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Month 00 2006 - PowerPoint PPT Presentation


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Why earn?. Month 00 2006. Why Invest?. The Objective. Wealth Creation.

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Presentation Transcript
slide1

Why earn?

Month 00 2006

Why Invest?

the objective
The Objective

Wealth Creation

slide3

Comparative returns for the last 20 yearsWhat $1000 invested at the end of 1986would be worth at the end of 2006?Instrument  Value Average Annual Return   Stocks (S&P500) $9310 11.80%  Real Estate $8540 11.32%   Commodities $6510 9.82%   International Stocks $5020 8.40%   Inflation (CPI) $1820 3.05%    Gold $1550 2.23%   

unbelievable but it has happened
Unbelievable

but it has happened

Power of Equity

Month 00 2006

just imagine
How much can you make in 26 years by just investing Rs.10,000 initially in any of financial instruments ?

Take a wild guess ???

Let us look at the real example…

Just imagine…
if you have subscribed in 100 shares of company with a face value of rs 100 in 1980
In 1981 company declared 1:1 bonus = you have 200 shares

In 1985 company declared 1:1 bonus = you have 400 shares

In 1986 company split the share to Rs. 10 = you have 4,000 shares

In 1987 company declared 1:1 bonus = you have 8,000 shares

In 1989 company declared 1:1 bonus = you have 16,000 shares

In 1992 company declared 1:1 bonus = you have 32,000 shares

In 1995 company declared 1:1 bonus = you have 64,000 shares

In 1997 company declared 1:2 bonus = you have 1,92,000 shares

In 1999 company split the share to Rs. 2 = you have 9,60,000 shares

In 2004 company declared 1:2 bonus = you have 28,80,000 shares

In 2005 company declared 1:1 bonus = you have 57,60,000 shares

If you have subscribed in 100 shares of ________ company with a face value of Rs. 100 in 1980…
at the end of 2005
You have 57,60,000 shares of the company

Any guess about the company ?

(Hint : Its an Indian company)

Any guess about the present valuation ?

At the end of 2005…
other such examples
CIPLA

Investment of Rs. 10,000 in 1979 will fetch Rs. 95 cr.+

INFOSYS

Investment of Rs. 10,000 in 1992 will fetch Rs. 1.5 cr.+

RANBAXY

Investment of Rs. 1000 in 1980 will fetch Rs. 1.9 cr.+

Other such examples…
slide11

Stock Market ============== Mandi

Buyers and Sellers come together

Seller Seller Seller

Buyer

Buyer Buyer Buyer

Seller

Buyer’s Price – Lower Offer

Seller’s Price – Higher offer

slide12

Stock Exchange (BSE / NSE)

Broker Broker

Sub- Broker Sub- Broker

Client Client

slide13

Delivery Based (Primary and Secondary Markets)

Depository (NSDL / CDSL)

Depository Participant Depository Participant

Client Client

slide14

Off-line Model

Sub broker Depository Participant Bank

Client

slide15

On-line Model

Reliance Money

Broker

(Reliance Securities)

Sub broker Depository Participant Bank

(R Money Franchisee)(Reliance Capital)UTI, IDBI, HDFC, Offline CMS

Reliance Money

Client

slide16

Margin Trade

Scenario 1

Company A

Market Opens 10 am

Share Price: Rs. 100/-

Buy 100 shares

Total Investment Rs. 10000/-

At 2 pm

Share Price : Rs. 120/-

Sell 100 shares

Profit: Rs. 2000/-

Return on investment: 20%

slide17

Margin Trade

Scenario 2

Company A

Market Opens 10 am

Share Price: Rs. 100/-

Buy 100 shares

Total Investment Rs. 2000/- Broker provides Rs. 8000/-

At 2 pm

Share Price : Rs. 120/-

Sell 100 shares

Profit: Rs. 2000/-

Return on investment: 100%

slide18

Services Available

  • Equities – Delivery, ATST, Margin
  • Futures and Options
  • IPO's online
  • Research Inputs – Dow Jones, Saans
  • Trading Ideas – Sachin Chavan, Deepak Mohini
  • Overseas Equities, Commodities, Currency combinations.
slide19

Target Clients

  • Existing Market
  • Traders
  • Investors
  • IPO Applicants
  • New Market
  • MF Investors
  • ULIP Investors
  • Debt Market – FD Invetors
slide20

Futures

Contract

Current Share Price Rs. 100

Market assessment of value on last Thursday: Rs. 120/-

Contract Value Rs. 120/-

My Assessment: Rs. 125/-

I ‘ll buy the contract.

Counter Party Assessment: Rs. 115/-

Counter party sells contract

On last Thursday Price is Rs. 121: Buyer Gains.

On last Thursday Price is Rs. 118: Seller Gains.