Stock Exchanges project blackbook
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Stock Exchanges project blackbook
- 1. 1 PROJECT REPORT ON Stock Exchanges SUBMITTED BY MR. RAVI . R .YADAV BACHELOR OF MANAGEMENT STUDIES SEMESTER V (TYBMS) (Academic year 2016 – 2017 ) REENA MEHTA COLLEGE OF COMMERCE AND MANAGEMENT STUDIES ( Bhyander west )
- 2. 2 CERTIFICATE This is to certify that Mr RAVI R YADAV student of REENA MEHTA COLLEGE OF MANAGEMENT STUDIES has completed her project work of “Stock Exchange” and submitted the project in partial fulfilment of “BACHELOR OF MANAGEMENT STUDIES” of Mumbai University of the academic year 2016-2017 He has worked under the guidance , the said project is in bonafied information . Project.co.ordinator Guide (DR. SATINDRER KAUR GUJRAL ) ( ARUN THANVI) Signatiure Signatiure EXTERNAL PROF. Signatiure
- 3. 3 DECLARATION I, RAVI R YADAV roll no. 48 , hereby declare that this project work entitled “Stock Exchange” is my original work. I further declare that this report is based on the information collected by me and has not been submitted to any other university or academic body. PLACE – MUMBAI RAVI R YADAV Date:
- 4. 4 ACKNOWLEDGEMENT It is matter of outmost pleasure to express my deep sense of gratitude and tanks to my guide ARUN THANVI and our coorfinator DR. SATINDRER KAUR GUJRAL , the college teacher and my family for the guidance and the timely suggestions and the information provided by them for this project. I alos wish to express my heartiest thanks to all people who have contributed to the making of this project. I also heartily thank who have supported. Provided their valuable guidance and healped for the accomplishment of the project. Above all , I wish to thanks the “UNIVERSITY OF MUMBAI” for giving me the opportunity to work on this project which was done with great consideration and outmost seriousness
- 5. 5 Index Topic 1. Stock Exchanges 2. History of Stock Exchanges 3. Role of Stock Exchanges 4. Major Stock Exchanges 5. Listing Requirements 6. Indian Stock Markets 7. Stock Exchanges in India i. National Stock Exchange ii. Bombay Stock Exchange iii. OTC Exchange of India iv. UP Stock Exchange v. Jaipur Stock Exchange vi. Madras Stock Exchange vii. Cochin Stock Exchange viii. Bangalore Stock Exchange ix. Guwahati Stock Exchange x. Madhya Pradesh Stock Exchange xi. Ludhiana Stock Exchange Association xii. Vadodara Stock Exchange xiii. Calcutta Stock Exchange Association Limited xiv. Delhi Stock Exchange xv. Bhubaneshwar Stock Exchange 8. Bibliography
- 6. 6 Stock Exchanges A stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it must be listed there. Usually, there is a central location at least for record keeping, but trade is increasingly less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of increased speed and reduced cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets are driven by various factors that, as in all free markets, affect the price of stocks (see stock valuation). There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over- the-counter. This is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a global market for securities.
- 7. 7 History of Stock Exchanges Securities markets took centuries to develop.[1] The idea of debt dates back to the ancient world, as evidenced for example by ancient Mesopotamian clay tablets recording interest-bearing loans. There is little consensus among scholars as to when corporate stock was first traded. Some see the key event as the Dutch East India Company's founding in 1602, while others point to earlier developments. Economist Ulrike Malmendier of the University of California at Berkeley argues that a share market existed as far back as ancient Rome. In the Roman Republic, which existed for centuries before the Empire was founded, there were societates publicanorum, organizations of contractors or leaseholders who performed temple-building and other services for the government. One such service was the feeding of geese on the Capitoline Hill as a reward to the birds after their honking warned of a Gallic invasion in 390 B.C. Participants in such organizations had partes or shares, a concept mentioned various times by the statesman and orator Cicero. In one speech, Cicero mentions "shares that had a very high price at the time." Such evidence, in Malmendier's view, suggests the instruments were tradable, with fluctuating values based on an organization's success. The societas declined into obscurity in the time of the emperors, as most of their services were taken over by direct agents of the state. Tradable bonds as a commonly used type of security were a more recent innovation, spearheaded by the Italian city-states of the late medieval and earlyRenaissance periods. In 1171, the authorities of the Republic of Venice, concerned about their war-depleted treasury, drew a forced loan from the citizenry. Such debt, known asprestiti, paid 5 percent interest per year and had an indefinite maturity date. Initially regarded with suspicion, it came to be seen as a valuable investment that could be bought and sold. The bond market had begun. From 1262 to 1379, Venice never missed an interest payment, solidifying the credibility of the new instruments. Other Italian city-states such as Florence and Genoa became bond issuers as well, often as a means of paying for warfare. Bonds were traded widely in Italy and beyond, a business facilitated by bankers such as the Medicis. War between Venice and Genoa resulted in suspension of prestiti interest payments in the early 1380s, and when the market was restored, it was at a lower interest rate. Venice's bonds traded at steep discounts for decades thereafter. Other blows to financial stability resulted from the Hundred Years War, which caused monarchs of France and
- 8. 8 England to default on debts to Italian banks, and the Black Death, which ravaged much of Europe. Still, the idea of debt as a tradable investment endured. As with bonds, the concept of stock developed gradually. Some scholars place its origins as far back as ancient Rome. Partnership agreements dividing ownership into shares date back at least to the 13th century, again with Italian city-states in the vanguard. Such arrangements, however, typically extended only to a handful of people and were of limited duration, as with shipping partnerships that applied only to a single sea voyage. The forefront of commercial innovation eventually shifted from Italy to northern Europe. The Hanseatic League, an alliance of mercantile cities such asBruges and Antwerp, operated counting houses to expedite trade. By the late 1500s, British merchants were experimenting with joint-stock companies intended to operate on an ongoing basis; one such was theMuscovy Company, which sought to wrest trade with Russia away from Hanseatic dominance. The next big step was in Amsterdam. In 1602, the Dutch East India Company was formed as a joint-stock company with shares that were readily tradable. The stock market had begun. The Dutch East India Company, formed to build up the spice trade, operated as a colonial ruler in what's now Indonesia and beyond, a purview that included conducting military operations against recalcitrant natives and competing colonial powers. Control of the company was held tightly by its directors, with ordinary shareholders not having much influence on management or even access to the company's accounting statements. However, shareholders were rewarded well for their investment. The company paid an average dividend of over 16 percent per year from 1602 to 1650. Financial innovation in Amsterdam took many forms. In 1609, investors led by one Isaac Le Maireformed history's first bear syndicate, but their coordinated trading had only a modest impact in driving down share prices, which tended to be robust throughout the 17th century. By the 1620s, the company was expanding its securities issuance with the first use of corporate bonds. The Dutch West India Company was formed in 1621, bringing a new issuer to the burgeoning securities market. Amsterdam's growth as a financial center survived the tulip mania of the 1630s, in which contracts for the delivery of flower bulbs soared wildly and then crashed. New techniques and instruments proliferated for securities as well as commodities, including options, repos and margin trading.[2]
