A Study On Investment Fre

KIFS Securities Limited
KESs Institute of Excellence in Management Science, Hubli 1 | P a g e

1 Introduction
1.1 Background:
Stock exchanges to some extent play an important role as indicators, reflecting the
performance of the country's economic state of health. Stock market is a place where
securities are bought and sold. It is exposed to a high degree of volatility; prices fluctuate
within minutes and are determined by the demand and supply of stocks at a given time.
Stock brokers are the ones who buy and sells securities on behalf of individuals and
institutions for some commission.
The Securities and Exchange Board of India (SEBI) is the authorized body which
regulates the operations of stock exchanges, banks and other financial institutions. The
past performances in the capital markets especially the securities scam by Harshad Mehta
has led to tightening of the operations by SEBI. In addition the international trading and
investment exposure has made it imperative to better operational efficiency.


1.2 Purpose :
The purpose of doing this project is mainly to understand the different asset classes and to
create awareness about different asset classes.
1.3 Importance of study :
To know the best investment option for individual investors.
To study the investors preference for different asset classes.

1.4 Research objectives :
To know the pattern of investment and factors they consider while investing.
To make comparison of different asset classes.
To analyze the investors preference for different asset classes.
To study the perception towards different asset classes.

1.5 Assumptions and limitations :
Difficulty to make comparison between different asset classes
Lack of accurate data
Difficult to collect relevant data
1.6 Industry & Company profile:
COMPNAY PROFILE
Khandwala Securities is promoted by Jayantilal Khandwala & Sons, one of the large
broking houses in India with over 60 years of experience in Capital Markets and Mr.
Samir S Doshi, a professional member of the Stock Exchange, Bombay, having a wide
experience in various financial activities. The promoter Group today comprises of two
broking firms, five memberships of the Stock Exchange, Bombay and two dealerships of
OTCEI. The Company is managed by the Board and a team of professionals with

considerable experience in capital markets, banking and law. Khandwala Securities
commenced its activities by providing investment and financial consultancy services to
corporate and individual clients. In 1993, the Company was accredited by SEBI as a
Category I Merchant Banker and expanded its range of financial services to achieve a
balanced mix of fund based and non-fund based activities. The Company currently offers
a range of diversified financial services with focus on investment banking and investment
advisory services. The Company is in the process of consolidating similar operations that
are currently under different entities. The Company has embarked upon a further and
extensive exercise of internal restructuring and transparency, in order to achieve global
standards. Khandwala Finances Ltd., a wholly owned subsidiary of the company is being
merged with the company.
About us
KIFS Securities Ltd. (Formerly known as "Khandwala Integrated Financial Service Ltd")
is an established premier stock broking house with a vision to offer broking & financial
services and products is such a way that it leads to optimum gains for the entities involved
in these transactions.
Incorporated by the Khandwala Brothers, KIFS Group started its equity broking business
operations in 1987 and incorporated flagship entity of the group in 1995. Currently, the
Group is engaged in various capital market related operations like equity broking,
commodity broking, arbitrage trading, investment activities, margin funding and
distribution of financial of financial products. All the group companies are held 100%,
directly or indirectly by the promoters.
KIFS Securities limited is the flag-ship company of KIFS Group, and started its broking
operations under corporate license in 1995. Currently, KIFS is engaged in equity broking,
arbitrage trading, depository operations and distribution of financial products.


KIFS SECURITIES LTD. is in the business of shares and stocks broker ship, investment
advisory, financial services and portfolio management in stock markets, debt markets and
derivatives markets. We are also providing dematerialized accounts services.

We are corporate member of National Stock Exchange. We are equipped with
sophisticated infrastructure in various cities in India. We have well qualified human
resources doing research and analysis work. We have a dedicated team to provide support
services to our customers.
KIFS Financial Services Limited (KIFS FSL) is a Non Banking Financial Company
registered with RBI under the Category of Loan Company and is a Subsidiary Company
of KIFS Securities Limited A Khandwala Integrated Venture, Ahmedabad, the flagship
company of the Khandwala group.
The group is into the business of Stock & Commodities Broking, Arbitrage, Depository
Services and Portfolio Manager. The flagship Company of the Croup viz; KIFS Securities
Limited is a member of NSE, BSE, MCX-SX, USE, OTCEI, and DP of NSDL &
Portfolio Manager. One of the other subsidiary companies of KIFS Securities Limited is
KIFS Commodities Pvt. Ltd. which is FMC Registered Commodity broker & member of
MCX, NCDEX and ACE.
Stock broking
This division offers our clients the facility for transacting their trades through the NSE
and the BSE. We serve the investment needs of more than 64000 of our investors through
a country wide branch network and a state of art network infrastructure. We are
committed to providing better quality services to our clients. This client base includes
Corporate, High Net worth Individuals and small retail investors. Our business has
flourished based on strong relationship of trust with our clients that have helped us to
establish a clear leadership position. We provide a range of trading & clearing platforms
comprising NSE Capital Market, NSE futures & Options, NSE Currency Derivatives and
BSE Cash Segments.

Depositary service
We offer Depository services to facilitate a seamless transaction platform as a part of our
package of value added services for our clients. We serve to more than 100000 DP
Accounts across India. We are a depository participant with National Securities
Depository Ltd. (NSDL) for trading and settlement of dematerialized shares. Apart from
being "cost competitive" in nature, brokerage services integrated with DP services
guarantee a quicker and smoother conduct of investment and trading affairs of our clients.
We offer a whole range of Depository Services like dematerialization custody, transfer
and pledge of shares. Depository services make the share transactions faster, cheaper and
easier.The other benefits are low fees; access to beneficiary demat accounts through
internet and phone, portfolio valuation on the account statements, online execution of
transactions at branches, special rates for stock market intermediaries and sub brokers,
transactions update from back office etc.

Primary Market Distribution:
We are actively involved in distribution of IPOs & FPOs and hold 4th rank all over India
(Source: Prime Database). We have made very easy mechanism to apply in IPOs and
FPOs for the benefit of investors. We have been able to carve out a good market share in
the IPO & FPO market through better investors servicing and wide reach in the state of
Gujarat.

Debt Products:
We provide services in Fixed Income Securities (Treasury Bills, Government securities,
State Development Loans, Non SLR Bonds and Corporate Bonds) and Short Term
Money Market instruments (Certificates of Deposit, Commercial Paper, Inter Corporate
Deposits, and Call & Notice Money Deposits).
Commodities:
KIFS Commodities enables the retail & corporate investors to diversify their portfolio and

enjoy the benefits of commodity trading in MCX, NCDEX and ACE. It is a trading-cum-
clearing member of the leading national commodity exchanges. We have an extensive
network spread across the country through our branches and registered franchisees
DEMAT
KIFS Advantages
View your DP activity Any Time - Any Where through net
Competitive charges for demat
No hidden cost
Nomination facility available
Highly trained & personalized Help-desk
Wide branch / franchisee network (more than 30 branches & 525 franchisee)
Reduce paper work
Hassle free automated pay-in of your Market Sell obligation with no need of
physical instruction
All Demat staff is NCDO/ NCFM qualified
We are providing single account opening form for DP, NSE & BSE with single
documentation
KIFS Facilities
Automated Pay in Facility
Monthly DP statement with valuation (for transact B.O.)
Quarterly DP Statement with valuation (for both transact & non-transact B.O.)
Additional Statement on Request
Facility to view your DP transaction & Holding
Commodity Trading
FS Commodity Pvt. Ltd., 100% subsidiary of KIFS Securities Ltd. offers commodity
brokerage services to its customers. It is a registered Trading-cum-Clearing member of
Multi Commodity Exchange of India Ltd. (MCX), ACE and National Commodity and
Derivatives Exchange Ltd (NCDEX). These Commodity Exchanges have shown a

phenomenal growth in trading volumes. Significant Trading and Arbitrage opportunities
exist for informed players in the futures market.

Our retail branch network is one of the largest retail branch networks in the private
financial services sector and provides our customers with an unmatched distribution and
service capability.
The Commodities Broking Services cater to the retail private investor segment, while the
Hedging Services are offered through our corporate desk to the producing/consuming
firms that have either direct or economic exposure to the underlying commodity. Our
offerings also include Arbitrage products that are backed by our experts.

Currency Trading
The Currency market is the largest and most liquid financial market in the world. It is the
arena in which a nations currency is exchanged for that of another at a mutually agreed
rate. It was created in the 1970''s when international trade transitioned from fixed to
floating exchange rates. Traditionally, the currency market has been the preserve of banks
and larger financial institution. However with advances in technology, and the global
nature of the market, it is now possible for traders of all levels of experience to take part
in online currency trading. It offers traders huge opportunities to benefit from fluctuations
in the currency markets and eliminate underline foreign currency fluctuation risk arising
due to revision such as commodity trading, international trading, frequent overseas
travelling, close correlations with equity indexes and international investments. KIFS
Securities Limited offers a comprehensive range of services which include equity broking
and currency futures and options broking.

Exchange-driven currency trading has shown remarkable growth over the past few years.
It is the basis for cross-border diversification and business deals. It is our strong belief
that a valuable broking franchise is one that has a very high level of client retention and
can provide differentiated services based on client needs.

At KIFS, we enable our clients to seize investment opportunities in the currency market
by facilitating futures and options trades in four currency pairs:
US$-Indian Rupee
Euro-Indian Rupee
Pound Sterling-Indian Rupee
Japanese Yen-Indian Rupee

Business Operations
KIFS Securities Pvt Ltd (KIFS Securities), a part of the Khandwala group, was
established in 1995. The company operates in the equity cash market, equity Derivatives
and currency futures segments. The company also provides demat services, distribution of
financial products, investment advisory services, PMS and research services such as
derivatives strategies, IPO research and mutual fund research. The company is a member
of cash and derivative segment of NSE and BSE. The company is also a member in
currency derivative segment of NSE, USE and MCX-SX. It is a DP with NSDL. KIFS
Securities operates in the commodity segment through its subsidiary company, KIFS
Commodities Pvt Ltd which is a member of MCX and NCDEX. As on Mar 31, 2011, the
total terminal count of the company stood at 2,393 which comprises of 187 NEAT
terminals, 126 BOLT terminals and 2,080 CTCL terminals. In FY11, The Company
added 7,331 client accounts taking total number of client accounts to 58,961

Vision
To become one of the most respected and preferred Financial Services Organization
through innovative products enabling wealth creation for all our stakeholders.


