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SHIV SHAKTI
International Journal of in Multidisciplinary and
Academic Research (SSIJMAR)
Vol. 4, No. 1, February 2015 (ISSN 2278 – 5973)
Investment Options In Capital Market- An Empirical Study On Coimbatore Capital
Limited
M.PADMINI
Assistant Professor, Department of Management Studies, M. Kumarasamy College of
Engineering, Karur- 639 113, E-mail: [email protected]
K.SINDHUJA
Department of Management Studies, M. Kumarasamy College of Engineering, Karur- 639 113,
E-mail:[email protected]
R.KUMARA KANNAN
Assistant Professor, Department of Management Studies, Francis Xavier Engineering College
Tirunelveli – 627 003
--
Impact Factor = 3.133 (Scientific Journal Impact Factor Value for 2012 by Inno Space
Scientific Journal Impact Factor)
Indexing:
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Abstract:
It paper has been carried out at Coimbatore capital. Coimbatore capital is one of the Leading
brokerage house in India and it has been emerged as a power house in the financial services
industry. The main objective of the study is to identify the benefits of investing in Capital
market to retail investors, and comparison between the capital market Investment which other
financial institution, which will be useful to the organization for attracting more numbers of
customers. Primary data were collected through structured interview schedule. Secondary
data are collected from websites, journals and books. The suggestions from the respondents
are useful for the organization to develop their capital market benefits. The researcher has
prepared the interview schedule and the data’s are collected from the existing customers and
the present customers through survey method. After the survey, the researcher has analysed
through various critical methods. The findings and suggestions will be discussed in the
forthcoming chapters.
Key word: ANNOVA, Simple weighted average
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INTRODUCTION
The economic growth and liberalization in India has a positive effect on the capital market.
As the stock markets boom, more people tend to invest in the capital markets. The investors
may take their own decision and sometimes they will consult the stockbrokers regarding buy
or sell the securities. The stockbroker utilizes the expertise of the research department of his
firm to provide this kind of information and the people involved in such research called
securities analysts or market analysts. The main aim of the security analyst is to research and
evaluate companies and their profitability and also the indications of growth and expansion of
the company. In India, Securities and Exchange Board of India (SEBI) is the authorized body
which regulates the operations of stock exchanges, banks and others financial institutions.
Similarly, other countries have their regulating body and licensing authorities who regulate
the operations of capital markets and finance professionals in the respective countries.They
should be able to handle heavy work load, priorities and complete work under strict deadlines,
work as a part of the team and able to keep abreast of new technologies and development in
this field. Volatility is the variability of asset price changes over a particular period of time.
It is very hard to predict it correctly and consistently. In capital markets, volatility presents a
strange paradox to market participants, academicians and policy makers. Without volatility
superior returns cannot be earned, since a risk free security offers small returns. However,
there is no easy answer to the question of which model should be used to calculate volatility
since different volatility models which are being used by practitioners lead to different
volatility estimates. In the past two decades, this has been a fertile area for research in
financial economics for both academicians as well as practitioners. Unfortunately, most of the
work was done in developed markets in the context of stock and forex markets.
COMPANY PROFILE
Coimbatore Capital Limited (CCap) was promoted by industrialist and financial expert
Mr.D.Balasundaram is a Founder and Director of Coimbatore Stock Exchange Limited and
Inter Connected Stock Exchange of India Limited. One of the leading regional exchanges in
India is Coimbatore Capital. It offers complete financial solutions that encompass every
sphere of life. From commercial banking to stock broking of mutual funds, investment
banking, the group caters to the financial needs of the individuals and corporate.
Mr.Balasundaram is a Member of Executive Committee of the National Stock Exchange of
India Limited (NSE) and also served as an Executive Committee Member of the National
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Securities Depository Limited (NSDL) earlier. Mr.Balasundaram also served as an elected
President of Indian Chamber of Commerce and Industry, Coimbatore and Coimbatore Stock
Exchange Limited. Coimbatore Capital was founded with a vision built on the concept of '
Enrich Yourself ' for the future. As Chairman of Coimbatore Capital and its associate
companies, he has been instrumental in building the business model for Coimbatore Capital.
The accolades that Coimbatore capital has been graced with include :.
