The

THE WORLD OF STOCK MARKET

1

First step into

Stock market!!!!2Things that we would followWhat is stock market all aboutTheir workingThe market functionsMethodsCalculationsNew ideasEnd

3

4TYPES OF ORGANISATIONSPRIVATELIMITEDPSUS5What is the stock exchange?

A stock market, or (equity market), is a private or public market for the trading of company stock and derivatives of company stock at an agreed price ; these are securities listed on a stock exchange as well as those only traded privately6the world around us

7Bse-bombay stock exchangeSituated at the Dalal StreetsStarted in the year 1875Annual transaction about 1.79$ trillionStarts from 9:55 am till 3:00 pmHas all the companies of India listed

8SENSEXAlso known the sensitive indexThe index for the BSE companiesThe index counts on account of the BSE 30 companies

9National stock exchangeMumbai-based stock exchangeLargest stock exchange in India in terms of daily turnover 1.46 total turnoverTrade time same as the BSEIt is mutually owned

10S&P CNX NIFTY (NSE)The index for the NSEChosen on the basis of NSE-25

11Importance of the marketFunction and purposeRelation of the stock market to the modern financial systemThe stock market, individual investors, and financial riskThe behavior of the stock marketIrrational behaviorCrashes12INTRODUCTION to the market The market for long term securities like bonds, equity stocks is divided into PRIMARY MARKET and SECONDARY MARKET. PRIMARY MARKET Deals with the new issues of securities.

SECONDARY MARKET Deals with outstanding securities. Also known as STOCK MARKET.

13

14EQUITY/share MARKETSTOCK 1)COMMON STOCKS 2)PREFERRED STOCKS

SHARE

MUTUAL FUNDS

FACE VALUE/MARKET VALUE/ISSUE VALUE

PROMOTERS

15Investment and speculationDealing in securities for purpose of getting a fair return on the investment

The purchase and sale of securities at the stock exchange is the speculation

16Types of speculationBull (Tejiwala)

Bear (Mandiwala)

Lame Duck (Langda)

Stag

17THE FUNCTION Stock exchangesBrokersRegistrarsDepositories and their participants Securities and Exchange Board of India (SEBI)

18THE MARKET INDEXStock market indices are the barometer of the stock market.BSE SENSEX,NSE-50 etc are some of the market indices.

Their usefulness: Indices help to recognize broad trends in the market. The investor can use the indices to allocate the funds rationally among the stocks. Technical analysts use these indices to predict the future market. Indices function as a status report on the general economy.

19WHAT DOES THE INDICES DO? These indices have just one job:

20STOCK PRICES RISES,BUT WHY? The price of every stock increases or decreases for the following possible reasons:

News about company. News about the country. Exchange rate regime. Depends on demand and supply for that stock.Bank RateSpeculation Pressure

21WHO SELECTS THESE STOCKSThey are selected by the Index committee. Some of the criteria they follow include :1)Market capitalization.2)Liquidity.3)Continuity.4)Industry representation.5)Listed history.

22THE SHOWCASE OF THE MARKETTHE NEWSPAPERTELEVISION INTERNETPHONESVERBALLY

23THE SHOWCASE

24WHY INVEST IN SHARES?

Why need I invest?Why shares?So what are the various investment options?25HOW & WHERE TO BUY SHARES

26CALCULATIONS OF STOCKFACE VALUETOTAL EQUITYANNUALPROFITEARNING PER SHARE(EPS)Rs10RS5 CRORERs 25 CRORERs 50TOTALEARNING FROM SHARESEPS5 CRORE/10=50 LAKHS25CRORE/50 LAKHS=RS 5027HOW TO MAKE MONEY Patience, profound knowledge.Best guess.Diversification .Portfolio management.

28SEBI-SECURITY EXCHANGE BOARD OF INDIAWatches over the trade in IndiaIs the judiciary of stock market in IndiaTakes active part in making rules

29The market crisis

30ROLE IN ECONOMYIn theory they are required to facilitate, support, enable the healthy growth and functioning of primary marketsThe current focus of thinking on the SENSEX, market capitalization etc.reflects an excessive preoccupation with the secondary market activity.Beyond a point, the expansion of the secondary markets may reduce the volume of activity not only on the new issue market but also in the banks, other financial institutions, gold, real estate and commodities. The multiple serious problems visiting the stock market caution us against too much optimism and enthusiasm about the stock market.

31INDIAN MARKET-DRAWBACKSUnethical practices.Big irrational greed, excessive speculation.Lack of protection to interests of the genuine and small investors .Trading is extremely thin and restricted.Structural and organizational imbalance in the growth of the stock market.Volatility of the market has increased over the years.

32NEW IDEAS Single authority Demutualization. Prescribing capital adequacy norms. Stricter registration of brokers Margin requirements33queriesASK US ?????????34THANK YOU

35