Training Report

Published on December 2016 | Categories: Documents | Downloads: 45 | Comments: 0 | Views: 489
of 77
Download PDF   Embed   Report

Comments

Content

1ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

SUMMER TRAINING REPORT On

Analyzing the financial products of HSBC Invest Direct Securities (India) Limited

Submitted in partial fulfillment of the requirements of the two year Post Graduate Diploma in Management (PGDM).

Submitted by

Manmohan Chawla
……………………………………………………………………………….

Roll No: 706 Batch: 2009-2011

AICAR BUSINESS SCHOOL

AICAR BUSINESS SCHOOL

1

2ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

ACKNOWLEDGEMENT With great pleasure I take the privilege to acknowledge the people who have been involved in completion of my project at different stages. I acknowledge gratefully my indebtedness to my Company Guide; Mr. Amit Johari, Branch Manager, HSBC Invest Direct Securities (India) Limited, Jaipur, for his patient help, valuable suggestions, encouragement and guidance at every stage of my project. I would like to thank Mr. Amit Jhori, Branch Head, HSBC Invest Direct (India) Limited, Jaipur for providing information and suggestions for this project report. I am also grateful to all the employees of HSBC Invest Direct (India) Limited, Jaipur, for helping me throughout the tenure of this project. I would give the credit of fruition of my project to Dr.S.Kutty, my faculty guide for the summer internship project who inspired me by her discussions and showed me the right course to pursue. The successful completion of the project would not have been possible without her constant support. In the end, I express my thanks to all those who were directly or indirectly involved in this project.

AICAR BUSINESS SCHOOL

2

3ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

SIP REPORT

DECLARATION FORM
I hereby declare that the Project work entitled, ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT (INDIA) LIMITED submitted by me for the partial fulfilment of the Post Graduate Diploma in Management (PGDM) to AICAR Business School, is my own original work and has not been submitted earlier either to AICAR or to any other Institution for the fulfilment of the requirement for any course of study. I also declare that no chapter of this manuscript in whole or in part is lifted and incorporated in this report from any earlier / other work done by me or others. Place :Jaipur Date : 15 July 2010

Signature of Student

Name of Student: MANMOHAN CHAWLA Address: V.P.O. – KIRAWAR, TEHSIL – TOSHAM, DISTRICT- BHIWANI, HARYANA

AICAR BUSINESS SCHOOL

3

4ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Executive Summary
In today's complex financial environment, investors have unique needs which are derived from their risk appetite and financial goals. But regardless of this, every investor seeks to maximize his returns on investments without capital erosion. The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. These are the basic activities done by the broking firms. HSBC Invest Direct (India) Limited, a financial services company, provides customized financial management solutions to individual and corporate customers in India. The company offers various retail broking service offerings comprising equities, derivatives, mutual funds, and insurance products, as well as NRI, online trading, and branch trading services. It also provides wealth management products and services, including investments; IPO advisory and distribution services; various risk management solutions for corporate and individual customers; and portfolio management services.. These options depend on the financial requirements of the investors and constructed according to that only, but with time these requirements changes, so all products need some up gradations. This project will also concentrate on this area. Project will also compare and analyze products of major competitors of HIDL. It will help in making financial products of HSBC Invest Direct Limited more superior and beneficial to customers.

AICAR BUSINESS SCHOOL

4

5ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Table of Contents
COVER PAGE……………………………………………………………………………………….1 Certificate From the company……………………………………………………………………….2 Acknowledgement…………………………………………………………………………………….3 Declaration form ……………………………………………………………………………………..4 Executive summary…………………………………………………………………………………...5 Table of Contents……………………………………………………………………………………..6 Industry Profile……………………………………………………………………………………….7 Company Profile……………………………………………………………………………………...9 Financial analysis……………………………………………………………………………………13 Competitor…………………………………………………………………………………………..18 Objective of the study …………………………………………………………………………........19 Research Methodology………………………………………………………………………………20 Analysis of financial and investment industry…………………………………………………….,21 Analysis of investment option available……………………………………………………………31 Analysis of Product and services of HSBC………………………………………………………..36 Competitive Analysis………………………………………………………………………………..49 Questionnaire data Analysis………………………………………………………………………..64 Factors Affecting Investment Pattern……………………………………………………………...66 Limitations…………………………………………………………………………………………..71 Conclusion…………………………………………………………………………………………..72 Questionnaire......................................................................................................................................73 Risk Test……………………………………………………………………………………………..75 References…………………………………………………………………………………………...78

AICAR BUSINESS SCHOOL

5

6ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Industry Profile
Finance and Investment Industry is a fairly broad ranging group of institutions that provide various financial services. Examples of such institutions include commercial banks, merchant (or investment) banks, insurance companies, brokerage firms, asset managers, and an assortment of other institutions. Services provided range from money management for private individuals, to debt and equity underwriting for corporations to issuance of insurance policies, and many other services. In today’s global markets, this industry is the engine of the global economy, enabling corporations and the government to grow and expand.

In 2009-10, the Indian economy is estimated to have grown by 7.2 per cent. According to the latest Central Statistical Organization (CSO) data, financial services and real estate sector rose by 7.8 per cent in the third quarter of 2009-10. The sectors including banking and insurance and mutual funds are beginning to reap the benefits of a good closure of 2009-2010. Financial services organizations are striving to achieve increasingly ambitious profit and growth targets against a background of heightened risk, regulation and market pressures. Customer needs and expectations are evolving in the face of increasing personal wealth, more private funding of pensions and health care and the desire for ever more accessible and personalized financial products and services. In turn, intense competition has squeezed industry margins and forced organizations to cut costs while still seeking to enhance the quality of client choice and service. The battle for talent is also heating up as companies seek to enhance innovation, customer loyalty and investment returns The corollary of this market evolution is increasing risk as products become more complex, organizations more diffuse and the business environment ever more uncertain. Regulation is also tightening in the wake of public and government pressure for improved governance, transparency and accountability. In this environment, the winners will be companies that can turn the challenges into opportunities to build stronger and more enduring customer relationships; sharpen process efficiency; unlock talent
AICAR BUSINESS SCHOOL 6

7ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

and creativity; use improved risk management processes to deliver more sustainable returns; and use new regulatory demands as a catalyst for strengthening the business and enhancing market confidence. The government has taken a number of steps to revive the economy, including slashing interest rates, lowering factory levies and more than doubling the limit on foreign investment in corporate bonds. The financial services space is a rapidly growing one in India. The country received US$ 45 billion in foreign currency remittances from non-resident Indians in 2008, the highest in the world. India’s market capitalization (m-cap) has touched US$ 1.04 trillion making it the ninth largest in the world. India’s share in the total world m-cap has risen to 2.79 per cent. The Indian stock market has currently responded to the optimism of reforms by the new stable government and its continuity in policies. Fund raising by India Inc. through initial public offers (IPOs) rose by a whopping 62 per cent since the beginning of 2008 to May 29, 2008 to US$ 4.2 billion, against US$ 2.6 billion during the same period in 2006. Indian companies may raise US$ 4 billion-6 billion from IPOs in the fiscal year ending March 31, 2010. April-May 2009 saw increased inflow in to equity with investors steadily turning positive on equity according to mutual fund analysts. As per the Securities and Exchange Board of India (SEBI), on May 15, net investment of mutual funds in equity was around US$ 83.3 million lowering to US$ 20.5 million on May 21. As against this, net investment of mutual funds in debt has more than tripled from US$ 42.9 million on May 15 to US$ 134.2 million on May 31, 2009. There is optimism in the economy as funds are investing in corporate bonds, making liquidity available to enterprises. The total amount traded in corporate bonds tripled from US$ 17.8 million to US$ 55.7 million during May 15 to May 21, 2009. The Central Board of Direct Taxes (CBDT) has changed the investment pattern for recognized provident funds and superannuation trusts managed by the private sector under the income-tax rules to take a greater exposure in the stock market from April 1, 2009.

AICAR BUSINESS SCHOOL

7

8ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Company Profile
IL&FS Invest smart is one of India's leading financial services organizations providing varied range of Financial Services for corporates and individuals. Invest smart has a strong presence across wide range of products and operates in the areas of Investment Management and Advisory Services, Broking Services, Merchant Banking, Project Syndication, Equity and Debt Broking, Commodity Broking and Distribution of Financial Products. The company is now held by HSBC, one of the world's largest banking and financial services organizations. HIDL Ltd has an all India presence through its network of branches and franchisees over 126 cities. Following a successful Initial Public Offer IPO), HIDL has been listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). HIDL is geared towards understanding and achieving the financial goals of all its customers, through its specialists in the aforesaid areas. Acquisition of IL&FS Investsmart Limited by HSBC Group: HSBC Group acquired 93.86 per cent of IL&FS Investsmart Limited in the year 2008. The deal was settled for a total consideration of INR 1,311.0 crore (approximately US$296.4 million). Investsmart gives HSBC access to the world’s third-largest investor base, with over 20 million investor base. Under the transaction agreement, HSBC acquired 43.85 per cent of Investsmart from E*TRADE Mauritius Limited, an indirectly wholly-owned subsidiary of E*TRADE Financial Corporation, and 29.36 per cent from Infrastructure Leasing and Financial Services Limited (IL&FS). The decision to acquire a controlling stake in Investsmart triggered an open offer to public shareholders, through which HSBC accepted shares equivalent to 20.65 per cent of Investsmart's capital. E*TRADE Mauritius Limited, IL&FS and those that tendered shares through the open offer received INR200 per share for their Investsmart shares. In addition, IL&FS was paid, as part of a three-year non-compete agreement, INR82.0 crore (approximately US$17.9 million). In accordance with local regulations, HSBC paid interest of INR2.3 per share to the public shareholders who tendered their shares. This amounted to INR3.31 crore approximately US$0.72 million). HSBC was advised on the acquisition by the investment banking division HSBC Global Banking and Markets.

