STOCK EXCHANGE EASY WAY TO EARN MONEY, EASY WAY TO LOOSE MONEY Presented BY Prof .Vishal Varma HISTORY OF STOCK EXCHANGE

The stock exchange was established by “East company” in 18th century . In India it was established in 1850 with 22 stock brokers opposite to town hall Bombay .This stock exchange is known as oldest stock exchange of Asia. FEATURES OF STOCK EXCHANGE  It is an organized market

 It is a securities market

 It is an important constituent of capital market i.e., market for long-term finance

 It is a voluntary association of persons desirous of dealing in securities.  Stock exchange is a voluntary association, its membership is not open to everybody

 In a stock exchange, only the members can deal in i.e., buy & sell securities

 The dealings in a stock exchange are under certain accepted code of conduct i.e., rules and regulations Functions of Stock exchange 1. Continuous market for securities The Investors are able to invest in good securities and in case of any risk, it enables people to switch over from one security to another. So stock markets provides a ready and continuous opportunities for securities.

2. Evaluation of securities It the stock exchange, the prices of securities clearly indicate the performance of the companies. It also clearly indicates the stability of companies. Thus, investors are in a better position to take stock of the position and invest according to their requirements. 3. Mobilizes savings The savings of the public are mobilized through mutual funds, investments trusts and by various other securities. Even those who cannot afford to invest in huge amount of securities are provided opportunities by mutual funds and investment trusts. 4. Stock exchange Protect investors As only genuine companies are listed and the activities of the stock exchange are controlled, the funds of the investors are very much protected.

5. Stock exchange helps Capital formation Stock exchange plays an active role in the capital formation in the country. Companies are able to raise funds either by issuing more shares through rights shares or bonus shares. But when a company wants to go in for diversification, they can issue the shares and raise more funds. Thus, they are able to generate more capital and this promotes economic growth in the country. 8. Liquidity in Stock Exchange Institutions like banks can invest their idle funds in the stock exchange and earn profit even within a short period. When necessity arises , these securities can be immediately sold for raising funds. Thus, it is the stock exchange which provides opportunities for converting securities into cash within a short notice. 9. Economic barometer The most important function of a stock exchange is that it acts as an economic indicator of conditions prevailing in the country. A politically and economically strong government will have an upward trend in the stock market. Whereas an unstable government with heavy borrowings from other countries will have a downward trend in the stock market. 11. Attracts foreign capital Due to its dynamism,liberalization and higher return on capital, the stock exchange is capable of attracting more foreign funds. 12. Monetary and fiscal policies The monetary policy and the fiscal policy of the government have to be favorable to businessmen and producers. If they are not so, then through the stock exchange the government may indicate and accordingly suitable steps can be taken. 13. Safety of Capital and Fair Dealing The stock exchange transactions are made publicly under well defined rules and regulations and bye-laws. This factor ensures a great measure of safety and fair dealings to the average investors. 14. Regulation of Company management The companies, which want to get their securities listed in the stock exchange, should have to follow certain rules and fulfill certain conditions. Thus stock exchanges safeguards the interest of the investing public and also regulates company management.

15. Barometer of Business Progress Stock exchanges function as a barometer of the business. Booms and depressions are reflected by the index of prices of various securities maintained by the stock exchange. By analyzing the ups and downs of the market quotations, the causes for the changes in the business climate can be ascertained.  Help the investors to know the worth of their holdings

 Promote the habit of saving and investment

 Help capital formation

 Help companies and government to raise funds from the investors  Provide central and convenient meeting places for sellers and buyer of securities for carrying transactions. Largest stock exchanges

IN THE WORLD IN INDIA

LONDON STOCK EXCHANGE NATIONAL STOCK EXCHANGE NEW YORK STOCK EXCHANGE  SHANHAI STOCK EXCHANGE  AUSTRALIA STOCK EXCHANGE COCHIN STOCK EXCHANGE TOKYO STOCK EXCHANGE MULTI COMMODITY HONG KONG STOCK EXCHANGE EXCHANGE TORONTO STOCK EXCHANGE DERIVATIVES EXCHANGE DEUTSCHE BORSE OTC EXCHANGE BM&F BOVESPA  NASDAQ OMX STOCK EXCHANGE INTERCONNECTS EXCHANGE LONDON STOCK EXCHANGE It was the first stock exchange established by east India company in 18th century in London. The top gainer of LONDON STOCK EXCHANGE is “Blue chip shares”. BOMBAY STOCK EXCHANGE

It is oldest and first stock exchange of India established in the year 1875. First it was started under baniyan tree opposite to town hall of Bombay over 22 stock brokers. The top gainer in BSE is 100 companies in that GMR infra is first NATIONAL STOCK EXCHANGE OF INDIA(NSE OR NSEI) The NSE of India is the leading stock exchange of India, covering 370 cities and towns in the country. It was established in1994 as a TAX company. It was established by 21 leading financial institutions and banks like the IDBI,ICICI,IFCI,LIC,SBI,etc. Features of NSEI

Nation wide coverage i.e., investors from all over country

Ringless i.e., it has no ring or trading floor

Screen-based trading i.e., trading in this stock exchange is done electronically. Transparency,i.e.,the use of computer screen for trading makes the dealings in securities transparent.

Professionalization in trading, i.e., it brings professionalism in its functions OVER-THE-COUNTER EXCHANGE OF INDIA(OTCEI)

The OTCEI is a national,ringless and computerized stock exchange. It was established in october,1990.it started its operation in september,1992. Features of OTCEI

1. It is a nation-wide stock exchange. Its operational areas cover entire India.

2. It is a ringless stock exchange. The trading ring(i.e., trading place)commonly found in a traditional stock exchange is not found in the OTCEI.

3. It is a computerized stock exchange Advantages of OTCEI 1. It helps the investors to have easy and direct access to the stock exchange

2. It helps investors to get fair prices for their securities

3. It provide safety to the investors

4. To provide computerized trading system

5. To provide investors a convenient,effcient and transparent mode of investment