Minor Project Report on

A Study on Financial Investment in Indian Commodity Market

Submitted in partial fulfilment of the requirement of the Bachelor of Business Management Degree Offered by Jain University during the year 2012 By

Name: Charanpreet Singh Reg No: 11bbm20051 Semester: IIIrdSection: F

Under the guidance of R.Ratchana M.com (CA), M.phil, MBA

#1/1-1, Atria Tower, Palace Road, Bangalore 560001, India Phone: +91 80 43430200 |Fax: +91 80 22353215 E-mail: info@cms.ac.in | Website:www.cms.ac.in

Certificate

Awarded to Charanpreet Singh This is to certify that the Minor Project entitledA Study on Financial Investment in Indian Commodity Market has been submitted in partial fulfilment of the requirement for the Degree of Business Management of Jain University.

Date: Place:

Head JU-CMS

Certificate

This is to certify that the project titledA Study on Financial Investment in Indian Commodity Marketis a record of the original and independent work carried byCharanpreet Singhunder my guidance and supervision.

This has not previously formed the basis of the award of any degree/diploma or other similar title of recognition.

Date : Place: Guide Signature

Declaration

I, hereby declare that this minor project titledA Study on Financial Investment in Indian Commodity Market for is prepared by during the academic year 2012 under the guidance of Ms.R. Ratchana

This project is not based on any previously submitted project for the award of any degree or diploma offered by any University. It is the result of my own effort.

Name:Charanpreet Singh Sem:III rd SEM Reg No:11BBM20051 Date: Place: Bangalore Signature

Contents
Chapter 1 Introduction Chapter 2 Company profile, specifically % of business when compared to competitors. Highlights of financials of the company annual report a minimum of two years. Chapter 3 Methodology of the study/Design of the study of minor project The student should take one major problems in any one functional area like Finance, Marketing, Production, Human Resource and Systems and make a detailed study on that area. Chapter 4 Data analysis and interpretation Chapter 5 Summary of findings, suggestions and conclusions Annexure Bibliography

Chapter 1

INTRODUCTION
The world has changed and so has investing. The market is shell shocked and yesterdays momentum stocks are todays slow-motion stocks. But in the new reality of low-growth investing, commodities are hot and getting hotter. A rapidly industrializing and urbanizing Asia will be demanding lots more copper, zinc, iron ore, coal, fertilizers, gold and oil to transform their societies. Commodities are it and thats great news for investors who want to profit from the next great bull market in commodities. In fact, commodities may be about the only asset class that is likely to outperform the broad market in the future. Although they are without a doubt important to the global economy, commodities are among the most misunderstood of all asset classes. Stocks, bonds and real estate all have legions of followers and plenty of experts agree on their importance within an investment portfolio, but venture into the world of commodities and you are into an area thats intimidating to the average investor, where suspicions run deep and understanding is limited. As a result, commodities get short-shrift in most investment accounts and investors miss out on some important opportunities.

Most people have the impression that commodity markets are very complex and difficult to understand. Actually, they are not. There are several basic facts that one must know, and once these are understood one should have little difficulty understanding the nature of futures markets and how they function. First, a commodity futures market (or exchange) is, in simple terms, nothing more or less than a public market place where commodities are contracted for purchase or sale at an agreed price for delivery at a specified date. These purchases and sales, which must be made through a broker who is a member of an organized exchange, are made under the terms and conditions of a standardized futures contract. The primary distinction between a futures market and a market in which actual commodities are bought and sold, either for immediate or later delivery, is that in the futures market one deals in standardized contractual agreements only. These agreements (more formally called futures contracts) provide for delivery of a specified amount of a particular commodity during a specified future month, but involve no immediate transfer of ownership of the commodity involved. In other words, one can buy and sell commodities in a futures market regardless of whether or not one has, or owns, the particular commodity involved. When one deals in futures one need not be concerned about having to receive delivery (for the buyer) or having to make delivery (for the seller) of the actual commodity, providing of course that one does not buy or sell a future during its delivery month. One may at any time cancel out a previous sale by an equal off setting purchase, or a previous purchase by an equal offsetting sale. If done prior to the delivery month the trades cancel out and thus there is no receipt or delivery of the commodity. Actually, only a very small percentage, usually less than two percent, of the total futures contracts that are entered into are ever settled through deliveries. For the most part they are cancelled out prior to the delivery month in the manner just described Indian markets have recently thrown open a new avenue for retail investors and traders to participate: commodity derivatives. For those who want to diversify their portfolios beyond shares, bonds and real estate, commodities are the best option. Till some months ago, this wouldn't have made sense. For retail investors could have done very little to actually invest in commodities such as gold and silver or oilseeds in the futures market. This was nearly impossible in commodities except for gold and silver as there was practically no retail avenue for punting in commodities. However, with the setting up of three multi-commodity exchanges in the country, retail investors can now trade in commodity futures without having physical stocks! Commodities actually offer immense potential to become a separate asset class for market-savvy investors, arbitrageurs and speculators. Retail investors, who claim to
7

understand the equity markets, may find commodities an unfathomable market. But commodities are easy to understand as far as fundamentals of demand and supply are concerned. Retail investors should understand the risks and advantages of trading in commodities futures before taking a leap. Historically, pricing in commodities futures has been less volatile compared with equity and bonds, thus providing an efficient portfolio diversification option. In fact, the size of the commodities markets in India is also quite significant. Of the country's GDP of Rs 13, 20,730 core (Rs 13,207.3 billion), commodities related (and dependent) industries constitute about 58 per cent. Currently, the various commodities across the country clock an annual turnover of Rs 1, 40,000 cores (Rs 1,400 billion). With the introduction of futures trading, the size of the commodities market grows many folds here on. Like any other market, the one for commodity futures plays a valuable role in information pooling and risk sharing. The market mediates between buyers and sellers of commodities, and facilitates decisions related to storage and consumption of commodities. In the process, they make the underlying market more liquid. Instability of commodity prices has always been a major concern of the producers as well as the consumers in an agriculture dominated country like India. Farmers direct exposure to price fluctuations, for instance, makes it too risky for many farmers to invest in otherwise profitable activities. There are various ways to cope with this problem. Apart from increasing the stability of the market, various factors in the farm sector can better manage their activities in an environment of unstable prices through derivative markets. These markets serve a risk -shifting function, and can be used to lock -in prices instead of relying on uncertain price developments. Both forwards and futures contracts have specific utility to commodity producers, Merchandisers and consumers. Apart from being a vehicle for risk transfer among hedgers and from hedgers to speculators, futures markets also play a major role in price discovery. Commodities have attracted considerable interest as a financial investment in recent years. This project discusses the factors behind their growing appeal and assesses the extent to which market characteristics, such as price volatility, have changed as a result. The feature concludes that commodity markets have become more like financial markets in terms of the motivations and strategies of participants, but that the physical characteristics of commodity markets are still important.

