Professional Documents
Culture Documents
REFERANCE TO SHAREKHAN
I, ALISHA SHARMA M.B.A (4th Semester) IIMT Management College, Meerut hereby
original work and the same has not been submitted to any other institute for the award of other
degree.
A seminar presentation of the Research Report was made on date and the suggestions as
2
ACKNOWLEDGEMENT
and other personnel staff for guiding and encouraging me to the completion of project on time.
I am grateful to my parents for their continuous support right from the beginning of my
project to the submission of this report.
ALISHA SHARMA
1507270027
3
CHAPTER-I
INTRODUCTION
The main idea behind the study conducted was to find out the investors
This study should deal with the investors preference from commodity
market. To identify the investors preference means, it should find out the
brokers. It also should concentrate on whether they are satisfied with the
investment guide. Some of them may not be satisfied with their service and
the information they give. My aim is to find out the investors preference from
commodity market of the investors from their share brokers. How is investors
providing better services. Keeping all these things in mind the primary
MEANING OF INVESTOR:
4
An investor is any party that makes an investment. The term has
people and companies that regularly purchase equity or debt securities for
Less frequently, the term is applied to parties who purchase real estate,
term implies that a party purchases and holds assets in hopes of achieving
Types of investors:
Investment banks.
Mutual funds, hedge funds, and other funds, ownership of which may or
may not be publicly traded (these funds typically pool money raised from
graded products are bought and sold. Worldwide, there are 48 major
and cotton to silver and oil. Most trading is done in futures contracts, that is,
agreements to deliver goods at a set time in the future for a price established
Trading of S&P 500 and other financial futures has broken down
some of the barriers that once separated stock, bond, and commodity markets
and made it easier for investors to hedge their stock investments. Critics
charge that the futures trading at the commodity markets in Chicago have
exchange in the United States, the largest in the world is Eurex, an electronic
European exchange.
Hedgers:
Hedgers are those who protect themselves from the risk associated
with the price of an asset by using derivatives. A person keeps a close watch
upon the prices discovered in trading and when the comfortable price is
6
reflected according to his wants, he sells futures contracts. In this way he gets
cash commodity. Take an example: A Hedger pay more to the farmer or dealer
of a produce if its prices go up. For protection against higher prices of the
the produce to cover the amount of produce he expects to buy. Since cash and
futures prices do tend to move in tandem, the futures position will profit if the
price of the produce raise enough to offset cash loss on the produce.
Speculators:
Speculators are some what like a middle man. They are never
interested in actual owing the commodity. They will just buy from one end and
sell it to the other in anticipation of future price movements. They actually bet
on the future movement in the price of an asset. They are the second major
and investors. They handle trades for their personal clients or brokerage
7
Speculators have certain advantages over other investments they are as
follows:
futures market faster because prices tend, on average, to change more quickly
than real estate or stock prices. Futures are highly leveraged investments. The
margin, yet he can ride on the full value of the contract as it moves up and
contract, but a performance bond. The actual value of the contract is only
Arbitrators:
chosen to make a decision between two people or groups who do not agree is
If he finds future prices of a commodity edging out with the cash price, he will
take offsetting positions in both the markets to lock in a profit. Moreover the
with futures commodity and their possible uses for the farmers, traders,
8
Hedging:
reduce a pre-existing risk position. Having a position does not mean that the
anticipates the need for a certain commodity in the future or a person who
commodity. In many cases, the hedger has a certain hedging horizon the
future date when the hedge will terminate. The hedge can be a long hedge or a
short hedge. If the hedger buys futures contract to hedge, it will be a long
hedge.
For example, a roller flourmill owner may like to lock-in the price of
the wheat that he wants to purchase three months later by purchasing wheat
futures. If three months later the wheat prices rise, carrying futures prices
along with them, the flourmill owner will purchase wheat from the spot
market at a higher price. The loss that he may suffer in the cash market will
sell three-month futures at the prevailing price and lock-in his profits at that
level. If the prices fall, the loss suffered by the farmer in the cash market will
be compensated by the profit that the farmer will earn by squaring the
above. In the above example, the goods in question were exactly the same
both in the cash and the futures market, the amounts purchased / sold in the
cash market matched the futures contract amounts, and the hedging horizons
of the farmer and the mill owner matched the delivery dates of the futures
9
contracts. It will be rare for all factors to match perfectly; they will differ in
the commodity that are traded in the cash and the futures markets. Such
hedges are known as cross-hedges. In such cases, the hedger must trade the
right number and kind of futures contract to control the risk in hedged
positions as much as possible. There can be situations where the hedger does
not have any definite hedging horizon and may enter into what is known as
risk-minimizing hedge.
hedged situation, the profits fluctuate widely and the person / firm may have
to pay taxes in the high profit years while he is not able to utilize the tax
credits when he runs into losses. Hedging also serves to minimize the cost of
financial distress. Widely fluctuating profits may drive many persons / firms
procedures.
Role of Speculators:
emphasize that functioning derivative markets will have speculators who need
10
to be viewed from the point of view of their economic usefulness and who need
Scalpers time horizon is the shortest, ranging from the next few
seconds to the next few minutes and they make profits that may be only one
or two ticks, the minimum allowable price movement. If the prices do not
the scalper will like to close the position and begin looking for a new
survive as they pay minimum transaction cost. Besides earning profits for
themselves, their main role is to provide liquidity in the market. They provide
a party willing to take the opposite side of a trade for other traders; hedgers
markets to discover prices more effectively. By competing for trades, they help
Day Traders close their position before the end of trading each day.
data. Position Traders maintain overnight positions, which may run into
weeks or even months. They may hold outright positions in which they run
The more risk averse among them assume spread positions which
are sufficiently large numbers of short and long hedgers, they may fulfill each
others need and the speculators may have no role. However, in practice, there
is always a mismatch between the time when the short and long hedgers
would approach the market and the speculators fill in this gap.
