CHAPTER-5 LITERATURE REVIEW AND SAMPLE PROFILE 5.1 LITERATURE REVIEW: Legal Aspects of Internet Stock Trading in Brazil - By Alexandre Ramos Coelho: This paper presents the structure of the Brazilian stock market. It covers the concept of Internet in Brazil and the relevant legal aspects it has raised. It also covers the statement of the legal and operational aspects that are directly affecting the buying and selling of stocks via Internet in Brazil. Legal Issues Regarding Spatial Data - By Rados SUMARADA, Slovenia: This paper presents the general legal provenance, regulatory development and its implementation in the field of GIS technology in Slovenia. The copyright security, privacy protection and liability issues regarding the spatial (geographic) data sets in general are outlined. Further on protection of spatial databases and quality assurance for spatial data in the country of economic, social and political transition are discussed. The outlined problems are presented in the light of legal provision and its practical acceptance for public services and private enterprises. The main stress is addressed on the spatial data sets that are produced and maintained by the geodetic service and the surveying branch, which are kept in the large official databases covering the whole country. 130
Online Trading and the National Association of Securities Dealers Suitability Rule: Are Online Investors Adequately Protected? By Renee Barnett, 2001. This paper presents that online trading has enabled increased access to the securities market. Encouraging investment in securities can be good for both individual investors and the economy as a whole. Yet to preserve the benefits created by online trading, investor protection is imperative. One aspect of this protection is the clarification of suitability obligations online. The difficulty in determining what constitutes a recommendation online makes investor protection difficult. This difficulty is further complicated by online brokers aggressive advertising campaigns. Unsophisticated investors are particularly vulnerable to the potential pitfalls of online trading. Therefore, to encourage these investors to continue participating in the securities market for the long term, they should be protected now through the use of suitability checks for all the orders they place online. In addition to suitability checks, regulators should continue investor education initiatives and strongly encourage online brokers to better educate their customers. The SEC, Retail Investors and the Institutionalization of the Securities Markets. - By Donald C. Langevoort. This paper presents the SEC at age seventy-five should not seek a make-over to look as attractive as some of the younger agencies around the world, but rather should sit back and let them go through the pain that will inevitably accompany their adolescence. If the natural evolution of global securities markets were steadily in the direction of greater retaliation, then that would probably be good ad-vice. But if institutionalization truly is the future, both in the United States and around the world, then the layers of retail investor driven regulation that have accumulated over the last seventy-five years will surely weigh more heavily going forward. 131
Investigating the nature of investor s grievances and assessing the role of the grievance redressal agencies - By Keyur Mahesh Nayak Laxmi Institute of Management, Sarigam, Gujarat, India - 1 March, 2010. The present study seeks to examine the nature of investor s grievances and assessing the role of grievance redressal agencies. The respondents were selected by convenient random sampling technique in Valsad district of Gujarat State. The relevant data on the investor s demographic profile, Knowledge about various grievances, awareness about the functions of various grievances redressal agencies, loading of complain and their satisfaction level were collected by distributing the structured questionnaire to the investors who are actively involved in securities trading. The chi square analysis shows that there is significant difference between the various demographic variables and investor s knowledge of grievances, awareness of functions of redressal agencies, loading of complain and their satisfaction level. Survey of online trading websites - By Australian Securities and Investments Commission, August 2000. This