Wednesday 29 October 2014

Trade4target : Daily News 30/10/2014

Trade4target : About Indian stock market

Stock Exchange provides a trading platform, where buyers and sellers can meet to transact in securities.

Capital Market: The capital market is divided into two segments:

 a) Primary Market
 b) Secondary Market

a) Primary Market:

         Most companies are usually started privately by their promoters. However the promoters‘ capital and the borrowed capital from banks or financial institutions might not be sufficient for running the business over the long term. That is when corporate and the government looks at the primary market to raise long term funds by issuing securities such as debt or equity.

 These securities may be issued at face value, at premium or at discount. Let us understand the meaning of these terms:

* Face Value: Face value is the original cost of the security as shown in the certificate. Most equity shares have a face value of Rs. 1, Rs. 5, Rs. 10 or Rs. 100 and do not have much bearing on the actual market price of the stock. When issuing securities, they may be offered at a discount or at a premium.

* Premium: When the security is offered at a price higher than the face value it is called a premium

* Discount: When the security is offered at a price lower than the face value it is called a discount.

b) Secondary Market:

           The secondary market provides liquidity to the investors in the primary market. Today we would not invest in any instrument if there was no medium to liquidate our position. The secondary markets provide an efficient platform for trading of those securities initially offered in the primary market. Also those investors who have applied for shares in an IPO may or may not get allotment. If they don‘t then they can always buy the shares in the secondary market.

Trading in the secondary market is done through stock exchange. The Stock exchange is a place where the buyers and sellers meet to trade in shares in an organized manner.Trade4target is provide help to stock exchange for investors.The stock exchange performs the following functions:

* Provide trading platform to investors and provide liquidity
* Facilitate Listing of securities
* Registers members - Stock Brokers, sub brokers
* Make and enforce by-laws
* Manage risk in securities transactions
* Provides Indices

There are two leading stock exchanges in India which help us trade are:

National Stock Exchange:
                       National Stock Exchange incorporated in the year 1992 provides trading in the equity as well as debt market. Maximum volumes take place on NSE and hence enjoy leadership position in the country today

 Bombay Stock Exchange:
              BSE on the other hand was set up in the year 1875 and is the oldest stock exchange in Asia. It has evolved in to its present status as the premier stock exchange.

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