Ms. Renu Bhandari, Manager, National Stock Exchange delivered a lecture here at IIT Delhi on Wednesday, 28 September. The lecture, presented in the V-Lecture Theatre-1, was attended by 100+ enthusiastic students, both from IIT and from nearby colleges. The lecture was basically an introduction to the stock exchange market, with Ms. Bhandari explaining the origins of the stock exchange and how NSE has grown in the post-reforms period---how a volume of Rs.2 Crore trade per day in 1994 has grown to Rs.2 lakh crore per day in 2011.
Ms. Bhandari discussed mutual funds and the emergence of the Gold ETFs---Exchange traded funds backed by gold. ETFs are based on real time movement of the underlying---gold or equities. The key difference between mutual fund and ETFs is that whereas mutual funds can be subscribed or redeemed only at the start or at the end of day-trade, ETFs can be traded in real-time.
NSE has made efforts to eliminate unauthorized intermediaries. Earlier large volume buyers were given preference and were given lower buying prices and higher selling prices than the ordinary buyer. With the elimination of unauthorized intermediaries, there are now equal prices for both the large and low volume buyers---effectively the democratization of the stock market. She explained that investors should deal only with intermediaries registered with SEBI. This is because in the case of complaints against the intermediary, NSE can only help the investor when the concerned Mutual Fund is registered with them.
She explained the main steps that an investor has to take before investing:
Ms. Bhandari also gave an introduction to the primary market comprising IPOs, and the secondary market comprising equities that are traded daily. Oversubscription of IPOs means that the IPO is booked more than the number of shares to be alloted. For instance if the IPO is oversubscribed 4 times, it means that for every 1 share there are four investors who have applied. In such a case each investor is allotted one-fourth the number of shares that they applied for. Whereas the price of an IPO depends on speculation, the long-term investment in that share depends on the business plan overall strategy of the company. She explained that short-term investments are speculations---they rely on profit/loss solely on by-the-minute news of the company, and not on the long-term plans and growth of a company.
She cautioned that even big name companies are not completely reliable to bring profits. Whether a stock performs well or not depends on many aspects, which include the kind of orders that it receives, the competition in the market that it has entered, and many other factors which depend not completely on the big name of the concerned company.
Ms. Bhandari discussed mutual funds and the emergence of the Gold ETFs---Exchange traded funds backed by gold. ETFs are based on real time movement of the underlying---gold or equities. The key difference between mutual fund and ETFs is that whereas mutual funds can be subscribed or redeemed only at the start or at the end of day-trade, ETFs can be traded in real-time.
NSE has made efforts to eliminate unauthorized intermediaries. Earlier large volume buyers were given preference and were given lower buying prices and higher selling prices than the ordinary buyer. With the elimination of unauthorized intermediaries, there are now equal prices for both the large and low volume buyers---effectively the democratization of the stock market. She explained that investors should deal only with intermediaries registered with SEBI. This is because in the case of complaints against the intermediary, NSE can only help the investor when the concerned Mutual Fund is registered with them.
She explained the main steps that an investor has to take before investing:
- Identifying surplus funds
- Identifying products
- Choosing intermediary
- Completing registration formalities
- Deciding on what, when and how much
- Monitoring the market movements
- Decision on Stop Loss or Book Profit
Ms. Bhandari also gave an introduction to the primary market comprising IPOs, and the secondary market comprising equities that are traded daily. Oversubscription of IPOs means that the IPO is booked more than the number of shares to be alloted. For instance if the IPO is oversubscribed 4 times, it means that for every 1 share there are four investors who have applied. In such a case each investor is allotted one-fourth the number of shares that they applied for. Whereas the price of an IPO depends on speculation, the long-term investment in that share depends on the business plan overall strategy of the company. She explained that short-term investments are speculations---they rely on profit/loss solely on by-the-minute news of the company, and not on the long-term plans and growth of a company.
She cautioned that even big name companies are not completely reliable to bring profits. Whether a stock performs well or not depends on many aspects, which include the kind of orders that it receives, the competition in the market that it has entered, and many other factors which depend not completely on the big name of the concerned company.
Great lecture thanks for share this and i am try to do this but no more time to attend that type of lecture
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