seen that the index stocks share of total market capitalization in India is 81.6% whereas US index accounted for 89.5%. The ten largest index stocks share of total market capitalization is 32.2% in India and 13.4% in case of US. The stock markets worldwide have grown in size as well as depth over the years. As can be observed from (Table 1-6), the turnover of all markets taken together have grown from

47 US $ 39.61 trillion in 2004 to US $ 67.91 trillion in 2006. It is significant to note that US alone accounted for about 48.99 % of worldwide turnover in 2006. Despite having a large number of companies listed on its exchanges, India accounted for a meager 0.94% in total world turnover in 2006. The market capitalization of all listed companies taken together on all markets stood at US $ 54.19 trillion in 2006 (US $ 43.68 trillion in 2005). The share of US in worldwide market capitalization decreased from 38.85 % as at end2004 to 35.84 % as at end 2006, while Indian listed companies accounted for 1.51% of total market capitalization in 2006. According to the 'World Development Indicators 2007, World Bank' there has been an increase in market capitalization as percentage of Gross Domestic Product (GDP) in some of the major country groups. The increase, however, has not been uniform across countries. The market capitalization as a percentage of GDP was the highest at 112.9% for the high income countries as at end 2005 and lowest for middle income countries at 49.5%. Market capitalization as percentage of GDP in India stood at 68.6 % as at end 2005. The turnover ratio, which is a measure of liquidity, was 122.2 % for highincome

48 countries and 96.6 % for low-income countries. The total number of listed companies stood at 28,733 for high-income countries, 11,141 for middle-income countries and 6,177 for low-income countries as at end 2006.

Equity is: 1. Stock or any other security representing an ownership interest. 2. On the balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the retained earnings (or losses), also referred to as "shareholder's equity". 3. In the context of margin trading, the value of securities in a margin account minus what has been borrowed from the brokerage. Equity is a term whose meaning depends very much on the context. In general, one can think of equity as ownership in any asset after all debts associated with that asset are paid off. For example, a car or house with no outstanding debt is considered the owner's equity since he or she can readily sell the items for cash. Stocks are equity Because they represent ownership of a company, whereas bonds are classified as debt because they represent an obligation to pay and not ownership of assets. The ability of equities to deliver over longer time frames and even outperform other investment avenues like gold, property and bonds is an often chronicled fact. However, over shorter time frames, equities also hold the potential to be a very risky asset class and expose the portfolio to high levels of volatility. This is the primary reason why any fund manager worth his salt always recommends a sufficiently long (at least 3 years) time frame for an equity-oriented investment. Similarly financial planners

49 advocate pruning of the equity holdings with advancement in the investors age, when the investor is typically closer to retirement (shorter investment horizon) and has a lower risk appetite as well.

1. Invest for Real Returns 2. Keep an Open Mind 3. Never Follow the Crowd 4. Everything Changes 5. Avoid the Popular 6. Learn from your Mistakes 7. Buy during Times of Pessimism 8. Hunt for Value and Bargains 9. Search Worldwide 10. No-one Knows Everything Equity Markets in India An Overview If you buy the same securities as other people, you will have the same results as other people. It is impossible to produce a superior performance unless you do something different from the majority. To buy when others are despondently selling and to sell when others are greedily buying requires the greatest fortitude and pays the greatest reward. Bear markets have always been temporary. And so have bull markets. Share prices usually turn upward from one to twelve months before the bottom of the business cycle and vice versa. If a particular industry or type of security becomes popular with investors, that popularity will always prove temporary and, when lost, may not return for many years. The investor should bear in mind that while he makes investment decision, he should have idea of the companys break-even point and companys position in

50 the stock exchange. For this EQUITY RESEARCH is done. Equity Research does the research of companys income and growth. In the process, it uses the various sources of financial information available in the country and accordingly advises in which company an investor should invest.

The investor while buying stock has the primary purpose of gain. If he invests for a short period of time it is speculative but when he holds it for a fairly long period of time the anticipation is that he would receive some return on his investment. Fundamental analysis is a method of finding out the future price of a stock, which an investor wishes to buy. The method for forecasting the future behavior of investments and the rate of return on them is clearly through an analyze of the broad economic forces in which they operate. The kind of industry to which they belong and the analysis of the company's internal working through statements like income statement, balance sheet and statement of changes of income.

