Tag: Principles of Marketing

Company Fixed Deposit (corporate FD) is a term deposit which is held over fixed period at fixed rates of interest. Company Fixed Deposits are offered by Financial and Non-Banking financial companies (NBFCs). The maturities of various company fixed deposits can range from a few months to a few years.

Factors before choosing Corporate FD schemes to invest in.

• Company Background: Assess a company’s business viability by referring to its Financial Statements, Management Discussion and Analysis (MD & A).
• Credit Rating: Opt for higher-rated corporate FDs based on its credit rating which indicates the underlying risk of the company.
• Repayment History: Companies repayment history helps to determine company’s credit score, credibility and stability.

Reasons to invest:

Short-Term Investments

One of the major advantages of investing in corporate FDs is short-term investments. Bank FDs can be anywhere between a few months to a few years, but corporate FDs cannot exceed more than five years of timeframe, and this makes it a viable option when investors want high returns in a short duration of time.

Interest rates

Corporate FDs are the best in interest rates compared to banks. Considering a debt instrument where the investor needs higher returns, Corporate FDs can find the best fit. These are not influenced by the market performance and the fluctuations in the interest rate and provide much better returns than banks and other financial institutions.

Likewise to the banks, Corporate FDs also take care of the senior citizens. Here, senior citizens can find stability and attractive periodic money that can make life easier. Besides, the interest rates for senior citizens are higher than the banking schemes, which makes it a much more viable option when choosing to invest in FDs.

Ratings and Comparisons

Several corporates offer FDs, but which is the right company to invest the money as a Fixed Deposit? This is a common problem, and to solve this, investors can check the ratings of corporates given by CARE (Credit Analysis and Research Limited), CRISIL(Credit Rating Information Services of India Limited), or ICRA (Investment Information and Credit Rating Agency of India Limited) and then make a wise decision. These ratings are given to corporate after examining the company records, repayments, and interest rates which help potential investors by giving them a clear picture.

Company ratings are in the format AAA, AA, BBB, and more. AAA is the highest rating which signifies an investor can find a potential money hive after investing in such a company. This also gives a clear comparison with other companies, and investors can stop investing in a AA or BBB rating.

Solid Comparison

Several corporates offer Fixed Deposits but not all the corporates offer the same interest rate, they vary, and sometimes the marginal difference is too high. It is better to compare the corporates first before investing and check if they have better CARE, CRISIL, and ICRA ratings. AAA rating is considered to be the best.

Nominee

Nominee can be chosen by the investors when investing in corporate FDs, and this gives a greater advantage for investors. If the investor is holding a huge amount in the corporate Fixed Deposit and there is a sudden unfortunate demise of the investor, the nominee can take charge and possess all the money.

There is a higher return with the Corporate Fixed deposits compared to bank FDs, but there are a few notes that the investors should make before investing in Corporate FDs,

Research

One of the things that most investors do is only follow the rating system. Investors should check the company’s track record with profit and loss-making history. If the loss is a one-time or exceptional case and the track record is much positive. It can stand as a great investment opportunity for corporate FDs. Besides, it is a good practice to know the company’s plans and analyze if it will cause a positive or negative impact overall.

Premature Withdrawals

Most banks penalize the FD investors for premature withdrawals. This is usually around three months after investing. The situation is the same with Corporate FDs, and there is a penalty for premature withdrawal. It is best to know the penalty before investing.

Gold ETF

A Gold ETF is an exchange-traded fund (ETF) that aims to track the domestic physical gold price. They are passive investment instruments that are based on gold prices and invest in gold bullion.

In short, Gold ETFs are units representing physical gold which may be in paper or dematerialised form. One Gold ETF unit is equal to 1 gram of gold and is backed by physical gold of very high purity. Gold ETFs combine the flexibility of stock investment and the simplicity of gold investments.

Gold ETFs are listed and traded on the National Stock Exchange of India (NSE) and Bombay Stock Exchange Ltd. (BSE) like a stock of any company. Gold ETFs trade on the cash segment of BSE & NSE, like any other company stock, and can be bought and sold continuously at market prices.

Buying Gold ETFs means you are purchasing gold in an electronic form. You can buy and sell gold ETFs just as you would trade in stocks. When you actually redeem Gold ETF, you don’t get physical gold, but receive the cash equivalent. Trading of gold ETFs takes place through a dematerialised account (Demat) and a broker, which makes it an extremely convenient way of electronically investing in gold.

Because of its direct gold pricing, there is a complete transparency on the holdings of a Gold ETF. Further due to its unique structure and creation mechanism, the ETFs have much lower expenses as compared to physical gold investments.

Purity & Price:

Gold ETFs are represented by 99.5% pure physical gold bars. Gold ETF prices are listed on the website of BSE/NSE and can be bought or sold anytime through a stock broker. Unlike gold jewellery, gold ETF can be bought and sold at the same price Pan-India.

