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NIRANJAN REDDY.EMANGA SOWJANYA.KODEY ASHIRITHA

MANISHA

SATPREETH

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`  A capital market is a market for 

(debt or equity), where business

enterpr ises (companies) andgover nments can raise long-term funds.

` It is def ined as a market in which money is provided for 

per iods longer than a year as the raising of short-termfunds takes place on other markets (e.g., the moneymarket). The capital market includes the stockmarket (equity secur ities) and the bond market (debt).

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` The Bombay Stock

Exchange (BSE) is a stockexchange located on DalalStreet, Mumbai and is the oldeststock exchange in Asia.

` The equity market capitalization of the companies listed on the BSE

was US$1.63 tr illion as of December 2010, making it the 4thlargest stock exchange in Asia andthe 8th largest in the world. TheBSE has the largest number of listed companies in the world.

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` The National Stock Exchange (NSE)is a stock exchange locatedat Mumbai, India.

` It is the 9th largest stock exchange in 

the world by market capitalization andlargest in India by daily tur nover andnumber of trades, for both equities and der ivative trading.

` Though a number of other exchanges exist, NSE and the Bombay StockExchange arethe two most signif icant stockexchanges 

in India, and between them are

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`  A corporate bond is a bond issued bya corporation. It is a bond

that a corporation issues toraise money in order toexpand its business. Theterm is usually applied to

longer-term debt instruments,generally with a matur ity datefalling at least a year after their issue date.

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` In this year budget the gover nment has focused on easingf inancing to infrastructure.

` The allocation to infrastructure has been raised by 23.3% toRs 2.14 lakh Crore.

` To give a boost to infrastructure development in railways,ports, housing And highway development gover nmentproposes to allow tax-free bonds of Rs 300 billion to beissued by var ious undertakings in 2011-12

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` The impact of above policies will result in an increasingappetite for infrastructure-or iented mutual funds.

` The focus on infrastructure project is likely to result in an increasing number of corporate bond and equityissuances for fund raising by infrastructure companies and institutions.

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` The FII limit for investment in the Corporate bonds(withmatur ity over f ive year s) issued in the infrastructuresector has been raised by US$20 bn.

` FIIs would also be permitted to invest in unlisted bonds with a minimum lock in per iod of 3 year s and will beallowed to trade amongst themselves dur ing the lock in per iod

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`  Although an increase in FII limit is a positive factor, thecorporate bond market is expected to remain rangebound as the appetite for investment in infrastructurebonds by FIIs, which till now was US$5 bn, has not been 

utilized to its fullest.

` However, over the coming year s, we expect theinfrastructure sector to increase its share in the

corporate bond market.

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` Continuing with its disinvestment agenda, thegover nment has set a target of raising Rs 40,000 crore

through disinvestment of its stake in PSU, which wouldbe challenging in current market situation.

` This will decrease the f iscal def icit of the India.

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`  Allowing Foreign investor s to invest in domestic mutual

fun

ds

 is

a key posi

ti

ve for equi

ty markets

an

dis

 expected to lead to higher capital flow from foreign investor s.

` The impact of this is will widen the investor base of 

mutual funds and give non-SEBI registered foreign investor s an opportunity to invest in Indian equitymarkets.

` The measures will also provide an avenue to boost AUM(Assets Under Management) of equity mutual funds

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` In Fiscal year 2010-11 the domestic fund industry is impacted by liquidity tightening in the banking system,which resulted in systemic outflows from the industry.

` The industry¶s average assets under managementdeclined by 15% to Rs 6.78 tr illion in December 2010from Rs 7.96 tr illion in the year-ago per iod.

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` Services provided by life insurance companies in the

area of investment are proposed to be brought into thetax net along the same lines as ULIPs.

` This may have a negative impact on the bottom line of insurance companies. The incremental impact can bemore on insurance companies that have a larger shareof non-ULIP products 

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` The Nifty started the budget day on positive note.

` How ever, the index was very volatile. It witnessed an intra day high of 5477(+3.3%) and an intra day low of 5309 (+0.1%) and it closed at 5,333 (+0.6%) for the day

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