Escolar Documentos
Profissional Documentos
Cultura Documentos
SECURITIES MARKET IN INDIA- AN OVERVIEW Basically, Securities markets provide a channel for allocation of savings by an individual or an organization to those who have a productive need for them. A security market can be said a location where the savers meet the real investors who need the fund. The savers and investors are constrained by the economys abilities to invest and save respectively which thus helps market in enhancing savings and investment in the economy. The Security market denotes buyers and sellers of securities and agencies which help in the marketing of securities.
SECURITIES MARKET IN INDIA- AN OVERVIEW Securities are broadly categorized into debt securities (such as banknotes, bonds and debentures) and equity securities, e.g., common stocks; and derivative contracts, such as forwards, futures, options and swaps.
1. 2. 3. 4.
Organised Market Dealings in securities issued by various concerns Dealing only through authorised members Necessary to obey rules
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.
Cont.
11.Cochin stock exchange 12.coimbatore stock exchange 13.Gauhati stock exchange 14.Hydrabad stock exchange 15.Madhya pradesh stock exchange(indore) 16.Jaipur stock exchange 17.Ludhina stock exchange 18.Mangalore stock exchange 19.Pune stock exchange 20.saurashtrakutch stock exchange
FUNCTIONS
Provides a ready market for buying and selling of securities. Performs an act of magic as it enables long term investments to be financed by funds provided by individuals who are otherwise interested in short term or medium term investment. Directs the flow of capital in the most profitable channels. Includes corporate enterprises to raise their standards of performance. Offers and easily understood evaluation of the financial conditions and prospects of listed firms Facilitates speculation, Promotes the habit of saving and investment thereby helping in capital formation. Promotes industrial growth and economic development.
The Security market includes : 1. The market for new securities 2. The market for existing securities. Activities in originating, distributing and trading in securities. Organizations which facilitate and contribute to activities in the securities market. Persons and organizations who buy and sell securities. Regulations, practices and customs which influence and control the conduct of business in securities market. It will be convenient to study the securities market under two heads: 1. The New Issues Market 2. The Stock Exchange
BSE SENSEX The BSE SENSEX, short form of Sensitive Index, first compiled in 1986 is a market Capitalization-Weighted index of 30 component stocks representing a sample of large, well-established and financially sound companies. The index is widely reported in both, the domestic international, print electronic media and is widely used to measure the used to measure the performance of the Indian stock markets. The BSE SENSEX is the benchmark index with wide acceptance among individual investors, institutional investors, foreign investors, foreign investors and fund managers. The objectives of the index are:
BSE
Bombay stock exchange : it has 30 companies scripted. ACC 2.BAJAJ 3.AIRTEL 4.BHEI 5.CIPLA 6.DLF 7.GRASIM 8.GUJRAT AMBUJA 9.HDFC 10.HDFC BANK
CONT
11.HERO HONDA 12.HINDALCO 13.HUL 14.ICICI BANK 15.INFICYS 16.ITC 17.L&T 18.MARUTI 19.NTPC 20.ONGC
CONT
21.RANBAXY 22.RELIANCE COMMUNICATION 23.RELIANCE ENERGY 24.RIL 25.SATYAM 26.SBI 27.TCS 28.TATA MOTERS 29.TATA STEEL 30.WIPRO
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 nonavailability 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.
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.
Tarawaniwala
Non-members : The following categories of non members are also permitted to enter trading hall and transact business on the behalf of members. Authorized clerks: They are the assistant or agents.They buy or sell on the behalf of employers.They can not transact business on their own account. Remisers: They are the sub-brokers. He is also called the half commission men.
OBJECTIVES OF SEBI
1.Registring and regulating the working of stock brokers, sub-brokers, share transfer agents, underwriters.who may be associated securities market in any manner. 2.Registering and regulating the working of collective investment scheme including mutual funds. 3.Prohibiting insider trading in securities. 4.Regulating substantial acquisition of shares and takeovers of companies. 5.Calling for information from, undertaking inspection, conducting inquiries and audits of stock exchanges and intermediaries and self regulatory organizations in the securities market. 6.Prohibiting fraudulent and unfair trade practices related to sec. market. 7.Promoting investors knowledge and training of intermediaries .
The major functions of SEBI are: 1Protecting interest of investor in securities a) Prohibiting fraudulent & unfair practices b) Prohibiting misleading statements, inducing purchase & sale of securities. c) Educating investors d) Promoting fair practices and code of conduct e) Stopping preferential allotment
The major functions of SEBI are: 2 Promoting development of securities market a) b) c) d) e) Registration of FII Promoting training of intermediaries of market. Making underwriting optional Debenture trustees to be registered with SEBI Permitting internet trading through registered broker.
3 Regulating securities market a) b) c) d) Regulating business in stock market Regulating intermediaries Registering and regulating working of stock brokers Regulating takeover of companies.