Some of the leading exchanges of the world are New York Mercantile
Exchange (NYMEX), the London Metal Exchange (LME) and the Chicago Board
of Trade (CBOT).
similar to the BSE & NSE, to come up and let them deal in commodity
trading system for trading. The Forward Markets Commission (FMC) will
12
1.2 INTRODUCTION TO THE INDUSTRY PROFILE
This article focuses on the history and current debates regarding global
markets but not the ways that services, including those of governments, nor
markets, stock markets, bond markets and currency markets cover those
concerns separately and in more depth. One focus of this article is the
1. History
agricultural products. While wheat and corn, cattle and pigs, were widely
traded using standard instruments in the 19th century in the United States,
other basic foodstuffs such as soybeans were only added quite recently in
broad consensus on the variations in the product that make it acceptable for
13
effective spokesmen for, and innovators of, improvements in transportation,
warehousing, and financing, which paved the way to expanded interstate and
international trade.
other peoples using pigs, rare seashells, or other items as commodity money,
people have sought ways to standardize and trade contracts in the delivery of
believed to have originated in Sumer where small baked clay tokens in the
shape of sheep or goats were used in trade. Sealed in clay vessels with a
certain number of such tokens, with that number written on the outside, they
time and date of delivery - this made them like a modern futures contract.
Regardless of the details, it was only possible to verify the number of tokens
inside by shaking the vessel or by breaking it, at which point the number or
terms written on the outside became subject to doubt. Eventually the tokens
disappeared, but the contracts remained on flat tablets. This represented the
silver for spices, cloth, wood and weapons, most of which had standards of
14
quality and timeliness. Considering the many hazards of climate, piracy, theft
and abuse of military fiat by rulers of kingdoms along the trade routes, it was
a major focus of these civilizations to keep markets open and trading in these
the states which could handle them most effectively became very powerful
commerce.
volume of trading since the start of the decade. This was largely a result of the
increased by a fifth in 2010, and a half since 2008, to around 2.5 billion
million contracts. During the three years up to the end of 2010, global
15
Commodity assets under management more than doubled between
2008 and 2010 to nearly $380bn. Inflows into the sector totalled over $60bn
in 2010, the second highest year on record, down from the record $72bn
allocated to commodities funds in the previous year. The bulk of funds went
into precious metals and energy products. The growth in prices of many
3. Commodity Trading
immediately, or with a minimum lag between the trade and delivery due to
inspection.
16
A forward contract is an agreement between two parties to exchange
at some fixed future date a given quantity of a commodity for a price defined
now, pay and deliver later were used as a way of getting products from
producer to the consumer. These typically were only for food and agricultural
products. Forward contracts have evolved and have been standardized into
what we know today as futures contracts. Although more complex today, early
forward contracts for example, were used for rice in seventeenth century
1840s, with the appearance of the railroads. Chicago, being centrally located,
emerged as the hub between Midwestern farmers and producers and the east
which the buyer and the seller accept the terms in regards to product, grade,
quantity and location and are only free to negotiate the price.
3.4. Hedging
17
cooperative has significantly less of its product to sell due to weather or
insects, it makes up for that loss with a profit on the markets, since the
overall supply of the crop is short everywhere that suffered the same
conditions.
point must all be specified. Typically, trading must end two (or more) business
days prior to the delivery day, so that the routing of the shipment can be
finalized via ship or rail, and payment can be settled when the contract
4. Standardization
U.S. soybean futures, for example, are of standard grade if they are
silo)," and of deliverable grade if they are "GMO or a mixture of GMO and Non-
GMO No. 2 yellow soybeans of Iowa, Illinois and Wisconsin origin produced in
the U.S.A. (Non-screened, stored in silo)." Note the distinction between states,
and the need to clearly mention their status as GMO (Genetically Modified
wheat, corn, barley, pork bellies, milk, feedstuffs, fruits, vegetables, other
grains, other beans, hay, other livestock, meats, poultry, eggs, or any other
18
5. Regulation of commodity markets
the National Futures Association that enforces rules and regulations put forth
by the CFTC.
5.1. Oil
established for food and precious metals, many such markets have
proliferated drastically in the late 20th century. Oil was the first form of
energy so widely traded, and the fluctuations in the oil markets are of
of certain states, e.g., during the Persian Gulf War, speculation on the
The oil market is an exception. Most markets are not so tied to the
their currencies, accept International Monetary Fund rules, join the World
19
amount to a hedge against being isolated. China's entry into the WTO
signaled the end of truly isolated nations entirely managing their own
currency and affairs. The need for stable currency and predictable clearing
and rules-based handling of trade disputes, has led to global trade hegemony
There are signs, however, that this regime is far from perfect. U.S.
trade sanctions against Canadian softwood lumber (within NAFTA) and foreign
steel (except for NAFTA partners Canada and Mexico) in 2002 signaled a shift
and sellers to meet, set quality and quantity standards, and establish rules of
business.
20
York market to a system in terms of storage, pricing, and transfer of
agricultural products.
was established in New York through the merger of four small exchanges the
National Metal Exchange, the Rubber Exchange of New York, the National Raw
The major commodity markets are in the United Kingdom and in the
USA. In India there are 25 recognized future exchanges, of which there are
traditional business known as Adhat and Vayda Vyapar to facilitate better risk
All the exchanges have been set up under overall control of Forward Market
under the Companies Act, 1956 and had commenced its operations on
21
December 15, 2003.This is the only commodity exchange in the country
Life Insurance Corporation of India (LIC), National Bank for Agriculture and
various laws of the land like the Companies Act, Stamp Act, Contracts Act,
are Financial Technologies (India) Ltd., State Bank of India, Union Bank of
India, Corporation Bank, Bank of India and Canara Bank. MCX facilitates
MCX started offering trade in November 2003 and has built strategic
Sanghatana.
