Major Financial Crisis of Past Two and Half Decade: a Conceptual Study

Total Page:16

File Type:pdf, Size:1020Kb

Major Financial Crisis of Past Two and Half Decade: a Conceptual Study International Journal of Disaster Recovery and Business Continuity Vol.11, No. 2, (2020), pp.1568–1572 Major Financial Crisis of Past Two and Half Decade: A Conceptual Study Anuradha Samal1 and A K Das Mohapatra2 1Assistant Professor, Department of Business Administration, Sambalpur University, Odisha- India. [email protected] 2Professor, Department of Business Administration, Sambalpur University, Odisha- India. [email protected] & [email protected] Abstract This paper analyses is regarding the conceptual understanding of the major financial crisis in the Indian Stock Market during the past 24 years since 1995. A critical Incident Analysis has been done by dividing the entire data into three major events namely; Asian Financial Crisis, Sub Prime Mortgage Crisis and Chinese Stock Market Turbulence which has affected the Indian stock market to the maximum extent in the past two and half decade. Keywords: Asian Financial Crisis, Sub Prime Mortgage Crisis and Chinese Stock Market Turbulence Introduction This paper analyses is regarding the conceptual understanding of the major financial crisis in the Indian Stock Market during the past 24 years since 1995. A critical Incident Analysis has been done by dividing the entire data into three major events namely; Asian Financial Crisis, Sub Prime Mortgage Crisis and Chinese Stock Market Turbulence which has affected the Indian stock market to the maximum extent in the past two and half decade. Indian Stock Market In Indian Stock market shares of pubic listed companies are traded. The origin of the Indian stock market began in 1875 where long period securities in the form of negotiable instruments were introduced. Sooner the clause of limited liability was introduced in the mid of 19 century, when Companies Act 1950 was established with the main objective to create interest among the public to invest in securities. Sooner, with the development of “native share and stockbrokers” at Bombay in 1875, that is presently the Bombay Stock Exchange, the formation of exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937) took place. Securities Contracts (Regulation) Act, 1956 was introduced which mandated the stock exchanges to avail government recognition. As of January 2005 there were 23 stock exchanges in India. They are situated at, Kanpur, Delhi, Guwahati, Ahmedabad, Calcutta, Chennai (Madras Stock Exchange), Cochin, Coimbatore, Bangalore, Ludhiana, Mangalore, Baroda, Bhubaneshwar, Hyderabad, Indore, Jaipur, Mumbai (Bombay Stock Exchange), Mumbai (National Stock Exchange or NSE), Mumbai (OTC Exchange of India), Mumbai (Interconnected Stock Exchange of India), Patna, Pune, and Rajkot.) The most significant advancement in Indian stock exchange was with the foundation of the National Stock Exchange (NSE) in 1994. In a very short period, it rose as the biggest stock exchange in the nation competing at par with the Bombay Stock Exchange (BSE) the oldest stock exchange of India. 1568 ISSN: 2005-4289 IJDRBC Copyright ⓒ2020 SERSC International Journal of Disaster Recovery and Business Continuity Vol.11, No. 2, (2020), pp.1568–1572 National Stock Exchange (NSE) Introduced in 1994, NSE was built up in Mumbai (India) with a goal to give across nation trading offices with proper facilities for the trading of varied securities and facilitate equivalent trading access to investors across the nation. NSE has settled on a request-driven framework. At the point when a request is set by an exchanging part, the Computer consequently creates a special request and the party can take a print of request affirmation slip containing that number. The NSE is a countrywide computerized stock exchange. The NSE is classified into 2 different segments: Wholesale Debit Market segment and the Capital Market segment whose explanation is given below. Table 1: Wholesale Debit Market segment Vs. the Capital Market segment Basis Wholesale Debit Market segment Capital Market segment Market It is a market for high-value transactions in It is a market for convertible debentures, government related securities like equities, and retail trade in non- commercial papers, public sector undertaking convertible debentures bonds other government debt instruments etc. Trading The trading members are linked to the central The trading members are connected computer in Mumbai through a Very Small through dedicated high speed lines to the Aperture Terminals (VSATS) which is central computer at connected through satellite Mumbai. Bombay Stock Exchange BSE is one of mainly recognized and sorted out stock exchanges in the world with a long, vivid, and colorful history. In the 1850s, exchanging was limited to dozen brokers under the banyan tree opposite to the Town hall in Bombay. The area of trading shifted many places as the number of brokers kept on rising. The gatherings inevitably moved to Dalal Street in 1874 and 1875 which officially became an authorized organization