PROJECT REPORT ON CAPITAL MARKET

BY_ NezamuddinMBA(IC) 3rd YEARROLL NO. 629

‘LUDHIANA STOCK EXCHANGE’About company and it’s objectives

The Ludhiana Stock Exchange Limited was established in 1981, by S.P. Oswal of Vardhman Group and B.M. Munjal of Hero Group, leading industrial luminaries, to fulfill a vital need of having a Stock Exchange in the region of Punjab Himachal Pradesh Jammu & Kashmir and Union territory of Chandigarh. The stock Exchange has played an important role in channelising savings into capital for the various industrial and commercial units of the state of Punjab and other parts of the company. In the era of Screen based trading introduced by national Stock exchange and Bombay stock Exchange, entering into the filed of Commodities trading or imparting education to the Public at large by way of starting Certificate Programmes in Capital Market.

OBJECTIVES OF THE COMPANY

The objective of the company is to enhance business and investment opportunities for the investors and members of lse at large, through innovative products by encompassing a variety of activities related to the capital market.

RESEARCH METHODOLOGY

Objectives of the research_To know:

Where the securities of a company are being resale

How the capital market works To study the performance of stock

exchanges in the Indian economy Regulator of the stock exchanges in India

FINANCIAL MARKETA financial market is a market in which people can trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural goods.Markets work by placing many interested buyers and sellers, including households, firms, and government agencies, in one "place", thus making it easier for them to find each other.

TYPES OF FINANCIAL MARKET

Capital market Money market

Types of financial market

MONEY MARKET CAPITAL MARKET

Deals with the short term securities

Maturity period is less than one year

RBI( Reserve Bank of India) is the controller of the money market

Instruments are: commercial paper, commercial bills, inter bank call money etc.

Deals with the long term securities

Maturity period is more than one year

SEBI(Security and Exchange Board of India) is known as the controller of the capital market

Instruments are: equity shares, preference shares, bonds, debentures etc.

CAPITAL MARKET

capital markets provide a wide range of products and services that are related to financial investments. Their primary purpose is to raise funds and channels investor’s money to areas where there is a need for investments. They played a vital role as intermediaries between the governments and the companies.

Objectives of the capital market

To bring transparency in dealing To bring market to international

standards Faster delivery of securities and funds To improve market efficiency

Instruments of capital markets

Equity shares Preference shares Debentures Bonds: same as debentures but maturity

period is more than 5 years

SEGMENTS OF THE CAPITAL MARKET

Basically, this market consists of two markets:1_ Primary market2_ Secondary market

PRIMARY MARKETThis market is the place where the investors meet the issuers directly. Here, the securities are issued first time. In primary market the price of the securities are fixed by the book building process, where the process is depend on the demand of the securities.

SECONDARY MARKET

In the secondary market the investors buy/ sell securities through stock exchanges, it deals with the already issued securities. This market provides the liquidity to the securities on the exchanges, and this activity commences subsequent to the original issues. A stock exchange is the single most important institution in the secondary market for providing a platform to the investors for buying and selling of securities through it’s members.

STOCK EXCHANGEStock exchange is the only media by which one investor can sale its securities to further parties or another parties. It provides the safety to the investors.

HOW AN INVESTOR GET INTO THE SECONDARY

MARKET

Participants in secondary market

Stock exchange Sub- brokers Investors Clearing corporations Trading members/clearing members

To start trading, the following are required

Trading a/c Demate a/c PAN (permanent a/c number) Unique client code

SETTLEMENT OF TRADING

Trade t+2 settlement failure to pay in

close out auction

TRANSACTION CYCLE

DECISION TO TRADE PLACING

ORDER

TRADE EXECUTIONCLEAR TRADE

FUNDS/SECURITIE

S

Securities listed on the stock exchange have the following advantages:

It provides a fair market place It enhances liquidity Their prices are determined fairly Full information is available of the

companies Rights of investors are protected

MEMBERS OF THE STOCK EXCHANGE

The securities contract regulations act of 1956 has provided uniform regulation for the admission of members in the stock exchanges.

Required qualifications are as follows:

Minimum age required of the member is 21 year

He should be Indian citizen he should not be convicted for fraud and

dishonesty He should not engaged in other business

connected with a company He should not be a defaulter of any other

stock exchange

CONCLUSION

Capital market is the heart of any economy through which the savings are channelized into effective long term investments. If there is any single factor that makes a huge impact in improving the GDP of a country, that is capital market.

FINDINGS OF THE RESEARCH

1. Stock exchanges are the backbone of the secondary market, because it is the only place where we can deal in stocks and securities and can earn profit. By this market, one can make resale of its securities.2. Every company brings IPO in the market where the shares are issued and further the holder of the shares wanted to sell its share then he must sell through the secondary market with the help of stock exchange.3. The stock exchanges are the brokers of NSE and BSE. Which are known as the oldest exchange of India.4. Ludhiana stock exchange has some departments which give the contribution in the settlement of the transactions and make the transaction clear. Those departments are as follows; clearing corporations, investor’s grievances solution departments.5. Stock exchanges only deal with long term securities having time duration of more than two years.6. Every party in the securities market should have the legal entrance certificate from SEBI. These exchanges are regulated by SEBI. This is known as the regulatory body of the stock exchanges in India.

RECOMMENDATION

1. The facilities provided by Ludhiana stock exchange were not sufficient so they should add more facilities to attract the investors as more as possible.2. The sitting facilities provided by organization were not good so they should provide best sitting facilities so that each member of the company interacts with the learners.3. They should provide separate classes for students from different classes and from different schools and colleges.4. In the organization the canteen facilities was worst so they should provide the good and hygienic mess and café facilities so that the employees and the investors does not feel bad there.5. The organization should enable the whole department WIFI services to make the building wireless, safe and clean.

Thank you