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Project Report On Bombay Stock Exchange
Project Report On Bombay Stock Exchange
On
Bombay Stock Exchange
CONTENTS
What Is Stock?
STOCK EXCHANGE
Introduction
FUNCTIONS OF BSE
OBJECTIVES OF BSE
FEATURES OF SENSEX
INDICES OF BSE
MARKET CAPITALIZATION
BENEFITS OF BSE
SPECULATION
CONCLUSION
What Is Stock?
Imagine you wanted to start a retail store with members of your family.
You decide you need Rs.100,000 to get the business off the ground so
you incorporate a new company. You divide the company into 1,000
pieces, or "shares" of stock. (They are called this because each piece of
stock is entitled to a proportional share of the profit or loss). You price
each new share of stock at Rs.100. If you can sell all of the shares to
your family members, you should have the Rs.100,000 you need (1,000
shares x Rs.100 contributed capital per share = Rs.100,000 cash raised
for the company).
If the store earned Rs.50,000 after taxes during its first year, each share
of stock would be entitled to 1/1,000th of the profit. You'd take
Rs.50,000 and divide it by 1,000, resulting in Rs.50.00 earnings per
share (or EPS). You could call a meeting of the company's Board of
Directors (these are the people the stockholders elected to watch over
their interest since they couldn't run the business) and decide to use the
money to pay dividends, repurchase, or expand the company by
reinvesting in the retail store.
At some point, you may decide you want to sell your shares of the family
retailer. If the company is large enough, you could trade on a stock
exchange. That's what is happening when you buy or sell shares of a
company through a stock broker. You are telling the market you are
interested in acquiring or selling shares of a certain company and Wall
Street matches you up with someone and takes fees and commissions for
doing it. Alternatively, shares of stock could be issued to raise millions,
or even billions, of dollars for expansion. When Sam Walton formed WalMart Stores, Inc., the initial public offering that resulted from him selling
newly created shares of stock in his company gave him enough cash to
pay off most of his debt and fund Wal-Mart's nationwide expansion.
STOCK EXCHANGE
STOCK EXCHANGE is an organized market place, either corporation
or mutual organization, where members of the organization gather
to trade company stocks or other securities.Stock Exchange also
facilitates for the issue and redemption of securities and other
financial instruments including the payment of income and
dividends. The trade on an exchange is only by members and stock
broker who have a seat on the exchange.
Name of Indian Stock Exchanges
1. Ahmedabad Stock Exchange
2. Bangalore Stock Exchange
3. Bhubaneswar Stock Exchange
4. Bombay Stock Exchange
5. Calcutta Stock Exchange
6. Cochin Stock Exchange
7. Coimbatore Stock Exchange
8. Delhi Stock Exchange Association
9. Gawahati Stock Exchange
10. Hyderabad Stock Exchange
11. Inter-connected Stock Exchange of India
12. Jaipur Stock Exchange
13. Ludhiana Stock Exchange
14. Madhya pradesh Stock Exchange
15. Madras Stock Exchange
16. Mangalore Stock Exchange
17. National Stock Exchange
18. Magadh Stock Exchange (Patna)
19. Over The Counter Stock Exchange of India (OTCEI)
20. Pune Stock Exchange
21. Uttar Pradesh Stock Exchange
INTRODUCTION
Bombay Stock Exchange is the oldest stock exchange in Asia What is
now popularly known as the BSE was established as "The Native Share &
Stock
Brokers'
Association"
in
1875.
Over the past 135 years, BSE has facilitated the growth of the Indian
corporate sector by providing it with an efficient capital raising platform.
Today, BSE is the world's number 1 exchange in the world in terms of
the number of listed companies (over 4900). It is the world's 5th most
active in terms of number of transactions handled through its electronic
trading system. And it is in the top ten of global exchanges in terms of
the market capitalization of its listed companies (as of December 31,
2009). The companies listed on BSE command a total market
capitalization
of
USD
Trillion
1.28
as
of
Feb,
2010.
BSE is the first exchange in India and the second in the world to obtain
an ISO 9001:2000 certifications. It is also the first Exchange in the
country and second in the world to receive Information Security
Management System Standard BS 7799-2-2002 certification for its BSE
On-Line
trading
System
(BOLT).
