CAPITAL MARKETS

Investment is the commitment of money or capital to purchase financial instruments or other assets.
To gain profitable returns in the form of interest, income {dividend}, or appreciation of the value of the instrument.

It is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance no matter for households, firms, or governments.
An investment involves the choice by an individual or an organization such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of generating returns over a period of time.

Financial Instruments
Equity investments

An equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and firms in anticipation of income from dividends and capital gains, as the value of the stock rises. It may also refer to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup company. When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.

Mutual Funds

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks, bonds, short-term money market instruments, other mutual funds, other securities, and/or commodities such as precious metals). The mutual fund will have a fund manager that trades (buys and sells) the fund's investments in accordance with the fund's investment objective.

Bonds

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals. Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in the company (i.e., they are owners), whereas bondholders have a creditor stake in the company (i.e., they are lenders).

Deposits

A deposit account is a current account, savings account, or other type of bank account, at a banking institution that allows money to be deposited and withdrawn by the account holder. Banks pay the customer interest on the funds deposited.

CASH EQIVALENTS

Cash and cash equivalents are the most liquid assets found within the asset portion of a company's balance sheet.

Cash equivalents are assets that are readily convertible into cash, such as money market holdings, short-term government bonds or Treasury bills, marketable securities and commercial paper.

Non - Financial Instruments

Real estate

Real estate is a legal term that encompasses land along with improvements to the land, such as buildings & other site. Real estate investment involves the commitment of funds to property with an aim to generate income through rental or lease and to achieve capital appreciation. One can opt for real estate investment with an aim to rent the property out to a tenant. The owner (landlord) earns a continuous stream of rent from the tenant.

GOLD

Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or safe haven against any economic, political, social, or fiat currency crises .The gold market is also subject to speculation as other commodities are, especially through the use of futures contracts and derivatives. PRATHAM23@hotmail.com

AGE:

Equit y

Mutual Bonds Deposits Fund 5% 10% 10% 15% 5% 10% 10% 15% 15% 15% 17.5% 20%

Currency Real Estate 0% 2.5% 2.5% 5% 0% 2.5% 2.5% 7.5%

Gold

18-25 75% 25-40 60% 40-60 50% 60 30% AbovNote:

0% 0% 2.5% 7.5%

Figures are in %
0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 18-25

Stocks Mutual Funds Bonds Deposits Currency Real Estate Gold

25-40

40-60

60-above

1.2

0.8 Gold Real Estate Currency 0.6 Deposits Bonds Mutual Funds Stocks 0.4

0.2

0 18-25 25-40 40-60 60-above

Mutual Funds Stocks

18-25 25-40 40-60 60-above

18-25 25-40 40-60 60-above

Bonds

Deposits

18-25 25-40 40-60 60-above

CORPORATE DEBT MARKET

MARKET WHERE FIXED INCOME SECURITIES OF VARIOUS TYPES AND FEATURES ARE ISSUED AND TRADED IS CALLED DEBT MARKET.

FINANCIAL INSTRUMENTS
GOVERNMENT SECURITIES SUCH AS TREASURY BILLS, ZERO COUPON ETC. PUBLIC SECTOR BONDS:SUCH

BONDS ISSUED BY THE PUBLIC SECTOR ENTITIES LIKE GOVERNMENT AGENCY. INSTRUMENT ISSUED ARE PSU BONDS, DEBENTURES. ETC.

 PRIVATE SECTOR BONDS:

BONDS ISSUED BY PRIVATE SETOR ENTITIES SUCH AS COMPANIES, BANKS. FINANCIAL SECURITIES ISSUED ARE DEBENTURE BONDS,COMMERCIAL PAPER ETC. INVESTMENT IS FIXED INCOME SECURITIES IS PROFITABLE TO INVESTORS AND BANKS. ENSURE STEADY AND CONSTANT RETURN BY INTEREST AND REPAYMENT OF PRINCIPAL OF MATURITY OF THE INSTRUMENT.

FEATURES
FACILITATES MOBILIZATION OF RESOURCES AT A REASONABLE

COST.
PROVIDES GREAT FUNDING AVENUE TO THE PUBLIC AN PRIVATE SECTOR PROJECTS. FACILITATES THE EFFICIENT LIQUIDITY MANAGEMENT IN TUNE WITH THE OVERALL SHORT TERM AND LONG TERM OBJECTIVES OF ECONOMIC PLANNING.

PRICE IS DETERMINED IN THE MARKET BY OPERATION OF THE FORCES OF DEMAND AND SUPPLY YIELD.