AICAR BUSINESS SCHOOL

8

9ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

OWNERSHIP PATTERN Table :Shareholding Pattern of HIDL Ltd. No. of Equity Shares HSBC Securities and Capital Markets (India) Pvt. Ltd. HSBC Violet Investments (Mauritius) Ltd. Others Total 34,922,751 30,625,692 4,287,830 69,836,273 % of total paid-up capital 50.01 43.85 6.14 100.00

Chart :A break up of the Equity Shares of HIDL Ltd.

AICAR BUSINESS SCHOOL

9

10ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

DIVISIONS OF THE COMPANY The following are the divisions of HIDL Limited: • • • • • The Investment Advisory and Broking Division Merchant Banking Division The Project Syndication Division Institutional Equity Broking Division Institutional Debt Broking division

Key Executives

Chairman

Hardeep Singh

Director

Ajay Dua

Managing Director & CEO

Manasije Mishra

Director

Tarun Kataria Sonal Dave

Additional Director

Naina Lal Kidwai

Company Secretary

Kashmira Mathew

AICAR BUSINESS SCHOOL

10

11ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

ORGANISATION STRUCTURE THE CHAIN OF COMMAND AND DEPARTMENTS

AICAR BUSINESS SCHOOL

11

12ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Financial Analysis of HSBC Invest Direct Profit & Loss (Rs. in Crores) Particulars INCOME : Operating Income Other Income Total Income EXPENDITURE : Operating & Administration Expenses Miscellaneous Expenses Interest Less: Pre-operative Expenses Capitalised Employee Expense Total Expenditure Gross Profit Depreciation Profit Before Tax Tax Fringe Benefit tax Deferred Tax Reported Net Profit Extraordinary Items Adjusted Net Profit
AICAR BUSINESS SCHOOL

Mar-09 Mar-08 Mar-07 Mar-06 Mar-05 Mar-04

24.30 0.93 25.23

39.81 1.16 40.97

119.51 215.55 116.82 4.02 1.42 0.86

81.47 0.88 82.35

123.53 216.97 117.68

3.38 21.38 0.00 0.00 10.64 35.40 -10.17 0.83 -11.00 3.60 0.10 0.51 -15.21 0.00 -15.21

5.28 0.98 3.38 0.00 5.83 15.47 25.50 0.09 25.41 9.52 0.19 0.12 15.58 -0.01 15.59

32.90 3.33 3.63 0.00 22.44 62.30 61.23 2.12 59.11 20.45 0.53 -0.33 38.46 -0.71 39.17

65.60 3.56 1.92 0.00 40.68 111.76 105.21 4.64 100.57 30.57 1.10 -0.22 69.12 -0.11 69.23

37.96 2.54 3.49 0.00 21.59 65.58 52.10 3.40 48.70 15.40 0.00 0.24 33.06 -0.07 33.13

19.72 2.09 10.99 0.00 16.44 49.24 33.11 3.52 29.59 6.10 0.00 1.40 22.09 0.00 22.09
12

13ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Dividend Preference Dividend Equity Dividend % Earnings Per Share-Unit Curr

0.00 0.00 0.00 0.00

20.95 0.00 30.00 1.72

17.46 0.00 25.00 5.08

20.77 0.00 30.00 9.89

7.87 0.00 22.50 9.14

7.00 0.00 20.00 6.06

From the P&L account of HSBC Invest Direct we found that the net income for the year 2009 is decreased and its decreased around 37% which is not good the reason behind that the nifty and sensex went down in this particular period, net profit for the year is (-15.21cr)where is last year profit was counted 15.58 cr .for this financial year company does not show the profit in positive so interest doesn’t applicable for this year.

Balance Sheet
(Rs. in Crores) Particulars SOURCES OF FUNDS : Share Capital Reserves Total Total Shareholders Funds Secured Loans
AICAR BUSINESS SCHOOL

Mar-09 Mar-08 Mar-07 Mar-06 Mar-05 Mar-04

69.84

69.84

69.84

66.92

35.00 51.85 86.85 2.81

35.00 28.44 63.44 5.71
13

597.39 612.59 621.52 591.86 667.23 682.43 691.36 658.78 0.00 0.00 73.71 1.47

14ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Unsecured Loans Total Loan Funds Total Liabilities APPLICATION OF FUNDS : Loan / Non-Current Assets Fixed Assets Gross Block Less: Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets,Loans & Advances Inventories Sundry Debtors Cash and Bank Balance Loans and Advances Total Current Assets Less: Current Liab. & Provisions Current Liabilities Provisions Total Current Liabilites & Provisions Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets
AICAR BUSINESS SCHOOL

0.23 0.23

0.00 0.00

0.00 73.71

0.00 1.47

20.00 22.81

10.55 16.26 79.70

667.46 682.43 765.07 660.25 109.66

0.00

0.00

0.00

0.00

0.00

0.00

12.49 1.27 0.00 11.22 0.00 0.00

1.20 0.49 0.00 0.71 0.00 0.00

2.22 1.13 0.00 1.09 0.00 0.00

32.36 17.45 0.00 14.91 0.00 0.00 37.43

25.85 13.28 0.00 12.57 0.00 0.00 16.04

21.71 9.34 0.00 12.37 0.00 0.00 26.11

478.49 448.99 433.99

0.66 0.00 11.70 167.82

78.14 3.13

47.13 8.33

3.47 184.70

22.83 31.36 55.31 74.50

0.30 69.96 12.41 54.61

126.81 181.06 468.75 53.48 133.75 209.56

180.18 261.56 370.27 866.48 184.00 137.28

2.05 0.08 2.13

3.85 25.19 29.04

19.51 21.09 40.60

233.16 25.71

75.82 27.44

82.03 14.70 96.73 40.55 0.34 0.71
14

258.87 103.26 80.74 0.22 0.54

178.05 232.52 329.67 607.61 0.00 0.10 0.00 0.21 0.00 0.32 0.00 0.61

15ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liability

0.40 -0.30

0.00 0.21

0.00 0.32

0.31 0.30

0.45 0.09

0.38 0.33 79.70
14.98

667.46 682.43 765.07 660.25 109.66 191.17 345.75 290.00 381.05 0.00

From the balance sheet of HSBC Invest Direct we found that their total assets is decreased by around 14.5 cr which is around 2.2%, but their contingent liability is decreased which is good sign for the company as compare their total current assets to previous year they also decreased which is around 54 cr ,their capital reserve is also decreased as concern their total liabilities also decreased .most difference in total current liabilities where as it was 29.04cr in 2008 but for the year 2009 it counted 2.13 cr around 90% decrease its also a good sign that company is not having more current liabilities.

Key Ratios
Years Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio Fixed Assets Inventory
AICAR BUSINESS SCHOOL

Mar-09 0.0 0.0 13.9 3.7 0.6

Mar-08 0.1 0.1 9.1 24.0 0.7

Mar-07 0.1 0.1 4.1 7.1 4.9

Mar-06 0.0 0.0 2.8 7.5 16.5

Mar-05 0.3 0.1 1.5 5.0 10.2
15

16ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%)

16.1 0.0 -40.3 -43.6 -40.3 -57.0

7.2 8.5 70.5 70.3 62.2 38.3

1.3 17.3 52.5 50.8 49.6 32.9

2.0 53.4 49.4 47.2 48.5 34.0

2.3 15.0 47.2 44.4 44.3 31.0

Fixed assets ratio is decreased as show that their fixed assets is decreased as compare to their current liabilities as their P&L account shows their net income is decreased and their profit is showing in negative so their Profit after tax is same as profit before tax because there are no income in positive so there are no taxes. Their debtor ratio is also increased so its shows that their debt is increased.

AICAR BUSINESS SCHOOL

16

17ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

THE COMPETITOR
The existing major players in the stock broking industry besides HSBC invest direct are. 1. ICICIDirect 2. HDFC Securities 3. Standard Chartered -STCI 4. IDBI Paisa Builder 5. AXIS Bank

AICAR BUSINESS SCHOOL

17

18ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

OBJECTIVE OF THE STUDY
The main objective of this study is to understand the rationale behind an individual’s investment decision or financial planning, considering whether or not factors like age, no. of dependents, income level, risk appetite, etc. influence his/her investment/financial planning decision. This will help in creating the financial products which are framed according to the investor’s risk appetite and rationale behind investment. Other objective for the study is analyze the product and services offered by major competitor of HSBC Invest direct.

Methodology:
For the accomplishment of the above mentioned objectives the methodology followed may be summed up as follows: Analyzing the Financial products: Reading about the product was the first step undertaken. This gave not only in depth knowledge about what is been offered by the home organization as well as that of the other players but also proved useful while developing the questionnaire. Developing Survey instruments: The main instruments required for survey was a well-developed questionnaire. The questionnaire development took place in a series of steps as described below— • • • • • • Research objectives are being transformed into information objectives The Appropriate data collection methods have been determined The information required by each objective is being determined Specific Questions/Scale Measurement format has been developed. Question/Scale Measurements is being evaluated Research objectives are being transformed into information objectives
18

AICAR BUSINESS SCHOOL

19ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

• • • •

The number of information needed is being determined The questionnaire and layout is being evaluated Revision of the questionnaire layout if needed The Questionnaire format is being finalized

Customer Survey: Conducting personal interviews of different age-groups, sex, monthly income and occupation through the survey instrument, the Questionnaire. This is very useful in knowing about the requirements of the people.

