Commodity Project Report
Commodity Project Report
Commodity Project Report
SUBMITTED TO:
L.J. INSTITUTE OF MANAGEMENT STUDIES
SUBMITTED ON:
PREFACE
In todays world of globalization, opportunities are plenty and they keep knocking at your
doors all times. World is becoming very small. The work of success is always open to the
dynamic, confident, and courageous youth. All we need is the positive attitude and forceful
personality to break the myth of bad luck. All over the world the demand for managerial and
administrative person has increased. To survive in this highly competitive market practical
knowledge and experience is as important as theoretical. As a student of M.B.A., we are
supposed to have practical knowledge and experience of business and management.
Due to globalization there has been a rush of multinational companies in India. Keeping these
entire things in mind the M.B.A. courses have introduced practical studies as one of its
subjects. In this, the students are given the opportunity to work in industry and are required to
know, how practically the work is performed. This also teaches the students, how to present
themselves in front of different people, their attitude, and their way of communicating and
working in a team.
Summer placement (summer internship program, i.e., now popularly known as SIP), is an
integral part of the academic curriculum of MBA. For the successful completion of the MBA
program, the students are required to complete the SIP. After completion of the 1st year of
the program, i.e., after the 2nd semester and before the commencement of the second year of
the program, the students are required to work with an organization for hands on experience.
The duration of the SIP is six to eight weeks.
ACKNOWLEDGEMENT
The feeling of gratefulness to anyones help directly arises from the bottom of the heart. A
small but an important & timely help proved to be a milestone in ones life. Every human
being has such kind of experience. I also have the same feeling of gratefulness as today I
have achieved an important milestone in my own life the completion of this project.
I express my sincere gratitude to my faculty guide Prof. MEETALI SAXENA who took a lot
of personal interest in supervising this project and guiding me. She has been a great source of
inspiration in the task of completion of this project work. Her profound advice, timely
guidance has been of immense value to me.
EXECUTIVE SUMMARY
Arihant capital market ltd (ACML) is a leading stock broker organization. ACML has a
membership in India's largest stock exchange National Stock Exchange of India ltd (NSE),
Bombay
Stock
Exchange
(BSE),
Multi-Commodity
Exchange
(MCX),
National
I have also carried out a project during summer training. The title of my project is
Portfolio Management Services An investment option.Objective behind this project is
to know how investor thinks before investing in the capital market by using the portfolio
management service.
I have surveyed people who are actual and potential investors as my study objective is to
know investor behaviour in by using PMS.
First part of the project contains company information, industry overview. Industry overview
includes information about capital markets, stock exchanges, derivatives, stock broking
industry etc. Next part of the project contains details about research methodology used in the
study. Further it contains data analysis & interpretation and also findings, recommendations
& conclusions. Last part of the report includes limitations of the study, bibliography.
INTRODUCTION
INDUSTRY PROFILE
Journey of Indian stock market
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years
ago. The earliest records of security dealings in India are meager and obscure. The East India
Company was the dominant institution in those days and business in its loan securities used
to be transacted towards the close of the eighteenth century.
By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in
Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers
recognized by banks and merchants during 1840 and 1850.
The 1850's witnessed a rapid development of commercial enterprise and brokerage business
attracted many men into the field and by 1860 the number of brokers increased into 60.
In 1860-61 the American Civil War broke out and cotton supply from United States of
Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased
to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous
slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be
sold at Rs. 87).
At the end of the American Civil War, the brokers who thrived out of Civil War in 1874,
found a place in a street (now appropriately called as Dalal Street) where they would
conveniently assemble and transact business. In 1887, they formally established in Bombay,
the "Native Share and Stock Brokers' Association" (which is alternatively known as "The
Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it
was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.
PORTFOLIO
Meaning of portfolio:Portfolio
A combination of securities with different risk & return characteristics will constitute the
portfolio of the investor. Thus, a portfolio is the combination of various assets and/or
instruments of investments. The combination may have different features of risk & return,
separate from those of the components. The portfolio is also built up out of the wealth or
income of the investor over a period of time, with a view to suit his risk and return preference
to that of the portfolio that he holds. The portfolio analysis of the risk and return
characteristics of individual securities in the portfolio and changes that may take place in
combination with other securities due to interaction among themselves and impact of each
one of them on others.
