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Industry Practice - BFSI

Module 1
Introduction to Financial Markets

15th February 2002


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Financial Markets Players

All about Money
• No complaint … is more common than that of a scarcity of money
- Adam Smith (Wealth of Nations)
• Money is like a sixth sense - and you can't make use of the other five
without it. -- W.Somerset Maugham, English novelist
• I do everything for a reason, most of the time the reason is money.
-- Suzy Parker, American model and actress
• Money is a stupid measure of achievement, but unfortunately it is the
only universal measure we have. -- Charles Steinmetz, American
electrical engineer
• Money is always there, but the pockets change. -- Gertrude Stein,
American writer
• If a man runs after a money, he's money mad; if he keeps it, he's a
capitalist; if he spends it, he's a playboy; if he doesn't get it, he's a
ne'er-do-well; if he doesn't try to get it, he lacks ambition. If he gets it
without working for it, he's a parasite; and if he accumulates it after a
lifetime of hard work, people call him a fool who never got anything out
of life. -- Vic Oliver, English author
Introduction to Money
• Introduction of Money
• a wonderful instrument invented by mankind
• forms of money before currency notes
• What is Money?
“something acceptable and generally used as payment for
goods and services”
“anything that functions as a
means of payment (medium of exchange),
unit of accounts and
store of value”
• Why coins are round ?
Introduction to Business, Economics
• Evolution of Business
• evolution of business from barter to money
Transaction costs associated with barter encourages Development of money
facilitates Exchange /Trading facilitates Specialization & division of labour
facilitates Economic Development
• Beginning of Corporate Enterprise
• proprietary to partnership to company
• Need for Capital
• Difference forms of Capital
• Owners Vs Lenders ; Short Term Vs Long Term
• Allocation of capital
• Economics - the study of how society decides what gets
produced and how and who gets what
What is a Company?
• Types of business entities:Proprietorship
• Partnership
• Company - Originated from Latin “com panis”
To come together and share bread
How is it formed?
Coming together of Individuals is a MUST for
formation of a company
Company- Public Vs Private, Limited Vs
unlimited liability
• First company registered in 1602
•Dutch East India Company founded by Dutch Merchants survived for
two centuries
• Others - Trusts, Societies, Corporations etc.
Corporate Finance Vs Personal Finance

Personal Finance Corporate Finance

Funds are owned by self Funds are always BORROWED
Accountability optional Principal - Agency relationship
Negligible interest costs Funds always carry cost
Negligible Time Value of money Time value of money is critical
Limited sources of funds Several sources of funds
Undefined application of funds Clearly defined objective
Loose control over resources Clearly defined control
No financial implications on Incorporation and Dissolution
Incorporation or Dissolution has financial implications
Essentials of Corporate Finance

Share Capital Debt Long/Short Govt/Pvt Retail/Wholesale


Fixed Assets Current Assets Loans Investments Project
All about Assets


Accounting Equation

Assets = Liabilities + Capital

All about Balance Sheet
Balance Sheet as on dd/mm/yyyy
Liabilities Assets
Capital xxxxxxx Fixed Assets xxxxxxx
Profit / Loss xxxxxxx Investments xxxxxxx
Long Term Loans xxxxxxx Trade Debtors xxxxxxx
Trade Creditors xxxxxxx Cash xxxxxxx
xxxxxxx xxxxxxx
Profit & Loss Account for the period ended dd/mm/yyyy
Cost of Goods Sold xxxxxx Sales xxxxxxx
Gross Profit xxxxxx
xxxxxx xxxxxxx
Administrative expense xxxxxx Gross Profit xxxxxxx
Selling Expenses xxxxxx Other Income xxxxxxx
Net Profit xxxxxx
xxxxxx xxxxxxx
Capital from different sources
Introduction to Finance
• What is Finance?
“Finance is the art of passing currency from hand to hand until
it finally disappears” - Robert W Sarnoff

