INTRODUCTION TO INDIAN MARKETS

THERE ARE TWO TYPES OF MARKETS IN INDIA 1. Money Market 2. Capital Market Money market instruments:The money market is a monetary system of lending and borrowing of short-term funds. It was started in 1992 after globalization. The Reverse Bank of India has been playing the key role of regulator and controller of such money markets. The RBI intervenes regularly to curb crisis situations, such as liquidity crunching in the markets, by reducing the cash reserve ratio.

Types of money market instruments in India:-

1. Treasury bills. 2. Repurchase agreements. 3. Commercial papers. 4. Certificate of deposits. 5. Bankers acceptance.

Treasury bills:

These are short-term instruments issued by RBI. It began being issued by the Indian government in 1917. These are risk free and the returns are less. The primary and secondary markets circulate this instrument. Maturity period is up to one year. The buy value is set by a bidding process in auctions.

Repurchase agreement:

It is also known as Repos. They are short-term loans that buyers and sellers agree to sell and purchase.

Commercial Papers:
These are promissory notes that are unsecured and issued by companies and financial institutions. They are issued at discounted rate of their face value. Maturity period 1 to 270 days. These are yield higher returns than T-bills.

Certificate of deposits:

It is a short-term borrowing note, like a promissory note, in the form of a certificate. The returns are higher than T-bills as the risk is higher. Returns are based on annual percentage yield or annual percentage rate.

Bankers acceptance:It is a short-term investment plan created by a company or firm with a guarantee from a bank. Maturity period vary between 30 and 180 days. Companies use the acceptance as a time draft for financing imports, export and other trade.

CAPITAL MARKET
Capital market is a market for long-term debt and equity shares. In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges.

Capital market can be divided into Primary and Secondary Markets. PRIMARY MARKET:
In primary markets, new stock or bond issues are sold to investors via a mechanism known as underwriting. Stocks available for the first time are offered through new issue market. The issuer may be an new company or an existing company. In the new issue market the issuer can be considered as manufacturer. The issuing houses, investment bankers and brokers act as a channel of distribution for the new issues. They take the responsibility of selling the stocks to the public. In the primary market , securities are issued on an exchange basis. The underwriters, that is, the investment banks, play an important role in this market: they set the initial price range for a particular share and then supervise the selling of that share. Investors can obtain news of upcoming shares only on the primary market. The issuing firm collects money, which is then used to finance its operations or expand business, by selling its shares. Before selling a security on the primary market, the firm must fulfill all the requirements regarding the exchange. There are three methods though which securities can be issued on the primary market: rights issue, Initial Public Offer (IPO), and preferential issue. A company's new offering is placed on the primary market through an initial public offer.

SECONDARY MARKET:
Secondary Market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets.

For the general investor, the secondary market provides an efficient platform for trading of his securities. For the management of the company, Secondary equity markets serve as a monitoring and control conduitby facilitating value-enhancing control activities, enabling implementation of incentive-based management contracts, and aggregating information (via price discovery) that guides management decisions.

Difference between the primary market and the secondary market

In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. Secondary market is an equity trading avenue in which already existing/preissued securities are traded amongst investors. Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, Over-the-Counter (OTC) is a part of the dealer market.

Main financial products/instruments dealt in the secondary market Equity: The ownership interest in a company of holders of its common and preferred stock. The various kinds of equity shares are as follows

Equity Shares: An equity share, commonly referred to as ordinary share also represents
the form of fractional ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company and have voting rights. A company may issue such shares with differential rights as to voting, payment of dividend, etc.

Rights Issue/ Rights Shares:

ratio to those already held.

The issue of new securities to existing shareholders at a

Bonus Shares: Shares issued by the companies to their shareholders free of cost by
capitalization of accumulated reserves from the profits earned in the earlier years. Preferred Stock/ Preference shares: Owners of these kind of shares are entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before dividend can be paid in respect of equity share. They also enjoy priority over the equity shareholders in payment of surplus. But in the event of liquidation, their claims rank below the claims of the companys creditors, bondholders / debenture holders. Cumulative Preference Shares: A type of preference shares on which dividend accumulates if remains unpaid. All arrears of preference dividend have to be paid out before paying dividend on equity shares.

Cumulative Convertible Preference Shares: A type of preference shares where the

dividend payable on the same accumulates, if not paid. After specified date, these shares will be converted into equity capital of the company.

 Participating Preference Share: The right of certain preference shareholders to

participate in profits after a specified fixed dividend contracted for is paid. Participation right is linked with the quantum of dividend paid on the equity shares over and above a particular specified level. Security Receipts: Security receipt means a receipt or other security, issued by a securitization company or reconstruction company to any qualified institutional buyer pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an undivided right, title or interest in the financial asset involved in securitisation.

Government securities (G-Secs): These are sovereign (credit risk-free) coupon bearing
instruments which are issued by the Reserve Bank of India on behalf of Government of India, in lieu of the Central Government's market borrowing programme. These securities have a fixed coupon that is paid on specific dates on half-yearly basis. These securities are available in wide range of maturity dates, from short dated (less than one year) to long dated (upto twenty years). Debentures: Bonds issued by a company bearing a fixed rate of interest usually payable half yearly on specific dates and principal amount repayable on particular date on redemption of the debentures. Debentures are normally secured/ charged against the asset of the company in favour of debenture holder.

Bond: A negotiable certificate evidencing indebtedness. It is normally unsecured.

A debt security is generally issued by a company, municipality or government agency. A bond investor lends money to the issuer and in exchange, the issuer promises to repay the loan amount on a specified maturity date. The issuer usually pays the bond holder periodic interest payments over the life of the loan.

The various types of Bonds are as follows Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No periodic
interest is paid. The difference between the issue price and redemption price represents the return to the holder. The buyer of these bonds receives only one payment, at the maturity of the bond. Convertible Bond: A bond giving the investor the option to convert the bond into equity at a fixed conversion price. Commercial Paper: A short term promise to repay a fixed amount that is placed on the market either directly or through a specialized intermediary. It is usually issued by companies with a high credit standing in the form of a promissory note redeemable at par to the holder on maturity and therefore, doesnt require any guarantee. Commercial paper is a money market instrument issued normally for a tenure of 90 days. Treasury Bills: Short-term (up to 91 days) bearer discount security issued by the Government as a means of financing its cash requirements.

The Birth of Stock Exchanges: A stock market or equity market is a public (a loose network of economic transactions, not a physical facility or discrete) entity for the trading of company stocks (shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.
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Trading:
Participants in the stock market range from small individual stock investor to large hedge traders, who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who executes the order. The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a market place (virtual or real). The exchanges provide real-time trading information on the listed securities, facilitating price discovery. Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry. This type of auction is used in stock exchanges and commodity exchange where traders may enter "verbal" bids and offers simultaneously. The other type of stock exchange is a virtual kind, composed of a network of computers where trades are made electronically via trader.

HISTORY:
In 12th century France the courratiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. Because these men also traded with debts, they could be called the first brokers. A common misbelief is that in late 13th century Bruges commodity traders gathered inside the house of a man called Van der Beurze, and in 1309 they became the "Brugse Beurse", institutionalizing what had been, until then, an informal meeting, but actually, the family Van der Beurze had a building in Antwerp where those gatherings occurred, the Van der Beurze had Antwerp, as most of the merchants of that period, as their primary place for trading. The idea quickly spread around Flander and neighboring counties and "Beurzen" soon opened in and Amsterdam. In the middle of the 13th century, Venetian bankers began to trade in government securities. In 1351 the Venetian government outlawed spreading rumors intended to lower the price of government funds. Bankers in Verona, Genoa and Florence also began trading in government securities during the 14th century. This was only possible because these were independent city states not ruled by a duke but a council of influential citizens. The Dutch later started joint stock companies, which let shareholders invest in business ventures and get a share of their profits or losses. In 1602, the Dutch East India Company issued the first share on the Amsterdam Stock Exchange. It was the first company to issue stocks and bonds. The Amsterdam Stock Exchange (or Amsterdam Beurs) is also said to have been the first stock exchange to introduce continuous trade in the early 17th century. The Dutch "pioneered short selling, option trading, debt-equity swaps, merchant banking, unit trusts and other speculative instruments, much as we know them". There are now stock markets in virtually every developed and most developing economies, with the world's biggest market being in the United States, United Kingdom, Japan, India, China, Canada, Germany's (Frankfurt Stock Exchange), France, South Korea and the Netherlands.

Although the stock exchange market has multiple functions, its main activities are two:
To promote the savings and for them to be canalized towards of carrying through investment projects that otherwise wouldnt be possible you need that the issuing institution of the securities to be admitted for quoting. The negotiations will be done on the primary market.
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To provide liquidity to the investors. The investor can recuperate the money invested when needed. For it, he has to go to the stock exchange market to sell the securities previously acquired. This function of the stock market is done on the secondary market. To guarantee the legal and economic security of the agreed contracts. To provide official information about the quantities that are negotiated and of the quoted prices. To fix the prices of the securities according to the fundamental law of the offer and the demand. Specifying a bit more and centering on the two main agents that intervene in the market, investors and companies, we could do the following classification:

Other functions of the stock exchange market as an organization are:

Functions done by the stock exchange market in favor of the investor:

It permits him the access to the profitable activities of the big companies. It offers liquidity to the security investments, through a place in which to sell or buy securities. It permits for the investor to have a political power in the companies in which he invests its savings due that the acquisition of ordinary shares gives him the right (among other things) to vote in the general shareholders meetings of the company in question. It offers the possibility of diversifying your portfolio by enlarging the field of strategy of investments due to alternative options, as could be the derived market, the money market, etc.

With respect to the function done by the stock exchange market in favor of the companies:
It supplies them with the obtaining of long-term funds that permits the company to make profitable activities or to do determine projects that otherwise wouldnt be possible to develop for lack of financing. Also, this funding signifies a less cost than if obtained at other channels. The securities quoted at the stock exchange market usually have more fiscal purpose advantages for the companies. It offers to the companys free publicity, which in other way would suppose considerable expenses. The institution is objecting of attention of the media (television, radio, etc.) in case any important change in its owners (the share holders).

Benefits of investing in stock market:

Investing has become increasingly important over the years, as the future of social security benefits and for other countries, their respective government programs which supports up and coming retiring people. Most, if not all of us, want to insure and take control of our future, and a lot of us know that because of the extra burdens being placed on government or even their retirement plan safety net might not be enough to support them through their non-working years.
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Investing is the answer to the unknowns of your financial future. You may have been saving money in a low interest savings account over the years. Now, you want to see that money grow at a faster pace. Perhaps you have inherited and you need a way to make that money grow or you might even have come across similar articles such as this one from CNN Top 25 Fastest Growing Techs wished that you also could invest in these companies. Not only do you want to own stocks but you want to provide that income to purchase a new home, provide for your childrens college education and other material things which we want in life. If you want or need to make a lot of money fast, you would be more interested in higher risk investing, which will give you a larger return in a shorter amount of time. If you are saving for something in the far off future, such as retirement, you would want to make safer investments that grow over a longer period of time. The overall purpose in investing is to create wealth and security, over a period of time so as to provide for yourself when you will not be or simply be unable to earn an income.

Benefits of Stock Market:

Stock market (or share market) trading is a common investment strategy, with many benefits to traders. If youre looking to make money buying and selling company stock and shares, you have a few choices to make, and you need to evaluate the benefits of each.

Short-term or Long-term Investments?

One of the biggest benefits of stock market trading in general is that you have a relatively liquid asset (meaning you can easily and quickly convert those stocks to cash when you need to by selling them). This is an attractive aspect of both long-term and short-term investing. While long-term investments are known for being a safer investment strategy because a companys value generally increases over time, short-term investments can bring in a sudden influx of cash with smart investment choices (such as selling shortly after a popular companys IPO to take advantage of a quick and dramatic share price increase). If you have no preference, the strategies can be combined, taking on more equal amounts of risk and reward over time.

Stock Brokers or Online Trading?

Another choice youll have to make when deciding to invest in the share market is whether you want to trade through a stock broker or online trading service. Each has its own benefits to certain groups of investors. Working through stock brokers is the more traditional way of buying and selling shares. When you want to sell your stock, you would contact your broker who would then deal with a trader on your behalf. Stock brokers can also advise you on sales and purchases of stocks with personal attention to your portfolio, which may make them a wise option for you if you have a huge sum of money invested into the market, or a very large portfolio that would be difficult to manage more independently. Online stock trading companies are another, newer, option for stock traders. Online trading allows you to participate in more hands-on investing, managing your own portfolio much
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more independently. While you wont get the amount of personal attention a private stock broker could give you, youll realize other benefits. Online trading gives you more freedom over your transactions (as opposed to working with a broker, who may refuse to make a specific transaction). You can buy and sell any stock that you want at any time. Transactions through online trading services also let you avoid the sometimes high fees of brokers. Because the system is automated, fees are significantly lower (as little as a few dollars per trade). Without having to wait on a broker to make offers for you, online stock trading is also a much faster process the simple click of the mouse versus repeated telephone conversations. By choosing the best investment strategies and methods for you, you can take advantage of all of the benefits of share market investment. Stock exchanges have multiple roles in the economy, this may include the following: Raising capital for business:17The Stock Exchange provide companies with the facility to raise capital for expansion through Selling shares to the investing public.

Role of stock exchange:

2.Mobilizing savings for investment:

When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in stronger economic growth and higher productivity levels and firms.

3.Facilitating company growth

Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business Assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion.

4 Redistribution of wealth
Stock exchanges do not exist to redistribute wealth. However, both casual and professional stock investors, through dividends and stock price increases that may result in capital gains, will share in the wealth of profitable businesses.

5.Corporate governance
By having a wide and varied scope of owners, companies generally tend to improve on their Management standards and efficiency in order to satisfy the demands of these shareholders and The more stringent rules for public corporations imposed by public stock exchanges and the Government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and 18heirs, or otherwise by a small group of investors). However, some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies. The dot-com bubble in the early 2000s and the subprime .Mortgage crisis in 2007-08, are classical examples of corporate mismanagement. Companies like Pets.com
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(2000), Enron Corporation (2001), One.Tel (2001), Sunbeam (2001), Webvan (2001), Adelphia (2002), MCI WorldCom (2002), Parmalat (2003), American International Group(2008), Lehman Brothers (2008), and Satyam Computer Services (2009) were among the most widely scrutinized by the media.

