Capital Market is generally understood as a market for long term funds and investments in long term instruments available in this market. However now this market also inclus=de short-term funds. Capital markets mean the market for all the financial instruments, short term and long term, as also commercial, industrial and government paper.
The capital market deals with capital. The capital market is a market where borrowing and lending of long term funds takes place.
Capital markets deal in both debt and equity. In these markets productive capital is raised and made available to the corporates. The governments both central and state raise money in the capital market, through the issue of government securities. Capital market refers to all the institutes and mechanisms of raising medium and long-term funds, through various instruments available like shares, debentures, bonds etc.
The importance of capital markets has grown in the last ten years. Corporates both in the private sector as well as in the public sector raise thousands of crores of rupees in these markets. The capital markets consist of the primary market and the secondary market . The primary markets are where new stock and bonds issues are sold (underwriting) to investors. The secondary markets are where existing securities are sold and bought from one investor or speculator to another, usually on an exchange.
There are two important operations carried on in these markets.
1. The raising the new capital
2. Trading in the securities already issued by the companies
The important constituents of the Capital market are:
1. The Stock Exchanges
2. Banks
3. The investment trusts and companies
4. Specialised financial institutions or development banks
5. Mutual funds
6. Post office savings banks
7. Non-banking financial institutions
8. International financial investors and institutions
August 28, 2009
>HOW TO TRADE ON-LINE
1. Log on to the Broker's website.
2. Register yourself as a client.
3. Fill in the client broker agreement on tamp paper.
4. Log on to the broker's site using secure user ID and password.
5. The market watch page will show real time data.
6. Trade shares directly by entering the symbol of the securities.
7. The brokers' server will check the limit in the on-line and the demat account for the number of shares. And execute the trade.
8. Usually the order is executed in about 20 seconds and you get the confirmation.
9. The broker will send one e-mail confirmation and printed contract by mail.
10. On the settlement day the demat and bank accounts will automatically get debited and credited.
2. Register yourself as a client.
3. Fill in the client broker agreement on tamp paper.
4. Log on to the broker's site using secure user ID and password.
5. The market watch page will show real time data.
6. Trade shares directly by entering the symbol of the securities.
7. The brokers' server will check the limit in the on-line and the demat account for the number of shares. And execute the trade.
8. Usually the order is executed in about 20 seconds and you get the confirmation.
9. The broker will send one e-mail confirmation and printed contract by mail.
10. On the settlement day the demat and bank accounts will automatically get debited and credited.
>BSE AUTO
In August 2004 BSE launched a new Sector Series (90/FF) indices comprising BSE Auto Index, BSE BANKEX, BSE Capital Goods Index, BSE Consumer Durables Index, BSE FMCG Index, BSE Health care Index, BSE IT Index, BSE Metal Index, BSE Oil & Gas Index, BSE Mid Cap Index, BSE Small Cap Index. BSE Auto Index comprises all the major auto stocks in the BSE 500 Index.
- AMTEK AUTO L
- APOLLO TYRE
- ASHOK LEYLAND
- BAJAJ AUTO
- BHARAT FORGE
- BOSCH LTD
- CUMMINS IND
- ESCORTS LTD
- EXIDE INDUS
- HEROHONDA M
- MAHINDRA & MAHINDRA LTD.
- MARUTI SUZUKI
- MRF LTD
- TATA MOTORS
>STOCK INDICES
Stock Indices represents the performance of stock market and by proxy, reflects investors sentiment on the state of the economy. This section will keep you updated with the BSE and NSE indices along with index from NYSE Composite, NASDAQ Composite, Dow Jonds I. A., and other leading stock markets of the world.
- BSE AUTO
- BSE TECk
- Metals Index
- CNX 100
- BSE 100 Index
- Oil & Gas Index
- BSE PSU
- BSE 200 Index
- Sensex
- BSE IT
- BSE Healthcare
- BSE FMCG
- Capital Goods index
- BSE Small Cap
- BANKEX
- Consumer Durables Index
- BSE Mid-Cap
- BSE 500 Index
- Nifty
- CNX Midcap Index - NSE
- S&P CNX 500
- Bank Nifty
>DEMATERIALISATION & REMATERIALISATION
Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited into investor’s account with his/her Depository Participant
How can one convert physical holding into electronic holding i.e. how can one dematerialise securities?
