SHIV SHAKTI International Journal of in Multidisciplinary and Academic Research (SSIJMAR) Vol. 4, No. 1, February 2015 (ISSN )

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1 SHIV SHAKTI International Journal of in Multidisciplinary and Academic Research (SSIJMAR) Vol. 4, No. 1, February 2015 (ISSN ) Investment Options In Capital Market- An Empirical Study On Coimbatore Capital Limited M.PADMINI Assistant Professor, Department of Management Studies, M. Kumarasamy College of Engineering, Karur , K.SINDHUJA Department of Management Studies, M. Kumarasamy College of Engineering, Karur , R.KUMARA KANNAN Assistant Professor, Department of Management Studies, Francis Xavier Engineering College Tirunelveli Impact Factor = (Scientific Journal Impact Factor Value for 2012 by Inno Space Scientific Journal Impact Factor) Indexing: 1

2 Abstract: It paper has been carried out at Coimbatore capital. Coimbatore capital is one of the Leading brokerage house in India and it has been emerged as a power house in the financial services industry. The main objective of the study is to identify the benefits of investing in Capital market to retail investors, and comparison between the capital market Investment which other financial institution, which will be useful to the organization for attracting more numbers of customers. Primary data were collected through structured interview schedule. Secondary data are collected from websites, journals and books. The suggestions from the respondents are useful for the organization to develop their capital market benefits. The researcher has prepared the interview schedule and the data s are collected from the existing customers and the present customers through survey method. After the survey, the researcher has analysed through various critical methods. The findings and suggestions will be discussed in the forthcoming chapters. Key word: ANNOVA, Simple weighted average 2

3 INTRODUCTION The economic growth and liberalization in India has a positive effect on the capital market. As the stock markets boom, more people tend to invest in the capital markets. The investors may take their own decision and sometimes they will consult the stockbrokers regarding buy or sell the securities. The stockbroker utilizes the expertise of the research department of his firm to provide this kind of information and the people involved in such research called securities analysts or market analysts. The main aim of the security analyst is to research and evaluate companies and their profitability and also the indications of growth and expansion of the company. In India, Securities and Exchange Board of India (SEBI) is the authorized body which regulates the operations of stock exchanges, banks and others financial institutions. Similarly, other countries have their regulating body and licensing authorities who regulate the operations of capital markets and finance professionals in the respective countries.they should be able to handle heavy work load, priorities and complete work under strict deadlines, work as a part of the team and able to keep abreast of new technologies and development in this field. Volatility is the variability of asset price changes over a particular period of time. It is very hard to predict it correctly and consistently. In capital markets, volatility presents a strange paradox to market participants, academicians and policy makers. Without volatility superior returns cannot be earned, since a risk free security offers small returns. However, there is no easy answer to the question of which model should be used to calculate volatility since different volatility models which are being used by practitioners lead to different volatility estimates. In the past two decades, this has been a fertile area for research in financial economics for both academicians as well as practitioners. Unfortunately, most of the work was done in developed markets in the context of stock and forex markets. COMPANY PROFILE Coimbatore Capital Limited (CCap) was promoted by industrialist and financial expert Mr.D.Balasundaram is a Founder and Director of Coimbatore Stock Exchange Limited and Inter Connected Stock Exchange of India Limited. One of the leading regional exchanges in India is Coimbatore Capital. It offers complete financial solutions that encompass every sphere of life. From commercial banking to stock broking of mutual funds, investment banking, the group caters to the financial needs of the individuals and corporate. Mr.Balasundaram is a Member of Executive Committee of the National Stock Exchange of India Limited (NSE) and also served as an Executive Committee Member of the National 3

