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Prof.

Mahesh Haridas, Christ University, Bangalore

4/20/2012

Capital market deals in long term securities inclusive of both government securities and corporate securities. It comprises of primary market or new issue market and secondary market.

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

New issue market arranges for raising capital through floating of new issues by the corporate units in the form of shares and debentures. Secondary market segment or stock exchanges are engaged in trading. ie; buying and selling of existing securities.

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Mobilise long term savings to finance long term investments Provide risk capital in the form of equity to the entrepreneurs Provide liquidity Lower the cost of transaction and information Improve the efficiency of capital allocation through various pricing mechanism

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Enable quick valuation of financial instruments Provide insurance against market risk or price risk through derivative trading Provide operational efficiency through simplified transaction procedures, settlement timings and lowering transaction costs. Develop integration among equity and debt instruments, long term and short term funds, private and govt sectors, domestic and external funds etc.
Prof. Mahesh Haridas, Christ University, Bangalore 4/20/2012

Ways of floating new issues Issue of prospectus Private placement Right issue Bonus issue

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Fixed price Book building

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Initial issues Further issues

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Ordinary shares Preference shares Debentures

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Origination Underwriting distribution

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

SEBI was set up in 1988and has given with statutory power in 1992 through the enactment of SEBI Act 1992. Setting up of merchant bankers, investment and consulting agencies etc. Many mutual funds were set up in private sector The requirement to issue shares at a par value of Rs.10 and Rs.100 was withdrawn.

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Issue of GDR, ADR etc. Code of conduct on advertisement Issuer can make a public issue in demat form only Green shoe option ECS facility for refunds

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Setting up of new stock exchanges New settlement cycle NSDL and CDSL Corporate governance committee Exchanges, brokers and sub brokers brought under the purview of SEBI Insider trading regulation Introduction of circuit breaker Internet trading
Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Buy back of shares F&O trading Establishment of Investor Education and Protection Fund ETFs ISINs

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Improved disclosure standards and simplified issue procedures Underwriting made optional Permission of FIIs in Indian market Indian companies were allowed to raise capital from international capital markets A code of conduct on advertisement has been issued mutual funds

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Central listing authority was set up ECS facility

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

The post liberalisation era witnessed scams in the Indian capital market. All the scamsters employed common tactics like price manipulation, price rigging, insider trading etc.

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Public sector banks were forced to undertake more trading in govt securities. Banks began trading of repos. Most of the ready forward deals were done through bank receipts Bank of Karad and Metropolitan Co-operative Bank were having significant role in this issue. Boom began in July 1991 and peaked in April 1992. SENSEX rose by more than three and a half times than the previous year. BSE was closed for a month when the scam came to light.
Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Lifting up of prices of IT, Communication and Entertainment stocks. Eg.HFCL, Satyam Executed through the brokers in Kolkata and Ahmedabad. Sources of funds were NRIs and new private sector banks who accepted shares as collateral. Sharp decline in stock market because of economic slow down. Ketan Parekh borrowed huge amount from Ahmedabad based Madhavpura Mercantile Cooperative Bank, by way of pay orders without receiving cash or collateral.Bank of India discounted Rs.137 Cr worth of pay orders which bounced.
Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012

Started in August 2004 1 lac bogus demat a/c, bank a/c Covering 53 IPOs Failure of surveilance and vigilance of regulators Major issues: IDFC, Yes Bank Syndicate of culprits: karvy DP, brokers, bank branch managers etc.

Prof. Mahesh Haridas, Christ University, Bangalore

4/20/2012