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STOCK EXCHANGE

WHAT IS STOCK EXCHANGE

Stock exchange is that place where trading of shares is done in terms of sale and purchase.

INTRODUCTION :

• 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 twenty-two Stock Exchanges recognised by the Government of India under the Securities Contracts (Regulation) Act, 1956, it was the first one to be recognised and it is the only one that had the privilege of getting permanent recognition ab-initio.

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21 Other 21 Other Regional Regional

ExchangesExchanges

STOCK ExchangesSTOCK Exchanges

NSENSE

Structure of Indian Stock Exchanges

National National exchangeexchange

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Regional Regional exchangeexchange

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SEBISEBI

BSEBSE

REGULATORY BODY OF INDIAN STOCK EXCHANGE

Type:Statutory BoardLocation:Mumbai ,IndiaFounded:1992Key people:U.K SINHA(Chairman)Employees:525Web:www.sebi.gov.in

WHAT SEBI PERFORMS

Regulatory Operates the trading of stock ExchangeRegistration of Broker, transfer agents, merchant bank etc. Abolition of internal tradingAuditing of Stock exchangeRegistration of credit rating Agency

DEVELOPMENTResearch & DevelopmentPublighing of InformationEducates investorsPromoting Self operating organization Control over fraud

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

Cont…….

• 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

BOMBAY STOCK EXCHANGEType Stock Exchange

Location Mumbai, India

Coordinates 18°55′47″N 72°50′01″E / 18.929681°N 72.833589°E / 18.929681; 72.833589Founded 1875

OwnerBombay Stock Exchange Limited

Key peopleMadhu Kannan (CEO & MD)

Currency

No. of listings 6.123

MarketCapUS$1.28 trillion (Feb, 2010)

Volume US$980 billion (2006)

Indexes BSE Sensex

Website www.bseindia.com

HOURS OF OPERATION• Session Timing• Beginning of the Day Session 8:00 - 9:00• Trading Session 9:00 - 15:30• Position Transfer Session 15:30 - 15:50• Closing Session 15:50 - 16:05• Option Exercise Session 16:05 - 16:35• Margin Session 16:35 - 16:50• Query Session 16:50 - 17:35• End of Day Session 17:30

Cont…….• Bombay stock exchange : it has 30 companies sripted.

Housing related1. Associated Cement Companies Ltd2. Gujarat Ambuja Cements LtdTransport Equipments3. Bajaj Auto Ltd4. Hero Honda Motors Ltd5. Maruti Udyog Ltd6. Tata Motors Ltd.Capital Goods7. Bharat Heavy Electricals Ltd8. Larsen & Toubro LimitedTelecom9. Bharti Airtel Ltd10. Reliance Communications Limited Healthcare11. Cipla Ltd12. Dr Reddy's Laboratories Ltd13. Ranbaxy Laboratories LtdDiversified14. Grasim Industries Ltd Finance15. HDFC

CONT……• 16. HDFC Bank Ltd

17. ICICI Bank Ltd18. State Bank of India

• Metal, Metal Products & Mining19. Hindalco Industries Ltd20. Tata Steel LtdFMCG 21. Hindustan Lever Ltd22. ITC LtdInformation Technology23. Infosys Technologies Ltd24. Satyam Computer Services Ltd25. Tata Consultancy Services Limited26. Wipro LtdPower 27. NTPC Ltd28. Reliance Energy LtdOil & Gas29. ONGC Ltd30. Reliance Industries Ltd

CRITERA FOR SELECTING THE 30 COMPANIES FOR CALCULATING INDEX OF BSE

• Listing History: The company should have listing history on BSE for at least one year

• Track Record: Company should have good track record• Market Capitalizition :Company should be one among

100 market capitalizition of BSE & each company should have more than 0.5 of total capitalizition of BSE index

• Frequence of trading: Company stock should be traded on each & every trading day for the last one year.

• Industrial representation:Company should be a Leader in the industry it represents

sensex

• Sensex stands for “Sensitive Index” ,It represents BSE (Bombay Stock exchange)

• Sensex indicates all major companies of BSE • Sensex is calculatted using share prices of 30

major companies ,which are listed in BSE .• If the Sensex goes up ,it means that share valuaes

of the major companies have gone up& vice versa.

Market Capitalization • Market capitalization is the total worth of all outstanding

(issued) share of the company .it represents the total worth of a company

Free float Market capitalsition

Free float concept is an index construction methodology ,which makes use of free float shares in the market. free float market capitalization is the total worth of all shares of a company ,which are available for trading in the open market .These shares are called free float shares & are available for trading by any one.

EXP:

Calculation of sensex

• Sensex calculation is practiced SINCE 1986 • Initially it had been calculated using total market

capitalization method but the methodology changed to free float market capitalization since from 2003.Hence these days sensex is calculated using free float market capitalization of 30 major BSE listed companies & by using base Value

100(1978-79) • Sensex is calculated for every 15 seconds.