“The study of how the financial systems co-ordinates

and channelises the flow of funds from lenders to
borrowers and vice versa and how funds are created
by the financial intermediaries during the borrowing
• Financial system consists of variety of institutions,
markets and instruments that are related
Financial System
Financial Institutions
Commercial Banks
Insurance Companies
Funds Mutual Funds Funds
Provident/Pension Funds
Deposits Non-banking Financial Companies Loans
Funds Securities

Suppliers of Funds Demanders of Funds

Individuals Funds Individuals
Businesses Placement Businesses
Governments Securities Governments

Funds Funds

Financial Markets
Money Market
Capital Market
Introduction to Financial Markets
• What are Financial Transactions and Financial
“Markets in which spending units trade financial claims”
Direct Finance(Stock Market, Bond Market)
Indirect Finance (Banks and Credit Unions)
• Functions of Financial Markets
• facilitates price discovery
• provide liquidity
• reduces the cost of transacting - search costs &
information costs
Classification of Financial Markets
• By Nature of Claims
• Debt Market
• Equity Market
• By Maturity of Claims
• Money market - short term claims
• Capital Market - long term claims
• By Seasoning of Claims
• Primary market - New claims
• Secondary market - Outstanding claims
• By Timing of Delivery
• Cash / Spot Market
• Forward / Futures Market
• By Organisation Structure
• Exchange Traded
• Over the counter
• What are Third and Fourth Markets?
Classification of Financial Markets
Money Debt Equity

Short Term Medium to Long Term LongTerm

Non Permanent Fund Permanent Fund

0 1

Money Debt Equity

Markets Markets Markets
Essentials Savings and Investments
•What is Savings ?
Savings is foregone consumption - income not spent on
•What is Investment ?
Assets created with a sole purpose of increasing outputs
•Types of Investments
•Real Investments - on tangible assets
•Financial Investments
•Financial Investments are created with a sole purpose
of yielding financial returns
•Investments may be short term / long term
•Returns may be regular or cumulative
•Investment may be in shares / debentures / mutual
fund units
•Investment is valued at Acquisition price Vs Current
General principles of portfolio
• What is portfolio ?
• What are your portfolios? Components … savings account,
life insurance, house property, precious metals like gold &
silver, units of mutual funds, share and bonds.
• Why Investments ? Need for it and Varieties of Instrument .
• What is Return on Investment (RoI)
• Real return - adjusted for inflation - Time value of money
• Principles of Portfolio Management?
• Risk Vs Return and correlation between both - risk/return
• Averaging of return and risk
• Advent of mutual funds, collective investment schemes.
General principles of Risk & Return




Low (0-5) Return High(15- )
Medium (5-10)
Beginning of Share & Securities
• What is a Share ?
• A share is exactly what it says it is
• A share of business
• Share is a share in share capital of a company
• What is a Security?
• Securities cover wider range of instruments and
includes share, debentures, bonds
• Security - different meanings - physical, financial,
data …etc.
• What is Stock? Is share a stock ?
• Why are Stock Exchanges not called Securities
exchanges ?
Essentials of Equity
• Issued at Par or Premium or Discount
• Face Value is Value written on Share Certificate
• Preference Equity carries Dividends, and can be Redeemable
• Further equity expanded through Bonus / Rights /Stock Split
• Returns available only through trading on bourses in case of listing
• Exchanged during Mergers / Acquisitions
• Equity Base of a company is a MAJOR indicator of its size &
• A large equity base facilitates raising further debt
• Foreign Equity : Participation in Equity Capital by Foreign Investors
Essentials of Debt
• Is it a dirty word?
• Debt has well defined obligation to return the Principal as well as
• the Interest amount. Default attract legal action
• Interest may be Fixed rate / Floating rate
• Debt may be secured or unsecured with additional assets
• Less riskier than equity
• Available in a wide range of options
Maturity / Interest Rate / Taxability
• Available from a variety of sources
Govt. / Pvt. / Individuals
• A large debt restricts prospects of raising further debt
• Convertible into Equity
• Secured Debt has highest priority in case of winding up
• May be listed or unlisted
• Debentures/Bonds/Project Loans/Lease/HP/Bills/CP/CD are all debts
• Interest Repayments on debt attract tax rebate
Types of financial instruments
Several categories of instruments are dealt in the
market place.
A share, or a bond, or a debenture issued by a
company is an an acknowledgement of sums
received from the investors

