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PRESENTATION ON INVESTOR AWARENESS

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PRESENTATION ON INVESTOR AWARENESS YOUR RIGHTS AS A MUTUAL FUND UNIT HOLDER As a unit holder in a Mutual Fund scheme coming under the SEBI (Mutual Funds) Regulations ... – PowerPoint PPT presentation

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Title: PRESENTATION ON INVESTOR AWARENESS


1
PRESENTATION ON INVESTOR AWARENESS
2
INVESTMENT OPTIONS AVAILABLE IN THE MARKET
  • SHARE MARKET
  • MUTUAL FUNDS
  • BONDS
  • BANKS
  • OTHERS

3
WAYS TO INVEST INTO SHARE MARKET / MUTUAL FUNDS
  • PRIMARY MARKET IPO/NFO
  • SECONDARY MARKET STOCK EXCHANGES

4
LAWS AND RULES TO BE FOLLOWED BY THE
COMPANIES/STOCK EXCHANGES
  • SEBI GUIDELINES
  • SCRA
  • CDSL/NSDL NORMS
  • STOCK EXCANGE RULES AND REGULATIONS
  • COMPANIES ACT/ROC, Etc.

5
  • ALL THESE FACTORS NEED TO CREATE AN INFORMED AND
    ENLIGHTENED INVESTOR, WHO KNOWS WHAT PRECAUTIONS
    TO TAKE WHILE DEALING IN THE MARKET AND WHERE TO
    GO IN IN CASE OF ANY TROUBLE.

6
INITIAL PUBLIC OFFERING - IPO
  • IPO means when the company issues the shares in
    the market for the first time. This means that in
    the case of IPO the investor is dealing directly
    with the company, which is issuing its shares.
  • In such case document available for inspection
    is the Prospectus of the issue, which lays down
    the details about the issue.

7
Dos in case of IPO
  • Check the pricing of the issue. Is it aggressive
    or conservative?
  • Check out the promoters track record,
    performance of other group companies and
    Promoters interest in the company.
  • Understand Issuer Companys Balance Sheet and
    Profit Loss Account by paying attention to the
    total turnover and Profit After Tax (PAT)
    figures, the reasons for variances. Carefully
    examine the reasons for sudden increase in the
    top line or sudden increase in the profits.
  • Read Risk factors carefully and try to do an
    impact analysis of the critical risk factors.

8
  • Know about the major shareholders of the
    company. Whether the Institutional Investors have
    already invested in the company or not? Analyse
    carefully.
  • Carefully examine the reasons for which the IPO
    is coming. Is the issue for general corporate
    purpose, or to finance a new project or for an
    expansion/diversification project? Or is it for
    retiring a debt? Look carefully.
  • Find out whether the listed group of companies
    have been diligent in filing their returns with
    various Regulatory Bodies. The prospectus
    discloses all major litigation cases filed
    against the Companys Directors and Promoters, as
    well as against group companies. Avoid companies
    that are deeply mired in litigations.
  • Check out outstanding dues and defaults to
    lenders and depositors.
  • Check IPO Grading assigned by the Credit Rating
    Agency, if any.

9
Donts in case of IPO
  • Do not allow others to take decisions on your
    behalf. Do not invest on the basis of market
    tips.
  • Dont underestimate risk or overestimate gains
    in IPOs
  • Dont invest because of Brand or corporate
    image but always remember that you are investing
    in a company. A company may have a hugely
    popular brand, but may be bleeding financially.
    Moreover, a high-flying company may still be a
    risky losing proposition if its issue has been
    aggressively priced.

10
  • Do not invest based on bull run of the market
    index / scrips of other companies in the same
    industry.
  • Do not invest all your money in one company.
    Keep your portfolio diversified.

11
Dealing in the Secondary Market
  • Secondary Market means the dealing of shares
    through Stock Exchanges or between shareholders
    amongst themselves.
  • While dealing through the Stock Exchanges there
    are brokers and DPs acting as mediators, there
    is no such body when shares are transferred
    off-market.
  • As in such a case the company is not involved in
    between there is a need to take extra care, while
    making such transactions.

12
Essentials to Deal in Securities Market
  • To Deal it the securities market it is essential
    for an investor to open two types of accounts
  • 1) A Demat account with any Depository
    Participant, for holding shares in electronic
    form on behalf of the shareholder. It works in
    the similar manner as our saving bank account is
    maintained to hold our money.
  • 2) A trading Account with any Broker registered
    with any Stock Exchange to buy and sell shares
    on your behalf.

13
  • These days most DPs are also registered with
    Stock Exchanges as brokers as well. This provides
    us with the option to open a Trading as well a
    Demat account with the same entity.
  • This provides ease of transfer of shares in case
    of sale and purchase although it is not by any
    means necessary to do so. One can maintain a
    Demat account with a different entity and a
    Trading Account with a different entity.