INDUSTRY PROFILE

BROKERSHIP CONCEPT
A broker is an individual or party (brokerage firm) that arranges transactions between a buyer and a seller, and gets a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Distinguish agent: one who acts on behalf of a principal.Brokers also can furnish considerable market information regarding prices, products and market conditions. Brokers may represent either the seller (90 percent of the time) or the buyer (10 percent) but not both at the same time. An example would be a stockbroker, who makes the sale or purchase of securities on behalf of his client. Brokers play a huge role in the sale of stocks, bonds and other financial services. A brokerage firm, or simply brokerage, is a financial institution that facilitates the buying and selling of financial securities between a buyer and a seller. Brokerage firms serve a clientele of investors who trade public stocks and other securities, usually through the firm's agent stockbrokers. A traditional, or "full service", brokerage firm usually undertakes more than simply carrying out a stock or bond trade. The staff of this type of brokerage firm is entrusted with the responsibility of
9

researching the markets to provide appropriate recommendations and in so doing them direct the actions of pension fund managers and portfolio managers alike. These firms also offer margin loans for certain approved clients to purchase investments on credit, subject to agreed terms and conditions. Traditional brokerage firms have also become a source of up-to-date stock prices and quotes. A commodity broker is a firm or individual who executes orders to buy or sell commodity contracts on behalf of clients and charges them a commission. A firm or individual who trades for his own account is called a trader. Commodity contracts include futures, options, and similar financial derivatives. Clients who trade commodity contracts are either hedger using the derivatives markets to manage risk, or speculators who are willing to assume that risk from hedgers in hopes of a profit. While historically commodity brokers traded grain and livestock futures contracts, today commodity brokers trade a wide variety of financial derivatives based on not only grain and livestock, but also derivatives based on foods/softs, metals, energy, stock indexes, equities, bonds, currencies, and an ever growing list of other underlying assets. Ever since the 1980s, the majority of commodity contracts traded are financial derivatives with financial underlying assets such as stock indexes and currencies.

COMMODITY BROKERS;
Floor Broker/Trader:
An individual who trades commodity contracts on the floor of a commodities exchange. When executing trades on behalf of a client in exchange for a commission he is acting in the role of a broker. When trading on behalf of his own account, or for the account of his employer, he is acting in the role of a trader. Floor trading is conducted in the pits of a commodity exchange via open outcry.

Futures Commission Merchant (FCM):

A firm or individual that solicits or accepts orders for commodity contracts traded on an exchange and holds client funds to margin, similar to a securities broker-dealer. Most individual traders do not work directly with a FCM, but rather through an IB or CTA.

Introducing Broker (IB):

A firm or individual that solicits or accepts orders for commodity contracts traded on an exchange. IBs do not actually hold customer funds to margin. Client funds to margin are held by a FCM associated with the IB.

Commodity Trading Advisor (CTA):

A firm or individual that, for compensation or profit, advises others, on the trading of commodity contracts. They advise commodity pools and offer managed futures accounts. Like an IB, a CTA does not hold customer funds to margin; they are
10

held at a FCM. CTAs exercise discretion over their clients' accounts, meaning that they have power of attorney to trade the clients account on his behalf according to the client's trading objectives. A CTA is generally the commodity equivalent to a financial advisor or mutual fund manager.

Commodity Pool Operator (CPO):

A firm or individual that operates commodity pools advised by a CTA. A commodity pool is essentially the commodity equivalent to a mutual fund.

Registered Commodity Representative (RCR)/Associated Person (AP):

An employee, partner or officer of a FCM, IB, CTA, or CPO, duly registered and licensed to conduct the activities of a FCM, IB, CTA, or CPO. This is the commodity equivalent to a registered representative.

REGULATION
A single firm or individual may be registered and act in more than one capacity. In the United States, an individual working in any of the above roles must pass the Series 3 National Commodity Futures Examination administered by the Financial Industry Regulatory Authority (FINRA). With few exceptions, most individuals who act as a FCM, IB, CTA, and CPO, as well as their RCR/APs, are required to register with the Commodity Futures Trading Commission (CFTC), and be members of the National Futures Association (NFA). Floor brokers/traders who are members or employees of a commodity exchange generally do not need to be members of the NFA, as they are regulated by the exchange.

BROKERAGE FEE
A fee charged by an agent, or agents company to facilitate transactions between buyers and sellers. The brokerage fee is charged for services such as negotiations, sales, purchases, delivery or advice on the transaction. There are many types of brokerage fees added in areas such as insurance, realty, delivery services or stocks. Brokerage fees will usually be based on either a percentage of the transaction or a flat fee. They can also be a combination of the two.

SUMMARY ABOUT COMMODITY BROKERAGESHIP

STRENGTHS;
11

Huge market potential given the under-penetration of commodities as an investment avenue amongst Indian investor community and an increasing investor interest in new market segments like equity, currency futures, interest rate derivatives. Adequate capitalization levels, at least for larger players provides cushion to absorb potential losses resulting from the short term challenges in the operating environment. A relatively diversified revenue profile at least for the larger players. A more flexible cost structure arising from the increasing reliance on franchisee model. CHALLENGES; Protecting brokerage yields and market share in the highly competitive and fragmented commodity brokerage industry; further accentuated by the rising share of the low yielding options segment. Volatility in earnings and profitability due to linkages with vagaries of capital market and increasing cost of regulatory compliances. Achieving a critical scale of operations and managing costs to sustain profitability even in a prolonged dull phase. Managing the inherent refinancing risk as players scale up capital market funding book. Continue investing in upgrading the risk management systems and monitoring policies to mitigate associated risks, especially during periods of extreme market volatility. Scaling up the non broking business lines to diversify revenue streams while containing risks. Greater dominance of the foreign brokerage houses in the institutional broking segment

TOP BROKERAGE FIRMS IN INDIAN CONTEXT

Brokerage firms are the business entities that deal with stock trading. India, with an increasing capital market and a growing number of investors, has a number of brokerage firms. In Indian retail brokerage industry, the brokerage firms primarily work as agents for buying and selling of securities like shares, stocks and other financial instruments and earn

12

commission for each of the transactions. There are plenty of brokerage firms in India. Let's have a look at the top 10 brokerage firms in India. Before talking anything about top brokerage firms in India, let's have a glance at the Indian retail brokerage market, which is going through a wonderful phase with high growth rate. The total trading volume of the Indian brokerage companies stood at US$ 1239.1 billion in the year 2004, which increased to US$ 1492.1 billion in 2005. It is further expected to reach US$ 6535.7 billion by the year 2015.