Bonds or

Convertible Other Derivative

Bonds/Stocks Instruments Contracts
Types of Securities
• Represents a share of the investor in the company
• Dividends payable on the value of shares held, depending upon the
performance of the company in a particular year
• May be obtained in Primary Market (directly from the company in its
public issue)or in the Secondary Market (from other shareholders)
or at OTCs (Over The Counter markets)
• May be held in physical paper or immobilised or dematerialised form
• May be kept in custody of self, or a custodian or a depository
participant or a depository
• Shares may be issued as GDRs/ADRs/ADS in foreign markets
• Have you heard of EDR /RDRs
• Know about Globally Registered Share
Types of Securities
Bond / Debenture
• Represents a loan given to the company.
• Distinct from a loan or deposit.
• Interest payable on the principal amount loaned to the
company at predetermined rates and frequency like
quarterly semi-annually or annually
• Can also be issued at a discount, and repaid at face value,
without explicit interest payment e.g. zero coupon bonds
• Can carry a fixed or varying(floating) interest rate
• Can be converted into a share if it is a convertible debenture
• Convertible debentures may be partially or fully convertible
• Straight / Perpetual / Putable / Callable / Zero Coupon
• New Innovation - Bonus Debenture
Types of Securities
Convertible Debenture
Represents a loan given to the company which may be converted into a
share at a future date
The full or partial amount of the loan may be converted into a share at a
conversion price
- Fully / Partly Convertible Debentures (FCD/PCD)
Interest payable on debenture amount so long as it is not converted into
the share, thereafter, dividend is payable on the amount of shares held
Preference Shares could also be convertible into equity shares.

Other Instruments
Other instruments that may be defined as securities are:
- Commercial papers issued by reputed companies
- Certificates of Deposit and Inter Corporate Deposits
- Treasury Bills and Bonds issued by Government bodies
What is a derivative ?
• Derivative is a financial contract the value of which depends on
the value of one or more underlying security, rates or indices.
• The product is derived from a simple transaction in a spot
• Product whose price is derived from the price of underlying
asset. For Example: Commodity, Currency, Interest Rates,
Equity, Indices.
• A sophisticated financial product such as swaps, warrants,
futures, options (calls and puts).

Why Derivatives?
•Rationale : Hedging of Risk
For Example: Index Futures for Portfolio risk
Types of Derivative Contracts
Futures are like forward contracts, but contracts are
standardised and trading is centralised and hence
liquid contracts.

Options are contracts which provides the holder the
right with out an obligation. Option buyer pays to the
Option writer the price called premium. Options have
an exercise price at which the holder can exercise his
right at the expiration date.
Types of Derivative Contracts
Warrants are contracts entitling the holder to purchase
additional shares at a specified price before a expiration
date.Warrants are long term options that allows the
purchase (sale)of common stocks, stock indices,
bonds or foreign currencies.

Exchange of debt obligations between two parties for
exchange of currencies of fixed to floating rate
(vice versa)and some time both. This is in order to
take advantage of conditions in different financial
market.Transactors exchange between themselves
streams of cash flows.
Types of Financial Markets

Capital Money Forex Derivatives

Market Market Market Market
Equity T-Bills
Spots Produces,
Debt Call Money
Forwards Metals,
futures like
Interest rate,
indices etc
Banks Banks
FI Corporate
Corporate Banks, FIs
FI, FIIs Corporate
Money Market - Features

• It is not one market, but collection of Markets.

