Exchange In India Research Articles

Social Stock Exchange: An Innovative Financing Platform for Social Enterprises in India

Social finance is considered to be the mainstream problem in India for goods and services which targets the disadvantaged and poorer sections of the society. It is proposed by Indian finance ministry in the recent budget speech to create a separate system to for fund raising to help the disadvantaged people of society. Social stock exchange is a platform on which social enterprises, volunteer groups and welfare organizations will be listed so that they can raise capital. The proposal has attracted much attention, and social entrepreneurs, among others, have said that the move can have a revolutionary effect on how they tap investors for capital. With social finance, impact investors put their capital behind enterprises that profitably cater to underserved populations by expanding access to critical goods and services, such as healthcare, affordable housing, credit, and quality employment etc. A unified platform can bring in greater transparency for nonprofits, and help both individuals and the corporate sector evaluate organizations they would like to give money to. Such a platform can help with both discoveries of organizations and in impact evaluation, which is otherwise expensive. The fund channeling capability of social stock exchanges for the purpose of social upliftment of society will certainly be a game changer for those who have fire to do something for the society but lack resources. The present paper highlights the basic concepts of Social Stock Exchange and various terms associated with it, such as Social Enterprises and Impact Investment. It also analyses the proposal of Indian Government for setting Social Stock Exchange and how it will function. The paper further exhibits how would social stock exchange help in Indian context? In the end paper studies the probable challenges in introducing Social Stock Exchange in India.

Trade Performance of Top 2 National Commodity Exchanges: MCX and NCDEX

The commodity futures trading is supported to all sectors of the economy, particularly farmers and consumers. Commodity producers optionally store some production for the future and go for futures contracts to hedge the uncertainty of the futures commodity price. Apart from that Indian commodity market requires major investment and commercial activities in the National and regional markets. But the demand and supply, Indian verses other currencies, export and import parity and current scenario news are the main factors are affecting the commodity trading. This study is focused the second boom period from 2011 to 2018 and identify the trade performances of number 1 and number 2 national commodity exchanges in India.

Spot and Derivative Contract Prices: Articulation of Relationships of Cardamom through ARDL Method

India is known as land of spices and boast of a long history in spices trading. Cardamom derivative contract is listed for trading on Multi commodity Exchange in India. This paper endeavors to find out relationship between spot and derivative contract of cardamom. The relationship is also tested between derivative price of cardamom and spot price. Two period derivative contracts, near month contract and next contract of cardamom are used for the study. Long run relationship is examined through ARDL Bounds test. ECM is applied to find out short term relationship and speed of adjustment towards long run. Long run relationship was found between spot and derivative as well as between derivative and spot. Long run relationship was established in both period contracts. Short run relationship was also established and speed of adjustment is higher in near month contract.

Rolling drops: Nilkamal Wello Water Wheel

Learning outcomes The case will enable students to understand and ponder on how an organization goes about identifying and launching social impact products, how social impact products should be promoted, what the opportunities and challenges in executing a social impact strategy of developing a new product line by a leading industry player are, what is the type of social investment that will generate both social and financial returns and how a sustainable social impact strategy should be aligned with the corporate strategy of the firm. Case overview/synopsis Listed in 1991 on the National Stock Exchange in India, Nilkamal Limited is the largest manufacturer of moulded plastic furniture in the world. In line with their tradition, Nilkamal has now introduced a new range of products, under “social impact products” category, to cater to some of the pressing needs of the society. For this purpose, they have entered into an agreement with a US-based organization, Wello, to manufacture and market their iconic product, the Water Wheel. The euphoria surrounding the new social impact product, Water Wheel, has been immense but its commercial viability is yet to materialize. The case provokes the students to analyse the decision of venturing into social impact products and the challenges associated with it. The case grapples with the issues faced by a business firm that looks to incorporate social impact products as part of regular commercial operations. The key question to be addressed is “How far can social impact products be a good strategy to bring corporate sustainability and what should be the approach in this case?” Complexity academic level Study level: MBA students’ applicability: corporate responsibility and corporate sustainability, social impact strategy Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS 11: Strategy

Impact of corporate governance characteristics on intellectual capital performance of firms in India

This study examines the corporate governance characteristics and its influence on the intellectual capital (IC) performance for a sample of 95 firms listed on National Stock Exchange in India. The corporate governance (CG) characteristics are represented through board size, independence of directors, frequency of board meetings, remuneration of directors and composition of board. The impact of these CG characteristics on the performance of intellectual capital and its components is studied for a 7-year period, i.e. FY2010–2011 to FY2016–2017, using panel regression. The research findings provide clear evidence that CG characteristics influence the IC performance of only large-cap firms in India. Further, board size and independence of directors are seen to have the most significant impacts. Board size is negatively associated with IC performance of large-cap firms. Capital expended efficiency and productivity of midcap firms are observed to have a significant inverted-U relation with board size. The relative significance of various other CG factors varies for IC as well as its sub-components. The findings of this study are important because it gives a strong empirical evidence for regulatory authorities in India to strictly monitor the compliance of rules on structure and composition of the board of directors besides just laying down broad guidelines for the listed companies. This also serves as the first research work to justify the significance of corporate governance on IC performance of firms in India. One of the limitations of this research is inability to incorporate several other characteristics of board such as duality and detailed profile of board members due to non-availability of time-series data for all the firms.

