The document provides an overview of financial markets and investment options. It defines key terms like investment, interest, stocks, bonds, mutual funds, and stock exchanges. It explains why investing is important to earn returns and beat inflation. It also outlines various short-term and long-term financial investment options and factors to consider when selecting investments.
It is good to know the basics before making investments in Stock Markets. History has recorded scores of investors who have made fortune out of stock market. And if your investments are timed well, you could be the next fortune maker in the market.
investment strategies to grow your income. How much risk can you subject your investments to? How much can
you afford to lose in the near future? Remember that most forms of
investment have risk associated with them. Simply pick investment
instruments that match your risk tolerance.
Liquid funds are used primarily as an alternative to short-term fix deposits. Liquid funds invest with minimal risk (like money market funds). Most funds have a lock-in period of a maximum of three days to protect against procedural (primarily banking) glitches, and offer redemption proceeds within 24 hours.
It is good to know the basics before making investments in Stock Markets. History has recorded scores of investors who have made fortune out of stock market. And if your investments are timed well, you could be the next fortune maker in the market.
investment strategies to grow your income. How much risk can you subject your investments to? How much can
you afford to lose in the near future? Remember that most forms of
investment have risk associated with them. Simply pick investment
instruments that match your risk tolerance.
Liquid funds are used primarily as an alternative to short-term fix deposits. Liquid funds invest with minimal risk (like money market funds). Most funds have a lock-in period of a maximum of three days to protect against procedural (primarily banking) glitches, and offer redemption proceeds within 24 hours.
The Wealth Creation Study is one of the most anticipated annual events where Mr. Raamdeo Agrawal identifies the fastest, the most consistent, and the biggest value creating companies over the past 5 years. This year's theme is on Focused Investing; Power of allocation in Wealth Creation
Many people tend to over complicate saving and investing. This overabundance of information can sometimes generate so many different answers and opinions that you just give up on the question. You don't need brain surgery to fix a sprained wrist, and you don't need to be a pro to build a diversified portfolio and accumulate wealth. This article shows the benefits and the simplicity of investing in a mutual fund.
Indian Growth under Rising Risks Show Financial Stability Report June 2016atul baride
Ā
RBI Detail Financial Stability Report shows that, Growth is Stagnant and Corporate Indebtedness ability to service Banking Debt weakening daily. The Indian Public sector Banks Return on Assets has fallen to mere 0.4 , ROE 4.8 , and Net Interest Income to 8.3 from 15.8 in 2012. The Iron and Steel , Telecom, Construction, Electricity, Transport are enlarging systemic risks. While Macro Economic and Institutional Risk have risen. The Housing Price and Price Indices showing Significant divergence.
My Comments : Britain exit from Euro is not accounted. And, Slow down in IT is not considered. Also, Slowing Global Growth particularly China and now EU is not considered. The Rise 45 % Investors from Small Town indicates Equity Markets is taken as Positive Dispersion, While it shows that Indian Equity market is increasingly in ' Weaker Hands ' .
The Big Money should surely ' Press Pause Button ' and Cash is going to be King
Reliance Industries Continued its Strides in Carbon Chemicals and its components. The Media Venture CNBC TV 18 , Viacom, Colors added new dimensions to the diversity, achieved by the Retail Stores. All this Pointing a new chapter in 2016-2017 as JIO comes on Board.
SIT Report on Black Money to Hon. Supreme Courtatul baride
Ā
The Executive Summary of the Special Investigation Team ( S.I.T.) was submitted by the Shah Panel and is published by Indian Government On 24 Th July 2015 Insider Trading, Share Price Manipulation, P-Notes, Mispricing Import-Export, Cricket Betting, Indirect Tax Evasion are cited to be Main Sources of Money Laundering. The Present Set Up of Indian Government was vociferous and Proactive during Election Campaigns of 2014. But, has done little after assuming charge.
Dr Raghuram Rajan, RBI Governor Speech At NewYorkatul baride
Ā
Dr Rajan has Alluded the Extended Rate Cut Regime by FOMC In USA, Now, Followed by EU and Likely China. Never Forgetting being Governor of Central Bank pressed concern being economist. His Warning is Stark and Clear.
