Profile of NYSE Stock market concept Origin of NYSE History of NYSE Brief timeline of NYSE Major companies in NYSE Crashes along with their reasons and effects Mergers Capital market Classification of issues Bibliography
Location U.S. Founded Owner CEO Currency No. of Listing Co. Market Capital Website New York city March 8, 1817. NYSE Euronext Duncan L. Niederauer US $ 2800 aprox. US$ 13.39 Trillio ( Dec 2010) www.nyse.comn A stock market is a public entity for the trading of company stock (shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. Back to over 200year ago U.S. decided to finance the war by selling the bonds, and government notes promising to payout at profit at a later date. At the same time pvt. Bank began to raise money by issuing stock or shares of the company to raise their own money. NYSE started in 1792. In start only five securities traded. In 1817, the rules & regulations was developed. Anthony Stockholm was elected the first president of exchange. First set trading hours were estd in 1873. Dow Jones industrial average with a starting value of 90. Crashes over the years effect on the NYSE.
1792 - Twenty-four brokers and merchants gathered on Wall Street to sign the Buttonwood Agreement. The NYSE is born! 1792 - Bank of New York becomes the first listed company on the NYSE. 1903 - April 22, the NYSE moved into 18 Broad Street. (This building is still in use today.) 1918 - The pneumatic vacuum tube system is made for sending tickets to and from different departments. 1929 - October 23: Black Thursday. October 26: Blue Monday (Market loses $26 billion in value.)
1953 - October 10: Trade volume on the NYSE reaches 900,000 shares, this marks the last day that the daily volume of the NYSE is under 1 million shares. 1967 - NYSE admits its first woman member. 1987 - October 19: Black Monday (Market drops 508 points, the largest one-day drop in history.) 1992 - May 17: the NYSE celebrates its 200th anniversary. 1996 - May 7: The highest price ever paid for a membership is $1,450,000
In Oct 24, 1929 was known as a Black Thursday stock prices fell sharply by a volume of about 13 million shares. Five days later, October 29th, 1929, the market crashed by a volume of over 16 million shares. At the time this was the highest volume drop that was not to be matched for 39 years. This crash marked the beginning of the Great Depression. Reason behind the crash:-
Stocks were overpriced. Federal Reserve policies were causing disagreement and problems. Many people had an overconfidence from the 20's which influenced a search for easy money and made many people greedy. Many people took their chances in the market by "buying on a margin". This means that they bought stocks on borrowed money, money they did not have. They would be making money as long as their stock price increased, but if the prices fell then they would be deep in debt.
In Oct 19, 1987 was known as Black Monday because the NYSE dropped 508 points, the largest one-day fall in history. From October 14 to October 19th of 1987 the major parts of the market dropped around 30% or more. Some explanations for the causes of the crash: Computer trading securities-many analysts say this is the cause. Computers in large investing companies were programmed to order large numbers of stocks when certain market trends prevailed.
Liquidity- trading mechanisms in the stock market were unable to deal with such a large flow of sell orders.
Trade and Budget deficits-trade and budget debts during the third quarter of 1987 might have led investors into thinking that these debts would cause the crash.
Euronext and NYSE Group:- NYSE Group bid 8 billion in cash and shares for Euronext on May 22, 2006.
The new firm, tentatively dubbed NYSE Euronext, would be headquartered in New York City.
NYSE CEO John Thain, who would head NYSE Euronext. NYSE Euronext and Deutsche Brse:- The new company becoming the world's largest stock exchange operator with a market capitalisation of listed companies equal to US$15 trillion.
President and deputy CEO of NYSE Euronext Dominique Cerutti would become the new company's president.
Deutsche Brse shareholders will have 60% ownership of the new entity, and NYSE-Euronext shareholders will have 40%.
The nature of capital market is brought out by the following facts: It Has Two Segments It Deals In Long-Term Securities It Performs Trade-off Function It Creates Dispersion In Business Ownership It Helps In Capital Formation It Helps In Creating Liquidity
The capital market constitute of two members , i.e. the lenders and the borrowers, without which the market wouldnt function Lending and borrowing of capital is nothing but supply and demand of money The function of lending and borrowing should balance out itself to maintain growth and stability in the economy Following indications are affected as a mismatch in lending and borrowing 1. Liquidity 2. Growth 3. Cost of capital 4. Inflation 5. Credit 6. Gold prices 7. Bond yields 8. Market sentiment
CAPITAL MARKET PRIMARY MARKET PUBLIC ISSUE RIGHT ISSUE BONUS ISSUE PRIVATE PLACEMENT SECONDARY MARKET STOCK MARKET It Is Related With New Issues It Has No Particular Place It Has Various Methods Of Float Capital: Following are the methods of raising capital in the primary market: i) Public Issue ii) Offer For Sale iii) Private Placement iv) Right Issue v) Electronic-Initial Public Offer It comes before Secondary Market
It Creates Liquidity It Comes After Primary Market It Has A Particular Place It Encourage New Investments
Issues Further Public Offering Fresh Issue Initial Public Offering Private placement Right Public Offer for sale Offer for sale Fresh Issue The Indian Capital Market is one of the oldest capital markets in Asia which evolved around 200 years ago. Chronology of the Indian capital markets 1830s: Trading of corporate shares and stocks in Bank and cotton Presses in Bombay. 1850s: Sharp increase in the capital market brokers owing to the rapid development of commercial enterprise. 1860-61: Outbreak of the American Civil War and ' Share Mania ' in India. 1894: Formation of the Hamada Shares and Stock Brokers Association. 1908: Formation of the Calcutta Stock Exchange Association.
Capital market investment takes place through the bond market and the stock market. The capital market is basically the financial pool in which different companies as well as the government can raise long term funds. Capital market investment that takes place through the bond and the stock market may be elucidated in the following heads.
The stock market is basically the trading ground capital market investment in the following: i) Companys stocks ii) Derivatives iii) Other securities The capital market investments in the stock market take place by: 1) Small individual stock investors 2) Large hedge fund traders. The capital market investments can occur either in: 1) The physical market by a method known as the open outcry. 2) Trading can also occur in the virtual exchange where trading is done in the computer network.
The bond market is a financial market where the participants buy and sell debt securities. The bond market is also differently known as the debt, credit or fixed income market. There are different types of bond markets based on the different types of bonds that are traded. They are: 1. Corporate, 2. Government and agency, 3. Municipal, 4. Bonds backed by mortgages & assets, 5. Collateralized Debt Obligation. 6. The capital market investment in the bond market is done by: 7. Institutional investors 8. Governments, traders and 9. Individuals.
Investment in long term financial instruments is accompanied by high capital market risks. Since there are two types of Capital markets- the Stock market and the Bond market. So risks are present in both the market.