- 9. 9 Joseph de la Vega, also known as Joseph Penso de la Vega and by other variations of his name, was an Amsterdam trader from a Spanish Jewish family and a prolific writer as well as a successful businessman in 17th-century Amsterdam. His 1688 book Confusion of Confusions explained the workings of the city's stock market. It was the earliest book about stock trading, taking the form of a dialogue between a merchant, a shareholder and a philosopher, the book described a market that was sophisticated but also prone to excesses, and de la Vega offered advice to his readers on such topics as the unpredictability of market shifts and the importance of patience in investment. The year that de la Vega published also brought an event that helped spread financial techniques and talent from Amsterdam to London. This was the "glorious revolution," in which Dutch rulerWilliam of Orange also ascended to England's throne. William sought to modernize England's finances to pay for its wars, and thus the kingdom's first government bonds were issued in 1693 and the Bank of England was set up the following year. Soon thereafter, English joint-stock companies began going public. London's first stockbrokers, however, were barred from the old commercial center known as the Royal Exchange, reportedly because of their rude manners. Instead, the new trade was conducted from coffee houses along Exchange Alley. By 1698, a broker named John Castaing, operating out of Jonathan's Coffee House, was posting regular lists of stock and commodity prices. Those lists mark the beginning of the London Stock Exchange. One of history's greatest financial bubbles occurred in the next few decades. At the center of it were the South Sea Company, set up in 1711 to conduct English trade with South America, and the Mississippi Company, focused on commerce with France's Louisiana colony and touted by transplanted Scottish financier John Law, who was acting in effect as France's central banker. Investors snapped up shares in both, and whatever else was available. In 1720, at the height of the mania, there was even an offering of "a company for carrying out an undertaking of great advantage, but nobody to know what it is." By the end of that same year, share prices were collapsing, as it became clear that expectations of imminent wealth from the Americas were overblown. In London, Parliament passed the Bubble Act, which stated that only royally chartered companies could issue public shares. In Paris, Law was stripped of office and fled the country. Stock trading was more limited and subdued in subsequent decades. Yet the market survived, and by the 1790s shares were being traded in the young United States.
- 10. 10 On February 8, 1971, NASDAQ, the world's first electronic stock exchange, started its operations. Role of Stock Exchanges Stock exchanges have multiple roles in the economy. This may include the following: Raising capital for businesses The Stock Exchange provide companies with the facility to raise capital for expansion through selling shares to the investing public. Common forms of capital raising Besides the borrowing capacity provided to an individual or firm by the banking system, in the form of credit or a loan, there are four common forms of capital raising used by companies and entrepreneurs. Most of these available options, might be achieved, directly or indirectly, involving a stock exchange. Going public Capital intensive companies, particularly high tech companies, always need to raise high volumes of capital in their early stages. By this reason, the public market provided by the stock exchanges, has been one of the most important funding sources for many capital intensive startups. After the 1990s and early-2000s hi- tech listed companies' boom and bust in the world's major stock exchanges, it has been much more demanding for the high-tech entrepreneur to take his/her company public, unless either the company already has products in the market and is generating sales and earnings, or the company has completed advanced promising clinical trials, earned potentially profitable patents or conducted market research which demonstrated very positive outcomes. This is quite different from the situation of the 1990s to early-2000s period, when a number of companies (particularly Internet boom and biotechnology companies) went public in the most prominent stock exchanges around the world, in the total absence of sales, earnings and any well-documented promising outcome. Anyway, every year a number of companies, including unknown highly speculative and financially unpredictable hi-tech startups, are listed for the first time in all the major stock exchanges - there are even specialized entry markets for this kind of companies
- 11. 11 or stock indexes tracking their performance (examples include theAlternext, CAC Small, SDAX, TecDAX, or most of the third market companies). Limited partnerships A number of companies have also raised significant amounts of capital through R&D limited partnerships. Tax law changes that were enacted in 1987 in the United States changed the tax deductibility of investments in R&D limited partnerships. In order for a partnership to be of interest to investors today, the cash-on-cash return must be high enough to entice investors. As a result, R&D limited partnerships are not a viable means of raising money for most companies, specially hi-tech startups. Venture capital A third usual source of capital for startup companies has been venture capital. This source remains largely available today, but the maximum statistical amount that the venture company firms in aggregate will invest in any one company is not limitless (it was approximately $15 million in 2001 for a biotechnology company).[5] At those level, venture capital firms typically become tapped-out because the financial risk to any one partnership becomes too great. Corporate partners A fourth alternative source of cash for a private company is a corporate partner, usually an established multinational company, which provides capital for the smaller company in return for marketing rights, patent rights, or equity. Corporate partnerships have been used successfully in a large number of cases. Mobilizing savings for investment When people draw their savings and invest in shares (through a IPO or the issuance of new company shares of an already listed company), it usually leads torational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to help companies' management boards finance their organizations. This may promote business activity with benefits for several economic sectors such as agriculture,commerce and industry, resulting in stronger economic growth and higher productivity levels of firms. Sometimes it is very difficult for the stock investor to determine whether or not the allocation of those funds
- 12. 12 is in good faith and will be able to generate long-term company growth, without examination of a company's internal auditing. Facilitating company growth Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion. Profit sharing Both casual and professional stock investors, as large as institutional investors or as small as an ordinary middle class family, through dividends and stock priceincreases that may result in capital gains, share in the wealth of profitable businesses. Unprofitable and troubled businesses may result in capital losses for shareholders. Corporate governance By having a wide and varied scope of owners, companies generally tend to improve management standards and efficiency to satisfy the demands of these shareholders, and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged thatpublic companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). Despite this claim, some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies. The dot-com bubble in the late 1990s, and the subprime mortgage crisis in 2007-08, are classical examples of corporate mismanagement. Companies like Pets.com (2000), Enron Corporation (2001), One.Tel (2001), Sunbeam (2001), Webvan (2001), Adelphia (2002), MCI WorldCom (2002), Parmalat (2003), American International Group (2008), Bear Stearns (2008), Lehman Brothers (2008), General Motors (2009) and Satyam Computer Services (2009) were among the most widely scrutinized by the media.
