The article is about Sharekhan and Analysis of Selected stocks by using ARIMA Model. And i selected cement industry. i selected top 5 cement company in India.
1. i
“Analysis of Selected stocks by using ARIMA Model”
A Summer training report submitted to ISME, Bangalore
In partial fulfillment of requirements of the award of
POST GRADUATION DIPLOMA IN MANAGEMENT
Submitted By
Makham Narasimha Rao
Reg no: 181250
Under the guidance of
Sudindra VR
And
Sudhakar Reddy
International School of Management Excellence
Sy. No. 88 Chambanahalli, Near Dommasandra Circle,
Sarjapur Road,
Banglore-562125
May 2019
2. ii
International School of Management Excellence
Sy. No. 88, Chembanahalli, Near Dommasandra Circle,
Sarjapur Road, Bangalore-562125
CERTIFICATE
This is to certify that the Summer Training Report entitled “ANALYSIS OF SELECTED
STOCKS BY USING ARIMA MODEL AT SHAREKHAN PVT LTD” in partial
fulfillment of the requirements for the award of the Post Graduate Diploma in Management,
is a record of original training undergone by Makham Narasimha Rao (181250) during the
year 2018-2020 of his study at the International School of Management Excellence,
Bangalore. Under my supervision and the report has not formed the basis for the award of
any Degree/Fellowship or other similar title to any candidate of any University.
Place: Bangalore Signature of Guide
Date:
Countersigned
(Principal)
ISME, Bangalore
3. iii
CERTIFICATE
This is to certify that Mr. Makham Narasimha Rao, a student of Post Graduate
Diploma in Management, 2018-2020, International School of Management
Excellence, Bangalore bearing Enrolment No. 181250, has undertaken the Summer
Internship Training at SHAREKHAN PVT LTD during 01/04/2019 to 31/05/2019
under my supervision & guidance. He has conducted a study & completed the Project
on "ANALYSIS OF SELECTED STOCKS BY USING ARIMA Model ".
Seal of Organization Signature of the Guide
Date: Name of the Guide:
Designation:
Address:
4. iv
DECLARATION
I, Makham Narasimha Rao, hereby declare that the Summer Training Report, entitled
“ANALYSIS OF SELECTED STOCKS BY USING TECHNICAL ARIMA Model AT
SHAREKHAN PVT LTD”, submitted to the International School of Management
Excellence, Bangalore, in partial fulfillment of the requirements for the award of the Post
Graduate Diploma in Management is a record of original training undergone by me during
the period April- May2018. Under the supervision and guidance of Prof. Sudindra, MBA,
(Finance Faculty), International School of Management Excellence, Bangaloreandit has not
formed the basis for the award of any Degree/Fellowship or other similar title to any
candidate of any University
Place: Signature of the Student
Date:
5. v
ACKNOWLEDGEMENT
I am extremely thankful to “Mr. Keshav Reddy- Manager for their invaluable support and
guidance in the completion of this project. I wish to thank Mr. Nitin Garg, Director, ISME
Bangalore, for enabling this endeavor. I wish to express my profound gratitude to our Dean
of Academics Dr. Rony G Kurien and our Principal DR. Shampa Nandi for their kind
permission to take up this project work. I express my heartfelt thanks to our Col. H. S.
Mishra, COC-Placement and his team at ISME, Bangalore who provided all facilities for
carrying out this project.
I immensely thank our Project Guide Prof.Sudindra, MBA, (Finance Faculty), for his
valuable suggestions and for guiding me throughout the work.