Indian Government Had Declared to create 100 Smart Cities in India. But, there has not been any white paper or Vision Document. Any Cut Copy and Paste of these document for India is not going to be of Help. The Piece meal operation and political slogans are not going to help
Indian Government Passed Coal Mines Bill 2015, In March 2015. The Coal Mines which were the Meat and Bones of Corruption in Indian Economy Were Auctioned in March 2015, Under the Proviso of the Bill. The Indian Supreme Court has asked the Indian Government to Bring out Norms and Auction the Mines.
US Interest Rates Suspense Continues F.O.M.C.Statement--march 18, 2015atul baride
Ā
US F.O.M.C. Decided to Drop Patient and indicates being Data Dependent. What are the right Interest Rate in present circumstance is the Question Never Asked Nor Answered..
What Is the Right Interest rates Path For US and World
Jai prakash Associate Court Order For Fixed Deposit Repayment atul baride
Ā
This the court case order in Case of Fixed Deposit Investor Refund of the Investment. Jaiprakash Associate and others are old players in company FD Market. The Few Percentile of higher interest attracted many investor
Shri Gajanan Maharaj Is the Siddha Yogi. there Billions of Devotees. The Gajanan Maharaj Prathishtan does an excellent service to the devotees and is inspired by Shri Yogi Gajanan Maharaj.
This for the benefit of All
Well as the FOMC tries to Kick Off the Web of QE, The respectable Governors appear to be in state of confusion about the correct timing. The Car Brake and Gas Example of Mr Ben Bernanke gives view of the mindset, the facts on the ground are changing rapidly. While Oil has sprang to $106 in WTI, shall soon have its shadow on American Consumption story and particularly as the Feel Good factor Erodes.
Ben Bernanke's Opening Press Conference Statement.atul baride
Ā
This are the opening remarks before the likely last press conference of over stayed FOMC Chairman Ben Bernanke. Ben now driving the Economy Car with Brakes and accelerator. But Where is the steering ..?
US Federal Reserve has published the Projected, Adverse and Very Adverse situations and estimated the economic Scenarios. Well, Nothing seems to have been provided for ' Fiscal Cliff' and International slow Down
Indian Banks : Trends and Progress, RBIatul baride
Ā
This report is published by Reserve Bank of India showing the detail analysis of the Indian Banking Industry and various tenets like NPA's, Deposit growth, types of credit etc
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how can i use my minded pi coins I need some funds.DOT TECH
Ā
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. š I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Ā
Pi coins is not launched yet in any exchange š± this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAYĀ you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ā„ļø
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
what is the best method to sell pi coins in 2024DOT TECH
Ā
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
Ā
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new productāit signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how to swap pi coins to foreign currency withdrawable.DOT TECH
Ā
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
Ā
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ ā 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
Ā
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Ā
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to sell pi coins in South Korea profitably.DOT TECH
Ā
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
NO1 Uk Black Magic Specialist Expert In Sahiwal, Okara, Hafizabad, Mandi Bah...Amil Baba Dawood bangali
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when will pi network coin be available on crypto exchange.DOT TECH
Ā
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
3. Basics of Financial Markets
What is Investment?
The money you earn is partly spent and the rest saved for meeting
future expenses. Instead of keeping the savings idle you may like
to use savings in order to get return on it in the future. This is called
Investment.
Why should one invest?
One needs to invest to:
earn return on your idle resources
generate a speciļ¬ed sum of money for a speciļ¬c goal in life
make a provision for an uncertain future
One of the important reasons why one needs to invest wisely is to
meet the cost of Inļ¬ation. Inļ¬ation is the rate at which the cost of
living increases. The cost of living is simply what it costs to buy the
goods and services you need to live. Inļ¬ation causes money to lose
value because it will not buy the same amount of a good or a service
in the future as it does now or did in the past. For example, if there
was a 6% inļ¬ation rate for the next 20 years, a Rs. 100 purchase
today would cost Rs. 321 in 20 years. This is why it is important to
consider inļ¬ation as a factor in any long-term investment strategy.
Remember to look at an investmentās ārealā rate of return, which is
the return after inļ¬ation. The aim of investments should be to provide
a return above the inļ¬ation rate to ensure that the investment does not
decrease in value. For example, if the annual inļ¬ation rate is 6%, then
the investment will need to earn more than 6% to ensure it increases
in value. If the after-tax return on your investment is less than the
inļ¬ation rate, then your assets have actually decreased in value; that
is, they wonāt buy as much today as they did last year.
