All About Share Market

What is pre-Open trade session?

2011-05-31T09:56:00.000-07:00

re-open trade session is a 15 minute trade session from 9:00AM to 9:15AM on the 50 stocks of NIFTY index to reduce the volatility.

This was introduced on Indian stock market from 18th Oct 2010 onwards. Both NSE and BSE will have a 15 minute ‘pre-open session call auction’ from 9:00AM to 9:15AM.

Only 50 stocks of the NIFTY index can be traded during this time on both NSE and BSE. Normal trading for all other stocks will start at 9:15AM till 3:30PM.

Please Note: Market trading hours may change due to outage or any other reasons published by the Stock exchanges. Visit BSE or NSE website for more details.

What is Capital Gains Tax?

2011-05-26T01:38:00.000-07:00

Long Term Capital Assets: Stocks can be considered as Long-term Capital assets when held for more than 12 months by the assessee. If it is helf for 12 months or less than that, then it will be considered as short-term assets. All short-term capital gains are taxable like other income. It means, that they will be added together with the income from other sources to attain a gross taxable income. In India Long-term Capital gains tax has been removed, the short-term capital gains is 10 percent.

Tax on Dividends: Dividend income is now completely Tax Free for the investor. This was abolished in 2003 budget.

Wealth Tax: Stocks, Bank deposits and other specific financial assets are fully exempted from Wealth Tax.

Tax on Bonus Shares & Rights Issue: The Bonus shares are not subject to Tax, when issued. Rights issue Shares and Bonus shares are taxable, if profit is made from them (by selling these shares).

How to Pick Profitable Stocks?

2011-05-24T22:58:00.000-07:00

Stock selection: In Indian Stock market, a disciplined stock selection strategy is very are important for an investor to grow his personal wealth drastically. Investors stock picking strategies depend upon some factors which includes the performance of company, market and industry trends, and share prices.
Let us simplify for you some of the best stock picking strategies based on different investing style.

Investing for Growth: In this strategy, you need to focus on fast growing companies, which are showing major increase in revenues and profits. This kind of investors who focus on this strategy intend on making money from the significant increase in the share prices of companies they decide to invest.

Returns from growth stocks: The returns from growth stocks are largely higher than that of other type of stocks. Though, the risks involved in this type of stocks are high as compared to others. This type of investors pick young and fast-growing companies, regardless of the expensiveness of these stocks, as the investors bet on the future growth potential of the companies. The fundamental idea of growth investing may differ from industry to industry and company to company.

Investing in Value Stocks:
This kind of strategy is different to growth investing mentioned above. These investors focus on stocks, which are trading below their intrinsic values. Value investors look into the fundamentals of the companies cautiously and they believe that the market undervalues these stocks.

Value investing: Value stocks are comparatively cheaper to the net asset value (NAV) of their respective companies. Value investing does not mean to pick a cheap stock, rather investing in undervalued stocks that have good growth potential.

GARP Investing Strategy: GARP (Growth At Reasonable Price) Investing Strategy, is a mixture of value investing and growth investing strategies. Through GARP investing strategy, an investor focus on stocks that are reasonably priced, at the same time possess robust growth potential. In other words GARP investors do not go for high growth stocks that have high risks or cheaply priced stocks, which are in problem. So, GARP investors avoid expensive high-growth stocks. The significant barometer for GARP investors is PEG ratio, which is PE ratio divided by growth.

Fundamental Analysis of Stocks: Using Fundamental analysis, an investor or analyst tries to estimate the intrinsic value of a stock based on fundamentals. Although this strategy takes more time and effort, it is appropriate for long-term investors.

Earning trends: With fundamental analysis, an investor try to understand the earning trends of a company and expected earnings in the future, rather than market sentiments. Further more than earnings and revenues, investors also focus on factors such as, ROIC (Return On Invested Capital), ROE (Return on Equity), cash flows and P/E ratio etc. Many Indian Business magazines are available with all of these factors for each company.

Using Technical Analysis to Pick stocks: Technical analysis ( chart analysis), is an investing strategy through which investors weigh the future price movement of a stock through past performance. Technical analysis mainly depends upon the demand and supply of the particular stock and trading volumes.

Intrinsic value stock: Technical analysis is quite contrary to fundamental analysis. Technical analysts do not bother much about the intrinsic value stock. Regardless of the advantages and disadvantages of the above-mentioned stock picking strategies, many investors are making millions irrespective of the strategies they choose. Always an investor’s choice of a particular strategy should depend upon his/her knowledge about the market, industry trends and growth potential of companies. Most important is investors devotion of time and risk calculation capabilities play major role in choosing a particular stock picking technique.

A mixture of above strategies to fine tune and pick the winning stocks works the best in Indian Stock markets.