Investors are concerned with those forces in the economy, which affect the performance of organizations in which they wish to participate, through purchase of stock. A study of the economic forces would give an idea about future corporate earnings and the payment of dividends and interest to investors. Some of the broad forces within which the factors of investment operate are: 1. POPULATION: Population gives an idea of the kind of labor force in a country. In some countries the population growth has slowed down whereas in India and some other third world countries there has been a population explosion. Population explosion will give demand for more industries like hotels, residences, service industries like health, consumer demand like refrigerators and cars. Likewise, investors should

51 prefer to invest in industries, which have a large amount of labor force because in the future such industries will bring better rates of return.

2. RESEARCH AND TECHNOLOGICAL DEVELOPMENTS: The economic forces relating to investments would be depending on the amount of resources spent by the government on the particular technological development affecting the future. Broadly the investor should invest in those industries which are getting a large amount of share in the funds of the development of the country. For example, in India in the present context automobile industries and spaces technology are receiving a greater attention. These may be areas, which the investor may consider for investments. 3. CAPITAL FORMATION: Another consideration of the investor should be the kind of investment that a company makes in capital goods and the capital it invests in modernization and replacement of assets. A particular industry or a particular company which an investor would like to invest can also be viewed at with the help of the economic indicators such as the place, value and property position of the industry, group to which it 110ngs and the year-to-year returns through corporate profits. 4. NATURAL RESOURCES AND RAW MATERIALS: The natural resources are to a large extent responsible for a country's economic development and overall improvement in the condition of corporate growth. In India, technological discoveries recycling of materials, nuclear and solar energy and new synthetics should give the investor an opportunity to invest in untapped or recently tapped resources which would also produce higher investment opportunity.

The industry has been defined as homogeneous groups of people doing a similar kind of activity or similar work. In India, the broad classification of industry is

52 made according to stock exchange list, which is published. This gives a distinct classification to industry to industry in different forms such as: (A) Engineering, (B) Banking and Insurance, (C) Textiles, (D) Cement, (E) Steel Mills and Alloys, (F) Chemicals and Pharmaceuticals, (G) Retail, (H) Sugar, (I) Information Technology, (J) Automobiles and Ancillary, (K) Telecommunications, (L) FMCG, (M)Miscellaneous. Industry should also be evaluated or analyzed through its life cycle. Industry life cycle may also be studied through the industrial life cycle state. There are generally three stages of an industry. These stages are pioneering stage, expansion stage and stagnation stage. 1. THE PIONEERING STAGE: The industrial life cycle has a pioneering stage when the new inventions and technological developments take place. During this time the investor will notice great increase in the activity of the firm. Production will rise and in relation to production, there will be a great demand for the product. At this stage, the profits are also very high as the technology is new. Taking a look at the profit many new firms enter into the same field and ill; market becomes competitive. The market competitive pressures keep on increasing with the en" of new-firms and the prices keep on declining and then ultimately profits fall. At this stage all firms compete with each other and only a few efficient firms are left to run the business and most of the other firms are wiped out in the pioneering stage itself.


2. THE EXPANSION STAGE: The efficient firms, which have been in the market now, find that it is time to stabilize them. Although competition is there, the, number of firms have gone down during ill pioneering stage itself and there are a large number of firms left to run the business in the industry. This is the time when each one has to show competitive strength and superiority. The investor will find that this is the best time to make an investment. At the pioneering stage it was difficult to find out which of the firm to invest in, but having waited for the stability period there has been a dynamic selection proces and a few of the large number of firms are left in the industry. This is the period of security and safety and this is also called period of maturity for the firm. This stage lasts from five years to fifty years of a firm depending on the potential and productivity and policy to meet the change of competition and rapid change in buyer and customer habit. After this stage develops the stage of stagnation or obsolescence. 3. THE STAGNATION STAGE: During the stagnation stage the investor will find that although there is increase in sales of an organization, this is not in relation to the profits earned by the company. Profits are also there but the growth in the firm is lower than it was in the expansion stage. The industry finds that it is at a loss of power and cannot expand. During most of the firms who have realized the competitive nature of the industry and the arrival of the stagnation stage, begin to change their course of action and start on a new venture should make a continuous evaluation of their investments. In firms in which they have received profits for large number of years and have reached stagnation they can plan to their investments and find better avenues in those firms where the expansion stage has set in.

Company analysis is a study of the variables that influence the future of a firm both qualitatively and quantitatively. It is a method of assessing the competitive position of a firm earning and profitability, the efficiency with which it operates its financial position and its ful1l with respect to the earning of its shareholders.