named “The naive share and stockbrokers association”. In 1895, the association purchased a premise in Dalal Street and it was launched in 1899. Subsequently, Stock exchanged at Bombay was united and consolidated. BSE got acknowledgment in May 1927 under the Bombay securities contracts control act, 1925. The Indian constitution appeared on 26th Jan, 1950. The Constitution put stock exchanges and the forward markets under the restricted authority of the Government of India. In 1956, BSE turned out to be the 1ststock exchange to be acknowledged by the Government of Indian under securities contracts (regulation) act. BSE changed from open clamour or outcry framework to screen-based framework in1995. It accelerated its computerization program keeping in mind the threat of competition from NSE. Brokers play a significant role in BSE, A broker is a specialist who trades for his own account and thus offers a two- way quote or a bid-ask quote. Bid quote reflects the cost at which the broker is ready to purchase and ask a quote speaks to the cost at which the broker is ready to sell. Prospective Investors need to transact by means of a broker/agent. BSE presently works on a “request-driven” structure and “quote-driven” structure. 1569 ISSN: 2005-4289 IJDRBC Copyright ⓒ2020 SERSC International Journal of Disaster Recovery and Business Continuity Vol.11, No. 2, (2020), pp.1568–1572 BSE 500 INDEX BSE 500 which is also called SandP Bombay Stock Exchange 500 is a free-float market weighted index of BSE. It is intended to be a broad image of the Indian market. The best 500 organizations recorded at BSE Ltd cover all the significant industries in the Indian economy. Graph: 1 Sensex performance for past 25years Worldwide Financial Crisis Major global financial emergencies in the past two and half decades were the Asian Financial Crisis, Sub Prime Mortgage Crisis and Chinese Stock market Turbulence whose explanations are given below: Asian Financial Crisis It was one of major worldwide financial crisis which has influenced the Asian economy and affected the world economy during 1997-98. It started in Thailand when Bangkok (Thai baht) stopped to keep up the financial relationship with US (U.S. dollar), which lead to a series of currency devaluation, like Indonesian (rupiah) was devalued somewhere about 80%, Thai (baht) by 50%, South Korean(won) around 50 percent and Malaysian ringgit by 45% and it has also affected to Russian and Brazilian currency too. Altogether there was dropping in capital inflows of more than $100 billion in 1styear of crisis overall in the world. The reason behind the crisis was the failure of governance, which can be: international, national, and domestic. IMF was additionally criticized for general global administration plans focussing "one size fits all" approach of governance. Even APEC the Asia-Pacific Economic Cooperation and ASEAN and the Association of Southeast Asian Nations were also criticized as well. 1570 ISSN: 2005-4289 IJDRBC Copyright ⓒ2020 SERSC International Journal of Disaster Recovery and Business Continuity Vol.11, No. 2, (2020), pp.1568–1572 Sub Prime Mortgage Crisis Sub Prime Mortgage Crisis otherwise named as the Great Recession which began in December of 2007 in the US had a significant negative impact on the world economy. The World Economy declined by 1.1 percent during the time of 2008 to 2009 with a staggering drop of 3.4 percent on an average in the GDP (Gross Domestic Product) of most of the developed nations. But even during the downturn, the Indian economy managed out with a 5.35 percent growth in GDP in 2009. The crisis has its underlying roots in the US house bubble which saturated in 2006, when numerous banks offered loans at low rates along with very basic fulfilment criteria to the borrowers who were qualified as well as not qualified to reimburse them. Starting in mid-2007, these sub-prime moneylenders began to collapse, after their borrowers failed to meet their instalment commitment. This circumstance gave rise to "Credit Crunch" (characterized as "a serious deficiency of cash or credit"), caused due to the absence of trust of significant banks who ceased to distribute funds among each another and when credit crunch occurred, banks and financial institutions found it even more difficult or impossible to obtain any more cash, which drove them to job cuts, stop investments and eventually defaulting on their own obligation. Chinese Stock Market Turbulence The Shanghai Stock Exchange (SSE) is situated in China in the city of Shanghai. It is one of the few stock exchanges operating without restraint in the People’s Republic of China, another s Shenzhen Stock Exchange. The SSE is the world's fourth-biggest financial stock exchange by market capitalization at US$4.0 trillion as of Nov 2018 SSE is restricted for foreign investors and often regulated and influenced by choices of the government. The Chinese stock market turbulence started with the stock market bubble which popped on 12 June 2015 and end toward the starting of February 2016. Nearly 33% of A-grade shares on SSE was lost within1 month of time.
