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A
PROJECT REPORT ONTREND ANALYSYS OF COMMODITY MARKET;
COPPER
UNDERTAKEN AT:
NIRMAL BANG SECURITIES PVT. LTD.
Cannaught Place, New Delhi.
Submitted By:
MOHAMMED ASIF
Guided By:
MR. SHADAB
POST GRADUATION PROGRAMME
(FALL WINTER 2010-12)
ISBE-(A)
SECTION- FD-1
ID NO. -D1012FWISBE-A10255(GGN-2B-GA-2038)
INDIAN INSTITUTE OF PLANNING AND MANAGEMENT
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DECLARATION
I, MOHAMMED ASIF here by declare that the project report entitled TREND ANALYSYS OF
COMMODITY MARKET; COPPER is based on my own work and my indebtedness to other
work/ publications, if any have been duly acknowledged at the relevant place.
PLACE: New Delhi
DATE:
MOHAMMED ASIF
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ACKNOWLEDGEMENT
To acknowledge is very great way to show your gratitude towards the persons who have contributed
in your success in one or other way.
I find words inadequate to express my gratitude to Mr. DHARMESH PATEL for providing me an
opportunity to carry out my Project as such a well reputed and leading stock broking company
Nirmal Bang Securities Private Limited.
At the very outset of the training I deem it is my pious duty to express my sincere thanks also to
companys Gujarat Head Mr. Dharmesh Patel for his continuous guidance and supervision and
support during the project.
I would like to thank MR. SHADAB, who has guided me for my project work and provided
encouragement through out my training period.
This study could not have been successful without the valuable input of the customer of Nirmal
Bang.
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Table of contents
S.no Topic Page No.
1. EXECUTIVE SUMMARY 5
2. INTRODUCTION 6
3. RESEARCH OBJECTIVES &METHODOLOGY
7-10
4. BODY OF THE REPORT - SECTOROVERVIEW
11-21
5. COMPANY DETAILSPRIMARY FINDINGS
22-44
6. INTERNSHIP ACTIVITIES 45-55
7. ASSESSMENT OF THE INTERNSHIP 56-68
8. Conclusion 69
9. Recommendations 70
10. ILLUSTRATION & ANNEXURE 70
11.BIBLIOGRAPHY 71
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EXECUTIVE SUMMARY
This project is completely based on market research of Awareness of Commodity
Market. Under this research, we have taken 100 sample sizes of which 100 questionnaires belong to
Retail investors. On the basis of that we have assessed the awareness of the people towards
commodity market, their preference towards trading in commodity market & in context to segment
(Agro, Precious metals).
For this research, firstly I draft a questionnaire for the research purpose & then I look upon the
working class people of my society for my research.
While pursuing my research work I came to know that majority of Indian investors are not aware of
organized commodity market; their perception about is of risky to very risky investment. Many of
them have wrong impression about commodity market in their minds. It makes them suspicious
towards commodity market. Concerned authorities have to take initiative to make commodity trading
process easy and simple. There is no doubt that in near future commodity market will become Hot
spot for Indian farmers rather than spot market. And producers, traders as well as consumers will be
benefited from it. But for this to happen one has to take initiative to standardize and popularize the
Commodity Market.
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INTRODUCTION:
LEARNING/WORKING TILL DATE:The 2months at Nirmal Bang had been a very fruitful experience.I realized that no matter how much
good we are in learning from books, the real situation is faced when one enter into the real
market.The corporate structure is completely different. With NIRMAL BANG I got the chance to
implement my marketing knowledge and skill to develop the business of the franchisee.
DATABASE COLLECTION
The initial task was to create a database of the potential individual client. The database was formed
through various methods. Firstly, the name and phone numbers of the investors were collected from
the internet and from newspaper. Secondly, initially I had to accompany my seniors to campaigning
programs where name and phone numbers of individual clients were collected.
FIXING APPOINTMENTS
The next step in acquiring clients were to give them a call and finalizing an appointment with the
interested individuals.
VISITINGS POTENTIAL CLIENTS
After the appointment is fixed, the next step was to visit these potential clients. I was most of the timeaccompanied by a senior while visiting any client. I had to visit many clients mostly in Vasantkunj,
Hauzkhas,Noida etc. In these client visits, we used to pitch our product and services according to the
needs of the clients.
FOLLOW UP PROCESS
Most of the potential clients were not readily convinced at the first visit. Thus I had to keep in touch
with these clients and updating my seniors with the present situation
CLOSING DEAL
When a client is convinced, we needed to close the deal by filling up our forms and getting the
required documents like Xerox of PAN card, Xerox of address proof, photograph, etc. When all these
formalities were completed, only then the deal was completed
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RESEARCH METHODOLOGY:
Research methodology is the Procedure adopted for conducting the research study. Research
methodology should be carefully planned as the accuracy reliability and adequacy of results is totally
depending on the Research Methodology followed. It gives the researcher a guideline by which
he/she can decide which techniques and procedures will be applicable to a given problem. Moreover
it helps in the evaluation of research by other also. So for the research to be successful, purposeful
and effective the researcher should plan the Research Methodology before preceding the study.
The following aspect should be considered while designing a Research Methodology.
Research Problem
The first step while conducting a research is to carefully define a problem as the report emphasis on
the TREND ANALYSIS OF COPPER
Research design: A research study conducted scientifically has a specific framework of research from the
problem identification to the research study. The framework of conducting the research is
known as Research Design.
After defining the research problem in a clear-cut terms it will be required to prepare such a
research design which will state the conceptual structure within which the research would be
conducted.
The research study presently done is both subjective and exploratory The study is subjective because.
The sampling technique was convincing sampling.
Use of survey method with the sample population was done in order to extract data.
Structural and well thought out instruments for collection of data were used.
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This measurement-based methodology focuses on market measurement, analysis,
forecasting, strategy, development and monitoring. Data retrieved from the secondary and
primary research regarding the awareness of commodity market was compiled, analyzed and
to provide a market structure and market forecasts.
Sampling Population
For conducting the research study, the population selected was the Investors of India.
Sample size:
Investors of south Delhi region have been taken for the research purpose. In order to realize the
study the objectives a considerably volume of both primary and secondary data is needed. It has
been therefore found necessary to conduct an Interview schedule for gathering relevant data fromthe users.
