biness mgmt

8/4/2019 biness mgmt

1/25


2/25

Sr. No. Particulars Slide #

1. Nifty

2. B.S.E

3. Sensex

4. F.D.I.

5. F.I.I.

6. Franchisee

7. Import & Export

8. Capital Markets

9. Mutual Funds

10. Foreign Exchange

INDEX


3/25

11. Open End Fund

12. Closed End Fund

13. Active Fund

14. Passive Fund15. Equity Fund

16. Right Share

17. Bond share

18. N.A.V

19. Primary Market

20. Secondary Market

INDEX ( Contd)


4/25

NIFTY-50

NIFTY means National Index for Fifty Nifty Fifty was an informal term used to refer to 50

Popular large cap stocks on the New York Stock Exchange in

the 1960s and 1970s that were widely regarded as

solid buy and hold growth stocks. The stocks were often described as "one-decision", as they

were viewed as extremely stable, even over long periods of

time.

The most common characteristic by the constituents weresolid earnings growth for which these stocks were assigned

extraordinary high price-earnings ratios. Fifty times

earnings was not uncommon.


5/25

LIST OF NIFTY-50 COMPANIESABB Ltd. Electrical equipment

ACC Ltd. Cement and cement products

Ambuja Cements Ltd. Cement and Cement ProductsBajaj Auto Ltd. Automobiles - 2 and 3 Wheelers

Bharat Heavy Electricals Ltd. Electrical Equipment

Bharat Petroleum Corporation Ltd. Refineries

Bharti Airtel Ltd. Telecommunication - Services

Cipla Ltd. Pharmaceuticals

Dr. Reddy's Laboratories Ltd. Pharmaceuticals

GAIL (India) Ltd. Gas

Glaxosmithkline Pharmaceuticals Ltd. PharmaceuticalsGrasim Industries Ltd. Cement and Cement Products

HCL Technologies Ltd. Computers - Software

HDFC Bank Ltd. Banks

Hero Honda Motors Ltd. Automobiles - 2 and 3 Wheelers

Hindalco Industries Ltd. Aluminium

Hindustan Petroleum Corporation Ltd. Refineries

Hindustan Unilever Ltd. Diversified

Housing Development Finance Corporation Ltd. Finance -Housing

I T C Ltd. Cigarettes

ICICI Bank Ltd. Banks

Infosys Technologies Ltd. Computers - Software

Larsen & Toubro Ltd. Engineering

Mahanagar Telephone Nigam Ltd. Telecommunication - Services

Mahindra & Mahindra Ltd. Automobiles - 4 wheelers

Maruti Udyog Ltd. Automobiles - 4 wheelersNTPC Ltd. Power

National Aluminium Co. Ltd. Aluminium

Oil & Natural Gas Corporation Ltd. Oil

Exploration/ProductionPunjab National Bank Banks

Ranbaxy Laboratories Ltd. Pharmaceuticals

Reliance Communications Ltd. Telecommunication -

Services

Reliance Energy Ltd. Power

Reliance Industries Ltd. Refineries

Reliance Petroleum Ltd. Refineries

Satyam Computer Services Ltd. Computers - SoftwareSiemens Ltd. Electrical Equipment

State Bank of India Banks

Steel Authority of India Ltd. Steel and Steel Products

Sterlite Industries (India) Ltd. Metals

Sun Pharmaceutical Industries Ltd. Pharmaceuticals

Suzlon Energy Ltd. Electrical Equipment

Tata Consultancy Services Ltd. Computers - Software

Tata Motors Ltd. Automobiles - 4 WheelersTata Power Co. Ltd. Power

Tata Steel Ltd. Steel and Steel Products

Unitech Ltd. Construction

Videsh Sanchar Nigam Ltd. Telecommunication -

Services

Wipro Ltd. Computers - Software

Zee Entertainment Enterprises Ltd. Media &

Entertainment


6/25

BOMBAY STOCK EXCHANGE

The Bombay Stock Exchange (BSE) (Hindi : Bombay hareBzar) is the oldest stock exchange in Asia and has the largestnumber of listed companies in the world, with 4990 listed as of

August 2010.It is located at Dalal Street, Mumbai.

On Aug, 2010, the equity market capitalization of the companies

listed on the BSE was US$1.78 trillion, making it the 4th largeststock exchange in Asia and the 11th largest in the world.

With over 4,996 Indian companies listed & over 7700 scrips on

the stock exchange,[5] it has a significant trading volume. The BSE

SENSEX (SENSitive indEX), also called the "BSE 30", is aw

idelyused market index in India and Asia.

Though many other exchanges exist, BSE and the National Stock

Exchange of India account for most of the trading in shares in

India.


7/25


8/25

Initially, the index was calculated based on the full market capitalization

method. However this was shifted to the free float method from

September 1, 2003.

The Calculation of Sensex involves dividing the free float market

capitalization of 30 companies in the index by a number called Index

divisor. The Divisor is the only link to original base period value of theSensex. It keeps the index comparable over time and is the adjustment

point for all Index adjustments arising out of corporate actions,

replacement of scrips, etc.

