Demat Account In India

In India, a Demat account means dematerialized account for people to invest in securities online.
The investor opens a demat account while registering with an investment broker. This account number is used by the broker for all transactions that are used in online stock trading.
To access a demat account, the investor requires an internet password and a transaction password. This allows an initiation of buying or selling of securities on the demat account.
A demat account reduces brokerage charges considerably. It makes transfer of shares easier, enables quick ownership of shares by settlement resulting in an increased liquidity.
It also avoids confusion in ownership of securities and provides easy receipts for public issue allotments.
In the last 15 years, the capital market in India has witnessed an unprecedented boom. However, in the early 80's a lot of paperwork and tedious maintenance meant that the common man kept himself away from the capital market.
Due to overwhelming number of paper shares they were becoming increasingly tedious to maintain and archive.
Problems like fake and stolen shares, forged signatures, mismatch of signatures, duplication of shares, transfer problems plagued the traditionally paper based trading and settlement system.
To top it all, the system had some very irritable procedures and an overdose of paperwork that made retail and institutional investors from entering the capital market. Investors felt that they were gaining less for the risks undertaken by them.
Lack of modernization in a large and inefficient system became a major hurdle to the growth of the Indian capital market.
Thus, Indian stock market adopted the Demat system for electronic book-keeping where the securities are represented and maintained electronically. It erased the troubles that one would associate with paper shares.
After the introduction of the depository system by the Depository Act of 1996, the procedure for buying, selling and transfers of shares became much easier and most of the risks associated with paper certificates were eliminated.
Advantages of a Demat Account:
1. Convenient, easier and safer ways of holding securities
2. Instant transfer of securities
3. Zero stamp duty on transfer of securities
4. Less transaction cost
5. Even a single share can be sold or purchased
6. Flexibility for traders to work from anywhere
7. A single demat account can hold both equity as well as debt investments
8. Address change recorded with a DP will get registered with all companies in which the investor holds his securities, thus it erases the need to contact all of them separately and save time.
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Daily Report of Indian Stock Market

Outlook on Markets Today

The Sensex on Saturday closed flat on inadequate buying by investors in a special 90 minute session perform for testing. The sensex closed at 17,636.99, marginally up by 0.19 points over last close. IT chief Infosys ended higher by 0.45% to 2,859.40. Main supporters to the market were Tata power, Jindal steel, Sunpharma and HDFC Bank closed up 1.09%, 0.52%, 0.41% and 0.33%. On the other hand Cipla, Bajaj Auto, Sterlite industry, NTPC and Bharti Airtel were down 1.00%, 0.99%, 0.88%, 0.62% and 0.61%. Meanwhile, shares in Indian hospitality firm EIH rose as much as 9.92% on Saturday after a subsidiary of Reliance Industries bought an additional 3.73% stake for Rs.1.92Bn in an open market transaction.

Market breadth was feeble at ~1.56x. On interim basis, FIIs and domestic institutions sold equity of Rs.0.1Bn and Rs.0.05Bn.

Asian markets refuse today, after feeble US markets on Friday as technology firms pared the losses. We expect markets to open moderately lower today following the cues from the Asian markets.

Investors may keep close eye on number of UP election results tomorrow as strategy reforms direction going is much more dependent on the election results.

Financial and Commercial Developments

With one more concern of NBCC in the pipeline, the government will be able to accomplish only a little over 36% of the disinvestment target of Rs 40,000 crore in the existing economic.

The government attached economic growth at around 7.5% in 2012-13, mainly driven by growth in the manufacturing sector.

Active Stocks

Agro Tech Foods, the Indian subsidiary of universal food main ConAgra, proposes to set up four more manufacturing units including one in Bangladesh over the next three years at a cost of around Rs 100 crore.

National Thermal Power Corporation (NTPC), the country's chief thermal power producer, expects to get physical control of land for its super thermal projects proposed at Gajamara and Darlipalli, with capacity of 1,600 MW apiece, by June this year.

Infosys will set up a software development centre here, second in Maharashtra after Pune, with an investment of Rs 100 crore.

Power Grid Corporation is likely to get $400 million (over Rs 1,980 crore) funding from the International Finance Corp for undertaking electricity transmission projects in the country.

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Daily Report for Indian Stock Market

Vision on markets today

A lower than expected economic growth in the third quarter led to bearish outlook on the Street yesterday. The BSE Sensex plunged over 250 points from the day's high to fall into negative province in afternoon session. The Sensex closed up 21.56 points at 17752.68, while the broader Nifty index up 9.7 points at 5385.20. The third quarter gross domestic product (GDP) grew at 6.1%, falling short of consent guess that had pegged GDP growth at 6.3%. This is the slowest pace of economic growth since 2008. BSE Midcap Index was up 1.10% and BSE Smallcap Index moved 0.62% higher. Amongst the sectoral indices, BSE Oil&Gas Index gained 2.53%, BSE Power Index moved 0.28% higher and BSE Realty Index advanced 1.10%. Whereas BSE Capital Goods Index was down 1.59% and BSE Bankex slipped 0.59%. The Major Sensex gainers were ONGC, Sterlite Industries, Tata steel, Reliance Industries, and Wipro up 3.46%, 2.98%, 2.90%, 2.84% and 2.72%. Whereas Larsen & Toubro, Jindal Steel, HDFC Bank, Maruti Suzuki and Tata Motors were down 2.91%, 1.81%, 2.34%, 1.02%, 0.68% respectively. Shares of ONGC pitch higher on reports that the government is set to initiate its FPO through share auction. The government is likely to mount around Rs.124Bn.

Market breadth was muscular at ~1.23x as investors bought large lid stocks. On interim basis, FIIs bought equity of Rs.5.80Bn while domestic institutions sold equity of Rs.4.31Bn.

Asian markets are mixed today, as Japanese stocks are increasing while Chinese are down after a weak close for the US markets.

We anticipate a cautious opening for the Indian markets which tumbled on profit taking from the investors yesterday. Weak GDP data announced yesterday may oppose investors for strong buying in the Indian markets today.

Economic and Mutual Improvement

The government's financial deficit target for the current year has been violated in January, and with the numbers for the two months still to come, the gap between expenditure and revenue may extend further. At the end of the 10 months ending January, the financial deficit was Rs 4, 34,933 crore or 105.4% of the target, the Controller General of Accounts (CGA) said.

Bustling stock

In one of the prime property covenant in the country in recent years, the real estate division of Adani Enterprises (AEL) has bought a two-acre land parcel in Mumbai from property developer HDIL for Rs 900 crore. The plot is situated at the city’s Andheri suburb. It was component of a large mixed-use project being developed by HDIL, sources said.

ONGC’s overseas investigation arm ONGC Videsh Ltd (OVL) and GAIL India have confirmed their awareness in bidding for UK-based Cove Energy. The association may have to quote a price in surplus of $1.77 billion, the amount already quoted by Thai rigid PTT.

A joint venture (JV) between BGR Energy Systems and Hitachi Power Europe has appeared as the lowest bidder for NTPC’s Rs 16,000-crore supercritical boiler order. BHEL had appeared as the second-lowest bidder, while a JV between Larsen & Toubro (L&T) and Mitsubishi Heavy Industries was placed third lowest, an official from NTPC said.

Arvind Ltd, the textile chief is looking to liquidate about 1.5 million square meters of its enormous tracts of land in Gujarat and Karnataka with the predictable revenues of Rs 5000 crore over the next two years' time.

State-owned oil companies today hiked jet fuel price by 3.2% on the back of firming up of global oil tariff.

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