- 13. 13 However, when poor financial, ethical or managerial records are known by the stock investors, the stock and the company tend to lose value. In the stock exchanges, shareholders of underperforming firms are often penalized by significant share price decline, and they tend as well to dismiss incompetent management teams. Creating investment opportunities for small investors As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors. Government capital-raising for development projects Governments at various levels may decide to borrow money to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need, in the short term, to directly tax citizens to finance development—though by securing such bonds with the full faith and credit of the government instead of with collateral, the government must eventually tax citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature. Barometer of the economy At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and theeconomy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy. Speculations The stock exchanges are also fashionable places for speculation. In a financial context, the terms "speculation" and "investment" are actually quite specific. For instance, although the word "investment" is typically used, in a general sense, to mean any act of placing money in a financial vehicle with the intent of producing returns over a period of time,
- 14. 14 most ventured money—including funds placed in the world's stock markets—is actually not investment but speculation. Major Stock Exchanges: Year ended 31 December 2011
- 15. 15 Listing Requirements Listing requirements are the set of conditions imposed by a given stock exchange upon companies that want to be listed on that exchange. Such conditions sometimes include minimum number of shares outstanding, minimum market capitalization, and minimum annual income. Requirements by stock exchange Companies must meet an exchange's requirements to have their stocks and shares listed and traded there, but requirements vary by stock exchange: New York Stock Exchange: To be listed on the New York Stock Exchange (NYSE) a company must have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years NASDAQ Stock Exchange: To be listed on the NASDAQ a company must have issued at least 1.25 million shares of stock worth at least $70 million and must have earned more than $11 million over the last three years. London Stock Exchange: The main market of the London Stock Exchange has requirements for a minimum market capitalization (£700,000), three years of audited financial statements, minimum public float (25 per cent) and sufficient working capital for at least 12 months from the date of listing. Bombay Stock Exchange: Bombay Stock Exchange (BSE) has requirements for a minimum market capitalization of 25 crore (US$4.99 million) and minimum public float equivalent to 10 crore (US$2 million) Ownership Stock exchanges originated as mutual organizations, owned by its member stock brokers. There has been a recent trend for stock exchanges to demutualize, where the members
- 16. 16 sell their shares in an initial public offering. In this way the mutual organization becomes a corporation, with shares that are listed on a stock exchange. Examples are Australian Securities Exchange (1998), Euronext (merged with New York Stock Exchange), NASDAQ (2002), the New York Stock Exchange (2005), Bolsas y Mercados Españoles, and the São Paulo Stock Exchange (2007). The Shenzhen and Shanghai stock exchanges can been characterized as quasi-state institutions insofar as they were created by government bodies in China and their leading personnel are directly appointed by theChina Securities Regulatory Commission. Indian Stock Markets Stock markets refer to a market place where investors can buy and sell stocks. The price at which each buying and selling transaction takes is determined by the market forces (i.e. demand and supply for a particular stock). Let us take an example for a better understanding of how market forces determine stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of an upward movement in its stock price. More and more people would want to buy this stock (i.e. high demand) and very few people will want to sell this stock at current market price (i.e. less supply). Therefore, buyers will have to bid a higher price for this stock to match the ask price from the seller which will increase the stock price of ABC Co. Ltd. On the contrary, if there are more sellers than buyers (i.e. high supply and low demand) for the stock of ABC Co. Ltd. in the market, its price will fall down. In earlier times, buyers and sellers used to assemble at stock exchanges to make a transaction but now with the dawn of IT, most of the operations are done electronically and the stock markets have become almost paperless. Now investors dont have to gather at the Exchanges, and can trade freely from their home or office over the phone or through Internet. History of the Indian Stock Market - The Origin One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years old history.
- 17. 17 18th Century East India Company was the dominant institution and by end of the century, busuness in its loan securities gained full momentum 1830's Business on corporate stocks and shares in Bank and Cotton presses started in Bombay. Trading list by the end of 1839 got broader 1840's Recognition from banks and merchants to about half a dozen brokers 1850's Rapid development of commercial enterprise saw brokerage business attracting more People into the business 1860's The number of brokers increased to 60 1860-61 The American Civil War broke out which caused a stoppage of cotton supply from United States of America; marking the beginning of the "Share Mania" in India 1862-63 The number of brokers increased to about 200 to 250 1865 A disastrous slump began at the end of the American Civil War (as an example, Bank of Bombay Share which had touched Rs. 2850 could only be sold at Rs. 87) Pre-Independence Scenario - Establishment of Different Stock Exchanges 1874 With the rapidly developing share trading business, brokers used to gather at a street (now well known as "Dalal Street") for the purpose of transacting business. 1875 "The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock Exchange") was established in Bombay 1880's Development of cotton mills industry and set up of many others 1894 Establishment of "The Ahmedabad Share and Stock Brokers' Association" 1880 - 90's Sharp increase in share prices of jute industries in 1870's was followed by a boom in tea stocks and coal 1908 "The Calcutta Stock Exchange Association" was formed
- 18. 18 1920 Madras witnessed boom and business at "The Madras Stock Exchange" was transacted with 100 brokers. 1923 When recession followed, number of brokers came down to 3 and the Exchange was closed down 1934 Establishment of the Lahore Stock Exchange 1936 Merger of the Lahoe Stock Exchange with the Punjab Stock Exchange 1937 Re-organisation and set up of the Madras Stock Exchange Limited (Pvt.) Limited led by improvement in stock market activities in South India with establishment of new textile mills and plantation companies 1940 Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was established 1944 Establishment of "The Hyderabad Stock Exchange Limited" 1947 "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and Shares Exchange Limited" were established and later on merged into "The Delhi Stock Exchange Association Limited" Post Independence Scenario The depression witnessed after the Independence led to closure of a lot of exchanges in the country. Lahore Stock Exchange was closed down after the partition of India, and later on merged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in 1957 and got recognition only by 1963. Most of the other Exchanges were in a miserable state till 1957 when they applied for recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that were recognized under the Act were: Bombay Calcutta Madras Ahmadabad Delhi Hyderabad Bangalore Indore
- 19. 19 Many more stock exchanges were established during 1980's, namely: Cochin Stock Exchange (1980) Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982) Pune Stock Exchange Limited (1982) Ludhiana Stock Exchange Association Limited (1983) Gauhati Stock Exchange Limited (1984) Kanara Stock Exchange Limited (at Mangalore, 1985) Magadh Stock Exchange Association (at Patna,1986) Jaipur Stock Exchange Limited (1989) Bhubaneswar Stock Exchange Association Limited (1989) Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989) Vadodara Stock Exchange Limited (at Baroda, 1990) Coimbatore Stock Exchange Meerut Stock Exchange At present, there are twenty one recognized stock exchanges in India which does not include the Over The Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL). Government policies during 1980's also played a vital role in the development of the Indian Stock Markets. There was a sharp increase in number of Exchanges, listed companies as well as their capital, which is visible from the following table: S. No. As on 31st December 1946 1961 1971 1975 1980 1985 1991 1995 1 No. of Stock Exchanges 7 7 8 8 9 14 20 22 2 No. of Listed Cos. 1125 1203 1599 1552 2265 4344 6229 8593 3 No. of Stock Issues of Listed Cos. 1506 2111 2838 3230 3697 6174 8967 11784 4 Capital of Listed Cos. (Cr. Rs.) 270 753 1812 2614 3973 9723 32041 59583 5 Market value of Capital of Listed Cos. (Cr. Rs.) 971 1292 2675 3273 6750 25302 110279 478121
- 20. 20 6 Capital per Listed Cos. (4/2)(Lakh Rs.) 24 63 113 168 175 224 514 693 7 Market Value of Capital per Listed Cos. (Lakh Rs.) (5/2) 86 107 167 211 298 582 1770 5564 8 Appreciated value of Capital per Listed Cos. (Lak Rs.) 358 170 148 126 170 260 344 803 Trading Pattern of the Indian Stock Market Indian Stock Exchanges allow trading of securities of only those public limited companies that are listed on the Exchange(s). They are divided into two categories:
- 21. 21 Types of Transactions The flowchart below describes the types of transactions that can be carried out on the Indian stock exchanges: Indian stock exchange allows a member broker to perform following activities: Acts as an agent, Buy and sell securities for his clients and charge commission for the same,
- 22. 22 Act as a trader or dealer as a principal, Buy and sell securities on his own account and risk. Over The Counter Exchange of India (OTCEI) Traditionally, trading in Stock Exchanges in India followed a conventional style where people used to gather at the Exchange and bids and offers were made by open outcry. This age-old trading mechanism in the Indian stock markets used to create many functional inefficiencies. Lack of liquidity and transparency, long settlement periods and benami transactions are a few examples that adversely affected investors. In order to overcome these inefficiencies, OTCEI was incorporated in 1990 under the Companies Act 1956. OTCEI is the first screen based nationwide stock exchange in India created by Unit Trust of India, Industrial Credit and Investment Corporation of India, Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation of India, General Insurance Corporation and its subsidiaries and CanBank Financial Services. Advantages of OTCEI Greater liquidity and lesser risk in intermediary charges due to widely spread trading mechanism across India. The screen-based scrip less trading ensures transparency and accuracy of prices. Faster settlement and transfer process as compared to other exchanges.