7.Creating investment opportunities for small investors

As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors.

8.Government capital-raising for development projects

Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange Where by members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional Funds to make any regular coupon payments and refund the principal when the bonds mature.

9.Barometer of the economy

At the stock exchange, share prices rise and fall depending, largely, on market forces. Shareprices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually leadto a stock market crash. Therefore the movement of share prices and in general stock Index can be an indicator of the general trend in the economy.

Benefits of listing your company in the stock exchange

A listing on a Stock Exchange presents many opportunities for companies. Value Addition a listing can also be anticipated to attach importance to a company's Employee Share Ownership Scheme. In addition, a listing on a stock exchange can add value to a company. A listing could press forward brand awareness of company products and can augment a company's corporate standing. Furthermore, the superior profile, tied with larger lucidity, could add to the company's capacity to have access to traditional sources of capital. Increasing capital The Stock Exchange makes available access to a collection of institutional and retail
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investors and to the capital market. A registration on the exchange allows a company to raise capital and use it to sponsor investment and expansion. Even after a company is listed, it can boost up capital from the market, through the issue of fresh securities such as Rights issues or through the issue of a new nature of securities.

Access to a widespread shareholder base

The stock exchange puts forward companies a right of entry to a wide-ranging and mounting investor base, which contains both entity investors and plentiful local and international institutional investors.

Price Detection
A listing facilitates companies to ascertain a price for their shares.

Low cost capital

The primary gain of raising capital from the market is that it eschews a number of the intermediation expenses apparent in the other forms of capital raising. Consequently, the market endows companies with capital at a cheaper cost. Going public is not an easy task. In deciding whether to seek a listing, a company should consider the alternative financing needs available and the benefits versus the drawbacks of listings. There are many advantages that accrue to companies that attain a public listing of their shares. Some of the key considerations and benefits are: Creating a market for the company's shares; Enhancing the status and financial standing of the company; Increasing public awareness and public interest in the company and its products; Providing the company with an opportunity to implement share option schemes for their employees; Accessing to additional fund raising in the future by means of new issues of shares or other securities; Facilitating acquisition opportunities by use of the company's shares; and Offering existing shareholders a ready means of realizing their investments.

Drawbacks
While there are benefits to going public, it also means additional obligations and reporting requirements on the companies and its directors: Increasing accountability to public shareholders Need to maintain dividend and profit growth trends Becoming more vulnerable to an unwelcome takeover Need to observe and adhere strictly to the rules and regulations by governing bodies Increasing costs in complying with higher level of reporting requirements Relinquishing some control of the company following the public offering Suffering a loss of privacy as a result of media interest As the owner or major shareholder of a private company, it is important to outweigh the benefits and costs of listing in the light of the plans and goals that have been set for the company. Discussions with lawyers, independent accountants and other professional advisors will also provide you with better considerations.
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Stock Market and Its Benefits for Common Investors

Stock exchange trading attracts attention of many people. However, it is evident that it is impossible for everyone to gain there good money. The only think you should keep in mind about stock market trade is the fact that you should investigate as much information as it is possible about stock market trade organization. It depends on the fact that the person, that possess information able invest money in the proper niche in the suitable time. Therefore, you mighty get good incomes in turn. If you think, that the definite way to make money would be of great value for you assets you have to follow some instructions when you would invest your money in it. First of all, we have to thin about stock market and its benefit in the future, we mean that you should analyze how much money you might gain due to the gambling process. So, we hope it would be interesting for you to know that first investor input his funds in the stock exchange trade, he makes a lot of invisible investigations that allow them decide which niche of gambling would be of great benefit for them. In spite of the fact that the stock market trade has the same organization whenever it is, there are some details that might differ one stock market from other. Therefore, we always ask our readers to pay greatest attention to the fact that the stock market is the way to involve money that requires preparation and attention as well. So, we hope you would be careful in this question and do your best to involve money in it. The other event that has great value when you start cooperative work with the stock exchange trade is the observing cooperative niches that make their stocks available at the market as well. You must learn how many companies present their shares at the stock market gambling and what is the general turnover of funds at the very stock market. In the case, you cannot determine which of stock markets able bring you good incomes you must attentively investigate some more information about definite event. In the case, you cannot determine yourself what kind of investing would be better for you, we advise to ask for professional tips that might do their best just to consult potential investors in such ordinary questions. We hope it would be of great value for you to ask for such tips. Moreover, you should do your best investigating amount of initial investment you should do in the future. So, we consider that it is impossible invest money in stock market with the benefit if you do not deal with the financial planner. So, do not waste your time and look for the person that might positively affect on your gambling process. Take care and keep in touch! One of the advantages of the stock market is that it is multifunctional. Even the people who think about retirement investing consider the investing into the stock market trading to be a great investment tool.

BOMBAY STOCK EXCHANGE OF INDIA LIMITED

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. Popularly known as "BSE", it was established as "The Native Share & Stock Brokers Association" in 1875. It is the first stock exchange in the country to obtain permanent recognition in1956 from the Government of India under the Securities Contracts (Regulation) Act 1956.
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The Exchange's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a demutualised and corporative entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatization and Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualization, the trading rights and ownership rights have been de-linked effectively addressing concerns regarding perceived and real conflicts of interest. The Exchange is professionally managed under the overall direction of the Board of Directors. The Board comprises eminent professionals, representatives of Trading Members and the Managing Director of the Exchange. The Board is inclusive and is designed to benefit from the participation of market intermediaries. In terms of organization structure, the Board formulates larger policy issues and exercises over-all control. The committees constituted by the Board are broad-based. The day-to-day operations of the Exchange are managed by the managing director and a management team of professionals. The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The systems and processes of the Exchange are designed to safeguard market integrity and enhance transparency in operations. During the year 2004-2005, the trading volumes on the Exchange showed robust growth. The Exchange provides an efficient and transparent market for trading in equity, debt instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietary system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing & settlement functions of the Exchange are ISO 9001:2000 certified. Bombay Stock Exchange Limited (BSE) which was founded in 1875 with six brokers has now grown into a giant institution with over 874 registered Broker-Members spread over 380 cities across the country. Today, BSE's Wide Area Network (WAN) connecting over 8000 BSE Online Trading (BOLT) System Trader Work Stations (TWS) is one of the largest of its kind in the country. With a view to provide efficient and integrated services to the investing public through the members and their associates in the operations pertaining to the Exchange, Bombay Stock Exchange Limited (BSE) has set up a unique Member Services and Development to attend to the problems of the Broker-Members. Member Services and Development Department is the single point interface for interacting with the Exchange Administration to address to Members' issues. The Department takes care of various problems and constraints faced by the Members in various products such as Cash, Derivatives, Internet Trading, and Processes such as Trading, Technology, Clearing and Settlement, Surveillance and Inspection, Membership, Training, Corporate Information, etc.

The Objectives of stock exchange are

To safeguard the interest of investing public having dealings on the exchange. To establish and promote honourable and just practices in securities transactions. To promote, develop and maintain well-regulated market for dealing in securities.
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To promote industrial development in the country through efficient resource mobilization by the way of investment in corporate securities.

VISION OF BSE
Emerge as the premier Indian stock exchange by establishing global benchmarks".

NATIONAL STOCK EXCHCHANGE

The National Stock Exchange was incorporated in November, 1992 with an equity capital of Rs.25 crores. The International Securities Consultancy (ISC) of Hongkong has helped in setting up National Stock Exchange.ISC has prepared the detailed business plans and installation of hardware and software systems. The promotions for National Stock Exchange were Financial Institutions, Insurances companies, Banks and SEBI Capital Market Limited, Infrastructure Leasing and Financial Services Limited and Stock Holding Corporation Limited. It has been set up to strengthen the move towards professionalization of the capital market as well as provide Nationwide securities trading facilities to investors. National Stock Exchange is not an exchange in the traditional sense where brokers own and manage the exchange. A two tier administrative set up involving a company board and a governing board of the exchange is envisaged. National Stock Exchange is a National market for shares public units Bonds, Debentures and Government. The National Stock Exchange (NSE) of India became operational in the capital market segment on 3rd November 1994 in Mumbai. The genesis of the NSE lies in the recommendations of the Pherwani Committee(1991). Apart from NSE, it had recommended for the establishment of National Stock Market system also. Committee pointed out six major defects in the Indian Stock Market.

OBJECTIVES OF NATIONAL STOCK EXCHANGE

1. To establish a Nationwide trading facility fro equities, debt instruments and hybrids. To ensure equal access to investors all over the country through appropriate communication network. 2.To provide a fair, efficient and transparent securities market to investors using an electronic communication network. 3.To enable shorter settlement cycle and book entry settlement system. 4.To meet current international standards of securities market.

NSE-NIFTY
The National Stock Exchange on April 22, 1996 launched a new Equity Index The NSE-50. The new index which replaces the existing NSE-100 Index, is expected to serve as an appropriate Index for the new segment of futures and options. Nifty means National Index for Fifty Stock. The NSE-50 comprises 50 companies that represents 20 broad Industry groups with an aggregate market capitalization of around Rs.1,70,000 crores. All companies included in the Index have a market capitalization in excess of Rs.500crores each and should have traded for 85% of trading days at an impact cost of less than 1.5%.

Group
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NSCCL

NCCL

NSETECH

DotEx Intl. Ltd. IISL NSE.IT

Market Segments and Products

NSE provides an electronic trading platform for of all types of securities for investors under one roof - Equity, Corporate Debt, Central and State Government Securities, T-Bills, Commercial Paper, Certificate of Deposits (CDs), Warrants, Mutual Funds units, Exchange Traded Funds, Derivatives like Index Futures, Index Options, Stock Futures, Stock Options, Futures on Interest Rates etc., which makes it one of the few exchanges in the world providing trading facility for all types of securities on a single exchange.

The Exchange provides trading in 3 different segments viz.

Wholesale debt market (WDM)

Capital market (CM) segment and The futures & options (F&O) segment. The Wholesale Debt Market segment provides the trading platform for trading of a wide range of debt securities which includes State and Central Government securities, T-Bills, PSU Bonds, Corporate Debentures, CPs, CDs etc. However, along with these financial instruments, NSE has also launched various products (e.g. FIMMDA-NSE MIBID/MIBOR) owing to the market need. A reference rate is said to be an accurate measure of the market price. In the fixed income market, it is the interest rate that the market respects and closely matches. In response to this, NSE started computing and disseminating the NSE Mumbai Inter-bank Bid Rate (MIBID) and
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NSE Mumbai Inter- Bank Offer Rate (MIBOR). Owing to the robust methodology of computation of these rates and its extensive use, this product has become very popular among the market participants. Keeping in mind the requirements of the banking industry, FIs, MFs, insurance companies, who have substantial investments in sovereign papers, NSE also started the dissemination of its yet another product, the Zero Coupon Yield Curve. This helps in valuation of sovereign securities across all maturities irrespective of its liquidity in the market. The increased activity in the government securities market in India and simultaneous emergence of MFs (Gilt MFs) had given rise to the need for a well defined bond index to measure the returns in the bond market. NSE constructed such an index the, NSE Government Securities Index. This index provides a benchmark for portfolio management by various investment managers and gilt funds. The Capital Market segment offers a fully automated screen based trading system ,known as the National Exchange for Automated Trading (NEAT) system. This operates on a price/time priority basis and enables members from across the country to trade with enormous ease and efficiency. Various types of securities e.g. equity shares, warrants, debentures etc. are traded on this system. The average daily turnover in the CM Segment of the Exchange during 2004-05 was nearly Rs. 4,506 crores. NSE started trading in the equities segment (Capital Market segment) on November 3, 1994 and within a short span of 1 year became the largest exchange in India in terms of volumes transacted. Trading volumes in the equity segment have grown rapidly with average daily turnover increasing from Rs.17 crores during 1994-95 to Rs.6,253 crores during 2005-06. During the year 2005-06, NSE reported a turnover of Rs.1,569,556 crores in the equities segment. The Equities section provides you with an insight into the equities segment of NSE and also provides real-time quotes and statistics of the equities market. In-depth information regarding listing of securities, trading systems & processes, clearing and settlement, risk management, trading statistics etc are available here. Futures & Options segment of NSE provides trading in derivatives instruments like Index Futures, Index Options, Stock Options, Stock Futures and Futures on interest rates. Though only four years into its operations, the futures and options segment of NSE has made a mark for itself globally. In the Futures and Options segment, trading in Nifty and CNX IT index and 53 single stocks are available. W.e.f. May 27 2005, futures and options would be available on 118 single stocks. The average daily turnover in the F&O Segment of the Exchange during 2004-05 was nearly Rs. 10,067crs Listing means admission of securities of an issuer to trading privileges (dealings) on a stock exchange through a formal agreement. The prime objective of admission to dealings on the exchange is to provide liquidity and marketability to securities, as also to provide a mechanism for effective control and supervision of trading.

Listing of Securities

At the time of listing securities of a company on a stock exchange, the

15

Listing Agreement

company is required to enter into a listing agreement with the exchange. The listing agreement specifies the terms and conditions of listing and the disclosures that shall be made by a company on a continuous basis to the exchange.

The term Delisting of securities means permanent removal of securities of a listed company from a stock exchange. As a consequence of delisting, the securities of that company would no longer be traded at that stock exchange. Delisting refers to the practice of removing the stock of a company from a stock exchange so that investors can no longer trade shares of the stock on that exchange. This typically occurs when a company goes out of business, declares bankruptcy, no longer satisfies the listing rules of stock exchange, or has become a private company after a merger or acquisition, or wants to reduce regulatory reporting complexities and overhead, or if the stock volumes on the exchange from which it wishes to delist are not significant. Delisting does not necessarily mean a change in company's core strategy.[1] In the United States, securities which have been delisted from a major exchange for reasons other than going private or liquidating may be traded on over-thecounter markets like the OTC Bulletin Board or the Pink Sheets.

