WHAT IS STOCK EXCHANGE

STOCK EXCHANGE

WHAT IS STOCK EXCHANGEStock exchange is that place where trading of shares is done in terms of sale and purchase.

SECURITIES CONTRACT(REGULATIONS )ACT,1965Any 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.Shares,stocks,bonds,debentures, stock.

Function of stock exchange Maintains active trading Price may vary from transaction to transaction Increase liquidity and marketability of the shares traded Fixation of the prices Prices are determined by the transaction

CONTDEnsure safe and fair dealing Rules and regulation transparency Aids in financing the industry Negotiability and transferability of the securities help companies to raise funds

CONTDDissemination of the information Various publication Performance inducers Price reflect the performance of the company Self regulation Monitor the integrity of the members , companies and clients Settlement of disputes

STOCK EXCHANGE -INDIA

NAME OF INDIAN STOCK EXCHANGES:1.Bombay stock exchange2.National stock exchange(Mumbai)3.Banglore stock exchange4.Utter Pradesh stock exchange(kanpur)5.Magadh stock exchange(Patna)6.Ahmedabad stock exchange7.vadodara stock exchange(Baroda)8.Bhubaneswar stock exchange9.Calcutta stock exchange(kolkata)10.Madras stock exchange

Cont.11.Cochin stock exchange12.coimbatore stock exchange13.Gauhati stock exchange14.Hydrabad stock exchange15.Madhya Pradesh stock exchange(indore)16.Jaipur stock exchange17.Ludhina stock exchange18.Mangalore stock exchange19.Pune stock exchange20.saurashtrakutch stock exchange

Cont.Bombay stock exchange : it has 30 companies scripted.Name:1.ACC2.BAJAJ3.AIRTEL 4.BHEI 5.CIPLA6.DLF7.GRASIM8.GUJRAT AMBUJA9.HDFC10.HDFC BANK

CONT11.HERO HONDA12.HINDALCO13.HUL14.ICICI BANK15.INFICYS16.ITC17.L&T18.MARUTI19.NTPC20.ONGC

CONT21.RANBAXY22.RELIANCE COMMUNICATION23.RELIANCE ENERGY24.RIL25.SATYAM26.SBI27.TCS28.TATA MOTERS29.TATA STEEL30.WIPRO

BSE CHART

NSEThe National Stock Exchange (NSE), located in Bombay, is India's first debt market. It was set up in 1993 to encourage stock exchange reform through system modernization and competition. It opened for trading in mid-1994. It was recently accorded recognition as a stock exchange by the Department of Company Affairs. The instruments traded are, treasury bills, government security and bonds issued by public sector companies

Contd..NSE operates on the National Exchange For Automated Trading(NEAT) systemAdopts the principle of order driven market. As opposed to quote driven market.Operates in 2 different segments:Debt marketCapital market

OBJECTIVESEstablishing nationwide trading facilities for all types of securities . Ensuring equal access to investors all over the country through an appropriate telecommunication network. Providing fair , efficient & transparent securities market using electronic trading system. Meeting international benchmark and standards.

Regulatory framework Capital Issue (Control) Act ,1947 Securities Contract (Regulation) Act, 1956 SEBI Act, 1992 Depositories Act, 1996 Companies Act, 1956

SECURITIES CONTRACT (REGULATION) ACT, 1956 It provided for control on : all aspect of securities trading and running of stock exchange to prevent undesirable transaction It gives central government regulatory jurisdiction over; Stock exchanges : recognition and supervision Contracts in securitiesListing of securities

ContdThis act also empowers the Central government to call for periodical returns and make direct enquiries. to direct rules to be made and powers of SEBI to make or amend bye-laws of recognized stock exchanges have been laid down. to supersede governing body of recognized stock exchange and vests with the Central Government the power to suspend business of recognized stock exchanges

Stock exchanges : recognition and supervision

processing application of recognition of stock exchanges grant of recognition to stock exchange, withdrawal of recognition to stock exchange

BENEFITS OF STOCK EXCHANGEFROM THE POINT OF VIEW OF COMMUNITY:1.It assist the economies development by providing a body of interested investors.2.it uploads the position of superior enterprises and assist them in raising further funds.3.It encourages capital formation4.Government can undertake projects of national importance and social value raising funds through the sale of its securities on the stock exchange.5.It is the stock exchanges that central bank of a country can control credit by undertaking open market operations (purchase and sale of securities)

FROM THE COMPANY POINT OF VIEW1.A company whose shares quoted on stock exchange they enjoy better reputation and credit.2.The market for the shares of such a company is naturally widened.3.The market price of securities is likely to be higher in relation to its earnings,dividends and property values.This raises the bargaining power of the company in the event of a takeover,merger or amalgamation.

FROM THE INVESTORS POINT OF VIEW1.Liquidity of the investment is increased2.The securities dealt on a stock exchange are good collateral security for loans.3.The stock exchange safeguards interests of investors through strict enforcement of rules and regulations.4.The present net worth of investments can be easily known by the daily quotations.5.His risk is considerably less when he holds or purchases listed securities.

CAUSES OF PRICE FLUCTUATION1.DEMAND AND SUPPLY2.BANK RATE3.SPECULATIVE PRESSURE4.ACTIONS OF UNDERWRITERS AND OTHER FINANCIAL INSTITUTIONS5.CHANGE IN COMPANYS BOARD OF DIRECTORS6.FINANCIAL POSITION OF THE COMPANY

CONT..7.TRADE CYCLE8.POLITICAL FACTORS9.SYMPATHETIC FLUCTUATIONS10.OTHER FACTORS:A.EXPECTED MONSOONB.PERSONAL HEALTH OF HEAD OF GOVERNMENT OR CHAIRMAN OF THE COMPANYC.OIL PRICES IN THE INTERNATIONAL MARKET.

CONT.D.CHANGES IN EXCHANGE RATEE.BORDER TENSIONF.STOCK BROKERS SCAM LIKE HARSHAD MEHTA AND KETHAN PAREKHG.STRIKES AND LOCK-OUT OF THE COMPANY.H.NEW BUDGET PROPOSALSI.LOBERLIZATION AND PRIVATIZATION OF THE COMPANY.

SEBIIt was constituted and made a statutory body by SEBI act 1992.With the coming into effect of SEBI, some of the powers and function exercised by the central government,in respect of regulation of stock exchanges were transferred to the SEBI.

OBJECTIVES OF SEBI1.Registring and regulating the working of stock brokers,sub-brokers,share transfer agents, underwriters who may be associated securities market in any manner.2.Registering and regulating the working of collective investment scheme including mutual funds.3.Prohibiting insider trading in securities.4.Regulating substantial acquisition of shares and takeovers of companies.

Cont5.Calling for information from, undertaking inspection, conducting inquiries and audits of stock exchanges and intermediaries and self regulatory organizations in the securities market.6.Performing such function and exercising such powers under the provisions of the Capital Issues(control) Act 1947 And SCRA 1956,as may be delegated to it by the central government.7.Performing such other functions as may be prescribed.

HOW RATING IS GIVEN TO THE COMPANY?Basically rating is given after see the company 'image,management quality,assets quality,auditors quality,accounting accuracy.Rating is not fixed, it may be change. The rating grades are:AAA: HIGHEST SAFTYAA: HIGH SAFTYA: ADEQUATE SAFTYBBB: MODERATE SAFTYBB: IN ADEQUATE SAFTYBC&D: HIGH RISK AND DEFAULT

CREDIT RATING AGENCY IN INDIA