Prime Ranking Award (2003-04)- Largest Distributor of IPO’s
Finance Asia Award (2004)- India’s best Equity House
Finance Asia Award (2005)- Best Broker In India
Euro money Award(2005)- Best Equities House In India
Coimbatore Commodities Limited (CCOM):
Coimbatore Commodities is a wholly owned subsidiary of Coimbatore Capital which extends
trading in the Commodity derivatives. Coimbatore Commodities is a Member of National
Commodities and Derivatives Exchange Limited (NCDEX) and Multi Commodities
Exchange Limited (MCX). Trading in commodities is extended in strict compliance with
statutory rules and regulations. All regular updates come though SMS alert in all mobiles. It
has helpful for the investor to invest their money in stock market.
In south India one of the most trusted and reputed investment services company is
Coimbatore Capital. It has a wide array of wealth creating solution for a growing client base
in South India. In the year 1995, the company emerged as one of the best stock broking
houses focusing on the retail segment in South India. It has over 150 terminals / branches
across South India and they servicing more than 70,000 customers and a coverage of 187
cities and headquarters in Coimbatore. Coimbatore Capital is focusing on expanding its reach
to semi urban and rural areas.
Coimbatore Capital Account
Its basic account that allows doing trading over the internet and phone.Offering ease and
convenience. Coimbatore capital Gateway Account can be activate with any amount less than
Rs. 1,00, 000/- as margin, by way of cash or stock. The customers can also have 4 times
exposure on the margin.
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Services Offered by Coimbatore Capital
1. Margin Finance
Coimbatore capital Securities is the first online websites to provide with margin finance. This
means that one can invest in stocks by paying only 50% of the actual money due.
2. Instant Credit on Delivery Trades
Instant credit for delivery marked trades is a great product advantage offered by Coimbatore
capital securities. When one sells his shares, he do not realize the payment immediately. The
exchange makes the payment to the broker according to the settlement calendar. After
receiving payment from the exchange from the exchange the broker makes payment to the
client. Realization of the sale proceeds of the shares take anywhere between 4 days from the
days from the date of the sale depending on what day of the trading cycle the shares were
sold.
3. Call and Trade Facilities
Call and trade enables customers to trade while on the move. With Coimbatore Capital
account, customers can trade even when they cannot access the internet.
4. Easy Access to Neat Software
Coimbatore capital trading access terminal is the terminal in the customers desktop. With
NEAT customers can watch the live ticker rates.
Capital Market Concept
A capital market is the market where securities are traded. It is in this market that
government and companies raise funds for long term. The capital market consists of both the
primary markets. The distributions of new issues among investors take place in the primary
market. On the other hand, existent securities are traded in the secondary market. In the
capital market montages, bonds, equities and other such investment funds are traded. The
funds provided by the capital market are both overnight and long term. The financial
instruments used in this market have long maturity periods..
The following financial instruments are dealt with in this market
Foreign exchange instrument
Equity instruments.
Insurance instruments.
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Credit market instruments.
Derivative instruments.
Hybrid instruments.
Bond Market:
The bond market is a place for buying and selling of debt securities mainly in the form of
bonds. The size of the bond market is almost $45 trillion.
Stock Market:
The stock market forms a major portion of the capital market. In the stock market are traded
stocks of companies and their derivatives are listed on the stock exchanges worldwide. The
stocks exchanges are places where buyers and sellers of securities and stocks come together
under one roof to carry our trade. The important exchanges of the capital market are:
a) Major Exchanges
1. National Stock Exchange (NSE) of India
2. Bombay Stock Exchange (BSE) of India
b) Regional Stock Exchanges
3. Ahmadabad Stock Exchange
4. Bangalore Stock Exchange
5. Bhubaneswar Stock Exchange
6. Calcutta Stock Exchange
7. Cochin Stock Exchange
8. Coimbatore Stock Exchange
9. Delhi Stock Exchange
10. Guwahati Stock Exchange
11. Hyderabad Stock Exchange
12. Jaipur Stock Exchange
13. LudhianaStock Exchange
14. Madhya Pradesh Stock Exchange
15. Madras Stock Exchange
16. Magadh Stock Exchange
17. Mangalore Stock Exchange
18. Meerut Stock Exchange
19. OTC Exchange Of India
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20. Pune Stock Exchange
21. Saurashtra Kutch Stock Exchange
22. Uttar Pradesh Stock Exchange
23. Vadodara Stock Exchange
STATEMENT OF THE PROBLEM
Due to LPG the average income has increased considerably.People have various options for
saving like banks, investment in gold, fixed assets, insurance, capital market and mutual
funds. Investing in shares need some basic knowledge and tactics.How far the investor
possesses awareness is a matter of question.Also the problem of risk is involved.Hence this
study is conducted with the above back ground.
