WHAT IS STOCK

EXCHANGE(secondary
. market)
• Stock-A stock is an ownership of
cooperation as a evidenced by shares
which are claim on corporations earning
and assets.
• Stock holder-is an individual who owns
one or more share of organisation
• 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.
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…….
• 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
 Cont…….
• Bombay stock exchange : it has 30 companies sripted.
• Name:1.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
 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.
 Cont……………………..ss

• NSE Group:
1. India Index Services & Products Ltd. (IISL)
2. National Securities Clearing Corporation Ltd.
(NSCCL)
3. NSE.IT Ltd.
4. National Securities Depository Ltd. (NSDL)
5. DotEx International Limited
Function and services of stock exchange

• Flow of capital
• Safety of funds
• Marketing of new issues
• Liquidity and marketability of secruity
• Promotion of investor
• Supply of long term funds
 listing of securities

• Listing of security refers to admission of

securities to dealing on a recognized stock
exchange. The securities may be of any
public limited company,central or state
govt,financial institution or muncipilities.
– It is a green signal for selected company to be
traded.
 Objective of listing

• Provide liquidity of securities

• Mobilize saving for economic
development.
• Protect interest of investor by ensuring full
disclosure.
Departments of stock exchange

• Listing department
• Operation department
• Computer and EDP department
• Inspection and audit department
• Monitoring department
• Investor service department
 Advantage of listing

• Facilitate buying and selling of securities

• Protect investor interest
• Ensure liquidity
• Improve public awareness
• Offers wide publicity
• Assures finance
• Easier to raise fund
 Disadvantage of listing

• Degrades company reputation

• Leads to speculation
• Disclose vital information to compitators
• Additional obligation
Product available in secondary
market
• Equity share
• Preference share
• Right share
• Bonus share
• Cumulative preference shares
• Cummulative convertible preference share
• Participating preference share
 Cont--

• Debenture
• Bonds
• convertible bond
• Government security
• Zero coupon bond
• Commercial paper
• Treasury bill
 Stock brokers

• A stock broker is a qualified and regulated

professional who buys and sells shares and
other securities on behalf of investors.
• He is the member of recognized stock
exchange who is permitted to do trades.
They are recognized by sebi
 Function of brokers

• Obtain marginal money

• Client registration
• Execution of order
• Supply of necessary slip
• Preparation and issue of contract notes
• Settlement of transaction.
 Types of brokers

• Full service broker

• Direct action broker
• Discount broker
• Jobbers
• Tarawaniwalas
• Commission brokers
• Authorized clerks
• Sub-brokers
 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.
Problems in Indian stock exchange

• Price rigging
• Insider trading
• Lack of confidence among investor
• Lack of investor awareness
• Difficult procedure
• Lack of liquidity
• Lack of transparency
 Cont---

• Lack of professionals
• Unhealthy competition among merchant
banker and broker
• Volatile market
• Shortage of floating securities
Measure to promote Indian stock
exchange
• Prohibition of inside trading
• Qualitative securities
• Transparency
• Regulation of intermediaries
• Prevention of price rigging
• Introduction of depository system
• Improvement of investor confidence
 Cont--

• Increase in level of investors awareness.

• Strict supervision by the regulator
• Listing of securities
• Setting up credit rating agency.