capital market

2. Need of Finance…!

3. Economic System
Household Sector Business Sector
Economic system
System

6. Financial Market
Types of Financial Market
A financial market is a market
in which people and entities
can trade financial securities,
commodities and fungible
items of value at low
transaction cost and at prices
that reflect supply and
demand.
 Money Market
 Capital Market

7. Capital Market
 A market deals in medium and long-term funds, both
debt and equity, is termed as Capital Market.
 The market is an institutional arrangement for
borrowing medium and long-term funds and which
provides facilities for marketing and trading of
securities

8. Factors Responsible for Growth of
Indian Capital Market
• Growth of Stock Exchange
• Growth of Financial Institution
• Growth of Mutual Fund
• Growth of Merchant Bank Service
• Development of Venture Capital Funds
• Development of Credit Rating Agency
• Setting up SEBI
• National securities Clearing Corporations
• Corporate Governance

9. Capital Market Types
Primary Market Secondary Market
 A market where the issuers
access the prospective investors
directly for funds required by
them either for expansion or for
meeting the working capital
needs.
 A market where securities are
traded after being initially
offered to the public in the
primary market and/or listed in
the stock exchange.

10. Pricing Of the Share
 Fixed Pricing
 book Building

11. Methods of raising capital in the
Primary Market:
 Initial Public Offer
 Follow-on Public Offer
 Private Placement
 Offer for Sale
 Rights Issue
 E-Ipo
 Qualified Institutional Placement
11

12. Secondary Market
Secondary/Stock
market!!!!

13. Functions of Stock Markets
 Liquidity for Securities
 Evaluation
 Promotion of Savings Habits
 Ready & Continuous Markets
 Public Finance
 Growth of Joint Stock Company

14.  Hyderabad Stock Exchange
 Uttar Pradesh Stock Exchange
 Coimbatore Stock Exchange
 Cochin Stock Exchange
 Bangalore Stock Exchange
 Saurashtra Kutch Stock
Exchange
 Pune Stock Exchange
 OTC Exchange of India
 Calcutta Stock Exchange
 Madras Stock Exchange
 Madhya Pradesh Stock Exchange
 Vadodara Stock Exchange
 The Ahmedabad Stock Exchange
 Magadh Stock Exchange
 Gauhati Stock Exchange
 Bhubaneswar Stock Exchange
 Jaipur Stock Exchange
 Delhi Stock Exchange Assoc
 Ludhiana Stock Exchange

15. Bombay Stock Exchange
 Bombay Stock Exchange, commonly
referred to as the BSE, (Bombay Share
Bazaar) is a stock exchange located on
Dalal Street, Mumbai, Maharashtra,
India.
It is the oldest stock exchange
in Asia. The equity market
capitalisation of the companies
listed on the BSE was US$1 trillion
as of December 2011, making it
the 6th largest stock exchange
in Asia and the 14th largest in
the world.
The BSE has the largest
number of listed companies in the
world.

16. National Stock Exchange
 The National Stock Exchange (NSE) is
stock exchange located at Mumbai,
Maharashtra, India. It is in the top 20
largest stock exchanges 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$1 trillion and over 1,652 listings
 Fully Automated System
 Universal Membership
 Listing
 Demat
 Settlement Cycle

17. Stock Exchanges names and their
Indices Name:
Country Stock exchange name Indices name
India National Stock Exchange S & P Nifty
India Bombay Stock Exchange Sensex
Hong Kong Hong Kong Stock Exchange Hang Seng
USA New York Stock Exchange NYSE
Korea Korean Stock Exchange KRX 100
Russia Russian Stock Exchange RTS Index

18. Some Important Terms Relating
To ‘Stock Market’
Speculators
 Market Capitalization
 Capital Structure
 Cornering
 Speculation
 Bull
 Bear
 Lame Duck
 Arbitrageur

19. Source-Securities and Exchange Board of India
Getting started
 To start trading the following are required –
 Bank account
 Trading account
 Demat account
 Permanent Account Number (PAN)
 Unique Client Code

20. Source -Securities and Exchange Board of India
Where to trade
 The secondary market is divided into two segments
 Cash/ Equity segment
 Derivative segment –
 Equity Futures and Option (F & O)
 Currency Futures/ Option
 Interest Rate Futures

21. Trading Procedure in Stock
Market
 Selection Of Broker
 Opening Demat Account with Depository
 Placing the Order
 Executing the Order
 Settlement

22. Source-Securities and Exchange Board of India 22
Settlement
 The settlement in the securities market is
done on a T+2 Rolling Settlement Cycle
(where T = Trading Day).
Trading
(T)
Option of
Early Pay-in
(T1)
Auction
(T3)
Close out
(T4)
Pay-in and
Pay out
(T2)
TRADE SETTLEMENT
T + 2
FAILURE
TO
PAY-IN

23. SEBI Guidelines in Capital Market
Primary Market Secondary Market
 Initial Public offer
 Follow-on Public Offer
 Underwriting
 Public Issue and Right Issue
 Innovative Instruments
 Bonus Shares
a) source of fund
b) residual reserves
c) past profit
d) other conditions
 Issue of Debenture
 Compulsory Registration of
Intermediaries
 Demutualization
 Transparency in Trading
 Compulsory Audit
 Investor protection
 Capital Adequacy Norms

24. Major crash and
Rallies in Indian
Capital Market
28 April 1992
18 May 2006
21 January 2008
18 may 2009

25. Money Market Vs. Capital Market

26. Concluded