wealth management fortune

8/6/2019 wealth management fortune

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INDUSTRY PROFILE

In last few years, India has emerged as the one of the most rapidly growing economies in the

world. India has been categorized with nations like Brazil, Russia and China (BRIC Nations) who

are going to be the prime drivers of world economy in next few decades. Since the time, India first

opened its gates to foreign investment (FDI & FII), there has been a complete turnaround. Now the

traditional Hindu rate of growth is a thing of past and clocking 8%-9% GDP growth rate is the

common norm. India along with other Asian powerhouse China makes for the fastest growing

nations in the entire world.

Even if we take the case of ongoing global recession, India has managed to perform far better than

other nations. Right from banking system to financial regularities, the country has thrived on

discipline and out-performance. The booming Indian economy resulted in widespread growth and

arrival of new industries. The most sparkling phenomenon is in form of financial market of India.

Financial services in India has taken a giant leap from the days of standing in banks queue for

several hours for opening a saving account or trying to get some fixed deposits (FD) done. The

financial services have increased manifold and now people have the choice to choose the one that

most suitably fits the bill.

SECURITIES MARKET

Securities market refers to all the facilities and the institutional arrangements for the buying

and selling of recognized securities. An efficient securities market is an indispensable pre-requisite

to economic development. A developed securities market system provides for a great level of

wealth in the economy. Economic liberalization, privatization and foreign institutional investors

participation provided a new impetus to the growth of securities market. In simple terms, the

concept of LPG paved way for the development of securities market to a larger extent. Securities

market is the market for equity, debt and derivatives. It is a market where purchases and sales of

securities whether of Government or Semi-Government bodies or other public bodies and also

shares and debentures issued by joint stock companies are affected.

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Structure of the Securities market

Securities are dealt both in the Primary market or New Issue Market (NIM) and Secondary

market or Stock market. Primary market or NIM is the segment in which the newly established or

incorporated companies offer with new securities for the first time for public subscription.

The floatation of securities in the Primary market may be in the form of:

1. Public Issue

Public Issue is where the issuing company directly offers securities to the general public at large.

This is the most common method followed by joint stock companies.

2. Rights Issue

Rights Issue involves selling securities to the existing shareholders, in proportion to their

existing share ownership.

3. Private Placement

Private Placement refers to buying of securities by the Issue Houses or Brokers outright with the

intention of selling them in retail to the public. It is mostly of equity-related instruments of

unlisted companies.

4. Preferential allotment

Preferential allotment refers to the issue of issue of equity by a listed company to selected

investors at a price which may or may not be related to the prevailing market price.

A detailed flowchart representing all the classifications of mode of share issue and the modeof investing are depicted as follows.

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FLOW CHART OF ISSUES

Secondary market

Secondary market or stock market5 is where existing or outstanding companys securities are

traded. The companys securities are eligible for trading in stock markets only through listing.

Listing of securities means that the securities which are admitted for trading on a recognised

stock exchange. Hence listing is the very basis of stock market operations.

MARKET CONDITIONS

The securities market is really a good avenue for investment of hard-earned money, provided

that the pros and cons of the securities market are known. The securities market is a great

leveler, in that it lifts up one day and dumps on the mat the very next day. This is true in case of

the Indian stock market. Though the domestic institutions play a dominant role in the Indian

stock market, it is the foreign institution which changes the trend of the market. Hence volatility

is the word that springs in the minds of the Indian investors in the present scenario.

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The past four years from the phenomenal crash of May 2004 had witnessed unprecedented gains

for the Indian equity scenario. Stocks which sold for Rs.50 and Rs.60 four years ago rose to such

dizzying heights as Rs.2000 and Rs.4000, trading almost 400 to 500 times. The strange feature

here is that none of the investors had the vision or foresight to buy and hold their stocks for four

years at a stretch.

At the slightest upward trend, most people liquidated their holdings leaving with handsome

profits. But the year 2008 had been so far very unfavorable to the investors. The reason is due to

the rise in international crude oil prices from US$60 a barrel in 2007 to the US$140 a barrel,

changed everything for the worse. With inflation soaring high in India, the investors sold their

positions for fear of losing heavily. Foreign Institutional Investors (FIIs) pulled out totally and

left the markets in the lurch leading to a share depreciation of the rupee value. The tradedvolumes in Indian stock market have reduced considerably during 2008.

MARKET FUNCTIONS

The functions of securities market are

Securities market is one of the most important sources for companies to raise money. This

helps the companies to incorporate a new business or expand or diversify the existing business.

Securities market helps in easy marketability of securities.

Securities market helps in buying and selling of securities at a quicker rate and thereby

providing liquidity to the investors. This is an attractive feature of investing in securities,

compared to other less liquid investments such as real estate.

Share prices constitute an important part of the dynamics of economic activity and can

influence or be an indicator of social mood. In short, an economy where the securities market is

on the rise is considered to be an upcoming or a developing economy.

Exchanges act as the clearing house for each transaction in the securities market. It

collects and delivers the shares and guarantee payment to the seller of a security. This helps in

elimination of risk to the individual buyers and sellers.

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Securities market facilitates economic growth and a healthy stock market reflects the

status of any country. Thus stock market is vital for every countrys development.