Studying brochures and websites of competitors: To understand the competitors’ product, brochures and websites of various players were referred and a competitive analogy of all the information is been made. Secondary data is collect about various researches done earlier on this topic. Data are collected from various sites about the investment patterns.

AICAR BUSINESS SCHOOL

19

20ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

ANALYSIS OF FINANCIAL AND INVESTMENT INDUSTRY INTRODUCTION TO BROKERAGE INDUSTRY Post major reforms initiative in early 2000s brokerage industry in India is experiencing rapid growth and diversity. At present apart of brokerage business industry is also offering wide range of financial services. These developments have resulted in huge spurt in business and also growing market share of the large sized brokerage houses has led to surge in enterprise value. In the year 2007 IPOs of large firms (Motilal Oswal, Religare, and Edelweiss,ILFS invest smart) received huge response (Indian catalog, 2001). At the same time global and private equity firms have taken stake in brokerage firms.

Industry Insight
Majority of the broking firms entered the business post 1990. A majority of members have memberships in more than one stock exchange and across equities, equity derivatives and commodities futures in domestic and International stock exchange. On the back of growing equity culture broking activity is spreading in Tier II and Tier III cities in India. Deepening financial system and economic growth has provided growth and expansion opportunities to broking firms. Access to public equity markets and growing international investor’s interest has enabled them to raise resources. Although there are more than 9000 brokers registered with SEBI 80% of the turnover in NSE and BSE is accounted by about 100 brokers. One of the oldest trading industries that have been around even before the establishment of BSE is the Indian Broking Industry. Post liberalization there have been number of changes, despite this the stock broking industry was at its pace and retained its sustainable growth.
AICAR BUSINESS SCHOOL 20

21ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

On the basis of geographical concentration, the West region has the maximum representation of 52%. Around 24% firms are located in the North, 13% in the South and 10% in the East, 3% firms started broking operations before 1950, 65% between1950-1995 and 32% post 1995 On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad, 7% in Kolkata, 4% in Chennai and 29% are from other cities. In the cash market, around 34% firms trade at NSE,14% at BSE and 52% trade at both exchanges. In the derivative segment, 48% trade at NSE, 7% at BSE and 45% at both, whereas in the debt market, 31% trade at NSE, 26% at BSE and 43% at both exchanges Majority of branches are located in the North, i.e. around 40%. West has 31%, 24% are located in South and 5% in East. In terms of sub-brokers, around 55% are located in the South, 29% in West, 1% in North and 4% in East. In terms of various areas of growth, 84% firms have expressed interest in expanding their institutional clients, 66% firms intend to increase FII clients and 43% are interested in setting up JV in India and abroad. In terms of IT penetration, 62% firm shave provided their website and around 94% firms have email facility.

INDIAN STOCK MARKETS AND EXCHANGES
There are 23 recognized stock exchanges in India, including the Over the Counter Exchange of India (OTCEI) for small and new companies and the National Stock Exchange (NSE) which was set up as a model exchange to provide nation-wide services to investors.

BOMBAY STOCK EXCHANGE (BSE)
Bombay stock exchange is the oldest stock exchange of India For the premier Stock Exchange that pioneered the stock broking activity in India, 128 years of experience seems to be a proud milestone. Till the decade of eighties, there was no scale to measure the ups and downs in the Indian stock market. The Stock Exchange Mumbai(BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market.

SENSEX
SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 stocks. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media. The index is calculated on the “Freefloat Market Capitalization” methodology.
AICAR BUSINESS SCHOOL 21

22ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. The SENSEX captured all these events in the most judicial manner. One can identify the booms and busts of the Indian stock market through SENSEX.

NATIONAL STOCK EXCHANGE (NSE)
The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FI’s) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. Critics even went to the extent of warning that NSE’s sophisticated systems would be a misfit in an Indian capital market dominated by physical deliveries, arbitrary speculative trade, and lengthy trade settlements. Today, with number of trades touching 2.5 million a day and turnover touching turnover touching Rs 100 billion in value terms, NSE towers over all the other stock exchanges in the country. The Stock Exchange, (NSE) came out with a stock index that subsequently became another barometer of the Indian stock market known as NIFTY. Nifty been the focal point of investors, as it provides trading the shares as well as index in futures and options, Before Nifty came into existence trading of index concept was not present it was introduced by Nifty and is present in it only, till date. Security market has two main interdependent segments a) Primary market b) Secondary market.

PRIMARY MARKET:
The primary is that part of the capital markets that deals with the issuance of new securities. Companies, government so public sector institutions can obtain funding through the sale of a new

AICAR BUSINESS SCHOOL

22

23ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus. In primary market certain companies issue their shares directly to the public, collect applications and after sorting out the good issues, they put in their applications. The share brokers get their brokerage on the transactions made.

SECONDARY MARKET:
The secondary market is that market in which trading is done of securities that have already been issued in an initial private or public offering. The secondary market comprises of brokerage that a broker earns in the buying and selling of stocks of companies that are listed in the stock exchange. These stock brokers are in charge of the conformation and carrying out of transactions. The fluctuation of rates in the share market makes the activity in a trade market a dynamic process. ORDER MANAGEMENT Order Management consists of entering orders, order modification order Cancellation and order matching. ENTERING ORDER: The trading member can enter orders in the normal market, odd lot, Retdebt and auction market. A user can place orders in any of the above mentioned markets by invoking the respective order entry screens. After doing so, the system automatically picks up information as entered by trading member. Active & Passive Order: When any order enters the trading system, it is an active order. It tries to find a Match. If it finds a match, a trade is generated. If it does not find a match, the order becomes a passive order and goes and sits in the order book. Order Modification: All orders can be modified in the system till the time they do not get fully traded And only during market hours. Once an order is modified, the branch order value Limit for the branch gets adjusted automatically. Order Cancellation:
AICAR BUSINESS SCHOOL 23

24ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Order cancellation is performed only for orders which have not been fully or partially Traded. Order Matching: The best sell order is the order with the lowest price and a best buy order is the Order with the highest price. The unmatched orders are arranged in the system by the following priority: (a) By Price: A buy order with a higher price gets a higher priority and similarly, a sell order with a lower price gets a higher priority. E.g. consider the following buy orders: 1) 100 shares @ Rs. 35 at time 9:30 a.m. 2) 500 shares @ Rs. 35.05 at time 9:43 a.m. The second order price is greater than the first order price and therefore is the best buy order. (b) By Time: If there is more than one order at the same price, the order entered earlier gets a higher priority. E.g. consider the following sell orders: 1) 200 shares @ Rs. 72.75 at time 9:30 a.m. 2) 300 shares @ Rs. 72.75 at time 9:35 a.m. Both orders have the same price but they were entered in the system at different time. The first order was entered before the second order and therefore is the best sell order. Trade Management: A trade is an activity in which a buy and a sell order match with each other. Matching of two orders is done automatically by the system. Whenever a trade takes place, the system sends a trade confirmation message to each of the users involved in the trade. The trade confirmation slip gets printed at the trader workstation of the user with a unique trade number.

CASH MARKET AND DERIVATIVES National stock exchange gives the investors different option where an investor can deal the equities into different market situations like cash market and derivatives. Cash market is simply the equity market where investors have to pay the security amount which is done in BSE also but in NSE investors has the choice of dealing in derivatives. Derivatives are the future market where investors have the option of dealing in the price list of futures for which there a separate index is present known as NIFTY FUTURE. In Derivatives there are two choices available for an investor FUTURES AND OPTIONS
AICAR BUSINESS SCHOOL 24

25ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

FUTURE – In future market shares are deal in lots these lots could be of different numbers like 100, 200, 500 etc. Investors while taking over these lots and coming under the contract takes the position of the shares by paying the 1/3rd amount of the total holdings. (Could be understood by a formula). Holdings of investors = (shares lot * price of the lot) / 3.This formula explains that as investor is interested in taking 2 lots of reliance of 100 shares of Rs. 900, the investor has to pay:(2*100*900) / 3 = 60000/ Which shows the investor is taking the position of Rs. 180000/- in just Rs. 60000/- in future market which the area of attraction of this particular market. These holdings are taken for 1 month, 2 months and three months according to the investor’s preference. The beauty of this contract is that the remaining 2/3rd money of the holdings is paid by the broking house the investors dealing with. Investor coming into this contract should know that by the time of contract he is in like of 1 or 2 months investor should clear its position before the last Thursday of the expiry month. OPTIONS – Option is a contract where the investor has two options to deal with CALL and PUT. The concept of call and put is opposite to each other call is the contract where the investors believe that the market is going to be BULLISH in near future and put option is taken when he thinks that the market is going to be BEARISH in the future. Stock Trading Traditionally stock trading is done through stock brokers, personally or through telephones. As number of people trading in stock market increase enormously in last few years, some issues like location constrains, busy phone lines, miss communication etc. start growing in stock broker offices. Information technology (Stock Market Software) helps stock brokers in solving these problems with Online Stock Trading. Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through a website without any manual intervention from Stock Broker. There are two different type of trading environments available for online equity trading. Installable software based Stock Trading Terminals These trading environment requires software to be installed on investor’s computer. This software is provided by the stock broker. This software’s require high speed internet connection. These kind of trading terminals are used by high volume intraday equity traders. Advantages: • Orders directly send to stock exchanges rather than stock broker. This makes order execution very fast.
25

AICAR BUSINESS SCHOOL

26ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED



It provide almost each and every information which is required to a trader on a screen including stock market charts, live data, alerts, stock market news etc.

single

Disadvantages: • • • Location constrains - You cannot trade if you are not on the computer where you have installed trading terminal software. It requires high speed internet connection. These trading terminals are not easily available for low volume share traders.