- 23. 23 Shorter allotment procedure(in case of a new issue) than other exchanges. National Stock Exchange In order to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others. NSE provides exposure to investors in two types of markets, namely: Wholesale debt market Capital Market Wholesale Debt Market - Similar to money market operations, debt market operations involve institutional investors and corporate bodies entering into transactions of high value in financial instruments like treasury bills, government securities, commercial papers etc. Trading at NSE 1. Fully automated screen-based trading mechanism. 2. Strictly follows the principle of an order-driven market. 3. Trading members are linked through a communication network. 4. This network allows them to excuse trade from their offices. 5. The prices at which the buyer and seller are willing to transact will appear on the screen. 6. When the prices match the transaction will be completed. 7. A confirmation slip will be printed at the office of the trading member Advantages of trading at NSE 1. Integrated network for trading in stock market of India 2. Fully automated screen based system that provides higher degree of transparency 3. Investors can transact from any pary of the country at uniform prices
- 24. 24 4. Greater functional efficiency supported by totally computerized network 23 Stock Exchanges in India 1. National Stock Exchange Location Mumbai, India Coordinates 19°3′37″N 72°51′35″E Founded 1992 Owner National Stock Exchange of India Limited Key people Ravi Narain (MD) Currency Indian rupee ( ) No. of listings 1,646 MarketCap US$985 billion (Dec 2011) Indexes S&P CNX Nifty CNX Nifty Junior S&P CNX 500
- 25. 25 Website www.nseindia.com Trading Hours: 9:15 AM TO 3:15(3:30) pm The National Stock Exchange (NSE) (Hindi: राष्ट्रीय शेयर बाजार Rashtriya Śhare Bāzaār) is a stock exchange located at Mumbai, India. It is the16th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around US$985 billion and over 1,646 listings as of December 2011. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by market capitalisation. NSE is mutually owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%. Markets
- 26. 26 Currently, NSE has the following major segments of the capital market: Equity Futures and options Retail debt market Wholesale debt market Currency futures Mutual fund Stocks lending and borrowing In August 2008 currency derivatives were introduced in India with the launch of Currency Futures in USD INR by NSE. Currently it has also launched currency futures in euros, pounds and yen. Interest Rate Futures were introduced for the first time in India by NSE on 31 August 2009, exactly one year after the launch of Currency Futures. NSE became the first stock exchange to get approval for interest rate futures, As recommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7% 10 Year Government of India (Notional) was launched with quarterly maturities. Milestones November 1992 Incorporation April 1993 Recognition as a stock exchange May 1993 Formulation of business plan June 1994 Wholesale Debt Market segment goes live November 1994 Capital Market (Equities) segment goes live March 1995 Establishment of Investor Grievance Cell April 1995 Establishment of NSCCL, the first Clearing Corporation June 1995 Introduction of centralised insurance cover for all trading members July 1995 Establishment of Investor Protection Fund October 1995 Became largest stock exchange in the country April 1996 Commencement of clearing and settlement by NSCCL April 1996 Launch of S&P CNX Nifty June 1996 Establishment of Settlement Guarantee Fund November 1996 Setting up of National Securities Depository Limited, first depository in India, co-promoted by NSE November 1996 Best IT Usage award by Computer Society of India December 1996 Commencement of trading/settlement in dematerialised securities December 1996 Dataquest award for Top IT User
- 27. 27 December 1996 Launch of CNX Nifty Junior February 1997 Regional clearing facility goes live November 1997 Best IT Usage award by Computer Society of India May 1998 Promotion of joint venture, India Index Services & Products Limited (IISL) May 1998 Launch of NSE's Web-site: www.nse.co.in July 1998 Launch of NSE's Certification Programme in Financial Market August 1998 CYBER CORPORATE OF THE YEAR 1998 award yes. February 1999 Launch of Automated Lending and Borrowing Mechanism April 1999 CHIP Web Award by CHIP magazine October 1999 Setting up of NSE.IT January 2000 Launch of NSE Research Initiative February 2000 Commencement of Internet Trading June 2000 Commencement of Derivatives Trading (Index Futures) September 2000 Launch of 'Zero Coupon Yield Curve' November 2000 Launch of Broker Plaza by Dotex International, a joint venture between NSE.IT Ltd. and i-flex Solutions Ltd. December 2000 Commencement of WAP trading June 2001 Commencement of trading in Index Options July 2001 Commencement of trading in Options on Individual Securities November 2001 Commencement of trading in Futures on Individual Securities December 2001 Launch of NSE VaR for Government Securities January 2002 Launch of Exchange Traded Funds (ETFs) May 2002 NSE wins the Wharton-Infosys Business Transformation Award in the Organization-wide Transformation category October 2002 Launch of NSE Government Securities Index January 2003 Commencement of trading in Retail Debt Market June 2003 Launch of Interest Rate Futures August 2003 Launch of Futures & options in CNXIT Index June 2004 Launch of STP Interoperability August 2004 Launch of NSE’s electronic interface for listed companies March 2005 ‘India Innovation Award’ by EMPI Business School, New Delhi June 2005 Launch of Futures & options in BANK Nifty Index December 2006 'Derivative Exchange of the Year', by Asia Risk magazine January 2007 Launch of NSE – CNBC TV 18 media centre March 2007 NSE, CRISIL announce launch of IndiaBondWatch.com June 2007 NSE launches derivatives on Nifty Junior & CNX 100 October 2007 NSE launches derivatives on Nifty Midcap 50 January 2008 Introduction of Mini Nifty derivative contracts on 1 January 2008
- 28. 28 March 2008 Introduction of long term option contracts on S&P CNX Nifty Index April 2008 Launch of India VIX April 2008 Launch of Securities Lending & Borrowing Scheme August 2008 Launch of Currency Derivatives August 2009 Launch of Interest Rate Futures November 2009 Launch of Mutual Fund Service System December 2009 Commencement of settlement of corporate bonds February 2010 Launch of Currency Futures on additional currency pairs October 2010 Launch of 15-minute special pre-open trading session, a mechanism under which investors can bid for stocks before the market opens. Indices NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including: S&P CNX Nifty(Standard & Poor's CRISIL NSE Index) CNX Nifty Junior CNX 100 (= S&P CNX Nifty + CNX Nifty Junior) S&P CNX 500 (= CNX 100 + 400 major players across 72 industries) CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)
