SHARE MARKET
B.KRISHNAKUMARE
WHAT IS A STOCK?A stock is a
small share that represents a partial ownership of a company.
SHARE MARKET
The place where selling and buying takes place.
TO START A BUSINESS
Initial investment
From one personFrom more no. of
personsFrom one or two
persons
Proprietorship Partnership Limited company
WHY DOES THE COMPANY ISSUE A STOCK?
The reason is that at some point every company
needs to raise money. To do this, companies can
either borrow it from somebody or raise it by
selling part of the company, which is known as
issuing stock. A company can borrow by taking a
loan from a bank or by issuing bonds.
WHO WILL RUN THE COMPANY?
Being a shareholder of a public company does not mean you have a say in the day-to-day running of the business. Instead, one vote per share to elect the board of directors at annual meetings is the extent to which you have a say in the company.
INITIAL PUBLIC OFFERING
The first sale of a
stock, which is issued
by the private company
itself, is called the
initial public offering
(IPO).
IF YOU ARE UNABLE TO BUY A SHARE DIRECTLY FROM THE COMPANY
WHAT WILL YOU DO?
BOMBAY STOCK EXCHANGE(BSE)
Oldest and first stock exchange of India (1875)
First it was started under banyan tree opposite to town hall of Bombay over 22 brokers.
NATIONAL STOCK EXCHANGE(NSE)Leading stock
exchange of India (1994) covers 360 towns and cities in the country.
Established by 21 financial institutions & banks like IDBI, ICICI, LIC, SBI
OTHER EXCHANGES
London stock exchangeNewyork “ “Shanhai “ “Australia “ “ Tokyo “ ” Hong Kong “ “Toronto “ “NASDAQ
Calcutta stock exchangeCochin stock exchangeMulti commodity
exchangeDerivatives exchangeOTC exchangePune stock exchangeInterconnects exchange
A stock is represented by a stock certificate. This is a fancy piece of paper that is proof of your ownership.
DEMATERIALIZATION
• In today's computer age, you won't actually get to
see this document because your brokerage keeps
these records electronically, which is also known as
holding shares "in street name". This is done to
make the shares easier to trade. In the past, when a
person wanted to sell his or her shares, that person
physically took the certificates down to the
brokerage.
BROKERS
He is one acts as an intermediary on behalf of others. A broker in a stock exchange is a commission agent who transacts business in securities on behalf of non members.
TRADE
SPECULATION
The activity of
buying and selling
goods or shares in a
company in the hope
of making a profit but
with the risk of losing
money.
SPECULATOR
Bull
Bear
Stag
Lame duck
BULL MARKET
A situation at the stock exchange in which the prices of shares are rising and people known as bulls buy shares in order to make a profit by selling them later at a higher price.
BEAR MARKET
A situation at the stock exchange in which company share prices are falling rapidly. People who sell their shares, hoping to buy them back later at a lower price, are called bears.
HOW TO MEASURE THE VALUE OF A SHARE?
SENSEX
NIFTY
HOW TO READ A STOCK TABLE?
HOW TO CHOOSE STOCKS?
Read as much as you can.
Start with industries with which you are
familiar.Think of products you like or companies that
provide services you think are good or popular.Decide how much money you are willing to risk.Learn how to identify stocks with criteria that
may indicate potential for future price appreciation.
Determine a method of knowing when to be buying a stock and when to avoid adding new money to your investments.
Don't place orders overnight.Do not impulse buying stocks.Don't sell when a stock falls unless you're sure
it's only going to drop further.
WARNINGS