Capital Market

BY
 AGENDA
• WHAT IS INVESTMENT?
• WHY ONE SHOULD INVEST?
• WHAT IS A FINANCIAL MARKET?
• WHAT IS A CAPITAL MARKET?
• STOCK EXCHANGES IN INDIA
• WHAT IS SEBI ?
• WHAT IS IPO
 CONT….
• HOW TO START TRADING?
• MOVEMENTS OF INDIAN STOCK
MARKET IN LAST 2 YEARS
• INVESTMENT STRATEGIES
• WHAT MAKES MARKET GOES UP AND
DOWN?
• WHY PEOPLE LOOSES MONEY?
• HOW TO INVEST WISELY?
• CURRENT TRENDS
 Investment

•INVESTING IS A METHOD OF PURCHASING ASSETS IN ORDER TO GAIN

PROFIT IN THE FORM OF REASONABLY PREDICTABLE INCOME (DIVIDENDS,
INTEREST, OR RENTALS) AND APPRECIATION OVER THE LONG TERM. 
• INVESTING IS NOT ABOUT PUTTING ALL YOUR MONEY INTO THE "NEXT
BIG THING," HOPING TO MAKE A KILLING. INVESTING ISN'T GAMBLING OR
SPECULATION; IT'S ABOUT TAKING REASONABLE RISKS TO REAP STEADY
REWARDS.
 CONT…..
• SIMPLY PUT, YOU SHOULD INVEST SO THAT YOUR
MONEY GROWS AND SHIELDS YOU AGAINST RISING
INFLATION. THE RATE OF RETURN ON INVESTMENTS
SHOULD BE GREATER THAN THE RATE OF INFLATION,
LEAVING YOU WITH A NICE SURPLUS OVER A PERIOD OF
TIME. WHETHER YOUR MONEY IS INVESTED IN STOCKS,
BONDS, MUTUAL FUNDS OR CERTIFICATES OF DEPOSIT
(CD), THE END RESULT IS TO CREATE WEALTH FOR
RETIREMENT, MARRIAGE, COLLEGE FEES, VACATIONS,
BETTER STANDARD OF LIVING
 Financial Market

• TYPICALLY THE MARKET MEANS THE AGGREGATE OF POSSIBLE BUYERS AND

SELLERS OF A THING AND TRANSACTIONS BETWEEN THEM.

• A FINANCIAL MARKET IS A MECHANISM THAT ALLOWS PEOPLE TO EASILY BUY

AND SELL (TRADE) FINANCIAL SECURITIES (SUCH AS STOCKS AND BONDS),
COMMODITIES (SUCH AS PRECIOUS METALS OR AGRICULTURAL GOODS).

• ORGANIZATIONS THAT FACILITATE THE TRADE IN FINANCIAL SECURITIES ARE

CALLED STOCK EXCHANGE OR COMMODITY EXCHANGE. THIS MAY BE A
PHYSICAL LOCATION (LIKE THE NYSE) OR AN ELECTRONIC SYSTEM (LIKE
NASDAQ).
 FINANCIAL MARKET

• FINANCIAL MARKETS FACILITATE:

THE RAISING OF CAPITAL (IN THE CAPITAL MARKETS);

THE TRANSFER OF RISK (IN THE DERIVATIVES MARKETS);
INTERNATIONAL TRADE (IN THE CURRENCY MARKETS)
 PURPOSE OF A FINANCIAL MARKET
RAISING CAPITAL

TO UNDERSTAND FINANCIAL MARKETS BETTER, LET US LOOK AT THE VERY PURPOSE OF
THESE MARKETS:

• WITHOUT FINANCIAL MARKETS, BORROWERS WOULD HAVE DIFFICULTY FINDING

LENDERS THEMSELVES. INTERMEDIARIES SUCH AS BANKS HELP IN THIS PROCESS. BANKS
TAKE DEPOSITS FROM THOSE WHO HAVE MONEY TO SAVE. THEY CAN THEN LEND MONEY
FROM THIS POOL OF DEPOSITED MONEY TO THOSE WHO SEEK TO BORROW. BANKS
POPULARLY LEND MONEY IN THE FORM OF LOANS AND MORTGAGES.