14
Essentials for opening a Demat/Trading A/c
  • Completely filled Form
  • One coloured Photograph
  • Proof of Identity
  • Proof of Address
  • Copy of PAN card
  • Duly executed agreement on a Stamp Paper between
    the Client Depository Participant/Broker
  • Banker verification

15
Dos and Donts while dealing in securities market
  • DOs PRE-ACCOUNT OPENING
  • Always deal with market intermediaries registered
    with SEBI/Exchanges.
  • Its is very important that one should make
    himself/herself familiar with the rules,
    regulations, byelaws and circulars issued by
    Stock Exchanges/SEBI before entering into and/or
    carrying any transaction.
  • Transact only through Stock Exchanges.
  • Please carry out due-diligence before registering
    as client with any intermediary. Clients should
    carefully read and understand the contents stated
    in the Risk disclosure document, which forms part
    of investor registration requirement for dealing
    through brokers in stock market.

16
  • Clear all your doubts by raising your queries
    with the Relationship Manager prior to opening an
    account.
  • DONTs PRE-ACCOUNT OPENING
  • Do not start trading until you have read and
    understood the Risk Disclosure Document and
    Member-Client Agreement.

17
  • DOs ACCOUNT OPENING
  • Please read and understand and thereafter execute
    the Member-Client Agreement with the DP, setting
    out the terms and conditions clearly.
  • Enter accurate and complete details in the form,
    fill up all fields. Do not leave any spaces
    blank.
  • All information provided should be factually
    correct and accurate since this will form the
    basis of your relationship with your DP
  • Read and understand every document in the
    Registration kit carefully before signing.
  • Please provide accurate Email ID, Client ID, DP
    ID, Mobile Number, Contact Details and Bank
    account number.

18
  • The correspond address should always be updated.
  • Submit your Permanent Account Number (PAN)
  • Understand the utility of maintaining a running
    account before signing the authorization for the
    same. Maintaining a Running Account with the same
    DP is not compulsory.
  • Ensure that all details are correctly mentioned
    in the welcome letter sent by your DP after
    account opening.
  • DONTs ACCOUNT OPENING
  • Do not sign the Member- Client Agreement without
    clearing your doubts in respect thereof.
  • Do not fill in wrong or incomplete details. Do
    not overwrite, cancel, misspell the details.

19
  • DOs PRE-TRADING
  • Adopt trading / investment strategies
    commensurate with you risk bearing capacity, as
    all investments carry risk, the degree of which
    varies according to the investment strategy
    adopted.
  • Assess the risk-return profile of the investment
    as well as the liquidity and safety aspects
    before making and/or acting upon your investment
    decision.
  • Make investments based on your sound reasoning,
    after taking into account all publicly available
    information, fundamentals and information made
    available.
  • Check the veracity of the information available.
  • Access the website of  Companies and Regulators
    for information.

20
  • Keep copies of the Member Client Agreement and
    your trading account related documents.
  • Familiarise yourself with the rules, regulation
    and circulars issued by stock exchanges/SEBI
    before carrying out any transaction.
  • Ask all relevant question and clear your doubts
    with your broker before transacting
  • Please be informed that there are no guaranteed
    returns on investment in stock markets.
    Investment in Capital Market are subject to
    market risk.
  • Ensure that you have adequate balance before you
    buy.
  • Ensure that you are holding securities before you
    sell.
  • Exercise due caution while trading in illiquid
    shares or penny stocks or Z, T2T category stock.

21
  • DONTs PRE-TRADING
  • Do not trade in any product without knowing
    and/or understanding the associated risks and
    rewards.
  • Do not be influenced by information which is not
    originating from an appropriates source.
  • Do not believe any promises made about Assured
    Returns by DPs employees or Sub-Brokers or
    Authorized Persons or Marketing Associated.
  • Do not rely on any implicit/explicit promise made
    by the issuer or any third party on returns.
  • Do not be influenced into buying fundamentally
    unsound companies (penny stocks) based on sudden
    spurts in trading volumes or prices or
    non-authentic favorable looking articles/stories.

22
  • Do not match/ synchronize trades with any other
    person for any thinly traded shares.
  • Do not be misled by rumors circulating in the
    market.
  • Do not indulge in any manner including
    manipulation of price of any scrips.
  • Do not follow the herd or play on momentum it
    could turn against you.
  • Do not be misled by so called hot tips.
  • Do not undertake deals for others or trade on
    your own name and then issue cheques from family
    members/friend accounts.
  • Do not pay in cash or do not issue a cheque in
    the name of any employee of the Broker or any
    other person in respect of the transactions.

23
  • Do not get carried away by luring advertisements,
    if any.
  • Do not try to time the market.
  • Do not leave signed blank delivery instruction
    slips (DIS) of your depository account lying
    around carelessly or with anyone.
  • Do not sign blank DIS and keep them with
    Depository Participant or broker to save time.
    Remember your carelessness can be your peril.
  • Do not invest based on bull run of the market
    index/ scrips of other companies in same
    industry/ issuer company.
  • Do not start trading before reading and
    understanding the Risk Disclosure documents.
  • Dont get misled by guarantees of repayment of
    your investments through postdated cheques.