FINANCIAL SERVICES

BROKING FIRMS

INVESTMENT SERVICES

FINANCIAL CONSULTING

NATIONAL BANKS

NUMEROUS PRIVATE BANKS

MUTUAL FUNDS

EQUITY MARKET

CAR AND HOMELOANS

OTHER BANKING SERVICES

Services are many and offered by blue chip names of the industry. Most of the companies in

financial segment offer taxation services, project consultancy services and all the services of

wide financial gamut.

Whether its taking a car loan or booking your favorite house, going for pension plan or getting

your child insured, numerous attractive financial services are available at affordable costs.

Personal banking services have acquired an altogether new meaning. Now customers have

multiple choices to choose from. One can find all the financial services on the internet that are

just a call away.

STOCK BROKING FIRM

Stock broking is a non-banking activity. Stock broker is an individual or a firm which

executes trades of securities on behalf of clients for remuneration. The broker executes the order

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through exchanges and the investors are linked to the stock exchanges through the trading

members who are to comply with the regulatory discipline. Any person with the prescribed

eligibility criteria can become a member and can exit his position by surrendering trading

membership without any hidden cost.

FUNCTIONS OF STOCK BROKING FIRM

A stock broker is an individual or an organization, who is licensed by the government to

trade in stocks/shares and has the right to access the share market. On payment of a small fee, he

acts on your behalf in the stock market and carries out your transactions of buying and selling of

shares. Besides these, he also provides professional advice in debentures sale/purchase of

government bonds, and listed property trusts etc.

b) Full Service Broker (Advisory):

Stock brokers are generally divided in two categories:

- Full Service Brokers- Discount Brokers

As the name would indicate comprehensive services from trading to financial planning of the

clients are provided by a full service broker. Based on your financial aims and objectives, he

provides advice on the client's investment portfolio and additions/alterations required in the

some from time to time. Since he provides comprehensive services, his charges are a little higher

than discount brokers.

c) Selection of a full service broker:

As full service broker will be your vital link for making financial deals, the selection of the samehas to be undertaken with great caution and circumspection. You need to assess some of his

capabilities in the following fields:

1. How much he charges for the services he provides and how they compare with others in the

market?

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2. Is his advice and data backed by adequate equity research?

3. Does he have access to floats?

4. What is the style and pattern of his investment?

5. Is his communication system reliable? Does he communicate with his clients on a monthly,

weekly or daily basis? Is he printing any newsletter etc?

6. What is the frequency of review of your investment portfolio? Will he review it often

though, to increase your returns?

d) Discount brokers (Non Advisory):

Discount brokers generally provide limited services of buying and selling your stocks/shares;

based on the orders given by you, via telephone and/or internet. Since their services are of a non-

advisory nature, their fee is also less vis--vis full service brokers.

various accounts an investor should have for trading in securities market

Beneficial owner Account (B.O. account) / Demat Account: It is an account opened with a

depository participant in the name of client for the purpose of holding and transferring securities.

Trading Account: An account which is opened by the broker in the name of the respective

investor for the maintenance of transactions executed while buying and selling of securities.

Client Account / Bank Account: A bank account which is in the name of the respective client

and is used for debiting or crediting money for trading in the securities market.

COMPANY PROFILE

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COMPANY NAME Fortune Wealth Management CompanyIndia (p) Limited

PROMOTER Mr. JOSE C. ABRAHAM., MBA

DIRECTOR Mrs. LANA JOSE

INDUSTRY FINANCIAL SERVICES

SERVICE SHARE BROKING

HEAD QUARTERS COIMBATORE

LOCATION 1056, AVANASHI ROAD,OPP: THE NILGIRIS,

COIMBATORE - 641018

TAMIL NADU.

BRANCHES 55

TURN OVER 150 CRORES

TELEPHONE 0422-4334333/4334343

FAX 0422-4334331

WEBSITE www.fortunewmc.com

E-MAIL [email protected]
http://www.fortunewmc.com/mailto:[email protected]://www.fortunewmc.com/mailto:[email protected]


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FORTUNE WEALTH MANAGEMENT COMPANY INDIA (P) LTD. IS

1. MEMBER OF NSE

2. DEPOSITORY PARTICIPANT OF CDSL (CENTRAL

DEPOSITORY SERVICES LIMITED) - DP ID 12041600

3. MEMBER CURRENCY DERIVATIVES SEGMENT IN NSE

4. MEMBER OF COIMBATORE STOCK EXCHANGE (CSE)

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Fortune Wealth Management Company India (p) Limited was formed in the year

2003 by Mr. Jose C Abraham. Company was admitted to the trading and Self Clearing

membership of NSE in the year 2004.It became a depository participant of CDSL in the year

2006.Fortune Commodities Limited its fully owned subsidiary is a member of MCX.Fortune is

also a member in the Currency Derivatives Segment of NSE.

Mr. Jose C Abraham, M.B.A, also a member of Coimbatore and Inter Connected Stock

Exchange started his career as a banker and went on to become a professional stock Broker. His

Knowledge of the Equity, Currency and Money Markets is the foundation for the success of

Fortune. He has a clean track record, a reputation for integrity and a steady vision for the

company. Jose C Abraham is the Managing Director of the Company and holds 81.25% of

shares of the company along with Mrs. Jose.

Mrs. Lana Jose, M.Sc, his wife is a director of the company and is in charge of the D.P currently

Fortune has been a profitable company from the first year of operations.Ups and downs in the

market had hardly any affect on its performance. Fortune has now grown to over 55 branches

and daily Turnover is in the region of 150 crores. Most of the branches are in kerala and

Tamilnadu. Company is in the process of expanding its footprint to the length and breadth of

the Country.