Determinants of Divided Policy in Indian Companies: A Panel Data Analysis

This article examined the determinants of the dividend policy of Automobiles companies and pharmaceuticals companies listed on Auto index and Pharma Index of the sectoral indices of national stock exchange in India. The study covers the tenure of ten years starting from 2006-2007 to 2015-2016. Static panel data model has been used for the analysis. From the literature review we identified the variables like profitability measure as Return on equity, Liquidity or cash flow, leverage (debt equity ratio), investment opportunities, dividend distribution tax, retained earnings, size of the company and sales growth of the company which affect the dividend decision of the company. The result of panel regression concludes that in automobiles sector Liquidity/Cash Flow, dividend distribution tax, investment opportunities and retained earnings are the significant factor which influence the dividend payout ratio where as in Pharmaceuticals sector profitability, debt equity ratio, sales growth and retained earnings are the significant factor for deciding dividend payout ratio.

Modelling and forecasting volatility for BSE and NSE stock index: linear vs. nonlinear approach

This article addresses the important issues related to stock market volatility by modelling and forecasting in the Sensitivity Index of Bombay Stock Exchange and Nifty 50 of National Stock Exchange in India by employing linear models and nonlinear models to show the usefulness of the model by attempting the sample forecast from 1 January 1996 to 31 December 2004, 1 January 2006 to 31 December 2014 and 1 January 1996 to 31 December 2014 as an in-sample forecast, by considering pre-period, post-period and full period. Apart from that, the out-of-sample forecast is also attempted in this study to draw a valid conclusion by using forecasting models. Overall, the study suggests that volatility is a part and parcel of the stock market, which is influenced by other key determining factors such as like inflow of foreign capital into the country, exchange rate, balance of payment and interest rate.

NSE Is Better Than BSE

Indian Market is an open economy since 1991. Till date many reforms have taken place in the Indian Market. One such Major Change was the coming of the National Stock Exchange (“NSE”) for trading of Shares and Commodities other than the Bombay Stock Exchange (“BSE”). From the emergence of NSE it is always a hot topic as which Exchange is better. Here in this Research Paper I have tried to answer this question in favor of NSE. The two largest and most prominent stock exchanges in India are the BSE and the NSE. While the BSE has the distinction of being the oldest stock exchange in Asia, established in 1875, the NSE has quickly grown to prominence since its creation in 1992. While these two markets dominate in India there are clear differences between the two that can impact your decision to invest. When you open an account to buy or sell shares with a broker, they generally are members of both the exchanges ie BSE and NSE. So, if you have an account at Zerodha when you buy shares you have an option of buying the same at the BSE or the NSE. Is it advantageous to buy and sell shares at BSE or NSE? Well, the only advantage that an investor will have is in terms of price. So, if you are buying a share online you can look at the price on both the exchanges and buy where the price is lower. Again, if you are selling a share you can look at the price on both the exchanges and sell at the exchange where it is higher. For example, if you want to sell Reliance and if you see on the BSE the stock is quoting at Rs 1000 and NSE it is quoting at Rs 1002, you are better off selling shares on the NSE. However, this will make sense only for market orders. If you want to place a limit order to sell Reliance shares at Rs 1006 it does not make a difference on which exchange you want to sell. There is no other difference in buying on either exchange for a limit order. The brokerage charged by the broker, the Securities Transaction Tax are all the same on either of the exchanges. The volumes of shares is generally higher on the NSE, which means if you are selling sizeable quantities the NSE could be a better proposition. It is almost impossible to get similar prices on both the exchanges. There is bound to be some price differential. Also, some shares are not traded on the NSE, which will force you to buy or sell the shares on the BSE. For example, Claris Lifesciences, Spice Jet are examples of stocks that are not traded on the NSE. Interestingly, the largest number of stocks in the world are listed on the BSE.