Web (Internet) based trading application This kind of trading environments doesn't require any additional softwareinstallation. They are like other internet websites which investor can access from around the world through normal internet connection. Below are few advantages and disadvantages of Online Stock Market Trading:Advantages of Online Stock Trading (Website based): • • • • • • • • Real time stock trading without calling or visiting broker's office. Display real time market watch, historical data’s, graphs etc. Investment in IPOs, Mutual Funds and Bonds. Check the trading history; demat account balance and bank account balance at any time. Provide online tools like market watch, graphs and recommendations to do analysis of stocks. Place offline orders for buying or selling stocks. Set alert to inform you certain activity on the stock through email or sms. Customer service through Email or Chat.

Disadvantages of Online Stock Trading (Website based): • • Website performance - sometime the website istoo slow or not enough user friendly. Little long learning curve especially for people who don’t know much about computer and internet.
26

AICAR BUSINESS SCHOOL

27ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

PEST Analysis
POLITICAL ANALYSIS Tax Policies: - Tax policies are one of the important issues in forming the brokerage firm. If the taxes charged by the government are high then the company has to raise their opening charges to recover their money. ECONOMIC ANALYSIS Economic Growth: - As the economy grows people tend to invest. As there is slowdown in the economy people are not interested to invest. Interest Rates: - In this trading market interest rate is very important. Each and every company in this industry earns from the brokerage the charge for the transactions. SOCIAL ANALYSIS Consumer Behaviour:- This industry total depends upon the behaviour of the customer. Industry depends upon the brokerage they earn from the trade the customer does. If the customer trade regularly the company earns more profit. Income:- Income of the people is also important. the income of the people in the country is more than people tend to invest more. TECHNOLOGY ANALYSIS Information Technology:-The Company uses different Software’s in their work. Company that provides the software in NSE NEAT DEAL & ODIN for BOLT DEAL in BSE. Relationship Management Service (RMS) is used for Accounting and Customer Relationship Management (CRM).
AICAR BUSINESS SCHOOL 27

28ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

ENVIRONMENT Company is working in very dynamic industry.There is uncertainty about future growth of share market.Company is facing very tough competition because large numbers of players are present in broking industry.

PORTERS FIVE FORCES ANALYSIS

Bargaining power of Buyer
Lack of Expertise Curtails Bargaining Power Retail investors often lack the knowledge and expertise in the financial sector that calls them to approach the broking houses. Low Product Differentiation Proves Beneficial The retail broking services provided by the various companies are homogeneous with very low product differentiation. This allows customers to enjoy a greater bargaining power.

Bargaining power of Supplier
Increased Dependence on IPOs There is a growing dependence of corporates on broking houses with the rising number of IPO’scoming to the market.

Intensity of Competition
Move towards consolidation Lot of brokerage companies are moving towards consolidation with the smaller ones becoming either franchisees for the larger brokers or closing operations. Increased Focus of Banks in Retail
AICAR BUSINESS SCHOOL 28

29ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

BrokingVarious foreign banks like ABN Amro and others are planning to enter the Indian retail brokerage industry. Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumer’s growing preference for internet as compared to approaching the brokers.Each and every firm in this industry try to gain advantage over its competitors. In this industry significant market share is enjoyed by many small players.

Threat of New Entrants
Entry of Foreign Players New forms of trading including T+2 settlement system, dematerialization etc are strengthening the retail brokerage market and attracting foreign companies to enter the Indian industry. SEBI Regulations: - Security Exchange Board of India had many rules and regulation to deal in Brokerages Firms.So before entering in this type of Business the Firm has to follow all the rules and regulations. Capital Investment: - To enter in this type of firm it requires a lot of capital investment.The minimum capital investment is 2Crore.So it is very hard to collect a lot of investment. Licensing: - It is very difficult to get a license from the Government to run up this type of firms. Product Differentiation: - The important barrier is the differentiation of the products the company is going to produce. For Eg. As Angle is providing a free ICICI Banks A/C with ZERO Balance with the opening of Demat A/C with Angle

Threat of Substitutes
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes to retail broking products and services. Substitute affects the level of competition. The substitutes for this type of firm is the Fixed Deposits kept in the bank

AICAR BUSINESS SCHOOL

29

30ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Listing of Investment Option available
Investments: Investment refers to the concept of deferred consumption, which involves purchasing an asset, giving a loan or keeping funds in a bank account with the aim of generating future returns. Various investment options are available, offering differing risk-reward trade offs. An understanding of the core concepts and a thorough analysis of the options can help an investor create a portfolio that maximizes returns while minimizing risk exposure. Types of financial investments include shares and other equity investments and bonds. Equity investments generally refer to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of stock rises. There are two important decisions one needs to make before investing. These are: • • How much to invest? Where to invest it?

It is important for one to understand his/her options as well as the risks associated with each of them. Three major types of investments are stocks, bonds and cash equivalent. One can invest in any or all of the three investment types directly or indirectly by buying Mutual Funds. One might also want to consider an individual retirement account (IRA) or annuity, both of which can offer tax-deferred investment savings.

AICAR BUSINESS SCHOOL

30

31ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Types of Investments: Investments can be classified into the following types: • Stocks

Broadly, investing in stocks (also known as equities) implies buying a share of ownership in a company and becoming a shareholder. Companies sell shares of stock to raise money for start-up or growth. There are two types of stocks, namely, common stock and preferred stock. Common stockholders have a percentage of ownership in the company and may or may not receive dividends based on company profits while preferred stockholders are entitled to dividends at specified times and in predetermined amounts. Investment returns and risks for both types of stocks vary, depending on factors such as the economy, political scene, the company’s performance and the other stock market factors. Stocks are more volatile and riskier than bonds.



Cash-equivalent investments:

These include passbook savings accounts, certificates of deposit (CDs) and treasury bills. These investments generally deliver a more stable rate of return. Though, on the other hand, the rate of return (after taxes are paid) is so low that these don’t keep pace with inflation. A passbook savings account, money market fund or CD may give the investor a quick access to his/her cash and may provide more short-term security. However, they’re not designed for long-term investment goals like retirement. Certificate of Deposit (CDs)

It refers to a fixed period, interest-bearing investment with a bank or savings & loan. An FDIC-insured CD is a low-risk investment.
-

Passbook Savings
-

A bank account that generally provides a low, guaranteed, fixed rate of return.

AICAR BUSINESS SCHOOL

31

32ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED



Debt securities

This form of investment provides returns in the form of fixed periodic payments and possible capital appreciation at maturity. It is a safer and more 'risk-free' investment tool than equities. However, the returns are also generally lower than other securities • Derivatives

These are financial contracts the values of which are derived from the value of the underlying assets, such as equities, commodities and bonds, on which they are based. Derivatives can be in the form of futures, options and swaps. Derivatives are used to minimize the risk of loss resulting from fluctuations in the value of the underlying assets (hedging). One of the derivative contracts is Options Options give the buyer the right to buy or sell an underlying asset at a certain price within a specified time period. Selling or buying options involves two parties, namely a buyer and a seller. The strategy of selling options is popular mostly with traders who are capable of managing the element of risk that is inherent in such transactions. Options trading involves understanding market conditions and predicting where the markets are headed. So, when a trader believes that an asset will appreciate in the future, he/she is likely to buy the asset at a premium value. The instrument that gives an options holder this right to buy the underlying asset is called a call option. A put option gives the buyer the right to sell the asset before the predetermined date. Options are particularly used for: o Speculation: Buyers speculate on the extent of price movement in a financial instrument over a specific period. o Hedging: You can use options to hedge your investments or business contracts against a possible downside.



Types of Options:

The various types of options include: Exchange traded options: These options have standard contracts that are settled through clearing houses. Some of the exchange traded options include stock options, bond options and options in futures contracts.
o

AICAR BUSINESS SCHOOL

32

33ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Over-the-counter options: These options are contracts between two private parties. Some of the OTC options are interest rate options and currency cross rate options.
o



Commodities:

The items that are traded on the commodities market are agricultural and industrial commodities. These items need to be standardized and must be in a basic, raw and unprocessed state. The trading of commodities is associated with high risk and high reward. Trading in commodity futures requires specialized knowledge and in-depth analysis. Whoever plans to diversify his/her investment portfolio and earn high returns from price fluctuations should invest in the commodity market. Despite risk factors, commodity trading is preferred by investors who like to take risks so as to earn high returns even when trends are unpredictable. • Real estate:

This investment involves a long-term commitment of funds and gains that are generated through rental or lease income as well as capital appreciation. This includes investments into residential or commercial properties. • Mutual funds:

A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.[1] In a mutual fund, the fund manager, who is also known as the portfolio manager, trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding. Mutual Fund is an instrument of investing money. Nowadays, bank rates have fallen down and are generally below the inflation rate. Therefore, keeping large amounts of money in bank is not a wise option, as in real terms the value of money decreases over a period of time. A common investor is not informed and competent enough to understand the intricacies of stock market. This is where mutual funds come to the rescue. A mutual fund is a group of investors operating through a fund manager to purchase a diverse portfolio of stocks or bonds. Mutual funds are highly cost efficient and very easy to invest in. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower
AICAR BUSINESS SCHOOL 33

34ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

trading costs than if they tried to do it on their own. Also, one doesn't have to figure out which stocks or bonds to buy. But the biggest advantage of mutual funds is diversification. Diversification means spreading out money across many different types of investments. When one investment is down another might be up. Diversification of investment holdings reduces the risk tremendously.