4 Securities Depository Limited (NSDL) earlier. Mr.Balasundaram also served as an elected President of Indian Chamber of Commerce and Industry, Coimbatore and Coimbatore Stock Exchange Limited. Coimbatore Capital was founded with a vision built on the concept of ' Enrich Yourself ' for the future. As Chairman of Coimbatore Capital and its associate companies, he has been instrumental in building the business model for Coimbatore Capital. The accolades that Coimbatore capital has been graced with include :. Prime Ranking Award ( )- Largest Distributor of IPO s Finance Asia Award (2004)- India s best Equity House Finance Asia Award (2005)- Best Broker In India Euro money Award(2005)- Best Equities House In India Coimbatore Commodities Limited (CCOM): Coimbatore Commodities is a wholly owned subsidiary of Coimbatore Capital which extends trading in the Commodity derivatives. Coimbatore Commodities is a Member of National Commodities and Derivatives Exchange Limited (NCDEX) and Multi Commodities Exchange Limited (MCX). Trading in commodities is extended in strict compliance with statutory rules and regulations. All regular updates come though SMS alert in all mobiles. It has helpful for the investor to invest their money in stock market. In south India one of the most trusted and reputed investment services company is Coimbatore Capital. It has a wide array of wealth creating solution for a growing client base in South India. In the year 1995, the company emerged as one of the best stock broking houses focusing on the retail segment in South India. It has over 150 terminals / branches across South India and they servicing more than 70,000 customers and a coverage of 187 cities and headquarters in Coimbatore. Coimbatore Capital is focusing on expanding its reach to semi urban and rural areas. Coimbatore Capital Account Its basic account that allows doing trading over the internet and phone.offering ease and convenience. Coimbatore capital Gateway Account can be activate with any amount less than Rs. 1,00, 000/- as margin, by way of cash or stock. The customers can also have 4 times exposure on the margin. 4

5 Services Offered by Coimbatore Capital 1. Margin Finance Coimbatore capital Securities is the first online websites to provide with margin finance. This means that one can invest in stocks by paying only 50% of the actual money due. 2. Instant Credit on Delivery Trades Instant credit for delivery marked trades is a great product advantage offered by Coimbatore capital securities. When one sells his shares, he do not realize the payment immediately. The exchange makes the payment to the broker according to the settlement calendar. After receiving payment from the exchange from the exchange the broker makes payment to the client. Realization of the sale proceeds of the shares take anywhere between 4 days from the days from the date of the sale depending on what day of the trading cycle the shares were sold. 3. Call and Trade Facilities Call and trade enables customers to trade while on the move. With Coimbatore Capital account, customers can trade even when they cannot access the internet. 4. Easy Access to Neat Software Coimbatore capital trading access terminal is the terminal in the customers desktop. With NEAT customers can watch the live ticker rates. Capital Market Concept A capital market is the market where securities are traded. It is in this market that government and companies raise funds for long term. The capital market consists of both the primary markets. The distributions of new issues among investors take place in the primary market. On the other hand, existent securities are traded in the secondary market. In the capital market montages, bonds, equities and other such investment funds are traded. The funds provided by the capital market are both overnight and long term. The financial instruments used in this market have long maturity periods.. The following financial instruments are dealt with in this market Foreign exchange instrument Equity instruments. Insurance instruments. 5

6 Credit market instruments. Derivative instruments. Hybrid instruments. Bond Market: The bond market is a place for buying and selling of debt securities mainly in the form of bonds. The size of the bond market is almost $45 trillion. Stock Market: The stock market forms a major portion of the capital market. In the stock market are traded stocks of companies and their derivatives are listed on the stock exchanges worldwide. The stocks exchanges are places where buyers and sellers of securities and stocks come together under one roof to carry our trade. The important exchanges of the capital market are: a) Major Exchanges 1. National Stock Exchange (NSE) of India 2. Bombay Stock Exchange (BSE) of India b) Regional Stock Exchanges 3. Ahmadabad Stock Exchange 4. Bangalore Stock Exchange 5. Bhubaneswar Stock Exchange 6. Calcutta Stock Exchange 7. Cochin Stock Exchange 8. Coimbatore Stock Exchange 9. Delhi Stock Exchange 10. Guwahati Stock Exchange 11. Hyderabad Stock Exchange 12. Jaipur Stock Exchange 13. LudhianaStock Exchange 14. Madhya Pradesh Stock Exchange 15. Madras Stock Exchange 16. Magadh Stock Exchange 17. Mangalore Stock Exchange 18. Meerut Stock Exchange 19. OTC Exchange Of India 6

