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STOCK EXCHANGE
EASY WAY TO EARN MONEY,
EASY WAY TO LOOSE MONEY
Presented BY
Prof .Vishal Varma
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HISTORY OF STOCK EXCHANGE
The stock exchange was established by “East Indiacompany” in 18th century .In India it was established in 1850 with 22 stockbrokers opposite to town hall Bombay .This stockexchange is known as oldest stock exchange of Asia.
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FEATURES OF STOCK EXCHANGE
It is an organized market
It is a securities market
It is an important constituent of capital
market i.e., market for long-term finance
It is a voluntary association of persons
desirous of dealing in securities.
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Stock exchange is a voluntary association, its
membership is not open to everybody
In a stock exchange, only the members can
deal in i.e., buy & sell securities
The dealings in a stock exchange are under
certain accepted code of conduct i.e., rules and
regulations
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Functions of Stock exchange1. Continuous market for securitiesThe Investors are able to invest in good securities and in case of any risk, it enables people to switch over from one security to another. So stock markets provides a ready and continuous opportunities for securities.
2. Evaluation of securitiesIt the stock exchange, the prices of securities clearly indicate the performance of the companies. It also clearly indicates the stability of companies. Thus, investors are in a better position to take stock of the position and invest according to their requirements.
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3. Mobilizes savingsThe savings of the public are mobilized through mutual funds, investments trusts and by various other securities. Even those who cannot afford to invest in huge amount of securities are provided opportunities by mutual funds and investment trusts.
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4. Stock exchange Protect investorsAs only genuine companies are listed and the activities of the stock exchange are controlled, the funds of the investors are very much protected.
5. Stock exchange helps Capital formationStock exchange plays an active role in the capital formation in the country. Companies are able to raise funds either by issuing more shares through rights shares or bonus shares. But when a company wants to go in for diversification, they can issue the shares and raise more funds. Thus, they are able to generate more capital and this promotes economic growth in the country.
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8. Liquidity in Stock Exchange
Institutions like banks can invest their idle funds in the
stock exchange and earn profit even within a short period.
When necessity arises , these securities can be immediately
sold for raising funds. Thus, it is the stock exchange which
provides opportunities for converting securities into cash
within a short notice.
9. Economic barometer
The most important function of a stock exchange is that it
acts as an economic indicator of conditions prevailing in
the country. A politically and economically strong
government will have an upward trend in the stock market.
Whereas an unstable government with heavy borrowings
from other countries will have a downward trend in the
stock market.
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11. Attracts foreign capital
Due to its dynamism,liberalization and higher return on
capital, the stock exchange is capable of attracting more
foreign funds.
12. Monetary and fiscal policies
The monetary policy and the fiscal policy of the
government have to be favorable to businessmen and
producers. If they are not so, then through the stock
exchange the government may indicate and accordingly
suitable steps can be taken.
13. Safety of Capital and Fair Dealing
The stock exchange transactions are made publicly under
well defined rules and regulations and bye-laws. This
factor ensures a great measure of safety and fair dealings to
the average investors.
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14. Regulation of Company management
The companies, which want to get their securities listed in
the stock exchange, should have to follow certain rules and
fulfill certain conditions. Thus stock exchanges safeguards
the interest of the investing public and also regulates
company management.
15. Barometer of Business Progress
Stock exchanges function as a barometer of the business.
Booms and depressions are reflected by the index of prices
of various securities maintained by the stock exchange. By
analyzing the ups and downs of the market quotations, the
causes for the changes in the business climate can be
ascertained.
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Help the investors to know the worth of their
holdings
Promote the habit of saving and investment
Help capital formation
Help companies and government to raise funds
from the investors
Provide central and convenient meeting
places for sellers and buyer of securities for
carrying transactions.
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Largest stock exchanges
IN THE WORLD IN INDIA
LONDON STOCK EXCHANGE
NEW YORK STOCK EXCHANGE
SHANHAI STOCK EXCHANGE
AUSTRALIA STOCK EXCHANGE
TOKYO STOCK EXCHANGE
HONG KONG STOCK EXCHANGE
TORONTO STOCK EXCHANGE
DEUTSCHE BORSE
BM&F BOVESPA
NASDAQ OMX STOCK EXCHANGE
NATIONAL STOCK EXCHANGE
BOMBAY STOCK EXCHANGE
CALCUTTA STOCK EXCHANGE
COCHIN STOCK EXCHANGE
MULTI COMMODITY
EXCHANGE
DERIVATIVES EXCHANGE
OTC EXCHANGE
PUNE STOCK EXCHANGE
INTERCONNECTS EXCHANGE
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LONDON STOCK EXCHANGEIt was the first stock exchange established by east India
company in 18th century in London. The top gainer of
LONDON STOCK EXCHANGE is “Blue chip shares”.
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BOMBAY STOCK EXCHANGE
It is oldest and first
stock exchange of India
established in the year
1875. First it was
started under baniyan
tree opposite to town
hall of Bombay over 22
stock brokers. The top
gainer in BSE is 100
companies in that GMR
infra is first
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NATIONAL STOCK
EXCHANGE OF INDIA(NSE
OR NSEI)
The NSE of India is the leading
stock exchange of India,
covering 370 cities and towns in
the
country. It was established
in1994 as a TAX company. It
was established by 21 leading
financial institutions and banks
like the
IDBI,ICICI,IFCI,LIC,SBI,etc.
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Features of NSEI
Nation wide coverage i.e., investors from all
over country
Ringless i.e., it has no ring or trading floor
Screen-based trading i.e., trading in this stock
exchange is done electronically.
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Transparency,i.e.,the use of computer screen for
trading makes the dealings in securities
transparent.
Professionalization in trading, i.e., it brings
professionalism in its functions
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OVER-THE-COUNTER EXCHANGE OF INDIA(OTCEI)
The OTCEI is a national,ringless and computerized stock exchange. It was established in october,1990.it started its operation in september,1992.
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Features of OTCEI
1. It is a nation-wide stock exchange. Its
operational areas cover entire India.
2. It is a ringless stock exchange. The trading
ring(i.e., trading place)commonly found in a
traditional stock exchange is not found in the
OTCEI.
3. It is a computerized stock exchange
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Advantages of OTCEI1. It helps the investors to have easy and direct
access to the stock exchange
2. It helps investors to get fair prices for their
securities
3. It provide safety to the investors
4. To provide computerized trading system
5. To provide investors a convenient,effcient and
transparent mode of investment