TOP TEN COMMODITY BROKERAGE FIRMS IN INDIA

Name Terminals Sub Brokers No. of Employees Kotak Securities Limited 4320 910 4008

No. of Branches 350 Name Terminals Sub Brokers No. of Employees Karvy Stock Broking Limited 1700 19000 3910

No. of Branches 581 Name Terminals Sub Brokers No. of Employees India bulls 2876 NA 5873

No. of Branches 522 Name Terminals IL&FS Investmart Limited 1644

13

Sub Brokers No. of Employees

NA 1900

No. of Branches 294 Name Terminals Sub Brokers No. of Employees MotilalOswal Securities 7923 890 2193

No. of Branches 63 Name Terminals Sub Brokers No. of Employees Reliance Money 2428 1494 2037

No. of Branches 142 Name Terminals Sub Brokers No. of Employees India Infoline 173 173 NA

No. of Branches 605 Name Terminals Sub Brokers No. of Employees Angel Broking Limited 5715 NA 284

No. of Branches NA Name Terminals AnandRathi Securities Limited 1527

14

Sub Brokers No. of Employees

320 4566

No. of Branches 220 Name Terminals Sub Brokers No. of Employees Geojit 627 247 343

No. of Branches 314 Business Today 2012 may issue

There are basically two types of trading on market

Delivery Intraday Delivery trading is one in which shares are bought and can only be sold after they are delivered by the broker that means that they cannot be sold the same day, and delivery takes two to three days after they are bought and then they are ready to be sold. Intraday trading which takes place for that very particular day and there is no delivery they can be bought and sold the same day and are automatically sold at the end of the trading session if you have not sold it by yourself during the trading session. Brokerage is usually negotiable: Several of you trying to choose an online broker and open an online trading account must have been frustrated trying to search for the exact brokerage charges charged by various online brokers. But the fact is the brokerage charged by the same broker varies and in several cases is negotiable. For example if you go and tell a brokerage house that you are going to deposit 2 lakh rupees and try to convince them you are going to trade heavily, they might consider reducing your brokerage. That is why in the above table you will find only a range for the brokerage charges in some cases. But that should be enough to get an idea. Effective brokerage with taxes is more: In addition to the above brokerage charges you will have to pay STT (Securities Transaction Tax) at the rate or 0.02% of the total transaction amount. You will also be charged 12.5% Service Tax on the
15

brokerage amount (and not on the transaction amount). For example, if your brokerage is 0.50% for delivery and you do a delivery transaction of Rs.100/- then the total brokerage you pay is 0.50 (brokerage) + 0.02 (stt) + 0.063 (service tax) = 0.58. Thus our effective brokerage (including all taxes) will be 0.58%. Similarly for brokerage on intraday transactions. One may also like to compare brokerages charged by the online brokers mentioned above for trading in futures and options. I have traded options on SBICAP securities and have been charged Rs.100/- flat brokerage fee for every options trade. I will probably find out and also add a comparison table for brokerage charges for trading derivatives (futures and options) later, if i see enough people Google searching for the same. For futures, some online brokers charge different brokerage for different legs of the trade, i.e. different for buy and sell trade.

COMMODITY AND COMMODITY MARKET

The vast geographical extent of India and her huge population is aptly complemented by the size of her market. The broadest classification of the Indian Market can be made in terms of the commodity market and the bond market. The commodity market in India comprises of all palpable markets that we come across in our daily lives. Such markets are social institutions that facilitate exchange of goods for money. The cost of goods is estimated in terms of domestic currency. Electronic trading and settlement of transactions has created a revolution in global financial and commodity markets. A commodity is a product that has commercial value, which can be produced, bought, sold, and consumed. Commodities are basically the products of the primary sector of an economy. The primary sector of an economy is concerned with agriculture and extraction of raw materials such as metals, energy (crude oil, natural gas), etc., which serve as basic inputs for the secondary sector of the economy.In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services. A commodity has full or partial fungibility; that is, the market treats it as equivalent or nearly so no matter who produces it. "From the taste of wheat it is not possible to tell who produced it, a Russian serf, a French peasant or an English capitalist."Petroleum and copper are examples of such commodities. The price of copper is universal, and fluctuates daily based on global supply and demand. Items such as stereo systems, on the other hand, have many aspects of product differentiation, such as the brand, the user interface, the perceived quality etc. And, the more valuable a stereo is perceived to be, the more it will cost.

COMMODITY MARKET
16

Commodity market is an important constituent of the financial markets of any country. It is the market where a wide range of products, viz., precious metals, base metals, crude oil, energy and soft commodities like palm oil, coffee etc. are traded. It is important to develop a vibrant, active and liquid commodity market. This would help investors hedge their commodity risk, take speculative positions in commodities and exploit arbitrage opportunities in the market. The commodities market is actually a collection of 48 worldwide markets that trade 96 commodities. Everything from silver to orange juice concentrate can be sold. The largest market here in the United States is located in Chicago. Smaller in size and fame, the Chicago Mercantile Exchange or CME trades in a large amount of commodities. STRUCTURE OF COMMODITY MARKET

HISTORY OF EVOLUTION OF COMMODITY MARKET

Commodities trading was evolved from need of assured continuous supply of seasonal agricultural crops. The concept of organized trading in commodities evolved in Chicago, in 1848. But one can trace its roots in Japan. In 19th century Chicago in United States had emerged as a major commercial hub. So that wheat producers from Mid-west attracted here to sell their produce to dealers & distributors. Due to lack of organized storage facilities, absence of uniform weighing & grading mechanisms producers often confined to the mercy of dealers discretion. These situations lead to need of establishing a common meeting place for farmers and
17

dealers to transact in spot grain to deliver wheat and receive cash in return. Gradually sellers & buyers started making commitments to exchange the produce for cash in future and thus contract for futures trading evolved; Whereby the producer would agree to sell his produce to the buyer at a future delivery date at an agreed upon price. Trading of wheat in futures became very profitable which encouraged the entry of other commodities in futures market. This created a platform for establishment of a body to regulate and supervise these contracts. Thats why Chicago Board of Trade (CBOT) was established in 1848. In 1870 and 1880s the New York Coffee, Cotton and Produce Exchanges were born. Agricultural commodities were mostly traded but as long as there are buyers and sellers, any commodity can be traded. In 1872, a group of Manhattan dairy merchants got together to bring chaotic condition in New -York market to a system in terms of storage, pricing, and transfer of agricultural products. The largest commodity exchange in USA is Chicago Board of Trade, The Chicago Mercantile Exchange, the New York Mercantile Exchange, the New York Commodity Exchange and New York Coffee, sugar and cocoa Exchange. Worldwide there are major futures trading exchanges in over twenty countries including Canada, England, India, France, Singapore, Japan, Australia and New Zealand.