Recommended publications
  • Download Report
    DIGITAL FIRST Insta Products Seamless Payments FUTURE READY Trustworthy Building Resilience ECOSYSTEM BANKING Partnerships API Banking Co-create Solutions ACCELERATING DIGITISATION ANNUAL REPORT 2020-21 OUR APPROACH TO REPORTING ABOUT THIS REPORT This is ICICI Bank’s Annual Report for the year ended March 31, 2021. It has been prepared in accordance with Indian regulatory reporting requirements as well as the principles of the International Integrated Reporting Framework as developed by the International Integrated Reporting Council (IIRC). Through this report, the Bank aims to provide its stakeholders a comprehensive view of its operations, performance, its financial and non-financial resources and strategy to create long-term value. The report provides insights into the Bank’s primary activities, its strategic priorities, risks and mitigants, governance structure, and the manner in which it has leveraged the six capitals, namely Financial, Human, Intellectual, Manufactured, Social and Relationship, and Natural. REPORTING BOUNDARY The non-financial information in the integrated report largely covers data on the India operations of ICICI Bank Limited and ICICI Foundation for Inclusive Growth. REPORTING PERIOD The Annual Report provides material information relating to the Bank's strategy and business model, operating context, performance and statutory disclosures covering the financial year April 1, 2020 to March 31, 2021. SAFE HARBOUR Certain statements in this Annual Report relating to a future period of time (including inter alia concerning our future business plans or growth prospects) are forward-looking statements intended to qualify for the 'safe harbour' under applicable securities laws including the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements.
    [Show full text]
  • Regulation of Securities Market
    PART THREE: REGULATION OFPart SECURITIESThree: Regulation ofMARKET Securities Market This part of the Report delineates the functions of SEBI as specified in Section 11 of the SEBI Act, 1992 1. PRIMARY SECURITIES MARKET 2. SECONDARY SECURITIES The market intermediaries play an MARKET important role in the development of I. Registration of Stock Brokers securities market by providing different types of services. Major intermediaries in the During 2007-08, 218 new stock brokers securities market regulated by SEBI are registered with SEBI (Table 3.3). There were brokers, sub-brokers, portfolio managers, 174 cases of cancellation/ surrender of merchant bankers, depository participants, membership which was higher than 155 in bankers to an issue and share transfer agents. 2006-07. The total number of registered stock brokers as on March 31, 2008, was 9,487 as During 2007-08, there was an increase compared to 9,443 in 2006-07. The share of in the number of intermediaries registered. corporate brokers to the total stock brokers As on March 31, 2008, the highest increase increased marginally to 44.1 per cent in 2007- in absolute terms, was observed in case of 08 from 43.5 per cent in 2006-07 (Table 3.5). depository participants (DPs) of CDSL (52) followed by portfolio managers (47). A NSE had the highest number of 1,129 decline was witnessed, in the number of registered stock brokers, followed by the underwriters followed by registrar to an issue Calcutta Stock Exchange (957), Bombay Stock and share transfer agent and debenture Exchange Ltd. (946) and Inter-connected trustees as compared to 2006-07.
