stock market and terminology

8/8/2019 Stock Market and Terminology

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STOCK EXCHANGES IN INDIA

By

KARTHIKEYAN.K


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BOMBAY STOCKEXCHANGE

Bombay Stock Exchange

Type Stock Exchange

Location Mumbai, India

Coordinates185547N

725001E 18.929681N

72.833589E

Founded 1875

OwnerBombay Stock ExchangeLimited

Key people Madhu Kannan (CEO & MD)

Currency Indian rupee

No. of listings 4,996

MarketCap US$1.39 trillion (August 2010)[1]

Volume US$980 billion (2006)

Indexes BSE Sensex

Website www.bseindia.com
http://en.wikipedia.org/wiki/Stock_Exchangehttp://en.wikipedia.org/wiki/Mumbaihttp://toolserver.org/~geohack/geohack.php?pagename=Bombay_Stock_Exchange&params=18.929681_N_72.833589_E_region:IN-MH_type:landmarkhttp://toolserver.org/~geohack/geohack.php?pagename=Bombay_Stock_Exchange&params=18.929681_N_72.833589_E_region:IN-MH_type:landmarkhttp://toolserver.org/~geohack/geohack.php?pagename=Bombay_Stock_Exchange&params=18.929681_N_72.833589_E_region:IN-MH_type:landmarkhttp://en.wikipedia.org/wiki/Chief_Executive_Officerhttp://en.wikipedia.org/wiki/Managing_Directorhttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Market_capitalizationhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Bombay_Stock_Exchange#cite_note-0http://en.wikipedia.org/wiki/Bombay_Stock_Exchange#cite_note-0http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/BSE_Sensexhttp://en.wikipedia.org/wiki/Websitehttp://www.bseindia.com/http://en.wikipedia.org/wiki/File:Bombay_Stock_Exchange_3.jpghttp://en.wikipedia.org/wiki/File:Bombay_Stock_Exchange_logo.svghttp://en.wikipedia.org/wiki/Mumbaihttp://toolserver.org/~geohack/geohack.php?pagename=Bombay_Stock_Exchange&params=18.929681_N_72.833589_E_region:IN-MH_type:landmarkhttp://toolserver.org/~geohack/geohack.php?pagename=Bombay_Stock_Exchange&params=18.929681_N_72.833589_E_region:IN-MH_type:landmarkhttp://toolserver.org/~geohack/geohack.php?pagename=Bombay_Stock_Exchange&params=18.929681_N_72.833589_E_region:IN-MH_type:landmarkhttp://en.wikipedia.org/wiki/Chief_Executive_Officerhttp://en.wikipedia.org/wiki/Managing_Directorhttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Market_capitalizationhttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Bombay_Stock_Exchange#cite_note-0http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/BSE_Sensexhttp://en.wikipedia.org/wiki/Websitehttp://www.bseindia.com/http://en.wikipedia.org/wiki/Stock_Exchange


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The Bombay Stock Exchange (BSE) (Hindi : Bombay hare Bzar)(formerly, The Stock Exchange, Bombay) is the oldest stock exchange in Asia and largest number

of listed companies in the world, with 4990 listed as of August 2010.[2][3]

It is located at DalalStreet, Mumbai, India. On Aug, 2010, the equity market capitalizationof the companies listed onthe BSE was US$1.39 trillion, making it the 4th largest stock exchange in Asia and the 11thlargest in the world.[4]

With over 4,990 Indian companies listed & over 7700 scrips on the stock exchange,[5]it has asignificant trading volume. The BSE SENSEX (SENSitive indEX), also called the "BSE 30", isa widely used market index in India and Asia. Though many other exchanges exist, BSE and theNational Stock Exchange of India account for most of the trading in shares in India.

Contents

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1 Hours of operation 2 History 3 Timeline 4 BSE indices 5 Sensex correlation with emerging market indices 6 Awards 7 See also 8 References

9 External links

[edit] Hours of operation

Session Timing

Beginning of the Day Session 8:00 - 9:00

Trading Session 9:00 - 15:30

Position Transfer Session 15:30 - 15:50

Closing Session 15:50 - 16:05

Option Exercise Session 16:05 - 16:35

Margin Session 16:35 - 16:50

Query Session 16:50 - 17:35

End of Day Session 17:30
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The hours of operation for the BSE quoted above are stated in terms of the local time (i.e. GMT+5:30) in Mumbai (Bombay), India. BSE's normal trading sessions are on all days of the weekexcept Saturdays, Sundays and holidays declared by the Exchange in advance.[6]

[edit] History

The Phiroze Jeejeebhoy Towers house the Bombay Stock Exchange since 1980.