Delisting of securities

Voluntary De-listing of Companies

Any promoter or acquirer desirous of delisting securities of the company under the provisions of these guidelines shall obtain the prior approval of shareholders of the company by a special resolution passed at its general meeting, make a public announcement in the manner provided in these guidelines, make an application to the delisting exchange in the form specified by the exchange, and comply with such other additional conditions as may be specified by the concerned stock exchanges from where securities are to be de-listed. Any promoter of a company which desires to de-list from the stock exchange shall also determine an exit price for delisting of securities in accordance with the book building process as stated in the guidelines. The stock exchanges shall provide the infrastructure facility for display of the price at the terminal of the trading members to enable the investors to access the price on the screen to bring transparency to the delisting process.

Compulsory De-listing of Companies

The stock exchanges may de-list companies which have been suspended for a minimum period of six months for non-compliance with the listing agreement. The stock exchanges have to give adequate and wide public notice through newspapers and also give a show cause notice to a company. The exchange shall provide a time period of 15 days within which 30 representation may be made to the exchange by any person who may be aggrieved by the proposed delisting. Where the securities of the company are de-listed by an exchange, the promoter of the company shall be liable to compensate the security holders of the company by paying them the fair value of the securities held by them and acquiring their securities, subject to their option to remain securityholders with the company.

Literature 1. INTRODUCTION TO INDIAN MARKETS

16

THERE ARE TWO TYPES OF MARKETS IN INDIA

1. MONEY MARKET
Money market is a market for debt securities that pay off in the short term usually less than one year, for example the market for 90-days treasury bills. This market encompasses the trading and issuance of short term non equity debt instruments including treasury bills, commercial papers, bankers acceptance, certificates of deposits, etc. In other word we can also say that the Money Market is basically concerned with the issue and trading of securities with short term maturities or quasi-money instruments. The Instruments traded in the money-market are Treasury Bills, Certificates of Deposits (CDs), Commercial Paper (CPs), Bills of Exchange and other such instruments of short-term maturities (i.e. not exceeding 1 year with regard to the original maturity)

2. CAPITAL MARKET
Capital market is a market for long-term debt and equity shares. In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges.

Capital market can be divided into Primary and Secondary Markets. PRIMARY MARKET
In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. In primary markets, new stock or bond issues are sold to investors via a mechanism known as underwriting. Stocks available for the first time are offered through new issue market. The issuer may be an new company or an existing company. In the new issue market the issuer can be considered as manufacturer. The issuing houses, investment bankers and brokers act as a channel of distribution for the new issues. They take the responsibility of selling the stock. In the primary market, securities are issued on an exchange basis. The underwriters, that is, the investment banks, play an important role in this market: they set the initial price range for a particular share and then supervise the selling of that share. Before selling a security on the primary market, the firm must fulfill all the requirements regarding the exchange .There are three methods though which securities can be issued on the primary market: rights issue, Initial Public Offer (IPO), and preferential issue. A company's new offering is placed on the primary market through an initial public offer.

SECONDARY MARKET
17

In the secondary markets, existing securities are sold and bought among investors or traders, usually on a securities exchange, over-the-counter, or elsewhere. A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves. The national exchanges - such as the New York Stock Exchange and the NASDAQ are secondary markets. Secondary markets exist for other securities as well, such as when funds, investment banks, or entities For the general investor, the secondary market provides an efficient platform for trading of his securities. For the management of the company, Secondary equity markets serve as a monitoring and control conduitby facilitating value-enhancing control activities, enabling implementation of incentive-based management contracts, and aggregating information (via price discovery) that guides management decisions.

Difference between the primary market and the secondary market

In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors. Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, Over-the-Counter (OTC) is a part of the dealer market.

2. SEBI
The SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 to protect the interests of the investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith and incidental thereto. Securities and Exchange Board of India constituted under the Resolution of the Government of India in the Department of Economic Affairs No.1 (44)SE/86, dated the 12th day of April, 1988;

SECURITY AND EXCHANGE BOARD OF INDIA

The Board shall consist of the following members namely:-

1. A Chairman 2. Two members from amongst the officials of the Ministry of the Central Government dealing with Finance (and administration of the Companies Act, 1956;) 2 of 1934 3. One member from amongst the officials of [the Reserve Bank 4. Five other members of whom at least three shall be the whole-time members

POWERS & FUNCTIONS

1. Regulating the business in stock exchanges and any other securities markets. 2. Registering and regulating the working of stock brokers, sub-brokers, share
18

transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner. 3. Registering and regulating the working of the depositories, participants custodians of securities, foreign institutional investors, credit rating agenciesand other intermediaries as the board may, by notification, specify in thisbehalf. 4. Registering and regulating the working of (venture capital funds and collective investment schemes) including mutual funds. 5. Promoting and regulating self-regulatory organizations. 6. Prohibiting fraudulent and unfair trade practices relating to securities markets. 7. Promoting investors' education and training of intermediaries of securities markets. 8. Prohibiting insider trading in securities. 9. Regulating substantial acquisition of shares and take-over of companies. 10. Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, (mutual funds) and other persons associated with the securities market and intermediaries and self- regulatory organizations in the securities market. 11. Performing such functions and exercising such powers under the provisions of securities contracts (regulation) act, 1956, as may be delegated to it by the central government. 12. Levying fees or other charges for carrying out the purpose of this section. 13. Conducting research for the above purposes. such

DETAILS OF STOCK EXCHANGES

Sr. No. 1 2 3 4 Name of the Exchange Ahmedabad Stock Exchange Ltd. Bangalore Stock Exchange Ltd. Bhubaneswar Stock Exchange Ltd. Bombay Stock Exchange Ltd. Valid Upto PERMANENT PERMANENT June 04, 2011 PERMANENT
19

5 6 7

8 9 10

Calcutta Stock Exchange Ltd. Cochin Stock Exchange Ltd. Coimbatore Stock Exchange Ltd. Due to pending litigation before the Hon'ble Madras High Court, Coimbatore Stock Exchange Ltd. (CSX) has not filed application for renewal of recognition which expired on 17.09.06. However, in terms of order dated 15.09.06 of the Hon'ble Court, the right of CSX to apply for renewal shall be subject to further orders of the court and the stock exchange shall not be entitled to oppose the renewal solely on the ground of lapse of time. Delhi Stock Exchange Ltd., Gauhati Stock Exchange Ltd., Hyderabad Stock Exchange Ltd. The Hyderabad Stock Exchange Ltd. (HSE) failed to dilute atleast 51% of its equity share capital to public other than shareholders having trading rights on or before the stipulated date i.e. August 28, 2007. Consequently, in terms of section 5(2) of the Securities Contracts (Regulation) Act, 1956, the recognition granted to HSE stands withdrawn with effect from August 29, 2007.

PERMANENT November 07, 2010 September 17, 2006

PERMANENT April 30, 2011

11 12 13 14 15 16

17

18 19 20

Interconnected Stock Exchange of India Ltd. Jaipur Stock Exchange Ltd. Ludhiana Stock Exchange Ltd.,The Madhya Pradesh Stock Exchange Ltd Madras Stock Exchange Ltd. Magadh Stock Exchange Ltd. "SEBI vide order dated September 3, 2007 refused to renew the recognition granted to Magadh Stock Exchange Ltd." * Mangalore Stock Exchange As per Securities Appellete Tribunal order dated October 4, 2006, the Mangalore Stock Exchange is a de-recognized Stock Exchange under Section 4 (4) of SCRA MCX Stock Exchange Ltd National Stock Exchange of India Ltd. OTC Exchange of India

November 17, 2010 January 08, 2011 April 27, 2011 PERMANENT PERMANENT

September 15, 2011 PERMANENT August 22, 2011

20

21 22

23 24 25

Pune Stock Exchange Ltd. Saurashtra Kutch Stock Exchange Ltd. SEBI vide order dated July 06, 2007 has withdrawn the recognition granted to Saurashtra Kutch Stock Exchange Limited. U.P. Stock Exchange Limited United Stock Exchange of India Limited The Vadodara Stock Exchange Ltd.

September 01, 2010

June 02, 2011 March 21, 2011 January 03, 2011

3. NSE - A New ideology

The broad objective for which the exchange was set up has made it to play a leading role in enlarging the scope of market reforms in securities market in India. During last one decade it has been playing the role of a catalytic agent in reforming the markets in terms of market microstructure and in evolving the best market practices keeping in mind the investors. The Exchange is set up on a demutualised model wherein the ownership, management and trading rights are in the hands of three different sets of people. This has completely eliminated any conflict of interest. This has helped NSE to aggressively pursue policies and practices within a public interest framework. NSE's nationwide, automated trading system has helped in shifting the trading platform from the trading hall in the premises of the exchange to the computer terminals at the premises of the trading members located at different geographical locations in the country and subsequently to the personal computers in the homes of investors and even to hand held portable devices for the mobile investors. It has been encouraging corporatization of membership in securities market. It has also proved to be instrumental in ushering in scrip less trading and providing settlement guarantee for all trades executed on the Exchange. Settlement risks have also been eliminated with NSE's innovative endeavors in the area of clearing and settlement viz., establishment of the clearing corporation (NSCCL), setting up a settlement guarantee fund (SGF), reduction of settlement cycle, implementing on-line, real-time risk management systems, dematerialization and electronic transfer of securities to name few of them. As a consequence, the market today uses state-of-the-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism. In order to take care of investors interest, it has also created an investors protection fund (IPF), that would help investors who have incurred financial loss due to default of brokers.

GENESIS
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Capital market reforms in India have outstripped the process of liberalization in most other sectors of the economy. However, the creation of an independent capital market regulator was the initiation of this reform process. After the formation of the Securities Market regulator, the Securities and Exchange Board of India (SEBI), attention were drawn towards the inefficiencies of the bourses and the need was felt for better regulation, discipline and accountability. A Committee recommended the creation of a 2nd stock exchange in Mumbai called the "National Stock Exchange". The Committee suggested the formation of an exchange which would provide investors across the country a single, screen based trading platform, operated through a VSAT network. It was on this recommendation that setting up of NSE as a technology driven exchange was conceptualized. NSE has set up its trading system as a nation-wide, fully automated screen based trading system. It has written for itself the mandate to create a world-class exchange and use it as an instrument of change for the industry as a whole through competitive pressure. NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It started operations in June 1994, with trading on the Wholesale Debt Market Segment. Subsequently it launched the Capital Market Segment in November 1994 as a trading platform for equities and the Futures and Options Segment in June 2000 for various derivative instruments.

NSE was set up with the objectives of:

Establishing a nationwide trading facility for all types of securities; Ensuring equal access to investors all over the country through an appropriate communication network; Providing a fair, efficient and transparent securities market using electronic trading system; Enabling shorter settlement cycles and book entry settlements; and Meeting international benchmarks and standards. NSE has been able to take the stock market to the doorsteps of the investors. The technology has been harnessed to deliver the services to the investors across the country at the cheapest possible cost. It provides a nation-wide, screen-based, automated trading system, with a high degree of transparency and equal access to investors irrespective of geographical location. The high level of information dissemination through on-line system has helped in integrating retail investors on a nation-wide basis. The standards set by the exchange in terms of market practices, products, technology and service standards have become industry benchmarks and are being replicated by other market participants. Within a very short span of time, NSE has been able to achieve all the objectives for which it was set up. It has been playing a leading role as a change agent in transforming the Indian Capital Markets to its present form. The Indian Capital Markets are a far cry from what they used to be a decade ago in terms of market practices, infrastructure, technology, risk management, clearing and settlement and investor service.

Market Segments and Products

22

NSE provides an electronic trading platform for of all types of securities for investors under one roof - Equity, Corporate Debt, Central and State Government Securities, TBills, Commercial Paper, Certificate of Deposits (CDs), Warrants, Mutual Funds units, Exchange Traded Funds, Derivatives like Index Futures, Index Options, Stock Futures, Stock Options, Futures on Interest Rates etc., which makes it one of the few exchanges in the world providing trading facility for all types of securities on a single exchange.

Wholesale debt market (WDM) Capital market (CM) segment and The futures & options (F&O) segment.

The Exchange provides trading in 3 different segments viz.

The Wholesale Debt Market segment provides the trading platform for trading of a wide range of debt securities which includes State and Central Government securities, T-Bills, PSU Bonds, Corporate Debentures, CPs, CDs etc. However, along with these financial instruments, NSE has also launched various products (e.g. FIMMDA-NSE MIBID/MIBOR) owing to the market need. A reference rate is said to be an accurate measure of the market price. In the fixed income market, it is the interest rate that the market respects and closely matches. In response to this, NSE started computing and disseminating the NSE Mumbai Inter-bank Bid Rate (MIBID) and NSE Mumbai InterBank Offer Rate (MIBOR). Owing to the robust methodology of computation of these rates and its extensive use, this product has become very popular among the market participants. Keeping in mind the requirements of the banking industry, FIs, MFs, insurance companies, who have substantial investments in sovereign papers, NSE also started the dissemination of its yet another product, the Zero Coupon Yield Curve. This helps in valuation of sovereign securities across all maturities irrespective of its liquidity in the market. The increased activity in the government securities market in India and simultaneous emergence of MFs (Gilt MFs) had given rise to the need for a well defined bond index to measure the returns in the bond market. NSE constructed such an index the, NSE Government Securities Index. This index provides a benchmark for portfolio management by various investment managers and gilt funds.

Capital market segment.

The segment offers a fully automated screen based trading system, known as the National Exchange for Automated Trading (NEAT) system. This operates on a price/time priority basis and enables members from across the country to trade with enormous ease and efficiency. Various types of securities e.g. equity shares, warrants, debentures etc. are traded on this system. The average daily turnover in the CM Segment of the Exchange is nearly Rs. 14,148 crore. (US $ 3,540 million).

