Indian capital market b.v.raghunandan


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explains the Indian capital market with emphasis on stock exchanges in India

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Indian capital market b.v.raghunandan

  1. 1. Capital Market-B.V.Raghunandan, SVS College, Bantwal<br />PG Department of Economics,<br />St.Aloysius College,<br />Mangalore<br />
  2. 2. Capital Market: Meaning<br />The capital market is the market for securities, where companies and governments can raise long-term funds. It is a market in which money is lent for periods longer than a year. The capital market includes the stock market and the bond- wikipedia<br />
  3. 3. Players in the Capital Market<br />Commercial Banks<br />Financial Institutions<br />Corporates<br />Retail Investors<br />Others: FFI,HNI,NRI, Investment Trusts, <br />Governments<br />Public Sector Undertakings<br />Insurance Companies<br />Mutual Funds<br />Non-Banking Financial Companies<br />Provident Funds and Pension Funds<br />
  4. 4. Capital Market Instruments<br />Equity Shares<br />Preference Shares<br />Government Bonds<br />Corporate Bonds / Debentures<br />Perpetual Bonds<br />
  5. 5. Classification of Markets<br />Primary Markets<br />Secondary Markets<br />
  6. 6. Secondary Market for Corporate Securities:Stock Exchange<br />Stock Exchange is,<br />” an organised market for second-hand corporate and government securities”<br />
  7. 7. A More Inclusive Definition<br />Stock Exchange is a regulated market for second-hand corporate securities, government securities, commodities, and foreign exchange<br />
  8. 8. Characteristics of Stock Exchange<br />Organised Market<br />Securities Market<br />Secondary market<br />Part of Capital Market<br />Listed Securities<br />Restricted Membership<br />Dealing only by Members<br />Standardised Practices<br />Facilitator<br />Speculation<br />
  9. 9. Role and Functions of a Stock Exchange<br />Public Finance<br />Growth of Joint Stock Companies<br />Enabling Book-Building Route<br />Capital Mobility<br />Foreign Funds<br />Index Compilation<br />Technical Analysis<br />Economic Development<br />Ready Market<br />Liquidity for Securities<br />Evaluation<br />Price Stability<br />Capital Formation<br />Promoting Saving Habits<br />Investor Protection<br />Corporate Governance<br />
  10. 10. Members of a Stock Exchange: Jobber & His Characteristics<br />Dealer<br />Specialist<br />Stability in the Market<br />Dealing with Brokers<br />Jobber’s Profit<br />Equalising Quantity<br />Speculation<br />Two-way Quotes<br />Matching Demand and Supply<br />Company Sponsorship<br />
  11. 11. Brokers & Their Characteristics<br />Agent<br />Generalist<br />Conduit between Jobber and the Public<br />Income in the form of Commission<br />
  12. 12. Types of Dealings<br />Dealings in Cash Market<br />Dealings in Futures & Options Market<br />
  13. 13. Cash Market<br />Rolling Settlement<br />T+2 Settlement<br />Trading Day<br />Pay-In Day<br />Pay-Out Day<br />
  14. 14. Futures & Options Marker<br />Meant for Risk Management Arising Out of Dealings in Cash Market<br />Exchange Traded<br />Big Investors and Institutions Take Positions<br />For Protecting the Value of Holding<br />Providing for the Risks Arising Out of Trading<br />
  15. 15. Futures: Characteristics<br />Standardised Features<br />Counter-Party is the Clearing House<br />Margin Requirement<br />Time Spread<br />Three Contracts for Settlement<br />
  16. 16. Futures: Trading Mechanism<br />Trading Strategies<br />Uses:<br /> -Hedging<br /> -Speculation<br /> -Arbitrage<br />Types of Futures: Stock Future and Index Future<br />
  17. 17. Option<br />A contract to buy or sell without an obligation<br />European Option and American Option<br />Call Option and Put Option<br />Uses of Options: <br /> -Hedging<br /> -Speculation<br /> -Arbitrage<br />
  18. 18. Advantages of Option<br />No Big Investment<br />No Margin as in Futures<br />No Obligation<br />No Marked-to-Market<br />More Gain than Risk<br />Premium paid alone is the Disadvantage<br />
  19. 19. Listing of Shares: Procedure<br />Initial Public Offer<br />Size of Public Offer: Not Less than 25% of Issued Capital & Post Issue Paid Up Capital is not less than <br /> Rs.10 Crore<br />Filing Application: MA, AA, Prospectus, Directors Report, Specimen Copies of Share Certificates and Debenture Certificates<br />-Wide Distribution of Shares: 5 for Each Rs.1 Lakh cap<br />-Dividend & Bonus in the Past 10 years<br />-Brief History of the Company<br />-Management Pattern<br />
  20. 20. Listing Procedure ….Continued<br />Payment of Listing Fees<br />Signing Listing Agreement<br />Screening the Application<br />Listing the Shares<br />
  21. 21. SEBI: Functions<br />Regulation of Securities Market<br />Registration of FIs<br />Registration of Collective Investment Scheme<br />Education & Training<br />Prohibition of Insider Trading<br />Prohibition of Unfair Trade Practices<br />Regulation of M&A<br />Registration of FII<br />Registration & Regulation of SEs<br />Conducting Research<br />
  22. 22. Powers of SEBI<br />Levying Fees<br />Approving Bye-laws of SEs<br />Ordering Amendment of Bylaws of SEBI<br />Inspection<br />Compulsory Listing<br />Power of Punishment<br />
  23. 23. THANK YOU<br />