SharehhhhhhhhMarket

8/16/2019 SharehhhhhhhhMarket

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AN OVER VIEW OFINDIAN SHARE MARKET

DAVID ASHIRVADAM

ShareKhan Pvt Ltd


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STOCK MARKET ORSHARE MARKET

• Stocks are issued by companies in order to raise capitals

and are bouht by investors in order to ac!uire a portion

o" the company#

• A Stock market is the place $here buyin and sellin o"

stocks takes place# %o$adays due to internet and

advanced technoloy buyin and sellin o" stocks takes

place any$here in India and also "rom "orein country&

there is no need to be physical present in e'chanes like

%S( and )S(# Stock markets are per"ect competitive

market#


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Who is a shareholder?• A shareholder *or stockholder + is an individual or

company *includin a corporation+ that leally o$ns

one or more shares o" a company#

• Shareholders are ranted privilees dependin on the

class of stock& includin the riht to vote on matters

such as elections to the board o" directors& the riht to

share in distributions o" the company,s income& the

riht to purchase ne$ shares issued by the company&

and the riht to a company,s assets durin a li!uidation

o" the company#• Shareholders vary "rom individual stock investors to

lare hede "und traders#


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Why does a company issue shares to thepublic?

• A company may $ant additional capital to invest in ne$

pro-ects#

• .he promoters may simply $ish to reduce their holdin&

"reein up capital "or their o$n private use#

• /nce a company is listed& it $ill be able to issue "urther

shares via a rihts issue& thereby aain providin itsel"

$ith capital for expansion without incurring any

debt#

• 0inancin a company throuh the sale o" stock in acompany is kno$n as equity financing.


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Importance and role of the stock markets

• Raising capital for businesses• Government capital-raising for development projects

• Mobilizing savings for investment

• Facilitating company growth through acquisitions

• Creating investment opportunities for small investors

• Barometer of the economy


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Types of Market

1. 1. Primary Market1. The first group of investors to whom a new issue of a security is sold.

2. The primary market consists of the issuer and the first buyers of the issue.

3. The primary market can be a time more volatile than the secondary market because it is

difficult to determine the underlying value of new issues.

2. Secondary Market

1. A market where investors purchase securities or assets from other investors, rather than

from issuing companies themselves.

2. The national exchanges - such as the New York Stock Exchange

and the NASDAQ are secondary markets.


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Big Stock MarketsNYSE ( New York Stock Exchange)

NASDAQ-America

Do$ 1ones

Tokyo Stock ExchangeLondon Stock Exchange

Bombay Stock Exchange !ndia

Nationa" Stock Exchange !ndia


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Big Stock Markets


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Stock Exchanges in India

.here are 22 stock e'chanes in India# )ut& t$o o" them

are biest#

NSE (National stock exchange) is the 2th larest stock

e'chane in the $orld by market capitali3ation and larest

in India by daily turnover and number o" trades& "or both

e!uities and derivative tradin#

BSE (Bombay stock exchange) - is the oldest stocke'chane in Asia $ith a rich heritae o" over 456 years o"

e'istence#


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Bombay Stock Exchange• Location7 Mumbai• Inde'7 Sense' *S!"Sitve ind!#$

• 8onsist o" roup o" 59 Stock

• Members7 :;<

• Date o" Launch7 95 1anuary 42:=

• )ase period7426:>62

• )ase Inde' Value7499

•Sectoral indices

• .imin7 92#59 AM ? 95#59 PM

• Listed 8o# 7 over =999


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National StockExchange

• Location# $%mbai

• !ndex# Ni&ty *%ational Stock ('chane 0i"ty+

• 'onit o& gro% o& *+ Stock

• Date o& La%nch# Ari" ,.

• Bae eriod# ,/-.

• Bae index 0a"%e# ,+++• $ember 123


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Stock Broker

• A stockbroker is person $ho is licensed to tradein shares#

• )rokers also have direct access to the share

market and can act as your aent in share

transactions#

• 0or this service they chare a "ee i#e# brokerae#

• .hey can also o""er additional services like

advice on shares& debentures& overnmentbonds and listed property trusts and non>listed

investment options *cash manaement trusts&

property and e!uity trusts#


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TRADING IN STOCK MARKET • The market reg%"ator the Sec%ritie and

Exchange Board o& !ndia (SEB!) ha made itcompulsory to open the demat accounti& yo% want to b%y and e"" tock4

•A eron want to b%y5e"" tock in the tockmarket ha to 6rt "ace hi5her order with abroker or can do theme"0e %ing on"inetrading ytem4

• The tock %rchaed wi"" be ent to theyo%r demat acco%nt4 Thi roce i ca""ed7o""ing Sett"ement 'yc"e4


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What is Deat acco!nt"DE$AT tand &or DEMATeria"i8ation4 !t

i roce in which hyica" aerhare are con0erted into aer"e(com%teri8ed) &orm4

!n !ndia there are two Deoitoryorgani8ation ca""ed NSDL (Nationa"Sec%ritie Deoitory Ltd4) 9'DSL('entra" Deoitory Ser0ice !ndia Ltd4)

