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    Basics of Stock Market

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    Nitesh Panch
    The document provides an overview of stock markets and the Bombay Stock Exchange. It discusses that a stock is a share that represents partial ownership in a company. Companies issue stock to raise capital from the public. There are different types of stocks like defensive, cyclical, discount and growth stocks. Stock exchanges allow for trading of these stocks and help companies raise capital, mobilize savings, and facilitate growth. The key Indian stock exchange discussed is the Bombay Stock Exchange, which is the oldest in Asia and facilitates trading of over 5,000 companies.

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    Basics of Stock Market

    Uploaded by

    Nitesh Panch
    151 views23 pages
    The document provides an overview of stock markets and the Bombay Stock Exchange. It discusses that a stock is a share that represents partial ownership in a company. Companies issue stock to raise capital from the public. There are different types of stocks like defensive, cyclical, discount and growth stocks. Stock exchanges allow for trading of these stocks and help companies raise capital, mobilize savings, and facilitate growth. The key Indian stock exchange discussed is the Bombay Stock Exchange, which is the oldest in Asia and facilitates trading of over 5,000 companies.

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    13486221 Basics of Stock Market

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    The document provides an overview of stock markets and the Bombay Stock Exchange. It discusses that a stock is a share that represents partial ownership in a company. Companies issue stock to raise capital from the public. There are different types of stocks like defensive, cyclical, discount and growth stocks. Stock exchanges allow for trading of these stocks and help companies raise capital, mobilize savings, and facilitate growth. The key Indian stock exchange discussed is the Bombay Stock Exchange, which is the oldest in Asia and facilitates trading of over 5,000 companies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    151 views23 pages

    Basics of Stock Market

    Uploaded by

    Nitesh Panch
    The document provides an overview of stock markets and the Bombay Stock Exchange. It discusses that a stock is a share that represents partial ownership in a company. Companies issue stock to raise capital from the public. There are different types of stocks like defensive, cyclical, discount and growth stocks. Stock exchanges allow for trading of these stocks and help companies raise capital, mobilize savings, and facilitate growth. The key Indian stock exchange discussed is the Bombay Stock Exchange, which is the oldest in Asia and facilitates trading of over 5,000 companies.

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    At a glance
    Powered by AI
    Some of the key takeaways from the document are that it discusses the basics of the stock market such as different types of shares, how companies raise capital through shares, stock exchanges, and how stock prices are represented.

    The document discusses four main types of shares - defensive shares, cyclical shares, discount shares, and growth shares. Defensive shares are of stabilized mature companies, cyclical shares are of companies engaged in trade cycles, discount shares have a market price lower than par or book value, and growth shares are of rapidly growing companies.

    The document explains that companies register for an authorized capital and divide it into shares/units. The shares issued for sale are the issued capital, and the shares actually sold are the paid-up capital. An example is provided to illustrate authorized, issued, and paid-up capital amounts.

    A,B,C,D OF STOCK MARKET

    Presented by Mr. Nilesh Karhade


    1st Year MBA++ Dept. of Management Sciences University of PUNE Year 2008-09

    Agenda
    The Stock Market is a very broad term which involves trading of variety of entities. This presentation provides basics of some of the terms & understanding of stock market at macro level. In this we will focus on only shares in BSE Introduction to stock

    Types of Share
    About Stock Market Types of Market Major Stock Exchanges The role of Stock Exchanges

    Bombay Stock Exchange

    Introduction to Stock
    A stock is a small share that represents a partial ownership of a company.

    Stocks are issued by companies in order to raise capital.

    Stock is also referred to as equity, & it is limited to particular number of shares.

    Types of Share
    Defensive Shares These are the shares of stabilized & mature companies. Over the years these companies have standard practices for dividend payments. Cyclical Shares These are the shares of companies engaged in trade cycle. During boom they do extremely well & during recessionary phase, they hit the bottom. Discount Shares These are the shares whose market price is lower than the par value or book value. Growth Shares These are the shares of those companies whose assets, sales turnover & profits are growing rapidly.

    How capital is raised through shares/stocks?

    Issued Capital

    Reserved Capital

    1. Registration for Authorized Capital.


    Paid up capital

    2. Amount divided into number of small units/shares. 3. The units which are issued for sale out of authorized capital are called Issued Capital or Initial Public Offering.

    How capital is raised through shares?

    Issued Capital

    Reserved Capital

    Paid up capital

    4. Out of Issued Capital, units which are actually sold are called Paid-up Capital.
    5. Shareholders

    How capital is raised through shares?

    Issued Capital

    Reserved Capital

    Paid up capital

    Example
    Authorized Capital Rs. 1 Crore Issued Capital Rs. 50 Lakhs

    Paid-up Capital Rs. 35 Lakhs

    About Stock Market


    Stock market is a term used to describe the physical location where the buying and selling of stocks take place. The correct term to be used in pertaining to the physical location for trading stocks is stock exchange. The Stock market in India consists of about approx. twenty two stock exchanges. The stock exchanges constitute a market where securities issued by the Central & State Govt., Public bodies & Joint Stock companies are traded.

    Types of Market
    Primary Market In this new issues of equity & debt are arranged either publicly or privately. Secondary Market The market where existing securities are traded. Future Market It is a market of contracts where goods are bought & sold at specified prices & times. Options Market It is similar to future market i.e. it is a contract that gives the right, & not the obligation, to trade a stock at a certain price before the specified date.

    What is Bulls & Bears Market?

    Bulls Market - Bull markets occur when a particular nation experiences high economic production, low unemployment level, and low inflation rates.

    What is Bulls & Bears Market?