When to start Investing?
The sooner one starts investing the better. By investing early you
allow your investments more time to grow, whereby the concept
1
4. Basics of Financial Markets
of compounding (as we shall see later) increases your income, by a
cumulating the principal and the interest or dividend earned on it,
year after year. The three golden rules for all investors are:
Invest early
Invest regularly
Invest for long term and not short term
What care should one take while investing?
Before making any investment, one must ensure to:
1. obtain written documents explaining the investment
2. read and understand such documents
3. verify the legitimacy of the investment
4. ļ¬nd out the costs and beneļ¬ts associated with the investment
5. assess the risk-return proļ¬le of the investment
6. know the liquidity and safety aspects of the investment
7. ascertain if it is appropriate for your speciļ¬c goals
8. compare these details with other investment opportunities
available
9. examine if it ļ¬ts in with other investments you are considering or
you have already made
10. deal only through an authorised intermediary
11. seek all clariļ¬cations about the intermediary and the investment
12. explore the options available to you if something were to go
wrong, and then, if satisļ¬ed, make the investment.
These are called the Twelve Important Steps to Investing.
What is meant by Interest?
When we borrow money, we are expected to pay for using it ā this
2
5. Basics of Financial Markets
is known as Interest. Interest is an amount charged to the borrower
for the privilege of using the lenderās money. Interest is usually
calculated as a percentage of the principal balance (the amount of
money borrowed). The percentage rate may be ļ¬xed for the life of the
loan, or it may be variable, depending on the terms of the loan.
What factors determine interest rates?
When we talk of interest rates, there are different types of interest
rates - rates that banks offer to their depositors, rates that they lend
to their borrowers, the rate at which the Government borrows in
the Bond/Government Securities market, rates offered to investors
in small savings schemes like NSC, PPF, rates at which companies
issue ļ¬xed deposits etc.
The factors which govern these interest rates are mostly economy
related and are commonly referred to as macroeconomic factors.
Some of these factors are:
Demand for money
Level of Government borrowings
Supply of money
Inļ¬ation rate
The Reserve Bank of India and the Government policies which
determine some of the variables mentioned above
What are various options available for investment?
One may invest in:
Physical assets like real estate, gold/jewellery, commodities etc.
and/or
Financial assets such as ļ¬xed deposits with banks, small saving
instruments with post ofļ¬ces, insurance/provident/pension fund
etc. or securities market related instruments like shares, bonds,
debentures etc.
3
6. Basics of Financial Markets
What are various Short-term ļ¬nancial options available for
investment?
Broadly speaking, savings bank account, money market/liquid funds
and ļ¬xed deposits with banks may be considered as short-term
ļ¬nancial investment options:
Savings Bank Account is often the ļ¬rst banking product people use,
which offers low interest (4%-5% p.a.), making them only marginally
better than ļ¬xed deposits.
Money Market or Liquid Funds are a specialized form of mutual
funds that invest in extremely short-term ļ¬xed income instruments
and thereby provide easy liquidity. Unlike most mutual funds, money
market funds are primarily oriented towards protecting your capital
and then, aim to maximise returns. Money market funds usually
yield better returns than savings accounts, but lower than bank ļ¬xed
deposits.
Fixed Deposits with Banks are also referred to as term deposits and
minimum investment period for bank FDs is 30 days. Fixed Deposits
with banks are for investors with low risk appetite, and may be
considered for 6-12 months investment period as normally interest on
less than 6 months bank FDs is likely to be lower than money market
fund returns.
What are various Long-term ļ¬nancial options available for
investment?
Post Ofļ¬ce Savings Schemes, Public Provident Fund, Company
Fixed Deposits, Bonds and Debentures, Mutual Funds etc.