OBJECTIVES OF THE STUDY
i. To know the benefits of investing in capital market to retail investors.
ii. Comparison between capital market investments with other financial institution.
iii. To determine the existing investors awareness about the capital market.
iv. To offer suggestions and recommendations regarding investment in capital market to
retail investors.
Hypothesis of the study:
H0 = There is no significant relationship between the educational qualification of the
respondent and financial instrument in the capital market.
LIMITATION OF THE STUDY
i. It is not possible to analyse all the aspects in details with in the time allowed.
ii. The respondent’s responses were not truly representation in nature.
iii. The investment pattern analysis has been limited only 100 investors.
iv. An interpretation of this study is based on the assumption that the respondent
has given correct information.
v. The economy and industry are wide and comprehensive that it is difficult all
the likely factors influencing the investor’s investment pattern in the given
period of time.
vi. This study limiting factors life time, place and resources.
REVIEW OF LTERATUR
James M. Poterba and Lawrence H. Summers (1986), in their paper “The
Persistence of Volatility and Stock Market Fluctuations” evaluated the changing risk
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premium hypothesis and examined the influence of changing stock market volatility on the
level of stock prices. The study used the tool of autocorrelation, partial auto correlation, and
serial correlation.
AmitaBatra (2004) in his paper,” Stock Return Volatility Patterns in India”, analyzed
the time variation in volatility in the Indian stock market during 1979-2003. Monthly stock
returns have been used for analysis. Asymmetric GARCH model has been used to estimate
the element of time variation in volatility. This analysis also shows that stock market cycles
in India have not intensified after financial liberalization.
Janak Raj and Sarat Dhal (2008) in their paper entitled, “Integration of India’s stock
market with global and major regional markets” analyzed the factors contributing to
growing financial integration. The study used descriptive statistics, correlated and co
integration for testing the portfolio return of the capital. It is suggested that for the long run
portfolio diversification cannot benefit the investors.
Ser-Huang Poon and Clive W. J. Granger (2003) in their study on “Forecasting Volatility
in Financial Markets: A Review”pointed out that the United States have caused great
turmoil in financial markets on several continents and a negative impact on the world
economy. In this study, it was observed that to measure Performance of the financial market
(after the financial crisis) the tools are used by standard deviation, GARCH, time series
model, EWMA, ARIMA, etc.
S. S. S. Kumar (2006) in his article entitled “Comparative Performance of
Volatility Forecasting Models in Indian Markets” evaluated the ability of ten different
statistical and econometric volatility forecasting models to the context of Indian stock and
forex markets. The study used tools like Random walk,.Historical mean, Moving average,
simple regression, Exponential Weighted moving average, Simple and higher order GARCH
models. The result showed that during the study period there was heavy volatility in the
stock market.
METHODOLOGY
Scope of the Study:
The primary market starts from broad environmental to the industry, which influences the
share price and finally analysing the companies, potentiality by considering possible risk
associated with securities for investing public. Income and risk factor’s play a significant role
while selected particular product, so it can create an opportunity for one product and may not
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for other, the analysing impact of income and risk on investment pattern of investors is
important. As research reports shows that frequency of investment pattern, factors, income
level play more significant role in deciding pattern of investment. So analysing the factors
that offers investment pattern of investors criteria provide the valuable insights.
Research Design:
Random sampling techniques i have used for my present study.
Sampling Size:
From the investors of capital market 100 respondents were investment at random from
various portfolios for the research and I have selected sample by way of questionnaire.
Source of Data
A capital market is a market for securities like debt or equity, where business enterprises or
companies and governments can raise long term funds, in which money is provided for
periods longer than a year, as there raising of short term funds takes place on other markets.
Indian
Tools Used:
The statistical tool used here is percentage analysis. The analysis and interpretation has
been done using the statistical tools like simple percentage, Chi-square test method.
A) Simple Percentage Method:
The percentages are often used in data presentation for them simply numbers, reducing all
of them to a 100 range. The use of percentage reduces the data in the standard from with base
equal to 100 that facilitates relative comparisons.
No. of respondents
Percentage method = ---------------------------------
Total no. of respondent
B) ANOVA
It is a statistical technique specially designed to test whether the means of more than two
quantitative populations are equal. It consists of classifying and cross classifying statistical
result and testing whether the means of a specified classification differ significantly.