Primary Data has been collected from the investors during May 11 Jun 11 with the help of a
structured Questionnaire with convenience judgment sample of 100 respondents have been taken
for carrying out the study. These respondents were the working class & businessmen of the society.
Secondary Data the information regarding the Indian commodity market has been drawn from
various published sources. They include Professional business Journals and Magazines, besides the
Newspapers. The data relating to Nirmal Bang Commodities has been collected from company
website and its published sources.
This study is necessarily based on the limited knowledge and little practical exposure the constraints
of resources and time have further imposed limits to the study boundaries.
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RATIONALE FOR STUDY:
The main objective of the study is to find out the awareness level of the persons towards
commodity market.
The need for this can be explained if one knows the importance of understanding the
Customer awareness. So in the following paragraph the Customer awareness and its role in
the success of an organization have been explained.
Customer awareness is taken up to boost the sales of a product by the company. Companies
having service facilities may service a product and price is according and provide it through
the sub brokers and franchise by its distribution network.
Considering the fact that consumer according to the time need, want and the purchasing
power, it depends on the services therefore, the marketers rely on the marketing mix to cater
to the customers efficiently and effectively.
So the companies giving the service, pricing and planning them have to carefully look into the
minds of the consumers and place the services favorably in the minds of the consumers.
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LIMITATIONS:
The respondents of the questionnaire are very busty and could not afford more time to
answer. The average time to response was 5-6 minutes only.
A limited sample size of 100 customers was considered because of time constraint. An
assumption is made that the sample represents the whole population. It will not carry the total
reflection of the copier market. Total sample size is comparatively less to represent the entire
population.
The data was of primary nature. So the degree biases were relatively high as the sample was
randomly selected.
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INDUSTRY PROFILE:HISTORY OF THE STOCK BROKING INDUSTRY:
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago.
In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association"
(which is alternatively known as "The Stock Exchange"). In 1895, the Stock Exchange acquired a
premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombaywas consolidated.
Thus in the same way, gradually with the passage of time number of exchanges were increased and
at currently it reached to the figure of 24 stock exchanges.
This was followed by the formation of associations /exchanges in Ahmadabad (1894), Calcutta
(1908), and Madras (1937).
In order to check such aberrations and promote a more orderly development of the stock market, thecentral government introduced a legislation called the Securities Contracts (Regulation) Act, 1956.
Under this legislation, it is mandatory on the part of stock exchanges to seek government
recognition. As of January 2002 there were 23 stock exchanges recognized by the central
Government. They are located at Ahmadabad, Bangalore, Baroda, Bhubaneswar, Calcutta,
Chennai,(the Madras stock Exchanges ), Cochin, Coimbatore, Delhi, Guwahati, Hyderabad, Indore,
Jaipur, Kanpur, Ludhiana, Mangalore, Mumbai(the National Stock Exchange or NSE), Mumbai (The
Stock Exchange), popularly called the Bombay Stock Exchange, Mumbai (OTCExchange of India),
Mumbai (The Inter-connected Stock Exchange of India), Patna, Pune, and Rajkot. Of course, the
principle bourses are the National Stock
Exchange and The Bombay Stock Exchange, accounting for the bulk of the business done on the
Indian stock market.
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BSE (BOMBAY STOCK EXCHANGE)
The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The
Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the
Tokyo Stock Exchange, which was established in 1878. It is the first Stock Exchange in the Country
to have obtained permanent recognition in 1956 from the Govt. of India under the Securities
Contracts (Regulation) Act, 1956.
A Governing Board having 20 directors is the apex body, which decides the policies and
regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who arefrom the broking comm
Unity (one third of them retire ever year by rotation), three SEBI nominees, six public representatives
and an Executive Director & Chief Executive Officer and a Chief Operating Officer.
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NSE (NATIONAL STOCK EXCHANGE)
NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It
started operations in June 1994, with trading on the Wholesale Debt Market Segment. Subsequently
it launched the Capital Market Segment in November 1994 as a trading platform for equities and the
Futures and Options Segment in June 2000 for various derivative instruments.
MCX (MULTI COMMODITY EXCHANGE)
MULTI COMMODITY EXCHANGE of India limited is a new order exchange with a mandate for
setting up a nationwide, online multi-commodity market place, offering unlimited growth opportunities
to commodities market participants. As a true neutral market, MCX has taken several initiatives for
users in a new generation commodities futures market in the process, become the countrys premier
exchange.
MCX, an independent and a de-mutualized exchange since inception, is all set up to introduce a
state of the art, online digital exchange for commodities futures trading in the country and has
accordingly initiated several steps to translate this vision into reality.
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NCDEX (NATIONAL COMMODITIES AND DERIVATIVES EXCHANGE)
NCDEX started working on 15th December, 2003. This exchange provides facilities to their
trading and clearing member at different 130 centers for contract. In commodity market the main
participants are speculators, hedgers and arbitrageurs.
Facilities Provided By NCDEX
NCDEX has developed facility for checking of commodity and also provides a wear house
facility
By collaborating with industrial partners, industrial companies, news agencies, banks and
developers of kiosk network NCDEX is able to provide current rates and contracts rate.
To prepare guidelines related to special products of securitization NCDEX works with bank.
To avail farmers from risk of fluctuation in prices NCDEX provides special services for
agricultural.
NCDEX is working with tax officer to make clear different types of sales and service taxes.
NCDEX is providing attractive products like weather derivatives
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STOCK MARKET BASIC
What are corporations?
Companies are started by individuals or may be a small circle of people. They pool their money
or obtain loans, raising funds to launch the business.
A choice is made to organize the business as a sole proprietorship where one
Person or a married couple owns everything, or as a partnership with others who may wish to invest
money. Later they may choose to "incorporate". As a
Corporation, the owners are not personally responsible or liable for any debts of the company if the
company doesn't succeed. Corporations issue official-looking sheets of paper that represent
ownership of the company. These are called stock certificates, and each certificate represents a set
number of shares. The total number of shares will vary from one company to another, as each
makes its own choice about how many pieces of ownership to divide the corporation into. One
corporation may have only 2,500 shares, while another, such as IBM or the Ford Motor Company,
may issue over a billion
Shares. Companies sell stock (pieces of ownership) to raise money and provide funding for the
expansion and growth of the business. The business founders give up part of their ownership in
exchange for this needed cash. The expectation is that even though the owners have surrendered a
portion of the company to the
Public, their remaining share of stock will become increasingly valuable as the business grows.