Post Ofļ¬ce Savings: Post Ofļ¬ce Monthly Income Scheme is a
low risk saving instrument, which can be availed through any post
ofļ¬ce. It provides an interest rate of 8% per annum, which is paid
monthly. Minimum amount, which can be invested, is Rs. 1,000/-
and additional investment in multiples of 1,000/-. Maximum amount
is Rs. 3,00,000/- (if Single) or Rs. 6,00,000/- (if held Jointly) during
4
7. Basics of Financial Markets
a year. It has a maturity period of 6 years. A bonus of 10% is paid at
the time of maturity. Premature withdrawal is permitted if deposit is
more than one year old. A deduction of 5% is levied from the principal
amount if withdrawn prematurely; the 10% bonus is also denied.
Public Provident Fund: A long term savings instrument with
a maturity of 15 years and interest payable at 8% per annum
compounded annually. A PPF account can be opened through a
nationalized bank at anytime during the year and is open all through
the year for depositing money. Tax beneļ¬ts can be availed for the
amount invested and interest accrued is tax-free. A withdrawal is
permissible every year from the seventh ļ¬nancial year of the date of
opening of the account and the amount of withdrawal will be limited
to 50% of the balance at credit at the end of the 4th year immediately
preceding the year in which the amount is withdrawn or at the end of
the preceding year whichever is lower the amount of loan if any.
Company Fixed Deposits: These are short-term (six months) to
medium-term (three to ļ¬ve years) borrowings by companies at a
ļ¬xed rate of interest which is payable monthly, quarterly, semi10
annually or annually. They can also be cumulative ļ¬xed deposits
where the entire principal alongwith the interest is paid at the end of
the loan period. The rate of interest varies between 6-9% per annum
for company FDs. The interest received is after deduction of taxes.
Bonds: It is a ļ¬xed income (debt) instrument issued for a period of
more than one year with the purpose of raising capital. The central or
state government, corporations and similar institutions sell bonds. A
bond is generally a promise to repay the principal along with a ļ¬xed
rate of interest on a speciļ¬ed date, called the Maturity Date.
Mutual Funds: These are funds operated by an investment company
which raises money from the public and invests in a group of assets
(shares, debentures etc.), in accordance with a stated set of objectives.
It is a substitute for those who are unable to invest directly in equities
or debt because of resource, time or knowledge constraints. Beneļ¬ts
5
8. Basics of Financial Markets
include professional money management, buying in small amounts
and diversiļ¬cation. Mutual fund units are issued and redeemed by
the Fund Management Company based on the fundās net asset value
(NAV), which is determined at the end of each trading session. NAV
is calculated as the value of all the shares held by the fund, minus
expenses, divided by the number of units issued. Mutual Funds are
usually long term investment vehicle though there some categories
of mutual funds, such as money market mutual funds which are short
term instruments.
What is meant by a Stock Exchange?
The Securities Contract (Regulation) Act, 1956 [SCRA] deļ¬nes
āStock Exchangeā as any body of individuals, whether incorporated
or not, constituted for the purpose of assisting, regulating or
controlling the business of buying, selling or dealing in securities.
Stock exchange could be a regional stock exchange whose area of
operation/jurisdiction is speciļ¬ed at the time of its recognition or
national exchanges, which are permitted to have nationwide trading
since inception. NSE was incorporated as a national stock exchange.
What is an āEquityā/Share?
Total equity capital of a company is divided into equal units of small
denominations, each called a share. For example, in a company the
total equity capital of Rs 2,00,00,000 is divided into 20,00,000 units
of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the
company then is 11 said to have 20,00,000 equity shares of Rs 10
each. The holders of such shares are members of the company and
have voting rights.
What is a āDebt Instrumentā?
Debt instrument represents a contract whereby one party lends
money to another on pre-determined terms with regards to rate and
periodicity of interest, repayment of principal amount by the borrower
6
9. Basics of Financial Markets
to the lender. In the Indian securities markets, the term ābondā is used
for debt instruments issued by the Central and State governments
and public sector organizations and the term ādebentureā is used for
instruments issued by private corporate sector.
What is a Derivative?
Derivative is a product whose value is derived from the value of one
or more basic variables, called underlying. The underlying asset can
be equity, index, foreign exchange (forex), commodity or any other
asset. Derivative products initially emerged as hedging devices against
ļ¬uctuations in commodity prices and commodity-linked derivatives
remained the sole form of such products for almost three hundred
years. The ļ¬nancial derivatives came into spotlight in post-1970
period due to growing instability in the ļ¬nancial markets. However,
since their emergence, these products have become very popular and
by 1990s, they accounted for about twothirds of total transactions in
derivative products.