• MORE COMPLEX TRANSACTIONS THAN A SIMPLE BANK DEPOSIT REQUIRE MARKETS

WHERE LENDERS AND THEIR AGENTS CAN MEET BORROWERS AND THEIR AGENTS, AND
WHERE EXISTING BORROWING OR LENDING COMMITMENTS CAN BE SOLD ON TO OTHER
PARTIES.

• A GOOD EXAMPLE OF A FINANCIAL MARKET IS A STOCK EXCHANGE. A COMPANY CAN

RAISE MONEY BY SELLING SHARES TO INVESTORS AND ITS EXISTING SHARES CAN BE
BOUGHT OR SOLD.
 Types of Financial Market
 CAPITAL MARKET:
THIS CONSIST OF-
STOCK MARKET WHICH PROVIDES FINANCING THROUGH THE ISSUANCE OF SHARES
OR COMMON STOCK, AND ENABLE THE SUBSEQUENT TRADING THEREOF.
BOND MARKET WHICH PROVIDES FINANCING THROUGH THE ISSUANCE OF BONDS,
AND ENABLE THE SUBSEQUENT TRADING THEREOF.
 COMMODITY MARKET:
FACILITATES THE TRADING OF COMMODITIES.
 MONEY MARKET:
PROVIDES SHORT TERM DEBT FINANCING AND INVESTMENT.
 DERIVATIVES MARKET
PROVIDES INSTRUMENTS FOR THE MANAGEMENT OF FINANCIAL RISK.
 FUTURES MARKET
PROVIDES STANDARDIZED FORWARD CONTRACTS FOR TRADING PRODUCTS AT
SOME FUTURE DATE.
 INSURANCE MARKET
FACILITATES THE REDISTRIBUTION OF VARIOUS RISKS.
 FOREIGN EXCHANGE MARKET
FACILITATES THE TRADING OF FOREIGN EXCHANGE.
 CAPITAL MARKET
FINANCIAL MARKETS
• MONEY MARKET ( SHORT TERMS FUND)
• CAPITAL MARKET( LONG TERM FUND)
– CAPITAL MARKET INCLUDE FINANCIAL
INSTITUTIONS, COMMERCIAL BANKS, MUTUAL
FUNDS, CORPORATIONS AND STOCK MARKETS.
 ROLE AND IMPORTANCE OF CAPITAL
MARKET
• CAPITAL FORMATION- THE CAPITAL MARKETS ENCOURAGE CAPITAL
FORMATION. THE CAPITAL MARKET MOBILIZE SAVINGS OF
HOUSEHOLDS AND OF INDUSTRIAL CONCERN
• ECONOMIC GROWTH – CAPITAL MARKETS FACILITATE THE
GROWTH OF ALL THE SECTORS OF THE ECONOMY BY LENDING
FUNDS TO VARIOUS PROJECTS.
• DEVELOPMENT OF BACKWARD AREAS – THE CAPITAL MARKET
PROVIDE FUNDS FOR THE PROJECTS IN THE BACKWARD AREAS.
 CONT…..
• GENERATES EMPLOYMENT – CAPITAL MARKET GENERATE
EMPLOYMENT IN THE COUNTRY BOTH DIREST AND INDIRECT.
• INVESTMENT OPPORTUNITY – CAPITAL MARKETS PROVIDE AN
EXCELLENT INVESTMENT OPPORTUNITY TO THE MEMBERS OF THE
PUBLIC BY PROVIDING BONDS, SHARES AND DEBENTURES.
• FOREIGN CAPITAL – THE CAPITAL MARKETS MAKES POSSIBLE TO
GENERATE FOREIGN CAPITAL. INDIAN FIRMS ARE ABLE TO
GENERATE CAPITAL FROM OVERSEAS MARKETS BY WAYS OF
BONDS AND OTHER SECURITIES
Types of Capital Market