prices of any commodity are not fixed, in an organized way. Earlier only the
buyer of produce and its seller in the market judged upon the prices. Others
nature. Before discovering the price, they reach to the producers, end-users,
between a typical auction, where a single auctioneer announces the bids and
the Exchange is that people are not only competing to buy but also to sell. By
Exchange rules and by law, no one can bid under a higher bid, and no one
can offer to sell higher than someone elses lower offer. That keeps the market
as efficient as possible, and keeps the traders on their toes to make sure no
23
CHAPTER-II
on February 8, 2000 as an online trading portal, Share khan has today a pan-
India presence with over 1,529 outlets serving 950,000 customers across 450
cities. It also has international presence through its branches in the UAE and
Oman. Share khan offers services like portfolio management, trade execution
funds, IPOs and much more. Sharekhan is a member of the Bombay Stock
Exchange, the National Stock Exchange and the countrys two leading
24
a depository participant with National Securities Depository and Central
tools relevant to day traders. Its second initiative, First Step, is targeted at
empowering the first-time investors. Sharekhan has also set its global
Sharekhan to help the non-resident Indians participate and benefit from the
SHAREKHAN TIMELINE
CEO, Sharekhan
His hands-on approach and rich experience in sales led him to higher
decades of legendary service to its credit. The capital market at that time was
undergoing a sea change in terms of character and SSKI under the vision and
guidance of Shripal Morakhia and the commitment and hard work of Mr Shah
was able to change and adopt the new business practices to achieve a
Desk of SSKI.
this new effort as the CEO of Sharekhan, the retail broking arm of SSKI.
Jaideep Arora, completed his B.Tech from IIT (Kanpur) and his PGDM
from IIM, Kolkata.He worked with ICICI for 8 years where his work spanned a
brokerage, investments etc. During his tenure there he set up and headed the
Institutional Equity Brokerage Desk at ICICI Securities & Finance Co. Ltd.
development division. A year later he took over the reins of the online
26
business of Sharekhan. At present Mr Aroras responsibilities include
acquisition effort.
most turbulent times in the aftermath of the securities scam in 1992 and
successfully steered the company clear of a flurry of bad papers that hit the
I.FIRST STEP:
Always wanted help on what the stock market is all about? Been
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27
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stock market? We've created special information tools for you, to help answer
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beginners like you didn't have any place they could start out from. This is why
we started the First Step program - to assist and guide new investors when
they take their first steps into the world of investing in shares. This program is
explicitly designed for beginners. You will not feel unintelligent when asking
questions like "Who owns the Stock Market?" or "What is a stock-split?" since
our people are trained to assist those taking their first step in the market.
II.CLASSIC ACCOUNT:
a button. With live stock prices, online cash transfer and instant order
execution you get complete freedom from boring paper-work. Our friendly
28
customer service representatives are accessible via toll-free phone, email and
Get live analysis before, during & after market hours. From daily
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with well-defined profit targets. In addition, you can invest in the companies
Advantages:
Multiple Exchange
Unlimited Charts
29
Features:
1. A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX,
NCDEX, Mutual Funds, IPOs.
3. Multiple Charts with Tick by Tick Intraday and End of Day Charting
powered with various Studies.
6. User can save his own defined screen as well as graph template that is,
saving the layout for future use.
the application form and send it to the nearest Sharekhan ShareShop in your
city. Alternatively, just call up our toll-free customer care number, and we will
Fund schemes.
Why PMS?
31
Who's your Money Expert?
professionals to manage the entire thing that are most important to you. Do
for you.
2. Disciplined Approach
We are investing the funds and not just allocating to the sectors to
3. Time is Money
Few Years ago you never imagined that you would have so much
money. And never imagined that you would have so little Time.
Success has extorted a fee from you: Time Leaving you very few hours
for all the things you think are important. Which is why at Sharekhan
precious time.
4. Complete Transparency
32
The third advantage of PMS is the transparent fee structure. With
5. Structurally Better
enter 100% at any time as long as they dont leverage and dont do intraday
trading.
The second big advantage of PMS services is that they can hold fewer
Sharekhan Limited
st
i. This Document has been updated up to 31 March, 2011 and has
been filed with the Securities and Exchange Board of India (SEBI)
advised to read this document and retain this document for future
33
reference.
iv. The name, phone number, e-mail address of the principal officer
VI.COMMODITIES:
With a Share khan online trading account, you can buy and sell
commodities in an instant! Anytime you like and from anywhere you like! Also,
Get access to cutting edge analysis, latest research reports and the most
VII.LEARN TO TRADE:
Share khan, your own guide to the financial jungle, in a step to boost
34
As our educational partner, Online Trading Academy will provide
professional education to traders who want to succeed in any market, and any
asset class. With 34 centers across the globe and growing, Online Trading
trader education for every need and experience level. We provide traders with:-
1. FUNDAMENTAL:
Stock Ideas: Aimed at investors. Presents our stock pick and discusses
reasons for the same. It comes with a price target and a time frame over which
decisions.
35
Share khan Top Picks: A model portfolio comprising of 12 stocks for
investors with a horizon of more than a year. Portfolio is updated with new
performance.
IPO Flash: Report on forthcoming IPOs - only those IPOs which are covered
Sector Reports: View on various sectors and its constituents (Eg. sugar and
2. TECHNICAL:
Punter Call: A daily view on how the market and major indices are
expected to trade for the day the closest support and resistance levels are
Calls created for tomorrow: These calls are for a one-day period and
are created today to buy in cash or futures. For selling tomorrow at the target
price. Buy with a stop loss or square off by 3.30pm the day after.
36
Smart Charts: It presents the best positional trading calls in the
market. Each call is introduced along with a Reco (Go Long/Go Short), a price
target, a stop loss and a chart depicting the trend in the stock.
