Securities Market

Securities Market

2 ► The

securities market is the market for equity debt and derivatives ► Except the derivatives market, each of the above markets has two components ► Primary Market ► Secondary Market ► New issues of securities take place in the primary market like IPO and rights issue

3 ► In

the secondary market, transfer of securities take place. ► There are 4 ways to raise equity capital in the primary market :► 1.Public Issue ► 2. Rights issue ► 3.Private Placement ► 4.Preferential allotment

4 ► Terms

associated with Securities Markets ► 1. Regulators ► 2.Stock Exchanges ► 3. Listed Securities ► 4.Depositories ► 5.Brokers ► 6.Foreign Institutional Investors ► 7.Merchant Bankers ► 8.Primary dealers ► 9.Mutual Funds

5 ► ► ► ► ► ► ► ► ► ► ► ►

9.Custodians 10.Share Transfer Agent 11. Underwriters 12 Bankers to an issue 13. Registrars to an issue 14. Lead Managers to an issue 15.Debenture Trustees 16 Venture Capital Funds 17 Credit rating in the case of debt securities 18. Book Building 19 Employees stock option scheme 20 StockInvest

6 ► Stock

Market Quotations and Stock Market Indices ► This information is available in the daily newspapers as well as Economic Times and Financial Express ► Individual Stock Quotations ► On a daily basis, two quotes are given ► 1. The BSE Quotation ► 2. The NSE Quotation in italics

7 Co(Prev CL)Open High Low Close (vol val.(Rs’000, Trades)

Bajaj Auto (932.65) 937, 948,931,932.85 [46436,43591.29,1384]

(932.80),940,949,931,933.20 [138630,130216.84,4404

P/E

Market 52 week H/L Capitaliza tion

12.7

(9438.6)

1200/692)

12.7

(9438.6)

1200/692

9 ► Market

Capitalization is the product of the share price and the number of shares outstanding ► Important abbreviations ► Con convertible ► Xd ex dividend ► Cd cum dividend ► Xr excluding right ► Sl small lot

10 ► Stock

Market Indices ► The general movement of the market is measured by indices representing the entire market or segments thereof ► Price Weighted Index ; An index reflecting the sum of the prices of the sample shares during a period with reference to a base year. The price weighted index assumes that the investor buys one share of each stock included in the index.

11 ► Equal

Weighted Index ► An index reflecting the simple arithmetic average of the price relatives of sample shares in a certain period with reference to a base year. An equal weighted index assumes that an investor invests an equal amount of money in each stock included in the index.

12 ► Value

weighted index ► An index reflecting the aggregate market capitalization of the sample shares during a certain period in relation to a base year. ► A value weighted index assumes that the investor allocates money across various stocks included in the index in such a way that the weights assigned to the various stocks are proportional to their market capitalization.