Capital Market

Corporate Securities
Gilt-edge Securities Market
Market •Primary Market
•Secondary market
 TYPES OF CAPITAL MARKET
• GLIT-EDGE SECURITIES MARKET –THE MARKET DEALS WITH
THE SECURITIES SUCH AS BONDS ISSUED BY CENTRAL
GOVERNMENT, STATE GOVERNMENT, ALL INDIA FINANCIAL
INSTITUTIONS LIKE IFCI< STATE FINANCIAL INSTITUTIONS AND
OTHER GOVERNMENTAL BODIES. THESE TYPES OF SECURITIES
HAVE FULL GOVERNMENT BACKING AND AS SUCH ARE MORE
SECURED THAN THE SECURITIES IN THE CORPORATE
SECURITIES MARKETS.
 CLASSIFICATION
• PRIMARY MARKET –
– PUBLIC ISSUE
– RIGHT ISSUE
– PRIVATE PLACEMENT

• SECONDARY MARKET – THE MARKET FOR OUTSTANDING

SECURITIES IS REFERRED TO AS SECONDARY MARKET. THE
STOCK MARKETS ARE ORGANIZED MARKETS TO TRADE
SECURITIES I.E. SHARES AND DEBENTURES OF WELL
ESTABLISHED COMPANIES.
 CAPITAL MARKET SET UP IN INDIA
• GROWTH OF STOCK EXCHANGES IN INDIA – THE ORIGIN
OF CAPITAL MARKET CAN BE TRACKED IN 1875 WITH THE
SETTING UP OF BOMBAY STOCK EXCHANGE, THIS WAS
FOLLOWED UP BY THE FORMATION OF STOCK
EXCHANGES IN AHMEDABAD IN 1894 AND CALCUTTA
(1908) AND MADRAS (1937). AT PRESENT THERE ARE 24
STOCK EXCHANGES RECOGNIZED BY CENTRAL
GOVERNMENT. AND NATIONAL STOCK EXCHANGED WAS
SET UP IN 1994.
• GROWTH OF MUTUAL FUNDS – THE FIRST MUTUAL
FUNS TO BE SET UP IN INDIA WAS THE UNIT TRUST
OF INDIA 1964
• SETTING UP OF SEBI – THE GOVERNMENT OF INDIA
SET UP SECURITIES AND EXCHANGE BOARD OF INDIA
IN 1988.
• NATIONAL SECURITIES CLEARING CORPORATION –
THE NSCC WAS SETUP IN 1996 TO GUARANTEE ALL
TRADED ON NATIONAL STOCK EXCHANGE.
 MARKET CAPITALISATION
• CONCEPT CAPATILISATION
• IT IS THE MEASUREMENT OF CORPORATE
SIZE OF THE COMPANY
• LARGE CAP ( >$10 b)
• MID-CAP($2 - $10 b)
• SMALL-CAP($300 m - $2b)
 STOCK
• A PIECE OF A CORPORATE PIE , WHICH
ENTITLES THE HOLDER TO THE SHARE OF
ASSETS AND EARNINGS OF THE COMPANY.
 BONDS
• LENDING MONEY TO STATE AUTHORITIES
AND OTHER GOVT. ENTITIES WHICH THEY
USE FOR A PARTICULAR PROJECT.
 SECURITIES
• IT IS ANY CONTRACT REPRESENTING
OWNERSHIP, SUCH AS STOCKS BONDS
ETC. IT SAYS , “I OWN THIS”.
 DIVIDEND
• THEY ARE PAYMENTS THE COMPANY
MAKES TO THEIR SHAREHOLDERS.THEY
ARE THE WAY OF GIVING THE
SHAREHOLDER A SHARE OF THE PROFIT.
 STOCK EXCHANGE
• A PLACE WHERE STOCKS OF PUBLIC
LIMITED COMPANY ARE BOUGHT ANDS
SOLD.
 STOCK EXCHANGES IN INDIA
1. Ahmedabad Stock Exchange 1. Madhya Pradesh Stock Exchange
2. Bangalore Stock Exchange 2. Madras Stock Exchange (MSE)
3. Bhubaneshwar Stock Exchange 3. Mangalore Stock Exchange
4. Bombay Stock Exchange (BSE) 4. National Stock Exchange of India
(NSE)
5. Calcutta Stock Exchange
5. Magadh Stock Exchange - In Patna,
6. Cochin Stock Exchange Bihar
7. Coimbatore Stock Exchange 6. Over The Counter Stock Exchange o
8. Delhi Stock Exchange Association f India (OTCEI)
9. Guwahati Stock Exchange
10. Hyderabad Stock Exchange (HSE) 7. Pune Stock Exchange
11. Inter-connected Stock Exchange of 8. Uttar Pradesh Stock Association
India 9. Vadodara Stock Exchange
10. Meerut Stock Exchange
12. Jaipur Stock Exchange 11. United Stock Exchange (starting in J
13. Ludhiana Stock Exchange Associati une 09)
on
12. Saurashtra Stock Exchange
 MAJOR STOCK EXCHANGES
• BOMBAY STOCK EXCHANGE (B.S.E.)
• NATIONAL STOCK EXCHANGE (N.S.E.)
Bombay Stock Exchange
Mumbaī Śeyar Bājār