7 20. Pune Stock Exchange 21. Saurashtra Kutch Stock Exchange 22. Uttar Pradesh Stock Exchange 23. Vadodara Stock Exchange STATEMENT OF THE PROBLEM Due to LPG the average income has increased considerably.people have various options for saving like banks, investment in gold, fixed assets, insurance, capital market and mutual funds. Investing in shares need some basic knowledge and tactics.how far the investor possesses awareness is a matter of question.also the problem of risk is involved.hence this study is conducted with the above back ground. OBJECTIVES OF THE STUDY i. To know the benefits of investing in capital market to retail investors. ii. Comparison between capital market investments with other financial institution. iii. To determine the existing investors awareness about the capital market. iv. To offer suggestions and recommendations regarding investment in capital market to retail investors. Hypothesis of the study: H 0 = There is no significant relationship between the educational qualification of the respondent and financial instrument in the capital market. LIMITATION OF THE STUDY i. It is not possible to analyse all the aspects in details with in the time allowed. ii. The respondent s responses were not truly representation in nature. iii. The investment pattern analysis has been limited only 100 investors. iv. An interpretation of this study is based on the assumption that the respondent has given correct information. v. The economy and industry are wide and comprehensive that it is difficult all the likely factors influencing the investor s investment pattern in the given period of time. vi. This study limiting factors life time, place and resources. REVIEW OF LTERATUR James M. Poterba and Lawrence H. Summers (1986), in their paper The Persistence of Volatility and Stock Market Fluctuations evaluated the changing risk 7

8 premium hypothesis and examined the influence of changing stock market volatility on the level of stock prices. The study used the tool of autocorrelation, partial auto correlation, and serial correlation. AmitaBatra (2004) in his paper, Stock Return Volatility Patterns in India, analyzed the time variation in volatility in the Indian stock market during Monthly stock returns have been used for analysis. Asymmetric GARCH model has been used to estimate the element of time variation in volatility. This analysis also shows that stock market cycles in India have not intensified after financial liberalization. Janak Raj and Sarat Dhal (2008) in their paper entitled, Integration of India s stock market with global and major regional markets analyzed the factors contributing to growing financial integration. The study used descriptive statistics, correlated and co integration for testing the portfolio return of the capital. It is suggested that for the long run portfolio diversification cannot benefit the investors. Ser-Huang Poon and Clive W. J. Granger (2003) in their study on Forecasting Volatility in Financial Markets: A Review pointed out that the United States have caused great turmoil in financial markets on several continents and a negative impact on the world economy. In this study, it was observed that to measure Performance of the financial market (after the financial crisis) the tools are used by standard deviation, GARCH, time series model, EWMA, ARIMA, etc. S. S. S. Kumar (2006) in his article entitled Comparative Performance of Volatility Forecasting Models in Indian Markets evaluated the ability of ten different statistical and econometric volatility forecasting models to the context of Indian stock and forex markets. The study used tools like Random walk,.historical mean, Moving average, simple regression, Exponential Weighted moving average, Simple and higher order GARCH models. The result showed that during the study period there was heavy volatility in the stock market. METHODOLOGY Scope of the Study: The primary market starts from broad environmental to the industry, which influences the share price and finally analysing the companies, potentiality by considering possible risk associated with securities for investing public. Income and risk factor s play a significant role while selected particular product, so it can create an opportunity for one product and may not 8

