Rules for making your investment profitable in BSE | NSE

Indian stocks markets (BSE and NSE) are known through out the world for their enormous volatility and still no one can predict where the market will go in a week's time , However these rules(50 in number) are compiled by me after following the market for last 4 years, if followed correctly the investment can become very profitable both for NSE and BSE.

50 rules which a market beginners must follow in order to make their investment profitable are as follows : 

1. An attempt at making a quick buck usually leads to losing much of that buck.

2. If stocks in general don’t seem cheap, stand aside.

3. Buy and hold doesn’t always work.

4. Never throw good money after bad investments (don’t buy more of a loser).

Also read -
-BSE aims at internationalization of listing businessNEW !!
-Effect of Recession on Indian Economy
-Economies hit by recession
-World's Strongest economies list

5. Cut your losers, and let your winners ride.

6. If the investment sounds too good to be true, it is.

7. Don’t fight “the tape” (the trend).

8. Don’t fight the Fed (interest rates).

9. Most stocks that fall under $5 rarely see $10 again.

10. The best hot tip: there is no such thing as a hot tip.

11. Don’t fall in love with your stock; it won’t fall in love with you.

12. Don’t have more than 3% at risk in any one position.

13. The trend is your friend until the end.

14. Trading options often leads to a quick trip to the poorhouse.

15. Bear-market rallies are often violent; giving the illusion the bull is back.

16. Low-priced stocks don’t double any faster than high-priced ones.

17. Valuations don’t matter in the short run.

18. When a stock hits a new high, it’s not time to sell. Something is going right.

19. Have a rose garden portfolio (don’t trim your roses while your weeds fester).

20. It takes courage to be a pig (don’t settle for taking 10% profits).

21. Not selling a stock for a gain, simply because you’re afraid of the taxes, is a bad idea.

22. Avoid limited upside, unlimited downside investments.

Also read -
-BSE aims at internationalization of listing businessNEW !!
-Effect of Recession on Indian Economy
-Economies hit by recession
-World's Strongest economies list

23. When all you’re left with is hope, get out.

24. Don’t keep losing money just to “prove you are right.” Nobody cares.

25. Forecasts are useless.

26. Have patience and stick with your discipline.

27. When it’s time to act, don’t hesitate.

28. Expert investors care about risk, novice investors shop for returns.

29. Don’t lose money.

30. You can learn more from your bad moves than your good.

31. A rising tide raises all ships, and vice versa, so assess the tide, not the ships.

32. Stocks fall more than you think and rise higher than you can possibly imagine.

33. Very few people have had great success short selling, even in bear markets.

34. You can’t know everything about everything.

35. Since you can’t know everything, seek out specialists who know their areas.

36. If a company’s sales are shrinking, the business isn’t growing anymore.

37. Real estate cycles are not the same as stock market cycles.

38. Investing in what’s popular never ends up making you any money.

39. Know your investment edge, and don’t stray too far from it.

Also read -
-BSE aims at internationalization of listing businessNEW !!
-Effect of Recession on Indian Economy
-Economies hit by recession
-World's Strongest economies list

40. Bear markets begin in good times. Bull markets begin in bad times.

41. Buy value - stocks that are priced less than their underlying assets are worth.

42. Neglected sectors often turn out to offer good values.

43. There’s usually only one reason corporate insiders buy stock.

44. Don’t miss a good one by being too concerned with the exact price you pay.

45. Avoid popular stocks, fad industries and new ventures.

46. Buy shares in businesses you understand.

47. Try to buy a stock when it has few friends.

48. Be patient: don’t be rattled by fluctuations.

49. Mutual funds underperform the averages over the long run. Buy index funds instead.

50. If you don’t understand the investment, don’t invest.

That’s a lot of rules. Reasonably intuitive, yet millions of investors break these simple rules every day. I’d like to leave you with one more rule of investing, which I’m seeing among investors trying to get back to where they were…

posted under - 50 rules, 50 Rules for investing, investing rules, stock investments, investing in BSE, investing in shares, indian stock markets, invest in NSE

ASBA - Investment friendly way of investing in IPO's

Bombay Stock Exchange Ltd. (BSE) has developed an interface for the banks to participate in the ASBA (Application Supported by Blocked Amounts) process. This new initiative is in the area of IPO payments as proposed by the capital markets regulator, Securities and Exchange Board of India (SEBI).