Makham Narasimha Rao
(181220)
6. vi
TABLE OF CONTENTS
COVER PAGE I
CERTIFICATE Ii
COMPANT CERTIFICATE Iii
DECLARATION Iv
ACKNOWLEDGMENT v
TABLE OF CONTENTS vi
LIST OF FIGURES viii
LIST OF TABLES viii
Number Topics Pg No
CHAPTER-1 INTRODUCTION 1
1.1 INTRODUCTION TO INTERNSHIP 2
1.2 IMPORTANCE OF INTERNSHIP 3
1.3 OBJECTIVES OF INTERNSHIP 3
1.4 SCOPE AND PERIOD OF THE TRAINING AS WELL AS
CHAPTARIZATION SCHEME
4
1.5 MEANING OF THE CONCEPT 4
1.6 RATIONALE FOR CHOOSING THE TOPIC/PROBLEM 5
1.7 IMPLEMENTATION STRATEGY OF CONCEPT IN YOUR
PRESENT STUDY
6
Number Topics Pg No
CHAPTER-2 COMPANY PROFILE 7
2.1 COMPANY PROFILE 8
2.2 AREA OF OPERATION 9
2.3 NATURE OF THE ORGANIZATION AND ITS BUSINESS 10
2.4 PRODUCT OR SERVICE PROFILE 11
2.5 SIZE OF THE ORGANIZATION 11
2.6 ORGANIZATION STRUCTURE OF THE COMPANY 12
2.7 COMPETITOR INFORMATION 13
7. vii
Number Topics Pg No
CHAPTER-3 INDUSTRY PROFILE 15
3.1 BRIEF PROFILE OF THE INDUSTRY 16
3.2 PRESENT INDUSTRY STATUS 19
3.3 FUTURE PROSPECTS OF THE INDUSTRY 19
Number Topics Pg No
CHAPTER-4 ORGANISATION STUDY 20
4.1 VARIOUS DEPARTMENT OF THE ORGANIZATION 21
4.2 FUNCTIONS OF THE DEPARTMENTS 21
Number Topics Pg No
CHAPTER-5 WORK ASSIGNED 22
5.1 PROCESS FOLLOWED 23
5.2 RESULTS ACHIEVED 24
5.3 CONCLISION, LEAENING AND SUGGESESTION 24
Number Topics Pg No
6 Review of Literature 26
7 Research methodology 27
8 Data analysis and Interpretation 30
9 Findings & Conclusion 39
10 Limitations 45
BIBLIOGRAPHY 45
8. viii
Figure Number LIST OF FIGURES Pg No
2.2.1 AREAS OF OPERATIONS IN INDIA 8
8.1 The correlogram of UltraTech Cement closing price 36
8.2 The correlogram of UltraTech Cement closing price 36
8.3 ADF test on DClose 37
8.4 ARIMA Model for UltraTech Cement 38
8.5 ARIMA Model for UltraTech Cement 38
9.1 graph of UltraTech Cement 40
9.2 graph of Shree Cements 41
9.3 graph of Ambuja Cements 42
9.4 graph of ACC 43
9.5 graph of J. K. Cement 44
Table Number LIST OF TABLES Pg No
8.1 Raw data of UltraTech Cement 31
8.2 Raw data of Shree Cements 32
8.3 Raw data of Ambuja Cements 33
8.4 Raw data of ACC 34
8.5 Raw data of J. K. Cement 35
9.1 Final data of UltraTech Cement 40
9.2 Final data of Shree Cements 41
9.3 Final data of Ambuja Cements 42
9.4 Final data of ACC 43
9.5 Final data of J. K. Cement 44
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1.1 Introduction to Internship/Summer Training.
The internship program is designed to get experience in some work and also understanding
the management and its functions. Also provide students engaged in a field experience with
an opportunity to share their insights, to explore the links between students' academic
preparation and their field work.
My Internship Company is share khan. The company is providing Equity, Derivatives,
Mutual funds, Currency, Commodity. As more & more people are getting aware about share
market and due to various incentives taken by SEBI and GOI for educating people regarding
investment avenues in stock markets large number of people are investing their savings in
share market where it is shares of the companies or Mutual funds to get good amount of
returns from stocks but at same time they have to bear both systematic risk and unsystematic
risk of fluctuations in earnings due volatility. So as to minimize the effect of risk various
models and theories had been formulated, among them one is ARIMA ANALYSIS.
Arima analysis is a tool to study and forecast the stock market movements. It is a method of
measuring and evaluating the stocks by observing analyzing the data or statistics provided by
market activity. Such as past prices and volume etc. Through it does not measure the
securities intrinsic value, but help to understand the signals through charts and others tools. in
fact the decision made on the basis of technical analysis is done only after inferring a trend
and judging the future movement of the stocks on the basis of the trend study .The study of
technical analysis of selected stocks based is significant as it helps in understanding the
intrinsic value of shares and to know whether the shares are underpriced or overpriced or
correctly priced. It becomes essential to know about the prices of the stocks so that the
investments made will be safe and will be duly giving returns. Further it helps in
understanding the price movement and pattern of the shares, the signals given by them and
the major turning points of the market price.
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1.2 The Importance of Internship/Summer Training.
Internship is great way to apply the knowledge from the classroom to real world experience.
Having an internship gives us experience in the career field I want to pursue. Not only does
this give individuals an edge over other candidates when applying for job, but also prepares
me foe what to expect in my field and increases in my work.
