A PROJECT REPORT
ON
CAPITAL MARKETS, FINANCIAL INTERMEDIATION, AND INVESTMENT ANALYSIS FOR THE PARTIAL FULFILMENT OF P.G.D.B.A. PROGRAMME
SUBMITTED BY: PRIYANK A
B AID
REGISTRATION NO. 200717026 SUBMITTED TO: YM BI OS CENT RE FOR DI ST NG (SC DL) S YM OS I IS ST ANCE LE ARN I ING
MY ENROLMENT DATE: JULY 2007
PROJECT PROPOSAL
Name of the Learner :
Ms Priyanka Baid
Registration No.
:
200717026
Program Name
:
PGDBA
Address
:
801, garden palace, Behind City light Society, Parle Point, Surat. GUJARAT INDIA 395007
Phone No
CAPITAL
:
0261-3054896 0261-3054 896
MARKETS,
FINANCIAL
INTERMEDIATION,
AND
INVESTMENT ANALYSIS Indian Capital Market is seeing a bullish trend since few quarters. It had touched the level which it had never reached earlier. In a very short duration of time sensex touched 20000 points . Still people are very bullish for the market and expecting sensex to reached 25000 points.
Current scenario is that market is over performing than then it actual potential and where major investors are just attracted by the high short term returns and ignoring the actual facts and figures of the company. In such condition it became very necessary that investor don¶t work on ³greater fool theory´ rather invest in the company whose fundamentals are strong by doing proper analysis and invest keep ing long term perspective. Investment is putting money into something with the hope of profit. More specifically,
investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, income (dividends), (dividends ), or [1]
appreciation (capital gains) of the value of the instrument.
It is related to saving or deferring
consumption. Investment is involved in many areas of the economy, such as business
PROJECT PROPOSAL
Name of the Learner :
Ms Priyanka Baid
Registration No.
:
200717026
Program Name
:
PGDBA
Address
:
801, garden palace, Behind City light Society, Parle Point, Surat. GUJARAT INDIA 395007
Phone No
CAPITAL
:
0261-3054896 0261-3054 896
MARKETS,
FINANCIAL
INTERMEDIATION,
AND
INVESTMENT ANALYSIS Indian Capital Market is seeing a bullish trend since few quarters. It had touched the level which it had never reached earlier. In a very short duration of time sensex touched 20000 points . Still people are very bullish for the market and expecting sensex to reached 25000 points.
Current scenario is that market is over performing than then it actual potential and where major investors are just attracted by the high short term returns and ignoring the actual facts and figures of the company. In such condition it became very necessary that investor don¶t work on ³greater fool theory´ rather invest in the company whose fundamentals are strong by doing proper analysis and invest keep ing long term perspective. Investment is putting money into something with the hope of profit. More specifically,
investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, income (dividends), (dividends ), or [1]
appreciation (capital gains) of the value of the instrument.
It is related to saving or deferring
consumption. Investment is involved in many areas of the economy, such as business
management and finance no matter for households, firms, or governments. An investment involves the choice by an individual or an organization, such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of [2]
generating returns over a period p eriod of time.
Investment comes with the risk of the loss of the principal sum. The investment that has not been thoroughly analyzed can be highly risky with respect to the investment owner because the possibility of losing money is not within the owner's control. The difference between speculation and investment can be subtle. It depends on the investment owner's mind whether [3]
the purpose is for lending the resource resour ce to someone else for economic purpose or not.
In the case of investment, rather than store the good produced or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits. In the first case, the individual creates durable consumer goods, hoping the services from the good will make his life better. In the second, the individual becomes an entrepreneur using the resource to produce goods and services for others in the hope of a profitable sale. The third case describes a lender, and the fourth describes an investor in a share of the business. In each case, the consumer obtains a durable asset or investment, and accounts for that asset by recording an equivalent liability. As time passes, and both prices and interest rates change, the value of the asset and liability liability also change. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin "vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' [4]
pockets.
The basic meaning of the term being an asset held to have some recurring or capital
gains. It is an asset that is expected to give returns without any work on the asset per se. The term "investment" is used differently in economics and in finance. Economists refer to a real investment (such as a machine or a house), while financial economists refer to a financial
asset, such as money that is put into a bank or the market, which may then be used to buy a real asset. In today¶s world the most common objective for any individual is to invest its hard earned money He has to think hundred times before he invests Therefore I here produce data of different companies and try to select best between t hem. The main objective of the project is to find out which companies is the best for investment and for portfolio analysis.
This project involves fundamental analysis of ssj finance and secur ities pvt. Ltd.
The project is done for the partial fulfillment of P.G.D.B.A.programme, this project is done under ssj finance and securities pvt. Ltd., Surat. Sincere efforts have been made to make this project live up to the expectation to Department of Finance Management where t his project is to be submitted.
NO OBJECTION CERTIFICATE
This is to certify that Priyanka Baid is permitted to use relevant data/information of this organization for her project in fulfillment of the PGDBA Pro gram.
We wish her all the success.
Seal
Place: Surat Date:
Signature
DECLARATION BY THE LEARNER
This is to declare that I have carried out this project work myself in part fulfillment of the PGDBA Program of SCDL. The work is original, has not been copied from anywhere else and has not been Submitted to any other University/Institute for an award of any degree/diploma.
Date:
Signature:
Place: Surat
Name: Priyanka Baid
CERTIFICATE OF SUPERVISOR (GUIDE)
Certified that the work incorporated in this Project Report ³CAPITAL MARKETS, FINANCIAL INTERMEDIATION, AND INVESTMENT ANALYSIS´
Submitted by: Priyanka Baid is her original work and completed under my supervision. Material obtained from other sources has been duly acknowledged in the Project Report
Date: Place: Surat
Signature of Guide:
INDEX
SR. No
TOPIC
PAGE NO
1
INDUSTRY PROFILE
7-
INTRODUCTION
OF
SSJ
FINANCE
AND
FINANCE
AND
SECURITIESPVT LTD. RANKING OF INDUSTRY. COMPETITORS
OF
SSJ
SECURITIES BOMBAY STOCK EXCHANGE NATIONAL STOCK EXCHANGE ECONOMIC UPS AND DOWNS WHAT DO SHARE MARKETS DO? INDIAN STOCK MARKET 5 YEAR PLANS OF INDIA MARKET VOLUME MARKET WATCH(GLOBAL MARKET)
2
COMPANY PROFILE PAST,PRESENT AND FUTURE OF SSJ STRENGTH OF COMPANY TRAINING AND DEVELOPMENT REASONS FOR SUCCESS COMPANYS VISION BUSINESS PHILOSOPHY COMPANYS VALUE MANAGEMENT TEAM CORE BUSINESS MEMBERSHIP QUALITY ASSURANCE POLICY
CRM POLICY LEADERSHIP MODEL CODE OF ETHICS DISTRIBUTION MODEL INFRASTRUCTURE REGIONAL OFFICES FUTURE PLANS COMPANY NOW HR INFORMATION IN DETAIL FINANCIAL INFORMATION IN DETAIL DEALINGS OF COMPANY
3
RESEARCH METHODOLOGY
80-86
SAMPLE DESIGN TYPES OF DATA DATA COLLECTION TOOLS SURVEY METHODS RESEARCH INITIATIVES WHEN &WHY RESEARCH? ANGEL RESEARCH STRENGTH RESEARCH AND INVESTMENT ADVISORY RESEARCH PRODUCTS RESEARCH PROCESS TECHNICAL RESEARCH CALLS
4
FINANCIAL ANALYSIS OF DATA
87
5
FINDINGS
105
6
CONCLUSION
106
7
SUGGESTIONS
107
8
GLOSSARY
108-109
9
BIBLOGRAPHY
105
INDUSTRY PROFILE
Introduction of the industry:-
INDIAN EQUITY MARKET:-
The Indian Equity Market is also known as Indian share market or Indian stock market. The Indian market of equities is transacted on the basis of two major stock indices, National Stock Exchange of India Ltd. (NSE) and The Bombay Stock Exchange (BSE). Indian Equity Market at present is a lucrative field for the investors and investing in Indian stocks are profitable for not only the long and medium-term investors, but also the position traders, short-term swing traders and for intra-day traders. In terms of market capitalization, there are over 5000 companies in the BSE chart list. Generally the bigger companies are listed with the NSE and the BSE, but there is the OTCEI or the Over the Counter Exchange of India, which lists the medium and small sized companies. There is the SEBI or the Securities and Exchange Board of India which supervises the functioning of the stock markets in India.
The growing financial capital markets of India being encouraged by domestic and foreign investments is becoming a profitable business more with each day. If all the economic parameters are unchanged Indian Equity Market will be conducive for the growth of private equities and this will lead to an overall improvement in the Indian economy.
THE INDIAN CAPITAL MARKET:-
The function of the financial market is to facilitate the transfer of funds from surplus sectors (lenders) to deficit sectors (borrowers). Normally, households have investible funds or savings, which they lend to borrowers in the corporate and public sectors whose requirement of funds far exceeds their savings. A financial market consists of investors or buyers of securities, borrowers or sellers of securities, intermediaries and regulatory bodies. Financial market does not refer to a physical location. Formal trading rules, relationships and
communication networks for originating and t rading financial securities link the participants in the market. Primary market
Primary market refers to the long term flow o f funds from the surplus sector to the government and corporate sector (through primary issue) and to banks and non bank financial intermediaries (through secondary issues).Primary issues of the corporate sector lead to capital formation (creation of net fix asset and incremental change in inventories) thus primary market is again sub divided into: Public issue Right issue Private placement
Professional allotment Professional
Secondary market
Secondary market is a market for outstanding securities. An equity instrument, being an eternal fund, provides an all-time market while a debt instrument with a defined maturity period, is traded at the secondary market till maturity. Unlike primary issues in the primary market which result in capital formation, the secondar y market facilities facilities only o nly liquidity and marketability of outstanding debt and equity instruments. The secondary market contributes to economic growth by channelizing funds into the most efficient channel through the process of disinvestment to reinvestment. The secondary market also provide instant valuation of securities made possible by changes in the internal environment, that is , through companywide and industry wide factors. Such a valuation facilities the measurement of the cost of capital and rate of o f return of economic entities at the micro level.
For trading in issue of corporate and financial intermediaries, intermediaries, there are:
Recognized stock exchanges, National stock exchange of India limited (NSE)
Organized money market
Indian financial system consists of money market and capital market. The money market has two components - the organized and the unorganized. The organized market is dominated by commercial banks. The other major participants are the Reserve Bank of India, Life Insurance Corporation, General Insurance Corporation, Unit Trust of India, Securities Trading Corporation of India Ltd. and Discount and Finance House of India, other primary dealers, commercial banks and mutual funds. The core of the money market is the inter-bank call money market whereby short-term money borrowing/lending is affected to manage temporary liquidity mismatches.
Un-organized money market
Despite rapid expansion of the organized money market through a large network of banking institutions that have extended their reach even to the rural areas, there is still an active unorganized market. It consists of indigenous bankers and moneylenders. In the unorganized market, there is no clear demarcation between short-term and long-term finance and even between the purposes of finance.
Securities and Exchange Board of India
With the objectives of improving market efficiency, enhancing transparency, checking unfair trade practices and bringing the Indian market up to international standards, a package of reforms consisting of measures to liberalize, regulate and develop the securities market was introduced during the 1990s. This has changed corporate securities market beyond recognition in this decade. The practice of allocation of resources among different competing entities as well as its terms by a central authority was discontinued. The secondary market overcame the geographical barriers by moving to screen-based trading. Trades enjoy counter party guarantee. Physical security certificates have almost disappeared. The settlement period has shortened to three days. The following paragraphs discuss the principal reform measures undertaken since 1992. A major step in the liberalization process was the repeal of the Capital Issues (Control) Act, 1947 in May 1992. With this, Government's control over issue of capital, pricing of the issues, fixing of premium and rates of interest, on debentures, etc., ceased. The office, which administered the Act, was abolished and the market was allowed to allocate resources to competing uses and users. Indian companies were allowed access to international capital market through issue of ADRs and GDRs. However, to ensure effective regulation of the market, SEBI Act, 1992 was enacted to empower SEBI with statutory powers for (a) protecting the interests of investors in securities, (b) promoting the development of the securities market, and (c) regulating the securities market. Its regulatory jurisdiction extends over corporates in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market. SEBI can specify the matters to be disclosed and the standards of disclosure required for the protection of investors in respect of issues.
Major stock Players
Eighteen Stock Exchanges in the World: Market Capitalization & Year-to-date Total Turnover at the end of December 2010.
Region
Africa
Market
Stock Exchange Johannesburg
Securities
Exchange
Value Total Share Turnover
(millions USD)
(millions USD)
605,040.2
117,424.7
Americas
NASDAQ
2,77 3,684.3
12,256,704. 3
Americas
São Paulo Stock Exchange
920,26 3.9
191,926.1
Americas
Toronto Stock Exchange
1, 347,674.0
490,912.4
Americas
New York Stock Exchange
9,574,066.6
7,9 86,835.8
Asia-Pacific
Australian Securities Exchange
839,062.7
273,205.9
Asia-Pacific
Bombay Stock Exchange
1,0 32,589.6
83,906.6
Asia-Pacific
Hong Kong Stock Exchange
1,77 3,002.2
519,465.7
Asia-Pacific
Korea Exchange
640, 357.6
618,607.8
Asia-Pacific
National Stock Exchange of India 96 8,815.1
242,641.7
Asia-Pacific
Shanghai Stock Exchange
2,069,9 37.1
1,685,862.2
Asia-Pacific
Shenzhen Stock Exchange
56 3,103.3
880,744.6
Asia-Pacific
Tokyo Stock Exchange
3,102,492.9
1,561, 888.8
Europe
Euronext
2,262,751.6
742, 885.6
1,132,126.2
1,101,064.6
2,204, 320.0
1,483,263.3
1,084,606.4
591,217. 3
554,61 3.9
341,421.1
Europe Europe Europe Europe
Frankfurt
Stock
Exchange
(Deutsche Börse London Stock Exchange Madrid Stock Exchange (Bolsas y Mercados Españoles Milan Stock Exchange
Opportunity in Future in India ± Will the Indian Stock Market still going on and on i.e. BOOM period in Indian Stock Market still alive? India just keeps getting better and better. The economy is growing rapidly surpassing some of Asia¶s biggest economies. India is now becoming the third largest country in Asia economically. It has grown so much and is expected to continue to grow like this for a long time. The Indian Government is doing everything it can do to propel the growth rates in the Indian Industry, primarily in: India Stock Market, Indian Companies, India¶s manufacturing index, India Business Sector, India¶s Company secto r and other India investment industries. The yearly salaries are rising and the command to buy is under the command to spend. The Investment GDP ratio is at a high. It is now over 30 percent and between the years 1990 and 2004 the average was only 25 percent. It has been said that, once it reaches 30 percent, it is going to take off rapidly. So India is expected to move rapidly. The down side to India¶s big movement is that there is a limit to how high it can go. India has grown so much, making the costs of everything go up so frequently. It can turn into the most expensive country in the world. The companies are now working above their finest ability. A lot of professionals say that this is a problem, but that people over-exaggerate while talking about it. Their main worry about India is that the roads are so bad in India and the amount of terrible roads may increase, but the government is addressing this issue. The prices of cement, used to make good roads, have also gone up a lot with the prices of everything else. There are so many road related projects that need to be done soon. A lot of people try to People undervalue India¶s accomplishment in growth. The growth rates are very good and it wouldn¶t be wrong for people to overvalue it. India has created the best growth story that happen over a long time. Although India is growing, there can still be corrections in the market. No matter how well a country is doing, there is always something that can be fixed. Some say that they would like to wait until the market is fixed to invest.
