Know the pulse of the market

By Ranjan K Baruah

We have published articles on financial securities, share market and its present scenario. Many readers have emailed and messaged to write more about it as it is yet to be explored in our area. We have published some of the career options in our last edition and in this edition, we are publishing details about some of the terms. Most of these are available online.

Stock broker: A stock broker is a regulated professional individual, usually associated with a brokerage firm or broker dealer, who buys and sells stocks and other securities for both retail and institutional clients through a stock exchange or over the counter in return for a fee or commission. Stock brokers are known by numerous professional designations, depending on the licence they hold, the type of securities they sell or the services they provide. Most brokerage firms in India look for at least a bachelor’s degree in a related filed — accounting, finance, business or economics.
An applicant with a master’s of business administration can receive higher level positions and compensation than an applicant with a bachelor’s degree. On-the-job training is provided by the hiring firm. Having natural decision-making skills, math skills and taking initiative are important qualities in a successful candidate.

Merchant banking: The word merchant bank does not have a fixed definition as this term is used differently in different countries. In the US these are called investment banks and in the UK they are called accepting and issuing houses. The notification of the Ministry Of Finance here defines merchant banker as a person who is engaged in the business of issue management either by making arrangements regarding selling, buying, or subscribing to the securities as manager, consultant, adviser in relation to such an issue management. In general the merchant banks are the financial institution which provides financial services, solutions and advice to corporate houses. Some of the world famous merchant banks are Goldman Sachs, Credit Suisse & Morgan Stanley etc. In India there are many banks which are into the field of merchant banking some of the banks are ICICI, State Bank Of India, Punjab National Bank etc.

Mutual fund distributors: Simply put, they advice people on various mutual funds and where one may invest. Usually, when people select a scheme themselves, they do so based on its performance. They don’t judge that past performances may not be sustained. Evaluation of schemes is a function of various attributes of the schemes, for example scheme objective, investment universe, the risks that the fund is taking, among others. This requires the investor to put in time and effort. The investor also needs to have the requisite expertise to be able to understand the features and nuances as well as the ability to analyse and compare from among many options. A distributor of mutual funds or an investment advisor would be qualified and trained for such a job.

Mutual fund distributor verses investment adviser: We might be wondering about this two terms, both are supposed to help with individual’s investment decisions, which may include selection of MF schemes. An MF distributor is more likely to be focused on MF products, whereas an investment adviser may have a broader basket of products and services. We will publish more about this topic in our next edition.

Updates

AAI SPORTS Scholarships 2018: In a bid to encourage promising young players, the Airport Authority of India is offering sports scholarships to candidates for outstanding sports persons for the financial year 2018-19. The scholarship will be given initially up to March 31, 2019, which is extendable based on the individual’s performance/improvement in his/her event. Aspirants may send application before February 19.

(Ranjan K Baruah is a career mentor and can be reached at [email protected] or 8473943734 for any career related queries)