ADR on Unauthorized Liquidation of Futures Positions at the Stock Exchange in India: An Empirical Study

The paper investigates margin rules, and regulations of Futures segment of Stock Exchanges in India and practices followed by stock brokers of the Stock Exchanges. Trading practices, misuses and abuses of securities market by trading members have been identified and analyzed. It finds how trading members violate of trading rules, misinterpret regulatory compliances and indulge unauthorized trading. The findings and conclusions provide inputs for the development of appropriate regulatory framework for the futures segment of securities market. However, the results may be generalized only in the emerging markets environment. Hence, researchers are suggested to study margin guidelines of futures market, appreciate the dynamics of futures market and apply the same in their future research in India and abroad.

Earnings Management in IPO Bound Firms: Evidence From Indian SME Exchanges

We study earnings management in IPO-bound SME firms that are raising equity capital on the SME exchanges in India. SME exchanges in India are recently incorporated, privately regulated, and have restricted market participation. Managerial decisions such as earnings management influence a firm’s stock performance. In an emerging economy like India with underdeveloped financial markets for SMEs, earnings management also impacts the long-term sustainability of a nascent financing market at an early stage of its development. We find IPO-bound firms on the SME exchanges resort to a higher degree of earnings management vis-a-vis the Main Board IPO-bound firms. The earnings management in SME firms has a negative impact on their stock performance after listing. The evidence of an adverse relationship with the stock performance suggests that earnings management reduces investors’ protection. The reduction in investors’ protection may act as a challenge to the sustainable development of SME exchanges to meet financing needs of the SME sector in India and its emergence as a credible alternative to bank financing.

A Study on Sustainable Stock Exchanges in India and the World

A Study on Sustainable Stock Exchanges in India and the World

Influence of Macroeconomic Variables on Stock Market Volatility: A study on Nifty

The economic health of a country is reflected by the performance of its stock market. The Bombay Stock Exchange and National Stock are the two major stock indices of India. The National Stock Exchange (NSE) which was established in the year 1992 is the most important stock exchange in India. Nifty 50 or simply called Nifty is the flagship index of NSE. The performance of Nifty reflects the financial health of the Indian economy. Nifty is a collection of fifty companies from various sectors of the Indian economy. All the fifty company shares perform simultaneously in the market and therefore the net impact is an aggregate impact of all the fifty shares as a whole. Volatility is one of the important factors that are to be taken into account while pricing. The movement of the stock market is known as volatility. There are many factors which influence the volatility of the stock index. The objective of the present study is to analyse some of the selected factors which influence the volatility of Nifty during the period 2006–07 to 2016–17. Crude Oil prices, Gold price, US$/INR exchange rate, Cash Reserve Ratio, Wholesale Price Index, Call Money Rate, Foreign Direct Investment, and Foreign Exchange Reserve have been identified as those factors which are likely to have an impact on Nifty.

Arbitration on Margin Positions Liquidation at Stock Exchange in India

The paper investigates compliances of margin trading rules and regulations of the Stock Exchange by stock brokers in India. Trading practices, misuses and abuses of securities market by trading members have been discussed in detail in this paper. It highlights how some trading members violate the margin trading rules and misinterpret the regulatory compliances. The award provides inputs for the development of appropriate regulatory framework for the securities market. A discussion on capital market abuses would promote customer education and their curtailment by the competent authority. The limitation of the findings may lack generalizability. However, the results may be generalized in the emerging markets environment. Hence, researchers are advised to understand the facts of the case, analyze it in terms of stock exchange regulations, appreciate the appropriateness of the award, and apply the same in their future research activities in some other similar contexts in India and abroad.

Alternative Dispute Resolution on Margin Trading Close out at Stock Exchange in India: A Case Study Approach

The paper examines compliances of the margin trading rules and regulations of the Stock Exchange by trading members while serving their clients in the securities market in India. The paper applies case study approach to study the trading practices of trading members on Indian Stock Exchange systems and identifies the nature of securities market’s misuses and abuses. The paper identifies how trading members are violating and avoiding the regulatory compliances. The paper provides inputs for the development of appropriate regulatory framework for prevention of violations of rules and regulations in Indian securities market, prevention of capital market abuses and enables the investor protection. The limitation in a case study approach, the research findings and results may lack generalizability. The results may be generalized in the emerging markets. Hence, researchers are encouraged to study results further in other developed countries. The results provide critical perspectives on regulatory challenges and encourage the regulatory authorities to issue relevant guidelines to stock brokers to prevent from non-compliances of margin trading rules.