Having an internship benefits me in the working environment, and it also builds my
professional network. Internship can provide me with the soft skills needed in workplace and
in leadership positions. It might seem common sense I am interning to learn skills, after all
but don’t forget to purposefully observe others in their job role to learn the ins and outs of
different positions.
1.3 Objectives of Internship/Summer Training.
The primary objective of the summer internship program was to get awareness about the
stock market, its variables and the various factors that govern the stock market.
To provide an over view of share price on selected companies.
To study about mutual funds.
To study about commodity.
To study about IPO.
To identify the growth drivers of banking sectors.
To take buy or sell decisions by interpreting tread.
To show the importance of using ARIMA ANALYSIS method for stock selection.
To study price moments by using different techniques.
To study pattern in stock by using ARIMA analysis.
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1.4 SCOPE AND PERIOD OF THE TRAINING AS WELL AS
CHAPERIZATION SCHME.
SCOPE OF INTERNSHIP
Internship experience plays a vital role to me to implement my theoretical knowledge and get
a practical knowledge from my organization. I can implement this internship experience in
my future work area. Share khan ltd gives me opportunity for gathering practical experience
and preparation of the report.
PERIOD OF INTERNSHIP
The company I am working as intern is Sharekhan limited. My internship period is 2 months;
I have joined on 1st April 2019 and will be working up to 31st may 2019.
CHAPTALIZATION SCHME
CHAPTER 1. – ‘INTRODUCTION TO INTERNSHIP’
CHAPTER 2. – ‘STUDY ABOUT THE COMPONY PROFILE’
CHAPTER 3 – ‘STUDY ABOUT THE INDUSTRY PROFILE’
CHAPTER 4 – ‘ORAGANISATION STUDY’
CHAPTER 5 – ‘WORK ASSIGNED’
CHAPTER 6 – ‘LITERSTURE REVIEW’
CHAPTER 7 – ‘RESERECH METHODLOGY’
CHAPTER 8 – ‘DATA ANALYSIS & INTERPRETATION’
CHAPTER 9 – ‘FINDING, SUGGESTIONS & CONLUSIONS’
CHAPTER 10 – ‘LIMITAIONS AND SCOPE FOR THE STUDY’
1.5 MEANING OF THE CONCEPT:
DEMAT ACCOUNT: A Demat account is an account that allows investors to
hold their shares in an electronic form. Stocks in Demat account remain in
dematerialized form. Dematerialization is the process of converting physical
shares into in electronic format. A Demat account number is required to
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enable electronic settlements of all the trades. Demat account functions like a
bank account.
STOCK EXCHANGE: Stock exchange is a market where shares and
securities are bought and sold by members/brokers on behalf of their clients
and also on their accounts.
IPO: An initial public offering is referred to as sale of equity of a company to
the public by the promoters of the company.
MUTUAL FUNDS: Mutual funds companies collect funds from the investors
and invest in a driver’s portfolio. The investments are made in equity, bond,
money market instruments, real estate, gold etc
CAPITAL MARKET: Capital market is the part of financial system which is
concerned with raising capital funds by dealing in Shares, Bonds, and other
long-term investments. The market where Investments instruments like bonds,
equities and mortgages are traded is known as the capital market.
MONEY MARKET: Money market is a market where short-term securities
are bought and sold. The highly liquid marketable securities are also called as
‘’ MONEY MARKET’’
THE MAJOR PLAYERS IN THE MONEY MARKET:
1. Reserve Bank of India
2. Banks
3. Financial institutions
4. Big corporate houses
PRIMARY MARKET: The market in which new issues of securities are sold
to the public.
SECONDORY MARKET: The market in which securities are traded after
they have been issued.
1.6 RATIONALE FOR CHOOSING THE TOPIC:
As more & more people are getting aware about the share market and due to various
incentives taken by SEBI and GOI for educating people regarding investments avenues in
stock market. large number of people is investing their surplus money in shares of the
companies to get good amount of returns from stocks but at same time they have to bear both
14. 6
systematic risk and unsystematic risk of fluctuations in earning due volatility. So as to
minimize the effect of risk various models and theories had been formulated, among them
one is ARIMA ANALYSIS. It is a tool to study and forecast the stock market movements. It
is a method of measuring and evaluating the stocks by observing, analyzing the data or
statistics provided by market activity.
1.7 IMPLEMENTATION STRETARGY FOR CONCEPT IN YOUR
PRESENTSTUDY:
The main objective of using the analysis tool is to predict the future fluctuations of the
securities market and its effectiveness and impact level on market analysis, so for that
purpose the following are some of the tools used in analysis process:-
Simple moving average
Exponential moving average
Stationary and non stationary data
Making data to stationary data and apply ARIMA
SIMPLE MOVING AVERAGES:
A simple moving average is an arthematic moving averages calculated by adding the
closing price of the security for a month of time periods and then dividing this total by
the number of time periods.