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DATA ANALYSIS AND INTERPRATION
Age Group of the Respondent
S.no Particulars NO. of Respondents Percentage
1 20-25 yrs 2 2.0
2 26-30 yrs 32 32.0
3 31-35 yrs 34 34.0
4 36-40 yrs 26 26.0
5 Above 40 yrs 6 6.0
Total 100 100.0
Income Level of the Respondent
S.no Particulars NO. of Respondents Percentage
1 10000-20000 9 9.0
2 20001-30000 29 29.0
3 30001-40000 26 26.0
4 40001-50000 28 28.0
5 Above50000 8 8.0
Total 100 100.0
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People awareness in Capital Market
S.no Particulars NO. of Respondents Percentage
1 Well Aware 57 57.0
2 Medium 43 43.0
Total 100 100.0
Preference of Investment in Coimbatore capital Ltd
S.no Particulars NO. of
Respondent
Percentage
1 Long Term Investment 42 42.0
2 Short Term Investment 58 58.0
Total 100 100.0
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Preferences towards Level of Risk and Return in Capital Market
S.no Particulars NO. of Respondents Percentage
1 High Risk & High Return 36 36.0
2 Medium Risk & Medium Return 63 63.0
3 Low Risk & Low Return 1 1.0
TOTAL 100 100.0
0
20
40
60
80
high risk and high return medium risk and medium
lowrisk and loe return
The level of growth in Financial Markets
S.no Particulars NO. of Respondent Percentage
1 Highly Satisfaction 38 38.0
2 Satisfaction 46 46.0
3 Neutral 16 16.0
TOTAL 100 100.0
0
100
Short term investment Long term investment
PERCENTAGE
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Choice towards the Investment
S.no Particulars NO. of Respondent Percentage
1 Mutual Fund 14 14.0
2 Portfolio Management Services 33 33.0
3 Individual Trading 16 16.0
4 Unit Linked Products 37 37.0
TOTAL 100 100.0
Impression towards Primary and Secondary Market
S.no Particulars No. of Respondent Percentage
1 Primary Market 14 14.0
2 Secondary Market 36 36.0
3 Both 50 50.0
TOTAL 100 100.0
0
20
40
60
highly satisfaction satisfaction neutral
0
10
20
30
40
Mutual fund portfolio management services
individual trading unit linked products
PERCENTAGE
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Return based Analysis of Portfolio
S.no Particulars No. of Respondent Percentage
1 Mutual funds 12 12.0
2 Fixed deposit 23 23.0
3 Real-estate 16 16.0
4 Share/commodity/market 24 24.0
5 Other investment option 25 25.0
Total 100 100.0
Mutual Fund Gives Better Returns in the Capital Market
S.no Particulars No. of Respondent Percentage
1 Reliance 23 23.0
2 ICICI Prudential 19 19.0
3 SBI 18 18.0
4 Others 40 40.0
TOTAL 100 100.0
0
50
100
Primary Market Secondary Market Both
Percentage
02040
PERCENTAGE
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Inference:
Above 30 years old investors only investing in the stock market compare to youngsters.
People know very well about the stock market but the investing levels are very low because
of risk fear. Major investors in the stock markets are speculators and they will think to earn
more return in the stock market with in stipulated time so they are investing in major stocks
are listed above reliance,ICICI,SBI like that. Mainly people are investing in bank deposits
rather than securities. Primary market investors are less than the secondary market and all
investors are willing to take medium risk for their investment.
Analysis of Educational Qualification of the Respondent and Financial Instrument in
the Capital Market
Funds Sum of
Square
Df Mean Square F Sig.
Mutual funds
Between Groups
Within Groups
Total
4.593
36.407
41.000
3
96
99
1.531
.