    [Show full text]
  • Fintech Monthly Market Update | July 2021
    Fintech Monthly Market Update JULY 2021 EDITION Leading Independent Advisory Firm Houlihan Lokey is the trusted advisor to more top decision-makers than any other independent global investment bank. Corporate Finance Financial Restructuring Financial and Valuation Advisory 2020 M&A Advisory Rankings 2020 Global Distressed Debt & Bankruptcy 2001 to 2020 Global M&A Fairness All U.S. Transactions Restructuring Rankings Advisory Rankings Advisor Deals Advisor Deals Advisor Deals 1,500+ 1 Houlihan Lokey 210 1 Houlihan Lokey 106 1 Houlihan Lokey 956 2 JP Morgan 876 Employees 2 Goldman Sachs & Co 172 2 PJT Partners Inc 63 3 JP Morgan 132 3 Lazard 50 3 Duff & Phelps 802 4 Evercore Partners 126 4 Rothschild & Co 46 4 Morgan Stanley 599 23 5 Morgan Stanley 123 5 Moelis & Co 39 5 BofA Securities Inc 542 Refinitiv (formerly known as Thomson Reuters). Announced Locations Source: Refinitiv (formerly known as Thomson Reuters) Source: Refinitiv (formerly known as Thomson Reuters) or completed transactions. No. 1 U.S. M&A Advisor No. 1 Global Restructuring Advisor No. 1 Global M&A Fairness Opinion Advisor Over the Past 20 Years ~25% Top 5 Global M&A Advisor 1,400+ Transactions Completed Valued Employee-Owned at More Than $3.0 Trillion Collectively 1,000+ Annual Valuation Engagements Leading Capital Markets Advisor >$6 Billion Market Cap North America Europe and Middle East Asia-Pacific Atlanta Miami Amsterdam Madrid Beijing Sydney >$1 Billion Boston Minneapolis Dubai Milan Hong Kong Tokyo Annual Revenue Chicago New York Frankfurt Paris Singapore Dallas
    [Show full text]
  • CHAPTER-2 STOCK MARKET the Financial Market Where the Existing Securities Are Traded Is Referred to As the STOCK MARKET
    CHAPTER-2 STOCK MARKET The financial market where the existing securities are traded is referred to as the STOCK MARKET. It provides liquidity to financial instruments which are already issued in primary market. Stock exchange Stock exchanges are organized market place corporation or mutual organizations, where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers, or as principals for their own accounts. History of Stock Exchange: The origin of stock exchange in India can be traced back to the letter half of 19th century. It started in the year 1875 where the brokers formed an informal association in Mumbai, In 1894 Ahmadabad stock exchange came in to existence and in the year 1956, Securities contract and regulation act gave power to the stock exchanges. In 1995 NSE and OTCEI was setup with screen based facility. Today we have 23 stock exchanges. Organisation and membership: Stock exchanges are an organised market place where members of the organisation gather to trade company stocks or other securities. The members may act either as agents for their own accounts. Stock exchange is an organised market for buying and selling corporate and other securities. It provides is a convenient and secured platform for transactions in different securities Governing body: Stock exchange is managed by a governing body which consists of 13 members, of which A] 6 members of the stock exchanges are elected by its member. B] Central Government nominates 3 members C] SEBI nominates 3 members D] One executive director is appointed by stock exchange.