Introduction of the industry India level:-
A BRIEF HISTORY OF STOCK EXCHANGES:-
Do you know that the world's foremost market place ³New York Stock Exchange´ (NYSE), started its trading under a tree (now known as 68 Wall Street) over 200 years ago? Similarly, India's premier stock exchange Bombay Stock Exchange (BSE) can also trace back its origin to as far as 125 years when it started as a voluntary non-profit making association. You hear about it any time it reaches a new high or a new low, and you also hear about it daily in statements like 'The BSE Sensitive Index rose 5% today'. Obviously, stocks and stock markets are important. Stocks of public limited companies are bought and sold at a stock exchange. But what really are stock exchanges? Known also as News on the stock market appears in different media every day. The stock market or bourse, a stock exchange is an organized market place for securities stock , bonds, options) featured by the centralization of supply and demand for the transaction of orders by member brokers, for institutional and individual investors.
BSE
The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualized and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act, 1956
NSE
NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It started operations in June 1994, with trading on the Wholesale Debt Market Segment. Subsequently it launched the Capital Market Segment in November 1994 as a trading platform for equities and the Futures and Options Segment in June 2000 for various derivative instruments.
Regional Stock Exchange
Comparative Assessment of different companies
SHCIL (STOCK HOLDING CORPORATION OF INDIA LIMITED)
Stock Holding Corporation of India Limited (SHCIL) was p romoted by public financial institutions and insurance majors like IDBI, UTI, ICICI, LIC, GIC and its subsidiaries, IFCI and IIBI. SHCIL was incorporated as a public limited company on July 28, 1986. SHCIL provides depository, post trading, custodial services, securities lending to institutional investors and retail investors. Other auxiliary services provided by SHCIL include derivatives clearing, PF fund accounting, SGL constituent account services, mutual funds and other capital market instruments distribution.
ICICI direct
ICICI Bank is India's second-largest bank with total assets o f about Rs.1,67,659 crores at March 31, 2005 and profit after tax of Rs. 2,005 crores for the year ended March 31, 2005 (Rs. 1,637 crores in fiscal 2004). ICICI Bank has a network of about 560 branches and extension counters and over 1,900 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management.
ICICI Bank set up its international banking gro up in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Canada and Russia, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh and South Africa.
SHAREKHAN
Sharekhan is an equities focused organization tracing its lineage to SSKI, a veteran equities solutions company with over 8 decades of experience in the Indian stock markets. In the stock markets. Sharekhan does not claim expertise in too many things. Sharekhan's expertise lies in stocks and that's what he talks about with authority. So when he says that investing in stocks should not be confused with trading in stocks or a portfolio-based strategy is better than bett ing on a single horse, it is something that is spoken with years o f focused learning and experience Sharekhan brings a user- friendly online trading facility, coupled with a wealth of content that will help investors stalk the right shares.
UTI SECURITIES
UTI Bank is a registered member (Depository Participant) of NSDL. India¶s first depository. We can avail all of the depository-related services by just opening an account with NSDL through UTI Bank. UTI Bank provides services like dematerialization of shares, rematerilialization, pledge-Hypothecation, freezing/ locking Of Accounts, transfer of shares and settlements, receipt of corporate benefits, holdings & transaction statements on email, tele depository services.
MARWADI SHARES AND FINANCE PRIVATE LIMITED
Marwadi Shares And Finance Pvt. Ltd. Was incorporated in 1992.Marwadi Group servicing more than 75000 clients, more than 554 pin codes. The company ranked among top 50 broking houses. It has 250 franchisee / subbrokers and authorized person¶s network.
HDFC SECURITIES
HDFC Securities, a trusted financial service provider promoted by HDFC Bank and JP Morgan Part ners and their associates, is a leading stock broking company in the country, serving a diverse customer base of institutional and retail investors. HDFCsec.com provides investors a robust platform to trade in Equ ities in NSE and BSE , and derivatives in NSE. Our website will support you w ith the highest standards of service, convenience and hassle-free trading tools. Our research team tracks the economy, industries and companies to provide you the latest information and analysis. Our content offers financial
information, analysis, investment guidance, news & views, and is designed to meet the requirements of everyone from a beginner to a savvy and well-informed trader.
KOTAK SECURITIES
Kotak Securities, an affiliate of Kotak Mahindra Bank, is the stock-broking and distribution arm of the Kotak Mahindra Gro up. The institutional business division, which brings you AKSESS, primarily covers secondary market broking. It caters to the needs of foreign and Indian institutional investors in Indian equities (both local shares and GDRs, Global Depository Receipts). The division also has a comprehensive research cell with sectorial analysts covering all the major areas of the Indian economy. The group a net worth of over Rs.1, 550 crores and employs over 3,000 employees in its various businesses. With a presence in 59 cities in India and offices in New York, London, Dubai and Mauritius, it services a customer base of over 5, 00,000 Kotak Mahindra has partnerships with Goldman Sachs (o ne of the world's largest investment banks and brokerage firms), Ford Credit (one o f the world's largest dedicated automobile financiers) and Old Mutu al (a large insurance, banking and asset management conglomerate).
KARVY STOCKBROKING LIMITED
Karvy offers a full range of financial services and pro ducts ranging from Equities to Research to enhance your wealth and hence achieve your financial goals. Equities & Derivatives
Comprehensive services for independent investors, active traders & NonResident Indians. Karvy Research
Premium research on all most all companies updated daily. Depository Services
Value added services for seamless delivery.
RELIANCE MONEY
Reliance Money is an endeavour to change the way India trades in financial markets and avails of various financial services. Reliance Money ensures maximum security with a unique security token to keep your online account safe.
ANAGRAM SECURITIES
Anagram Securities is the part of the Rs. 2000 crores Lalbhai Group. It was found in 1993 and is a member of the National Stock Exchange. Last year their trading crossed Rs. 17000 crores with around 5000 people making. They are dealing only in Stock Market and nothing else. Though they are doing good research work regarding companies and market which will be the beneficial to the investors. Gujarat state is one o f the most important fields of their business. And they have about 30 branches throughout Gujarat
COMPANY PROFILE
About SSJ
SSJ FINANCE is a well-diversified financial services entity o ffering clients advice
on structuring a complete investment portfolio. We have written for ourselves the mandate to be a single-point, unbiased financial advisor to our clients. Our v ision is to be the preferred financial services entity throu gh a nation-wide network of Branches, Financial Advisors and Business Associates. We listen, analyze, advice and act - focused solely on our clients¶ financial interest. With services in equities, derivatives, commodities and depository, we seek to give clients a well balanced exposure into the myriad financial products available, t aking into consideration their risk profile and investment outlook. The SSJ Finance Group is a clearing cum trading member of various Equ ity and
Commodity Exchanges and market segments through these entities: SSJ Finance & Securities (P) Ltd.
Member: The National Stock Exchange (NSE); Member: Bombay Stock Exchange Ltd. (BSE);
Cash & Derivatives Segments Member: Calcutta Stock Exchange Association (CSE) Depository Participant: Central Depository Service (I) Ltd. (CDSL) SSJ Commodities (P) Ltd. Member: Multi-Commodity Exchange (MCX) Member: National Commodity & Derivatives Exchange (NCDEX) Member: National Multi-Commodity Exchange of India Limited (NMCE) M/s Sureshchand S. Jain Member: The National Stock Exchange (NSE);
Cash & Derivatives Segments
Promoter Group and Intellectual Capital
The SSJ Finance team comprises a diverse group of talented and experienced individuals whose expertise and guidance will enable you to meet your investment objectives. We owe our success to the combined efforts of our Promoters and executives, both at the senior and junior management level. y
Mr. Sureshchand Jain - Founder-Promoter and Chairman
y
Mr. Saurabh Jain - Managing Director
y
Our Intellectual Capital
Mr. Sureshchand Jain Mr. Sureshchand S. Jain , the founder-promoter and Chairman of the Group, has
over 35 years of experience in the Equity and Commodity markets. He has seen the financial markets through various economic cycles over these years. His experience, vision and far-sightedness have been a great source of wisdom for all
at SSJ Finance. He spent the initial 15 years of his career in the Bullion markets as member of The Bombay Bullion Association and The Bombay Commodity Exchange Ltd. (the erstwhile Bombay Oilseeds & Oils Exchange Ltd.) and has acquired domain expertise in gold and silver. His acquaintance with the Indian Equity bourses began in 1987 as member of Bombay Stock Exchange (BSE); which eventually gave shape to the present SSJ Finance Group. The SSJ Finance Group subsequently acquired memberships of all the major Equity & Commodity Exchanges in the country. Mr. Sureshchand Jain has been a pioneer in the development of arbitrage trading strategies in the Indian equity & commodity markets and leads the entire trading / arbitrage activities at SSJ Finance including the proprietary book of the Group. Mr. Saurabh Jain Overall management and strategic planning of the Group vest with senior executives includingMr. Saurabh Jain , Managing Director of the Group. Saurabh, a Chartered Accountant and an MBA by qualification, has more than 5 years of exposure to the Financial Services Industry with experience in Audit & Consulting, Investment Banking, Equity Sales & Trading, Asset Management and Investment Research. Our Intellectual Capital The senior management of the Group comprises of professional executives having broking, investment, trading & specialized research experience of over 10 years. They have prior experience in structuring Indices, carrying out Risk-free Arbitrage, Index Arbitrage as well as Risk Arbitrage strategies, executing Private Equity Placement, Project Finance, Currency Swap transactions, Fixed Income and Equity research and portfolio structuring. SSJ Finance¶s broking & research team has the experience of trading, hedging and developing strategies in Equities, Derivatives & Commodities. Members of the team analyze alternative investment avenues and prepare Special Situation Reports. SSJ Finance¶s network of branches across the country is headed by senior
professionals with exhaustive experience and know ledge of the Capital Markets. The Group is supported in its daily operations by senior executives who have been with the Group for several years now with extensive training and experience in their respective areas. Not only has this given them an excellent grasp over daily operations combined with knowledge of compliance requirements, it has also resulted in huge loyalty to the firm, the value of which is indeterminable. The heads of each department are easily approachable at all points of time.
SSJ Finance Broking Activities ± Our History
SSJ Finance Group provides Equity & Commodity Broking services on the NSE, BSE, MCX and NCDEX through the following entities:
y
M/s. Sureshchand S. Jain (NSE)
y
SSJ Finance & Securities (P) Ltd. (BSE, NSE, CSE, and CDSL)
y
SSJ Commodities (P) Ltd. (MCX, NCDEX)
M/s. Sureshchand S. Jain (NSE) M/s. Sureshchand S. Jain is a proprietary concern, which acquired membership of NSE as a Clearing-cum-Trading Member at the time of the Exchange¶s inception in 1994. Membership of the Derivatives segment was acquired in the year 2001 at the time of its introduction to the Indian capital markets. SSJ Finance & Securities (P) Ltd. (BSE, NSE, CSE, and CDSL) The Company was incorporated in December 1996 and acquired membership of the Bombay Stock Exchange (BSE) in April 1997. It subsequently became a composite member (dual membership) of BSE in the year 2000. In the same year, the Company also acquired membership of the Calcutta Stock Exchange (CSE) as well as became a Depository Participant (DP) with Central Depository Services (India) Ltd. (CDSL). With a surge in volumes and the Group¶s intentions of expanding its clientele business, a corporate membership of NSE was acquired under the name of SSJ Holdings (P) Ltd. in the year 2000 for Cash Market segment and in the year 2001 for the Derivatives segment. SSJ Holdings (P) Ltd. has been amalgamated with SSJ Finance & Securities (P) Ltd. SSJ Commodities (P) Ltd. (MCX, NCDEX) The SSJ Finance Group ventured into the commodities arena to leverage upon the rich experience of the promoters in the bullion market. It acquired membership of
the Multi Commodity Exchange (MCX) and the National Commodity & Derivatives Exchange of India (NCDEX) in the year 2003 and National MultiCommodity Exchange (NMCE) in the year 2007.
Our Vision
Our vision is to be a leading wealth management service provider acting solely in the financial interest of our clients through a nationwide network of qualified professionals and business associates. Our Philosophy Our business is built upon three important cornerstones« our Client, Business Associates and Employees. Our philosophy is unique and clearly defined.
y
Towards our Client
y
Towards our Business Associates
y
Towards our Employees
Towards our Client The Client is the driving force behind what we do. Our goal is to provide the highest quality of products and services, along with value-added advice and guidance based on the client¶s needs. We look to develop long-term relationships with our clients built on strong ethics and trust.
Towards our Business Associates The power of partnership engenders involvement,
respect and mutual support. This is precisely the relationship that we foster with our Business Associates and Financial Advisors. We provide a complete platform built upon the best infrastructure and technology to enable our Business Associates and Financial Advisors to efficiently service the financial needs of our investing clients. Towards our Employees Our employees are what set us apart. We¶re all here for one reason - to serve our clients¶ best interests. It is through leadership and accountability across our organization that we establish a common direction, encourage creative collaboration and provide an inspiring environment for our people.
Our Values
Upholding these values is the primary responsibility of leaders at every level within SSJ.
y
Respect for the Individual: We respect the dignity of each individual,
whether an employee, shareholder, client or member of the general public. y
Partnership: Relationships among our staff members as well as our clients
are driven by the power of partnership. The power of partnership engenders involvement, respect, contribution and mutual support. We encourage free exchange of ideas and demand teamwork. y
Striving for excellence: While serving our clients we constantly strive for
excellence to ensure that they derive complete satisfaction in their dealings with us. y
Client focus: We aim to provide the highest quality of products and services
to best serve the changing needs of clients. y
Teamwork: We strive for seamless integration of services through
cooperation and collaboration within and acro ss workgroups and teams. y
Meritocracy: We invest in our employees¶ development and actively strive
to be the best at attracting and retaining talented people. Our success calls for entrepreneurial spirit and initiative from each individual. y
Integrity: At SSJ, our goal is to act in ways that help us to exemplify the
highest standards of personal and professional ethics in all aspects of our business. y
Privacy: We respect our clients¶ right to privacy and use information with
appropriate discretion.
Our SSJ Logo The SSJ alphabets in an ascending chain formation ± signify the strong link that we strive
to build between the company, our clients and employees. We work in the best interest of our clients, always! The upward direction of the SSJ chain ± signifies growth as the prime focus of the
company. Extension of the SSJ chain beyond the Logo borders ± symbolizes unbounded prosperity for
all its constituents as per µVaastu¶ philosophy. The Green Colour ± depicts wealth and an ethical work environment.
Why SSJ At SSJ, we believe that investing is not a ³one size fits all´ proposition. Individual investors are real people, each with his or her own personal long-term financial goals. We offer financial solutions tailored specially to your individual needs. So if you are interested in high quality investments, we invite you to explore this site and learn more about the unique services we have to offer to help you reach your financial goals.
Locate Us
Contact our Investment Centre closest to you to help you get started with SSJ Finance.