Mission
To provide personalized, fast, reliable, quality-driven, convenient, and cost effective
solutions to our clients through Innovative Product Structure, Personalized Approach &
Services, Effective Cost Management, Ethical and transparent Practices and delivering
what we promise
KIFS Financial Services Limited is a professionally managed company. The overall
management is vested in the Board of Directors, comprised of qualified and experienced
persons. There are currently four Directors on the Board.

1. Shri Rajesh P. Khandwala, chairman cum MD
Shri Rajesh P. Khandwala, son of Shri Parmanand G. Khandwala aged about 48 years,
holds the Bachelors Degree in Commerce and has an experience of more than two
decades in capital market activities. He has rich and varied experience in the field of
Primary market, Secondary market and Mutual Funds. He is an independent thinker and a
measured risk taker with a passion for equities. With his expertise in the field of
derivatives, arbitrage and margin trading activities, Shri Rajesh P. Khandwala is taking up
the Company to the new heights, growth and success.
2. Shri Atul Parikh Non executive Independent Director
Shri Atul Parikh aged about 61 years is having a Bachelors Degree in Commerce,
Diploma in Taxation Law & Practice, Post Graduation diploma in Business Management
and a CAIIB. He has been seasoned banker for more than 3 decades. He has wide range
of banking experience in Operations; Audit; Retail Banking; Foreign Exchange; Credit
Management; Training; Merchant Banking; Capital Market operations etc. He has held
various positions in Banking Industry and at the time of his retirement he was designated
as a Sr. Vice President with one of the best private sector bank. With his vast and rich
experience in Banking and Financial Services sector coupled with his knowledge and
education, he is contributing significantly in the growth of the Company.

3. Shri Dharmendra Soni Non executive Independent Director
Shri Dharmendra Soni is commerce graduate and involved in the securities market for
more than a decade. With his expertise in the field, he has significantly contributed in the
development of the business of the company.
FUTURES AND OPTIONS
The National Stock Exchange and The Stock Exchange, Mumbai have commenced
trading in Derivatives Market with Index Futures being the first instrument. Now, both
the exchanges provide trading in Index Futures and Options and Stock Futures and
Options.
A derivative is a financial contract, between two or more parties, which is derived from
the future value of an underlying asset. At any point of time there will always be available
near three months contract periods. For e.g. in the month of January 2010 one can enter
into January, February or March contracts. The last Thursday of each month is the expiry
day for that months contract. When one contract expires, a new contract is introduced.
For instance, on expiry of Jan 2010 contract, April contract shall get activated.
Currently, settlements of all Derivatives trades are in cash. There is Daily as well as Final
Settlement. As long as the position is open, the same will be marked to Market at the
Daily Settlement Price, the difference will be credited or debited accordingly and the
position shall be brought forward to the next day at the daily settlement price. Any
position which remains open at the end of the final settlement day (i.e., last Thursday)
shall be closed out by the Exchange at the Final Settlement Price which will be the
closing spot value of the underlying.
There are two types of margins collected on the open position, viz., Initial Margin which
is collected upfront and Mark to Market Margin to be paid on T+1 day. As per SEBI
Guidelines it is mandatory for clients to give margin, failing which the outstanding
positions may be closed out.

There are three types of Members in the Futures and Options Segment:

Trading Members: These are only eligible to trade, their trades are settled by the
Clearing Members.
Trading cum Clearing members: The members who are eligible to trade and also settle
trades on their own behalf and also settle on behalf of other trading members.
Professional Clearing Members: Here the members who are only specialized in the
clearing and settlement activities. They do not trade on their own behalf or on behalf of
other members
Self Clearing Members: Members are those who trade and settle only their own trades
KIFS Financial Services Ltd is trading cum clearing member at NSE.
MARGIN TRADING FUNDING SCHEME
KIFS Financial Services Ltd. offers Margin Trading Funding facility to all offline
customers under the scheme of Margin Funding approved by SEBI.

Key features of the Scheme are as follows:
1. Easy and prompt account opening formalities
2. No processing fees
3. Margin funding of up to 50% of the purchase value
4. Shares purchased are credited to customers Demat account maintained specifically
for the purpose of Margin Trading
5. Bonus, and Rights are also directly credited to the customers said demat account.
Similarly dividend shall be credited to the bank account stated in the said demat
account.

6. Margin calls are made if there is fall of 10% in the Margin Funded Portfolio.
Margins can be replenished by cheque or by transferring funds from Normal
Trading account.
7. Liquidation if margins are not topped up on a 20% falls in the Margin Funded
Portfolio. In such an event liquidation will be at the lenders discretion.
8. This is a product to facilitate investments for short term. Interest is charged a
monthly rests at the rate of 1.50% per Month.
9. Purchases can be made only against clear funds
10. We provide Margin Funding only for scrips traded at NSE only.
Margin Ratios
Margin Ratio: 50:50
Maintenance margin/ Call Margin: 40 %
Liquidation Margin: 30 %
Registration Procedure:
Currently, customers who have an offline trading account with KIFS Financial Services
can avail the Margin Trading Funding facility. Clients desirous of registering for Margin
Trading Funding Scheme are required to complete / provide the documents given below.
Rs.300/- is recovered towards Agreement and documentation charges for opening the
Margin Trading Funding Account.
Margin Trading Agreement
Separate Demat account to be opened for the purpose (standard demat charges
shall apply)

POA to be issued in favor of KIFS Financial Services Ltd. to operate the said
demat account.
Authorization to KIFSs DP to debit demat account for shares sold
Undertaking that MTFS has been availed of from only one broker
Authorization letter to transfer funds from/to MTF ledger
DEPOSITORY SERVICES
A depository can be compared to a bank. It holds securities such as shares, debentures,
bonds, government securities, units etc. of investors in electronic form. There are two
depositories in India, The National Securities Depository Limited (NSDL) and Central
Depository Services Limited (CDSL). An individual who desires to avail the depository
services can approach a Depository Participant (DP). Banks, financial institutions,
custodians, brokers or any other entity eligible as per SEBI (Depositories and
Participants) Regulations, 1996 can apply to the Depository to become a Depository
Participant. As on 31st March, 2010 there are 526 Depository Participants in India.

KIFS, is a depository participant of NSDL & CDSL. Investors can open demat accounts
with NSDL & CDSL through KIFS. One can approach the nearest branch of KIFS for
opening an account. Agreement charges (statutory charges) along with Annual
Maintenance Charge (AMC) are collected upfront while opening an account. It takes two
to three days to open a demat account. Upon activation of the demat account, a Welcome
Letter is sent to the customer along with the Delivery Instruction Slip book.


DP facilities offered by KIFS
De-materialization: Customer can convert physical shares into electronic form by
surrendering the shares for dematerialization at the KIFS branch.
Re-materialization: Re-materialization enables customer to convert the
dematerialised shares into physical form.
Repurchase: This facility helps the customer to submit the units of open-ended
Mutual Funds in case of re-purchase.
Pledge: Customer can pledge securities to avail a loan.
Transfer: Here customer can transfer securities from one demat account to
another.
IPOs: In case the customer has applied for an IPO and receive an allotment then
the securities are transferred directly to his/her demat account. The same applies
for bonus and rights issues.
Commodity De-mat Account: If customer is a commodity player, then they may
need to open a commodity de-mat account with KIFS.
Speed-e: If customer register for Speed-e services, then transfer instructions can
be placed online over the internet to pre-notified Clearing Members Pool a/c. This
does away with the need to submit a physical delivery instruction slip.
Internet Services : If customer have access to Internet then they can register with
us to view thier demat account over the Internet. This is very beneficial as the
customers can avail of a host of services at no extra cost. Customer will be able to
view their holdings,reports,ledger and will have free access to our research reports
at any time.
SMS Alert Facility : The alert messages for debits(transfers) and IPO credits
would be sent to the account holders who have subscribed to this facility.

Depository provides this facility and no charge is levied on DPs for providing this
service to investors.
COMMODITY FUTURES TRADING
KIFS Commodities, a subsidiary of KIFS Financial Services Limited, is mainly engaged
in the business of Commodity Futures Trading. KIFS Commodities is a member of:
National Multi Commodity Exchange of India limited (NMCE)
National Commodity & Derivatives Exchange Limited (NCDEX)
Multi Commodity Exchange (MCX)
India Pepper and Spice Trade Association (IPSTA)
Singapore Commodity Exchange (SICOM)
KIFS provides information on commodity futures, along with technical and fundamental
analysis online at its website and also through the company's large branch network. The
company conducts Seminars, distributes free in-house literature and holds interactive
sessions that help raise awareness on the futures market. The number of participants is
continuously on the rise thus leading to increased volumes and market efficiency.

KIFS Commodity offers futures trading through multiple exchanges in varied
commodities such as:
Agri commodities: oilseeds, soya, groundnut, pulses, rice, wheat, sugar, spices,
rubber, guar, pepper, cardamom, coffee, etc
Precious metals: gold and silver,
Base metals: steel, aluminium, nickel, zinc, copper, etc
Energy products: crude oil and furnace oil
KIFSs clientele in commodities range from investors, co-operative societies, state and
national institutions to dealers, traders, manufacturers, financiers, speculators, arbitragers,
etc.