Where to buy:

Gold ETFs can be bought on BSE/NSE through the broker using a demat account and trading account. A brokerage fee and minor fund management charges are applicable when buying or selling gold ETFs

Source: https://www.amfiindia.com/investor-corner/knowledge-center/gold-etf.html

RBI Bonds

The Government of India launched the Floating Rate Savings Bonds, 2020 (Taxable) scheme on July 01, 2020 to enable Resident Indians/HUF to invest in a taxable bond, without any monetary ceiling.

Eligibility for Investment:

The Bonds may be held by:

(i) A person resident in India,

(a) in her or his individual capacity, or

(b) in individual capacity on joint basis, or

(c) in individual capacity on any one or survivor basis, or

(d) on behalf of a minor as father/mother/legal guardian

(ii) a Hindu Undivided Family

Form of the Bonds:

Electronic form held in the Bond Ledger Account.

Period:

The Bonds shall be repayable on the expiration of 7 (Seven) years from the date of issue. Premature redemption shall be allowed for specified categories of senior citizens.

Individuals

• Duly filled in application form (Complete application forms with all pages in full,duly filled in from the investors)
• Self attested PAN card copy of the investor
• Self attested Address copy of the investor
• Cancelled cheque leaf of the bank which was mentioned in application for interest and maturity payments
• No correction / alteration allowed in the application and the corrections if any to be duly authenticated by the investor

HUF

• Duly filled in application form (Complete application forms with all pages in full,duly filled in by the Karta with stamp and signature)
• Self attested PAN card copy of the HUF
• Self attested Address copy of the HUF
• Cancelled cheque leaf of the bank which was mentioned in application for interest and maturity payments
• No correction / alteration allowed in the application and the corrections if any to be duly authenticated by the Karta
• List of coparceners in the Hindu Undivided Family along with their signatures attested by Karta

Minors

• Duly filled in application form (Complete application forms with all pages in full,duly filled in from the Guardian)
• Self attested PAN card copy of the minor / Guardian
• Self attested Address copy of the minor / Guardian
• Birth Certificate of the minor attested by the Guardian
• Cancelled cheque leaf of the bank which was mentioned in application for interest and maturity payments
• No correction / alteration allowed in the application and the corrections if any to be duly authenticated by the investor.
• In case of POA, Original POA to be verified by the bank and certified as “Original Seen and Verified”.

Source: https://www.hdfcsec.com/rbi-bond

The secondary market is where securities are traded after the company has sold its offering on the primary market. It is also referred to as the stock market. The New York Stock Exchange (NYSE), London Stock Exchange, and Nasdaq are secondary markets.

The Secondary Market refers to the financial marketplace where existing securities, previously issued in the primary market, are bought and sold among investors. It provides a platform for individuals and institutions to trade stocks, bonds, and other financial instruments after their initial issuance. Unlike the primary market, which involves the issuance of new securities, the secondary market facilitates the resale and exchange of already-existing securities. Stock exchanges, such as the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India, are key components of the secondary market, providing the infrastructure for transparent and organized trading activities. The secondary market enhances liquidity, price discovery, and market efficiency.

Small investors have a much better chance of trading securities on the secondary market since they are excluded from IPOs. Anyone can purchase securities on the secondary market as long as they are willing to pay the asking price per share.

A broker typically purchases the securities on behalf of an investor in the secondary market. Unlike the primary market, where prices are set before an IPO takes place, prices on the secondary market fluctuate with demand. Investors will also have to pay a commission to the broker for carrying out the trade.

The volume of securities traded varies from day to day, as supply and demand for the security fluctuates. This also has a big effect on the security’s price.

Because the initial offering is complete, the issuing company is no longer a party to any sale between two investors, except in the case of a company stock buyback. For example, after Apple’s Dec. 12, 1980, IPO on the primary market, individual investors have been able to purchase Apple stock on the secondary market. Because Apple is no longer involved in the issue of its stock, investors will, essentially, deal with one another when they trade shares in the company.

Role of Secondary Market

• Maintaining the Fair Price of Shares

The secondary market is a market of already issued securities after the initial public offering (IPO). Capital markets run on the basis of supply and demand of shares. Secondary markets maintain the fair price of shares depending on the balance of demand and supply. As no single agent can influence the share price, the secondary markets help keep the fair prices of securities intact.

• Facilitating Capital Allocation

Secondary markets facilitate capital allocation by price signaling for the primary market. By signaling the prices of shares yet to be released in the secondary market, the secondary markets help in allocating shares.

• Offering Liquidity and Marketability

Second-hand shares are of no use if they cannot be sold and bought for liquid cash whenever needed. The shareholders usually use the share markets as the place where there is enough liquidity and marketability of shares. That means that the secondary markets play the role of a third party in the exchange of shares.

Without a secondary market, the buyers and sellers would be left with a self-exchange in one-to-one mode that is not quite effective till now. Therefore, the secondary market is a facilitating body of liquidity and marketability for the shareholders.