paper presents use of online brokers to conduct securities transactions on the Australian Stock Exchange have grown in an extraordinary way. Retail investors have embraced online trading as a cheap and easy method to buy and sell securities. This growth in online trading and the corresponding increase in securities trading generally by retail investors, signaled a possible concern for the Australian Securities and Investments Commission (ASIC) in terms of its responsibilities to protect and educate retail investors and promote market efficiency and integrity. This report details the findings of a survey of online trading websites undertaken by ASIC in late March 2000. 132
Online Stock Trading in India: An Empirical Investigation, by Nidhi Walia and Ravinder Kumar, Indian Journal of Marketing, 2007, volume XXXVII Number 4. As financial system is becoming more complex it has become need of the hour where investors should comprehend the data and understand recent intricacies of online trading. In Indian context e- trading is relatively new phenomenon, which has yet to gain some significant meaning. In the past investors have no other option to get market information except to contact their local broker? But Internet trading in stock market is becoming medium of exchange whereby investor can order stock exchange on simple mouse click sitting at his place. Keeping in view current market requirement an attempt has been made in this research paper to analyze current status of online trading in Indian scenario. Facts highlighted in this study clearly reveal that although online trading is picking up its speed to tap investors yet it is expected to adopt creative strategies to lure customers from physical trading to net trading. 5.2 SAMPLE PROFILE: The practical aspect starts from here. The survey was conducted in online trading investors. The researcher can successfully collected data from 344 respondents. The method of sampling is used here that is convenience sampling. This chapter covers the profile of the sampled respondents like gender, education, age, occupation, monthly income and demat and trading account. The above mentioned aspects can be seen from the table 5.1 to 5.6 which are as follows: 1. AGE GROUP: The online trading investors are distributed in different age group. That is below 25 years, 26 to 35 years, 36 to 45 years and above 45 years. The above mentioned aspects can be seen from the table 5.1 which are as follows: 133
TABLE 5.1 AGE WISE DISTRIBUTION OF RESPONDENTS AGE AHMEDABAD RAJKOT SURAT VADODARA STATE LEVEL NO. IN % NO. IN % NO. IN % NO. IN % NO. IN % Below 25 17 21 19 19 13 19 11 11 60 17 26-35 14 18 47 48 32 46 38 40 131 38 36-45 20 25 22 22 17 24 13 14 72 21 above 45 29 36 10 10 8 11 34 35 81 24 TOTAL 80 100 98 100 70 100 96 100 344 100 Fig. 5.1 Age wise distribution of respondents 134
The above table and figure indicates age wise distribution of respondents. Ahmedabad has highest number of online traders are in the age group of 45 years and above (36%), closely followed by the age group of 36 to 45 years (25%), below 25 years (21%) and 26 to 35 years (18%) of the respondents. Rajkot has highest number of online traders are in the age group of 26 to 35 years(48%), closely followed by the age group of 36 to 45 years (22%), below 25 years (19%) and above 45 years(10%). Surat has highest number of online traders are in the age group of 26 to 35 years(46%), closely followed by the age group of 36 to 45 years (24%), below 25 years (19%) and above 45 years(11%). Vadodara has highest number of online traders are in the age group of 26 to 35 years(40%), closely followed by the age group of above 45 years (35%), 36 to 45 years (14%) and below 25 years(11%). Overall all 4 cities have different patterns of investment in respect to age. It can be said that in the sample, the investment is more after 26 years onwards. In state level 26 to 35 years age group has highest no of online traders (38%), closely followed by above 45 years (24%), 36 to 45 years (21%) and below 45 years (17%). 2. GENDER: The online trading investors are distributed in different group of gender. That is male and female. These aspects can be seen from the table 5.2 which are as follows: 135