Broker and mot o& Bank ro0ide&aci"ity to oen demat acco%nt4


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market and in stock

trading

Open- The tock rice in beginning o&Day(i4e4 in morning)4

High - The tock rice reached at thehighet "e0e" in a day4

Low - The tock rice reached the "owet"e0e" in a day4


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I#ortant ters in stock arket andin stock trading

Close - The tock rice at which it remain a&terthe end o& market timing or the 6na" rice o&the tock when the market c"oe &or a day4

olume - ;o"%me i nothing b%t


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term% Mid term and Long

term trading$hort Term Trading -

Stock trading done &rom one week toco%"e o& month i ca""ed hort term4

Mid term Trading -Stock trading done &rom one month to

co%"e o& month ay ix to eightmonth i ca""ed mid term trading4


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In$estent in Short ter% Mid ter and &ong ter trading

Long term trading -Stock trading done &orm co%"e o& month

to co%"e o& year i ca""ed "ong termtrading4'omanie whoe &%ndamenta" are goodand ha0e good &%t%re "an then the tock

o& thee comanie are %ed &or "ong termtrading4>enera""y trader ha0ing good caita" go&or "ong term trading4


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Stock Market Conditions There are two way to decribe the genera"

condition o& the tock market#

1)BULL MARKET

2)BEAR MARKET

!ull Market - A B%"" $arket indicate the contant %ward

mo0ement o& the tock market4 A artic%"artock that eem to be increaing in 0a"%e i

decribed to be b%""ih4


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Stock Market Conditions

!EA& MA&'ETA bear market indicate the contin%o%downward mo0ement o& the tock market4 tockthat eem to be decreaing in 0a"%e i decribed

to be bearih4


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Ho' Sensex Index is ca(c!(ated

The formula for calculating the sensex %*sum o" 0ree 0loat Market capitali3ation o" 59 benchmark

stocks+@ Inde' 0actor

hereB

Inde' 0actor C 499market cap value in 426:>62#


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Exa#(e on Sensex Index

ca(c!(ationA%me enex ha on"y 2 tock name"ySB! and 7EL!AN'E4 Tota" hare in SB! are

*++ o%t o& 2++ are he"d by go0ernment andon"y /++ are a0ai"ab"e &or %b"ic trading47e"iance ha ,+++ hare o%t o& which *++are he"d by romoter and *++ area0ai"ab"e &or trading4 A%me rice o& SB!tock i 74 ,++ 9 7e"iance i 7S4 2++4


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Exa#(e on sensexca(c!(ation

Solution –

.hen 0ree 0loat 8ap o" these t$o company

C *599@499E;99@62 $as


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Ho' Ni)t* Index is ca(c!(ated

.he %ational Stock ('chane *%S(+ isassociated $ith %i"ty

The calculation of "ifty is same as we

calculated S!"S!#. &ut with two keydifferences.

4# )ase year is 422; and base value is 4999


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!xample of "ifty 'alculation• Assumin )ase inde'C4999 & Market 8ap inde' consist

o" ; stocks& then

'ompany 'urrent Market'apitalisation ()s.*n +akhs$

&ase Market'apitalisation()s. *n +akhs$

Reliance 4=&=:&624#4 4=&;G&


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8ont##

Inde'C * 8urrent Market 8apitalisation +

)ase Market 8apitalisationMultiply by )ase Value

Inde'C 65&59&;==#4 @4999 65&44&5:5#G

Inde'C 499


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Important Indices in the $orld

"ame of*ndex

'ountry 4eight "o. PfStock

&ase 5ear

&ase6alue

S P 8%F%i"ty

%S(IL&India

Market 8apitalisation ;9 422; 4999

S(%S(F 59 )S(&India

Market 8apitalisation 59 426:>62 499

%ASDA499

%ASDA& SA

Market 8apitalisation 499 42:; 4


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Bene)its o) in$esting in shares

• Possibility o" increase invalue o" share

• Income "rom dividends

•

(asy li!uidity• .a' bene"its on income

earned such as e'emptions

s 49*5G+ "or dividends&

Sec ;G "or calculatin S.8 L.8


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4#DE$AND AND S?@@LY

24BAN 7ATE

/4S@E'?LAT!;E @7ESS?7E

.4 A'T!NS C ?NDE77!TE7S AND TE7C!NAN'!AL !NST!T?T!NS

*4'AN>E !N '$@ANYFS BA7D C D!7E'T7S

CA+SES O, -RICE ,&+CT+ATION


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=# C!NAN'!AL @S!T!N C TE '$@ANY14 T7ADE 'Y'LE

G4 @L!T!'AL CA'T7S

4 SY$@ATET!' CL?'T?AT!NS

,+4 OTHE& (ACTO&$)

A4 EH@E'TED $NSN

B4 @E7SNAL EALT C EAD C>;E7N$ENT 7 'A!7$AN C TE'$@ANY

'4 !L @7!'ES !N TE !NTE7NAT!NAL$A7ET

8ont


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5ou7

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