1 INDRODUCTION This project aims at creating a practical knowledge, experience and exposure for the students by giving an opportunity to know, observe, and learn the nature, vision, objectives and functioning of an organization and the activities in the organization. This would enable me to get a practical and real time feel of the various aspects of an organization and relate it to the concepts and theories studied so far in the class room. This exercise would enable the future managers to face the challenges lying ahead. It also enables to create a good relationship with the officials. The study was undertaken during the period from 13 th June to 9 th July, 2010 as a partial fulfillment of the requirement for the award of the degree of Masters of Business Administration of Vels University. This project was a good experience to know about the various departments and its functions of Geojit BNP Paribas Ltd.
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INDRODUCTION
This project aims at creating a practical knowledge, experience and exposure for the students by
giving an opportunity to know, observe, and learn the nature, vision, objectives and functioning
of an organization and the activities in the organization. This would enable me to get a practical
and real time feel of the various aspects of an organization and relate it to the concepts and
theories studied so far in the class room. This exercise would enable the future managers to face
the challenges lying ahead. It also enables to create a good relationship with the officials.
The study was undertaken during the period from 13th June to 9th July, 2010 as a partial
fulfillment of the requirement for the award of the degree of Masters of Business Administration
of Vels University. This project was a good experience to know about the various departments
and its functions of Geojit BNP Paribas Ltd.
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INDUSTRY PROFILE
HISTORY
Historian Fernand Braudel suggests that in Cairo in the 11th century Muslim and Jewish
merchants had already set up every form of trade association and had knowledge of many
methods of credit and payment, disproving the belief that these were invented later by Italians. In
12th century France the courratiers de change were concerned with managing and regulating the
debts of agricultural communities on behalf of the banks. Because these men also traded with
debts, they could be called the first brokers. In late 13th century Bruges commodity traders
gathered inside the house of a man called Van der Beurse, and in 1309 they became the "Brugse
Beurse", institutionalizing what had been, until then, an informal meeting. The idea quickly
spread around Flanders and neighboring counties and "Beurzen" soon opened in Ghent and
Amsterdam.
In the middle of the 13th century Venetian bankers began to trade in government securities. In
1351 the Venetian government outlawed spreading rumors intended to lower the price of
government funds. Bankers in Pisa, Verona, Genoa and Florence also began trading in
government securities during the 14th century. This was only possible because these were
independent city states not ruled by a duke but a council of influential citizens. The Dutch later
started joint stock companies, which let shareholders invest in business ventures and get a share
of their profits - or losses. In 1602, the Dutch East India Company issued the first shares on the
Amsterdam Stock Exchange. It was the first company to issue stocks and bonds.
The Amsterdam Stock Exchange (or Amsterdam Beurs) is also said to have been the first stock
exchange to introduce continuous trade in the early 17th century. The Dutch "pioneered short
selling, option trading, debt-equity swaps, merchant banking, unit trusts and other speculative
Instruments, much as we know them" (Murray Sayle, "Japan Goes Dutch", London Review of
Books XXIII.7, April 5, 2001). There are now stock markets in virtually every developed and
most developing economies, with the world's biggest markets being in the United States, Canada,
China (Hong Kong), India, UK, Germany, France and Japan.
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The behavior of the stock market
From experience we know that investors may temporarily pull financial prices away from their
long term trend level. Over-reactions may occur—so that excessive optimism (euphoria) may
drive prices unduly high or excessive pessimism may drive prices unduly low. New theoretical
and empirical arguments have been put forward against the notion that financial markets are
efficient.
According to the efficient market hypothesis (EMH), only changes in fundamental factors, such
as profits or dividends, ought to affect share prices. (But this largely theoretic academic
viewpoint also predicts that little or no trading should take place—contrary to fact—since prices
are already at or near equilibrium, having priced in all public knowledge.) But the efficient-
market hypothesis is sorely tested by such events as the stock market crash in 1987, when the
Dow Jones index plummeted 22.6 percent—the largest-ever one-day fall in the United States.
This event demonstrated that share prices can fall dramatically even though, to this day, it is
impossible to fix a definite cause: a thorough search failed to detect any specific or unexpected
development that might account for the crash. It also seems to be the case more generally that
many price movements are not occasioned by new information; a study of the fifty largest one-
day share price movements in the United States in the post-war period confirms this. Moreover,
while the EMH predicts that all price movement (in the absence of change in fundamental
information) is random (i.e., non-trending), many studies have shown a marked tendency for the
stock market to trend over time periods of weeks or longer.
Various explanations for large price movements have been promulgated. For instance, some
research has shown that changes in estimated risk, and the use of certain strategies, such as stop-
loss limits and Value at Risk limits, theoretically could cause financial markets to overreact.
Irrational behavior
Sometimes the market tends to react irrationally to economic news, even if that news has no real
affect on the technical value of securities itself. Therefore, the stock market can be swayed
tremendously in either direction by press releases, rumors, euphoria and mass panic.
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Over the short-term, stocks and other securities can be battered or buoyed by any number of fast
market-changing events, making the stock market difficult to predict
BOMBAY STOCK EXCHANGE
Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning
three centuries in its 133 years of existence. What is now popularly known as BSE was
established as "The Native Share & Stock Brokers' Association"in1875.
