SECURITY

ANALYSIS

1

SECONDARY EQUITY MARKET: Secondary equity market is the place where the outstanding securities are traded is called as the secondary equity market and it is also referred as STOCK MARKET. 4. The procedure is  Offering shares to public  With information is prospectus  Also SEBI guidelines to issues 2. The existing shareholders are given rights to have additional capital. It is a listing agreement between the issuing company and stock exchange. A public issue involves sale of securities to the public at large. Preferential Allotment: An issue of equity by a listed company to selected investors at a price which may or may not be related to the prevailing market price is referred to as preferential allotment. In this the identity of investors is known when the offer document is prepared. Public issues: The most important method of issuing securities. The most important development in the Indian stock market was the development of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Private placement 4. Public issues 2. Private Placement: Private placement refer to sale of equity or equity related instruments of an unlisted company. Preferential allotments 1. The primary equity market also called as new issues market. Rights issues: A right issue involves selling securities in primary market by issuing rights to the existing shareholders. 2 . Price of the preferential allotment of shares should not be higher than the weekly high and not lower than the closing prices of the shares quoted on the stock exchange.PRIMARY EQUITY MARKET: Primary Equity market involves the issuing of fresh securities for the first time by a company to public. it is issuing of securities for the first time. 1. There are four ways in which a company may raise equity capital in the primary market. Rights issues 3. 3.

efficiency and transparency to securities. e) Meet international securities market standards. using VSAT (Very Small aperture Terminals).  Members are required to deliver securities and cash by a certain day. 3 .NATIONAL STOCK EXCHANGE (NSE): It was inaugurated in 1994. the Bombay Stock Exchange (BSE) is one of the oldest organized exchanges in the world. d) Shorten settlement cycle.  It is a computerization program. Its distinctive features are as follows:  The BSE switched from the open outcry system to the screen-based system in 1995 which is called BOLT (which is an acronym for BSE Online Trading).  To begin with.  All trades on NSE are guaranteed by National Securities Clearing Corporation (NSCC).  The NSE has opted for an order-driven system. b) Facilitate equal access to investors across the country.1) Capital Market Segment 2) Wholesale Debt Market Segment Capital Market Segment: Which deals with Equities. c) Impart fairness. Wholesale Debt Market: Government securities. through a satellites linkup.  The trading members in the capital market segments are connected to the central computer in Mumbai.  NSE has 2 segments:. BOMBAY STOCK EXCHANGE: It is established in 1875. BOLT was a ‘quote-driven’ as well as an ‘order-driven’ system with jobbers. debt and hybrids. The payout day in the following day. Convertible and non convertible debentures. the National Stock Exchange seeks to a) Establish a national wide trading facility for equities. PSU bonds and debt instruments. The distinctive features of NSE as it functions currently as follows  NSE is first totally computerized exchange.

A jobber is broker who trades on his own account and hence offers a two way quote or a bid ask quote.  The bid price reflects the price at which the jobber is willing to buy and the ask price represents the price at which the jobber is willing to sell. which is linked to main server at the BSE. 2001 both NSE and BSE became a completely order driven market.  Investors have to transact via a jobber/broker.  From August 13. The jobber/broker feeds his buy/sell quotes in his computer terminal. 4 . Jobbers play an important role on BSE.