Futures and Options

23

The segment of NSE provides trading in derivatives instruments like Index Futures, Index Options, Stock Options, Stock Futures and Futures on interest rates. The derivatives trading at NSE commenced on June 12, 2000 with futures trading on S&P CNX Nifty Index. Subsequently, the product base has been increased to include trading in options on S&P CNX Nifty Index, futures and options on CNX IT Index, Bank Nifty Index, CNX Nifty Junior, CNX 100, Nifty Midcap 50 Indices and 228 single stocks. Though only eight years into its' operations, the futures and options segment of NSE has made a mark for itself globally. The average daily turnover in the F&O Segment of the Exchange is nearly Rs. 52,153 crore (US $ 13,048 million).

Technology
Technology has been the backbone of the Exchange. Providing the services to the investing community and the market participants using technology at the cheapest possible cost has been its main thrust. NSE chose to harness technology in creating a new market design NSE stresses on innovation and sustained investment in technology to remain ahead of competition. NSE is the first exchange in the world to use satellite communication technology for trading. It uses satellite communication technology to energise participation through about 2,829 VSATs from nearly 345 cities spread all over the country. Its trading system, called National Exchange for Automated Trading (NEAT), is a state of the art client server based application. At the server end all trading information is stored in an in-memory database to achieve minimum response time and maximum system availability for users. It has uptime record of 99.7%. For all trades entered into NEAT system, there is uniform response time of less than 1.5 seconds. NSE has been continuously undertaking capacity enhancement measures so as to effectively meet the requirements of increased users and associated trading loads. With recent up gradation of trading hardware, NSE can handle up to 6 million trades per day. NSE has also put in place NIBIS (NSE's Internet Based Information System) for on-line real-time dissemination of trading information over the Internet. As part of its business continuity plan, NSE has established a disaster back-up site at Chennai along with its entire infrastructure, including the satellite earth station and the high speed optical fiber link with its main site at Mumbai. This site at Chennai is a replica of the production environment at Mumbai. The transaction data is backed up on near real time basis from the main site to the disaster back-up site through the 2 mbps high-speed link to keep both the sites all the time synchronized with each other.

4. NSE FAMILY

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 NSCCL
National Securities Clearing Corporation Ltd. (NSCCL), a wholly-owned subsidiary of NSE, was incorporated in August 1995 and commenced clearing operations in April 1996. It was the first clearing corporation in the country to provide notation/settlement guarantee that revolutionized the entire concept of settlement system in India. It was set up to bring and 9 sustain confidence in clearing and settlement of securities; to promote and maintain short and consistent settlement cycles; to provide counter-party risk guarantee, and to operate a tight risk containment system. It carries out the clearing and settlement of the trades executed in the equities and derivatives segments of the NSE. It operates a well-defined settlement cycle and there are no deviations or deferments from this cycle. It aggregates trades over a trading period T, nets the positions to determine the liabilities of members and ensures movement of funds and securities to meet respective liabilities. It also operates a Subsidiary General Ledger (SGL) for settling trades in government securities for its constituents. It has been managing clearing and settlement functions since its inception without a single failure or clubbing of settlements. It assumes the counter-party risk of each member and guarantees financial settlement. It has tied up with 10 Clearing Banks viz., Canara Bank, HDFC Bank, IndusInd Bank, ICICI Bank, UTI Bank, Bank of India, IDBI Bank and Standard Chartered Bank for funds settlement while it has direct connectivity with depositories for settlement of securities. It has also initiated a working capital facility in association with the clearing banks that helps clearing members to meet their working capital requirements. Any clearing bank interested in utilizing this facility has to enter into an agreement with NSCCL and with the clearing member. NSCCL has also introduced the facility of direct payout to clients account on both the depositories. It ascertains from each clearing member, the beneficiary account details of their respective clients who are due to receive pay out of securities. It has provided its members with a front-end for creating the file through which the information is provided to NSCCL. Based on the information received from members, it sends payout instructions to the depositories, so that the client receives the pay out of securities directly to their accounts on the pay-out day. NSCCL currently settles trades under T+2 rolling settlement. It has the credit of continuously upgrading the clearing and settlement procedures and has also brought Indian financial markets in line with international markets. It has put in place online real-time monitoring and surveillance system to keep track of the trading and clearing members outstanding positions and each member is allowed to trade/operate within the pre-set limits fixed according to the funds available with the Exchange on behalf of the member. The online surveillance mechanism also generates various alerts/reports on any price/volume movements of securities not in line with the normal trends/patterns.

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 IISL
India Index Services and Products Limited (IISL), a joint venture of NSE and Credit Rating Information Services of India Limited (CRISIL), was set up in May 1998 to provide indices and index services. It has a consulting and licensing agreement with Standard and Poor's (S&P), the world's leading provider of invest able equity indices, for co-branding equity indices. IISL pools the index development efforts of NSE and CRISIL into a coordinated whole. It is India's first specialized company which focuses upon the index as a core product. It provides a broad range of products and professional index services. It maintains over 70 equity indices comprising broadbased benchmark indices, sectoral indices and customized indices. Many investment and risk management products based on IISL indices have been developed in the recent past. These include index based derivatives on NSE, a number of index funds and India's first exchange traded fund

NSDL
Prior to trading in a dematerialized environment, settlement of trades required moving the securities physically from the seller to the ultimate buyer, through the seller's broker and buyer's broker, which involved lot of time and the risk of delay somewhere along the chain. Further, the system of transfer of ownership was grossly inefficient as every transfer Involved physical movement of paper to the issuer for registration, with the change of ownership being evidenced by an endorsement on the security certificate. In many cases, the process of transfer took much longer than stipulated in the then regulations. Theft, forgery, mutilation of certificates and other irregularities were rampant. All these added to the costs and delays in settlement and restricted liquidity. To obviate these problems and to promote dematerialization of securities, NSE joined hands with UTI and IDBI to set up the first depository in India called the "National Securities Depository Limited" (NSDL). The depository system gained quick acceptance and in a very short span of time it was able to achieve the objective of eradicating paper from the trading and settlement of securities, and was also able to get rid of the risks associated with fake /forged/stolen/bad paper. Dematerialize

NSE.IT
26

NSE.IT Limited, a 100% technology subsidiary of NSE, was incorporated in October 1999 to provide thrust to NSEs technology edge, concomitant with its overall goal of harnessing latest technology for optimum business use. It provides the securities industry with technology that ensures transparency and efficiency in the trading, clearing and risk management systems. Additionally, NSE.IT provides consultancy services in the areas of data warehousing, internet and business continuity plans. Amongst various products launched by NSE.IT are NEAT XS, a Computer-ToComputer Link (CTCL) order routing system, NEAT iXS, an internet trading system and Promos, professional brokers back office system. NSE.IT also offers an elearning ortal, invarsitywww.finvarsity.com) dedicated to the finance sector. The site is powered by Enlitor - a learning management system developed by NSE.IT jointly with an e-learning partner. New initiatives include payment gateways, products for derivatives segments and Enterprise Management Services (EMSs).

NCDEX
NSE joined hand with other financial institutions in India viz., ICICI Bank, NABARD, LIC, PNB, CRISIL, Canara Bank and IFFCO to promote the NCDEX which provide a platform for market participants to trade in wide spectrum of commodity derivatives. Currently NCDEX facilitates trading of 37 agro based commodities, 1 base metal and 2 precious metal.

5. LISTING OF SECURITIES
The stocks, bonds and other securities issued by issuers require listing for providing liquidity to investors. Listing means formal admission of a security to the trading platform of the Exchange. It provides liquidity to investors without compromising the need of the issuer for capital and ensures effective monitoring of conduct of the issuer and trading of the securities in the interest of investors. The issuer wishing to have trading privileges for its securities satisfies listing requirements prescribed in the relevant statutes and in the listing regulations of the Exchange. It also agrees to pay the listing fees and comply with listing requirements on a continuous basis. All the issuers who list their securities have to satisfy the corporate governance requirement framed by regulators.

Benefits of Listing on NSE

NSE provides a trading platform that extends across the length and breadth of the country. Investors from approximately 345 centers can avail of trading facilities on the NSE trading network. Listing on NSE thus, enables issuers to reach and service investors across the country. NSE being the largest stock exchange in terms of trading volumes, the securities trade at low impact cost and are highly liquidity. This in turn reduces the cost of trading to the investor. The trading system of NSE provides unparallel level of trade and post-trade information. The best 5 buy and sell orders are displayed on the trading
27

system and the total number of securities available for buying and selling is also displayed. This helps the investor to know the depth of the market. Further, corporate announcements, results, corporate actions etc are also available on the trading system, thus reducing scope for price manipulation or misuse. The facility of making initial public offers (IPOs), using NSE's network and software, results in significant reduction in cost and time of issues. NSE's web-site www.nseindia.com provides a link to the web-sites of the companies that are listed on NSE, so that visitors interested in any company can visit that company's web-site from the NSE site. Listed companies are provided with monthly trade statistics for the securities of the company listed on the Exchange. The listing fee is nominal.

Listing Agreement
All companies seeking listing of their securities on the Exchange are required to enter into a listing agreement with the Exchange. The agreement specifies all the requirements to be continuously complied with by the issuer for continued listing. The Exchange monitors such compliance. Failure to comply with the requirements invites suspension of trading, or withdrawal/delisting, in addition to penalty under the Securities Contracts (Regulation) Act, 1956. The agreement is being increasingly used as a means to improve corporate governance.

De-listing
The securities listed on NSE can be de-listed from the Exchange as per the SEBI (Delisting of Securities) Guidelines, 2003 in the following manner:

Voluntary De-listing of Companies

Any promoter or acquirer desirous of delisting securities of the company under the provisions of these guidelines shall obtain the prior approval of shareholders of the company by a special resolution passed at its general meeting, make a public announcement in the manner provided in these guidelines, make an application to the delisting exchange in the form specified by the exchange, and comply with such other additional conditions as may be specified by the concerned stock exchanges from where securities are to be de-listed. Any promoter of a company which desires to de-list from the stock exchange shall also determine an exit price for delisting of securities in accordance with the book building process as stated in the guidelines. The stock exchanges shall provide the infrastructure facility for display of the price at the terminal of the trading members to enable the investors to access the price on the screen to bring transparency to the delisting process.

Compulsory De-listing of Companies

28

The stock exchanges may de-list companies which have been suspended for a minimum period of six months for non-compliance with the listing agreement. The stock exchanges have to give adequate and wide public notice through newspapers and also give a show cause notice to a company. The exchange shall provide a time period of 15 days within which 30 representation may be made to the exchange by any person who may be aggrieved by the proposed delisting. Where the securities of the company are de-listed by an exchange, the promoter of the company shall be liable to compensate the security holders of the company by paying them the fair value of the securities held by them and acquiring their securities, subject to their option to remain security-holders with the company.

6. MEMBERSHIP ADMINISTRATION
The trading in NSE has a three tier structure-the trading platform provided by the Exchange, the broking and intermediary services and the investing community. The trading members have been provided exclusive rights to trade subject to their continuously fulfilling the obligation under the Rules, Regulations, Byelaws, Circulars, etc. of the Exchange. The trading members are subject to its regulatory discipline. Any entity can become a trading member by complying with the prescribed eligibility criteria and exit by surrendering trading membership. There are no entry/exit barriers to trading membership.

Eligibility Criteria
The Exchange stresses on factors such as corporate structure, capital adequacy, track record, education, experience, etc. while granting trading rights to its members. This reflects a conscious effort by the Exchange to ensure quality broking services which enables to build and sustain confidence in the Exchange's operations. The standards stipulated by the Exchange for trading membership are substantially in excess of the minimum statutory requirements as also in comparison to those stipulated by other exchanges in India. The exposure and volume of transactions that can be undertaken by a trading member are linked to liquid assets in the form of cash, bank guarantees, etc. deposited by the member with the Exchange as part of the membership requirements. The trading members are admitted to the different segments of the Exchange subject to the provisions of the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the rules, circulars, notifications, guidelines, etc., issued there under and the byelaws, Rules and Regulations of the Exchange. All trading members are registered with SEBI.

Transaction Charges
In addition to annual fees, members are required to pay transaction charges on trades undertaken by them. They pay transaction charges at the rate of Rs. 4 for every Rs. 1 lakh of turnover in the CM segment, at the rate of Rs. 2 for every Rs. 1 lakh of turnover in Futures contracts and at the rate of 5 paise per Rs. 1 lakh gross trade
29

value up to Rs. 25,000 crors and at the rate of 2 paise per Rs. 1 lakh gross traded value above Rs. 25,000 crors subject to minimum of Rs. 10,000 per annum in the WDM segment. For the transactions in the Options sub-segment the transaction charges are levied on the premium value at the rate of 0.05% (each side).

7. INVESTOR GRIEVANCES
Investors are the backbone of the securities market. Protection of their interests is paramount for NSE. In furtherance of their interests, NSE has put in place systems to ensure availability of adequate, up-to-date and correct information to investors to enable them to take informed decisions. It ensures that critical and price-sensitive information reaching the exchange is made available to all classes of investor at the same point of time. Such price-sensitive information as bonus announcements, mergers, new line of business, etc. received from the companies is disseminated to all the market participants through the network of NSE terminals all over India. Action is initiated by the Exchange whenever any kind of price sensitive information is not provided to the Exchange at the prescribed time by companies listed on the Exchange. In an attempt to ease the existing system of information dissemination by the listed companies, NSE launched the electronic interface for listed companies in August 2004. Under the new system, all corporate announcements including that of Board meetings which needs to be disclosed to the market is handled electronically in a straight through and hands free manner. The Exchange also conducts various seminars and programs for the investors all over the country with a view of educating them on their rights and obligations. Investors are also made aware of the precautions they need to take while dealing in the securities market. The Exchange makes an audit trail available on request for all transactions executed on NSE to enable investors to counter-check trade details for the trades executed on his behalf by the member. The Exchange has also prescribed and makes efforts to ensure the implementation of various safeguards like time schedules for issuing contract notes, for receiving funds and securities purchased by investors, segregation of client funds and securities from those of members, etc. In spite of all the necessary steps taken by the Exchange to offer quality services to investors, it is possible that some investors may still have certain complaints, grievances. For this NSE has put in place a system for redressal of investor grievances for matters/issues related to/against trading members/listed companies. The Investor Grievance Cell (IGC) of NSE is manned by a team of professionals possessing relevant experience in the areas of securities markets, company and legal affairs and specially trained to identify problems faced by the investor and to find and effect a solution quickly. It takes up complaints in respect of trades executed on the NSE through its NEAT terminal and routed through the NSE trading member or SEBI registered sub-broker of NSE trading member and trades pertaining to companies traded on NSE.