WORKFORCE

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S.No Name Designation

New Account opening

Mrs. Prina Exe. Customer care

Mrs. Sharmila PRO.

Ms. Reshma Receptionist

General

Ms. Vimala Exec. Asst. To MD

Survillance Department

Mr. M.T. Santhosh Technical Manager

Ms. Gayathri Surveillance

Ms. Chitra Surveillance

Accounts Department

Ms. Nathiya Acc. Officer

Mrs. Rathnamala Acc. Officer

Mr. Prabu Compliance officer

Mrs. Theivanai Acc. Officer

Ms. Sathya Acc. Officer DP Department.

Ms. Nithya DP officer

Mr. Selvam DP officer

Mr. Manju DP officer

Ms. Harini DP officer

Research and development

Mr. Venkat R&D (Fundamentals &

technical)

Ms. Saranya

Dealers F&O

Mrs. Sudha NSE F&O

Mr. Radhakrishnan NSE F&O


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SERVICES PROVIDED

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EQUITY & DERIVATIVES

o CASH (BSE)

o F & O (NSE)

COMMODITY TRADING

o MCX

CURRENCY TRADING

PORTFOLIO MANAGEMENT SERVICE (PMS)

DEPOSITORY SERVICES

Services

Equity & Derivatives

Trading in Equities with Fortune truly empowers you for your investment needs. A highly

process driven, diligent approach backed by powerful Research & Analytics and one of the best

in class dealing rooms ensures that you have a superlative experience. Further, Fortune also has

one of the largest retail networks, with its presence in more than 500 locations across more than

180 towns & cities. This means, you can walk into any of these branches and connect to our

highly skilled and dedicated relationships managers to get the best services. You could also

choose to enjoy the freedom to execute your own trade through our online mechanism.

Equity

Equity is a share in the ownership of a company. It represents a claim on the companys assets

and earnings. As you acquire more stock, your ownership stake in the company increases. The

terms share; equity and stock mean the same thing and can be used interchangeably

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Holding a companys stock means that you are one of the many owners (shareholders) of a

company, and, as such, you have a claim (to the extent of your holding) to everything the

company owns. Yes, this means that technically, you own a portion of every piece of furniture;

every trademark; every contract, etc. of the company. As an owner, you are entitled to your share

of the companys earnings as well as any voting rights attached to the stock.

Another extremely important feature of equity is its limited liability, which means that, as a

part owner of the company, you are not personally liable if the company is not able to pay its

debts. In case of other entities such as partnerships, if the partnership goes bankrupt, the partners

are personally liable towards the creditors/lenders and they may have to sell off their personal

assets like their house, car, furniture, etc., to make good the loss. In case of holding equity

shares, the maximum value you can lose is the value of your investment. Even if a company ofwhich you are a shareholder goes bankrupt, you can never lose your personal assets.

DERIVATIVES

The term "Derivative" indicates that it has no independent value, i.e. its value is entirely

"derived" from the value of the underlying asset. The underlying asset can be securities,

commodities, bullion, currency, live stock or anything else. In other words, Derivative means a

forward, future, option or any other hybrid contract of pre determined fixed duration, linked forthe purpose of contract fulfillment to the value of a specified real or financial asset or to an index

of securities.

With Securities Laws (Second Amendment) Act,1999, Derivatives has been included in the

definition of Securities. The term Derivative has been defined in Securities Contracts

(Regulations) Act, as:-

A Derivative includes: -

a security derived from a debt instrument, share, loan, whether secured or unsecured, risk

instrument or contract for differences or any other form of security;

b.a contract which derives its value from the prices, or index of prices, of underlying securities;

FUTURES CONTRACT

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Futures Contract means a legally binding agreement to buy or sell the underlying security on a

future date. Future contracts are the organized/standardized contracts in terms of quantity,

quality (in case of commodities), delivery time and place for settlement on any date in future.

The contract expires on a pre-specified date which is called the expiry date of the contract. On

expiry, futures can be settled by delivery of the underlying asset or cash. Cash settlement enables

the settlement of obligations arising out of the future/option contract in cash.

A future, in financial terminology, is a financial contract that obligates the buyer (seller) to

purchase (sell and deliver) financial instruments or physical commodities at a future date, unless

the holder's position is closed prior to expiration. Mutual funds and large institutions to hedge

their positions when the markets are rocky, preventing large losses in value, often use futures.

The primary difference between options and futures is that options provide the holder the right tobuy or sell the underlying asset at expiration, while futures contracts holders are obligated to

fulfill the terms of their contract

OPTIONS CONRACT

Options Contract is a type of Derivatives Contract which gives the buyer/holder of the

contract the right (but not the obligation) to buy/sell the underlying asset at a predetermined

price within or at end of a specified period. The buyer / holder of the option purchases the rightfrom the seller/writer for a consideration which is called the premium. The seller/writer of an

option is obligated to settle the option as per the terms of the contract when the buyer/holder

exercises his right. The underlying asset could include securities, an index of prices of securities

etc.

Under Securities Contracts (Regulations) Act,1956 options on securities has been defined as

"option in securities" meaning a contract for the purchase or sale of a right to buy or sell, or a

right to buy and sell, securities in future, and includes a teji, a mandi, a teji mandi, a galli, a put,

a call or a put and call in securities.