EXPOTENTIAL MOVING AVEREGES:
An exponential moving average is a type of average that is similar to a simple moving
average, except that more weight is given to the latest data. It’s also known as the
exponential weighted moving averages.
STATIONARY AND NON STATIONARY DATA:
A stationary series is one whose statistical properties such as the mean, variance and
autocorrelation are all constant over time. Hence, a non-stationary series is one
whose statistical properties change over time. Non-stationary data should be first
converted into stationary data, so that further statistical analysis can be done on the
de-trended stationary data.
If the data is non stationary data, make it stationary data and apply ARIMA
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2.1 ABOUT SHAREKHAN COMPANY:
Sharekhan Limited is an online website portal for online trading, investing and stock
marketing. This company has eighteen years of experience of brokering business. It was
earlier known as SSKI Group. This company now acquired by French Bank BNP paribus.
Sharekhan offers its customers a wide range of equity related services including trade
execution on BSE, NSE, Derivatives, Depository services, Online trading, Investment advice
etc.
The firm’s online trading and investment site-www.Sharekhan.com was launched on Feb 8,
2000 by Shripals Morakhiya. It is the largest stock broker portal and has its branches in 575
cities in India. The site gives access to superior content and transaction facility to real
customers across the country. Known for its Jargon-free, investor friendly language and high-
quality research, the site has a register base of over 4 lakh customers. The number of trading
members currently stands at over 03 laths. While online trading currently accounts for just
01% of the daily trading stocks in India, Sharekhan alone accounts of 22% of the volumes
traded online.
TECHNOLOGY USED BY COMPANY
Sharekhan has always believed in investing in technology to build its business. The company
has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle,
Microsoft, Cambridge technologies, Nexgenix, vignette, Verisign Financial technologies
India Ltd, Spider software Pvt Ltd. to build its trading engine and content.
SHAREKHAN BUSINES
Brokering Business
White feathering house production.
Name of the firm: Sharekhan by BNP Paribas.
Founded: Feb 2008
Headquarter: Mumbai, India
Country of origin: India
CEO: Jaideep Aroura
Industry: Financial Services
Parent: BNP Paribas
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Contact Address details
Head office: A-206 Phoenix house,
2nd floor, Senapathibapatmarg,
Lower panel
Mumbai- 400013
Branch Office: Marathalli, Bangalore
Company website: www.Sharekhan.com
MISSION, VISION AND OBJECTIVES
Vision: “To be the best retail brokering brand in the retail business of stock
market”
Mission: “To educate and empower the individual investor to make better
investment decisions through quality advise and superior service”
Objectives of Sharekhan: “02 lakh plus retail customers being serviced through
centralized call centre/web solutions”
60 branches, semi branches servicing affluent/aggressive traders through highly
skilled financial advisors.
250 independent investment managers/franchises servicing 50 thousand highly
valued clients
Strong advisory role through fundamental and technical research
New initiative-portfolio management services and commodities trading
Dealing in mutual funds
2.2 AREA OF OPERATIONS
Sharekhan is limited company operates in financial services in national level.
Sharekhan head office is located in Mumbai.
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2.2.1 Branches all over India
2.2.1 Figure showing areas of operations in India.
2.3 Name of the organizationand its business
Name of the organization: Sharekhan Ltd
Business: Financial services
Functions of department
Marketing Department: the marketing is done through Offline and online ways. In the
online we are using lead management system. And also, we are adopting various
digital marketing techniques for easy marketing. In offline we follow Peer-peer
marketing in which we meet the clients in person and briefing them about Demat
Accounts.
Finance deportments: Keshav reddy our Branch manager takes care of each and every
activity of the company. He is the financial head and deals with the all kinds of
financial related issues.
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2.4 PRODUCTS OF COMPANY:
Sharekhan products and services
Equities and Derivatives trading
Portfolio Management
Fundamental Research
Technical Research
Trade trigger: Ultimate online trading pattern with unifies screen for all exchanges
Share mobile: Mobile app for online trading
Classic account Trade on Sharekhan.com in equities, F&O, commodities, and
currency.
Investing in IPOs, Mutual funds, and Bonds.
Share shop: Visit our branches to trade.
Deal-n-Trade: Trade on phone.
