Financial market env.

In India

Growth and Evalution of Stock mrket in India

Process of liberlization and de-regulation that begin in late 1980s has directly effected the process of capital market of the country. No. of steps were taken by the Govt. in order to bring aling economy back to rails. The extent of growth can be gauged from the fact that amount realised by the primary market which has lowers in 70s and during the next up coming years. it went up high India has the highest no. of listed companys in the world and this no. as on the date more then 10,000 companys app.

An Overview about Stock Market

What are Markets? What are shares? What is a stock exchange? Who is a broker? What is a Demat A/c? Buying and selling of dematerialised securities How to receive income from shares? How much should you invest? How to make investment decisions? How to track your investments?

What are Markets?

A stock market is a market for the trading of company stock/ shares, and derivatives. This includes securities listed on a stock exchange as well as those only traded privately. Market is a place where buyers and sellers of securities can enter into transactions to purchase and sell shares, bonds, debentures etc. 1.1 Primary markets: The primary market is that part of the capital markets that deals with the issuance of new securities. 1.2 Secondary markets: The secondary market is the financial market for trading of securities that have already been issued in an initial private or public offering. In the secondary market, securities are sold by and transferred from one investor or speculator to another.

2. What are shares?

A share is one of a finite number of equal portions in the capital of a company, entitling the owner to a proportion of distributed, nonreinvested profits known as dividends and to a portion of the value of the company in case of liquidation. Equity is a share in the ownership of a company. It represents a claim on the companys assets and earnings. As you acquire more stock, your ownership stake in the company increases. The terms share, equity and stock mean the same thing and can be used interchangeably.

3. What is a stock exchange?

Securities contracts act of 1956 defines, an association, organization or body of individuals, incorporation, established for the purpose of assisting, regulating and controlling business in buying, selling and dealing in securities

Meaning
Stock exchange is a place where buyers and sellers are come together for undertaking transactions involving sale of securities.

Function of Stock Exchange

It provide ready market for securities It provide liquidity It helps in price discovery of securities. It insure low cost of raising finance issue of new market instruments in the market Helps in capital generation process. Spreads equity cult & saving habits. Member of stock exchange provide investment policy. Promotion of investment. Help capital formation. Give mobility to capital. Exercise control over the working of companies. Marketing of new issues.

In India overview
There are 23 stock exchanges in the India. Mumbai's (earlier known as Bombay), Bombay Stock Exchange is the largest, with over 6,000 stocks listed. The BSE accounts for over two thirds of the total trading volume in the country. Established in 1875, the exchange is also the oldest in Asia. Among the twentytwo Stock Exchanges recognized by the Government of India under the Securities Contracts (Regulation) Act, 1956, it was the first one to be recognized and it is the only one that had the privilege of getting permanent recognition ab-initio.

Name of Indian stock exchange:

1.Bombay stock exchange 2.national stock exchange(Mumbai) 3.Banglore stock exchange 4.Utter Pradesh stock exchange (Kanpur) 5.Magadh stock exchange(Patna) 6.Ahmedabad stock exchange 7.vadodara stock exchange(Baroda) 8.Bhubaneswar stock exchange 9.Calcutta stock exchange(kolkata) 10.madras stock exchange

11.Cochin stock exchange 12.coimbatore stock exchange 13.Gauhati stock exchange 14.Hydrabad stock exchange 15.Madhya Pradesh stock exchange(indore) 16.Jaipur stock exchange 17.Ludhina stock exchange 18.Mangalore stock exchange 19.Pune stock exchange 20.saurashtrakutch stock exchange

Guidelines of listing
Checklist Listing means admission of securities to dealings on a recognised stock exchange. The securities may be of any public limited company, Central or State Government, quasi governmental and other financial institutions/corporations, municipalities, etc. The objectives of listing are mainly to : provide liquidity to securities; mobilize savings for economic development; protect interest of investors by ensuring full disclosures. BSE has set various guidelines and forms that need to be adhered to and submitted by the companies. These guidelines will help companies to expedite the fulfillment of the various formalities and disclosure requirements that are required at various stages of Public Issues
Initial Public Offering Further Public Offering

REQUIREMENTS
Some of the requirements are as under :
Minimum Listing Requirements for New Companies Minimum Requirements for Companies Delisted by BSE seeking relisting on BSE Permission to Use the Name of BSE in an Issuer Company's Prospectus Submission of Letter of Application Allotment of Securities Trading Permission Requirement of 1% Security Payment of Listing Fees Compliance with the Listing Agreement Cash Management Services (CMS) - Collection of Listing Fees

Hours of operation
Session Beginning of the Day Session pre-open trading session Trading Session Position Transfer Session Closing Session Option Exercise Session Margin Session Query Session Timing 8:00 - 9:00 9:00 - 9:15 9:15 - 15:30 15:30 - 15:50 15:50 - 16:05 16:05 - 16:35 16:35 - 16:50 16:50 - 17:35

End of Day Session

17:30

Working
Trading System: The NSE has an automated screen based trading systems, which allow orders to be placed at a pre-determined or best price. The automated screen based trading system for the NSE it is known as the National Exchange for Automated Trading (NEAT) system. The online trading systems follow the principles of an order driven market which facilitates efficient input of orders and automatic matching, resulting in faster execution of orders in a transparent manner. The member-brokers enter orders for purchase or sale of securities from work stations connected to the exchange trading systems. Order matching is anonymous (i.e. the orders are matched by the exchange system) and the identity of the counter-party is not revealed.