The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the 1850s,when 4 Gujarati and 1 Parsi stockbroker would gather under banyan trees in front of Mumbai'sTown Hall. The location of these meetings changed many times, as the number of brokersconstantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became anofficial organization known as 'The Native Share & Stock Brokers Association'. In 1956, theBSE became the first stock exchange to be recognized by the Indian Government under the

Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE Sensex in1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSEused this index to open its derivatives market, trading Sensex futures contracts. The developmentof Sensex options along with equity derivatives followed in 2001 and 2002, expanding the BSE'strading platform. Historically an open outcry floor trading exchange, the Bombay StockExchange switched to an electronic trading system in 1995. It took the exchange only fifty daysto make this transition. This automated, screen-based trading platform called BSE On-linetrading (BOLT) currently has a capacity of 80 lakh orders per day. The BSE has also introducedthe world's first centralized exchange-based internet trading system, BSEWEBx.co.in to enableinvestors anywhere in the world to trade on the BSE platform.[7]. The BSE is currently housed inPhiroze Jeejeebhoy Towers atDalal Street,Fort area.

[edit] Timeline

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.
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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 andcoal

1978-79 Base year ofSensex, defined to be 100.

1986 Sensex first compiled[8] using a market Capitalization-Weighted methodology for 30component stocks representing well-established companies across key sectors.

30 October 2006 The Sensex on October 30, 2006 crossed the magical figure of 13,000 andclosed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the Sensex to movefrom 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.

5 December 2006 The Sensex on December 5, 2006 crossed the 14,000-mark to touch 14,028points. It took 36 days for the Sensex to move from 13,000 to the 14,000 mark.

6 July 2007 The Sensex on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005points in afternoon trade. It took seven months for the Sensex to move from 14,000 to 15,000points.

19 September 2007 The Sensex scaled yet another milestone during early morning trade onSeptember 19, 2007. Within minutes after trading began, the Sensex crossed 16,000, rising by450 points from the previous close. The 30-share Bombay Stock Exchange's sensitive index took53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points.

The Sensex finally ended with a gain of 654 points at 16,323. The NSE Nifty gained 186 points

to close at 4,732.

26 September 2007 The Sensex scaled yet another height during early morning trade onSeptember 26, 2007. Within minutes after trading began, the Sensex crossed the 17,000-mark .Some profit taking towards the end, saw the index slip into red to 16,887 - down 187 points fromthe day's high. The Sensex ended with a gain of 22 points at 16,921.

9 October 2007 The BSE Sensex crossed the 18,000-mark on October 9, 2007. It took just 8days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-dayhigh of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market setseveral new records including the biggest single day gain of 789 points at close, as well as the

largest intra-day gains of 993 points in absolute term backed by frenzied buying after the news ofthe UPA and Left meeting on October 22 put an end to the worries of an impending election.

15 October 2007 The Sensex crossed the 19,000-mark backed by revival of funds-based buyingin blue chip stocks in metal, capital goods and refinery sectors. The index gained the last 1,000points in just four trading days. The index touched a fresh all-time intra-day high of 19,096, andfinally ended with a smart gain of 640 points at 19,059.The Nifty gained 242 points to close at5,670.
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29 October 2007 The Sensex crossed the 20,000 mark on the back of aggressive buying byfunds ahead of the US Federal Reserve meeting. The index took only 10 trading days to gain1,000 points after the index crossed the 19,000-mark on October 15. The major drivers of today'srally were index heavyweights Larsen and Toubro, Reliance Industries, ICICI Bank, HDFCBank and SBI among others. The 30-share index spurted in the last five minutes of trade to fly-

past the crucial level and scaled a new intra-day peak at 20,024.87 points before ending at itsfresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to a record high5,922.50 points before ending at 5,905.90, showing a hefty gain of 203.60 points.

8 January 2008 The sensex peaks. It crossed the 21,000 mark in intra-day trading after 49trading sessions. This was backed by high market confidence of increased FII investment andstrong corporate results for the third quarter. However, it later fell back due to profit booking.

13 June 2008 The sensex closed below 15,200 mark, Indian market suffer with major downfallfrom January 21, 2008

25 June 2008 The sensex touched an intra day low of 13,731 during the early trades, then pulledback and ended up at 14,220 amidst a negative sentiment generated on the Reserve Bank of Indiahiking CRR by 50 bps. FII outflow continued in this week.

2 July 2008 The sensex hit an intra day low of 12,822.70 on July 2, 2008. This is the lowest thatit has ever been in the past year. Six months ago, on January 10, 2008, the market had hit an alltime high of 21206.70. This is a bad time for the Indian markets, although Reliance and Infosyscontinue to lead the way with mostly positive results. Bloomberg lists them as the top twogainers for the Sensex, closely followed by ICICI Bank and ITC Ltd.

6 October 2008 The sensex closed at 11801.70 hitting the lowest in the past 2 years.

10 October 2008 The Sensex today closed at 10527,800.51 points down from the previous dayhaving seen an intraday fall of as large as 1063 points. Thus, this week turned out to be the weekwith largest percentage fall in the SenseX

18 May 2009 After the result of 15th Indian general election Sensex gained 21000.79 pointsfrom the previous close of 12173.42, a record one-day gain. In the opening trade itself theSensex evinced a 15% gain over the previous close which led to a two-hour suspension intrading. After trading resumed, the Sensex surged again, leading to a full day suspension oftrading.

[edit] BSE indices
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For the premier stock exchange that pioneered the securities transaction business in India, over acentury of experience is a proud achievement. A lot has changed since 1875 when 318 personsby paying a then princely amount of Re. 1, became members of what today is called BombayStock Exchange Limited (BSE).