    [Show full text]
  • CAREER SUCCESS: Navigating the New
    ... Ghayur and Churchill Ghayur CAREER SUCCESS: Navigating the New ... Work Environment Third Edition 23 Khalid Ghayur, CFA, FSIP, and Dwight D. Churchill, CFA ... CAREER SUCCESS: Navigating the New Work Environment Work the New Navigating Third Edition Third CAREER SUCCESS: Navigating the New Work Environment Third Edition Khalid Ghayur, CFA, FSIP, and Dwight D. Churchill, CFA © 2017 CFA Institute. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission of the copyright holder. Requests for permission to make copies of any part of the work should be mailed to: Copyright Permissions, CFA Institute, 915 East High Street, Charlottesville, Virginia 22902. Portions of this book are used with permission from FindingFit. FindingFit is a copyrighted publication of the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. CFA®, Chartered Financial Analyst®, CIPM®, Investment Foundations®, and GIPS® are just a few of the trademarks owned by CFA Institute. To view a list of CFA Institute trademarks and the Guide for the Use of CFA Institute Marks, please visit our website at www.cfainstitute.org. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional
    [Show full text]
  • Private and Confidential (For Addressee Only)
    THE DISCLOSURE DOCUMENT IS FOR FURTHER ISSUANCE (II) OF NCDs UNDER ISIN no. INE860H08EB9– ISSUED UNDER DISCLOSURE DOCUMENT DATED: June 04, 2019 (SERIES ‘SC1’ FY2019-20) (PART – A: PRIVATE AND CONFIDENTIAL (FOR ADDRESSEE ONLY) DISCLOSURE DOCUMENT AS PER SCHEDULE 1 OF SEBI (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008 AS AMENDED VIDE SEBI (ISSUE AND LISTING OF DEBT SECURITIES) (AMENDMENT) REGULATIONS, 2012 ADITYA BIRLA FINANCE LIMITED Corporate Identity Number (CIN) U65990GJ1991PLC064603 (A Public Limited Company Incorporated under the Companies Act, 1956) (Formerly known as Birla Global Finance Company Limited) Registered Office: Indian Rayon Compound, Veraval, Gujarat 362266 Corporate Office: One Indiabulls Centre, Tower 1, 18th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai 400 013. Tel: 022 43567100 Fax: 022 43567266 ISSUE BY ADITYA BIRLA FINANCE LIMITED (“Company” or “Issuer”) OF 500 UNSECURED, RATED, LISTED, TAXABLE, REDEEMABLE, NON-CONVERTIBLE SUBORDINATEDEBENTURES (“Unsecured NCDs”) AS TIER II CAPITAL OF FACE VALUE OF RS. 10,00,000 EACH, AGGREGATING RS. 50 CRORE (FIFTY CRORE ONLY) ON A PRIVATE PLACEMENT BASIS (“Issue”) TO BE LISTED ON THE WHOLESALE DEBT MARKET SEGMENT OF THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED AND BSE LIMITED Credit Rating: [ICRA]AAA (Stable) & ‘IND AAA Stable’ RISKS IN RELATION TO TRADING OF SECURITIES ADITYA BIRLA FINANCE LIMITED’S ABSOLUTE No assurance can be given regarding an active or sustained trading in the RESPONSIBILITY securities of the Company/Issuer nor regarding the price at which the Aditya Birla Finance Limited having made all reasonable inquiries, securities will be traded after listing accepts responsibility for, and confirms that this Disclosure Document GENERAL RISKS contains all information with regard to the Issuer and the Issue, Investors are advised to read the risk factors carefully before taking an which is material in the context of the issue, that the Information investment decision in this private offering.
    [Show full text]
  • Stock Exchanges – the More the Merrier?
    Institutional EYE Stock exchanges – the more the merrier? It is hard to argue against SEBI’s intent to foster competition for stock exchanges and depositories. However, it is unclear if adding more stock exchanges will accomplish the desired outcome. While ownership regulations are being eased to lower entry barriers, SEBI needs to ensure this be done with stronger guardrails. Source: morguefile.com Competition is essential for continuous improvement to products and services, and to this extent, the intent of fostering greater competition for stock exchanges and depositories is in the right direction. Increasing use of technology, breakdown of trading platforms, co-location issues, have all laced the ‘equity’ exchanges. Commodity exchanges too have seen their fair share of scams. While the regulator can provide an enabling 05 February 2021 iiasadvisory.com 1 Institutional EYE environment, it cannot run the exchange. Therefore, the most enduring solution to customer delight is market-driven competition. Will having more stock exchanges and depositories achieve that objective? SEBI, in its January 2021 discussion paper on “Review of Ownership and Governance norms for facilitating new entrants to set up Stock Exchange / Depository” believes it will1. SEBI has argued that newer technologies of block chain and distributed ledgers will bring an innovative element to trading and price discovery, and perhaps that will. If nothing else, it will increase the technology intensity of trading from its current levels. Yet, India had over 20 stock exchanges in the past – most of them being local / territorial2. Although the Calcutta Stock Exchange continues (largely in name only), none of the other local / territorial exchanges survived against the size and liquidity of NSE and BSE (Exhibit 1).