COMMODITY MARKET AND INDIA

Organized futures market evolved in India by the setting up of "Bombay Cotton Trade Association Ltd." in 1875. In 1893, following widespread discontent amongst leadingcottonmill owners and merchants over the functioning of the Bombay Cotton Trade Association, aseparate association by the name "Bombay Cotton Exchange Ltd." was constituted. A future trading in oil seeds was organized in India for the first time with the setting up of GujaratiVyapariMandali in 1900, which carried on futures trading in groundnut, castor seed andcotton. Before the Second World War broke out in 1939 several futures markets in oilseedswere functioning in Gujarat and Punjab. A three-pronged approach has been adopted to revive and revitalize the market. Firstly, on policy front many legal and administrative hurdles in the functioning of the markethave been removed. Forward trading was permitted in cotton and jute goods in 1998, followed by some oilseeds and their derivatives, such as groundnut, mustard seed, sesame,cottonseed etc. in 1999. A statement in the first ever National Agriculture Policy, issued inJuly, 2000 by the government that futures trading will be encouraged in increasing number ofagricultural commodities was indicative of welcome change in the government policytowards forward trading. Secondly, strengthening of infrastructure and institutional capabilities of the regulator and the existing exchanges received priority. Thirdly, as the existing exchanges are slow toadopt reforms due to legacy or lack of resources, new promoters with resources and
18

Professional approach were being attracted with a clear mandate to set up dematerialized, technology driven exchanges with nationwide reach and adopting best international practices.

The year 2003 marked the real turning point in the policy framework for commodity market when the government issued notifications for withdrawing all prohibitions and Opening up forward trading in all the commodities. This period also witnessed other reforms,such as, amendments to the Essential Commodities Act, Securities (Contract) Rules, whichhave reduced bottlenecks in the development and growth of commodity markets. Of thecountry's total GDP, commodities related (and dependent) industries constitute about roughly50-60 %, which itself cannot be ignored.

TYPES OF COMMODITIES
World-over one will find that a market exits for almost all the commodities known to us. These commodities can be broadly classified into the following: Precious Metals: Other Metals: Agro-Based Commodities: Soft Commodities: Live-Stock: Energy: Gold, Silver, and Platinum etc Nickel, Aluminum, Copper etc Wheat, Corn, Cotton, Oils, Oilseeds. Coffee, Cocoa, Sugar etc Live Cattle, Pork Bellies etc Crude Oil, Natural Gas, Gasoline etc

COMMODITY EXCHANGES
Most of the existing Indian commodity exchanges are single commodity platformsare regional in nature, run mainly by entities which trade on them resulting in substantialconflict of interests, opaque in their functioning and have not used technology to scale uptheir operations and reach to bring down their costs. But with the strong emergence ofNational Multi-commodity Exchange Ltd., Ahmadabad (NMCE), Multi CommodityExchange Ltd., Mumbai (MCX), National Commodities and Derivatives Exchange, Mumbai(NCDEX), and National Board of Trade, Indore (NBOT), all these shortcomings will beaddressed rapidly. These exchanges are expected to be role model to other exchanges and arelikely to compete for trade not only among themselves but also with the existing exchanges. The current mindset of the people in India is that the Commodity exchanges arespeculative (due to non delivery) and is not meant for actual users. One major reason beingthat the awareness is lacking amongst actual users. In India, Interest rate risks, exchange raterisks are actively managed, but the same does not hold true for the commodity risks. Someadditional impediments are centered on the safety, transparency and taxation issues.
19

LARGEST COMMODITY EXCHANGES IN THE WORLD

Exchange Country Volume per month $M CME Group USA 19[6] Tokyo Commodity Japan Exchange NYSE Euronext USA Dalian Commodity China Exchange Multi Commodity Exchange India Intercontinental Exchange USA, Canada, China, UK Africa Mercantile Africa Exchange

Chapter 2

COMPANY PROFILE
20

NAME OF THE COMPANY

NIRMAL BANG SECURITIES PVT.LTD

LOGO OF THE COMPANY

Green signifies wealth. Blue signifies loyalty & perseverance.

The logo symbolizes holding hands together to create a relationship beyond broking.

MISSION
To work Together With Integrity and Makes Our Customer Feel Valued

VISION To Create Valuable relationship and Provide the Best Most Professionally CORE VALUE Respect our colleagues and The Business itself

21

NIRMAL BANG - AN OVERVIEW

Founded in 1986 by Shri Nirmal Bang, the Nirmal Bang Group is recognized as one of the largest retail broking houses in India, providing an array of financial products and service. Throughout the company history, they have fostered one overriding purpose: To provide each client with personal service and quality work. By adhering to this principle, company has grown to become a successful and well-respected firm of highly qualified professionals. The group is headed by Shri Dilip Bang and Shri Kishore Bang who bring forward industry expertise and strong business acumen. A premier financial services organization in broking, providing individual and co-operates with customized financial solutions. Nirmal Bang realizes the dreams, needs, aspirations, concerns and resources that are unique and is reflected in every move we make with and for you. Nirmal Bang has deep appreciation for the value of building an everlasting relationship with their clients. It inherits the legacy of Nirmal Bang Group which has been one of the dominant entities in financial Markets. The strive to achieve excellence and dynamic growth has been possible through optimum mix of technology, customer orientation, best business practices, forging alliances, high quality standards and proactive business culture. The company mainly dealing with Equities, Derivatives, Commodities, Currency, Mutual funds, IPOs, Insurance, DP. Here, in Bangalore branch they are dealing with Equities, Derivatives, Commodity, and Currency factor.

PRODUCT OFFERD

22

Equitie s

Comm odities

Curren cy Mutua l Funds

Insura nce

Nirmal Bang

IPOs Deriva tives

Depository

PCG

SERVICES OFFERD Online Platfor ms

Customer Service Desk EContract Note

Margin Fundin g Advance Brokera ge

Nirmal Bang

Advisory Services
Internet Presence

Back office Software

(LD/ HAWKEY)

SMS Facility

NIRMAL BANG ADVANTAGES AS A BROKERAGE FIRM

PEOPLE; Treated as greatest asset. Drawn from a diversity of professional backgrounds, their blend of experience, skill and dedication is shared with all clients.
23

APPROACH; Innovative and enthusiastic. We emphasize adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. AIM; Simply to help the clients and maximize their returns. The interests no matter how big or small - come first. PRODUCTS & SERVICES; Comprehensive and available to meet every investment financial need. COMMITMENT; To provide service, par excellence and become the spirit of change

TEAM WORK OF NIRMAL BANG

24

Marketing & Sales Com RMS plian ce & Surv eilla Demat Settlem entnce Dp KY HR C I T Dispatc h& Contrac t Notes Publishing

Re se ar ch

Finan Cust ce & omer Accou Care nts Legal

UNIQUE PROPOSITIONS
A very strong and dedicated Research and Advisory desk One of the highest success ratio in both technical and fundamental calls An excellent IT infrastructure in place Marketing support to channel partners Training Programs to upgrade the knowledge base & competency levels of our employees Nirmal Bang has subscribed a SPEED-e Facility of NSDL & Easiest facility of CDSL

25

 Like NSDLs Ideas and CDSLs Easi, Nirmal Bang has its own website which shows holding with valuation as clients request and transaction statement from the date of A/C opening till date. Free account opening scheme. KYC operations run in both the shift to ensure a TAT of 36 to 48 hours to activate client codes. Analysts have been featuring daily on various business news channels like: ET Now Zee Business Bloomberg UTV NDTV CNBC Awaaz CNBC TV-18 and

Second by second S.M.S alert is the one of the prospectus of Nirmal Bang.