• Adjusting the Portfolios

Secondary markets allow investors to adapt to adjusting portfolios of securities. That is, the secondary markets allow investors to choose shares for buying as well as for selling to build a solid portfolio of shares that offers maximum returns. Investors and shareholders can change their investment portfolios in secondary markets that cannot be done anywhere else.

Functions of Stock Market

1. Capital Formation:

Primary Market: The stock market facilitates the primary market, where companies raise capital by issuing new securities, such as stocks and bonds. This process allows businesses to fund expansion, research, and other capital-intensive activities.

2. Secondary Market Trading:

Liquidity Provision: The secondary market provides a platform for investors to buy and sell existing securities, enhancing liquidity. Investors can easily convert their investments into cash, and this liquidity contributes to market efficiency.

3. Price Discovery:

Market Valuation: The stock market plays a crucial role in determining the fair market value of securities through the continuous buying and selling of shares. This price discovery process reflects investor perceptions of a company’s performance and future prospects.

4. Facilitation of Investment:

The stock market encourages savings and investment by providing individuals and institutions with opportunities to invest in a diversified portfolio of securities. This helps channel funds from savers to productive enterprises.

5. Ownership Transfer:

Investors can easily buy and sell securities, allowing for the transfer of ownership in a transparent and regulated manner. This facilitates the transfer of funds between investors and supports portfolio diversification.

6. Borrowing and Lending:

The stock market serves as a platform for companies to raise funds by issuing bonds. Investors who purchase these bonds essentially lend money to the issuing companies, creating an additional avenue for corporate financing.

7. Market Indicators:

The performance of stock indices, such as the Nifty 50 and the Sensex in India, serves as indicators of the overall health and sentiment of the financial markets and the economy at large.

8. Corporate Governance:

Stock markets impose certain listing requirements on companies, promoting transparency and adherence to corporate governance standards. Companies with publicly traded shares are often subject to higher scrutiny, enhancing investor confidence.

9. Dividend Distribution:

Companies listed on stock exchanges can distribute dividends to their shareholders, providing a return on investment. Dividends are a key factor influencing investment decisions and shareholder wealth.

10. Risk Mitigation:

Investors can manage risk through diversification, buying and selling securities, and utilizing various financial instruments available in the stock market, such as options and futures.

11. Economic Indicator:

The stock market’s performance is often considered a barometer of economic health. Bullish markets are associated with economic optimism, while bearish markets may reflect concerns about economic conditions.

12. Market Efficiency:

The stock market allocates resources efficiently by directing capital to companies with the most promising growth prospects. Efficient market mechanisms contribute to the optimal allocation of resources within the economy.

13. Facilitation of Mergers and Acquisitions:

The stock market plays a role in corporate restructuring by facilitating mergers and acquisitions. Companies can use their shares for acquisitions, enabling strategic growth and consolidation.

Structure of Stock Market

The stock market in India has a well-defined structure, comprising various entities and mechanisms that facilitate the buying and selling of securities. The structure encompasses both primary and secondary markets, each serving distinct functions in the capital market ecosystem.

1. Primary Market:

The primary market is where new securities are issued and initially offered to the public. It consists of the following elements:

1. • Issuer: The company or entity that issues new securities to raise capital. This can include initial public offerings (IPOs) and additional offerings.
   • Underwriter: Investment banks or financial institutions that facilitate the issuance by committing to purchase the entire issue and then selling it to the public.
   • Registrar and Transfer Agent (RTA): Entities responsible for maintaining records of shareholders and processing share transfers.

2. Secondary Market:

The secondary market is where existing securities are traded among investors. The primary components include:

• • Stock Exchanges: Platforms where buyers and sellers come together to trade securities. In India, the two primary stock exchanges are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). They regulate and oversee the trading activities and ensure market integrity.
  • Brokers and Sub-Brokers: Intermediaries authorized to facilitate securities transactions on behalf of investors. They act as a link between investors and the stock exchanges.
  • Depositories: Entities that hold and maintain securities in electronic form. In India, the two central depositories are the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL). They facilitate the electronic transfer of securities.
  • Clearing Corporation: Entities that handle the clearing and settlement of trades, ensuring the smooth and secure transfer of securities and funds between buyers and sellers. In India, the National Securities Clearing Corporation Limited (NSCCL) and the Clearing Corporation of India Limited (CCIL) play crucial roles.
  • Custodians: Institutions responsible for safeguarding and holding securities on behalf of investors. They provide custodial services to institutional investors, foreign institutional investors (FIIs), and high-net-worth individuals.

3. Regulatory Authorities:

Regulatory bodies oversee and regulate the functioning of the stock market to ensure fair practices, investor protection, and market integrity. In India, the Securities and Exchange Board of India (SEBI) is the primary regulatory authority governing the securities market.

