logging in or signing up financial market ahmadshavez Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 2549 Category: Education License: All Rights Reserved Like it (10) Dislike it (0) Added: April 25, 2010 This Presentation is Public Favorites: 6 Presentation Description No description available. Comments Posting comment... By: sreenivas.jpl (8 month(s) ago) this ppt give complete information abt finacial market.Can u give me permission to dwnload this ppt Saving..... Post Reply Close Saving..... Edit Comment Close By: sreenivas.jpl (8 month(s) ago) plz send this ppt Saving..... Post Reply Close Saving..... Edit Comment Close By: rahulsmarty (14 month(s) ago) nice presentation Saving..... Post Reply Close Saving..... Edit Comment Close By: shreekumar (14 month(s) ago) Very nice presentation financial market. Saving..... Post Reply Close Saving..... Edit Comment Close By: vandnababbli (17 month(s) ago) this ppt give complete information abt finacial market.Can u give me permission to dwnload this ppt Saving..... Post Reply Close Saving..... Edit Comment Close loading.... See all Premium member Presentation Transcript Slide 1: Financial system Prepared by:-SHAVEZ AHMAD Under guidance of:- Mr. RAJEEV SINGH BHANDARI Work of financial system : Work of financial system Process of financial system : Process of financial system Seekers Of funds (mainly Business Firms And Government) Suppliers Of Funds (mainly Households) Flow of funds(savings) Flow of financial services Incomes and financial claims Function of financial system : Function of financial system Slide 5: Types of Financial Markets Capital Market Money Market Forex Market Equity Debt Retail Corporate Banks FI FIIs T-Bills Call Money ICD, CP, CD Banks Corporate FI, FIIs Spots Forwards Banks Corporate FI, FIIs Agriculture Produces, Metals, Financial futures like Interest rate, currency, indices etc Banks, FIs Corporate Derivatives Market Structure of Indian financial system : Structure of Indian financial system Financial Markets : Financial Markets Defined as the market in which financial assets are created or transferred. These assets represent a claim to the payment of a sum of money sometime in the future and/or periodic payment in the form of interest or dividend. Classification : Classification Money market Capital Market (Short term instrument) Capital market (Long term instrument) The most important distinction between the two: The difference in the period of maturity. Money Market : Money Market Main Function To channelize savings into short term productive investments like working capital . INSTRUMENT Call Money Market : Call Money Market Part of the national money market Day-to day surplus funds mainly of banks are traded Short term in nature Maturity of these loans vary from 1 to 15 days Lent for 1 day: Call money Lent for more than 1 day but less than 15 days: Notice money Convenient interest rate Highly liquid loan repayable on demand Commercial Papers : Commercial Papers Unsecured Promissory note. Issued by well known companies with strong and high credit rating. Sold directly by the issuers to investors or through agents like merchant banks and security houses. Flexible Maturity Low interest rates with compared to banks. Imparts a degree of financial stability to the system. Promissory Note : Promissory Note Referred as note payable in accounting It is a contract detailing the terms of a promise by one party (the maker) to pay a sum of money to the other (the payee). The obligation may arise from the repayment of a loan or from another form of debt. For example, in the sale of a business, the purchase price might be a combination of an immediate cash payment and one or more promissory notes for the balance. Certificates of deposits : Certificates of deposits Defined as short term deposit by way of usance promissory notes. Greater flexibility to investors in the deployment of surplus funds. Permitted by the RBI to banks Maturity of not less than 3 months and upto 1 year. Transferable in nature Free negotiability and limited flexibility Capital Market : Capital Market Provided resources needed by medium and large scale industries. Purpose for these resources Expansion Capacity Expansion Investments Deals in long term instruments and sources of funds Activity of capital market : Activity of capital market Functioning as an institutional mechanism to channelize funds from those who save to those who needed for productive purpose. Provides opportunities to various class of individuals and entities. Structure of Capital Markets : Structure of Capital Markets TYPE OF ISSUE : TYPE OF ISSUE INTERNAL SOURCE OF FINANCE AND GROWTH : INTERNAL SOURCE OF FINANCE AND GROWTH Organic growth’ – growth generated through the development and expansion of the