STOCK EXCHANGE

EASY WAY TO EARN MONEY,

EASY WAY TO LOOSE MONEY

Presented BY

Prof .Vishal Varma

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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

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”.

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

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.

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.

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

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.

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

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