9 for other, the analysing impact of income and risk on investment pattern of investors is important. As research reports shows that frequency of investment pattern, factors, income level play more significant role in deciding pattern of investment. So analysing the factors that offers investment pattern of investors criteria provide the valuable insights. Research Design: Random sampling techniques i have used for my present study. Sampling Size: From the investors of capital market 100 respondents were investment at random from various portfolios for the research and I have selected sample by way of questionnaire. Source of Data A capital market is a market for securities like debt or equity, where business enterprises or companies and governments can raise long term funds, in which money is provided for periods longer than a year, as there raising of short term funds takes place on other markets. Indian Tools Used: The statistical tool used here is percentage analysis. The analysis and interpretation has been done using the statistical tools like simple percentage, Chi-square test method. A) Simple Percentage Method: The percentages are often used in data presentation for them simply numbers, reducing all of them to a 100 range. The use of percentage reduces the data in the standard from with base equal to 100 that facilitates relative comparisons. No. of respondents Percentage method = Total no. of respondent B) ANOVA It is a statistical technique specially designed to test whether the means of more than two quantitative populations are equal. It consists of classifying and cross classifying statistical result and testing whether the means of a specified classification differ significantly. 9

10 DATA ANALYSIS AND INTERPRATION Age Group of the Respondent S.no Particulars NO. of Respondents Percentage yrs yrs yrs yrs Above 40 yrs Total Income Level of the Respondent S.no Particulars NO. of Respondents Percentage Above Total

11 People awareness in Capital Market S.no Particulars NO. of Respondents Percentage 1 Well Aware Medium Total Preference of Investment in Coimbatore capital Ltd S.no Particulars NO. of Percentage Respondent 1 Long Term Investment Short Term Investment Total

12 100 PERCENTAGE 0 Short term investment Long term investment Preferences towards Level of Risk and Return in Capital Market S.no Particulars NO. of Respondents Percentage 1 High Risk & High Return Medium Risk & Medium Return Low Risk & Low Return TOTAL high risk and high return medium risk and medium lowrisk and loe return The level of growth in Financial Markets S.no Particulars NO. of Respondent Percentage 1 Highly Satisfaction Satisfaction Neutral TOTAL

13 highly satisfaction satisfaction neutral Choice towards the Investment S.no Particulars NO. of Respondent Percentage 1 Mutual Fund Portfolio Management Services Individual Trading Unit Linked Products TOTAL PERCENTAGE Mutual fund portfolio management services individual trading unit linked products Impression towards Primary and Secondary Market S.no Particulars No. of Respondent Percentage 1 Primary Market Secondary Market Both TOTAL

14 100 Percentage 50 0 Primary Market Secondary Market Both Return based Analysis of Portfolio S.no Particulars No. of Respondent Percentage 1 Mutual funds Fixed deposit Real-estate Share/commodity/market Other investment option Total PERCENTAGE Mutual Fund Gives Better Returns in the Capital Market S.no Particulars No. of Respondent Percentage 1 Reliance ICICI Prudential SBI Others TOTAL

15 PERCENTAGE 50 0 Reliance ICICI prudential SBI Others Inference: Above 30 years old investors only investing in the stock market compare to youngsters. People know very well about the stock market but the investing levels are very low because of risk fear. Major investors in the stock markets are speculators and they will think to earn more return in the stock market with in stipulated time so they are investing in major stocks are listed above reliance,icici,sbi like that. Mainly people are investing in bank deposits rather than securities. Primary market investors are less than the secondary market and all investors are willing to take medium risk for their investment. Analysis of Educational Qualification of the Respondent and Financial Instrument in the Capital Market Mutual funds Between Groups Within Groups Total Fixed deposit Between Groups Within Groups Total Post office deposit Between Groups Within Groups Total Funds Sum of Square Df Mean Square F Sig