379
4.037
.009
Fixed deposit
Between Groups
Within Groups
Total
1.218
37.542
38.760
3
96
99
0.406
0.391
1.038
.379
Post office deposit
Between Groups
Within Groups
Total
1.670
49.720
51.390
3
96
99
.557
.518
1.075
.364
0
50
Reliance ICICI prudential SBI Others
PERCENTAGE
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Real estate
Between Groups
Within Groups
Total
4.573
38.417
42.990
3
96
99
1.524
.400
3.809
.013
Commodity
Between Groups
Within Groups
Total
2.011
51.949
53.960
3
96
99
.670
.541
1.239
.300
ANOVA TABLE
Factors Df ANOVA
Value
F Significant
Mutual fund 3 4.037 0.009 Significant
Fixed deposit 3 1.038 0.379 Non-Significant
Post office deposit 3 1.075 0.364 Non-Significant
Real-estate 3 3.809 0.013 Significant
Commodity 3 1.239 0.300 Non-Significant
Interpretation:
From the above table is inferred that, the p value for instrument variables fixed deposit
(0.379), post office deposit (0.364), and commodity(0.300) are >0.05. so, we accept null
hypothesis and there is no significant relationship between the instrument variables(fixed
deposit, post office deposit and commodity) and the significant level.
Since the p value for the instrument variables mutual fund (0.009), Real-estate (0.013) ,<0.05
so we reject the null hypothesis and accept the alternative hypothesis. So there is a
relationship between the instrument variable (mutual fund and Real-estate) and the
satisfaction level.
FINDINGS
i. 34% of the respondents are age has 30-35years in the investors.
ii. 29% of the respondents’ income level is 20001-30000 earnings per month.
iii. The respondents are well aware in the capital market is 57%.
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iv. The respondents are investing in to short term investment in the capital market 58%.
v. 46% of the respondents are satisfied towards speed growth in the capital market.
vi. The respondents are impression to investment is both in the capital market is 50%.
vii. 25% of the respondents are investing in other for better returns in the capital market.
SUGGESTION
i. The investors must be made aware of the pros and cons of each area, so as to help to
decide upon which area to choose.
ii. The study shows that only less member of people invest in mutual funds, which is
now a major area of investment.
iii. This is because of the fact that they are unaware about the mutual fund.
iv. Therefore the company should give proper guidance in this matter.
v. The company should treat their investors more friendly so as to both existing
customers as well as new customers.
vi. Conferences and meetings need to be arranged for the investors, to clear all their
doubts and to increase the scope for investment.So that they can take investment
decisions.
CONCLUSION
Investor’s awareness is more important in the capital market. Companies performing well
naturally attract more investors where investment in cash segment.Mutual funds is found to
be more attracting investment option in nowadays. Medium risk and medium return is mostly
preferred by investors. Since market condition is not always the same, investors need to
change their option according to market conditions. The investors need to be educated on the
matters of terms, risks and returns. It is highly essential that the players and regulators should
protect the interest of individual investors and thus create confidence in their mind. This
interest shown towards them will help in retaining the investors and attracting new ones in
the long run. Capital Market is an emerging market. This study helps the investor to make an
investment and to know the percentage of investors in t he capital market as well as various
portfolios.
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REFERENCE
Bibliography:
1. Ser-Huang Poon and Clive W. J. Granger1 (2003),“Forecasting Volatility in Financial
Markets: A Review”,Journal of Economic Literature Vol. XLI , No 478–539
2. S. S. S. Kumar (2006), “Comparative Performance of Volatility Forecasting Models in
Indian Markets”, Asia Pacific Journal of Management,Vol. 33, 2
3. Jean-Philippe Peters (2001), “Estimating and forecasting volatility of stock indices using
asymmetric GARCH models and (Skewed) Student-t densities” The IUP Journal of
Applied Finance, Vol.16, No.1.
4. AmitaBatra (2004), “Stock Return Volatility Patterns in India” International research
journal of Finance and Economics, Issue 14.
5. Janak Raj and Sarat Dhal (2008), “Integration of India’s stock market with global and
major regional markets”, Springer Publication, Mumbai.
6. Jian yang1, James W. Kolari, and Insik Min (2002),“ Stock market integration and
financial crises: the case of Asia”,JEL Classification: G15, C32.
7. HojatallahGoudarzi, C. S. Ramanarayanan (2010), “Modeling and Estimation of
Volatility in the Indian Stock Market”International Journal of Business and
Management,Vol 5,No 2.
8. Ser-Huang Poon, Clive Granger (2002),“Forecasting Volatility in Financial Markets: A
Review”, JEL classification: A10, C10, C50, G10.
9. James M. Poterba and Lawrence H. Summers (1986), “The Persistence of Volatility and
Stock Market Fluctuations”, American Economic Association, Vol. 76, No. 5
10. Aggarwal R, C.Inclan and R Leal, 1999, “volatility in Emerging Stock Markets”,
Journal of Financial and Quantitative Analysis 34(1),33-55
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