AICAR BUSINESS SCHOOL

34

35ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Types of Mutual Funds: On the basis of their structure and objective, mutual funds can be classified into following major types:
• • • • • • • • • • • • • • • •

Closed-end Funds Open-end Funds Large cap Funds Mid-cap Funds Equity Funds Balanced Funds Growth Funds No load Funds Exchange Traded Funds Value Funds Money Market Funds International Mutual Funds Regional Mutual Funds Sector Funds Index Funds Fund of Funds

Studies have shown that financial services and brokerage firms in India have seen profits go up by 136% on a sequential quarter basis, i.e. compared to the quarter ended December’08. The improved bottom line was largely due to HIDL cutting down on its losses from the previous quarter.

AICAR BUSINESS SCHOOL

35

36ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Analysis of product and services of HSBC Invest Direct
PRODUCTS & SERVICES The products and services can be categorized as follows: 1. Retail offerings These can further be categorized as follows:  ADVISORY PRODUCTS

Mutual Funds: As a part of HIDL’s Mutual Fund Advisory Services, a team of experts across India helps its customers in selecting the right scheme from over 500 offerings, matching their needs, goals and risks. In addition to this, HIDL also helps its customers constantly monitor their MF portfolio, making changes according to their changing needs as per the market scenario, in order to make their money work for them. At HIDL , the expert teams of relationship managers interact with the customers on a regular basis to discern their changing needs, in tune with the changing environment. Most of us require some assistance in making selections appropriate to our individual needs. We need sound advice from people who have expertise to decipher the financial jargon of investment options available today. The Investment Advisory Team at HIDL helps its customers customize and execute plans, based on their individual needs towards wealth maximization.

Portfolio Management: Financial markets today offer enormous growth potential. But managing one’s own investments can be an extremely challenging task. Anticipating market trends, assessing the impact of socio-economic changes on one’s investments, keeping abreast of latest corporate developments and financial analysis all HIDL provides its customers with, in its HIDL-PMS, a Discretionary Portfolio Management Service through its team of experts.

About the HIDL PMS Options: HIDL offers a choice of two types of PMS schemes since every investor is unique and has unique investment preferences and risk appetites. These schemes are:

iPreserve- is a discretionary portfolio management scheme, which invests in a mix of various mutual fund schemes. Ideal for investors who wish to invest in maximizing returns from mutual funds but
AICAR BUSINESS SCHOOL 36

37ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

cannot make the right choices.

iGrowth- is a discretionary portfolio management scheme, focused on equities. Sub-schemes are based on investors’ risk profile. IPO Advisory & Distribution Services HIDL is one of India's leading companies engaged in the activity IPO Advisory and Distribution. Its primary markets division does a comprehensive research before recommending issues to clients. HIDL’s pan India reach helps it in mobilising large number of applications across India during public offerings, this has ensured that it constantly figures amongst the top ranking performers in the primary market distribution space.

As a part of the online offering of HIDL, customers can invest in IPO's not only through its branches but also through its website, which also provides its customers with regular updates on the IPO scenario, Open IPOs as well as all the forthcoming IPO's at any given point of time. The primary markets distribution division works in conjunction with the retail and wholesale distribution networks, as well as its private client group. Insurance Advisory Services HIDL works as a one stop shop for all Insurance & Retirement needs. HIDL has also been recognized as Best Retail Financial Advisor by CNBC TV 18 for two years in a row 2006-07 and 2007-08. HIDL is a composite insurance broker providing comprehensive risk management solutions, both for corporate as well as individuals. The solutions include identification, measurement and assessment of the risk and handling of the risk, of which insurance is an integral part. We deal into both life insurance and general insurance products for all insurance companies across India. The key service features include the following:o o o o

Risk management solutions for all Comprehensive research for all policies available on a regular basis Recommendations on a comprehensive insurance cover based on clients needs Maintain proper records of client policies
37

AICAR BUSINESS SCHOOL

38ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED
o



Continuous monitoring of client account TRADING PRODUCTS

Equities & Derivatives As a part of the Investment Advisory and Broking Services for individuals, HIDL offers end-to-end solutions to its investors, from capital build-up to wealth generation and retirement planning, starting with value added investment recommendations that suit their investment objectives, then executing these and finally step-by-step monitoring to ensure that they achieve their long term financial goals. HIDL is a full service broking house offering services across both the Cash and F&O segments. HIDL is a member with National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE). HIDL’s offerings include 3 different trading platforms to suit the individual needs of its customers, depending upon their profile. These are: • SmartTRADE: Trading platform for the Active Traders

A view of the platform as it would appear on the screen SmartTrade is an EXE based desktop software designed for active traders who transact frequently to capture favorable short-term price movements. The platform offers active traders the tools they need to make critical decisions with confidence. SmartTrade is designed and built from the ground up to address the needs of active traders. SmartTrade makes the most of state-of the-art technology to deliver power, speed and reliability. Through an easy-to-use interface, users are provided with the same tools and advantages that the professionals enjoy. Its features include:
AICAR BUSINESS SCHOOL 38

39ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Fully customizable display The save desktop option allows the traders to save their created trade screen layout, so the next time they access the application the created layout is not lost.
o

Dynamic charts with indicators It provides the traders a wealth of charting capabilities and timing indicators, which allow them to go right into the action with real-time daily charts, and intra-day charts. They can watch price movements by minutes, days, or weeks.
o

EOD charts SmartTrade puts up to 5 years of in-depth market history at the trader’s command with the power to instantly back-test any trading strategy they design, before risking one rupee of their trading capital.
o

Real-time market data Traders can get real time market data from both the NSE and BSE similar to what their broker gets.
o

Advanced alert capabilities Alert Window allows the traders to be free from watching every tick. They can be notified once a security has reached the set parameters. Multiple securities can be monitored using the set parameters. These alerts can be triggered both visually and audibly.
o

Live order status Tracking all the orders of the trader is made easy through the order status screen. Further drill down into all details pertaining to an order is available in the order detail sub report.
o

Track orders real-time Traders can track their stock order and trades in real time.
o

Real-time position updates All the positions of the traders are updated automatically and instantly. There is no need to use refresh button at all.
o

Dynamic buying power It reflects the trader’s credits and debits instantly on every trade execution. There is no need to refresh each statement to know the latest buying limits.
o

AICAR BUSINESS SCHOOL

39

40ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Derivative chain This feature provides the traders with a list of all derivative contracts available for the selected security. To view derivative prices of a security, trader just needs to right click on the symbol and click on derivative chain.
o

Lock terminal option If the trader’s system is unattended this function locks the trading platform for the trader and can be accessed again only on providing the proper login details.
o

Message window docking This feature enables the trader to receive trading messages, intra-day trading calls, and messages from both the exchanges flashed real time onto their screen.
o



SmartINVEST: Trading platform for the Serious Investors

A view of the platform as it would appear on the screen It is a browser-based system designed for customers who transact occasionally. It is ideal for investors who believe in the Buy and Hold approach towards investment in equities. SmartInvest's capability as a browser-based trading platform gives the investors the benefit of real-time streaming data with the flexibility of trading on any Internet capable system. With access to both the NSE & BSE, the investor is in the driver's seat when routing your order to the best price on either of the exchanges. SmartInvest sophisticated yet easy to use point and click order entry interface allows you to react more quickly to the markets and make better decisions. Its features include:
AICAR BUSINESS SCHOOL 40

41ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

o Instant loading The browser-based applet system allows the investors instant access to their account with no wait time, unlike other systems that take a few minutes to load. o Works behind a proxy This platform can be accessed on any Internet enabled network. Investors can access it even from their place of work. o Live streaming quotes Investors can keep an eye on the stocks they care about most with streaming, real-time quotes and customizable market data. Color-coded price changes help them to spot trends and react to them quickly. o Multiple watch lists The new watch list option allows the investors to create up to 10 watch lists. Each watch list can be personalized by inserting securities which they would like to view as a group. o NSE & BSE Access It facilitates flexibility of trading on both the NSE & BSE via a single screen. o Single order form for Cash and FnO Single order form offers the investors convenience of transacting in various segments of the market without having to switch between multiple windows. o Point and click order entry Makes order entry quick and simple with a click on the security the same gets inserted into the order form on the investor’s trade screen. o Hot Key Functions Using a single keystroke (Hot Key) function, investor can achieve important tasks very similar to a broker's terminal. Accessing important reports is also one keystroke away. o Market Depth Window It gives an immediate "at a glance" info about the stock the investor is following. The view provides the best 5 bid and offer quotes and the outstanding order quantities. o Back Office Access View segment wise ledger bills and contract notes, trades, positions, account balance, realized/unrealized profit & loss, and buying power all in real time.
AICAR BUSINESS SCHOOL 41

42ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED



SmartSTART: Trading platform for the Beginners

A view of the platform as it would appear on the screen It is a powerful browser based trading system for those who are relatively new to online investing. A unique integrated account, which integrates the investor’s banking, broking, and Demat accounts. A comprehensive trading service, which allows one to invest in equities and derivatives. SmartStart trading platform allows the investor the flexibility of trading on any internet capable system, with access to both the NSE and BSE. Its features include:

• Trade on NSE and BSE Flexibility of trading on both the NSE & BSE via a single screen. • Fully customizable display The save desktop option allows you to save your created trade screen layout, so the next time you access the application the created layout is not lost. • Integrated accounts (Bank, Demat & Trading) Integrates your banking, broking and demat accounts. This enables you to trade in shares without going through the hassles of tracking settlement cycles, writing cheques and Transfer Instructions, chasing your broker for cheques or Transfer Instructions etc. • Live order status
42