Over the decades, the stock market in the country has passed through good and bad periods. Thejourney in the 20th century has not been an easy one. Till the decade of eighties, there was nomeasure or scale that could precisely measure the various ups and downs in the Indian stockmarket. BSE, in 1986, came out with a Stock Index-SENSEX- that subsequently became the

barometer of the Indian stock market.

The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSENational Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stockexchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Indexwas renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated takinginto consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked versionof BSE-100 index on May 22, 2006.

With a view to provide a better representation of the increasing number of listed companies,larger market capitalization and the new industry sectors, BSE launched on 27th May, 1994 two

new index series viz., the 'BSE-200' and the 'DOLLEX-200'. Since then, BSE has come a longway in attuning itself to the varied needs of investors and market participants. In order to fulfillthe need for still broader, segment-specific and sector-specific indices, BSE has continuouslybeen increasing the range of its indices. BSE-500 Index and 5 sectoral indices were launched in1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the country's first free-floatbased index - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-floatmethodology (except BSE-PSU index).
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BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio andthe Dividend Yield Percentage on day-to-day basis of all its major indices.

The values of all BSE indices are updated on real time basis during market hours and displayedthrough the BOLT system, BSE website and news wire agencies.

All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee whichcomprises eminent independent finance professionals frames the broad policy guidelines for thedevelopment and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-daymaintenance of all indices and conducts research on development of new indices.[9]

[edit] Sensex correlation with emerging market indices

Sensex is significantly correlated with the stock indices of other emerging markets[10][11]

[edit] Awards The World Council of Corporate Governance has awarded the Golden Peacock Global

CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR). 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.
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NATIONAL STOCK EXCHANGE

The National Stock Exchange (NSE) (Hindi: ) is a stock exchange located atMumbai, India. It is the largest stock exchange in India in terms of daily turnover and number oftrades, for both equities and derivative trading.[2] NSE has a market capitalization of around6,393,418 crore (US$1,412.95 billion) (August 2010) and was expected to become the biggeststock exchange in India in terms of market capitalization by 2009 end[3], although this has not yetoccurred. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are

the two most significant stock exchanges in India, and between them are responsible for the vastmajority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the NSENIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by marketcapitalisation.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companiesand other financial intermediaries in India but its ownership and management operate as separateentities.[4] There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have
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taken a stake in the NSE.[5] As of 2006, the NSEVSAT terminals, 2799 in total, cover more than1500 cities across India.[6] In October 2007, the equitymarket capitalizationof the companieslisted on the NSE was US$ 1.46trillion, making it the second largest stock exchange inSouthAsia. NSE is the third largest Stock Exchange in the world in terms of the number of trades inequities.[7] It is the second fastest growingstock exchange in the world with a recorded growth of

16.6%.[8]

Contents

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1 Origins 2 Innovations 3 Markets 4 Hours 5 Milestones 6 Indices 7 Exchange Traded Funds on NSE 8 Certifications 9 NSE - Corporate Offices in India 10 See also 11 References

12 External links

[edit] Origins

NSE building at BKC, Mumbai

The National Stock Exchange of India was promoted by leading Financial institutionsat thebehest of the Government of India, and was incorporated in November 1992 as a tax-payingcompany. In April 1993, it was recognized as astock exchangeunder the Securities Contracts(Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market(WDM)segment in June 1994. The Capital market (Equities) segment of the NSE commenced operationsin November 1994, while operations in theDerivatives segment commenced in June 2000.
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[edit] Innovations

NSE has remained in the forefront of modernization of India's capital and financial markets, andits pioneering efforts include:

Being the first national, anonymous, electronic limit order book (LOB) exchange to tradesecurities in India. Since the success of the NSE, existent market and new marketstructures have followed the "NSE" model.

Setting up the first clearing corporation "National Securities Clearing Corporation Ltd."in India. NSCCL was a landmark in providing innovation on all spot equity market (andlater, derivatives market) trades in India.

Co-promoting and setting up of National Securities Depository Limited, first depositoryin India [9]

Setting up ofS&P CNX Nifty. NSE pioneered commencement of Internet Trading in February 2000, which led to the

wide popularization of the NSE in the broker community. Being the first exchange that, in 1996, proposed exchange traded derivatives, particularly

on an equity index, in India. After four years of policy and regulatory debate andformulation, the NSE was permitted to start trading equity derivatives

Being the first and the only exchange to trade GOLD ETFs (exchange traded funds) inIndia.

NSE has also launched the NSE-CNBC-TV18 media centre in association with CNBC-TV18.

NSE.IT Limited, setup in 1999 , is a 100% subsidiary of the National Stock Exchange ofIndia. A Vertical Specialist Enterprise, NSE.IT offers end-to-end InformationTechnology (IT) products, solutions and services.