Alternatively,
you
may
also
e-mail
us
based
on
your
nature
of
query:
Trading :
[email protected] or
[email protected]
Online
Business Associate / Franchisee :
[email protected] Corporate Office:
Registered Office:
1st Floor,Merchant Chamber
1st Floor, Surya Mahal
41,New Marine Lines.Opposite Patkar Hall
5, Burjorji Bharucha Marg, Fort,
Mumbai - 400 020
Mumbai 400 001
Maharashtra
Maharashtra
India
India
T: +91-22-4300 8800
T: +91-22-4347 2271
F: +91-22-4300 8899
F: +91-22-2264 4090
Regional Offices SrNo State
City
Address
116 Linkway Estate, Link 1
Maharashtra Mumbai Road, Malad (W), Mumbai 400 064
Telephone
Fax
+91-22-
+91-22-
67415130-36
28769409
Regional Offices SrNo State
1
City
Maharashtra Nashik
Address
G-10/11,
Telephone
Suyojit
Trade
Centre, +91-0253-
Sharanpur Road, Nashik ± 422 002 3018541 / 42 / 43
Fax
Regional Offices
Maharashtra India Regional Offices SrNo State
City
Address
Telephone
Fax
303, 3rd Floor, Karan Selene Building, 0201
Maharashtra Pune Above Yes Bank, Bhandarkar Institute 30261111-13 Road, Shivaji Nagar, Pune-411004
Regional Offices SrNo State
City
Address
Telephone
Fax
101-104, 124-126, O. P. Commerce +91-221
Maharashtra Thane Centre
Jesal
Park,
Bhayendar
(E), 28162402 / 03 /
Mumbai - 401 105 Maharashtra India SrNo State
City
Address
07
Telephone
No. 216, Empire State Building, Near 02611
Gujarat Surat Udhna Darwaja, Ring Road, Surat - 395 3024309/312(B) 002
0261-3024308(D)
Fax
Regional Offices SrNo State
City
Address
201, Star Chambers, Hari Har Chowk, 1
Gujarat Rajkot Dr. Rajendra Prasad Road, Rajkot 360 001 Gujarat India
Telephone
Fax
+91-0281-
+91-0281-
3048652
3045649
Regional Offices SrNo State
1
City
Madhya Pradesh Indore
Address
Telephone
406-407, D M Tower, Race Course 0731-3024783Road, Indore- 452001 (MP)
92
Fax
Regional Offices SrNo State
City
Address
303, 1
Gujarat Ahmedabad
Telephone
Iscon
Avenue,
Fax
Opposite
Choice Restaurant, C.G. Road, +91-79-
+91-79-
Ahmedabad - 380 009 Gujarat 30073800
30007675
India M-12, Ghadiali Complex, Jawahar 0792
Gujarat Ahmedabad Chowk, Maninagar, Ahmedabad - 30480284-92 380 008 Gujarat
Regional Offices SrNo State
City
Address
G-32/33, 1
Telephone
Megh
Malhar
Complex,
Gujarat Gandhinagar Sector -11, Gandhinagar ± 382 011 Gujarat India
+91-079
Fax
±
30580301
Regional Offices SrNo State
City
Address
2nd 1
Floor,
Baldeo
House,
Jharkhand Ranchi Shradhanand Road, Upper Bazaar, Ranchi ± 834 001 Jharkhand, India
Telephone
Fax
+91-651-
+91-651-
6455109
6455110
Regional Offices SrNo State
City
Address
Telephone
UGF-4, Kanchanjunga Building, 18, 1
New Delhi
New Delhi Barakhamba Road, Connaught Place, New Delhi - 110001
Fax
+91-1130238906
Regional Offices SrNo State
1
City
Rajasthan Jaipur
Address
Telephone
Off No.302 , Luhadia Tower, K-11, 9314451122 Ashok Marg ,Near Ahinsa Circle, C ,0141-3928700
Fax
Scheme ,JAIPUR egional Offices SrNo State
City
Address
Telephone
114-117, Kan Chambers, 14/113 Civil 1
Uttar Pradesh Kanpur Lines,
Adjacent
To
UP
Stock
Exchange, Kanpur-208001
Fax
0512-3067880 to 87
Regional Offices SrNo State
City
Address
Telephone
Fax
FMC Fortuna, Suit No. A1
West Bengal Kolkata (AJC BOSE ROAD)
14, 4th Floor, 234/3-A, AJC Bose
Road,
Kolkata - 700
+91-3330588996 97 / 98 / 99
/
+91-3330588995
Regional Offices SrNo State
City
Address
Shanti
Telephone
Fax
Niketan,
Room No. 9, 10th +91-0331
West Bengal Kolkata (Camac Street)
Floor, 8, Camac 22825425 Street, Kolkata - 033700
017
Bengal India
West 32992260
/
+91-03340061241
Benefits of Equity Investing with SSJ...
As an investor, you would want quality services from a full-service brokerage firm whose function goes far beyond mere execution of buy-and-sell transactions. Congratulations! Your search has just come to an end. At SSJ Finance, we assure you that you will have a rewarding investing experience. We help you assimilate the massive amount of information ± trends in the economy, the markets, specific industries and individual companies ± that may affect your particular investments or investment decisions. The role of SSJ Finance is to help you, the investor, make deliberate, thoughtful decisions that match your personal needs with suitable investment alternatives. We particularly enhance your investing experience with: y
Excellent trade execution capabilities on BSE, NSE, MCX and NCDEX
y
Futures & Options / Derivatives trading for those with a higher risk appetite
y
Online Trading Facility with integrated Depository and Bank Gateway
y
Arbitrage trading strategies
y
Daily Market Analysis, Advisory reports & Special Situation Research Reports
y
Online real-time back office, available 24/7
y
Online Depository Services with Auto Pay-in facility
y
Seamless transaction flow.
We have made investing and trading much simpler for you. By opening an
account with SSJ Finance, you can enjoy the freedom to trade in any of the following 3 ways:
y
Trade Online ± on your desktop through different trading platforms
y
Call-n-Trade (for online trading clients)
y
Contact or visit your nearest SSJ Finance branch office to place your orders.
To start trading in Equities, Derivatives and / or Commodities, using any of the 3 methods mentioned above, all you need to do is open an account with us or Contact us for any related queries.
Equtiy Basics
What is Share/ Stock/ Equity?
A share is one of a finite number of equal portions in the capital of a company, mutual fund or limited partnership, entitling the owner to a proportion of distributed, non-reinvested profits known as dividends and to a portion of the value of the company in case of liquidation. Dividends are not guaranteed. They may be increased if the company performs well, but they may also be reduced or eliminated if the company performs poorly. So when you purchase shares, you become part owner of a company. As an owner, you are usually entitled to voting rights on the board of directors and corporate policy. Modes of Stock Purchase
Stocks can be purchased individually (meaning you purchase shares of stock in one particular company) or as part of a pool investments, such as mutual funds. Mutual funds are baskets of stocks that are available for the fraction of the price you would need to buy the same stocks individually. That's because a large number of investors pool their money together and invest in the entire portfolio of stocks. Professional money managers direct the investments within mutual funds, choosing each of the individual investments based on the mutual fund's investment goals. For example, some equity mutual funds invest in well-established companies that pay regular dividends. Others invest in younger, more growth-oriented firms or companies that have been operating below expectations for several years. Note: As with the purchase of individual stocks, your investment return and principal value of
an investment in mutual funds will fluctuate. Your shares may be worth more or less than your original investment when redeemed. What are the different kinds of risks one should consider while investing?
Risk in investments can be of the following types:
y
Market Risk or Volatility: This refers to the fluctuation in the value of investments
due to changes in the price of the stocks included in an investor¶s portfolio which could be caused by a variety of factors such as performance of the company, policy announcements, political factors etc. Even a portfolio of well-diversified assets cannot escape all risk. y
Inflationary risk: Also known as purchasing power risk, this is the decline in the
purchasing power of money over time, so that even the "safest" investments can leave investors with substantially less purchasing power. For example, assuming an inflation rate of 4% for the next 10 years, if you have Rs.100 today, 10 years from now inflation will have eroded that Rs.100 so that it is worth only Rs.68. y
Investment or credit risk: This is the possibility that a company in which an investor
is invested in may not be sufficiently profitable to remain in business. Another manner of classifying risk in securities is as follows:
y
Unsystematic Risk: Unsystematic risk affects a very specific group of securities or an
individual security. Internal risks such as strikes, management policies, etc. are to a large extent controllable and are examples of non-systematic risks. An investor can easily manage such non-systematic risks by having a well-diversified portfolio spread across the companies, industries and groups so that a loss in one may easily be compensated with a gain in other. y
Systematic Risk: The risk inherent to the entire market or entire market segment is
called Systematic Risk. It is also known as "un-diversifiable risk". Such risks are external and beyond the control of the company. Examples of such risks are economic, political and sociological changes. Their impact is on prices of all individual stocks and they move together in the same manner. Therefore quite often the stock prices may be falling despite good company performance and vice versa. Since higher returns are associated with higher risks, you, as an investor, need to understand
your risk tolerance level and certain principles of investing which can help you diversify and mitigate this risk. Before venturing into the world o f stock investments, consider:
y
Are you conservative, aggressive or speculative in your approach to investing?
y
Are you comfortable owning aggressive stocks?
y
Are you looking for a steady stream of income, long-term returns from growth or very high returns from risky short-term trading?
Factors affecting Investment Decisions
Before you begin investing, it's helpful to understand some of the factors that will affect your investment decisions, such as: y
Risk
y
Liquidity
y
Time Horizon
y
Total Return
y
Diversification
y
Tax Consequences
y
Rupee Cost Averaging y
Risk: Risk in investments can take various forms. For details click here.
y
Liquidity: A "liquid" investment is one that can be readily turned into cash if
you need the funds on short notice. Investments can vary greatly in their degree of liquidity. Shares can be traded on any business day at their current market value, which may be more than, equal to or less than the amount initially invested.
y
Time Horizon: Different investors have different time frames in which to
achieve their investment objectives. Generally, young investors with long time horizons should be able to assume greater risks because they have more time to
offset any losses with the higher return potential of investments with greater risk. Older investors, however, often choose to reduce risk because they have less time to recoup losses.
y
Total Return: All investments provide one or a combination of two different
types of returns to investors - income or growth. Income is the dividend earned from stocks. Growth is the price appreciation of the security. The total return of an investment is the combination of income and growth realized over a given time period. In selecting investments based upon their expected total return, you should understand which portion is generated from income and which from growth. Usually, the greater the reliance on income, the lower the market risk but the greater the long-term purchasing power (or inflationary) risk. y
Diversification: Building a diversified portfolio with securities spread across
different investment classes can help you avoid the risk of having all of your eggs in one basket. By mixing industries and types of assets, you spread your risk. A particular market condition may have less impact if your portfolio consists of a wide assortment of securities than if you purchase only one type of security.
Most beginning investors don't have sufficient capital to properly diversify their portfolio by purchasing individual securities. Investing in mutual funds allows you to buy a professionally managed, diversified portfolio with relatively small rupee amounts. In addition, many mutual funds allow you to take advantage of rupee
cost
averaging
by
investing
at
regular
intervals.
Note: Mutual fund investing involves risk. Your principal and investment return in a mutual fund will fluctuate in value. Your investment, when redeemed, may be worth more or less than the original cost. y
Tax Consequences: Not all investment returns are subject to the same taxation.
Short term and long term returns are taxed at different capital gains rates or even taxed as business income. The taxation policy should be kept in mind while deciding which investments to make. y
Rupee Cost Averaging: Rupee cost averaging, the practice of committing a
fixed amount of money to an investment program on a regular basis, is a popular practice with many long-term investors. By investing a set amount regularly (usually monthly or quarterly), investors are able to avoid the pitfalls of trying to time market peaks and valleys. Also, because the amount of the investments is set, investors who practice rupee cost averaging buy more shares of a stock or mutual fund when they are less costly and fewer shares when they are more expensive. y
Like any investment strategy, rupee cost averaging doesn't guarantee a profit or protect against loss in a declining market. Because rupee cost averaging requires continuous investment regardless of fluctuating prices, you should consider your financial and emotional ability to continue the program through both rising and declining markets.
What are the different kinds of risks one should consider while investing?
Risk in investments can be of the following types: y
Market Risk or Volatility: This refers to the fluctuation in the value of investments
due to changes in the price of the stocks included in an investor¶s portfolio which could be caused by a variety of factors such as performance of the company, policy announcements, political factors etc. Even a portfolio of well-diversified assets cannot escape all risk. y
Inflationary risk: Also known as purchasing power risk, this is the decline in the
purchasing power of money over time, so that even the "safest" investments can leave investors with substantially less purchasing power. For example, assuming an inflation rate of 4% for the next 10 years, if you have Rs.100 today, 10 years from now inflation will have eroded that Rs.100 so that it is worth only Rs.68. y
Investment or credit risk: This is the possibility that a company in which an investor
is invested in may not be sufficiently profitable to remain in business. Another manner of classifying risk in securities is as follows: y
Unsystematic Risk: Unsystematic risk affects a very specific group of securities or an
individual security. Internal risks such as strikes, management policies, etc. are to a large extent controllable and are examples of non-systematic risks. An investor can easily manage such non-systematic risks by having a well-diversified portfolio spread across the companies, industries and groups so that a loss in one may easily be compensated with a gain in other. y
Systematic Risk: The risk inherent to the entire market or entire market segment is
called Systematic Risk. It is also known as "un-diversifiable risk". Such risks are external and beyond the control of the company. Examples of such risks are economic, political and sociological changes. Their impact is on prices of all individual stocks and they move together in the same manner. Therefore quite often the stock prices may be falling despite good company performance and vice versa. Since higher returns are associated with higher risks, you, as an investor, need to understand your risk tolerance level and certain principles of investing which can help you diversify and mitigate this risk. Before venturing into the world o f stock investments, consider:
y
Are you conservative, aggressive or speculative in your approach to investing?
y
Are you comfortable owning aggressive stocks?
y
Are you looking for a steady stream of income, long-term returns from growth or very high returns from risky short-term trading?
Benefits of Derivatives trading with SSJ«
Derivatives are a key part of the financial system, with the various derived contracts accounting for a significant share of all capital market transactions in the domestic and global markets. In India, derivative contracts are heavily traded on the National Stock Exchange (NSE). Derivate contracts are increasingly being traded on the Bombay Stock Exchange (BSE) as well. With our membership of the Derivatives Segment on both these exchanges, we, at SSJ Finance, encourage you to avail of the several benefits of derivatives trading, including, researched trading ideas, hedging and arbitrage strategies, strong risk management of leveraged positions, lower cost of trading and many more. The SSJ Derivative Market segment has a composite understanding of the equity and derivatives market reflected in our unique Trading / Hedging / Arbitrage strategies. We offer the latest technological infrastructure for hassle-free trading, live market reports, in-depth analysis and tracking services to enable you to adopt appropriate derivative strategies (Bull Spread, Bear Spread, Cover call writing, hedging strategies etc.) specific to your individual portfolio. We have made investing and trading much simpler for you. By opening an
account with SSJ Finance, you can enjoy the freedom to trade in any of the following 3 ways: y
Trade Online ± on your desktop through different trading platforms
y
Call-n-Trade (for online trading clients)
y
Contact or visit your nearest SSJ Finance branch office to place your orders.
