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Equity Market By Hitesh Mali/ M.N.

Jayprakash Vice President of Motilal Oswal


What is Equity?
Features

Entitled to a portion of the companys profits


share and claim on assets

Tradability Limited Liability

Equity is Based on

Indian Growth Story


Indian Stock Market NSDL (National Securities Depositories Ltd)

Demate Accounts

Investors Accounts 11966928 Dp Service Center - 13969 Investors Accounts 7862627 Dp Service Center - 10675

CDSL (Central Depositories Securities Ltd)


Low participation is also a Growth Opportunity in Equity


Equity - 11728 Insurance - 19502 Mutual Fund 2219

Equity - 65000 Insurance - 53860 Mutual Fund 11482

FY 2010

FY 2020

The Big Opportunity in Equity


Country China Korea Investors 152 4.6 Population 1,325 47 % 11% 10%

India

16

1,190

1%

Asset Classes in India

Bank Deposit/FD Real Estate Equity

Gold Silver

Player In Market

Regional Broker Discount Broker Advisories

Bank Broker

Intermediaries Comes in Various Shapes & Size Intermediary 1. Agent


80% to 90%

Advantages
Personalized service, comes & picks up your form as & when you wish low cost service provider Ease of transacting anytime, anywhere in the globe No blas towards products since he/she does not sell them Well trained to after you advice across multiple asset classes Large organization with strong research capabilities ability to advice across assets

Disadvantages
Cannot advice across multiple asset classes

2. Internet

No personal touch

3. Pure Advisor
4. Financial Planner 5. Brokerage House
/Bank

For execution, you have to approach someone else If your portfolio size is small, you may not be able to afford him Lacks personal touch relationship managers could change very oftern

Wealth Creation Cycle

Research

Advisory

Distribution

Process Excellent

Technology

Operation

Employment

Customer

Evolution from Broker to Financial Planner

Position from a one stop financial service destination

Focus on grater wallet share Standalone brokers may become defunct

in the next decade

Why we need Stock Market???


Stock Market
Capital Requirement of a Company Long term Common player for buyers & Sellers Requirement of capital Providers Long term/Short/Medium

Sources of new capital for companies

Investor can convert their stock into cash

Ministry of Finance

IRDA Insurance

SEBI
Stock Exchange/ Broker/ Advisors

RBI

Banks/ NBFC

What are Market Activities???


NSDL

DP CC Brokers

DP

Broker

Sellers

Buyers

Sellers

Derivatives????

Future

Option

Unlimited profits & Unlimited Loses

Call
Buyer

Put

Buyer Limited Loses & Unlimited gains

Limited losses & Seller Unlimited gains


Limited gains & Unlimited Loses

Seller Unlimited gains & Limited loses

Investors
1. Long term

Trader
1. Short term

2. Follows Fundamental Analysis 3. Stay invested as long as home is continuing

3. Follows Technical Analysis 3. Trades with sharp loses & price Target

Debt Market - By Abhiroop Mukhrajee Fund Manager Motilal Oswal

Case for Government Borrowing

Fund required to run operations of government

Salaries of government employees Day to day activities Capital expenditure

Types of Debt Securities

Government Securities

Long term market borrowing of the government Largest segment of the debt market Issued by RBI & Subscribed banks, primary dealers & Institutions

Corporate Bonds

All listed debt securities issued by banks, PSU undertakings, Municipal Corporations, Bodies Corporate & Companies Issued by the above entities mostly through private placement route

Bond Price Dynamics

Bond market prices are inversely related to the market yields, when market yields go up, bond market price falls & Vice Versa

The sensitivity of bonds market price to change in yield is given by its modified duration, higher the duration of the bond, more sensitivity it is to yield changes, vice

versa

Factors Affecting Interest Rates


Macro & Micro economic scenarios Inflation expectations Money supply in the system

Monetary & Fiscal policies


Global economic conditions Crude oil prices Currency situation

Structure of Debt Market


Government Market Money Market Corporate Bonds Derivatives

Government Bonds

Central Government

State Government
State Development Loan

G-Sec 10 yr

T-Bill 90,182, 364 days

CMB 90,182, 364 days

FRB Upto 10yr

10yr

Money Market

Corporate Bonds
Corporate Bonds

Call Money CBLO REPO Certificate of Deposits Commercial Papers

Commercial Papers
Certificate of Deposits

Derivatives

Derived from another Security or overnight rates Interest rate swaps Traded in OTC market

Used mainly as tool of hedging against interest rate risks


Tenures 3m, 6m, 1yr, 3yr, 5yr, 7yr & 10yr 1 to 5 yr segments are the most actively traded

Trading

Done by telephonic negotiation between counterparties (OTC Market) Order Matching Reported on the Negotiated Dealing System Credit risk or Issuer risk

Risk involved in Debt Market

It is the risk that the issuer will not pay the coupon income and/or the maturity amount on the specified dates.

Interest rate risk


Interest rate risk affects investors in bonds who do not plan to hold till maturity

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Debt Market www.nseindia.com Equity Market Thank You Krunal & Raxit