8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 1/21

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 2/21

` ³Sacrifice of certain present value for some

uncertain future value´

Economic activity

Eg stocks mf bonds money mkt funds collctibles

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 3/21

` Real

` Real estate

` Bullion

`  Art` Financial

` Debts Equity

MF

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 4/21

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 5/21

` Safety

` Income

` Growth of capital

` Tax minimization` Marketability

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 6/21

` Mkt wch deals with financial assets or instrments

issued by org, corporate units, central n state

govts

Two categories f Security mkt

Primary mkt- mkt for public issues(IPO)

Secondary mkt-deals with already issued

securities of all types, thru authorised stock

xchanges.

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 7/21

` The securities contracts(regulation) act 1956

` SEBI Act 1992

` Depositories Act 1996

` Foreign Xchange regulation Act, 1973` Companies Act 1956 etc

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 8/21

` Ctrl over issue of capital

` Establishment of regulator 

` Screen based trading

` Risk mgt` Trading Cycle

` Dematerialization

` Derivatives

` Settlement Guarantee

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 9/21

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 10/21

` Mobilization

` Safe n fair deal

` Canalization of funds

` Raises standard of performance of cmpny` Info to investors

` Fixation of prices

` Promotes economic growth

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 11/21

` Formal admission of security to trading platform of 

hhe exchange

Benefits

Trading platformFair price

Liquidity

Porablity

Easy tax assesments

Nation¶s devlpmnt

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 12/21

` Selection of broker 

`  Agreement with broker 

` Placing an order 

Dayorder 

GTC- Goods till Cancelled

GTD- Goods till date/days

IOC- Immediate or cancel order 

FOK- Fill or kill

Limit price order 

market price order 

stop loss price order 

Disclosed order Execution of order 

Issue of Contract note

settlement

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 13/21

` Speculation

Investment to make quick money by selling the

securities on his own a/c & risk.

Market MakersDon¶t earn commission from their activities.

Simply buy n sell share on their own a/c. buy sell

diffrnz z called Spread.

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 14/21

` Involves what counter parties owe , and which

counter parties are due to receive on the

settlement date thereafter the obligations are

discharged by settlement.` Clearing corporation , clearing members ,

custodians, clearing banks, depositories and

Proffesional clearing member.

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 15/21

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 16/21

` Physical share certificates of an investor are taken

back by the company and an equivalent number of 

securities are credited in e-form at the request of 

investor.

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 17/21

` This s/m holds shares in the form of e-form.

` This is paperless trading and transfers

electronically without involving share certificates

and transfer deeds.` Two depositories

NSDL(national Securities Depository ltd)

CDSL(Central Depository Services India ltd)

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 18/21

NSDL(national Securities Depository ltd)

1st indian depository promted by IDBI, unit trust of 

india and NSE to provide e-depository facilities

CDSL(Central Depository Services India ltd)promoted by BSE, association with HDFC bank,

bank of india, Bank of baroda,SBI

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 19/21

` Dematerialization

` Rematerialization

`  A/c transfer 

` Pledge & hypothecation` Linkages with clearing system

` Corporate actions

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 20/21

`  Agent of depository & is the medium thru which

shares are held in e-form.

`  Are representatives of the investor, providing the

link b/w the investor and the company through thedepository.

 Activities of DP include

Maintaining securities a/c balances

Intimation of the position of the account toinvestors periodically.

8/8/2019 Investment Management Module 1

http://slidepdf.com/reader/full/investment-management-module-1 21/21

` Exercise conducted by rating organization to

evaluate the credit worthiness of the issuer wrt the

instrument being issued.

` CRISIL(credit rating & info services of India ltd)` ICR A(Invest info n credit rating agency of India )

` CARE(credit analysis & research ltd)

` ONICR A