[edit] Markets

Currently, NSE has the following major segments of the capital market:

Equity Futures and Options Retail Debt Market Wholesale Debt Market Currency futures MUTUAL FUND STOCKS LENDING & BORROWING

August 2008 Currency derivatives were introduced in India with the launch of Currency Futuresin USD INR by NSE. Currently it has also launched currency futures in EURO, POUND &YEN. Interest Rate Futures was introduced for the first time in India by NSE on 31 August 2009,exactly after
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SHARE MARKET TERMINOLOGY


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1. Absolute ReturnThe return that an asset achieves over a period of time. This measuresimply looks at the appreciation or depreciation (expressed as apercentage) that an asset - usually a stock or a mutual fund - facesover a period of time. Absolute return differs from relative returnbecause it is concerned with the return of the asset being looked at

and does not compare it to any other measure.2. Actual Returnthe actual gain or loss of an investor.

3. AcquisitionWhen one company purchases a majority interest in the acquired.

4. AllotmentThe number of shares allotted to a partcipant in IPO against the actualnumber of securities he had applied for.


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5. American Depository Receipt (ADR)A negotiable certificate issued by a U.S. bank representing a specifiednumber of shares (or one share) in a foreign stock that is traded on aU.S. exchange. ADRs are denominated in U.S. dollars, with theunderlying security held by a U.S. financial institution overseas.

6. American Depository Share (ADS)A share issued under deposit agreement that represents an underlyingsecurity in the issuer's home country. The terms American depositaryreceipt (ADR) and American depositary share (ADS) are often thoughtto mean the same thing. However, an ADS is the actual share trading,while an ADR represents a bundle of ADSs.

7. AnalystA financial professional who has expertise in evaluating investmentsand puts together buy, sell and hold recommendations on securities.Also known as a "financial analyst" or a "security analyst".

8. Annual General Meeting (AGM)

A mandatory yearly meeting of shareholders that allows stakeholdersto stay informed and involved with company decisions and workings.9. Annual Report

A company's annual statement of financial operations. Annual reportsinclude a balance sheet, income statement, auditor's report, and adescription of the company's operations.

10.AnnuityA financial product sold by financial institutions that is designed toaccept and grow funds from an individual and then, uponannuitization, pay out a stream of payments to the individual at a laterpoint in time. Annuities are primarily used as a means of securing a

steady cash flow for an individual during their retirement years.11.ArbitrageThe difference between price of a security in two different exchanges.The difference can be used to make profits by persons holding asecurity to sell the same at an exchange where its price is high andbuy it at an exchange where it is available at a lower price.

12.AskThe price a seller is willing to accept for a share, also known as theoffer price.

13.Ask SizeThe number of shares a seller is selling at a quoted ask price.

14.Asset AllocationThe process of dividing a portfolio among major asset categories suchas bonds, stocks or cash. The purpose of asset allocation is to reducerisk by diversifying the portfolio.

15.Asset Allocation FundA mutual fund that splits its investment assets among stocks, bondsand other investment vehicles in an attempt to provide a consistentreturn for the investor.


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16.Average Annual Growth RateThe average increase in the value of a portfolio over the period of ayear.

17.Average Annual ReturnThe historical return of a mutual fund.

18.Average ReturnThe simple average of a series of returns generated over a period oftime.

19.Back door listingA strategy of going public used by a company that fails to meet thecriteria for listing on a stock exchange. To get onto the exchange, thecompany desiring to go public acquires an already listed company.

20.Bad DebtA debt that is not collectible and therefore worthless to the creditor.This debt, once considered to be bad, will be written off by thecompany as an expense.

21.Balance SheetA financial statement that summarizes a company's assets, liabilitiesand shareholders' equity at a specific point in time. These threebalance sheet segments give investors an idea as to what thecompany owns and owes, as well as the amount invested by theshareholders.

22.Balanced FundA mutual fund that invests its assets into the money market, bonds,preferred stock, and common stock with the intention to provide bothgrowth and income.

23.Bankruptcy

The state of a person or firm unable to repay debts.24.Bar ChartA style of chart used by some technical analysts, the top of the verticalline indicates the highest price a security traded at during the day, andthe bottom represents the lowest price. The closing price is displayedon the right side of the bar, and the opening price is shown on the leftside of the bar. A single bar like the one below represents one day oftrading.

25.Basis PointA unit that is equal to 1/100th of 1%, and is used to denote the changein a financial instrument. The basis point is commonly usedfor calculating changes in interest rates, equity indexes and the yieldof a fixed-income security.

26.Bear MarketA market condition in which the prices of shares are falling or areexpected to fall.


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27.Best AskThe lowest quoted ask price for a particular share among those offeredfrom competing market makers.

28.Best BidThe highest quoted bid for a particular share among all those offered

by competing market makers.29.Blue ChipA nationally recognized, well-established and financially soundcompany.

30.BondA debt investment with which the investor loans money to an entity(company or government) that borrows the funds for a defined periodof time at a specified interest rate

31.Book BuildingThe process by which an underwriter attempts to determine at whatprice to offer an IPO based on demand from institutional investors.

32.Book ClosureA company's announcement of a dividend or bonus to investors.33.Book Value

The net asset value of a company, calculated by total assets minusintangible assets (patents, goodwill) and liabilities.

34.BoomA period of time during which sales or business activity increasesrapidly.