Corporations are not allowed to sell shares of stock on the open
Stock market without the approval of the Securities and Exchange Commission (SEC). This
transition from a privately held corporation to a publicly traded one is
Called going public, and this first sale of stock to the public is called an initial public offering, or IPO.
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Why do people invest in the stock market?
When you buy stock in a corporation, you own part of that company. This gives you a vote at annual
shareholder meetings, and a right to a share of future profits.
When a company pays out profits to the shareholder, the money received is called a "Dividend".
The corporation's board of directors choose when to declare a dividend and how much to pay. Most older
and larger companies pay a regular dividend, most newer and smaller companies do not.
The average investor buys stock hoping that the stock's price will rise, so the shares can be sold at a
profit. This will happen if more investors want to buy stock in a company than wish to sell. The
potential of a small dividend check is of little concern.
What is usually responsible for increased interest in a company's stock is the prospect of the company's
sales and profits going up.
A company who is a leader in a hot industry will usually see its share price rise dramatically.
Investors take the risk of the price falling because they hope to make more money in the market than
they can with safe investments such as bank CD's or government bonds.
What is a stock market index?
In the stock market world, you need a way to compare the movement of the market, up and down, from
day to day, and from year to year. An index is just a benchmark or yardstick expressed as a number
that makes it possible to do this comparison. For e.g. S&P CNX Nifty is the index of NSE and SENSEX
is the index of BSE.
The price per share, like the market cap, has nothing to do with how big a company is.
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The Securities Market consists of two segments, viz. Primary market and Secondary market.
Primary market is the place where issuers create and issue equity, debt or hybrid instruments forsubscription by the public; the Secondary market enables the holders of securities to trade them.
Secondary market essentially comprises of stock exchanges, which provide platform for purchase
and sale of securities by investors. In India, apart from the Regional Stock
Exchanges established in different centers, there are exchanges like the National StockExchange (NSE) and the Over the Counter Exchange of India (OTCEI), who provide nation wide
trading facilities with terminals all over the country. The trading platform of stock exchanges is
accessible only through brokers and trading of securities is confined only to stock exchanges.
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Corporate Securities:
The no of stock exchanges increased from 11 in 1990 to 23 now. All the exchanges are fully
computerized and offer 100% on-line trading. 9644 companies were available for trading on stock
exchanges at the end of March 2002. The trading platform of the stock exchanges was accessible to9687 members from over 400 cities on the same date.
Derivatives Market:
Derivatives trading commenced in India in June 2000. The total exchange traded derivatives
witnessed a volume of Rs. 442,343 crore during 2002-03 as against Rs. 4018 crore during the
preceding year. While NSE accounted for about 99.5% of total turnover, BSE accounted for about
0.5% in 2002-03. The market witnessed higher volumes from June 2001 with introduction of index
options, and still higher volumes with introduction of stock options in July 2001. There was a spurt in
volumes in November 2001 when stock futures were introduced. It is believed that India is the
largest market in the world for stock futures.
Supply and Demand
A stock's price movement up and down until the end of the trading day is strictly a result of supply
and demand. The SUPPLY is the number of shares offered for sale at anyone one moment. The
DEMAND is the number of shares investors wish to buy at exactly that same time. What a share of a
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company is worth on anyone day or at any one minute, is determined by all investors voting with their
money. If investors want a stock and are willing to pay more, the price will go up. If investors are
selling a stock and there aren't enough buyers, the price will go down Period.
Secondary Market Intermediaries
Stock brokers, sub-brokers, portfolio managers, custodians, share transfer agents constitute the
important intermediaries in the Secondary Market.
No stockbrokers or sub-brokers shall buy, sell or deal in securities unless he holds a certificate of
registration granted by SEBI under the Regulations made by SEBI ion relation to them.
The Central Government has notified SEBI (Stock Brokers & Sub-Brokers) Rules, 1992 in exercise of
the powers conferred by section 29 of SEBI Act, 1992. These rules came into effect on 20th August,
1992.
Trading Through Brokers / Traditional Method of Share Trading:-
Trading in the stock exchange can be conducted only through member broker in securities that are
listed on the respective exchange. Investor intending to buy/sell securities in the exchange has to do
so only through a SEBI registered broker/sub-broker. This is very popular concept in India for Share
Trading before the facilities like on line trading introduce.
Both the exchange have switched over from the open outcry trading system to fully automated
computerized mode of trading knows as Bolt and Neat. In this system, the broker trade with each
other through the computer network. Buyers and sellers place their orders specifying the limits for
quality and price. Those that are not matched remain on the screen and is opened for future
matching
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during the day / settlement. After the advent of computerized trading the speed of trading has
increased multi-fold and a fuller view of the market is available to the investors.
To start dealing with broker you have to fill a form with the broker. After fill all the formalities the firm
gives you a User Id no like a bank a/c no. through which you can enter in the transaction with broker.
Broker will gives all the which one investor needed.
What is stock Broker?
A stock broker is one who invests other peoples money until its all gone.
-Woody Allen, American Film Maker
A stock broker is a person or a firm that trades on its clients behalf, you tell them what you want to
invest in and they will issue the buy or sell order. Some stock brokers also give out financial advice
that you a charged for.
It wasnt too long ago and investing was very expensive because you had to go through a full service
broker which would give you advice on what to do and would charge you a hefty fee for it.
There are three different types of stock brokers.
1. Full Service Broker - A full-service broker can provide a bunch of services such as
investment research advice, tax planning and retirement planning.
2. Discount BrokerA discount broker lets you buy and sell stocks at a low rate but
doesnt provide any investment advice.
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3. Direct-Access Broker- A direct access broker lets you trade directly with the electronic
communication networks (ECNs) so you can trade faster. Active traders such as day traders
tend to use Direct Access Brokers
No. of stock broker in India
9368:- Total no of share broker in the country
12687:- The no. of sub-broker.
46%:- The share of trades accounted for by NSE broker
90%: The share of On line trades clocked by segments top five companies
Generally there are two types of trading have been done in India which is given below:
On line Trading / E Broking / Modern Method
Trading through Brokers / Traditional method of Share trading.