 NEW INSTRUMENTS

ARE ISSUED IN THE PRIMARY MAKET. MARKET FOR BONDS AND AND SECURITIES BOUGHT AND SOLD IS CALLED SECONDARY MARKET. SECURITIES ALREADY ISSUED ARE TRADED IN THE MARKET.

 WHOLESALE DEBT MARKET COMPRISES OF INSTITUTIONS

AND AGENCY SUCH AS BANKS, RBI,PROVIDENT FUNDS ETC.

THE 2 TYPES OF TRANSACTIONS ARE EXECUTED IN A

WHOLESALE DEBT MARKET. IE. AN OUTRIGHT SALE OR PURCHASE AND REPO TRADE.
THE RETAIL DEBT COMPRISES INDIVIDUAL INVESTORS AND

OTHER LEGAL ENTITIES.

 DEBT INSTRUMENTS ARE EXPOSED TO DIFFERENT TYPES OF RISKS: DEFAULT OR CREDIT RISK: RISK OF INABILITY OF THE ISSUER TO MAKE

PROMPT PAYMENT OF THE INTEREST AND PRINCIPAL AMOUNT.

INTEREST RATE RISK: RISK EMERGING FROM AN ADVERSE CHANGE IN THE RATE OF INTEREST PREVALENT IN THE MARKET SO AS TO AFFECT THE YIELD ON THE EXISTING INSTRUMENT.

 PRICE RISK: RISK ARISING FROM THE POSSIBILITY OF NOT BEING ABLE TO RECEIVE THE EXPECTED MARKET PRICE

OF THE DEBT INSTRUMENT, DUE TO AN ADVERSE MOVEMENT IN PRICE.

COUNTER PARTY RISK: RISH WHICH ARISES FROM THE FAILURE OR THE INABILITY OF THE ISSUER TO DELIVER EITHER THE PROMISED SECURITY OR THE SALES PRICE

AT THE TIME OF SETTLEMENT.

ABOUT STOCK EXCHANGES

BY END OF MARCH 2001, THERE WERE 24 STOCK EXCHANGES IN NDIA.

20 WERE REGIONALS ONES WHILE THE OTHER 4 OPERATE AT NATIONAL LEVEL.

NSEIL, OTCEIL, ISE,BSE OPERATE AT NATIONAL LEVEL.

STOCK EXCHANGE TERMS

BULL
BULL IS A SPECULATOR ON

THE STOCK EXCHANGE WHO EXPECTS A RISE IN PRICE OF A CERTAIN SECURITY. HE BUYS THE SECURITY WITHOUT TAKING ACTUAL DELIVERY TO SELL IT IN THE FUTURE WHEN PRICE GOES UP IT IS CALLED TEJIWALA IT IS A MARKET IN WHICH THE PRICES ARE RISING AS PER THE EXPECTATION OF THE BULL SPECULATOR.

BEAR
IS A SPECULATOR ON THE STOCK EXCHANGE. HE EXPECTS THE FALL IN PRICE OF SECURITIES. IN ORDER TO TAKE BENEFIT OF THE FUTURE SITUATION, HE AGREES TO SLELL FOR DELIVERY ON THE FIXED DATE

SECURITIES WHICH ARE NOT IN POSSESSION.

BEFORE THE DELIVERY DATE,HE PURCHASES AT A LOWER RATE AND SEELS AT A HIGHER RATE TO EARN PROFITS. A BEAR IS CALLED MANDIWALAON BSC.

SPECULATION
SPECULATION IS AN ANTISOCIAL ACTIVITY UNDERTAKEN TO EARN PROFIT. SPECULATOR ESTIMATES A FUTURE POSSIBLE TREND IN THE STOCK EXCHANGE AND MAKES TRANSACTION IN THE PRESENT

PERIOD.
SPECULATION UPTO A LIMIT MAKES THE MARKET ACTIVE. IT NEEDS EFFECTIVE CONTROL FOR HEALTHY GROWTH OF SHARE AND PROTECTION OF GENUINE INVESTORS.

SCRIPT-LESS TRADING
MEANS TRADING IN ELECTRONIC SHARES, WHERE THERE ARE NO CERTIFICATES. SUCH TRADING IS SAFE, QUICK AND BENEFICIAL IN

INVESTORS.

DEMATERIALIZATION
PROCESS BY WHICH AN

INVESTOR GETS HIS CERTIFICATE CONVERTED INTO ELECTRONIC SHARES MAINTAINED IN HIS A/C WITH THE PARTICIPANT IN DEPOSITORY SYSTEM.