To start trading in Equities, Derivatives and / or Commodities, using any of the 3 methods mentioned above, all you need to do is open an account with us
or Contact us for any related queries. Come and enhance your investing experience with us! Derivatives
Derivatives are financial contracts between two or more parties whose values are derived from the value of an underlying primary financial instrument, commodity or index, such as interest rates, exchange rates, commodities, bonds and equities. Derivatives include a wide assortment of financial contracts, including forwards, futures, swaps and options. Most derivatives are characterized by high leverage. Since derivatives are mere contracts, just about anything can be used as an underlying asset. There are even derivatives based on weather data, such as the amount of rain or the number of sunny days in a particular region. Derivatives are generally used to hedge risk, but can also be used for speculative and arbitrage purposes. History of Derivatives in India
In India, derivative contracts are heavily traded on both the national exchanges, NSE and BSE. History of Derivatives in India can be outlined as follows: Date 9th June 2000
Event First exchange traded Index Derivative Product ± Sensex Futures ± was launched by BSE
12th June 2000
NSE commenced Trading in Index Futures
1st June 2001
BSE commenced Trading in Index Options
4th June 2001
NSE introduced Trading in Index Options
2nd July 2001
NSE commenced Trading in Options on Individual Securities
9th July 2001
BSE commenced Trading in Stock Options NSE commenced Trading in Futures on Individual
November 2001
Securities
9th November 2002 June 2007 Why
BSE commenced Trading in Futures on Individual Securities NSE launched derivatives on Nifty Junior & CNX 100
consider
Derivative
Contracts?
With the present volatile market conditions and the continuous national and international developments making it risky to have overnight positions, clients need a way to safeguard their profits and at the same time minimize their losses. Derivative contracts are ideal for this purpose. Futures investors have long recognized that they have the potential to profit from both upward and downward movement of investments. Derivatives help to improve market efficiency because risks can be isolated and sold to those who are willing to accept taking these risks at the least cost. The use of derivatives breaks risk into pieces, which can be managed independently. Thus, from the market prospective, derivatives offer the free trading of financial risks. Speculators can take advantage of highly leveraged exposures in both financial and non-
financial markets. That means they can buy futures contracts by depositing just a small percentage of the overall contract price. Their goal is to profit from changes in the price of the futures contract. Hedgers, those who hold a specific asset or have a specific exposure in the cash market, often
take a position in the derivatives market opposite to that in the cash market to help reduce the risk of rising or falling prices.
Futures ± Trading Strategies
For a market to succeed it must have all kinds of participants ± hedgers, speculators and arbitragers. The confluence of these participants ensures liquidity and efficient price discovery on the market. We, at SSJ Finance can help you choose the right trading strategy that suits your profile and requirement. The main trading strategies that can be formulated using futures are listed below: Hedging Speculation Arbitrage
Hedging
Hedging is the act of taking a position in the futures market that is exactly
opposite to ones position in other segments of the market such as the equity segment, commodity physical market etc., with a view of offsetting losses in one segment (say ,in equities/commodities spot market) with a gain in the other (say ,futures segment). Hedging does not necessarily improve financial outcome or result in increased profit. This strategy helps in reducing or limiting risk associated with unpredictable changes in prices, in other words, it increases the certainty of the outcome. Hedging strategy can be adopted in the following two ways:
Buying Hedge or Long Hedge ± In the equities market, if you are short in the
cash segment, you can buy futures contracts and hedge your cash position. Based on the rationale that both cash and futures segment move in tandem, in case prices rise, you will make a profit in the futures contract which will offset your loss in the cash segment. If prices fall, you will make a profit in the cash segment and a loss in the futures segment. In case of commodities market, this strategy is quite useful for exporters / traders who have made commitments to deliver the specified amount of raw materials / processed products / manufactured goods at a later date at a price currently agreed upon, but do not have the stock of raw materials
to
fulfill
their
commitments
for
forward
deliveries.
Selling Hedge or Short Hedge ± This means selling futures contracts to hedge
long position in cash market. For example, in the commodities market, manufacturers and dealers who have bought raw materials or are maintaining inventory for future sale, can protect the prices of their future sales by selling futures contracts. Top Speculation
Under the hedging strategy, profit is minimal since profit generated in one segment is eaten up by loss in the other segment. If risk minimization is not your motive, and you are interested in making maximum gains from your investment, you can become a speculator. Under the speculation strategy, when an investor thinks that the market is bullish, he buys the Index futures contract. Similarly, if he is bearish about the market, he sells the Index futures contract. The same strategy
can
be
applied
to
individual
stock
futures
as
well.
The advantage of this strategy is that without any existing position in the cash market, and even without having the physical resources to take delivery of the underlying asset or the desire to take delivery of the underlying asset, a
speculator can make use of price movements to make a profit, based on his expectations. Another advantage to the market as a whole is that speculators provide liquidity to the market, since they accept the risk which hedgers wish to transfer. Without them, the hedging function would have proved to be a very expensive
option.
Note: Futures market provides you with the advantage of leverage, since you can trade large volumes with only a small investment in the form of margin money. While profits can be huge, ones losses can also be large. Hence, you must step into the futures market with great caution, only after understanding the risks involved.
Top Arbitrage
Arbitrage involves the simultaneous purchase and sale of an asset in order to
profit from a temporary price differential, usually taking place on different exchanges or marketplaces. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, ³a risk-free profit´. If you want to replace the returns from your idle funds in fixed deposits with higher yielding returns, arbitrage is a good risk free investment option for you.
A person who engages in arbitrage is called an arbitrageur. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies.
Options ± Strategy Guide
With various option strategies such as long call/put, short call/put, straddle, strangle, butterfly, spread etc. possible, it is very eas y to get confused as to which strategy one should adopt to fulfill ones objective of maximizing gains or hedging. If you have a view on market trend (bullish / bearish / neutral / volatile), you can make optimum use of the strategy guide given below. Click on the appropriate link to get details of the strategy that you should adopt in the given scenario.
BULLISH
STRATEGY
Very Bullish
Buy Call
Moderately Bullish + Certain that the market will not fall
Sell Put
Moderately Bullish + Fairly certain that the market will not fall
Bull Spread
Bearish in immediate near-term (weeks) + bullish in long term Diagonal (months)
Spread
BEARISH Very Bearish
Buy Put
Certain that the market will not rise
Sell Call
Moderately bearish + Fairly certain that the market will not rise
Bear Spread
Flat/mod. bullish in near-term(weeks) + bearish in longer Diagonal term (months)
Spread
Hold stock and bearish
Put Hedge
NEUTRAL
Expect prices to fluctuate in very narrow range
Sell Straddle
Expect prices to fluctuate in a broader range
Sell Strangle
Moderately certain that prices will not fluctuate much
Long Butterfly
Expect short-term weakness but longer-term rally
Calendar Spread
Hold stock but expect no movement
Covered Call
VOLATILE Expect prices to be very volatile
Buy Straddle
Expect prices to be volatile
Buy Strangle
Moderately expect prices to be volatile
Short Butterfly
BULLISH Very Bullish ± BUY CALL
Strategy View
You think that the market will rise significantly in the short-term. Buy Call option with a strike price µx¶. The more bullish you are,
Strategy
the higher the strike price should be, i.e. the more out-of-the-
Implementation
money the option you buy. (However, the more out-of-themoney the option is, the less likely that it will make money)
Upside Potential Profit potential is unlimited and rises as the market rises. Breakeven Point at Expiry Downside Risk Margin Comment
Strike Price + Premium Limited to the premium paid for the option and is incurred if the market at expiry is at, or below, the strike µx¶. Not Required Once you have bought the option, the strike price is fixed. Other things remaining constant, the value of the option decays as time
passes. This is why some people say, a call is a ³wasting asset´. If price goes up or volatility increases, the erosion slows. If price drops or volatility decreases, the erosion speeds up. Moderately Bullish + Certain that the market will not fall ± SELL PUT
You are certain that the market will not go down, but unsure /
Strategy View
unconcerned about whether it will rise. Sell Put option with a strike price µx¶. If you are very bullish
Strategy
and aggressive, then sell in-the-money puts. If conservative,
Implementation
sell out-of-the-money puts. Profit potential is limited to the premium received. The more
Upside Potential
the option is in-the-money, the greater will be the premium you will receive.
Breakeven Point at Expiry
Strike Price - Premium Loss is almost unlimited (³almost´ as the underlying price
Downside Risk
cannot fall below Zero!). [ If the strategy appeals, but not the downside risk, investors may prefer a µBull Spread¶]
Margin Comment
Always Required If the market does little, and time passes, this helps as the short position gains when the time value erodes.
Moderately Bullish + Fairly certain that the market will not fall ± BULL SPREAD
You are bullish but unsure. You think that the market will not Strategy View
fall, but want to cap the risk. Conservative strategy for one who thinks that the market is more likely to rise tha n fall.
Strategy Implementation
USING CALLS
USING PUTS
Long a Call with strike price µx¶ Long a Put at a strike price µx¶
and Short another Call with a and Short another Put with a higher
strike
price
µy¶, higher
producing a net initial debit. Limited to Difference between Strikes minus Initial Debit.
strike
price
µy¶,
producing a net initial initial credit. Limited to Net Initial Credit
Upside Potential Maximum Profit if market at expiry is above the higher strike price. Limited to Net Initial Debit
Limited to Difference between Strikes minus Initial Credit.
Downside Risk Maximum Loss if market at expiry is below the lower strike price. Margin
Possibility Possibility for Margin Requirements to be off-set. Time value erosion not too significant due to balanced position. The benefit of buying a spread is that it requires a smaller
Comment
investment than buying a single call / put. The cost is that it makes less money (limited) than the call (unlimited) should the stock rise sharply.
Bearish in immediate near-term (weeks) + bullish in long term (months) ± DIAGONAL SPREAD
Strategy View
You think that the market will be weak in the short term, but then rally later.
Strategy
A near-dated call option is sold, and a longer dated, further out-
Implementation
of-the-money call option is bought. Unlimited, if the bought option is held after the short option
Upside Potential
expires (the position then becomes a straight-forward buy call). If the position is closed at expiry of the near option, maximum profit will accrue if the market is at the level of the sold strike.
Downside Risk
Limited to the difference in in strikes strikes plus / minus the initial initial debit debit /
credit when establishing the spread. Margin Comment
Yes, but off-set may apply There is a risk of the sold options being called (i.e. being exercised).
BEARISH Very Bearish ± BUY PUT
Strategy View
You think that the market will fall significantly in the shortterm. Buy Put option with a strike price µx¶. The more bearish you are,
Strategy
the lower the strike price should be, i.e. the more out-of-the-
Implementation
money the option you buy. (However, the more out-of-themoney the option is, t he less likely that it will make money)
Upside Potential Breakeven Point at Expiry Downside Risk Margin Comment
Profit potential is unlimited (well, not really unlimited of course, as the market cannot fall below below Zero!) Strike Price ± Premium paid Limited to the premium paid for the option and is incurred if the market at expiry is at, or o r above the strike µx¶ Not Required If the market does little, and time passes, the value of the position will decrease as the option time value ero des.
Certain that the market will not rise ± SELL CALL
Strategy View
You are certain that the market will not rise, but unsure / unconcerned whether it will w ill fall. fall.
Strategy
Sell Call option with a strike price µx¶. If conservative, sell out-
Implementation
of-the-money calls. If you are not so conservative and believe
the stock is stagnant, sell at-the-money options. If you are aggressive and confident that the market is going down, sell inthe-money call options. Profit potential is limited to the premium received. The more the Upside Potential option is in-the-money, the greater will be the premium you will receive. Breakeven Point at Expiry
Strike Price + Premium Downside risk is unlimited. Losses on the position will increase
Downside Risk
as the market rises. [ If the strategy appeals, but not the downside risk, investors may prefer a µBear Spread¶]
Margin Comment
Always Required If the market does little, and time passes, this helps as the short position gains when the time value erodes.
Moderately bearish + Fairly certain that the market will not rise ± BEAR SPREAD
You are bearish but unsure. You think that the market will not Strategy View
rise, but want to cap the risk. Conservative strategy for one who thinks that the market is more likely to fall than rise.
Strategy Implementation
USING CALLS
USING PUTS
Sell a Call with strike price µx¶ Sell a Put at a strike price µx¶ and Buy another Call with a and Buy another Put with a higher
strike
price
producing a net initial credit. Upside Potential Limited to Net Initial Credit
µy¶, higher
strike
price
µy¶,
producing a net initial debit. Limited to Difference between Strikes minus Initial Debit.
Maximum Profit if market at expiry is below the lower strike price. Limited to Difference between Strikes minus Initial Credit.t
Limited to Net Initial Debit
Downside Risk Maximum Loss if market at expiry is above the higher strike price. Margin
Possibility for Margin Requirements to be off-set. Time value erosion not too significant due to balanced position.
Comment
The benefit of a bear spread is that it requires a smaller investment. The cost is that it makes less money than a pure long put position should the stock fall sharply.
Flat / moderately bullish in near-term(weeks) + bearish in longer term (months) ± DIAGONAL SPREAD
Strategy View
You think that the market will be flat or rise only slightly in the short term, but then fall later.
Strategy
A near-dated put option is sold, and a longer dated, further out-
Implementation
of-the-money put option is bought. Large, if the bought option is held after the short option expires
Upside Potential
(the position then becomes a straight-forward buy put). If the position is closed at expiry of the near option, maximum profit will accrue if the market is at the level of the sold strike.
Downside Risk Margin Comment
Limited to the difference in strikes plus / minus the initial debit / credit when establishing the spread. Yes, but limited There is a risk of the sold options being called (i.e. being exercised).
Hold stock and bearish ± PUT HEDGE
You hold stock and are worried about a market fall. You can Strategy View
buy Put Options to protect the value of the stock position, while allowing the position to benefit in the eve nt of a market rise. Buy Put Options with a strike price µx¶. The number of put
Strategy Implementation
Upside Potential
options bought will depend on your bearishness and the size o your stock holding. Profit potential is unlimited, being the ordinary return on the stock minus the fixed premium paid for the put options. Potentially limited (depending on the hedge-ration initially
Downside Risk
applied). The gains on the put options as the market falls, will off-set the loss in the value of the sto ck.
Margin
Not Required
Comment
Strategy characteristics are similar to a Buy Call.
NEUTRAL Expect prices to fluctuate in very narrow range ± SELL STRADDLE
Strategy View Strategy Implementation Upside Potential
You are certain that the market will not be very volatile, but will stagnate (neither go up or down very much). Short a Call and a Put option at the same strike price µx¶ Limited to the 2 premiums received. This will be realized if market at expiry is exactly at the level of the strike price. The lower point µa¶ will be the strike minus the value of the 2
Breakeven
Point premiums received. The upper point µb¶ will be the strike plus
at Expiry
the 2 premiums received. (If you would like to broaden this band, a Sell Strangle might appeal to you)
Downside Risk
Unlimited, should the market rise or fall greatly.
Margin
Always Required
If the market does little, and time passes, then the value of the Comment
position will benefit as the short positions gain when the time value erodes.
Expect prices to fluctuate in a broader range ± SELL STRANGLE
Strategy View
You expect the market to stagnate within a broadish band.
Strategy
Sell Put option with a strike price µ x¶ and Sell Call option with
Implementation
a higher strike price µy¶
Upside Potential
Limited to the 2 premiums received.
Breakeven Point at Expiry
Lower point µa¶ will be the lower strike µx¶ minus the value o the 2 premiums received. The upper point µb¶ will be the higher strike µy¶ plus the 2 premiums received. Unlimited, should the market rise or fall greatly. (If you like
Downside Risk
this strategy, but not the downside risk, a Long Butterfly might be interesting)
Margin
Always Required If the market does little, and time passes, then the value of the
Comment
position will benefit as the short positions gain when the time value erodes.