- 29. 29 2. Bombay Stock Exchange Location Mumbai, India Coordinates 18.929681°N 72.833589°E Founded 1875 Owner Bombay Stock Exchange Limited Key people Madhu Kannan (CEO & MD) Currency Indian rupee ( ) No. of listings 5,133 MarketCap US$1 trillion (Dec 2011)[1] Volume US$231 billion (Nov 2010) Indexes BSE SENSEX BSE Small Cap BSE Mid-Cap BSE 500 Website www.bseindia.com
- 30. 30 Hours of Operation Session Timing Beginning of the Day Session 8:30 - 9:00 Pre-open trading session 9:00 - 9:15 Trading Session 9:15 - 15:30 Position Transfer Session 15:30 - 15:50 Closing Session 15:50 - 16:05 Timeline Following is the timeline on the rise of the SENSEX through Indian stock market history. 1830's Business on corporate stocks and shares in Bank and Cotton presses started in Mumbai. 1860-1865 Cotton price bubble as a result of the American Civil War. 1870 - 90's Sharp increase in share prices of jute industries followed by a boom in tea stocks and coal 1978-79 Base year of SENSEX, defined to be 100. 1986 SENSEX first compiled using a market Capitalization-Weighted methodology for 30 component stocks representing well-established companies across key sectors. 30 October 2006 The SENSEX on October 30, 2006 crossed the magical figure of 13,000 and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the SENSEX to move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000. 5 December 2006 The SENSEX on December 5, 2006 crossed the 14,000-mark to touch 14,028 points. It took 36 days for the SENSEX to move from 13,000 to the 14,000 mark.
- 31. 31 6 July 2007 The SENSEX on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005 points in afternoon trade. It took seven months for the SENSEX to move from 14,000 to 15,000 points. 19 September 2007 The SENSEX scaled yet another milestone during early morning trade on September 19, 2007. Within minutes after trading began, the SENSEX crossed 16,000, rising by 450 points from the previous close. The 30-share Bombay Stock Exchange's sensitive index took 53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points. The SENSEX finally ended with a gain of 654 points at 16,323. The NSE Nifty gained 186 points to close at 4,732. 26 September 2007 The SENSEX scaled yet another height during early morning trade on September 26, 2007. Within minutes after trading began, the SENSEX crossed the 17,000- mark. Some profit taking towards the end saw the index slip into red to 16,887 - down 187 points from the day's high. The SENSEX ended with a gain of 22 points at 16,921. 9 October 2007 The BSE SENSEX crossed the 18,000-mark on October 9, 2007. It took just 8 days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-day high of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market set several new records including the biggest single day gain of 789 points at close, as well as the largest intra-day gains of 993 points in absolute term backed by frenzied buying after the news of the UPA and Left meeting on October 22 put an end to the worries of an impending election. 15 October 2007 The SENSEX crossed the 19,000-mark backed by revival of funds-based buying in blue chip stocks in metal, capital goods and refinery sectors. The index gained the last 1,000 points in just four trading days. The index touched a fresh all-time intra-day high of 19,096, and finally ended with a smart gain of 640 points at 19,059.The Nifty gained 242 points to close at 5,670. 29 October 2007 The SENSEX crossed the 20,000 mark on the back of aggressive buying by funds ahead of the US Federal Reserve meeting. The index took only 10 trading days to gain 1,000 points after the index crossed the 19,000-mark on October 15. The major drivers of today's rally were index heavyweights Larsen and Toubro, Reliance Industries, ICICI Bank, HDFC Bank and SBI among others. The 30-share index spurted in the last five minutes of trade to fly-past the crucial level and scaled a new intra-day peak at 20,024.87
- 32. 32 points before ending at its fresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to a record high 5,922.50 points before ending at 5,905.90, showing a hefty gain of 203.60 points. 8 January 2008 The SENSEX peaks. It crossed the 21,000 mark in intra-day trading after 49 trading sessions. This was backed by high market confidence of increased FII investment and strong corporate results for the third quarter. However, it later fell back due to profit booking. 13 June 2008 The SENSEX closed below 15,200 mark, Indian market suffer with major downfall from January 21, 2008 25 June 2008 The SENSEX touched an intra day low of 13,731 during the early trades, then pulled back and ended up at 14,220 amidst a negative sentiment generated on the Reserve Bank of India hiking CRR by 50 bps. FII outflow continued in this week. 2 July 2008 The SENSEX hit an intra day low of 12,822.70 on July 2, 2008. This is the lowest that it has ever been in the past year. Six months ago, on January 10, 2008, the market had hit an all time high of 21206.70. This is a bad time for the Indian markets, although Reliance and Infosys continue to lead the way with mostly positive results. 6 October 2008 The SENSEX closed at 11801.70 hitting the lowest in the past 2 years. 10 October 2008 The SENSEX today closed at 10527, 800.51 points down from the previous day having seen an intraday fall of as large as 1063 points. Thus, this week turned out to be the week with largest percentage fall in the SENSEX 18 May 2009 After the result of 15th Indian general election SENSEX gained 2100.79 points from the previous close of 12173.42, a record one-day gain. In the opening trade itself the SENSEX evinced a 15% gain over the previous close which led to a two-hour suspension in trading. After trading resumed, the SENSEX surged again, leading to a full day suspension of trading. 19 October 2010 BSE introduced the 15-minute special pre-open trading session, a mechanism under which investors can bid for stocks before the market opens. The mechanism, known as 'pre-open session call auction', lasted for 15 minutes (from 9:00- 9:15 am). 5 November 2010 BSE SENSEX crossed the 21000 mark (exactly 21004.96).
