Thursday, May 11, 2017

How many companies are listed on BSE and NSE?

Tag showing "Companies  Listed on Exchanges"

Actual Question:


How many companies are listed on BSE and NSE? I thought they were 30 and 50 respectively, but I just discovered there are many more.

Answer:



Dear Friend!
As on date more than 5500 companies are listed on the BSE, as per the information available on the website of the BSE.

NSE being a relatively new exchange, about 2000 companies are said to be listed.
Perhaps you had arrived at the numbers of 30 and 50 respectively based on the composition of the two popular indices, S&P BSE Sensex (comprising 30 scrips enjoying the top 30 market capitalisation) and NIFTY which comprises of the top 50 companies.

Kindly note that for a stock market to function effectively it is required that a sufficiently large number of companies are listed on the exchange. The numbers of 30 and fifty will not suffice. Only a fairly large number of listed companies can meet the wide range investing tastes and styles of market players like domestic institutional investors (DIIs), foreign institutional investors (FIIs), high net worth individuals (HNIs), retail investors and so on.

For your kind information, though popular, Sensex and NIFTY are not the only two indices. Following is the list of various indices of the Bombay Stock Exchange:
Table listing BSE's Indices

Related Articles:



To conclude a large number of companies are listed on India’s two popular exchanges, BSE and NSE, offering a wide choice for various types and categories of investors.

Thank you,

With Best Regards


Anand


Wednesday, May 10, 2017

What is the Difference Between Bond and Share?

Two pieces of cakes depicting share and bond

Share is a piece of ownership of a business. Bond is a piece of the loan of a business. Both are small pieces of a bigger cake, only the cakes are different.

Share

Share is the single unit of a large sum (share capital) invested by owners in the company. There are two types of shares, equity shares or common stock and preference shares or preferred stock. Equity or common shares being the most popular and widely owned we will concern ourselves with equity shares in this discussion.

As an investment, shares of excellent companies will yield excellent benefits of dividends and capital appreciation, over long periods of time and will generate enduring wealth.

Share certificate

As an investment, share alone can offer a shield against inflation.

Bond

Bond is a type of loan that is broken down into small pieces and issued to general public. Usually these are listed on popular stock exchanges are freely tradable in the open market. As in the case of any loan, following terms of agreement are pre-specified:
  1. Face value of the bond
  2. The rate of interest or coupon rate
  3. Frequency of payment of interest – quarterly or half yearly or annually
  4. Date of redemption or repayment or maturity


Bond Certificate

As an investment bonds yield a regular income. They are suitable for individuals and institutions who have a large corpus upfront and need a regular income for sustenance. They are not good for regular, middle class wage earners who have to build a corpus. Bonds do not offer any protection against inflation.

Differences between Share and a Bond:


Nature of Relationship
Owner
Lender
Return on Investment
Dividend
Interest
Mandatory Nature of income
Discretionary. Payable only upon declaration by directors.
Compulsory. No discretion in the hands of Directors.
Priority in Receipt of Income
Dividend can be paid only after interest is paid.
Interest is top most priority.
Capital Appreciation
Available
Not Always Available
Voting Rights
Available
Not Available
Priority in repayment during liquidation
Last, after all the obligations are met
After government and secured dues but before payment of capital.
Scope of Participation Surplus Assets after all obligations are met
Available
Not Available
Risk
Maximum Risk
Normal Risk
Rewards
Maximum Rewards
Limited Rewards
Liquidity of Investment
Liquid
Liquid only when listed on stock exchange.

To conclude, share is a piece of ownership of a business and bond is a piece of loan raised by the business. As an investment both serve different purposes. Shares offer inflation protection.