Online Trading Brokers in India

2011-05-23T10:34:00.000-07:00

Anand Rathi Securities Ltd	11th Floor, Times Tower Kamala City Senapati Bapat Marg Lower Parel Mumbai - 400013, India. Tel : +91-22-4047 7000 Fax: +91-22-4047 7070
Angel Broking Limited	G-1, Akruti Trade Center, Road No -7, MIDC, Andheri (E), Mumbai - 400 093 Tel: (022) 2835 8800 / 3083 7700
Geojit Securities	Finance Towers , Kaloor , Kochi - 682017 Phone : 91 - 484 - 2405501 Fax : 91 - 484 - 2405618
Indiabulls	Helpline : 0124-4572444 E-mail : helpdesk@indiabulls.com
Religare	Religare Enterprises Limited 19, Nehru Place, New Delhi - 110019 Phone:- +91-11-30815100 Email us at :- info@religare.in
Sharekhan	A-206, Phoenix House, 2nd Floor, Senapati Bapat Marg, Lower Parel, Mumbai- 400 013. Telephone No: 022- 6618 9300 Email: mehuldedhia@sharekhan.com; mehulkshah@sharekhan.com
5Paisa by IndiaInfoline	India Infoline Securities P Ltd Tel No:022) 66489000/ 9821543319 Fax No:(+91-22) 2685 0451 E-mail: info@5pmail.com website: http://www.5paisa.com/
Reliance Money	Tel : 022-39886000. Email : customer.support@reliancemoney.co.in
ICICI Direct by ICICI Bank	By ICICI Bank Limited, Mumbai
Jaypee Capital Services	1114, Naurang House 21 K.G Marg New Delhi 110001 India Tel: +91 11 66303030 Fax: +91 11 66303404
Motilal Oswal	Motilal Oswal Financial Services Ltd. 3rd Floor, Hoechst House, Nariman Point, Mumbai - 400 021. Board : + 91 – 022 - 39825500 / 39825540. Fax : + 91 – 022 - 22823499.
Emkay	Paragon Centre, C-06, Ground Floor, Pandurang Budhkar Marg, Worli, Mumbai 400013. India Tel: +91 22 66121212 Fax: +91 22 66121299
JV Financial	A-24,2nd Floor, Hauz Khas, New Delhi -110 016, INDIA Tel: 11-32575438, 11-32598735
Kotak Securities	Kotak Securities Ltd. Bakhtawar, 1st Floor, 229 Nariman Point, Mumbai 400 021 India Tel.: 91-22-66341 100 Fax: 91-22-2288 6453 e-mail: sales.aksess@kotak.com
IDBI Paisabuilder	IDBI Capital Market Services Ltd. 5th Floor Mafatlal Center, Nariman Point, Mumbai 400 021, India
SMC India Online	17, Netaji Subhash Marg, Daryaganj, New Delhi-110002, Tel.:30111000 (30 Lines), Fax:91-1123263297, email: smcsite@smcindiaonline.com
ManSukh Securities	306, Pratap Bhawan 5, Bahadur Shah Jafar Marg, New Delhi-110002 Tel :- 011-30123450/1/3/5, 23311853, 23326278.
Karvy	Karvy Consultants Limited "Karvy House", 46 Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034. Tel No:(+91-40) 23312454,23320751 Fax No:(+91-40) 23311968 E-mail: mailmanager@karvy.com website: www.karvy.com

What is ETF?

2010-03-07T19:30:00.000-08:00

An exchange-traded fund (or ETF) is an investment fund traded on stock exchanges, much like stocks.[citation needed] An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features.

Only so-called authorized participants (typically, large institutional investors) actually buy or sell shares of an ETF directly from/to the fund manager, and then only in creation units, large blocks of tens of thousands of ETF shares, which are usually exchanged in-kind with baskets of the underlying securities. Authorized participants may wish to invest in the ETF shares long-term, but usually act as market makers on the open market, using their ability to exchange creation units with their underlying securities to provide liquidity of the ETF shares and help ensure that their intraday market price approximates to the net asset value of the underlying assets. Other investors, such as individuals using a retail broker, trade ETF shares on this secondary market.

An ETF combines the valuation feature of a mutual fund or unit investment trust, which can be bought or sold at the end of each trading day for its net asset value, with the tradability feature of a closed-end fund, which trades throughout the trading day at prices that may be more or less than its net asset value. Closed-end funds are not considered to be exchange-traded funds, even though they are funds and are traded on an exchange. ETFs have been available in the US since 1993 and in Europe since 1999. ETFs traditionally have been index funds, but in 2008 the U.S. Securities and Exchange Commission began to authorize the creation of actively managed ETFs.

Are Mutual Funds Risk Free and What are the Advantages?

2008-01-30T04:35:00.002-08:00

One must not forget the fundamentals of investment that no investment is insulated from risk. Then it becomes interesting to answer why mutual funds are so popular. To begin with, we can say mutual funds are relatively risk free in the way they invest and manage the funds. The investment from the pool is well diversified across securities and shares from various sectors. The fundamental understanding behind this is not all corporations and sectors fail to perform at a time. And in the event of a security of a corporation or a whole sector doing badly then the possible losses from that would be balanced by the returns from other shares.