- 33. 33 27 December 2010 BSE SENSEX is at 20,028.93. Indices The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Index was renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated taking into consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked version of BSE-100 index on May 22, 2006. BSE launched two new index series on 27 May 1994: The 'BSE-200' and the 'DOLLEX-200'. BSE-500 Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX- 30 and the country's first free-float based index - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-float methodology (except BSE-PSU index). BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices. The values of all BSE indices are updated on real time basis during market hours and displayed through the BOLT system, BSE website and news wire agencies. All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee which comprises eminent independent finance professionals frames the broad policy guidelines for the development and maintenance of all BSE indices. The BSE Index Cell carries out the day- to-day maintenance of all indices and conducts research on development of new indices. SENSEX is significantly correlated with the stock indices of other emerging markets.
- 34. 34 3. OTC Exchange of India Type Stock Exchange Location Mumbai, India Founded 1990 Owner OTC Exchange of India Key people Mr Praveen Mohnot, MD[1][2] Currency Indian rupee ( ) Website Official Website OTC Exchange Of India (OTCEI) also known as Over-the-Counter Exchange of India based in Mumbai, Maharashtra. It is the first exchange for small companies. It is the first screen based nationwide stock exchange in India. It was set up to access high-technology enterprising promoters in raising finance for new product development in a cost effective manner and to provide transparent and efficient trading system to the investors. OTCEI is promoted by the Unit Trust of India, the Industrial Credit and Investment Corporation of India, the Industrial Development Bank of India, the Industrial Finance Corporation of India and others and is a recognised stock exchange under the SCR Act. History
- 35. 35 OTC Exchange Of India was founded in 1990 under the Companies Act 1956 and got recognized by the Securities Contracts Regulation Act, 1956 as a stock exchange. 4. UP Stock Exchange The UP Stock Exchange Limited ((Formerly known as The U.P.Stock Exchange Association Ltd., Kanpur), is a Kanpur-based stock exchange.It occupies one of the prominent place among the Stock Exchanges in India. The Exchange was inaugurated on 27th August, 1982 by the then Finance Minister Shri Pranab Mukherjee. It plays an important role in the development of the capital market of North India. Initially, it had only 350 members which has grown up to 540 at present. UPSE is the only Stock Exchange in whole of Uttar Pradesh and the membership of this Stock Exchange is not restricted to the territories of Uttar Pradesh only. Members living outside Kanpur has contributed a lot by creating the equity cult in whole of the Uttar Pradesh. Type Stock Exchange Location Kanpur, INDIA Founded 27th August, 1982 Key people Dr. G.H.Singhania (Founder) Currency Website upse-india.com UPSE Securities UPSE Securities Ltd. is a 100% owned subsidiary of the U.P. Stock Exchange Association Ltd. and was incorporated on 19th of April, 2000. Its main object is to obtain membership of the big exchanges like BSE or CSE. It aims at providing trading facilities on these bigger exchanges to the members of U.P. Stock Exchange as a sub-brokers according to the policies/guidelines issued by SEBI. The Company acquired the membership of Bombay Stock Exchange (BSE) and commenced an online trading on BSE On-Line Trading System (BOLT) from 29th of
- 36. 36 January, 2001. Currently, 43 members are trading on BSE through the Company, 96 have been registered with SEBI as sub-brokers and 153 have applied for participation. The Company has also been admitted as member of CSE and further steps are being taken in this regard. Investor's Service Center / Library of UPSE R&D Wing of UPSE is in function since 1992 under the directions of SEBI and it provides valuable services to the investors. Investor's Service Centre maintains a well equipped library of Books, journals, periodicals and Newspapers on Financial Markets. They maintain the records of day to day quotations of major exchanges, the annual reports,of companies, PRIME Directory, complete set of volumes of the Stock Exchange, Mumbai Directories. Along with this it also maintains the news letters, daily bulletin, books on Capital Markets, Investor Awareness, Budget, Taxation with other relevant books. The UPSE has been organising summer camps to give trainings to Company Secretaries and MBAs from different institutes giving them complete data and helping the student to know the practical day-to-day working of the exchanges. Along with this it also organises Investor Awareness Shows. The changing technology have helped the exchange to install a corporate database of over 7000 companies. The rates of UPSE, BSE and NSE is displayed live for the benefit of investors. 5. Jaipur Stock Exchange Jaipur Stock Exchange (JSE) is located in Jaipur Rajasthan it was founded and was recognized in 1989. JSE is the third largest exchange in India in terms of membership. It was established in the year 1989. In the same year, the exchange was granted recognition in the month of January and the commencement of business took place from the month August, 1989. Its license from SEBI is valid up to January 8, 2011. Within seven years of its incorporation, i.e. by January 1996, the exchange managed to attract 750 companies who were listed on the exchange. Then the volume of the daily turnover rose to an average of Rs.80 million. Jaipur Stock Exchange was one of the 15 regional Stock Exchanges which promoted the Inter-connected Stock Exchange of India Ltd. by paying the Initial Capital of Rs.1 crore (Rs.5 lakhs as admission fee and Rs.95 lakhs as infrastructure fee).
- 37. 37 6.Madras Stock Exchange The Madras Stock Exchange (MSE) is a stock exchange in Chennai, India. The MSE is the fourth stock exchange to be established in the country and the first in South India. It had a turnover (2001) of 3090 crores (950 million USD), but is a fraction (below 3.5 per cent) of the turnover generated by the Bombay Stock Exchange and National Stock Exchange of India. In 1996, the MSE was fully computerized and online trading became operational, as the MSE was connected to 120 broking offices in and around Chennai through wide area networking. The MSE has about 120 live members and 1,785 companies listed. The exchange follows the Rolling Settlement system, as per the January 2000 SEBI (Securities Exchange Board of India) guidelines and a proactive Grievance Cell is operational. By this system, investors can log in their complaints, for which a number will be given for further reference, through which investors can keep track of the action taken by the exchange as regards their complaint. A subsidiary company - MSE Financial Services Ltd, has been established. A member of the Bombay Stock Exchange, MSE Financial Services will help create greater broker and investor flexibility through multi-market access. Hereafter the members will be able to trade in both BSE and MSE. This will be followed up with National Stock Exchange (NSE) membership. Live trading at the MSE takes place from 10.00 am to 3.30 pm. 7.Cochin Stock Exchange The Cochin Stock Exchange Limited (CSE) is a capital stock market in Kochi, Kerala in India. Incorporated in 1978, it has now over 350 Indian companies listed. CSBL a wholly owned subsidiary of CSE is a member of NSE and BSE. Facility Computerized trading was introduced in 1997.The major back office system software used are NESS and BOSS respectively for NSE and BSE. The trading software used in CSBL is Multex. Traders are provided Meta Stock and ERS software, trading terminals and optical fiber connections. DP holdings are maintained by demat services like CDSL.