3. MUTUAL FUND:
Mutual Fund Industry Update: This report provides all the latest news in the
Top SIP Fund Picks: This report provides details on the SIP performances of
various funds across different categories for various time periods. Top SIP
fund picks are provided in Large-cap funds, Multi-cap funds, Mid-cap funds
Top Equity Fund Picks: This report provides details of the Top Funds in
funds, ELSS funds etc. Take an informed decision, depending on your risk
taking appetite, and stay ahead of the ups and downs of the market.
Top Debt Fund Picks: This report provides details of the Top Funds in
Monthly income plans, Income funds, Short-term debt funds, Ultra short
term funds, Floating rate funds, Liquid funds, Gilt funds etc.
4. COMMODITY:
37
Riveting Metals: Daily newsletter with Technical calls on metals
commodities
CHAPTER III
REVIEW OF LITERATURE
distribution, forwards and futures markets for hedging rice risk in those
institutional and policy level constraints facing this segment calls for more
focused and pragmatic approach from government, the regulator and the
exchanges for making the agricultural futures markets a vibrant segment for
risk management.
This paper reviews more and less mainstream policy options in relation to
the commodity question in the light both of its classical definition and of the
especially once they come to the market. Farmers typically face a short period
between the time that they harvest and the time that they can sell the crop.
is analyzed within the context of the capital asset pricing model recently
developed by harpe, Lintner, and others. Under that approach the risk
of prices but on the extent to which the variations in prices are systematically
related to variations in the return on total wealth. The systematic risk was
estimated for a sample of wheat, corn, and soybean futures contracts over the
period 1952 to 1967 and found to be close to zero in all three cases. Average
realized holding period returns on the contracts over the same period were
close to zero.
in agriculture, and can impact upon the lives of millions. n this paper, we
describe the existing market design prevalent on both the spot and the
futures markets. We show some evidence on the role played by the nascent
two years that commodity trading is finding favor with Indian investors and is
been seen as a separate asset class with good growth opportunities. For
commodity trading offers a good option for long-term investors and arbitrageurs
and speculators. And, now, with daily global volumes in commodity trading
by Indian investors.
futures in commodities to make the markets more attractive. The national multi-
the growth of the commodities market, foreign institutional investors, too, should
be given the go-ahead to invest in commodity futures in India. Their entry will
deepen and broad base the commodity futures market. As a matter of fact,
derivative instruments, such as futures, can help India become a global trading
back of factors like global economic recovery and increasing demand from China
for commodities. Considering the huge volatility witnessed in the equity markets
recently with the Sensex touching 6900 level commodities could add the required
zing to investors' portfolio. Therefore, it won't be long before the market sees the
40
emergence of a completely redefined set of retail investors.
3.7 According to Chua, Jess H., Gordon Sick, and Richard S. Woodward
(1990). "Diversifying with Gold Stocks" The authors extend Jaffes (1989)
versus gold bullion during the period September 1971 through December 1988.
By splitting their sample period into two sub periods, the authors show that the
diversification benefits of gold bullion are much more consistent than the
diversification benefits of gold equities. In particular, they find that the beta of
gold equities more than doubled between the 1970s and 1980s, whereas the beta
3.8 According to de Roon, Frans A., Theo E. Nijman, and Chris Veld (2000).
present a simple model implying that futures risk premium depend on both own-
markets, divided into four groups (financial, agricultural, mineral, and currency)
indicate that, after controlling for systematic risk, both the futures own hedging
pressure and cross-hedging pressures from within the group significantly affect
futures returns. These effects remain significant after controlling for a measure of
price pressure. Finally, we show that hedging pressure also contains explanatory
power for returns on the underlying asset, as predicted by the model. (p. 1437).
41
Political Economy, Vol. 81, No. 6 (November/December): 1387-1406. The long-
premium is analyzed within the context of the capital asset pricing model
recently developed by Sharpe, Linter, and others. Under that approach the risk
prices but on the extent to which the variations in prices are systematically
related to variations in the return on total wealth. The systematic risk was
estimated for a sample of wheat, corn, and soybean futures contracts over the
period 1952 to 1967 and found to be close to zero in all three cases. Average
realized holding period returns on the contracts over the same period were close
3.10. According to Edwards, Franklin R., and Jimmy Liew (1999). "Managed
Commodity Futures" Journal of Futures Markets, Vol. 19, No. 4 (June): 377-
commodity trading advisers. The authors indicate that the costs associated with
investing in CPOs and CTAs may be quite large because the funds may incur
Despite these relatively high costs, the authors find that the net return to
compare the returns to CTAs and CPOs with the returns to the passive
42
Reuters/Jefferies CRB Index and the MLM. The MLM is a dynamic index based
followed by many managed futures funds. The authors find a significant positive
relationship between the returns to managed futures and the MLM but no
significant relationship between managed funds and the CRB. This finding is
consistent with the contention that the MLM provides a general indicator of the
performance of managed futures. The authors also find, however, that neither the
MLM nor the CRB supplants managed futures in their derived efficient
portfolios.
CHAPTER IV
RESEARCH METHODOLOGY
the procedure of gathering valid and reliable data for the problem under
43
investigations (Kothari, 1996). The methodology of this study includes the choice
Research approach
The selection of the research approach is the basic procedure for the
collect and how to analyze it. It also suggests possible conclusion to be drawn
obtaining answers to the research question and for testing the research
hypothesis. It spells out the strategies that the investigator adopts to develop
spots designed to keep the investigator in the right direction. ( Polit and Hungler,
1999).
commodity market.
44
To study about the investors acceptance level of rumors in commodity
market.
commodity market.
commodity market.
Research design constitutes the blue print for the collection and
money.
DESCRIPTIVE RESEARCH:
45
the state of affairs as it exists at present. In social science and business
research we quite often use the term ex post facto research for description
research studies.
SAMPLING UNIT
wife etc.
SAMPLE SIZE
A sample size of 120 investors was selected for the study in the Gobi
Region.
A. PRIMARY DATA
Data are collected for the first time for a specific purpose in mind
using the questionnaire method and interview method.