This logic has seen the mutual funds to be perceived as risk free investments in the market. Yes, this is not entirely untrue if one takes a look at performances of various mutual funds. This relative freedom from risk is in addition to a couple of advantages mutual funds carry with them. So, if you are a retail investor and planning an investment in securities, you will certainly want to consider the advantages of investing in mutual funds.

Lowest per unit investment in almost all the cases
Your investment will be diversified
Your investment will be managed by professional money managers

A Brief of How Mutual Funds Work

2008-01-30T04:35:00.001-08:00

Mutual funds can be either or both of open ended and closed ended investment companies depending on their fund management pattern. An open-end fund offers to sell its shares (units) continuously to investors either in retail or in bulk without a limit on the number as opposed to a closed-end fund. Closed end funds have limited number of shares.

Mutual funds have diversified investments spread in calculated proportions amongst securities of various economic sectors. Mutual funds get their earnings in two ways. First is the most organic way, which is the dividend they get on the securities they hold. Second is by the redemption of their shares by investors will be at a discount to the current NAVs (net asset values).

Mutual Funds - The Logic behind Investing in Them

2008-01-30T04:34:00.000-08:00

Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. This article helps you to know in depth on:

Is it possible to diversify investment if invested in mutual funds?
Find more on the working of mutual fund
Know more about the legal aspects in relation to the mutual funds

At the beginning of this millennium, mutual funds out numbered all the listed securities in New York Stock Exchange. Mutual funds have an upper hand in terms of diversity and liquidity at lower cost in comparison to bonds and stocks. The popularity of mutual funds may be relatively new but not their origin which dates back to 18th century. Holland saw the origination of mutual funds in 1774 as investment trusts before spreading to Anglo-Saxon countries in its current form by 1868.
We will discuss now as to what are mutual funds before going on to seeing the advantages of mutual funds. Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. The stocks these mutual funds have are very fluid and are used for buying or redeeming and/or selling shares at a net asset value. Mutual funds posses shares of several companies and receive dividends in lieu of them and the earnings are distributed among the share holders.

What is Mutual fund

2008-01-30T04:32:00.000-08:00

Mutual funds are pools of money that are managed by an investment company. They offer investors a variety of goals, depending on the fund and its investment charter. Some funds, for example, seek to generate income on a regular basis. Others seek to preserve an investor's money. Still others seek to invest in companies that are growing at a rapid pace. Funds can impose a sales charge, or load, on investors when they buy or sell shares. Many funds these days are no load and impose no sales charge

What is a Demat Account?

2007-12-27T00:42:00.000-08:00

Demat refers to a dematerialised account.

Though the company is under obligation to offer the securities in both physical and demat mode, you have the choice to receive the securities in either mode.

If you wish to have securities in demat mode, you need to indicate the name of the depository and also of the depository participant with whom you have depository account in your application.

It is, however desirable that you hold securities in demat form as physical securities carry the risk of being fake, forged or stolen.

Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, Nowadays, you need to open a demat account if you want to buy or sell stocks.

So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account. Let's say your portfolio of shares looks like this: 150 of Infosys, 50 of Wipro, 200 of HLL and 100 of ACC. All these will show in your demat account. So you don't have to possess any physical certificates showing that you own these shares. They are all held electronically in your account. As you buy and sell the shares, they are adjusted in your account. Just like a bank passbook or statement, the DP will provide you with periodic statements of holdings and transactions.

Is a demat account a must?
Nowadays, practically all trades have to be settled in dematerialised form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500 shares to be settled in physical form, nobody wants physical shares any more.

So a demat account is a must for trading and investing.

What is a Share?

2007-12-27T00:29:00.000-08:00

In finance a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT's. In British English, the usage of the word share alone to refer solely to stocks is so common that it almost replaces the word stock itself.

In simple Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.

By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price.

A company's stock price reflects what investors think about the stock, not necessarily what the company is "worth." For example, companies that are growing quickly often trade at a higher price than the company might currently be "worth." Stock prices are also affected by all forms of company and market news. Publicly traded companies are required to report quarterly on their financial status and earnings. Market forces and general investor opinions can also affect share price.

Quick Facts on Stocks and Shares

Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer noguarantee of any returns and can lose value, even in the long run
Investments in stocks can generate returns through dividends, even if the price

How does one trade in shares ?
Every transaction in the stock exchange is carried out through licensed members called brokers.
To trade in shares, you have to approach a broker However, since most stock exchange brokers deal in very high volumes, they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders.
The general investors should identify a sub-broker for regular trading in shares and palce his order for purchase and sale through the sub-broker. The sub/broker will transmit the order to his broker who will then execute it .

What are active Shares ?
Shares in which there are frequent and day-to-day dealings, as distinguished from partly active shares in which dealings are not so frequent. Most shares of leading companies would be active, particularly those which are sensitive to economic and political events and are, therefore, subject to sudden price movements. Some market analysts would define active shares as those which are bought and sold at least three times a week. Easy to buy or sell.