STOCK EXCHANGE

• INMANTEC
WHAT IS STOCK EXCHANGE
Stock exchange is that place where trading of
shares is done in terms of sale and purchase.
 INTRODUCTION :
• There are 23 stock exchanges in the
India. Mumbai's (earlier known as
Bombay), Bombay Stock Exchange is the
largest, with over 6,000 stocks listed. The
BSE accounts for over two thirds of the
total trading volume in the country.
Established in 1875, the exchange is also
the oldest in Asia. Among the twenty-two
Stock Exchanges recognised by the
Government of India under the Securities
Contracts (Regulation) Act, 1956, it was
the first one to be recognised and it is the
only one that had the privilege of getting
permanent recognition ab-initio.
Name of Indian stock exchange:
• 1.Bombay stock exchange
• 2.national stock exchange(Mumbai)
• 3.Banglore stock exchange
• 4.Utter pradesh stock exchange(kanpur)
• 5.Magadh stock exchange(Patna)
• 6.Ahmedabad stock exchange
• 7.vadodara stock exchange(Baroda)
• 8.Bhubaneswar stock exchange
• 9.Calcutta stock exchange(kolkata)
• 10.madras stock exchange
 Cont…….
• 11.Cochin stock exchange
• 12.coimbatore stock exchange
• 13.Gauhati stock exchange
• 14.Hydrabad stock exchange
• 15.Madhya pradesh stock exchange(indore)
• 16.Jaipur stock exchange
• 17.Ludhina stock exchange
• 18.Mangalore stock exchange
• 19.Pune stock exchange
• 20.saurashtrakutch stock exchange
 Cont…….
• Bombay stock exchange : it has 30 companies sripted.
• Name:1.ACC
• 2.BAJAJ
• 3.AIRTEL
• 4.BHEI
• 5.CIPLA
• 6.DLF
• 7.GRASIM
• 8.GUJRAT AMBUJA
• 9.HDFC
• 10.HDFC BANK
 CONT……
• 11.HERO HONDA
• 12.HINDALCO
• 13.HUL
• 14.ICICI BANK
• 15.INFICYS
• 16.ITC
• 17.L&T
• 18.MARUTI
• 19.NTPC
• 20.ONGC
 CONT……
• 21.RANBAXY
• 22.RELIANCE COMMUNICATION
• 23.RELIANCE ENERGY
• 24.RIL
• 25.SATYAM
• 26.SBI
• 27.TCS
• 28.TATA MOTERS
• 29.TATA STEEL
• 30.WIPRO
THE TOP TEN SINGLE DAY FALLS
OF THE SENSEX HAS :
1. Jan 21, 2008 --- 1,408.35 points
2. Jan 22, 2008 --- 857 points
3. Feb 11, 2008 --- 833.98 points
4. May 18, 2006 --- 826 points
5. Dec 17, 2007 --- 769.48 points
6. Oct 17, 2007 --- 717.43 points
7. Jan 18, 2007 --- 687.82 points
8. Nov 21, 2007 --- 678.18 points
9. Aug 16, 2007 --- 642.70 points
10. Apr 2, 2007 --- 616.73 points
 BSE CHART
•
• Index Value:
• 17,349.07 Trade Time:
• 3:58PM IST
• Change:
•  385.61 (2.17%)
• Prev Close:
• 17,734.68
• Open:
• 17,503.04
• Day's Range:
• 17,309.47 - 17,526.80
 NSE
• The National Stock Exchange (NSE),
located in Bombay, is India's first debt
market. It was set up in 1993 to encourage
stock exchange reform through system
modernization and competition. It opened
for trading in mid-1994. It was recently
accorded recognition as a stock exchange
by the Department of Company Affairs.
The instruments traded are, treasury bills,
government security and bonds issued by
public sector companies
 CONT……….
• The Organisation: The National Stock
Exchange of India Limited has genesis
in the report of the High Powered Study
Group on Establishment of New Stock
Exchanges, which recommended
promotion of a National Stock
Exchange by financial institutions (FIs)
to provide access to investors from all
across the country on an equal footing.
 CONT………

• Based on the recommendations, NSE was promoted by

leading Financial Institutions at the behest of the Government
of India and was incorporated in November 1992 as a tax-
paying company unlike other stock exchanges in the country
 Cont……………………..ss

