Role of Share Market in Indian Economy

8/6/2019 Role of Share Market in Indian Economy

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ROLE OF SHARE MARKET IN INDIAN

ECONOMY



Introduction

� Indian Stock Markets are one of the oldest in Asia. Its history dates back tonearly 200 years ago. The earliest records of security dealings in India are

meagre and obscure. The East India Company was the dominant institutionin those days and business in its loan securities used to be transactedtowards the close of the eighteenth century.

The two major stock exchanges in India are:-

� National Stock Exchange (NSE)

� Bombay Stock Exchange (BSE).The National Stock Exchange (NSE) is India's leading stock exchange

covering various cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screen-basedtrading system with national reach. The Exchange has brought aboutunparalleled transparency, speed & efficiency, safety and market integrity.

It has set up facilities that serve as a model for the securities industry interms of s stems, ractices and rocedures.



National Stock Exchange (NSE)

Trading at NSE can be classified under two broad categories:

� Wholesale debt market

� Capital market

� Wholesale debt market operations are similar to money market operations - institutions and

corporate bodies enter into high value transactions in financial instruments such as

government securities, treasury bills, public sector unit bonds, commercial paper, certificate

of deposit, etc.

� Capital market: A market where debt or equity securities are traded



Bombay Stock Exchange

The Bombay Stock Exchange is one of the oldest stock exchanges in Asia. It was established as "The

Native Share & Stock Brokers Association" in 1875. It is the first stock exchange in the country

to obtain permanent recognition in 1956 from the Government of India under the Securities

Contracts (Regulation) Act, 1956. The Exchange's pivotal and pre-eminent role in the developmentof the Indian capital market is widely recognized and its index, SENSEX , is tracked worldwide.

SENSEX

The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market. SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. First

compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sampleof large, liquid and representative companies. The base year of SENSEX is 1978-79 and the

base value is 100. The index is widely reported in both domestic and international marketsthrough print as well as electronic media. Due to is wide acceptance amongst the Indianinvestors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldestindex in the country, it provides the time series data over a fairly long period of time. Small

wonder, the SENSEX has over the years become one of the most prominent brands in the

country.



THE REGULATORY FRAMEWORK OFTHE CAPITAL MARKET � 1. R eserve Bank of India: The RBI was set up in

1935 and is the central bank of India. It regulates thefinancial and banking system. It formulatesmonetary policies and prescribes exchange controlnorms.

� 2. The Securities Exchange Board of India:The Government of India constituted SEBIon April 12, 1988, as a non-statutory body topromote orderly and healthy development of thesecurities market and to provide investor protection



� The Capital Market is governed by:

� Securities Contract (Regulation) Act, 1956� Securities Contract (Regulation) Rules, 1957

� SEBI Act, 1992

� Companies Act 1956

� SEBI (Stock Brokers and Sub Brokers) Rules,1992

� Exchange Bye-Laws Rules & Regulations



OBJECTIVES OF THE STUDY

� To analyze the Indian stock market.� To know the impact of FIIs on Indian stock

market.



R esearch Design:

� The research design is a pattern or an outline of a research project . It is a statement only theessential of a study those provide the basicguidelines for the detail of the project. Thepresent study being conducted follows adescriptive research design has the data would

be responses from a simple containing g a largenumbers of sources .It is a cross section of thesituation design of the descriptive studiesincluding the nature and the analytical method.



Data Collection

� After the research problem has been defied and the research design has been chalked out,the task of date collection begins. Data can be collectedfrom other primary or secondary sources.The main source of obtaining

necessary data for the study was Secondary Data. This study is empirical innature and hence secondary data is used to conduct the research. The data was collected from the Internet by exploring the Secondary sourcesavailable on websites. Secondary Data: The secondary data constitutes of daily FII flows data which was collected from Money Control and Equity Master, the daily returns of SENSEX and NIFTY from BSE and NSE websites respectively. The trends in FII flow from the RBIwebsite andinformation on FII from SEBI.

� Magazines and Bulletins: - NSE News Bulletins etc.� INTERNET: -� www.sebi.gov.in� wwwnse.co.in� www.moneycontrol.com

�



TRADING WITH STOCK MARKET

� 3 photographs ( signed across)� Photo Identification Proof - any of the following - Voter ID/Driving

License/Passport.� Address Proof any of the following - Voter ID/Driving License/

Passport/ Bank statement� or pass book sealed and attestation by bank official/ BSNL landline

bill.� A crossed Cheque favouring ³India Infoline Ltd´. Of the required

amount. The amount

� for Demat as well as trading will be Rs.� Copy of PAN Card is mandatory.� Registration Kit� CDSL Demat Kit� Bank and address proof declaration.� PAN name discrepancy form.



Techniques and Instruments f or Trading

The various techniques that are available in the

hands of a client are:-� 1. Delivery

� 2. Intraday

� 3. Future

� 4. Forwards� 5. Options

� 6. swaps



Depositories In India

There are only two depositories in India ±� The National Securities Depository Ltd (NSDL)

and the� Central Depository Services Ltd (CDSL).Types of Investors� Institutional Investors- MFs / FI / FIIs / Banks� Retail Investors� Arbitrageurs / Speculators� Hedgers� Day traders/Jobbers



Investment

� Essentials of investment refer to why investment, or the needfor investment, is required. The investment strategy is a plan,

which is created to guide an investor to choose the mostappropriate investment portfolio that will help him achievehis financial goals within a particular period of time.

Investment strategies can be broadly categorized into thefollowing types:

�A

ctive strategies: One of the principal active strategies ismarket timing (an investor is able to move into the market when it is on the low and sell the stocks when the market is onthe high), which is applied for maximizing yields.

� · Passive strategies: Frequently implemented for reducingtransaction costs.

�



INVESTMENT PR OCESS



COMPANY STRUCTURE



PR ODUCT& SER VICES

� Equity

� Commodities� Insurance

� A sset Management

� Stock SMS Services

� News Letters



COMPETITORS

Top 10 broking firms

� ICICI direct.com� India Infoline� Kotak Securities Ltd.� India Bulls� Share Khan

� Motilal Oswal� Angel Broking� Reliance Money � HDFC Securities� SMC Global



COMPETITORS



SWOT ANALYSIS



Bussiness review



Equity



Industry Update



Mutual Funds



FIIS



CONCLUSION

� Share market plays the major role in Indian economy as we can see that theshare market has provided a platform for the growth and development of various industries by helping them to raise capital for expansion through

selling shares to the investing public , secondly it also helps in facilitatingcompanies growth as companies view acquisitions as an opportunity toexpand product line, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary businessassets. A takeover bid or a merger agreement through the stock markets oneof the simplest and most common ways for a company to grow by acquisition or fusion.

� It brings the corporate governance into the picture: - by having a wide and

varied scope of owners, companies generally tend to improve on theirmanagement standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporationsimposed by public stock exchanges and the government. Consequently, it isalleged that public companies tend to have better management records thanprivately held companies,

Documents

Role of Share Market in Indian Economy