Type Stock Exchange

Location Mumbai, India
Bombay Stock
Owner
Exchange Limited
Currency INR
No. of listings 4,800(approx)
US$ 1.61 trillion
MarketCap
(2006)
Volume US$ 980 billion (2006)
Indexes BSE Sensex
Website www.bseindia.com
 SENSEX 30
• ITS AN INDEX (AN INDICATOR) WHICH
GIVES YOU IDEA ABOUT WEATHER MOST
OF THE STOCKS ARE GOING UP OR GOING
DOWN.
• IT INCLUDES MAJOR STOCKS
REPRESENTING 12 MAJOR SECTORS.
• THESE 30 COMPANIES ACCOUNT TO 1/5
OF TOTAL MARKET CAPITALISM OF BSE.
 National Stock Exchange Limited

                      
Type Stock Exchange
Location Mumbai, India

Owner National Stock Exchange of India Limited

Currency INR
No. of listings 1587 (approx)
MarketCap US$ 1.46 trillion (2006)
Indexes Nifty 50

Website www.nse-india.com
 NIFTY 50
• INDICATOR OF ALL THE MAJOR
COMPANIES OF N.S.E.
• THE NIFTY INDEX IS THE COMPOSITE OF
TOP 50 STOCKS LISTED ON N.S.E.
 MALPRACTICE BY A BROKER
 MANUPULATION BY PROMOTERS
 LACK OF ADEQUATE REGULATION
 LACK OF MARKET AWERNESS
 TO MUCH OF SPECULATION IN STOCK
MARKET
 ATTRACTIVE UNORGANISED MARKET
 SECURITIESS SCAM
 SECURITIES AND EXCHANGE BOARD OF
INDIA (SEBI)

 RESERVE BANK OF INDIA(RBI)

 MINISTRY OF FINANCE
 PROTECTION OF INVESTORS’ INTEREST

 GUIDELINES ON CAPITAL ISSUES

 REGULATES WORKING OF MUTUAL FUND

 RESTRICTION ON INSIDER TRADING

 REGULATES MERCHANT BANKING

 REGULATE STOCK BROKERS ACTIVITIES

 REGULATE TAKE OVER AND MERGERS

 RESEARCH AND PUBLICITY

IPO" stands for an "initial public offering" of
securities. The term is usually used when a
business has decided to "go public" to raise
substantial amounts of capital by offering
ownership interests in the company to the
public at large.
 RAISING FUNDS TO FINANCE PROGRAMS LIKE
EXPANSION, DIVERSIFICATION, MODERNIZATION.
 FINANCING OF INCREASED WORKING CAPITAL
REQUIREMENTS.
 DEBT REFINANCING.

 FINANCING ACQUISITIONS LIKE A MANUFACTURING

UNIT, BRAND ACQUISITIONS.
 EXIT ROUTE FOR EXISTING INVESTORS.
MMS- III FINANCE 12/08/21 38
  FACILITATES FUTURE FUNDING.

 ENABLES VALUATION OF THE COMPANY.

 PROVIDES LIQUIDITY TO EXISTING SHARES.

 INCREASES VISIBILITY OF THE COMPANY

 COMMANDS BETTER PRICING THAN PLACEMENT

WITH FEW INVESTORS.
 DILUTION OF OWNERSHIP STAKE.

 INVOLVES SUBSTANTIAL EXPENSES.

 NEED TO MAKE CONTINUOUS DISCLOSURES.

 INCREASED REGULATORY MONITORING.

 TAKES SUBSTANTIAL AMOUNT OF MANAGEMENT

TIME AND EFFORTS.
 