B. SECONDARY DATA
46
This sampling method involves purposive or deliberate selection of
particular units of the universe for consulting a sample, which represents the
universe.
2. Chi-Square Test
3. Correlation Analysis
4. Weighted Average
5. ANOVA
responses. Using this method we can get clear view of how customer
X 100
2. CHI-SQUARE TEST
47
The chi-square test is an important test amongst the several tests of
populations and actual data when categories are used. Thus, the chi-square
Where,
Oij = Observed frequency of the cell in ith row and jth column.
Eij = Expected frequency of the cell in ith row and jth column.
3. CORRELATION ANALYSIS:
variables X &Y. In other words as to how strongly are these two variables
association in case where the relationship is a linear one. i.e. where the trend
48
of the relationship can be described by a straight line.
N dx dy ( dx) ( dy)
r = ------------------------------------------
4. WEIGHTED AVERAGE:
the various item in serious by certain values know as weighted and the total of
Where,
5. ANOVA:
disciplines. This technique is used here since multiple sample cases are
involved.
can be judged through either Z-test or T- Test but the difficulties arise when we
happen to examine the significance of the difference amongst more than two
researcher. Using this technique, one can draw inferences about whether the
samples have been drawn from populations having the same mean.
data is broken down into two types, that amount which can be attributed to
Where,
T = Grand Total
N = No. Of observation
Where,
c = Number of columns
r = Number of rows
50
Degree of Mean
Source of Sum of square
freedom Square F-ratio
variation SS (d.f) (ms)
SS
Between Between MS between
( ( Tj ) / nj )- ( c-1 )
columns Columns Columns /
(T)/n)) / MS residual
treatment
( c-1 )
SS
Between MS between
( ( Ti ) / ni )- (r1) Between
Rows rows / MS
rows /
(T)/n)) residual
treatment
(r1)
SS
Total SS ( SS (c1) Residual
Residual or between /( c 1 )
(r1)
Error columns + SS
(r1)
between Rows )
51
The respondents were less interested in answering the questionnaire, as
All respondents were not very much open in giving their details.
Difficulties to see the investors, since most of the investors were trading in
The whole study has been divided into five chapters as detailed below:
commodity market.
The second chapter deals the overview about the industry profile and,
company profile.
commodity market.
The fourth chapter deals with research methodology adopted in the study.
In this chapter, the objectives set for the study, data collection sources,
data collection tools, limitation of the study and chapter of schemes are
explained.
The fifth chapter deals with analysis and interpretation of data are
tools.
The sixth chapter brings out a comprehensive list of various findings of the
study; the researcher has come out with certain practical suggestions and
conclusion. In this chapter, the researcher also has outlined the directions
53
CHAPTER V
Table No 5.1: The table showing the Age Group of the Respondents
Respondents in (%)
1 Below 25 yrs 19 15.8
2 25-50 yrs 41 34.2
3 50-75 yrs 52 43.3
4 Above75 yrs 8 6.7
Total 120 100
Inference:
From the above table, it is clear that 15.8% of the respondents are
belongs to the age below 25yrs, 34.2% of the respondents are belongs the age
75yrs of age group. Hence, the investors belongs the age between 50 to 75
54
Table No 5.2: The table showing occupation of the Respondents
1 Business 33 27.5
2 Profession 46 38.33
3 Employed 27 22.5
4 Others 14 11.66
Inference:
From the above table, it is reveals that 27.5% of the respondents are
respondents are Employed & 11.6% of the respondents are private others.
55
Table No. : 5.3 The table showing Gender of the Respondents
1 Male 92 76.7
2 Female 28 23.3
Inference:
From the above table, it is notified that 76.7% of the respondents are
56
Table No.5.4: The table showing Educational Qualifications of the
Respondents
1 Up to 12th 20 16.7
2 UG 48 40
3 PG 38 31.7
4 Others 14 11.7
Inference:
57
From the above table, it is shows that 16.7% of the respondents are
qualifications are UG, 31.7% of the respondents are belongs to PG and 11.7%
Respondents
58
Inference:
and 24.2% of the respondents are belongs to above 6 Lakhs. Hence, most of
Chart No: 5.5 : The chart showing Annual Income of the Respondents
Respondents
59
4 Tax benefit 0 0
Inference:
Hence, Most of the investors are aims at earning the high income.
Respondents
income
income
Table No.5.8: The table showing Risk taking capacity of the Respondents
Inference:
respondents risk taking capacity is very high, 20% of the respondents risk
Medium, 21.66% of the respondents risk taking capacity is low and 20% of
the respondents risk taking capacity is very low. Hence, majority of the
Respondents
62
Respondents in (%)
1 Below 1 lakhs 59 49.16
2 1 Lakhs -2 Lakhs 33 27.5
3 2 Lakhs -3 Lakhs 17 14.16
4 Above 3 Lakhs 11 9.16
Total 120 100
Inference:
Hence, most of the respondents (59) investment amount falls below 1 lakhs.
1 Friends 59 49.16
2 Family 21 17.5
3 Consultants 9 7.5
4 others 31 25.83
Inference:
From the above table, it shows that 49.16% of the respondents are
getting investment advice from their family, 7.5% of the respondents are
64
Table No.5.11: The table showing Various Investment preferences of the
Respondents
Inference:
From the above table, it is noted that 43.33% of the respondents are
investment avenues, and 8.33% of the respondents are like to invest only in
Respondents
65
Table No.5.12: The table showing Source of know about the commodity
are getting know about commodity market through friends, 4.16% of the
getting know about commodity market through mass medias, and 19.16% of
the respondents are came to know about commodity market through officials
66
respondents are came to know about commodity market through their
friends.