The BSE Index, SENSEX, is India's first and most popular Stock Market
benchmark index. Exchange traded funds (ETF) on SENSEX, are listed
on BSE and in Hong Kong. Futures and options on the index are also
traded
at
BSE.
Purchased of Marketplace Technologies in 2009 to enhance the inhouse technology development capabilities of the BSE and allow
faster time-to-market for new products
BSE also successfully launched the BSE IPO index and PSU
website
BSE revamped its website with wide range of new features like
'Live streaming quotes for SENSEX companies', 'Advanced Stock
Reach', 'SENSEX View', 'Market Galaxy', and 'Members'
With its tradition of serving the community, BSE has been undertaking
Corporate Social Responsibility (CSR) initiatives with a focus on
Education, Health and Environment. BSE has been awarded by the
World Council of Corporate Governance the Golden Peacock Global CSR
Award for its initiatives in Corporate Social Responsibility (CSR).
Other Awards:
The Annual Reports and Accounts of BSE for the year ended
March 31, 2006 and March 31, 2007 have been awarded the ICAI
awards for excellence in financial reporting.
The Human Resource Management at BSE has won the Asia Pacific HRM awards for its efforts in employer branding through
talent management at work, health management at work and
excellence in HR through technology
Drawing from its rich past and its equally robust performance in the
recent times, BSE will continue to remain an icon in the Indian capital
market.
FUNCTIONS OF BSE
The Stock Market is a pivotal institution in the financial system. A
well-ordered stock market performs several economic functions: It
ensures the measure of safety and fair dealing
It
induces
companies
to
raise
their
standard
of
performance.
OBJECTIVES OF BSE
1) To safeguard the interest of investing public having dealings on the
exchange.
2) To establish and promote honorable and just practices in securities
transactions.
3) To promote, develop and maintain well regulated market in securities.
4) To promote industrial development in the country through efficient
resource mobilization by the way of investment in corporate securities.
FEATURES OF SENSEX
1) Sensex is a value weighted index
2) Composed of 30 stocks representing various sectors
3) These companies accounts for one fifth of market capitalization
4) Base value of sensex is 100 (april 1,1979)
5) Base year (1978-79)
6) Free float capitalization method
7) Iconic stature-tracked worldwide
8) Index cooperation agreement with deutsche borse has made sensex
available to investors in europe and america
9) Also available in hong kong
INDICES OF BSE
1) Sensex
2) Bse 100
4) Bse500
Sectoral Indices
1) Bse Auto
2) Bankex
4) Consumerable Goods
5) Fmcg
3) Bse 200
3) Capital Goods
6)IT, Power
1) Dollex30
2) Dollex100
3) Dollex 200
KINDS OF SHARES
Large
Caps
(large
Capitalization
in
between
$10billion-
$200billion),
MARKET CAPITALIZATION
BENEFITS OF BSE
FROM THE POINT OF VIEW OF COMMUNITY:
1. It assist the economic development by providing a body of interested
investors.
2. it uploads the position of superior enterprises and assist them in
raising further funds.
Bank of India along with Punjab National Bank and SBI were at the
receiving end. Madhavapura Bank and Classic Cooperative Bank are the
others affected. Ketan Parekh owes around Rs1.3bn to the Bank of India
KPs scam was one of the major scam in India after Harshad Mehta
which lost the confidence of investors in investing in share market. KPs
scam is also regarded as one mans army scam.
(b) FOREIGN INSTITUTIONAL INVESTORS (FII)
Foreign investment refers to investments made by residents of a
country in another countrys financial assets and production
processes. After the opening up of the borders for capital movement,
foreign investments in India have grown enormously. It affects the
productivity factor of the beneficiary or the receiver country and has
the potential to create a ripple effect on the balance of payments of
that country. In developing countries like India, foreign capital helps
in increasing the productivity of labor and to build up foreign
exchange reserves to meet the current account deficit. It provides a
channel through which these countries can have access to foreign
capital.