The index has increased by over ten times from June 1990 to the present.

Using information from April 1979 onwards, the long-run rate of return onthe BSE Sensex works out to be 18.6% per annum, which translates to

roughly 9% per annum after compensating for inflation.

CONTD..


9/25

F.D.I.

Foreign direct investment (FDI) or foreign investment refers to long termparticipation by country A into country B. It usually involves participationin management,joint-venture, transfer of technologyand expertise.There are two types of FDI: inward foreign direct investment andoutward foreign direct investment, resulting in a netFDI inflow(positive

or negative) and "stock of foreign direct investment", which is thecumulative number for a given period. Direct investmentexcludes investment through purchase of shares.[1]

FDI is a measure of foreign ownership of productive assets, such asfactories, mines and land. Increasing foreign investment can be used asone measure of growing economic globalization. The figure below shows

net inflows of foreign direct investment in the United States. The largestflows of foreign investment occur between the industrialized countries(North America, Western Europe and Japan). But flows to non-industrialized countries are increasing sharply.


10/25

F.I.I. Institutional investors are organizations which pool large sums of

money and invest those sums in securities, real property and other

investment assets.

They can also include operating companies which decide to invest

its profits to some degree in these types of assets.

Types of typical investors include banks, insurance companies,retirement or pension funds, hedge funds, investment

advisors and mutual funds. Their role in the economy is to act as

highly specialized investors on behalf of others.

For instance - an ordinary person will have a pension from his

employer. The employer gives that person's pension contributionsto a fund. The fund will buy shares in a company, or some other

financial product. Funds are useful because they will hold a

broad portfolio of investments in many companies. This spreads

risk, so if one company fails, it will be only a small part of the whole

fund's investment.


11/25

Franchisee

Franchising is the practice of using another firm's successful businessmodel. The word 'franchise' is of anglo-french derivation - from franc-meaning free.

For the franchisor, the franchise is an alternative to building 'chain stores'

to distribute goods and avoid investment and liability over a chain. The

franchisor's success is the success of the franchisees. The franchisee is saidto have a greater incentive than a direct employee because he or she has

a direct stake in the business.

However, except in the US, and now in China (2007) where there are

explicit Federal laws covering franchise, most of the world recognizes

'franchise' but rarely makes legal provisions for it.

Businesses for which franchising works best have the following

characteristics:

Businesses with a good track record of profitability.

Businesses which are easily duplicated.


12/25

As practiced in retailing, franchising offers franchisees the advantage of starting up

quickly based on a proven trademark, and the tooling and infrastructure asopposed to developing them.

Although there are franchises around products Chanel and other cosmetics, to

name the prominent by and large, the franchises revolve around service firms. Atthe sub-$80,000 level, they are, by far, the largest number of franchises.[2]These

allow a business, combined with family time and a location not far from home.

Some franchises are available for a few thousand dollars.

The following US-listing tabulates[3] the early 2010 ranking of major franchises

along with the number of sub-franchisees (or partners) from data available for

2004.[4] It will also be seen from the names of the franchise that the US is a leader

in franchising innovations, a position it has held since the 1930s when it took the

major form of fast-food restaurants, food inns and, slightly later, the motels during

the first depression. Franchising is a business model used in more than 70

industries that generates more than $1 trillion in U.S. sales annually (2001

study).[citation needed] Franchised businesses operated 767,483 establishments in the

United States in 2001, counting both establishments owned by franchisees and

those owned by franchisors

CONTD..


13/25

Import Export

The term "import" is derived from theconceptual meaning as to bring in the

goods and services into the port of a

country.

The term export is derived from theconceptual meaning as to ship the goods

and services out of the port of a country.

The buyer of such goods and services is

referred to an "importer" who is based in

the country of import whereas theoverseas based seller is referred to as an

"exporter.

The seller of such goods and services is

referred to as an "exporter" who is based in

the country of export whereas the overseasbased buyer is referred to as an "importer".

Thus an import is any good

or service brought in from one country to

another country in a legitimate fashion,typically for use in trade.

In International Trade, "exports" refers to

selling goods and services produced in

home country to other markets

An import in the receiving country is

an export to the sending country.

An export in the sending country is

an import to the receiving country.


14/25

Capital Markets

A capital market is a market for securities,w

here business enterprisesand governments can raise long-term funds. It is defined as a market in

which money is provided for periods longer than a year, as the raising of

short-term funds takes place on other markets.

The capital market includes

The stock market

The bond market

Financial regulators oversee the capital markets in their designated

jurisdictions to ensure that investors are protected against fraud, among

other duties.

Capital markets may be classified as

Primary markets- In primary markets, new stock or bond issues are sold to

investors via a mechanism known as underwriting.

Secondary markets- In the secondary markets, existing securities are sold and

bought among investors or traders, usually on a securities exchange, over-the-

counter, or elsewhere.


15/25

Mutual Funds

A mutual fund is a professionally managed typeof collective investment scheme that pools money frommany investors and invests typically ininvestment securities.