Chart No.5.12: The chart showing Source of know about the commodity
commodity Trading
are trading between 2-3 years and 30.83% of the respondents are experienced
67
in commodity market more than 3 years. Hence, Its concluded that majority
commodity Trading
From the above table, it is clear that 85.83% of the respondents are
68
frequency of trading falls in weekly basis, 2.5% of the respondents are trading
rarely. Hence, its reveals that most of the investors are trading in commodity
69
Inference:
awareness level of markets regulations and its circulars is very high, 25% of
the respondents awareness level falls in high, 8.33% of the respondents are
moderately aware about markets regulations and its circulars, 5.83% of the
respondents are having low level awareness of markets regulations and its
circulars, and 2.5% of the respondents are not aware of markets regulations
and its circulars. Hence, its concluded that out of the sample most of the
70
Total 120 100
Inference:
From the above table, it is found that 68.33% of the respondents are
choosing the commodity market for getting High return, 3.33% of the
3.33% of the respondents are prefer to choose the commodity market is for
earning safety return, and 25% of the respondents reason for choosing
commodity market falls in low Margin. Hence, Its inferred that majority of the
respondents are likely to choose the commodity market for getting high return.
71
Turmeric,
Jeera,
chilli,
coriander
Pulses: 16.6 19.1 36.6
18 15 20 23 44 15 12.5
Chana 6 6 6
Fibres:
V-797 kapas , 26 21.66 12 10 27 22.5 30 25 25 20.83
shankar kapas
Cereals:
20.8 25.8
Wheat, 23 19.16 15 12.5 25 31 26 21.66
3 3
Barley,
Oil and Oil seeds: 26.6
22 18.33 15 12.5 21 17.5 32 30 25
Castor seeds, 6
Others:
11.6 18.3
Guar Seeds, 15 12.5 14 22 33 27.5 36 30
6 3
Guar Gum,
Metals:
Steel, 26.6 9.16 13.3
50 41.66 32 11 16 11 9.166
Copper, 6 6 3
Zinc,
Energy:
16.6 16.6
Crude Oil, 52 43.33 20 15 12.5 20 13 10.83
6 6
Thermal Coal,
Precious Metals:
Gold,
Gold (100 gms),
Gold International, 15.8
60 50 19 11 9.16 15 12.5 15 12.5
Silver, 3
Silver (5kg),
Silver International,
Platinum
Others:
33.3
CER, 2 1.66 0 0 15 12.5 40 63 52.5
3
Polyvinyl Chloride
Inference:
72
33.3% of the respondents are not ready to prefer the plantation products,
Majority of the respondents i.e. 75.5% of the respondents are prefer only
36.7% of the respondents are likely to prefer only low level of pulses
products,
26.7% of the respondents are prefer low level of oil seeds products and
41% of the respondents are very highly given their preference is metal
43% of the respondents are very highly preferred the Energy products like
50% of the respondent s preference falls in the Precious products like gold,
33.3% of the respondents are not prefer other metal products like polyvinyl,
Hence, from the above consolidated table it shows that majority of the
73
74
Chart No.5.17: The chart showing Investors preference of commodity
75
Specialty of No. of No. of Respondents
S.No
commodity market Respondents in (%)
1 Price hedging 51 42.5
2 Regulated marketing 39 32.5
3 Low risk 20 16.66
4 Quality products 10 8.33
Total 120 100
Inference:
respondents are saying the specialty of the commodity trading are price
hedging, 32.5% of the respondents are saying the specialty of the commodity
specialty of trading are low risk, and 8.33% of the respondents given their
opinion about the specialty of the commodity trading are quality products.
Hence, form the above table its clearly reveals that most of the respondents
i.e., (51) are given their opinion about the specialty of this market is price
hedging.
Chart No.5.18: The chart showing Opinion of the respondents about the
76
Table No.5.19: The table showing Level of acceptance of the respondents about
Level of acceptance of
No. of No.of Respondents
S.No luring advertisement,
Respondents in (%)
rumors etc
1 Very high 81 67.5
2 High 25 20.83
3 Medium 12 10
4 Low 1 0.83
5 Very low 1 0.83
Total 120 100
Inference:
From the above table, it is found that 67.5% of the respondents level of
acceptance about rumors and luring advertisements is very high, 20.83% of the
respondents are highly accepting about rumors and luring advertisements, 10% of
the respondents level of acceptance about rumors and luring advertisements falls in
medium, 0.83% of the respondents are having very low level of acceptance about
rumors and luring advertisements, and 0.83% of the respondents are not accepting
the rumors and luring advertisements. Hence, Its concluded that majority of the
investors are very highly accepting the rumors & luring advertisements.
Chart No.5.19: The chart showing Level of acceptance of the respondents about
77
Table No.5.20: The table showing Respondents recommendation of
Respondents
No. of No. of Respondents
S.No recommendation to
Respondents in (%)
others
1 Definitely 75 62.5
2 Probably 33 27.5
3 Not sure 12 10
4 Never 0 0
Total 120 100
Inference:
are recommends others enter into the commodity, 27.5 % of the respondents
are probably recommends others enter into commodity market, and 10% of
the respondents are saying not sure to other entering into the commodity
market. Hence, from the above table its clearly understood that out of the
78
Chart No.5.20: The chart showing Respondents recommendation of
2. CHI-SQUARE ANALAYSIS
and Pulses
79
Income * Pulses Cross tabulation
Pulses
Total
1 2 3 4 5
Count 4 6 8 14 8 40
Count 8 5 3 11 1 28
Two Lakhs -
Four Lakhs Expected
4.2 4.7 5.4 10.3 3.5 28.0
Inco Count
me Count 4 6 4 7 2 23
Four Lakhs -
Six Lakhs Expected
3.4 3.8 4.4 8.4 2.9 23.0
Count
Count 2 3 8 12 4 29
Count 18 20 23 44 15 120
Total Expected
18.0 20.0 23.0 44.0 15.0 120.0
Count
Oij-
S.No Oij Eij (Oij-Eij) (Oij-Eij)/Eij
Eij
1 4 6 -2 4 0.6666
5 8 5 3 9 1.8
81
20 4 3.63 0.37 0.1369 0.0377
= (r-1) (c-1)
= 12
Step5 : Conclusion:
tabulated value and hence the result of the experiment supports the
and Fibres
82
Income * Fibers Cross tabulation
Fibres
Total
1 2 3 4 5
Count 8 5 8 10 9 40
Count 10 3 4 6 5 28
Two Lakhs -
Four Lakhs Expected
6.1 2.8 6.3 7.0 5.8 28.0
Incom Count
e Count 3 3 6 6 5 23
Four Lakhs -
Six Lakhs Expected
5.0 2.3 5.2 5.8 4.8 23.0
Count
Count 5 1 9 8 6 29
Above Six
Lakhs Expected
6.3 2.9 6.5 7.2 6.0 29.0
Count
Count 26 12 27 30 25 120
Total Expected
26.0 12.0 27.0 30.0 25.0 120.0
Count
Annual Fibers.