8. DEMATERIALISATION & REMATERIALISATION DEMATERIALISATION

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 MEANING
Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited into the investor's account with his/her DP.

Dematerialising securities (physical holding into electronic holding)

In order to dematerialise physical securities one has to fill in a DRF (Demat Request Form) which is available with the DP and submit the same along with physical certificates one wishes to dematerialise. Separate DRF has to be filled for each ISIN Number. The complete process of dematerialisation is outlined below: Surrender certificates for dematerialisation to your depository participant. Depository participant intimates Depository of the request through the system. Depository participant submits the certificates to the registrar of the Issuer Company. Registrar confirms the dematerialisation request from depository. After dematerialising the certificates, Registrar updates accounts and informs depository of the completion of dematerialisation. Depository updates its accounts and informs the depository participant. Depository participant updates the demat account of the investor.

REMATERIALISATION
The process of rematerialisation is used to convert the electronic holding into physical holdings. If one wishes to get back his securities in the physical form one has to fill in the RRF (Remat Request Form) and request his DP for rematerialisation of the balances in his securities account. The process of rematerialisation is outlined below: One makes a request for dematerialisation. Depository participant intimates depository of the request through the system. Depository confirms dematerialisation request to the registrar. Registrar updates accounts and prints certificates. Depository updates accounts and downloads details to depository participant. Registrar dispatches certificates to investor

Procedure for buying & selling dematerialised securities

The procedure for buying and selling dematerialised securities is similar to the procedure for buying and selling physical securities. The difference lies in the process of delivery (in case of sale) and receipt (in case of purchase) of securities.

In case of purchase:-

1. The broker will receive the securities in his account on the payout day 2. The broker will give instruction to its DP to debit his account and credit investor's account 3. Investor will give Receipt Instruction to DP for receiving credit by filling appropriate form. However one can give standing instruction for credit
31

into ones account that will obviate the need of giving Receipt Instruction every time.

In case of sale:-

The investor will give delivery instruction to DP to debit his account and credit the brokers account. Such instruction should reach the DPs office at least 24 hours before the pay-in as other wise DP will accept the instruction only at the investors risk.

9. BROKER & SUB-BROKER BROKER

A broker is a member of a recognized stock exchange, who is permitted to do trades on the screen-based trading system of different stock exchanges. He is enrolled as a member with the concerned exchange and is registered with SEBI.

SUB BROKER
A sub broker is a person who is registered with SEBI as such and is affiliated to a member of a recognized stock exchange.

This form is an agreement entered between client and broker in the presence of witness where the client agrees (is desirous) to trade/invest in the securities listed on the concerned Exchange through the broker after being satisfied of brokers capabilities to deal in securities. The member, on the other hand agrees to be satisfied by the genuineness and financial soundness of the client and making client aware of his (brokers) liability for the business to be conducted.

Client Agreement Form

Details of Client Registration form

The brokers have to maintain a database of their clients, for which you have to fill client registration form. In case of individual client registration, you have to broadly provide following information: Your name, date of birth, photograph, address, educational qualifications, occupation, residential status(Resident Indian/ NRI/others) Unique Identification Number (wherever applicable) Bank and depository account details Income tax No. (PAN/GIR) which also serves as unique client code. If you are registered with any other broker, then the name of broker and concerned Stock exchange and Client Code Number. Proof of identity submitted either as MAPIN UID Card/Pan No./Passport/Voter ID/Driving license/Photo Identity card issued by Employer registered under MAPIN

For proof of address (any one of the following):

1. Passport 2. Voter ID
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3. Driving license 4. Bank Passbook 5. Rent Agreement 6. Ration Card 7. Flat Maintenance Bill 8. Telephone Bill 9. Electricity Bill 10. Certificate issued by employer registered under MAPIN 11. Insurance Policy Each client has to use one registration form. In case of joint names /family members, a separate form has to be submitted for each person.

In case of Corporate Client, following information has to be provided:

1. Name, address of the Company/Firm 2. Unique Identification Number (wherever applicable) 3. Date of incorporation and date of commencement of business. 4. Registration number(with ROC, SEBI or any government authority) 5. Details of PAN Account Number: 6. Details of Promoters/Partners/Key managerial Personnel of the Company/Firm in specified format. 7. Bank and Depository Account Details 8. Copies of the balance sheet for the last 2 financial years (copies of annual balance sheet to be submitted every year) 9. Copy of latest share holding pattern including list of all those holding more than 5% in the share capital of the company, duly certified by the Company Secretary / Whole time Director/MD. (copy of updated shareholding pattern to be submitted every year) 10. Copies of the Memorandum and Articles of Association in case of a company / body incorporate / partnership deed in case of a partnership firm 11. Copy of the Resolution of board of directors' approving participation in equity / derivatives / debt trading and naming authorized persons for dealing in securities. 12. Photographs of Partners/Whole time directors, individual promoters holding 5% or more, either directly or indirectly, in the shareholding of the company and of persons authorized to deal in securities. 13. If registered with any other broker, then the name of broker and concerned Stock exchange and Client Code Number.

Maximum brokerage that a broker/sub broker can charge

The maximum brokerage that can be charged by a broker has been specified in the Stock Exchange Regulations and hence, it may differ from across various exchanges. As per the BSE & NSE Bye Laws, a broker cannot charge more than 2.5% brokerage from his clients. This maximum brokerage is inclusive of the brokerage charged by the
33

sub-broker. Further, SEBI (Stock brokers and Sub brokers) Regulations, 1992 stipulates that sub broker cannot charge from his clients, a commission which is more than 1.5% of the value mentioned in the respective purchase or sale note.

10. Settlement and Settlement Cycles

Settlement refers to the process in which traders who have made purchases make payments while those who have sold shares, deliver them. The exchange ensures that buyers receive their shares either in the physical or the demat form. Similarly, sellers who have delivered shares to the exchange receive payment for the same. The process of settlement is managed by stock exchanges through Clearing House (CH) entities, formed specifically to ensure that the process of settlement takes place smoothly. SEBI introduced a new settlement cycle known as the rolling settlement cycle from Jan 12, 2000.

NSE Settlement life Cycle

The NSE settlement cycle is a weekly cycle. It begins on Wednesday (Day1) and ends on the following Tuesday (Day7). There are therefore 5 trading days in the weekly settlement cycle, as trading doesn't take place on Saturdays and Sundays. All the trades, which take place from and during the weekly-cycle (Day1-7), are settled on the following Monday, Tuesday and Wednesday (Day 13,14,15). All securities are delivered to the NSE Clearing House (CH) on Monday (Day 13) and all payments are made on Tuesday (Day14). The CH makes the payment and delivery of shares to brokers on Wednesday (Day15), who would then transfer it to their clients. This means that if you buy a share on any day from Day 1-7 (Wednesday to Tuesday), the payment will have to be made to the CH on Day 14. Shares will then be delivered to your broker on Day 15, and subsequently will be transferred to your demat account on Day 16.

Settlement life Cycle on NSE:

Day T T+1 working days T+1 working day T+2 working day T+2 working day T+2 working day T+3 working day Type of Activity Trading Clearing Settlement Activity Rolling Settlement Trading Custodial Confirmation Delivery Generation Securities and Funds pay in Securities and Funds pay out Valuation Debit Auction
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Post Settlement

T+4 working day T+5 working day T+6 working day T+8 working day T+9 working days

Bad Delivery Reporting Auction settlement Rectified bad delivery pay-in and pay-out Re-bad delivery reporting and pickup Close out of re-bad delivery and funds pay-in & pay-out

11. AUCTION WHAT IS AN AUCTION?

The Exchange purchases the requisite quantity in the Auction Market and gives them to the buying trading member. The shortages are met through auction process and the difference in price indicated in contract note and price received through auction is paid by member to the Exchange, which is then liable to be recovered from the client.

What happens if the shares are not bought in the auction?

If the shares could not be bought in the auction i.e. if shares are not offered for sale in the auction, the transactions are closed out as per SEBI guidelines. The guidelines stipulate that the close out Price will be the highest price recorded in that scrip on the exchange in the settlement in which the concerned contract was entered into and up to the date of auction/close out OR 20% above the official closing price on the exchange on the day on which auction offers are called for (and in the event of there being no such closing price on that day, then the official closing price on the immediately preceding trading day on which there was an official closing price), whichever is higher. Since in the rolling settlement the auction and the close out takes place during trading hours, the reference price in the rolling settlement for close out procedures would be taken as the previous days closing price.

COMMODITY EXCHANGES There are three categories:

NCDEX MCX NMCE
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A brief description of commodity exchanges are those which trade in particular commodities, neglecting the trade of securities, stock index futures and options etc. In the middle of 19th century in the United States, businessmen began Organizing market forums to make the buying and selling of commodities easier. These central marketplaces provided a place for buyers and sellers to meet, set quality and quantity standards, and establish rules of business. Agricultural commodities were mostly traded but as long as there are buyers and sellers, any commodity can be traded. In 1872, a group of Manhattan dairy merchants got together to bring chaotic condition in New York market to a system in terms of storage, pricing, and transfer of agricultural products. In 1933, during the Great Depression, the Commodity Exchange, Inc. was established in New York through the merger of four small exchanges the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. The major commodity markets are in the United Kingdom and in the USA. In India there are 25 recognized future exchanges, of which there are three national level multi-commodity exchanges. After a gap of almost three decades, Government of India has allowed forward transactions in commodities through Online Commodity Exchanges, a modification of traditional business known as Adhat and Vayda Vyapar to facilitate better risk coverage and delivery of commodities.

The three exchanges are:

1. 2. 3.

National Commodity & Derivatives Exchange Limited (NCDEX) Multi Commodity Exchange of India Limited (MCX) National Multi-Commodity Exchange of India Limited (NMCL)

All the exchanges have been set up under overall control of Forward Market Commission (FMC) of Government of India.

National Commodity & Derivatives Exchange Limited (NCDEX)

National Commodity & Derivatives Exchange Limited (NCDEX) located in Mumbai is a public limited company incorporated on April 23, 2003 under the Companies Act, 1956 and had commenced its operations on December 15, 2003.This is the only commodity exchange in the country promoted by national level institutions. It is promoted by ICICI Bank Limited, Life Insurance Corporation of India (LIC), National Bank for Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSE). It is a professionally managed online multi commodity exchange. NCDEX is regulated by Forward Market Commission and is subjected to various laws of the land like the Companies Act, Stamp Act, Contracts Act, Forward Commission (Regulation) Act and various other legislations.

Multi Commodity Exchange of India Limited (MCX)

36

Headquartered in Mumbai Multi Commodity Exchange of India Limited (MCX), is an independent and de-mutulised exchange with a permanent recognition from Government of India. Key shareholders of MCX are Financial Technologies (India) Ltd., State Bank of India, Union Bank of India, Corporation Bank, Bank of India and CanaraBank. MCX facilitates online trading, clearing and settlement operations for commodity futures markets across the country. MCX started offering trade in November 2003 and has built strategic alliances with Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors Association of India, Pulses Importers Association and Shetkari Sanghatana.

National Multi-Commodity Exchange of India Limited (NMCEIL)

National Multi Commodity Exchange of India Limited (NMCEIL) is the first demutualzed , Electronic Multi-Commodity Exchange in India. On 25th July, 2001, it was granted approval by the Government to organize trading in the edible oil complex. It has operationalised from November 26, 2002. It is being supported by Central Warehousing Corporation Ltd., Gujarat State Agricultural Marketing Board and Neptune Overseas Limited. It got its recognition in October 2000. Commodity exchange in India plays an important role where the prices of any commodity are not fixed, in an organized way. Earlier only the buyer of produce and its seller in the market judged upon the prices. Others never had a say. Today, commodity exchanges are purely speculative in nature. Before discovering the price, they reach to the producers, end-users, and even the retail investors, at a grassroots level. It brings a price transparency and risk management in the vital market. A Big difference between a typical auction, where a single auctioneer announces the bids , and the Exchange is that people are not only competing to buy but also to sell. By Exchange rules and by law, no one can bid under a higher bid, and no one can offer to sell higher than someone elses lower offer. That keeps the market as efficient as possible, and keeps the traders on their toes to make sure no one gets the purchase or sale before they do.

Categories of stocks
"A" "B1,B2" "C" "Z" are from the equities and "F" is from debt markt.. 'A' Group is a category where there is a facility for carry forward to the next settlement cycle. These are companies with fairly good growth record in terms of dividend and capital appreciation. The scrips in this group are classified on the basis of equity capital, market capitalisation, number of years of listing on the exchange, public share holding, floating stock, trading volume etc. 'B1, B2'Group is a subset of the other listed shares that enjoy higher market capitalisation and liquidity than the rest. 'C' group covers the odd lot securities in 'A', 'B1' & 'B2' groups 'T'' Also termed as the trade to trade group this category comprises of shares which have to be settled in delivery for all buys and sells and square off of bought and sold positions during the day is not permitted. This is a part of the survelience from the BSE to counter any ackward unwarranted movements in such scrips 'Z' Group category comprises of shares of the companies which does not comply with the rules
37

and regulations of the Stock Exchange and are at times suspended from trading due to the above said reasons The trading cycle for the above scrips is from monday to friday and starting sat(carry forward for A scrips) the settlement by payment of money and delivery of securities in the following week. 'F' Group represents the debt market segment Primarily there are five groups in which the listed stocks are divided and they are A, B, T, Z, and F. The A group comprises stocks that have fairly good growth rate. These companies offer dividend to the investors and have good capital appreciation over the time. The stocks that are listed with A category have the facility to carry forward to the next settlement cycle. This is an advantage from the margin and derivative trading point of view. The category B is basically a subset of all the listed stocks and the stocks listed in this category have greater market capitalization that the rest of the stocks. The trading of the stocks that are listed in the T category needs to be settled on the very trading day and the deals can not be carried forward. This is done by BSE to restrict any unwanted movement in these scripts. The stocks in the Z group are marked for not complying with the rules and regulations of the stock exchange and these stocks are often suspended from trading. The F group is reserved for the stocks listed at the debt market.