The objective of introducing ASBA is to ensure that the investor's funds leave his bank account only upon allocation of shares in public issues. The ASBA process also ensures that only the requisite amount of funds are debited to the investor's bank account on allotment of shares. In this mechanism, the need for refunds is completely obviated.

Using this interface the banks, participating in the IPO process would be able to upload the bids with respect to their customers, into the electronic book of BSE. The interface facilitates not only the controlling branch but also the designated branches of the banks to directly upload the bids into the electronic book at BSE. The ASBA application has been successfully tested with eleven banks.

The list of SCSBs are as below. For details of designated branches click on respective banks below:

Axis Bank
Bank of Baroda
Corporation Bank
HDFC Bank
ICICI Bank Ltd
IDBI Bank Limited
Kotak Mahindra Bank
State Bank of Bikaner & Jaipur
State Bank of India
Union Bank of India
Yes Bank Limited

Investment in the equity shares of (BSEL) Bombay Stock Exchange Limited

Attensions to the investors: read for investing in shares of BSEL (Bombay Stock Exchange Limited)
1.1 Attention of the investors is invited to the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006, (hereinafter 'the Regulations'), notified by Securities and Exchange Board of India (SEBI) on 13th November,2006.

1.2 Chapter III of the Regulations inter-alia stipulates the shareholding restrictions and eligibility criteria for holding equity shares in the recognized Stock Exchange as under:

1.2.1 Shareholding and transferability restrictions
Regulation 8 (1) of the Regulations provides that no person shall, directly or indirectly, acquire or hold more than five per cent in the paid up equity capital of a recognised stock exchange at any time after commencement of these regulations.

1.2.2 Eligibility criteria for persons acquiring or holding more than one per cent equity shares in a recognised stock exchange

Regulation 9. (1) of the Regulations provides that no person shall, either individually or together with persons acting in concert with him, acquire and/or hold more than one per cent of the paid up equity capital of a recognised stock exchange after commencement of these regulations, unless he is a fit and proper person and has taken prior approval of the SEBI for doing so.

Further, regulation 9(2) provides that for the purpose of sub-regulation (1), a person shall be deemed to be a fit and proper person if -

1. such person has a general reputation and record of fairness and integrity, including but not limited to -
1. financial integrity;
2. good reputation and character; and
3. honesty.
2. such person has not incurred any of the following disqualifications -

1. the person or any of its whole time directors or managing partners has been convicted by a Court for any offence involving moral turpitude or any economic offence, or any offence against the securities laws;

2. an order for winding up has been passed against the person;

3. the person or any of its whole time directors or managing partners has been declared insolvent and has not been discharged;

4. an order, restraining, prohibiting or debarring the person, or any of its whole time directors or managing partners from dealing in securities in the capital market or from accessing the capital market has been passed by the Board or any other regulatory authority and a period of three years from the date of the expiry of the period specified in the order has not elapsed;

5. any other order against the person or any of its whole time directors or managing partners which has a bearing on the capital market, has been passed by the Board or any other regulatory authority and a period of three years from the date of the order has not elapsed;

6. the person has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force; and
7. the person is financially not sound.

In terms of regulation 9(3) If any question arises as to whether a person is a fit and proper person, the SEBI's decision on such question shall be final.

2.1 Under the BSE (Corporatisation and Demutualisation) Scheme, 2005 the Exchange has to ensure that "Public" other than shareholders having trading rights continuously hold at least 51% of equity shares of the Exchange.

2.2 In terms of regulation 2 (h) of the Regulations "public" includes any member or section of the public but does not include any share holder of the recognised stock exchange having trading rights therein or any associate of such shareholder;

2.3 According to the clarification received from SEBI vide MRD/DSA/SE/Cir-09/08 dated April 17, 2008 the term "shareholder having trading rights' mentioned in the Regulations would mean a shareholder who has a trading interest in the stock exchange, whether directly or indirectly through a person having trading rights.

Explanation: a shareholder having trading interest 'indirectly' in relation to a person having trading rights would be understood in the same manner as the term 'associate' is in relation to a shareholder having trading rights under regulation 2(1)(b) of the Regulations.