KIFS does not have proprietary interest in any commodity and therefore is price neutral.
Transaction costs are highly affordable attracting a spectrum of investors. Membership in
multiple exchanges gives clients the added advantage of arbitrage. KIFS has specialized
staff that provide the required guidance, help and enable clients to enter at the appropriate
price.
How to trade in Commodities at K.I.F.S
Open a trading account and maintain initial margin with K.I.F.S.
When an order request is entered for buying/selling for a match with the existing
orders in the Exchange system. If the order matches another order in the system it
results in a trade.
Contract note is issued in the exchange specified format containing details such as
transaction, quantity, price etc. Contract note is a legal document enforceable in
the court of law.
The open purchase/sale positions can be squared off at any time during the
contract period.
NMCE however does not allow members to enhance their position during the
settlement month. Existing positions can be squared off.
On the first (tenth in case of gold & silver) day of settlement month, margins on
existing position are increased by 20%.
From 1st to 15th of the contract month (10th to 15th in case of gold & silver),
seller can tender warehouse receipt for settlement. This means that the seller has
the right to make delivery of the sold position any time between the 1st to 15th
(10th to 15th in case of gold & silver) of the contract month. The first buyer (as
per the exchange records) shall have to necessarily take delivery of the same. The
seller shall receive payment from the exchange on T+3 day while the buyer has to
make payment on T+1 day. (T is the transaction day)
The seller who places his commodity with Central Warehousing Corporation
(CWC) is issued a CWC receipt against this delivery. This receipt is accepted by

K.I.F.S and sent to the exchange that gives it to the buyer. The buyer presents it at
CWC and takes delivery of his commodity

Commodity Depository
1. The Commodity Depository account can be opened by individuals, partnerships
firms, companies, etc. unlike in the capital market segment where Partnership
firms cannot open the demat account in the firm name.
2. The content of the Agreements shall differ for each category
3. Depository charges differ for each category
4. Only warehouse electronic receipts are considered for the purpose debiting /
crediting depository account
5. Commodities depository account can be availed at both the Depositories i.e.
NSDL and CDSL
6. The Commodities Identification number i.e. INC is akin to the ISIN
The Commodities Depository account may be credited in the following situations:
1. Demat
2. Revalidation
3. Actual purchase from market.


Demat:
If the customer has some commodities with him, he may unload it in the warehouse and
take the warehouse receipt after due verification of the Assayer appointed by NCDEX
and MCX . To convert the warehouse receipt in demat form, he has to fill up necessary
details in the Commodity Deposit Form available in the Warehouse. The Warehouse shall
inform the Registrar and Transfer Agents (RTA) with the required details who shall then
arrange to credit the depository account of the customer through NSDL/CDSL. Currently,
there is only one RTA for commodities i.e. Karvy
Revalidation:
If the client doesnt wish to open the DP account then he may trade directly in the market
with the physical warehouse receipts ( in MCX AND NMC) Normally the warehouse
receipt (whether demat or physical) is for duration of 3 months. After the expiry of 3
months the owner of the receipt needs to revalidate it. He will request the Warehouse to
revalidate the receipt. The assayer will examine the commodity and take into account the
wear and tear (normal as well as abnormal) for revalidating the warehouse receipt.
PORTFOLIO MANAGEMENT SERVICES
KIFS, a SEBI registered Portfolio Manager (Reg. No.INP000000316) offers discretionary
portfolio management services. KIFS has a team of experts who carefully take investment
decisions based on the clients' objectives. The Portfolio Management team has a
successful track record of more than 10 years in the capital market. The team has access
to KIFS's strong Equity Research, and Fundamental & Technical Analysis .
Investment Objective

To generate medium to long-term capital growth (2-3 years) by identifying undervalued
stocks and those with growth opportunities from a select list of well researched stocks.

Strategy

Identifying growth stocks from a select list through extensive research.


Minimum Investment

Rs.10 lakhs for resident Indians and Rs.25 lakhs for Non-Resident Indians.

Reports

Portfolio and NAV are communicated bi-weekly via e-mail.

Risk factors

As the stocks are normally held for medium to long term, the net asset value will be
affected by market volatility.

PMS fee

Option 1: 3% p.a. (charged @0.75% at the end of every quarter on the average of
beginning and ending NAV)

Option 2: 1% p.a. (charged @0.25% at the end of every quarter on the average of
beginning and ending NAV) and performance fee

Performance fee

20% on gain in NAV over and above 12% p.a. based on the high watermark concept
charged at the end of the year or on withdrawal.

DISTRIBUTION SERVICES
KIFS undertake the distribution of variety financial instruments such as Mutual Funds,
Bonds, Life Insurance products, Fixed Deposits etc. The wealth centre team understands
the universe of investment options analyzes the risk and return from these options and
recommends investment options to clients to help them achieve their financial goals.
KIFS have a tie up with all the Mutual Funds across the country.
KIFS offer life insurance products of the following life insurance companies:
MetLife India Insurance Company Limited
LIC of India
ICICI Prudential

For general insurance, KIFS has partnered with the following:
Bajaj Allianz General Insurance Company
National Insurance Company Ltd
KIFS also helps its customers in investing in 8% RBI taxable bonds, Capital gain bonds
(Sec 54 EC bonds), fixed deposits (KPFC, KTDFC) etc. through its tie- up with the
required organizations.
RESEARCH
KIFS have a team of experts who track the markets and related events very closely.
Sophisticated tools are used for technical analysis and research to offer recommendations,
technical analysis and research reports. Each day KIFS Research team brings to table
information that helps you profit from it.
Daily Market View: Technical Analysis - Market, a daily report on markets gives
a clear picture on the expected market movements (NSE and BSE). It also covers
the key support and resistance levels. It also provides clues on market direction
and the expected profit booking levels.
Daily Stock View: Technical Analysis - Stocks, a daily report on the stocks for
the day. These are prepared with "Departure Oscillators" tool that have a high
degree of accuracy on stock readings; which in turn helps investors, day traders,
High Net worth Individual's with stock ideas that may benefit them.
F&O Analysis: F&O Analysis is a daily report that gives near 100% accurate
reading on both Futures and Options. Tools such as PC ratios, Open Interest and
volatility combined with RSI indicator are used for the purpose. It is helpful for
day traders, long-term holders and HNI clients
SMS: SMS alerts are sent to those who have registered for the service. These are
prepared with utmost care, ensuring that it is suitable for both the Bulls and the

Bears. It provides instantaneous buy/sell/hold recommendations purely on
technicals. It also provides option strategies with the use of Implied/Historical
Volatility study. SMS is especially handy for Index Traders.
Geo Data: Geo Data is a monthly research report covering most financial
instruments. It is quite comprehensive, and provides in-depth information on
stocks to watch out for, recommended Mutual Funds, performance of schemes,
Futures and Options update and a review of the commodities markets.

ACCOUNT OPENING FOR DEMAT & TRADING
Documents to be submitted for registration
you need to submit the documents mentioned below while opening an Online Trading and
Demat account. It helps in faster registration. Trading account is opened in single name
while demat account may be opened in joint name with a maximum of 3 holders. It is
however essential that the customer maintains a demat account with KIFS for availing the
online Trading facility. In case the permanent address is different from the
correspondence address then the proof of address has to be submitted for separately for
each of them from the list given below.

For a two-in-one account: i.e. Trading and Demat Two recent passport size photographs
Proof of Bank Account: Any one of the following may be submitted
1. Copy of Bank Statement
2. Copy of first page of the Bank Pass Book.
3. A cancelled cheque (only if the account holder's name is printed on it)
Copy of Client Master towards proof of an existing Demat Account
DP Proof in case of DP's other than KIFS DP
Proof of Identity: Pan Card

Proof of Address: Any one of the following may be submitted
1. Passport copy
2. Voter Id card copy
3. Driving license copy
4. Bank Pass book copy
5. Verified copies of
a. Electricity bill or telephone bill in the customers name (not more
than two months old)
b. Leave and license agreement/agreement for sale.
6. Copy of Ration Card
7. Identity card/document with address, issued by
a. Central/State government and its departments
b. Statutory /Regulatory Authorities
c. Public Sector Undertakings
d. Scheduled Commercial banks
e. Public Financial Institutions
f. Colleges affiliated to Universities
g. Professional Bodies such as ICAI, ICWAI, ICSI, Bar council etc to
their Members
ACCOUNT OPENING PROCEDURE
1. You need to fill and / or sign following documents
The 'Know Your Client' form, also attach all the documents as mentioned in the
checklist,
The client agreement,
Power of Attorney for trading account
Power of attorney for DP account


2. You may then draw a cheque of Rs.500/- in favor of 'KIFS Financial Services Ltd.'
towards the account opening charges.
In case you need any assistance in filling up the form and understanding the documents
you may want to contact our marketing executive / branch official.
After you have submitted all the documents and the cheque these will be processed at
centralized 'Client Registration Department' at the Head Office in Kochi, Kerala. If any
document / information is missing then you will be contacted by the concerned IT
executive or the branch.
If all the documents / information are correct then your account will be activated and an
email will be sent to your registered email id (as mentioned in your account opening
documents) with the welcome letter, your user id and password.
You can login to the KIFS system immediately on receipt of the user ID and Password.
On logging in for the first time you have to necessarily change your password for security
reasons.


BROKERAGE RATES AT KIFS
Brokerage rates applicable w.e.f. December 1, 2010 for Online Retail Trading **
provided linked demat account is with KIFS Financial Services Ltd.
Delivery-based Volumes *
Volume *(Rs.) New Brokerage Rate
< 10 lacs 0.30% (current)
> 10 lac < 50 lac 0.25%
> 50 lac < 1 cr 0.20%
> 1 cr < 2 cr 0.15%
> 2 cr 0.10%

Intra-day Volumes *
Volume *(Rs.) New Brokerage Rate
< 2 cr 0.030% (current)
> 2 cr < 6 cr 0.025%
> 6 cr < 12 cr 0.020%
> 12 cr < 15 cr 0.015%
> 15 cr 0.010%


F&O Volumes *
Volume *(Rs.) New Brokerage(per lot)(Rs.)
< 9 cr 75(current)
> 9 cr < 18 cr 65
> 18cr < 27 cr 50
> 27cr < 36 cr 40
> 36 cr 30
* Applicable for a calendar month and should be achieved through online channels.

** Applicable to Ordinary Resident account only
# Subject to minimum brokerage as under:
Rs.20 per Contract or 1 paisa per share whichever is higher subject to a maximum
of 2.5% per share.
In case the contract note is delivered by post then Rs.20/- per Contract or 5 paisa
per share whichever is higher subject to a maximum of 2.5% per share.


Overview of different asset classes
An asset class is a grouping of similar investments whose prices tend to move
together. Asset classes can be defined on a very general level, such as stocks or on a
more specific level, such as American silver producing companies.
The concept of asset classes is important because one of the goals when building an
investment portfolio is to use different asset classes which are not correlated with each
other. It is critical to know what type of asset classes you currently own to see if your
asset allocation (amounts of each asset class) is appropriate.