SEBI COMPANY

IPO AD
(NEWSPAPER)
(BROKER)
(TV, SMS)

INDIVIDUAL BROKER
 TOPICS TO COVER
• What is secondary market?
• Different investments in capital market?
• How to read stock prices?
• How to do online trading?
• How to create your portfolio?
• How to track your investments?
Secondary Market

Secondary/Stock
market!!!!
 Different Investments in Capital
market
 Bonds:- fixed income investment issued by corporation or
government.
Eg. Infrastructure Bonds India
 Mutual funds:- investing in mutual fund is like hiring your
own professional money manager.
Popular investment in last few years.
Eg. Franklin India Bluechip-G, Birla-Growth,
For Best information on muual fund value research:-
http://new.valueresearchonline.com/
 Shares :-
 Why u should invest in stocks?
• Reasons:-
..
..
..
only one reason to make money … 
 How to start investing in shares?
• Retail investor like you and me

broker (e.g. Sharekhan,

indiabulls, reliance money)

Stock Exchange (BSE,NSE)

 Who is a Stock Broker?

• registered member of
stock exchange.
Some popular stock Brokers
in India…
1. Reliance money
2. Angle Broking
3. Indiabulls
4. ICICI Direct
5. HDFC Securities
6. Sharekhan
 DEMAT ACCOUNT

 type of banking account which dematerializes paper-

based physical stock shares.

 Safe and convenient means of holding securities

 Opening Process
 Bank Account Vs Demat Account
Basis Of
S. No. Bank Account Demat Account
Differentiation

Form of
1. Funds Securities
Holdings/Deposits

2. Used for Safekeeping of money Safekeeping of shares

Transfer of money (without Transfer of shares (without

3. Facilitates
actually handling money) actually handling shares)

4. Where to open A bank of choice A DP of choice (can be a bank)

Requirement of Mandatory (effective from April

5. Mandatory
PAN Number 01, 2006)

Interest accrual Interest income is subject to the No interest accruals on securities

6.
on holdings applicable rate of interest held in demat account

Minimum balance AQB* maintainance is specified

7. No such requirement
requirement for certain bank accounts

*AQB - Average Quarterly Balance

 Share Trading Methods
• Traditional Stock trading:- personally or
through telephone
Latest technology:-Online trading
 HOW to read Stock Quotes of
company ?
• Getting online Stock Quote:-
http://www.moneycontrol.com/
http://www.bseindia.com/
http://in.finance.yahoo.com/
 WHAT MAKES SENSEX UP & DOWN?
• REGULATORY BOIES OF INDIA (RBI)
• RUPEE
• INFLATON
• POLITICS
• COMPANY STRATERGIES
• COMPANY BODY
REGULATORY BOIES OF INDIA (RBI)
 INTEREST RATE BORROWING CAPACITY OF
PEOPLE SO STOCK MARKET GOES UP
(VICE VERSA)

RUPEE
 STRENGTH AND WEAKNESS OF RUPEE
 RUPEE VALUE FOREGIN INVESTERS TAKE
OUT THEIR MONEY FROM MARKET
INFLATION & DEFLATION
 COMPANY STRATERGIES
• COMPANY DECISIONS (TAKE
OVER,SELLING,EXPANSION ETC….)
• NEW CEO/BOAR OF DIRECTORS (E.g. R-POWER)

POLITICS
• CONGRESS HAS EMERGED AS THE SINGLE
LARGEST PARTY WITH CLAIMING OVER 200
SEATS
• INDIA US NUCLEAR EAL
 STOCK MARKETS REPLY TO PRANAB BUDGET
• 10 MINUTES BEFORE , SENSEX 100 PTS (15014) NIFTY
30 PTS (4453) (BUDGET STARTS AT 11 AM )
• PRANAB MUKHERJEE SAYS THAT THE GOVERNMENT WILL
TAKE IT AS A CHALLENGE TO GET BACK THE GDP TP 9%.
• 10 MINUTES INTO THE SPEECH AND THE INDEXES STAY CALM
BUT SLIGHTLY DIP. SENSEX GOES BELOW 15000.
• SAYS INFRASTRUCTURAL INVESTMENT WILL EXCEED 9% OF
GDP BY 2014 AND INFRA STOCKS RISE.
• SENSEX GOES 100 PTS (CROSSES 15000)
• BUDGET SPEECH ENDS AT 12.40PM.
• STOCK MARKETS CRASH. SENSEX 750 POINTS & NIFTY
200 POINTS
 INVESTMENT STRATERGIES
• STRATERGY .................?
• TINGS TO REMEMBER
- RISK
- NOT ALL STRATERGIES ALWAYS WORK
- NEVER DEVOTE TO A SINGLE STRATERGY
INVETSMENT STRATERGIES
 BUY AND HOLD
• EASIEST & MOST POPULAR
• BUY A STOCK AND HOLD IT FOR LONGER
PERIOD (MINIMUM 1YEAR)
• NO NEED FOR CONSTANT MONITERING
• LESS BROKER COMISSION
• SELLING TIME WHEN FUNDAMENTAL
CHANGES IN COMPANY
• BEST EXAMPLE BILLENIAR WARREN BUFFETT
 BUY ON THE DIP

