Copy of Capital Mkts Final

8/8/2019 Copy of Capital Mkts Final

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Indian capital markets Overviewy The economy of the country largely depends upon the performance

of the capital markets/stock markets.

The Better are stock market results of the country, The sounder is

consider its economy.

It also helps to boost the economy through savings & also maintain

the liquidity in the market.

Capital market can be defined as :-

A market for medium to long-term financial instruments. Financial

instruments traded in the capital market include shares, and bonds

issued by the Government, corporate borrowers and financial

institutions.


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Indian capital markets Overview

In other words,

y The capital market (securities markets) is the market for

securities, where companies and the government can raise long-

term funds. The capital market includes the stock market and thebond market.

y In India there are two major financial institution in capital

markets:-

The National stock exchange .(NSE)

The Bombay stock exchange. (BSE).


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National stock exchange

y National stock exchange:-

The Trading on the NSEs capital market commenced on

November 4, 1995. The growth of NSE turnover figures shows a

substantial rise from Rs. 1,805 crore (US $ 574.29 million) in theyear 1994-95 to Rs. 2,752,023 crore (US $ 540,141.59 million) in

2008-09.

The NSES Data network supporting close to 200,000 dealer

terminals.

y The total market capitalization of securities available for trading

on capital market segment increased from Rs363,550 crore at the

end of March 1995 to Rs 28,96,194 as at end March 2009.


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National stock exchangey

The Capital Market (CM) segment offers a fully automated tradingsystem.

y It is known as the National Exchange for Automated Trading (NEAT)

system.

y Various types of securities e.g. equity shares, warrants, debentures

etc. are traded on this system. The average daily turnover in the CM

Segment of the Exchange during 2008-09 was Rs. 11,325 crore. (US $

2,223 million).

y Nifty 50- Means the 50 stocks that were most favored by the

institutional investors . Companies in this group were usually

characterized by consistent earnings growth and high P/E ratios.


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Bombay stock exchange

y Bombay stock exchange:- BSE is the one of the famous & major stock

exchange in India. It gives up-to-date information on the countries

economic performance through its market movement index &

indicator i.e. BSE sensex.BSE India also plays major role in Indian capital market through its

electronic trading platform with more than 9400 stock broking

outfits across the country.

y In BSE, Sensex & list of 30 companies make the most watched index

in India.


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Investment modes in India

y Equity:- Means investment in Equity stocks e.g.

investment in stocks of HUL,ITC,etc.

y Equity derivatives:- It can be classified into single stockderivatives & index derivatives.

Single stock derivatives are the derivatives on specific

stock e.g. Castrol.

Index derivatives are derivatives on stock exchangeindices e.g. Nifty.

The employee stock option is also a equity derivatives.


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Investment modes in Indiay Currency :- It is a transferable futures contract that

specifies the price at which a specified currency can be

bought & sold at a future date.It helps the companies in hedging their underlying

currency exposure & will bring in more liquidity into the

market.

yCommodity:- Commodity markets are the markets whereRaw or primary products are exchanged or sold.

e.g.:- Food, Metal, Minerals, Energy. etc


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Investment modes in Indiay Now a days FIIS,Mutual funds, & Banks are also entered in the

Indian capital markets.

y FIIS:- Means the foreign institutional investors

The overseas investors pump USD 816.69 million in Indian stock

market in first trading week of 2010.

According to the data released by SEBI , FIIS were net investors

of USD 973.22 million in debt instrument in the first trading weekof the year.


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Foreign institutional investors.

ReportingDate

Debt/Equity

GrossPurchases(Rs Crore)

GrossSales(RsCrore)

NetInvestme

nt (RsCrore)

NetInvestment US($)million

Conversion

(1 USDTO INR)*

30-Nov-09Equity 1420.8 2151.1 -730.3 -156

Rs.46.81Debt 206.1 458 -252 -53.8


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Mutual fundsy Mutual funds:-Mutual fund is a professionally managed type of

collective investment scheme that pools money from many investorsand invests it in equities, Fixed income & money market funds.

y History/Emergence :-y 1964- UTI introduced mutual funds in market.

y 1987- Public Sector banks, Insurance Companies,SBI, PNB ,LIC, GIC,entered into mutual funds.

y 1993- Private Sector such as,JP Morgan, Morgan Stanly, etc entered into

Indian Mutual fund market.


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Mutual fundsy Mutual fund:- statistics issued by SEBI

TradingDate Debt/Equity

GrossPurchases(Rs Crores)

GrossSales(RsCrores)

NetInvestment(Rs Crores)

11-Mar-10

Equity 468.6 713 -244.4

Debt 3659.7 2804.4 855.3


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Referencey www.economictimes.com

y www.nseindia.com

y www.bseindia.com

y www.moneycontrol.com

y www.sebi.com


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Thank You

Copy of Capital Mkts Final

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