Fundaental Analysis of Nifty Fifty

Topics: Stock market, Stock, Stock exchange Pages: 51 (12957 words) Published: March 13, 2013
Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations that manage money, including credit unions, banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises. INDIAN STOCK BROKING INDUSTRY

The Indian broking industry is one of the oldest trading industries that have been around even before the establishment of BSE in 1875. BSE is the oldest stock market in India. The history of India stock trading starts with 318 persons taking membership in Native share and Stock Brokers Association, which we know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. BSE and NSE represent themselves as synonyms of India stock market. The history of India stock market is almost the same as the history of BSE The regulations and reforms laid down in the equity market has resulted in rapid growth and development .Basically the growth in the equity market is largely due to the effects intermediaries. The broking houses not only act as an intermediate link in the equity market but also in the commodity market, the foreign currency exchange market and many more. The broking houses have also made an impact on foreign investors to invest in India to a certain extent. In the last decade, the Indian brokerage industry has undergone a dramatic transformation..Large and fixed commissions have been replaced by wafer thin margins , with competition driving down the brokerage fee , in some cases to a few basis points. There have also been major changes in the way the business is conducted. The scope of services has enhanced from being equity products to a wide range of financial services. FINANCIAL PRODUCTS

The survey also revealed that in the past couple of years, apart from trading, the firms have started various investment value services. The sustained growth of the economy in the past couple of years has resulted in broking firms offering many diversified services related to IPO’s, mutual funds, company research etc… However, the core trading activity is still the predominant form of business, forming 90% of the firms in the sample. 67% firms are engaged in offering IPO related services. The broking industry seems to have capitalized on the growth of the mutual fund industry, which pegged at 40% at 2006. More than 50% of the sample broking houses deal with mutual fund investment services. The average growth in assets under management in the last two years is almost 48 research services. Additionally, a host of other value added services such as fundamental and technical analysis, investment banking, arbitrage etc. Is offered by the firms at different levels. CAPITAL MARKET

The capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. Capital markets may be classified as primary markets and secondary markets. At primary market new stock or bond issues sell to invest via a mechanism known as underwriting. In secondary markets, existing securities are sold and brought among investors or traders, usually on a securities exchange, over the counter or elsewhere. The capital market includes e stock market (equity securities) and Bond market (debt). PRIMARY AND SECONDARY CAPITAL MARKETS

A company cannot easily attract investors to invest in their securities if the investors cannot subsequently trade these securities at will. In other words, securities cannot have a good primary market unless it is ensured of an active secondary market.

Securities generally have two stages in their lifespan. The first stage is when the company initially issues the security directly from its treasury at a predetermined offering price. The primary market is the market for...
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