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8/2/2019 Secondry Market

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Stocks

A stock is a certificate that certifies ownershipof a certain portion of a firm.

When a firm issues new shares of stock, it doesnot add to its debt. Instead, it brings inadditional owners who supply it with funds.

Stockholders have a right to select themanagement of the firm and to share in itsprofits.


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Stocks

Unlike bonds or direct borrowing, stocks do notpromise a fixed annual payment. Returnsdepend on company performance. If profits arehigh, the firm may pay dividends.

Most stocks bought and sold on the stockmarket daily are not newly issued but issuedlong ago, when the firm goes public.


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Overview of Financial Markets

Two types of financial markets

Money markets

Capital markets

Primary market

Secondary market


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WHAT IS STOCK EXCHANGE

Stock exchange is that place where trading ofshares is done in terms of sale and purchase.
http://en.wikipedia.org/wiki/Image:Bombay-Stock-Exchange.jpg


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Role and Functions of

a stock exchange

Established for the purposeof assisting, regulating and

controlling business ofbuying, selling and dealing

in securities


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Role and Functions ofa stock exchange contd

Provides a market for thetrading of securities to

individuals and organizationsseeking to invest their savingor excess funds through the

purchase of securities


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FROM THE COMPANY POINT OF VIEW

1.A company whose shares quoted on stockexchange they enjoy better reputation and credit.

2.The market for the shares of such a company isnaturally widened.

3.The market price of securities is likely to be

higher in relation to its earnings,dividends andproperty values.This raises the bargaining powerof the company in the event of a takeover,mergeror amalgamation.


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FROM THE INVESTORS POINT OF VIEW

1.Liquidity of the investment is increased

2.The securities dealt on a stock exchange are good

collateral security for loans. 3.The stock exchange safeguards interests of investors

through strict enforcement of rules and regulations.

4.The present net worth of investments can be easilyknown by the daily quotations.

5.His risk is considerably less when he holds orpurchases listed securities.


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INTRODUCTION :

There are 23 stock exchanges in theIndia. Mumbai's (earlier known asBombay), Bombay Stock Exchange isthe 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 isalso the oldest in Asia. Among thetwenty-two Stock Exchanges recognisedby the Government of India under theSecurities Contracts (Regulation) Act,1956, it was the first one to be

recognised and it is the only one that hadthe privilege of getting permanentrecognition ab-initio.
http://en.wikipedia.org/wiki/Image:Bombay-Stock-Exchange.jpg


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Name of Indian stock exchange:1. Bombay Stock Exchange

2. National Stock Exchange

3. OTC Exchange Of India

4. Ahmedabad Stock Exchange

5. Bangalore Stock Exchange

6. Bhubaneshwar Stock Exchange

7. Calcutta Stock Exchange

8. Cochin Stock Exchange

9. Coimbatore Stock Exchange

10. Delhi Stock Exchange

11. Guwahati Stock Exchange


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12. Hyderabad Stock Exchange

13. Jaipur Stock Exchange

14. Ludhiana Stock Exchange

15. Madhya Pradesh Stock Exchange

16. Madras Stock Exchange

17. Magadh Stock Exchange

18. Mangalore Stock Exchange

19. Meerut Stock Exchange

20. Pune Stock Exchange

21. Saurashtra Kutch Stock Exchange

22. Uttar Pradesh Stock Exchange

23. Vadodara Stock Exchange


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Oldest Stock Exchange in Asia Starting in 1850 under Banyan trees in front of Mumbai

Town Hall Horniman Circle Park, with 4 Gujarati & 1Parsi people

Changed place, Once Members increases. In 1874 group came at Dalal Street

In 1875 official organization known as 'The Native Share& Stock Brokers Association

In 1956 it became first Stock Exchange which wasrecognized by Govt. of India.


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In 1986 BSE developed BSE SENSEX (Sensitive Index).

Base year is 1978-79

Measures overall performance of this Exchange.

In 2000 the BSE used this index to open its derivativesmarket, trading Sensex futures contracts

The development of Sensex options along with equityderivatives followed in 2001 & 2002 expansion ofplatform of trading

Premchand Roychand was a leading stockbroker of thattime, and he assisted in setting out traditions,conventions, and procedures for the trading of stocks atBSE and they are still being followed.


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India's biggest exchange, in terms of listed companies andmarket capital position.

BSE has played a pioneering role in the development of the

Indian securities market

BSE's pride that almost every leading corporate in India hassourced BSE's services in capital raising and is listed with BSE

BSE, as a brand, has been and is synonymous with the capitalmarket in India. Its SENSEX is the benchmark equity index thatreflects the health of the Indian economy


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First in India to introduce Equity Derivatives

First in India to launch a Free Float Index

First in India to launch US$ version of BSE SENSEX

First in India to launch Exchange Enabled Internet Trading Platform in1995

First in India to obtain ISO certification for a stock exchange 'BSE On-Line Trading System (BOLT) has been awarded the globally

recognised the Information Security Management System standardBS7799-2:2002.

First to have an exclusive facility for financial training

First in India in the financial services sector to launch its website inHindi and Gujarati

Shifted from Open Outcry to Electronic Trading within just 50 days

First bell-ringing ceremony in the history of the Indian capital markets(listing ceremony of Bharti Televentures Ltd on 18th Feb, 2002


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ACC HDFC BANK

ITC ONGCSUN PHARMA AIRTELHERO HONDA JAIPRAKASH ASRELIANCE TATA MOTORSBHEL HINDALCO

L&T REL COMMUTATA POWER DLFHUL MAH N MAHREL INFRA TATA STEELGRASIM ICICI BANK

MARUTI SUZ SBITCS HDFCINFOSYS NTPCSTRELITE WIPRO


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NSE

The National Stock Exchange (NSE),located in Bombay, is India's first debtmarket. It was set up in 1993 toencourage stock exchange reform

through system modernization andcompetition. It opened for trading inmid-1994. It was recently accordedrecognition as a stock exchange by theDepartment of Company Affairs. The

instruments traded are, treasury bills,government security and bonds issuedby public sector companies
http://en.wikipedia.org/wiki/Image:National_Stock_exchange_Mumbai.JPG


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CONT.

The Organisation: The National Stock Exchange of IndiaLimited has genesis in the report of the High Powered StudyGroup on Establishment of New Stock Exchanges, whichrecommended promotion of a National Stock Exchange byfinancial institutions (FIs) to provide access to investors from

all across the country on an equal footing. Base year is 1983-84

Based on the recommendations, NSE was promoted byleading Financial Institutions at the behest of the Governmentof India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country


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Security And Exchange Board of India

Established in 1988 on the proposal of Cabinet Ministry,and got legal rights on 30-jan-1992


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OBJECTIVES OF SEBI

1.Registring and regulating the working of stockbrokers,sub-brokers,share transfer agents, underwriterswho may be associated securities market in any manner.

2.Registering and regulating the working of collectiveinvestment scheme including mutual funds.

3.Prohibiting insider trading in securities.

4.Regulating substantial acquisition of shares andtakeovers of companies.


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Cont

5.Calling for information from, undertakinginspection, conducting inquiries and audits of stockexchanges and intermediaries and self regulatoryorganizations in the securities market.

6.Performing such function and exercising suchpowers under the provisins of the capitalissues(control) act 1947 and SCRA 1956,as may bedelegated to it by the central government.

7.Performing such other functions as may beprescribed.


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conclusion

THE STOCK EXCHANGE ISCONSIDERED TO BE THEBAROMETER OF ECONOMIC

ACTIVITY.


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