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PREPARED BY : MR.ROSHAN DHUNGEL
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Legislation Governing The Securities Market
SEBI Act ,1992
Depositories Act,1996
Securities contract (Regulation ) Act,1956
 SEBI (Securities and Exchange Board of India) is a centrally
controlled body that is entrusted with the task of protecting the
interest of investors in securities and promoting the growth of
securities market by implementing suitable rules and norms.
 It was officially established by The Government of India in the
year of 1992 with SEBI Act 1992, being passed by the Indian
Parliament.
Regulating the business in stock exchanges and any other securities
market.
Registering and regulating the working of intermediaries and player
in the securities market.
Registering and regulating the working of collective investment
schemes, e.g. –mutual funds.
Prohibiting fraudulent activities in the securities market.
Prohibiting insiders trading in securities.
Promoting investors education.
 Primary Market
 Secondary Market
 Mutual Funds and
 Foreign Institutional Investments
Criteria for admission of members
Criteria for Admission of liscence Dealers
Criteria for listing of companies
 Debenture or Bond is a creditor ship security with a fixed rate of
return, fixed maturity period, perfect income certainty and low
capital uncertainty.
 Types of Debentures include: Registered, Bearer, Redeemable,
Perpetual, Convertible, Non Convertible, Partially Convertible,
Callable etc.
Features of bond
• Indenture , Maturities , Interest payments , Call Feature
Bond Valuation
The intrinsic value of bond or debenture is equal to the present value
of its expected cash flows.
n C C
PV = ---------- + ----------
t=1 (1+r)t (1+r)n
Where,
Pv =Present value of security today
C =Coupons or interest payments per time period
T = Terminal value repayable at maturity
r =Appropriate discount rate or market yield
n =Number of years to maturity
 These shares carry a fixed return in the form of dividend.
 They have preference over equity shareholders on payment
of dividend and on repayment of Capital.
 Earnings valuation
 Revenues valuation
 Cash flow valuation
 Asset valuation
 Yield valuation
 Member valuation
Types of Investment Risk
 Systematic Risk
 Non-systematic Risk
On the basis of Systematic and Non-systematic Risk, there are various
risk , They are :-
-Market Risk - Management Risk
-Interest Rate Risk - Default Risk
-Purchasing Power Risk -International Risk
-Regulation Risk - Industry Risk
-Business Risk -Political Risk
-Reinvestment Risk
-Bull-Bear Market Risk
 Volatility
 Standard Deviation
 Probability Distribution
 Beta
Capital market regulations,Security valuation and risk analysis

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Capital market regulations,Security valuation and risk analysis

  • 1. PREPARED BY : MR.ROSHAN DHUNGEL   
  • 2. Legislation Governing The Securities Market SEBI Act ,1992 Depositories Act,1996 Securities contract (Regulation ) Act,1956
  • 3.  SEBI (Securities and Exchange Board of India) is a centrally controlled body that is entrusted with the task of protecting the interest of investors in securities and promoting the growth of securities market by implementing suitable rules and norms.  It was officially established by The Government of India in the year of 1992 with SEBI Act 1992, being passed by the Indian Parliament.
  • 4. Regulating the business in stock exchanges and any other securities market. Registering and regulating the working of intermediaries and player in the securities market. Registering and regulating the working of collective investment schemes, e.g. –mutual funds. Prohibiting fraudulent activities in the securities market. Prohibiting insiders trading in securities. Promoting investors education.
  • 5.  Primary Market  Secondary Market  Mutual Funds and  Foreign Institutional Investments
  • 6. Criteria for admission of members Criteria for Admission of liscence Dealers Criteria for listing of companies
  • 7.
  • 8.
  • 9.  Debenture or Bond is a creditor ship security with a fixed rate of return, fixed maturity period, perfect income certainty and low capital uncertainty.  Types of Debentures include: Registered, Bearer, Redeemable, Perpetual, Convertible, Non Convertible, Partially Convertible, Callable etc.
  • 10. Features of bond • Indenture , Maturities , Interest payments , Call Feature Bond Valuation The intrinsic value of bond or debenture is equal to the present value of its expected cash flows. n C C PV = ---------- + ---------- t=1 (1+r)t (1+r)n Where, Pv =Present value of security today C =Coupons or interest payments per time period T = Terminal value repayable at maturity r =Appropriate discount rate or market yield n =Number of years to maturity
  • 11.  These shares carry a fixed return in the form of dividend.  They have preference over equity shareholders on payment of dividend and on repayment of Capital.
  • 12.  Earnings valuation  Revenues valuation  Cash flow valuation  Asset valuation  Yield valuation  Member valuation
  • 13. Types of Investment Risk  Systematic Risk  Non-systematic Risk On the basis of Systematic and Non-systematic Risk, there are various risk , They are :- -Market Risk - Management Risk -Interest Rate Risk - Default Risk -Purchasing Power Risk -International Risk -Regulation Risk - Industry Risk -Business Risk -Political Risk -Reinvestment Risk -Bull-Bear Market Risk
  • 14.  Volatility  Standard Deviation  Probability Distribution  Beta