4. Investors:

Investors are individuals, institutions, or entities that participate in the stock market by buying and selling securities. They can include retail investors, institutional investors, foreign investors, and other market participants.

5. Market Intermediaries:

Various intermediaries facilitate different functions in the stock market. These include investment advisors, merchant bankers, credit rating agencies, and financial institutions that contribute to the smooth operation of the market.

6. Indices:

Stock market indices provide a benchmark for measuring the performance of the overall market or specific segments. In India, prominent indices include the Nifty 50 and the Sensex.

7. Market Surveillance and Compliance:

Surveillance mechanisms and compliance functions ensure that the market operates within regulatory frameworks. This includes monitoring for market abuse, insider trading, and other malpractices.

8. Technology Infrastructure:

The stock market relies on advanced technological infrastructure to facilitate trading, clearing, and settlement processes. Electronic trading platforms, data dissemination systems, and secure networks contribute to the efficiency of market operations.

Players in Stock Market

The stock market involves various players, each playing a distinct role in the buying, selling, and overall functioning of the financial markets. These participants contribute to the liquidity, transparency, and efficiency of the stock market.

1. Investors:

   • Retail Investors: Individual investors who buy and sell securities for personal investment. They include small-scale investors, often trading through brokerage accounts.
   • Institutional Investors: Large entities like mutual funds, pension funds, insurance companies, and hedge funds that invest on behalf of a group of individuals or their members.

2. Stock Exchanges:

   • Bombay Stock Exchange (BSE): One of the major stock exchanges in India.
   • National Stock Exchange (NSE): Another significant stock exchange, known for electronic trading and providing a platform for various financial instruments.

3. Brokers and Sub-Brokers:

   • Brokers: Facilitate securities transactions between buyers and sellers. They may be full-service brokers providing a range of services or discount brokers offering lower-cost trading.
   • Sub-Brokers: Individuals or entities affiliated with brokers, authorized to facilitate trades on their behalf.

4. Market Intermediaries:

   • Merchant Bankers: Facilitate the issuance of new securities in the primary market and provide financial advisory services.
   • Underwriters: Guarantee the sale of newly issued securities, ensuring that the issuing company receives the intended capital.

5. Depositories:

   • National Securities Depository Limited (NSDL): A central securities depository in India, holding securities in electronic form.
   • Central Depository Services Limited (CDSL): Another central depository facilitating the electronic holding and transfer of securities.

6. Clearing Corporations:

   • National Securities Clearing Corporation Limited (NSCCL): Handles clearing and settlement for equity and derivatives segments.
   • Clearing Corporation of India Limited (CCIL): Manages clearing and settlement for fixed income and money market instruments.

7. Regulatory Authorities:

   • Securities and Exchange Board of India (SEBI): The regulatory body overseeing the securities market in India, responsible for investor protection and market integrity.

8. Corporate Entities:

   • Listed Companies: Companies whose shares are listed on stock exchanges, allowing them to raise capital and provide ownership to shareholders.
   • Unlisted Companies: Companies that are not listed on stock exchanges.

9. Research Analysts and Advisory Firms:

Professionals and firms providing research, analysis, and investment advice to investors. They play a role in guiding investment decisions.

10. Credit Rating Agencies:

Entities that assess the creditworthiness of issuers and their securities, providing credit ratings to assist investors in evaluating risk.

11. Custodians:

Financial institutions responsible for the safekeeping of securities on behalf of investors, particularly institutional investors.

12. Government:

The government, through various agencies, can influence the stock market through fiscal and monetary policies, regulations, and initiatives.

13. Media:

Financial news outlets and media play a role in disseminating information about market trends, company performance, and economic developments, influencing investor sentiment.

14. Arbitrageurs and Speculators:

Individuals or entities engaging in arbitrage (exploiting price differences) and speculation (betting on future price movements) to profit from market inefficiencies.

15. Technology Providers:

Companies providing technology infrastructure, trading platforms, and data services essential for the operation of electronic trading in the modern stock market.

Objectives of NSE

National Stock Exchange of India (NSEI) commenced operations in Whole- sale Debt Market (WDM) in June 1994 and trading in equities has been started in the Capital Market Segment (CM) in November 1994.

• To establish nationwide trading facility for equities and debt instruments.
• To provide a fair, transparent and efficient securities market to investors using electronic trading system.
• To ensure equal access to investors all over the country through an appropriate communication network.
• To improve the standard of securities market to international level.

Objectives of BSE

The full form of BSE is the Bombay Stock Exchange. The BSE is the oldest stock exchange of Asia which was established in the year 1875 as Native Shares and Stock Broker’s Association and is the first exchange in India that was recognized as the exchange in the year 1957 under the Securities Contract (Regulation) Act by the government. Since then, it is playing a pivotal role in the development of the capital market of the country.