business itself. Can be achieved through: Generating increasing sales – increasing revenue to impact on overall profit levels Use of retained profit – used to reinvest in the business Sale of assets – can be a double edged sword – reduces capacity? External Source of finance : External Source of finance Long Term – may be paid back after many years or not at all! Short Term – used to cover fluctuations in cash flow 'Inorganic Growth' : 'Inorganic Growth' Acquisitions The necessity of financing external inorganic growth Merger: firms agree to join together – both may retain some form of identity Takeover: One firm secures control of the other, the firm taken over may lose its identity What is venture capital : What is venture capital Pooling of capital in the form of limited companies – Venture Capital Companies Looking for investment opportunities in fast growing businesses or businesses with highly rated prospects May also buy out firms in administration who are going concerns May also provide advice, contacts and experience Long term : Long term Shares (Shareholders are part owners of a company) Ordinary Shares (Equities): Ordinary shareholders have voting rights Dividend can vary Last to be paid back in event of collapse Share price varies with trade on stock exchange Preference Shares: Paid before ordinary shareholders Fixed rate of return Cumulative preference shareholders – have right to dividend carried over to next year in event of non-payment New Share Issues – arranged by merchant or investment banks Rights Issue – existing shareholders given right to buy new shares at discounted rate Bonus or Scrip Issue – change to the share structure – increases number of shares and reduces value but market capitalisation stays the same Long term : Long term Loans (Represent creditors to the company – not owners) Debentures – fixed rate of return, first to be paid Bank loans and mortgages – suitable for small to medium sized firms where property or some other asset acts as security for the loan Merchant or Investment Banks – act on behalf of clients to organise and underwrite raising finance Government/EU – may offer loans in certain circumstances Grants Short term : Short term Bank loans – necessity of paying interest on the payment, repayment periods from 1 year upwards but generally no longer than 5 or 10 years at most Overdraft facilities – the right to be able to withdraw funds you do not currently have Provides flexibility for a firm Interest only paid on the amount overdrawn Overdraft limit – the maximum amount allowed to be drawn - the firm does not have to use all of this limit Trade credit – Careful management of trade credit can help ease cash flow – usually between 28 and 90 days to pay Factoring – the sale of debt to a specialist firm who secures payment and charges a commission for the service. Leasing – provides the opportunity to secure the use of capital without ownership – effectively a hire agreement STOCK EXCHANGE : STOCK EXCHANGE SENSEX AND NIFTY : SENSEX AND NIFTY The BSE Sensex or Bombay Stock Exchange Sensitive Index is a value-weighted index composed of 30 stocks with the base April 1979 = 100. It consists of the 30 largest and most actively traded stocks, representative of various sectors Nifty is a index of national stock exchange which launched its equity market segment on nov3,1994 and the objective is for speedy transaction, fast settlement and benefit to small investors who often to sell shares at BSE What is demat a/c? : What is demat a/c? In India, a demat account, the abbreviation for dematerialised account, is a type of banking account which dematerializes paper-based physical stock shares. The dematerialised account is used to avoid holding physical shares: the shares are bought and sold through a stock broker. This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a demat account should posses a Permanent Account Number (PAN), and the deadline for submission of PAN details to the depository lapsed on January 2007. INSURANCE : INSURANCE ULIP : ULIP ULIP stands for Unit Linked Insurance Plan. It provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). MUTUAL FUNDS : MUTUAL FUNDS A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. Shares : Shares OPTION : OPTION BANKING OPERATION : BANKING OPERATION LIQUIDITY CREATION OF MONEY RESERVE BANK OF INDIA : RESERVE BANK OF INDIA The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. Though initially RBI was privately owned, it was nationalized in 1949. Its central office is in Mumbai where the Governor of RBI sits. RBI has 22 regional offices and most of them are located in state capitals. The Reserve Bank of India also has three fully owned subsidiaries: National Housing Bank (NHB), Deposit Insurance and Credit Guarantee