What is a Mutual Fund?
A Mutual Fund is a body corporate registered with SEBI (Securities
Exchange Board of India) that pools money from individuals/
corporate investors and invests the same in a variety of different
ļ¬nancial instruments or securities such as equity shares, Government
securities, Bonds, debentures etc. Mutual funds can thus be considered
as ļ¬nancial intermediaries in the investment business that collect
funds from the public and invest on behalf of the investors. Mutual
funds issue units to the investors. The appreciation of the portfolio
or securities in which the mutual fund has invested the money leads
to an appreciation in the value of the units held by investors. The
investment objectives outlined by a Mutual Fund in its prospectus
are binding on the Mutual Fund scheme. The investment objectives
specify the class of securities a Mutual Fund can invest in. Mutual
Funds invest in various asset classes like equity, bonds, debentures,
7
10. Basics of Financial Markets
commercial paper and government securities. The schemes offered by
mutual funds vary from fund to fund. Some are pure equity schemes;
others are a mix of equity and bonds. Investors are also given the
option of getting dividends, which are declared periodically by the
mutual fund, or to participate only in the capital appreciation of the
scheme.
What is an Index ?
An Index shows how a speciļ¬ed portfolio of share prices are moving
in order to give an indication of market trends. It is a basket of
securities and the average price movement of the basket of securities
indicates the index movement, whether upwards or downwards.
What is a Depository?
A depository is like a bank wherein the deposits are securities (viz.
shares, debentures, bonds, government securities, units etc.) in
electronic form.
What is Dematerialization ?
Dematerialization is the process by which physical certiļ¬cates
of an investor are converted to an equivalent number of securities
in electronic form and credited to the investorās account with his
Depository Participant (DP).
What is the function of Securities Market?
Securities Markets is a place where buyers and sellers of securities
can enter into transactions to purchase and sell shares, bonds,
debentures etc. Further, it performs an important role of enabling
corporates, entrepreneurs to raise resources for their companies and
business ventures through public issues. Transfer of resources from
those having idle resources (investors) to others who have a need for
them (corporates) is most efļ¬ciently achieved through the securities
8
11. Basics of Financial Markets
market. Stated formally, securities markets provide channels for
reallocation of savings to investments and entrepreneurship. Savings
are linked to investments by a variety of intermediaries, through a
range of ļ¬nancial products, called āSecuritiesā.
Which are the securities one can invest in?
Shares
Government Securities
Derivative products
Units of Mutual Funds etc., are some of the securities investors in
the securities market can invest in.
What is the role of the āPrimary Marketā?
The primary market provides the channel for sale of new securities.
Primary market provides opportunity to issuers of securities;
Government as well as corporates, to raise resources to meet their
requirements of investment and/or discharge some obligation. They
may issue the securities at face value, or at a discount/premium and
these securities may take a variety of forms such as equity, debt etc.
They may issue the securities in domestic market and/or international
market.
Why do companies need to issue shares to the public?
Most companies are usually started privately by their promoter(s).
However, the promotersā capital and the borrowings from banks and
ļ¬nancial institutions may not be sufļ¬cient for setting up or running the
business over a long term. So companies invite the public to contribute
towards the equity and issue shares to individual investors. The way
to invite share capital from the public is through a āPublic Issueā.
Simply stated, a public issue is an offer to the public to subscribe to
the share capital of a company. Once this is done, the company allots
shares to the applicants as per the prescribed rules and regulations
laid down by SEBI.
9
12. Basics of Financial Markets
What is meant by Market Capitalisation?
The market value of a quoted company, which is calculated by
multiplying its current share price (market price) by the number of
shares in issue is called as market capitalization. E.g. Company A has
120 million shares in issue. The current market price is Rs. 100. The
market capitalisation of company A is Rs. 12000 million.
What is an Initial Public Offer (IPO)?
An Initial Public Offer (IPO) is the selling of securities to the public
in the primary market. It is when an unlisted company makes either
a fresh issue of securities or an offer for sale of its existing securities
or both for the ļ¬rst time to the public. This paves way for listing and
trading of the issuerās securities. The sale of securities can be either
through book building or through normal public issue.
