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portfolio management

Nov 16, 2014




Study of different investment strategies and portfolio management

ACKNOWLEDGEMENTI wish to express my gratitude to Standard Chartered Banks management for giving us an opportunity to be a part of their esteem organization and enhance our knowledge by granting permission to do our Summer Internship Program under their kind guidance. I am grateful to Mr. NITISH DIPANKAR (Area Sales Manager), our guide, for his invaluable guidance and cooperation during the course of the program. He provided us with his assistance and support whenever needed that has been instrumental in completion of this program. I am also sincerely thankful to my faculty guide, Mrs. Anupama Raina (faculty, IBS-Gurgaon) who had an immense patient to take up my all queries and suggest me her invaluable suggestions. Her guidance and encouragement has showed the path of fulfillment to my project. I am grateful to Prof. A.K.Bhattacharya (Faculty, IBS-Gurgaon) for his helpful guidance to stick to the right path in the project. His guidance during the questionnaire preparation was very useful and helps me to analyse the report.



Study of different investment strategies and portfolio management

Table of contentSl. No.1. 2. 3. 4. 5.

Particulars Acknowledgement Table of content Abstract of the Report Banking Industry Current scenario Company Profilea. Back ground of Standard Chartered Bank b. Principle and values c. Business offered by Standard Chartered Bank d. Products Offered By Standard Chartered Bank

Page no. 1 2 3 4

6 7 9 11 14 16

6. 7. 8.

Introduction Investment & Investment planning Study of Financial Productsa. Savings Bank A/c b. Mutual funds c. Life Insurance & ULIPs d. Stock market e. Term Deposits & Bonds

21 23 35 45 46 49 51 88 91 106 119


Field survey

10. Analysis



12. Portfolio Management 13. Annexure 14. Bibliography



Study of different investment strategies and portfolio management

Abstract of the ReportThis report contains the different investment strategies taken by the investors (mainly small investors) and the trends of investment in different investment instruments. Project focused on findings of risk tolerance of investors and the time horizon they want to remain invested n the market. The project extended to find out the instrument in which different investor is now investing evaluating the projecting risk in the instrument. To understand the trend of the investor I have gone through a field survey, based on investment strategy questionnaire. The result of the survey depicts a clear picture of current investment trend in Indian market. The analysis shows that the age groups of 18-30 years are more adaptable to the high risk where as the age group of 41-50 are the safe players. Annual income and the disposable income also played a major role in the investment strategies in the investors mind. Results reveal that most investors first priority to invest is the Tax Savings. The project continues with the portfolio management of the selected respondent of the field survey. To do the portfolio management study have been done on different investment instrument in details, like Savings bank A/c, ULIP (Unit Linked Insurance Policy), Mutual Funds, Stocks, Term Deposits of Standard Chartered Bank and other different private Banks and AMCs. After the study portfolio is prepared for the selected respondent after revisiting them for the portfolio management discussion. The portfolio is made on the response of the respondent in the last visit.

Introduction to Banking IndustryICFAI-Gurgaon 3

Study of different investment strategies and portfolio management

The Indian banking can be broadly categorized into Nationalized, Private Banks and Specialized banking institutions. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of products and services through the internet has galvanized players at all levels of the banking and financial institutions market grid to look a new at their existing portfolio offerings. Indian banks are now quoting all higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.). The reasons are numerous: the economy is growing at a rate of 8%, Bank credit is growing at 30% per annum and there is an ever-expanding middle class of between 250 and 300 million people (larger than the population of the US) in need of financial services. Indian markets provide growth opportunities, which are unlikely to be matched by the mature banking markets around the world. Some of the high growth potential areas to be looked at are: the market for consumer finance stands at about 2%-3% of GDP, compared with 25% in some European markets, the real estate market in India is growing at 30%



Study of different investment strategies and portfolio management

annually and is projected to touch $ 50 billion by 2008, the retail credit is expected to cross Rs 5,70,000 crore by 2010 from the current level of Rs 1,89,000 crore in 2004-05 and huge SME sector which contributes significantly to Indias GDP. Banks that employ IT solutions are perceived to be futuristic and proactive players capable of meeting the multifarious requirements of the large customer base. The Indian banking has come from a long way from being a sleepy business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams. The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. Industry estimates indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that have started their operations here. Under the ambit of the nationalized banks come the specialized banking institutions. These co-operatives, rural banks focus on areas of agriculture, rural development etc. Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively



Study of different investment strategies and portfolio management

The Background of Standard Chartered Bank


he Standard Bank of British South Africa founded in 1863 and the Chartered Bank of India, Australia and China, founded in 1853. The Standard Chartered Group was formed in 1969 through a merger of these two banks. Both companies were keen to capitalize on the huge expansion of trade and to earn the handsome profits to be made from financing the movement of goods from Europe to the East and to Africa. The Chartered Bank Founded by James Wilson following the grant of a Royal Charter by Queen Victoria in 1853. Chartered opened its first branches in Mumbai (Bombay), Calcutta and Shanghai in 1858, followed by Hong Kong and Singapore in 1859. Traditional business was in cotton from Mumbai (Bombay), indigo and tea from Calcutta, rice in Burma, sugar from Java, tobacco from Sumatra, hemp in Manila and silk from Yokohama. Played a major role in the development of trade with the East which followed the opening of the Suez Canal in 1869 and the extension of the telegraph to China in 1871. In 1957 Chartered Bank bought the Eastern Bank together with the Ionian Bank's Cyprus Branches. This established a presence in the Gulf.

The Standard Bank

Founded in the Cape Province of South Africa in 1862 by John Paterson. Commenced business in Port Elizabeth, South Africa, in January 1863. Was prominent in financing the development of the diamond fields of Kimberley from 1867 and later extended its network further north to the new town of Johannesburg when gold was discovered there in 1885. Expanded in Southern, Central and Eastern Africa and by 1953 had 600 offices.



Study of different investment strategies and portfolio management

In 1965, it merged with the Bank of West Africa expanding its operations into Cameroon, Gambia, Ghana, Nigeria and Sierra Leone.

In 1969, the decision was made by Chartered and by Standard to undergo a friendly merger. All was going well until 1986, when a hostile takeover bid was made for the Group by Lloyds Bank of the United Kingdom. When the bid was defeated, Standard Chartered entered a period of change. Provisions had to be made against third world debt exposure and loans to corporations and entrepreneurs who could not meet their commitments. Standard Chartered began a series of divestments notably in the United States and South Africa, and also entered into a number of asset sales. From the early 1990s, Standard Chartered has focused on developing its strong franchises in