Workshop on equity market basic

8/8/2019 Workshop on equity market basic

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Workshop

Basic Understanding of Share Market &

its Future and Scope


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What is Equity?

Equity is a one financial instrument by which

company invite the public to invest their

money in the company and investor can

become a partner of the company.

Generally, when the company have

insufficient money to expand its business it

comes with equity shares


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Share

In simple Words, a share or stock is a

document issued by a company, which

entitles its holder to be one of the owners of

the company. A share is issued by acompany or can be purchased from the stock

market


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Primary Market

The primary market is that part of the capital

markets that deals with the issuance of new

securities. Companies, governments or public

sector institutions can obtain funding throughthe sale of a new stock or issue.


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Primary Market

This is typically done through a syndicate of

securities dealers. The process of selling new

issues to investors is called underwriting. In

the case of a new stock issue, this sale is aninitial public offering (IPO). Dealers earn a

commission that is built into the price of the

security offering, though it can be found in the

prospectus


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Primary Market

An initial public stock offering (IPO)

referred to simply as an "offering" or

"flotation," is when a company (called the

issuer) issues common stock or shares to thepublic for the first time. They are often issued

by smaller, younger companies seeking

capital to expand, but can also be done by

large privately-owned companies looking tobecome publicly traded.


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Primary Market

In an IPO the issuer may obtain the

assistance of an underwriting firm, which

helps it determine what type of security to

issue (common or preferred), best offeringprice and time to bring it to market.


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Primary Market

An IPO can be a risky investment. For the

individual investor, it is tough to predict what

the stock or shares will do on its initial day of

trading and in the near future since there isoften little historical data with which to

analyze the company. Also, most IPOs are of

companies going through a transitory growth

period, and they are therefore subject toadditional uncertainty regarding their future

value


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Secondary Market

The secondary market, also known as the

aftermarket, is the financial market where

previously issued securities and financial

instruments such as stock, bonds, options,and futures are bought and sold..


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Secondary Market

The term "secondary market" is also used to

refer to the market for any used goods or

assets, or an alternative use for an existing

product or asset where the customer base isthe second market


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Index

A stock market index is a method of

measuring a section of the stock market.

Many indices are cited by news or financial

services firms and are used to benchmark theperformance of portfolios such as mutual

funds.


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Nifty & Sensex

S&P CNX Nifty is a well diversified 50 stock indexaccounting for 21 sectors of the economy. It is usedfor a variety of purposes such as benchmarking fundportfolios, index based derivatives and index funds.

S&P CNX Nifty is owned and managed by IndiaIndex Services and Products Ltd. (IISL), which is a

joint venture between NSE and CRISIL. IISL is India'sfirst specialised company focused upon the index as

a core product. IISL has a Marketing and licensingagreement with Standard & Poor's (S&P), who areworld leaders in index services.


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Nifty (50)

The traded value for the last six months of allNifty stocks is approximately 44.89% of thetraded value of all stocks on the NSE

Nifty stocks represent about 58.64% of thetotal market capitalization as on March 31,2008.

Impact cost of the S&P CNX Nifty for a

portfolio size of Rs.2 crore is 0.15% S&P CNX Nifty is professionally maintained

and is ideal for derivatives trading


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Sensex (30)

SENSEX, first compiled in 1986, was calculated on a

"Market Capitalization-Weighted" methodology of 30

component stocks representing large, well-

established and financially sound companies across

key sectors. The base year of SENSEX was taken as

1978-79. It is scientifically designed and is based on

globally accepted construction and review

methodology. Since September 1, 2003, SENSEX is

being calculated on a free-float market capitalizationmethodology.


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Bull Market & Bear Market

The terms bull market and bear market

describe upward and downward market

trends, respectively, and can be used to

describe either the market as a whole orspecific sectors and securities.


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StockBroker

A stock brokerorstockbrokeris a regulated

professional broker who buys and sells shares and

other securities through market makers or Agency

Only Firms on behalf of investors.

A brokeris a party that mediates between a buyer

and a seller. A broker who also acts as a seller or as

a buyer becomes a principal party to the deal.

Distinguish agent one who acts on behalf of a

principal. A "brokerage" or a "brokerage firm" is abusiness that acts as a broker. A brokerage firm is a

business that specializes in trading stocks.


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StockBroker

A sales person working for a securities or

commodity brokerage firm is popularly (but

incorrectly) called a "broker." A broker in that

context is, strictly speaking, an exchangemember who is actually executing the

purchase or sales order in the 'pit', on the

exchange, as a service to the client of the firm

for which that salesman works.


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How to read or understand Stock

Practical or Live Demo

www.nseindia.com

ET ( Any working Day)

TV ( CNBC)


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Some Terms

Face Value

Bonus

Dividend

Market Timing

Expiry

Software


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Face Value & Market Value

Face value of the share means real value of the

share offered in the primary market....

Market value means the present trading price at

secondary markets like NSE AND BSE it is

fluctuating according to the demand and supply

forces at the market level...

The main difference between these two is face value

is fixed by the company in the primary market it's notchanged any time.....


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Face Value & Market Value

Market value means after completion of

primary market activities that shares are

traded in the secondary market based upon

the company performance investors areinterested to buy that shares on stock

exchange that rate is decided by the demand/

supply i am already mentioned you first lines.


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face value of a share is the original price of

the share over which eps, book value, etc will

be calculate. if a share whose face value is

Rs.10/- is being quoted in the market forRs.250/-, if the company declares a dividend

of say 50%, the shareholders will get Rs.5/-

per share as dividend (i.e., 50% of the face

value - Rs.10/-)


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eps is "earnings per share". this denotes the earningsmade by a company for each share. that means, netprofit divided by the total number of shares is the epsof the company. it shows the earning capacity of thecompany. hence, higher the eps, it is advantageous

p/e ratio is 'market price' of the share divided by 'eps'of the company. this denotes whether the company'sshares are under priced or over priced. a companywith a lesser p/e ratio is considered to be under

priced and their prices are bound to go up, in thenormal conditions.

Workshop on equity market basic

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