What is a Prospectus ?
A large number of new companies ļ¬oat public issues. While a large
number of these companies are genuine, quite a few may want to
exploit the investors. Therefore, it is very important that an investor
before applying for any issue identiļ¬es future potential of a company.
A part of the guidelines issued by SEBI (Securities and Exchange
Board of India) is the disclosure of 23 information to the public.
This disclosure includes information like the reason for raising the
money, the way money is proposed to be spent, the return expected
on the money etc. This information is in the form of āProspectusā
which also includes information regarding the size of the issue, the
current status of the company, its equity capital, its current and past
performance, the promoters, the project, cost of the project, means of
ļ¬nancing, product and capacity etc. It also contains lot of mandatory
information regarding underwriting and statutory compliances. This
helps investors to evaluate short term and long term prospects of the
company.
10
13. Basics of Financial Markets
What is meant by Secondary market?
Secondary market refers to a market where securities are traded after
being initially offered to the public in the primary market and/or
listed on the Stock Exchange. Majority of the trading is done in the
secondary market. Secondary market comprises of equity markets
and the debt markets.
What is a Contract Note?
Contract Note is a conļ¬rmation of trades done on a particular day
on behalf of the client by a trading member. It imposes a legally
enforceable relationship between the client and the trading member
with respect to purchase/sale and settlement of trades. It also helps to
settle disputes/claims between the investor and the trading member. It
is a prerequisite for ļ¬ling a complaint or arbitration proceeding against
the trading member in case of a dispute. A valid contract note should
be in the prescribed form, contain the details of trades, stamped with
requisite value and duly signed by the authorized signatory. Contract
notes are kept in duplicate, the trading member and the client should
keep one copy each. After verifying the details contained therein,
the client keeps one copy and returns the second copy to the trading
member duly acknowledged by him.
What precautions must one take before investing in the stock
markets?
Here are some useful pointers to bear in mind before you invest in the
markets:
Make sure your broker is registered with SEBI and the exchanges
and do not deal with unregistered intermediaries.
Ensure that you receive contract notes for all your transactions
from your broker within one working day of execution of the
trades.
11
14. Basics of Financial Markets
All investments carry risk of some kind. Investors should always
know the risk that they are taking and invest in a manner that
matches their risk tolerance.
Do not be misled by market rumours, luring advertisement or āhot
tipsā of the day.
Take informed decisions by studying the fundamentals of the
company. Find out the business the company is into, its future
prospects, quality of management, past track record etc Sources of
knowing about a company are through annual reports, economic
magazines, databases available with vendors or your ļ¬nancial
advisor.
If your ļ¬nancial advisor or broker advises you to invest in a
company you have never heard of, be cautious. Spend some time
checking out about the company before investing.
Do not be attracted by announcements of fantastic results/news
reports, about a company. Do your own research before investing
in any stock.
Do not be attracted to stocks based on what an internet website
promotes, unless you have done adequate study of the company.
Investing in very low priced stocks or what are known as penny
stocks does not guarantee high returns.
Be cautious about stocks which show a sudden spurt in price or
trading activity.
Any advise or tip that claims that there are huge returns expected,
especially for acting quickly, may be risky and may to lead to
losing some, most, or all of your money.
What Doās and Donāts should an investor bear in mind when
investing in the stock markets?
Ensure that the intermediary (broker/sub-broker) has a valid SEBI
registration certiļ¬cate.
12
15. Basics of Financial Markets
Enter into an agreement with your broker/sub-broker setting out
terms and conditions clearly.
Ensure that you give all your details in the āKnow Your Clientā
form.
Ensure that you read carefully and understand the contents of the
āRisk Disclosure Documentā and then acknowledge it.
Insist on a contract note issued by your broker only, for trades
done each day.
Ensure that you receive the contract note from your broker within
24 hours of the transaction.
Ensure that the contract note contains details such as the brokerās
name, trade time and number, transaction price, brokerage, service
tax, securities transaction tax etc. and is signed by the Authorised
Signatory of the broker.
To cross check genuineness of the transactions, log in to the NSE
website (www.nseindia.com) and go to the trade veriļ¬cation
facility extended by NSE at www.nseindia.com/content/equities/
eq_trdverify.htm.