54 The fundamental nature of this analysis is that each share of a company has an intrinsic value, which is dependent on the company's financial performance, quality of management and record of its earnings and dividend. They believe that the market price of share in a period of time will move towards its intrinsic value. If the market price of a share is lower than the intrinsic value, as evaluated by the fundamental analysis, then the share is supposed to be undervalued and it should be purchased but if the current market price shows that it is more than intrinsic value then according to the theory the share should be sold. This basic approach is analyzed through the financial statements of an organization. The basic financial statements, which are required as tools of the fundamental analyst, are the income statement, the balance sheet, and the statement of changes in financial position. These statements are useful for investors, creditors as well as internal management of a firm and on the basis these statements the future course of action may be taken by the investors of the firm. While evaluating a company, its statement must be carefully judged to find out that they are: (a) Correct, (b) Complete, (c) Consistent and (d) Comparable

Technical analysis is simply the study of prices as reflected on price charts. Technical analysis assumes that current prices should represent all known information about the markets. Prices not only reflect intrinsic facts, they also represent human emotion and the pervasive mass psychology and mood of the moment. Prices are, in the end, a function of supply and demand. However, on a moment to moment basis, human emotionsfear, greed, panic, hysteria, elation, etc. also dramatically effect prices. Markets may move based upon peoples

55 expectations, not necessarily facts. A market "technician" attempts to disregard the emotional component of trading by making his decisions based upon chart formations, assuming that prices reflect both facts and emotion. Analysts use their technical research to decide whether the current market is a BULL MARKET or a BEAR MARKET.

A stock chart is a simple two-axis (X-Y) plotted graph of price and time. Each individual equity, market and index listed on a public exchange has a chart that illustrates this movement of price over time. Individual data plots for charts can be made using the CLOSING price for each day. The plots are connected together in a single line, creating the graph. Also, a combination of the OPENING, CLOSING, HIGH and/or LOW prices for that market session can be used for the data plots. This second type of data is called a PRICE BAR. Individual price bars are then overlaid onto the graph, creating a dense visual display of stock movement. Stock charts can be drawn in two different ways. An ARITHMETIC chart has equal vertical distances between each unit of price. A LOGARITHMIC chart is a percentage growth chart.

The stock chart is used to identify the current trend. A trend reflects the average rate of change in a stock's price over time. Trends exist in all time frames and all markets. Trends can be classified in three ways: UP, DOWN or RANGEBOUND. In an uptrend, a stock Equity Markets In India An Overview 21 rallies often with intermediate periods of consolidation or movement against the trend. In doing so, it draws a series of higher highs and higher lows on the stock chart. In an Uptrend; there will be a POSITIVE rate of price change over time. In a downtrend, a stock declines often with intermediate periods of consolidation or movement against the trend. In doing so, it draws a series of lower highs and lower lows on the stock chart. In a downtrend,

56 there will be a NEGATIVE rate of price change over time. Range bound price swings back and forth for long periods between easily seen upper and lower limits. There is no apparent direction to the price movement on the stock chart and there will be LITTLE or NO rate of price change. Trends tend to persist over time. A stock in an uptrend will continue to rise until some change in value or a condition occurs. Declining stocks will continue to fall until some change in value or conditions occur. Chart readers try to locate TOPS and BOTTOMS, which are those points where a rally or a decline ends. Taking a position near a top or a bottom can be very profitable. Trends can be measured using TRENDLINES. Very often a straight line can be drawn UNDER three or more pullbacks from rallies or OVER pullbacks from declines. When price bars then return to that trend line, they tend to find SUPPORT or RESISTANCE and bounce off the line in the opposite direction.

Volume measures the participation of the crowd. Stock charts display volume through individual HISTOGRAMS below the price pane. Often these will show green bars for up days and red Equity Markets In India An Overview 22 bars for down days. Investors and traders can measure buying and selling interest by watching how many up or down days in a row occur and how their volume compares with days in which price moves in the opposite direction. Stocks that are bought with greater interest than sold are said to be under ACCUMULATION. Stocks that are sold with great interest than bought are said to be under DISTRIBUTION. Accumulation and distribution often LEAD price movement. In other words, stocks under accumulation often will rise some time after the buying begins. Alternatively, stocks under distribution will often fall some time after selling begins. It takes volume for a stock to rise but it can fall of its own weight. Rallies require the enthusiastic participation of the crowd. When a rally runs out of new participants, a stock can easily fall. Investors and traders use indicators such as ON BALANCE

57 VOLUME to see whether participation is lagging (behind) or leading (ahead) the price action. Stocks trade daily with an average volume that determines their LIQUIDITY. Liquid stocks are very easy for traders to buy and sell. Liquid stocks require very high SPREADS (transaction costs) to buy or sell and often cannot be eliminated quickly from a portfolio. Stock chart analysis does not work well on illiquid stocks.