2.5 Size of the Organization
Organization and position
In India, Sharekhan has over 4800+ employees, and is present in over 575 cities through 150
branches, more than 2600 business partners. The company has 1.6 Million clients and on and
average, executes more than 4lakh trades per day.
Position of the company
Sharekhan is the largest standalone retail brokerage in the country and third largest in terms
of customer based of ICICI Direct and HDFC securities.
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2.6 Organization Structure:
As it is one of the branches of Sharekhan all the activities in the company are organized and
monitored under the survey lines of our manager keshav reddy. Sharekhan follows line
organization structure where the flow of authority and decision flows from top to bottom
below.
Line organization structure
Sales Side Dealings Side
Trainees Junior Dealers
Super Trainees Dealers
Sales executives Relationship Manager
Senior Sales executives Senior Relationship Manger
Business Development executives Equity Advisor
Assistant Sales Manger Assistant Branch Manger
Deputy Manager Branch Manger
Territory Manager Cluster Head
Area Sales Manager Directors
Regional Sales Manger CEO
Regional Head
Vice President
Directors
CEO
Branch Manger
Relationshipmanager
Assistant Branch Manager
Sales executives & Student Interns
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2.7 Competitor Information:
1. Angel Broking: Angel broking is one of the Sharekhan’s Top Competitors
Angel Broking’s Headquarters is in Mumbai, and it was founded in 1987.
Angel Broking Competes in the diversified financial service industry. Angel
broking generates 35% of Sharekhan’s revenue.
2. Karvy: It is one of Sharekhan’s top rival, it was founded in 1979 and its
headquarters is in Hyderabad, Telangana. It competes in the diversified
Financial Services filed. It has 5350 more employees than Sharekhan.
3. Motilal Oswal: It is the Sharekhan’s 3rd rival. It is a public company that was
founded in 1987 in Mumbai, Maharashtra. It operates in the bank industry.
Compare to Sharekhan it has 5364 more employees.
Comparative Analysis of Stock Brokers in Bangalore Region
Sharekhan
ICICI Direct
Angel Broking
Indian Bulls.
2.7.1 On the Basis of Brokerages
There are 2 types of transactions
1. Intraday,
2. Delivery.
ICICI Direct Sharekhan Indian Bulls Angel Broking
Ltd
A/C Opening
fees
750 0 900 749
Recruiting fees
for Trading A/c
0 0 0 0
Demat A/C 500 0 0 0
Delivery 75p 50p 50p 50p
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Brokerage
Intraday
Brokerage
0.15 0.10 0.10 0.5
Initial Margin
Required
0 0 0 Rs.5000
2.7.2 On the Basis of Account Opening Charges:
1. Angel Broking
Account Opening charges are as follows Rs.749 But there is no AMC in it.
2. Sharekhan
There are no Account opening charges.
3. ICICI Direct
A onetime charge of Rs 750 AT the time of Account Opening will be charged. You
may later upgrade your invest account to an ICICI Direct.com. Share trading Account
when you desire to trade in Equity.
4. Indian Bulls
Account Opening charges are Rs.900 there is no AMC and no margin money is
required.
Comment: Indian Bulls Charge Maximum account opening charges but there are no
such charges in Sharekhan Pvt Ltd.
2.7.3 On the basis of facilities
Basis difference Sharekhan Ltd Angel Broking ICICI direct Indian Bulls
Share trading Yes Yes Yes Yes
Commodity
trading
Yes Yes Yes Yes
Demat Opening
Rights
Yes No Yes Yes
24. 16
3.1 Brief profile of the Industry
Financial services are the economic services provided by the finance industry, the financial
industry, or financial services industry, includes a wide range of companies and institutions
involved with money, including business providing money management, lending, investing,
insuring and securities issuance and trading services.
The following institutions are a part of the financial industry:
Banking
Insurance companies
Mutual funds
Securities exchanges
Payment Banks / Payment Processing companies like paytm
Housing Financing Companies like HDFC, LIC Housing, etc.
Investment Banking
Stock broking services
Financial planners.
STOCK EXCHANGE:
A stock exchange, share market or bourse is a corporation or mutual fund organization which
provides facilitates for stock brokers and traders, to trade company stocks and other
securities. Stock exchanges also provide facilities for the issue and redemption of securities,
as well as, other financial instruments and capital events including the payment of income
and dividends. The securities traded on a stock exchange include: shares issued by
companies, unit trusts and other pooled investment products and bonds. To be able to trade a
security on a certain stock exchange, it has to be listed there.
