STOCK EXCHANGE

‡ INMANTEC

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

INTRODUCTION :
‡ 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.

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

Cont««.Cochin stock exchange 12.Ludhina stock exchange 18.Madhya pradesh stock exchange(indore) 16.coimbatore stock exchange 13.Gauhati stock exchange 14. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ 11.Hydrabad stock exchange 15.Pune stock exchange 20.Jaipur stock exchange 17.saurashtrakutch stock exchange .Mangalore stock exchange 19.

‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Bombay stock exchange : it has 30 companies sripted.HDFC BANK . Name:1.ACC 2.GRASIM 8.BAJAJ 3.CIPLA 6.DLF 7.BHEI 5.GUJRAT AMBUJA 9.AIRTEL 4.Cont««.HDFC 10.

HINDALCO 13.HERO HONDA 12.INFICYS 16.NTPC 20.ICICI BANK 15.ITC 17.MARUTI 19.ONGC .HUL 14.CONT«« ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ 11.L&T 18.

TCS 28.RIL 25.TATA MOTERS 29.TATA STEEL 30.SBI 27.RELIANCE ENERGY 24.RANBAXY 22.CONT«« ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ 21.SATYAM 26.RELIANCE COMMUNICATION 23.WIPRO .

642.35 points Jan 22. 2.769. 8. 2007 --.408. 2007 --. 2008 --. Jan 21. 2008 --. 2008 --.THE TOP TEN SINGLE DAY FALLS OF THE SENSEX HAS : 1. 2007 --. 3. 6. 4.98 points May 18.717. 2007 --.826 points Dec 17.616. 2006 --. 2007 --.82 points Nov 21.70 points Apr 2. 2007 --. 10.48 points Oct 17.678.1. 7. 5.43 points Jan 18.73 points .687. 9.857 points Feb 11.18 points Aug 16.833.

BSE CHART ‡ .

61 (2.349.526.47 .17.80 .734.07 Trade Time: 3:58PM IST Change: 385.‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Index Value: 17.17%) Prev Close: 17.309.68 Open: 17.503.04 Day's Range: 17.

located in Bombay. click Options in the Message Bar. treasury bills. NSE ‡ The National Stock Exchange (NSE). It was recently accorded recognition as a stock exchange by the Department of Company Affairs.To help protect your privacy. PowerPoint prevented this external picture from being automatically downloaded. It was set up in 1993 to encourage stock exchange reform through system modernization and competition. To download and display this picture. is India's first debt market. It opened for trading in mid-1994. and then click Enable external content. government security and bonds issued by public sector companies . The instruments traded are.

To download and display this picture. PowerPoint prevented this external picture from being automatically downloaded. . click Options in the Message Bar. and then click Enable external content. 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.To help protect your privacy.

NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a taxpaying company unlike other stock exchanges in the country .To help protect your privacy. To download and display this picture. and then click Enable external content. click Options in the Message Bar. PowerPoint prevented this external picture from being automatically downloaded. CONT««« ‡ Based on the recommendations.

4.ss ‡ NSE Group: 1.To help protect your privacy. DotEx International Limited . (NSCCL) 3. (IISL) 2. Cont««««««««. To download and display this picture. National Securities Clearing Corporation Ltd. National Securities Depository Ltd. click Options in the Message Bar. India Index Services & Products Ltd.. and then click Enable external content. PowerPoint prevented this external picture from being automatically downloaded.IT Ltd. (NSDL) 5. NSE.

. click Options in the Message Bar. PowerPoint prevented this external picture from being automatically downloaded.selling.currencies. SPECULATION : ‡ Definition : it involves the buying.shortterm selling of stocks.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. and then click Enable external content.commodities.To help protect your privacy. To download and display this picture.bonds.holding.

he is also called a long buyer. click Options in the Message Bar. 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. To download and display this picture. ‡ 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 ³short selling´. PowerPoint prevented this external picture from being automatically downloaded. .To help protect your privacy. and then click Enable external content.

find it difficult to meet his commitment due to non-availability of security.they always struggling..He is bullish and very cautious. ..Cont«««««« ‡ Lame duck : When a bear has made contracts to sell securities. ‡ 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.

DOLLAR) Euro 63.4072 S'pore Dollar 29.160 ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ .CurrencyIN .48 GB Pound 81. 40.20 Japanese Yen 0. 4:30 P.45(US.M.Forex Market ‡ Mar 19.

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

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

.His risk is considerably less when he holds or purchases listed securities. ‡ 4.The securities dealt on a stock exchange are good collateral security for loans.The present net worth of investments can be easily known by the daily quotations.The stock exchange safeguards interests of investors through strict enforcement of rules and regulations. ‡ 5.Liquidity of the investment is increased ‡ 2.FROM THE INVESTORS POINT OF VIEW ‡ 1. ‡ 3.

ROLE PLAYER ‡ EXTERNAL:---‡ 1.DEBENTURE HOLDER .SHAREHOLDER ‡ 2.

and a preferential right to the return of the capital when the company is wound up. .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.