Moderately certain that prices will not fluctuate much ± LONG BUTTERFLY
Strategy View
Strategy Implementation
You expect that prices will not fluctuate much, but want to cap the downside risk. Buy Call option with low strike µa¶, Sell 2 Call options with medium strike µx¶(x > a) and Buy Call option with high strike µb¶ (b > x > a) Limited to the difference between the lower and the middle
Upside Potential
strikes minus the net debit of establishing the spread. This is obtained if the stock ends up at the middle point (x) on the expiration day
Downside Risk Comment
Limited to the initial debit of establishing the spread. This occurs if the stock is on the µwing¶. Can be difficult to execute such strategies quickly.
Expect short-term weakness but longer-term rally ± CALENDAR SPREAD
Strategy View
You think that the market will be weak in the short-term, but rally in the longer term. You Sell a near-dated Call option and Buy a longer-dated Call
Strategy
option, both options having the same strike price. (If you have
Implementation
the opposite view, then a comparable strategy can be constructed using puts) Large, if the bought option is held after the short option expires
Upside Potential
(the position then becomes a straightforward Buy Call). If the position is closed at expiry of the near option, maximum profit will accrue if the market is at the level of the sold strike.
Breakeven Point at Expiry
Strike Price + Premium
Downside Risk
Limited to the Initial Debit incurred for establishing the spread.
Margin
Off-set maybe available There is a risk of the sold options being called (i.e. being
Comment
exercised). Sometimes, this strategy is also called Horizontal or Time spread.
Hold stock but expect no movement ± COVERED CALL
You hold stock but do not think that the stock will rise in the Strategy View
short term, or that the stock will be neutral. Income can be earned by selling call options against the stock holding.
Strategy Implementation
Sell Call options. The number of call options that you sell will be determined by your market view and the size of the stock holding.
Upside Potential
Limited. By selling calls, you are writing off the potential profit of the stock position. Large. Similar to that incurred with ordinary stock ownership,
Downside Risk
only offset partially by the fixed option premium received. Main loss could be the opportunity lost if the market rises strongly.
Margin
Always Required
VOLATILE Expect prices to be very volatile ± BUY STRADDLE
You think that the market will be very volatile in the short term. Strategy View
You expect a big move but are not sure in which direction. Especially good strategy if the market has been quiet then starts to zigzag sharply.
Strategy
Buy Call option and Put option with the same strike price µx¶,
Implementation
usually at-the-money.
Upside Potential Breakeven
Unlimited. The maximum gain is obtained when the stock is up or down significantly.
Point Lower point is the Strike minus the 2 Premiums paid. The upper
at Expiry
point is the Strike plus the 2 Premiums paid. Limited to the 2 Premiums paid. This occurs if the stock ends up
Downside Risk
at the strike price. (If you want to reduce the premium paid, then a Buy Strangle might be interesting)
Margin Comment
Not Required Position loses value with passage of time as time value decreases on options.
Expect prices to be volatile ± BUY STRANGLE
Strategy View Strategy
You think that the market will be very volatile in the short term. You expect a big move but are not sure in which direction. Buy Put option with a strike µx¶ and Buy Call option with a
Implementation Upside Potential
higher strike µy¶ Unlimited. The maximum gain is obtained when the stock is up or down significantly. Limited to the 2 Premiums paid. (If you want to reduce the
Downside Risk
premium paid even further, then a Short Butterfly might be interesting)
Margin
Not Required Position loses value with passage of time as time value
Comment
decreases on options. A strangle is cheaper because you buy a lower strike Put, but the stock has to move further to make a profit.
Moderately expect prices to be volatile ± SHORT BUTTERFLY
Strategy View
Short a Call at strike µa¶, Buy 2 Calls at a higher strike µx¶ and Short another Call at a still higher strike µb¶. (b > x > a) Maximum gain is the proceeds received (net premium) which
Upside Potential occurs if the stock rises above the highest strike (b) or falls below the lowest strike (a) Breakeven Point Lower point is the lowest strike (a) plus the initial credit. The at Expiry
upper point is the highest strike (b) minus the initial credit.
Downside Risk
Limited. This occurs when the stock is at the middle strike (x) A Short Butterfly position can also be created using puts, by
Comment
selling 2 put at strikes µa¶ and µb¶, and buying 2 puts at a middle strike µx¶ (b > x > a)
Benefits of Commodity Trading with SSJ...
Our promoters have over 35 years of rich experience in the commodity markets built upon the time since they held memberships of The Bombay Bullion Association and the Bombay Commodity Exchange Ltd. (the erstwhile Bombay Oilseeds & Oils Exchange Ltd.). Today, SSJ Finance is also a member of the following commodity exchanges:
y
y
y
National Commodity & Derivatives Exchange Ltd. (NCDEX) Multi Commodity Exchange of India Ltd. (MCX) National Multi-Commodity Exchange of India Ltd. (NMCE)
Our membership across these Exchanges allows you to trade in a vast variety of commodities as well as profit from arbitrage opportunities arising out of price differences between these Exchanges. Some of the commodities you can trade are:
Precious Metals: Gold, Silver Other Metals: Aluminum, Copper, Nickel, Steel, Tin Energy: Crude Oil, Brent Crude Agricultural Products: Chana, Guar Gum, Guar Seed, Gur, Jeera, Maize, Kapas,
Silk, Raw Jute, Jute Sacking Bags, Red Chilly, Basmati Rice, Rice, Urad, Wheat, Pepper, Cashew, Castor Seed, Crude Palm Oil, Expeller Mustard Oil, Mustard Seed, Ground Nut Oil, RBD Palmolein, Soya Bean, Soy Seed, Refined Soya Oil, Rubber, Sugar, Turmeric, Yellow Peas. There are a number of other commodities traded including their variations and this list is continuously expanding. SSJ Finance has also developed relationships with intermediaries in the physical
market, i.e. mandis, enabling us to obtain quality information and provide trading opportunities for our clients. We further enhance your investing experience with:
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Round-the-clock Commodity Desk on MCX & NCDEX
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Prompt Dealing Services to cater to trade and post trade needs
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Experienced Commodity Team
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Hedging, Investment and Arbitrage Strategies suited for Individual Needs
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Regular News and Updates on the Market
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Strong Inbuilt Risk Management System
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Online Trading facility empowering you to execute your own trades over the internet
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Online Commodity Back-office completely synchronized with Equity Markets.
We have made investing and trading much simpler for you. By opening an account with SSJ Finance, you can enjoy the freedom to trade in any of the following 3 ways: y
Trade Online ± on your desktop through different trading platforms
y
Call-n-Trade (for online trading clients)
y
Contact or visit your nearest SSJ Finance branch office to place your orders.
To start trading in Commodities and / or Equities using any of the 3 methods mentioned above, all you need to do is open an account with us or Contact us for any related queries.
Commodities Market
India, a country with a population of over one billion, is essentially a commodity based economy encompassing agriculture, precious metals and base metals. The size of the physical commodity market in India is estimated to be around Rs.11 lakh crore per annum. Of late, commodities have come to be accepted as a separate asset class with a unique and distinct source of returns, along with traditional avenues like stocks, bonds and real estate. The increasing volumes on commodity exchanges such as MCX and NCDEX suggest that commodity markets in India are here to stay. Benefits of using Commodity Futures
Commodity Futures offer a number of benefits to users. Some of these are:
o
Investors can take long-term view on the underlying commodity and trade accordingly using commodity futures.
o
High degree of leverage available
o
Hedging opportunity available
o
Opportunity to arbitrage or earn risk-free profit due to temporary distortions in the price relationship between the futures and spot prices.
o
Presence of international commodities like gold, silver, crude oil, aluminium, steel etc. which can be tracked based on the international market movements as we ll.
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Liquidity - ease of entry and exit o f market
o
Price discovery - for taking farming and business decisions
o
Price stabilization along with balancing demand a nd supply position
o
Flexibility, certainty and transparency in purchasing commodities facilitate bank financing
o
Commodities
offered
o
Precious Metals: Gold, Silver
on
MCX
&
NCDEX...
o
Other Metals: Aluminum, Copper, Nickel, Steel, Tin...
o
Energy: Crude Oil, Brent Crude«
o
Agricultural Products: Chana, Guar Gum, Guar Seed, Gur, Jeera, Maize, Kapas, Silk,
Raw Jute, Jute Sacking Bags, Red Chilly, Basmati Rice, Rice, Urad, Wheat, Pepper, Cashew, Castor Seed, Crude Palm Oil, Expeller Mustard Oil, Mustard Seed, Ground Nut Oil, RBD Palmolein, Soya Bean, Soy Seed, Ref. Soya Oil, Rubber, Sugar, Turmeric, Yellow Peas« o
There are a number of other commodities traded including their variations and this list is continuously expanding.
o
At present, trading in commodities is restricted to futures contracts only. The Exchanges are also in the process of establishing online Spot Exchanges as well
o
Participants in the Commodities Futures Market
o
Hedger: One who wants to hedge the price risk in the commodity he is exposed to. He
transfers the price-risk associated with the ownership of the commodity by taking an equal and opposite position in the futures market. Any loss resulting from change in spot prices will be compensated by an equivalent gain in the futures market. Similarly any profit which he might realize from change in spot prices will be set off by the loss that will be incurred from position taken in the futures market. o
Investor: One who sees participation in the commodities market only as an investment
opportunity to diversify the risk of his portfolio. o
Arbitrageur: One who works at making profits by taking advantage of discrepancy
between prices of the same product across different markets. If, for example, they see the futures price of a commodity getting out of line with the cash price, they would take offsetting positions in the two markets to lock in the profit. o
Speculator: One who wishes to bet on future movements in the price of a commodity.
Futures contracts give them leverage; that is, by putting in small amounts of money upfront, they can take large positions on the market. As a result of this leveraged speculative position, they increase the pot ential for large gains as well as large losses
Benefits with SSJ
Our philosophy of being a one-stop shop for our clients, providing professional and personalized service, is complemented by our Depository (DP) operations. SSJ Finance is a member of the CDSL [Central Depository Services (India) Ltd.] network. Our DP service allows a seamless flow of the entire transaction cycle. In today¶s T+2 settlement mode, being an in-house DP, provides a huge operational and cost advantage to o ur clients. As your DP, we open and maintain your demat account with CDSL. As our client, you can now maintain your investments electronically. You can find the status of your holdings and transactions online as well as through regular correspondences sent by us. Benefits
By opening your demat account with SSJ Finance, you can avail of the following benefits: y
Seamless transaction flow with your equity market transactions. No paper instructions required to fulfill your broker pay-in obligations at SSJ Finance from your demat account.
y
Maximum time flexibility for executing your DP instructions.
y
View your demat account details online anywhere, any time through your secured login. Your information is also available with our branch w ith which you are attached.
y
Transaction statements are sent to you via cou rier on a monthly basis.
What is a Depository?
A Depository facilitates holding of securities in the electronic form and e nables securities transactions to be processed by book entry by a Depository Participant (DP), who as an agent of the depository, offers depository services to investors. According to SE BI guidelines, financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs.
The investor who is known as beneficial owner (BO) has to open a demat account through any DP for dematerialisation of his holdings and transferring securities.The balances in the investors account recorded and maintained with the depository can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account which gives the details of the securities holdings and t ransactions. Number of Depositories in India
There are two Depositories currently operational in India
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National Securities Depository Limited (NSDL) - The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India.
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Central Depository Services Limited (CDSL) ± This was the second depository in the country.
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A Depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a Depository Participant (DP), who as an agent of the depository, offers depository services to investors. According to SEBI guidelines, financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs.
y
The investor who is known as beneficial owner (BO) has to open a demat account through any DP for dematerialisation of his holdings and transferring securities.The balances in the investors account recorded and maintained with the depository can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account which gives the details of the securities holdings and transactions.
Benefits of Depository
The benefits of participation in a depository are: y
y
Immediate transfer of securities; No stamp duty on transfer of securities;
y
Elimination of risks associated with physical certificates such as bad delivery, fake securities, loss, theft, mutilation due to careless handling, etc.;
y
Reduction in paperwork involved in transfer of securities;
y
Reduction in transaction cost;
y
y
Nomination facility; Change in address recorded with DP gets registered electronically with all companies in which investor holds securities eliminating the need to correspond with each of them separately;
y
Transmission of securities is done by DP eliminating correspondence with co mpanies;
y
Convenient method of consolidation of folios/accounts;
y
Holding investments in equity, debt instruments and Government securities in a single account;
y
Automatic
credit
into
demat
account,
of
shares,
arising
out
of
split/consolidation/merger etc
Role of a Depository Participant
y
A Depository Participant(DP) is an agent appointed by the Depository and is authorized to offer depository services to all investors. An investor cannot directly open a Demat account with the depository. An investor has to open his / her account through a DP only. The DP in turn opens the account with the Depository. The DP in turn takes up the responsibility of maintaining the account and updating them as per the instructions given by the investor from time to time. The DP generates and provides the holdings statement from time to time as required by the investor. Thus, the DP is basically the interface between the investor and the Depository.
DP Services offered at SSJ
As a depository participant with CDSL, we o ffer the following services:
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Account Opening
To open an account with us, all you have to is fill in the demat account opening form and submit it along with proof of identity, proof of address and passport size photograph. Alternatively, you can contact us and we will assist you with a better understanding of the products as well as procedure for getting your account operational. On receipt of the client account form we will verify the mandatory requirements and attachments. Once verification is complete, we will allot a unique BO ID (Beneficial Owner Identification Number), which is required to be quoted for all future transactions.
y
Dematerialisation
This is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited in the investor's account with its Depository Participant (DP).
y
Rematerialisation
This refers to conversion of the securities held in electronic form in a demat account to an equivalent number of securities in physical form (certificates). Rematerialisation is, thus, the reverse process of Dematerialisation.
y
Transfer of securities
The power of attorney submitted by you with respect to the Demat Account enables us to credit your demat account whenever purchase of securities
takes place. In case of sale of securities, we directly debit your demat account to transfer the securities to the Clearing House / Clearing Corporation to complete your pay-in obligation. Such a system avoids unnecessary delays and avoids issuance of multiple instructions from the client.
y
Pledging/Hypothecation
Securities held in demat form can be pledged / hypothecated to avail o loan/credit facility or for other purposes. This allows you to get liquidity without having to sell your shares. The securities continue to be in pledgor¶s account and therefore all benefits viz. Dividend, Bonus and Rights accrue to the account holder and not the pledgee.
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Corporate Benefit - Dividend, Bonus or Rights Issue
In case the company in which you hold shares in demat form announces any corporate benefits like bonus, dividend etc., the same are credited to your relevant account in a hassle-free and transparent manner.
y
Public Issue
When subscribing for shares in a public issue, you can request for securities, if allotted, to be credited directly to your demat account and quote your demat account for the purpose in the application form.
y
Nomination
You can make a nomination of your account in favour of any person by filing up the nomination details in the account opening form. This is to enable the nominee to receive the securities after the death of all the holder(s) of the demat account. An NRI can nominate another NRI or a
resident Indian directly. But, the power of attorney holder cannot nominate on behalf of NRI. An NRI can be a nominee subject to the exchange control regulations in force from time to time.
y
Transmission
This is the process by which securities of a deceased account holder are transferred to the account of the surviving joint holder(s)/nominee/legal heirs of the deceased account holder.
y
SMS Alerts
SSJ Finance provides SMS Alerts through CDSL on your mobile phone for all debit/credit transactions in your Demat Account including IPO allotments. This service can be enjoyed at no additional cost. DP Charges
SSJ FINANCE & SECURITES PRIVATE LIMITED CHARGES FOR INDIVIDUAL AND CORPORATE DEMAT ACCOUNTS No. Service
Trades through
executed Trades
through other Clearing
SSJ FINANCE GROUP Members (with POA)
Account Maintenance: 1.