INVESTMENT OPTIONS FOR INVESTORS
1. Life Insurance:
Life insurance is a contract for payment of a sum of money to the person assured
(or to the person entitled to receive the same) on the happenings of event insured against.
Usually the contract provides for the payment of an amount on the date of maturity or at
specified dates at periodic intervals or if unfortunate death occurs. Among other things,
the contracts also provide for the payment of premium periodically to the corporation by
the policy holders. Life insurance eliminates risk.
There are many variants of a life insurance policy:
1. Whole Life Assurance Plans: These are low-cost insurance plans where the sum
assured is payable on the death of the insured
2. Endowment Assurance Plans: Under these plans, the sum assured is pay-able on the
maturity of the policy or in case of death of the insured individual before maturity of
the policy.
3. Term Assurance Plans: Under these plans, the sum assured is payable only on the
death of the insured individual before expiry of the policy.
4. Pension Plans: These plans provide for either immediate or deferred pension for life.
The pension payments are made till the death of the annuitant (person who has a
pension plan) unless the policy has provision of guaranteed period.
Life Insurance Corporation (LIC) is a government company. Till the year 2000,
the LIC was the sole provider of life insurance policies to the Indian public. However, the
Insurance Regulatory & Development Authority (IRDA) has now issued licenses to
private companies to conduct the business of life insurance. Some of the major private
players in the sector are:


Bajaj Allianz Life Insurance Corporation
Birla Sun Life Insurance Co. Ltd.
HDFC Standard Life Insurance Co. Ltd.
ICICI Prudential Life Insurance Co. Ltd.
ING Vysya Life Insurance Co. Pvt. Ltd.
MAX New York Life Insurance Co. Ltd.
MetLife India Insurance Co. Pvt. Ltd.
Kotak Mahindra Old Mutual Life Insurance Co. Ltd.
SBI Life Insurance Co. Ltd.
TATA AIG Life Insurance Co. Ltd.
AMP Sanmar Assurance Co. Ltd.
AVIVA Life Insurance Co. Pvt. Ltd.
Sahara India Life Insurance Co. Ltd.
Shriram Life Insurance Co. Ltd.

The major advantages of life insurance are given below:
Protection:
Saving through life insurance guarantees full protection against risk of death of the
saver. The full assured sum is paid, whereas in other schemes only the amount saved is
paid.
Easy payments:
For the salaried people the salary savings schemes are introduced. Further, there is an
easy installment facility method of payment through monthly, quarterly, half yearly or
yearly mode.
Liquidity:
Loans can be raised on the security of the policy.


Tax relief:
Tax relief in Income Tax and Wealth Tax is available for amounts paid by way of
premium for life insurance subject to the tax rates in force.
2. Mutual Funds:
Investment companies or investment trusts obtain funds from large number of
investors through sale of units. The funds collected from the investors are placed under
professional management for the benefit of the investors. The mutual funds are broadly
classified into open-ended scheme and close-ended scheme.

Open-ended scheme:
The open-ended scheme offers its units on a continuous basis and accepts funds from
investors continuously. Repurchase is carried out on a continuing basis thus, helping
the investors to withdraw their money at any time. In other words, there is an
uninterrupted entry and exit into the funds. The open-end scheme has no maturity
period and they are not listed in the stock exchanges. Investor can deal directly with
the mutual fund for investment as well as redemption. The open-ended fund provides
liquidity to the investors since the repurchase facility is available. Repurchase price is
fixed on the basis of net asset value of the unit. In 1998 the open-ended schemes have
crossed 80 in number.

Closed-ended funds:
The close-ended funds have a fixed maturity period. The first time investments are
made when the close end scheme is kept open for a limited period. Once closed, the
units are listed on a stock exchange. Investors can buy and sell their units only
through stock exchanges. The demand and supply factors influence the prices of the

units. The investors expectation also affects unit prices. The market price may not be
the same as the net asset value.
Sometimes mutual funds with the features of close-ended and open-ended schemes
have been launched, known as interval funds. They can be listed in the stock
exchange or may be available for repurchase during specific periods at net asset value
or relative prices.
Interval Funds
Interval funds combine the features of open-ended and close-ended schemes. They
are open for sale or redemption during pre-determined intervals at NAV related prices.
Let us now classify Mutual Fund Schemes on the Basis of its Investment Objective:
Growth Funds
The aim of growth funds is to provide capital appreciation over the medium to
long-term. Such schemes normally invest a majority of their corpus in equities. It has
been proven that returns from stocks, have outperformed most other kind of investments
held over the long term. Growth schemes are ideal for investors having a long-term
outlook seeking growth over a period of time.
Income Funds
The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds, corporate
debentures and Government securities. Income Funds are ideal for capital stability and
regular income.
Balanced Funds
The aim of balanced funds is to provide both growth and regular income. Such
schemes periodically distribute a part of their earning and invest both in equities and fixed
income securities in the proportion indicated in their offer documents. In a rising stock
market, the NAV of these schemes may not normally keep pace, or fall equally when the
market falls. These are ideal for investors looking for a combination of income and
moderate growth.

TAX IMPLICATIONS ON MUTUAL FUNDS
While dividend paid on closed-ended mutual funds is fully tax exempt, on redemption or
sale of units in the secondary market, your realization will attract short-term capital gains
tax of 10 per cent. However, you can save tax by investing in Equity-Linked Savings
Scheme (ELSS) under Section 88 of the Income Tax Act, 1961, according to which 20
per cent of the amount invested in ELSS which have a lock-in period of 3 years-can be
deducted from your tax liability subject to a maximum investment of Rs.10,000 per year.
Also available under Section 88 are two pension plans: Unit Trust of Indias Retirement
Benefit Unit Plan (RBP) and Kothari Pioneers Pension Plan.
3. Equity Shares:
Equity shares are commonly referred to common stock or ordinary shares. Even
though the words shares and stocks are interchangeably used, there is difference between
them. Share capital of a company is divided into a no. of small units of equal value called
shares. The term stock is the aggregate of a members fully paid up shares of equal value
merged into one fund. It is a set of shares put together in a bundle. The stock is
expressed in terms of money and not as many shares. Stock can be divided into fractions
of any amount and such fractions may be transferred like shares.
Equity shares have the following rights according to section 85(2) of the companys
act 1956.
Right to vote at the general body meetings of the company.
Right to control the management of the company.
Right to share in the profits in the firm of dividends and bonus shares.
Right to claim on the residual after repayment of all the claims in the case of
winding of the company.
Right of pre-emption in the matter of issue of new capital.
Right to apply to court if there is any discrepancy in the rights set aside.
Right to receive a copy of the statutory report, copies of annual accounts along
with audited report.

Right to apply the central government to call an annual when a company fails to
call such a meeting.
Right to apply the Company Law Board for calling an extraordinary general
meeting.
In a limited company the equity shareholders are liable to pay the companys
debit only to the extent of their share in the paid up capital.
The equity shares have certain advantages. The main advantages are
Capital Appreciation
Limited liability
Free tradability
Tax advantages (in certain cases) and
Hedge against inflation.
TAX IMPLICATIONS ON EQUITY SHARES
While dividend is not taxable at the hands of the investor, capital gains are. When you
sell your shares at a profit, it attracts a capital gains tax. Gains realized within one year of
purchase of shares come under the short-term capital gains tax, and are included in gross
taxable income. If the duration is more than one year, it is termed as long-term capital
gains tax. The rate is 10 percent for short-term capital gains and nil for long-term capital
gains (long-term capital gains is exempted totally).

4. Bonds:
Bond is a long term debt instrument that promises to pay a fixed annual sum as
interest for specified period of time.
The basic features of the bond are given below.
Bonds have face value. The face value is called par value. The bonds may be
issued at par value or at discount.

The interest rate is fixed sometimes it may be variable at as in the case of floating
rate bond. Interest is paid semi-annually or annually. The interest rate is known as
coupon rate. The interest rate is specified in the certificate.
The maturity date of the bond is usually specified at the issue time except in the
case of perpetual bonds.
The redemption value is also stated in the bonds. The redemption value may at par
value or at premium.
Bonds are traded in the stock market. When they are traded the market value may
be at par or at premium or at discount. The market value and redemption value
need not be the same.
The different bonds are:
Secured bonds and unsecured bonds
Perpetual bonds and redeemable bonds
Fixed interest rate bonds and floating interest bonds
Zero coupon bonds
Deep discount bonds
Capital indexed bonds
Debentures:
According to Companies Act 1956 debenture includes debenture stock, bonds and any
other securities of company, whether constituting a charge on the assets of the company or not.
Debentures are generally issued by the private sector companies as a long-term promissory note
fro raising loan capital. The company promises to pay interest and principal as stipulated. Bond is
an alternative form of debenture in India. Public sector companies and financial institutions issue
bonds. Some of the characteristic features of debentures are from it is given in the form of
certificate of indebtedness by the company specifying the date of redemption and interest rate.


Interest:
The rate of interest is fixed at the time of issue itself which is known as
contractual or coupon rate of interest. Interest is paid as a percentage of the par.
Redemption
As earlier the redemption date would be specified in the issue itself. The
maturity period may range from 5 years to 10 years in India. They may be redeemed
in installments. Redemption is done through a creation of sinking fund by the
company. A trustee In charge of the fund buys the debentures either from the market
or owners. Creation of the sinking fund eliminates the risk of facing financial
difficulty at the time of redemption because redemption requires huge sum.
Buy back provisions help the company to redeem the debentures at a special price
before the maturity date. Usually the special price is higher than the par value of the
debenture.
Indenture
It is a trust deed between the company issuing debenture and the debenture
trustee who represents the debenture holders. The trustee takes the responsibility of
protecting the interest of the debenture holders and ensures that the company fulfills
the contractual obligations.
Financial institutions, banks, insurance companies or firm attorneies act s
trustees to the investors.

In the indenture the terms of the agreement, description of debentures, rights if the
debenture holders, rights of the issuing company and the responsibilities of the
company are specified clearly. Debentures are classified on the basis of the security
and convertibility as

Secured or unsecured
Fully convertible debenture
Partly convertible debenture
Non-convertible debenture
TAX IMPLICATIONS ON BONDS
There are specific tax saving bonds in the market that offer various concessions
and tax-breaks. Tax-free bonds offer tax relief under Section 88 of the Income Tax Act,
1961. Interest income from bonds, up to a limit of Rs.12,000, is exempt under section 80L
of the Income tax Act, plus Rs.3,000 exclusively for interest from government securities.
However, if you sell bonds in the secondary market, any capital appreciation is subject to
the Capital Gains Tax.
Tax-Saving Bonds
Some bonds have a special provision that allows the investor to save on tax. These are
termed as Tax-Saving Bonds, and are widely used by individual investors as a tax-saving
tool. Examples of such bonds are:
Infrastructure Bonds under Section 88 of the Income Tax Act, 1961
Capital Gains Bonds under Section 54EC of the Income Tax Act, 1961
RBI Savings Bonds (erstwhile, RBI Relief Bonds)
Tax Saving Infrastructure Bonds
Infrastructure bonds are available through issues of ICICI Bank and IDBI, brought out in
the name of ICICI Safety Bonds and IDBI Flexi bonds. These provide tax-saving benefits
under Section 88 of the Income Tax Act, 1961, up to an investment of Rs.1, 00,000,
subject to the bonds being held for a minimum period of three years from the date of
allotment.


