Wednesday, February 1, 2012

Facebook entrance into the Share Market, offering IPO

The popular social networking media Facebook after a long time cherishing time has come to the share market providing IPO to the people.The starting day is 1st February.Facebook expects to raise $100 bn stock flotation.


Morgan Stanley has got the prestigious 'Lead left' position for the handling of the deal of the Facebook beating its longtime rival Goldman Sacks(which initially thought would be in that position.).So Morgan Stanley will be the Underwriter for the IPO process  of Facebook.


Facebook's IPO seems to be the largest investment IPO on record greater   than the Google.
It is expected that in the stock market Facebook will be among the top 10 IT public limited company.Facebook will be in the position like the McDonald, Amazon.com, VISA incorporated,Bank of America.


In the stock market the total value of the Facebook's share is expected between 7 thousand crore Dollar to 10 crore Dollar.

Officials expect Facebook will have a strong influence in the share market.

IPO PROCESS INFO


Wednesday, January 25, 2012

Advantages got by the shareholders from the companies

In some ways shareholder got advantage:
1. The Company may declare a Dividend:
Usually companies provide a part of its profit to the existing shareholders by the way of dividend.The normal level of dividend ranges from 5-100%. Loss making,marginal profit making companies may not declare dividend.

2.Rise in the Share price :

As the EPS or earning per share increases the share prices also increase and the investors benefited from the stock markets.


3.The Company may issue Bonus share:
A bonus share is a gift of shares to the shareholders.If a company makes better profit in some years it provides Bonus share to the existing shareholder.The number of shares gifted is proportionate to the number of shares held.The usual ratios in which bonus is issued are 1:5,2:5,3:5 (1:2 bonus implies one share gift for every two shares held)


4.Providing Right Shares:
If a company wants to raise more funds it is obliged to offer these instruments first to the existing shareholders.This offer is called an offer on right basis.

Thursday, January 12, 2012

Secondary market process in the stock market

What is Secondary Market ?
A place where investor purchase Securities or Assets from other investors.The buying and selling place of shares,bond debenture is the secondary market in the stock markets.
The New York Stock Exchange or NYSE, or the NASDAQ, DSE is the Secondary market place.
In the primary market prices are often set beforehand.whereas in the secondary market only basic forces like Supply and Demand determine the price of the Securities.



Which Products available in the Secondary Market?

EQUITY: 
The ownership interest in a company of holders of its common and preferred stocks.Various types of Equity are
1.Equity Share:Known as ordinary shares, represents the form of fractional ownership in which the shareholder is associated with the risk with business venture.

2.Right Share: The issuance of new securities to existing shareholders as a ratio already held.


3.Bonus Shares:Shares issued by the companies to their shareholders free of cost by capitalization of accumulated reserves from the profits earned from the previous years.

 4.Preference Shares: Owners of those shares are entitled to a fixed dividend to be paid regularly before dividend to be paid in respect of equity shares.

 5.Cumulative Preference Share:Preference shares on which dividend accumulates if remains unpaid.

6.Government Securities:These are sovereign coupon instruments which are issued by the Reserve bank on behalf of the Government.These securities have a fixed coupon that is paid on specific dates on half yearly basis.


7.Debenture:Bonds issued by a company bearing a fixed rate of interest payable usually half-yearly and principal amount repayable on particular date on redemption of the debentre.


8.Bond:Investors lend money to issuer and in exchange the issuer promises to repay the loan in a specified date including interest.


9.Commercial Paper:A short term notes issued by the big companies to raise fund for them.They provide interest for it.


10.Treasury Bills:Short term (up to 91 days) bearer discount securities issued by the government as a means of financing cash requirements.


                                                   

Friday, January 6, 2012

PROCESS IN THE STOCK MARKET: IPO

IPO stand for initial public offering. After registering in the securities and exchange commission the public limited company has to go for the IPO. 
The IPO process in the stock markets is given below 


1.Decision to issuance of shares -Done by Issuer

2.Appointment of intermediaries -Done by Issuer

3.Draft of Red herring prospectus -Done by issuer, investment bank,legal advisor.

4. Preparation to finalize -Done by Issuer with intermediaries

5.Introduction of bid - Done by Issuer, investment bank

6.Offer closure - Done by Issuer, investment bank.

