CAPITAL MARKET IS A MARKET WHICH DEALS WITH LONG TERM ASSETS
CREATION.
CAPITAL MARKET-
A) DEBT-
1) BOND. 2) DEBENTURE
B) SHARE MARKET - 1) EQUITY SHARE.
IPO
FPO
RIGHT ISSUE
2) PREFERENCE SHARE
PRIMARY MARKET- IT IS A MARKET
WHERE COMPANY TO CUSTOMER DEALS TAKES PLACE.
SECONDARY MARKET- IT IS A
MARKET WHERE CUSTOMER TO CUSTOMER DEALS TAKES PLACE.
IPO - WHEN A / UNLISTED COMPANY
FIRST TIME SELLING SHARE TO PUBLIC THROUGH PRIMARY MARKET.
FPO- WHEN A COMPANY SELLING
SHARE SECOND TIMES, THIRD TIME AND SO ON AFTER GET LISTED IS KNOWN AS FPO.
RIGHT ISSUE- AFTER IPO OR FPO
ISSUE IF CO UNABLE TO SELL SOME SHARE THEN SHARES ISSUED SOME DISCOUNT TO THEIR
EXISTING SHAREHOLDER.
BONUS ISSUE- WHEN A COMPANY
DISTRIBUTE DIVIDEND FROM THEIR EXCESS RESERVE ACCORDING TO PROPORTION OF SHARES
HOLDING IS KNOWN AS BONUS ISSUE.
BOND- IT IS ISSUED BY GOVT TO
PUBLIC TO TAKE LOAN FOR LONG PERIOD OF TIME.
DEBENTURE- IT IS ISSUED TO
PUBLIC FOR CORPORATE LONG TERM FUND REQUIREMENT. IT IS INSECURE IN NATURE.
PREFERENCE SHARE- IT IS SHARE
BUT ACT LIKE AN INSURANCE CONTRACT. PREF SHARE HOLDER GET PREFERENCE WHILE
COMPANY DISTRIBUTING PROFIT BY COMPANY.
EQUITY SHARE- THIS TYPE OF
SHAREHOLDER HAVING VOTING RIGHT AND CAN ATTAIN AM AND CAN PARTICIPATE COMPANY’S
DECISION MAKING PROCESS. EQUITY SHARE HOLDER FACE HIGH RISK WITH HIGH RETURN.
ADR- IT IS A DEPOSITORY SYSTEM
WHERE A COMPANY WANT HUGE FUND FOR LONG PERIOD OF TIME ASK PERMISSION FROM ONLY
USE STOCK EXCHANGE WITH INDIAN STOCK EXCHANGE. AFTER FULFILLING ALL NECESSARY
REQUIREMENTS CORPORATE GET PERMISSION TO COLLECT MONEY FROM USA STOCK EXCHANGE
THROUGH GET LISTED AS ADR.
GDR- IF CORPORATE GOT
PERMISSION FROM MULTIPLE STOCK EXCHANGES IS KNOWN AS GLOBAL DEPOSITORY RECEIPT.
IDR- IF FOREIGN COMPANY ASKING
PERMISSION FROM INDIA IS KNOWN AS IDR.
DERIVATIVE- WHEN THE VALUE OF
ANY ASSETS DEPENDS UPON THE VALUE OF UNDERLYING ASSETS IS KNOWN AS DERIVATIVE.
FORWARD CONTRACT- IT IS INFORMAL OVER THE COUNTER CONTRACT BETWEEN TWO PARTIES TO DELIVER CERTAIN
ASSETS AT PRE AGREED PRICE AFTER CERTAIN PERIOD OF TIME. BECAUSE THERE IS NO
REGULATORY BODY IF COUNTER PARTY RISK ARISES THEN SETTLEMENT DONE WITH THE HELP
OF COURT.
FUTURE CONTRACT - IT IS STANDARDIZE CONTRACT BETWEEN TWO PARTIES WHERE BUYER/SELLER HAVING BOTH RIGHT
AND OBLIGATION TO SETTLE THAT DEAL AT PRE AGREED PRICE AND PERIOD. BECAUSE OF
REGULATORY THERE IS NO COUNTER PARTY RISK.