An Option to buy is called Call option and option to sell is called Put option. Further, if an

option that is exercisable on or before the expiry date is called American option and one that is

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exercisable only on expiry date, is calledEuropean option. The price at which the option is to be

exercised is called Strike price or Exercise price.

Therefore, in the case of American options the buyer has the right to exercise the option at

anytime on or before the expiry date. This request for exercise is submitted to the Exchange,

which randomly assigns the exercise request to the sellers of the options, who are obligated to

settle the terms of the contract within a specified time frame.

As in the case of futures contracts, option contracts can be also be settled by delivery of the

underlying asset or cash. However, unlike futures cash settlement in option contract entails

paying/receiving the difference between the strike price/exercise price and the price of the

underlying asset either at the time of expiry of the contract or at the time of exercise / assignment

of the option contract.

INDEX FUTURES AND INDEX OPTION CONTRACTS

Futures contract based on an index i.e. the underlying asset is the index, are known as Index

Futures Contracts. For example, futures contract on NIFTY Index and BSE-30 Index. These

contracts derive their value from the value of the underlying index.

Similarly, the options contracts, which are based on some index, are known as Index options

contract. However, unlike Index Futures, the buyer of Index Option Contracts has only the right

but not the obligation to buy / sell the underlying index on expiry. Index Option Contracts are

generally European Style options i.e. they can be exercised / assigned only on the expiry date.

An index, in turn derives its value from the prices of securities that constitute the index and

is created to represent the sentiments of the market as a whole or of a particular sector of the

economy. Indices that represent the whole market are broad based indices and those that

represent a particular sector are sectoral indices.

In the beginning futures and options were permitted only on S&P Nifty and BSE Sensex.

Subsequently, sectoral indices were also permitted for derivatives trading subject to fulfilling the

eligibility criteria. Derivative contracts may be permitted on an index if 80% of the index

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constituents are individually eligible for derivatives trading. However, no single ineligible stock

in the index shall have a weightage of more than 5% in the index. The index is required to fulfill

the eligibility criteria even after derivatives trading on the index has begun. If the index does not

fulfill the criteria for 3 consecutive months, then derivative contracts on such index would be

discontinued.

By its very nature, index cannot be delivered on maturity of the Index futures or Index

option contracts therefore, these contracts are essentially cash settled on Expiry.

COMMODITY

Commodities are more than what you think they are. Almost everything you see around is made

of what market considers commodity. A commodity could be an article, a product or material

that is bought and sold. It could be any kind of movable property, except actionable claims,

money and securities. Commodity trade forms the backbone of world economy.

The Indian commodity market is estimated to be around Rs. 11 million, and forms almost 50

percent of the Indian GDP. It deals with agricultural commodities such as rice, wheat,

groundnut, tea, coffee, jute, rubber, spices and cotton. Besides precious metals such gold and

silver, the commodity market also deals with base metals like iron and aluminum and energy

commodities such as crude oil and coal. The list is long.

What do the commodity brokers do? They simply facilitate the business of buyers and sellers,

for a legalized rate of commission.

PORTFOLIO MANAGEMENT SERVICES (PMS)

Portfolio management service (PMS) is a type of professional service offered by portfolio

managers to their client to help them in managing their money in less time. Portfolio managersmanage the stocks, bonds, and mutual funds of clients considering their personal investment

goals and risk preferences. In addition to money, the portfolio managers manage the portfolio of

stocks, bonds, and mutual funds.

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Benefits of Choosing Portfolio Management Services (PMS) Instead of Mutual Funds:

While selecting Portfolio management service (PMS) over mutual funds services it is foundthat portfolio managers offer some very services which are better than the standardized product

services offered by mutual funds managers. Such as:

Asset Allocation: Asset allocation plan offered by Portfolio management service PMS helps in

allocating savings of a client in terms of stocks, bonds or equity funds. The plan is tailor made

and is designed after the detailed analysis of client's investment goals, saving pattern, and risk

taking capacity.Timing: portfolio managers preserve client's money on time. Portfolio

management service PMS help in allocating right amount of money in right type of saving plan

at right time. This means, portfolio manager provides their expert advice on when his client

should invest his money in equities or bonds and when he should take his money out of a

particular saving plan. Portfolio manager analyzes the market and provides his expert advice to

the client regarding the amount of cash he should take out at the time of big risk in stock market.

Flexibility: portfolio managers plan saving of his client according to their need and preferences.

But sometimes, portfolio managers can invest client's money according to his preference because

they know the market very well than his client. It is his client's duty to provide him a level of

flexibility so that he can manage the investment with full efficiency and effectiveness. In

comparison to mutual funds, portfolio managers do not need to follow any rigid rules of

investing a particular amount of money in a particular mode of investment.Mutual fund

managers need to work according to the regulations set up by financial authorities of their

country. Like in India, they have to follow rules set up by SEBI.

Services and Strategies Provided Through Portfolio Management Are:

portfolio managers works as a personal relationship manager through whom the

client can interact with the fund manager at any time depending on his own preference.

To discuss any concerns regarding money or saving, the client can interact with his

appointed portfolio manager on monthly basis.

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The client can discuss on any major changes he want in his asset allocation and

investment strategies.

Portfolio management service (PMS) handles all type of administrative work like

opening a new bank account or dealing with any financial settlement or depository

transaction.