16 Real estate Between Groups Within Groups Total Commodity Between Groups Within Groups Total ANOVA TABLE Factors Df ANOVA F Significant Value Mutual fund Significant Fixed deposit Non-Significant Post office deposit Non-Significant Real-estate Significant Commodity Non-Significant Interpretation: From the above table is inferred that, the p value for instrument variables fixed deposit (0.379), post office deposit (0.364), and commodity(0.300) are >0.05. so, we accept null hypothesis and there is no significant relationship between the instrument variables(fixed deposit, post office deposit and commodity) and the significant level. Since the p value for the instrument variables mutual fund (0.009), Real-estate (0.013),<0.05 so we reject the null hypothesis and accept the alternative hypothesis. So there is a relationship between the instrument variable (mutual fund and Real-estate) and the satisfaction level. FINDINGS i. 34% of the respondents are age has 30-35years in the investors. ii. 29% of the respondents income level is earnings per month. iii. The respondents are well aware in the capital market is 57%. 16

17 iv. The respondents are investing in to short term investment in the capital market 58%. v. 46% of the respondents are satisfied towards speed growth in the capital market. vi. The respondents are impression to investment is both in the capital market is 50%. vii. 25% of the respondents are investing in other for better returns in the capital market. SUGGESTION i. The investors must be made aware of the pros and cons of each area, so as to help to decide upon which area to choose. ii. The study shows that only less member of people invest in mutual funds, which is now a major area of investment. iii. This is because of the fact that they are unaware about the mutual fund. iv. Therefore the company should give proper guidance in this matter. v. The company should treat their investors more friendly so as to both existing customers as well as new customers. vi. Conferences and meetings need to be arranged for the investors, to clear all their doubts and to increase the scope for investment.so that they can take investment decisions. CONCLUSION Investor s awareness is more important in the capital market. Companies performing well naturally attract more investors where investment in cash segment.mutual funds is found to be more attracting investment option in nowadays. Medium risk and medium return is mostly preferred by investors. Since market condition is not always the same, investors need to change their option according to market conditions. The investors need to be educated on the matters of terms, risks and returns. It is highly essential that the players and regulators should protect the interest of individual investors and thus create confidence in their mind. This interest shown towards them will help in retaining the investors and attracting new ones in the long run. Capital Market is an emerging market. This study helps the investor to make an investment and to know the percentage of investors in t he capital market as well as various portfolios. 17

18 REFERENCE Bibliography: 1. Ser-Huang Poon and Clive W. J. Granger1 (2003), Forecasting Volatility in Financial Markets: A Review,Journal of Economic Literature Vol. XLI, No S. S. S. Kumar (2006), Comparative Performance of Volatility Forecasting Models in Indian Markets, Asia Pacific Journal of Management,Vol. 33, 2 3. Jean-Philippe Peters (2001), Estimating and forecasting volatility of stock indices using asymmetric GARCH models and (Skewed) Student-t densities The IUP Journal of Applied Finance, Vol.16, No AmitaBatra (2004), Stock Return Volatility Patterns in India International research journal of Finance and Economics, Issue Janak Raj and Sarat Dhal (2008), Integration of India s stock market with global and major regional markets, Springer Publication, Mumbai. 6. Jian yang1, James W. Kolari, and Insik Min (2002), Stock market integration and financial crises: the case of Asia,JEL Classification: G15, C HojatallahGoudarzi, C. S. Ramanarayanan (2010), Modeling and Estimation of Volatility in the Indian Stock Market International Journal of Business and Management,Vol 5,No Ser-Huang Poon, Clive Granger (2002), Forecasting Volatility in Financial Markets: A Review, JEL classification: A10, C10, C50, G James M. Poterba and Lawrence H. Summers (1986), The Persistence of Volatility and Stock Market Fluctuations, American Economic Association, Vol. 76, No Aggarwal R, C.Inclan and R Leal, 1999, volatility in Emerging Stock Markets, Journal of Financial and Quantitative Analysis 34(1),33-55 WEBSITES: