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- The pulse of an

economy


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INTRODUCTIONSTOCK EXCHANGES

HISTORYDEPOSITORIESTRADINGEVENTS INVESTING GUIDELINES


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Introduction What is stock?

Types of stock Common stock Preferred stock Treasury stock


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Types of Markets Primary Markets

Secondary Markets What is a stock exchange? BSE

NSE Arbitrage


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Market Capitalization Small Cap($300-$2bn)

Mid Cap ($2-$10bn) Large Cap (> $10bn)

Circuits

Upper Circuit Lower Circuit


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10 % Fall :10 am 1 pm : 1 hour Halt1 pm 2.30 pm : Half Hour Halt

2.30 pm 3.35 pm : No Halt 15 % Fall :

10 am 1 pm : 2 hour halt1 pm 2 pm : 1 hour halt2 pm 3.35 pm : Remainder ofDay

20 % Fall : Remainder ofDay


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What is SENSEX? Formation (1978-79=100) Basic functioning of the SENSEX Companies listed in SENSEX


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ACC Bajaj Auto BHEL

Bharti Airtel Cipla Dr. Reddy's Laboratories Grasim Industries Gujarat Ambuja Cements HDFC HDFC Bank
http://en.wikipedia.org/wiki/Associated_Cement_Companieshttp://en.wikipedia.org/wiki/Bajaj_Autohttp://en.wikipedia.org/wiki/Bharat_Heavy_Electricals_Limitedhttp://en.wikipedia.org/wiki/Bharti_Airtelhttp://en.wikipedia.org/wiki/Ciplahttp://en.wikipedia.org/wiki/Dr._Reddy's_Laboratorieshttp://en.wikipedia.org/wiki/Grasim_Industrieshttp://en.wikipedia.org/wiki/Gujarat_Ambuja_Cementshttp://en.wikipedia.org/wiki/HDFChttp://en.wikipedia.org/wiki/HDFC_Bankhttp://en.wikipedia.org/wiki/HDFC_Bankhttp://en.wikipedia.org/wiki/HDFChttp://en.wikipedia.org/wiki/Gujarat_Ambuja_Cementshttp://en.wikipedia.org/wiki/Grasim_Industrieshttp://en.wikipedia.org/wiki/Dr._Reddy's_Laboratorieshttp://en.wikipedia.org/wiki/Ciplahttp://en.wikipedia.org/wiki/Bharti_Airtelhttp://en.wikipedia.org/wiki/Bharat_Heavy_Electricals_Limitedhttp://en.wikipedia.org/wiki/Bajaj_Autohttp://en.wikipedia.org/wiki/Associated_Cement_Companies


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Hero Honda Motors Hindalco Industries Hindustan Lever Limited

ICICI Bank Infosys ITC Limited Larsen & Toubro Maruti Udyog NTPC ONGC
http://en.wikipedia.org/wiki/Hero_Honda_Motorshttp://en.wikipedia.org/wiki/Hindalco_Industrieshttp://en.wikipedia.org/wiki/Hindustan_Lever_Limitedhttp://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/Infosyshttp://en.wikipedia.org/wiki/ITC_Limitedhttp://en.wikipedia.org/wiki/Larsen_&_Toubrohttp://en.wikipedia.org/wiki/Maruti_Udyoghttp://en.wikipedia.org/wiki/National_Thermal_Power_Corporationhttp://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporationhttp://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporationhttp://en.wikipedia.org/wiki/National_Thermal_Power_Corporationhttp://en.wikipedia.org/wiki/Maruti_Udyoghttp://en.wikipedia.org/wiki/Larsen_&_Toubrohttp://en.wikipedia.org/wiki/ITC_Limitedhttp://en.wikipedia.org/wiki/Infosyshttp://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/Hindustan_Lever_Limitedhttp://en.wikipedia.org/wiki/Hindalco_Industrieshttp://en.wikipedia.org/wiki/Hero_Honda_Motors


