CAPITAL MARKET final presentation

8/7/2019 CAPITAL MARKET final presentation

http://slidepdf.com/reader/full/capital-market-final-presentation 1/19

CAPITAL MARKET CAPITAL MARKET

Presented byPresented by--VivekVivek KothariKothari

Yaman TiwariYaman Tiwari



INTRODUCTION INTRODUCTION ´The´The capitalcapital marketmarket (securities(securities markets)markets) isis thethe marketmarketfor for securities,securities, wherewhere companiescompanies andand thethe governmentgovernment cancanraiseraise longlong--termterm fundsfunds.. TheThe capitalcapital marketmarket includesincludes thethestockstock marketmarket andand thethe bondbond marketµmarketµ..

InIn other other words,words,´A´A marketmarket for for mediummedium toto longlong--termterm financialfinancial

instrumentsinstruments.. FinancialFinancial instrumentsinstruments tradedtraded inin thethecapitalcapital marketmarket includeinclude shares,shares, andand bondsbonds issuedissued byby thetheGovernment,Government, corporatecorporate borrowersborrowers andand financialfinancialinstitutionsinstitutions..µµ







Evolution of Indian Capital Market Evolution of Indian Capital Market

�� Indian Stock Markets are one of the oldest in Asia.Indian Stock Markets are one of the oldest in Asia.Its history dates back to nearly 200 yearsIts history dates back to nearly 200 years ago.ago.

�� By 1830's business on corporate stocks and sharesBy 1830's business on corporate stocks and sharesin Bank and Cotton presses took place in Bombay.in Bank and Cotton presses took place in Bombay.

�� The 1850's witnessed a rapid development of The 1850's witnessed a rapid development of commercial enterprise and brokeragecommercial enterprise and brokerage business.business.

�� In 1860In 1860--6161 --, the 'Share Mania' in India, the 'Share Mania' in India begun.begun.



Evolution of Indian Capital Market

�� 18741874 ²² Dalal streetDalal street

�� 19401940 ²² Uttar Pradesh stock exchange Ltd.Uttar Pradesh stock exchange Ltd.

�� 19441944 -- Hyderabad Stock Exchange L Hyderabad Stock Exchange Ltdtd

�� 1947 1947 -- Delhi StockDelhi Stock ExchangeExchange AssociationAssociation Ltd.Ltd.

�� 19631963 -- Bangalore Stock ExchangeBangalore Stock Exchange Ltd.Ltd.

�� 19921992-- National stock exchange Ltd.National stock exchange Ltd.



P Post 1991..ost 1991..

�� AA major major developmentdevelopment inin our our countrycountry postpost19911991 hashas beenbeen liberalizationliberalization of of thethefinancialfinancial sector,sector, especiallyespecially thatthat of of capitalcapital

marketsmarkets..

�� Our Our countrycountry todaytoday hashas oneone of of thethe mostmost

prominentprominent andand followedfollowed stockstock exchangesexchanges ininthethe worldworld.. Further,Further, IndiaIndia hashas alsoalso beenbeenconsistentlyconsistently gaininggaining prominenceprominence ininvariousvarious internationalinternational forumsforums..



R ole of apital arkets R ole of apital arkets

R aising of long term CapitalR aising of long term CapitalMobilization of Savings & acceleration of Mobilization of Savings & acceleration of

Capital FormationCapital FormationPromotion of Industrial GrowthPromotion of Industrial GrowthR eady & Continuous MarketsR eady & Continuous MarketsProper Channelization of FundsProper Channelization of Funds Provision of a variety of ServicesProvision of a variety of Services



F unctions of a capital market F unctions of a capital market > Enable> Enable qq uickuick valuation of valuation of

financial instrumentsfinancial instruments

> Provide insurance against market> Provide insurance against marketrisk or price riskrisk or price risk

>

Enable wider participation>

Enable wider participation

> Provide operational efficiency through> Provide operational efficiency through



F unctions of a capital market continued..F unctions of a capital market continued..