The mutual fund will have a fund manager that trades (buysand sells) the fund's investments in accordance with thefund's investment objective

Most funds are overseen by a board ofdirectors or trustees which is charged with ensuring the

fund is managed appropriately by its investment adviserand other service organizations and vendors, all in the bestinterests of the fund's investors.


16/25

Foreign Exchange The foreign exchange market (forex, FX, or currency market) is a worldwide

decentralized over-the-counter financial market for the trading of currencies.

Financial centres around the world function as anchors of trading between a

wide range of different types of buyers and sellers around the clock, with the

exception ofweekends. The foreign exchange market determines the relative

values of different currencies.

The primary purpose of the foreign exchange is to assist international tradeand investment, by allowing businesses to convert one currency to another

currency. For example, it permits a US business to import British goods and

pay Pound Sterling, even though the business's income is in US dollars. It also

supports speculation, and facilitates the carry trade, in which investors borrow

low-yielding currencies and lend (invest in) high-yielding currencies, and which

(it has been claimed) may lead to loss of competitiveness in some countries. In a typical foreign exchange transaction, a party purchases a quantity of one

currency by paying a quantity of another currency. The modern foreign

exchange market began forming during the 1970s when countries gradually

switched to floating exchange rates from the previous exchange rate regime,

which remained fixed as per the Bretton Woods system.


17/25

Open End Fund Closed End Fund

An open-end(ed) fund is

a collective investment scheme

which can issue and redeem

shares at any time. An investor

will generally purchase shares in

the fund directly from the fund

itself rather than from the existing

shareholders.

The price at which shares in an

open-ended fund are issued or

can be redeemed will vary in

proportion to the net asset value

of the fund, and therefore directly

reflects the fund's performance.

A closed-end fund (or closed-

ended fund) is a collective

investment scheme with a limited

number of shares. It is called a

closed-end fund (CEF) because

new shares are rarely issued once

the fund has launched, and

because shares are not normally

redeemable for cash or securities

until the fund liquidates.


18/25

Open End Fund Closed End FundThere may be a percentage charge

levied on purchase or sale of shares

or units called an initial charge or

'front-end load'. This charge may

represent profit for the fund manager

or cover the cost or distributing the

fund by paying commission to the

adviser or broker that arranged the

purchase. These fees are commonly

referred to as 12b-1 fees in U.S. Not

all fund have initial charges; if thereare no such charges levied, the fund

is "no-load".

The price of a share in a closed-end

fund is determined partially by the

value of the investments in the fund,

and partially by the premium (or

discount) placed on it by the market.

The total value of all the securities in

the fund divided by the number of

shares in the fund is called the net

asset value (NAV) per share. The

market price of a fund share is often

higher or lower than the per shareNAV: when the fund's share price is

higher than per share NAV it is said to

be selling at a premium; when it is

lower, at a discount to the per share

NAV.

CONTD..


19/25

Active Fund Passive Fund


20/25

Equity Fund

Equity fund is a fund that investsin equities more commonly known as stocks.

Stock funds are contrasted with bond fundsand money funds.

Fund assets are typically mainly in stock, withsome amount of cash, which is generally quitesmall, as opposed to bonds, notes, orother securities.

It may be a mutual fund or exchange-traded fund.The objective of an equity fund is long-termgrowth through capital gains, although


21/25


22/25

Right Shares Bond ShareSection 81 i.e Further issue of

capital of companies act 1956 deals

with this and it states that where at

any time after the expiry of two

years from the formation of acompany or at any time after the

expiry of one year from the

allotment of shares in that

company made for the first time

after its formation, whichever isearlier, it is proposed to increase

the subscribed capital of the

company by allotment of further

shares.

Thus a bond is like a loan:

the issueris the borrower (debtor),the holderis the lender (creditor),and the coupon is the interest.

Bonds provide the borrower withexternal funds to finance long-

term investments, or, in the case of

government bonds, to finance

current expenditure. Certificates of

deposit (CDs) or commercialpaper are considered to be money

market instruments and not bonds.

Bonds must be repaid at fixed

intervals over a period of time.

CONTD..


23/25

N.A.V

Net asset value (NAV) is a term used to describe thevalue of an entity's assets less the value of its liabilities.The term is most commonly used in relation to open-ended or mutual funds due to the fact that shares of

such funds registered with the U.S. Securities andExchange Commission are redeemed at their net assetvalue. However, the term may also be used as asynonym for book value or the equity value of abusiness. Net asset value may represent the value of

the total equity, or it may be divided by the numberof shares outstanding held by investors and, thereby,represent the net asset value pershare.


24/25


25/25

Secondary Market The secondary market, also known as the aftermarket,

is the financial market where previously issued

securities and financial instruments such

as stock, bonds, options and futures are bought and

sold.

The term "secondary market" is also used to refer to

the market for any used goods or assets, or an

alternative use for an existing product or asset where

the customer base is the second market

For example, corn has been traditionally used primarily

for food production and feedstock, but a "second" or

"third" market has developed for use in ethanol

production.

Documents

biness mgmt