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.
>STOCK EXCHANGES
Stock exchange is an association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting and controlling the business of buying, selling and dealing in securities.
Without an efficient stock exchange, the saving of the community, which are essential for economic progress would not be able for the business community. It provides for a mechanism in buying and selling the securities. It assists in reasonably correct evaluation of securities in terms of the real worth. In evaluating the prices on the exchange, the operators take into account all the relevant factors, present and prospective, concerning the particular enterprise and industry. It is because of this the price of one company's share is different than the other company's share price. This price difference can be attributed to the difference between the profitability and the future prospects of the two companies.
Stock exchanges constitute a market for trading in the listed securities and they also facilitate listing of new securities for trading. They also provide a reasonable degree of safety and fair dealing to the investors.
The stock markets are affected by practically anything, especially in India. Mr. Armstrong an authority of market says, "The wind that play upon stock exchanges are as varying and inconsistent as those that blow upon the ocean are. They are frequently just as disturbing". Basically two sets of factors affect the stock exchanges, one is known as fundamental factor and other is technical factor. The fundamental factor are related to the industry and are economic and financial in nature. The technical factor are related to techniques of stock evaluation methods.
The governing body of a recognised stock exchange has wide powers and is the decision making body of the exchange. It has the power, subject to government approval, to make, amend and suspend the operation of the rules, bylaws and regulations of the exchanges. It also has complete jurisdiction over all members and in practice, its power of management and control is almost absolute. The governing body has the power has the power to admit and expel members, to warn, censure, fine and suspend members,
Without an efficient stock exchange, the saving of the community, which are essential for economic progress would not be able for the business community. It provides for a mechanism in buying and selling the securities. It assists in reasonably correct evaluation of securities in terms of the real worth. In evaluating the prices on the exchange, the operators take into account all the relevant factors, present and prospective, concerning the particular enterprise and industry. It is because of this the price of one company's share is different than the other company's share price. This price difference can be attributed to the difference between the profitability and the future prospects of the two companies.
Stock exchanges constitute a market for trading in the listed securities and they also facilitate listing of new securities for trading. They also provide a reasonable degree of safety and fair dealing to the investors.
The stock markets are affected by practically anything, especially in India. Mr. Armstrong an authority of market says, "The wind that play upon stock exchanges are as varying and inconsistent as those that blow upon the ocean are. They are frequently just as disturbing". Basically two sets of factors affect the stock exchanges, one is known as fundamental factor and other is technical factor. The fundamental factor are related to the industry and are economic and financial in nature. The technical factor are related to techniques of stock evaluation methods.
The governing body of a recognised stock exchange has wide powers and is the decision making body of the exchange. It has the power, subject to government approval, to make, amend and suspend the operation of the rules, bylaws and regulations of the exchanges. It also has complete jurisdiction over all members and in practice, its power of management and control is almost absolute. The governing body has the power has the power to admit and expel members, to warn, censure, fine and suspend members,
>PRIMARY MARKET
The primary market is a place for the fresh issue of securities. Corporates, banks, FIIs and government can issue new securities and raise fund for investment purpose. 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 an initial 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.
Features of primary markets are:
* This is the market for new long term capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called the new issue market (NIM).
* In a primary issue, the securities are issued by the company directly to investors.
* The company receives the money and issues new security certificates to the investors.
* Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business.
* The primary market performs the crucial function of facilitating capital formation in the economy.
* The new issue market does not include certain other sources of new long term external finance, such as loans from financial institutions. Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known as "going public."
* The financial assests sold can only be redeemed by the original holder.
Methods of issuing securities in the primary market are:
Features of primary markets are:
* This is the market for new long term capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called the new issue market (NIM).
* In a primary issue, the securities are issued by the company directly to investors.
* The company receives the money and issues new security certificates to the investors.
* Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business.
* The primary market performs the crucial function of facilitating capital formation in the economy.
* The new issue market does not include certain other sources of new long term external finance, such as loans from financial institutions. Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known as "going public."
* The financial assests sold can only be redeemed by the original holder.
Methods of issuing securities in the primary market are:
- Initial public offering;
- Rights issue (for existing companies);
- Preferential issue.
>SECONDARY MARKET
The transactions involving the securities issued in the primary market take place in the secondary market. Thus secondary market deals in securities previously issued in the primary market and thereby provide liquidity to the investors. Investors can either buy securities previously issued or sell securities held by them in the secondary market on a continuous basis. Due to this, the volumes of transactions taking place in the secondary market are far greater than those taking place in the primary market. Except for the capital market, the other markets present in the financial system either do not have a secondary market or either or their operations in the same are negligible. The secondary market transactions of the capital markets at the stock exchanges. All securities that are issued in primary market will have to be listed on the stock exchanges to enable trading activity.
The secondary market helps in undertaking ‘Maturity Intermediation’, by bringing together savers and users with conflicting maturity targets. 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
The secondary market helps in undertaking ‘Maturity Intermediation’, by bringing together savers and users with conflicting maturity targets. 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
July 20, 2009
>LIST OF 200 BSE INDEX
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