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Stocks
Equity shares of ownership in a corporation that give the holder a claim on the company's earnings and dividends
3,861 Questions
What is the income you earn from the shares dividend?
Income earned from shares is called dividend income and shown in income statement as "Other income".
Why would a company issue stock rather than debt to finance its operations?
This is not applicable to all cases.If a company is operating under uncertain markets where profits u get is not stable it is better to go for stock issues which gives u an option to return bk the money to shareholders when company have good profits but at the same time if u have debt financing irrespective of the market conditions u have to pay interest expenses which may pose u big trouble in bad conditions.Hence companies to be on safe side goes for equity rather than debt
Give the brief note on the Organisational structure of nse and bse?
The National Stock Exchange (NSE), located in Bombay, is India's first debt market. It was set up in 1993 to encouragestock exchange reform through system modernization and competition. It opened for trading in mid-1994. It was recently accorded recognition as a stock exchange by the Department of Company Affairs. The instruments traded are, treasury bills, government security and bonds issued by public sector companies.
The number of members trading on the exchange has been on a steady increase, helping integrate the national market and providing a modern system with a complete audit trail of all transactions.
Membership
- 1026 trading members on the Capital Market segment, of which around 86% account for corporates and the remaining individuals and firms.
- 113 trading members on the Wholesale Debt Market segment, all of which account for corporates. (Out of these 113 trading members, 106 are members of the Capital Market segment also and are included in the 1026 members indicated above).
Geographic Distribution
- Over 2600 trading terminals
- Over 1500 VSAT's across the country with a 24 hour Network monitoring system in over 160 cities as of December 31st, 1997.
Number of Companies
- On the Capital Market segment, 600 securities are listed and 762 securities are permitted to trade as of December 31st, 1997.
- On the Wholesale Debt Market segment, 470 securities are listed and 369 securities are permitted to trade as of December 31st, 1997. Of the 470 securities listed, 267 are Government Securities, T-Bills and the balance account for other securities.
Capital Market Operations
- NSE is working to increase the capacity of the trading system from the present 4,00,000 trades per day to more than 10,00,000 trades per day.
- The average daily numbers of trades have gone up from over 893 trades in November-94 to over 1,48,783 trades in November 97. On August 7, '97 the number of trades reached a record high of 2,36,411 which makes NSE one of the largest stock exchanges in the world.
- Average daily traded value has increased from Rs.7 crores in November-94 to more than Rs. 1480 crores in December-97 with a high of Rs.3,080.61 crores recorded on 26th June-97.
- Number of shares traded has increased from 76.10 lakhs in November-94 to 11,148.21 lakhs in December-97.
- Net traded value has increased from Rs.125 crores in November -94 to Rs. 32,549 crores in December-97.
- Delivered value (settlement wise) has increased from Rs.60 crores in November -94 to Rs.5,008 crores in December -97.
- Number of shares traded (depository segment) has increased from 200 shares in December -96 to 1,19,102 shares in December-97.
- Net traded value (depository segment) has increased from Rs.0.43 lakhs in December -96 to Rs.185.44 lakhs in December-97.
- Market share of cities other than five metros (Mumbai, Delhi, Calcutta, Chennai & Ahmedabad) which was about 16% in first quarter of 1996 grew to as high as 24% during the last quarter of 1997.
- The ratio of contribution to turnover from Non Stock Exchange centres to Stock Exchange centres has risen from 0.36% in first quarter (Jan to Mar) of 1996 to over 10% in fourth quarter of 1997.
- The market capitalisation of companies has increased from Rs. 292637 crores in November'94 to Rs. 4571663 crores in February'98.
Clearing & Settlement
- Completed 170 settlements successfully without any delay or postponement as on February 28, 1998.
- Value of shares handled by the Clearing house per week has increased from Rs. 30 crores in November-94 to over Rs.1042 crores per week in December-97. The highest value of shares handled during the period was more than Rs. 2251.40 crores.
- Inter-Region Clearing : NSCCL has Regional Clearing Centres at Delhi, Calcutta, Chennai and a Central Clearing Centre at Mumbai. Members have the option of delivering/receiving the securities at a clearing centre chosen by them.