2.4 Attention of the Investors is also invited to the term "Associate" in relation to a shareholder having trading rights in a recognised stock exchange as defined in the Regulations.

In terms of regulation 2 (1) (b) of the Regulations "associate" in relation to a shareholder having trading rights in a recognised stock exchange means a person -

1. who directly or indirectly, by himself or in combination with other persons, exercises control over such shareholder or holds substantial shares entitling not less than fifteen per cent of the voting rights in such shareholder being a body corporate; or

2. over whom such shareholder, directly or indirectly, by itself or in combination with other persons, exercises control; or

3. whose director or partner is also a director or a partner of such shareholder , being a body corporate or a partnership firm, as the case may be; or

4. who is a holding company or subsidiary company of such shareholder or acompany under the same management as such shareholder; or

5. who is a relative of the shareholder being a natural person under Schedule IA of the Companies Act, 1956 (1 of 1956); or
6. who is a sub-broker of the shareholder in that stock exchange; or

7. who acts in accordance with instructions of such shareholder in the exercise of voting rights and other rights in the recognised stock exchange, directly or indirectly.

3 Attention of the Investors is further invited to the term "Persons Acting in Concert" [for the purpose of regulation 9(1) of the Regulations] as defined under Securities & Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (SAST Regulations)

In terms of regulation 2 (e) of the SAST Regulations "person acting in concert" comprises,-

1. persons who, for a common objective or purpose of substantial acquisition of shares or voting rights or gaining control over the target company, pursuant to an agreement or understanding (formal or informal), directly or indirectly co-operate by acquiring or agreeing to acquire shares or voting rights in the target company or control over the target company,

2. without prejudice to the generality of this definition, the following persons will be deemed to be persons acting in concert with other persons in the same category, unless the contrary is established :

1. a company, its holding company, or subsidiary or such company or company under the same management either individually or together with each other;
2. a company with any of its directors, or any person entrusted with the management of the funds of the company;
3. directors of companies referred to in sub-clause (i) of clause (2) and their associates;
4. mutual fund with sponsor or trustee or asset management company;
5. foreign institutional investors with sub-account(s);
6. merchant bankers with their client(s) as acquirer;
7. portfolio managers with their client(s) as acquirer;
8. venture capital funds with sponsors;

9. banks with financial advisers, stock brokers of the acquirer, or any company which is a holding company, subsidiary or relative of the acquirer :
   
   Provided that sub-clause (ix) shall not apply to a bank whose sole relationship with the acquirer or with any company, which is a holding company or a subsidiary of the acquirer or with a relative of the acquirer, is by way of providing normal commercial banking services or such activities in connection with the offer such as confirming availability of funds, handling acceptances and other registration work;

10. any investment company with any person who has an interest as director, fund manager, trustee, or as a shareholder having not less than 2 per cent of the paid-up capital of that company or with any other investment company in which such person or his associate holds not less than 2 per cent of the paid-up capital of the latter company.

Note: For the purposes of this clause "associate" means,-

1. any relative of that person within the meaning of section 6 of the Companies Act, 1956 (1 of 1956); and

2. family trusts and Hindu undivided families.

4.1 In view of the aforesaid provisions, any person desirous of acquiring the shares of Bombay Stock Exchange Limited (BSE) should adhere to the following conditions:

1. That under the Regulations, there are restrictions on holding (either directly or indirectly) more than 5% of the paid up capital of the BSE;

2. That under the Regulations there are restrictions on holding (either individually or together with persons acting in concert with him) more than 1% in the paid up equity capital of BSE without complying with "fit and proper" criteria.

4.2

In order to comply with the aforesaid provisions as stipulated by SEBI, investor(s) before acquiring equity share(s) of BSE, are hereby advised to disclose/declare in the prescribed format given hereunder to the Exchange, which inter alia include among other things:

1. Whether such investor(s) is falling under the category of "Public" / "Trading Member of BSE" / "Associate of shareholder having trading rights in BSE";

2. details of the persons with whom he is associated [in terms of regulation 2(1)(b) of the Regulations]; and

3. details of the persons acting in concert [for the purpose of regulation 9(1) of the Regulations] with such investor(s) as defined under SAST Regulations.

To download DISCLOSURE AND DECLARATION FORM and shareholding pattern - Click here