• NSE Group:
1. India Index Services & Products Ltd. (IISL)
2. National Securities Clearing Corporation Ltd.
(NSCCL)
3. NSE.IT Ltd.
4. National Securities Depository Ltd. (NSDL)
5. DotEx International Limited
 SPECULATION :
• Definition : it involves the buying,holding,selling,short-
term selling of
stocks,bonds.commodities,currencies,collectibles or any
valuable financial instrument to profit from fluctuations
in its price as opposed to buying it for use or for income
via method like dividends or interest.
 Kinds of speculation
• Bull Market (Tejiwala): In case of that they purchase the
shares at current prices to sell at a higher price in the near
future and makes a profit if his expectations come true.he
is also called a long buyer.
• Bear Market (Mandiwala) : He sells security in the hope
that he will be able to buy them back at lesser price.It is
also called “short selling”.
 Cont………………
• Lame duck : When a bear has made contracts to sell
securities,find it difficult to meet his commitment due to
non-availability of security,,they always struggling..
• Stag : He is that type of speculator who applies for a large
number of a shares in a new issue with the intention of
selling them at a premium.He is bullish and very
cautious.
 Forex Market
•
Mar 19, 4:30 P.M.CurrencyIN ;
• 40.45(US.DOLLAR)
• Euro
• 63.48
• GB Pound
• 81.20
• Japanese Yen
• 0.4072
• S'pore Dollar
• 29.160
BENEFITS OF STOCK EXCHANGE

• FROM THE POINT OF VIEW OF COMMUNITY:

• 1.It assist the economis development by providing a body of
interested investors.
• 2.it uploads the position of superior enterprises and assist
them in raising further funds.
• 3.It encourages capital formation
• 4.Government can undertake projects of national importance
and social value raising funds through the sale of its securities
on the stock exchange.
• 5.It is the stock exchanges that central bank of a country can
control credit by undertaking open market operations
(purchase and sale of securities)
FROM THE COMPANY POINT OF VIEW

• 1.A company whose shares quoted on stock

exchange they enjoy better reputation and credit.
• 2.The market for the shares of such a company is
naturally widened.
• 3.The market price of securities is likely to be
higher in relation to its earnings,dividends and
property values.This raises the bargaining power
of the company in the event of a takeover,merger
or amalgamation.
FROM THE INVESTORS POINT OF VIEW

• 1.Liquidity of the investment is increased

• 2.The securities dealt on a stock exchange are good
collateral security for loans.
• 3.The stock exchange safeguards interests of investors
through strict enforcement of rules and regulations.
• 4.The present net worth of investments can be easily
known by the daily quotations.
• 5.His risk is considerably less when he holds or purchases
listed securities.
 ROLE PLAYER

• EXTERNAL:----
• 1.SHAREHOLDER
• 2.DEBENTURE HOLDER
 SHAREHOLDER
• Shareholders are divided into two parts
• 1.Preference shareholder: Preference shareholder
are those which have preferential right to the
payment of dividend during the life time of the
company,and a preferential right to the return of
the capital when the company is wound up.
CHARACTERISTICS OF PREF.SHAREHOLDER

• 1.The dividend on them is fixed by the articles of

the company.
• 2.They get their fixed rate of dividend before any
dividend is distributed among the other class of
shareholders.
• 3.At the time of winding up of the company, the
preference shareholder must be paid back their
capital before anything is paid to the ordinary
shareholders.
 KINDS OF PREF.SHAREHOLDER

• 1.Comulative shareholder: These shares are

entitled to fixed dividends whether there are
profits or loss.If profits are not sufficient to pay
in a particular year then that will pay on next
year.
• 2.Non comulative pref.share: These shares cannot
claim arrears of dividends of any year (if not paid
due to insufficiency of pfofits ) out of rofits of
subsequent year.
 Cont…….
• 3.Participating pref. Shares: These shares
receives a fixed rate of dividend in priority to
ordinary shares and further,the right to participate
in balance of profits in an agreed proportion
together with ordinary shares.
• 4.Redeemable pref.shares: These are shares
which can be purchased back by the
company.The company researves its rights to call
back or purchased these shares at any time .
EQUITY SHARES

• All shares which are not preference shares are

equity shares.These shares do not have a fixed
rate of dividend,they are always irredeemable and
their holders have normal voting rights.
• They are also the owners of the company.
• They take dividend
 DEBENTURES
• A document under the company seal which
provides for the payment of a principal sum and
interest there on at regular intervals which is
usually secured by a fixed or floating charge on
the company’s property or undertaking which
acknowledges a loan to the company.
 INTERNAL PLAYERS
• The members of the stock exchange can be
divided into two parts:
• A.Broker: He is a commission agent who
transacts business in securities on behalf of non-
members.They may have number of sub-brokers
to canvass and secure business for them.
• B.Jobber: He is an independent dealer
securities.He purchase and sells securities in his
own name. He is not allowed to deal with non-
members directly.He works for profit.
 Tarawaniwala
• Non-members : The following categories of non
members are also permitted to enter trading hall
and transact business on the behalf of members.
• Authorized clerks: They are the assistant or
agents.They buy or sell on the behalf of
employers.They can not transact business on
their own account.
• Remisers: They are the sub-brokers. He is also
called the half commission men.
CAUSES OF PRICE FLUCTUATION