NSE
The National Stock Exchange of India is a Mumbai-based stock exchange. It is largest stock
exchange in India and the 3rd largest in the world in terms of volumes of transactions. NSE is
mutually- owned by a set of leading financial institutions, banks, insurance companies and
other financial intermediaries in India bit its ownership and management operates as a
separate entity. NSE has a market capitalization of around US$1 trillion and over 1652
listings as of July 2012.
25. 17
NSE MISSION
NSE’s mission is setting the agenda for change in the securities market in India.
The NSE was set -up with the main objective of :
Establishin a nation -wide facility for equities, debt instruments and hybrids,
Ensuring equal acces to investors all over the counrtry through an appropriate communication
network,
Providing a fair, efficient and transperent securities market to investors using electronic
trading systems,
Enabling shorter settlement cycles and book entry settlements systems, and meetings the
current international standards of securities markets.
26. 18
BSE
The Bombay Stock Exchange is the oldest stock exchange in Asia. It is located at Dalal
Street, Mumbai, India.
The BSE was established in 1875. There are around 7000+ companies are listed with the
stock exchange, and have a significant trade volume. The companies listed on BSE Ltd
command a total market capitalization of USD Trillion 1.32of January 2013. The BSE
SENSEX (Sensitive index), also called the ‘’BSE30’’, is a widely used market index in India
and Asia. It is also one of the world’s leading exchanges (3rd largest in December 2012) for
index option trading.
MISSION
To drive sustainable economic growth by providing a gateway for rising for capital and
accessing investment opportunities.
History of financial services in global:
The term ‘’financial services’’ became more prevalent in the United States partly as a result
of the Gramm-Leach-Bliley Act of the late 1990s, which enabled different types of
companies operating in the U.S. financial services industry at the time to merge.
27. 19
3.2Present Financial Industry Status:
The financial sector in India is experiencing swift expansion. The financial sector represents a
mix of banking and non-banking financial companies, pension funds, insurance companies,
mutual funds and all other companies offering financial services and advice to the investors
and clients. The services sector in India is already contributing a lot to the economic
development. Approximately 57 percent of the GDP of India is represented by service sector.
The Government of India is also committed to opt for liberalized policy to boost in further
and motive foreign players to enter in this segment. The Indian market is the one of the most
vibrant financial market of the world.
3.3Future prospects of the industry:
The following are some of the key features of performance of financial sector in India.
1. The banking assets in India are expected to reach USD 28.5 trillion by financial year 2025
2. The investment corpus in the pension sector in India is expected to cross USD 1 trillion by
2025
3. SEBI has given approval to International Finance Centre which will help India to develop as
a financial hub like Dubai and Singapore.
4. Indian finance companies are extending their business across the world and having the
collaboration with all major financial sector performance at world level.
29. 21
4.1 Various departments in the organization
Marketing department
Finance department
4.2 Functions of various department:
Marketing department
The marketing is done through both offline and online ways. In online we are using lead
management system and also, we are adopting various digital marketing techniques for the
easy marketing.
In offline we follow peer-peer marketing in which we meet the clients in person and brief
them about the Demat account.
Finance department
Mr. Keshav Reddy, our finance manager takes care of financial activities in the company. He
is the financial head and deals with the all kind s of financial related issues.
31. 23
WORK ASSIGNED:
In the organisation, I am direct associate to my branch Manager Mr. Keshav Reddy who
manages all the activities in the firm. The following are works assigned to me during my
internship.
Communicating various clients Via Telephone and e-mail.
Fixing an appointment with the client for the meeting.
Meeting the clients as per the schedule an appointment time.
Giving brief presentation about the company and its various services.
Understanding the client’s requirements.
Convincing the clients for opening Demat account in Sharekhan.
Client Assistance if he / she agree for the opening of Demat account or other financial
services like mutual funds we deal accordingly.
Client documentation
Analysing the stocks.
5.1 Process followed
Made awareness about
stock marketinvestment
to clients
Discuss advantages of
Demat account in
Sharekhan
Taught the basic and
Usage of website of
Sharekhan
Convince them to
Demat Account
Finally collected the
documentsandverify
and thenopenDemat
Account
32. 24
5.2Results Achieved:
The following are the results that I have achieved by working with Sharekhan as a part of my
internship.
I have met around 22 clients and my child friends. I made them aware about the benefits of
investing in stock market. I have convinced 12 clients for the opening of Demat accounts.
Almost all of them started trading in share market. I have also advised them to invest in IPOs
as well as mutual funds. I could also analyse performance of the stocks.
5.3Conclusion, Learning and Suggestion
5.3.1Learning from the training program:
Sharekhan Limited has reputed name worldwide and it is concentrating more on stock
broking. It has renowned name in finance products distribution.