35.BottomThe lowest point or price reached by a financial security,commodity, index or economic cycle in a given time period, which

is followed by a steady increase.36.Bottom FisherAn investor who looks for bargains among stocks whose prices haverecently dropped dramatically. The investor believes that the recentprice drop is temporary and a recovery is soon to follow.

37.Bottom LineRefers to a company's net earnings.

38.BreakoutA price movement through an identified level of support or resistance,which is usually followed by heavy volume and increasedvolatility. Traders will buy the underlying asset when the price breaks

above a level of resistance and sell when it breaks below support.39.Broker

An individual or firm that charges a fee or commission for executingbuy and sell orders submitted by an investor.

40.Brokerage AccountAn arrangement between an investor and a licensed brokerage firmthat allows the investor to deposit funds with the firm and place


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investment orders through the brokerage, which then carries out thetransactions on the investor's behalf.

41.BubbleA surge in equity prices, often more than warranted by thefundamentals and usually in a particular sector, followed by a drastic

drop in prices as a massive selloff occurs.42.Bull MarketA financial market of a certain group of shares in which prices arerising or are expected to rise.

43.BullionGold and silver that is officially recognized as high quality (at least99.5% pure), and is in the form of bars rather than coins.

44.BuyA recommendation to purchase a specific security.

45.Buy and HoldA passive investment strategy in which an investor buys stocks and

holds them for a long period of time, regardless of fluctuations in themarket.46.Buy Back

The buying back of outstanding shares (repurchase) by a company inorder to reduce the number of shares on the market. Companies willbuyback shares either to increase the value of shares still available(reducing supply), or to eliminate any threats by shareholders whomay be looking for a controlling stake.

47.CAGRThe year-over-year growth rate of an investment over a specifiedperiod of time. It's an imaginary number that describes the rate at

which an investment would have grown if it grew at a steady rate48.Capital GainAn increase in the value of a capital asset (investment or real estate)that gives it a higher worth than the purchase price. The gain is notrealized until the asset is sold.

49.Capital Gains TaxA type of tax levied on capital gains incurred by individuals andcorporations. Capital gains are the profits that an investor realizeswhen he or she sells the capital asset for a price that is higher than thepurchase price.

50.Cash Flow StatementThis document provides aggregate data regarding all cash inflows a


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company receives from both its ongoing operations and externalinvestment sources, as well as all cash outflows that pay for businessactivities and investments during a given quarter.

51.Choppy MarketA stock market condition whereby prices swing up and down

considerably but with no resulting overall price movement in eitherdirection.52.Closely Held Shares

The shares held by individuals closely related to a company.53.Closing Price

The final price at which a security is traded on a given trading day.54.Commodity

A basic good used in commerce that is interchangeable with othercommodities of the same type. Commodities are most often used asinputs in the production of other goods or services.

55.Commodity Index

An index that tracks a basket of commodities to measure theirperformance.56.Common Shareholder

An individual, business or institution that holds common shares in acompany, giving the holder an ownership stake in the company. Thiswill also give the holder the right to vote on corporate issues such asboard elections and corporate policy, along with the right toany common dividend payments.

57.Consensus EstimateA figure based on the combined estimates of the analysts covering apublic company. Generally, analysts give a consensus for a company's

earnings per share and revenue; these figures are most often made forthe quarter, fiscal year and next fiscal year.58.Correction

Corrections are generally temporary price declines, interrupting anuptrend in the market or asset.

59.CrashA major decline in a financial market.

60.Demat - DematerializationThe move from physical certificates to electronic book keeping.

61.Dalal StreetA term that refers to the Bombay Stock Exchange, the major stock

exchange in India. The street is home not only the Bombay StockExchange but also a large number of other financial institutions.62.Day Trader

A stock trader who holds positions for a very short time (from minutesto hours) and makes numerous trades each day. Most trades areentered and closed out within the same day.

63.De-mergerA corporate strategy to sell off subsidiaries or divisions of a company.


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64.DebentureA type of debt instrument that is not secured by physical asset orcollateral. Debentures are backed only by thegeneral creditworthiness and reputation of the issuer. Bothcorporations and governments frequently issue this type of bond in

order to secure capital.65.DebtAn amount of money borrowed and owed by one party to another.

66.Debt FundAn investment pool, such as a mutual fund or ETF, in which coreholdings are fixed income investments.The fee ratios on debt funds arelower, on average, than equity funds because the overall managementcosts are lower.

67.DeflationA general decline in prices, often caused by a reduction in the supplyof money or credit. It is the opposite of inflation.

68.DelistingThe removal of a listed security from the exchange on which it trades.69.Derivative

A security whose price is dependent upon or derived from one or moreunderlying assets. The derivative is a contract between two or moreparties. Its value is determined by fluctuations in the underlying assetlike commodities, bonds, stocks, etc

70.DisinvestmentThe action of an organization or government selling or liquidating anasset or subsidiary.

71.Diversification

A risk-management technique that mixes a wide variety of investmentswithin a portfolio. The rationale behind this technique contends that aportfolio of different kinds of investments will, on average, yield higherreturns and pose a lower risk than any individual investment foundwithin the portfolio.

72.DividendDistribution of a portion of a company's earnings, decided by the boardof directors, to a class of its shareholders.