How can one organize the endless stream of stock chart data into a logical format? Charts allow investors and traders to look at past and present price action in order to make reasonable predictions and wise choices. It is a highly visual medium. This one fact separates it from the colder world of value-based analysis. The stock chart Equity Markets In India An Overview 23 activates both left-brain and right-brain functions of logic and creativity. So it's no surprise that over the last century two forms of analysis have developed that focus along these lines of critical examination. The oldest form of interpreting charts is PATTERN ANALYSIS. This method gained popularity through both the writings of Charles Dow and Technical Analysis of Stock Trends, a classic book written on the subject just after World War II. The newer form of interpretation is INDICATOR ANALYSIS, a math-oriented examination in which the basic elements of price and volume are run through a series of calculations in order to predict where price will go next. Pattern analysis gains its power from the tendency of charts to repeat the same bar formations over and over again. These patterns have been categorized over the years as having a bullish or bearish bias. Some well-known ones include HEAD and SHOULDERS, TRIANGLES, RECTANGLES, DOUBLE TOPS, DOUBLE BOTTOMS and FLAGS. Also, chart landscape features such as GAPS and TRENDLINES are said to have great significance on the future course of price action. Indicator analysis uses math calculations to measure the relationship of

58 current price to past price action. Almost all indicators can be categorized as TREND-FOLLOWING or OSCILLATORS. Popular trend-following indicators include MOVING AVERAGES, ON BALANCE VOLUME and MACD. Common oscillators include STOCHASTICS, RSI and RATE OF CHANGE. Trend-following indicators react much more slowly than oscillators. They look deeply into the rear view mirror to locate the future. Oscillators react very quickly to short-term changes in price, flipping back and forth between OVERBOUGHT and OVERSOLD levels. Equity Markets In India An Overview 24 Both patterns and indicators measure market psychology. The core of investors and traders that make up the market each day tend to act with a herd mentality as price rises and falls. This "crowd" tends to develop known characteristics that repeat themselves over and over again. Chart interpretation using these two important analysis tools uncovers growing stress within the crowd that should eventually translate into price change.


There are two main reasons why individuals transact in the secondary market: 1. INFORMATION MOTIVATED REASONS: Information motivated investors believe that they have superior information about a particular security than other market participants. This information leads them to believe that the security is not being correctly priced by the market. If the information is good, this suggests that the security is currently under-priced, and investors with access to such information will want to buy the security. On the other hand, if the information is bad, the security will be currently overpriced and such investors will want to sell their holdings of the security. 2. LIQUIDITY MOTIVATED REASONS: Liquidity motivated investors, on the other hand, transact in the secondary market because they are currently in a position of either excess or insufficient liquidity. Investors with surplus cash holdings (e.g., as a result of an inheritance) will buy securities, where as investors with insufficient cash (e.g., to purchase a Car) will sell securities.



1. To facilitate liquidity and marketability of the outstanding equity and debt instruments. 2. To contribute to economic growth through allocation of funds to the most efficient Channel through the process of disinvestments to reinvestment. 3. To provide instant valuation of securities caused by changes in the internal environment (that is, company-wide and industry wide factors). Such valuation facilitates the measurement of the cost of capital and the rate of return of the economic entities at the micro level. 4. To ensure a measure of safety and fair dealing to protect investors interest. To induce companies to improve performance since the market price at the stock exchanges reflects the performance and this market price is readily available to investors.

INTROUCTION EQUITY Meaning: Equity is a term whose meaning depends very much on the context. In general you can think of equity as ownership in any asset after all debts associated with that are paid off. Stocks are equity because they represent ownership of a company, whereas bonds are classified as debt because they represent on obligations to pay and not ownership of assets.

60 In a brokerage account the market value of security amount borrowed equity is particularly important for margin accounts for which minimum standards must met. SHARE Meaning; Any business has a lot of assets: The machinery, buildings, furniture, stock-in-trade, cash, etc. It will also have liabilities. This is what the company owes other people. Banks loans, money owed to people from whom things have been bought on credit, are examples of liabilities. Take away the liabilities from the total assets, and you are left with the capital. Capital = Assets - Liabilities.