Issue account payee cheques/demand drafts in the name of your
broker only, as it appears on the contract note/SEBI registration
certiļ¬cate of the broker.
While delivering shares to your broker to meet your obligations,
ensure that the delivery instructions are made only to the designated
account of your broker only.
Insist on periodical statement of accounts of funds and securities
from your broker. Cross check and reconcile your accounts
promptly and in case of any discrepancies bring it to the attention
of your broker immediately.
Please ensure that you receive payments/deliveries from your
broker, for the transactions entered by you, within one working
day of the payout date.
13
16. Basics of Financial Markets
Ensure that you do not undertake deals on behalf of others or trade
on your own name and then issue cheques from a family members
ā/ friendsā bank accounts.
Similarly, the Demat delivery instruction slip should be from your
own Demat account, not from any other family membersā/friendsā
accounts.
Do not sign blank delivery instruction slip(s) while meeting
security payin obligation.
No intermediary in the market can accept deposit assuring
ļ¬xed returns. Hence do not give your money as deposit against
assurances of returns.
āPortfolio Management Servicesā could be offered only by
intermediaries having speciļ¬c approval of SEBI for PMS. Hence,
do not part your funds to unauthorized persons for Portfolio
Management.
Delivery Instruction Slip is a very valuable document. Do not
leave signed blank delivery instruction slip with anyone. While
meeting pay in obligation make sure that correct ID of authorised
intermediary is ļ¬lled in the Delivery Instruction Form.
Be cautious while taking funding form authorised intermediaries
as these transactions are not covered under Settlement Guarantee
mechanisms of the exchange.
Insist on execution of all orders under unique client code allotted
to you. Do not accept trades executed under some other client
code to your account.
When you are authorising someone through āPower of Attorneyā
for operation of your DP account, make sure that:
your authorization is in favour of registered intermediary
only.
14
17. Basics of Financial Markets
authorisation is only for limited purpose of debits and credits
arising out of valid transactions executed through that
intermediary only.
you verify DP statement periodically say every month/
fortnight to ensure that no unauthorised transactions have
taken place in your account.
authorization given by you has been properly used for the
purpose for which authorization has been given.
in case you ļ¬nd wrong entries please report in writing to the
authorized intermediary.
Donāt accept unsigned/duplicate contract note.
Donāt accept contract note signed by any unauthorised
person.
Donāt delay payment/deliveries of securities to broker.
In the event of any discrepancies/disputes, please bring them
to the notice of the broker immediately in writing (acknowledged
by the broker) and ensure their prompt rectiļ¬cation.
In case of sub-broker disputes, inform the main broker in
writing about the dispute at the earliest and in any case not
later than 6 months.
If your broker/sub-broker does not resolve your complaints
within a reasonable period (say within 15 days), please bring
it to the attention of the āInvestor Grievances Cellā of the
NSE.
While lodging a complaint with the āInvestor Grievances Cellā
of the NSE, it is very important that you submit copies of all
relevant documents like contract notes, proof of payments
delivery of shares etc. alongwith the complaint. Remember,
in the absence of sufļ¬cient documents, resolution of complaints
becomes difļ¬cult.
15
18. Basics of Financial Markets
Familiarise yourself with the rules, regulations and circulars
issued by stock exchanges/SEBI before carrying out any
transaction.
For more information on Basics of Financial Markets, please refer to
the NCFM module :
Financial Markets : A Beginnersā Module. Details are available on
the website - www.nseindia.com under the link āNCFMā.
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19. Disclaimer
The information contained herein is subject to change without
prior notice. While every effort is made to ensure the accuracy and
completeness of information contained, the Exchange makes no
guarantee and assumes no liability for any errors or omissions of
the information. No one can use the information as the basis for any
claim, demand or cause of action.
Please refer to relevant regulations and circulars in case of speciļ¬c
cases and problems.
20. NATIONAL STOCK EXCHANGE OF INDIA LIMITED
āExchange Plazaā, Bandra Kurla Complex,
Bandra (East), Mumbai 400051, INDIA.
Tel.: +91 22 2659 8100 / 66418100 Fax: +91 22 2659 8120
Website: www.nseindia.com ā¢ email: cc_nse@nse.co.in
February, 2008