• Net work of large number of participants

mostly by institutional players.

• It is a wholesale market.

• The transactions take place over phone/fax in

a one-to-one communication.
Money Market
Entities Instruments /securities
• Government Bodies • Treasury Bills
• Corporate Bodies • Treasury Notes
• Banks
• Commercial Paper
• Money Market Mutual
• Certificate of Deposit
• Call Money Receipts
• Insurance Companies
• Inter Corporate Deposit
• Institutional Investors
• Commercial/Trade Bills
• Primary Dealers
• Repos
• Money Market Brokers
Participants and Products in Debt Market
Capital Markets - Features
• Characterized by issue of large number of securities
to a large number of investors - retail as well as

• Securities are traded on the stock exchange through

registered members (brokers) of the exchange

• Trading in Stock Exchanges could be either in open

out cry method or electronic screen based trading

• Trading could be on either order based or quote

based trading

• Trades between brokers settled through Clearing and

Settlement Organisations
Evolution and Growth of Markets

• What is a Stock Exchange?

• 1631 - Antwerp (Netherlands)
• 1773 - London Stock Exchange
• 1790 - Philadelphia Stock Exchange
• Why Stock Exchanges ?

• What is a Market?

• Primary Market Vs Secondary Market

• What is a Share Certificate ?

• Listing with Stock Exchange

Capital Markets
Entities Instruments /
• Issuer Company securities
• Investor •Share
• Stock Exchange
•Preference Share
• Broker Member
• Clearing House/ Corporation •Debenture
• Clearing Member •Bond
• Share Registrar/Transfer Agent
• Investment Manager
• Depository
• Depository Participant
• Custodian
Other Markets
• Foreign Exchange Market - Where the currencies of various
countries are traded, and their value determined. Currency
dealings are either on spot or forward basis. The deals take
between banks dealers. This market is either telephone or network
• Derivatives Market - Where the transacted securities derive their
value from the value of an underlying asset dealt the cash markets
e.g. options, futures, forward contracts. Derivatives are either
Financial Derivatives or Commodity Derivatives.
• Financial Derivatives - Financial Derivative Contracts are interest
futures, currency futures, futures and options on stock indices,
options on stocks.
• Commodities Derivatives - These contracts are futures and
options on standard contracts of various commodities transacted
in wholesale e.g. bullion, tea, oilseeds, metals and other products
like energy, bandwidth etc.

• What is Securitisation?

• What are Mortgage Backed Securities (MBS)?

• What are Asset Backed Securities (ABS) ?

• What are Pass Through Certificates (PTC) ?

Instruments Summary
• Treasury Bills
• Treasury Note
• Preferred Stock
• Treasury Bonds • GNMA
• Convertible Preferred Stock
• Agency Debentures
• Cumulative Preferred Stock • FNMA
• Ageny MTN
• Listed Stock • FHLMC
• Agency Discount Notes
• OTC Stock
• STRIPS • TBA’s(To Be Announced)
• Warrants
• Stripped Interest Only
• Rights • CMOs(Collaterised Mortgage
• Zero Coupon Bonds
• Non-voting
• Inflation Indexed Bonds Obligations)
• Restricted Stock
• Tracking Stock • REMICs(Real Estate Mortgage
• ADR/GDR Investment Conduits
• Global Registered Share CORPORATES • IOs (Interest Onlys)
• investment Grade • POs(Principal Onlys)
• Non rated (high yield)
• Convertible Bonds • ARMs (Adjustable Rate
• Yankee Bonds Mortgages)
• Brady Bonds
• General Obligation Bonds • Asset Backed Securities
• Samurai Bonds
• Revenue Bonds
• Dragon Bonds • SBA Loans (Small Business
• State & Municipal Agency
• Euro Bonds Administration)
• Adjustable Rate Securities
Instruments Summary
• Financial futures
• Limited Partnerships
• Physical futures
• REITs ( Real Estate
Investment Trusts)
• Options on futures • Commercial Paper
• Private Placements
• Options on Index Products • Time Deposits
• Bankers Acceptances • Variable Rate Notes
• Options on Stock
• Futures on Stock • Term CDs • Payment in Kind Securities