While choosing online Portfolio management service (PMS), the client receives a

User-ID and Password, which helps him in getting online access to his portfolio details and

checking his portfolio as frequent as he want.

Portfolio management service (PMS) also help in managing tax of his client based

on the detailed statement of the transactions found on his portfolio.

There are types of payment criteria offered by portfolio managers to their client, such as:

1. Fixed-linked management fee.

2. Performance-linked management fee.

In fixed-link management fee the client usually pays between 2-2.5% of the portfolio valuecalculated on a weighted average method.

In performance-linked management fee the client pays a flat fee ranging between 0.5-1.5%

based on the performance ofportfolio managers. The profits are calculated on the basis of 'high

watermarking' concept. This means, that the fee is paid only on the basis of positive returns on

the investment.

In addition to these criteria, the manager also gets around 15-20% of the total profit earned bythe client. The portfolio managers can also claim some separate charges gained from

brokerage, custodial services, and tax payments.

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BUSINESS OPERATION INSIDE FORTUNE WEALTH MANAGEMENT

DEMAT ACCOUNT OPENING

TRADING

RESEARCH AND DEVELOPMENT

o FUNDAMENTAL ANALYSIS

o TECHNICAL ANALYSIS

SURVEILLANCE

BACK OFFICE WORK

ACCOUNTS MAINTANENCE

ARBITRATION

CUSTOMER SERVICE

VALUE ADDED

DEMAT ACCOUNT OPENING

Demat refers to a dematerialised account.

Though the company is under obligation to offer the securities in both physical and demat

mode, you have the choice to receive the securities in either mode.

If you wish to have securities in demat mode, you need to indicate the name of the depository

and also of the depository participant with whom you have depository account in your

application.

It is, howeverdesirable that you hold securities in demat form as physical securities carry the

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risk of being fake, forged or stolen.

Just as you have to open an account with a bank if you want to save your money, make cheque

payments etc, Nowadays, you need to open a demat account if you want to buy or sell stocks.

OPENING AN INDIVIDUAL DEMAT ACCOUNTIS A TWO-STEP PROCESS:

You approach FORTUNE WEALTH MANAGEMENT and fill up the Demat account-opening

booklet. You will then receive an account number and a DP ID number for the account from the

FORTUNE. Quote both the numbers in all future correspondence with your DPs.

So it is just like a bank account where actual money is replaced by shares. to open

yourdemat account. Let's say your portfolio of shares looks like this: 150 of Infosys, 50 of

Wipro, 200 of HLL and 100 of ACC. All these will show in yourdemat account. So you don't

have to possess any physical certificates showing that you own these shares. They are all held

electronically in your account. As you buy and sell the shares, they are adjusted in your

account. Just like a bank passbook or statement, the DP will provide you with periodic

statements of holdings and transactions.

Practically all trades have to be settled in dematerialised form. Although the market regulator,

the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500 shares to be

settled in physical form, nobody wants physical shares any more.

A broker is separate from a DP. A broker is a member of the stock exchange, who buys and

sells shares on his behalf and on behalf of his clients.

A DP will just give you an account to hold those shares.

DEMAT ACCOUNT OPENING COST AND OTHER CHARGES

The cost of opening and holding a Demat account. There are four major charges usually levied

on a Demat account: Account opening fee, annual maintenance fee, custodian fee and

transaction fee. All the charges vary from DP to DP.

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Depending on the DP, there may or may not be an opening account fee. Private banks, such as

ICICI Bank, HDFC bank and UTI bank, do not have it. However, players such as Karvy

Consultants and the State Bank of India charge it. But most players levy this when you re-open a

Demat account, though the Stock Holding Corporation offers a lifetime account opening fee,

which allows you to hold on to your Demat account over a long period. This fee is refundable.

Annual maintenance fee: This is also known as folio maintenance charges, and is generally

levied in advance.

Custodian fee: This fee is charged monthly and depends on the number of securities

(international securities identification numbers ISIN) held in the account. It generally ranges

between Rs. 0.5 to Rs. 1 per ISIN per month.DPs will not charge custody fee for ISIN on which

the companies have paid one-time custody charges to the depository.

Transaction fee: The transaction fee is charged for crediting/debiting securities to and from the

account on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction,

HDFC Bank and ICICI Bank peg the fee to he transaction value, subject to a minimum amount.

The fee also differs based on the kind of transaction (buying or selling). Some DPs charge only

for debiting the securities while others charge for both. The DPs also charge if your instruction

to buy/sell fails or is rejected.

In addition, service tax is also charged by the DPs.

TRADING

NSE

-CASH

-FUTURES AND OPTIONS

BSE

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-CASH

CURRENCY

RESEARCH AND DEVLOPMENT

The methods used to analyze securities and make investment decisions fall into two very

broad categories: fundamental analysis and technical analysis. Fundamental analysis involves

analyzing the characteristics of a company in order to estimate its value. Technical analysis takes

a completely different approach; it doesn't care one bit about the "value" of a company or a

commodity. Technicians (sometimes called chartists) are only interested in the price movements

in the market.

Fundamental analysis

Fundamental analysis is the cornerstone of investing. In fact, some would say that you

aren't really investing if you aren't performing fundamental analysis. Because the subject is so

broad, however, it's tough to know where to start. There are an endless number of investment

strategies that are very different from each other, yet almost all use the fundamentals. The goal

of this tutorial is to provide a foundation for understanding fundamental analysis. It's geared

primarily at new investors who don't know a balance sheet from an income statement. While you

may not be a "stock-picker extraordinaire" by the end of this tutorial, you will have a much more

solid grasp of the language and concepts behind security analysis and be able to use this to

further your knowledge in other areas without feeling totally lost. The biggest part of

fundamental analysis involves delving into the financial statements.