2.
Individual1
Rs.250/- p.a.
Rs.250/- p.a.
Others
Rs.500/- p.a.
Rs.500/- p.a.
Account closing charges NIL
executed
NIL
Custody
3.
Charges
(Per ISIN / per month)
4.
Dematerialisation
5.
NIL
Rs.2/-
per
certificate Rs.2/-
per
certificate
subject
to
minimum subject
to
minimum
charge
Rematerialisation
NIL
of
Rs.20/-
+ charge
of
Rs.20/-
courier charges
courier charges
Rs.25/- per certificate
Rs.25/- per certificate
+
Settlement fees for On & 6.
Off-market
trades:
Buy
:
NIL
0.01%
Sell :
NIL
on
the
value 0.04%
0.01%
Inter-Depository
8.
Rs.10/on
the
value 0.04%
Rs.10/-
Creation
Cancellation
Non-periodic Statement
on
the
value
Rs.10/-
/
0.04%
/ Rs.25/- per transaction
subject to a minimum of
Invocation
9.
value
subject to a minimum of subject to a minimum of
Transfer (Sell): Pledge
the
subject to a minimum of subject to a minimum of Rs.10/-
7.
on
on
the
value
Rs.25/Account Mailing Rs.25/-
Rs.25/-
charges: 10.
Charges for Instructions Book
Rs.20/- for 20 leaves
Rs.20/- for 20 leaves
Note: y
1No AMC will be payable for the first year of operations for Individual accounts.
y
The fee schedule is based on existing CDSL charges and is subject to change at the sole discretion of
CDSL / SSJ Finance & Securities Private Limited.
y
All charges are payable monthly.
y
Service Tax would be payable as applicable.
y
One-time Account Opening charges of Rs. 600/- are payable, at the time of opening Trading Account on NSE SSJ Finance Group.
and BSE and demat account with the
Benefits of ARBITRAGE with SSJ«
At SSJ Finance, we have a highly experienced arbitrage desk at your service. You will enjoy the following benefits while executing your arbitrage transactions through us: y
Expertise in identifying arbitrage opportunities and executing simple as well as complex strategies in large volumes.
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Dedicated teams for equities and co mmodities segments.
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Support of strong Quantitative Research that allow us to analyse and identify arbitrage oppportunities.
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A seamless facility to execute your arbitrage trades and earn the best possible return on your capital, with limited or no risk.
y
Sales Tax Registration
y
Risk-reward profiling
y
Experienced team that keeps you educated about such opportunities as well as the risks associated with such a strategy, if any.
y
Delivery taken in Spot market treated as margin for the corresponding futures trades in equity and commodity segments. Therefore, there is optimal utilisation of capital.
y
Tax planning
Arbitrage
Arbitrage involves the simultaneous purchase and sale of an asset in order to profit from a
temporary price differential, usually taking place on different exchanges or marketplaces. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple
terms, ³a risk-free profit´ . If you want to replace the returns from your idle funds in fixed deposits with higher yielding returns, arbitrage is a good risk free investment option for you. A person who engages in arbitrage is called an arbitrageur. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies. If the market prices do not allow for profitable arbitrage, the prices are said to constitute an arbitrage equilibrium or arbitrage free market. Risks involved in Arbitrage
Although arbitrage is considered to involve risk-free profit, there are some risks which may arise in any of the following situations: Quick change in prices: While adopting an arbitrage strategy, it may not be possible to close
two or three transactions at the same instant. Such failure to execute all parts of the transaction simultaneously can result in a situation where o ne part of the deal is closed, but a quick shift in prices makes it impossible to close the other at a profitable price. Counter-Party Risk: The counter-party to one of the deals may fail to deliver as agreed. Though unlikely, this is a serious potential threat in view of the large quantities one must trade in order to make a profit on small price differences. If leverage or borrowed money is used, these risks become magnified. Arbitrage between different assets: Sometimes, arbitrage transactions are undertaken between items/assets which are not identical. In spite of the difference in the nature of the assets, the purchase and sale are made on the assumption that the prices of the articles are correlated or predictable. In such situations, if price movement is contrary to ones expectations, it can produce huge losses.
Risk in Market Arbitrage: If one is trying to profit from a price discrepancy between a stock on BSE and the same stock on NSE, he may perform one leg of the arbitrage transaction by purchasing a large number of shares on BSE, but may find that he is unable to sell simultaneously on NSE. This will expose the arb itrageur to an unhedged risk position Price Convergence ± A Result of Arbitrage
Since arbitrage is based on making profit from temporary price discrepencies, it results inconvergence in prices in different markets. As a result of arbitrage, currency exchange rates, prices of commodities and prices of securities tend to converge to the same prices in all markets, in each category. The market efficiency can be judged from the speed at which the prices converge. As long as buyers are not prohibited from reselling and the transactions cost of buying, holding and reselling are small relative to the difference in prices in the different markets, arbitrage tends to reduce price discrimination by encouraging people to buy the asset where its price is lower and resell it where the price is higher Arbitrage Strategies
Various different kinds of Arbitrage Strategies are in use depending on the kind of markets, time period, nature of assets that are involved. We, at SSJ Finance can help you choose the right trading strategy that suits your profile and requirement. Some of the different types of arbitrage strategies are listed below. Please click on the name of the strategy to get a detailed insight on the same.
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Statistical Arbitrage
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Market Arbitrage
y
Risk Arbitrage
y
Volatility arbitrage
y
Index Arbitrage
y
Spread Trading
y
Cash & Carry Arbitrage
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Reverse Cash-and-Carry Arbitrage
To engage in arbitrage transactions in Equities and Commodities using any of the arbitrage strategies mentioned above, you are required to open an account with us or Contact us for any related queries.
Statistical Arbitrage:
This is a profit situation arising from pricing inefficiencies between securities. Investors identify the arbitrage situation through mathematical modelling techniques. Statistical arbitrage is not without risk; it depends heavily on the ability of market prices to return to a historical or predicted normal. Market
Arbitrage:
This refers to purchasing and selling the same security at the same time in different markets to take advantage of a price difference between the two separate markets. An arbitrageur would short sell the higher priced stock and buy the lower priced one. The profit is the spread between the two assets. Risk Arbitrage:
This is a broad definition for three types of arbitrage that contain an element of risk. In theory true arbitrage is riskless, however, the world in which we o perate offers very few of these opportunities. Despite these forms of arbitrage being somewhat risky, they are st ill relatively low-risk trading strategies which money managers (mainly hedge fund managers) and retail investors alike can employ.
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Merger and acquisition arbitrage - The simultaneous purchase of stock in a company being acquired and the sale (or short sale) of stock in the acquiring co mpany.
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Liquidation arbitrage - The exploitation of a difference between a company's current value and its estimated liquidation value.
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Pairs trading - The exploitation of a difference between two very similar companies in the same industry that have historically been highly correlated. When the two company's values diverge to a historically high level you can take an offsetting position in each (e.g. go long in one and short the other) because, as history has shown, they will inevitable come to be similarly valued.
Volatility arbitrage:
This is a type of statistical arbitrage that is implemented by trad ing a delta neutral portfolio of an option and its underlying. The objective is to take advantage of differences between the implied volatility of the option, and a forecast of future realized volatility of the option's underlying. In volatility arbitrage, volatility is used as the unit of relative measure rather than price - that is, traders attempt to buy volatility when it is low and sell volatility when it is high. So long as the trading is done delta-neutral, buying an option is a bet that the underlier's future realized volatility will be high, while selling an o ption is a bet that future realized volatility will be low. Because of put call parity, it doesn't matter if the options traded are calls or puts. Being long in a delta neutral call results in the same returns as being long in a delta neutral put. Index Arbitrage:
This ia a strategy designed to profit from temporary discrepancies between the prices of the stocks comprising an index and the pr ice of a futures contract on that index. By buying either the stocks or the futures contract and selling the other, an investor can sometimes exploit market inefficiency for a profit. Like all arbitrage o pportunities, index arbitrage opportunities disappear rapidly once the opportunity becomes well-known and many investors act on it. Index arbitrage can involve large t ransaction costs because of the need to simultaneously buy and sell many different stocks and futures, and so only large money managers are usually able to profit from index arbitrage.
Spread Trading:
A futures spread (or spread) is a long-short futures position that provides exposure to a spread or difference in two prices. Buying a Spread: When actual spread between two futures contracts of the same asset
widens, it is desirable to buy the near month contract since it is underpriced and sell the far month contract since it is overpriced.This strategy is called ³buying a spread´. Selling a Spread: When actual spread between two futures contracts of the same asset
narrows, it is desirable to sell the near month contract because it is overpriced and buy the far month contract because it is underpriced. This strategy is called ³selling a spread´. In either case of buying or selling a spread, the trader can square off his /her position when the spread corrects and the contracts are traded at their fair spread. Spreads can be intracommodity(or calendar spread) with same underlying but with different maturities, or intercommodity with different underlying typically having same maturity or on different exchanges using futures on the same underlying. Exchanges generally have less strict margin requirements for futures spreads because through spread trading, speculators face reduced risk compared to trading outright futures. This happens because the long and short futures that comprise a spread are usually correlated and tend to hedge one another. Cash & Carry Arbitrage:
Cash & carry arbitrage between spot and futures refers to a basis trade involving a long
cash position exactly offset by a short futures position. The holder of the position believes that the futures contract is expensive (futures price of the asset is more than the spot price of the asset plus cost of carrying the asset to the futures expiry date). He shorts the future, borrows at money market rates to finance a long position in the underlying, and either delivers the asset
into the futures contract or waits for a narro wing of the basis and closes out the positions in which case he effectively collects the yield on a synthetic money market instrument. It is also called buying the basis. This arbitrage and its opposite, reverse cash-and-carry, ensure an efficient relationship between cash and derivatives markets. Cash & carry arbitrage between two futures contracts refers to buying the near month
futures contract with borrowed funds with the intention of taking delivery and selling the far month futures contract with the intention of giving delivery. The above opportunity arises when futures price of the far month contract is more than the near month futures price plus cost of carrying the asset from the near month to the far month expiry date. Reverse Cash-and-Carry Arbitrage:
This refers to the creation of a low-risk or neutral position by simultaneously selling assets and buying the corresponding futures contract. Reverse Cash-and-Carry Arbitrage opportunity between spot and futures prices arises when the futures price of the asset is less than the spot price of the asset plus the cost of carrying the asset to the futures expiry date. Similarly Reverse Cash-and-Carry Arbitrage opportunity between two futures contracts arises when the far month futures price is less than the near month futures price plus the cost of carrying the asset from the near month to the far month expiry date
NRI Services
SSJ Finance and Securities Ltd is one-stop-shop to Non-Resident Indians (NRIs) for investments in Indian Capital Market. NRIs can invest in both Primary Market and Secondary Market through us. We offer wide range of services to ensure that NRIs feel at home while they take their investment decisions. Using the best of technology to provide you the best o services continues to be one of our Key Focus Areas. Featured Services y
Interlinked Demat + trading.
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Get free Stock Recommendations.
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Dedicated Professionals for your services.
Benefits of IPO Investing with SSJ
The IPO market in India has now become an attractive avenue for investment not only for regular traders, but also for new investors who so far have been averse to participating in the secondary markets on account of volatility and risk factors attached. The recent success witnessed in IPO issues along with handsome returns on listing, have made IPOs a source of great enthusiasm and excitement among investors across the country. As more and more companies are tapping the primary markets for raising capital, the IPO market is bound to grow and evolve at a fast pace. In such a lucrative scenario, we, at SSJ Finance offer you the opportunity to benefit from use of our IPO services to invest in the primary market.
At SSJ Finance, we provide you with complete ease and convenience in completing the IPO application process. Services relevant to the Primary market offered by us to investors are as follows: y
Analysis of Primary market offerings to help you make informed investment decisions
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Bidding and collection of IPO forms at several locations in India through all our branch offices.
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Regular updates provided on our website on ongoing and forthcoming IPO issues. Other relevant details pertaining to closed issues, new listings, basis of allotment and draft prospectus are also made available.
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Sections such as New Issue Monitor, IPO News and research reports provided by us on our website enable you to monitor and compare the performance of various IPOs.
IPO Application Procedure
To apply in an IPO, you can collect the IPO Application Form directly from your nearest SSJ Finance branch. To get a list of our branches, please click here.
Alternatively, you can Contact Us or e-mail us at
[email protected] and request for any IPO Application Form. The duly filled form, along with the bank cheque, has to be submitted at any of our collection centres (SSJ Finance branches). The shares allotted to you will be directly credited to your demat account and any excess application money will be refunded by a direct credit to your bank account. What is an IPO?
An Initial Public Offer or IPO is the first sale of a company¶s shares to investors on a public stock exchange. While IPOs are effective at raising capital, being listed on a stock exchange imposes regulatory compliance and reporting requirements. When a shareholder sells shares it is called a ³secondary offering´ and the shareholder, not the company who originally issued the shares, retains the proceeds of the offering. To avoid confusion, it is imporatnt to remember that only a company which issues shares can make a ³primary offering´. Secondary offerings occur on the ³secondary market´, where shareholders (not the issuing company) buy and sell shares to each other. Different Types of IPOs
There are two types of IPOs. These are listed below:
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Fixed Price Issue ± In this case, t he issue price is pre ascertained by the issuer.
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Book Building ± In this case, an indicative price range is declared by the company for a public offer of its equity shares. Interested investors place bids within this price range for the quantum of securities they want to subscribe to. Prospective investors can revise their bids at anytime during the bid period, that is, the quantity of shares or the bid price or any of the bid options. Usually, the bid must be for a minimum of 500 equity shares and in multiples of 100 equity shares thereafter. By recording the bids (quantum of shares ordered and the respective prices offered) received in a ³book´, the issuer makes an assessment of the demand for the securities proposed to be issued. After the bid closing date, the book runner and the company fix the issue price and decide the allocation to each syndicate member. Thus, book building method helps in optimum price discovery for the security
Strategy Guide to successful IPO investing
Investors are people. They like novelty; get excited by something new, especially if it holds the promise of making them a whole lot richer. Be careful. Amateur and professionals alike tend to lose their minds in bull markets, particularly when a hot initial public offering, or IPO, makes its appearance in the market. Just because a company persuades an investment bank to take it public doesn't mean it's a worthwhile investment. Here are a few guidelines that may help you make the right choice while selecting an IPO for investment. Please read the offer document and study the IPO issue with the following considerations in mind:
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Understand the real need for the product or service this company is planning to market. As we said earlier, new issues often come to market in industry clusters. As a result, not every company going public has a viable product or service to offer.
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Study company performance. It is important that the company has a track record of good operational performance indicated by figures of sales, profit, EPS etc. You must also look at the performance of the group companies and the inter-company transactions within the group, ensuring that there are no dubious transactions. If any loans are given to the group companies, you must study whether they are paying reasonable interest and whether the loan is likely to be repaid.
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Check promoter¶s background, the experience he has in the industry, the performance of the other companies promoted by him, his track record, investor complaints etc. Read the risk factors very carefully, especially those pertaining to the promoter/management. Check for any serious litigation against the promoter or the company. A good promoter or management team ensures regular growth in the company, by constantly looking for new business expansion opportunities. In the short to medium term, businesses may face ups and downs, but long term
success can be significantly influenced by good management which takes all necessary steps to ensure profitable performance. With a reliable and trustworthy management in charge of the company, you can be reasonably sure that your money will not be deliberately misused or siphoned off. y
Study future prospects of the Company, including expansion plans, plans for utilisation of funds raised, etc. Future prospects play an important role in the performance of the scrip on the stock exchange. Some investors feel as though they just don¶t "get" a company's vision. Very often, this may happen because the company may not have a vision at all. This is something investors must watch out for in a hot IPO market where several companies with no path to profitability go public.