In order to dematerialise physical securities one has to fill in a DRF (Demat Request Form) which is available with the DP and submit the same along with physical certificates one wishes to dematerialise. Separate DRF has to be filled for each ISIN no.. The complete process of dematerialization is outlined below:
⇒ Bullet Surrender certificates for dematerialization to your depository participant.
⇒ Depository participant intimates Depository of the request through the system.
⇒ Depository participant submits the certificates to the registrar.
⇒ Registrar confirms the dematerialization request from depository.
⇒ After dematerializing certificates, Registrar updates accounts and informs depository of the completion of dematerializations.
⇒ Depository updates the accounts and informs the depository participant.
⇒ Depository participant updates the accounts and informs the investor.
What is the ISIN?
ISIN (International Securities Identification Number) is a unique identification number for a security.
Can odd lot shares be dematerialized?
Yes, odd lot share certificates can also be dematerialized.
Do materialized shares have distinctive numbers?
Dematerialized do not have any distinctive numbers. These shares are fungible, which means that all the holdings of a particular security will be identical and interchangeable.
Can Transfer Cum dematerialization be done simultaneously?
Yes. After the company/registrar has transferred the shares in ones name they will request one to let them know whether one wishes to receive them in electronic mode. In case one opts to receive in electronic mode one should inform the company / registrar through ones DP within 3o days of the date of option letter failing which company or registrar can dispatch the certificates and the securities shall be credited to ones account. This facility is offered only for those scripts for which the issuer company has agreed to provide this facility.
Can ones electronic holdings be converted back into physical certificates?
Yes. The process is called Rematerialisation. If one wishes to get back your securities in the physical form one has to fill in the RRF form (Remat Request Form) and one request your DP for rematerialisation of the balances in your securities account. The process of rematerilisation outlined below:
One makes a request for rematerialisation.
Depository Participant intimates depository of the request through the system.
Depository confirms rematerialisation request to the registrar.
Registrar updates accounts and prints certificates.
Depository updates accounts and downloads details to depository participant.
Registrar dispatches certificates to the investor.
How can one convert physical holding into electronic holding i.e. how can one dematerialise securities?
In order to dematerialise physical securities one has to fill in a DRF (Demat Request Form) which is available with the DP and submit the same along with physical certificates one wishes to dematerialise. Separate DRF has to be filled for each ISIN no.. The complete process of dematerialization is outlined below:
⇒ Bullet Surrender certificates for dematerialization to your depository participant.
⇒ Depository participant intimates Depository of the request through the system.
⇒ Depository participant submits the certificates to the registrar.
⇒ Registrar confirms the dematerialization request from depository.
⇒ After dematerializing certificates, Registrar updates accounts and informs depository of the completion of dematerializations.
⇒ Depository updates the accounts and informs the depository participant.
⇒ Depository participant updates the accounts and informs the investor.
What is the ISIN?
ISIN (International Securities Identification Number) is a unique identification number for a security.
Can odd lot shares be dematerialized?
Yes, odd lot share certificates can also be dematerialized.
Do materialized shares have distinctive numbers?
Dematerialized do not have any distinctive numbers. These shares are fungible, which means that all the holdings of a particular security will be identical and interchangeable.
Can Transfer Cum dematerialization be done simultaneously?
Yes. After the company/registrar has transferred the shares in ones name they will request one to let them know whether one wishes to receive them in electronic mode. In case one opts to receive in electronic mode one should inform the company / registrar through ones DP within 3o days of the date of option letter failing which company or registrar can dispatch the certificates and the securities shall be credited to ones account. This facility is offered only for those scripts for which the issuer company has agreed to provide this facility.
Can ones electronic holdings be converted back into physical certificates?
Yes. The process is called Rematerialisation. If one wishes to get back your securities in the physical form one has to fill in the RRF form (Remat Request Form) and one request your DP for rematerialisation of the balances in your securities account. The process of rematerilisation outlined below:
One makes a request for rematerialisation.