Equity shares
By investing in shares, investors basically buy the ownership right to the company. When the company makes profits, shareholders receive their share of the profits in the form of dividends. In addition, when company performs well and the future expectation from the company is very high, the price of the companys shares goes up in the market. This allows shareholders to sell shares at a profit, leading to capital gains. Investors can invest in shares either through primary market offerings or in the secondary market. The primary market has shown abnormal returns to investors who subscribed for the public issue and were allotted shares. CAPTIAL MARKET INTRODUCTION: Companies raise long term funds from the capital markets. Finance managers should, therefore, know the ways in which securities are traded and pried in the capital markets. They should also know the procedures to be followed

61 in issuing securities. Securities will be fairly priced in the capital markets if they are efficient. CAPITAL MARKET EFFICENCY : Capital markets facilitate the buying and selling of securities such as shares and bonds. They perform two valuable functions: liquidity and pricing securities. Liquidity means the convenience and speed of transforming assets into cash, or transferring assets from one person to another without any loss of value. Cash in the most liquid asset as it can be readily converted into any other asset, or transferred to another person without any decline in value. Capital markets make securities liquid. They facilitate the buying and selling of securities by a large number of investors continuously and instantaneously without incurring significant cost. They help to reduce, if not eliminate, transaction costs. For ensuring the liquidity, capital markets do require certain investors who are always ready to buy or sell securities. These market makers enhance liquidity and reduce transaction cost. In the capital markets hundred of investors make several deals a day. These deals are made known to all in the capital markets. Thus, a large number of buyers and sellers interact in the capital markets. The demand and supply forces help in determining the prices. Since all information is publicly available and since investor is large enough to influence the security prices, the capital markets provide a measure of fair price of securities. If capital markets are efficient than the current share price of a company is fair. There is no question of the share price being under or over-valued. The phenomenon of under or over-valuation of share is possible only in an inefficient capital market.




The capital market in India has exhibited some special features in the recent years which A F are noting here. MI 1. Greater reliance on debt instruments as against equity and in particular, borrowing from financial institutions. 2. Issue of debentures, particularly convertible debentures with automatic or compulsory conversion into equity without the normal option given to 3.

S O R s

I vs e t n e tmn Bn e s a kr

MR A investors. Floatation of mega issues for the purpose of take over amalgamation, etc. R E IN E M D T
and avoidance of borrowing from financial institutions for the fear of their

R T & A e ts gn

63 discipline and conversion clause by the bigger companies, which has now become optional. 4. Avoidance of underwriting by some companies to reduce the costs. 5. Fast growth of mutual funds and subsidiaries of banks for financial services leading to larger mobilization of saving from the capital market. There are a number of other features of the capital market which are relatively unhealthier and are brought out in the authors study on ownership and Distribution pattern of shareholdings of companies. Published in the stock exchanges review of March 1930. The share of small shareholders up to Rs.10, 000 has declined proportionately as compared to five years ago, while the relative share of large shareholders increased. His pattern of allotment is, therefore regressive in nature. The results of the study also showed that the share of the corporate units increased while that of individuals declined which is again unhealthy due to the fast the real net savings emanate in India only from individual and households and not from companies. SECURITIES MARKET MEANING OF SECURITIES The definition of Securities as per the Securities Contracts Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrips, stocks or other marketable securities of similar nature in or of any incorporate company or body corporate, government securities, derivatives of securities, units of collective investment scheme, interest and rights in securities, security receipt or any other instruments so declared by the Central Government. FUNCTION OF SECURITIES MARKET Securities Markets is a place where buyers and sellers of securities can enter into transactions to purchase and sell shares, bonds, debentures etc. Further, it performs an important role of enabling corporate, entrepreneurs to raise resources for their companies and business ventures through public issues.

64 Savings are linked to investments by a variety of intermediaries, through a range of financial products, called Securities. WHICH ARE THE SECURITIES ONE CAN INVEST IN? Shares Government Securities Derivative products Commodities.

LITERATURE REVIEW Advertising has always hung in a delicate balance of acceptance and criticism. In an article Doing Well By Doing Good: Case Study of Fair & Lovely Whitening Cream (karnani 2007), the author has presented two views about the famous Fair & Lovely cream in India, where the opponents are of the view that the ads of the product are doing good for the society, as it is empowering women, making them make the right choices, giving them self confidence, and helping them shape their own lives. This is what was depicted in their ads, where usually a dark complexion woman is shown to have made improvement in her complexion by using the product. But, the same strategy that they used as an appeal backfired, when the opponents such as the Department of Dermatology India, Department of