24
  • DOs TRADING
  • Call on the landline numbers of your broker and
    give clear and unambiguous instructions while
    placing orders over the phone. In case you visit
    the broker, kindly give your orders in writing.
  • Be vigilant in your transactions
  • Be aware of the risk associated with your Cash
    Market and Futures Options positions in the
    market and margin calls on them. In case of
    inadequate margin or nonpayment of margin in your
    account, your positions will be squared off by
    the Risk Management Team.
  • Please bear in mind that while the usually the
    broker informs you in case of a margin call, it
    is your responsibility to maintain margins.
    Broker will square up outstanding position in
    case of shortfall in margin and delay in payments.

25
  • Maintain secrecy of your password in case of
    Internet trading, since you will be solely
    responsible for all transactions effected from
    its usage.
  • The password should be distinct periodically
    changed to ensure security.
  • If at any point of time you receive response for
    resetting password against request which has not
    been made by you, you may contact DP immediately.

26
  • DONTs TRADING
  • Do not give instructions which are not clear.
    They should be given verbally over recorded phone
    lines or in writing.
  • Do not forget to take note of risks involved in
    the investment.
  • Do not reveal your password to any other person.
  • Do not engage your self in any activity which is
    in the nature of intermediary such as sub-broker
    without proper registration with SEBI/Exchanges.

27
  • DOs DEPOSITORES
  • Handle Delivery Instruction Slips (DIS) Book
    issued to you carefully.
  • Insist that the DIS numbers are pre-printed and
    you account number (client id) be pre-stamped.
  • While sending securities for demat, record the
    distinctive numbers of the securities sent.
  • Check the demat performance of the issuer company
    with your DP before deciding to send certificates
    for demat.
  • Scrutinize minutely both the transaction and the
    holding statements that you receive from your
    depository participant.
  • Always mention the details like ISIN, number of
    securities accurately. If in doubt, contact
    Depository Participant or your broker.

28
  • Authorise any corrections, over-writing or
    cancellations on the instruction slips by signing
    against the same.
  • Ensure that all joint holders of the demat
    account sign the slip.
  • If there is space for multiple instructions and
    it is not used fully, please strike out the blank
    space for furnishing securities details.
  • Avoid over-writing cancellations, misspellings,
    changing of the name and quantity of securities.
  • In case you are not transacting frequently make
    use of the freezing facilities provided for your
    depository account.

29
  • DONTs DEPOSITORIES
  • Do not issue depository delivery instruction slip
    from any other family members/friends accounts.
    Issue the DIS only from your own depository
    account.
  • Do not sign blank Delivery instruction slip(s)
    while meeting security pay in obligation.

30
MUTUAL FUNDS
  • WHAT IS A MUTUAL FUND?
  • A Mutual Fund is a Trust that pools the savings
    of a number of investors who share a comman
    financial goal. Anybody with an investible
    surplus of as little as a few thousand rupees can
    invest in Mutual Fund. These investors buy units
    of a particular Mutual Fund Scheme that has a
    defined investment objective strategy.
  • Invests
  • The Fund Manager in different types of
    securities
  • Income Earned is distributed to the
    unitholders
  • Dividend NAV Appreciation

31
TYPES OF MUTUAL FUND SCHEMES
  • Mutual Funds can be divided two basis
  • By Structure By Investment objective
  • Open ended schemes i) Growth Schemes
  • Closed ended schemes ii) Income
    Schemes
  • iii) Balanced Schemes
  • iv) Money Market/Liquid
    Schemes
  • Other Schemes Tax Saving Schemes
  • Special Schemes

32
REASONS TO INVEST IN MUTUAL FUNDS
  • Following are the advantages of investing in
    Mutual Funds
  • Professional Management
  • Diversification
  • Convenient Administration
  • Return potential
  • Low Costs
  • Liquidity
  • Transparency
  • Flexibility
  • Multiple options
  • Well Regulated

33
STEPS TO INVEST IN MUTUAL FUNDS
  • Identify your investment needs
  • Choose the Right Mutual Fund
  • Select the ideal mix of Schemes
  • Invest Regularly
  • Keep your Taxes in mind
  • Start Early
  • Buy a Mutual Fund

34
YOUR RIGHTS AS A MUTUAL FUND UNIT HOLDER
  • As a unit holder in a Mutual Fund scheme coming
    under the SEBI (Mutual Funds) Regulations, you
    are entitled to
  • Receive unit certificates or statements of
    accounts confirming your title within 30 days
    from the date of closure of the subscription
    under open-ended schemes or within 6 weeks from
    the date your request for a unit certificate is
    received by the Mutual Fund
  • Receive information about the investment
    policies, investment objectives, financial
    position and general affairs of the scheme
  • Receive dividend within 30 days of their
    declaration and receive the redemption or
    repurchase proceeds within 10 days from the date
    of redemption or repurchase

35
  • Voting in accordance with the Regulations to
  • Change the Asset Management Company.
  • Wind up the schemes.
  • To receive communication from the Trustee about
    change in the fundamental attributes of any
    scheme or any other changes which would modify
    the scheme and effect the interest of the
    unitholders and to have option to exit at
    prevailing Net Asset Value without any exit load
    in such cases.
  • Inspect the documents of the Mutual Funds
    specified in the schemes offer document.

36
  • THANK YOU
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