• To provide a trading platform for equities of small and medium enterprises.
• To provide an efficient and transparent market for trading in equity, debt instruments, derivatives, and mutual funds.
• To ensure active trading and safeguard market integrity through an electronically-driven exchange.
• To provide other services to capital market participants, like risk management, clearing, settlement, market data, and education.
• To conform to international standards.

Objectives of OTCEI

The establishment of the Over the Counter Exchange of India (OTCEI) marked the down of a new era in the history of a stock exchanges in India. It is regarded a blessing for the small, both existing and new, companies and for investors, particularly small investors. The OTCEI which was incorporated in 1990 become fully operational in 1992.

Over The Counter Exchange of India allows nationwide listing and trading in securities, widely disbursed trading across centres provides for greater liquidity and less risk of intermediary charges, there is no arbitrage. The main feature is screen based scrip less trading, settlement is faster and no physical delivery of scrips is involved. The approach is highly professional.

• National Network:

Unlike other Stock Exchanges, the Over the Counter Exchange will have a nationwide reach enability widely dispersed trading across the cities, resulting in greater liquidity. Companies, thus, have the unique benefit of nationwide listing and trading of their script by listing at one exchange, Over the Counter Exchange.

• Ringless Trading:

Over the Counter Exchange has eliminated the traditional trading ring with a view to have greater accessibility to the investors. Trading will instead take place through a network of computers (screen based) of Over the Counter dealers at located several places within the same city and even across cities. These computers allow dealers to quote, query and transact through a central Over the Counter computer using telecommunication links. Investors can walk into any of the counters of members and dealers and see the quote display on the screen, decide to deal and conclude the transaction.

• Computerized Totally:

All the activities of the Over the Counter trading process will be computerized, making for more transparent, quick and disciplined mark. The trading mechanism brings on these features of the system.

• Two Ways of Making Public Offer:

Another unique of Over the Counter Exchange of India is its two ways of making public offer. Under ‘direct offer’ a company can offer its shares directly to the public after getting it sponsored by sponsored but under indirect offer’, the company may give its shares first to the sponsor who along with the company can at a later and convenient time make a public offer.

• Exclusive List of Companies:

The Over the Counter Exchange will not list and trade in companies listed on any other stock exchange. It will therefore list an entirely new set of companies sponsored by members of the Over-the-Counter Exchange.

• Faster Transfers and Trading Without Shares:

Over the Counter trading also provides for transfer of shares by Registrars, up to a certain percentage per folio. This results in faster transfers. The concept of immediate settlement makes it better for the investors. Investors will trade, not with share certificates, but with a different tradable documents called Counter Receipt (CR). However, an investor can always exercise his right of having a share certificate for Counter Receipt surrendering the Counter Receipt and again exchanging the share certificate for Counter Receipt when he wants to trade. There will be a custodian who will provide this facility along with a settler who will do the signature verification and Counter Receipt validation.

• Investor Registration:

Yet another feature of Over the Counter Exchange of India is investor registration, introduced for the first time in India. The investor registration is required to be done only once and is valid for trading on any Over the Counter in the country in any scrip. The purpose of the investor registration is to facilitate computerized trading. It also provides greater safety of operations to the investors.

The National Stock Exchange of India Limited (NSE) is the leading stock exchange of India, located in Mumbai. The NSE was established in 1992 as the first demutualized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system which offered easy trading facility to the investors spread across the length and breadth of the country. Vikram Limaye is Managing Director & Chief Executive Officer of NSE.

National Stock Exchange has a total market capitalization of more than US$2.27 trillion, making it the world’s 11th-largest stock exchange as of April 2018. NSE’s flagship index, the NIFTY 50, the 50 stock index is used extensively by investors in India and around the world as a barometer of the Indian capital markets. Nifty 50 index was launched in 1996 by the NSE. However, Vaidyanathan (2016) estimates that only about 4% of the Indian economy / GDP is actually derived from the stock exchanges in India.

Benefits

To the Investors

• Availability of regular information on prices of securities traded at the stock exchanges helps them in deciding on the timing of their purchase and sale.
• The investors enjoy the ready availability of facility and convenience of buying and selling the securities at will and at an opportune time.
• Because of the assured safety in dealings at the stock exchange the investors are free from any anxiety about the delivery and payment problems.
• It becomes easier for them to raise loans from banks against their holdings in securities traded at the stock exchange because banks prefer them as collateral on account of their liquidity and convenient valuation.

To the Companies

• The market for their securities is enlarged as the investors all over the world become aware of such securities and have an opportunity to invest.
• The companies whose securities have been listed on a stock exchange enjoy a better goodwill and credit-standing than other companies because they are supposed to be financially sound.
• As a result of enhanced goodwill and higher demand, the value of their securities increases and their bargaining power in collective ventures, mergers, etc. is enhanced.
• The companies have the convenience to decide upon the size, price and timing of the issue.