• OTC Options • Floating Rate CDs • Step-up Rate Securities

• Currency Options • Repos • Perpetual Securities
• Reverse Repos • Mutual Fund Units
• Interest Rate Swaps
• Equity Swaps • Participatory Notes
• Currency Swaps • ETFs (Exchange Traded
• Swaptions Funds)
All at the Market
Buy Side NewYork Sell Side
Institu Stock Exchange
Investors Companies
Mutual, Fund ment
Pension, Managers CBOE
NASDAQ Exchanges, Bankers
Hedge, CBOT Under
Insurance AMEX Alternate Trading corporations
CME writers
Insti- GNMA

Retail Regional Fixed Income utional/

Asset Retail
Managers Exchanges Trading Systems Fderal
Dealers Reserve


Clearing Agents Custodians

Utilities, Intermediaries, Service Providers

Key Players
Key Agencies which operate in financial services

Company Investor Exchanges

Investment Broker/ Custodian

Manager Dealers

Clearing Depository Depository

Corporation Participant
Key Players
Company/ Issuer

The corporate entity that issues securities, which are traded on the stock
exchange e.g. Reliance Industries Ltd.., Proctor & Gamble, IBM.
One company may have its securities listed on many exchanges

An individual or a company which buys and sells securities with an
investment objective. An individual , a company, a corporate entity, or a
group of individuals who buy and sell securities. An individual investor
could be a retail client, and institutional investors could be an Investment
Manager, Mutual Fund, Bank, Companies, that invest in securities either
on behalf of their clients or on their own account e.g. UTI (mutual fund),
Axa Investment Managers (Investment Manager).
Key Players
•A platform for the buyer and the seller to trade in the securities e.g.
• New York Stock Exchange formed in 1792
London Stock Exchange, NASDAQ, Chicago Mercantile Exchange,
Chicago Board Of Trade. In India - NSE, BSE
•Performs various roles such as:
• Admission of securities for trading - listing
• Admission of members who can trade in the securities
• Defining market segments like Equity / Debt / Derivative Market
• Defining market indices like Sensex, Dow Jones, Nifty
• Defining price range for trading
• Monitoring the trading activities - surveillance on day to day basis.
• Regulating the activities of the members of the exchange.
Key Players
Investment Manager
The agency which acts on behalf of its clients, and buys or sells securities
through brokers, on various stock exchanges e.g. Alliance Capital
Management. Also provides value added services like portfolio
management to its clients May operate in various instruments, markets
regions of the world May have an identified set of brokers and custodians
through which it deals.
Brokers / Dealers
A member of a given stock exchange, authorised to trade only on that
exchange. Can be a member of multiple exchanges at a time. Can trade on
multiple exchanges at a time. Can be an individual or a corporate entity
like Merrill Lynch, MSDW. Only members can trade on the exchange -
investors cannot trade directly If a member gives both buy and sell quotes
for a given security, he is called a market maker in that security. If he
deals on his own account, he is called dealers Has final obligation to
honour the trades done by him on the exchange
Key Players

• The agency which keeps custody of physical and electronic holdings on

behalf of their clients (investors).e.g. HSBC, ABN AMRO Bank
• They also provide additional services like cash management, accounting,
taxation, reporting and effecting corporate actions on the clients’
holdings They also execute settlement instructions received from the
client or client’s broker or investment manager
• They may operate across different countries and act as Global Custodians
As global custodians, they act through central security depositories,
international central security depositories and local agents
As Local Custodian or Local Agent they represent the global custodians
in the domestic market
Key Players

