stock exchange case study

8/3/2019 stock exchange case study

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PERFECT COMPETITION CASE

STUDY ON STOCK EXCHANGE

By:

Sumiksha Sarmal

Sushant Gupta

Pravesh Mishra

Sachin Sharma


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STOCK MARKET

Stock market: A stock market is a physical place, sometimes known as

a stock exchange, where brokers gather to buy and sell stocks and other

securities.

The term is also used more broadly to include electronic trading thattakes place over computer and telephone lines and internet.


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NSE (NATIONAL STOCK EXCHANGE)

The National Stock Exchange of India was promoted by leadingFinancial institutions at the behest of the Government of India, and wasincorporated in November 1992 as a tax-paying company.

In April 1993, it was recognized as a stock exchange under theSecurities Contracts (Regulation) Act, 1956.

The National Stock Exchange (NSE) is a stock exchange located at

Mumbai, Maharashtra, India. It is the 9th largest stock exchange in theworld by market capitalization and largest in India by daily turnover andnumber of trades.

NSE is mutually-owned by a set of leading financial institutions,banks, insurance companies and other financial intermediaries in India

but its ownership


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BSE(BOMBAY STOCK EXCHANGE)

The Bombay Stock Exchange (BSE) formerly, The Stock

Exchange, Bombay is a stock exchange located on Dalal

Street, Mumbai and is the oldest stock exchange in Asia.

The equity market capitalization of the companies listed on the

BSE was US$1.63 trillion as of December 2010, making it the

4th largest stock exchange in Asia and the 8th largest in the

world.

The BSE has the largest number of listed companies in the

world.


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PERFECT COMPETITION

A perfectly competitive market must meet the following

requirements:

Both buyers and sellers are price takers.

The number of firms is large.

There are no barriers to entry.

The firms products are identical.

There is complete information.


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Examples of Perfect Competition

Agriculture

Poultry

Stock Market

Fisheries


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DEMAND CURVE AND

PERFECT COMPETITION

Demand Curves for the Whole Market

market demand curve is downward sloping.

Quantity/TimePrice

Pe

rUnit

D

1000

$ 9

2000

$ 7


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DEMAND CURVE AND

PERFECT COMPETITION

Demand Curve for the Firm A perfectly competitive firms demand curve is perfectly

elastic. The firm can sell all it produces at the market price.

Quantity/Time

Price Per Unit

d$ 10

Li t f St k h i I di


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List of Stock exchanges in IndiaBombay Stock Exchange (BSE)

National Stock Exchange of India (NSE)

United Stock Exchange of India (USE)

Multi Commodity Exchange (MCX)

MCX Stock Exchange (MCX-SX)

Over the Counter Exchange of India (OTCEI)

Inter-connected Stock Exchange of India (ISE)

Madras Stock Exchange (MSE)

Ahmedabad Stock Exchange (ASE)

Cochin Stock Exchange (CSE)Hyderabad Stock Exchange (HSE)

Calcutta Stock Exchange (CSE)

Delhi Stock Exchange (DSE) Bangalore Stock Exchange

Madhya Pradesh Stock Exchange, Indore

Jaipur Stock Exchange (JSE)

Commodity Exchange:-Multi Commodity Exchange of India Limited (MCX)

National Commodity & Derivatives Exchange Limited (NCDEX)

Indian National Multi-Commodity Exchange (NMCE)Commodity Exchange Limited ICEX


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CHARACTERISTICS OF STOCK MARKET IN

RELATION TO PERFECT COMPETITION

Large number of investors and traders globally.

Current information is freely available to all the participants.

Single product is included- (share prices and stock prices of

various companies are traders). Price of the individual security is determined by market forces.

In short run, no players can enter and exit but in case of long

run, players can exit the market if they are not able to earn the

profits.


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A player has to depend on completely market price for the

profit maximization.

Maximum capital is owned by FII and DII.

Stock market activities ,becoming more centralized and non

competitive


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IMPACT OF CHANGE IN FII ON

NATIONAL STOCK EXCHANGE


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QUESTIONS

1.) Is stock market a good example of perfectcompetition?

2.) Identify the characteristics of perfectcompetition in the stock market setting?

3.) Can you find some basic aspects of perfectcompetition which is essentially absent instock market?


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Questions???


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THANK YOU!!

Documents

stock exchange case study