TABLE 5.2 GENDER WISE DISTRIBUTION OF RESPONDENTS GENDER AHMEDABAD RAJKOT SURAT VADODARA STATE LEVEL NO. IN % NO. IN % NO. IN % NO. IN % NO. IN % MALE 61 76 72 73 52 74 75 78 260 76 FEMALE 19 24 26 27 18 26 21 22 84 24 TOTAL 80 100 98 100 70 100 96 100 344 100 Fig. 5.2 Gender wise distribution of respondents The above table and figure indicates sex wise distribution of the respondents. In Ahmedabad 76% is male and 24% is female, in Rajkot 73% is male and 27% is female, in Surat 74% is male and 26% is female and in Vadodara 78% is male and 22% is female. At state level 76% respondents are male and 21% respondents are female. 136
Overall online trading in Gujarat indicates a dominance of males. This is expected too. As males predominate earning members and females have generally less resources than males for online trading. 3. EDUCATION: The online trading investors are distributed in different education group. That is below HSC, graduation, post-graduation and any others. These aspects can be seen from the table 5.3 which are as follows: TABLE 5.3 EDUCATION WISE DISTRIBUTION OF RESPONDENTS EDUCATION AHMEDABAD RAJKOT SURAT VADODARA STATE LEVEL NO. IN % NO. IN % NO. IN % NO. IN % NO. IN % HSC 27 34 7 7 13 19 31 32 78 23 Graduation 30 38 51 52 32 46 49 51 162 47 Post-Graduation 18 23 28 29 20 29 11 11 77 22 Any Other 5 6 12 12 5 7 5 5 27 8 Total 80 100 98 100 70 100 96 100 344 100 Fig. 5.3 Education wise distribution of respondents 137
The above table and figure indicates educational qualification of the respondents. In Baroda educational qualification of investors indicate a higher Percentage of graduates (51%) followed by HSC (32%), Post graduates (11%), (12%) and any other (5%). In Ahmedabad investors indicate a higher percentage by graduates (38%) followed by HSC (34%), post graduates (23%) and any other (6%). In Surat investors indicate a higher percentage of graduates (46%) followed by post graduates (29%), HSC (19%), and any other (7%). In Rajkot investors indicate a higher percentage of graduates (52%) followed by post graduates (29%), SSC (18%), any other (12%) and HSC (7%). Overall state wise investors indicate a higher percentage of graduates followed by HSC, post graduates, any other with 47%, 23%, 22%, and 8% respectively. 4. OCCUPATION: The online trading investors are distributed in occupation wise distribution different education group. That is government employee, business, retired, professionals and others. These aspects can be seen from the table 5.4 which are as follows: 138
TABLE 5.4 OCCUPATION WISE DISTRIBUTION OF RESPONDENTS OCCUPATION AHMEDABAD RAJKOT SURAT VADODARA STATE LEVEL NO. IN % NO. IN % NO. IN % NO. IN % NO. IN % Govt. Employee 8 10 6 6 8 11 18 19 40 12 Business 25 31 30 31 24 34 41 43 120 35 Retired 3 4 6 6 2 3 13 14 24 7 Professional 11 14 38 39 12 17 9 9 70 20 Others 33 41 18 18 24 34 15 16 90 26 Total 80 100 98 100 70 100 96 100 344 100 Fig. 5.4 Occupation wise distribution of respondents The above table and figure explains occupation wise distribution of the respondents. In Ahmedabad occupation wise others are 41%, businessmen are 31%, professionals are 14%.Government employees are 10% and retired are 4%. 139
In Rajkot occupation wise professionals are 39%, businessmen are 31%, others are 18%, Government employees are 6% and retired are 6%. In Surat occupation wise businessman are 43%, Government employees are 19%, others are 16%, retired are 14% and professionals are 9%. In Baroda occupation wise businessman are 43%, Government employees are 19%, others are 16%, retired are 14% and professionals are 9%. Overall state wise 35% respondents are businessmen, 26% are others, 20% are professionals, 12% have Government job and the rest 7% respondents falls under the category of retired. 5 MONTHLY INCOME: The online trading investors are distributed in income wise distribution. That is below Rs. 10000, Rs.10001 to Rs. 20000, Rs. 20001 TO Rs. 30000 and over Rs. 30000. These aspects can be seen from the table 5.5 which are as follows: TABLE 5.5 MONTHLY INCOME WISE DISTRIBUTION OF RESPONDENTS MONTHLY AHMEDABAD RAJKOT SURAT VADODARA STATE LEVEL INCOME NO. IN % NO. IN % NO. IN % NO. IN % NO. IN % Below 10,000 24 30 15 15 13 19 18 19 70 20 10000-20000 29 36 24 24 28 40 42 44 123 36 20000-30000 13 16 32 33 13 19 20 21 78 23 Above 30000 14 18 27 28 16 23 16 17 73 21 Total 80 100 98 100 70 100 96 100 344 100 140