• 1.DAMAND AND SUPPLY

• 2.BANK RATE
• 3.SPECULATIVE PRESSURE
• 4.ACTIONS OF UNDERWRITERS AND
OTHER FINANCIAL INSTITUTIONS
• 5.CHANGE IN COMPANY’S BOARD OF
DIRECTORS
• 6.FINANCIAL POSITION OF THE COMPANY
 CONT……..
• 7.TRADE CYCLE
• 8.POLITICAL FACTORS
• 9.SYMPATHETIC FLUCTUATIONS
• 10.OTHER FACTORS:
• A.EXPECTED MONSOON
• B.PERSONAL HEALTH OF HEAD OF
GOVERNMENT OR CHAIRMAN OF THE COMPANY
• C.OIL PRICES IN THE INTERNATIONAL MARKET.
 CONT…….
• D.CHANGES IN EXCHANGE RATE
• E.BORDER TENSION
• F.STOCK BROKERS SCAM LIKE HARSHAD
MEHTA AND KETHAN PAREKH
• G.STRIKES AND LOCK-OUT OF THE
COMPANY.
• H.NEW BUDGET PROPOSALS
• I.LOBERLIZATION AND PRIVATIZATION
OF THE COMPANY.
 SEBI

• It was constituted and made a statutory body by

SEBI act 1992.With the coming into effect of
SEBI, some of the powers and function exercised
by the central government,in respect of
regulation of stock exchanges were transferred to
the SEBI.
 OBJECTIVES OF SEBI

• 1.Registring and regulating the working of stock

brokers,sub-brokers,share transfer
agents,underwriters……….who may be associated
securities market in any manner.
• 2.Registering and regulating the working of collective
investment scheme including mutual funds.
• 3.Prohibiting insider trading in securities.
• 4.Regulating substantial acquisition of shares and
takeovers of companies.
 Cont……
• 5.Calling for information from,undertaking
inspection,conducting inquiries and audits of
stock exchanges and intermediaries and self
regulatory organizations in the securities market.
• 6.Performing such function and exercising such
powers under the provisins of the capital
issues(control) act 1947 and SCRA 1956,as may
be delegated to it by the central government.
• 7.Performing such other functions as may be
prescribed.
 BUY BACK SHARES

• In simple term when company re-purchase of its

own shares that is called buy back shares.
 MODESS OF REPURCHASE

• BASICALLY THERE ARE TWO MODES OF

REPURCHASE:
• 1.Open market repurchase: company makes an announcement
regarding the repurchase of a specified number of shares.The
purchases are made anonymously through a broker from the
secondary market over a specified period of time.
• 2.tender offers: this is basically two types
• A.Fixed price tender offers: company announces a fixed price
at which it is willing to buy its shares,a maximum number of
shares that it will commit to buy and an expiration date for
the offer.The offer price is premium over the market price to
encourage the shareholder.
 Cont………….

• Dutch auction tender offers : In a dutch auction,

the company announces the maximum number of
shares it wishes to buy and a range of prices at
which it will entertain offers.Shareholders who
choose to participate must then select a single
price in this range at which to tender their shares.
RULES FOR REPURCHASE UNDER SEBI ACT
1988
• 1.Regulations cover only the listed securities of the
company
• 2.In case of purchase through the stock exchange an offer
for buy back will not remain open for more than 30 days.
• 3.Buy back through negotiated deals, spot transactions or
private arrangements is not permitted.
• 4.In the purchases made through stock exchange, the
details under the buy back scheme shall be made
available to the stock exchange on daily basis:the details
in turn shall be made available to public regularly.
HOW RATING IS GIVEN TO THE COMPANY?

• Basically rating is given after see the company

'image,management quality,assets quality,auditors
quality,accounting accuracy.Rating is not fixed, it may be
change. The rating grades are:
• AAA: HIGHEST SAFTY
• AA: HIGH SAFTY
• A: ADEQUATE SAFTY
• BBB: MODERATE SAFTY
• BB: IN ADEQUATE SAFTY
• BC&D: HIGH RISK AND DEFAULT
 CREDIT RATING AGENCY IN INDIA

• 1.CRISIL
• 2.ICRA
• 3.CARE
• 4.DPCR
 conclusion
• THE STOCK EXCHANGE IS
CONSIDERED TO BE THE
BAROMETER OF ECONOMIC
ACTIVITY.