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Evaluate fair price. Based on factors such as the fundamentals of the company, the company¶s EPS and the average industry PE, you can derive the fair price of any scrip. On comparison with the issue price, you will be able to conclude whether the issue is undervalued or overvalued. In case the issue is overpriced, it will tend to quote below issue price over a period of time, making it profitable to enter later at a lower price, rather than at the IPO stage. A high price is likely to reduce the prospects of appreciation of the scrip at the exchange, thereby defeating your purpose of investing.
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Have patience. If you truly believe in the company's products, strategy, and management, buying its shares and holding on for a long time will make you a lot more money with a lot less work than will trading new issues recklessly. This does not mean you should never sell, of course. Just make sure you are selling because the company¶s fundamentals have changed, not just because the company¶s stock price has gone down. With these investing principles in mind, you have a much higher chance of having a successful IPO investing experience.
Benefits of Mutual Fund Investing with SSJ
Mutual Funds (MFs) are undoubtedly an important product innovation in the financial field, as an instrument of raising capital from the wider public for corporate enterprise growth. With a wide range of mutual funds available in the market, finding the right fund can be difficult. At SSJ Finance, our goal is to recommend mutual funds that fit your investment objectives and risk tolerance and help you understand how well your current mutual funds are performing in today's market. We constantly strive to help you, the investor, make deliberate, thoughtful decisions that match your personal needs. We are dedicated to providing all our clients with the highest level of service. As an SSJ client, you can invest in a wide range of mutual funds based on their differing financial objectives and create a comprehensive investment strategy suitable for your financial goals. ( Investors should carefully con sider the investment objectives, risks, charges and expen ses prior to investin g. The prospectus contain s this and other important in formation and should be read carefully before you invest ) So if you are looking to invest in mutual funds or have any queries relating to the same, please contact us. We will respond to your query at the earliest.
What is a Mutual Fund?
Mutual funds provide a way for investors to "mutually" share the benefits of investing. A mutual fund is an investment company that professionally invests a pool of money on behalf of individuals and institutions with similar investment goals by issuing units to the investors and investing funds in securities in accordance w ith objectives as disclosed in offer document.
Investors of mutual funds are known as unitholders. Mutual fund issues units to the investors in
accordance
with
quantum
of
money
invested
by
them.
The profits or losses are shared by the investo rs in proportion to their investments Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same pro portion at the same time. Different Types of Mutual Funds
A wide variety of Mutual fund schemes cater to different preferences of the investors based o n their financial position, risk tolerance and return expectations. The mutual fund schemes can be broadly categorized under 3 headings:
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Funds by Structure/ Maturity Period
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Funds by Investment objective
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Other Schemes
Funds by Structure/ Maturity Period: These include open ended and close ended schemes.
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An open ended fund provides the investors with an easy entry and exit option at NAV (Net Asset Value), which is declared on a daily basis. The key feature of these schemes is liquidity.
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A close-ended fund has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
Funds by Investment Objective: A scheme can also be classified as growth scheme, income
scheme, or balanced scheme considering its investment objective. Such schemes may be openended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows:
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Growth/ Equity Oriented Schemes provide capital appreciation over medium to long ± term by investing a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period o f time.
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Income/ Debt Oriented Schemes provide regular and steady income to investors by investing in fixed income securities such as bonds, corporate debentures, government securities and money market instruments. Hence they are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.
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Balanced Funds provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less vo latile compared to pure equity funds.
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Money Market or Liquid Funds provide easy liquidity and preserve capital but generate moderate income. As they invest exclusively in safer short- term instruments such as treasury bills, certificates of deposit, commercial paper, inter bank call money
and government securities. These funds are appropriate for corporate and individual investors as a means to park t heir surplus funds for short periods. y
Gilt Funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes.
Other Schemes: These include index schemes, sector specific schemes, tax saving schemes
and fund of funds schemes.
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Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weightage as in the index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due
to
some
factors
known
as
"tracking
error"
in
technical
terms.
There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges. y
Sector specific Funds/ Schemes invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must are traded on the stock exchanges. exit at an appropriate time. They may also seek advice of an expert.
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Tax Saving Schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-dominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme.
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Fund of Funds (FoF) scheme invests primarily in other schemes of the same mutual fund or other mutual funds. An FoF scheme enables the investors to achieve greater diversification through one scheme. It spreads risks across a greater un iverse.
Why invest in Mutual Funds?
Mutual funds are popular investments, primarily because of their nu merous benefits:
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Diversification: Mutual funds help you diversify your portfolio, or spread your money
over a number of different investments that are handpicked and tracked by professional money managers. This strategy can help decrease risk to your portfolio because when your investment return isn't dependent on any single investment, the impact of one poor performer on your portfolio is reduced. y
Convenience: Mutual funds make investing easy and flexible by emphasizing
convenience to the investor in several ways: o
Low minimum investment: Most mutual funds require low minimum investments making it easy for investors to build a diverse portfolio fairly quickly.
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Easy liquidity: You can cash in any or all of your mutual fund shares on any business day. The value of your shares is based on the closing market price (net asset value, or NAV) of the underlying securities.
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Automatic reinvestment: You can automatically purchase more mutual fund shares by reinvesting your dividends and capital gains distributions.
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Systematic withdrawal: You
can
request
that
regular payments
from
systematically selling shares be sent directly to you. y
Professional Management: Experienced, full-time money managers manage each
mutual fund. These professional money managers: o
Research general market and economic trends. Using the information they gather, the fund's professional money managers decide when to buy or sell
securities to increase return potential and keep constant tabs on individual holdings and the overall performance of particular markets, adjusting the portfolio for the strongest possible performance. o
Strive to achieve specific objectives: Because each fund has a specific investment objective, such as long-term growth or aggressive growth, managers can focus on the strategic goals of their funds.
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Financial benefits: These include: o
Mutual fund unitholders can earn dividends on their mutual fund units.
o
Unitholders can also profit from the sale of their units if they sell them for more than their original value.*
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Unitholders can receive their dividend payments directly or reinvest them back into the fund and purchase add itional units.
(*An investment in mutual funds will fluctuate such that an investor's shares when redeemed may be worth more or less than the original investment) Systematic Investment Plans
Investing regularly through a Systematic Investment Plan (SIP) in an equ ity fund is one strategy that can ensure success to a large extent for those who are looking to build up their capital over the longer term and are not familiar with equity markets. It is a proven fact t hat a steady saving and investing plan helps pursue financial goals. What SIP really means is that you invest a fixed sum every month. Some of the Benefits of SIPs are as follows:
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Rupee Cost Averaging - SIP makes market timing irrelevant. In other words, you can
invest a certain amount of money every month at various entry prices buying fewer units when the share prices are high and more units when the share prices are low. Besides, you take advantage of the fact that over a period of time stock markets generally go up, so your average cost price tends to fall below the average NAV. This "averaging" ensures that you buy at different levels, not just the top.
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Benefit of Compounding - The profits you earn from your investments get reinvested.
Therefore you earn returns on your primary investments and reinvested profits.
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Cost Effective Method of Investment - Instead of blocking your money by making a
one-time investment, in an SIP, you can spread the same amount over a certain period of time and maintain liquidity.
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Building for the Future - SIP is an effective method of ensuring regular savings and
achieving your short-term or long-term financial goals. It is also an excellent method of utilizing your funds, which may be, otherwise, lying idle. Step-wise Approach to an SIP y
Choose the amount you want to invest at each interval. (The amount must be such that you will be comfortable investing regularly over the long term)
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Choose the frequency of your investment - every month, every quarter, every six months.
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Continue investing the same amount each period irrespective of whether the market falls or rises.
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Maintain a long-term perspective. Ignore the day-to-day fluctuations in the market. Keep investing over a long period of time to give your money a chance to grow
Strategy Guide to successful MF investing
With the stock market near record territory and rising volatility in global financial markets, there's no shortage of mutual fund advice on how to master the markets. For most investors, sifting through all the advice and filtering out the background noise can be a daunting and cumbersome experience.
However, there are certain basic guidelines which can make your decision relatively easier. To ensure you areselecting the right type of funds that are appropriate for your needs, consider the following Do¶s & Don¶ts: Do's
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Determine your investment objectives . Are you investing for preserving principal, generating income, paying for a child's education or saving for retirement? Choose a mutual fund whose objective is in line with your investment goal.
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Decide the time horizon you are looking to invest for-3 months, 3 years or 3 decades. This will help you assess your risk tolerance. The longer your time horizon, the more risk you will be able to take
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Consider your Investment stage in terms of life-cycle while choosing a fund. During your working or accumulation years, growth-oriented strategies will attain higher total returns than income-oriented strategies. As you approach retirement, possibly a balanced-oriented strategy may be more appropriate to conserve your accumulated assets. Finally, in your retirement, income and stability would most likely be your priorities, although some growth is also important to help protect against inflation. These are general guidelines -- your return objectives and time horizon should govern your strategy.
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Assess your risk tolerance level. Which of the following 3 categories do you fall in? y
Conservative - will accept lower returns to minimize risk.
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Moderate - will accept average price fluctuations to pursue higher returns.
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Aggressive - will accept above average price fluctuations to seek above average returns.
Answering this question will help you in choosing the right scheme. Before
you invest, be sure to read a fund's prospectus and shareholder reports to learn about its investment strategy and the potential risks. Funds with higher rates of return may take risks that are beyond your comfort level and are inconsistent with your financial goals. y
Read and understand all information in the fund's offer document, Statement of Additional Information, and, if available, its annual report .
In case you still have any queries, contact the Fund Company or the Securities Division to clarify the same.
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As with any business, running a mutual fund involves costs ² including shareholder transaction costs, investment advisory fees, and marketing and distribution expenses. Funds pass along these costs to investors by imposing fees and expenses. It is important that you study the fund's fee table and compare the fees among various fund groups before choosing a fund because the fees significantly lower your returns.
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Analyse your existing portfolio . Study the kinds of funds that are a part of
your portfolio ± Large cap, Mid cap, Flexi cap, Balanced Funds, Tax planning funds etc. Then see whether the fund you are considering for investment will add any value to your existing portfolio and whether it falls in line with your investment objectives and asset allocation. Additional Do¶s - specific to New Fund Offerings (NFOs) y
Check whether the NFO really has something new to offer which will add value to your portfolio. Either the investment strategy of the fund should be new or at least it should be a new scheme offered by an existing AMC you are comfortable with. Unless something different is offered it may be prudent to invest in a fund which already has a track record, and whose portfolio, investment strategies and expenses are all known to you.
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Before investing in an NFO, study the performance of other schemes
managed by the fund manager of the NFO, especially during periods of
market turmoil. Check the stability of the investment team of the fund house and the number
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of schemes it is managing. Be careful while investing in fund houses which keep introducing new NFOs in the market at a faster-than-required pace. The AMC¶s performance is more important than the fund manager¶s background because the recommendations of the research teams of the AMC and the investment philosophy of the AMC ultimately guide the fund managers to invest. Moreover, even if a fund manager were to quit, a good AMC would be able find another competent fund manager. As per Sebi guidelines, mutual funds can charge up to 6% of their NFO
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collections as µcost of the issue¶ expenses to the scheme. These include marketing expenses incurred on advertisements, road shows, offer documents, incentives to distributors etc. Since these expenses are written off from the NAV over a period of 5 years, all things remaining the same, an NFO will offer net lower returns vis-à-vis an existing scheme where the expenses have already been adjusted in the previous years. If after doing all of the above, you are still not clear about whether you
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should invest in a fund, seek our advice and our concerned representatives will assist you. Don'ts y
µAt
par¶ NAV has absolutely no role to play in your future returns . Do
not assume that getting the units of the scheme at par i.e. Rs. 10 means getting it cheap. Whether the NAV is 10 or 100 makes no difference. The NAV of an existing scheme is higher merely for the fact that its¶ portfolio has appreciated since the time it built it¶s portfolio. Going forward, the returns over a given period of time will be same from an existing portfolio (with a higher NAV) and an identical new portfolio (with Rs.10 NAV). The earlier appreciation of the old fund does not make it expensive. What you
should be concerned about is the% fall or% rise. A Re. 1 fall in a NAV 10 fund is the equivalent of Rs.10 fall in a NAV 100 fund. In fact Rs.100 means proven competence and a long track record of capital appreciation. y
Do not have investments in either too few or too many mutual fund schemes. An ideal number would be between 4 and 10. Your investment
should be spread across different Mutual Funds, fund managers, investing styles, expense ratios, portfolio turnover and market capitalization and diversified between equity, balanced and tax planning funds etc. Invest in sectoral funds only if you are very bullish on the sector concerned and have a good knowledge of sector performance. y
Do not fall for fancy terminology used for marketing any scheme. Be guided by the basics of the fund. If there is any confusion it is preferable to invest in an existing fund with longer track records having similar investment goals and strategies.
PROJECT PROFILE
Project Profile: ³Financial analysis Of SSJ´
Objectives Of study: -
To study the fundamentals of the securities as a whole prior to
investment. To understand and analyze online trading at SSJ. To study the fundamental of the top securities according to their
market capitalization
Methodology Adopted: -
The methodology adopted for the present study was focus discussion, interview and close observation through in-house study. Since the project is based on action research it was necessary to build rapport to collect maximum information from the data. Hence the research spent considerable time with the people who posses good knowledge about data analysis. The main focus was to do with the assessing the satisfaction level of investors and explore the possibility of more sound arrangement of disseminating outlook information system investment analysis.
Marketing Research: WHAT IS MARKETING RESEARCH ?
Marketing research is the function which likes the consumers, customers & public the marketer through information which is used to identify & define marketing opportunities & problems, generate, refine & evaluate marketing action; monitor marketing performances & improve understanding of marketing as a p rocess. TYPES OF MARKETING RESEARCH
On the basis of fundamental objectives of the research, marketing research projects are classified into two branches: Exploratory Research Conclusive Research
EXPLORATORY RESEARCH:
It seeks to discover new relationships. All marketing research projects start with it. This is a preliminary phase & is absolutely essential in order to obtain a proper definition of problems at hand. The major emphasis is on the discovery of ideas & insight. Exploratory research looks for hypothesis in well-established fields of study. Hypothesis usually comes from ideas developed in previous researches or are delivered from theory. Hypothesis is tentative answer to the question that serves as guide for most of the research projects.
CONCLUSIVE RESEARCH:
Conclusive research provides information that helps the executive so that he can make a rational decision. This study has done well while attempting to arrive at a more clear description of an apparent problem.
Data Collection
Primary data: -
Secondary
data:
which is collected by new research called pr imary data.
-
Close observation
Survey conduction
Discussions with the Associate RMs of SSJ
already
existing data is called secondary data. I collected
them by following method ±
Internet
Books
OFFERINGFS
SSJ offers two products: -
³Get More At SSJ.´ 1. NS - Normal SSJ 2. PS - Power SSJ
NS ± Normal SSJ: -
³A multitude of ways to access your account either through priority access to Relationship Manager over phone OR online access to your Account & Research Tools.´
Enjoy priority telephone access that gives you direct access to your Relationship Manager. Stay on the top of your investments with a snapshot of your Account Statements. Get access to Portfolio statement and access to digital contract notes.