Investment options in equities

Margin Delivery BTST Futures and Options

Margin:
Margin trading is also called as intraday trading. Intraday trading is typically completed within a day that means you have sell the stocks that you have purchased that day before the closing of the exchange. Even if you do not sell the stocks by yourself, they will automatically square off before the closing of the exchange. Advantages Of intraDay Trading In day trading you can buy stocks without paying for the full price of the stocks. The market makers allow you pay only a part of the price to hold the shares. So, you can gain more by investing less. In day trading you can always short sell the stocks that mean you can always sell the stocks before buying them and then buy the stocks before the closing of the market. This is one benefit that can give you profit even when the price of the stock is sure to fall. The brokerage of the intraday trading is always lower than the delivery trading. In day trading you are getting the profit on the very day. So, you investment is for a few hours only. Therefore, even if the stock price rises, a little your profit percentage is significant. You get back the money each day after the market closes and hence you can always start afresh the next morning. Disadvantages Of Intraday Trading
38

The biggest disadvantage of intraday trading is the time frame. You have to sell the stocks within a day. So, if the stock loses price you are sure to loose money.

Delivery:
In case of delivery based investment or long term investment, you can sell the stocks as and when you wish to sell or buy them. Advantages Of Delivery Based Trading With delivery based trading, you can always hold a stock till it reaches the expected price. The long term investment can always get you dividend. You can also benefit from split shares, bonus stocks and other benefits that the company announces. Disadvantage Of Delivery Based Trading In delivery trading you pay higher brokerage. Your investment is always susceptible to market crashes, business cycles and other factors. Whatever it is, as an investor, you should know which stock is for intraday trading and which one is to hold as long term investment.

BTST:
Buy Today Sell Tomorrow (BTST ) is a facility that allows you to sell shares even one day after the buy order date, without you having to wait for the receipt of shares into your demat account. Futures and options represent two of the most common form of "Derivatives". Derivatives are financial instruments that derive their value from an 'underlying'. The underlying can be a stock issued by a company, a currency, Gold etc., The derivative instrument can be traded independently of the underlying asset. The value of the derivative instrument changes according to the changes in the value of the underlying.

Futures
A 'Future' is a contract to buy or sell the underlying asset for a specific price at a pre-determined time. If you buy a futures contract, it means that you promise to pay the price of the asset at a specified time. If you sell a future, you effectively make a promise to transfer the asset to the buyer of the future at a specified price at a particular time. Every futures contract has the following features: Buyer Seller Price Expiry Some of the most popular assets on which futures contracts are available are equity stocks, indices, commodities and currency. The difference between the price of the underlying asset in the spot market and the futures market is called 'Basis'. (As 'spot market' is a market for immediate delivery) The basis is usually negative, which means that the price of the asset in the futures market is more than the price in the spot market. This is because of the interest cost, storage cost, insurance premium etc., That is, if you buy the asset in the spot market, you will be incurring all these expenses, which are not needed if you buy a futures contract. This condition of basis being negative is called as 'Contango'.
39

Sometimes it is more profitable to hold the asset in physical form than in the form of futures. For eg: if you hold equity shares in your account you will receive dividends, whereas if you hold equity futures you will not be eligible for any dividend. When these benefits overshadow the expenses associated with the holding of the asset, the basis becomes positive (i.e., the price of the asset in the spot market is more than in the futures market). This condition is called 'Backwardation'. Backwardation generally happens if the price of the asset is expected to fall. It is common that, as the futures contract approaches maturity, the futures price and the spot price tend to close in the gap between them ie., the basis slowly becomes zero.

Options
Options contracts are instruments that give the holder of the instrument the right to buy or sell the underlying asset at a predetermined price. An option can be a 'call' option or a 'put' option. A call option gives the buyer, the right to buy the asset at a given price. This 'given price' is called 'strike price'. It should be noted that while the holder of the call option has a right to demand sale of asset from the seller, the seller has only the obligation and not the right. For eg: if the buyer wants to buy the asset, the seller has to sell it. He does not have a right. Similarly a 'put' option gives the buyer a right to sell the asset at the 'strike price' to the buyer. Here the buyer has the right to sell and the seller has the obligation to buy. So in any options contract, the right to exercise the option is vested with the buyer of the contract. The seller of the contract has only the obligation and no right. As the seller of the contract bears the obligation, he is paid a price called as 'premium'. Therefore the price that is paid for buying an option contract is called as premium.

Systematic Risk It influences a large number of assets. A significant political event,

for example, could affect several of the assets in your portfolio. It is virtually impossible to protect yourself against this type of risk. Unsystematic Risk Is sometimes referred to as "specific risk". This kind of risk affects a very small number of assets. An example is news that affects a specific stock such as a sudden strike by employees. Diversification is the only way to protect yourself from unsystematic risk.

Interest Rate Risk - Is the risk that an investment's value will change as a result of a
change in interest rates. This risk affects the value of bonds more directly than stocks

Political Risk - represents the financial risk that a country's government will suddenly
change its policies. This is a major reason why developing countries lack foreign investment.
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Market Risk - This is the most familiar of all risks. Also referred to as volatility,
market risk is the the day-to-day fluctuations in a stock's price. Market risk applies mainly to stocks and options. As a whole, stocks tend to perform well during a bull market and poorly during a bear market - volatility is not so much a cause but an effect of certain market forces. Volatility is a measure of risk because it refers to the behavior, or "temperament", of your investment rather than the reason for this behavior. Because market movement is the reason why people can make money from stocks, volatility is essential for returns, and the more unstable the investment the more chance there is that it will experience a dramatic change in either direction.

Credit or Default Risk -Is the risk that a company or individual will be unable to
pay the contractual interest or principal on its debt obligations. This type of risk is of particular concern to investors who hold bonds in their portfolios. Government bonds, especially those issued by the federal government, have the least amount of default risk and the lowest returns, while corporate bonds, tend to have the highest amount of default risk but also higher interest rates. Bonds with a lower chance of default are considered to be investment grade, while bonds with higher chances are considered to be junk bonds. Bond rating services, such as Moody's, allows investors to determine which bonds are investment-grade, and which bonds are junk.

Foreign-Exchange Risk - When investing in foreign countries you must consider

the fact that currency exchange rates can change the price of the asset as well. Foreignexchange risk applies to all financial instruments that are in a currency other than your domestic currency. As an example, if you are a resident of America and invest in some Canadian stock in Canadian dollars, even if the share value appreciates, you may lose money if the Canadian dollar depreciates in relation to the American dollar.

Operational risk- Operational risk is a risk arising from execution of a Companys business
functions.

NSE Derivative weightage

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Business Growth in Derivatives Segment (NSE) Index Futures

Year 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 No.of contracts 79897214 178306889 210428103 156598579 81487424 58537886 21635449 17191668 2126763 1025588 90580

Number of contracts per year

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 Interpretation:
From the data and the bar diagram above, there is high business growth in derivative segment in india. In the year 2000-01 the number of contracts in index future were 90580 where as a significant increase of 79897214 in 2010-11.

Index Futures Number of turnovers per year

Years 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 Turnover 2019875.96 3934388.67 3570111.4 3820667.27 2539574 1513755 772147 554446 43952 21483 2365

Turnover in Rs.cr

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 Interpretation:
From the data and bar chart above there is high turnover in the derivative segment in india.In the year 2000-01the turnover of inex future was 2365 there was ahuge increase of 2019875.96 in the year 2010-11 was observed.

Stock Futures
Years 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 No.of contracts 88825701 145591240 221577980 203587952 104955401 80905493 47043066 32368842 10676843 1957856 _

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 Interpretation:
From the data and the bar diagram above there were no stock futures available but in the year 2001-02 it predominately increased to 1957856.Then there was huge increase in the year 2008-09 by 221577980 but there was study decline to 88825701 in the year 2010-11. . No.of turnovers Year 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 Turnover 2738550.1 5195246.64 3479642.12 7548563.23 3830967 2791697 1484056 1305939 286533 51515 _

Turnover in Rs.cr

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 Interpretation:
From the data and bar chart above, there were no stock futures available in the year 2000-01. There was a steady increase of stock future 51515 in the year 2001-02. but in the year there was a huge increae of 7548563.23 in the year2007-08 with a considerable decline of 2738550.1 in the year 2010-11.

Index options
Year 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 No.of contracts 266667351 341379523 212088444 55366038 25157438 12935116 3293558 1732414 442241 175900

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 Interpretation:
From the data and bar chart above, the no of contracts of index option was nil in the year 2000-2001. But there was a predominant increase of 1,75,900 in the year 2001-2002. In the year 2009-2010 there was a huge increase in the index option contracts to 341379523 and a decline of 266667351 in the year 2010-2011. Turnover per year in Rs.cr Years Turnover(Rs.cr) 2010-11 7182162.05 2009-10 8027964.2 2008-09 3731501.84 2007-08 1362110.88 2006-07 791906 2005-06 338469 2004-05 121943 2003-04 52816 2002-03 9246 2001-02 3765 2000-01

Turnover in Rs.cr

47

 Interpretation:
From the data and bar chart above, there was no turnover in the year 2000-2001 for Index option. It slowly started increasing in the year 2000-2001 to 3765.But in the year 2009-2010 there was a huge increase of 8027964.2 and a sudden decline to 7182162.05 observed in 2010-2011.

Stock Options
Years 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 No.of contracts 15437389 14016270 13295970 9460631 5283310 5240776 5045112 5583071 3523062 1037529

Number of contracts traded per year in stock option

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Interpretation:

From the data and bar chart above the no of contracts of stock option in the year 2000-2001 was nil. But there was a huge increase of 1037529 observed in the year 2001-2002. It was 9460631 which was the the highest in the year 2007-2008.Then a huge increase of 15437389 in the year 20102011.

Notional Turnover per year in Rs.cr NotionalTurnover(Rs.cr) 511156.02 506065.18 229226.81 359136.55 193795 180253 168836 217207 100131 25163

Years 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01

Notional turnover in Rs.cr

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Interpretation:

From the chart and the bar diagram above the stock option turnover in the year 2000-2001 was nil. There was a slow increase of 25163 in the year 2001-2002.But a phenomenal increase of 359136.55 in the year 2007-2008, and a decline of 58355.03 in the year 2008-2009. Then an increase of 511156.02 in the year 2010-2011.

Overall trading
Years 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 No.of contracts 450827655 679293922 657390497 425013200 216883573 157619271 77017185 56886776 16768909 4196873 90580 Turnover 12451744 17663665 11010482 13090478 7356242 4824174 2546982 2130610 439862 101926 2365

50

Interpretation:

From the data and bar chart above, the overall trading contracts in the year 2000-2001 was 90580 and huge increase of 657390497 in the year 2008-2009. then there was decline of 450827655 in the year 2010-2011. From the data and bar chart above the overall trading turnover in the year 20002001 was as low as 2365 but a predominant increase of 17663665 observed in The year 2009-10 then a decline of 12451744 in the year 2010-11. Graphs of Three companies: 1st day data graphs open price NSE BSE Coal India 315.5 316.3 PSB 129.9 128.9 MOIL 454 451

Companies Investment

Coal India Limited 400000

PSB 300000

MOIL 300000
51

Offer price Buy Price No. of shares

245 245 1633

120 120 2500

375 375 800

Companies Open price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

Coal India 315.5 316.3 515211 516518 115211 116518

PSB 129.9 128.9 324750 322250 24750 22250 203161 199568

MOIL 454 451 363200 360800 63200 60800

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000, in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we getNo. of Shares).In NSE the open price is 315.5 and in BSE is 316.3.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 515211 and BSE is 516518.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 115211,116518 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the open price is 129.9 and in BSE is 128.9.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 324750 and BSE is 322250.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 24750,22250 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the open price is 454 and in BSE is 451.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 363200 and BSE is 360800.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 63200,60800 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 203161 and 199568 in NSE and BSE respectively. The investor got more profit in NSE than in BSE. Low price NSE 314.55 128.1

Coal India PSB

BSE 314.55 128.05

52

MOIL

450.8

451

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633

PSB 300000 120 120 2500 Coal India 314.55 314.55 513660 513660 113660 113660

MOIL 300000 375 375 800

Companies Low price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

PSB 128.1 128.05 320250 320125 20250 20125 194550 194585

MOIL 450.8 451 360640 360800 60640 60800

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000, in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 314.55 and in BSE is 314.55.By
53

multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 513660 and BSE is 513660.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 113660,113660 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 128.1 and in BSE is 128.05.By multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 320250 and BSE is 320125.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 20250,20125 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 450.8 and in BSE is 451.By multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 360640 and BSE is 360800.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 60640,60800 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 194550 and 194585 in NSE and BSE respectively. The investor got more profit in BSE than in NSE. Volume NSE 2929118 4209015 1777912

Coal India PSB MOIL

BSE 192531638 241539478 430908986

Companies Investment Offer price Buy Price No. of shares Companies Volume

Coal India Limited 400000 245 245 1633

PSB 300000 120 120 2500 Coal India 2929118

MOIL 300000 375 375 800 MOIL 1777912

54

NSE

PSB 4209015

BSE Portfolio value Profit Total Profit NSE BSE NSE BSE NSE BSE

192531638 4783249694

241539478

430908986

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000, in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 314.55 and in BSE is 314.55.By multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 513660 and BSE is 513660.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 113660,113660 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 128.1 and in BSE is 128.05.By multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 320250 and BSE is 320125.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 20250,20125 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 450.8 and in BSE is 451.By multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 360640 and BSE is 360800.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 60640,60800 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 194550 and 194585 in NSE and BSE respectively. The investor got more profit in BSE than in NSE. High price NSE 318 131.15 460.5

Coal india PSB MOIL

BSE 318.4 131.25 460.5

55

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633 Coal India 318 318.4 519294 519947 119294 119947

PSB 300000 120 120 2500

MOIL 300000 375 375 800

Companies High price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

PSB 131.15 131.25 327875 328125 27875 28125 215569 216472

MOIL 460.5 460.5 368400 368400 68400 68400

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the High price is 318 and in BSE is 318.4.By multiplying high price with number of shares we get portfolio value. The portfolio of NSE is 519294 and BSE is 519947.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 119294,119947 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the high price is 131.15 and in BSE is 131.25.By multiplying high price with number of shares we get portfolio value. The

56

portfolio of NSE is 327875 and BSE is 328125.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 27875,28125 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the high price is 460.5 and in BSE is 460.5.By multiplying high price with number of shares we get portfolio value. The portfolio of NSE is 368400 and BSE is 368400.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 68400,68400 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 215569 and 216472 in NSE and BSE respectively. The investor got more profit in BSE than in NSE. Close price NSE BSE Coal India 317.3 317.4 PSB 129.5 129.5 MOIL 453.95 453.65

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633

PSB 300000 120 120 2500

MOIL 300000 375 375 800

Companies Close price Portfolio

NSE BSE NSE

Coal India 317.3 317.4 518151

PSB 129.5 129.5 323750

MOIL 453.95 453.65 363160

57

value Profit Total Profit BSE NSE BSE NSE BSE 518314 118151 118314 323750 23750 23750 205061 204984 362920 63160 62920

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 317.3 and in BSE is 317.4.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 518151 and BSE is 518314.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 118151,118314 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 129.5 and in BSE is 129.5.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 323750 and BSE is 323750.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 23750,23750 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 453.95 and in BSE is 453.65.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 363160 and BSE is 362920.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 63160,62920 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 205061 and 204984 in NSE and BSE respectively. The investor got more profit in NSE than in BSE.