73.DowngradeA negative change in the rating of a security.

74.Due Diligence - DD

An investigation or audit of a potential investment.75.EBITDA - Earnings Before Interest, Taxes, Depreciation and

AmortizationEBITDA is a good metric to evaluate profitability

76.EPS - Earnings Per ShareEPS is the earning on each share of a company


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77.ESOP - Employee Stock Ownership PlanA qualified, defined contribution, employee benefit plan designed toinvest primarily in the stock of the sponsoring employer.

78.Earnings EstimateAn analyst's estimate for a company's future quarterly or annual

earnings.79.Earnings SurpriseWhen the earnings reported in a company's quarterly or annual reportare above or below analysts' earnings estimates.

80.Equity FundA mutual fund that invests in a broad, well-diversified group of stocks.

81.Ex-DividendThe trading of shares when a declared dividend belongs to the sellerrather than the buyer.

82.Exponential Moving Average - EMAA type of moving average that is similar to a simple moving average,

except that more weight is given to the latest data.83.FCCB- Foreign Currency Convertible BondA type of convertible bond issued in a currency different than theissuer's domestic currency.

84.FDI - Foreign Direct InvestmentAn investment abroad, usually where the company being invested in iscontrolled by the foreign corporation.

85.FII - Foreign Institutional InvestorAn investor or investment fund that is from or registered in a countryoutside of the one in which it is currently investing.

86.Face Value

The nominal value of a security stated by the issuer. For shares, it isthe original cost of the share shown on the certificate.87.Financial Porn

A slang term used to describe sensationalist reports of financial newsand products causing irrational buying that can be detrimental toinvestors' financial health.

88.Fiscal YearAny 12-month period that a company uses for accounting purposes.

89.Fully Paid SharesShares issued in which no more money is required to be paid to thecompany by shareholders on the value of the shares.

90.Fund Of FundsA mutual fund that invests in other mutual funds.

91.Fundamental AnalysisFundamental analysis is to produce a value that an investor cancompare with the security's current price in hopes of figuring out whatsort of position to take on that stock.


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92.FuturesA financial contract obligating the buyer to purchase an asset (or aseller to sell an asset) at a predetermined date and price.

93.GAAP - Generally Accepted Accounting PrinciplesThe common set of accounting principles, standards and procedures

that companies use to compile their financial statements.94.GDPThe forfeited output of a country's economy.

95.GDR - Global Depositary ReceiptA bank certificate issued in more than one country for shares in aforeign company. The shares are held by a foreign branch of aninternational bank.

96.Gilt FundA mutual fund that invests in several different types of medium andlong-term government securities in addition to top quality corporatedebt.

97.Going PublicThe process of selling shares that were formerly privately held to newinvestors for the first time. Also known as Initial public offering (IPO).

98.Green Field InvestmentA form of foreign direct investment where a parent company starts anew venture in a foreign country by constructing new operationalfacilities from the ground up.

99.Greenshoe OptionA provision contained in an underwriting agreement that gives theunderwriter the right to sell investors more shares than originallyplanned by the issuer.

100. Growth FundA diversified portfolio of stocks that has capital appreciation as itsprimary goal, and thereby invests in companies that reinvest theirearnings into expansion, acquisitions, and/or research anddevelopment.

101. GuidanceInformation that a company provides as an indication or estimate oftheir future earnings.

102. HaircutThe difference between prices at which a market maker can buy andsell a security.

103. HammeringThe rapid and concentrated sale of a stock thought to be overvaluedby the market.

104. HedgeMaking an investment to reduce the risk of adverse price movementsin an asset. Normally, a hedge consists of taking an offsetting positionin a related security, such as a futures contract.


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105. Hedge FundAn aggressively managed portfolio of investments that uses advancedinvestment strategies such as leverage, long, short andderivative positions in both domestic and international markets withthe goal of generating high returns.

106. Holding PeriodIn a long position, holding period refers to the time between an asset'spurchase and its sale. In a short sale, the length of time for which theshort position is held.

107. Initial Public Offering - IPOThe first sale of stock by a private company to the public.

108. Iceberg OrderA large single order that has been divided into smaller lots, usually bythe use of an automated program, for the purpose of hiding the actualorder quantity.

109. In And Out

The purchase and sale of a security within a short period of time,usually on the same day.110. Income Fund

A mutual fund that seeks to provide stable current income by investingin securities that pay interest or dividends.

111. IndexA statistical measure of change in an economy or a securities market.In the case of financial markets, an index is essentially an imaginaryportfolio of securities representing a particular market or a portion ofit.

112. Index Fund

A portfolio of investments that is weighted the same as a stock-exchange index in order to mirror its performance.113. Inflation

The rate at which the general level of prices for goods and services isrising, and, subsequently, purchasing power is falling.

114. Inorganic GrowthA growth in the operations of a business that arises from mergers ortakeovers, rather than an increase in the companies own businessactivity.

115. Insider InformationMaterial information about a company's activities that has not been

disclosed to the public.116. Insider Trading

The buying or selling of a security by someone who has accessto material, nonpublic information about the security. Insider tradingcan be illegal or legal depending on when the insider makes the trade.It is illegal when the material information is still nonpublic.