BSE is the first stock exchange in the country which obtained permanent recognition (in 1956)
from the Government of India under the Securities Contracts (Regulation) Act 1956. BSE's
pivotal and pre-eminent role in the development of the Indian capital market is widely
recognized. It migrated from the open outcry system to an online screen-based order driven
trading system in 1995. Earlier an Association of Persons (AOP), BSE is now a corporatized and
demutualised entity incorporated under the provisions of the Companies Act, 1956, pursuant to
the BSE (Corporatization and Demutualization) Scheme, 2005 notified by the Securities and
Exchange Board of India (SEBI). With demutualization, BSE has two of world's best exchanges;
Deutsche borse and Singapore exchange as its strategic partner.
NATIONAL STOCK EXCHANGE
National Stock Exchange of India (NSE) is India's largest Stock Exchange & World's third
largest Stock Exchange in terms of transactions. Located in Mumbai, NSE was promoted by
leading Financial Institutions at the behest of the Government of India, and was incorporated in
November 1992 as a tax-paying company. In April 1993, NSE was recognized as a Stock
exchange under the Securities Contracts (Regulation) Act-1956. NSE commenced operations in
the Wholesale Debt Market (WDM) segment in June 1994. Capital Market (Equities) segment of
the NSE commenced operations in November 1994, while operations in the Derivatives segment
commenced in June 2000. NSE has played a catalytic role in reforming Indian securities market
in terms of microstructure, market practices and trading volumes. NSE has set up its trading
system as a nation-wide, fully automated screen based trading system. It has written for itself the
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mandate to create World-class Stock Exchange and use it as an instrument of change for the
industry as a whole through competitive pressure. NSE is set up on a demutualised model
wherein the ownership, management and trading rights are in the hands of three different sets of
people. This has completely eliminated any conflict of interest.
NSE was set up with the objectives of:
Establishing nationwide trading facility for all types of securities
Ensuring equal access to investors all over the country through an appropriate
telecommunication network
Providing fair, efficient & transparent securities market using electronic trading system
Enabling shorter settlement cycles and book entry settlements
Meeting International benchmarks and standards
Within a very short span of time, NSE has been able to achieve its objectives for which it was set
up. Indian Capital Markets are a far cry from what they were 12 years back in terms of market
practices, infrastructure, technology, risk management, clearing and settlement and investor
service. To ensure continuity of business, NSE has built a fully fledged BCP site operational for
last 7 years.
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COMPANY PROFILE
ABOUT GEOGITH BNP PARIBAS
A leading retail financial service player
Geojit BNP Paribas today is a leading retail financial services company in India with a growing
presence in the Middle East. The company rides on its rich experience in the capital market to
offer its clients a wide portfolio of savings and investment solutions. The gamut of value-added
products and services offered ranges from equities and derivatives to Mutual Funds, Life &
General Insurance and third party Fixed Deposits. The needs of over 495,000 clients are met via
multichannel services – a countrywide network of over 500 offices, phone service, dedicated
customer care center and internet. Geojit BNP Paribas has membership in, and is listed on, the
National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). In 2007, global
banking major BNP Paribas joined the company’s other major shareholders – Mr. C.J.George,
KSIDC (Kerala State Industrial Development Corporation) and Mr.Rakesh Jhunjhunwala – when
It took a stake to become the single largest shareholder.
Strategic joint ventures and business partnerships in the Middle East have provided the company
access to the large Non-Resident Indian (NRI) population in the region. Now, as a part of the
BNP Paribas global network, Geojit BNP Paribas is well positioned to further expand its reach to
NRIs in 85 countries. Barjeel Geojit Securities is the joint venture with the Al Saud group in the
United Arab Emirates that is headquartered in Dubai with branches in Abu Dhabi, Ras Al
Khaimah, Sharjah and Muscat. Aloula Geojit Brokerage Company headquartered in Riyadh is
the other joint venture with the Al Johar group in Saudi Arabia. The company also has a business
partnership with the Bank of Bahrain and Kuwait, one of the largest retail banks in Bahrain and
Kuwait.
At the forefront of the many fruitful associations between Geojit BNP Paribas and BNP Paribas
is their joint venture, namely, BNP Paribas Securities India Private Limited. This JV was created
exclusively for domestic and foreign institutional clients. An industry first was achieved when
Geojith BNP Paribas became the first broker in India to offer full Direct Market Access (DMA)
on NSE to the JV’s institutional clients.
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A strong brand identity and extensive industry knowledge coupled with BNP Paribas’
international expertise gives Geojit BNP Paribas a competitive advantage.
Expanding range of online product and services
Geojit BNP Paribas has proven expertise in providing online services. In the year 2000, the
company was the first stock broker in the country to offer Internet Trading. This was followed by
integrating the first Bank Payment Gateway in the country for Internet Trading, and many other
industry firsts. Riding on this experience, and harnessing BNP Paribas Personal Investors’
expertise as the leading online broker in Europe, is helping the company to rapidly expand its
business in this segment. Presently, clients can trade online in equities, derivatives, currency
futures, mutual funds and IPOs, and select from multiple bank payment gateways for online
transfer of funds. Strategic B2B agreements with Axis Bank and Federal Bank enable the
respective bank’s clients to open integrated 3-in-1 accounts to seamlessly trade via a
sophisticated online trading platform. Further, deployment of BNP Paribas’ state-of-the-art
globally accepted systems and processes is already scaling up the sales of Mutual Funds and
Insurance.
Wide range of products and services
Certified financial advisors help clients to arrive at the right financial solution to meet their
individual needs. The wide range of products and services on offer includes -