Professional Documents
Culture Documents
&
SPECULATION
BY -
INVESTMENT
Investment is a financial operation that,
upon thorough analysis, promises safety of
principal and a satisfactory return.
SPECULATION
Speculation is a financial action that does
not provide safety of initial investment
along with the return on the principal
sum.
Basis
Planning Horizon
Investor
Longer planning
horizon
Risk Disposition
Not willing to
assume more than
moderate risk
Return Expectation Modest rate of
return
Basis for decision
Fundamental
factors,careful
evaluation of the
prospects of the
firm
Leverage
Uses his own funds
& eschews
Speculator
Shorter planning
horizon
Willing to assume
high risk
High rate of return
Hearsay,technical
charts,market
psychology
Resorts to
borrowing
Investment Policy.
2.
Security Analyses.
3.
Valuation.
4.
Portfolio Construction.
5.
Portfolio Evaluation.
KEY PARTICIPANTS
IN INVESTMENT PROCESS
Government
Federal, state and local projects & operations
Typically net demanders of funds
Business
Investments in production of goods and services
Typically net demanders of funds
Individuals
Some need for loans (house, auto)
Typically net suppliers of funds
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FUNCTIONS OF SEBI
The SEBI Act, 1992 has entrusted with two functions, they
are
Regulatory functions and
Developmental functions
REGULATORY FUNCTIONS
Regulation of stock exchange and self regulatory
organizations.
Registration and regulation of stock brokers, sub-brokers,
Registrars to all issues, merchant bankers, underwriters,
portfolio managers etc.
Registration and regulation of the working of collective
investment schemes including mutual funds.
Prohibition of fraudulent and unfair trade practices relating
to securities market.
Prohibition of insider trading.
Regulating substantial acquisition of shares and takeover
of companies.
DEVELOPMENTAL FUNCTION
Promoting investors education.
Training of intermediaries.
Conducting research and publishing information useful
to all market participants.
Promotion of fair practices.
Promotion of self regulatory organizations
ORGANIZATION OF SEBI
The SEBI Act provides for the establishment of a Statutory Board
consisting of six members. The chairman and two members are to be
appointed by the Central Government, one member to be appointed by
the Reserve Bank and two members having experience of securities
market to be appointed by the Central Government.
SEBI has divided the activities into four operational departments. They
are primary market department, issue management and intermediarys
department, secondary market department and institutional department.
Each department is headed by an Executive Director.
RIGHTS OF INVESTOR
To receive the share certificates, on allotment or
transfer as the case may be, in due time.
To receive copies of the Directors report,
Balance Sheet and P&L A/c and the Auditors
report.
To participate and vote in General Meeting either
personally or through proxies.
To receive dividend in due time once approved in
General Meeting.
To receive corporate benefits like rights, bonus,
etc once approved.
To proceed against the company by way of civil or
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