65 Pharmaceutical Technology India, and All India Democratic Womens Congress (AIDWC) raised their voices about the controversial ads and the product as a whole. The institutes related to health said that since the product is not included in the medicine category, its effectiveness cannot be determined, and hence, it cannot be charged for the contents. The societal groups claim that the ads are being racist against those of dark complexion and by influencing children of young ages, 12-14, that fall outside their target audience, i.e., 18-35, which made them conclude that the advertising company doesnt care about the society as a whole; rather they are only interested in hitting the big buck. In their article (Franses & Vriens 2004, p.6) Advertising effects on awareness, consideration and brand choice using tracking data say that advertising has three types of effects: i) cognitive effect (brand awareness) that makes the audience aware of the existence or introduction of a brand, ii) affective effect (consideration or liking), that make the advertised product stand superior to the product of the competitors, and iii) behavioral effect (brand choice) that finally make the audience take a step and buy the advertised product. Advertising is intended to address any or all the three or some combination of the three effects. The contents of advertising have always been a controversial issue. From time-totime, history has witnessed various critical writings, agitated rallies, news items, law suits, or strict bans against controversial contents in advertising. In Pakistan, although the rules have been laid, yet the contents are not regulated accordingly. In an article about the contents of advertising, the writer says that the firms strictly want to restrict the information they give in the advertisements, either it be about the price, the contents, or both. Ironically, if the firm is forced to disclose critical information, the product rarely improves performance. Conversely, even if the information is restricted, the performance of the product is hurt. (Anderson & Renault 2004)

66 (Clark, R. C., Ulrich Doraszelski, & Michaela Draganska, 2007, p.4) writes in his article, Information or Persuasion? An Empirical Investigation of the Effect of Advertising on Brand Awareness and Perceived Quality using Panel Data that the advertising has two purposes; informative and persuasive. The purpose of persuasive advertisingis to shape consumers' attitudes towards new brands and alter their tastes for established brands. This type of advertising encourages buyer inertia and brand loyalty by building up a stock of goodwill towards a brand. It allows brand differentiation, thereby creating an image in the minds of the audiences, and hence reduces the elasticity of demand. This is done by putting entry barriers for the new products. It is also said that the more advertised products are considered to be more prestigious and preferred over those brands that are not advertised much. The idea is that advertising can in itself create prestige or image by associating the brand with someone or something (Clark, R. C., Ulrich Doraszelski, & Michaela Draganska, 2007, p.4).

A very significant finding in this research is that advertising budgets dont have any significant impact in the perceived quality of the product being advertised, however, it helps in creating awareness. He concluded that advertising is not likely to be persuasive in nature, at least not when it comes to altering consumers quality perceptions (Clark, R. C., Ulrich Doraszelski, & Michaela Draganska, 2007, p.8)and based on this we conclude that providing basic information is the dominant role of advertising (Clark, R. C., Ulrich Doraszelski, & Michaela Draganska, 2007, p.26)

67 1)How Do You know about Networth Stock Broking Ltd Stock broking ltd
TV- Advertisement SMS Advertisement News Paper Advertisement Online-Advertisement

2) WHAT IS THE OPNION ON Networth Stock Broking Ltd Stock broking ltd ADVERTISMENT
Responses motivating Colorfully Music is very good Presentation is good Attractive

3) Based on advertisements made by company, would you like to go for product for you or your family in future? Yes No

4. Perception of Networth Stock Broking Ltd Stock broking ltd advertisement?

Responses Great product The right fit A new trend wave Informative Another supplement


5: How is the News paper/magazine advertisement of Networth Stock

Broking Ltd Stock broking ltd?
Responses Excellent Very good Informative Colorful & interesting Captures the changes

6: Networth Stock Broking Ltd Stock broking ltd need to more concentrate on its advertisement from its competitor?
Yes No

7: Which company is the competitor in Networth Stock Broking Ltd Stock broking ltd advertising? Broking Companies India Infoline Motilal Oswal Share Khan India Bulls Networth Stock Broking Ltd 8: Recently which product seen in Networth Stock Broking Ltd Stock broking ltd advertising
Product name

India Infoline Motilal Oswal Share Khan


Networth Stock Broking Ltd

9: Like to Refer Networth Stock Broking Ltd Stock broking to your friends and relations
Responses Yes No

10: Satisfied with Networth Stock Broking Ltd Stock broking products?
Responses Yes No

11: Would like to continue with Networth Stock Broking Ltd

Responses Yes No

12: How is the presentation of Networth Stock Broking Ltd Stock broking Advertising logo? Response Attractive Not attractive 13: How memorable did you find the Networth Stock Broking Ltd Stock broking
advertisement? memorable

Un-decided Not memorable


Creative Not creative

14: Did you find that the advertisement is creative?