To the Society

• The facility for convenient purchase and sale of securities at the stock exchange provides support to new issue market. This helps in promotion and expansion of industrial activity, which in turn contributes, to increase in the rate of industrial growth.
• The availability of lucrative avenues of investment and the liquidity thereof induces people to save and invest in long-term securities. This leads to increased capital formation in the country.
• The Stock exchanges facilitate realisation of financial resources to more profitable and growing industrial units where investors can easily increase their investment substantially.
• The volume of activity at the stock exchanges and the movement of share prices reflect the changing economic health.
• Since government securities are also traded at the stock exchanges, the government borrowing is highly facilitated. The bonds issued by governments, electricity boards, municipal corporations and public sector undertakings (PSUs) are found to be on offer quite frequently and are generally successful.

Limitations of Stock Exchanges

Like any other institution, the stock exchanges too have their limitations. One of the common evils associated with stock exchange operations is the excessive speculation. Speculation implies buying or selling securities to take advantage of price differential at different times. The speculators generally do not take or give delivery and pay or receive full payment. They settle their transactions just by paying the difference in prices.

Normally, speculation is considered a healthy practice and is necessary for successful operation of stock exchange activity. But, when it becomes excessive, it leads to wide fluctuations in prices and various malpractices by the vested interests. In the process, genuine investors suffer and are driven out of the market.

Another shortcoming of stock exchange operations is that security prices may fluctuate due to unpredictable political, social and economic factors as well as on account of rumor’s spread by interested parties. This makes it difficult to assess the movement of prices in future and build appropriate strategies for investment in securities. However, these days good amount of vigilance is exercised by stock exchange authorities and SEBI to control activities at the stock exchange and ensure their healthy functioning.

Secondary market is also called as after market. Stock exchange is the secondary market. The stock exchange is the medium through which the exchange of shares, Equities takes place between the seller and the buyer. Secondary market is the place where most of the trading takes place. The trading of shares and capital in secondary market takes place between the buyer and the seller, company is not involved in transactions. The price of share is decided by demand and supply of the shares and price keeps on fluctuating. In secondary market no new stocks are issued, only trading of stocks is there.

Benefits

Secondary markets are have benefits because they provide liquidity to investors. Buying and selling securities quickly often reduces the amount of value lost on a trade. These markets also allow smaller investors to get involved with trading securities. Many investors don’t initially have access to initial public offerings (IPOs), so secondary markets provide resources for smaller investors. Here’s a list of other ways that illustrate the importance of secondary markets:

• They provide adequate resources for a company’s fair valuation.
• They help indicate the economic health of a country by revealing booms and recessions.
• They drive security prices toward their genuine market value through supply and demand.

Limitations of Secondary Market

• Buying and selling in a secondary market can be time consuming. Investors have to deal with the tedious paperwork involved before completing final transactions.
• The prices of securities in a secondary market are subject to high volatility. Price fluctuations may lead to sudden or unpredictable losses for investors.
• Investors must be careful with their brokerage commissions because they are taxed every time the trade is made. Commissions can have a huge impact on investors and may even dent your profit margin if you’re not paying attention.
• Multiple external factors influence the investments in a secondary capital market thereby subjecting them to high risk. These may lead investors’ existing valuations to change rapidly within seconds.

When a company publicly sells new stocks and bonds for the first time, it does so in the primary capital market. This market is also called the new issues market. In many cases, the new issue takes the form of an initial public offering (IPO). When investors purchase securities on the primary capital market, the company that offers the securities hires an underwriting firm to review it and create a prospectus outlining the price and other details of the securities to be issued.

All issues on the primary market are subject to strict regulation. Companies must file statements with the Securities and Exchange Commission (SEC) and other securities agencies and must wait before their filings are approved before they can go public.

Companies that issue securities through the primary capital market may hire investment bankers to obtain commitments from large institutional investors to purchase the securities when first offered. Small investors are often unable to purchase securities at this point because the company and its investment bankers want to sell all of the available securities in a short period of time to meet the required volume, and they must focus on marketing the sale to large investors who can buy more securities at once. Marketing the sale to investors can often include a road show or dog and pony show, in which investment bankers and the company’s leadership travel to meet with potential investors and convince them of the value of the security being issued.

Prices are often volatile in the primary market because demand is often hard to predict when a security is first issued. That’s why a lot of IPOs are set at low prices.

A company can raise more equity in the primary market after entering the secondary market through a rights offering. The company will offer prorated rights based on share investors already own. Another option is a private placement, where a company may sell directly to a large investor such as a hedge fund or a bank. In this case, the shares are not made public.

Benefits / Advantages of Primary Market

1. Mobilization of Saving: Primary market helps in mobilising surplus savings of individuals and others to investment.
2. Channelizing Savings for Productive Use: The funds raised in the primary market are mainly used for expansion, diversification and modernisation purposes of the corporate.
3. Source of Large Supply of Funds: The new issue market is a market for raising long term capital funds from investors who are spread across the country. Thus, large amount of funds can be raised for a longer period.
4. Rapid Industrial Growth: Investment of the surplus saving by the corporate in industrial sector led to increase in production and productivity in the economy.