An investor considering investments in securities is faced with the problem of choosing from
among a large number of securities. His choice depends upon the risk and return
characteristics of individual securities. He would attempt to choose the most desirable
securities and like to allocate is funds over this group of securities. Again he is faced with the
problem of deciding which securities to hold and how much to invest in each. The investor
faces an infinite number of possible portfolios or groups of securities. The risk and return
characteristics of portfolio differ from those of individual securities combining to form a
portfolio. The investor tries to choose the optimal portfolio taking in to consideration the risk
return characteristics of all possible portfolios.
As the economy and the financial environment keep changing the risk return characteristics
of individual securities as well as portfolios also change. This calls for periodical review and
revision of investment portfolios of investors. An investor invests his funds in a portfolio
expecting to get a good return consistent with the risk that he has to bear. The return realized
from the portfolio has to be measured and the performance of the portfolio has to be
evaluated.
These aren't hard and fast allocations, just guidelines to get you thinking about how your
portfolio should look. Your risk profile will give you more equities or more fixed income
depending on your aggressive or conservative bias. However, it's important to always have
some equities in your portfolio (or equity funds) no matter what your age. If inflation roars
back, this will be the portion of your investments that protects you from the damage, not your
fixed income.
Also, the fixed income of your portfolio should be diversified. If you buy bonds and
debentures directly or if you invest in FDs, then make sure you have at least five different
maturities to spread out the interest rate risk.
Diversifying in equities and bonds means more than buying a number of positions. Each
position needs to be scrutinized as to how it fits into the stocks or bonds that already are in
your portfolio, and how they might be affected by the same event such as higher interest
rates, lower fuel prices, etc. Put your portfolio together like a puzzle, adding a piece at a time,
each one a little different from the other but achieving a uniform whole once the portfolio is
complete.
1. Random portfolio
Random portfolio consists of the scripts that are randomly selected by the investor by its own
knowledge and preference of the stocks. Here there is no analysis is done of the script, they
are selected on the tips and buts received by the investors from the external sources.
Such portfolios are not able to sustain when there is a crisis in the market.
There is a very high risk and return involve in such portfolio.
COMPANY INFORMATION
History:
Arihant Capital Markets Limited was established in 1994 by Mr. Ashok Kumar
Jain, a Chartered Accountant. Arihant has followed a consistent growth path and has
established itself as one of the leading broking houses of the country with the support and
confidence of its clients, investors, employees and associates. We pride ourselves on our
independence and continuous service since inception.
Since inception, Arihant is dedicated to creating wealth for clients and over a
period of time we have built a reputation for quality service. We have also refined ourselves
as an investment advisor and are poised to provide complete investment management
solutions to our valued clientele.
Association:
Arihant Capital Markets Limited is listed on the Bombay Stock Exchange since
1993 and since then the company has grown in leaps and bounds.
We are members of the leading stock exchanges of India:
We are AMFI Certified Mutual Fund Distributor, are registered with the SEBI for
Portfolio Management Services (PMS) and are a Category - I Merchant Banker.
Overview:
With more than 500 professionals and staff working in 90 plus cities, Arihant has
the resources and nationwide reach to ensure the highest level of personalized service.
Our fundamental mission is to provide our clients everything they need to do
better as realizing their strategic visions is our shared objective. Our service achieves these
goals by putting clients at the center of everything we do. Our client-centric approach, ethical
and transparent business practices, research-based advice, implementation of cutting-edge
technology and keeping up-to-date to the ever changing world of finance has helped our
clients grow with the surging Indian economy over the years.
COMPANY PROFILE
Registered Office
Name of Company: Arihant Capital Market Ltd.
Address: E-5, Ratlam Kothi,
Indore-452001
Contact: 0731-2519610
Fax: 0731-3016199
Email:contactus@arihantcapital.com
Website: www.arihantcapital.com
Corporate Office
Name of Company: Arihant Capital Market Ltd.