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Also known as quantitative analysis, this involves looking at revenue, expenses, assets,

liabilities and all the other financial aspects of a company. Fundamental analysts look at this

information to gain insight on a company's future performance. A good part of this tutorial will

be spent learning about the balance sheet, income statement, cash flow statement and how they

all fit together. But there is more than just number crunching when it comes to analyzing a

company. This is where qualitative analysis comes in - the breakdown of all the intangible,

difficult-to-measure aspects of a company. Finally, we'll wrap up the tutorial with an intro on

valuation and point you in the direction of additional tutorials you might be interested in.

fundamental analysis is a technique that attempts to determine a securitys value by focusing on

underlying factors that affect a company's actualbusiness and its future prospects. On a broader

scope, you can perform fundamental analysis on industries or the economy as a whole.The term simply refers to the analysis of the economic well-being of a financial entity as

opposed to only its price movements.

Fundamental analysis serves to answer questions, such as:

Is the companys revenue growing?

Is it actually making a profit?

Is it in a strong-enough position to beat out its competitors in the future?

Is it able to repay its debts?

Is management trying to "cook the books"?

Of course, these are very involved questions, and there are literally hundreds of others you might

have about a company. It all really boils down to one question: Is the companys stock a good

investment? Think of fundamental analysis as a toolbox to help you answer this question.

derivative. As long as you look at the economic fundamentals, you are doing fundamental

analysis. For the purpose of this tutorial, fundamental analysis always is referred to in the

context of stocks.

Fundamentals: Quantitative and Qualitative You could define fundamental analysis as

researching the fundamentals, but that doesnt tell you a whole lot unless you know what

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fundamentals are. As we mentioned in the introduction, the big problem with defining

fundamentals is that it can include anything related to the economic well-being of a company.

Obvious items include things like revenue and profit, but fundamentals also include everything

from a companys market share to the quality of its management. The various fundamental

factors can be grouped into two categories: quantitative and qualitative. The

financial meaning of these terms isnt all that different from their regular definitions. Here is

how the MSN Encarta dictionary defines the terms:

Quantitative capable of being measured or expressed in numerical terms.

Qualitative related to or based on the quality or character of something, often as opposed to its

size or quantity.

In our context, quantitative fundamentals are numeric, measurable

characteristics about a business. Its easy to see how the biggest source of quantitative data is the

financial statements. You can measure revenue, profit, assets and more with great precision.

Turning to qualitative fundamentals, these are the less tangible factors surrounding a business -

things such as the quality of a companys board members and key executives, its brand-name

recognition, patents or proprietary technology.

Quantitative Meets QualitativeNeither qualitative nor quantitative analysis is inherently better

than the other. Instead, many analysts consider qualitative factors in conjunction with the hard,

quantitative factors. Take the Coca-Cola Company, for example. When examining its stock, an

analyst might look at the stocks annual dividend payout, earnings per share, P/E ratio and many

other quantitative factors. However, no analysis of Coca-Cola would be complete without taking

into account its brand recognition. Anybody can start a company that sells sugar and water, but

few companies on earth are recognized by billions of people. Its tough to put your finger on

exactly what the Coke brand is worth, but you can be sure that its an essential ingredient

contributing to the companys ongoing success.

Technical analysis is a method of evaluating securities by analyzing the statistics generated by

market activity, such as past prices and volume. Technical analysts do not attempt to measure a

security's intrinsic value, but instead use charts and other tools to identify patterns that can

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suggest future activity. Just as there are many investment styles on the fundamental side, there

are also many different types of technical traders. Some rely on chart patterns, others use

technical indicators and oscillators, and most use some combination of the two. In any case,

technical analysts' exclusive use of historical price and volume data is what separates them from

their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care

whether a stock is undervalued - the only thing that matters is a security's past trading data and

what information this data can provide about where the security might move in the future.

TECHNICAL ANALYSIS

Technical analysis is a method of evaluating securities by analyzing the statistics generated by

market activity, such as past prices and volume. Technical analysts do not attempt to measure a

security's intrinsic value, but instead use charts and other tools to identify patterns that can

suggest future activity. Just as there are many investment styles on the fundamental side, there

are also many different types of technical traders. Some rely on chart patterns, others use

technical indicators and oscillators, and most use some combination of the two. In any case,

technical analysts' exclusive use of historical price and volume data is what separates them from

their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care

whether a stock is undervalued - the only thing that matters is a security's past trading data and

what information` this data can provide about where the security might move in the future.

The field of technical analysis is based on three assumptions:

1. The market discounts everything.

2. Price moves in trends.

3. History tends to repeat itself.

1. The Market Discounts Everything A major criticism of technical analysis is that it only

considers price movement, ignoring the fundamental factors of the company. However, technical

analysis assumes that, at any given time, a stock's price reflects everything that has or could

wwvaffect the company - including fundamental factors. Technical analysts believe that the

company's fundamentals, along with broader economic factors and market psychology, are all

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priced into the stock, removing the need to actually consider these factors separately. This only

leaves the analysis of price movement, which technical theory views as a product of the supply

and demand for a particular stock in the market.

