Download - Investment Management Module 1
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` ³Sacrifice of certain present value for some
uncertain future value´
Economic activity
Eg stocks mf bonds money mkt funds collctibles
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` Real
` Real estate
` Bullion
` Art` Financial
` Debts Equity
MF
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` Safety
` Income
` Growth of capital
` Tax minimization` Marketability
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` Mkt wch deals with financial assets or instrments
issued by org, corporate units, central n state
govts
Two categories f Security mkt
Primary mkt- mkt for public issues(IPO)
Secondary mkt-deals with already issued
securities of all types, thru authorised stock
xchanges.
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` The securities contracts(regulation) act 1956
` SEBI Act 1992
` Depositories Act 1996
` Foreign Xchange regulation Act, 1973` Companies Act 1956 etc
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` Ctrl over issue of capital
` Establishment of regulator
` Screen based trading
` Risk mgt` Trading Cycle
` Dematerialization
` Derivatives
` Settlement Guarantee
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` Mobilization
` Safe n fair deal
` Canalization of funds
` Raises standard of performance of cmpny` Info to investors
` Fixation of prices
` Promotes economic growth
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` Formal admission of security to trading platform of
hhe exchange
Benefits
Trading platformFair price
Liquidity
Porablity
Easy tax assesments
Nation¶s devlpmnt
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` Selection of broker
` Agreement with broker
` Placing an order
Dayorder
GTC- Goods till Cancelled
GTD- Goods till date/days
IOC- Immediate or cancel order
FOK- Fill or kill
Limit price order
market price order
stop loss price order
Disclosed order Execution of order
Issue of Contract note
settlement
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` Speculation
Investment to make quick money by selling the
securities on his own a/c & risk.
Market MakersDon¶t earn commission from their activities.
Simply buy n sell share on their own a/c. buy sell
diffrnz z called Spread.
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` Involves what counter parties owe , and which
counter parties are due to receive on the
settlement date thereafter the obligations are
discharged by settlement.` Clearing corporation , clearing members ,
custodians, clearing banks, depositories and
Proffesional clearing member.
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` Physical share certificates of an investor are taken
back by the company and an equivalent number of
securities are credited in e-form at the request of
investor.
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` This s/m holds shares in the form of e-form.
` This is paperless trading and transfers
electronically without involving share certificates
and transfer deeds.` Two depositories
NSDL(national Securities Depository ltd)
CDSL(Central Depository Services India ltd)
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NSDL(national Securities Depository ltd)
1st indian depository promted by IDBI, unit trust of
india and NSE to provide e-depository facilities
CDSL(Central Depository Services India ltd)promoted by BSE, association with HDFC bank,
bank of india, Bank of baroda,SBI
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` Dematerialization
` Rematerialization
` A/c transfer
` Pledge & hypothecation` Linkages with clearing system
` Corporate actions
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` Agent of depository & is the medium thru which
shares are held in e-form.
` Are representatives of the investor, providing the
link b/w the investor and the company through thedepository.
Activities of DP include
Maintaining securities a/c balances
Intimation of the position of the account toinvestors periodically.
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` Exercise conducted by rating organization to
evaluate the credit worthiness of the issuer wrt the
instrument being issued.
` CRISIL(credit rating & info services of India ltd)` ICR A(Invest info n credit rating agency of India )
` CARE(credit analysis & research ltd)
` ONICR A