Address: 67, Nehru Road,
3rd Floor Krishna Bhavan,
Vile Parle(E)
Mumbai-57
Contact: 022-67664800
Fax: 022-67664800
Email:contactus@arihantcapital.com
Website: www.arihantcapital.com
Regional Office
Ahmadabad
Name of Company: Arihant Capital Market Ltd.
Address: 401, 4th Floor, High Street-1.
Opp. Thakorbhai Desai Hall
Law Garden, Ellisbridge,
Ahmedabad-380006(Gujarat)
Contact: 079-40701700, 9327552453
Fax: 079-40088640
Website: www.arihantcapital.com
RESEARCH METHODOLOGY
The field of investment is traditionally divided into security analysis and portfolio
management. The heart of security analysis is a valuation of financial assets. Value in turn is
the function of risk and return. These two concepts are in the study of investment. Investment
can be defined as the commitment of funds to one or more assets that will be held over for
some future time period.
In todays fast growing world, many opportunities are available. So in order to move with
changes and grab the best opportunities in the field of investments, a professional fund
manager is necessary. Therefore, in the present scenario, the Portfolio Management Services
(PMS) is fast gaining importance as an investment alternative for the high net worth
investors.
Research design
This report is based on primary as well secondary data, however primary data collection has
given more importance since it is overhearing factor in attitude
s t u d i e s . O n e o f t h e m o s t important users of research methodology is that it
helps in identifying the problem, collecting, analyzing the required information data
and providing an alternative solution to the problem .It also helps in collecting the vital
information that is required by the top management to assist them for the better
decision making both day to day decision and critical one.
Sources of data
Primary data: Questionnaire
Secondary data: Published materials of Arihant Capital Market Ltd. such as
periodicals, journals,newspapers and website.
Duration of study
The study will be carried out for the period of one and a half months.
Sampling plan
Sampling:
Since Arihant Capital has many segments, I have selected Portfolio Management
Services as per my profile to do market research. 100% coverage is difficult within
the limited period of time. Hence sampling survey method is adopted for the purpose
of the study.
Population:
Customers and non customers of Arihant Capital Market Ltd. from Gujarat state.
Sampling size:
A sample of 100 has been chosen for the purpose of study. A sample consisted of
investors based on their income and profession as well as educational background.
Sampling method:
Non-probability sampling will be conducted for the study.
Sampling procedure:
From large number of customers and non customers, sample lot will be randomly
picked up.
Field study
Some respondents will be directly approached by the following strategies:
Tele-calling
Personal visits
Clients references
Database provided by Arihant Capital Market Ltd.
Q.1 Do you know about the investment option available in the capital market?
Particular
Respondents
Percentage (%)
Yes
88
88%
No
12
12%
Total
total
100%
No. of respondents
88%
100%
80%
60%
40%
12%
20%
0%
Yes
No
Interpretation:- As the above graph shows that 88% of people out of 100 in the city of
Ahmadabad are knowing about investment option available in the capital market. As we
know that the people are not so much familiar with this investment and they are also consider
capital market as a riskier option as compare to other option.
Particular
Respondents
Percentage (%)
High returns
49
56%
Savings
39
44%
Total
88
100%
No. of respodents
56%
44%
60%
50%
40%
30%
20%
10%
0%
High returns
Savings
Interpretation: - Most of the people take risk for having higher returns of their investment.
As per the response of the people 56% invest because of having the good amount of return
and 44% are investing for the saving purpose to meet the future uncertainties.
Q3. How much rise in your income do you expect from this investment?
Particulars
Respondents
Percentage%
Below 10,000
39
44%
10,000 30,000
20
23%
30,000 - 50,000
17
19%
50,000 above
12
14%
Total
88
100%
No. of respondents
14%
Below 10,000
44%
19%
10,000 30,000
30,000 - 50,000
50,000 above
23%
Interpretation: - Most of the respondents say that to invest in the share market is more
profitable than any other investment option but on another side it is riskier also. As per the
graph we can see that 44% of the respondents expect rise of their income below 10,000.