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COMPANY PROFILE:
ABOUT NIRMAL BANG
INTRODUCTION:-
Nirmal Bang Group is one of the largest retail broking house in India, providing the investors
state of art services in capital markets in the country. The Group has memberships of Bombay
Exchange Limited, National Stock of India Limited, Multi Commodity Exchange of India Limited,
National Commodity and Derivatives Exchange Limited and is also a depository participant of NSDL
and CDS (I) L, the depositories of the country.
They started in 1986 under Late Shri Nirmal Bang as sub brokers but have grown steadily and
progressively since then. Their clients had contributed tremendously to their growth they recognize
and applaud that, they value their relationship with the customers and for their convenience had all
investing avenues under one roof.
NIRMAL BANG consultant:
NIRMAL BANG believe that they were best positioned to venture into that activity as a Depository
Participant. They were one of the early entrants registered as Depository Participant with NSDL
(National Securities Depository Limited), the first Depository in the country and then with CDSL
(Central Depository Services Limited). Today, It service over 1Lac customer accounts in this
business spread across over 350 cities/towns in India and are ranked amongst the largest
Depository Participants in the country. With a growing secondary market presence.
It has transferred this business to NIRMAL BANG SECURITIES PRIVATE LIMITED (NBSPL), their
associate and a member of NSE, BSE, MCX & NCDEX.
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Business Focus:
The focus of the business is the Customer Customer service, Customer education, Customer
support, Customer relations and last but not the least Customer acquisition. Trade execution
transparency, timely settlements, risk monitoring and superior service shall have topmost priority, in
the best interests of all concerned.
VISION STATEMENT
TO CREATE VALUABLE RELATIONSHIP AND PROVIDE THE BEST FINANCIAL
SERVICES MOST PROFESSIONALLY
MISSION STATEMENT
TO WORK TOGETHER WITH INTEGRITY & MAKE OUR CUSTOMER FEEL
VALUED
RESPECT OUR COLLEAGUE AND THE BUSINESS ITSELF
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Board of Directors
Of
NIRMAL BANG GROUP
NAME POSITION
Mr. Dilip M.
Bang
Director
Mr. Kishor M.
Bang
Director
Mr.Rakesh
Bhandari
Chartered Accountant
Mr. Deepak
Agarval
Chartered Accountant
Mr.Suvinay
Sharma
Chartered Accountant
Mr.Naresh
Samdani
Chartered Accountant
Mr. Deepak
Patel
Chartered Accountant
Mr. Sunil
Jain
Chartered Accountant
Mr.Anup
Agarval
Chartered Accountant
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PPrriinncciippaall AAccttiivviittiieess OOff
NIRMAL BANG GROUP
NIRMAL BANG Securities Private Limited
Member : National Stock Exchange of India Limited
Member : Bombay Stock Exchange Limited
Participant : National Securities Depository Limited
Participant : Central Depository Service (India) Limited
NIRMAL BANG Commodities Private Limited
Member - Multi Commodity Exchange of India Limited
Member - National Commodities and Derivatives Exchange Ltd.
BANG Equity Broking Private Limited
Member - Bombay Stock Exchange Ltd
Nadi Finance & Investment Private Limited
RBI registered Non Banking Finance Company
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Publications of NIRMAL BANG
NIRMAL BANG- Beyond Market
NIRMAL BANG Profile
REGISTERED OFFICE
NEW DELHI Branch
"NIRMAL BANG HOUSE"38, Khatau Building, 2nd Floor,Alkesh Dinesh Modi Marg, Fort,Mumbai - 400 001,Maharashtra.
Flat No. 120, 1st Floor, New Delhi
House, 27 BarakhambaRoad, Cannaught Place,New Delhi - 110 001.
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Organization Chart:
Nirmal Bang
FranchiseBranch
Web Sales Sales Coordinator
Customer
Receptionist
Account Head
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SWOTAnalysis
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Strength:-
23 years of research and broking experience
Understandings of the markets
All financial needs under one roof
Scalable and robust infrastructure
Full fledge research unit comprising of both fundamental & technical research
Dedicated, Qualified and Loyal staff
Flexible Brokerage charges
Weakness:-
Low Brand Image in the market. Low Professionalism
Low Advertisements
Opportunity:-
Large potential market for delivery and intra-day transactions.
Open interest of the people to enter in to stock market for investing
Attract the customers who are dissatisfied with other brokers & DPs.
Up growing markets in commodity and forex trading
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Threats:-
Decreasing rates of brokerage in the market. A Increasing competition against other brokers
& DPs.
Poor marketing activities for making the company known among the customers. A threat of loosing
clients for any kind of weakness of the company. An Indirect threat from instable stock market, i.e.,
low/no profit of NIRMAL BANG's clients would lead them to go for other broker/DP.
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Nirmal Bang Commodities:
Nirmal Bang Commodities is founded in the year 1986 by ShriNirmal Bang, the Nirmal Bang Group
is recognized as one of the largest retail broking houses in India, providing an array of financial
products and services. Their retail and institutional clients have access to products such as equities,
derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services
and PMS. It is amongst the top 10 Brokerage house in the country in terms of branches and
amongst top 15 brokerage houses by trading volume.
It is the member of all principal stock and commodity exchanges in the country.
The group is headed by Mr. Dalip Bang & Kishore Bang, who bring forward industry expertise,
insight & most importantly, create an environment of unmatched commitments to client. Our greatest
asset drawn from a diversity of professional backgrounds, their blend of experience, skill and
dedication is shared with all our clients.
The firms online trading and investment site - www.nirmalbang.com which allows the users to get
access through the various services available like stock quotes, NB Research etc. and it also
publishes its fortnightly magazine named BEYOND MARKET.
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Some key steps of the company :
Success mantrasof Nirmal Bang Commodities:-
The success story of the company is driven by their greatest asset. Drawn from a diversity of
professional backgrounds, their blend of experience, skill and dedication is shared with all our
clients.
Vision of Nirmal Bang Commodities:-
To create valuable relationships
And
Provide the best financial services most professionally.
Mission statement:
Innovative and enthusiastic. We emphasize adequate, thorough research local and world-wide
developments, balancing these with the astute discovery of intrinsic values, synergies and growth.