Step5 : Conclusion:
and Energy
85
Occupation * Energy Cross tabulation
Energy
Total
1 2 3 4 5
Count 13 3 4 8 5 33
Business Expected
14.3 5.5 4.1 5.5 3.6 33.0
Count
Count 22 10 6 3 5 46
Professio
Expected
n 19.9 7.7 5.8 7.7 5.0 46.0
Occupati Count
on Count 15 3 3 4 2 27
Employe
Expected
d 11.7 4.5 3.4 4.5 2.9 27.0
Count
Count 2 4 2 5 1 14
Others Expected
6.1 2.3 1.8 2.3 1.5 14.0
Count
Count 52 20 15 20 13 120
Total Expected
52.0 20.0 15.0 20.0 13.0 120.0
Count
87
= (r-1) (c-1) = (4-1) (5-1) = 12
Step5 : Conclusion:
tabulated value and hence the result of the experiment supports the
88
3. ANNOVA
Metals
Metals
Total
1 2 3 4 5
Business 13 7 5 6 2 33
Professio
21 16 2 2 5 46
Occupati n
on Employe
13 5 1 4 4 27
d
Others 3 4 3 4 0 14
Total 50 32 11 16 11 120
89
Step4 : Total SS
=169+49+25+36+4+441+256+4+4+25+169+25+1+16+16+9+16+9+9
= 570
= 285.5
= 106
Rows)
= 178.5
5% F-Limit
Source of (or the
SS d.f MS F- ratio
variation table
values)
90
Between
= ( c-1 ) =
columns
= 285.5 / 4 71.375 / F ( 4 , 12 )
(i.e. 285.5 = ( 5 1 ) 14.875
= 71.375 = 5.9117
between =4 = 4.7983
occupation)
Between
Rows
=(r1) =
(i.e. = 106 / 3 35.3333 F ( 3 , 12 )
between 106 =(41) / 14.875
= 35.3333 = 8.7446
Metal =3 = 2.3753
Preference
level )
=(c1) = 178.5 /
(r1) 12
Residual or
178.5
Error =4x3 = 14.875
= 12
(4 x 3 ) 1 =
Total 570
11
Inference:
It is noted from the above table that, the calculated ANOVA value is
less than the table value. So, there is no relationship between Occupation and
91
Table No.5.29: The table showing Relationship between Risk Taking
Age
Very
0 19 1 0 20
high
High 0 1 23 0 24
Risk
taking Medium 19 5 2 0 26
Low 0 6 20 0 26
Very low 0 10 6 8 24
Total 19 41 52 8 120
There is significant difference between Risk Taking Capacity and Age Group
720
Step4 :
= 836
= 242
Rows)
= 836 (242 + 6)
= 588
5% F-
Source of Limit (or
SS d.f MS F- ratio
variation the table
values)
94
Between Rows
=(r1)
(i.e. between = 6/ 4 = 1.5/ 49 F ( 4 , 12 )
Metal 6 =(51)
= 1.5 = 0.3061 = 5.9117
Preference =4
level )
=(c1)
= 588 / 12
Residual or (r1)
588 = 49
Error =3x4
= 12
(3 x 4 ) 1
Total 836
= 11
Inference:
It is identified from the above table that, the calculated ANOVA value
is less than the table value. So, there is no relationship between Risk taking
capacity and age of the respondents. Hence, the null hypothesis accepted.
4. CORRELATION ANALYSIS
Table No.5.31: The table showing Correlation between Spices and metals
Spices (X) 17 20 18 32 33
Metal (Y) 50 32 11 16 11
95
N dx dy ( dx) ( dy)
r = ------------------------------------------
(X-24) (Y-25)
X dx Y dy dx dy
dx dy
17 -7 49 50 25 625 -175
20 -4 16 32 7 49 -28
18 -6 36 11 -14 196 84
32 8 64 16 -9 81 -72
r = -0.5980
Inference:
Since the correlation value should lies between -1 & +1. Here, r value
of the respondents.
Table No.33: The table showing correlation between Risk Taking capacity
96
Step 1: Calculation of Correlation
N dx dy ( dx) ( dy)
r = ------------------------------------------
(X-26) (Y-30)
X dx Y dy dx dy
dx dy
20 -6 36 60 30 900 -180
24 -2 4 19 -11 121 22
26 0 0 11 -19 361 0
26 0 0 15 -15 225 0
24 -2 4 15 -15 225 30
r = -0.94441
Inference:
Since the correlation value should lies between -1 & +1.Here, r value
97
Table No.5.35: The table showing opinion of the respondents preference
Gobi
Plantation Products:
17 15 14 34 40 120
Rubber, 9
Score 85 60 42 68 40 295
Spices: Pepper,
Turmeric, 17 20 18 32 33 120
Jeera,chilli, coriander 7
Score 85 80 54 64 33 316
Cereals: Wheat,
23 15 25 31 26 120
Barley, 5
Score 115 60 75 62 26 338
98
Metals: Steel, Copper,
50 32 11 16 11 120
Zinc, 1
Score 250 128 33 32 11 454
Others: CER,
2 0 15 40 63 120
Polyvinyl Chloride 10
Score 10 0 45 80 63 198
Inference:
From the above table by the weighted average method, its observed
that Precious Metals: Gold, Gold (100 gms), Gold International, Silver, Silver
preference, Energy: Crude Oil, Thermal Coal, commodities having the 2nd
commodities having the 3rd rank of among the investors preference. Therefore
from the weighted average method majority of the respondents very highly
prefer to invest in the commodities like Precious Metal, Energy and Fibres.