Because of the recession now a days the return in the share market is lower as compare to
before. 23% of respondents are expecting rise between 10,000 30,000, 19% of respondents
are expecting rise between 30,000 50,000 and only 14% of the respondents are expecting to
rise above 50,000.
Q.4 If you have invested in the capital market, what has been your experience?
Particulars
Respondents
Percentage %
Very Satisfied
5%
Satisfied
11
13%
Neutral
12
14%
Dissatisfied
41
47%
Very dissatisfied
20
21%
Total
88
100%
NO. of respondents
21%
5%
13%
Very Satisfied
14%
Satisfied
Neutral
47%
Dissatisfied
Very dissatisfied
Interpretation: - Only 5% of respondents are very satisfied with the investment in the share
market. 13% of the respondents are satisfied with the investment in the share market. The
satisfaction level of the respondents is low as compare to the dissatisfaction level. The reason
for dissatisfaction of the respondents may be the poor market condition or the lack of
knowledge of the share market among the investors.
Particular
Respondents
Percentage (%)
Yes
73
83%
No
15
17%
Total
88
100%
No. of respondents
83%
100%
80%
60%
17%
40%
20%
0%
Yes
No
Interpretation: - As above we can see that out of 100% respondents who knows the
investment option in the capital market 83% respondents are having the trading a/c and the
remaining 17% are not having the trading a/c that means all the respondents are not investing
in the capital market.
Respondents
Percentage %
19
26%
Sharekhan
12
16%
India Infoline
17
24%
Motilal Oswal
11%
Angel Broking
12
16%
Other
7%
Total
73
100%
No. of respondents
16%
7%
26%
Sharekhan
11%
India Infoline
16%
24%
Motilal Oswal
Angel Broking
Other
Interpretation: - As we all know that there are so many brokers available for the
respondents to invest in the capital market. On the basis of the survey 26% of the respondents
are trading through the Arihant Capital Market Ltd, 24% respondents through India Infoline,
16% of the respondents are trading through Sharekhan and Angel broking, 11% and 7%
through Motilala oswal and other broker respectively.
Q.7 Are you aware about the service called Portfolio Management Services?
Particulars
Respondents
Percentage %
Yes
31
43%
No
42
57%
Total
73
100%
No. of respondents
57%
43%
60%
50%
40%
30%
20%
10%
0%
Yes
No
Q.8 Which factors do you considered while choosing the forms of PMS?
Particulars
Respondents
Percentage %
Risk
29%
High Returns
19%
Market Condition
16
52%
Total
31
100%
No. of respondents
52%
60%
50%
29%
40%
19%
30%
20%
10%
0%
Risk
High returns
Market Condition
Respondents
Percentage%
Self
17
55%
14
45%
Total
31
100%
No. of respondents
55%
45%
60%
50%
40%
30%
20%
10%
0%
Self
Interpretation: - About 55% of respondents say that they themselves mange their Portfolio
and the remaining 45% depends on the broking company for managing the portfolio. 45%
Respondents prefer PMS of the Broking company because they dont keep the watch on their
investment regularly. The fund manager gives timely updates about their investment and also
gives suggestions whether to invest in the particular script or not.
Respondents
Percentage %
10%
3 6 months
19%
6months 1 year
18
58%
13%
Total
31
100%
No. of respondents
13%
10%
19%
58%
6months 1 year
More than 1 year
Interpretation: - About 58% of the respondents invest for the time horizon of 6months
1year because they think that they should get the enough return for the investment of their
money. 19% & 10% of the respondents invest for the 3 6 months and less than 3 months
respectively. Only 10% keeps their investment for more than 1year.
Respondents
Percentage %
11
35%
29%
19%
Balanced investment
17%
Total
31
100%
No. of respondents
Long term investment
17%
35%
Regular income to meet
current requirements
19%
Interpretation: - As above we can see that about 35% of the respondents important
outcome is Long term investment because everyone knows that future is uncertain so to meet
the future requirements they invest on the long term basis. 29% of respondents invest to have
a regular income to meet the current requirements, 19% of the respondents gives importance
to the short term investment and the remaining 17% to the balanced investment.
