PRESENTATION ON

ONLINE TRADING AND

STUDY OF INDIAN STOCK

WHAT IS A STOCK
MARKET?

Place where business of buying and

selling stock takes place

The stock market is not a specific

place, though some people use the
term "Dalaal Street

WHAT IS A STOCK?

Stock is a share in the ownership of a

company.
It represents a claim on the company's
assets and earnings

Whether you say shares, equity or

stock, it all means the same thing.

WHY COMPANIES ISSUE

STOCK?
When a company would like to grow, it
issues stocks to raise funds and pay for
ongoing business activities

It is popular because:

The company does not have to repay

the money

Paying dividends is optional

Dividends are distributions of earnings

paid to stockholders

HOW COMPANIES RAISE

THE CAPITAL

By following means

Debentures

Equity

Loans

MARKET SEGMENTS

Primary market
-Channel for creation of new securities

Secondary market
-The new securities issued in the
primary
market are traded the secondary market

STOCK EXCHANGE WORLD

WIDE

New York Stock Exchange - United States

NASDAQ (National Association of Security

Dealers Automated Quotations) - United
States

Shanghai Stock Exchange - China

London Stock Exchange

- UK

STOCK EXCHANGE IN
INDIA

BSE

(BOMBAY STOCK
EXCHANGE )

NSE
(NATIONAL STOCK
EXCHANGE)

BOMBAY STOCK EXCHANGE

(BSE)

Following is the timeline on the

rise and rise of the Sensex
through Indian stock market
history.

1830's Business on corporate

stocks and shares in Bank and
Cotton presses started in
Bombay.

1860-1865 Cotton price bubble

as a result of the American Civil
War

1870 - 90's Sharp increase in

share prices of jute industries
followed by a boom in tea stocks
and coal

1978-79 Base year of Sensex,

NATIONAL STOCK EXCHANGE

(NIFTY)

November 1992 as a taxpaying company

In April 1993, it was

recognized as a
stock exchange.

INDEX

SENSEX

Sensex is an index, an index is basically an

indicator.

It gives you a general idea about whether most of

the stocks have gone up or most of the stocks have
gone down. The sensex is an indicator of all the
prices of the major companies of the BSE(Bombay
stock exchange)

It includes 30 companies

NIFTY(NIFTY FIFTY)

Nifty is an indicator of all the major

companies of NSE.

The Nifty index is a composite of the top

50 stocks listed on the National stock
exchange. It is a simplified tool which
helps investors & ordinary people alike,
understand what happens in the stock
market & by extension, the economy.

MARKET TIMINGS
Trading on the equities segment takes place
on all days of the week (except
Saturdays and Sundays and holidays
declared by the exchange in advance)
The market timings of the equities
segment are:
Normal market open : 09:15 hours
Normal market close : 15:30 hours
The closing session is held between
15.50 hours and 16.00 hours in NSE and
15.40 hours and 16.00 hours in BSE

NEAT- CASH

NEAT-F&O

CIRCUIT BREAKERS

An index based market-wide circuit breaker system applies at three

stages of the index movement either way at 10%, 15% and 20%.

The breakers are triggered by movement of either S&P CNX Nifty

or Sensex, whichever is breached earlier

As an additional measure of safety, individual scrip-wise price bands has

been fixed as below:

Daily price bands of 2% (either way) on a set of specified securities

Daily price bands of 5% (either way) on a set of specified securities

Daily price bands of 10% (either way) on another set of specified

securities

SECURITIES AND EXCHANGE BOARD

OF INDIA (SEBI)

SEBI is the
Regulator for
the Securities
Market in India.

Originally set up
by the
Government of I
ndia
in 1988, it
acquired
statutory form
in 1992.

FUNCTIONS AND RESPONSIBILITIES

(SEBI)

SEBI has to be responsive to the needs

of three groups, which constitute the
market:

the issuers of securities

the investors

the market intermediaries.

HOW TO START?

Open Demat A/c.

Open Trading A/c.

HOW THE MARKET

WORK
NSE

Broker

Broker

Public

Public

BLUE CHIP INDIAN

COMPANIES
1.

6.

2.

7.

3.

8.

4.

9.

5.

10.

30 STOCK OF SENSEX
1.

ACC

11.BHEL

21. SBI

2.

GRASIM

12.GUJ AMBUJA

22.INFOSYS

3.

HINDALCO

13.ICICI BANK

23.DR.REDYS

4.

HLL

14.RANBAXY

24.SATYAM

5.

ITC

15.REL

25.CIPLA

6.

L&T

16.R.COM

26.AIRTEL

7.

RIL

17.HDFC BANK

27.ONGC

8.

TATA MOTORS

18.HDFC

28.WIPRO

9.

TATA STEEL

19.MURTUI

29.NTPC

10.

BAJAJ AUTO

20.TCS

30.HERO HONDA

50 STOCK OF NIFTY
1.ACC

11.GUJ AMBUJA

21.JET AIRWAYS

2.BAJAJ AUTO

12.HCL

22.ITC

3.BHEL

13.HDFC

23.L&T

4.BPL

14.HDFC BANK

24.MTNL

5.BHARTI AIRTEL 15.HERO HONDA

25.M&M

6.CIPLA

16.HINDALCO

26.MARUTI

7.DABUR

17.HLL

27.ONGC

8.DR.REDDYS

18.HPL

28.OBC

9.GAIL

19.ICICIBANK

29.PNB

10.GRASIM

20.INFOSYS

30.SBI

50 STOCK OF NIFTY
31.NATIONAL ALUMINIUM

41.TATA MOTORS

32.RANBAXY

42.TATA POWER

33.R.COM

43.TATA STEEL

34.REL

44.WIPRO

35.RIL

45.ZEE

36.SATYAM

46.VSNL

37.SAIL

47.SIEMENS

38SUN PHARMA

48.INDIAN PETRO

39.SUSLON

49.ABB

40.TCS

50.GLAXO

SECTOR INDICATORS
1.