Last day data graphs

Open price NSE 310.45 120.8 440

Coal india PSB MOIL

BSE 310 120.45 442.5

58

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633 Coal India 310.45 310 506965 506230 106965 106230

PSB 300000 120 120 2500

MOIL 300000 375 375 800

Companies Open price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

PSB 120.8 120.45 302000 301125 2000 1125 160965 161355

MOIL 440 442.5 352000 354000 52000 54000

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the open price is 310.45 and in BSE is 310.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 506965 and BSE is 506230.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 106965,106230respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the open price is 120.8 and in BSE is 120.45.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 302000 and BSE is 301125.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 2000,1125 respectively.
59

c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the open price is 440 and in BSE is 442.5.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 352000 and BSE is 354000.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 52000,54000 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 160965 and 161355 in NSE and BSE respectively. The investor got more profit in BSE than in NSE. close price NSE 310.5 119.3 435.65

Coal india PSB MOIL

BSE 310.15 118.85 435.15

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633 Coal India 310.5 310.15 507046 506475 107046

PSB 300000 120 120 2500

MOIL 300000 375 375 800

Companies Close price Portfolio value Profit

NSE BSE NSE BSE NSE

PSB 119.3 118.85 298250 297125 -1750

MOIL 435.65 435.15 348520 348120 48520

60

Total Profit

BSE NSE BSE

106475

-2875 153816 151720

48120

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 310.5 and in BSE is 310.15.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 507046 and BSE is 506475.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 107046,106475respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 119.3 and in BSE is 118.85.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 298250 and BSE is 297125.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are -1750,-2875 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 435.65 and in BSE is 435.15.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 348520 and BSE is 348120.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 48520,48120 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 153816 and 151720 in NSE and BSE respectively. The investor got more profit in NSE than in BSE. High price NSE BSE 315.5 315.65 120.8 120.45 441.95 442.5

Coal india PSB MOIL

61

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633 Coal India 315.5 315.65 515211 515456 115211 115456

PSB 300000 120 120 2500

MOIL 300000 375 375 800

Companies High price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

PSB 120.8 120.45 302000 301125 2000 1125 170771 170581

MOIL 441.95 442.5 353560 354000 53560 54000

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the high price is 315.5 and in BSE is 315.65.By multiplying high price with number of shares we get portfolio value. The portfolio of NSE is 515211 and BSE is 515456.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 115211,115456respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the high price is 120.8 and in BSE is 120.45.By multiplying high price with number of shares we get portfolio value. The portfolio of NSE is 302000 and BSE is 301125.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 2000,1125 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the high price is 441.95 and in BSE is 442.5.By multiplying high price with number of shares we get portfolio value. The portfolio of NSE is 353560 and BSE is 354000.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 53560,54000 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 170771 and 170581 in NSE and BSE respectively. The investor got more profit in NSE than in BSE.

Inception data graphs

Low
62

Coal India PSB MOIL

price NSE 291 126.2 456.65

BSE 287.45 126.2 458.5

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633

PSB 300000 120 120 2500

MOIL 300000 375 375 800

Companies Low price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

Coal India 291 287.45 475203 469405 75203 69405

PSB 126.2 126.2 315500 315500 15500 15500 156023 151705

MOIL 456.65 458.5 365320 366800 65320 66800

63

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 291 and in BSE is 287.45.By multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 475203 and BSE is 469405.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 75203,69405respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 126.2 and in BSE is 126.2.By multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 315500 and BSE is 315500.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 15500,15500 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the low price is 456.65 and in BSE is 458.5.By multiplying low price with number of shares we get portfolio value. The portfolio of NSE is 365320 and BSE is 366800.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 65320,66800 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 156023 and 151705 in NSE and BSE respectively. The investor got more profit in NSE than in BSE. open price NSE 291 144 565

Coal India PSB MOIL

BSE 287.75 146.1 551

Companies Investment

Coal India Limited 400000

PSB 300000

MOIL 300000
64

Offer price Buy Price No. of shares

245 245 1633 Coal India Limited 291 287.75 475203 469896 75203 69896

120 120 2500

375 375 800

Companies Open price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

PSB 144 146.1 360000 365250 60000 65250 287203 275946

MOIL 565 551 452000 440800 152000 140800

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the open price is 291 and in BSE is 287.75.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 475203 and BSE is 469896.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 75203,69896respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the open price is 144 and in BSE is 146.1.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 360000 and BSE is 365250.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 60000,65250 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the open price is 565 and in BSE is 551.By multiplying open price with number of shares we get portfolio value. The portfolio of NSE is 452000 and BSE is 440800.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 152000,140800 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 287203 and 275946 in NSE and BSE respectively. The investor got more profit in NSE than in BSE. Close price NSE 342.55 127.15 465.05

Coal India PSB MOIL

BSE 342.35 127.05 466.5

65

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633

PSB 300000 120 120 2500

MOIL 300000 375 375 800

Companies Close price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

Coal India 342.55 342.35 559384 559057 159384 159057

PSB 127.15 127.05 317875 317625 17875 17625 249299 249882

MOIL 465.05 466.5 372040 373200 72040 73200

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 342.55 and in BSE is 342.35.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 559384 and BSE is 559057.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 159384,159057 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 127.15 and in BSE is 127.05.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 317875 and BSE is 317625.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 17875,17625 respectively.
66

c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 465.05 and in BSE is 466.5.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 372040 and BSE is 373200.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 72040,73200 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 249299 and 249882 in NSE and BSE respectively. The investor got more profit in BSE than in NSE. High price NSE 344.9 146.7 590

Coal India PSB MOIL

BSE 344.75 149.7 591.05

Companies Investment Offer price Buy Price No. of shares

Coal India Limited 400000 245 245 1633

PSB 300000 120 120 2500

MOIL 300000 375 375 800

Companies High price Portfolio value Profit

NSE BSE NSE BSE NSE BSE

Coal India 344.9 344.75 563222 562977 163222 162977

PSB 146.7 149.7 366750 374250 66750 74250

MOIL 590 591.05 472000 472840 172000 172840

67

Total Profit

NSE BSE

401972 411067

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the high price is 344.9 and in BSE is 344.75.By multiplying high price with number of shares we get portfolio value. The portfolio of NSE is 563222 and BSE is 562977.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 163222,162977 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the high price is 146.7 and in BSE is 149.7.By multiplying high price with number of shares we get portfolio value. The portfolio of NSE is 366750 and BSE is 374250.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 66750,74250 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the high price is 590 and in BSE is 591.05.By multiplying high price with number of shares we get portfolio value. The portfolio of NSE is 472000 and BSE is 472840.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 172000,172840 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 401972 and 411067 in NSE and BSE respectively. The investor got more profit in BSE than in NSE. An investor invested Rs 300 in three different asset classes for 1 week then its value is given below.
Asset classes PSB NSE Nifty BSE sensex Investm ent 100 100 100 Outpu t 99.42 100.3 4 100.7 2

68

Interpretation: An investor invested a portfolio of Rs.300 in three different asset classes for
one week.i.e.,(In PSB he invested Rs100,in NSe Nifty Rs100 and in BSE Sensex Rs100) after One week its values are in PSB Rs99.42, in NSE Nifty Rs100.34 and in BSE Sensex Rs100.72. In view of the information mentioned above the investor get more profit in BSE compared with the othet two asset classes. An investor invested Rs 300 in three different asset classes for 1 month then its value is given below.
Asset classes PSB NSE Nifty BSE sensex Investme nt 100 100 100 outpu t 97.16 95.06 95.05

Interpretation: An investor invested a portfolio of Rs.300 in three different asset classes for
one week.i.e.,(In Coal india ltd he invested Rs100,in NSe Nifty Rs100 and in BSE Sensex Rs100) after One month its values are in Coal india ltd Rs97.16, in NSE Nifty Rs95.06 and in

69

BSE Sensex Rs95.05. In view of the information mentioned above the investor get more profit in Coal india ltd compared with the othet two asset classes. An investor invested Rs 300 in three different asset classes for 1 month then its value is given below.
Asset classes PSB NSE Nifty BSE sensex Investm ent 100 100 100 Output 93.95 95.06 95.05

Interpretation: An investor invested a portfolio of Rs.300 in three different asset classes for
one week.i.e.,(In Moil india ltd he invested Rs100,in NSe Nifty Rs100 and in BSE Sensex Rs100) after One month its values are in Moil india ltd Rs93.95, in NSE Nifty Rs95.06 and in BSE Sensex Rs95.05.In view of the information mentioned above the investor get more profit in NSE Nifty compared with the othet two asset classes.

Products Traded in NSE & BSE

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Pro ducts NSE Equity Derivatives F&O S&P CNX Nifty Mini derivative contracts CNXIT BANK Nifty Nifty Midcap 50 Individual Securities Debt FIMMDA-NSE MIBID MIBOR NSE Zero Coupon Yield Curve (ZCYC) NSE VaR for Government Securities NSE Government Securities Index Indices Financial products on IISL Indices Data subscription Customized Indices ETFs Gold ETFs Mutual Funds Currencies Euro (EUR) Pound (GBP) United states Dollar(USD) Japanese Yen (JPY)

BSE Equity Derivatives F&O Currency Future

Debt

Corporate Bonds

ETFs

Star Mutual Funds Securities Lending and Borrowing(SLB)

BOLT:
BSE has deployed an online Trading system (BOLT) on March 14, 1995. It works on a Tandem S74016 platform running on 16 cpus. The Tandem Himalaya S74016 machines act as the backend to more than8000 Trader Workstations networked on Ethernet, VSAT and Managed Leased Data Network (MLDN). The systems claim to handle up to two million trades a day. BOLT has a two-tier architecture. The trader workstations are connected directly to the backend server which acts as a communication server and a Central Trading Engine (CTE). Other services like information dissemination, index computation, and position monitoring are also provided by the system. A transaction monitoring facility in the Tandem architecture helps keep data integrity through non-stop SQL. With the help of MTNL, BSE has setup a MLDN Network comprising 300 2 Mbps lines and 1500 64 Kbps lines which connect all regional stock exchanges and offices in Mumbai. Access
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to market related information through the trader workstations is essential for the market participants to act on real-time basis and take instantaneous decisions. BOLT has been interfaced with various information vendors like Bloomberg, Bridge, and Reuters. Market information is fed to news agencies in real time. The exchange plans to enhance the capabilities further to have an integrated two-way information flow. The BSE On-line Trading (BOLT): BSE On-line Trading (BOLT) facilitates on-line screen based trading in securities. BOLT is currently operating in 25,000 Trader Workstations located across over 359 cities in India. BSE has introduced electronic trading system known as BOLT (BSE on Line Trading) with the following facility 1. Trading system displays on a continuous basis scrip and market-related information required supporting traders. (Information includes best five bids and offers, last traded quantity and price, total buy and sell depth (irrespective of rates), open, high, low and close price, total number of trades, volume and value, and index movement. Other company-related information is also displayed) 2. As soon as an order is matched, the confirmation of the trade is generated on-line. 3. The order matching logic is based on best price and time priority. 4. The BSE On line Trading Platform has a capacity of conducting 2 million trades per day. 5. The latest state of the art technology infrastructure with Trader Work Stations located in more than 400 cities all over the country. 6. Trading on the BOLT system is conducted from Monday to Friday between 9: 30 a.m. and 3:30 p.m. 7. Trading can also be conducted through the BSE Internet Trading System - www.bsewebx.com the first Exchange enabled Internet Trading System. 8. BSE aims to provide trading anywhere and at anytime. With this endeavor in mind, the exchange continuously upgrades the hardware, software and networking systems so as to enable it to enhance the quality and standards of service to its members and other market intermediaries. BSE Private Network in one of the largest and most sophisticated networks in Asia Pacific running multiple services from trading to settlement. products and services through a single internet platform. This system runs both on the internet and the BSE Private Network and allows members, their hierarchy and investors to trade and manage risk directly. The trading platforms of BSE offer a unique combination of ease of access, global reach, instantaneous trading capability content and effective risk management, which are the cornerstones of the convergence-based economy. BSE also claims to offer a cost benefit. The exchange offers its services to the user in the most cost effective manner and that the cost of transactions on the BSE is far lower than on any other exchange. One-Client Server Technology used in BOLT with TCP / IP as network protocol has helped BSE stay ahead of other exchanges.