Q.12 Are you using PMS of Arihant Capital Market? If no, then of which company please
specify
Particulars
Respondents
Percentage %
Yes
12
39%
No
19
61%
Total
31
100%
No. of respondents
61%
70%
60%
39%
50%
40%
30%
20%
10%
0%
Yes
No
Interpretation: - As talking about the Investment option, in most of clients it was common
that they know about the Option but as the PMS of Arihant have different Product offering,
Product Characteristics and the Investment amount is also different this makes the clients to
think differently. It is found that 39% of the respondents were using the PMS of Arihant &
the remaining 61% were using of the other broking company.
Respondents
Percentage %
Equity Fund
19%
Debt Fund
10
32%
Balanced Fund
15
49%
Total
31
100%
No. of respondents
49%
50%
32%
40%
30%
19%
20%
10%
0%
Equity Fund
Debt Fund
Balanced Fund
Interpretation: - The above analysis shows, in which portfolio the investor like to deal more
in PMS. As 19% investor likes to go for Equity Portfolio and 49% with Balanced Portfolio,
whereas around 32% investor like to go for Debt Portfolio.
Respondents
Percentage %
5,00,000- 25,00,000
22
71%
25,00,000 50,00,000
29%
50,00,000 75,00,000
0%
75,00,000 1,000,0000
0%
Total
31
100%
No. of respondents
0%
29%
5,00,000- 25,00,000
25,00,000 50,00,000
50,00,000 75,00,000
71%
75,00,000 1,000,0000
Q.15 What is the rate of return annually you expect from you portfolio?
Particulars
Respondents
Percentage %
5% - 9%
29%
10% - 13%
17
55%
14%- 17%
16%
18% - 23%
0%
Total
31
100%
No. of respondents
0%
16%
29%
5% - 9%
10% - 13%
14%- 17%
55%
18% - 23%
Interpretation:- Every investors invest by expecting some specific percentage of return they
will get on their investment. Here 55% of the respondents expects 10% - 13% return on their
investment annually, 29% of the respondents expect 5% - 9% of return and the remaining
16% of respondents expects 14% - 17% of return.
Q.16 How much brokerage does Arihant charge for managing your Portfolio?
Particulars
Respondents
Percentage %
10paisa 15paisa
0%
15paisa 20paisa
10%
20paisa 25paisa
26
84%
6%
Total
31
100%
No. of respondents
0%
6%
10%
10paisa 15paisa
15paisa 20paisa
20paisa 25paisa
84%
Interpretation:- All broking company charges the different brokerage for their PMS. 84% of
respondents says that Arihant charges brokerage between 20paisa 25paisa, 10% says that it
charge between 15paisa 20paisa and the remaining 6% of respondents says that they
charges more than 25paisa. As per the detail given by the Arihant they charges 25paisa
brokerage
for
PMS.
Respondents
Percentage %
Daily
13%
Weekly
16%
Fortnightly
26%
Monthly
14
45%
Total
31
100%
No. of respondents
13%
45%
16%
Daily
Weekly
Fortnightly
26%
Monthly
Interpretation:-About 45% of the respondents tack their portfolio monthly, because some
broking company provides the monthly detail of their portfolio by sending the detailed
statement. 26% of respondents say that they track their portfolio fortnightly, 16% says that
they track it weekly and the remaining 13% track it daily. Arihant provides the detail as per
the requirements of the investors.
Q.18 How was your experience about PMS of Arihant Capital Market?
Particulars
Respondents
Percentage %
Earned
33%
Faced loss
42%
No profit No loss
25%
Total
12
100%
No. of respondents
42%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
33%
25%
Earned
Faced loss
No profit No loss
Interpretation: - In the above analysis it is clear that the Investor have the good and the bad
experience both with the Arihant PMS services. In this current scenario 33% of the Investor
earned, whereas around 42% have suffer losses in the market. Similarly 25% of the
Respondents are there in Breakeven Point (BEP), where no loss and no profit.
Respondents
Percentage %
Yes
67%
No
33%
Total
12
100%
N0. of respondents
67%
70%
60%
33%
50%
40%
30%
20%
10%
0%
Yes
No
Interpretation:- The above analysis is talking about the Transparency of their PMS services.
