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Equity

What is Equity?

Quality research and Quantitative analysis is the rigid foundation on which the structure of the financial markets rests. The decision making achieved after a thorough basing of investment creates an astute forum. The Equity Research Desk provides trading as well as investment opportunities across the small-cap, mid-cap and blue-chip corporations that adds value to the end client.

Why Equity?

At GEPL, we have dedicated teams that focus on fundamental as well as technical research and is considered as one of the strongest technical analysis outfits in the country. GEPL is completely committed to Equity Research and we believe that this is the single most important value addition that differentiates a top of the end brokerage outfit like us from others.

New to GEPL

Our step by step guide will help you through understanding the basics

Before you invest for the first time it is important to understand the basics. We’ve put together a step-by-step guide to investments that we hope will clarify some of the broader benefits and risks.

The behaviour of the price movement of a stock is said to predict its future movement. One such approach is called technical analysis and is based on the historical movements of the individual stocks as well as the indices. Their belief is that by plotting the price movements over time, they can discern certain patterns which will help them to predict the future price movements of the stocks. On the other hand we have "fundamental analysis", where the forecasting is done on the basis of economic, industry and company data. Technical analysis is used more as a supplement to fundamental analysis rather than in isolation.

When company is buying back shares from the existing share holder through tender route. Shares are to be transferred to the broker. Broker then has to submit bid at the exchange level platform.

Exchange(s) The Exchange(s) where the Promoters decide to offload their holding.
Sellers (i) All promoter(s)/ promoter group entities of such companies that are eligible for trading and are required to increase public shareholding to meet the minimum public shareholding requirements. (ii) All promoter(s)/ promoter group entities of top 100 companies based on average market capitalization of the last completed quarter.
Buyers All investors registered with the brokers of the aforementioned stock exchanges other than the promoter(s)/ promoter group entities

BULK DEAL

With a view to imparting transparency in BULK Deal so as to prevent rumors/speculation about deals causing volatility in the Security prices, disclosures shall be made with respect to all transactions in Security where total quantity of shares brought/sold is more than 0.5% of the number of equity shares of the company listed on the stock exchange.

 

BLOCK DEAL

In order to facilitate execution of large trades, a separate trading window is provided. A trade, with a minimum quantity of 5,00,000 shares or minimum value of Rs.5 crore executed through a single transaction on this separate window of the stock exchange will constitute a BLOCK Deal. The Stock Exchanges shall disseminate the information of BLOCK Deal such as the name of the Security, name of the client, quantity of shares brought/sold, traded price, etc to the general public on the same day, after the market hours.

Corporate Actions are for BONUS / STOCK SPLIT /  RIGHTS / DIVIDENDS / INTERIM DIVIDENDS.

 

Bonus issues.

 

Instead of cash dividends, investors receive dividends in the form of a stock. The investor receives more shares when a bonus issue is announced. For example, when there is a bonus issue in the ratio of 1:1, the number of shares owned by an investor would double in number. However, the market price of the share would decrease as well. At times the decrease might not be proportionate to the extent of the bonus because market players might push the price up if they view the bonus issue as a positive development. Some companies might announce bonus issues to bring the market price of their share to a more popular range and also promote active trading by increasing the number of outstanding shares.

 

Stock splits.

 

Whenever a stock split occurs, the company ends up with more outstanding shares which will not only have a lower market price but also lower par value. Stock splits are prompted when the company thinks its stock price has risen to a level that is out of the "popular trading range".

 

For example, X corporation has 1 million outstanding shares. The par value is Rs.10 and the current market price is Rs.1000 per share. If the management feels this price is resulting in a decrease in trading volumes, they can declare a 1-for-1 split. By doing this, there will be 2 million outstanding shares with a par value of Rs.5 and a theoretical market price of Rs.500 per share. Sometimes when the market price is very low, the company might announce a "reverse split" which has the opposite effect of the normal stock split.

