8/4/2019 ISPE Assg Sanjoy Sarkar 34310

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Indian Social Political and Economic Environments Assignment

Sanjoy Sarkar Sec: D Roll: 34310

Advantages of Stock exchanges from the point view of

1. Companies 2. Investors 3. Society

Stock exchange is the term used commonly for the secondary market, which provides

a place where different types of existing securities such as shares, debentures andbonds can be bought and sold on a regular basis.

The main characteristics of a stock exchange are:

1. It is an organized market.

2. It provides a place where existing and approved securities can be bought and sold

easily.

3. In a stock exchange, transactions take place between its members or their

authorized agents.

4. Its regulated by the rules and by laws of the concerned stock exchange.5. It makes complete information available to public for better transparency and

clarity

The advantages of stock exchanges based upon the point of view of companies,

investors and the society as a whole are:

1. Companies They provide a platform to the company to raise capital through selling shares

IPO (Initial Public Offering) or FPO (Follow on Public Offering).

Companies listed on the market have better goodwill and credit standing thanthose who are not listed.

As a result of enhanced goodwill and higher demand, the value of theirsecurities increases and their bargaining power is enhanced.

Companies have the convenience to decide upon the size, price and timing ofthe issue of their shares.

Helps organizations to grow through mergers and acquisitions (M&A). Asset value of the company is determined by the share market. Realization price of shares of company through market forces.2. Investors: Helps people in deferring their current consumption and hence invest in shares,

bonds, commodities for greater future benefits.

Investors enjoy the convenience of buying and selling the securities at will andat an opportune time.

The investors are free from any anxiety about the delivery and paymentproblems because of its transparency.

8/4/2019 ISPE Assg Sanjoy Sarkar 34310

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Indian Social Political and Economic Environments Assignment

Sanjoy Sarkar Sec: D Roll: 34310

Regular information about prices of securities traded at the stock exchangeshelps investors in deciding on the timing of their purchase and sale.

Helps in risk mitigation to the investors. Easier for investors to raise loans from banks against their holdings in

securities traded at the stock exchange as banks prefer them as collateral on

account of their liquidity and convenient valuation.

3. Society Helps creating employment opportunities. Helps in increased capital formation in the country. Helps in generating money for the society in form of dividends and capital

gains. Helps in promotion and expansion of industrial activity, which in turn

contributes, to increase in the rate of industrial growth and per capita income.

The Stock exchanges facilitate realization of financial resources to moreprofitable and growing industrial units where investors can easily increase their

investment substantially. The volume of activity at the stock exchanges and the movement of share

prices reflect the changing economic health. As government securities are also traded at the stock exchanges, the

government borrowing is highly facilitated. The bonds issued by governments,

and PSU are found to be on offer quite frequently and are generally successful.

Subm it te d by:

Sanjoy Sar kar

Se c: D Ro ll : 34 310

MB A I (Marketing)