Financial Performance Evaluation of IT Companies through Two Stage- DEA

Data Envelopment Analysis (DEA) is a nonparametric technique for evaluating the relative efficiency of a set of homogenous decision making units (DMU) by using a ratio of weighted sum of outputs to the weighted sum of inputs. There are numerous advances emerged in DEA in recent past based on the ever-changing needs of the business organizations. This study applies a novel two-stage DEA framework where projected or best-practice revenues are calculated in the first stage and are fed as inputs into the second stage. We use this method to examine the operational and stock market efficiency of select IT companies listed on National Stock Exchange in India for period of Ten years from 2007 to 2016. Results indicate that only two companies are on efficient frontier in the both stage I and II. Most companies are neither efficient in stage-I nor in stage-II. We discuss the intuition of the results as well as the implications for practice.

Shock and Volatility Spillovers Among Equity Sectors of the National Stock Exchange in India

The basic thrust of this article is to examine how shocks and volatility are transmitted across sector indices. This article employs the autoregressive asymmetric BEKK-GARCH model. The study is based on daily data from the National Stock Exchange (NSE) of India from January 2004 to January 2014. Volatility spillover was found to be bidirectional among the two pro-cyclical sectors: Finance and IT. But, there was a unidirectional shock and volatility spillover from the non-cyclical FMCG sector to both the pro-cyclical sectors. The FMCG sector has remained almost unaffected by the spillover from the other sectors. Moreover, the evidence of asymmetric spillover has been found to be present in most of the case. Second, correlations between the sectors were found to be higher during the period of global financial crisis. But no such evidence was found in the context of the Euro zone debt crisis. Understanding the dynamics of shocks and volatility transmission is necessary for risk management in general and for optimal portfolio allocation and hedging strategy in particular. To the best of our knowledge, this is the first study on Indian stock market which has analysed the dynamics of shock and volatility transmission across sector indices.

Initial and After-market Performance of SME IPOs in India

This article examines the initial and after-market performance of the initial public offerings (IPOs) listed on the recently launched platform for small and medium enterprises (SMEs) by the Bombay Stock Exchange (BSE), Mumbai and the National Stock Exchange (NSE). The study does find evidence of underpricing of IPOs by SMEs in line with other studies internationally. However, the level of underpricing is found to be lower than that of IPOs listed on the main board stock exchanges in India, reported by earlier studies. This may be partially due to the fact that the SME platform is at an infancy stage and has failed to attract investors’ fancy. This is reflected in a low level of oversubscription of SME IPOs at 1.35 times on average. The multivariate analysis identifies the type of offer, size of issue, promoter holding, extent of oversubscription, lead manager prestige and the stock exchange of listing as the key determinants of underpricing of SME IPOs. Post listing, these IPOs have significantly out-performed the benchmark index. The finding is inconsistent with the results of other studies on the main board exchanges where the IPOs, in general, are found to underperform the markets over a significant period of time post listing. This may partly be attributed to thin trading in these stocks and, therefore, to their lower level of liquidity. The findings have significant implications for stock-market regulators, issuers and investors.

Design of Volatility Model in Nifty 50 Index using Thin Plate Spline Regression

<p>The analysis of volatility in stock markets has important consequences for investors and traders. The presence of volatility increases market risks and therefore discourages investment in the stock market. The proper study and understanding of volatility is needed for prudent risk management. In this paper, the market volatility in the National Stock Exchange in India as measured by the India Volatility Index is analyzed. The daily volatility in NIFTY 50 index is regressed on the price to earnings ratio and the volatility of previous day. The market volatility within a period of time is highly correlated and the highly volatile periods coincide with large impact negative events on a national and global scale. The Price to Earnings ratio represent the fundamentals of the market and it also strongly influences the price movements. The nonlinear regression problem is formulated and solved using thin plate spline regression technique. This effectively captures the nonlinear aspect of the problem. Results indicate that volatility has high upward correlation during middle range of P/E ratios than in the upper and lower ranges. Therefore risk management techniques using option derivatives are more important during the middle range of values of P/E ratio.</p>

The Effect of Seasonality over Stock Exchanges in India

This study investigated to examine stock market seasonality effect in Indian stock market for Bombay Stock Exchange (BSE) 100. The monthly return data of BSE 100 for the period from April, 2001 to March, 2016 was used for analysis. After examining the stationarity of the return series and correlogram, regression equation & ARIMA model is used to find the monthly effect in stock returns in India. The results confirmed the existence of seasonality in stock returns in India.

Stock Exchanges: Conflicts in Governance Upon Listing

This paper deals with the organisational challenges faced by demutualised stock exchanges in view of the new age competition, more particularly dealing with conflicts of interest faced by listed stock exchanges, as the regulator and the regulated. Further, the paper analyses the primary regulatory functions of a stock exchanges contradicting with their profit-making objectives. It analyses the functioning of the self-listed Australian Stock Exchange and the current listing drive initiated by the Bombay Stock Exchange in India, in light of the Securities and Exchange Board of India notifications.