Description
the impact of global financial crisis on the Indian securities market. It also includes strengths, market segments, market participants and regulatory framework of the Indian securities market
Securities Market
Agenda
• Impact of Financial Crisis
• Introduction • Analysis of the impact • Index examination
• Indian Securities Market
• • • • Strengths Market Segments Market Participants Regulatory Framework
Global Financial Crisis
• • • • • • Low interest rate regime Loans to sub prime borrowers Asset Securitization Mortgages packaged and sold Housing Prices declined Losses for almost all investment banks
Country Turnover and MarketCap Analysis
• • • • • Market caps had reached 2004 levels in 2008 44.53% lower market cap in 2008 18.52% lower turnover in 2008 Share of U.S in turnover came down by 3.56% Share of India in turnover increased from 0.95% to 1.3%
Developed Economies
Developing Economies
Index Examination
• Phase 1 : Positive correlation between global indices • Phase2 : Asian markets exceptional returns; European Markets meager returns • Phase 3 : Reduction in stock prices everywhere • Phase 4 : Bail out packages and impact on emerging economies • Phase 5 : Impact of stimulus
Phases of the crisis
Strengths of Indian Markets
• Fully automatic trading system • Wide range of products • Integrated platform for trading in both cash and derivatives • Nationwide network for trading in variety of securities • Quality of regulation • Advanced and scientific risk management syetems
Market Segments
• Primary Market
• Public Issue • Private Placement
• Secondary Market
• OTC market • Stock Exchanges
Market Participants
Investors
• Financial savings declined from 11.5% to 10.9% of GDP • Decline in investment in shares and debentures • Fixed Income investments remained stable • Investment in securities was negative
Household savings in market
Issuers
• • • • Resource mobilization fell by 31.17% Public issues declined by 82.47% Private placement declined by 4.62% Resource mobilization by Govt. increased by 70.58% • Euro issues fell by 50%
Intermediaries
• Put together demand of buyers and offers of sellers • Have a close relationship with investors • Regulation is directed at intermediaries • Encouraged to corporatize • Corporatization brings better governance
Regulators
• • • • • • Capital Issues Act - Repealed in 1992 SEBI Act 1992 - Protecting interest of investors Securities Contracts Regulation Act Depositories Act Companies Act Prevention of Money Laundering Act
Secondary Market
Shareholding Pattern
• • • • • Promoters hold 57.9% of the shares Non Promoters hold 42.1% of the shares Individuals held 13.05% Institutions held 12.49% 8.23% of the shares held by promoters have been pledged
Role of NSE
• Provides a market place for purchase and selling of securities • Provides linkage between the savings and investment • Acts a barometer of the health of companies and the economy • NSE has been a catalytic agent in reforms • NSE provides a trading platform for all type of securities • NSE’s infra acts as a role model
doc_184554699.pptx
the impact of global financial crisis on the Indian securities market. It also includes strengths, market segments, market participants and regulatory framework of the Indian securities market
Securities Market
Agenda
• Impact of Financial Crisis
• Introduction • Analysis of the impact • Index examination
• Indian Securities Market
• • • • Strengths Market Segments Market Participants Regulatory Framework
Global Financial Crisis
• • • • • • Low interest rate regime Loans to sub prime borrowers Asset Securitization Mortgages packaged and sold Housing Prices declined Losses for almost all investment banks
Country Turnover and MarketCap Analysis
• • • • • Market caps had reached 2004 levels in 2008 44.53% lower market cap in 2008 18.52% lower turnover in 2008 Share of U.S in turnover came down by 3.56% Share of India in turnover increased from 0.95% to 1.3%
Developed Economies
Developing Economies
Index Examination
• Phase 1 : Positive correlation between global indices • Phase2 : Asian markets exceptional returns; European Markets meager returns • Phase 3 : Reduction in stock prices everywhere • Phase 4 : Bail out packages and impact on emerging economies • Phase 5 : Impact of stimulus
Phases of the crisis
Strengths of Indian Markets
• Fully automatic trading system • Wide range of products • Integrated platform for trading in both cash and derivatives • Nationwide network for trading in variety of securities • Quality of regulation • Advanced and scientific risk management syetems
Market Segments
• Primary Market
• Public Issue • Private Placement
• Secondary Market
• OTC market • Stock Exchanges
Market Participants
Investors
• Financial savings declined from 11.5% to 10.9% of GDP • Decline in investment in shares and debentures • Fixed Income investments remained stable • Investment in securities was negative
Household savings in market
Issuers
• • • • Resource mobilization fell by 31.17% Public issues declined by 82.47% Private placement declined by 4.62% Resource mobilization by Govt. increased by 70.58% • Euro issues fell by 50%
Intermediaries
• Put together demand of buyers and offers of sellers • Have a close relationship with investors • Regulation is directed at intermediaries • Encouraged to corporatize • Corporatization brings better governance
Regulators
• • • • • • Capital Issues Act - Repealed in 1992 SEBI Act 1992 - Protecting interest of investors Securities Contracts Regulation Act Depositories Act Companies Act Prevention of Money Laundering Act
Secondary Market
Shareholding Pattern
• • • • • Promoters hold 57.9% of the shares Non Promoters hold 42.1% of the shares Individuals held 13.05% Institutions held 12.49% 8.23% of the shares held by promoters have been pledged
Role of NSE
• Provides a market place for purchase and selling of securities • Provides linkage between the savings and investment • Acts a barometer of the health of companies and the economy • NSE has been a catalytic agent in reforms • NSE provides a trading platform for all type of securities • NSE’s infra acts as a role model
doc_184554699.pptx