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In-Depth Jobs

Issue No 34, 20-26 November 2021

Career Opportunities Related To Stock Market

Vijay Prakash Srivastava

Savings and investments are integral to any economy. To keep the economy buoyant consumption has to be on the rise but this doesn't undermine the importance of savings and investments. Savings are usually for short term and investments are for long term. In case of savings return is not considered to be of prime importance whereas investments are made to derive as high a return as possible taking into account the risk factor. If somebody puts money in savings or fixed deposit with a bank it carries minimum risk. Gold, real estate and stock market are other avenues of investment of which stock market carries the maximum risk with the expectation of high return.

Since past few months, India's stock market is on a ball. When the pandemic began, BSE Sensex had gone down to 27,000, now it is hovering around 60,000.With the boom in stock market, more and more people are now willing to invest in shares. Retail investors' participation is increasing in stock market at unprecedented rate. As per a news report published in a leading financial daily, new investors are queuing up to put money into equities. Stock exchanges have witnessed more than 34.5 lakh fresh investor additions in the month of September this year and 95.95 lakh in the previous three months as per data made available by Bombay Stock Exchange. With this expansion, addition and due to many other reasons new opportunities of work are being created in India's stock market.

Understanding stock market and its functioning

We all know that trade is essentially an exchange of goods and services between two parties for a price. This trade happens at a market place. There are kirana shops, malls and other places where this trade takes place. We buy services at a hotel or a bank branch or at the outlets of other service providers. Now both goods and services can be bought and sold at e-market places as well. We call it e-shopping. Stock market is a place where financial products like equities, debentures, bonds etc. are bought and sold. Maximum trade happens in shares so it's good to understand what a share is.

Every business needs money. In case of businesses where huge capital is required, the promoters of business, if capable, may not require any money from outside. For others they may rope financial partners, take loans or may float issue of shares which can be on the basis of public or private placement. In case of public issue of shares (also called stock), the shares are listed on stock exchange. When a company issues shares for the first time it's called initial public offering (IPO for short).Any holder of such shares may sell her shares in the stock market. Face value of a share is decided by the floating company, and it may be sold at a justifiable premium. To illustrate, nearly a year ago, Government of India owned Mazagon Dock Shipbuilders Limited came out with its public issue of shares of face value Rs. 10 at a premium of Rs. 125 to Rs. 135 and the same is now being traded around Rs. 270 which will be called its market price at a particular time. Market value of a share is a completely different thing. It is the price at which trade of a share happens and it may keep fluctuating. The price of share in the stock market is determined by the performance and growth prospects of the related company and how investors perceive it.

Trade of every share happens at either of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Now all the shares are traded electronically and every company issues its shares in dematerialised form. National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) are two agencies providing depository services in the country. These are the custodians of all the shares issued. When a trade happens ownership of shares is transferred from seller to the buyer. There are broking agencies who facilitate the trade of shares. They take the order of buying or selling shares from their clients which has to be executed on BSE or NSE. Trade order may be placed at the website or app of the broking agency, or by personal visit or over phone.

Roles: For many roles in stock market no special qualification is required. For example in a broking firm there are people who simply attend phone calls to receive trade orders and enter these to the trading platform. Similarly there are customer service roles wherein one is required to deal with the issues or concerns raised by clients or provide guidance to people which may be in person, over phone or through chats. One may get such roles with simple qualifications of 10+2 or graduation, with good communication skills and knowledge of working on computers. For various other roles you need specific knowledge and expertise. Few of such roles have been described below. Since mutual funds also invest in stocks, the opportunities described here may also be available with mutual fund companies.

Finance/Accounts Manager: The business of stock market is the business of money. Broking houses need people to manage the inflow and outflow of money and maintain proper accounts. Graduates and postgraduates in Commerce (B.Com/M.Com) are considered suitable to work in accounts and finance department of a broking firm.

 Equity Researcher: Equity researchers make detailed study of companies whose stocks are traded on platforms like National Stock Exchange or Bombay Stock Exchange. The purpose of this study, is to understand the nature of business & performance of the company, its profitability and the potential it offers. Based on the outcomes of such study decision to hold, buy or sell the stock is taken. The study can be also sector wise covering sectors like steel, petrochemicals, fertilizers, pharmaceuticals, banking, information technology, business process outsourcing, gas, shipping, aviation etc. Each equity researcher may be assigned one or more sectors to keep a close watch and make recommendations as to which sectors are doing well or are likely to do well in short and long term. Such recommendations are used to decide about buying or selling scrips belonging to specific sectors. Researchers may also be required to find out comparative performance within particular sector to learn which companies are doing better than others, in order to decide about investing in them or take out the money already invested. Every big broking firm and mutual fund company has a team of equity researchers.