INFRASTRUCTURE
Nirmal Bang have Indias best single screen Multi Exchange Trading Software platform. Nirmal Bang has trading terminals (both direct and indirect), online monitoring, control terminals (administration terminals) and back office support terminals (settlement terminals) across all locations and centres. Nirmal Bang provide telephonic and chat support for technical and functional issues of branches, franchises and all our clients The company uses the LidhaDidha system of Apex Soft cell Pvt. Ltd which is one of the topmost back office software which has the capacity to process over one lakh trades in a five minutes time frame.
26

 The Company website www.nirmalbang.com is comprehensive and provides online feeds, net trading and portfolio tracking tool.

GEOGRAPHICAL SPREAD
Registered office: Lower-Parel Present in 26 states 89 Branches More than 2000 Employees More than 360 Cities More than 2000 Franchisees

REAGIONAL HUBS
Mumbai [H.O] Kerala Kolkata Jodhpur Bhopal Delhi Karnataka Jaipur Udaipur Indore Gujarat Tamilnadu Punjab J&K

ACHIEVEMENTS
Over the last two decades we have achieved many a milestones. We have been awarded Analyst of the year to Mr. Kunal Shah (Head Commodity Research (Commodity- Fundamentals) by Zee Business and NCDEX as the Indias Best Market Analyst Awards 2011.
27

BEYOND MARKET CONCEPT

Beyond Market is a fortnightly magazine which provides readers with the latest news, interesting stories and articles, key announcements and insightful excerpts Targeting different cities since Oct 2009 It also captures current market trends, useful tips on investing and other latest developments in economy

BEYOND MANDI
A series of commodity camps organized every month in cities like Mumbai, Delhi, Kolkata, Nagpur, Indore, Bikaner, Ludhiana, Rajkot, Kanpur, Lucknow and Jaipur among others An average of 400-500 people at each camp.

MEDIA COVERAGE

28

Mr. Sunil Jain, Mr.MehraboonIrani, Mr. Rahul Arora, Mr. Vishal Jajoo and Mr.Kunal Shah are regularly featuring on Business channels like Zee Business, ET Now, Bloomberg UTV etc .They also quoted in magazines, websites, newswires and newspapers like Outlook Profit, Forbes, The Analysts, Money control, Economic Times, Financial Chronicle, Business Bhaskar, Bloomberg and PTI.Companies Research team have been quoted in the newspapers like Economic Times and DNA as well.

GROUP OVERVIEW

Dp
NIRMAL BANG SECURITIE S NIRM AL BANG GROU P

NIRMA L BANG FINANC IAL SHRESTH SERVIC PROJECT ES PVT S LTD

SHRESTH SECURITI ES

NIRMAL BANG COMMODIT IES SAKSHAM HOLDING S NIRMAL BANG EQUITIES PVT LTD

29

SWOT ANALYSIS ABOUT NIRMAL BANG

STRENGTHS: 23 years of research and broking experience Understandings of the markets All financial needs under one roof Scalable and robust infrastructure Full fledge research unit comprising of both fundamental & technical research Dedicated, Qualified and Loyal staff Flexible Brokerage charges WEAKNESS: Low Brand Image in the market. Low Professionalism Low Advertisements OPPORTUNITY: Large potential market for delivery and intra-day transactions. Open interest of the people to enter in to stock market for investing Attract the customers who are dissatisfied with other brokers & DPs. Up growing markets in commodity and forex trading

THREATS: Decreasing rates of brokerage in the market. An Increasing competition against other brokers & DPs. Day to day growing completion, Non availability of Employees, Growing technologies for analysis of markets etc. An Indirect threat from instable stock market, i.e., low/no profit of NIRMAL BANG's clients would lead them to go for other broker/DP.

Witness the power of change at Nirmal Bang! Be the revolutionbe the change

30

Chapter 3

31

RESEARCH METHODOLOGY

Research in common parlance refers to search of knowledge. Research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. D. Slesinger and M. Stephenson in the Encyclopedia of Social Sciences define research as the manipulation of things, concepts or symbols
32

for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art. In short, the search for knowledge through the objective and systematic method of finding solution to the problem is research.
OBJECTIVES OF MY RESEARCH: The purpose of research is to discover answers to questions through the application of scientific procedures. My objective in doing this research report: 1. To study in detail the trading system in India. 2. To help potential investors to understand the commodity market trend 3. To study in which way the broking companies are assisting investors. 4. To understand the interest of investors in different investment options. The research I have done is explanatory in nature. And I am trying to explain the best market to invest in by comparing a commodity from others.. The price fluctuations, and the increase or decrease in profits and also comparing the views of people about markets and investment options available.

DATA COLLECTION:
Data collection is a term used to describe a process of preparing and collecting data, for example, as part of a process improvement or similar project. The purpose of data collection is to obtain information to keep on record, to make decisions about important issues, or to pass information on to others. Data are primarily collected to provide information regarding a specific topic. Data collection usually takes place early on in an improvement project, and is often formalized through a data collection planwhich often contains the following activity. 1. Pre collection activity agree on goals, target data, definitions, methods 2. Collection data collection 3. Present Findings usually involves some form of sortinganalysis and/or presentation.

33

Prior to any data collection, pre-collection activity is one of the most crucial steps in the process. It is often discovered too late that the value of their interview information is discounted as a consequence of poor sampling of both questions and informants and poor elicitation techniques. After pre-collection activity is fully completed, data collection in the field, whether by interviewing or other methods, can be carried out in a structured, systematic and scientific way. A formal data collection process is necessary as it ensures that data gathered are both defined and accurate and that subsequent decisions based on arguments embodied in the findings are valid. The process provides both a baseline from which to measure from and in certain cases a target on what to improve. Secondary data collection and analysis was performed. Secondary datawas collected from various sources such as websites, financial magazines and newspapers and financial management textbooks.

OBJECTIVE OF THE STUDY

The main and foremost object of my study is to identify the overall structure of a well reputed Financial based organization. To study the concepts of commodities trading in India. To study of the various trends in commodity trading To make understand the process of future commodity trading in India. To know the investment pattern of commodity traders and people. To assess the social commitment of a fast growing business. To study in detail the role of futures and forwards. To analyse the present situation of the commodities in Indian market and suggest for any improvements thereafter. To gain first-hand experience from a Financial based industry etc.