2. Price Moves in Trends In technical analysis, price movements are believed to follow trends.

This means that after a trend has been established, the future price movement is more likely to be

in the same direction as the trend than to be against it. Most technical trading strategies are based

on this assumption.

3. History Tends To Repeat ItselfAnother important idea in technical analysis is that history

tends to repeat itself, mainly in terms of price movement. The repetitive nature of price

movements is attributed to market psychology; in other words, market participants tend to

provide a consistent reaction to similar market stimuli over time. Technical analysis uses chart

patterns to analyze market movements and understand trends. Although many of these charts

have been used for more than 100 years, they are still believed to be relevant because they

illustrate patterns in price movements that often repeat themselves.

Business Process Flow Chart

27

CONFIRMATIO

N

CLIENT

REGISTRATION

AGREEMEN

T

ORDER

PLACING

TRADE

CONFIRMATION

CONTRACT

NOTE

DELIVRY AND

CLEARING

SHARE

TRANSFER

SETTLEMEN


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CONTRACT NOTE

A broker has to issue a contract note to clients for all transactions in the form specified by the

stock exchange. The contract note inter-alia should have following:

Name, address and SEBI Registration number of the Member broker.

Name of partner /proprietor /Authorised Signatory.

Dealing Office Address/Tel No/Fax no, Code number of the member given by the

Exchange.

Unique Identification Number

Contract number, date of issue of contract note, settlement number and time periodfor settlement.

Constituent (Client) name/Code Number.

Order number and order time corresponding to the trades.

Trade number and Trade time.

Quantity and Kind of Security brought/sold by the client.

Brokerage and Purchase /Sale rate are given separately.

Service tax rates and any other charges levied by the broker.

Securities Transaction Tax (STT) as applicable.

Appropriate stamps have to be affixed on the original contract note or it ismentioned that the consolidated stamp duty is paid.

Signature of the Stock broker/Authorized Signatory.

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Contract note provides for the recourse to the system of arbitrators for settlement of disputes

arising out of transactions. Only the broker can issue contract notes.

CHAREGES

FORTUNE WEALTH MANAGEMENT CHARGES

1. Brokerage

2. Penalties arising on specific default on behalf of client (investor)

3. Service tax as stipulated.

4. Securities Transaction Tax (STT) as applicable.

SECURITIES TRANSACTION TAX

Securities Transaction Tax (STT) is a tax being levied on all transactions done on the stock

exchanges at rates prescribed by the Central Government from time to time. Pursuant to the

enactment of the Finance (No.2) Act, 2004, the Government of India notified the Securities

Transaction Tax Rules, 2004 and STT came into effect from October 1, 2004.

ARBITRATION

Arbitration is an alternative dispute resolution mechanism provided by a stock exchange for

resolving disputes between the trading members and their clients in respect of trades done on theexchange.

Process for preferring arbitration

The byelaws of the exchange provide the procedure for Arbitration. You can procure a form

for filing arbitration from the concerned stock exchange. The arbitral tribunal has to make the

arbitral award within 3 months from the date of entering upon the reference. The time taken to

make an award cannot be extended beyond a maximum period of 6 months from the date of

entering upon the reference.

Every exchange maintains a panel of arbitrators. Investors may choose the arbitrator of their

choice from the panel. The broker also has an option to choose an arbitrator. The name(s) would

be forwarded to the member for acceptance. In case of disagreement, the exchange shall decide

upon the name of arbitrators.

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In case you are aggrieved by the arbitration award, you can take recourse to the appeal

provisions as given in the bye-laws of the Exchange.

CHARGES AS PER FORTUNE NORMS

01 Account Opening Chargesa) Stamp paper cost

b) Courier Charges

NilRs. 20/-

Rs. 20/-

02 Annual Maintenance Chargesa) Individualb) Corporate

Rs. 200/- (Quarterly Rs. 50/-)Rs. 800/-

03

Custody Charges Nil

04

Demat ChargesDemat rejection chargesRematerialisation Charges

Rs. 5/- per certificate + Courier Charges Rs.30/-Rs. 20/- per rejection + Courier Charges Rs.30/-Rs. 15/- per request + Courier Charges Rs. 30/-

05Bo A/c Debit Charges(On Market & Off Market)

Buying : NilSelling : Rs.17/- per transaction (includingservice tax)

06Failed Instruction Charges Rs. 10/- per transaction

07 Booklet Charges 5 Leaves Rs. 85/- (including service tax)]10 Leaves Rs. 170/- (including service tax)20 Leaves Rs. 340/- (including service tax)25 Leaves Rs. 400/- (including service tax)

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08Pledge Creation chargesPledge Cancellation chargesPledge Invocation charges

Rs. 25/- per pledge requestRs. 25/- per pledge CancellationRs. 25/- per pledge Invocation

OTHER CHARGES In addition to the above, the following specific will be applicable:

31

Cheque BouncingCharges

As per bank charges subject to a minimum of Rs. 50/-Interest @2% per month on the outstanding

Delay in payment

of monthly bill

value

Of the bill from the due date (which would normallyBeone month from the bill date)

Non-payment of bill after thedueDate for payment

the depository services for the account will betemporarily withdrawn. A renewal charges of Rs.100/-Per account will be payable for resuming theDepository operations of the account holder

Extra Statement Rs. 2/- per page subject to a minimum of Rs. 5/-


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SWOT ANALYSIS OF FORTUNE WEALTH MANAGEMENT

STRENGTH

Fortune wealth management is founded by Jose C. Abraham. His experience as an

individual trader and passion towards about the share market has leaded the success of the

company. This the experience and knowledge or rather the knowledge base is the important

strength of the organisation

Customer service rendered by fortune is a noteworthy and adds value to the firm.