Tax Saving Capital Gains Bonds
Investments in bonds issued by the Rural Electrification Corporation (REC) are at
present eligible for capital gains tax savings. Gains made out of a capital transfer need to
be invested in the above bonds within six months of sale of capital assets in order for the
proceeds of such sale to be exempt from capital gains tax.

RBI Savings Bonds
RBI Savings Bonds are an instrument that are issued by the RBI, and currently has
two options one carrying an 8 percent rate of interest per annum, which is taxable and
the other one carries a 6.5 percent (tax-free) interest per annum. The interest is
compounded half-yearly and there is no maximum limit for investment in these bonds.
The maturity period of the 8 percent (taxable) bond is six years and that of the 6.5 percent
(tax-free) bond is five years
5. Real Estate:
The real estate market offers a high return to the investors. The word real estate
means land and buildings. There is a normal notion that the price of the real estate has
increased by more than 12 percent over the past ten years. The population growth and the
exodus of people towards the urban cities have made the prices to increase manifold.
Recently, the recession in the economy has affected the real estate. Prices marked a
substantial fall in 1998 from the 1997 prices.
Reasons for investing in real estate are given below:
High capital appreciation compared to gold or silver particularly in the urban
area.
Availability of loans for the construction of houses. The 1999-2000 budget
provides huge incentives to the middle class to avail of housing loans.
Scheduled banks now have to disburse 3 percent of their incremental deposits
in housing finance.

Tax rebate is given to the interest paid on the housing loans.
Further Rs.75, 000 tax rebate on a loan up to Rs.5 lakhs which is availed of
after April 1999.
If an investor invests in a house for about Rs.6-7lakh, he provides a seed capital of about
Rs.1-2 lakh. The Rs.5 lakh loan, which draws an interest rate of 15 percent, will work out
to be less than 9.6 percent because of the Rs.75, 000 exempted from tax annually. In
assessing the wealth tax, the value of the residential home is estimated at its historical
cost and not on its present market value.
The possession of a house gives an investor a psychologically secure feeling and a
standing among his friends and relatives.
Apart from making investment in the residential houses, the people in the higher
income bracket invest their money in time share plans of the holiday resorts and land
situated near the city limit with the anticipation of a capital appreciation. Farm houses and
plantations also fall in the line. In spite of the fast capital appreciation investors generally
do not invest in the real estate apart in the real estate apart from owning one or two
houses. The reasons are:

Requirement of huge capital: To purchase a land or house in the urban
area, the investor needs money in lakhs whereas he can buy equity, gold or
other form of investment by investing thousands of rupees.
Malpractices: often-gullible investors become cheated in the purchase of
land. The properties already sold are resold to the investors. The investor
has to lose the hard-earned money.
Restriction of the purchase: The land ceiling Act restricts the purchase of
agriculture land beyond a limit.
Lack of liquidity: If the investor wants to sell the property, he cannot
immediately realize the money. The waiting period may be months or
years.

The points to be taken care of while purchasing the real estate are:
The plots should be approved by the local authority because on the un
approved layout construction of a house is not permitted.

Possibility of capital appreciation. It depends upon the locality and facilities of
the site.

Originality of title deeds. The site should be free from encumbrance.
Encumbrance certificate for a minimum period of latest 15 years should be got
from the registrars office.
Plinth area should be verified.

Earliest records of securities trading in India are available from the end of
eighteenth century. Before 1850 there was business conducted in Mumbai in the share of
bank and the securities of east India Company, which were consider as securities for
buying, selling and exchange. The share of commercial bank, mercantile bank and bank
of Bombay were some of the prominent shares traded. The business was conducted under
a sprawling banyan tree in front of the town hall, which is known as horniman Circle
Park. In 1850, the companies act was passed and that heralded the commencement of
joint stock companies in India.
It was the American civil war that helped Indians to established broking business.
The leading broker, Shri Premchand Roichand designed and developed a procedure to be
followed while dealing in shares. In 1874 the dalal street became the prominent place for
meeting of the brokers to conduct business. The broker organized an association on 9
th

July 1875 known as native share and stock broker association to protect the character,
status of the native brokers. That was the foundation of the stock exchange, Mumbai.
The exchange was established with 318 members. The stock exchange, Mumbai
did not have to look back as it started raiding high ladder of growth. The stock exchange

is a market place, like any other centralize market where buyers and sellers can transact
business in securities at given point of a time in a convenient and competitive manner at
the fairest possible prizes.
In Jan 1899, Mr. James M Mac Len, MP inaugurated the brokers hall. After the
first world war the stock exchange was housed properly at an old building near the Town
hall in1928, the present premises where acquired surrounded by Dalal street, Mumbai
samachar marg and hamam street. A new building a present location was constructed and
was occupied on 1
st
Dec 1930.In 1950 the regulation of business in securities and stock
exchange became an exclusively central Government sub following adaptation of
constitution of India. In 1956, the security contract act was passed by the parliament of
India. to regulate the securities market, SEBI was initial established on Oct 12 1988 as an
interim board under control of ministry of finance, Government of India. In 1992, SEBI
act was passed through which the SEBI came into existence.
Hence SEBI acquired statutory status on 30
th
Jan 1992 by passing an ordinance,
which was subsequently converted into an act passed by the parliament on April 4
th
1992.
The main objective of SEBI is to protect the interest of investor, regulate and promote the
capital market by creating an environment, which would facilitate mobilization of
resource through efficient allocation and to generate confidents among the investor.
As such SEBI is responsible for regulating stock exchanges and other
intermediaries who may be associated with capital market and the process of the public
companies rising capital by issuing instrument that will be traded on capital market. SEBI
has been empowered by the central government to develop and regulate capital markets in
India and there by protect the interest of investors. In 1992, OTCI (Over the counter
exchange of India) came in to existent where equities of small companies are listed. In
1994, NSE(national stock exchange) came into existent which brought an and to the open
but cry system of trading securities which was in vogue for 150 years, and introduced
screen based trading system.

BSE (Bombay stock exchange) online trading system was launched on March 14
th
1995.
Online trading can be done who are authorized by the stock exchange.
In screen based trading, investor place there buy and sale orders with brokers
whose enter the orders in the automated trading system. When buy and sale order
matches, a trade is generated and trade details are given to respective brokers. After a
trade has taken place, the buyer as to pay money and seller has to deliver the securities.
On the stock exchange hundred & thousands of trades take place every day.
Buyers and sellers are spread over a large geographical area. Due to these problems
completing a trade by paying cash to the seller & securities to buyer immediately on
execution of trades on an individually basis is virtually impossible. So the exchange
allows trading to take place for a specified period which is called trading cycle.
A unique settlement number identifies each trading cycle. Once the trading period
is over, buyer broker pays money and seller broker delivers securities to the CC/CH on a
predefined day. This process is called as pay in, after pay in securities are given to the
buyer brokers and money is given to seller brokers by the CC/CH, this process is called as
pay out. This process of pay in & payout is called settlement.
Initially the trading cycle was of one fortnight, which was reduced to one week.
The transactions entered during this period, of a fortnight or one week, were used to be
settled either by payment for purchase or by delivery of shares certificates sold on
notified days one fortnight or one week of expiry of the trading. The settlement schedules
are made known to the members of the exchange in advance.
The weekly settlement period was reduced by daily settlement popularly known as
rolling settlement, in which each day is separate trading day. With effect from December
2001, t+% rolling settlement cycle was introduced for all equities where T is the trading
day and pay in & pay out for the settlement was done on the 5
th
business day after the
trade day.


6. GOLD

Of all the choice of investments available, can this yellow metal take pride of the
place as a financial investment alternative option? Opinion on the subject of gold is
divided, on several issues are the yields from an investment in gold positive? Are its
uses productive? Is the strain on the economy evident? Should gold be allowed to be
brought into India freely for purposes of investment or otherwise.
Well, yields or no yields, there is hardly an Indian household that can ignore gold and
keep its entire savings in financial assets alone. Every investment has an intrinsic appeal
to its holder and to suggest that hundreds of tones of gold is bought every year without
regard to its economic value is to suggest that Indians dont act rationally. The fact is,
they do and probably do it better than others.
Indians faith in GOD and GOLD dates back to the Vedic times; they worshipped both.
According to the World Gold Council Report, India stands today as the worlds largest
single market for gold consumption. In developing countries, people have often trusted
gold as a better investment than bonds and stocks. Gold is an important and popular
investment for many reasons:

In many countries gold remains an integral part of social and religious customs,
besides being the basic form of saving. Shakespeare called it the saint seducing
gold.
Superstition about the healing powers of gold persists. Ayurvedic medicine in India
recommends gold powder and pills for many ailments.
Gold is indestructible. It does not tarnish and is also not corroded by acid except
by a mixture of nitric and hydrochloric acids.
Gold has aesthetic appeal. Its beauty recommends it for ornament making above all
other metals.

Gold is so malleable that one ounce of the metal can be beaten into a sheet covering
nearly a hundred square feet.
Gold is so ductile that one ounce of it can be drawn into fifty miles of thin gold
wire.
Gold is an excellent conductor of electricity; a microscopic circuit of liquid gold
printed on a ceramic strip saves miles of wiring in a computer.
Gold is so highly valued that a single smuggler can carry gold worth Rs.50 lac
underneath his shirt.
Gold is so dense that all the tones of gold, which has been estimated; to be mined
through history could be transported by one single modern super tanker.
Finally, gold is scam-free. So far, there have been no Mundra type or Mehta
type scams in gold.

Apparently, gold is the only product, which has an investment as well as ornamental
value. Going beyond the narrow logic of yield and maturity values, thus, the lure of this
yellow metal continues.