Creative Not creative Total

15: How would you rate this Networth Stock Broking Ltd Stock broking advertisement? Rate Excellent Fair Poor


How do you know Networth Stock Broking Ltd Stock broking ltd
Responses TV- Advertisement SMS Advertisement News Paper Advertisement Online-Advertisement TOTAL Respondents 12 12 5 1 30 percentage 40 40 16.5 3.5 100



News Paper

On friend suggestion

From the above table it is found that 40% of customer know about Networth Stock Broking Ltd Stock broking ltd remains through TV advertisement from the new paper advertisement of the Networth Stock Broking Ltd Stock broking ltd whereas another 40% reminds from the SMS advertisement, 16.5% people know from news paper advertisement and remaining of 3.5% of remains from the friend suggestion


TABLE NO:4.2 : WHAT IS THE OPNION ON Networth Stock Broking Ltd Stock broking ltd ADVERTISMENT

Responses motivating Colorfully Music is very good Presentation is good Attractive TOTAL

Respondents 6 4 2 11 7 30

Percentage 10 23 8 40 19 100

motivating A Colorfully B Music is very good- C Presentation is good-D Attractive -E

From the above table it is found that 36.5% people is like of advertisers of Networth Stock Broking Ltd Stock broking ltd Presentation is good and also 20% people is telling very motivation Networth Stock Broking Ltd advertisement


TABLE NO: 4.3:

Based on advertisements made by company, would you like to go for product for you or your family in future? Yes No Not Decided 12 11 8 43% 30% 27%



Yes 27% No Not decided

From the above table it is found that 43% of advertisers perceive Networth Stock Broking Ltd Stock broking ltd as a new trend wave for Broking industry , 7% of advertisers perceived as just an another supplement.

TABLE NO: 4.4:


Perception of Networth Stock Broking Ltd Stock broking ltd advertisement

Responses Great product The right fit A new trend wave Informative Another supplement TOTAL

Respondents 5 15 8 70

Percentage 16.6 50 26.6 6.6 100



17% Great product The right fit A new trend wave Informative Another supplement 49%


From the above table it is found that 49% of advertisers perceive Networth Stock Broking Ltd Stock broking ltd as a new trend wave for, 7% of advertisers perceived as just an another supplement.

TABLE NO:4.5 :


How is the News paper/magazine advertisement of Networth Stock

Broking Ltd Stock broking ltd?

Responses Excellent Very good Informative Colorful & interesting Captures the changes TOTAL

Respondents 0 6 9 7 8 30

Percentage 0% 20% 30% 23.3% 26.7% 100

0% 26.70%

Excellent Very good Informative Colorful & interesting Captures the changes



From the above table it is found that maximum of 30% of advertisers opinion about the look and content of the supplement is as informative. Networth Stock Broking Ltd Stock broking ltd needs to improve the News paper/magazine advertisement quality so that most people following news papers

TABLE NO: 4.6:

76 Networth Stock Broking Ltd Stock broking ltd need to more concentrate on

its advertisement from its competitor?

Responses Yes No TOTAL

Respondents 8 16 6 30

Percentage 26.6% 53.4% 20% 100

60.00% 40.00% 20.00% 0.00% Y es P ercentag e can n't say Y es No can n't say

I computation world to advertising is very important to improve company sales and company growth and need to keep observation on competitors advertising ways and 53% people are Networth Stock Broking Ltd Stock broking ltd to advertising is good to


TABLE NO: 4.9: Like to Refer Networth Stock Broking Ltd Stock broking ltd to your friends and relations
Responses Yes No TOTAL Respondents 25 5 30 Percentage 83 17 100

90 80 70 60 50 40 30 20 10 0 %

Yes No

INFERENCES: From the above table it is found that 83.3% of people are not willing to refer Networth Stock Broking Ltd Stock broking ltd product s to friend relatives


TABLE NO: 4.10: Satisfied with Networth Stock Broking Ltd Stock broking ltd products

Responses Yes No TOTAL

Respondents 14 16 30

Percentage 46.6% 53.3% 100

No 53%

Yes 47%

INFERENCES: From the above table it is found that 53.3% of clients are not satisfied with Networth Stock Broking Ltd Stock broking ltd services


TABLE NO: 4.11: Would like to continue with Networth Stock Broking Ltd
Stock broking ltd

Responses Yes No TOTAL

Respondents 14 16 30

Percentage 46.6% 53.3% 100

47 % 5 3%

Ye s N o

INFERENCES: From the above table it is found that 53.3% of advertisers are not willing to continue Witch Networth Stock Broking Ltd Stock broking ltd


