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Capital Market and Investment Avenues-B.V.Raghunandan


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Capital Market and Investment Avenues-B.V.Raghunandan

  1. 1. Capital Market and Investment Avenues -B.V.Raghunandan, SVS College, Bantwal Management Development Programme Sahyadri College, Adyar-Mangalore-India November 12, 2011 Page 1
  2. 2. Capital Market• A market for long-term funds• Securities having a life of more than one year• Based upon the interpretation of the Tax Laws and Public Finance Page 2
  3. 3. Securities in the Capital Market• Equity Shares• Preference Shares• Debentures• Bonds• Innovative Bonds or Preference Shares Page 3
  4. 4. Equity Shares: A Unique Investment• Regular Income by way of Annual Dividend, Interim Dividend, Special Dividend, Surplus Dividend• Capital Appreciation by way of Bonus Shares• Capital Appreciation by way of Increase in market value• Benefits from Corporate Action like share splitting, sponsored ADR, M&A• Real Time knowledge of prices Page 4
  5. 5. Segments of Equity Market Secondary Market: StockPrimary Market: IPO Exchange Page 5
  6. 6. Transactions in Stock Market• Cash Market• Derivatives Market: - Futures and Options Page 6
  7. 7. Investor Education: The Most Difficult Exercise• Converting emotional decisions into rational decisions• Convincing them about long-term investment• Exposure to analysis of financial information• Wisdom not to be moved by the vested opinions• ignore the concept of loss of profit Page 7
  8. 8. Traditional Retailers• Geographic concentration: Gujarat, Rajastan, and West Bengal• Community Biased: Parsis, Marwadis, Chettiars, GSBs and Brahmins• Urban Concentration• Broker Dominated with broker participating in the sale and purchase Page 8
  9. 9. Change Agents• Dhirubhai Ambani of Reliance Industries70s• IT Companies of the 80s• Media Companies of the 90s• Establishment of SEBI in 1988• Establishment of NSE in 1994• Entry of FIIs• Dematerialisation• Corporate Brokerage• Shorter Period of Allotment in Book-Building• Shorter Settlement Cycle Page 9
  10. 10. Investment in Primary Market• Study the Prospectus• Management Profile• Product Profile• Premium• Risk Factors• History of the Company• Industry Profile• Do not look at the response to the Issue Page 10
  11. 11. Opportunities• Infrastructure projects• Commercial Agriculture• Bio-Technology• Pharma-Research and Pharmaceuticals• Hospitals and Hospitality• Power Sector Development• Shipping and Ship-Building Page 11
  12. 12. Stock Exchange: Strategies• Buy in the Depressed Market• Understand the Seasonality of Market• Understand the Weekly Behavior of the Market• Invest for Life Time or for Generation• Sell only in a Boom Market• Select Dividend Paying Companies Page 12
  13. 13. Things to be Avoided• Acting on Tips• Avoid Speculation and Day Trading• It should not become a Full Time Occupation• Avoid Derivative Trading• Avoid borrowing and investing• Do not park short term funds• Avoid Distress or Emergency Sale Page 13
  14. 14. Opportunities• More Inflow of FII money• Better public finance through disinvestment• Gains for the Government through recapitalisation of banks• More Venture Capital Participation• Larger body of retailers• More stable operations Page 14
  15. 15. Investment Avenues• Corporate Securities • Medals and Others• Government • Bank Deposits Securities • Small Savings• Mutual Funds • Introduction of Capital• Exchange Traded for Starting Firms, Funds Private Limited• Real Estate Companies and• Gold Public Limited Companies• Old Coins & Stamps Page 15
  16. 16. THANK YOU Page 16