Disadvantages of Primary Market

Primary market operating in the country is not free from any defects and some of the important defects of the primary market in India are given below.

1. Possibility of Deceiving Investors: The corporate raising money through public issue may not disclose detailed information in the prospectus, in order to deceive investors.
2. No Fixed Norms for Project Appraisal: The projects for which money is raised are to be evaluated in terms of financial, economic, profitability and market feasibility by the project manager. As there are no fixed norms for the appraisal of a project, the evaluation is subject to the personal capability and judgement of the project.
3. Ineffective Role of Merchant Bankers: The merchant bankers perform most of the pre-issue and post issue obligations with regarded to the new issue. But it has

Electronic procurement, also known as e-procurement or supplier exchange, is the process of requisitioning, ordering and purchasing goods and services online. It is a business-to-business process.

Unlike e-commerce, e-procurement utilizes a supplier’s closed system and is only available to registered users. E-procurement facilitates interactions between preferred suppliers and customers through bids, purchase orders and invoices.

E-procurement started in the 1980s, following the development of Electronic Data Interchange (EDI). A decade later, improvements in EDI allowed organizations to develop online catalogs for vendors. Today, e-procurement involves everything from supplier evaluation and selection to contract management, electronic orders and payments.

Implementation Steps

Assess Your Current Process

Before you can introduce a new procurement solution, it’s important to have a clear understanding of the current process. Analyse every step of the procurement process, including how long each task takes, the suppliers involved, controlled commodities, payment methods, and compliance checks.

A typical master dataset consists of the following:

• Product and services master catalog: Unique numbering and naming of all routinely procured goods and services. The product naming and nomenclature is made consistent across your entire organization and your business units so that the same item is recorded with the same code and name across every transaction.
• Supplier master directory: Consolidated directory of suppliers across your entire organization. All goods and services in the master catalog should be mapped to the suppliers in a many-to-many relational structure.
• Master category list: List of all categories against which goods and services are classified for reporting and analytics purposes and to support strategic planning and budgeting. All items in the master catalog should be mapped to these categories.
• Organizational structure: A chart representing the breakdown of your organizational structure, specifically aligned to the way your procurement process flows. This helps create a structure against which users can be assigned relevant user roles and permissions, and approval workflows can be created. The organizational structure may include your head office, branch offices and regional locations, business units and departments, discrete functional units and teams, and any other independent procuring unit within your overall procurement organization.
• User directory and permissions: All levels of users of the system such as executives, managers, audit, finance, procurement agents, purchasers, storekeeper, and end-users. Once defined, you can also assign broad permissions and roles and responsibilities for these users. These users should be defined for each organizational entity that you have defined and mapped accordingly.
• Procurement approval workflow and hierarchy definition: For the users defined, approval hierarchies should be defined for use in procurement workflows along with any conditional flows and alternate workflows.
• Historical transactions: Uploading a year of historical data comprising transactions conducted, items procured, and supplier engaged enables you to set a baseline for your future procurement. This ensures that on future purchases of similar items, you have some price history and intelligence to guide your purchase decisions.

Identify any Potential Gaps

Once the assessment is completed, you will have a better understanding of where there’s wasted time, duplicated efforts, lack of visibility, non-compliance or supplier issues and other factors that the new e-procurement system will need to solve.

Think About the Benefits

When a business truly adopts an e-procurement solution and gains 100% user adoption, purchasing compliance increases ten-fold, more spend is brought under management, and goods and services can be negotiated at better prices from strategic suppliers. In addition, e-procurement can:

• Optimise spend by reducing maverick purchases
• Seize discounts by combining orders and purchasing in volume
• Increase overall transaction speed
• Standardise the purchasing experience
• Provide more spend visibility
• Negotiate more favorable contracts with strategic suppliers
• Strengthen supplier relationships
• Safeguard against risk and supply chain disruption
• Alleviates routine tasks so procurement teams can focus on strategic initiatives
• Minimise fraudulent purchases

Choose A Provider

There are many e-procurement providers on the market and initial research may make it feel a little overwhelming. When you begin your search for the perfect e-procurement solution, it’s important to take into consideration all relevant stakeholders’ needs. Make sure you lead with your requirements and understand your budget to ensure both are met. Refer to the procurement section of this source-to-pay checklist for some suggested functionality to review in your demo(s) with each provider and clearly communicate what you’d like to see, so you can fairly evaluate each.

Create An Implementation Plan

Once a solution provider is awarded, you need to develop a plan for the implementation of your e-procurement strategy. Before kicking off the implementation project, it’s important to ensure you have the proper time and resources allocated. To minimise disruption, we suggest establishing key points of contact for each team affected and frequently communicate progress throughout the process.

Analyse

Once the e-procurement solution is in place, you’ll need to monitor performance and analyse results. When doing this, keep in mind the KPIs set out earlier or refer to this eBook for key metrics to watch.

