Industrial Securities Market Case Study

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The market for industrial securities is known as securities market that offers an ideal market for corporate securities such as shares and debentures. Industrial securities market is relatively much smaller in India than that in other industrialized countries because of the industrial structure, investment habits and the level of education of investors in India. Industrial securities are not a major source of funds even for private sector industrial units. The volume of industrial securities in relation to government securities, their role in financing the private sector and their significance as a savings medium indicate that the industrial securities market in India can hardly be regarded as a barometer of economic activity. The industrial…show more content…
ZERO INTEREST BONDS Zero interest bonds are sold at a discount from their eventual maturity value and bear no interest. In India, zero interest convertible is bonds are issued by companies. These bonds do not carry any interest till the date of conversion and are converted into equity shares at par or premium on the expiry of a fixed period. 10. DEEP DISCOUNT BONDS These bonds are sold at a large discount to their nominal value. There are no interest payments on these bonds and the investors get return as accretion to the par value of the instrument over its life. The Industrial Development Bank of India issued in February 1996 deep discount bonds. Each bond having a face value of Rs. 200000 was issued at a discounted price of Rs. 53000 with a maturity period of 25 years. The Industrial Finance of India issued Deep Discount Bonds of Rs. 2500 and promised Rs. 100000 after 25 years. The Small Industrial Bank of India also issued similar type of bonds. 11. OPTION BONDS Option Bonds may be cumulative or non-cumulative as per the option of the holder of the bonds. In case of cumulative bonds, interest is accumulated and is payable on maturity only. In case of non-cumulative bonds, the interest is paid periodically. The option is to be exercised by the investor at the time of investment. The Industrial Development Bank of India issued option bonds in January…show more content…
NSE enjoys a dominant share in spot trading, with about 70% of the market share, as of 2009, and almost a complete monopoly in derivatives trading, with about a 98% share in this market, also as of 2009. Both exchanges compete for the order flow that leads to reduced costs, market efficiency and innovation. The presence of arbitrageurs keeps the prices on the two stock exchanges within a very tight range.  Trading Mechanism Trading at both the exchanges takes place through an open electronic limit order book, in which order matching is done by the trading computer. There are no market makers or specialists and the entire process is order-driven, which means that market orders placed by investors are automatically matched with the best limit orders. As a result, buyers and sellers remain anonymous. The advantage of an order driven market is that it brings more transparency, by displaying all buy and sell orders in the trading system. However, in the absence of market makers, there is no guarantee that orders will be executed. All orders in the trading system need to be placed through brokers, many of which provide online trading facility to retail customers. Institutional investors can also take advantage of the direct market access (DMA) option, in which they use trading terminals provided by brokers for placing orders directly into the stock market trading

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