In hundred respondents 67% said that they get all the information about their script buying
and selling information day by day, where as 33% of respondents are not satisfied with the
PMS information and Transparency because they dont get any type of extra services in PMS
as they were saying.
Respondents
Percentage %
Yes
58%
No
42%
Total
12
100%
No. of respondents
58%
60%
42%
50%
40%
30%
20%
10%
0%
Yes
No
Interpretation:- The above analysis shows the Investor perception toward the Arihant PMS
as on the basis of their good and bad experience with Arihant Capital Market limited. Among
hundred respondents 58% respondents were agree to recommend the PMS of Arihant to their
peers, relatives etc.
Findings
About 88% of respondents are aware about the investment option specifically in the
Capital Market.
More than 50% of the respondents are investing for having the high returns, to
increase their principal amount.
As expected from the market 44% of the respondents expects rise below 10,000
because of poor market condition.
The experience of the investors in the capital market was not good, about 47% of the
investors are not satisfied with their returns.
Arihant is having 26% of respondents in their side out of 100%, after Arihant the
respondents prefer India infoline as their broker.
As per the survey 31 respondents out of 73 respondents are aware about the portfolio
Management Services.
Most of the investors first analyze the market condition before investment. They also
gives importance to the risk and high returns also.
About
More than 67% Investor are happy with the Transparency system of Arihant Capital
Market Ltd.
As based on the good and bad experience with Arihant around 58% are ready to
recommended the PMS of Arihant to their peers, relatives etc.
As only Ahemdabad was dealt in the survey so it does not represent the view of the total
Indian market.
The sample size was restricted with hundred respondents.
There was lack of time on the part of respondents.
The survey was carried through questionnaire and the questions were based on perception.
There may be biasness in information by market participant.
Complete data was not available due to company privacy and secrecy.
Some people were not willing to disclose the investment profile.
Conclusion
Suggestions
The company should perform the study of profiling customers, try to understand their
specific needs and work towards providing right solutions to specific requirements
like safety, liquidity, return and risk.
The company should make the best use of the technology for doing research.
The company needs to promote the financial products through advertisements and
other activities.
The company should solve the query of the client in time so they dont get disappoint
with their performance.
Bibliography
Book referred: - Research Methodology by C R Kothari
Websites:www.arihantcapital.com
www.sebi.gov.in
www.nseindia.com
www.bse.com
ANNEXURE
1) Do you know about the investment option available in the Capital Market?
(A) Yes
(B) No
2) What is the basic purpose of your investments?
(A) High returns
(B) Savings
3) How much rise in your income do you expect from this investment?
(A) Below 10,000
(B) 10,000 30,000
(C) 30,000 50,000
(D) 50,000 Above
4) If you invest in the capital market, What has been your experience?
(A) Very satisfied
(B) Satisfied
(C) Neutral
(D) Dissatisfied
12) Are you using PMS of Arihant Capital Market? If no, then of which company Please
specify
(A) Yes
(B) No
13) Which Portfolio type you preferred?
(A) Equity fund
(B) Debt fund
(C) Balanced fund
14) What is the range of your portfolio?
(A) 5,00,000 25,00,000
(B) 25,00,0000 50,00,000
(C) 50,00,000 75,00,000
(D) 75,00,000 1,000,0000
15) What is the rate of return annually you expect from your portfolio?
(A) 5% - 9%
(B) 10% - 13%
(C) 14% - 17%
(D) 18% - 23%
16) How much brokerage does Arihant charge for Managing Your portfolio?
(A) 10paisa 15 paisa
(B) 15paisa 20 paisa
(C) 20paisa 25 paisa
(D) More than 25 paisa
17)As an investor how frequently do you track your investment portfolio?
(A)Daily
(B)Weekly
(C)Fortnightly
(D)Monthly
18) How was your experience about PMS of Arihant Capital Market?
(A) Earned
(B) Faced loss
(C) No profit no loss
19) Does Arihant keep its PMS process transparent?
(A) Yes
(B) No
20) Do you recommend Arihant PMS to others?
(A) Yes
(B) No