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• Stock market and share market essentially mean the same thing. Both terms describe an exchange in which buyers and sellers of stock or shares may trade in a market with high liquidity

Is the Stock Market and ShareMarket same?

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Share:

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• Share is a unit issued by a company at the time of raising fund from the market. It is a certificate issued to a person who applies for it and is given at a value predetermined by the company.

• It is the smallest unit of ownership that may be bought or sold on or off an exchange.

Stock:• Stocks in the reference of stock market are

th total number of shares a person has in one company or in many companies.

Stock & Share Tips

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• Stock market is an organised market, where securities of govt, semi govt bodies and corporate enterprises are brought or sold.

• It is established for the purpose of assisting, regulating and controlling business in buying selling and dealing in securities.

• In the stock market only those securities listed in the stock exchange are transacted.

• Individuals alone can buy and sell securities.

Stock Market

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1. Primary Market:

• The first group of investors to whom a new issue of a security is sold.

• The primary market consists of the issuer and the first buyers of the issue.

• The primary market can be a time more volatile than the secondary market because it is difficult to determine the underlying value of new issues.

2. Secondary Market:

• A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves.

• The national exchanges - such as the New York Stock Exchange and the NASDAQ are secondary markets.

Types of Stock Market

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er

BLUE CHIP :• The blue chips carry the highest value.• Large, established firms with a long record of profit growth, dividend

payout and a reputation for quality management, products and services are referred to as Blue Chip companies and their stocks are Blue Chip stocks.

PENNY :• Penny stocks are low-priced, speculative stocks that are very risky.• These stocks are generally issued by the type of companies with a

short or erratic history of revenues and earnings.INCOME :• Income stocks are stocks that pay higher-than-average dividends

ova sustained period.

• These above average dividends tend to be paid by large, established companies with stable earnings.

VALUE :• A value stock is a type of stock that is currently selling at a low price.• Companies that have good earnings and growth potential but whose

stock prices do not reflect this are considered value companies.• Investors who buy value stocks believe that these stocks are only

temporarily out of favour and will soon experience great growth.

Types of Stocks

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Procedure for listing in Stock Exchanges

1. Company decide to go public and raise fund from the market and decide upon the Total amount to be raised from the Market.

2. They get clarification from SEBI.3. This amount is broken down in number of shares by

deciding the Face Value. As per the norms of the SEBI the FV is to be multiple of 5. Normal practice is keeping this at Rs10.

4. Then the No of shares to be introduced in the Market is decided.

5. Depending upon the response of the Stock as IPO, when it is opened on Secondary Market the price is decided.

6. The combined collection of the firm from IPO and Secondary Market operations becomes the Market Capitalisation of the firm, from which a share of Profitability is distributed among the share holders in theWefoarmlotfhDividRendesearch

Market Capitalization

• Market capitalization is often called as market cap is a measurement of the size of a business enterprise.

• It is the total dollar market value of all of a company's outstanding shares calculated by multiplying a company's shares outstanding by the current market price of one share.

• The companies were divided into large-cap, mid- cap, and small-cap based on the size of market capitalization.

Large-cap: $10 billion–$100 billion. Mid-cap: $1 billion–$10 billion.Small-cap: $100 million–$1 billion.

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Bombay Stock ExchangeType Stock Exchange

Location Mumbai, India

Founded 1875

Owner Bombay Stock Exchange Limited

Key people Madhu Kannan (CEO & MD)

Currency Indian rupee

No. of listings 5,085

Market Cap US$1.8 trillion (Dec 2010)

Volume US$231 billion (Nov 2010)

IndexesBSE SENSEXBSE Small Cap BSE Mid-Cap BSE 500

Website www.bseindia.com

National Stock ExchangeType Stock Exchange

Location Mumbai, India

Founded 1992

Owner National Stock Exchange of India Limited

Key people Ravi Narain (MD)

Currency Indian rupee

No. of listings 1,552

Market Cap US$1.59 trillion (Dec 2010)

IndexesS&P CNX Nifty CNX Nifty Junior S&P CNX 500

Website www.nse-india.com

The stock market indexes are useful in a number of ways to stock investors:

1. The market indexes provide an historical perspective of stock market performance.

1. It provide a yardstick with which investors can compare the performance of their individual stock portfolios.

1. It acts as a forecasting tool. Studying the historical performance of the stock market indexes, investors can forecast trends in the market

Importance Of Indices

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