Share-Market

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SHARE MARKET IN
INDIA


WHAT IS STOCK EXCHANGE?
Stock exchange is that place where
trading of shares is done in terms of
sale and purchase.

•There are 23 stock exchanges in the India.
Mumbai's (earlier known as Bombay),
Bombay Stock Exchange is the largest, with
over 6,000 stocks listed. The BSE accounts
for over two thirds of the total trading volume
in the country. Established in 1875, the
exchange is also the oldest in Asia. Among
the twenty-two Stock Exchanges recognised
by the Government of India under the
Securities Contracts (Regulation) Act, 1956, it
was the first one to be recognised and it is
the only one that had the privilege of getting
permanent recognition ab-initio.


INTRODUCTION :
.
Name of Indian stock exchange:
• 1.Bombay stock exchange
• 2.National stock exchange(Mumbai)
• 3.Banglore stock exchange
• 4.Utter pradesh stock exchange(kanpur)
• 5.Magadh stock exchange(Patna)
• 6.Ahmedabad stock exchange
• 7.vadodara stock exchange(Baroda)
• 8.Bhubaneswar stock exchange
• 9.Calcutta stock exchange(kolkata)
• 10.madras stock exchange

1.ACC
2.BAJAJ
3.AIRTEL
4.BHEL
5.CIPLA
6.DLF
7.GRASIM
8.GUJRAT AMBUJA
9.HDFC
10.TATA
11.RIL
12.SATYAM
13.INFOSYS
14. WIPRO
15. SBI
ETC….

Bombay stock exchange : It has 30
companies scripted. Some of they
are…
THE TOP TEN SINGLE DAY FALLS OF THE
SENSEX HAS :
1. Jan 21, 2008 --- 1,408.35 points
2. Oct 24, 2008 --- 1070.63 points
3. Mar 17, 2008 --- 951.03 points
4. Jul 06, 2009 --- 870 points
5. Jan 22, 2008 --- 857 points
6. Feb 11, 2008 --- 833.98 points
7. May 18, 2006 --- 826 points
8. Oct 10, 2008 --- 800.10 points
9. Mar 13, 2008 --- 770.63 points
10. Dec 17, 2007 --- 769.48 points
BSE SENSEX CHART
DATE 11/01/2012
FROM 9:15AM TO 3:30 PM
MARKET CLOSE
WITH +10.77
AT 16,175.86
NATIONAL STOCK EXCHANGE (NSE)
•The National Stock Exchange (NSE),
located in Bombay, is India's first debt
market. It was set up in 1993 to
encourage stock exchange reform
through system modernization and
competition. It opened for trading in
mid-1994. It was recently accorded
recognition as a stock exchange by
the Department of Company Affairs.
The instruments traded are, treasury
bills, government security and bonds
issued by public sector companies

CONT……….
•The Organisation: The National Stock
Exchange of India Limited has genesis in
the report of the High Powered Study
Group on Establishment of New Stock
Exchanges, which recommended
promotion of a National Stock Exchange by
financial institutions (FIs) to provide access
to investors from all across the country on
an equal footing.
CONT………
• Based on the recommendations, 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 unlike other stock exchanges in the country

SPECULATION :
•Definition : it involves the buying,
holding, selling, short-term selling of
stocks, bonds, commodities, currencies,
collectibles or any valuable financial
instrument to profit from fluctuations in its
price as opposed to buying it for use or for
income via method like dividends or
interest.

Kinds of speculation
• Bull Market (Tejiwala): In case of that they purchase
the shares at current prices to sell at a higher price
in the near future and makes a profit if his
expectations come true.he is also called a long
buyer.
• Bear Market (Mandiwala) : He sells security in the
hope that he will be able to buy them back at lesser
price.It is also called “short selling”.

Cont………………
• Lame duck : When a bear has made contracts to sell
securities,find it difficult to meet his commitment
due to non-availability of security,they always
struggling..
• Stag : He is that type of speculator who applies for a
large number of a shares in a new issue with the
intention of selling them at a premium. He is bullish
and very cautious.

BENEFITS OF STOCK EXCHANGE
FROM THE POINT OF VIEW OF COMMUNITY:

•1.It assist the economis development by
providing a body of interested investors.
•2.it uploads the position of superior
enterprises and assist them in raising further
funds.
•3.It encourages capital formation
•4.Government can undertake projects of
national importance and social value raising
funds through the sale of its securities on the
stock exchange.
•5.It is the stock exchanges that central bank
of a country can control credit by undertaking
open market operations (purchase and sale of
securities)



FROM THE COMPANY POINT OF VIEW
•1.A company whose shares quoted on stock
exchange they enjoy better reputation and
credit.
•2.The market for the shares of such a
company is naturally widened.
•3.The market price of securities is likely to
be higher in relation to its earnings,dividends
and property values.This raises the
bargaining power of the company in the event
of a takeover ,merger or amalgamation.