34

METHOD OF STUDY

Various methods were used to conduct the study. The data used were collected through; Various softwares and Company websites. [www.moneycontrol.com, Forexfactory.com , Squareindia.com] Different Magazines & Articles. [Business Today, Business world, Indian financial system etc.] Different levels of Employees and from Sub brokers in Nirmal Bang Etc.

35

LIMITATION OF THE STUDY

The data collected is completely restricted to Nirmal Bang Securities Pvt.Ltd. Bangalore ofJuly September 2012, hence this analysis cannot be taken universal. The study was limited to only the main significant investment options in commodity market. Most of the information collected is secondary data. The data is compared and analyzed on the basis of performance of the investment options over the past five years. While considering the returns from mutual funds only top performing schemes were analyzed. It was very difficult to obtain the date regarding the details of returns of each investment history.

I havecollected most of the information about the company from my external guide and from the written works etc.

36

VARIOUS INVESTMENT OPTIONS IN INDIAN COMMODITY MARKET

37

GOLD AS A COMMODITY

38

Since 2000, investors have been buying historically unprecedented volumes of gold as long-term investments. Those involved in this modern day gold rush have ranged from individuals around the world to sophisticated institutional investors, fund managers, and the family offices of high net worth individuals; and from developing countries to major industrialized nations. Investors have many good reasons to invest in gold. Some are buying gold to protect their wealth from the impacts of inflation, recession, currency market upheaval, and financial market crises. Others are buying gold to capitalize on the shifts in economic and financial markets. Given the ravages of financial markets worldwide in 2008 and 2009, buying gold has become the hedge of choice against calamity. Even before the economic and financial problems associated with the Great Recession of 2008 and 2009 surfaced, investors were in the midst of this gold buying spree. The period of intense investor accumulation of gold began in 2001, following the stock market bubbles popping and a slide into recession in that year. Between 2001 and 2009, investors bought 356.8 million ounces of gold in bullion bars and coins, more than ever before in any surge of demand, even during the Great Depression and World War II. The buying of gold has never stopped. In fact, investors have added more gold to their collective gold bullion holdings between 2000 and 2010 than is estimated to have been accumulated by investors throughout all of history up to 1967. It would be a mistake only to focus on the current period of historically strong investment demand for gold. The fact is that gold always makes sense as an investment. The wisest and wealthiest people in the world, including famous institutional investors and billionaires, keep a portion of their assets in gold, silver and other precious metals as a hedge against various potential problems and as a portfolio diversifier. Recently, many investors have been buying gold investments because they were seeking to diversify their portfolios of stocks and bonds. Others have increased their gold holdings as a hedge against currency market volatility, not only in terms of the U.S. dollars exchange rate but out of concern about a wide range of currencies. Others have bought gold because they are concerned about the stability of financial institutions at whichthey house their assets, or inflation, or overall economic, financial, and political calamities. Still others have been buying gold as a commodity, because they expect the gold price to rise based on the metals fundamentals of supply and demand.

39

Whatever the reason, gold bullion investors did better in 2008 than any other major class of investors, and in general have done very well over most of the past decade due to their investments in gold and gold equities. In the final analysis, gold is a financial asset. It also is a commodity: The price of gold rises and falls based on its role as a financial asset, like acurrency, a stock or a bond, that investors buy and sell based on a complex web of factors. More importantly, gold has been a financial asset, a store of value and an investment that has held itsown for five millennia. Gold has stood the test of time repeatedly and has outlasted all other financial and monetary assets. Throughout history, gold has served three functions. It has been a financial asset, held by individual investors as a store of wealth and a portfolio diversifier. It has been a commodity, used primarily in jewelry but also in electronics, dentistry, and many other applications. Finally, it has been a monetary asset, used by governments as a reserve asset, as a form of money, and as a backing for their own currencies. Central banks have moved away from using gold as money or as backing their own currencies, but they still own nearly one billion ounces of gold as a reserve asset. The central banks of Europe, along with a few others (such as those of Canada, Australia,, THE GOLD PRICE Many factors influence the price of gold. Central banks have historically held large positions in gold; as a result, announcements and activities by those banks have influenced the supply and demand of gold. Fluctuations in the value of the US dollar, political uncertainties and economic concerns around the world, hedging activities by gold producers, and trading activities of speculators also help drive the price of gold. Gold is a physical asset that is accumulated, rather than consumed. This differentiates it from investment assets such as equities and fixed income instruments (which are claims on future cash flows), other commodities such as oil (which are consumed), and paper money (which can be more easily destroyed). Thesetraits are among the reasons why gold may perform differently than other investments. There are several ways that investors may use gold as part of a larger investment strategy. Potential safe haven during political or economic uncertainty; 1. Portfolio diversifier over both long and Short-term horizons 2. Inflation hedge and store of value 3. Hedge against a devaluing dollar.

INVESTING IN GOLD FUTURE

40

Gold futures are exchange-traded standardized contracts that oblige the buyer, to buy a definite quantity of gold at a future delivery date to a price fixed beforehand. The future buyer assumes that the price of gold increases at due date. The contracts are usually settled in cash, without delivery of physical gold. Gold futures are traded on the Commodity Exchange (COMEX) of the NYMEX and the Londoner Bullion Market (LBMA). The advantage of such gold investment is the possibility to bet on rising (long position) as well as falling (short position) gold prices depending on the investors market expectation, without the inconvenience of taking delivery of the underlying physical gold. The market is deep and liquid, and it is quite easy to track the true value of the futures contract by following the exchange price. Trading gold futures eliminates the costs of settlement and significantly reduces the costs of storage. Buying gold futures implies small transaction costs (initial and maintenance margin). An initial margin with 2% of the future value has to be paid up front, and any profit or losswill be adjusted on the down-payment and paid back to the investor net. In case of significant movements in the gold price which could lead to losses, the additional margin (variation margin) is however required. Therefore, the disadvantage is the high risk because of the high short-term volatility of the gold prices.

GOLD PRICES- A CHART ANALYSIS

41

42

43

CRUDEOIL AS A COMMODITY

44

Crude oil accounts for nearly 40% of the global energy demand and its consumption is estimated to be over 85 million barrels per day.Crude oil has wide application and global appeal. When refined, it gives an array of automobile fuels, lubricants, asphalt and petrochemicals. Petrochemical end-products include plastic, detergent, chemical fertilizer, synthetic fiber and rubber. Consequently, changes in crude oil price have considerable impact on world economy. As price rises, cost of transportation also increases. In turn, this raises costs of manufacturing and distribution, adversely affecting end-product prices. This has an industry-wide impact and adds to inflationary pressure. Thus, crude oil is the backbone of today's global economy and it is the largest traded commodity in the world

What makes crude oil a wise investment?