PS ± Power SSJ: -
³Trading just got faster´
It is advance trading software which great deals of versatility even at low band width assuring speed and total functionality ensuring speed and total functioning of a broker¶s terminal. An active trader market execute traders and get confirmation of the some computers terminal need to be 128 Bits Encrypted (Supported by explorer version 5 and above) Regardless of how the market is performing or which way the economic winds are blowing as traders, are researching, charting, crafting a strategy, buying and selling. Investors are getting in, getting out and moving on to the next trade. Choose from a comprehensive offering of accounts, platform and product. Customize technology and services to support the way of work. Choose from a broad spectrum of sophisticated trading tools using a fast desktop Trading Software. - Trading just got faster.
FINANCIAL ANALYSIS
An
industry provides the best judge how well a
financial
ratio methodology company
investment is performing. In evaluating any investment it is imperative that the company or investment be compared to the performance of the industry in which it competes. Venture Line provides the latest of data, less than 30 days old, for every industry within the public market. Your industry financial ratios analysis is immediate and available for download or printing at will.
Industry financial ratios can reveal much about an industry. However, there are several points to keep in mind about ratios. First, they are "flags" indicating areas of strength or weakness. One or even several ratios might be misleading, but when combined with other knowledge of an industry, industry analysis utilizing ratios can tell much about t hat industry. Second, there is no single correct value for a ratio. The observation that the value o f a particular ratio is too high, too low, or just right depends on the perspective of the analyst. Third, financial ratios are meaningful only when they are co mpared with some standard, such as another industry trend, ratio trend, a ratio trend for the specific sector being analyzed.
In industry analysis, using trends, industry ratios are compared over time, typica lly years.
or
Year-to-year comparisons can highlight trends and point u p the need for action. Trend analysis works best with five years of ratios.
The second type of ratio analysis, cross-sectional analysis, compares a company's financial ratios to industry ratio averages. Another popular forms of cross-sectional analysis compares the financial ratios of two or more co mpanies in similar lines of business.
Your industry analysis report is broken down into the various ratio categories:
y
Predictor Ratios indicate the potential for growth or failure.
y
Profitability Ratios which use margin analysis and show the return on sales and capital employed.
y
Asset Management Ratios which use turnover measures to show how efficient the companies within the sector perform in operat ions and use of assets.
y
Liquidity Ratios which give a picture of an industry's short term financial situation or solvency.
y
Debt Management Ratios which show the extent that debt is used in the sector's capital structure.
SSJ is providing Funding for trading to its client on nominal rates of interest i.e. on
18% limit of funding is as follow Delivery- for delivery trading SSJ pro viding 2 times funding Intraday - for this type of trading SSJ is proving 8 times funding without
charging any interest.
SSJ Equity Analysis SSJ provide an analysis of more than 540 companies it include
current and future planning of various companies but this service is optional for client. Building and maintaining customer¶s
ideal portfolio demands
objective, dependable information. SSJ Equity Analysis helps satisfy that need by rating stocks based on carefully selected, fact-based measures. And because we're not
focused on investment banking, SSJ don't have the same conflicts of interest as traditional brokerage firms. This objectivity is an important difference in our ratings. The SSJ Equity Analysis model attempts to gauge investor expectations, since stock prices tend to move in the same direction as changes in investor expectations. y
Stocks with low and potentially improving investor expectations tend to receive A or B ratings
y
Stocks with high and potentially falling investor expectations tend to receive D or E ratings Over the next 12 months, A-rated stocks have a return outlook of strongly outperforming the market while E-rated stocks have a return outlook of strongly under performing the market. Find out more about using SSJ Equity Analysis
In today¶s scenario when all services are going to be online or in electronic form SSJ is creating awareness of online trading that client can trade from anywhere from the World.
Risk management team of SSJ taking care of client portfolio and whenever the value
of his portfolio will go decrease by 30% client always informed by his Relationship Manager.
SSJ is providing a software called ³Power SSJ´ as describe above if a client have his
own PC and Internet then he can trade from his home o r office.
In SSJ possibility of auction is very less because of large client base, so he can sell
shares anytime.
Depository Services: -
³Whatever your individual goals, we can help.´
SSJ is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialised shares. SSJ performs clearing services for all securities transactions through its accounts. Company offer depository services to create a seamless transaction platform ± execute trades through SSJ Securities and settle these transactions through the SSJ Depository Services. SSJ Depository Services is part of our value added services for its clients that create multiple interfaces with the client and provide for a solution that takes care of all client needs
NRI Account
You can now enjoy the convenience of hassle-free and fast way of trading in the Indian Equity Markets through SSJ NRI Investor Services Our unique integrated service creates one window for all your trading, depository and banking needs. You can buy and sell on your computer using our NRI Trading Account Services, which have been seamlessly integrated with your SSJ Depository
Account
and
with
the
HDFC
NRE/NRO
Bank
Account.
We provide full access to the following services to help you trade seamlessly: y
SSJ NRI Trading Account - Provides access to comprehensive trading tools for
independent NRI investors y
SSJ Depository Services - Integrated services for seamless delivery
y
HDFC Bank Account - NRE/NRO Accounts with built in tax management solutions
and facility to source all regulatory approvals y
SSJ Equity Analysis - Premium Research on 540+ companies updated daily
OPERATING SYSTEMS
BOLT
NEA T
NEA T
TECHNICAL RESEARCH CALLS
ANALYSIS OF DATA
Share khan
Key Financial Ratios
------------------- in Rs. Cr. ------------------Mar '06
Investment
Mar '07
Mar '08
Mar '09
Mar '10
Valuation Ratios
Face Value
10.00 10.00
10.00
10.00
10.00
Dividend Per Share
1.00 --
--
--
--
19.47 13.93
10.46
11.21
13.34
75.79 87.37
101.08
107.10
99.88
59.70 51.50
51.10
-0.77
--
1.88 1.88
1.79
1.79
1.69
Operating Prof it Per Share (Rs) Net Operating Prof it Per Share (Rs) Free Reser ves Per Share (Rs) Bonus in Equity Capital
SHCIL Key Financial Ratios
------------------- in Rs. Cr. ------------------Mar '06
Investment
Mar '07
Mar '08
Mar '09
Jun '10
Valuation Ratios
Face Value
10.00 10.00
10.00
10.00
10.00
Dividend Per Share
--
--
--
--
2.91 13.08
10.39
9.18
11.24
41.34 61.58
68.41
67.60
83.44
Operating Prof it Per Share (Rs) Net Operating Prof it Per Share (Rs)
--
Free Reser ves Per Share (Rs) Bonus in Equity Capital
-5.34 -5.40
-4.85
-11.32
-13.75
--
--
--
--
--
ICICIDIRECT
Key Financial Ratios
------------------- in Rs. Cr. ------------------Mar '06
Investment
Mar '07
Mar '08
Mar '09
Mar '10
Valuation Ratios
Face Value
10.00 10.00
10.00
10.00
10.00
Dividend Per Share
8.50
10.00
11.00
11.00
12.00
36.75 42.19
51.29
48.58
49.80
196.87 316.45
354.71
343.59
293.74
193.24 199.52
346.21
351.04
356.94
--
--
--
--
Operating Prof it Per Share (Rs) Net Operating Prof it Per Share (Rs) Free Reser ves Per Share (Rs) Bonus in Equity Capital
--
Kotak
Key Financial Ratios
------------------- in Rs. Cr. ------------------Mar '06
Investment
Face Value
Mar '07
Mar '08
Mar '09
Mar '10
10.00
10.00
10.00
Valuation Ratios 10.00 10.00
Dividend Per Share Operating Prof it Per Share (Rs) Net Operating Prof it Per Share (Rs) Free Reser ves Per Share (Rs) Bonus in Equity Capital
0.60 0.70
0.75
0.75
0.85
6.51 7.10
16.32
13.08
25.88
29.42 48.81
81.83
94.39
105.01
13.00 34.53
85.15
89.63
102.80
59.80 56.71
53.66
53.51
53.13
SSJ
Key Financial Ratios
------------------- in Rs. Cr. ------------------Mar '06
Investment
Mar '07
Mar '08
Mar '09
Mar '10
Valuation Ratios
Face Value
10.00 10.00
10.00
10.00
10.00
Dividend Per Share
1.00 --
--
--
--
19.47 13.93
10.46
11.21
13.34
75.79 87.37
101.08
107.10
99.88
59.70 51.50
51.10
-0.77
--
1.88 1.88
1.79
1.79
1.69
Operating Prof it Per Share (Rs) Net Operating Prof it Per Share (Rs) Free Reser ves Per Share (Rs) Bonus in Equity Capital
Financial Analysis of Data of companies
SALES TURNOVER Share khan
25706.9 3 Cr
SHCIL
2318.49 Cr
Icicidirect
3255.62
Kotak
16172.90 Cr
SSJ
9176.52 Cr
Cr
Sales Turnover (Crores) 30000 25000 20000 15000 Sales Turnover (Crores) 10000 5000 0 Share khan
SHCIL
Icicidirect
Kotak
SSJ
NET PROFIT
Share khan
4024.9 8 Cr
SHCIL
52.00 Cr
Icicidirect
561.11 Cr
Kotak
2948.70
SSJ
451.00
NET PROFIT 4500 4000 3500 3000 Financials 2500
Column1
2000
Column2 Column3
1500
Column4 1000 500 0 Share khan
SHCIL
Icicidirect
Kotak
SSJ
TOTAL SHAREHOLDERS FUND Share khan
51618.37
SHCIL
1346.86
Icicidirect
4539.91
Kotak
21522.49
SSJ
966.38
TOTAL SHAREHOLDERS FUND 966.38
Share khan 21522.49
SHCIL Icicidirect
4539.91
51618.37
Kotak SSJ
1346.86
TOTAL DEBT Share khan
2962 80.17
SHCIL
1870.58
Icicidirect
30026.98
Kotak
180320.13
SSJ
7351.05
TOTAL DEBTS
SSJ
Kotak
Icicidirect
SHCIL
Share khan
0
50000
100000
150000
200000
250000
300000
350000
EARNING PER SHARE Share khan
34.63
SHCIL
2.20
Icicidirect
16.18
Kotak
62.43
SSJ
4.50
EARNING PER SHARE 70
1.2
60
1
50 0.8 40 0.6 30 0.4 20 0.2
10 0
0 Share khan
SHCIL
Icicidirect
Kotak
SSJ
FINDINGS
SSJ FINANCE & SECURITIES PVT LTD is one of the leading stock broking company having knowledgeable and exper ienced good name.
From the entire analysis, it was found that major ity of the people are aware of SSJ FINANCE & SECURITIES PVT LTD.
The reason for less preference of equity and mutual fund is that it does not give returns to clients once the market falls.where as in bank f d¶s customer s get some f ixed amount of returns without any considerations.
SSJ have wide var iety of products which benef its the customer s by giving them secur ity as well as hand some returns.
CONCLUSION
Conclusion
The products offered by share market are equity, commodity, portfolio management service, future and option market, bank fd¶s etc«.and the highest awareness among these product is of BANK FD¶S because this product is preferred by highest number of persons ie. almost
33%
of people prefer it. The company should try and make effort
towards its equity product as people fear for investing in it. According to my survey only 10% of the people has taken this product and even in that only few are satisfied and rest are not at all satisfied.
As said earlier, fundamental analysis is one of the most important tools when it comes to stock market investment. It guides a person as to which scripts should be selected and which ones to be rejected. The researcher studied the world economy, Indian economy and the sectors in brief as part of the fundamental analysis. Then the analysis is done selecting different firms such as Sharekhan ,SHCIL, ICICIDIRECT,KOTAK, SSJ. The performances of these securities were evaluated as per ratios available and t he result was found out.
From the results we can see that Sharekhan has highest total debts, the Earnings per share is highest in kotak bank as compared to other securities which show that it has a strong position to meet its customer satisfaction and other kinds of risks involved. Also the debt employed in the company is lower of others and so the debt burden is comparatively low on the security. Other profitable like sales, operating profit per share and earning per share is higher than others. Company made capital more from equity rather debt therefore acid test and current ratio is acceptable. SSJ stood good position with low volume less risk security. We can see from the analysis that SSJ group growth prospects are quite high. There is continuous growth in its deposits and also its advances year on year. The other most important thing that all of its profitable measure having the average stand. The company¶s ability to pay off its short-term obligations from
current assets is not well enough and the sales of the firm should be moderate. This shows that profitability of the bank is increasing which enhances the shareholders wealth. The company lags behind when it comes to the capital structure of the company. Its size of the capital and also its capital adequacy ratio is on a lower side. SHCIL stands second in group; The acid test of company is nearer with significant level; it draws a more realistic picture of a company's ability to repay current obligations than the current ratio as it excludes inventories that may hardly be liquidated at their book value. Debt burden is also huge on the company. Liquidity position have ideal stand. Earning per share, book value per share of the firm has the satisfactory level. Bottom to the final, investing in smaller companies is riskier than investing in larger companies. That seems sensible. Smaller companies don¶t have the financial resources of many larger companies to weather a financial storm. And the products or services of smaller companies are often still unproven. As we saw with stocks and bonds, the higher risk involved with investing in smaller companies has, historically, resulted in higher returns. After analyzing all the profitable measures it will be suggestion able that security of large companies generates more profit rather than others; the investors should invest their saving income in large companies securities. Securities of small firms also have the profitable parameters. Last some year whenever liquidity created than stock holders had made the profit from large and small companies. Volatility of market is mostly depending on large cap stocks where the mid cap makes stability, in some unfair situation. The given parameters can be helpful to the investor before their investment in any of particular stock.
Suggestion
SSJ should improve either on marketing part or other benefits products so that people are more attracted towards these plans.
SSJ has to make effort to reach the higher stages so that the probability of the company as well as the market share of the company can be increased. Lastly, the company should introduce new and attractive policies as the competition is high in the market.
GLOSSARY (1) CDSL- central depositary participative
(2) DERIVATIVES-these are financil instruments whose value depend on the value of other more basic underlying like equity,bonds,commodity,etc.
(3) DEMAT- demate means dematerialization.
(4) E-BROKING- means online trading platform.
(5) FII-foreign institutional investors.
(6) FUTURES- future contract is agreement to bu y or sell an asset at certain future time for a certain price.
(7) IPO-initial public offer.its function is to raise money for public,expansion of existing plant and adding new plants.
(8) KYC- this means know your customer.A customer can be known by checking his documents ,providing him a unique code and contracting with him in lot.
(9) MCX-multi commodity exchange.
(10) MINI-this is a gateway for small investors into derivatives.
(11) NCDEX-national commodity and derivatives exchange ltd.
(12) OPEN INTEREST-this is the total number of outstanding contract s that are held by
market participants at the end of the da y.
(13) OPTIONS-these are deffered delivery contracts that g ive the buyers the right but not the obligation,to by or sell at the set price or before a specified date.
(14) PM-portfolio management.The portfolio management team not only draws support from angels inhouse research team for new investment ideas but also has its own stock picking by adopting bottom up research.
(15) PULL BACK- share prices come back t o test the trendlines after a breakout or breakdown.
(16) RESISTANCE- is the level on the pricechart from which the stock price starts moving down.
(17) RETRENCHMENT ±is the correction that o ccurs in the price of a share.
(18) SUPPORT ± is the level on the price chart from which the sto ck price start moving up.
(19) TRADING ± is a form of account which is helpful in trading of securities.In commodity market only trading account is compulsory.
(20) TREND ± is the direction in which market moves.