- 38. 38 The new millennium saw the stock exchange building being shifted from the old structure in downtown Cochin to a brand new building in the Kaloor area in northern Kochi. Trading Trading hours historically used to begin late in the afternoon enabling access to traders from other regions of the state. Base Minimum Capital required to be maintained is Rs. 2 lakhs. Demutualization Scheme The securities scam of the early nineties led the SEBI regulations on stock exchanges requires separation of ownership and trading rights and made it mandatory for majority ownership rests with the public, those without any trading rights. Cochin Stock Brokers Limited Cochin Stock Brokers Limited (CSBL) a subsidiary of CSE is a corporate member of the National Stock exchang and Bombay Stock Exchange enabling CSBL users trading facilities in these listings. CSE Institute CSE institute provides training program on stock market for investors. Economic Impact Industrialisation did not happen in Kerala to the extent as in other Indian states. As a result most Keralites do not invest in manufacturing entities. The reasons for the failure to attract manufacturing industries is unclear, but it has be due to the political climate and the lack of resources in a small state with such a large population density. The stock exchange is therefore an excellent channel for investment opportunities in the face of local problems.
- 39. 39 8.Bangalore Stock Exchange (BgSE) Bangalore Stock Exchange (BgSE) is a public stock exchange based in Bangalore, India. It was founded in 1963 and currently has 595 regional and non-regional companies listed. In September 2005, the BgSE announced plans to go public by divesting at least 51% of its ownership. The stock exchange is managed by a Council of Management, consisting of members appointed by the Securities and Exchange Board of India. First stock exchange in South India to start electronic trading of securities in 1996. Some of the companies that trade on the BgSE include Infosys, Wipro, United Breweries and Bharat Electronics Limited. The Bangalore Stock Exchange Limited (BgSE) is a self regulatory organisation located in the garden city of India. The Exchange is managed by the Governing Board consisting of members nominated by Securities Exchange Board of India (SEBI), Public Representatives, Elected members and an Executive Director. The Exchange has been serving the investor community continuously since its inception in the year 1963. Over the decades, it has been a journey of progress to the Exchange from the pith to the pinnacle, from the alcove to the acme and, has emerged as a premier Exchange in India. The continuous change alone is the changeless law. As the saying goes, to keep pace with the fast changing technology and financial system, the Exchange went On-line in 1996. The Exchange has come a long way since the launch of BEST (Bangalore Electronic Securities Trading), its On-line trading system on 29 July 1996. Empowerment of the investors in the market has been the focus of the Exchange. Information needs of market participants are met through the Service Centres established by the Exchange at various places in Karnataka. In addition to this, Investment Education Centre at Bangalore plays a vital role in enhancing the knowledge base of the participants through several short and long duration programmes. Members The Exchange has 241 members serving the diverse needs of investors. The corporate members constitute more than 25% of the total membership of the Exchange. Members operate within the overall framework of policies and practices developed over a period of time by the Exchange. Listing The securities listed at the Exchange includes a number of innovative and seasoned corporates from different sectors of industry. As on 31 March 2006, the number of
- 40. 40 companies listed on the Exchange are 384 consisting of 186 regional and 198 non regional companies. Investor Services Centre With a view to support the investors to resolve their grievances expeditiously, Exchange has established an Investor Services Committee composed of Public Representatives, members and Executive Director, who oversee the functioning of the Cell and they take appropriate steps for amicable settlement. To enable the investors at other places to have access to various services, Centres have been set up at Davangere, Hassan, Hubli, Mysore, Madkeri, Mangalore Shimoga and Tumkur. Investor Information Centre The Exchange has established a well equipped Library and Investor Information Centre to cater to varied information needs of investors, corporates members and others. The Centre has a collection of wide range of books, periodicals, journals, annual reports, prospectus and research publications relating to Capital markets. Circulars, notifications issued by authorities are available. Draft prospectus, offer documents and other related information are displayed regularly. In addition, information on over 4000 companies is available in the Corporate data-bank for investors, corporates and members to help them in investment decision making process. This data bank consists of details of promoters, previous public issues, track record, digital form annual reports, financial performance of companies. Fundamental analysis and Technical analysis, other general information on industry, sector and economic scenario etc., are available. Investment Education Centre Empowerment of investors through education is the focus of the Exchange. The Exchange has established an exclusive investment education centre to cater to the needs of the market participants. This Centre conducts regular and intensive training sessions, seminars and workshops. In addition to this, the Exchange continuously holds monthly Investors’ Meet at Bangalore on last Sunday of every month on various current topics and issues.
- 41. 41 9.Guwahati Stock Exchange The Guwahati Stock Exchange (GSE) is locate in Guwahati, Assam, India. It was incorporated on 29 November 1983 and it was recognised by the Government of India on 1 May 1984. The GSE is limited by guarantee by the member-brokers. By 1999-2000, the exchange had a total of 206 brokers, out of which 5 were corporate brokers. Among 206 brokers, it was further classifies as 200 proprietor broker, 1 partnership broker and 5 corporate broker. Then, there was only 4 sub-brokers registered. Currently there are 290 companies listed in the GSE. Guwahati Stock Exchange Investors Service To settle down the grievances of investors and also to guide them in all respect, the GSE is setting up its own 'Investors Service Cell'. Guwahati Stock Exchange Management There are thirteen directors in the Council of Management of the GSE. Among them six are elected from the broking community, three are nominated from public eminent, another three are the nominee of SEBI and the remaining one is the whole time Executive Director of the Guwahati Stock Exchange. The Council of Management is headed by the President. He is elected from the broker directors. The tenure of the Council is for one year. Guwahati Stock Exchange Operating System The GSE is inter-connected with the NSE through the ISE Securities and Services Ltd. (ISS). ISS is the subsidiary of Inter-connected Stock Exchange of India Ltd. and GSE is one of the associated exchange of it. The trading of GSE is done through Screen Based Trading System. Settlement system The Guwahati Stock Exchange is having a T+5 trading system from Tuesday to Monday. The settlement takes place in the immediate next week of the trading cycle. The first step
- 42. 42 in the settlement process is the distribution of Offer and the Difference Statement. It takes place on Tuesday. The deliverable members are supposed to submit the shares/D-Mat slip to the clearing house of GSE on the following Thursday. On the same day the Delivery Statement of Shares is distributed among all the receivable members. The PAY-IN day is Friday and the PAY-OUT day is Saturday. The entire process of the settlement is done through the Clearing House of GSE. Guwahati Stock Exchange Future Plan The present need of the Indian Capital Market is to interconnect it, vanishing the concept of regional market. This helps in multiple access to different markets and it further results in greater liquidity and turnover. To achieve all these, the GSE is also planning to have its connectivity with the Calcutta Stock Exchange. In future it also looks forward to connect with BSE. Internet trading is also planned. 10.Madhya Pradesh Stock Exchange (MPSE) Madhya Pradesh Stock Exchange (MPSE) is located at Indore, Madhya Pradesh, India. MPSEL was originally set up as an association in 1928, with around 150 broking members. It was granted permanent recognition under the provisions of the Securities Contract (Regulation) Act, 1956 (“SCRA”), by the Government of India in 1988. MPSEL currently has 185 broker members, including some of the leading brokering houses in India. Around 343 companies, including some of the leading corporates of the country are listed on MPSEL.