• OFFSHOOT OF BUY AND HOLD

• WHEN YOU THINK DECLINE IS TEMPERORY
AND PRISES MAY/WILL GO HIGH.(BASED ON
PAST PREICTIONS/STUDY)
• YOU MUST PREDICT EARLY WHEN IT’S GOO
TO SELL
 BOTTOM FISHING
• WHICH ARE SO LOW OR WHICH SEMS TO HIT
AT BOTTOM
• CONTINUOUS WATCHING ON MARKET IS
REQUAIRED
• LITTLE MONEY IS SUFFICIENT
• MORE PATIENCE IS REQUAIRED
• BEST EXAMPLE IS ENRON
 WHY INVESTOR LOOSES MONEY
• THE BIGGEST MISTAKE IS THAT YOU NOT
RECOZNISE THAT YOU MADE A MISTAKE
• WE NEVER INVEST TO LOOSE
10 REASONS WHY INVESTOS LOOSES MONEY
CONT….
MARKET GROWING WITH RAPID SPEED

• START
Sensex Touch 13000
Movement Of SENSEX
 Journey Of SENSEX to 21000
 Journey to 10000 20 years

 To touch 20000 from 10000 20 months

 Total Market cap Reaches 62 lakh crore

 (Major Contributor –RIL, Infosys,SBI,TCS)

 All indices were at high

 (Nifty,BSE-Auto,Insurance,Heathcare)
 DATE SENSEX
July 25, 1990 1000
January 3, 1992 2000
February 29, 1992 3000
March 30, 1992 4000
October 8, 1999 5000
February 11, 2000 6000
June 20, 2005 7000
September 8, 2005 8000
November 28, 2005 9000
February 6, 2006 10000
March 21, 2006 11000
April 20, 2006 12000
October 30, 2006 13000
December 5, 2006 14000
July 6, 2007 15000
September 19, 2007 16000
September 26,2007 17000
October 9, 2007 18000
October 15, 2007 19000
October 29, 2007 20000
FEW BIGGEST RALLIES OF SENSEX
DATE GAIN SENSEX
Jan 25, 2008 1139 17504
Mar 25, 2008 928 14384
July 23, 2008 838 14942.80
Oct 31, 2008 743.33 8731
May 4, 2009 731 12134
May 18, 2009 2110.49 14384
 Jan 08, 2008
• Sensex Kisses
• all time peak
• of 21000
 Analysis Of Biggest Ever gain in
Sensex(18 May 09)
• Overseas investors started investing in Indian scrips
• Inflow of Rs15,638.10 crore (over $3 billion), that is about
one-third of last year’s total outflows so far in 2009
• Sensex Gained nearly 44% so far this year to touch 14,302
points
• So far in 2009,
• FIIs gross purchase of shares = Rs1,76,245.80 crore,
• FIIs Net Sell Equities = Rs1,60,607.75 crore
 6 BIGGEST FALL IN SENSEX
DATE FALL SENSEX
May 18, 2006 826 11391
April 2, 2007 617 12455
March 5, 2007 471 12415
March 15, 2006 463 11822
May 22, 2006 457 10482
May 19, 2006 453 10939
 Analysis Of Biggest Ever Fall in
Sensex(21 Jan 08)
• REASONS 12400