> Provide operational efficiency> Provide operational efficiencythroughthrough

-- simplified transaction proceduresimplified transaction procedure-- lowering settlement timingslowering settlement timings-- lowering transaction costslowering transaction costs



F actors contributing F actors contributing to to growth growth of of

Indian Indian Capital Market Capital Market Establishment of Development banks & IndustrialEstablishment of Development banks & Industrial

financial institution.financial institution.

Legislative measuresLegislative measuresGrowing public confidenceGrowing public confidence

Setting up of SEBISetting up of SEBI

Mutual FundsMutual Funds

Credit R ating AgenciesCredit R ating Agencies

IncreasingIncreasing awareness of investment opportunitiesawareness of investment opportunities

Growth of underwriting businessGrowth of underwriting business



I n d i a n C a p i t a l m a r k e t s In d i a n C a p i t a l m a r k e t s --

Ch r o n o l o g y Ch r o n o l o g y 19941994--Equity Trading commences onEquity Trading commences on

NSENSE

1995 1995--A

l l Trading goes Elec tronicA

l l Trading goes Elec tronic19961996-- Deposi tory comes in to ex istenceDeposi tory comes in to ex istence

19991999-- F I Is Part ic ipat ionFI Is Part ic ipat ion-- Global isat ionGlobal isat ion

2 0002 000-- over 80% trades inover 80% trades in DematDemat formform

2 0012 001--Major Stocks move to R o l l ingMajor Stocks move to R o l l ingSettSett

2 0032 003-- T+2 sett l ements in a l l s tocksT+2 sett l ements in a l l s tocks

2 0032 003 -- Demutual isat ionDemutual isat ion of Exchangesof Exchanges



Cap i t a l Ma r k e t s Cap i t a l Ma r k e t s ² ² R e f o r m s Re f o r m s

Each scam has brought in reformsEach scam has brought in reforms ²² 199 2 /199 2 /2 0012 001

Screen based Trading through NSEScreen based Trading through NSECapital ade q uacy norms stipulatedCapital ade q uacy norms stipulatedDematerialization of SharesDematerialization of Shares -- risks of risks of

fraudulent paper eliminatedfraudulent paper eliminatedEntry of Foreign InvestorsEntry of Foreign InvestorsInvestor awareness programsInvestor awareness programs



Reforms / Initiatives post 2000 Reforms / Initiatives post 2000

CorporatisationCorporatisation of exchangeof exchangemembershipsmemberships

B

anning of B

anning of B

adlaB

adla /A

L B

M/A

L B

MIntroduction of Derivative productsIntroduction of Derivative products-- Index / Stock Futures & OptionsIndex / Stock Futures & Options

STPSTP -- electronic contractselectronic contracts

Margin LendingMargin Lending

Securities LendingSecurities Lending



MARKET STRUCTURE (JULY 31 , 2007)

2 2 Stock Exchanges2 2 Stock Exchanges

O ver 10 ,000 Elec t ronic Terminals a t ove r O ver 10 ,000 Elec t ronic Terminals a t ove r 400 locat ions a l l over India .400 l ocat ions a l l over India .

9108 StockB

rokers and 14582 Sub9108 StockB

rokers and 14582 Subbrokersbrokers

9644 Lis t ed Companies9644 Lis t ed Companies



major financial institution in capital

markets:-The National stock exchange .(NSE)The National stock exchange .(NSE)

The Bombay stock exchange. (BSE).The Bombay stock exchange. (BSE).



�� News about company.News about company.

�� News about the country.News about the country.

�� Exchange rate regime.Exchange rate regime.

�� Depends on demand andDepends on demand andsupply for that stock.supply for that stock.

WH Y STOCK PRICE RISES?



DRA WB ACKS OF INDIAN STOCK MARKET

�� Unethical practices.Unethical practices.

�� Big irrational greed, excessiveBig irrational greed, excessivespeculation.speculation.

�� Lack of protection to interests of Lack of protection to interests of the genuine and smallthe genuine and small

investors .investors .

�� Organizational imbalance inOrganizational imbalance inthe growth of the stock market.the growth of the stock market.



TO ALL ANY QUESTIONS ANDANY QUESTIONS AND

SUGGETIONS...? ?SUGGETIONS...? ?

Documents

CAPITAL MARKET final presentation