Clearing Corporation
The agency which keeps track of buy and sell trades done by the members
e.g. National Securities Clearing Corporation (NSCCL)
It calculates the obligations for the member, for a given trading period
May also impose and collect margins on behalf of the exchange on
outstanding positions of the members
Ensures the settlement of the trades done on the stock exchange
May act as a clearing and settlement body for one or more stock
exchanges like NSCCL in USA.
May also act as Central Counterparties in case obligations are netted.
Key Players
The agency which provides services like holding of electronic shareholding
against immobilisation / dematerialisation of securities, rematerialisation
of securities, lending and pledging of electronic shares e.g. National
Securities Depository Ltd (NSDL), SIS Sega Intersettle

Depository Participant
The intermediary registered with a depository, which acts as a channel for
investors for opening accounts, maintaining electronic holdings and
carrying out transactions with the depository e.g. Credit Lyonnais,
Keeps the electronic holdings on behalf of the investor
An investor may keep holdings with one or more DPs
Offers services like dematerialisation, rematerialisation, execution of client
instructions for debit / credit of securities from their accounts
Players in the Game of Investments
•Market Place
•Stock Exchanges, Derivative Exchanges etc
•Alternate Trading Systems (ATS)
•Electronic Communications Networks (ECN)
•Market Utilities
•Clearing and Settlement Organisations and Central
Counterparties (CCPs)
•Central Securities Depositories (CSDs)
•Matching Utilities or ETCs
•Market Data Providers
•Service Providers
•Credit Rating Institutions
•Market analysts, Investment Advisers
Players in the Game of Investments
•Regulatory Bodies
•Retail Vs Institutional investors.
•Institutional Investors -
•Hedge Funds
•Pension Funds
•Insurance Funds
•Investment Companies & Mutual Funds,
•Corporate Entities - Public Ltd, Private Ltd, LLPs,
Corporations, Societies, Trusts
•Financial Institutions - State level, Central level, Foreign
•Government Bodies - State, Municipal and Central level
•Banks - Private, Public, Cooperative,
•Wholesale Vs Retail
•Universal Banks performing various roles
Players in the Game of Investments
• Investment Bankers
•Merchant Bankers, Lead Managers, Underwriters
• Registrars and Transfer Agents
• Custodians. - Global & Sub Custodians
• Asset Management Companies - Investment Managers,
Asset Managers
• Brokers/Security Dealers - servicing retail / institutional
•What is difference between Brokers and Dealers ?
•Discount Brokers Vs Full Service Firms, Online Brokers
•Registered Representatives / Sub-Brokers.


What is an Index?
• Index is a statistical yardstick expressed in terms of percentages of a
base year or years. For instance, the NYSE Composite Index of all NYSE
common stocks is based on year-end 1965 as 50. Index compares the
current price with price of the base year of the shares of the companies
comprised in the index. Such comparison of prices is through market
capitalization of the company.
• Market Capitalisation of the company = Number of shares * Price of the
• Popular Indices
• Dow Jones Industrial Average, S & P 500, NASDAQ Composite
Hang Seng in Hongkong
• FTSE in London
• NIKKEI in Japan
• SENSEX of Bombay Stock Exchange in India
• NSE NIFTY of National Stock Exchange of India.
Security / Party Identification Standard
• What is a Security/Asset Symbol ?

• What is an ISIN?

• What is ISO 6166 standard?

• What is a CUSIP?

• What is a SEDOL?

• What is a BIC?