    Bears Market It follow the down trends in the economy. Such indicators of economic downfall are increased unemployment and inflation. These causes the fall of stock prices.

    Major Stock Exchanges


    Market Value Region Stock Exchange (trillions of US dollars) 0.94 4.39 1.4 2.29 20.7 1.453 1.61 2.97 1.26 1.46 3.02 0.741 4.63 2.12 4.21 1.83 Total Share Turnover (trillions of US dollars) 0.349 12.4 0.476 1.36 28.7 1.003 0.263 1.7 1.66 0.564 3.56 1.86 5.45 3.64 9.14 2.49 Africa Americas Americas Americas Americas/Europe Asia-Pacific South Asia Asia-Pacific Asia-Pacific South Asia Asia-Pacific Asia-Pacific Asia-Pacific Europe Europe Europe JSE Securities Exchange NASDAQ So Paulo Stock Exchange Toronto Stock Exchange NYSE Euronext Australian Securities Exchange Bombay Stock Exchange Hong Kong Stock Exchange Korea Exchange National Stock Exchange of India Shanghai Stock Exchange Shenzhen Stock Exchange Tokyo Stock Exchange Frankfurt Stock Exchange (Deutsche Brse) London Stock Exchange Madrid Stock Exchange (Bolsas y Mercados Espaoles)

    Europe
    Europe Europe Europe

    Milan Stock Exchange (Borsa Italiana)


    Moscow Interbank Currency Exchange (MICEX) Nordic Stock Exchange Group OMX1 Swiss Exchange

    1.13
    0.9652 1.38 1.33

    1.98
    0.4882 1.6 1.58

    Ref. www.wikipedia.org

    The Role of Stock Exchanges


    Raising Capital for Business It facilitates companies to raise capital through selling of shares to the investing public. Mobilizing savings for investment When people invest in shares it leads to most rational allocation (agriculture, commerce, industry), as otherwise it remains idle in deposits with banks.

    Bombay Stock Exchange

    Frankfurt Stock Exchange

    Hong Kong Stock Exchange

    London Stock Exchange

    The Role of Stock Exchanges


    Facilitating company growth Companies views acquisition as an opportunity to expand their horizon. Stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion.

    Creating investment opportunities for small investors It enables small investor to invest in shares as per their affordability.

    Madrid Stock Exchange

    Mexican Stock Exchange

    Osaka Securities Exchange

    Philippine Stock Exchange

    The Role of Stock Exchanges


    Government capital-raising for development projects It may decide to borrow money for several projects (sewage & water treatment, housing) by selling securities known as bonds. Barometer of the economy - Movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.

    Shanghai Stock Exchange

    SWX Swiss Exchange

    Tokyo Stock Exchange

    Toronto Stock Exchange

    Bombay Stock Exchange


    Established as "The Native Share & Stock Brokers' Association" in 1875 Oldest stock exchange in Asia. Today, BSE is the world's number 1 exchange in terms of the number of listed companies & worlds 5th in transaction numbers.

    BSE has two of world's best exchanges, Deutsche Brse and Singapore Exchange, as its strategic partners.

    Bombay Stock Exchange


    The BSE Index, SENSEX, is India's first stock market index that enjoys an iconic stature , and is tracked worldwide.

    SENSEX
    BSE Sensex is a value-weighted index composed of 30 stocks. It consists of the 30 largest and most actively traded stocks, representative of various sectors.
    SENSEX 24 Sep 08 / 16:45

    SENSEX is calculated using the "Free-float Market Capitalization" methodology The base period of SENSEX is 1978-79 and the base value is 100 index points.
    SENSEX is calculated every 15 seconds.

    How Stocks are priced?


    Latest Change symbol price BCE BGM IBM MSFT 31.15 17.06 79.82 24.67 net -0.5 -0.3 -0.3 -0.3 % -1.5 -1.6 -0.4 -1.2 time 16:57 15:54 16:01 16:00 52 Weeks high 31.75 17.3 80.68 25.05 low 31.1 17 79.6 24.7 volume 3,643,000 207,400 4,999,200 73,696,700 high 33 26.9 99.1 27.9 low 27.2 17.1 71.9 23.8

    Stock Quote Table

    First Column indicates abbreviation of name of company.

    Latest Price indicates current price or closing price of the day (if in newspaper)
    Change (net) is difference between the previous day closing price & current stock quote.

    How Stocks are priced?


    Latest Change symbol price BCE BGM IBM MSFT 31.15 17.06 79.82 24.67 net -0.5 -0.3 -0.3 -0.3 % -1.5 -1.6 -0.4 -1.2 time 16:57 15:54 16:01 16:00 52 Weeks high 31.75 17.3 80.68 25.05 low 31.1 17 79.6 24.7 volume 3,643,000 207,400 4,999,200 73,696,700 high 33 26.9 99.1 27.9 low 27.2 17.1 71.9 23.8

    Stock Quote Table

    High indicates the highest price while low indicates lowest price of the stock sold. Volume describes the no. of shares traded for that day. The 52- week high & low shows the highest & lowest prices in the previous year.

    How Stocks are priced?

    PE Price to Earning ratio. Price per share divided by earning per share.

    References
    1. Stock market in India by D. R. Veena 2. Investment management by Dr. Mittal & Dr. Agarwal 3. The working of stock exchanges in India by H.R. Machiraju 4. The investment game how to win by Prasanna Chandra

    5. Managing Investment by Prasanna Chandra


    6. Managerial Economics by Dr. Mukund Mahajan 7. www.bseindia.com 8. www.stockmarketbasics.com 9. www.wikipedia.org

    10. www.sharekhan.com

    Thank You!!

    Questions??

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