99
CHAPTER VI
15.8% of the respondents are belongs 25yrs of age Group, 34.2% of the
lakh, and 24.2% of the respondents annual incomes level is above 6 lakh.
64.2 % of the respondents investment objectives is High Income ,29.2% of
100
30.8% of the respondents of investments portion from their income is below
is low, and 20% of the respondents risk taking capacity is very low.
49.2% of the respondents current investment is below 1 lakh, 27.5% of the
17.5% of the respondents are getting investments advice from their family
trading, and 6.7 % f the respondents are not having much aware about
commodity marketing.
49.2% of the respondents are know about commodity market trading
through their friends ,4.2% of the respondents are know about commodity
are know about commodity market trading through mass media, 19.2% of
101
the respondents are know about commodity market trading through the
weekly traders, 2.5% of the respondents are monthly traders, 1.7% of the
circular and its regulations , 25% of the respondents are high level
markets circular and its regulations, 5.8% of the respondents are having
low level of awareness about their commodity markets circular and its
regulations, and 2.5% of the respondents are having very low level of
3.3% of the respondents are choosing commodity trade for moderate return,
3.3% of the respondents are choosing commodity trade for safely return,
and 25% of the respondents are choosing commodity trading because its
rubber, 12.5% of the respondents are highly prefer the plantation products
like rubber, 11.7% of the respondents are prefer medium level of preference
of the plantation products like rubber, and 28.3% of the respondents are
102
prefer low .33.3% of the respondents are very low to prefer the plantation
prefer low level of preference of the spices products like pepper, turmeric,
jeera, chilli, coriander, and 27.5% of the respondents are very low to prefer
Chana, 16.7% of the respondents are highly prefer the pulses products like
products like Chana, 36.7 % of the respondents are prefer low level of
preference of the pulses products like Chana, and 12.5% of the respondents
797 Kapas, Shankar Kapas, 10% of the respondents are highly prefer the
preference of the Fibers products like V-797 Kapas, Shankar Kapas, and
20.8% of the respondents are very low to prefer the Fibers products like V-
103
products like wheat, barley, maize-feed/industrial Grade, 25.8 % of the
respondents are prefer low level of preference of the Cereals products like
are very low to prefer the Cereals products like wheat, barley, maize-
feed/industrial Grade.
18.3% of the respondents are very high to prefer the oil and oil seeds,
12.5% of the respondents are highly to prefer the oil and oil seeds, 17.5% of
the respondents are prefer it only the moderate level, 26.7% of the
respondents are prefer only low level and 25% of the respondents are very
Guar Seeds, potato .11.7 % of the respondents are prefer high level, 18.3
%of the respondents are prefer these products only moderate level, 27.5 %
of the respondents are prefer it low level and 30 % of the respondents are
copper and nickel, 26.7% of the respondents are highly prefer metal
products like steel, copper and nicke.9.2l % of the respondents are prefer it
only moderate levels, 13.3% of the respondents are prefer only low level and
the respondents are highly prefer it, 12.5 % of the respondents are only
moderate level of preference, and 16.7% of the respondents are very low to
prefer it. and 10.81% of the respondents are not ready to prefer it
50% of respondents are very high to prefer the Precious metals products,
15.8% of the respondents are highly prefer it, 9.2% of the respondents are
only moderate level of preference, 12.5% of the respondents are very low to
104
1.7% of the respondents are very highly prefer other products like Polyvinyl,
respondents are very low to prefer it ,52.5 % of the respondents are not to
prefer its.
42.5 % of the respondents are saying about commodity market is price
market is low risk, and 8.3 % of the respondents are saying about
advertisement and its rumors. 20.8% of the respondents are highly accept
advertisement and its rumors, 0.8% of the respondents are very low
accepting the commodity market advertisement and its rumors and 0.8% of
the respondents are not to accept the commodity market advertisement and
its rumors.
62.5% of the respondents are saying definitely recommend commodity
From the chi square analysis between the income and pulses calculation,
21.000. The calculated value is much less than the tabulated value and
Hypothesis Accepted)
105
From the chi square analysis between the income and fibers calculation,
21.000. The calculated value is much less than the tabulated value and
Hypothesis Accepted)
From the chi square analysis between the occupation and energy
tabulated value and hence the result of the experiment supports the
metal, the calculated ANOVA value is less than the table value. So, there is
It is noted from the ANOVA calculation between risk taking capacity and
age of the respondents, the calculated ANOVA value is less than the table
value. So, there is no relationship between Risk taking capacity and age of
The correlation calculation between spices and metal, the correlation value
106
between Risk Taking capacity and precious metals preference of the
respondents.
From the weighted average method, its observed that Precious Metals:
Gold, Gold (100 gms), Gold International, Silver, Silver (5kg), Silver
Energy: Crude Oil, Thermal Coal, commodities having the 2 nd Rank of the
having the 3rd rank of among the investors preference. Therefore from the
Fibres.
6.2 SUGGESTIONS
prefer bullion sector (GOLD). So the firm should create awareness over
other sectors.
Most of the investors getting the information from their friends, so the firm
107
Some investors are hesitating to recommend investing in commodity market
to other people. So, the firm has to give proper guidelines to the investors
The arrangement of experts and specialist seminar for investors will help to
The newsletters and special publishing will helps to create high awareness
6.3 CONCLUSION
108
on annual income and risk taking capacity .The female investors in Gobi are
conducted to improve the awareness level of among them. The major finds of
metals.
109