Crude oil is a versatile commodity and its byproducts are used as input for numerous industries. Modern industrial as well as agricultural economy depends upon crude oil. This makes it a good investment in the long run. Crude oil demand is on a rise in emerging nations like India and China and this trend will persist as economic activity rises further. Crude oil market is in tight balance and with increasing demand in emerging markets and dwindling sources of new supplies, price may remain firm in the long term. With steadily rising crude oil prices in India, why should a trader add the commodity to his portfolio? India is world's 4th largest crude oil consumer with consumption at 3.1 million barrels per day. India imports almost 70% of its total consumption. Crude oil is the biggest component of India's import basket and its price affects overall economy. Rapid economic development is expected to further increase its consumption. Indian commodity market is growing and crude oil is one of the most traded commodities on domestic bourses.

Crude Oil Description

Update

Crude oil which is also known as petroleum is a flammable liquid that is naturally occurring. In other words, it is a fossil fuel. It is a complex mixture of hydrocarbons.
45

Crude oil is an important commodity, used in many countries for various purposes. The most common use of crude oil is gasoline. The oil is refined and separated, which is done most often by boiling. Different compounds in the crude oil reach boiling point at different levels, making separation of the compounds an easy task. Heavy crude oil is widely available but is not ideal for refinement, taking longer to process and having more waste product. Light crude oil is the best type to use for refining and is most readily found in Arabic countries. What Increases the Price of Crude Oil?

Strong oil reserves Politics Limits Supplies Every nation has resources. Political systems contrive shortages, by making some resources more difficult to access. Governments (see OPEC cartel) create artificial shortages. Even rare elements like... Resource is Limited When resources are limited, they are impossible to replace. If demand for a resource stays the same, then a decreasing supply will increase the price of the resource. This happens whenever OPEC, an...

What Decreases the Price of Crude Oil?

Emits Carbon Carbon emitting products and industries are blamed for global warming. If global warming has a cost on the planet, then that cost should be attributed to the ones creating the problem. Increasing cost... Risks and benefits

Whether we are new to the trading world or a veteran who knows the ropes, the chances are that we have had an earful on whether or not crude oil is a smart option for our investment dollars. Some people in the trading field will tell you that crude oil is something that we want to stay away from, while others will say that as an investment crude oil is actually a way to help us gain nice profits. So, which outlook are you to believe? As a smart investor, new or old, taking a good look at all of our options is the only way to find out what is best for us and our investment funding. Certainly, in order to make the best possible decision on whether or not you should invest, it is necessary to take a look at the various aspects of crude oil. When it comes to crude oil, natural gas, unleaded gasoline and heating oil, you should know that they could be the perfect avenue for big profits with a number of advantages. Energy markets end up being volatile in nature. This volatility and price movement is needed in order to gain decent profits in the trading world. Once you learn how to properly
46

manage risk, you could be able to take this market volatility and turn crude oil investing into into profits. The bottom line is, there is money that can be made from crude oil. When you go into such investing with your eyes open with a grasp on how this trend works, then you will have a better chance of higher profits with less risk. Certainly, every single investment has a potential level of risk as well as reward. As an investor, you always hope for a decent return as a reward for the risks that you put in front of you. Knowing how to weed out crude oil investment schemes will help you to put your best foot forward as you trade. Take the time to look into all of the research and numbers that are available to you regarding all of the potential crude oil investments that are out there. There are a number of publications and online outlets where you can get the latest numbers and reports on crude oil and related investing. At the same time, be sure that you keep track of supply and demand, as well as the fluctuations that take place from season to season. Additionally, various news stories and political situations going on around the globe can have quite an impact on how you should be planning out your crude oil investments. When it comes to seasonal trends, you will see that the market and the trading patterns where crude oil is concerned will change greatly around holidays or changes in the weather. During the summer months, driving season will kick into full swing and gasoline will be very high in demand. On the other end of the spectrum, during the winter months heating oil tends to rise in prices as the demand gets higher. The general rule in trading in this case is that price actually precedes consumption. This means that the prices can fluctuate in anticipation of the upcoming need. As you look around for ways to invest in crude oil, you will see that there are many opportunities for trading. For starters you have crude oil companies of all kinds including major petroleum companies along with medium sized oil companies. The bigger petroleum companies have huge reserves and are generally traded publicly all over the world. There are exchange traded funds to name a few. When it comes to some of the independent oil companies that are out there, you will see that there are thousands throughout the United States that actually give you the option to take your money and turn it into an investment in their various products. There are a number of risks involved in such a trading venture. You simply have to make sure that you go back and do all of your research if you decide that this may be where your money is best suited to your level of comfort in terms of investing. My choice is in the NYMEX crude oil options on Futures. I can provide you with ideas on trades such as should you write options or trade spreads or just outright futures.

47

No matter what you decide to invest in, when it comes to crude oil or any other type of investment; you should never invest any more than you can actually afford to lose. Since there are so many risk factors involved in crude oil trading, it is important that you take into account any potential wars, the fact that accidents and oil spills can always happen or even the economy will come into play as you look to the future and your potential for a good return. All in all, crude oil investing is a smart way to make a decent return as long as you go into the venture knowing all of the possible risks.

ITS AWISE INVESTMENT BECAUSE..

1. New discoveries. Worldwide oil demand might be off. But its temporary. And even if demand miraculously plateaus (dont count on it with gas below $2 per gallon), the world would still need to replace one Saudi Arabia per three years, according to Petrobras CEO. No other company is making bigger discoveries than Petrobras. In fact, the companys recent finds could triple its reserves. And as we all know, the country with the oil is always in control! 2. Long-term focus. With crude below $40 per barrel, most oil companies are cutting back on exploration and development. Not Petro bras. They plan to spend $174 billion by 2013, which ensures theyll have plenty of products to sell when oil prices climb higher. 3. Low cost. Management estimates it can be profitable on new projects, even if crude oil stays around $45 per barrel. Few if any other major oil producers can claim such a low hurdle rate. Basic economic principles govern here the low cost provider of a commodity enjoys the most profits when prices rise. And share prices often go along for the ride, too. 4. Deep-water expertise. All the easy-to-find crude oil is gone. But Petrobras is an expert in deep-water exploration. Thats a competitive advantage no other oil company can touch. And it should continue to help Petro bras add reserves at much lower costs than its peers. 5. Valuation. Emerging markets took it on the chin twice as hard as the United States despite stronger underlying fundamentals. Its pointless to argue whether or not it was deserved. What matters is many high-quality stocks got caught up in the downdraft and now trade at mouthwatering levels. Petro bras is no exception, trading for less than 10 times earnings.

