Bulls and bears


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This Presentation will show data regarding Stock Market in INDIA

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Bulls and bears

  1. 1. Ravali.A.V Bulls And Bears
  2. 2. Objective <ul><li>Making a layman to take part in stock exchange trading. </li></ul>
  3. 3. WHAT IS STOCK EXCHANGE Stock exchange is that place where trading of shares is done in terms of sale and purchase.
  4. 4. <ul><li>Stock market foundation was laid in 1773 . This gave rise to investment banks, brokers, investment advisers and fund managers. </li></ul>ORIGIN OF STOCKS
  5. 5. Wall street
  6. 6. BSE CHART
  7. 7. SPECULATION <ul><li>Speculation involves the buying, holding, selling. </li></ul><ul><li>Short-term selling of stocks, bonds, commodities, currencies, collectibles or any valuable financial instrument to profit. </li></ul><ul><li>Fluctuations in its price as opposed to buying it for use or for income via method like dividends or interest. </li></ul>
  8. 8. Kinds of speculation <ul><ul><li>Bull Market : In case of that they purchase the shares at current prices to sell at a higher price in the near future and makes a profit if his expectations come true. he is also called a long buyer. </li></ul></ul><ul><ul><li>Bear Market : He sells security in the hope that he will be able to buy them back at lesser price. It is also called “short selling”. </li></ul></ul>
  9. 9. Cont……………… <ul><li>Lame duck : When a bear has made contracts to sell securities,find it difficult to meet his commitment due to non-availability of security, they will be always struggling.. </li></ul>
  10. 10. BENEFITS OF STOCK EXCHANGE <ul><li>It assists the economic development by providing a body of interested investors. </li></ul><ul><li>It uploads the position of superior enterprises and assists them in raising further funds. </li></ul><ul><li>It is the stock exchanges that central bank of a country can control credit by undertaking open market operations (purchase and sale of securities) </li></ul>FROM THE POINT OF VIEW OF COMMUNITY:
  11. 11. FROM THE COMPANY POINT OF VIEW <ul><li>A company whose shares are quoted on stock exchange, enjoy better reputation and credit. </li></ul><ul><li>The market for the shares of such a company is naturally widened. </li></ul><ul><li>Market price raises the bargaining power of the company in the event of a takeover,merger or amalgamation. </li></ul>
  12. 12. FROM THE INVESTORS POINT OF VIEW <ul><li>Liquidity of the investment is increased </li></ul><ul><li>The stock exchange safeguards interests of investors through strict enforcement of rules and regulations. </li></ul><ul><li>The present net worth of investments can be easily known by the daily quotations. </li></ul><ul><li>His risk is considerably less when he holds or purchases listed securities. </li></ul>
  13. 13. ROLE PLAYER <ul><li>EXTERNAL:---- </li></ul><ul><li>SHAREHOLDER </li></ul><ul><li>DEBENTURE HOLDER </li></ul>
  14. 14. SHAREHOLDER Shareholders are divided into two parts Preference share Equity share holders holders
  15. 15. Preference Shareholder <ul><li>Preference shareholders are those which have preferential right to the payment of dividend during the life time of the company </li></ul><ul><li>Preferential right to the return of the capital when the company is wound up. </li></ul><ul><li>Paid according to the rate every year. </li></ul>
  16. 16. Equity Shareholders <ul><li>All shares which are not preference shares are equity shares.These shares do not have a fixed rate of dividend,they are always irredeemable and their holders have normal voting rights. </li></ul><ul><li>They are also the owners of the company. </li></ul><ul><li>They receive dividend </li></ul>
  17. 17. DEBENTURES <ul><li>“ A document under the company seal which provides for the payment of a principal sum and interest there on at regular intervals which is usually secured by a fixed or floating charge on the company’s property or undertaking which acknowledges a loan to the company ” . </li></ul>
  18. 18. INTERNAL PLAYERS <ul><li>Broker : He is a commission agent who transacts business in securities on behalf of non-members.They may have number of sub-brokers to canvass and secure business for them . </li></ul><ul><li>Investor : He purchase and sells securities on his own name with personal trading account via online. </li></ul>The members of the stock exchange can be divided into two parts:
  19. 19. Floor Trading <ul><li>Floor Trading is done by a   floor trader  who trades on the floor of that exchange for his or her own account. </li></ul><ul><li>The floor trader must abide by trading rules similar to those of the exchange specialists  who trade on behalf of others. </li></ul>
  20. 20. Electronic Trading <ul><li>Market trend upgrading </li></ul><ul><li>Observation </li></ul><ul><li>Demate account </li></ul><ul><li>Online trading software </li></ul><ul><li>Guidelines </li></ul>
  21. 22. CAUSES OF PRICE FLUCTUATION <ul><li>Company Policies </li></ul><ul><li>Bank Rate </li></ul><ul><li>Speculative Pressure </li></ul><ul><li>Actions of underwriters and other financial institutions </li></ul><ul><li>Political Factors (Budget) </li></ul><ul><li>Global Effects (crisis) </li></ul><ul><li>Stock Market Scandals </li></ul>
  22. 23. 1.Bad Economic Policy ” Black Monday” <ul><li>In finance,  Black Monday  refers to Monday, October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time </li></ul>
  23. 24. What Caused the Stock Market Crash of 1987? <ul><li>COMPUTER TRADING </li></ul><ul><li>ILLIQUIDITY </li></ul><ul><li>TRADE AND BUDGET DEFICITS </li></ul><ul><li>INVESTING IN BONDS AS AN ATTRACTIVE ALTERNATIVE </li></ul><ul><li>OVERVALUATION </li></ul>
  24. 25. 2.Satyam Scandal <ul><li>IT major Satyam nosedived nearly 70 per cent to an all-time low </li></ul><ul><li>Shares of Satyam plunged as much as 67.71 per cent, but was later trading at Rs 73.50, down 58.96 per cent in the afternoon trade on the BSE. </li></ul><ul><li>The scrip, which had opened at Rs 179.10, plunged within minutes of Satyam Chairman and Managing Director tendering their resignation. </li></ul><ul><li>The counter saw frantic selling after the announcement and nearly 13 crore shares had changed hands on both the bourses within an hour. </li></ul><ul><li>Satyam stock holds a 1.56 per cent weight in the 30-share blue-chip index Sensex. Following the same, the benchmark index also plunged over 400 points and was trading down nearly 4 per cent at 9,922 points in the noon trade on the BSE. </li></ul>
  25. 27. 3.Global Financial Crisis Effecting Indian Stock Market <ul><li>On September 15, 2008, Lehman Brothers filed for bankruptcy. With $639 billion in assets and $619 billion in debt. </li></ul><ul><li>Lehman's bankruptcy filing was the largest in history. </li></ul><ul><li>Lehman was the fourth-largest  U.S. investment bank at the time of its collapse </li></ul><ul><li>Lehman's collapse was an intensified the 2008 crisis and contributed to the erosion close to $10 trillion in market capitalization in October 2008, the biggest monthly decline on record at the time. </li></ul>
  26. 29. US Stocks Crushed <ul><li>The biggest one-day percentage drop since the crash of '87, when it lost 20.5%. </li></ul><ul><li>The Nasdaq composite fell 9.1%, its third worst day on a percentage basis and also its worst decline since the crash of '87. </li></ul><ul><li>The first trading day after the September 11 attacks. However the 7% decline does not rank among the top 10 percentage declines. </li></ul>
  27. 30. Impact on Indian Stock Market Leman effect
  28. 31. BIGGEST falls in the Indian stock market history <ul><li>January 21, 2008 : </li></ul><ul><li>The Sensex saw its highest loss ever of  1,408   points </li></ul><ul><li>October 24, 2008: </li></ul><ul><li>  The Sensex plunged by  1070.63 points  </li></ul><ul><li>March 3, 2008 : </li></ul><ul><li>The Bombay Stock Exchange benchmark Sensex witnessed its Third-largest fall ever, losing  9922 points </li></ul>
  29. 32. <ul><li>Be professional </li></ul><ul><li>Do specific and selected trades </li></ul><ul><li>Don’t be greedy and fearful in day trading </li></ul><ul><li>Avoid panic by not doing over trading </li></ul>Day Trading Strategies
  30. 33. Day Trading Precautions <ul><li>If you are new comer to share market  </li></ul><ul><li>When you have a strong mind set (especially new comers to share market) that you want to earn big amount of money very fast in single day. </li></ul><ul><li>Not confident and not sure </li></ul><ul><li>Not able to judge market  </li></ul><ul><li>No good mind frame </li></ul><ul><li>When market opens and closes (especially few are new comers). </li></ul><ul><li>When shares and markets are trading in very narrow range. </li></ul><ul><li>Impatience, Greed and Fear </li></ul>Every situation is not suitable for day trading.
  31. 35. Queries ?