OPTION- IT IS A STANDARDIZED CONTRACT WHERE BUYER/SELLER HAVING RIGHT BUT NO OBLIGATION TO SETTLE THAT DEAL
AT PRE AGREED PERIOD BECAUSE HERE LOSS IS LIMITED UP TO THE EXTENT OF
INVESTMENT AMOUNT.
SWAP- IT IS A PROCEDURE OF
DIVERSIFICATION OF RISK. THERE ARE 2 TYPES OF SWAP- 1) CURRENCY RATE SWAP. 2)
INTEREST RATE SWAP.
ASBA- APPLICATION SUPPORTED BY
BLOCKED AMOUNT. HERE APPLICATION IS VALID IF AMOUNT IS BLOCKED IN CUSTOMERS OWN
ACCOUNT. WHEN COMPANY ALLOT SHARE THAN AMOUNT DIRECTLY GET DEDUCTED FROM
CUSTOMERS ACCOUNT AND SHARE GET CREDITED TO CUSTOMERS DEMAT ACCOUNT. IT IS USED
UNDER PRIMARY MARKET.
DEMAT ACCOUNT- PREVIOUSLY SHARE
SHOULD BE ISSUED IN MATERIAL FORM (LIKE FIXED DEPOSIT) BUT TO PROVIDE MORE
LIQUIDITY ITS MATERIALIZED FORM CONVERTED DEMATERIALISED FORM.
MUTUAL FUND- IT IS AN
INSTRUMENT TO COLLECT MONEY FROM PUBLIC AND INVEST IN DIFFERENT MARKET (SHARE,
DEBT, GOLD, MONEY MARKET) ACCORDING TO THE CHOICE OF PUBLIC.
NAV- NET ASSET VALUE. PER UNIT
COST OF INVESTMENT IN MUTUAL FUND IS KNOWN AS NAV. TOTAL ASSETS/ TOTAL
OUTSTANDING NUMBER OF SHARE.
AUTHORIZED CAPITAL - IT IS A
CAPITAL A COMPANY CAN RECEIVE FROM MARKET IN IT LIFE TIME (MAY INCREASE).
ISSUED CAPITAL- IT IS A PART OF AUTHORIZED CAPITAL ISSUED FOR SUBSCRIPTION FOR PUBLIC.
SUBSCRIBED CAPITAL- IT IS A
PART OF CAPITAL PUBLIC OFFERED AGAINST INVITATION OF OFFER BY COMPANY TO
PUBLIC.
PAID UP CAPITAL- IT IS AN
AMOUNT PUBLIC SUBSCRIBED AND COMPANY RECEIVED AMOUNT FROM SHARE HOLDER.
HEDGING- IT IS A PROCEDURE TO
DIVERSIFY RISK BY USING DIFFERENT INVESTMENT TOOLS. LIKE BOND, EQUITY SHARE
CURRENCY, GOLD ETC.
ARBITRAGE- IT IS A PROCEDURE TO
GENERATE PROFIT BY USING TWO DIFFERENT MARKETS PRICE FLUCTUATION.
BULL MARKET- IF SHARE MARKET
MOVING POSITIVELY ON UPWARD DIRECTION IS KNOWN AS BULL MARKET.
BEAR MARKET- IF SHARE ARE
MOVING NEGATIVELY DOWNSIDE IS KNOWN AS BEARISH MARKET.
BLUE CHIP COMPANIES- LARGE CAP
SHARES (CAPITAL MORE THAN 10000 CR) IS KNOWN AS BLUE-CHIP SHARE.
SEBI- SECURITY EXCHANGE BOARD
OF INDIA. SEBI IS A REGULATOR (LIKE RBI FOR BANK) TO AVOID FRAUD, CHEATING
ACTIVITY IN SHARE MARKET AS WELL AS PROMOTE AND EDUCATE PUBLIC.
INDEX- IT IS A SAMPLE OF
OVERALL SHARE MARKET LIKE NIFTY, SENSEX ETC.
SENSEX- IT IS AN INDEX OF
BOMBAY STOCK EXCHANGE OF BEST SHARES. IT IS MANAGED BY STANDARD AND POOR’S
(S&P) AND ALTERS TIME TO TIME ACCORDING TO THEIR PERFORMANCE.
NIFTY- NIFTY IS THE INDEX OF
NSE WHERE FEW THOUSAND SHARES ARE LISTED. CRISIL RATING AGENCY MANAGED INDEX
WITH BEST 50 SHARES AND ALTER IF REQUIRED.