7. Company Fixed Deposits
Fixed deposits in companies that earn a fixed rate of return over a period of time
are called Company Fixed Deposits. Financial institutions and Non-Banking Finance
Companies (NBFCs) also accept such deposits. Deposits thus mobilized are governed by
the Companies Act under Section 58A. These deposits are unsecured, i.e., if the company
defaults, the investor cannot sell the company to recover his capital, thus making them a
risky investment option. NBFCs are small organizations, and have modest fixed and
manpower costs. Therefore, they can pass on the benefits to the investor in the form of a
higher rate of interest. NBFCs suffer from a credibility crisis. So be absolutely sure to
check the credit rating. AAA rating is the safest. According to latest RBI guidelines,
NBFCs and companies cannot offer more than 14 per cent interest on public deposits

8. BANK DEPOSITS

When you deposit a certain sum in a bank with a fixed rate of interest and a specified
time period, it is called a bank Fixed Deposit (FD). At maturity, you are entitled to
receive the principal amount as well as the interest earned at the pre-specified rate during
that period. The rate of interest for Bank Fixed Deposits varies between 4 and 6 per cent,
depending on the maturity period of the FD and the amount invested. The interest can be
calculated monthly, quarterly, half-yearly, or annually, and varies from bank to bank.
They are one the most common savings avenue, and account for a substantial portion of
an average investors savings. The facilities vary from bank to bank. Some services
offered are withdrawal through cheques on maturity; break deposit through premature
withdrawal; and overdraft facility etc.

PROVIDENT FUND
Employees Provident Fund Scheme
The Employees Provident Fund (EPF) was first established on 1 October 1951 under
the EPF Ordinance 1951 which was subsequently known as the EPF Act 1951. The EPF
Act 1951 has since then been replaced by the EPF Act 1991 in June 1991. Besides being
the worlds oldest national provident fund, EPF is also one of the most successful funds
of its kind, providing a compulsory savings scheme to ensure security and well being in
old age. The first contributions were received in July 1952, totaling Rs.2.6 million. The
EPF is under the jurisdiction of a Board, which consists of 20 members who are
appointed by the Minister of Finance.
The EPF Board is made up of a Chairman, a Deputy Chairman and 18 other members,
which comprise of
5 Government Representatives
5 Employer Representatives

5 Employee Representatives
3 Professional Representatives
The EPF Board is responsible for formulating EPF policies and to ensure implementation
of these policies.
Apart from the Board, the EPF also has an Investment Panel, which is responsible
to formulate EPF investment policies. The Minister of Finance also appoints the members
of the Investment Panel. The Panel is made up of a Chairman, a representative of the
Governor of Bank Negara Malaysia, a representative from the Ministry of Finance and
three others who are experts in financial, business and investment related matters.
The EPF Headquarters is situated in the EPF building in Kuala Lumpur. Apart
from the Headquarters, the EPF has 14 State Offices and 33 Local Offices throughout the
country.
Public Provident Fund (PPF)
A Public Provident Fund (PPF) is a long-term savings plan with powerful tax benefits.
Your money grows @ 8 per cent per annum, and this is guaranteed by the Government of
India (GOI). You may consider this option if you are not looking for short-term liquidity
or regular income. Normal maturity period is 15 years from the close of the financial year
in which the initial subscription was made. Maturity values for your PPF account
depending on what you invest each year.


1 LITERATURE REVIEW
2.1 Introduction :
The role of liquidity in determining asset prices is the subject of a vast research literature
spanning a period of more than thirty years. The primary purpose of this report is to
provide a summary of the main conclusions of researchers albeit with the objective of
refining methods for ongoing estimation of the price of liquidity in specific asset markets.
Given the volume of research which has been produced on this topic, it is not practical to
review every reference in detail so we have concentrated our effort on recognised
seminal work, papers that may have practical application or which provide useful insight
into market dynamics and very recent research which analyses market behaviour over the
past two years. This price of liquidity the liquidity premium and its variability is
currently the subject of enormous interest from accountants, actuaries, financial
intermediaries and regulators given its role in determining prices, fair (i.e. market
consistent) values for known liabilities and its impact on risk capital.
2.2 Various sources in relation with the project :
The main content of the paper is broken down into three sections. In section 2 we review
definitions and sources of illiquidity. Section 3 summarises the theoretical evidence for
liquidity premia and in section 4 the empirical evidence is summarised with a particular
focus on corporate bond markets. An extensive (although not exhaustive) list of
references is provided. The research studies are summarised in Table 2.1 and illustrated
graphically in Figure 2.2.
Liquidity
Researchers identify two distinct types of liquidity. Trading liquidity refers to the ease
with which an asset can be traded. Funding liquidity concerns the access of traders or
firms to funding. We are concerned with the effect of trading liquidity on asset prices. In
practice, market and funding liquidity will be linked - particularly during periods of
market stress.

Market microstructure theory is concerned with the trading mechanisms and processes
of markets and how they affect transaction costs and other characteristics of markets.
The quality of a market is judged by reference to three characteristics tightness
(measured by the size of spreads); depth (measured by trade impact); resilience (measured
by the speed at which trade impact dissipates). These ideas are important for the purposes
of understanding liquidity premia since, as we shall see, one of the primary drivers of
liquidity premia are market transaction costs.
The literature identifies and tests the usefulness of various proxy measures of trading
costs including dealing spreads, measures of individual trade impact and activity, asset
size and asset volatility. All of these turn out to be helpful in quantifying real-world
liquidity premia.
Liquidity and asset prices - theory
Asset pricing theory tells us that, in a frictionless market (i.e. where there are no trading
costs) two assets with identical cash flows will have the same price. If this were not the
case arbitrage profits could be realised. However, financial economists (see for example
Amihud et al. [1986, 2005]) discuss pricing models of increasing sophistication in which
investors face frictional costs where prices must be adjusted downwards and returns
adjusted upwards to compensate investors for bearing illiquidity. They conclude that a
liquidity premium may be observed in the pricing of any asset in a market subject to
trading costs.
The literature also considers so-called clientele effects whereby different groups of
investors have different expected holding periods i.e. they face different probabilities of
suffering a liquidity shock which requires them to sell an asset. In the extreme, these
investors are characterised as buy-and-hold (with no immediate needs for liquidity) and
mark-to-market with a need to trade specified by a simple trading intensity or liquidity
policy. The equilibrium that emerges in this class of models shows that investors with the
shortest holding periods hold the assets with the lowest trading costs and investors with
the longest holding periods hold assets with the highest trading costs. Correspondingly,

they show that illiquid assets must offer higher returns relative to more liquid assets. The
theoretical research tells us we should expect investors with long horizons to earn
liquidity premia by holding relatively illiquid assets. The (absolute) liquidity premium for
a given security (or portfolio) can be thought of as being the price discount or excess
return/yield offered by the security relative to some hypothetical, perfectly liquid security
with otherwise equivalent characteristics. In practice these absolute liquidity premia are
difficult to measure since all assets, with the exception of cash in the reference currency
of the investor, are subject to illiquidity in varying degrees.
In practice, researchers choose to define relative liquidity premia as the difference in price
between two otherwise identical securities with differing levels of liquidity. At any point
in time, different assets and asset portfolios will contain different liquidity premia
dependent on their fundamental liquidity characteristics and market conditions. We can
think of a family of spreads (or price discounts) for different asset pools exhibiting
varying degrees of illiquidity. In practical terms, this means that measures of liquidity
premia will therefore be required to reference some benchmark asset pool. Portfolios of
corporate bonds exhibit low levels of liquidity relative to government bonds and offer a
liquidity premium as a result. However, corporate bonds do offer better liquidity than
some financial assets so their associated liquidity premium should be viewed as one point
on a wider spectrum of values.
Liquidity and asset prices - evidence
The theoretical literature of is strongly supported by empirical studies showing that
illiquid securities are priced at discounts to identical liquid securities irrespective of the
time period studied or the methodology used. In other words, hard-to-trade assets sell at a
different price to more liquid assets with otherwise equivalent characteristics.
The price of liquidity changes through time. In times of market stress, both the level of
illiquidity and the price of liquidity appear to rise. This is consistent with the
microstructure theory.As predicted by the theory on clientele effects (the demand from

long-term buy-and-hold investors to hold illiquid assets and earn the liquidity premia),
the reward for illiquidity appears to be a decreasing function of transaction cost size.
Corporate bonds
The consensus from the academic literature seems clear: liquidity premia do exist in
corporate bond markets. They can be substantial, but vary significantly through time. A
number of different approaches have been adopted to quantify the impact of liquidity on
corporate bond prices.
Microstructure approaches provide worthwhile insights into why liquidity premia
could and should exist in markets with trading frictions, although they tend not to
lend themselves well to empirical estimation.
Direct approaches (including the CDS approach) involve choosing a pair of assets
or asset portfolios which other than liquidity are assumed to be equivalent and then
comparing prices, expected returns or yields.
Structural model approaches using the Merton model. These are closely related to
the direct
method in that a corporate bond is compared to the cost of manufacturing an
approximately
equivalent synthetic position from a risk-free (liquid bond) and an option on the issuing
firms
total assets.
Equities
Much of the so-called small-cap effect (the out performance of small companies
equity over long horizons) is now attributed to their relative illiquidity compared to
larger companies. These equity market liquidity premia have been estimated at 3-8% p.a.
across different equity markets.

Government bonds & covered bonds
Government bond markets provide a rich information set because researchers are able to
compare assets with virtually identical characteristics. The primary focus of researchers
has been on US markets where they have estimated liquidity premia in a range of circa10-
50 basis points.
Other studies examine the liquidity effect in Japanese treasury markets and Pfandbrief
covered bond markets and identify comparable effects on pricing.
Other assets
In addition to stock and fixed income markets, other empirical studies have analysed the
liquidity effect across a variety group of asset classes. The results demonstrate that the
discount for illiquidity can be substantial, particularly for transitionally leveraged stock,
derivatives, real-estate funds, hedge funds and closed-end funds. Further studies reveal
illiquidity effects on the value of currency options, interest rate swap contracts and equity
index-linked bonds.
Audience
This paper should be of interest to all those concerned with the valuation of assets and
liabilities where market prices can be demonstrated, in part, to be determined by liquidity
factors. Given the ongoing development of market-consistent, fair valuations, the
academic consensus will be of interest to accountants, actuaries, financial intermediaries
and regulators.