Technical Analysts: Technical analysis in the parlance of stock market refers to mathematical and scientific approach to develop a view on the trend in stock market or on a particular stock. Past patterns are put on charts with the objective of exploring patterns in future, long, medium or short term. Technical analysis is used mostly for short term predictions.

 Portfolio Manager: There are many investors who instead of completely deciding on their own leave their investment decisions to Portfolio Managers or Portfolio Management agencies who charge a fee for their services and/or a commission from the profits made. The job of a Portfolio Manager is to understand the investment objective and time horizon by talking to the clients and then decide investment strategies. Few investors may desire quick returns even with high risk while others may prefer moderate returns with low or moderate risk.

Fund Manager: Fund Managers are required to play a bigger role particularly in mutual fund companies and pension funds. They decide the components of a particular mutual fund scheme depending on the nature of the scheme. For example in case of a pure equity fund they have to decide which shares are to be bought/sold and in what quantity. Similarly decision has also to be taken about selling of shares. Monitoring dividend income and planning for investment of such income is another functional area for them. The purpose is to maximize value of the fund which reflects in per unit value. With some experience equity researchers can grow into fund managers. Key result area of a fund manager is the return offered by the fund managed by her. Better performing fund managers are in great demand in the industry.

 In addition to broking firms, Foreign Institutional Investors, Domestic Institutional, investment wings of Insurance companies, pension funds appoint equity analysts/ researchers, technical analysts and fund managers.

Qualifications that would help you to make a career in stock market

There are a number of qualifications which may prove useful for making a career in stock market. A higher qualification in management such as Masters of Business Administration or postgraduate diploma in management (PGDM) with specialization in finance is now a very popular qualification. Chartered Accountants, Chartered Financial Analysts and Cost Accountants have good opportunities to work in stock market. For working in financial planners' role a certification in financial planning with or without the qualifications mentioned before is desirable. Opportunities also exist for those qualified in risk management, business analytics, data science, big data analytics and of course information technology is now heavily being used in stock markets. There are opportunities for programmers, software developers, database managers and information security experts. Financial Technology has emerged as a new discipline which carries a scope also to work with stock exchanges, broking firms and mutual fund companies etc.

National Institute of Securities Market, near Mumbai has many useful courses which may help in getting a stock market related career role. These are-Postgraduate Diploma in Management (Securities Markets), Post Graduate Program (Portfolio Management/Investment Advisory / Research Analysis), LL.M. program in investment and securities Laws (for Law graduates), Post Graduate Certificate in Management (Data Science in Financial Markets) and Post Graduate Certificate in Securities Markets (PGCSM). Bombay Stock Exchange has a subsidiary- BSE Institute Limited or Bsevarsity to offer classroom and online training courses related to stock markets. Classroom programmes include Post Graduate Diploma in Global Financial Markets and Post Graduate Diploma in Predictive Analytics (Data Analytics). Online courses offered by Bsevarsity are Comprehensive Investing Strategies for Capital Markets, Executive Program in Risk Management, Certificate Program on Stock Market (Advanced Level) (CPSM), Capital Markets Bootcamp and Introduction to Wealth Management + Mutual Funds Investment. Similarly National Stock Exchange has a NSE Academy which conducts Post Graduate Programmes like PGCM Investment Banking, PG Programme on Financial Analytics, PGP Certification Programme in Financial Technolgies, PG Diploma in Financial Markets. Online interactive courses are also available on Equity Research and Valuation, Technical Analysis, Futures and Options Trading Strategies, Certification in Research, Trading and Advisory/Online Technical Analysis/ Online Equity Research Analysis/ Equity Valuation and Financial Modelling/ Financial Planning and Wealth Management. NSE Academy has also few partnership programmes such as Live Trading Strategies, Capital Market Analytics, Intraday Trading Strategies, Algorithmic Trading and Computational Finance, Smart Index Trader Programme Portfolio Management Strategies.

 In our country stock markets are regulated by Securities and Exchange Board of India (SEBI). If you want to work with SEBI, the most common route is joining them as grade 'A' officer for which vacancies are advertised almost every year. These vacancies exist in general as well as specialised streams. For general stream one should have a Master's degree in any discipline or Bachelor's Degree in Law, Bachelor's degree in Engineering or qualification of Chartered Accountancy/ Chartered Financial Analyst/ Company Secretary / Institute of Cost and Works Accountant of India. Specialists' roles are available in legal, information technology, engineering and research streams. For research stream Master's Degree in Statistics/Economics/Commerce/Business Administration (Finance)/Econometrics is required. The selection happens on the basis of written examination (preliminary and main) and interview.

 If you're interested in pursuing a stock market related career, you shouldn't be dependent upon just newspapers advertisements as in many cases particularly by private firms, people are sourced through other means. Those possessing required qualifications/skillset may submit their resume to such firms to be considered for existing or upcoming opportunities. You should also have your profile at major job portals.

The author is a career counsellor, e-mail: vj2j25@ yahoo.in)

Views expressed are personal