THE TOP TEN SINGLE DAY FALLS OF THE SENSEX HAS :

1. Jan 21, 2008 --- 1,408.35 points 2. Jan 22, 2008 --- 857 points 3. Feb 11, 2008 --- 833.98 points 4. May 18, 2006 --- 826 points 5. Dec 17, 2007 --- 769.48 points 6. Oct 17, 2007 --- 717.43 points 7. Jan 18, 2007 --- 687.82 points 8. Nov 21, 2007 --- 678.18 points 9. Aug 16, 2007 --- 642.70 points 10. Apr 2, 2007 --- 616.73 points

BSE CHART

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• Index Value:• 17,349.07 Trade Time:• 3:58PM IST• Change:•  385.61 (2.17%)• Prev Close:• 17,734.68• Open:• 17,503.04• Day's Range:• 17,309.47 - 17,526.80

NSE• The National Stock Exchange (NSE),

located in Bombay, is India's first debt market. It was set up in 1993 to encourage stock exchange reform through system modernization and competition. It opened for trading in mid-1994. It was recently accorded recognition as a stock exchange by the Department of Company Affairs. The instruments traded are, treasury bills, government security and bonds issued by public sector companies

CONT……….

• The Organisation: The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing.

CONT………

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

Cont……………………..ss

• NSE Group:1. India Index Services & Products Ltd. (IISL)2. National Securities Clearing Corporation Ltd. (NSCCL) 3. NSE.IT Ltd. 4. National Securities Depository Ltd. (NSDL) 5. DotEx International Limited

NSE• Type: Stock Exchange• Location: Mumbai, India• Coordinates :

19 3 37 72 51 35 / 19.06028 72.85972 / 19.06028; 72.85972° ′ ″N ° ′ ″E °N °E

• Founded: 1992• Owner:National Stock Exchange of India Limited• Key people:Mr.Ravi Narain - MD• Currency• No. of listings :1810• MarketCap:  4,701,923 crore (US$ 1,020.32 billion) (2009 August)• Indexes:S&P CNX Nifty

CNX Nifty JuniorS&P CNX 500

• Website: www.nse-india.com

PROMOTERS OF NSE

• IDBI

• IFCI

• LIC

• GIC

• THE SBI CAPITAL MARKET LTD.

• SHCIL

NIFTY

• Nifty indicates NSE .It is the leading index for large companies the National Stock Exchange of india.It consists of 50 companies representing 24 sectors of the economy.Nifty represents approxmately 47% of the traded value of all stocks on the National Stock exchange . It is calculated using base year 1995 & base index value 1000

• Calculation of Nifty

SPECULATION :

• Definition : it involves the buying,holding,selling,short-term selling ofstocks,bonds.commodities,currencies,collectibles or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via method like dividends or interest.

Kinds of speculation• Bull Market (Tejiwala): In case of that they purchase the

shares at current prices to sell at a higher price in the near future and makes a profit if his expectations come true.he is also called a long buyer.

Bear Market (Mandiwala) : He sells security in the hope that he will be able to buy them back at lesser price.It is also called “short selling”.

Securities prices

Cont………………

• Lame duck : When a bear has made contracts to sell securities,find it difficult to meet his commitment due to non-availability of security,,they always struggling..

• Stag : He is that type of speculator who applies for a large number of a shares in a new issue with the intention of selling them at a premium.He is bullish and very cautious.

How trading share in stock Exchange

Compulsory Have to open the following 3 a/cs

BANK A/C DE-MAT A/C TRADING A/C

BENEFITS OF STOCK EXCHANGE

• FROM THE POINT OF VIEW OF COMMUNITY:• 1.It assist the economis development by providing a body

of interested investors.• 3.It encourages capital formation

FROM THE COMPANY POINT OF VIEW

• 1.A company whose shares quoted on stock exchange they enjoy better reputation and credit.

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.

ROLE PLAYER

• EXTERNAL:----• 1.SHAREHOLDER• 2.DEBENTURE HOLDER

INTERNAL PLAYERS

• The members of the stock exchange can be divided into two parts:

• A.Broker: He is a commission agent who transacts business in securities on behalf of non-members.They may have number of sub-brokers to canvass and secure business for them.

• B.Jobber: He is an independent dealer securities.He purchase and sells securities in his own name. He is not allowed to deal with non-members directly.He works for profit.

CAUSES OF PRICE FLUCTUATION

• 1.DAMAND AND SUPPLY• 2.BANK RATE• 3.SPECULATIVE PRESSURE• 4.ACTIONS OF UNDERWRITERS AND

OTHER FINANCIAL INSTITUTIONS• 5.CHANGE IN COMPANY’S BOARD OF

DIRECTORS• 6.FINANCIAL POSITION OF THE COMPANY

HOW RATING IS GIVEN TO THE COMPANY?

• Basically rating is given after see the company 'image,management quality,assets quality,auditors quality,accounting accuracy.Rating is not fixed, it may be change. The rating grades are:

• AAA: HIGHEST SAFTY• AA: HIGH SAFTY• A: ADEQUATE SAFTY• BBB: MODERATE SAFTY• BB: IN ADEQUATE SAFTY• BC&D: HIGH RISK AND DEFAULT

CREDIT RATING AGENCY IN INDIA

• 1.CRISIL• 2.ICRA• 3.CARE• 4.DPCR

conclusion• THE STOCK EXCHANGE IS

CONSIDERED TO BE THE BAROMETER OF ECONOMIC ACTIVITY.