3 RESEARCH METHODOLOGY
3.1 Introduction :
The data in this project is enabling in primary in nature. Interviewing primary and
secondary data have been the sources of data. Study derives its data mainly from primary
sources of information from the employee of the company and through the questionnaire.
This primary data is used to fill in the gaps while preparing this report and to know
the latest procedure adopted by the company.
3.2 Nature of study:
The study was carried out through primary as well as secondary data.

3.3 Statement of problem :
Stock market has been important barometer of Indian economy. Of late higher volatility
has lead into the decrease of retail participation. Though overall participation and volume
has been consistently maintained but the retail investors are away from the market since
2-3 years. Primarily investments are risky in nature and investors have to consider various
factors before investing in investment avenues. Therefore the study aims to educate the
investors towards different asset classes.
3.4 Objectives :
To know the pattern of investment and factors they consider while investing.
To make comparison of different asset classes.
To analyze the investors preference for different asset classes.
To study the perception towards different asset classes.
To educate the investors towards different asset classes.


3.5 Study of Area :
Study is conducted in Hubli city. And the interactions were carried out for 100
respondents.

3.6 Data Collection Method :
The information necessary for this research study is collected by tapping primary and
secondary sources.

3.7 Primary Data :
Questionnaire
Interaction with people

3.8 Secondary Data :
Company broachers.
Company Data.
Company Reports.
Company Websites.
3.9 Sampling :
Sample size : 100 respondents
Sample unit : Investors


3.10 Sampling Method: Convenient sampling

4 DATA ANALYSIS :
1. How much do you save per month ?

Frequency Percent Valid Percent
Cumulative
Percent
Valid Rs. 0 to 5000 18 18.0 18.0 18.0
Rs.5000-10000 60 60.0 60.0 78.0
10000-15000 18 18.0 18.0 96.0
Rs.15000 above 4 4.0 4.0 100.0
Total 100 100.0 100.0

Interpretation:
From the above data out of 100 respondents, 60 investors are saving their income between 5000
to 10000 income . So it helps them to invest in investment avenues that to decide where to invest.

2
4.00%
9
18.00%
30
60.00%
9
18.00%
Rs.15000 above
10000-15000
Rs.5000-10000
Rs. 0 to 5000
How much do you save per month ?

2. In which investments avenue are you investing ?
Investment avenues Investors
Equity 56
Derivative 14
Commodity 36
Mutual fund 14
Insurance 40
Fixed deposit 18
Real estate 36
Gold 26

Interpretation :This above chart shows that majority of the investors i.e 56 respondents
are investing in equity . And 36 respondents are investing in real estate 40 respondents are
investing insurance and 36 people are investing in commodity.

0
10
20
30
40
50
60
Series1
Series2

3. Are you investing in equity ?

Cumulative
Percent
Valid Yes 56 56.0 56.0 56.0
No 44 44.0 44.0 100.0
Total 100 100.0 100.0
Interpretation:
This chart shows that 56% of the respondents are investing in equity. So we can
understand by this they are investing in equity is to get more return. Most of the
respondents are believed that investing in equity is subjected to risk and return will be
also more.

Are you investing in equity ?
No Yes
F
r
e
q
u
e
n
c
y
60
50
40
30
20
10
0
44
44.00%
56
56.00%
Are you investing in equity ?

4. what parameters do you consider before investing in equity?
Cumulative
Percent
Valid Safety 12 21.4 21.4 21.4
Risk 28 50.0 50.0 71.4
Return 13 23.2 23.2 94.6
Comfort 3 5.4 5.4 100.0
Total 56 100.0 100.0

Interpretation:
This chart shows that 50% of the respondents are considered that investing in equity is
risk, as the same way the second highest respondents i.e 32% of respondents believes
that investing in equity is return. So by this we can consider this as where there is higher
risk there will be a higher return.

what parameters do you consider before investing in equity?
Comfort Return Risk Safety
F
r
e
q
u
e
n
c
y
30
20
10
0
3
5.36%
13
23.21%
28
50.00%
12
21.43%
what parameters do you consider before investing in equity?

5a) From how many years you are trading in equity investment ?

Cumulative
Percent
Valid lessthan a year 16 28.6 28.6 28.6
1--3 years 22 39.3 39.3 67.9
3--5 years 8 14.3 14.3 82.1
5 years & above 10 17.9 17.9 100.0
Total 56 100.0 100.0
Interpretation:
39% of the respondents have been investing in equity between 1 to 3 years. So it clears that more
number of investors are preferring to invest in equity. They have considered equity is one of the
important investment avenue because of high return associated with stock market.
q5a
5 years & above 3--5 years 1--3 years lessthan a year
F
r
e
q
u
e
n
c
y
25
20
15
10
5
0
10
17.86%
8
14.29%
22
39.29%
16
28.57%
q5a

5b) What return do you expect from equity investment ?
Cumulative
Percent
Valid High 10 17.9 17.9 17.9
Medium 46 82.1 82.1 100.0
Total 56 100.0 100.0
Interpretation:
Form the above pie chart we can understand 82 % of the respondents are expecting
medium return from equity investment because as the same way risk is also associated
with equity investment . so thats why more number of investors are investing in equity.

46
82.14%
10
17.86%
Medium
High
q5b

5c) What average amount do you invest in Equity Market ?
Cumulative
Percent
Valid Rs. 5000 34 60.7 60.7 60.7
Rs. 15000 14 25.0 25.0 85.7
Rs. 25000 6 10.7 10.7 96.4
Rs. 35000 & above 2 3.6 3.6 100.0
Total 56 100.0 100.0

Interpretation:
From the above chart, out of 100 respondents 61 % of the respondents are investing their
average amount Rs. 5000 in equity and 25% of the respondents are investing their
average amount of RS. 15000 in equity.
q5c
Rs. 35000 & above Rs. 25000 Rs. 15000 Rs. 5000
F
r
e
q
u
e
n
c
y
40
30
20
10
0
2
6
10.71%
14
25.00%
34
60.71%
q5c

5d) What type of trading you do in Equity ?

Cumulative
Percent
Valid Short term 12 21.4 21.4 21.4
Long term 14 25.0 25.0 46.4
Intra day 30 53.6 53.6 100.0
Total 56 100.0 100.0

Interpretation:
54% of the investors prefer intra day transaction. As they feel that trading by intraday
gives them high and quick and short term gain

30
53.57%
14
25.00%
12
21.43%
Intra day
Long term
Short term
q5d

5e) How do you choose your equity investments (based on) ?
Cumulative
Percent
Valid Performance 22 39.3 39.3 39.3
Dividend record 16 28.6 28.6 67.9
Bonus / right issue 8 14.3 14.3 82.1
Growth rate of a firm 8 14.3 14.3 96.4
Past record of a firm 2 3.6 3.6 100.0
Total 56 100.0 100.0

Interpretation:
The above graph reveals that majority of the investors choose their investments based on
performance of a firm. So it shows investors perception towards investment avenue

2
3.57%
8
14.29%
8
14.29%
16
28.57%
22
39.29%
Past record of a firm
Growth rate of a firm
Bonus / right issue
Dividend record
Performance
q5e

6. Are you investing in commodity ?

Cumulative
Percent
Valid Yes 36 36.0 36.0 36.0
No 64 64.0 64.0 100.0
Total 100 100.0 100.0

Interpretation:
The above graph reveals that 36% of the investors are investing in commodity market.
And 64% of the investors are not investing in commodity market . these investors are
believed that investing in commodity is risk.
64
64.00%
36
36.00%
No
Yes
Are you investing in commodity ?

7. what parameters do you consider before investing in commodity ?

Cumulative
Percent
Valid Safety 4 11.1 11.1 11.1
Risk 10 27.8 27.8 38.9
Return 11 30.6 30.6 69.4
Comfort 11 30.6 30.6 100.0
Total 36 100.0 100.0

Interpretation:
The above chart shows that majority of the investors consider comfort and return as their
parameter before investing in commodity. It shows perception of investors towards
particular investment avenue.
what parameters do you consider before investing in commodity ?
Comfort Return Risk safety
F
r
e
q
u
e
n
c
y
12
10
8
6
4
2
0
11
30.56%
11
30.56%
10
27.78%
4
11.11%
what parameters do you consider before investing in commodity ?

7a) How did you come to know about Commodity market ?

Cumulative
Percent
Valid Through friend 15 41.7 41.7 41.7
Through dealers 11 30.6 30.6 72.2
Through mass media 9 25.0 25.0 97.2
Others 1 2.8 2.8 100.0
Total 36 100.0 100.0

Interpretation :
This chart reveals that majority of investors i.e nearly 42% of investors come to know
about commodity market through friends. And 30 % investors are come to about
commodity market through dealers.

q7a
others Through mass media Through dealers Through friend
F
r
e
q
u
e
n
c
y
15
10
5
0
1
2.78%
9
25.00%
11
30.56%
15
41.67%
q7a

7b) How long you are trading in commodity market ?

Cumulative
Percent
Valid below 1 year 4 11.1 11.1 11.1
1--2 year 12 33.3 33.3 44.4
2 years & above 20 55.6 55.6 100.0
Total 36 100.0 100.0
Interpretation:
This chart shows that majority of the investors are trading from 2 years and above in
commodity market. These investors having good knowledge about commodity market.

q7b
2 years & above 1--2 year below 1 year
F
r
e
q
u
e
n
c
y
20
15
10
5
0
20
55.56%
12
33.33%
4
11.11%
q7b

7c) Your awareness of trading in Commodity market ?

Cumulative
Percent
Valid Total awareness 4 11.1 11.1 11.1
Good awareness 22 61.1 61.1 72.2
Awareness to some
extent
10 27.8 27.8 100.0
Total 36 100.0 100.0
Interpretation:
By this chart, we can understand that majority of the investors i.e 61% are having good awareness
about trading in commodity market. And 27% of respondents are having awareness to some
extent.
10
27.78%
22
61.11%
4
11.11%
Awareness to some
extent
Good awareness
Total awareness
q7c

7d) What do you think as the specialty of trading in Commodity market ?

Cumulative
Percent
Valid Price hedging 2 5.6 5.6 5.6
Regulated marketing 10 27.8 27.8 33.3
Low risk 6 16.7 16.7 50.0
Quality products 18 50.0 50.0 100.0
Total 36 100.0 100.0

Interpretation:
This chart shows that majority of the investors marked that probably they have
recommended others to enter into commodity market.
18
50.00%
6
16.67%
10
27.78%
2
5.56% Quality products
Low risk
Regulated marketing
Price hedging
q7d

8) Are you investing in Real estate ?