 Order Matching The trading system sorts pending orders in pricetime priority for order matching purposes by matching the best buy order and best sell order. Best buy order is the one with the highest price and the best sell order is the one with the lowest price (the system sorts buy orders from the seller point of view and vice versa). Orders may match with more than one order resulting in multiple trades for an order. Member broker can place market orders (which will be matched with the best available order) or limit orders (wherein member can specify the price for the order) which will remain a part of order books until matching.

Orders are assigned a unique order number by the trading system (for a member broker, security and transaction type) and time-stamped on entry by the member broker by the trading system. The orders are processed for potential match. Pending orders are stored in different books based on price-time priority in the following sequence: Best Price

Within Price, by time priority.

Price priority of two orders entered into the system, the order with the best price gets the higher priority for trade matching.

Time Priority of two orders having the same price, the order entered earliest gets the higher priority for trade matching.

Additionally, member brokers can place conditions at the time of order entry. These conditions are as under: Time Conditions: These conditions, as the name suggests, can be classified as Day orders, Good till Canceled, Good till Date order and Immediate or Cancel order. Price conditions: This permits members to specify conditions to execute the trade at specified price or best price. Members can also place stop loss orders. Quantity conditions: The member can disclose a part of the order quantity to the market. For example, an order for quantity 1000 at a limit price can specify a disclosed condition of quantity 200. This will ensure that only 200 quantity at a point of time is displayed to the market. Once this quantity is traded, another quantity 200 is automatically released and so on till the full order is executed. The Exchange may set a minimum disclosed quantity criteria from time to time.

 Minimum FII: these orders allow the trading member to specify the minimum quantity by which an order should be filled. All or none orders: all or none orders allow a trading member to impose the condition that only full order should be matched against.

Those debt securities are mainly negotiated bilaterally and subsequently reported to the stock exchanges.

How the market sets prices

The price is set by the buyer willing to pay the highest price The market price will be set by the buyer who can take best advantage of the asset Superior information about an asset can increase its value by reducing its risk

4. Who is a broker?
A stockbroker is person who is licensed to trade in shares. Brokers also have direct access to the share market and can act as your agent in share transactions. For this service they charge a fee. They can also offer additional services like advice on shares, debentures, government bonds and listed property trusts and non-listed investment options (cash management trusts, property and equity trusts.

5. What is a Demat A/c?

Investors who wish to trade in the market need to have a dematerialized, or demat, account. In India, the government has mandated two entities National Securities Depository, or NSDL, and Central Depository Services (India), or CDSL to be the custodian of dematerialized securities.

6. Buying and selling of dematerialised securities

The procedure for selling dematerialized securities is very simple. After you have sold the securities, you would instruct your DP to debit your account with the number of securities sold by you and credit your broker's clearing account. This delivery instruction has to be given to your DP using the delivery instruction slips given to you by your DP at the time of opening the account. For receiving demat securities you may give a one-time standing instruction to your DP. This standing instruction can be given at the time of account opening or later. Alternatively, you may choose to give separate receipt instruction every time some securities are to be received.

7. How to receive income from shares?

We invest in shares to make money either through a shares capital growth, i.e. the amount by which the share price increases in value over time, or through the dividends it pays to its shareholders. Dividends are payments made by companies to shareholders from their profits.

8. How much should you invest?

Asset allocator and other tools Benefits of Investing Early Power of compounding Magic of compounding Risk vs. Returns The Need To Diversify Financial Investment Options Financial Investment Options

9. How to make investment decisions?

The stock market has, perhaps, the most exciting investment opportunities for the investor community. At the same time, it could be unnerving and scary. In fact, equity investment has always remained a big challenge, not only for retail but institutional investors, too. In short, investing in equities can be a difficult proposition for retail investors. However, equity must form a part of every investors portfolio. The proportion could vary, depending on the investors age, monetary requirements, risk appetite, etc.

 To cope with volatility, it is important to have a disciplined and systematic approach to equity investment. Set your own rules and more importantly, follow them religiously. Indeed, the mantra for successful equity investment is a well thought-out, disciplined investment strategy. A long-term monetary commitment, adherence to discipline in investment and decisions based on company fundamentals are essential ingredients for successful equity investment.

10. How to track your investments?

The Portfolio Manager tracks and monitors all your investments, cash flow and assets, through live price updates. Investments like equity, mutual funds, assets, cash flows, borrowing and more can all be tracked. Displayed in real time, it is the most up-to-date and precise indicator of your net worth! With the Portfolio Manager, you can not only view your investments at each stage, but can use this record of your holdings to base any future investments decisions.

 The Portfolio Manager comes along with some useful tools to gain useful insight of volatile markets. These tools help you to track the trends of your current investments as well as some stocks that have caught your eye.