To Double the market share in retail Equity & Commodity broking market.
To Increase the trading turnover.
To expand the network of our branches.
To Target foreign institutional business and achieve significant volume of the total volume in the
industry.
To provide international commodity trading platform.
To Provide high speed hassle free services to clients by using latest technology.
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As the project is on the COMMODITY; COPPER, it is necessary to know the terms and
the exchange on which it is traded. The details are given as below-
Commodity futures are standard futures contract, which are exchange traded; these contracts have
their respective commodity as its underlying asset and derive the dynamics from it. Such contracts
allow the participant to buy and sell a certain commodity at a certain traded price for future delivery.
A commodity futures contract is generally leveraged giving opportunity for all types of investors to
enter. Typically such a contract has an expiry and delivery attached with it. Commodity futures are
stable speculative instruments and also a good portfolio diversifier.
India has a long history of commodity futures trading. The cotton exchange at Bombay, Bombay
Cotton Exchange, was the first institution to operate the cotton contract in 1921. However, after
1940s, futures trading faced rough weather because of the Governments urge to control inflation.
But the situation has undergone a lot of change since then. For over three decades since mid
1960s, the commodity traders in the country had been demanding resumption of futures trading in
major farm commodities and their products.
With the gradual withdrawal of the government from various sectors in the post-liberalization era, the
need has been felt that various operators in the commodities market be provided with a mechanism
to hedge and transfer their risks. India's obligation under WTO to open agriculture sector to world
trade would require futures trade in a wide variety of primary commodities and their products to
enable diverse market functionaries to cope with the price volatility prevailing in the world markets.
At preent the futures contracts for period up to six months are being traded in a variety of
commodities. Futures trade is allowed in items like gold, silver, copper, crude oil, wheat, pulses,
pepper, castor oil, sugar, soybean, coffee, etc.
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COMMODITY MARKET:
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Introduction to Commodity Market:
What is Commodity?
Any product that can be used for commerce or an article of commerce which is traded on an
authorized commodity exchange is known as commodity. The article should be movable of value,
something which is bought or sold and which is produced or used as the subject or barter or sale. In
short commodity includes all kinds of goods. Indian Forward Contracts (Regulation) Act (FCRA),
1952 defines goods as every kind of movable property other than actionable claims, money and
securities.
In current situation, all goods and products of agricultural (including plantation), mineral and fossil
origin are allowed for commodity trading recognized under the FCRA. The national commodity
exchanges, recognized by the Central Government, permits commodities which include precious
(gold and silver) and non-ferrous metals, cereals and pulses, ginned and un-ginned cotton, oilseeds,
oils and oilcakes, raw jute and jute goods, sugar and gur, potatoes and onions, coffee and tea,
rubber and spices. Etc.
What is a commodity exchange?
A commodity exchange is an association or a company or any other body corporate organizing
futures trading in commodities for which license has been granted by regulating authority.
What is Commodity Futures?
A Commodity futures is an agreement between two parties to buy or sell a specified and
standardized quantity of a commodity at a certain time in future at a price agreed upon at the time of
entering into the contract on the commodity futures exchange.
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Flexibility, certainty and transparency in purchasing commodities facilitate bank financing.
Predictability in prices of commodity would lead to stability, which in turn would eliminate the risks
associated with running the business of trading commodities. This would make funding easier and
less stringent for banks to commodity market players.
STRUCTURE OF COMMODITY MARKET IN INDIA:
Ministry ofConsumer Affairs
FMC (Forward
MarketCommission)
CommodityExchange
NationalExchange
NCDEX MCX NMCE
RegionalExchange
NBOT20 other regional
exchanges
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Contracts Act, Forward Commission (Regulation) Act and various other legislations, which impinge
on its working.
NCDEX is located in Mumbai and offers facilities to its members in more than 550 centres
throughout India. The reach will gradually be expanded to more centres.
Shareholders of NCDEX :
NCDEX is promoted by a consortium of four institutions. These are National Stock Exchange (NSE),
ICICI Bank Limited, Life Insurance Corporation of India (LIC) and National Board for Agriculture and
Rural Development (NABARD). Later on their shares were diluted and more institutions became
shareholders of NCDEX. These are Canara Bank, CRISIL Limited, Indian Farmers Fertilisers
Cooperative Limited (IFFCO), Punjab National Bank (PNB), Goldman Sachs, Intercontinental
Exchange (ICE) and Shree Renuka Sugars Ltd.
All the ten shareholders (now ICICI is not a shareholder of NCDEX) bring along with them expertise
in closely related fields such as agriculture, rural banking, co-operative expertise, risk management,
intensive use of technology, derivative trading besides institution building expertise.
Commodities Traded on NCDEX :
NCDEX gives priority to commodities that are most relevant to India, and where the price discovery
process takes place domestically. The products chosen are based on certain criteria such as price
volatility, share in GDP, correlation with global markets, share in external trade, warehousing
facilities, traders distribution, geographical spread, varieties etc. List of commodities offered for
futures trading on NCDEX are :
SPICES OIL AND OIL SEEDS PRECIOUS METALS
Pepper Caster seeds Gold
chilli Sesame seeds Silver
jeera Cotton seed oilcake Platinum
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NOTE- Currently, rice, sugar, urad and tur are de-listed(as on 1 April 2010)
turmeric Soy bean METALS
coriander Refined soy oil Steel
CEREALS Soybean meal(local and
export)
Copper
Wheat Mustard oil Zinc
Barley Kachhighani mustard oil Aluminium
Maize(yellow/red)
Rapseed- mustard seed
oilcake
Nickel
PULSES Crude palm oil ENERGY
Chana RBD Palmolein Crude Oil
Masoor Groundnut in shell Furnace Oil
Yellow peas Groundnut expeller oil Thermal Coal
OTHERS PLANTATION
PRODUCT
Brent crude oil
Guar seeds Rubber Natural Gas
Potato Coffee-Robusta cherry
AB
FIBRES
Mentha Oil Cashew Indian 28.5 mm cotton
Guar Gurr POLYMERS V 797 Kapas
CER Polypropylene Medium staple cotton
Gur Linear low density
polyethylene
Kapas
Almond Polyvinyl Chloride Raw Jute
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Leading five commodities traded on NCDEX:
2006-
07
2007-08 2008-09 2009-10 2010-11
Guar
Seeds
Guar Seeds Guar Seeds Guar Seeds RM Seeds
silver chana chana pepper Guar Seeds
Refined
Soy Oil
urad gold Refined Soy
Oil
Soybean
seeds
chana silver silver chana turmeric
Guar
gum
gold pepper jeera jeera
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MCX:
MCX stands of MULTI-COMMODITY EXCHANGE. MCX an independent and de-mutualized multi
commodity exchange has permanent recognition from Government of India for facilitating online
trading, clearing and settlement operations for commodity futures markets across the country. Key
shareholders of MCX include Financial Technologies (I) Ltd., State Bank of India (Indias largest
commercial bank) & associates, Fidelity International, National Stock Exchange of India Ltd. (NSE),
National Bank for Agriculture and Rural Development (NABARD), HDFC Bank, SBI Life Insurance
Co. Ltd., Union Bank of India, Canara Bank, Bank of India, Bank of Baroda and Corporation Bank.