Wholesale Debt Market Operations
- The WDM segment commenced operations on June 30, 1994 with 224 securities carrying an outstanding debt value of Rs. 1,35,000 crores (US$ 34 billion). This has now increased to 839 securities with a market capitalisation of Rs. 3,50,565 crores (US$ 88 billion). More than half of the securities available for trading are listed and the balance are permitted to trade.
- Currently, the Exchange has 78 registered participants on the WDM segment which includes 24 Public sector banks, 18 Foreign banks, 15 Private sector banks, 6 Primary dealers, 5 Financial institutions, the others being corporate bodies, mutual funds and foreign debt fund.
- Average daily value in the WDM segment increased from Rs. 2.4 crores in June-94 to Rs. 298.17 crores in December -97 with a high of Rs. 1831.27 crores recorded on 12-Aug-97.
- Net traded value in the WDM segment increased from Rs. 1096.25 crores in July -94 to Rs. 7,752.52 crores in December-97 with a high of Rs. 15,545.40 crores recorded in July '97.
- There has been a consistent increase in NSE's share of the total volume of activity in the market (gilt securities) over the period. Government securities along with Treasury bills together account for over 80% of the total market activity.
- The share of the Exchange of the total market activity in Government Securities and T-Bills has increased from a mere 22% in 1996 to 53% in 1997.
What is the full from demat account?
DEMAT stands for De-Materialized. A Demat account is one in which customers hold shares and other securities in electronic or de-materialized format. A Demat account is a mandatory requirement these days to trade in shares in India. ICICI, HDFC, SBI, Reliance etc. are all leading Demat account providers in India.
Allotment of shares by a company is not a transfer of property by the company in favor of allottees?
Acc. to the basic rule of company law: a co. has a separate and distinct entity from that of its owners, thus, a shareholder is the owner of the company to the extent he holds shares of that co. but he cannot own the property of the co.
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If your company is acquired how are your shares affected?
It may have either a positive or a negative impact on the price of your stocks.
Let us say XYZ Ltd has 1 million shares in the market out of which 400,000 is in the market and the remaining 600,000 shares is held by the management of XYZ.
Assuming ABC Ltd wants to acquire XYZ, the 600,000 shares would be owned now by ABC and the remaining 400,000 would remain with the investors.
Based on the history and past performance of ABC and the kind of management changes it plans on bringing into XYZ limited the price of the XYZ shares in the market might change. It can either go up or go down. Also, the share would get renamed to stocks of ABC Ltd and will no longer be stocks of XYZ Ltd.
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you buy stock's to hope that the price you bought them for rises, so you can then sell them, then subract the difference and gain a nice sum of cash.
What is the definition of earnings per share?
Earning per share is that per share amount of earning which is only relevant to common share holders of business and calculated as follows:
EPS = Net income available to common shareholders / Outstanding shares
What does it means to liquidate stock?
To have a big sale and sell everything off quickly! Maybe cheaply!
Can you sell stock if market is closed?
Yes, it is possible to trade stocks "after hours" through brokers that facilitate this type of trading.
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Where can you buy and sell stocks?
From an organized stock exchange like BSE, NSE, NASDAQ etc using a registered stock broker
ESOP stands for Employee Stock Option Plan whereby a company grants/issues shares to its employees either free or at a discount when compared to the market price.
You would need to fill up forms with your employer and provide details of your trading account and pay up the money that is required to buy the stocks as part of ESOP to buy them.
Do stock owners own the company?
Yes. They own a portion of the company. If a company has 1000 shares totally and you have bought 100 of them, then you are a 10% owner of the company
What happened to international thermal packaging inc?
Dennis Thomas, Dennis Brown and all the other crooks (Barney Guarino, etc.) took the money and ran. They sold our patents and kept the money for themselves. Hopefully they are all dead by now.
What does it mean to have shares or stock in a company?
having shares or stock in a company means the shareholder owns a specific percentage of the the company depending on the amount of share he/she has. And company's financial performance has a direct effect on the value of the shares.
What is the difference between dividends and interest?
It is very important that the self directed investor understands the difference between dividends and interest.
-Dividends- Dividends are generally paid to shareholders of a publicly traded company.
-Interest- Earning interest would be from loaning your money. If you put your money in the bank or buy bonds you are actually loaning your money.
The single most important reason for knowing the difference is tax. Dividends are taxed at a different rate than interest earned. It is suggested to seek professional accounting advice on how these tax rates affect you.