7.Allotment of securities - Done by issuer, investment bank

8.Refund of money - Done by Issuer, investment bank 

The process for the investor for the application of  IPO in stock markets:

 When a company comes with an IPO it prints and circulates The IPO application form among the investor.

To subscribe to an IPO , investor initially needs to fill up an application form these forms are available with brokers,sub-brokers, investment adviser, and also available in the stalls and in the footpath outside of the stock exchange. One can also download the form from the website of the company.After getting the form you need to fill it, remit the amount after calculation of the number of shares applied for in the banks,that is furnished in the form as collection center for the IPO.Investors has to disclose the details of their demat  amount and bank in the form.


My shares have been Allotted to me or not, how I can be informed ?

If the the investors have been allotted for the shares, he will is entitled to get a Confirmatory Allotment Note or (CAN) withing 15 days from the date of the book built issue.The merchant banker publishes an advertisement providing the details of the over subscription,basis of allotment, percentage of successful allotees,date of the distribution of Refund.
The investor can contact directly to the office of the register of the company about the allotment of the shares.It is a common process in the stock markets.

How I will be refunded if  shares are not allotted to me:
If one not has been alloted the shares, he will receive the refund of money.The merchant banker will advertise in the Newspaper or other media about the distribution of the shares.Then investor 
will receive the cheque  from the authorized banks.


Friday, November 18, 2011

Stock market basic information

Stock markets are the place for the selling of the share, stock, bond, debenture. Investor here do their dealings.In the share market different companies raise their required money for the running of their companies. Big and small investors purchase those company`s share for the purpose of getting dividend or selling the share for more price than they buy.
Dividend are the return from the companies  for the shareholder. share get the dividend according to the proportion of their shares.There may be two types of dividend..

Cash dividend:here dividend is given in cash to the investor. Cheque is mailed to the share holder.


Stock dividend: here dividend is given to the share holder by increasing their existing share.



 

Usually invesors trade their share through various brokerage houses.Brokerage houses take commisission for the share buying and selling.From the consultant of the brokerage house investor can be informed about the best and worst shares.
Trade in the share markets are only for those who can take frequent knowledge about the share MarketWhat is Good and Which is Bad Share?
Share which are from reputed company providing better dividend and classified as "A" category share are secured share and which from non reputed company and providing seldom dividend and classified as "Z" category are in-secured share.

Is it Secured to invest in the Stock markets?
Yes it is secured to invest in the stock markets if  you have proper knowledge about the share market. You need to know about following factors

EPS : Earning per share of the company which you want to invest.

1.Market value compared to the face value of the share.


2.Financial position of the company.


3.Last year dividend of the company


4.Market capturing capability of the company

5.Profit and Loss ratio of the company


6. Dividend payout ratio

Which sorts of share seems to be secured in the stock markets :


1. Banking sectors
2. Investment
3. Fuel and power
4. Pharmaceutical and chemicals
5. Service
6. Tannery
7. Insurance


Which seems to be in-secured:
1.Food and allied products
2. Zute
3.Textiles
4. Paper and printing
5. Cement
6. IT- sector
7. Ceramics 




Marketplace for the share and stock:

IPO: Initial public offering, from where the share initially bought.

Secondary market: Where the  primary share are sold and bought

Brokerage House: Which is the media for buying and selling of shares
                     
How to invest in the stock market:
Identify the profitable sector:
The foremost work to be done is that to identify the best sector. If you want to pullout the invested money in short term you need to invest into the critically moving sectors.You should not affect by the third party influence rather you should watch the whole share market carefully.Short term share investment means to pullout the invested money within 3-4 months if you work properly.
If you want the investment continuation for next generation you  need go for the long term investment which  sustain over at least 6 months.Before investment you need to know about pros and cons of the desired investment company.You need to know the dividend per year paid to the shareholder , earnings per share, pricing ratio, net earnings of the company.

Why Stock or Share price changes?:
The major concern for most of the investor about the change of the stock price.Stock price may increase or decrease.The change of stock price are due to some reasons.Those are-

1.Company earnings
2.Company growth
3.Company layoff
4.Economy
5.Inflation
6.Oil price
7.Today`s market
8.Year`s market
9.Company news
10.World news
11.Chart pattern
12.Supply and demand
13.Hype
14.Fear and greed
15.Syndicate