SYNOPSIS

EQUITY INVESTMENT AND EQUITY TRADING IN SECONDARY MARKET

A synopsis submitted to the Bangalore University For the Partial Fulfilment for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION

By RANJEET KUMAR Reg. No.-10RWCMA078

Under the Guidance of Prof. SHILU

DEPT. OF MANAGEMENT STUDIES T JOHN COLLEGE BANGLORE-560083 2010-12

EQUITY INVESTMENT AND EQUITY TRADING IN SECONDARY MARKET

INTRODUCTION

The study is about analyzing the performance of shares of listed companies in the Indian stock market, constructing the optimum portfolio using the data collected, and calculating the various statistical measures. Generating portfolios with a one to three year perspective is a difficult task at the best of times. It is a task made more difficult by the present uncertainty surrounding financial markets. What we are really looking for are investments, which transcend near term gyrations and generate longer term value. Before examining the nuts and bolts of our portfolios, it is useful to look at some key definitions and themes. First of all, the secret of portfolio selection is to diversify and diversify and diversify. Even with a small number of shares, we must spread our investments in a manner, which gives protection in uncertain and bad times and captures growth and opportunities in good times. The second feature of portfolio investing, which we must carry with us at all times, is that we must operate to a plan. Choose the stocks, which belong in our portfolio and then buy and sell them as market conditions present opportunities. It is not necessary to build our portfolio in one hit. Does it progressively as market conditions permit.

STATEMENT OF THE PROBLEM

Basically the company provides the financial services to the customers through the market research and expert team which is hire by the company. Some problems are there that isy No hundred percent accuracy level of the information which is given by the research team to the customer. y No proper communication between customer and research team. y Company provides services to the customer through the media like. (By sms, yahoo messenger, block, G mail, G talks etc.) y Some time customers not getting information at a time which sent by the media, so customers facing loss. y Company provides login id and password to the customer. But some time its not work properly.

REVIEW OF LITERATURE

Investment means the money earned, is partly spent and the rest saved for the meeting future expenses, instead of keeping the savings idle, it may used for savings in order to get return on it in the future. Investment is the sacrifice of certain present value for the uncertain future reward. Further, such decision making has not to be continuous but rational too. Broadly speaking investment decision is trade -off between risk and return. Now a day even a common person wants to invest, and get returns. The total equity capital of a company is divided into units

of small denominations, each called a share. There are two markets to trade these share that are Primary market and Secondary Market. Primary Market provides the channel for new securities, where as Secondary Market is a place where securities are traded after being initially offered to the public in the primary market, as compared to these two markets majority of trading is done in the secondary market.

OBJECTIVES OF THE STUDY

Some key aspects that affect the earnings persistence can be summarized as follows: y The stability of the equity under consideration y The predictability of the value of the given equity under the given circumstances y The variability of the given equity, given the various variance factors y Determining the earning power y Allocating the earnings component to the most appropriate per y The valuation process used for common stock y The conditions that lead up to a state of stock market equilibrium y The efficient market hypothesis y The valuation process of a preferred stock

HYPOTHESIS

By hypothesis we mean a statement about the population parameters. Hypothesis deals with a procedure, which accepts or rejects the hypothesis. The hypothesis is of two types.

Null Hypothesis
It states that there is no significant difference between the sample value and population value. This means that the observed difference is due to the random fluctuations. Ho denotes the null hypothesis.

Alternate Hypothesis
In case the null hypothesis is rejected, we should have an alternate hypothesis to accept. This alternate hypothesis is denoted by HA.

Types of Errors
While testing a hypothesis, there are four possible combinations between the population value and sample value. The four combinations are:  Hypothesis is true and test accepts it.  Hypothesis is true and test rejects it (Type 1 error)  Hypothesis is false and test accepts it (Type 2 error)  Hypothesis is false and test rejects it.

Procedure for Testing Hypothesis

 We set up a null hypothesis denoted by Ho. This means there is no significant difference between sample value and population value. In case if Ho is rejected we must have an alternate hypothesis HA. So we set up an alternate hypothesis.  Select the level of significance.  Select an appropriate distribution for the test, which is known as test statistics. The distribution generally used are normal distribution, skewed t distribution, Fishers F distribution or Chi-square (]2) distribution.  Calculate the necessary values from the given data for the test.  Make conclusions from testing. If the calculated value is less than the tabulated value, Ho is accepted. Or else, HA is accepted, rejecting Ho.

LIMITATIONS OF THE STUDY: 1. I have taken sample size of 50 that may not be sufficient for concluding the report. 2. Company has not given all information. 3. The information l have collected may not be sufficient. 4. Insufficient time to interact with maximum number of customers. 5. Respondents might not have been open in expressing their opinion.

METHODOLOGY

Primary Sources:
y Working and observing in back and front office at Stock Holding Corporation of India Ltd. y Interaction with clients and investors.

y Discussing with staff members of Stock Holding Corporation of India Ltd. y Primary information collects through questions.

Secondary sources:
y Stock Holding Corporation of India Ltd. websites; y .Internet y Articles from Magazines and Newspapers.