BANKING SECTOR

2.

CAPITAL GOODS SECTOR

3.

CEMENT SECTOR

4.

REAL ESTATE SECTOR

5.

INFRASTRUCTURE SECTOR

6.

POWER SECTOR

7.

TELECOM SECTOR

8.

AUTOMOBILES SECTOR

9.

METAL SECTOR

10.

INFORMATION TECHNOLOGY SECTOR

BANKING SECTOR

CAPITAL GOODS SECTOR

CEMENT SECTOR

REAL ESTATE SECTOR

INFRASTRUCTURE
SECTOR

POWER SECTOR

TELECOM SECTOR

AUTOMOBILES SECTOR

METAL SECTOR

INFORMATION TECHNOLOGY
SECTOR

FACTORS AFFECTING STOCK

MARKET

1.

INFLATION

2.

MARKET TRENDS

3.

GLOBAL MARKETS

4.

GOVT. POLICIES

5.

FINANCIAL STATEMENT OF COMPANIES

INFLATION

INFLATION RATE CURRENT 12.14

MAIN FACTOR CRUDE 147$ BARRAL

NOW CRUDE IS More than 105$ BARRAL

FINANCIAL STATEMENT OF
COMPANIES

PROFITS

LOSSES

GROWTH

FACTORS AFFECTING STOCK

PRICE

FINANCIAL STATEMENT OF COMPANIES

GROWTH OF CONPANIES

ORDER BOOK

MANAGEMENT

LAND BANK

POLICIES

PLANS

FIIS INVESTING IN INDIA

1.

FOREIGN
ECONOMY

2% GROWTH
RATE
DEVELOPED
ECONOMY
LESS
EXPANSION

2.INDIAN ECONOMY

8.5% GROWTH
RATE

DEVELOPING
ECONOMY

MORE Expansion

DEMAT ACCOUNT

1.

ILLEGAL TRADING
SYSTEM :

Dabba System

Private Karb System

Patiya System

Badla System

DABBA TRADING :
$ The illegal practice of buy/sale of securities outside the
exchange mechanism without any documentary evidence
to relate such transactions.
$ "Dabba Trading" also known as "Bucketing" is the
process used by brokers to route their clients trades
outside the Stock/Commodity exchange.
$ In such trading, the broker either does not execute any
trade or matches and execute trades on its own terminal.

CAUGHT DABBA TRADING :

Pradeep Kumar Bansal, who was the target of the SebiNSE operation, was a fairly big fish in the dabba trade.
He operates from a non-descript address at Byculla in
central Mumbai, but his office, packed with
sophisticated equipment and gadgetry, acts as the hub
for his nationwide operations.
His firm, Bansal Sharevest Securities Pvt Ltd has
multiple trading memberships on Indian stock
exchanges including: the National Stock Exchange
(derivatives segment), the Interconnected Stock
Exchange of India and the Calcutta Stock Exchange. He
is also a sub-broker to his own broking firm, earning
commissions on its deals. (Sebi has now banned
promoters/directors from acting as sub-brokers to their

SCAMS IN CAPITAL
Harshad
Mehta
MARKET
He was known as the 'Big Bull'. However, his bull run did not last too long.
He triggered a rise in the Bombay Stock Exchange in the year 1992 by
trading in shares at a premium across many segments. Taking advantages of
the loopholes in the banking system, Harshad and his associates triggered a
securities scam diverting funds to the tune of Rs 4000 crore (Rs 40 billion)
from the banks to stockbrokers between April 1991 to May 1992.
Harshad Mehta worked with the New India Assurance Company before he
moved ahead to try his luck in the stock markets. Mehta soon mastered the
tricks of the trade and set out on dangerous game plan. Mehta has siphoned
off huge sums of money from several banks and millions of investors were
conned in the process. His scam was exposed, the markets crashed and he
was arrested and banned for life from trading in the stock markets.
He was later charged with 72 criminal offences. A Special Court also
sentenced Sudhir Mehta, Harshad Mehta's brother, and six others, including
four bank officials, to rigorous imprisonment (RI) ranging from 1 year to 10
years on the charge of duping State Bank of India to the tune of Rs 600
crore (Rs 6 billion) in connection with the securities scam that rocked the

SCAMS IN CAPITAL
Ketan
Parekh
MARKET
Ketan Parekh followed Harshad Mehta's footsteps to swindle corers of rupees from banks. A
chartered accountant he used to run a family business, NH Securities.
Ketan however had bigger plans in mind. He targetted smaller exchanges like the Allahabad
Stock Exchange and the Calcutta Stock Exchange, and bought shares in fictitious names.
His dealings revolved around shares of ten companies like Himachal Futuristic, Global TeleSystems, SSI Ltd, DSQ Software, Zee Telefilms, Silverline, Pentamedia Graphics and
Satyam Computer (K-10 scrips).
Ketan borrowed Rs 250 crore from Global Trust Bank to fuel his ambitions. Ketan alongwith
his associates also managed to get Rs 1,000 crore from the Madhavpura Mercantile Cooperative Bank.
According to RBI regulations, a broker is allowed a loan of only Rs 15 crore (Rs 150 million).
There was evidence of price rigging in the scrips of Global Trust Bank, Zee Telefilms, HFCL,
Lupin Laboratories, Aftek Infosys and Padmini Polymer.

ADVANTAGES OF ONLINE
TRADING.

Instant Access

Convenience

Monetary Savings

Value Added Services.

DISADVANTAGES OF
ONLINE TRADING:

Investing alone:

Security

Personalized services