Security Identification(SIN): ISO 6166:2001

Security Type/Classification(CFI): ISO 10962:2001

Bank Identifier Code(BIC): ISO 9362 :1994

Exchange/Market Code(MIC): ISO 10383:1992

Country: ISO 3166 :1997/8

Currency: ISO 4217:1995

Data Field Definitions: ISO 15022

CFI Standard
The CFI consists of six alphabetical characters:
The first character indicates The second character indicates
the highest level of specific groups within each
classification (categories). category:Groups e.g. for equities:
Equities (E) Shares(ES)
Preferred shares(EP)
Debt instruments (D)
Convertible preferred shares
Entitlements (Rights) (R)
Units, i.e. unit trusts/mutual
Options (O) funds etc.(EU)
Futures (F) Others(EM)
Others/Miscellaneous (M)

The third to sixth character indicate the most important

attributes to each group: Attributes e.g. for equities: Voting
right; Ownership / transfer restrictions; Payment status ; Form
Structure of Indian Financial Markets
Ministry of Finance Dept of Co. Affairs

Registrar of

Stock Clearing Mutual

Depositories Banks Companies
Exchanges Corporations Funds

Registrar &
Broker Merchant Depository Primary
Dealers Bankers Participants Dealers
Regulation and Legal Aspects
• Companies Act, 1956
•company registration and management
• Securities Contract Regulation Act,1957
• stock exchange registration & management, securities contracts etc
• Foreign Exchange Management Act
•regulation of foreign currency transactions, regulation of
• Banking Regulation Act
•registrations and regulation of banks
• Sebi Act, 1992
•establishment of Sebi and its powers and regulations of
market intermediaries (Capital Issues Control Act Repealed)
• Every Act has a set of rules made thereunder
• Regulations for various Intermediaries
Ownership Structure
Indian Capital Market institutions

Banks and Financial Institutions Members


Clearing Corp
Overview of the Indian Stock Market
• The first Indian Stock Exchange is formed in 1875 in Bombay
under a Banyan Tree situated at what is today called DALAL
STREET. It is now called The Stock Exchange, Mumbai or
popularly as BSE.
• 22 Stock Exchanges exist in India. Major Centers are Calcutta,
Delhi, Ahmedabad, Chennai, Bangalore, Kanpur, Pune,
• OTCEI - Over The Counter Exchange of India is established in
1992 to meet the needs of smaller companies.Is the first Screen
Based Trading System in India.
• NSE - National Stock Exchange of India is established in 1994
which popularised the Screen Based Trading through V Sat
based Network of Computer Terminals.
• NSE and BSE contribute more than 70% business in the Indian
• National Securities Depository Limited (NSDL) and Central
Depository for Securities Limited (CDSL) are two Depositories.
Overview of the World Markets
•Worlds Biggest Markets
•Tokyo, Taiwan, HongKong, Singapore, Australia

•Various Types of Markets in the Exchanges. Ex:

• NASDAQ : National Market, Small Order Execution
System, NASDAQ International, Small Cap Market, OTC
Bulletin Board
Structure of US Securities Markets



Broker State
Dealers Securities

Keynes and the Market
JOHN MAYNAR KEYNES - writes in 1935

“It is usually agreed that casinos should,

in the public interest,
be in accessible and expensive.
And perhaps the same is true of stock exchanges.”
Adam Smith and the Market
ADAM SMITH - considered as father of Economics remarks
in his book Game of investment on Stock Market as under:

“The market is a beautiful woman

endlessly fascinating, always changing, always mystifying.
This market is not a science. It is an art.
You have to study behaviour patterns.
The market is a crowd , is like a woman’s mind.
If you observe her for long, you begin to see
little trick, little nervous movements.
You decide by yourself being part of the crowd,
where you stand in the game of investment.”
All about Investing
• It is not the return on my investment that I am concerned about;
it is the return of my investment. -- Will Rogers

• There are only two emotions in Wall Street - fear and greed.
-- William M. LeFevre, Jr.

•Choose stocks the way porcupines make love - very carefully.

-- Anonymous

•The safest way to double your money is to fold it over and put it
in your pocket. -- Frank McKinney Hubbard

• October. This is one of the peculiarly dangerous months to

speculate in stocks. The others are July, January, September,
April, November, May, March, June, December, August and
February. -- Mark Twain
Welcome to the Dalal Street !
Thank you !