AICAR BUSINESS SCHOOL

43ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Tracking all your orders is made easy through the order status screen. Further drill down into all details pertaining to an order is available in the order detail sub report. • Dynamic buying power Reflects your credits and debits instantly on every trade execution. No need to refresh each statement to know your latest buying limits. • Works behind a Proxy This platform can be accessed on any Internet enabled network. You can access it even from your place of work. • Back office access View segment wise ledger bills and contract notes, trades, positions, account balance, realized/unrealized profit & loss, and buying power all in real time. One additional feature that applies to all the Trading Platforms is SmartCall, where the investor can enjoy the convenience to trade over the phone. The experienced team of Research Analysts and Advisory Managers guide the investors with appropriate solutions, backed by in-depth research, knowledge and expertise on a regular basis and constantly help them with the strategies for investment in equities, recommendations for trading on futures and options, hedging with Nifty and other product opportunities of risk-less arbitrage in various segments.  NRI SERVICES

NRI Products from HIDL: HIDL is committed to creating a differentiated financial services organisation by leveraging technology to deliver the most compelling combination of product, service and price to a value driven consumer. HIDL’s end-to-end investment solutions guide its NRI customers at every step of their Investment in India right from PAN Card Assistance to formulating and executing investment plans based on NRI requirements, robust trading platforms till the assistance on accounting & income tax returns filing in India. NRI Product Offerings: NREquity Facilitates easy trading in NSE and BSE listed stocks by offering comprehensive trading solutions to the customers through its web and software based trading platforms which is equipped with a host of unique features to cater to their trading needs. HIDL, offers its customers a smooth online trading experience with exceptional trading tools, service and client support enabling them to make quick trading decisions.
AICAR BUSINESS SCHOOL 43

44ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Its 3-in-1 Trading Platform enables its customers to do online delivery based trading at their convenience. This account links their Banking, Demat and Trading account, thus providing you a seamless platform to trade efficiently and conveniently. Customers can also place their orders through their dedicated Call & Trade Facility or contact their Relationship Manager. NRI Portfolio Management Services- customized solutions to meet the investment needs. Indian markets today offer enormous growth potential. Anticipating the Indian market trends, assessing the impact of country’s socio economic changes on an individual’s investments, keeping abreast of latest corporate developments and financial analysis can be extremely challenging task. Therefore, managing one’s investments may become nearly a full-time affair that requires considerable time and expertise. HIDL offers solutions that are tailored to meet the investment needs of an NRI. It offers a choice of two types of Portfolio Management Services schemes which are focused on returns from various asset classes.  iGrowth It’s a discretionary Portfolio Management Scheme, focusing on investments in equities with an objective of growth. It aims at creating long-term wealth through judicious stock selection and asset location.  iPreserve This scheme invests in a mix of various mutual fund schemes, ideal for investors who wish to invest in maximizing returns from mutual funds but cannot make the right choices. Additional NRI Product Offerings: Mutual Funds HIDL offers an opportunity to spend in a broad spectrum of Mutual Funds with more than 500 schemes to choose from to match individual needs, goals and risk profiles. Customers can constantly monitor their MF portfolio and make changes according to their needs as per the market scenario, in order to make their money work for them. IPO As a part of wide range of offerings, NRIs can also invest in IPOs in India by applying through any of the branches in India or by calling the customer service desk. Through the company website, one can receive regular updates on the IPO scenario, ongoing IPOs as well the forthcoming IPOs at any given point of time.

AICAR BUSINESS SCHOOL

44

45ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Insurance HIDL serves as the one stop shop for all the Insurance and Retirement needs. As a composite Insurance Broker, HIDL provides comprehensive risk management solutions. HIDL offers both life insurance and general insurance products for all insurance companies in India. Other Wealth Management Products HIDL’s basket of Wealth Management products includes Real Estate products, Private Equity Funds and structured products in order to suit varied individual investment needs. Value Added Services to NRIs HIDL through its rich investment solutions and various alliances, endeavours to provide the services and support that NRIs need to manage their investments in India. It helps its customers through the entire investment process, step-by-step with a host of innovative and efficient services. Pan Card Assistance - A doorstep delivery of Pan Card at one’s foreign location. Permanent Account Number (PAN) Card being a mandatory requirement for NRIs investing in financial products in India, one has to face an additional task of communicating with PAN processing agencies in India. Being located in a different country with a different times zone makes this task all the more difficult and daunting for NRIs. HIDL provides the convenience of applying for the Pan Card at the comfort of the customer’s home at the time of availing the service itself.
-

Accounting and Income Tax Returns filing in India – Making tax filing in India easy.

HIDL provides assistance and expert guidance in filing of taxation returns to its NRI customers in India, through its exclusive alliances. This helps in better accountability and maintenance of tax records.
-

Research and Advisory – For sound investment decisions

The Investment solutions offered by HIDL are backed by in-depth research generated by top-drawer research team. Facilitates news and updates on the basis of daily and monthly market analysis to keep track of the investments of its NRI customers in India. 2. Institutional Offerings

Investment Banking Services:
AICAR BUSINESS SCHOOL 45

46ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

HIDL offers an extensive range of Investment Banking Services for equity related products and instruments. Its research team advises the customers on transactions like business structuring and capital raising opportunities based on their corporate needs and state of capital markets. Services they specialize in include the Management of:
• • • • • • • •

Initial Public Offering (IPOs) Follow-on Offerings Qualified Institutional Placements (QIPs) Buyback of Equities Open Offers Mergers & Acquisitions Private Equity Placements ESOPs

They identify, analyse and respond instantly to the customer’s needs. Since inception, HIDL has been structuring and delivering financial solutions geared towards its customer’s needs. This is implemented through an understanding of investor’s business needs and their preferences. HIDL’s distribution reach and financial structuring capabilities of the team ensures a winning combination for the client company. Institutional Equity Broking Services: Our efficient execution, quality research, top quality human resources and complete compliance with stock exchange regulations, as well as business standard ethics lend towards our exemplary services to investors, through IPOs, equities, derivatives and mutual funds HIDL also focuses on identifying undiscovered value stocks to investors. Through its gamut of services, this division is well-suited to corporate investors, banks, financial institutions, insurance companies and FII’s. HIDL’s Institutional Equity Business (IEB) is well positioned to offer support for a complete range of investment banking service to corporates. It offers a wide array of products and services, specifically aimed at improving market capitalization of forward looking companies. HIDL works closely with institutional investors, private equity investors and corporates. The research division has a designated team for each asset class and consists of qualified professionals who evaluate market trends and make unbiased and objective reports. HIDL has been hosting round table conferences with leading CIOs / Fund Managers etc. Also, conducts activities like organising of road shows, enabling the senior management to interact with FIIs, regular conference calls for institutional Investors etc. This works as a pre-requisite to investing in stocks. Its expertise in this area also extends to international investors from Singapore, Hong Kong, USA and the UK.
AICAR BUSINESS SCHOOL 46

47ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Institutional Debt Broking Services: HIDL’s institutional debt broking division includes, secondary market broking, primary market debt placement & distribution and provident fund advisory services. Secondary debt broking is the principle service provided by this division. The clients mainly comprise of institutional debt players, such as banks, primary dealers, mutual funds, large provident funds and in some cases corporate treasuries. The division empanelled with almost all banks, primary dealers and mutual funds, on whose behalf it acts either on the buying or selling side. All types of debt papers are covered, including government securities, treasury bills, public sector bonds, corporate bonds etc. This desk also provides transacting and advisory services to various provident funds and HNI clients. The primary market services cover placement of debt paper issued by corporates, with institutional segments covering banks, mutual funds etc. These services cover following activities :•

• • • •

Advising the clients on the issuance including the instrument, quantum, timing, other instrument specific structuring such as put / call option, conversion option and rating. Assisting in the rating exercise and suggesting various means and options to improve rating if so desired, through “Structured Obligations” or other mechanisms. Pre marketing the placement / issuance Selling / placing the issuance Assisting in any related documentation for the issuance Assisting in all other steps to complete the issuance for draw down funds

The debt instrument covered by this division cover both short term as well as longer term instruments. Commercial paper and MIBOR Linked Bonds are popular among the short-term instruments. The division uses a proprietary online platform called “DebtonNet” for online book building of debt issuances. 3. Other Services

Besides the above mentioned services, HIDL also provides services like: • Value Added Products that are customized for the investors ease and include Smart Alert Service that provides daily update of the stock markets through SMS, Smart Alert Calls give convenience to trade through phone, State-of-the-Art Security Platforms etc. • Well versed reports on Mutual funds, Market conditions, Share Market etc. on a daily as well as weekly basis • Free of cost timely updates on advisory services through SMS on the request of its customers • Providing Market Information and Company Information through an extensive research team.
AICAR BUSINESS SCHOOL 47

48ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Why Invest with HIDL Linited? Customisation: Investment plans are formulated on the basis of customer preference and needs, so that the best can be brought out of an individual’s or a company’s financial profile. Expertise: A huge integrated research team is at work to provide the customers with financial expertise and thorough understanding of financial markets. Trust: Investsmart is spread across the country through more than 300 offices providing unmatched services. HSBC advantage: Acquisition by HSBC provides access to Investsmart to a greater customer base. Apart from that, Investsmart’s customers get access to direct money transfer facility to their HSBC accounts. “Best performing National Financial Advisory” IL&FS Investsmart bagged the Best Performing National Financial Advisory Award from CNBC two years in a row in 2007-2008. One-stop-shop: HIDL is India’s financial multiplex providing a wide range of financial services to individuals as well as corporate.