During my internship, I got know about the following such as:
Client Relationship Management:
In the broking firm, the client and client data base are the asset of the company, the
management such as asset is very important. The client data base keeps on growing if it is
well managed, on addition of the new clients we should not compromise with the service of
the old clients.
1. Client handling skills:
I got an experience of handling almost all type of clients as in this industry. Most of the
clients are rude while others are good
2. Communication skills:
This project has given the opportunity to talk new people and meeting the unknown clients
which helped me in improving the communication skills. And now I am more confident in
talking to new people and am now better able to put my views on the discussions.
3. Familiarity with the trading basics:
In this internship, I came to learn about the basics in stock marketing trading like trading
terminology along with the software, and factors effecting the stock movements.
33. 25
5.3.2Suggestions:
A low rate brokerage than the existing rate will encourage the existing investors to invest
more and would attract more new clients.
Providing more in -depth insight of the market to the investors will strengthen their
confidence and help them to take quick decision.
Introduction of market alerts through SMS and Emails raise satisfaction level clients.
5.3.3Conclusion:
Everything that rises has to fall in the equity market. There is no solid proof way to determine
the trend of the equity market. Anything could happen to male all of the information collected
to study the trend of the equity market worthies, but we have to at least consider the past
trends and understand that there is a chance the market will behave similarly and will enter a
period of significant decline. Political, social happening and emotions of the investors play a
big role in the equity market.
That’s why a good and constant study of the market and hoe the equity of various companies
behaves in the market should be studied well and if possible a constant touch with the experts
to helps a long way.
From the Sharekhan point of view a better marketing of its product and a good advice
regarding investment can go a long way in attracting more investor. As it is a period of staff
competition it is necessary that the instruments of Sharekhan do offer attractive returns.
5.3.4Future possibilities:
As it is a branch office, there is no much scope for finance role. But there is good opportunity
in sales field as a client relationship manager.
35. 27
Bogdan svrydov: There are many algorithms of forecasting stock price using a time series.
The most popular methods are Autoregressive model (AR), Moving Average model (MA),
Autoregressive Moving Average (ARMA) and Autoregressive Moving Integrated Average
(ARIMA).
AR model based its predictions on the historical stock price, as against to MA model that
riles on historical error terms. ARMA is a combination of the previous two models. It
predicts future values according to the linear relationship of the past error term and stock
prices.
Ayodele A. Adebiy: Prediction will continue to be an interesting area of research making
researchers in the domain field always desiring to improve existing predictive models. The
reason is that institutions and individuals are empowered to make investment decisions and
ability to plan and develop effective strategy about their daily and future endevours. Stock
price prediction is regarded as one of most difficult task to accomplish in financial
forecasting due to complex nature of stock market. The desire of many investors is to lay
hold of any forecasting method that could guarantee easy profiting and minimize investment
risk from the stock market. This remains a motivating factor for researchers to evolve and
develop new predictive models.
Charles K. Ayo: ARIMA models are from statistical models perspectives. Generally, it is
reported in literature that prediction can be done from two perspectives: statistical and
artificial intelligence techniques. ARIMA models are known to be robust and efficient in
financial time series forecasting especially short term prediction than even the most popular
ANNs techniques. It has been extensively used in field of economics and finance. Other
statistics models are regression method, exponential smoothing, generalized autoregressive
conditional heteroskedasticity (GARCH). Few related works that has engaged ARIMA model
for forecasting includes.
37. 29
Box and Jenkins in 1970 introduced the ARIMA model. It also referred to as Box-Jenkins
methodology composed of set of activities for identifying, estimating and diagnosing ARIMA
models with time series data. The model is most prominent methods in financial forecasting.
ARIMA models have shown efficient capability to generate short-term forecasts. It constantly
outperformed complex structural models in short-term prediction. In ARIMA model, the
future value of a variable is a linear combination of past values and past errors.
The method used in this study to develop ARIMA model for stock price forecasting is
explained in detail in subsections below. The tool used for implementation is Eviews
software version 5. Stock data used in this research work are historical daily stock prices
obtained from two countries stock exchanged. The data composed of four elements, namely:
open price, low price, high price and close price respectively. In this research the closing
price is chosen to represent the price of the index to be predicted. Closing price is chosen
because it reflects all the activities of the index in a trading day. To determine the best
ARIMA model among several experiments performed, the following criteria are used in this
study for each stock index.
Correlogram show that there is no significant pattern left in the autocorrelation
functions (ACFs).
