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  • 1. Secondary Market
  • 2. Meaning of Secondary Market Refers to a market where securities are traded Securities are already listed in Stock Exchange Provides an efficient platform for trading of his securities
  • 3. Difference between Primary Market & Secondary Market Primary Market Secondary Market• Securities are offered to • Already existing public for subscription securities are traded • Purpose of Raising • Purpose of capital Capital or fund appreciation
  • 4. Stock ExchangeProvide a trading platform by SEBI Where transaction done in securities
  • 5. Demutualization of Stock Market Refers to the legal structure of an exchange Ownership, management and the trading rights at the exchange are segregated from one another
  • 6. Demutualised Stock Exchanges in India National Stock Over the Exchange Counter (NSE) Exchange of India (OTCEI)
  • 7. Stock Trading
  • 8. Screen Based Trading System (SBTS) Introduced by NSE Where a member can punch quantities and price of security in computerTransaction is executed as soon as a matching sale or buy order from a counter party is found
  • 9. National Exchange for Automated Trading (NEAT) A satellite communication technology for trading It’s a state of the art client server based application Has a uptime record of 99.7% Uniform response time of less than one second
  • 10. Contract Note A confirmation of trades done on particular day On behalf of the client by a trading memberEnforceable relationship between the client and the trading member For the propose of purchase / sale and settlement of trades It should be in Prescribed Form
  • 11. Benefits of trading in Stock Exchanges • Best prices prevailing at the time in the market1. • Lack of any counter party risk which is assumed by2. the clearing corporation • Access to investor grievance and redressal3. mechanism of stock exchange • Protection up to prescribed limit4.
  • 12. How to know if the Broker / Sub Broker is Registered? By verifying the registration certificate issued by SEBI Broker registration number begins with the letter ‘INB’ A sub broker with the letters ‘INS’
  • 13. Precautions of investing in the Stock Markets Make sure your broker is registered with SEBI and the Exchanges Ensure that you receive contract notes for all your transactions Invest in a manner that matches their risk tolerance Do not be misled by market rumors, luring advertisement or ‘hot tips’ Take informed decisions by studying the fundamentals of the company
  • 14. Instruments of Secondary Market Secondary Market Shares Bonds ZeroEquity Rights Bonus Preference Convertible Treasury CouponShares Shares Shares Shares Bond Bills Bonds Cumulative Cumulative Convertible Preference Preference Share Shares
  • 15. Shares Equity Shares• Represent the form of fractional ownership in a business venture Rights Shares• Issue of new securities to existing shareholders Bonus Shares • Issued by the companies to their shareholder free of cost based
  • 16. Preference Shares Entitled to get fixed dividend before equity shareholders Priority of getting surplus before equity shareholder At the time of liquidation their claims below to equity shareholders
  • 17. Types of Preference SharesCumulative • Dividend accumulates if remainedPreference unpaid SharesCumulative • Dividend payable on the sameConvertible accumulates, if not paidPreference • Converted into equity capital of the Shares company
  • 18. BondNegotiable certificate evidencing Normally Unsecured indebtedness Issued by a Company, Municipality or Government Agency
  • 19. Types of Bond • Issued at discount and repaid at faceZero Coupon Bond value • No periodic interest is paid • Giving the option to the investorConvertible Bond • Convert the bond into equity at fixed conversion price • Issued by government Treasury Bills • Short term bearer discount security
  • 20. Equity Investment Provides portfolio with growthReach on long term investment goals Equities are high risk investment
  • 21. Dividend A company returns A percentage of to its shareholdersthe face value of a from its annul share profits
  • 22. Factors affected the price of stock Stock Specific Market Specific
  • 23. Stock Specific Factor Level of Technology Financial & Marketing Health Skills Management Future Earning Capacity PeopleExpectation about the Company
  • 24. Market Specific Factor Generally short term factor Depends upon on the environment rather than performance Its include Budget, War Economic Growth & Crises etc.
  • 25. Growth Stock Whose potential for growth in sales Growing faster thanEarning are other excellent companies in market
  • 26. Value Stock Investor look toStock which buy stokes that may have arehidden value undervalued
  • 27. Portfolio Purpose ofCombination of different achieving an investment assets investor’s goal
  • 28. Diversification It’s A Risk Mixes a Reduce theManagement wide variety risk in Technique of portfolio investments with in portfolio
  • 29. Debt InstrumentsRepresents a contract whereby one party lends money to another
  • 30. Debt Instruments Bond Debenture Issued by the Issued bycentral and state private government corporate sector Public sector organization
  • 31. Features of Debt Instruments • The date on which borrower has agreed Maturity to repay the principal • Refers to the periodic interest Coupon payment that are made by borrower to lender • The amount that Principal has been borrowed
  • 32. Segment of Debt Market • Comprises the Centre, State andGovernment state sponsored securities Securities • They are not tax –freePublic Sector • They are tax –freeUnits Bonds Corporate • Comprise of commercial paper Securities and bonds
  • 33. Participants of Debt Market Financial Banks Institutions Provident Mutual Funds Funds Insurance Corporate Companies