In the case of splits, there is no change in the reserves and surplus of the company unlike the bonus issue.

Right Issues.

Rights are issued to existing share holders of the company. For Example a company market price is Rs. 100/- right are issued in the ratio of 1:1 at Rs. 50/-.

Dividends / Interim Dividends.

Dividend is the payment made by corporation to its shareholder members. It is the portion of corporate profits paid out to share holders

To receive a dividend you must buy the stock before the  ex-dividend date and hold the stock until at least the ex-dividend date. Ex Date information is available on stock exchange websites in Coroporate Actions.

In a Rolling Settlement, trades executed during the day are settled based on the net obligations for the day.Presently the trades pertaining to the rolling settlement are settled on a T+2 day basis where T stands for the trade day. Hence, trades executed on a Monday are typically settled on the following Wednesday (considering 2 working days from the trade day).The funds and securities pay-in and pay-out are carried out on T+2 day.

Session Time Action
Order Entry Period 9:00am - 9:07/08am Random stoppage between 7th and 8th minute

Dissemination of Indicative Price, Cumulative buy & sale Quantity & Indicative Index

Uniform price band of 20% is applicable

Order Matching & Confirmation Period 9:08am - 9.12am No Order Addition/Modification/Cancellation
Opening price determination, order matching and trade confirmation & trade confirmation
Buffer Period 9:12am - 9:15am To facilitate transition between pre open and continuous trading session
Continuous Trading Session 9:15am – 3:30pm Trades occur continuously as orders match at time/price priority
Post Closing 03.40pm- 04.00 p.m Trades occur only on the closing price which is pre determined as market closes.

Always visit Stock exchange websites for any information. Bombay Stock Exchange (BSE) : www.bseindia.com National Stock Exchange (NSE) www.nseindia.com.

Stocks can be bought or sold through stock exchanges. Always deal registered brokers and sub brokers. Orders can be placed by calling over the phone/ mobile trading / online trading.

Money can be made in different ways from the purchase of shares:

  1. By receiving dividends
  2. By the value of the shares increasing from the price at which they were first purchased. Then they can be sold at a higher price back to the stock market.

Security market is a market where securities are issued and traded. It is the market for different types of securities namely: Debt, Equity and Derivatives. Equity market is divided into two parts : Primary market - Secondary market. Derivatives market is also divided into two parts: - Options market - Futures market

EQUITY

Equity investments enable you to own or share equity in actual businesses. Equity investments offer a spectrum of diversification as they provide sectoral as well as regional demographics. This creates an avenue of long term wealth for you.

Benefits of an Equity Investment

  1. Liquidity Since stocks are exchanged daily, equities are a liquid investment that you as an investor can sell at anytime. This means that you can instantly convert your holdings into cash according to your requirements.
  2. Portfolio Diversification Equity investment minimizes risk due to your diversified portfolio. With investments in various stocks, you are less likely to lose your investment money, even if few of the stocks drop.
  3. Capital Gains Equity investors stand to gain from the profit of a business in which they own a share. A healthy business that continues to grow and profit in the market leads to capital gain for investors.
  4. Dividends Blue chip organizations pay regular dividends to investors. This forms a regular stream of income for investors. With the aid of a diversified portfolio, an equity investor can reap a continuous income.
  5. Professional Management The investment area is filled with uncertainties, risks, and challenges. The stress of this field for an investor can be avoided with professional experts managing the investments for the investor. With in-depth knowledge of the investments and market, and credible experience, professional management ensures a healthy and wealthy outcome of investments.

Why invest with us?

We at GEPL aim to provide you customized advice on equity investments that ensures all your requirements are met. Our experienced personnel take into account technical and fundamental parameters of the market to generate exclusive stock reports.

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We understand how important it is to keep an eye on your money – that’s why we make it easy for you to manage and track your investments. Plus, you’ll find answers to your questions and useful information about our products in our support centre.