• Investors Panicked 12200

1st Qtr

Following Weak Global 12000

Cues 11800

• High Volatility 11600

May 17,2006
3-D Column 2
May 18,2006
• amid fears of a recession
11400

11200
in the US.
11000

10800
1st Qtr
SENSEX MOVEMENT IN JAN 08
 MARKET CRASH IN JAN 08
 US market recession

 Weakness in global market

 FII turns net sellers

 Crude prices high

 R-Power IPO

 Pre – Budget movement

 ANALYSIS OF CRASH IN JAN 08

• In 3rd week of Jan 2008, the Sensex saw its highest ever loss
of 1,408 points on high volatility as investors panicked
following weak global cues amid fears of a recession in the
US.

• The next day, The index hit the lower circuit breaker in barely
a minute after the markets opened at 10 AM.
• Trading was suspended for an hour.
• Att 10.55 AM IST, the market fall by 2,273 points & hit a low
of 15,332, down.
• After reassurance from the Finance Minister of India, the
market bounced back to close at 16,730 with a loss of 875
points.[4]
 ANALYSIS OF CRASH IN JAN 08
• In 2 days, Sensex from 19,013 on Monday morning to 16,730
by Tuesday evening or a two day fall of 13.9%.[4]

• 9,975, October 17, 2008 - Sensex crashes below the

psychological 5 figure mark of 10K, following extremely
negative global financial indications in US and other countries.
Exactly one year back in October 2007, Sensex had gone past
the 20K mark.

• 8701.07, October 24, 2008 lost 10.96% of its value on the

intra day trade, the 3rd highest loss for a one day period in
its history
 EFFECT OF SUB-PRIMR CRSIS IN US

• July 23, 2007, the Sensex touched a new high of

15,733 points
• July 27, 2007 the Sensex comes back to 15160
because of selling by Foreign Institutional Investors
and global cues
• Following Weak global cues and heavy selling in the
international markets, the BSE Sensex fell by 615
points in a single day on August 1, 2007.
 EFFECT OF PARTICIPATORY NOTES ISSUE

• 16 Oct, 2007 -SEBI proposed curbs on participatory notes

which accounted for roughly 50% of investment FII in 2007.
• SEBI were not clear
• 17 Oct, 2007 Within a minute of opening trade, the Sensex
crashed by 1744 points or about 9% of its value - led to
automatic suspension of trade for 1 hour.
• FM P. Chidambaram issued clarifications, that the
government was not against FIIs and was not immediately
banning PNs. After the market opened at 10:55 AM, the index
staged a comeback and ended the day at 18715.82, down
336.04 from the last day's close.
• .
 EFFECT OF PARTICIPATORY NOTES ISSUE

• 18 Oct, 2007, Sensex tumbled by 717.43

points — 3.83 per cent — to 17998.39.
• 19 Oct, 2007 -Sensex fell 438.41 points to
settle at 17559.98
• 23 Oct –Sensex Gained 879-point gain ,after
detailed clarifications from the SEBI chief M.
Damodaran regarding the new rules,
• Thus signalling the end of the PN crisis.
EFFECT OF PARTICIPATORY NOTES ISSUE
 Key Economic Indicators
 Reverse Repo  Inflation (WPI)
 Repo Rate  GDP
 Bank Rate  Export USD bn
 CRR  Import USD bn
 IIP
 Fed Rate
 Credit Deposit Ratio
SENSEX MOVEMENT IN RECENT
PERIOD
 Why Sensex Is Moving Up?
• Higher Advance Tax
• Revival of mansoon
• Better Q1 Result
• Inflow of FDI
• Higher growth Prospectus
ADVANCE TAX BY INDIAN COMPANIES
 WHY FII ARE ATTRACTED TO INDIA?

 INDIAN ECONOMY SHOWING FASTEST RECOVERY

 GDP Still at 6.5
 ACCEPTED TO GROW WELL
 HUGE MAN POWER , COST EFFECTIVNESS
 FAST EMERGING MIDDLE - CLASS
 RATE OF RETURN ON INVESTMENT
 PREDICTION ABOUT ECONOMY
• Weak monsoon may impact GDP growth
• Huge Inflow of Liquidity
• Good Q1 & Higher Advance Tax for Q2 Will
Drag Economy Up
 FUTURE PREDECTION
• VIDEO