Date post: | 14-Apr-2017 |
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Economy & Finance |
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Capital Market
Need of Finance…!
Economic System
Household Sector Business Sector
Economic system System
Financial MarketTypes of Financial Market
A financial market is a market in which people and entities can trade financial securities, commodities and fungible items of value at low transaction cost and at prices that reflect supply and demand.
Money MarketCapital Market
Capital Market
A market deals in medium and long-term funds, both debt and equity, is termed as Capital Market.
The market is an institutional arrangement for borrowing medium and long-term funds and which provides facilities for marketing and trading of securities
Factors Responsible for Growth of Indian Capital Market
• Growth of Stock Exchange• Growth of Financial Institution• Growth of Mutual Fund• Growth of Merchant Bank Service• Development of Venture Capital Funds• Development of Credit Rating Agency• Setting up SEBI• National securities Clearing Corporations• Corporate Governance
Capital Market TypesPrimary Market Secondary Market
A market where the issuers
access the prospective
investors directly for funds
required by them either for
expansion or for meeting
the working capital needs.
A market where securities are traded after being initially offered to the public in the primary market and/or listed in the stock exchange.
Pricing Of the ShareFixed Pricing book Building
Methods of raising capital in the Primary Market:
Initial Public OfferFollow-on Public OfferPrivate PlacementOffer for SaleRights IssueE-Ipo Qualified Institutional Placement
11
Secondary Market
Secondary/Stock market!!!!
Functions of Stock MarketsLiquidity for SecuritiesEvaluation Promotion of Savings HabitsReady & Continuous MarketsPublic FinanceGrowth of Joint Stock Company
Stock Exchanges in INDIA Mangalore Stock Exchange Hyderabad Stock Exchange Uttar Pradesh Stock Exchange Coimbatore Stock Exchange Cochin Stock Exchange Bangalore Stock Exchange Saurashtra Kutch Stock
Exchange Pune Stock Exchange National Stock Exchange OTC Exchange of India Calcutta Stock Exchange Inter-connected Stock Exchange
(NEW) Madras Stock Exchange
Bombay Stock Exchange Madhya Pradesh Stock Exchange Vadodara Stock Exchange The Ahmedabad Stock Exchange Magadh Stock Exchange Gauhati Stock Exchange Bhubaneswar Stock Exchange Jaipur Stock Exchange Delhi Stock Exchange Assoc Ludhiana Stock Exchange
Bombay Stock Exchange Bombay Stock Exchange, commonly
referred to as the BSE, (Bombay Share Bazaar) is a stock exchange located on Dalal Street, Mumbai, Maharashtra, India.
It is the oldest stock exchange in Asia. The equity market capitalisation of the companieslisted on the BSE was US$1 trillion as of December 2011, making it the 6th largest stock exchange in Asia and the 14th largest in the world. The BSE has the largest number of listed companies in theworld.
National Stock Exchange The National Stock Exchange (NSE) is
stock exchange located at Mumbai,
Maharashtra, India. It is in the top 20
largest stock exchanges in the world by
market capitalization and largest in India
by daily turnover and number of trades,
for both equities and derivative trading.
NSE has a market
capitalization of around
US$1 trillion and over 1,652 listings
Fully Automated SystemUniversal MembershipListing DematSettlement Cycle
Stock Exchanges names and their Indices Name:
Country Stock exchange name Indices name
India National Stock Exchange
S & P Nifty
India Bombay Stock Exchange Sensex
Hong Kong Hong Kong Stock Exchange
Hang Seng
USA New York Stock Exchange
NYSE
Korea Korean Stock Exchange KRX 100
Russia Russian Stock Exchange RTS Index
Some Important Terms Relating To ‘Stock Market’
Speculators Market CapitalizationCapital StructureCorneringSpeculation
Bull BearLame DuckArbitrageur
Source-Securities and Exchange Board of India
Getting startedTo start trading the following are required –
Bank accountTrading accountDemat accountPermanent Account Number (PAN)Unique Client Code
Source -Securities and Exchange Board of India
Where to tradeThe secondary market is divided into two
segments Cash/ Equity segmentDerivative segment –
Equity Futures and Option (F & O) Currency Futures/ Option Interest Rate Futures
Trading Procedure in Stock MarketSelection Of BrokerOpening Demat Account with DepositoryPlacing the OrderExecuting the OrderSettlement
22Source-Securities and Exchange Board of India
Settlement
The settlement in the securities market is done on a T+2 Rolling Settlement Cycle (where T = Trading Day).
Trading (T)
Option of Early Pay-in
(T1)
Auction (T3)
Close out (T4)
Pay-in and Pay out
(T2)
TRADE SETTLEMENTT + 2
FAILURE TO
PAY-IN
SEBI Guidelines in Capital MarketPrimary Market Secondary MarketInitial Public offerFollow-on Public OfferUnderwriting Public Issue and Right
IssueInnovative InstrumentsBonus Shares a) source of fund b) residual reserves c) past profit d) other conditionsIssue of Debenture
Compulsory Registration of Intermediaries
DemutualizationTransparency in TradingCompulsory AuditInvestor protectionCapital Adequacy Norms
Major crash and Rallies in Indian Capital Market
28 April 1992Sensex fall by 570 points Harshad Mehtha Security Scam
18 May 2006Nifty crash by 496.50 pointsHeavy selling by FII’s due to weakness in
global market
21 January 2008Sensex crash by 1408pointsDue to recession in USA
18 may 2009Sensex raise by 2111 points Victory of UPA in election
Money Market Vs. Capital Market
Concluded
THANK YOU…