B. R. Murthy

Securities

and

Portfolio management

BEDADURI RAMA MURTHY B. Com, B.ED, MBA, ( M. Com ), AP-SET,

Associate Professor Dept. MBA , GIVC

And

Teaching Associate ,Academy Of Basic Concepts Zone (ABCZ)Room No 26, Metro Complex, Near Girls College, Madanapalli.

brmurthy.mba@gmail.com

Investment

1. The Investment Environment

2. Classifications of Financial Market

3. Classification of Financial Instruments

4. Securities Market

How Securities are Traded

Investment Avenues

Financial Derivatives(Futures, Options)

Equity Shares(Blue Chip , Growth, Income

Cyclical Shares)

Non-Marketable Instruments(Bank Deposits, Post Office Deposits, Public Provident Finds, National Saving Scheme,

Indira Vikas Patra, Kisan Vikas Patra)

Money Market Instruments(Treasury bills, Commercial Bills,

Certificates Of Deposits)

Bonds(Guilt Edge Securities, RBI Relief Bonds,

Private Sector Debentures, Preference Shares)

Life Insurance Schemes(Traditional & ULIP Plans)

Mutual Fund Schemes(Growth, Income, Balanced Schemes)

Real Estates(Real Estate, Commercial Property, Agriculture Land, Time Share in a

Holiday Resort)

Precious objects(Gold and Silver, Precious Stones &

Art Objectives')

Nature Of Clime

Seasoning Of Clime

Timing Of Delivery

Maturity of Clime

Debt Market Equity Market

Primary Market Secondary Market

Spot Market Future Market

Money Market Capital Market

STOSCK MARKET IN INDIA

As of January 2005 there were 23 stock exchanges

recognized by the central government.

The most important development in the Indian stock

market was the establishment of the National Stock

Exchange (NSE) in 1994.

Within a short period it emerged as the largest stock

exchange surging ahead of the Bombay Stock

Exchange (BSE)

Security Market

• Structure of the Securities Market

• Participants in the Securities Market

• Primary Equity Market

• Public Issue

• Secondary Equity Market (Stock Market)

• Trading and Settlement

• Buying and Selling Shares

• Stock Market Indices

• SEBI’s Regulation

STRUCTURE OF THE SECURITIES MARKET

Securities

Market

Equity

Market

Debt

Market

Derivatives

Market

PARTICIPANTS IN THE SECURITIES MARKET

Stock Exchanges Listed Securities Depositories Brokers FIIs Merchant Bankers or Investment Bankers Mutual Funds Registrars Underwriters Bankers to an issue Debenture trustees Venture capital funds. Credit rating agencies

BOOK BUILDING

Book building is a method of offering shares

to investors in which the issue price is not fixed in

advance (as is done in a fixed price offer) but is

determined through a bidding process.

How Securities are Traded

Open System

Screen-based System

Nature of Securities Trading

Cash Transaction Forward TradingRolling TradingMargin TradingScrip less TradingInternet tradingDemat Trading

Clearing

Trade ComparisonsSettlementsScreen Based Trading System

Return ri Probability Pi

Weighted AvgReturn piri

8 0.15 1.20

9 0.20 1.80

10 0.30 2.70

11 0.20 2.20

12 0.15 1.80

1.0 E(r) 10

RiPi Ri-E(r)

(ri – E (r))2 Pi (ri – E (r)2

8 0.15-2

4 0.6

9 0.20 -1 1 0.2

10 0.30 0 0 0

11 0.20 1 1 0.2

12 0.15 2 4 0.6

Ri=1 1.6