Stock Exchange• A stock market or equity market is a public entity (a loose network of economic transactions, not a physical facility or discrete entity) for the trading of company stock (shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.
History• 1875 - BSE is Asias first stock exchange.• 12th century France the courretiers de change - Debt of Agriculture – First Brokers.• 13th Century - 1309 Family Van der Beurze had a building in Antwerp - Where people trade.• 13th Century - 1351 Venetian bankers began to trade in government securities.• 14 Century – Bankers in Pisa and Florence also began trading in government securities.• 16th – Century – 1602 Dutch East India Company (Joint Stock Company) started to trade to raise fund - Amsterdam Exchange• Dutch people were pioneer in short selling but it was banned in 1610
Function & Purpose• To Raise Fund.• Liquidity – Easy to Sell & Buy rather than investing like Real Estate and so on.. – Companies are also trading its own share for Operational (Liquidity) Expense Needs.• Operating as Clearing House – Buy & Sell – Investor Safety.• Economy Growth – Promote Production of Products, Services & Employment Opportunities.
Investment Strategies or Tools to Analysis the Performance of Stock• Fundamental Analysis – Financial Statements like Balance Sheet, Trial Balance and so on…• Technical Analysis – Using of Charts and Quantitative Techniques like Trend Line….• Index Method – Buying weighted Stock of Entire Stock Market.. • Eg: BSE – Top 30 Blue Chip Companies…
Leveraged strategies• Short Selling – The trader borrows stock then sells it on the market, hoping for the price to fall.• Margin Buying – The trader borrows money (at interest from Brokers) to buy a stock based on collateral from other stocks the trader owns outright. – Eg: Regulation of US – for Investing $1000 – 50% can be borrowed on the basis of Stock. If price falls lower than the Margin Value the brokers will sold the share to the safety of borrowed money.• Derivatives – It may be used to control large blocks of stocks for a much smaller amount of money than would be required by outright purchase or sales.
Stock Exchange Crashes• Wall Street Crash of 1929• the stock market crash of 1973–74• The Black Monday of 1987• The Dot-com bubble of 2000• Stock Market Crash of 2008.
Circuit Breakers• In 1990 - The New York Stock Exchange and the Chicago Mercantile Exchange - Circuit Breakers for Dow Index.• Halts the Trade.• If Dow index Points declines a prescribed number of points for a prescribed amount of time. –
New York Stock Exchange (NYSE) circuit breakers% Drop Time of drop Close trading for10 before 2 pm one hour halt10 2 pm – 2:30 pm half-hour halt10 after 2:30 pm market stays open20 before 1 pm halt for two hours20 1 pm – 2 pm halt for one hour20 after 2 pm close for the day30 any time during day close for the day
Single - Stock Circuit Breakers• In February 2012, the Investment Industry Regulatory Organization of Canada (IIROC) introduced single-stock circuit breakers.
World Stock Exchanges Market Capitaliza Trade Value Rank Economy Stock Exchange Location tion (USD (USD Bill Billions) ions) United States NYSE Euronext (US & New York1 14,242 20,161 Europe Europe) City United States NASDAQ OMX (US & New York2 4,687 13,552 Europe North Europe) City3 Japan Tokyo Stock Exchange Tokyo 3,325 3,972 London Stock4 United Kingdom London 3,266 2,837 Exchange Shanghai Stock5 China Shanghai 2,357 3,658 Exchange Hong Kong Stock6 Hong Kong Hong Kong 2,258 1,447 Exchange Toronto Stock7 Canada Toronto 1,912 1,542 Exchange8 Brazil BM&F Bovespa São Paulo 1,229 931
Cont….. Australian Securities9 Australia Sydney 1,198 1,197 Exchange10 Germany Deutsche Börse Frankfurt 1,185 1,75811 Switzerland SIX Swiss Exchange Zurich 1,090 887 Shenzhen Stock12 China Shenzhen 1,055 2,838 Exchange BME Spanish13 Spain Madrid 1,031 1,226 Exchanges Bombay Stock14 India Mumbai 1,007 148 Exchange15 South Korea Korea Exchange Seoul 996 2,029 National Stock16 India Mumbai 985 589 Exchange of India17 Russia MICEX-RTS Moscow 800 51418 South Africa JSE Limited Johannesburg 789 372
Stock Exchanges in INDIA• Bombay Stock Exchange (BSE) • Bhubaneshwar Stock• National Stock Exchange of Exchange (BhSE) India (NSE) • Cochin Stock Exchange (CSE)• Indian Commodity Exchange (ICEX) • Hyderabad Stock Exchange (HSE)• United Stock Exchange of • Calcutta Stock Exchange (CSE) India (USE) • Delhi Stock Exchange (DSE)• Multi Commodity Exchange (MCX) • Bangalore Stock Exchange• MCX Stock Exchange (MCX-SX) • Madhya Pradesh Stock Exchange,• Over the Counter Exchange of Indore India (OTCEI) • Jaipur Stock Exchange (JSE)• Inter-connected Stock Exchange of • Magadh Stock Exchange, Patna India (ISE) • UP Stock Exchange (UPSE)• Madras Stock Exchange (MSE) • Vadodara Stock Exchange,Vadodara• Ahmedabad Stock Exchange (ASE) (VSE)
Commodity Exchanges• Multi Commodity Exchange of India Limited (MCX)• National Commodity & Derivatives Exchange Limited (NCDEX)• Indian National Multi-Commodity Exchange (NMCE)• Commodity Exchange Limited ICEX.