‡ 2.At the time of winding up of the company.They get their fixed rate of dividend before any dividend is distributed among the other class of shareholders. the preference shareholder must be paid back their capital before anything is paid to the ordinary shareholders. ‡ 3.SHAREHOLDER ‡ 1. .CHARACTERISTICS OF PREF.The dividend on them is fixed by the articles of the company.

share: These shares cannot claim arrears of dividends of any year (if not paid due to insufficiency of pfofits ) out of rofits of subsequent year. .KINDS OF PREF.Non comulative pref.If profits are not sufficient to pay in a particular year then that will pay on next year.SHAREHOLDER ‡ 1. ‡ 2.Comulative shareholder: These shares are entitled to fixed dividends whether there are profits or loss.

the right to participate in balance of profits in an agreed proportion together with ordinary shares.Redeemable pref.shares: These are shares which can be purchased back by the company. ‡ 3.Participating pref. Shares: These shares receives a fixed rate of dividend in priority to ordinary shares and further. .Cont««. ‡ 4.The company researves 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.

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

Tarawaniwala ‡ Non-members : The following categories of non members are also permitted to enter trading hall and transact business on the behalf of members. .They buy or sell on the behalf of employers. He is also called the half commission men. ‡ Remisers: They are the sub-brokers. ‡ Authorized clerks: They are the assistant or agents.They can not transact business on their own account.

ACTIONS OF UNDERWRITERS AND OTHER FINANCIAL INSTITUTIONS ‡ 5.CAUSES OF PRICE FLUCTUATION 1.CHANGE IN COMPANY¶S BOARD OF DIRECTORS ‡ 6.FINANCIAL POSITION OF THE COMPANY ‡ ‡ ‡ ‡ .SPECULATIVE PRESSURE 4.DAMAND AND SUPPLY 2.BANK RATE 3.

POLITICAL FACTORS 9.OIL PRICES IN THE INTERNATIONAL MARKET.TRADE CYCLE 8. ‡ ‡ ‡ ‡ ‡ ‡ 7.OTHER FACTORS: A.SYMPATHETIC FLUCTUATIONS 10.EXPECTED MONSOON B.PERSONAL HEALTH OF HEAD OF GOVERNMENT OR CHAIRMAN OF THE COMPANY ‡ C.CONT««.. .

CHANGES IN EXCHANGE RATE ‡ E.STRIKES AND LOCK-OUT OF THE COMPANY.STOCK BROKERS SCAM LIKE HARSHAD MEHTA AND KETHAN PAREKH ‡ G. ‡ H.BORDER TENSION ‡ F. ‡ D. .NEW BUDGET PROPOSALS ‡ I.CONT««.LOBERLIZATION AND PRIVATIZATION OF THE COMPANY.

some of the powers and function exercised by the central government.in respect of regulation of stock exchanges were transferred to the SEBI. .With the coming into effect of SEBI.SEBI ‡ It was constituted and made a statutory body by SEBI act 1992.

Prohibiting insider trading in securities. ‡ 4.Registering and regulating the working of collective investment scheme including mutual funds.underwriters«««.share transfer agents. ‡ 2.sub-brokers. ‡ 3. .who may be associated securities market in any manner.Registring and regulating the working of stock brokers.Regulating substantial acquisition of shares and takeovers of companies.OBJECTIVES OF SEBI ‡ 1.

as may be delegated to it by the central government.Performing such function and exercising such powers under the provisins of the capital issues(control) act 1947 and SCRA 1956.Performing such other functions as may be prescribed.undertaking inspection. ‡ 7. ‡ 6. .Cont«« ‡ 5.Calling for information from.conducting inquiries and audits of stock exchanges and intermediaries and self regulatory organizations in the securities market.

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

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

.Cont««««. ‡ 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.

In the purchases made through stock exchange. ‡ 4. spot transactions or private arrangements is not permitted.RULES FOR REPURCHASE UNDER SEBI ACT 1988 ‡ 1.In case of purchase through the stock exchange an offer for buy back will not remain open for more than 30 days.Buy back through negotiated deals.Regulations cover only the listed securities of the company ‡ 2. ‡ 3. 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. .

The rating grades are: ‡ AAA: HIGHEST SAFTY ‡ AA: HIGH SAFTY ‡ A: ADEQUATE SAFTY ‡ BBB: MODERATE SAFTY ‡ BB: IN ADEQUATE SAFTY ‡ BC&D: HIGH RISK AND DEFAULT .HOW RATING IS GIVEN TO THE COMPANY? ‡ Basically rating is given after see the company 'image.accounting accuracy.management quality.auditors quality.Rating is not fixed. it may be change.assets quality.

ICRA 3.CARE 4.DPCR .CRISIL 2.CREDIT RATING AGENCY IN INDIA ‡ ‡ ‡ ‡ 1.

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

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