117. Institutional InvestorA non-bank person or organization that trades securities in large


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enough share quantities or dollar amounts that they qualify forpreferential treatment and lower commissions.

118. Interim DividendA dividend payment made before a company's AGM and final financialstatements.

119. IPO Lock-UpA contractual caveat referring to a period of time after a company hasinitially gone public, usually between 90 to 180 days. During theseinitial days of trading, company insiders or those holding majoritystakes in the company are forbidden to sell any of their shares.

120. Joint VentureTwo companies joining together to start a new entity, keeping thecurrent entities untouched to start a business.

121. Key Performance Indicators - KPIA set of quantifiable measures that a company or industry uses togauge or compare performance in terms of meeting their strategic and

operational goals.122. Limit OrderAn order placed with a brokerage to buy or sell a set number of sharesat a specified price or better.

123. LiquidityThe degree to which an asset or security can be bought or sold in themarket without affecting the asset's price.

124. Long TermHolding an asset for an extended period of time. Depending on thetype of security, a long-term asset can be held for as little as oneyear or for as long as 15 years or more.

125. Losing Your ShirtIn the investment world, this expression is used to describe a very badinvestment that causes an investor to lose everything he or she hasinvested.

126. M&A- Mergers And AcquisitionsA merger is a combination of two companies to form a new company,while an acquisition is the purchase of one company by another withno new company being formed.

127. MarginBorrowed money that is used to purchase securities.

128. Margin Call

A broker's demand on an investor using margin to deposit additionalmoney or securities so that the margin account is brought up to theminimum maintenance margin.

129. Market OrderAn order to buy or sell a stock immediately at the best availablecurrent price.


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130. Market PerformMarket perform is a neutral assessment of a stock and is neitherstrongly positive or negative.

131. Market TimingThe act of attempting to predict the future direction of the market,

typically through the use of technical indicators or economic data.132. Market ValueThe current quoted price at which investors buy or sell a share ofcommon stock or a bond at a given time. Also known as "marketprice".

133. Maturity DateThe date on which the principal amount of a note, draft, acceptancebond or other debt instrument becomes due and is repaid to theinvestor and interest payments stop.

134. Medium TermAn intermediate period of time to hold an asset.

135. Mid CapCompanies having a market capitalization between Rs 500 crore andRs 1,000 crore

136. Monetary PolicyThe actions of a reserve bank of india, that determine the size and rateof growth of the money supply, which in turn affects interest rates.

137. Money MarketThe securities market dealing in short-term debt and monetaryinstruments.

138. Mutual FundA security that gives small investors access to a well-diversified

portfolio of equities, bonds and other securities. Each shareholderparticipates in the gain or loss of the fund. Units are issued and can beredeemed as needed.

139. NAV - Net Asset ValueThe total value of the fund's portfolio less liabilities.

140. Offering PriceThe price at which publicly issued securities are made available forpurchase.

141. One Night Stand InvestmentBuying a security with the intention of holding it for the long term, butsubsequently panicking and selling it the following day.

142. Online TradingThe act of placing buy/sell orders for financial securities and/orcurrencies with the use of a brokerage's internet-based proprietarytrading platforms.

143. Open End FundA type of mutual fund where there are no restrictions on the amount ofshares the fund will issue. If demand is high enough, the fund will


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continue to issue shares no matter how many investors there are.Open-end funds also buy back shares when investors wish to sell.

144. Open OfferA secondary market offering that is similar to a rights issue in which ashareholder is given the opportunity to purchase stock at a price that

is lower than the current market price.145. Organic GrowthThe growth rate that a company can achieve by increasing output andenhancing sales. This excludes any profits or growth acquired fromtakeovers, acquisitions or mergers.

146. OversubscribedA situation in which the demand for an initial public offering ofsecurities exceeds the number of shares issued.

147. P/E Ratio - Price-Earnings RatioPE ratio or PE multiples is the ratio arrived by dividing Current marketPrice by Earnings per share of that stock.

148. Par ValueThe face value of a bond.149. Pension Fund

A fund established by an employer to facilitate and organize theinvestment of employees' retirement funds contributed by theemployer and employees.

150. Poop And ScoopA highly illegal practice occurring mainly on the Internet. A small groupof informed people attempt to push down a stock by spreading falseinformation and rumors. If they are successful, they can purchase thestock at bargain prices.

151. PortfolioThe group of assets - such as stocks, bonds and mutuals - held by aninvestor.

152. Preferred StockA class of ownership in a corporation that has a higher claim on theassets and earnings than common stock.

153. PremiumThe difference between the higher price paid for a fixed-incomesecurity and the security's face amount at issue.

154. Price TargetA projected price level as stated by an investment analyst or advisor.

155. Private CompanyA company whose ownership is private.

156. Pro-RataUsed to describe a proportionate allocation.

157. Profit TakingThe action of selling stock to cash in on a sharp rise. This action pushesprices down temporarily.


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158. Public CompanyA company that has issued securities through an initial public offeringand which are traded on at least one stock exchange.

