1 STOCK MARKET MECHANISM by Mr Fahim Akhtar FINANCIAL MARKET.

Slides:



Advertisements
Similar presentations
1929 Stock Market Crash What IS the Stock Market? Post WWI Economic Prosperity 1920s Stock Market Activity Legacy of WWI Public Perception.
Advertisements

Veritas Financial Group Introduction to the Financial Universe Week 4– Hedge Funds.
Chapter 11: Financial Markets Section 3
An Overview of the Financial System chapter 2. Function of Financial Markets Lenders-Savers (+) Households Firms Government Foreigners Financial Markets.
Investing in Stocks Chapter 12 Goals for Chapter 12.1 Describe the features of common stock and compare it to preferred stock. Discuss stock investing.
STOCK MARKET How it Works.
Copyright ©2004 Pearson Education, Inc. All rights reserved. Chapter 13 Investing Fundamentals.
1 (of 25) FIN 200: Personal Finance Topic 17–Stock Analysis and Valuation Lawrence Schrenk, Instructor.
Investments & The Stock Market
BBA, MBA (Finance & Banking), DU
1 Closed End Investment Fund Closed End Fund (CEF) establishes a portfolio of securities, then issues shares to the public backed by the underlying securities.
Investing: Risking money to make money Chapter 2: Saving and Investing.
Stocks Chapter 9. Common and Preferred Stock 9.1 Objectives – How to identify the reasons for investing in common stock – How to identify the reasons.
Copyright ©2004 Pearson Education, Inc. All rights reserved. Chapter 18 Asset Allocation.
Dollars and Sense UNIT 5: Investing Part 3: Stocks.
Stock Market Analysis and Personal Finance Mr. Bernstein Stocks pp February 9, 2015.
Chapter 7 The Stock Market, The Theory of Rational Expectations, and the Efficient Market Hypothesis.
Back to Table of Contents pp Chapter 31 Investing in Stocks.
FOR INSTITUTIONAL USE ONLY NOT FOR PUBLIC DISTRIBUTION An introduction to the capital markets J.P. Morgan Investment Academy.
Fundamentals of Investing Dr. John P. Abraham Professor UTPA.
The Stock Market Understand the risks Describe how stocks are traded
Financial Markets: Saving and Investing
INVESTMENTS 101 STOCK MARKET SUMMARY STOCK MARKET SUMMARY What is an INVESTMENT? What is an INVESTMENT? Short term sacrifice long term gain Short term.
The Stock Market. In some countries, most businesses are owned and operated by the government. But in the United States, most businesses are privately.
Financial Markets. Section 1  Investment- the act of redirecting resources from being used today so they can be used to create future benefits  When.
Chapter Seven Stocks and Other Assets. Copyright © Houghton Mifflin Company. All rights reserved.7 | 2 What determines the prices of stock? How do analysts.
 Stock: A share of ownership in a corp.  Shareholder: Partial business owner  Limited Liability- Can only lose up to what you invested!!  2 types of.
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.
Ch. 11: Financial Markets. What to do with money: Make a list of as many places you can think of that you could invest money...
F305 Intermediate Corporate Finance Indiana University September 5, 2001.
Chapter 11 Financial Markets.
10/5/20151 A CREATION OF VALUE TO (INVESTORS)SHARE HOLDERS By M.P.NAIDU.
G1 © Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market Funded by a grant from Take.
1 FIN 604 Introduction and Overview 1. Investor vs. Speculator 2. Participants in the Investment Process 3. Steps in Investing 4. Types of Investors and.
Fourth Edition International Business. CHAPTER 11 The Global Capital Market.
Why would a business/corporation want to sell stock? To raise capital to invest in company growth.
Investment and portfolio management MGT 531.  MGT 531   Lecture # 16.
Chapter 11SectionMain Menu Do Now: There are 4 Exchange Student Guides at each table. Take one and begin reading the first two pages. –DO NOT WRITE ON.
PERSONAL FINANCE National Business Education Standards.
1 Security Valuation and Analysis Macroeconomic/Industry Analysis Security valuation Ratio analysis MBA566: chapter
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
Stock Market Analysis and Personal Finance Mr. Bernstein Stocks and Mutual Funds pp and April 1-2, 2013.
Chapter Ten The Efficient Market Hypothesis Slide 10–3 Computing the Price of Common Stock Basic Principle of Finance Value of Investment = Present Value.
Financial Markets & Institutions
Investment in Long term Securities Investment in Stocks.
The Stock Market Content Objectives: Students will learn about the stock market and how it effects the economy. Language Objective: Students will be able.
An Overview of the Financial System chapter 2 1. Function of Financial Markets Lenders-Savers (+) Households Firms Government Foreigners Financial Markets.
Financial Management (An Introduction). Contents of the Chapter Meaning of Finance Meaning of Financial Management Three Major Decisions of Financial.
Savings, Investments & the Stock Market. Saving and Investment  Saving Not consuming all current income Not consuming all current income Examples: Savings.
Special Topics in Economics Econ. 491 Chapter 10: Stock Exchange Market.
Chapter 6 Why Save?.  Saving benefits the economy as a whole. You save bank lends person can now invest or spend. You earn interest bank earns interest.
 Emerging Markets. How to invest  ETFs  Mutual Funds  Index Funds.
THE STOCK EXCHANGE QUIZ. 1. Fill in the missing words. Before you start dealing in all kinds of s______________, you must be aware of the risks you take.
The Stock Market Bulls and Bears!. Stock Def. A portion of ownership in a corporation. It is a way for a corporation to raise money. Also known as shares.
FUN FACTS  11% of the world is left handed  400 Quarter Pounders can be made from a single cow  Native Americans used to name their children after the.
Money Investments  What is an investment?  Investment is something bought for future financial benefit.  Promotes economic growth  Contributes to wealth.
What does finance mean ?  Finance = f (money)  Money = anything that is generally accepted as payment for goods and services and repayment of.
Chapter 15: Financial Markets Opener. Copyright © Pearson Education, Inc.Slide 2 Chapter 11, Opener Guiding Questions Section 3: The Stock Market –How.
STOCK MARKET. INVESTMENT  Definition- act of redirecting resources from being consumed today so they may create benefits in the future.
Theme 5: Investments.
INVESTMENTS 101 STOCK MARKET SUMMARY What is an INVESTMENT?
INVESTMENTS 101 STOCK MARKET SUMMARY What is an INVESTMENT?
Chapter 11: Financial Markets Section 3
Foreign Investment in Local Securities
SWARNAM S/UNIT 1/RISK & RETURN - CBS
Chapter 11 – Financial Markets
Investments: Chapter 11 Section 3
Personal Finance Stocks (Equities)
ENTREPRENEURIAL FINANCE Fifth Edition
Bassem Bimo Irwan Analysis Financial Report And Business Assessment EQUITY SECURITY ANALYSIS CHAPTER 9 Presented.
Presentation transcript:

1 STOCK MARKET MECHANISM by Mr Fahim Akhtar FINANCIAL MARKET

2

STOCK MARKET MECHANISM Topic Introduction

Sequence  General perception  How stock forms  Stock market index  Features of market  Some abnormal gainers / losers  Why investors mostly loose

5 Perception About Market A gamble or a casino

6 Perception About Market A place where big fishes eat small

7 Puzzling function Perception About Market

A place where one is always Perception About Market

9 Trading stock is a science and equally art too

Something that may be studied or learned like systematized knowledge

Expression or application of human creative skill & imagination

12 A company is desirous to expand the business. Options for generating the required funds:-  Get from some one amongst FNF  Borrow from bank  Get maximum financers from general public

13  Company is registered under company ordinance  IPOs ( Initial Public Offering ) is offered  IPO given normally multiples of 500  Fund raised through IPO utilized in business  Stock trades in stock exchange

 Registered company engages in business with funds generated  Company reports profit quarterly  Earnings and profitability is disbursed amongst all stake holders including those holding share during specified time  Company earns more, shares goes up and in case of loss share sinks

16  Company doing good or bad business  Financial results and bright or depressive expectations  Players go for buying seeing rapid growth or selling anticipating depressed earnings  New innovative product launched / business explored  Some incentives / taxation affecting stock

17  Growth in earnings and profitability  Better management  Cheaper inputs and raw material  Demand going up for product or service  News and rumours Stocks mostly moves in speculation and attempt to discovers the right price

Fundamental analysis is gauged on historical and present data, but with the goal of making financial forecast.  A company stock valuations and predict its probable price  Make a projection on its business performance  Evaluate its management and make internal business decisions

19 A place where buyer and seller meet and trade stocks under regulations set

20 Bulls indicate market is positive Bear indicates selling pressure

21 A stock index or stock market index is a method of measuring the value of a section of the stock market

 Opportunities & Better returns  Pronounced risk factor  Speculation, rumours and news orientation  Diverse type of participants  Connectivity with other financial markets  Dependence on commodity move  Fiscal, monitory and taxation policy effects  Sector performance and incentives by government

 Possibility of high returns  Easy liquidity  Unbeatable tax benefits  Income from dividends Benefits of investment in stocks

24

Market has a trend of crashes every 3-4 years The reasons for 2008 crash were  Poor law and order after assassination of lady PM  Bad economic outlook  Panic selling by funds and foreigners  Recession  Market manipulation

26Stock Low Price HighPrice Gain / loss %age gain Engro Foods 20.6 Aug May Pak Petroleum Lucky Cement 103 June June Jahangir Siddiqui Company jan Jan Bank of Punjab 8 April June

27  Best selling products  Persistent growth  Efficient management  Good products in pipeline to launch  Eps not too good but expected to go higher

 Greed and Fear  Lack of knowledge  Rely over brokers and friends  Lack of analytical skills  Poor comprehension of / with changing indicators  Insider trading

 Plan your Investment  Go for long term Investment  Control your fear and greed  Decide right entry and exit in market  Diversify your portfolio  Always keep some reserve cash  Learn science and develop art of investment

30