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Ranbaxy Laboratories Reliance Communications Reliance Energy

Reliance Industries Satyam Computer Services State Bank of India Tata Consultancy Services Tata Motors Tata Steel Wipro
http://en.wikipedia.org/wiki/Ranbaxy_Laboratorieshttp://en.wikipedia.org/wiki/Reliance_Communicationshttp://en.wikipedia.org/wiki/Reliance_Energyhttp://en.wikipedia.org/wiki/Reliance_Industrieshttp://en.wikipedia.org/wiki/Satyam_Computer_Serviceshttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Tata_Steelhttp://en.wikipedia.org/wiki/Wiprohttp://en.wikipedia.org/wiki/Wiprohttp://en.wikipedia.org/wiki/Tata_Steelhttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Satyam_Computer_Serviceshttp://en.wikipedia.org/wiki/Reliance_Industrieshttp://en.wikipedia.org/wiki/Reliance_Energyhttp://en.wikipedia.org/wiki/Reliance_Communicationshttp://en.wikipedia.org/wiki/Ranbaxy_Laboratories


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What is NIFTY Formation(1994-1000)

Companies listed in NIFTY


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ABB Ltd. ACC Ltd. Ambuja Cements Ltd.

Bajaj Auto Ltd. Bharat Heavy Electricals Ltd. Bharat Petroleum Corporation Ltd. Bharti Airtel Ltd. Cipla Ltd. Dabur India Ltd. Dr. Reddy's Laboratories Ltd.


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GAIL (India) Ltd. Glaxosmithkline Pharmaceuticals Ltd. Grasim Industries Ltd.

HCL Technologies Ltd. HDFC Bank Ltd. Hero Honda Motors Ltd. Hindalco Industries Ltd. Hindustan Petroleum Corporation Ltd. Hindustan Unilever Ltd. Housing Development Finance Corporation Ltd.


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I T C Ltd. ICICI Bank Ltd. Indian Petrochemicals Corporation Ltd.

Infosys Technologies Ltd. Larsen & Toubro Ltd. Mahanagar Telephone Nigam Ltd. Mahindra & Mahindra Ltd. Maruti Udyog Ltd. National Aluminium Co. Ltd. Oil & Natural Gas Corporation Ltd.


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Sterlite Industries (India) Ltd. Sun Pharmaceutical Industries Ltd. Suzlon Energy Ltd.

Tata Consultancy Services Ltd. Tata Motors Ltd. Tata Power Co. Ltd. Tata Steel Ltd. Videsh Sanchar Nigam Ltd. Wipro Ltd. Zee Entertainment Enterprises Ltd.


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SECTOR PERCENTAGE

OIL & GAS 18.0

BANKING & FINANCE 16.5

INFORMATION TECHNOLOGY 14.8

FMCG 12.5

HEALTHCARE 9.3

METALS 7.2

TRANSPORT 6.8

OTHERS

(AUTO,TEXTILES,CAPITAL

GOODS,ETC)

14.9


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The BullsThe BearsThe ChickensThe Pigs


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BSE Established In 1875.

318 members @ Re. 1. Confined to company owners and

brokers.

The Kingpins back then

Sir Premchand Roychand

Sir Phiroze Jeejeebhoy


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Termed SENSEX in 1990.

Planning Process.

Indian contract act 1872.

Controller of capital issues act 1947.

Securities and exchange board of India (SEBI)1992.


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NSE Founded in 1992.

Financial Institutions. Recognition as a stock exchange.

NIFTY.