A D F (Augmented Dickey-Fuller)
Relatively small of BIC (Bayesian or Schwarz Information Criterion)
Forecast helps to find the Predicted Values of share price.
I had selected top five cement companies in India for Predicted Values of share price by
using ARIMA Model in E-views software. The top five companies are following;
9 UltraTech Cement
10 Shree Cements
11 Ambuja Cements
12 ACC
13 J. K. Cement
44. 36
ARIMA Model for UltraTech Cement
Correlogram of UltraTech Cement closing price
Figure 8.1: The correlogram of UltraTech Cement closing price
Figure 8.1 is the correlogram of UltraTech Cement closing price. From the ACF dies
down extremely slowly this simply means that the time series is nonstationary. If the
series is not stationary, it is converted to a stationary series by differencing. After the
first difference, the series “DCLOSE” of UltraTech Cement stock index becomes
stationary as shown in figure 8.2 correlogram respectively.
Figer 8.2
45. 37
Augmented Dickey-Fuller Root Test on Dclose
Figer 8.3 ADF test on DClose
In figure 4 the model checking was done with Augmented Dickey Fuller (ADF) unit root test
on “DCLOSE” of UltraTech Cement stock index. The result confirms that the series becomes
stationary after the first-difference of the series.
46. 38
ARIMA Model for UltraTech Cement
Figers 8.4 & 8.5 ARIMA Model for UltraTech Cement
Figers 5 & 6 shows the different among the several ARIMA model experimented
upon. ARIMA (0, 0) (0, 0) is considered the best for UltraTech Cement stock index as
shown in figure 6. The model returned the smallest Bayesian or Schwarz information
criterion of 11.842 shown in figure 6.
14 As shown in the above process I had did for reaming four companies also (Shree
Cements, Ambuja Cements, ACC, J. K. Cement).
52. 44
J. K. Cement
Date Actual Values Predicted Values Date Actual Values Predicted Values
01/04/2019 851.50 854.88 02/05/2019 904.40 867.11
02/04/2019 859.90 833.51 03/05/2019 872.20 844.79
03/04/2019 838.40 846.33 06/05/2019 849.75 840.72
04/04/2019 851.30 854.98 07/05/2019 845.65 841.36
05/04/2019 860.00 861.59 08/05/2019 846.30 835.45
08/04/2019 866.65 859.95 09/05/2019 840.35 839.42
09/04/2019 865.00 865.02 10/05/2019 844.35 834.45
10/04/2019 870.10 868.85 13/05/2019 839.35 840.77
11/04/2019 873.95 869.95 14/05/2019 845.70 846.43
12/04/2019 875.05 880.98 15/05/2019 851.40 840.42
15/04/2019 886.15 880.68 16/05/2019 845.35 835.35
16/04/2019 885.85 878.84 17/05/2019 840.25 905.54
18/04/2019 884.00 864.88 20/05/2019 910.85 942.42
22/04/2019 869.95 863.63 21/05/2019 947.95 958.82
23/04/2019 868.70 871.19 22/05/2019 964.45 984.18
24/04/2019 876.30 900.07 23/05/2019 989.95 1032.99
25/04/2019 905.35 887.19 24/05/2019 1039.05 1023.79
26/04/2019 892.40 898.08 27/05/2019 1029.80 1061.92
30/04/2019 903.35 899.12 28/05/2019 1068.15 1029.01
29/05/2019 1035.05 1015.89
30/05/2019 1021.85 1036.92
Table 9.5 final data of J. K. Cement
Figure 9.5 graph of J. K. Cement
Here:
CLOSE is Actual Values
CLOSEF is Predicted Values
53. 45
Conclusions
This project presents extensive process of building ARIMA model for stock price prediction.
The experimental results obtained with best ARIMA model demonstrated the potential of
ARIMA models to predict stock prices satisfactory on short-term basis. This could guide
investors in stock market to make profitable investment decisions. With the results obtained
ARIMA models can compete reasonably well with emerging forecasting techniques in short-
term prediction.
Chapter-10
LIMITATIONS:
The study is confined to a period of 2 months from April 1st 2019 to 30th May 2019.
The accuracy is limited as the data collection was strictly confined to secondary
sources.
BIBLIOGRAPHY:
Bogdan svrydov -Forecasting stock price and stock index value in UK market.
Ayodele A. Adebiyi, Aderemi O. Adewumi, 3Charles - Stock Price Prediction
Using the ARIMA Model.
www.Sharekhan.com
www.NSE.com
www.BSE.com.
www.Moneycontrol.com
www.yahoofinance.com
