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ERPM 1

Date post: 07-Apr-2018
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    ERPM

    Unit 1

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    Securities

    Includes shares, scrips, stocks, bonds,debentures or other marketable securities ofany incorporated company or other body

    corporate or Government

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    Investment

    Process of employment of funds either toearn income or capital appreciation

    Factors Return

    Risk

    Liquidity

    Hedge against inflation

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    Investment process

    Investment policy

    Analysis market, industry, company

    Valuation risk, return, real worth, marketprice

    Portfolio construction

    Portfolio evaluation appraisal, revision

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    Alternatives

    Variable income securities

    Fixed income securities

    Preference shares

    Debentures

    Bonds

    Gilt edged securities

    IVP/KVP Money market securities

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    Financial market

    Organised

    UnorganisedCapital market Money market

    Industrial securities Commercial papers Money lenders

    Government securities Certificate of deposit Indigenous bankers

    Long term loan Treasury bills

    Call money

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    Capital market

    For financial assets with long or indefinitematurity

    LT securities

    Maturity period >1 year

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    Capital market structure

    Marketable securities

    Government

    PSU bonds

    Mutual fund Corporate

    Non-marketablesecurities

    Bank deposits

    Deposits with companies Loans and advances

    Post office certificate anddeposits

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    Corporate securities

    New issue market original players

    Promoters / directors

    Associates / friends

    Collaborators

    Employees

    FIs

    FFIs NRIs

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    Corporate securities

    Intermediaries

    Brokers

    Jobbers

    Dealers

    Badla financiers

    Arbitrageurs

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    Corporate securities

    New issue market for issue

    Merchant Bankers

    Brokers

    Sub-brokers

    Underwriters

    Ad agency

    Collecting bankers

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    Industrial securities

    Equity / ordinary shares

    Preference shares

    Debentures / bonds

    Primary market

    Public issue, rights issue, private placement

    Secondary market

    Secondary sale, quoted in Stock Exchanges

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    Government securities

    Gilt edged securities

    Denomination normally Rs.100

    Half-yearly interest payment

    Tax exemption

    Commercial banks hold this for SLR

    Sold through RBI Treasury bills are sold through auctions

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    Long-term loans market

    Term loans ICICI, IFCI

    Mortgages market

    Equitable only document Legal title is transferred

    Financial guarantees market Finance against guarantee of a reputed person

    Deferred payment for import / export

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    Capital market

    Capital formation

    Economic growth

    Productive use of economys savings

    Incentives for saving Avenue for financial assets

    Facilitates increase in production

    Gives direction to flow of funds

    Source for technological up gradation Serves as a link between those who save and invest

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    Money market

    Short-term financial assets < 1 year

    Treasury bills

    ST borrowing by Government

    Commercial papers

    Unsecured promisory note issued by companies

    Certificate of deposit

    Marketable receipts of funds banks 10+5lakhs

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    Money market

    Call money market

    Very short period 1 to 14 days repayable atthe option of both the parties

    Short term loan market WC needs

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    Financial Intermediation

    Banks and non-bank intermediaries channelthe funds

    Mobilises funds capital formation

    Reduce information cost

    Reduce transaction cost

    Raise long-term loans

    Liquidity

    Pools risk

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    Intermediaries

    FI agriculture / industrial growth

    UTI

    IFCI, IDBI, SIDBI, NABARD, EIM Bank

    Mutual funds savings

    VC entrepreneurs

    Credit rating agencies

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    Weakness in the system

    Co-ordination

    Monopoly

    Dominance of development banks

    Inactive and erratic capital market

    Imprudent financial practice

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    Capital market institutions

    SEBI

    RoC

    RBI

    SE

    Licensing authorities

    Pollution Control Authorities

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    SCRA, 1956

    Sec 28A

    Call for periodical returns from SE

    Prescribe documents to be maintained

    Call upon the SE or any member to furnishexplanation or information

    Approve byelaws of SE

    Licensing of dealers in securities Compel a public company to list its shares

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    SCRA

    Sec 29 A (1992)

    Amendment of rules

    Furnishing of annual reports of SE

    Directions to SE

    Suspending governing body of SE

    Prohibit contracts in certain cases

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    SCRA

    Sec 29A (1994) Submission of application for recognition of

    SE

    Grant of recognition of SE

    Withdrawal of recognition of SE

    Make / amend the rules / articles of a SEregarding voting rights

    Regulation of spot delivery contracts Hear appeals of companies against non-

    listing

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    Market Indicators

    Stock Exchange Indices

    BSE

    NSE

    International markets indicators

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    Stock indices

    Calculation

    Price-weighted

    Equal Weighted

    Value weighted

    Eg: Nifty reflects price movements of 50 stocks

    Sensex- 30 stocks

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    Assignment : 2

    Date of Submission : 02-08-2011

    Find out the different stock market indices indifferent countries and method of calculation.

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    Discuss

    Relation between

    Stock market

    Bullion market

    Exchange rate

    Oil market


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