Headquartered in Mumbai, MCX is led by an expert management team with deep domain knowledge
of the commodity futures markets. Through the integration of dedicated resources, robust technology
and scalable infrastructure, since inception MCX has recorded many first to its credit.
Inaugurated in November 2003 by ShriMukeshAmbani, Chairman & Managing Director, Reliance
Industries Ltd, MCX offers futures trading in the following commodity categories: Agri Commodities,
Bullion, Metals- Ferrous & Non-ferrous, Pulses, Oils & Oilseeds, Energy, Plantations, Spices and
other soft commodities.
MCX has built strategic alliances with some of the largest players in commodities eco-system,
namely, Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors' Association of
India, Pulses Importers Association, ShetkariSanghatana, United Planters Association of India and
India Pepper and Spice Trade Association.
Today MCX is offering spectacular growth opportunities and advantages to a large cross section of
the participants including Producers / Processors, Traders, Corporate, Regional Trading Centers,
Importers, Exporters, Cooperatives, Industry Associations, amongst others MCX being nation-wide
commodity exchange, offering multiple commodities for trading with wide reach and penetration and
robust infrastructure, is well placed to tap this vast potential.
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Following diagram gives a fair idea about working of the Commodity
market:
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FINDINGS:
1.The level of awareness among the investors about Nirmal Bang is very low
2.Most of the investors are businessman, the tendency of investing is much high among the
businessmen than those involved in service.
3.Most of the investors are invest their money from Kotak securities, Sharekhan, MotilalOswal andvery few of them are known about Nirmal Bang securities pvt.ltd.
4. The most popular source of information about the market among the investors are television and
newspaper followed by internet and business magazines.
5. People are reluctant to invest in commodities apart from Gold, Silver etc. This is due to the lack of
knowledge about the other commodities in them.
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INTERNSHIP ACTIVITY:
COPPER:
Copper was the first mineral that man extracted from the earth and along with tin give rise to Bronze
Age. As the ages and technology progressed, the uses of copper increased. With the increased
demand, exploration of the metal was extended throughout the world laying down the foundations of
the industry as we know it today. The diagram below shows the copper value chain.
Copper value chain:
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World copper production
Region %
Asia: 43
America: 32
Europe: 19
Africa: 4
Oceania: 2
Total: 100
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Industrial consumption
Industry %
Electrical/Electronic 42
Construction 28
Transportation 12
Consumer/General 9
Industrial mach. 9
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Characteristics of Copper
Copper ranks third in world metal consumption after steel and aluminum. It is a
product whose fortunes directly reflect the state of the world's economy.Copper is the
best non-precious metal conductor of electricity. The metal's exceptional
strength, ductility, and resistance to creeping and corrosion, makes it the preferred
and safest conductor for building wiring. Copper is also used in power cables,
either insulated or uninsulated, for high, medium and low voltage applications.
Copper is an essential component of energy efficient motors and transformers
and automobiles.
APPLICATION:
The global demand for copper continues to grow; world refined copper usage has
Surged by around 300% in the last 50 years owing to expanding sectors
such as electrical and electronic products, building construction, industrial
machinery
and equipment, transportation equipment, and consumer and general products.
Coppers chemical, physical, aesthetic properties make it a material of choice
in high technology applications. Since copper is biostatic, that is bacteria does not
grow on its surface, it is also used in air conditioning systems, and as an
anti-germ surface in hospitals.
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Supply and Demand :
Copper mine production was up nearly 2% from 15.805 million MT in 2009 to
16.099 million MT in 2010.
In 2010, global refined copper production was 19.186 million MT, up from 18.653
million MT in 2009, and global refined copper consumption was 19.200 million
MT,compared with 18.243 million MT in the previous year.
After substantial surpluses in 2008 and 2009, when it had seen an oversupply of
343,000 MT and 410,000MT respectively, the global copper market witnessed deficit
of 14000 MT in 2010.
copper usage- 2009
construction 33%
electrical and electronic
products 33%
Industrial machinery 12%
transport 11%
consumer products 11%
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Global Scenario
Economic, technological and societal factors influence the supply and demand of
copper. As society's need for copper increases, new mines and plants are introduced
and existing ones expanded.
Land-based resources are estimated at 1.6 billion tons of copper, and resources in
deep-sea nodules are estimated at 0.7 billion tons.
The global production of refined copper is around 15 million tons
While Chile accounts for 34% of the total world copper mine production, Peru, USA,
China, Australia and Indonesia, together are responsible for around 32%.
Growth in refined copper usage has been expecially strong in Asia where demand has
expaned more than 5-fold in less than 30 years.
Major refined copper exporting countries are Chile, Zambia, Japan, Russia and Peru.
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Indian Scenario:
Indias production of refined copper is approximately around 4% of the total world
production and in terms of figures it is around 600,000 MT
Birla Copper, Sterilite Industries are two major private producers and Hindustan
Copper Ltd the public sector producers.
India is emerging as net exporter of copper from the status of net importer on account
of rise in production by three companies.
Copper goes into various usage such as Building, Cabling for power and
telecommunications, Automobiles etc. Two major states owned telecommunications
service providers; BSNL and MTNL consume 10% of country's copper production.