FROM THE INVESTORS POINT OF VIEW
•1.Liquidity of the investment is increased
•2.The securities dealt on a stock
exchange are good collateral security for
loans.
•3.The stock exchange safeguards
interests of investors through strict
enforcement of rules and regulations.
•4.The present net worth of investments
can be easily known by the daily
quotations.
•5.His risk is considerably less when he
holds or purchases listed securities.
SHAREHOLDER
• Shareholders are divided into two parts
• 1.Preference shareholder: Preference shareholder
are those which have preferential right to the
payment of dividend during the life time of the
company,and a preferential right to the return of the
capital when the company is wound up.

CHARACTERISTICS OF
PREF.SHAREHOLDER
•1.The dividend on them is fixed by the
articles of the company.
•2.They get their fixed rate of dividend before
any dividend is distributed among the other
class of shareholders.
•3.At the time of winding up of the company,
the preference shareholder must be paid
back their capital before anything is paid to
the ordinary shareholders.
KINDS OF PREF.SHAREHOLDER
• 1.Comulative shareholder: These shares are entitled to
fixed dividends whether there are profits or loss. If profits
are not sufficient to pay in a particular year then that will
pay on next year.
• 2.Non cumulative pref.share: These shares cannot claim
arrears of dividends of any year (if not paid due to
insufficiency of profits ) out of profits of subsequent year.
• 3.Participating pref. Shares: These shares receives a
fixed rate of dividend in priority to ordinary shares and
further,the right to participate in balance of profits in an
agreed proportion together with ordinary shares.
• 4.Redeemable pref.shares: These are shares which can
be purchased back by the company.The company
reserves its rights to call back or purchased these shares
at any time .

EQUITY SHARES
•All shares which are not preference shares
are equity shares.These shares do not have a
fixed rate of dividend,they are always
irredeemable and their holders have normal
voting rights.
•They are also the owners of the company.
•They take dividend

DEBENTURES
• A document under the company seal which provides
for the payment of a principal sum and interest there
on at regular intervals which is usually secured by a
fixed or floating charge on the company’s property
or undertaking which acknowledges a loan to the
company.

INTERNAL PLAYERS
• The members of the stock exchange can be divided
into two parts:
• A. Broker: He is a commission agent who transacts
business in securities on behalf of non-
members.They may have number of sub-brokers to
canvass and secure business for them.
• B. Jobber: He is an independent dealer securities.He
purchase and sells securities in his own name. He is
not allowed to deal with non-members directly. He
works for profit.

CAUSES OF PRICE FLUCTUATION
•1.DAMAND AND SUPPLY
•2.BANK RATE
•3.SPECULATIVE PRESSURE
•4.ACTIONS OF UNDERWRITERS AND
OTHER FINANCIAL INSTITUTIONS
•5.CHANGE IN COMPANY’S BOARD OF
DIRECTORS
•6.FINANCIAL POSITION OF THE
COMPANY
•7.TRADE CYCLE
•8.POLITICAL FACTORS
•9.SYMPATHETIC FLUCTUATIONS
10.OTHER FACTORS:

•A.EXPECTED MONSOON
•B.PERSONAL HEALTH OF HEAD OF
GOVERNMENT OR CHAIRMAN OF THE
COMPANY
•C.OIL PRICES IN THE INTERNATIONAL
MARKET.
•D.CHANGES IN EXCHANGE RATE
•E.BORDER TENSION
•F.STOCK BROKERS SCAM LIKE
HARSHAD MEHTA AND KETHAN PAREKH
•G.STRIKES AND LOCK-OUT OF THE
COMPANY.
•H.NEW BUDGET PROPOSALS
•I.LOBERLIZATION AND PRIVATIZATION
OF THE COMPANY.


BUY BACK SHARES
• In simple term when company re-purchase of its own
shares that is called buy back shares.

MODESS OF REPURCHASE
•BASICALLY THERE ARE TWO MODES OF
REPURCHASE:

•1. Open market repurchase: company makes
an announcement regarding the repurchase of
a specified number of shares. The purchases
are made anonymously through a broker from
the secondary market over a specified period
of time.
•2. Tender offers: this has basically two types
•A. Fixed price tender offers: company
announces a fixed price at which it is willing
to buy its shares, a maximum number of
shares that it will commit to buy and an
expiration date for the offer. The offer price is
premium over the market price to encourage
the shareholder.




Cont………….
•B. Dutch auction tender offers : In a Dutch
auction, the company announces the
maximum number of shares it wishes to buy
and a range of prices at which it will entertain
offers. Shareholders who choose to
participate must then select a single price in
this range at which to tender their shares.

RULES FOR REPURCHASE UNDER
SEBI ACT 1988
• 1.Regulations cover only the listed securities of the
company
• 2.In case of purchase through the stock exchange an
offer for buy back will not remain open for more than
30 days.
• 3.Buy back through negotiated deals, spot
transactions or private arrangements is not
permitted.
• 4.In the purchases made through stock exchange,
the details under the buy back scheme shall be made
available to the stock exchange on daily basis:the
details in turn shall be made available to public
regularly.

conclusion
• THE STOCK EXCHANGE IS CONSIDERED TO BE
THE BAROMETER OF ECONOMIC ACTIVITY.


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