Basics stock market presentation made for the financial accounting subject for first trimester of FYMBA - Finance

1. Stock Market
Presented by-
• Vignesh Dongare
• Priyanka Acharya
• Sreya Bhattacharya
• Dinesh Naval
• Rubina Mohammed

2. What is stock market?
• A portion of ownership in a corporation. It is a way for a corporation to
raise money. Also known as shares or equities.
• Stock exchange is where stockbrokers and traders can buy and sell
shares, bonds and other securities.
• As of 2016, 60 stock exchanges in the world.
• Few leading stock exchanges in the world:
 New York Stock Exchange (NYSE)
 National Association of Securities Dealers Automated Quotations (NASDAQ)
 National Stock Exchange (NSE)
 Bombay Stock Exchange (BSE)

3. Terminologies
• Stock market condition:
 Bear Market
 Bull Market
• Bid
• Ask
• Bid-ask spread
• Liquidity
• Limit order
• Trading volume
• Exchange-Traded Funds
• Intra-day trading
• Market capitalisation
• Dividends
• Good-till-cancelled order

4. History
• Corporate shares started being traded in the 1830s in Bombay (now
Mumbai) with the stock of Bank and Cotton presses.
• The simple and informal beginnings of stock exchanges in India take
one back to the 1850s when 22 stockbrokers began trading opposite
the Town Hall of Bombay under a banyan tree. The tree still stands in
the area which is now known as Horniman Circle.
• as the number of brokers increased, finally settling in 1874 at what is
known as Dalal Street.
• This as yet informal group known as the Native Share and
Stockbrokers Association organized themselves as the Bombay Stock
Exchange (BSE) in 1875
• The BSE is the oldest stock exchange in Asia and was the first to be
granted permanent recognition under the Securities Contract
Regulation Act, 1956.

5. History (Continued)
• SEBI was born in 1988 as a non-statutory body. It was made a
statutory body in 1992.
• After the Harshad Mehta scam in 1992, there was a pressing need for
another stock exchange large enough to compete with the BSE and
bring transparency to the stock market. This gave birth to the National
Stock Exchange (NSE). It was incorporated in 1992, become
recognized as a stock exchange in 1993, and trading began on it in
1994.
• It was the first stock exchange on which trading took place
electronically. In response to this competition, BSE also introduced an
electronic trading system known as BSE On-line Trading (BOLT) in
1995.

6. Stock Exchanges in India
• At present, a total of 7 stock exchanges are recognized in India regulated by
Security Exchange Board of India (SEBI).
• Two major stock exchanges in India- BSE and NSE.
Bombay Stock Exchange
(BSE)
• Founded: 09th July 1875
• No. of Listings: 5439
• Index: SENSEX
• Market Cap: US$3.6 trillion
National Stock Exchange
(NSE)
• Founded: 1992
• No. of Listing: 1952
• Index: NIFTY 50
• Market Cap: US$3.1 trillion

7. Types of Stock
• Income Stock: stock that pays dividends at regular times in a year
• Growth Stock: pays few to no dividends. All profits are reinvested in
the business. Owners of growth stock are interested in making money
through capital gains.The company determines what stock it offers.
• Common Stock: stockholders are voting owners of the company.
• But, most people own such a small percent of a company’s shares,
they do not wish to vote on company decisions.
• Preferred Stock: stockholders do not vote in company decisions, but
receive dividends before owners of common stock.

8. Sectors representing BSE
6.16% 5.69%
5.69%
15.18%
4.19%
43.45%
15.01%
1.38%
1.10% 1.89%
Automobile
Cigrarettes
Consumer goods
Energy
Engineering
Financial services
Information Technology
Metals & Mining
Pharma
Telecom

9. Sectors representing NSE
37.87%
13.97%
12.59%
10.49%
8.90%
4.00%
3.87%
2.88%
1.89% 1.77% 0.72% 0.65% 0.61%
Financial services
Energy
IT
Consumer goods
Automobile
Construction
Metals
Pharma
Cement & Cement products
Telecom
Media and Entertainment
Services
Fertilisers & pesticides

10. Dematerialized account
(DEMAT)
• Account to hold financial security in electronic form.
• Maintained by two depository organizations in India.
 National Securities Depository Limited
 Central Depository Services Limited
• How to open a Demat account?
2. Submit a duly filled account opening
form and KYC form. Documents like
PAN card, cancelled cheque need to be
submitted.
3. Instruction slips are also
given by DP which are used for
depository service like transfer,
purchase, etc.
4. Demat Account with any DP
can be applied for online as well.
1. Decide on a Depository
Participant (DP). (authorized
bank, financial institution or
broker).

11. How to select a broker for trading?
• Look at commissions on the investments you'll
use most.
• Look for brokers with a track record of reliability.
• Pay attention to account minimums.
• Watch out for account fees.
• Look at the pricing and execution fine print.
• Consider tools, education and features.

12. Why should I buy stock?
Stockowners can earn a profit in two ways:
1. Dividends: portions of a corporation’s profit. They are paid out to
stockholders of many corporations every quarter (3 months). The
higher the corporate profit, the higher the dividend. If a corporation
makes no profit, there is no dividend.
The second way stockholders earn money:
2. Capital Gain: When a stock holder sells stock for more than he or
she paid for it.
Ex. I buy a share of XYZ Co. stock for Rs10. The value of the stock
increases to Rs.10, and I sell it for a profit of Rs.10.
When a stock holder sells stock for less than he or she paid, it is a
capital loss.

13. Stock market classifications
On the basis of ownership
•1. Preferred &
common stocks.
•2. Hybrid
stocks.
•3. Stocks with
embedded-
derivative
options.
On the basis of market capitalization
1. Small- cap
stocks.
2. Mid-cap
stocks.
3. Large-cap
stocks.
On the basis of dividend payments
1. Income stocks.
2. Growth stocks.
On the basis of risk
1. Blue-chip
stocks.
2. Beta stocks
On the basis of
price trends
1. Cyclical
stocks.
2. Defensive
stocks.

14. Stock market crashes
• A rapid and often unanticipated drop in stock prices.
• Side effect of major catastrophic event, economic crisis, or the collapse of a
long-term speculative bubble.
• Famous stock market crashes:
 The Great Depression, 1929
 Black Monday of 1987
 The 2001 dotcom bubble burst
 The 2008 financial crises
 The 2020 COVID-19 pandemic
Stock market crash of 1987

15. Live Trading

16. Thank You!