stock exchanges jobi 03 110202115758 phpapp02

8/12/2019 Stock Exchanges Jobi 03 110202115758 Phpapp02

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Stock Exchanges

Jobi mathai

S3 MBA


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Stock exchanges

Securitiesrefer to legal documents that show eithera persons__________of a company or_____to

buy shares at specified dates, or he/she has____

money to a business firm or a government.

ownership right

lent

A stock exchangeis an organised market for the trading

of_________.securities

Ab Ltd.


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Function of stock exchanges

To individuals

To businessfirms

To the economy

As an___________channelGaining__________

investmentprotection

Receiving___________information

Raising_______

Boosting_________

capitalcredibility

Raising_______ for the government

and public corporations

Fully utilising_________

capital

resources

As an economic________indicator


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Demand Supply

Features of stock exchanges

Keen / Little competition

______________determine the pricesMarket forces

_____________as middlemenStockbrokers

Shares in the market are sold in standardised____.lots

Market information on the stock exchange is_____.open

Trading on the stock exchange is being__________to

ensure fairness in trading.

monitored


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Process of securities trading

Investor Stockbroker

1. An investor places a_____________with the stockbroker.market order

3. The representative will then carry out the market order bybuying from or selling to other broker representatives.

2. The stockbroker then sends the order to her______________who is on the trading floor.representative

4. Details of the transaction are transferred electronically tothe____________________________________________for completion on or before the_______day of transaction.

Automatic Order Matching and Executive Systemsecond

Representative


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Types of securities

_______: evidence that an investor owns a proportion ofa companyShares

_________: allow the holder to buy a specified number

of shares at a fixed conversion price on or before a given

date.

Warrants

______: recognise that a loan has been made to a

company or government.

Bonds

________________________: investors money ispooled together to invest in a portfolio that is managed

by a fund management company.

Unit trusts/Mutual funds


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_______Placing

Methods of issuing shares

Methods of issuing shares in the stock exchange

_____________________Offer for subscription

______________Offer for sale

___________Rights issue

___________Bonus issue

__________________Consideration issue

____________Introduction

___________Open offer An offer to existing shareholders. It doesnot have to be in proportion to the

shareholders existing holdings.


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Financial institutions involved in issuing shares

An____________acts for a company wishing toissue new shares.issuing house

Functions of an issuing house

As an___________: agrees to buy the shares if they

are not bought by the public

underwriter

Prepares the___________for submission to the

HKSAR Government and HKEx.

prospectus

Distributes the prospectus to the public through_____________and_____.stockbrokers banks

Advertises the public offer


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Primary market and secondary market

Primary market

Secondary market

_________marketIt is the market mainly between the

________________ and_____

_________

New issue

issuing institution

purchaser

It is the market between________

_________________ and ______

Investors can buy securities that are

______________

existing

already in issue

bulk

Firms can___________ through

issuing securities

raise capital

securities holders buyers


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Factors affecting the prices of shares

Changes in economic and political conditions

General economic conditions

economic

conditions

If people expect a good economic

performance for a certain region,

the investment demand will

increase / decrease and share

prices are likely to rise / fall.


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The prospect for the________and________

If the prospect of aviation industryis poor, the price of these shares

will rise / drop.

industry company


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The interest rate

When the bank interest rate is high, the share

prices are likely to rise / fall.


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The foreign exchange rate

When the foreign exchange rate of a country

rises, the share prices are likely to rise / fall.

exchange rate

time

share price

time


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Political factor

If a country is unstable, itsshare prices are likely to rise /

fall.


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P/E ratio = x 100%Current per share earnings



Dividend yield

Current share price

Higher P/E ratio Share price rises / falls

Price-earning ratio (P/E ratio)


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Dividend yield

Price-earning ratio (P/E ratio)

Speculation

presence of speculative activitiesshare price changes


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Securitiesprices

Speculation in securities market

A____buys securities, hoping the price will increase.

A_____sells securities, hoping the price will decrease.

bull

bear

Bullsbuy securities and buyers to be able to sell them

at higher price later. The actual owningof securities is

called a____position.long

Somebearssell securities even though they do not have

the securities in hand, the actual owingof securities is

called a______position.short

______________is a method of speculation that

involves the use of borrowed funds.

Margin trading

An example of margin trading


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The Securities and Futures Ordinance

The monitoring of the securities market

establishing the______________ of the Securities and

Futures Commission and stating its functions and powers

accountability

introducing a simplified________ mechanism for

exchange and clearing house participants

licensing

setting up a flexible_______________ mechanism for

securities and futures industry

civil and criminal

setting up plans for________

protectioninvestorenforcing the rules of disclosure of a listed companys

______equity

stock exchanges jobi 03 110202115758 phpapp02

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