INDEX
A BASKET OF SECURITIES AND AVERAGE PRICE MOVEMENT OF THE BASKET OF SECURITIES INDICATES THE INDEX MOVEMENT WHETHER UPWARDS OR DOWNWARDS. IT SHOWS HOW A SPECIFIC PORTFOLIO OF SHARE PRICES IS MOVING IN ORDER

TO GIVE AN INDICATION OF MARKET TRENDS.

DEPOSITORY
LIKE A BANK WHERE IN THE DEPOSITS ARE SECURITIES.IE. SHARES, DEBENTURES ARE KEPT IN ELECTRONIC FORM

SCRIPT

IS A SECURITY WHICH INCLUDES INSTRUMENTS SUCH AS SHARES, DEBENTURES OR BONDS. IS THE MARKET VALUE OF A QUOTED COMPANY WHICH IS CALCULATED BY MULTIPLYING ITS CURRENT SHARE PRICE BY NUMBER OF SHARES IN ISSUE.

MARKET CAPITALIZATION

CONTRACT NOTE

IS A CONFIRMATION OF TRDES DONE ON A PARTICULAR DAY ON BEHALF OF A CLIENT BY A BROKER.

BOOK BUILDING
IS BASICALLY A MECHANISM WHERE DURING THE PERIOD FOR WHICH AN IPO IS OPEN, BIDS ARE COLLECTED FROM INVESTORS AT VARIOUS PRICES, WHICH IS OVER AND ABOVE THE FLOOR PRICE.

LISTING OF SECURITIES
ADMISSION OF SECURITY OF A COMPANY TO TRADING PRIVILEGES(DEALING) ON A STOCK EXCHANGE THROUGH A FORMAL AGREEMENT.

DELISTING OF SECURITIES
PERMANENT REMOVAL OF A SECURITY OF A LISTED COMPANY. AFTER DELISTING, THE COMPANYS SECURITY IS NOT

TRADED.

ROLLING SETTLEMENT
TRADES DONE BY A BROKER IN SECURITIES IN COMPULSORY ROLLING

SETTLEMENT ARE NOW SETTLED ON THE EXCHANGE BY PAYMENT AND DELIVERY OF SECURITIES ON T+2 BASIS.

CLEARING COOPERATION
IS A PART OF THE EXCHANGE OR A SEPARATE ENTITY WHICH PERFORMS 3 FUNCTIONS: CLEARS AND SETTLES ALL

TRANSACTIONS FINANCIAL GUARANTEE FOR ALL TRANSACTIONS EXECUTED. PROVIDES RISK MANAGEMENT FUNCTIONS

BOLTS
TRADING ON BSC WAS AUTOMATED WITH THE COMMISSIONING OF THE BROKERS ON LINE TRADING SYSTEM(BOLTS) SINCE 1995. A BROKERS OFFICE IS

CONNECTED WITH THE CENTRAL COMPUTER THROUGH VERYSMALL APERTURE TERMINALS(VATs).

COMPUTERIZED TRADING SYSTEM WAS DEVELOPED BY CMC LTD. USING UNIX- BASED SOFTWARE IN 1996.

BOMBAY STOCK EXCHANGE (BSE)

OLDEST STOCK

EXCHANGE IN INDIA WITH A HISTORY OF MORE THAN 125 YEARS. ESTABLISHED BY NATIVE SHARE AND STOCK BROKERS ASSOCIATION IN 1875 MOST ACTIVE WITH MORE THAN 70 % TRANSACTION IN THE COUNTRY TAKE PLACE HERE.

 HAS THE LARGEST

NUMBER OF LISTED COMPANIES OF MORE THAN 5000 ON THE TRADING LIST.

THE SCRIPTS HAVE BEEN

PUT UNDER CATEGORIES.

THESE SCRIPTS ARE

GROUPED DEPENDING UPON THEIR TRADING VOLUME AND LIQUIDITY

IT HAS THE WIDTH AND

DEPTH OF THE MARKETS FOR EQUITY WITH THE LARGEST NUMBER OF SCRIPTS

CATEGORY A B1 B2 Z

BSE INDEX(SENSEX)
BSE STARTED

COMPILING AND PUBLISHING SENSITIVE INDEX NUMBER OF EQUITY PRICES FROM 1986 WITH BASE YEAR 197879. 30 COMPANIES FROM BOTH SPECIFIED AND NON SPECIFIED GROUPS WERE SELECTED ON BASIS OF CAPITALIZATION WITH DUE REPRESENTATION TO THE MAJOR INDUSTRIES.