Corporation of India (DICGC), Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL). FUNCTIONS OF RBI : FUNCTIONS OF RBI Credit Control Instrument : Credit Control Instrument Reserve Requirement : Reserve Requirement SLR DEVELOPMENT BANKS : DEVELOPMENT BANKS INVESTMENT INSTITUTIONS : INVESTMENT INSTITUTIONS Fundamentals of personal finance : Fundamentals of personal finance Learning Objectives List the benefits of studying personal finance. Summarize the key steps in successful personal financial engineering. Understand the basic terms in personal finance Assets Vs Liabilities Savings Vs Investments Understanding time value of money Applying time value of money concept to Wealth Creation Retirement Insurance What is Financial literacy : What is Financial literacy Financial literacy is knowledge of... Facts Concepts Principles Technological tools ...fundamental to being smart about money. Financial Planning Benefits : Financial Planning Benefits Financial planning helps you achieve: Financial Success – achievement of financial aspirations. Financial Security – being able to fulfill any needs and most wants. Wealth – an abundance of money and other financial resources. Financial Freedom – the state where work is an option, you choose. Not compelled to opt. Building block of financial freedom : Building block of financial freedom …Important Personal Finance Terms : …Important Personal Finance Terms 44 Savings Vs Investment The Time Value of Money in Financial Decision Making : The Time Value of Money in Financial Decision Making The Time Value of Money compares: value in the future of a Rupee received today (FV) value today of a Rupee amount to be received in the future (PV) Key factors: Time, Interest, Principal Annuity - a series of payments/deposits Risk Management : Risk Management Insurance helps to transfer risk at low cost How much insurance do I need? Milestone Planning Income Replacement Method Golden Rules of Personal Finance : Golden Rules of Personal Finance “Pay yourself first” by spending less than you earn Stay up-to-date about current economic conditions Map your financial future by establishing goals and making realistic plans to achieve them Insure your risks Take advantage of tax benefits on investments Develop expertise in financial matters Remember that you are responsible for your own financial success. Slide 48: THANKS You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
financial market ahmadshavez Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 2549 Category: Education License: All Rights Reserved Like it (10) Dislike it (0) Added: April 25, 2010 This Presentation is Public Favorites: 6 Presentation Description No description available. Comments Posting comment... By: sreenivas.jpl (8 month(s) ago) this ppt give complete information abt finacial market.Can u give me permission to dwnload this ppt Saving..... Post Reply Close Saving..... Edit Comment Close By: sreenivas.jpl (8 month(s) ago) plz send this ppt Saving..... Post Reply Close Saving..... Edit Comment Close By: rahulsmarty (14 month(s) ago) nice presentation Saving..... Post Reply Close Saving..... Edit Comment Close By: shreekumar (14 month(s) ago) Very nice presentation financial market. Saving..... Post Reply Close Saving..... Edit Comment Close By: vandnababbli (17 month(s) ago) this ppt give complete information abt finacial market.Can u give me permission to dwnload this ppt Saving..... Post Reply Close Saving..... Edit Comment Close loading.... See all Premium member Presentation Transcript Slide 1: Financial system Prepared by:-SHAVEZ AHMAD Under guidance of:- Mr. RAJEEV SINGH BHANDARI Work of financial system : Work of financial system Process of financial system : Process of financial system Seekers Of funds (mainly Business Firms And Government) Suppliers Of Funds (mainly Households) Flow of funds(savings) Flow of financial services Incomes and financial claims Function of financial system : Function of financial system Slide 5: Types of Financial Markets Capital Market Money Market Forex Market Equity Debt Retail Corporate Banks FI FIIs T-Bills Call Money ICD, CP, CD Banks Corporate FI, FIIs Spots Forwards Banks Corporate FI, FIIs Agriculture Produces, Metals, Financial futures like Interest rate, currency, indices etc Banks, FIs Corporate Derivatives Market Structure of Indian financial system : Structure of Indian financial system Financial Markets : Financial Markets Defined as the market in which financial assets are created or transferred. These assets represent a claim to the payment of a sum of money sometime in the future and/or periodic payment in the form of interest or dividend. Classification : Classification Money market Capital Market (Short term instrument) Capital market (Long term