Satish Stock
-
Upload
prasadsatish -
Category
Documents
-
view
231 -
download
0
Transcript of Satish Stock
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 1/26
An Introduction to Stocks
Satish Prasad
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 2/26
What is a Stock?
Stock is a share in the ownership of acompany.
It represents a claim on the company'sassets and earnings
Whether you say shares, equity orstock, it all means the same thing.
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 3/26
What is a stock market?
Place where business of buying andselling stock takes place
The stock market is not a specificplace, though some people use the
term "Dalaal Street´
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 4/26
Types of stocks
Equity
Preference
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 5/26
Market Segments
Primary market
-Channel for creation of new securities
Secondary market
- where previously issued securities
and financial instruments such asstock, bonds, options, and futures arebought and sold.
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 6/26
Stock exchange (India)
The Bombay Stock Exchange (BSE)
National Stock Exchange of India Ltd
(NSE) India Infoline is a member of both BSE
and NSE
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 7/26
Major exchanges (world)
New York Stock Exchange (NYSE)
American Stock Exchange (AMEX)
National Association of
Securities Dealers AutomatedQuotations (NASDAQ)
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 8/26
BSE
BSE is the oldest stock exchange in Asia and has the greatestnumber of listed companies in the world, with 4700 listed as of August 2007.
On 31 December 2007, the equity market capitalization of the
companies listed on the BSE was US$ 1.79 trillion,
largest stock exchange in South Asia and the 12th largest inthe world.
over 7700 scripts on the stock exchange.
The BSE SENSEX (SENSitive indEX), also called the "BSE 30",
BSE On-line Trading (BOLT) facilitates on-line screen basedtrading in securities.
BOLT is currently operating in 25,000 Trader Workstationslocated across over 359 cities in India.
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 9/26
NSE
It is the largest stock exchange in India in terms of dailyturnover and number of trades, for both equities andderivative trading.
NSE has a market capitalization of around Rs 47,01,923 crore
(7 August 2009) with listed 1587 companies.
The NSE's key index is the S&P CNX Nifty, known as the Nifty,an index of fifty major stocks weighted by marketcapitalization.
NSE is mutually-owned by a set of leading financial
institutions, banks, insurance companies and other financialintermediaries.
it is the second largest stock exchange in South Asia. NSE isthe third largest Stock Exchange in the world in terms of thenumber of trades in equities. It is the second fastest growing
stock exchange in the world with a recorded growth of 16.6%.
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 10/26
Market Timings
Trading on the Indian equities segmenttakes place on all weekdays. No trading onSaturday, Sunday and Published IndianStock Market Holidays declared by theIndian Stock Exchange in advance.
Market timings (Indian Standard Time) :
-Market Opens at : 09:00 hours-Market Closes at : 15:30 hours
The closing session is held between 15.50 hours
and 16.00 hours in NSE and 15.40 hours and16.00 hours in BSE
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 11/26
WORK DAY SCHEDULE
Session Timing
Beginning of the Day Session 9.00 am
Position Transfer Session 15:30 - 15:50
Closing Session 15:50 - 16:05
Option Exercise Session 16:05 - 16:35
Margin Session 16:35 - 16:50
Query Session 16:50 - 17:35
End of Day Session 17:35
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 12/26
Trading on BSE and NSE
BSE and NSE provide trading facility on
two segments ,which are
- Cash Segment and- Derivative Segment
NSE also has another segment called
WDM,Wholesale Debt Market.
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 13/26
Markets of NSE
Equity
Futures and Options
Retail Debt Market Wholesale Debt Market
Currency futures
NSE became the first stock exchange to getapproval for Interest rate futures asrecommended by SEBI-RBI committee
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 14/26
NEAT-F&O
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 15/26
NEAT- Cash
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 16/26
What Causes Stock Prices to
Change?
Supply and Demand
Earnings (expectations)
Sentiments, attitudes, & sense of greed
Economic Indicators
Follow the leader Manipulation
LOTS of different theories
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 17/26
SENSEX
Top 30 companies form together thepremier index called SENSEX. In SENSEXdifferent weights are allocated to eachcompany. These companies represent all the
major sectors of Indian economy.
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 18/26
Index
Number which measures the change ina set of values over a period of time.
Stock index represents the change invalue of a set of stocks whichconstitute the index
A good stock market index is onewhich captures the behavior of theoverall equity market
It has to be well diversified yet highlyli uid
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 19/26
Importance of a Market Index
A market index is very important for itsuse as
a barometer for market behavior
as a benchmark portfolio performance
a passive fund management in indexfunds
an underlying for index futures and
options
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 20/26
Type of Indexes
Price weighted index
Equally weighted index
Market capitalization weighted index
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 21/26
Indices of BSE
SENSEX from 1986 onwards.
BSE National Index from 1989, but changedBSE-100 in 1996.
BSE-200 and DOLLEX-200 from 1994.
BSE-500 and five sectoral indices in 1999.
BSE-PSU and DOLLEX-30 & BSE-TECk from
2001. BSE uses Price-Earning Ratio, the Price to
Book Value Ratio and the Dividend YieldPercentage on day-to-day basis of all itsma or indices
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 22/26
Indices of NSE
S&P CNX Nifty (Standard & Poor's CRISILNSE Index)
CNX Nifty Junior
CNX 100 (= S&P CNX Nifty + CNX Nifty Junior )
S&P CNX 500 (= CNX 100 + 400 major
players across 72 industries) CNX Midcap (introduced on 18 July 2005
replacing CNX Midcap 200)
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 23/26
The Risk / Return Tradeoff
³principle that potential return riseswith an increase in risk´
Low risk with lower returns, high risk withhigh returns
Important to know your personal risktolerance when choosing investments
Balance between risk and reward
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 24/26
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 25/26
Mutual Funds
Funds in which investment professionals manageyour money and decide on the investments
These funds often amount to millions and billions of dollars and come in a variety of types
Advantages
Simplicity / Professional Management /Diversification / Liquidity / Usually Low Risk
Disadvantages
Fees (and lots of them)
8/9/2019 Satish Stock
http://slidepdf.com/reader/full/satish-stock 26/26
Questions & Answers