Depository Participant intimates depository of the request through the system.
Depository confirms rematerialisation request to the registrar.
Registrar updates accounts and prints certificates.
Depository updates accounts and downloads details to depository participant.
Registrar dispatches certificates to the investor.
>E-TRADING
One of the most revolutionary things to happen at the end of the twentieth century is obviously the revolution in communication through internet. The Net has become the way future business is heading towards. It is therefore no surprise that the Net has made a big difference in the way stock markets around world will function in future. Developments like screen based trading in the place of traditional trading ring and the dematerialisation of the shares, have played a big role in making E-trading a reality. Without these developments E-trading a reality. Without these developments E-trading would not be as effective as it is now. Due to this new innovation one can now operate in the stock market from the privacy of one's home or office. The transactions can be put through in a matter of few minutes, to one's satisfaction. This method guarantees complete secrecy in the transactions. Various portals like Indiainfoline, Sharekhan, ICICI, capital markets have come up in the last few years. These portals r full of information about almost 5000 companies listed on the stock exchanges. This enables the investors to study the companys' performance, before making investment decisions. They also provide latest information concerning the companies, which is essential for the investors to make decisions. TV channels like CNBC also contribute a great deal in this effort by reporting latest happenings alongwith the necessary analysis by experts and by telecastinglive the investor meets, allowing investors to get first hand information from the various company's officials.
The preconditions for trading on Net are:
1. A personal computer with net connection
2. A registered account with a broker
3. A demat account
4. An account with a bank with payment gateway or online banking facility
The preconditions for trading on Net are:
1. A personal computer with net connection
2. A registered account with a broker
3. A demat account
4. An account with a bank with payment gateway or online banking facility
>DEPOSITORY PARTICIPANT
Who is Depository Participant?
A Depository Participant (DP) is an agent of the depository through which it interfaces with the investor. A DP can offer depository services only after it gets proper registration from SEBI. A Depository can be compared with a bank, likewise a DP may be compared with a branch of a bank.
What is the minimum net worth required for depository?
The minimum net worth stipulated by SEBI for a depository is Rs.100 crore.
How many Depository Participants are registered with SEBI?
At present approximately 390 DPs are registered with SEBI. A list on DP’s and their addresses can be downloaded from SEBI website.
What are the benefits of availing depository services?
Benefits are enumerated below:
⇒ A safe, convenient way to hold securities;
⇒ Immediate transfer of securities;
⇒ No stamp duty on transfer of securities;
⇒ Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc;
⇒ Reduction in paperwork involved in transfer of securities;
⇒ Reduction in transaction cost;
⇒ No odd lot problem, even one share can be sold;
⇒ Nomination facility;
⇒ Change in address recorded with DP gets registered with all companies in which investor hold securities electronically eliminating the need to correspond with each of them separately.
⇒ Transmission of securities is done by DP eliminating correspondence with companies;
⇒ Automatic credit into demat account of shares, arising out-of bonus/split/consolidation/mergers etc.
A Depository Participant (DP) is an agent of the depository through which it interfaces with the investor. A DP can offer depository services only after it gets proper registration from SEBI. A Depository can be compared with a bank, likewise a DP may be compared with a branch of a bank.
What is the minimum net worth required for depository?
The minimum net worth stipulated by SEBI for a depository is Rs.100 crore.
How many Depository Participants are registered with SEBI?
At present approximately 390 DPs are registered with SEBI. A list on DP’s and their addresses can be downloaded from SEBI website.
What are the benefits of availing depository services?
Benefits are enumerated below:
⇒ A safe, convenient way to hold securities;
⇒ Immediate transfer of securities;
⇒ No stamp duty on transfer of securities;
⇒ Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc;
⇒ Reduction in paperwork involved in transfer of securities;
⇒ Reduction in transaction cost;
⇒ No odd lot problem, even one share can be sold;
⇒ Nomination facility;
⇒ Change in address recorded with DP gets registered with all companies in which investor hold securities electronically eliminating the need to correspond with each of them separately.
⇒ Transmission of securities is done by DP eliminating correspondence with companies;
⇒ Automatic credit into demat account of shares, arising out-of bonus/split/consolidation/mergers etc.
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