TABLE NO: 4.12: How is the presentation of Advertising logo

Networth Stock Broking Ltd Stock broking ltd


responds % 83 17

Attractive 25 Not 5 attractive 30

90 80 70 60 50 40 30 20 10 0 %

Attractive Not attractive


81 From the above table it is found that 83.3% of customers are attractive about Networth Stock Broking Ltd Stock broking ltd log looking good

TABLE NO: 4.13:

How memorable did you find the Networth Stock Broking Ltd Stock broking ltd advertisement? MEMORABLE UNDECIDED NOTMEMORABLE 50% 27% 23% 100% 15 8 7 30



memorable 23% undecided not memorable

INFERENCES: From the above table it is found that 50% of customers are memorable about Networth Stock Broking Ltd Stock broking ltd log looking good


TABLE NO: 4.14:

Did you find that the advertisement is creative?

Creative Not creative Total

28 2 30

93% 7% 100%


creative 93% not creative

INFERENCES: From the above table it is found that 93.3% of customers are creative advertisement of Networth Stock Broking Ltd Stock broking ltd in competitive world creativeness is very important


TABLE NO: 4.15:

How would you rate this Networth Stock Broking Ltd Stock broking ltd advertisement? Rate Excellent Fair Poor Response 18 8 4 % 67% 23% 10%



67% excellent fair poor


84 From the above table it is found that 93.3% of customer are using creative advertisement of Networth Stock Broking Ltd Stock broking ltd in competitive world creativeness is very important


1. 40% of customer know about Networth Stock Broking Ltd Stock broking ltd remains through TV advertisement from the new paper advertisement of the Networth Stock Broking Ltd Stock broking ltd whereas another 40% reminds from the Mobile SMS advertisement , 16.5% people know from news paper advertisement and remaining of 3.5% of remains from the friend suggestion 2. From the above table it is found that 36.5% people is like of advertisers of Networth Stock Broking Ltd Stock broking ltd Presentation is good and also 20% people is telling very motivation Networth Stock Broking Ltd advertisement 3. From the above table it is found that 49% of advertisers perceive Networth Stock Broking Ltd Stock broking ltd as a new trend wave for Chennai market, 7% of advertisers perceived as just an another supplement. 4. From the above table it is found that maximum of 30% of advertisers opinion about the look and content of the supplement is as informative. Networth Stock Broking Ltd Stock broking ltd need to improve the News paper/magazine advertisement quality so that most people following news papers 5. I computation world to advertising is very important to improve company sales and company growth and need to keep observation on competitors advertising ways and 53% people are Networth Stock Broking Ltd to advertising is good 6. From the above table it is found that maximum of 40%of people says that Infoline advertisement is very competitors for Networth Stock Broking Ltd Stock broking ltd advertisement of the supplement need to be improved whereas 40% of advertisers says layout need to be improved.


7. 53.3% of clients are not not satisfied with Networth Stock Broking Ltd Stock broking ltd services 8. it is found that 53.3% of advertisers are not willing to continue Witch Networth Stock Broking Ltd Stock broking ltd 9. 93.3% of customer are creative advertisement of Networth Stock Broking Ltd Stock broking ltd in competitive world creativeness is very important


The data for the project was conducted from the opinion of

customers in market. Any bias in the opinion of false will impact on the findings of the study. The sample size was large as the advertiser markets were to be Some of the answer given by the respondents may be biases. interviewed while at work.

Few respondents were reluctant while answering the question due to their busy schedule. Time is a constraint because duration of project is one month.

Some of the customers were hesitating to give whole- hearted opinions

due to fear.


In this study observed that half and above of the respondents are mentioned that the improvement have to be made in advertisement of Networth Stock Broking Ltd Stock broking ltd, so the company can take effort to improve the advertisements. A customer feels that product quality can be increased in the Networth Stock Broking Ltd Stock broking ltd. Availability of the product is scarce, so the company can improve its product advertising In competitive world Networth Stock Broking Ltd Stock broking ltd need to concentrate on online advertising like Google and yahoo Adsance ad-words


5.5 Conclusion:
The informative and interesting analysis of advertising management in Networth Stock Broking Ltd Stock broking ltd , advertise management provides media company executives insight necessary for increasing product sales, market position and competitive advantage. And it helps to make more benefits to customers. To give good quality and service automatically company and customer benefit from that It is concluded that advertisers perception are the basic things, which could helpful to the company. Some suggestions are given in this project, where the company could look into the grey areas and try to rectify them, so that customer could be highly satisfied.