AICAR BUSINESS SCHOOL

48

49ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Competitive Analysis
Charges for Opening Online Trading Account Broker HIDL (HSBC) ICICIDirect HDFC Securities Standard Chartered – STCI IDBI Paisabuilder AXIS Bank Online Trading Opening Charges Rs. 950 Rs. 975 Rs. 750 Rs. 499 Rs. 499 Rs. 1050 Account

Online Trading A/C Opening Charges of the Corporate Brokers Comment: An online trading account enables the investors to trade in the stock market through online trading platforms. According to table and chart, the charges for opening an online trading a/c are the highest for AXIS Bank and the lowest for Standard Chartered. The charges at HIDL are neither too high, nor too low.

AICAR BUSINESS SCHOOL

49

50ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Brokerage Rates on Delivery (Basic Plan)

Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered-STCI IDBI AXIS Bank

Brokerage on Delivery 0.50% 0.75% 0.50% 0.50% 0.65% 0.55%

Brokerage Rates on Delivery Comment: The brokerage rates for the delivery of shares are the highest for ICICIDirect and the lowest for HIDL, HDFC Securities and Standard Chartered.

AICAR BUSINESS SCHOOL

50

51ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Brokerage Rates on Intraday Trading (Basic Plan)

Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered- STCI IDBI Paisabuilder AXIS Bank

Brokerage Trading 0.05% 0.05% 0.15% 0.05% 0.055% 0.10%

on

Intraday

Brokerage Rates on Intraday Trading Comments: Intraday trading refers to opening and closing a position in a security in the same trading day. Brokerage rates for the Intraday Trading are the highest for HDFC Securities and the lowest for HIDL, ICICIDirect and Standard Chartered.

AICAR BUSINESS SCHOOL

51

52ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Annual Maintenance Charges for Demat A/C (Basic Plan) Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered –STCI IDBI Paisabuilder AXIS Bank AMC for Demat A/C Rs. 300 Rs. 500 Rs. 500 Rs. 400 Rs. 350 Rs. 500

Annual Maintenance Charges for the Demat A/C Comment: A Demat a/c holder needs to pay annual maintenance charges, which on a certain turnover level is refunded by some of the brokers. The charges are the highest for ICICIDirect, HDFC Securities and AXIS Bank while the lowest for only HIDL.

AICAR BUSINESS SCHOOL

52

53ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Brokerage Rates for Futures (Basic Plan) Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered - STCI IDBI Paisabuilder AXIS Bank Brokerage on Futures 0.05% 0.05% 0.05% 0.05% 0.055% 0.05%

Brokerage Rates for Futures by different Brokers Comment: The brokerage rates for futures are the highest for IDBI Paisabuilder while all the other brokers charge the equal rates.

AICAR BUSINESS SCHOOL

53

54ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Minimum Brokerage per Executed Order Value Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered – STCI IDBI Paisabuilder AXIS Bank Comment: The plan for minimum brokerage that is chargeable per executed order value varies for different brokers, in a way that Rs. 25 is maximum amount chargeable by HIDL and ICICIDirect, Rs. 25 is the minimum amount chargeable by Standard Chartered, Rs. 20 is the minimum amount chargeable by IDBI Paisabuilder and Rs. 20 is the maximum amount chargeable by AXIS Bank. The charges for HDFC Securities are not available. Hence, among the 5 brokers, the highest would be for Standard Chartered and the lowest would be for AXIS Bank. Brokerage Rs. 25 or 2.5% whichever is lower Rs. 25 or 2.5% whichever is lower Not Available Rs. 25 or 2.5% whichever is higher Rs. 20 or 2.5% whichever is higher Rs. 20 or 2.5% whichever is lower

SMS Alerts Service Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered- STCI IDBI Paisabuilder AXIS Bank Comment: The brokers provide SMS Alerts Service updating their customers on the share market and giving advice on investments on a regular basis. Some brokers like HIDL and HDFC Securities provide this facility free of cost. While the others charge some fee. Charges NIL Chargeable NIL Chargeable Chargeable Chargeable

AICAR BUSINESS SCHOOL

54

55ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Research Reports Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered –STCI IDBI Paisabuilder AXIS Bank Comment: Various brokers avail their customers of research reports on topics like trends in the market, position of mutual funds, IPOs, comparative studies of different companies, investment opportunities in a particular sector etc. HIDL, ICICI and HDFC provide these for free, while the others charge a certain amount. Charges Nil Nil Nil Chargeable Chargeable Chargeable

AICAR BUSINESS SCHOOL

55

56ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Failed Instruction Charges Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered- STCI IDBI Paisabuilder AXIS Bank Charges Rs. 25 Rs. 30 Not Available 25 30 10

Failed Instruction Charges Comment: The Charges in this category are the highest for IDBI and ICICI, while lowest for AXIS. For ILL, these charges are neither too high nor too low.

AICAR BUSINESS SCHOOL

56

57ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Demat Charges Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered- STCI IDBI Paisabuilder AXIS Bank Charges 35 35 Not Available 30 30 50

Demat Charges Comment: Demat refers to a dematerialized account. Just as one has to open an account with a bank, if he/she wants to save his/her money, make cheque payments etc., one needs to open a demat account if he/she wants to buy or sell and transact sharesDemat Charges are the highest for AXIS while lowest for Standard Chartered and IDBI. HIDL charges are neither too high nor too low.

AICAR BUSINESS SCHOOL

57

58ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Charges for Remat Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered- STCI IDBI Paisabuilder AXIS Bank Charges 25 20 Not Available 50 20 50

Charges for Remat Comment: The electronic holdings can be converted back into certificates if one wishes to get back his/her shares in physical form. This is called Rematerialisation or Remat. Remat Charges are highest for Standard Chartered and AXIS and lowest for ICICI and IDBI. HIDL charges are neither too high nor too low.

AICAR BUSINESS SCHOOL

58

59ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Charges for Pledge Creation Broker HIDL (HSBC) ICICI Direct HDFC Securities Standard Chartered- STCI IDBI Paisabuilder AXIS Bank Charges 25 30 Not Available 50 100 25

Charges for Pledge Creation Comment: Pledge is an activity of taking loan against securities by the investor. The investor is called as ‘pledgor’ and he entity who is giving the loan against the securities is called as ‘pledgee’. Charges in this category are the highest for Standard Chartered and AXIS while lowest for HIDL and IDBI.

AICAR BUSINESS SCHOOL

59

60ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Charges for Pledge Closure Broker HIDL (HSBC) ICICI Direct HDFC StanChart IDBI AXIS Bank Charges 25 30 Not Available 50 25 50

Charges for Pledge Closure Comment: After the pledgor repays the loan to the pledgee, the pledgor will submit an instruction to its DP to initiate the closure of pledge/hypothecation by indicating the option "close the pledge/hypothecation" in the pledge/hypothecation form. This is known as Pledge Closure. Here, the charges are highest for Standard Chartered and AXIS and lowest for HIDL and IDBI.

AICAR BUSINESS SCHOOL

60

61ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Account Statement Charges Broker HIDL (HSBC) ICICI Direct HDFC StanChart IDBI AXIS Bank Charges 25 20 Not Available 50 20 100

Account Statement Charges Comment: Here, the AXIS charges extraordinarily high fee while ICIC and IDBI charge the lowest. HIDL, on the other hand, charges just a little above the lowest rates.

AICAR BUSINESS SCHOOL

61

62ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Pledge Invocation Charges Broker (HSBC) ICICI Direct HDFC StanChart IDBI AXIS Bank Charges 50 30 Not Available 50 100 50

Pledge Invocation Charges Comment: When a pledgee does not repay the loan amount, the shares pledged with the Bank can be transferred in their favor. This is similar to the physical shares being transferred in the name of the lender in the event of a default, who will receive the corporate actions like dividends, bonus etc in Pledged shares. This is pledge invocation. The charges for these are extremely high for IDBI, while lowest for only ICICI. HIDL, Standard Chartered and AXIS charge average rates.

AICAR BUSINESS SCHOOL

62

63ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Turnover on the basis of Deposit Amount Broker HIDL (HSBC) ICICI Direct HDFC StanChart IDBI AXIS Bank Turnover 4 Times 4 Times 3 Times 3 Times 4 Times 3 Times

Turnover on the Deposit Account Comment: Turnover on the basis of deposit account is the limit which is given by the broker to the customer for doing intraday trading on his/her deposit amount. The higher it is, the better. The results of the research show that it is the highest for HIDL, ICICI and IDBI.

Questionnaire Data Analysis
AICAR BUSINESS SCHOOL 63

64ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Data collection method 1. Collection of Data:
The data collection comprises of Primary data through the use of Questionnaire (refer appendix) designed and developed specifically for the study and also a risk test to calculate the risk score of an individual

2. Code assigned to each category:
Different Proportions are assigned to each category, We have used a risk test to determine the risk appetite of an individual. The risk test contains about 13 questions; each option of each question has a designated score attached to it. Then the final score is calculated accordingly, which will tell about the risk appetite of an individual.

Sample Design
The population under consideration for this study comprises of individuals falling within the age group (22 years-50 years), who earn/secure funds, from different sources like salary, business, agriculture, other sources including funds from parents, etc., and are also involved in some sort of investment or financial planning. For the study a sample size of 72 individuals is being considered. The sample was drawn from the population at random.

Field work
The fieldwork was done by me by collecting data from clients of HSBC Invest Direct, approaching individuals at random in malls and other public places. Samples were also collected from known individuals (friends and relatives) by approaching them personally, through the internet, and telephone.