The valuable clients used to stay in the trading hall while the trade is done in their

presence. It creates a good rapport between the clients and the staffs or dealers in the trading

hall. It eventually creates a psychological attachment to the clients and thus the clients

become loyal to the fortune wealth management and they stay as a client to the firm for a

longer period of time. This adds to the strength of the firm.

Location of the firms head office is a significant area where most of the creamy

layer people prefer to come. As the investors are mostly of high income group they prefer

sophistication and the fortune is providing that in turn and that turned out to be strength.

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The quality in the work is more significant in the company. They are even educating

the investors by conducting special sessions. As they were educated much more about the

share market and the instruments that are available in the market, they try those instruments

with more investments and thus fortune wealth management can boost up their turnover and

also satisfying the clients by effective trading.

Experience persons are dealing the portfolio management services and they

obviously could make profits even out of a bearish market. Which is one more strength of

the firm.

WEAKNESSES

One of the main weaknesses that fortune has is that it does not have any separate

wing or stream for marketing their product or their brand.

Also no proper HR practices are implemented

The noteworthy event inside the management is the employee retention rate. The

attrition rate inside the company is abnormal and not an advisable fact. It should not be

encouraged and proper measures should be taken, but not much important is given on these

areas. This obviously becomes a weakness to the firm.

OPPORTUNITIES

Share trading and broking has lots of opportunities in the current economy. As the

Indian economy is recovering as fast as other countries could do, the share broking firm

could very well do well.

As far as FORTUNE is concerned, it has more opportunities in this field of business.

If they could improve their marketing with more aggressiveness, they can doubletheir current turnover, profits and client bases.

THREATS

The important threat they face is the attrition rate.

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If the rate is not plummeted by taking necessary actions, then in future the

FORTUNE might not have a talent or skill inventory to proceed the business successfully.

These days we can see more share broking or financial services firms are emerging

at a faster growth.

Also in Coimbatore and especially in the place (Avinashi road) where the

FORTUNE is situated, there are reasonable good numbers of share brokers are based and

they challenge the FORTUNE indirectly.

If FORTUNE is not concentrate on the issues like soaring attrition rate or rather the

employee turnover rate then it would results in a drastic decrease of clients and the clients

may find it easy to switch their operation to a new firm which is providing a better services.

SUGGESTIONS TO THE FIRM

As we are clear about the quality of service provided by FORTUNE WEALTH

MANAGEMENT its our opinion and suggestion to the firm that it should concentrate on

the marketing aspects of the firm.

By ensuring proper marketing of their service and products they can do well with the

clients and will eventually increase the Net worth of the firm and increases the profit margin

manifold times.

The firm should establish a solid HR system to ensure the harnessing the best talents

to the firm.

Also by the HR department they can address the problem of employee attrition rate

which would eventually add value to the firm.

LEARNING FROM THE FIRM

It was a golden opportunity to have our internship in FORTUNE WEALTH

MANAGEMENT, a reputed share broking firm. It is a learning ground where I could learnpractically all the attributes pertaining to the share market and stock exchanges which is the most

important sensitive economic indicator of Indian economy.

THE FOLLOWING ARE THE LEARNING FROM THE INTERNSHIP IN THE FIRM

Initially we experienced the trading online.

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Learnt the sector based shares movements, their volatility, their market

capitalisation and so on.

The risk involved in the share trading was clearly experienced and learnt the way of

hedging the investment in the highly volatile market conditions in order to product the

capital.

Learnt the JORGANS used in the share market parlance.

Understood the expectation of the investors out of the share market.

We could able to relate the corporate news with the fluctuations in the corresponding

companys share prices according to the news.

Understood the ways by which the ANNUAL GENERAL BODY MEETING,

QUARTELY RESULTS could affect their share prices in the market.

Understood the way by which the commodities market functions and the products

available in the MCX exchange and learnt the risks involved in the market.

The way by which international issues affects a share market.

Learnt the FIIs influence over the share market.

Learnt the back office functions of a typical share broking firm.

Learnt the basic functions of the back office which includes accounts maintenance,

surveillance, arbitration, despatch etc.

Use of the software involved in the technical analysis and other trading systems.

The importance of the Customer relationship management in a service industry like

share broking firm.

The functions and responsibilities of the depository participant (DP).

The charges or costs involved in the share transactions.

Overall view on the share market as a whole and the functions and profile of a

typical share broking firm. the risks and returns involved in it.

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CONCLUSION

It was a nice learning experience inside the broking firm FORTUNE WEALTH

MANAGEMENT. In the initial stages of entering the organisation we possessed only an iota of

financial knowledge. The summer internship programme in FORTUNE Wealth Management

Company facilitated us to gain a wide insight into the various dimensions of finance sector. The

practical experience on dealing with the clients and trading on securities like equities and Futures

and Options, the watching of hikes and plummets of currency derivatives, the thrill in the

movement of tick prices of gold and silver inculcated the burning desire to turn to be a successful

financial personality in the near future.

wealth management fortune

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