Growth in the building construction andautomobile sector would keep demand of
copper high.
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CATHODES 17:10 TO 22:40**
SHANGAI
FUTURES
EXCHANGE
(SHFE)
STANDARD
COPPER
CATHODES
5 6:30 TO 9:00
11:30 TO 13:30
COMEX GRADE 1
ELECTROLYTIC
COPPER
25000 POUND 18:00 TO
17:15***
MCX GRADE 1
ELECTROLYTIC
COPPER
1 10:00 TO 23:30#
(MON-FRI)
10:00 TO
14:00(SAT)
* LME SELECT ** LME Ring timing (start time- ring session, end time- kerb trading) *** ET: NY
Time- electronic trading. # day light timing 100:00 to 23:55
COPPER SPECIFICATIONS:
SYMBOL COPPER
Description COPPER MMMYY
Trading period MONDAY TO SATURDAY
Trading session MONDAY TO FRIDAY- 10:00 TO
23:30.
SATURDAY 10:00 TO 14:00Contract Months Bi- monthly contracts
Expiry date Last day of the month
Trading unit 1 MT
Quotation/base value RS/PER KG
Tick size 5 Paise per kg
Maximum order size 70 MT
Daily price limit 4%
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Initial margin Minimum 5 % or based on SPAN
whichever is higher
Special margin In case of additional volatility, a
special margin at such percentage,
as deemed fit; will be imposed
immediately on both buy and sale
side in respect of all outstanding
position, which will remain in force till
volatility persists, after which the
special margin will be relaxed.
Maximum allowable open position FOR INDIVIDUAL CLIENTS :- 5000
MT
For a member: 25000 MT or not more
than 15% of the market-wide open
position, whichever is higher.
Delivery logic Both options
Delivery center Within 20 km outside Mumbai octroi
limit.
Delivery unit 9MT with tolerance limit of +/-%
(90kg)
Due date rate (DDR) calculation Due date rate is calculated on the last
day of the contract expiry, by taking
international spot price of copper and
it would be multiplied by Rupee
US$ rate as notified by the Reserve
Bank Of India.
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STUDY OF COPPER PRICES AS COMPARED TO GOLD:
As per the recent study of copper and gold prices, we can observe a lot of fluctuation in the prices of
both.
The downgrade of the US sovereign debt by Standard and Poors to AA+, from the decades-
untouched rating of AAA, has given another shot in the arm to already rising gold price. As per the
recent data, the gold price touchedRs.26,000 per 10 grams. On the other hand, the prices of copper has fall down to Rs.403. copper
prices act as a strong indicator of economic growth.
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ASSESSMENT OF THE INTERNSHIP:
QUESTIONNAIRE:
Analysis of Commodity Market (Survey)
Name .
Age .
Mail id ..Gender .
Q.1 In which sector do you work?a) Government c) Private
b) Self employed d) Business
e) Other
Q.2 What is your current Annual Income (in Rs)?
a) Below 200000 c) 400000-800000
b) 200000-400000 d) Above 800000
Q.3 What percentage of your income do you invest?
a) Below 10% c) 25-50%
b) 10-25% d) Above 50%
Q.4 Please specify the investment pattern.
a) Short-term c) Long-term
b) Mid-term d) Mix
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If yes, then refer to questions no. 11 to 13
Q.11 Rate the following attributes which influence your decision in choosing a Brokerage House on
the scale of 1 to 5
1 (Least
Preferred)
2(Less
Preferred)
3 (Neutral) 4(More
Preferred)
5 (Most
Preferred)
Customer Service
Proper Guidance
Regular Updates
Trustworthiness
Brokerage Charges
Q.12 In which segment did you want to transact?
a) Natural Metals (Copper, Natural Gas) c) Precious Metals (Gold, Silver)
b) Base Metals (Lead, Zinc) d) Agro commodities (Potato, Pepper, Soybean)
Q.13 Which Commodity exchange do you prefer for your investment?
Ans. .
Q.15 Do you know anything about NIRMAL BANG Pvt. Ltd.?
a) Yes
b)No
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ANALYSIS OF THE QUESTIONAIRE:
Q.1: In which sector do you work?
SECTOR OF RESPONDENTS
Frequency Percent
Valid
Percent
Cumulative
Percent
GOVERNMENT 20 20.0 20.0 20.0
SELF
EMPLOYED
10 10.0 10.0 30.0
PRIVATE 55 55.0 55.0 85.0
BUSINESS 10 10.0 10.0 95.0
OTHERS 5 5.0 5.0 100.0
Total 100 100.0 100.0
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Inference:From the above graph it has been shown that out of 100 respondents, More than half of
the respondents were working in private sector & the rest of the respondents were apportioned in
different sectors.
Q.2: What is your current Annual Income (in Rs)?
INCOME OF RESPONDENTS
Frequency Percent
Valid
Percent
Cumulative
Percent
200000-
400000
50 50.0 50.0 50.0
400000-
800000
40 40.0 40.0 90.0
ABOVE
800000
10 10.0 10.0 100.0
Total 100 100.0 100.0
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From the above graph it has been shown that out of 100 respondents, half of the respondents i.e.
50% invest less than 10% of their income, 30% fall in the category of 10-25% & 5% of the
respondents invest more than 50% of their income. This shows that peoples working in government
sector would have the tendency to invest more of their income.
Q.4: Please specify the investment pattern.
INVESTMENT PATTERN OF RESPONDENTS
Frequency Percent
Valid
Percent
Cumulative
Percent
SHORT
TERM
10 10.0 10.0 10.0
MID TERM 35 35.0 35.0 45.0
LONG TERM 35 35.0 35.0 80.0
MIX 20 20.0 20.0 100.0
Total 100 100.0 100.0
Inference:
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From the above graph it has been shown that only 10% of the respondents prefer short-term
investments, 35% each respondents prefer mid-term &long term investment pattern and the rest
20% prefer the mixture of all. This shows that around one-third of the respondents done their
investment for the future contingencies.
Q.5: Do you invest in Commodity market?