Fig. 5.5 Monthly income wise distribution of respondents The above table and figure explain the annual income from regular sources wise distribution of the respondents. In Ahmedabad 36% of the respondent s annual income is Rs.10000 to Rs. 20000, 30% respondent s income is below Rs. 10,000, 18% respondents annual income is above Rs. 30000 and 16% respondent s income is between Rs. 20000 to Rs. 30000. In Rajkot, 33% of the respondent s annual income is Rs.20000 to Rs. 30000, 27% respondent s income is above Rs. 30000, 24% respondents annual income is Rs. 10000 to 20000 and 15% respondent s income is below Rs. 10,000. In Surat, 40% of the respondent s annual income is Rs.10000 to Rs. 20000, 23% respondent s income is above Rs. 30,000, 19% respondents annual income is below Rs. 10000 and 19% respondent s income is between Rs. 20000 to Rs. 30000. In Vadodara, 44% of the respondent s annual income Rs. 10000 to Rs. 20000, 21% of the respondents annual income is Rs. 20000 to Rs. 30000, 19% of the respondents annual income is below Rs.10000 and 17% of the respondent s annual income is above Rs. 30,000. 141
Overall state wise 20%, 36%, 23% and 21%, respondents annual income is below Rs. 10,000, Rs. 10,000 to Rs.20000, Rs. 20,000 to Rs. 30000 and above Rs. 30000 respectively. 6 DEMAT AND TRADING ACCOUNT: The online trading investors are opened various demat and trading account. That is Reliance Money, India info line, Angel Broking, Geogit Securities, ICICI direct, HDFC securities, India Bulls, Karvy, ICICI-securities, Share khan, City online, Kotak-Securities, Marwadi, SBI-Investment and others. These aspects can be seen from the table 5.6 which are as follows: TABLE 5.6 DEMAT AND TRADING ACCOUNT DEMAT & AHMEDABAD RAJKOT SURAT VADODARA STATE LEVEL TRADING ACCOUNT NO. IN % NO. IN % NO. IN % NO. IN % NO. IN % Reliance Money 13 16 6 6 6 9 1 1 26 8 India info line 3 4 6 6 6 9 5 5 20 6 Angel Broking 17 21 13 13 11 16 2 2 43 13 Geogit Securities 4 5 6 6 3 4 1 1 14 4 ICICI direct 5 6 6 6 7 10 12 13 30 9 HDFC securities 6 8 16 16 5 7 13 14 40 12 India Bulls 3 4 6 6 3 4 1 1 13 4 Karvy 3 4 10 10 4 6 11 11 28 8 ICICI-securities 4 5 5 5 3 4 18 19 30 9 Share khan 10 13 4 4 3 4 7 7 24 7 City online 2 3 3 3 2 3 5 5 12 3 Kotak-Securities 2 3 3 3 3 4 4 4 12 3 Marwadi 3 4 3 3 5 7 5 5 16 5 SBI-Investment 3 4 3 3 2 3 5 5 13 4 others 2 3 8 8 7 10 6 6 23 7 Total 80 100 98 100 70 100 96 100 344 100 142
Fig. 5.6 Demat and trading account In Ahmedabad, 16% of the respondents have Demat and Trading Account in Reliance Money, 4% have in India info line, 21% have in Angel broking, 21%Geogit Securities, 5% have in ICICI Direct, 8% have in HDFC Securities, 4% have in India Bulls, 4% have in Karvy, 5% have in ICICI-securities, 13% have in Share khan, 3% have in city online, 3%have in Kotak-securities, 4%have in Marwadi, 4% have in SBI- Investment and 3%have in others. In Rajkot, 6% of the respondents have Demat and Trading Account in Reliance Money, 6% have in India info line, 13% have in Angel broking, 6%Geogit Securities, 6% have in ICICI Direct, 16% have in HDFC Securities, 6% have in India Bulls, 10% have in Karvy, 5% have in ICICI-securities, 4% have in Share khan, 3% have in city online, 3%have in Kotak-securities, 3%have in Marwadi, 3% have in SBI-Investment and 8%have in others. 143
In Surat, 9% of the respondents have Demat and Trading Account in Reliance Money, 9% have in India info line, 16% have in Angel broking, 4%Geogit Securities, 10% have in ICICI Direct, 7% have in HDFC Securities, 4% have in India Bulls, 6% have in Karvy, 4% have in ICICI-securities, 4% have in Share khan, 3% have in city online, 4%have in Kotak-securities, 7%have in Marwadi, 3% have in SBI-Investment and 10%have in others. In Vadodara, 1% of the respondents have Demat and Trading Account in Reliance Money, 5% have in India info line, 2% have in Angel broking, 1%Geogit Securities, 13% have in ICICI Direct, 14% have in HDFC Securities, 1% have in India Bulls, 11% have in Karvy, 19% have in ICICI-securities, 7% have in Share khan, 5% have in city online, 4%have in Kotak-securities, 5%have in Marwadi, 5% have in SBI-Investment and 6% have in others. Overall state wise, 8% of the respondents have Demat and Trading Account in Reliance Money, 6% have in India info line, 13% have in Angel broking, 4%Geogit Securities, 9% have in ICICI Direct, 12% have in HDFC Securities, 4% have in India Bulls, 8% have in Karvy, 9% have in ICICI-securities, 7% have in Share khan, 3% have in city online, 3%have in Kotak-securities, 5%have in Marwadi, 4% have in SBI-Investment and 7% have in others. 144