    [Show full text]
  • Digitisation
    DIGITAL FIRST Insta Products Seamless Payments FUTURE READY Trustworthy Building Resilience ECOSYSTEM BANKING Partnerships API Banking Co-create Solutions ACCELERATING DIGITISATION ANNUAL REPORT 2020-21 OUR APPROACH TO REPORTING ABOUT THIS REPORT This is ICICI Bank’s Annual Report for the year ended March 31, 2021. It has been prepared in accordance with Indian regulatory reporting requirements as well as the principles of the International Integrated Reporting Framework as developed by the International Integrated Reporting Council (IIRC). Through this report, the Bank aims to provide its stakeholders a comprehensive view of its operations, performance, its financial and non-financial resources and strategy to create long-term value. The report provides insights into the Bank’s primary activities, its strategic priorities, risks and mitigants, governance structure, and the manner in which it has leveraged the six capitals, namely Financial, Human, Intellectual, Manufactured, Social and Relationship, and Natural. REPORTING BOUNDARY The non-financial information in the integrated report largely covers data on the India operations of ICICI Bank Limited and ICICI Foundation for Inclusive Growth. REPORTING PERIOD The Annual Report provides material information relating to the Bank's strategy and business model, operating context, performance and statutory disclosures covering the financial year April 1, 2020 to March 31, 2021. SAFE HARBOUR Certain statements in this Annual Report relating to a future period of time (including inter alia concerning our future business plans or growth prospects) are forward-looking statements intended to qualify for the 'safe harbour' under applicable securities laws including the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements.
    [Show full text]
  • Mumbai, India
    Infrastructure & Asset Finance Summit 2012 | Mumbai, India Brief Bios of speakers Day 1: Session 1| Asset Finance and Infrastructure Finance-Key to India’s Resurgence Mr. Sunil Kanoria | Vice Chairman, Srei Infrastructure Finance Limited Mr. Sunil Kanoria is the Co-founder and Vice Chairman of Srei Infrastructure Finance Limited. Srei started its operations in 1989. With consolidated assets under management of over Rs. 33,330 crores, Srei is one of India’s leading private sector Non Banking Financial Institutions in the infrastructure space. Mr. Kanoria is also the Joint Managing Director of Srei BNP Paribas (Registered name: Srei Equipment Finance Private Limited), a 50:50 JV between Srei Infrastructure Finance Limited and BNP Paribas, France. He is currently the Vice Chairman and Managing Director of Viom Networks Limited, a JV between Tata Teleservices and Quippo, a Srei Group enterprise. Viom is a pioneer in the Shared Passive Telecom Infrastructure industry in India. He conceptualized the brand ‘Quippo’. Be it launching the country's largest infrastructure equipment rental company or servicing the high growth verticals such as Construction, Oil & Gas, Telecom and Energy, under his guidance, brand Quippo has become a leading player in the industry. Mr. Kanoria takes active interest in the development of the international financial world. He has travelled around the world meeting potential investors to help Srei Group in attracting investments from multilateral and international funding agencies like BNP Paribas, IFC - Washington, DEG - Germany, FMO - Netherlands, BIO – Belgium, Finfund – Finland, Swedfund – Sweden, US Exim etc. He has been one of the vocal proponents of providing the NBFC industry a level playing field in India vis-à-vis banks and other financial institutions.
    [Show full text]
  • ^Adat of Fi|Tl0«0J% in COMMERCE
    IMPACT OF LIBERALISATION ON INDIAN CAPITAL MARKET ABSTRACT THESIS SUBMITTED FOR THE AWARD OF THE DEGREE OF ^adat of fi|tl0«0j% IN COMMERCE By MOHD. SHAMIM DEPARTMENT OF COMMERCE ALIGARH MUSLIM UNIVERSITY ALIGARH (INDIA) 2008 The Indian Capital Market The capital market consists of primary and secondary markets. Tlie primary market deals with the issue of new instruments by the corporate sector such as equity shares, preference shares and debt instruments. Central and State governments, various public sector industrial units (PSUs), statutory and other authorities such as state electricity boards and port trusts also issue bonds/debt instruments. The primary market in which public issue of securities is made through a prospectus is a retail market and there is no physical location. Offer for subscription to securities is made to investing community. The secondary market or stock exchange is a market for trading and settlement of securities that have already been issued. The investors holding securities sell securities through registered brokers/sub-brokers of the stock exchange. Investors who are desirous of buying securities purchase securities through registered brokers/sub-brokers of the stock exchange. It may have a physical location like a stock exchange or a trading floor. Even before the crisis of 1991, there had been a demand from domestic financial institutions (DFIs) to reform Indian equity markets. Liquidity on the exchanges lacked the depth the DFIs needed to execute large transactions. They also faced problems with brokers front-running against their orders, or the lack of resilience of liquidity once it was known that the DFIs had placed orders in the market.