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1000, July 25, 1990 Good monsoon + Excellent corporate

results 2000, January 15, 1992 Liberal economic policies

3000, February 29, 1992 Market friendly Budget

4000, March 30, 1992 Harshad Mehta Scam


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5000, October 11, 1999 BJP-led coalition wins majority

6000, February 11, 2000 InfoTech Boom

7000, June 21, 2005

Settlement between the Ambanibrothers 8000, September 8, 2005 Brisk buying by foreign funds


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9000, December 9, 2005 Frantic Buying spree by FII + local

investors 10000, February 7, 2006 11000, March 27, 2006 12000, April 20, 2006 13000, October 30, 2006 14000, December 5, 2006 15000, July 6, 2007


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What is CDSL Formation


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Dependability On Line information for users Contingency arrangements Audit and Inspection Dormant A/c monitoring


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Convenience Wide DP Network : 375 DPs spread across 124

cities/towns

On-line DP Services Wide Spectrum of Securities for Demat


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Introduction Services


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Electronic book entries Elimination of bad deliveries Elimination of all risks associated with

physical certificates Immediate transfer and registration of

securities Faster settlement cycle T+2

Safety


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Formation Role of SEBI

Bring transparency in trading system Regulating the stock exchange

Regulating of collective investmentschemes

such as mutual funds

Controlling unfair trade practices

Promoting investors education and

awareness


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Regulating substantial acquisition ofshares

and takeover of companies

Define eligibility of FIIs


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FII means an entity established orincorporated outside India which

proposes to make investment inIndia.


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Securities in primary and secondarymarkets

Units of mutual funds Dated Government Securities, other debt

instruments Derivatives traded on a recognized stock

exchange


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Singapore and few other exchangeshave acquired 14 % of BSE.

NYSE has acquired 5 % in NSE.


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Make provision for an uncertainfuture

To earn returns on your idle moneyBetter returns than banks and otherinvestments.


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What is Trading ? BOLT T+2 T+1 ($8 bn)

Types of Trading Online trading

Broker based trading


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Market Access Opening Session 9:01 to 9:54 am Continuous Trading Session 9:55 to

3:30pm Closing Session 3:30 to 3:40 pm

Auction

Intra - Day Trading (T) Delivery Based Trading (T+3) Stop Loss Trigger Price

Limit Price


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Trading Cycle Flow of the Trading Cycle

Decision to trade Placement of order

Trade execution

Clearing of Trades Settlement of trades

Deposition of Funds / Securities


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What is settlement? Introduction to rolling settlements

Time schedule Pay in Pay out


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TIME SCHEDULE OF ROLLINGSETTLEMENT :

Sr.no Day Time Description ofactivity

4) T - Trade day5) T+1 By 11am Confirmation of all

trades T+1 By 1:30pm Processing anddownloading

7) T+2 By 11am Pay in ofsecurities &

funds


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Evolution NSE

BSE What does it do? Reduces counter party risks

Speedy settlements Eliminates problems in delivery of

shares


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Market perspective Sector perspective Investor perspective


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Catastrophy/CalamityPolitical Factors

Corporate ReasonScamsSpeculationsGlobal


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Wealth and expenditure tax 1957 Tax on bonus issues 1958-59

China war 1962 (ban on trading commodities) Reduction in foreign share holding Next big boom 1980 (Dhirubhai

Ambani)


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Mr. V.P. Singhs fiscal budget 1984 Liberalization 1991 (Dr. Manmohan

Singh) Harshad Mehta (1992). Maximum

percentagefall (12.77%----570 points crash)

Introduction to online trading (1995) Ketan Parekh (late nineties) Software meltdown (2000) Largest ever market crash 1100

pts(May 2006)


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Primary market IPOSecondary market

DerivativesFutures and optionsMutual funds


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Pan CardSavings A/C

Demat A/CSimilar to bank a/cFacilitates electronic transfer of

securities


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Capital gain - Fluctuations in stockStock splits

Bonus sharesDividend gain - share in profit Interim Dividend

Final Dividend


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DOsDeal only with market intermediaries

registered with SEBI/Exchanges

Read quarterly and annual resultsregularly

Keep track of

Company performance

Sector Performance

Indian Economy

Global Market Scenario


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DONTs Deal based on rumours or tips

Don't fall prey to promises ofguaranteed returns.

Don't blindly follow media reports


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