Data Analysis
AICAR BUSINESS SCHOOL 64

65ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

We assigned 1 for the High riskier category,2 for Medium ,and 3 for less riskier category and calculated for every individual, we define a range Risk Score <15 15<x<25 >25 Behavior Aggressive Active Conservative

If score is less than 15 we assume that behavior of individual is aggressive they are ready to take the high risk and if the score is between 15 and 25 behavior of individual is active, they are moderate risk taker and if the score is greater than 25 behavior of individual is conservative and they are not ready to take any type of risk. From our sample size of we found that …… Aggressive Active Conservative 17 21 34

Factor affecting investment Pattern 1.Income of an individual:
AICAR BUSINESS SCHOOL 65

66ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

From survey I found that income of an individual does not have significant impact on individual decisions. from the outcome of the study I found that Low income group people are tend to invest in the same kind of investment instruments. it more depend on behavior of individual. from our sample size of 72 the break up of income group are

2.Source of income:
This factor affect the Investment pattern of an individual but not in big. in our sample size students are also include and their income source is differ than a high earning individual Break up of sample size are ..

AICAR BUSINESS SCHOOL

66

67ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

3.Profession:
It have some impact on investment pattern of individual. student and housewife these category can’t take high risk and a fixed salaried employee is ready to adopt the moderate risk. Breakup ..

AICAR BUSINESS SCHOOL

67

68ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

4.Investment Objective
Definitely investment objective affect the investment pattern of individual if a person doing investment only for tax savings their investment pattern will be differs from who is doing investment for improving investment returns . Break -up

5.Liability:
Its true that liabilities affect the investment pattern of individual we found that most of the respondents are totally agree with this that liabilities affect their investment decision . Break-up

AICAR BUSINESS SCHOOL

68

69ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

LIMITATIONS
The limitations of the study would be the constraints imposed on data collection. I was restricted only to the city of Jaipur, could e-mail the questionnaire to individuals who were tech savvy, and telephonic survey included individuals who had good comprehensive ability. Also, individuals were reluctant to give the actual income figures and so we had to create an interval scale for the same. When doing analysis on income levels, a mean figure of the upper and lower limits of a class was used as an approximation. I had to search for individuals who could actually understand the intricacy of risk tests, and other technical terms associated with the questionnaire. Thus I was curtailed to a small sample of 72 respondents, which is a big limitation to our study.

AICAR BUSINESS SCHOOL

69

70ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

AICAR BUSINESS SCHOOL

70

71ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

CONCLUSION
From the study I got to know that the investment pattern of an individual is largely influenced by its risk taking ability, as evident from the fact that there is a high correlation between the risk adjusted investment and risk scores (calculated through risk test). It is also determined that income of an individual does not have a significant impact on a person’s investment decision, as the outcome of the study pointed to the fact that college going student, who do not have any income source except from their parents and investment income, tend to invest in the same kind off investment instruments as a high earning individual. But the liability to be written of each year has much impact on an individual’s investment decision. Investment objectives also have some impact on investment pattern of individual. From the above analysis we are now aware of the investment pattern of investors which is highly influenced by his age. This research will help in developing financial products according to the choice and need of investors. This Questionnaire Research gives the investment behavior information of the investors of Jaipur which can help to gain competitive edge over its competitors.

AICAR BUSINESS SCHOOL

71

72ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Questionnaire
This survey is being conducted by student of AICAR Business School, Neral (Maharashtra) and is intended to provide an understanding of the rationale behind investment behavior. Your cooperation in completing this study by responding to the following questions would be greatly appreciated. Any information you provide will be kept strictly confidential 1. Name2. Gender – (Tick to specify) Male Female 4. Marital Status- (Tick to Specify) Single Married 5. Profession-: Salaried Self Employed (Professionals) Politician 3. Age- ………….

Self Employed Housewife Others ( Please Specify)

Retired Student

6.

Yearly Income: 0-2,49,9999 7,50,000-9,99,999

2,50,0000-4,99,999 10,00,000-12,49,999

5,00,000-7,49,999 12,50,000-14,99,999

7.

Income/ Fund Source Salary Investment Income

Business Inc Others (Please Specify)

Agriculture

AICAR BUSINESS SCHOOL

72

73ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

8. No. of Dependents (in family) ……………….

9. Investment Objective Objective Saving for your own education Saving for your children’s education Providing support for an aging parent/relative Improving insurance coverage

(Yes/no)? Objective Saving for retirement Minimizing income taxes Improving investment returns

(Yes/no)?

10. Different types of Financial Instruments- Say if you are given Rs 10000, how will you allocate the money to different sources of investments? (Disclaimer- If you do not know about any mentioned option, then leave it blank and allocate the money to other sources) Investment Types Rupees Invested Investment Types Rupees Invested 1) Bonds/ Debentures 3) Post Office Savings Scheme 5) Mutual Funds 7) Gold 9) Cash in Hand 11) Real Estate 2) Equity 4) Derivatives Instruments 6) Insurance plans 8) Fixed Deposits 10) Cash at Bank 12) Others (Please Specify)

11. How much percentage of your monthly income goes into clearing of loans? <=25% >25% to 50% >50% to 75% >75% to 100%

12. Your Liabilities effect your investment decision? Strongly Agree Agree Doesn’t Matter Disagree
AICAR BUSINESS SCHOOL

Strongly Disagree
73

74ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

Risk Test
Please write the concerned option in the space provided below. 1. Your investment loses 15% of its value in a market correction a month after you buy it. Assuming that none of the fundamentals have changed, do you: a. Sit tight and wait for it to journey back up. b. Sell it and rid yourself of further sleepless nights if it continues to decline. c. Buy more – if it looked good at the original price it looks even better now. 2. A month after you purchase it, the value of your investment suddenly skyrockets by 40%. Assuming that you cannot find any further information, what do you do? a. Sell it b. Hold it on the expectation of further gain. c. Buy more – it will probably go higher. 3. Which would you have rather done: a. Invested in an aggressive growth fund that appreciated very little in the last six months. b. Invested in a money-market fund only to see the aggressive growth fund you were thinking about double in value in 6 months. Would you feel better if: a. You doubled your money in an equity investment. b. Your money-market fund investment saved you from losing half your money in a market slide. Which situation would make you feel happiest? a. You win Rs.100,00 in a publisher’s contest b. You inherit Rs.100,000 from a rich relative. c. You earn Rs.100,000 by risking Rs.2,000 in the options market d. Any of the above

4.

5.

AICAR BUSINESS SCHOOL

74

75ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

6. The apartment building where you live is being converted into flat sytem. You can either buy your unit for Rs.80,000 or sell the option for Rs.20,000. The market value of the condo is Rs.120,000. You know if you buy the flat, it might take 6 months to sell, the monthly carrying cost is Rs.1,200 and you’d have to borrow the down payment for the mortgage. You don’t want to live in the building. What do you do? a. Take the Rs.20,000 b. Buy the unit and then sell it in the open market 7. You inherit your uncle’s Rs.100,000 house, free of any mortgage. Although the house is in a fashionable neighborhood and can be expected to appreciate at a rate faster than inflation, it has deteriorated badly. It would net Rs.1,000 monthly if rented as is, it would net Rs.1,500 if renovated. The renovations could be financed by a mortgage on the property. You would: a. Sell the house b. Rent it as is. c. Make the necessary renovations and then rent it 8. You work for a small, but thriving, privately held electronics company. The company is raising money by selling stock to its employees. Management plans to take the company public, but not for four or more years. If you buy the stock, you will not be allowed to sell until shares are traded publicly. In the meantime, the stock will pay no dividends. But when the company goes public, the shares could trade for 10 to 20 times what you paid for them. How much of an investment would you make? a. None at all b. One month’s salary. c. Three month’s salary d. Six months salary. 9. Your longtime friend and neighbor, an experienced geologist, is assembling a group of investors (of which he is one) to fund and exploratory oil well which could pay back 50-100 times its investment if successful. If the well is dry, the entire investment is worthless. Your friend estimates the chance of success at only 20%. What would you invest? a. Nothing at all b. One months salary c. 3 months salary d. 6 months salary 10. You learn that several commercial building developers are seriously looking at underdeveloped land at a certain location. You are offered an option to buy a choice parcel of that land. The cost is about 2 month’s salary and you calculate the gain to be 10 months salary. a. Purchase the option. b. Let it slide; it’s not for you.
AICAR BUSINESS SCHOOL 75

76ANALYZING THE FINANCIAL PRODUCTS OF HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED

11.

You are on a TV game show and can choose one of the following a. Rs.1,000 in cash b. A 50% chance of winning Rs.4,000 c. A 20% chance of winning Rs.10,000 d. A 5% chance of winning Rs.100,000 12. Its 1992, and inflation is returning. Hard assets such as precious metals, collectibles, and real estate are expected to keep pace with inflation. Your assets are all now in long term bonds. a. Hold the bonds b. Sell the bonds, and put half the proceeds into money funds and the other half into hard assets. c. Sell the bonds and put the total proceeds into hard assets. d. Sell the bonds, put all the money into hard assets, and borrow additional money to buy more. 13. You’ve lost Rs.500 at a table in Casino. How much you are prepared to lose to win the Rs.500 back. a. Nothing-you quit now b. Rs.100 c. Rs.250 d. Rs.500 e. More than Rs.500

********************Thank you for your cooperation**************

AICAR BUSINESS SCHOOL

76

References:
• • • • • • • • • •

www.hsbcinvestdirect.com www.hsbc.co.in www.nationwide.com www.businessweek.com www.financialexpress.com www.moneybhai.com www.economywatch.com www.investopedia.com www.nseindia.com www.sebi.com

Page 77

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close