DO YOU INVEST IN COMMODITY MARKET
Frequency Percent
Valid
Percent
Cumulative
Percent
YES 20 20.0 20.0 20.0
NO 80 80.0 80.0 100.0
Total 100 100.0 100.0
Inference:
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From the above graph, it has been shown that only 20% of the respondents prefer to invest in
commodity market as their investment, this shows the less awareness of the respondents towards
commodity market. Government agencies & NGO should do some seminars/conferences to educate
the investors about commodity market.
Q.6: In which Commodity exchange do you transact?
IN WHICH COMMODITY EXCHANGE DO YOU TRANSACT
Frequency Percent
Valid
Percent
Cumulative
Percent
MCX 20 20.0 100.0 100.0
DO
NOT
INVEST
80 80.0
Total 100 100.0
Inference:
From the above table, it has been shown that out of 100 respondents, only 20% of the investors
invest in commodity market & out of 20 investors who invest in commodity market all of the 20
investors invest in MCX.
Q.7: In which segment did you transact?
IN WHICH SEGMENT DID YOU TRANSACT
Frequency Percent
Valid
Percent
Cumulative
Percent
PRECIOUS
METALS
20 20.0 100.0 100.0
DO NOT INVEST 80 80.0
Total 100 100.0
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Inference:
From the above table, it has been shown that out of 100 respondents, only 20% of the investors
invest in commodity market & and all the investors invest in only one segment i.e. Precious metals
(Gold, Silver). This is because of the return in the gold & silver future market.
Q.8: Since how long you been investing in commodity market?
HOW LONG YOU BEEN INVESTING IN COMMODITY MARKET
Frequency Percent
Valid
Percent
Cumulative
Percent
LESS THAN 1
YR
5 5.0 25.0 25.0
1-2 YR 5 5.0 25.0 50.0
2-3 YRS 5 5.0 25.0 75.0
ABOVE 3 YRS 5 5.0 25.0 100.0
Total 20 20.0 100.0
DO NOT
INVEST
80 80.0
Total 100 100.0
Inference:
From the above table, it has been shown that out of 100 respondents, only 20% of the investors
invest in commodity market & out of 20 investors who invest in commodity market, 25% of the
respondents fall in each of the category i.e. 25% of respondents have been investing in commodity
market from less than 1 year, 25% from 1-2 year, 25% from 2-3 year & the rest 25% have been
investing in commodity market from more than 3 years.
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Q.9: Whom do you prefer to deal with while trading in commodity market?
PREFER TO DEAL WHILE DEAL IN COMMODITY MARKET
Frequency Percent
Valid
Percent
Cumulative
Percent
BROKERS 10 10.0 50.0 50.0
ONLIINE 5 5.0 25.0 75.0
SUB
BROKERS
5 5.0 25.0 100.0
Total 0 20.0 100.0
DO NOT
INVEST
80 80.0
Total 100 100.0
Inference:
From the above table, it has been shown that only 20% of the investors invest in commodity market
out of which 50% of the respondents prefer Brokers for their transactions, 25% of the prefer sub
brokers for their transactions & the rest 25% of the respondents have been doing their transactions
by their by their own i.e. Online.
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Q.10: Would you like to invest in commodity market in near future?
WOULD YOU LIKE TO INVEST IN COMMODITY MARKET IN FUTURE
Frequenc
y Percent
Valid
Percent
Cumulative
Percent
YES 10 10.0 12.5 12.5
NO 70 70.0 87.5 100.0
Total 80 80.0 100.0
Already
Investin
g
20 20.0
Total 100 100.0
10
70
20
00
10
20
30
40
50
60
70
80
YES 10%NO 70%Already invested 20%
Would ypu like to invest in commodity
market in near future?
Would ypu like to invest in commodity market in near future?
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CONCLUSION:
After almost two years that commodity trading is finding favor with Indian investors and is been seen
as a separate asset class with good growth opportunities in Gold, Silver Copper etc. For
diversification of portfolio beyond shares, fixed deposits and mutual funds, commodity trading offers
a good option for long-term investors and arbitragers and speculators. And, now, with daily global
volumes in commodity trading touching three times that of equities, trading in commodities cannot be
ignored by Indian investors.
Online commodity exchanges need to restore certain laws governing futures in commodities to make
the markets more attractive. The national multi-commodity exchanges have unitedly proposed to the
government that in view of the growth of the commodities market, foreign institutional investors
should be given the go-ahead to invest in commodity futures in India. Their entry will deepen and
broad base the commodity futures market. As a matter of fact, derivative instruments, such as
futures, can help India become a global trading hub for select commodities.
Commodity trading in India is poised for a big take-off in India on the back of factors like global
economic recovery and increasing demand from China for commodities. Considering the huge
volatility witnessed in the equity markets recently with the Sensex touching 19000 level commodities
could add the required zing to investors' portfolio. Therefore, it won't be long before the market sees
the emergence of a completely redefined set of retail investors in commodity market too.
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RECOMMENDATION:
Keeping in mind the preference and demand of the people in different locations and studying both
channel business model and own branch model and comparing the advantages and disadvantages
of the models I would like to provide some suggestions which may help Nirmal Bang to choose
proper expansion strategy for the growth of its market share in Eastern Region.
Improve the brand awareness of Nirmal Bang by increasing advertisements and promotional
activities like performing campaigning programs. This will improve the brand of NirmalBang
which will help to attract more clients.
Spreading awareness about different types of commodities among the potential buyers would
help them to make them trade in the areas not very popular, thus, encouraging small
investors to enter into commodity market.
Strong database and regular follow- up of it would help them to crate a goodwill among its
existing customers. Organizing investors meet at regular interval would be beneficial for their
business.
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BIBLIOGRAPHY:
For the preparation of project and other required concepts following websites are consulted for the
information
www.nirmalbang.com
www.answers.com
www.businessstandard.com
www.google.com
Following books, magazine and newspapers are also consulted:
1) Business World
2) Business & Economy
3) The Economic Times
http://www.nirmalbang.com/http://www.answers.com/http://www.businessstandard.com/http://www.google.com/http://www.google.com/http://www.businessstandard.com/http://www.answers.com/http://www.nirmalbang.com/ -
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NAME OF STUDENT- MOHAMMED ASIF
CONTACT NO. 9911007030
E-MAIL [email protected]
ID NO.- D1012FWISBE-A10255(GGN-2B-GA-2038)
mailto:[email protected]:[email protected]:[email protected]:[email protected]