48

49

Chapter 4

50

ANALYSIS AND INTERPRETATION

51

INTERPRETATION: Talking to people gave a clear point on why people do not invest in markets. Many people tried out investing in commodities, stocks, mutual funds etc. but because they had to bear loss once they left it and never tried again. And here also, the bad experience of one person affects the interest of the other.

GOLD AND CRUDE OIL: After the analysis of prices of gold and crude oil it was found out that gold and crude oil prices are interrelated.

GOLD
1.5 1 0.5 0 -0.5 -1 -1.5 -2 -2.5 -3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

CRUDE OIL
2 1.5 1 0.5 0 -0.5 -1 -1.5 -2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Gold is often seen as a wealth preserver during inflationary periods rather than a get-rich-quick investment opportunity. A balanced portfolio can certainly
52

include gold as a portion. Any investment strategy, though, that relies heavily on gold is a bet against the dollar. With this in mind, gold investors and speculators need to approximate when they expect the dollar to rebound and plan accordingly. Investors interested in riding the gold bull need to research more than just the oil-gold relationship as a basis for decisions by considering the other factors in play. Some long-term studies show gold also to be strongly correlated with economic indicators other than oil prices, such as the S & P 500 and 10-year Tbills, according to a Gold-Eagle editorial. Also there are other factors that influence the price rise and fall of gold prices like value of dollar, production of gold, demand of jewelry and central bank reserves.

THE DOLLAR AND COMMODITY: When analyzing the four sectors of the economy, the path to take is to start with the dollar, move into the commodity market, then the bond market, and finally the stock market. The connection of the dollar to stocks and bonds is more complete and makes more sense when analyzed through the commodity markets. We can see this if we begin with the stock market and work backwards toward the dollar. The stock market is reactive to interest rates and thus, movements in the bond market. A rising dollar has no effect on inflation. A rising dollar usually produces commodity that are lower. A fall in commodity prices leads to higher bond prices and lower interest rates. A falling dollar has the converse effect: it is bearish for bonds and equities and bullish for commodities.
53

BONDS AND COMMODITY PRICES: The relationship between bonds and commodity prices is one of the most important relationships in the intermarket area. The inverse relationship between treasury bond prices and commodity market shows the connection between financial sector and commodity sector that in effect shows a tie between the stock market and the commodity market. The inverse relationship between commodity market and bond prices can be documented. If we know that bond prices and bond yields move in opposing directions and that commodity prices and interest rate yields head in the same direction, then we establish that commodity prices and bond prices move in the opposite directions. These relationships do exist.

54

Chapter 5

FINDINGS AND SUGGESTION

55

FINDINGS;
The study that conducted at M/s Nirmal Bang Securities Pvt.Ltd. in Bangalore found out the final following facts;In my view, the main objectives of Nirmal Bang are to provide improved quality investment opportunities to customers and build up the public image of the company through better intermediary techniques. Majority of people prefer in investing in commodity market. People who invest in stock market have an experience in stock market 2 to 4 years. Most of the people do not want to invest in stock market more than 2 lakhs. Many people who invest totally depend on brokers and dealers. People feel that commodity market and currency market is more profitable than stock market. Most of the respondents prefer to buy shares worth Rs 50 to Rs100. It was found out that the Commodity prices fluctuate more than equity prices. The study reveals that the people with less income level were also taking interest in investing in equity market Qualified, experienced and hardworking employees are the assets of Nirmal Bang. For facing the competition confidently and courageously, Nirmal Bang tries to develop wide variety of services and create contact points with emotional values. The Company has a formal mechanism to evaluate the Performance of Employees.

56

SUGGESTIONS;
From the studies and observations, I noticed certain limitations, so based on these facts, put forward some recommendations: . TO COMPANY:. By the competition, Nirmal Bang is ranking below, facing the threats and challenges it should strive to come out first. By providing additional facilities, the company may be able to increase its target marketing, delight the customer and expand its business lines Company shall have to concentrate on those people who are not investing in equity market because of risk, then convert them in investing in other securities like mutual funds, bonds etc. Reduction of Brokerage fee according to the competition is a must factor for the company to survive. The researcher found out that only 70% of account holders in the company are using it and are involved in trading. The company should focus on the rest 30% who are idle and not investing Majority of investors (53%) are investing secondary market and very few (18%) are investing in primary market. So, here broking firms should promote to their clients for investing in primary market. Broking firms or companies shall promote investment in currency market as it is said to be the future. Stock broking firms shall also provide better services to the investor to increase the satisfaction level of the investors. TO INVESTORS: Investors should not invest only in equity market but, also invest in other safe securities like- Fixed deposits, government securities, bonds, mutual funds, insurances etc. Investors should select company based on Profit Earning ratio, Current Growth of the company and market capitalization.

57

LEARNING EXPERIENCE
It was a great experiences to work in a fully Financial based company and it give me an exposure as to how the Financial markets work and how the fluctuations in this field affects investors, were I learned many things about the function of an organizations in accordance with the present market trends. The main purpose of organization study is to make the student acquainted with the practical knowledge about the overall functioning of the organization which took place in perfect manner in the present economicset up. It gave me an opportunity to study the human behavior and also makes a person ready to face the different situation which he could normally come across while on work in the office or factory environment. The interaction with the industry gave me an insight and a firsthand experience of the industrial scenario in the competitive environment outside the realms of the institute. It was actually collecting all the required data from the organization in the first week to have an understanding about the company and its operation in the market along with the competitors. On the first day of the training, external guide detailed me very clearly about the guidelines to be followed with respect to maintain discipline and decorum of the organization during the project. After the initial ice broiling session, I was asked to indirect with the various departmental heads, and it was great interaction with them and I came to know the real situation duties and responsibilities as well as the functions of various sections in the organizations.

58

The atmosphere was so friendly and I did not feel any difficulty during the whole training period of 60 days which gave me a great deal information and know ledge as to how the organization really functions. The project provided an opportunity to relate class room learning with the reality of management and financial concept. I also learnt how the companies always try to feel the pulse of the customers, because customers are purpose of the business. More opportunity, I was able to understand the different marketing tactics of the companies to attract to the new investors etc.

59

CONCLUSION
Commodity markets are not as commonly believed. In many ways, they operate just as public marketplaces or auctions. For instance, prices ofcommodities on an exchange are determined solely bysupply and demand conditions, which is no differentfrom the way in which prices are determined in morefamiliar markets. In addition, commodity margins areanalogous to the down payment one generally makesin connection with a real estate transaction. Oncecertain facts are understood, one can see thatcommodity markets are an integral part of a well-runeconomy. After trading is finding favour with Indian investors and is been seen as a separate asset class with good growth opportunities. For diversification of portfolio beyond shares, fixed deposits and mutual funds, commodity trading offers a good option for long-term investors and arbitrageurs and speculators. And, now, with daily global volumes in commodity trading almost two years that commodity touching three times that of equities, trading in commodities cannot be ignored by Indian investors.

60