instrument) The most important distinction between the two: The difference in the period of maturity. Money Market : Money Market Main Function To channelize savings into short term productive investments like working capital . INSTRUMENT Call Money Market : Call Money Market Part of the national money market Day-to day surplus funds mainly of banks are traded Short term in nature Maturity of these loans vary from 1 to 15 days Lent for 1 day: Call money Lent for more than 1 day but less than 15 days: Notice money Convenient interest rate Highly liquid loan repayable on demand Commercial Papers : Commercial Papers Unsecured Promissory note. Issued by well known companies with strong and high credit rating. Sold directly by the issuers to investors or through agents like merchant banks and security houses. Flexible Maturity Low interest rates with compared to banks. Imparts a degree of financial stability to the system. Promissory Note : Promissory Note Referred as note payable in accounting It is a contract detailing the terms of a promise by one party (the maker) to pay a sum of money to the other (the payee). The obligation may arise from the repayment of a loan or from another form of debt. For example, in the sale of a business, the purchase price might be a combination of an immediate cash payment and one or more promissory notes for the balance. Certificates of deposits : Certificates of deposits Defined as short term deposit by way of usance promissory notes. Greater flexibility to investors in the deployment of surplus funds. Permitted by the RBI to banks Maturity of not less than 3 months and upto 1 year. Transferable in nature Free negotiability and limited flexibility Capital Market : Capital Market Provided resources needed by medium and large scale industries. Purpose for these resources Expansion Capacity Expansion Investments Deals in long term instruments and sources of funds Activity of capital market : Activity of capital market Functioning as an institutional mechanism to channelize funds from those who save to those who needed for productive purpose. Provides opportunities to various class of individuals and entities. Structure of Capital Markets : Structure of Capital Markets TYPE OF ISSUE : TYPE OF ISSUE INTERNAL SOURCE OF FINANCE AND GROWTH : INTERNAL SOURCE OF FINANCE AND GROWTH Organic growth’ – growth generated through the development and expansion of the business itself. Can be achieved through: Generating increasing sales – increasing revenue to impact on overall profit levels Use of retained profit – used to reinvest in the business Sale of assets – can be a double edged sword – reduces capacity? External Source of finance : External Source of finance Long Term – may be paid back after many years or not at all! Short Term – used to cover fluctuations in cash flow 'Inorganic Growth' : 'Inorganic Growth' Acquisitions The necessity of financing external inorganic growth Merger: firms agree to join together – both may retain some form of identity Takeover: One firm secures control of the other, the firm taken over may lose its identity What is venture capital : What is venture capital Pooling of capital in the form of limited companies – Venture Capital Companies Looking for investment opportunities in fast growing businesses or businesses with highly rated prospects May also buy out firms in administration who are going concerns May also provide advice, contacts and experience Long term : Long term Shares (Shareholders are part owners of a company) Ordinary Shares (Equities): Ordinary shareholders have voting rights Dividend can vary Last to be paid back in event of collapse Share price varies with trade on stock exchange Preference Shares: Paid before ordinary shareholders Fixed rate of return Cumulative preference shareholders – have right to dividend carried over to next year in event of non-payment New Share Issues – arranged by merchant or investment banks Rights Issue – existing shareholders given right to buy new shares at discounted rate Bonus or Scrip Issue – change to the share structure – increases number of shares and reduces value but market capitalisation stays the same Long term : Long term Loans (Represent creditors to the company – not owners) Debentures – fixed rate of return, first to be paid Bank loans and mortgages – suitable for small to medium sized firms where property or some other asset acts as security for the loan Merchant or Investment Banks – act on behalf of clients to organise and underwrite raising finance Government/EU – may offer loans in certain circumstances Grants Short term : Short term Bank loans – necessity of paying interest on the payment, repayment periods from 1 year upwards but generally no longer than 5 or 10 years at most Overdraft facilities – the right to be able to withdraw funds you do not currently have Provides flexibility for a firm Interest only paid on the amount overdrawn Overdraft limit – the maximum amount allowed to be drawn - the firm does not have to use all of this limit Trade credit – Careful management of trade credit can help ease cash flow – usually between 28 and 90 days to pay Factoring – the sale of debt to a specialist firm who secures payment and charges a commission for the service. Leasing – provides the opportunity to secure the use of capital without ownership – effectively a hire agreement STOCK EXCHANGE : STOCK EXCHANGE SENSEX AND NIFTY : SENSEX AND NIFTY The BSE Sensex or Bombay Stock Exchange Sensitive Index is a value-weighted index composed of 30 stocks with the base April 1979 = 100. It consists of the 30 largest and most actively traded stocks, representative of various sectors Nifty is a index of national stock exchange which launched its equity market segment on nov3,1994 and the objective is for speedy transaction, fast settlement and benefit to small investors who often to sell shares at BSE What is demat a/c? : What is demat a/c? In India, a demat account, the abbreviation for dematerialised account, is a type of banking account which dematerializes paper-based physical stock shares. The dematerialised account is used to avoid holding physical shares: the shares are bought and sold through a stock broker. This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a demat account should posses a Permanent Account Number (PAN), and the deadline for submission of PAN details to the depository lapsed on January 2007. INSURANCE : INSURANCE ULIP : ULIP ULIP stands for Unit Linked Insurance Plan. It provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). MUTUAL FUNDS : MUTUAL FUNDS A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. Shares : Shares OPTION : OPTION BANKING OPERATION : BANKING OPERATION LIQUIDITY CREATION OF MONEY RESERVE BANK OF INDIA : RESERVE BANK OF INDIA The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. Though initially RBI was privately owned, it was nationalized in 1949. Its central office is in Mumbai where the Governor of RBI sits. RBI has 22 regional offices and most of them are located in state capitals. The Reserve Bank of India also has three fully owned subsidiaries: National Housing Bank (NHB), Deposit Insurance and Credit Guarantee Corporation of India (DICGC), Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL). FUNCTIONS OF RBI : FUNCTIONS OF RBI Credit Control Instrument : Credit Control Instrument Reserve Requirement : Reserve Requirement SLR DEVELOPMENT BANKS : DEVELOPMENT BANKS INVESTMENT INSTITUTIONS : INVESTMENT INSTITUTIONS Fundamentals of personal finance : Fundamentals of personal finance Learning Objectives List the benefits of studying personal finance. Summarize the key steps in successful personal financial engineering. Understand the basic terms in personal finance Assets Vs Liabilities Savings Vs Investments Understanding time value of money Applying time value of money concept to Wealth Creation Retirement Insurance What is Financial literacy : What is Financial literacy Financial literacy is knowledge of... Facts Concepts Principles Technological tools ...fundamental to being smart about money. Financial Planning Benefits : Financial Planning Benefits Financial planning helps you achieve: Financial Success – achievement of financial aspirations. Financial Security – being able to fulfill any needs and most wants. Wealth – an abundance of money and other financial resources. Financial Freedom – the state where work is an option, you choose. Not compelled to opt. Building block of financial freedom : Building block of financial freedom …Important Personal Finance Terms : …Important Personal Finance Terms 44 Savings Vs Investment The Time Value of Money in Financial Decision Making : The Time Value of Money in Financial Decision Making The Time Value of Money compares: value in the future of a Rupee received today (FV) value today of a Rupee amount to be received in the future (PV) Key factors: Time, Interest, Principal Annuity - a series of payments/deposits Risk Management : Risk Management Insurance helps to transfer risk at low cost How much insurance do I need? Milestone Planning Income Replacement Method Golden Rules of Personal Finance : Golden Rules of Personal Finance “Pay yourself first” by spending less than you earn Stay up-to-date about current economic conditions Map your financial future by establishing goals and making realistic plans to achieve them Insure your risks Take advantage of tax benefits on investments Develop expertise in financial matters Remember that you are responsible for your own financial success. Slide 48: THANKS