159. Public OfferingThe sale of equity shares or other financial instruments by an

organization to the public in order to raise funds for businessexpansion and investment.160. Pump And Dump

A scheme attempting to boost the price of a stockthrough recommendations based on false, misleading, or greatlyexaggerated statements.

161. QOQ - Quarter on QuarterA measuring technique that calculates the change between one financial quarter and theprevious financial quarter. This is similar to the year over year measure, which comparesthe quarter of one year (Q1 2007) to the same quarter of the previous year (Q1 2006).

162. Quarterly Earnings Report

A quarterly filing made by public companies to report their performance. Included inearnings reports are items such as net income, earnings per share, earnings fromcontinuing operations and net sales.

163. RallyA period of sustained increases in the prices of stocks or indexes.

164. Record DateThe date established by an issuer of a security for the purpose ofdetermining the holders who are entitled to receive a dividend, rightsor bonus.

165. RedemptionThe return of an investor's principal in a security, such as a stock,

bond, or mutual fund.166. RegistrarAn institution or organization that is responsible for keeping records ofbondholders and shareholders.

167. ResistanceThe price at which a stock or market can trade, but which it cannotexceed, for a certain period of time.

168. Rights Offering (Issue)Issuing rights to a company's existing shareholders to buy aproportional number of additional securities at a given price (usually ata discount) within a fixed period.

169. SEBI - Securities And Exchange Board Of IndiaThe regulatory body for the investment market in India.170. Saturday Night Special

A slang term used to refer to a surprise takeover attempt.171. Sector Fund

An investment fund that makes investments solely in businesses thatoperate in a particular industry or sector of the economy.


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172. SensexAn abbreviation of the Bombay Exchange Sensitive Index (Sensex) -the benchmark index of the Bombay Stock Exchange (BSE). It iscomposed of 30 of the largest and most actively-traded stocks on theBSE.

173. Settlement DateThe date by which an executed security trade must be settled. That is,the date by which a buyer must pay for the securities delivered by theseller.

174. Share CapitalFunds raised by issuing shares in return for cash or otherconsiderations.

175. ShareholderAny person, company, or other institution that owns at least 1 share ina company.

176. Shares

A unit of ownership interest in a corporation or financial asset. The twomain types of shares are common shares and preferred shares.177. Short Sale

A market transaction in which an investor sells borrowed securities inanticipation of a price decline and is required to return an equalamount of shares at some point in the future.

178. Short TermHolding an asset for short period of time.

179. Simple Moving Average - SMAA simple, or arithmetic, moving average that is calculated by addingthe closing price of the security for a number of time periods and then

dividing this total by the number of time periods.180. Small CapRefers to stocks with a relatively small market capitalization. It is acompany with a market capitalization less than Rs 500 crore.

181. SpinoffThe creation of an independent company through the sale ordistribution of new shares of an existing business/division of aparent company.

182. Stop-Limit OrderAn order placed with a broker that combines the features of stop orderwith those of a limit order. A stop-limit order will be executed at a

specified price (or better) after a given stop price has been reached.183. Stop-Loss Order

An order placed with a broker to sell a security when it reachesa certain price. It is designed to limit an investor's loss on a securityposition.

184. SupportThe price level which, historically, a stock has had difficulty fallingbelow.


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185. TakeoverA corporate action where an acquiring company makes a bid for anacquiree. If the target company is publicly traded, the acquiringcompany will make an offer for the outstanding shares.

186. Technical Analysis

A method of evaluating securities by analyzing statistics generated bymarket activity, such as past prices and volume. Technical analysts donot attempt to measure a security's intrinsic value, but instead usecharts and other tools to identify patterns that can suggest futureactivity.

187. Technical RallyAn upward movement in a security's price following a declining trend.The movement is caused by technical as opposed to fundamentalfactors affecting sentiment.

188. TickThe minimum upward or downward movement in the price of a

security.189. Top LineA reference to the gross sales or revenues of a company.

190. Trailing EPSThe sum of a company's earnings per share for the previous fourquarters.

191. UnderperformAn analyst recommendation that means a stock is expected to doslightly worse than the market return.

192. UndersubscribedA situation in which the demand for an initial public offering of

securities is less than the number of shares issued.193. UpgradeA positive change in the rating of a security.

194. ValuationThe process of determining the current worth of an asset or company.

195. Vested InterestA financial or personal stake one entity has in an asset, security, ortransaction.

196. VolatilityVolatility refers to the amount of uncertainty or risk about the size ofchanges in a security's value.

197. WarrantA derivative security that gives the holder the right to purchasesecurities (usually equity) from the issuer at a specific price within acertain time frame.

198. Write-OffA reduction in the value of an asset or earnings by the amount ofan expense or loss.


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199. XD - Ex- DividendBuying the shares trading in XD will not entitle you for the dividendwhich is already declared but not yet been issued.

200. YOY- Year Over YearA method of evaluating two or more measured events that compares

the results of measurement at one time period with those from anothertime period, on an annualized basis.201. Yield

Yield is the annual rate of return for any investment and is expressedas a percentage.

202. Zero Dividend PreferencesZero dividend preference shares are Preference shares which receiveno dividends throughout their lives.

stock market and terminology

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