    [Show full text]
  • (Annual Report) Rules, 1994, ЧШ
    This Report is in conformity with the format as per the Securities and Exchange Board of India (Annual Report) Rules, 1994, ęȱȱĜȱ £ĴȱȱȱŝǰȱŗşşŚǯ 1 2 3 4 MEMBERS OF THE BOARD (As on March 31, 2013) Appointed under Section 4(1) (a) of the SEBI Act, 1992 (15 of 1992) U. K. SINHA CHAIRMAN Appointed under Section 4(1) (d) of the SEBI Act, 1992 (15 of 1992) PRASHANT SARAN WHOLE TIME MEMBER RAJEEV K. AGARWAL WHOLE TIME MEMBER S. RAMAN WHOLE TIME MEMBER V. K. JAIRATH PART TIME MEMBER P. C. CHHOTARAY PART TIME MEMBER Nominated under Section 4(1) (b) of the SEBI Act, 1992 (15 of 1992) DR. ARVIND MAYARAM Secretary Ministry of Finance ȱȱȱě Government of India NAVED MASOOD Secretary ¢ȱȱȱě Government of India Nominated under Section 4(1) (c) of the SEBI Act, 1992 (15 of 1992) ANAND SINHA Deputy Governor ȱȱȱ ȳ 5 6 MEMBERS OF THE SEBI BOARD (As on March 31, 2013) U. K. SINHA Chairman PRASHANT SARAN RAJEEV K. AGARWAL S. RAMAN V. K. JAIRATH Whole Time Member Whole Time Member Whole Time Member Part Time Member P. C. CHHOTARAY DR. ARVIND MAYARAM NAVED MASOOD ANAND SINHA Part Time Member Secretary Secretary Deputy Governor Ministry of Finance Ministry of Corporate Reserve Bank of India Department of Economic ě ě Government of India Government of India 7 8 CHAIRMAN, WHOLE TIME MEMBERS AND EXECUTIVE DIRECTORS Left to Right : Ĵ : Shri S. Raman, Whole Time Member; Shri Prashant Saran, Whole Time Member; Shri U. K. Sinha, Chairman; Shri Rajeev K. Agarwal, Whole Time Member.
    [Show full text]
  • SME Exchange: Transformation Opportunities of Smes
    IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668 PP 103-107 www.iosrjournals.org SME Exchange: Transformation Opportunities of SMEs Shriraj Shroff, Dr. Suchismita Sengupta Student, IES Management College and Research Centre, Bandra, Associate Professor, IES Management College and Research Centre, Bandra, Bombay Stock Exchange and National Stock Exchange are the very popular trading platforms offering securities for the investors that offer several benefits to all the stakeholders involved. It has not only helped investors to invest in the market and earn profits from their investments but also helped companies to raise money to fund their operations. Most importantly, it has created a transparency and clarity in the transactions done on the exchange. This has made all stakeholders responsible for the success of the companies listed on the exchange i.e. from bankers and financial institutions to the retail investor - not explicitly but implicitly. How it has made all the stakeholders responsible is a separate and long discussion and is out of the scope of this article. But given this fact, it has created the perennial existence of corporate. It may be a point being ignored, but the reality is that our country’s Small and Medium Enterprises (SMEs) deserve the same type of treatment. With respect to the launch of SME platforms on two separate exchanges – BSE and NSE, the government has taken a huge step towards highlighting the need and importance of SMEs in India. Why not? After all it is a sector that helps in creating jobs, generating around 40% of employment in our economy, contributes to 45% of its manufacturing output, accounts for 40% of its total exports and grew at a high growth rate of 19% in 2012-13.
    [Show full text]