Foreign investment can be of two forms: Foreign direct investment
(FDI) and Foreign portfolio investment (FPI).FDI involves direct
production activity and has a medium to long term investment
plans. In contrast the FPI has a short term investment horizon. They
mostly investment in the financial markets which consist of Foreign
Institutional Investors (FIIs). They invest in domestic financial
markets like money market, stock market, foreign exchange market
etc.
Foreign institutional investors investments are volatile in nature,
and they mostly invest in the emerging markets. They usually keep
in mind the potential of a particular market to grow.
OF
UNDERWRITERS
AND
OTHER
FINANCIAL
INSTITUTIONS
5. CHANGE IN COMPANYS BOARD OF DIRECTORS
6. FINANCIAL POSITION OF THE COMPANY
7. TRADE CYCLE
8. POLITICAL FACTORS
9. SYMPATHETIC FLUCTUATIONS
10.
OTHER FACTORS:
i) EXPECTED MONSOON
ii) PERSONAL HEALTH OF HEAD OF GOVERNMENT OR
CHAIRMAN OF THE COMPANY
iii) OIL PRICES IN THE INTERNATIONAL MARKET.
iv) CHANGES IN EXCHANGE RATE
v) BORDER TENSION
vi) STOCK BROKERS SCAM LIKE HARSHAD MEHTA AND
KETHAN PAREKH
vii) STRIKES AND LOCK-OUT OF THE COMPANY.
viii) NEW BUDGET PROPOSALS
ix) LIBERLIZATION AND PRIVATIZATION OF THE COMPANY.
SPECULATION:
Stag:
He is that type of speculator who applies for a large number of shares
in a new issue with the intention of selling them at a premium. He is
bullish and very cautious.
17,000, September 26, 2007 The Sensex scaled yet another height
during early morning trade on September 26, 2007.Within minutes after
trading began, the Sensex crossed the 17,000-mark .
18,000, October 09, 2007 The BSE Sensex crossed the 18,000-mark on
October 09, 2007. It took just 8 days to cross 18,000 points from the
17,000 mark. The market set several new records including the biggest
single day gain of 789 points at close, as well as the largest intra-day
gains of 993.
19,000, October 15, 2007 The Sensex crossed the 19,000-mark backed
by revival of funds-based buying in blue chip stocks in metal, capital
goods and refinery sectors. The index gained the last 1,000 points injust
four trading days.
20,000, October 29, 2007 The Sensex crossed the 20,000 mark on the
back of aggressive buying by funds ahead of the US Federal Reserve
meeting. The index took only 10 trading days to gain 1,000 points after
the index crossed the 19,000-mark on October 15. The major drivers
were index
21,000, January 8, 2008 The sensex peaks. It crossed the 21,000 mark
in intraday trading after 49 trading sessions. However, it later fell back
due to profit booking.
15,200, June 13, 2008 The sensex closed below 15,200 mark, Indian
market suffer with major downfall from January 21,2008
14,220, June 25, 2008 The sensex touched an intraday low of 13,731
during the early trades, then pulled back and ended up at 14,220 amidst
a negative sentiment.
12,822, July 2, 2008 The sensex hit an intraday low of 12,822.70 on
July 2nd, 2008.This is the lowest that it has ever been in the past year.
Six months ago, on January 10th, 2008, the market had hit an all time
high of
21206.70. This is a bad time for the Indian markets, although Reliance
and Infosys continue to lead the way with mostly positive results.
11801.70, Oct 6, 2008 The sensex closed at 11801.70 hitting the lowest
in the past 2years.
10527, Oct 10, 2008 The Sensex today closed at 10527,800.51 points
down.
14284.21, May 18, 2009 After the result of15th Indian general election
Sensex gained 2110.79 points from the previous close of 12173.42 these
creates a new history in Indian Market. In the Opening Trade itself
sensex gains 15% from the previous day close this leads to the
suspension of 2 hours trade. After 2 hours sensex again surged this
leads to the suspension of full day trading.
Sensex falls
Some major single-day falls of the Sensex have occurred on the following
dates
CONCLUSION
With the increasing Globalization, the Stock Exchanges have
tremendously affected the financial conditions of India.
The stock markets of the future will have a redefined pupose and
reinvented architecture due to the advent and widespread
use of