The term “Startup” has gained a lot of popularity these days. More and more individuals are interested in becoming entrepreneurs and therefore open their own business. Therefore, there are also more entities interested in helping new businesses.

A startup is a company established by one or more entrepreneurs to create unique and irreplaceable products or services. It aims at bringing innovation and building ideas quickly.

Nature:

Growth

An startup is company whose goal is grow and expand rapidly, taking up to sometimes drastic proportions. This is one of the points that distinguished startup a Small business.

Age

An startup is new company which is still in early stages brand management, sales and hiring employees. Too often the allocation of this concept to Business who have been on the market for less than 3 years, however, this is not true. That is, one company You can have 7 years and is still a startup.

Innovation

A business this type need to have a differentiator competition in order to gain competitive advantage in the market. It is innovation may be present in their products or in the business model associated with company.

Risk

Once a startup It has shed innovative strongly present, there are always several associated uncertainties about ensuring the success of the business. For this reason, these Business are considered risk investments with a high failure rate.

Solving a problem

Associated with your shed innovative, this Type of company focuses on solving any existing problem in the market. So they focus on making a difference not only in the marketplace but also in people’s lives through your product or service.

Flexibility

A startup is very dynamic and ready to adapt to the adversities that may arise. Due to the need for validation of your business idea, these Business need to be ready to tailor their product to meet customer requirements.

Types:

Small business startups. These businesses are created by regular people and are self-funded. They grow at their own pace and usually have a good site but don’t have an app. Grocery stores, hairdressers, bakers, and travel agents are the perfect examples.

Scalable startups. Companies in a tech niche often belong to this group. Since technology companies often have great potential, they can easily access the global market. Tech businesses can receive financial support from investors and grow into international companies. Examples of such startups include Google, Uber, Facebook, and Twitter. These startups hire the best workers and search for investors to boost the development of their ideas and scale.

Lifestyle startups. People who have hobbies and are eager to work on their passion can create a lifestyle startup. They can make a living by doing what they love. We can see a lot of examples of lifestyle startups. Let’s take dancers, for instance. They actively open online dance schools to teach children and adults to dance and earn money this way.

Big business startups. Large companies have a finite lifespan since customers’ preferences, technologies, and competitors change over time. That’s why businesses should be ready to adapt to new conditions. As a result, they design innovative products that can satisfy the needs of modern customers.

Buyable startups. In the technology and software industry, some people design a startup from scratch to sell it to a bigger company later. Giants like Amazon and Uber buy small startups to develop them over time and receive benefits.

Social startups. These startups exist despite the general belief that the main aim of all startups is to earn money. There are still companies designed to do good for other people, and they are called social startups. Examples include charities and non-profit organizations that exist thanks to donations. For instance, Code.org, a non-profit organization, encourages school students in the US to learn computer science.

Sniffing is the process of monitoring and capturing all the packets passing through a given network using sniffing tools. It is a form of “tapping phone wires” and get to know about the conversation. It is also called wiretapping applied to the computer networks.

There is so much possibility that if a set of enterprise switch ports is open, then one of their employees can sniff the whole traffic of the network. Anyone in the same physical location can plug into the network using Ethernet cable or connect wirelessly to that network and sniff the total traffic.

In other words, Sniffing allows you to see all sorts of traffic, both protected and unprotected. In the right conditions and with the right protocols in place, an attacking party may be able to gather information that can be used for further attacks or to cause other issues for the network or system owner.

Types of Sniffing

Sniffing can be either Active or Passive in nature.

Passive Sniffing

In passive sniffing, the traffic is locked but it is not altered in any way. Passive sniffing allows listening only. It works with Hub devices. On a hub device, the traffic is sent to all the ports. In a network that uses hubs to connect systems, all hosts on the network can see the traffic. Therefore, an attacker can easily capture traffic going through.

The good news is that hubs are almost obsolete nowadays. Most modern networks use switches. Hence, passive sniffing is no more effective.

Active Sniffing

In active sniffing, the traffic is not only locked and monitored, but it may also be altered in some way as determined by the attack. Active sniffing is used to sniff a switch-based network. It involves injecting address resolution packets (ARP) into a target network to flood on the switch content addressable memory (CAM) table. CAM keeps track of which host is connected to which port.

Cyber–Vandalism

The term vandalism describes the deliberate act of damaging or destroying another person or company’s property without their permission. For example, with a computer, hardware vandalism is the act of intentionally breaking or destroying computer hardware. For example, a student could purposely damage a laptop given to them by the school.

Vandalism or cyber-vandalism could include any of the following.

• Intentionally damaging or destroying a digital object.
• Post fake reviews.
• Hacking into and defacing a website.
• Giving bad information on a forum or wiki.
• Posting fake news on a social network.
• Cheating or creating bots to cheat in online gaming.
• Post a virus or other malware for others to download unknowingly.