NEAT:
NSE has deployed NIBIS (NSE's Internet Based Information System) forreal-time dissemination of trading information over the Internet and NEAT a client-server-based application to help its operations. NEAT stores all trading information in an in-memory database at the server end to achieve minimum response time and maximum system availability for users. The trading server software
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runs on a faulttolerant STRATUS mainframe and the client software runs on Windows pcs. The telecommunications network uses the X.25 protocol and is the backbone of the automated trading system. Each trading member trades on the NSE with other members through a PC located in the trading member's office. The trading members on the Wholesale Debt Market segment are linked to the central computer at the NSE through dedicated 64 Kbps leased lines and VSAT terminals. These leased lines are multiplexed using dedicated 2 MB optical-fiber links. The WDM participants connectto the trading system through dial-up links. The exchange uses RISC-based Unix servers from Digital and HP for back office processing. Applications like Oracle 7 and SQL/Oracle Forms 4.5 front ends are used for the exchange functions. the NSE trading system is implemented on the mainframe Continuum series... of machine, which is supplied by Stratus Computers. The Stratus machines provide hardware-fault tolerance and therefore are able to sustain any single point failure. The operating system offers transaction protection, robust inter-process communication and network interface. The proprietary in-memory database on the trading server is designed specifically for mission-critical stock exchange applications that offers transaction protection, high performance/throughput and data consistency across multiple processes the bottom line. The NSE system and the application are designed and scaled to handle about 2 million trades with more than 15,000 concurrent users. NSE platform, it operates on the National Exchange for Automated Trading (NEAT) system, a fully automated screen-based trading. Using the NEAT front-end provided by the exchange, members can enter their orders, the quantity and the price at which he wants to transact. The transaction is executed as soon as a matching order is encountered and...is executed instantaneously at the best price available in the market. The trades are executed in the capital market at an average rate of 3,500 trades/minute and peak rate of 6,000 trades per minute with less than 2 seconds response, thereby increasing the information efficiency. NSE is however one up with a disaster-recovery site in a different city along with its entire production infrastructure, including the satellite earth station. A high-speed optical fibre links the primary and back-up site. Besides, NSE boasts of using satellite communication technology to energise participation from around 400 cities spread all over the country. NSE is one of the largest interactive V-SAT based stock exchanges in the world. It supports more than 3000 VSATs.... The numerous advantages of the NEAT system are detailed out below : It electronically matches orders on a price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It allows faster incorporation of price sensitive information into prevailing prices, thus increasing the informational efficiency of markets. It enables market participants to see the full market on real-time, making the market transparent. It allows a large number of participants, irrespective of their geographical locations, to trade with one another simultaneously, improving the depth and liquidity of the market. It provides tremendous flexibility to the users in terms of kinds of orders that can be placed on the system. It ensures full anonymity by accepting orders, big or small, from members without revealing their identity, thus providing equal access to everybody.
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 It provides a perfect audit trail which helps to resolve disputes by logging in the trade execution process in entirety. The trading platform of the CM segment is accessed not only from the computer terminals from the premises of brokers spread over about 192 cities, but also from the personal computers in the homes of investors through the Internet.

Top five companies weightage of NSE-50(NIFTY) & BSE-30(SENSEX) as of 18-01-2011

Security name NSE(NIFTY)50 BSE(SENSEX)30 Days weightage RIL 9.3 11.57 ONGC 7.15 8.91 TCS 6.73 8.35 Infosys Tech 5.45 6.77 SBI 4.63 5.77 33.26 41.37

Interpretation: In NSE Nifty 50 stock are trading and in BSE Sensex 30 stocks are trading.
We took days weightage of top 5 companies in NSE and BSE as of 18-01-2011.By comparing both exchanges NSE Nifty total average of five companies is 33.26 and in BSE Sensex 41.37.In BSE Sensex the average of 5 Companies are more compared with NSE Nifty because in BSE block deals will Takes place and if the top companies of both exchanges are moving in negative side then the market will show downside because the average of those companies will effect the market even though other companies move in positive side.

Data for FII from 07-01-2011 to 17-01-2011 (In Rs. Crores)

Category FII FII FII FII FII FII FII Date 17-Jan-11 14-Jan-11 13-Jan-11 12-Jan-11 11-Jan-11 10-Jan-11 7-Jan-11 Buy Value 2569.5 2020.72 3370.21 3366.8 2726.62 2633.69 2397.19 Sell Value 2742.5 2769.32 3619.98 3738.3 3889.19 3772.47 3437.93 Net Value -173 -748.6 -249.77 -371.5 -1162.57 -1138.78 -1040.74

Data for DII from 07-01-2011 to 17-01-2011 (In Rs. Crores )

Category DII Date 17-Jan-11 Buy Value 1067.54 Sell Value 707.72 Net Value 359.82
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DII DII DII DII DII DII

14-Jan-11 13-Jan-11 12-Jan-11 11-Jan-11 10-Jan-11 7-Jan-11

1381.9 1405.47 1495.93 1854.65 1729.36 2179.56

1091.79 1163.05 1136.72 790.47 710.82 1063.73

290.11 242.42 359.21 1064.18 1018.54 1115.83

India Trade: Exports

Indian trade was impacted by the global recession of 2007-2009. Indian exports fell from $200.9 billion in 2008 to $165 billion in 2009. India ranked 22nd in the world in terms of export volume. Being a country with a huge workforce, India has seen its trade being boosted by the production of precious stones and metals. The various other export commodities that India exports are:

Petroleum products Machinery Iron and steel Chemicals Vehicles Apparel

Indias main export partners are:

UAE US CHINA SINGAPORE The following graph shows how the above countries have contributed to total volume.

India trade has undergone massive restructuring following the 1991 liberlisation policies. Ever since, Indias exports have experienced a growth rate of 18.11%. The big surprise has been the import sector that has experienced a growth rate of 34.30%.

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INDIA TRADE: IMPORTS

The Indian economy is headed towards becoming a developed economy and all its sectors are in need Of machinery and energy. Therefore, Indian imports are dominated by crude oil and machines. Other Imported commodities are: Precious Stones Fertilizer Iron & Steel Gold & Silver Electronic Goods Machinery other than electrical Organic & Inorganic Chemicals Metalliferous Ores & Products Coal Transport Equipment In 2009,total imports amounted to $253.9 billion, down from the 2008 figure of $322.3 billion. India ranked fifteenth in the world in terms of import volume.

India import partners are:

China 10.8% Saudi Arabia 6.9% US 6.7% AE 6.7% Iran 4.2%

The graph below shows how the above countries have contributed to total import volume.

India trade has undergone massive restructuring following the 1991 liberlisation policies. Ever since, Indias exports have experienced a growth rate of 18.11%. The big surprise has been the import sector .That has experienced a growth rate of 34.30%.

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Interpretation: In stock market four currencies are trading i.e, (Dollar, Euro, Yen, Pound). In
the year 2009 India experienced a growth rate of 34.30% whereas China has contributed 10.8% in import sector than other countries. I suggest that in future China currency Yuan should be traded in stock market. SWOT Analysis for exchanges (NSE & BSE) :

In a shot span of 22 years since inception, the Angel Group has emerged as one of the top five retail stock broking houses in India, having membership of BSE, NSE and the two leading Commodity Exchanges in the country i.e. NCDEX & MCX. Angel Broking is also registered as a Depository Participant with CDSL. The group is promoted by Mr. Dinesh Thakkar, who started this business as a sub-broker in 1987 with a team of 3. Today the angel group is managed by a team of 1937 direct employees and has a nationwide network comprising of 21 Regional hubs, 124 branches and 6810 sub brokers & business associates. Angel is 100% focused on retail stock broking business unlike any other larger national broking house. The group currently services more than 5.9 thousand retail clients. Angel habitually generates value added features without the cost burden being passed on to the clients as they strongly believe that better understanding of clients needs and wants is their top priority. Their e-broking facility is one such effort, which gives the client a platform to access state of the art trading facility at the click of a button. Angel has always strived for delivering customer delight and developing strong long term bonds with its clients as well as channel partners. Angel thrives on a vision to introduce new and
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NSE
INTRODUCTION to Company Profile

innovative products and services constantly. Moreover, Angel has been among the pioneers to introduce the latest technological innovations and integrate them efficiently within its business.

About the Angel

Angel Bookings tryst with excellence in customer relations began more than 20 years ago. Angel Group has emerged as one of the top 3 retail broking houses in India and incorporated in 1987. Today, Angel has emerged as a premium Indian stock-broking and wealth management house, with an absolute focus on retail business and a commitment to provide "Real Value for Money" to all its clients. It has memberships on BSE, NSE and the leading commodity exchanges in India NCDEX & MCX. Angel is also registered as a depository participant with CDSL. Angel Group Companies Angel Broking Ltd. Angel Capital Market Ltd. & Member on the BSE Participant with CDSL and Depository

Debt Membership on the NSE Cash and Futures & Options Segment

Angel Commodities Broking Member on the NCDEX & MCX Ltd. Angel Securities Ltd. Member on the BSE :1997 :1997 :1998

Incorporated BSE Membership NSE membership Member of NCDEX and MCX Depository Participants with CDSL

Vision of the Company

To provide best value for money to investors through innovative products, trading / investment strategies, state-of-the-art technology and personalized service

Quality Assurance Policy

We are committed to being the leader in providing World Class Product & Services which exceed the expectations of our customers Achieved by teamwork and a process of continuous improvement

CRM Policy
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A Customer is the most important visitor on our premises. He is not dependent on us but we are dependent on him. He is not interruption in our work, but is the Purpose of it. We are not doing him a favor by serving. He is doing us a favor by giving us an opportunity to do so.

LOGO OF THE COMPANY

ORGANIZATIONAL STRUCTURE

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Products of Angel Broking 1. Online Trading 2. Commodities 3. DP Services 4. PMS (Portfolio Management Services) 5. Insurance 6. IPO Advisory 7. Mutual Fund 8. Personal loans 9. Quality Assurance

DEPARTMENT STUDY
PRODUCT & SERVICE DETAILS AND PORTFOLIO REPORTS: Market Outlook at 9:15 a.m. Technical Report at 6:00 p.m. Derivative Analysis Report at 9:15 a.m. FUNDAMENTAL RESEARCH SERVICES: The Sunday Weekly Report The Industry Watch Stock Analysis Flash News

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TECHNICAL RESEARCH SERVICE: Nifty Tracker Online Chart Intraday Calls Position Calls Derivative Strategies Futures Calls

22/02/2011 Closeprice NSE BSE PSB 104.1 104.15 Moil India 405.9 406.35 Coal India 301.35 301

Companies Coal India Limited 400000 245 245 1633 PSB 300000 120 120 2500 MOIL 300000 375 375 800 Companies Coal India PSB MOIL
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Investment Offer price Buy Price No. of shares

close price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

301.35 301 492105 491533 92105 91533

104.1 104.15 260250 260375 -39750 -39625 77075 76988

405.9 406.35 324720 325080 24720 25080

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 301.35 and in BSE is 301.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 492105 and BSE is 491533.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 92105,91533 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 104.1 and in BSE is 104.15.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 260250 and BSE is 260375.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are -39750,-39625 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 405.9 and in BSE is 406.35.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 324720 and BSE is 325080.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 24720,25080 respectively. Conclusion: In view of the information mentioned above the overall profit for the investor by investing a portfolio of Rs.10,00,000 in three companies are 77075 and 76988 in NSE and BSE respectively. The investor got more profit in NSE than in BSE. 23/02/2011 C loseprice NSE 103.75 408.15 300.65

PSB Moil India Coal India

BSE 103.65 407.4 300.05

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Companies Coal India Limited 400000 245 245 1633 PSB 300000 120 120 2500 MOIL 300000 375 375 800 Companies Coal India 300.65 300.05 490961 489982 90961 89982 PSB 103.75 103.65 259375 259125 -40625 -40875 76856 75027 MOIL 408.15 407.4 326520 325920 26520 25920

Investment Offer price Buy Price No. of shares

close price Portfolio value Profit Total Profit

NSE BSE NSE BSE NSE BSE NSE BSE

Interpretation: An investor invested portfolio of Rs.10,00,000 in three companies. In Coal

India Limited he invested Rs.4,00,000 , in Punjab and Sind Bank Rs.3,00,000 and in Moil India Limited Rs.3,00,000. a) The offer price of Coal India Limited is Rs.245 and got 1633 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 300.65 and in BSE is 300.05.By multiplying close price with number of shares we get portfolio value. The
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portfolio of NSE is 490961 and BSE is 489982.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 90961,89982 respectively. b) The offer price of Punjab and Sind Bank is Rs.120 and got 2500 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 103.75 and in BSE is 103.65.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 259375 and BSE is 259125.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are -40625,-40875 respectively. c) The offer price of Moil India Limited is Rs.375 and got 800 shares(portfolio divided by offer price we get No. of Shares).In NSE the close price is 408.15 and in BSE is 407.4.By multiplying close price with number of shares we get portfolio value. The portfolio of NSE is 326520 and BSE is 325920.The difference of portfolio value and portfolio we get profit. profit of NSE and BSE are 26520,25920 respectively.

Conclusion: In view of the information mentioned above the overall profit for the investor by
investing a portfolio of Rs.10,00,000 in three companies are 76856 and 75027 in NSE and BSE respectively. The investor got more profit in NSE than in BSE. FINDINGS:

SUGGETIONS:

Trading should start at 8o clock in the morning and end at 4o clock in the evening with one hour break between1pm to 2pm. There should be 24 hours F & O. The pre open session should be from 7:30am to 8:00 am. When IPO is listed it should trade in pre open session. From exchange there should be strict norms that the company should disclose 5 years balance sheet to exchange within the time period prescribed. The exchange should add new currency Chinas Yuan because India has imported 10.8% from China out of 34.30% of import sector in 2009 compared with other countries. NSE alongwith SEBI should take more initiative to increase the awareness about the market from schooling. The exchange has to increase their branches & network. The exchange should increase product range. NSE should expand its operations to beat the new exchanges in mere future. NSE should change the calculations of stock settlement prices after closing the market. Brokers are blocking illiquid counters by stopping trading in particular companies. They have no right to stop the investors by liquidating the counters.

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