- 43. 43 11.Ludhiana Stock Exchange Association Ludhiana Stock Exchange Association Limited (LSE) was established in the year 1983. By 1999-2000, the exchange had a total of 284 brokers, out of which 79 were corporate brokers. Among 284 brokers, it was further classified as 212 proprietor broker, 2 partnership broker and 70 corporate broker. Then, there was only 23 sub-brokers registered. Ludhiana Stock Exchange became the second bourse in India to introduce modified carryforward system after BSE on April 6, 1998. On the same date, LSE also introduced a settlement guarantee fund (SGF). The SGF guarantees settlement of transactions and the carryforward facility provides liquidity to the market. LSE became the first in India to start LSE Securities Ltd., a 100% owned subsidiary of the exchange. The LSE Securities got the ticket as sub-broker of the NSE. In 1998, the exchange also got permission to start derivative trading. For the settlement of dematerialised securities, the Ludhiana Stock Exchange has also been linked up with National Securities Depository Ltd. (NSDL). 12.Vadodara Stock Exchange Vadodara Stock Exchange or VSE is located in the city of Vadodara in Western India. It was established in 1990 at Vadodara. It is the third largest stock exchange in the state of Gujarat afterAhmedabad and Rajkot. It is recognized by the Securities Contract (Regulations) Act of 1956 as a permanent stock exchange. From a humble beginning in 1986 with the Vadodara Stock Brokers' Association having 150 members, it was incorporated on January 22, 1990 as Vadodara Stock Exchange Limited. By 1999, the exchange had a total of 321 brokers, of which 65 were corporate brokers, 253 were proprietor brokers, and 3 were partnership brokers. Then, there were only 85 sub-brokers registered.
- 44. 44 13. Calcutta Stock Exchange Association Limited Type Stock Exchange Location Kolkata, India Founded 1908 Owner The Calcutta Stock Exchange Limited Key people Sunil Mitra, IAS (Retd.)(Chairman) B. Madhav Reddy (MD & CEO) Currency Indian rupee ( ) No. of listings 2,700~ MarketCap 1,40,141 Crores (2009) Indexes CSE 40 Website www.cse-india.com Calcutta Stock Exchange (CSE) located at the Lyons Range, Kolkata, India, was incorporated in 1908 and is the second largest bourse in India.
- 45. 45 History In 1830, the bourse activities in Kolkata used to conducted under a neem tree.[2] The earliest record of dealings in securities in India is the British East India Company’s loan securities. In 1908, the stock exchange was incorporated and consisted of 150 members. The present building at the Lyons Range was constructed in 1928. The Calcutta Stock Exchange has been granted permanent recognition by the Central Government with effect from April 14, 1980 under the relevant provisions of the Securities Contracts (Regulation) Act, 1956. The Calcutta stock exchange followed the familiar outcry system for stock trading up until 1997, when it was replaced by an electronic (eTrading) system known as C-STAR (CSE Screen Based Trading And Reporting). Alliance Bombay Stock Exchange (BSE) has made a strategic investment in Calcutta Stock Exchange, acquiring 5% of its shares. Profile Committee The Calcutta Stock Exchange Limited Board Of Directors Sunil Mitra, IAS (Retd.) - Shareholder Director and Chairman of the Board B Madhav Reddy - Managing Director & Chief Executive Officer Satyabrata Ganguly - Public Interest Director Jayanta Mitra - Public Interest Director Prasad Ranjan Ray, IAS (Retd.) - Public Interest Director Sanjay Budhia - Shareholder Director Mukul Somany - Shareholder Director V. Balasubramanium - Shareholder Director Jagdish Prasad Chowdhary - Shareholder Director Harsha Bardhan Agarwal - Shareholder Director Ajit Khandelwal - Trading Member Director Suresh Kumar Kaushik - Trading Member Director
- 46. 46 Sharad Chandra Jhunjhunwala - Trading Member Director Senior executives B Madhav Reddy - MD & CEO Satyabrata Sahoo - GM (Stock Exchange Operation) M.A.V Raju - DGM (Admin & HR) P. S. Mohapatra - DGM (Information Technology) D. Chakraborty - DGM (Business Development & Taxation) Sripriya Senthilkumar - DGM (Stock Exchange Operation) A Santra - Manager (Surveillance) Asis Maity- Manager (Market Operation) CSE indices CSE - 40 index 14. Delhi Stock Exchange (DSE) The Delhi Stock Exchange (DSE) is located in New Delhi, India. It was incorporated on June 25, 1947. The exchange is an amalgamation of Delhi Stock and Share Brokers' Association Limited and the Delhi Stocks and Shares Exchange Limited. It is India's fifth exchange. The exchange is one of the premier Stock Exchange in India. The Delhi Stock Exchange is well connected to 50 cities with terminals in North India. The exchange has over 3,000 listed companies. It has received the market regulator's permission from BSE and has become a member. Now it facilitates the DSE members to trade on the BSE terminals. The exchange is also considered the same from NSE. DSE dematerialized trading Delhi Stock Exchange has paired up with the National Security Depository Limited (NSDL), and commenced trading in dematerialised shares. This started September, 1988. However, the option for delivering shares either in physical or demat form started in November 1998. DSE Trade Guarantee Fund DSE initialised its Rs.125 crore Trade Guarantee Fund on July 27, 1998. TGF guarantees all the transactions of the DSE interse through the stock exchange. If a member fails to
- 47. 47 honour the settlement commitment, TGF undertakes to fulfil the commitment and complete all the settlement without disruption. 15.Bhubaneswar Stock Exchange Type Stock Exchange Location Bhubaneshwar, India Founded 1989 Owner Bhubaneswar Stock Exchange Association Limited Key people Vivekananda PattanayakChairman Debaraj Biswal CEO Currency Website www.bhseindia.com Origin Bhubaneswar Stock Exchange Association Ltd, (BhSE) is located in Bhubaneswar, Orissa, India. It was incorporated on 17th of April, 1989, and granted recognition to the Stock Exchange on 5th June, 1989, by the Ministry of Finance, Govt. of India. It is one among the 21 odd regional stock exchanges in India. Operations By 1999-2000, the exchange had a total of 234 brokers, out of which 15 were corporate brokers. Among 234 brokers, it was further classified as 209 proprietor and 15 corporate broker. Then, there was only 17 sub-brokers registered. The trading membership strength of Bhubaneswar Stock Exchange is 196 at present against the sanctioned strength of 350.[1]
- 48. 48 Organisation Structure The affairs of the BhSE are managed by a Board of Directors consisting 8 Directors from the following categories:[2] 2 Trading Member Directors 2 Public Interest Directors 4 Shareholder Directors 1 Director in the capacity of Chief Executive Officer (BhSE) Happenings On 15 September, 2005, SEBI approved the corporatisation and demutualisation schemes of the Bhubaneshwar Stock Exchange which were required in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956.