Investment Management Share/Stock Market
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The document discusses the differences and similarities between stocks, shares, and stock markets. It defines that a share is a unit of ownership in a company that is bought and sold, while stocks refer to the total number of shares a person owns. Both shares and stocks can be traded on a stock market, which is an organized market where securities are bought and sold. The stock market allows individuals and companies to trade shares and includes a primary market for new stock offerings and a secondary market for existing shares.
Investment Management Share/Stock Market
- 2. • 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 Share Market same?
- 3. Share: • 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 the total number of shares a person has in one company or in many companies.
- 4. • 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
- 5. 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
- 6. Market Conditions Bull Market: • A financial market conditions in which prices of securities or group of securities are rising or are expected to rise. • Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue. Bear Market: • It is a market condition in which the prices of securities are falling. • As investors anticipate losses in a bear market and selling continues, pessimism only grows
- 7. 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 over a 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
- 8. • 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. Market Capitalization
- 9. The Top 10 Largest Stock Markets Rank Exchange Name Country Domestic Market Capitalization(Billion Dollars) 1 New York Stock Exchange United States 11,837 2 Tokyo Stock Exchange Japan 3,306 3 NASDAQ United States 3,239 4 Euro next Belgium, France, Holland, Portugal 2,869 5 London Stock Exchange United Kingdom 2,796 6 Shanghai Stock Exchange China 2,704 7 Hong Kong Stock Exchange Hong Kong 2,345 8 Toronto Stock Exchange Canada 1,608 9 BM & FBovespa Brazil 1,337 10 Bombay Stock Exchange India 1,306
- 10. 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. 2. It provide a yardstick with which investors can compare the performance of their individual stock portfolios. 3. 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