Cumulative
Percent
Valid Yes 36 36.0 36.0 36.0
No 64 64.0 64.0 100.0
Total 100 100.0 100.0

Interpretation:
This chart reveals that, majority of the investors i.e 36% investors are preferring to invest
in real estate. And 64% of investors are not investing in real estate. Most of these
respondents believe that investing in real estate can get more return.
Are you investing in real estate ?
No Yes
F
r
e
q
u
e
n
c
y
60
40
20
0
64
64.00%
36
36.00%
Are you investing in real estate ?

9) What parameters do you consider before investing in real esate?

Cumulative
Percent
Valid Safety 7 19.4 19.4 19.4
Risk 6 16.7 16.7 36.1
Return 13 36.1 36.1 72.2
Comfort 10 27.8 27.8 100.0
Total 36 100.0 100.0
Interpretation:
This chart shows that majority of the investors thinks that return as parameters for
investing in real estate. So these investors can get more return on this investment avenues.
what parameters do you consider before investing in real estate ?
Comfort Return Risk Safety
F
r
e
q
u
e
n
c
y
12.5
10.0
7.5
5.0
2.5
0.0
10
27.78%
13
36.11%
6
16.67%
7
19.44%
what parameters do you consider before investing in real estate ?

9a) What is your Investment Strategy for Real Estate ?

Cumulative
Percent
Valid short term 14 38.9 38.9 38.9
long term 16 44.4 44.4 83.3
both a & b 6 16.7 16.7 100.0
Total 36 100.0 100.0

Interpretation:
This chart shows that, majority of the investors i.e 44% of investors having long term
strategy for investing in real estate. And 38 % of the investors are having short term
strategy and 16% are having both short term and long term strategy for investing in real
estate .
q9a
both a & b long term short term
F
r
e
q
u
e
n
c
y
20
15
10
5
0
6
16.67%
16
44.44%
14
38.89%
q9a

7b) How will you hold Title for your Real Estate Investments ?

Cumulative
Percent
Valid sole ownwe 26 72.2 72.2 72.2
Partnership 10 27.8 27.8 100.0
Total 36 100.0 100.0

Interpretation:
By this chart we can understand majority of the investors i.e 72% of the investors are
sole owner and 28% are partnership hold title for investing in real estate.

q9b
partnership sole ownwe
F
r
e
q
u
e
n
c
y
30
20
10
0
10
27.78%
26
72.22%
q9b

7c) How will you finance your Real Estate Investments ?

Cumulative
Percent
Valid conventional 18 50.0 50.0 50.0
unconventional 10 27.8 27.8 77.8
hard money loan 4 11.1 11.1 88.9
private money loan 4 11.1 11.1 100.0
Total 36 100.0 100.0

Interpretation:
This chart shows that 50% of the investors are financing for real estate from conventional.
And 27 % financing from unconventional.
q9c
private money loan hard money loan unconventional conventional
F
r
e
q
u
e
n
c
y
20
15
10
5
0
4
11.11%
4
11.11%
10
27.78%
18
50.00%
q9c

9d) Can you please specify the reasons for investment in real estate ?
Cumulative
Percent
Valid expecting a good long return
on investment
9 25.0 25.0 25.0
expecting a good rental return
4 11.1 11.1 36.1
expecting a quick short term
return on investment
21 58.3 58.3 94.4
Others 2 5.6 5.6 100.0
Total 36 100.0 100.0
Interpretation:
By this chart we can understand majority of the investors i.e 58 % of investors expecting
a quick short term rental return for investment in real estate.
q9d
others expecting a quick short
term return on investment
expecting a good rental
return
expecting a good long
return on investment
F
r
e
q
u
e
n
c
y
25
20
15
10
5
0
2
5.56%
21
58.33%
4
11.11%
9
25.00%
q9d

10) Which investment avenue do you think best ?
Cumulative
Percent
Valid Equity 30 30.0 30.0 30.0
Commodity 18 18.0 18.0 48.0
Real estate 52 52.0 52.0 100.0
Total 100 100.0 100.0
Interpretation:
This pie chart reveals that . majority of the respondents are considered real estate is the
best investment avenue to invest and to get more quick short term return.

which investment avenue do you think best ?
Real estate Commodity Equity
F
r
e
q
u
e
n
c
y
60
50
40
30
20
10
0
52
52.00%
18
18.00%
30
30.00%
which investment avenue do you think best ?

5 FINDINGS :
1. 56% of the investors are investing in equity. These majority investors feels that
more risky to investing in equity.
2. 82% of the equity investors expecting medium return from equity, because it is
having more risk is associated with stock market.
3. 25% of the investors investing their average amount of Rs 15000 in equity market.
Because most of the investors are middle class people.
4. 53% of equity investors are using intraday trading, because they feel that market is
continues fluctuating.
5. 22% of the equity investors are choosing equity on the basis of performance of a
firm
6. 36% of the investors are investing in commodity, because most of them consider
return as their parameter.
7. 41% of investors are come to know about commodity market through friends.
8. 61% of the investors are having good awareness about commodity market. So it
helps them to trade regularly in commodity market.
9. 18% of the investors have thought commodities are quality products. So they are
investing in commodity market.
10. 36% of the investors are trading in commodity market, they consider return as
their parameters before investing in commodity market
11. 44% of the investors are having long term strategy for investing in real estate.
12. 72% of investors are holding sole owner title for real estate investment.
13. 50% of the real estate investors financing from conventional for real estate
investment.
14. 58% of investors specified reason of expecting a quick short term return on
investment of real estate.
15. 52% of the total investors have thought real estate is best investment avenue to
invest, we can consider return and comfort as their parameter before investing.


6 SUGESSTIONS :
1. Majority of the equity share holders feel that investing in equity is risk , so the
company need to guide them in a proper manner.
2. Majority of the equity share holders expecting medium return , so the company
need to give proper suggestions in investing pattern of equities. So it helps them to
expect higher return.
3. The company need to create awareness in the market for commodity market for
increase commodity trade.
4. The company need to educate the investors towards different asset classes.
5. SEBI should conduct training programme, so that investors get much about
different asset classes.
6. As most of the investors consider return and safety as very important investment
parameter while investing , so company should explain to the non investors of
equity market about how best return they can earn from different asset classes.
7. Companies should promote its products on a mass scale to increase its client base.
8. Investors should study the plans investment objectives. Take a note of the risks of
investing in the plan. And check whether they are comfortable with them.


7 CONCLUSION :
The study was conducted to know the investors preference towards different asset
classes. Through this study I found that most the investors know the all the investment
options.
And investors should know the difference between savings and investment . so it
clearly states that investors are educated towards the risk return of the investment, choose
to invest in those avenues. And investors also should not invest in single investment
avenue.

In todays scenario when all services are going to be online, KIFS securities ltd.
is creating awareness about online trading and that client can trade from anywhere the
world. And to expand its services still more better, and KIFS can come with few new
schemes.


8 BIBLIOGRAPHY:
8.1 Books and Magazine :
Financial market service, Punitavati pandyan
Financial Management, Khan and Jain
Business Line
8.2 Web Based :
www.nseindia.com
www.bse.com
www.khandwalagroup.com


ANNEXURE
I, Jayaprakash, a student of K.E.Ss Institute of Excellence in Management Science,
Hubli, studying in second Semester M.B.A, I am conducting a survey on Investment
preference for different Asset Classes. as a part of my Project Work. I request you to
kindly fill in the following details
Name _____________________________________________________________________________
Phone __________________________ Mobile __________________________________
Gender: Male Female
Age _______________ Income __________________________

1) How much do you save per month ?
a)Rs.0 to 5000 b)Rs.5000 to 10000 c) Rs.10000 to 15000 d)Rs. 15000 & above
2) Your Current Investment is in investment avenues are.

Investment Avenues tick ( ) mark
a) Equities
b) Derivatives
c) Commodities
d) Mutual funds
e) Insurance
f) Fixed deposit
g) Real estate
h) Gold
i) Any other, please specify

3) What parameters do you consider before investing ?
Equity Derivative commodity MF Insurance F
D
Real
estate
Gold
Safety
Risk
Return
Comfort

4) Are you investing in equity ? if yes go to question 5
a) yes b) no
5)
A) From how many years you are trading in equity investment ?
a) Less than a year b) 1---3 years c) 3---5 years d) 5 years and above
B) What return do you expect from equity investment ?
a) High b) medium c) low
C) What average amount do you invest in Equity Market ?
a) Rs.5000 b) Rs.15000
c) Rs.25000 d)Rs.35000 and above
D) What type of trading you do in Equity ?
a) Short term b) Long term c) Intra day
E) How do you choose your equity investments (based on) ?
a) Performance b) Dividend record c) Bonus/Right issue
d) Growth rate of a firm e) Firm expansion f) Past record of a firm

6) Are you investing in commodity ? if yes go to question 7
a) Yes b) No
7 )
A) How did you come to know about Commodity market ?
a) Through friend b) Through dealers
c) Through mass media d) others
B) How long you are trading in commodity market ?
a) below 1 years b) 1-2 years c) 2 years & above

C) Your awareness of trading in Commodity market ?
a) Total awareness b) Good awareness
c) Awareness to some extend d) Unaware

D) What do you think as the specialty of trading in Commodity market ?
a) Price hedging b) Regulated marketing
c) Low risk d) Quality products
E) Would you recommend others to enter into Commodity market ?
a) Definitely b) Probably
c) Not sure d) Probably not
8) Are you investing in Real Estate ? if yes go to question 9
a) yes b) no

9)
A) What is your Investment Strategy for Real Estate ?
a) short term b) long term c) both a&b
B) How will you hold Title for your Real Estate Investments ?
a) sole owner b) partnership
C) How will you finance your Real Estate Investments ?
a) conventional b) unconventional
c) hard money loan d) private money loan
D) Can you please specify the reasons for investment in real estate ?
a) expecting a good long return on investment b) expecting good rental return
c) expecting a quick short term return on investment d) others

10) Which investment avenue do you think best ?
a) Equity b)Commodity c) Real estate d) others

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KIFS Securities Limited

KESs Institute of Excellence in Management Science, Hubli 1 | P a g e

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