 INDEX IS CALCULATED AS

THE %OF AGGREGATE MARKET VALUE OF EQUITY OF ALL COMPANIES IN THE SAMPLE ON THAT DAY TO THE AVERAGE MARKET VALUE OF THE EQUITY OF THE SOURCE COMPANY DURING BASE YEAR. INVESTORS USE SENSEX AS A BENCHMARK AGAINST WHICH THEY VALUATE THEIR PORTFOLIOS. THE INDEX DISPLAYS THE CURRENT INDEX, OPENING INDEX, INDEX HIGH, ETC.

 THE INDEX IS CALCULATED AT REGULAR INTERVALS AND

LATEST VALUE IS DISPLAYED.

THE FOLLOWING INDICES MAINTAINED BY BSE ARE

DISPLAYED:

SENSEX BSE 100 BSE 200 BSE 500 FMCG HEALTH CARE

CONSUME R DURABLES CAPITAL GOODS PSU TECHNOLO GY TRCK

BANKEX

NATIONAL STOCK EXCHANGE (NSE)

FORMED IN 1994. SLOWLY BECOMING

THE LEADING STOCK EXCHANGE IN TERMS OF TECHNOLOGY, SYSTEMS AND PRACTICES IN DUE COURSE OF TIME. ON THE 1ST DAY OF NSE TRADING , DEALS WORTH RS.2.4 CRORE WERE COMPLETED. IT BOOSTS SCREEN BASED TRADING SYSTEM.

 SET UP TO PROVIDE A NATION WIDE STOCK TRADING FACILITY TO INVESTORS. IMPORTANT STEP IN UPGRADING TRADING FACILITIES AND BRINGING THE INDIAN

FINANCIAL MARKETS IN LINE WITH INTERNATIONAL MARKETS. IT ACTS LIKE A RETAIL MARKET FOR EQUITIES, DEBENTURES, ETC.

 IT PROVIDES NATIONWIDE SCREEN BASED TRADING FACILITY AND EQUAL ACCESS TO INVESTORS. IT IS THE FIRST EXCHANGE IN THE WORLD TO USE SATELLITE COMMUNICATION TECHNOLOGY FOR TRADING. ITS TRADING SYSTEM IS CALLED THE

NATIONAL EXCHANGE FOR AUTOMATED TRADING(NEAT).

SPECIAL FEATURES: CENTRAL DEPOSITARY FUND NATIONAL CLEARING HOUSE COMMON SETTLEMENT AND TRADE CYCLES

BENEFITS OF NSE
BENEFITS OF NSC TO INVESTORS
PRICE AND BROKERAGE AND

SEPARATELY SHOWN ON CONTRACT NOTES.

DATE AND TIME OF TRADE INDICATED SYSTEM IS BETTER MONITORED AND REGULATED TO ENSURE FAIR DEALS SAFETY OF SECURITIES IS ENHANCED IN A DEPOSITORY

AND WILL BE NO PROBLEMS OF BAD DELIVERY LOSS, THEFT OR FORGERY.

 TRADING MEMBERS PROVIDE EFFICIENT SERVICE TO THEIR CLIENTS. THEY TRADE FROM THEIR RESPECTIVE OFFICE AND CAN MAKE USE OF FULL BACK OFFICE SUPPORT FOR TRADING. NSC SYSTEM WILL PROVIDE THE BEST PRICE TO THE PARTICIPANTS SYSTEM ENSURES FAIRNESS AMONGST MEMBERS.

BENEFITS OF NSE TO TRADING MEMBERS

BENEFITS OF NSE TO ISSUERS

BY A SINGLE LISTING,
THEY CAN PROVIDE NATIONWIDE ACCESS TO THEIR INVESTORS.

AS A RESULT, THEIR
LISTING COSTS ARE REDUCED CONSIDERABLY.

ISSUES WILL HAVE

HIGH VISIBILITY.

NSE INDEX(NIFTY)
NSC LAUNCHED ITS EQUITY INDEX ON 23RD NOVEMBER

1994.
ITS KNOWN AS NSC 100 IT WAS AN INTERIM INDEX CONSISTED OF 100 EQUITY SHARES OF COMPANY WHICH ACCOUNTED 70% OF THE MARKET CAPITALIZATION. THEREFORE IT DEVELOPED A SCIENTIFICALLY 50 STOCK
NIFTY IS THE BAROMETER OF THE INDIAN MARKETS. IT IS MAINTAINED BY THE INDIAN INDEX SERVICES AND PRODUCT LTD. WHICH IS A JOINT VENTURE BETWEEN NSE AND CRISIL.

INDEX KNOWN AS S&P CNX(NIFTY).

GROUP MEMBERS
ANUJ AGRAWAL 51 ABHILASH PAGARIA 33 HARSH SHAH 39 SANKET AGRAWAL 03 SANIKA BOHRA 06 SHASHANK VARMA 46