Presentation on theme: "Presentation by: Dawa Dakpa, Research/Listing Division."— Presentation transcript:
Presentation by: Dawa Dakpa, Research/Listing Division
GIST OF THE PRESENTATION Overview; Vision & Mission; Objective; Definition of Stock Market, Shares & Securities; Shares transaction; Benefits from shares, stocks & Securities; Conclusion; and Q&A.
Overview of RSEB: Established in October 1993; Incorporated under Companies Act 1989; Regulated under the Financial Institutions Act 1992; Owned by Four Brokerage Firms; De-linked from RMA in July 1996 as an autonomous body ;
Non-Profit making/service oriented organization; and Developed under the technical assistance of the Asian Development Bank and the parenthood of the Royal Monetary Authority.
VISION: To become an integral part of the financial system and participant in the nation building. MISSION: To develop and establish a fair, orderly and transparent securities market with the objective to facilitates efficient mobilization and allocation of capital, and ensure apt regulation to maintain market integrity and investor confidence.
OBJECTIVES: to encourage wider spread of shares ownership in enterprises; to mobilize saving; to provide forum to raise equity capital for new venture and; to provide liquidity to the existing shareholders;
What is a Stock market? It provides a venue to convert Securities into money or vice versa. What is a share? A share of stock represents a part ownership of a company. for example, if you buy 10,000 shares in a company that has issued 100,000 shares, you own 10% of that company.
What are Securities? A securities includes (shares, stock, bonds, debenture stock or other marketable securities), as may be declared by the Government to be securities that is available for trade on a Stock Exchange. It can be of equity and debt securities.
BUYING AND SELLING OF SHARE How can I buy or sell shares? Approach the Brokers for buy or sell Where can you find one? BOB Securities Ltd. Bank of Bhutan; BNB Securities Ltd. Bhutan National Bank; RICB Securities Ltd Royal Insurance Corpn. of Bhutan; and DROOK Securities Ltd Bhutan Dev. Finance Corpn
PROCEDURES FOR BUYERS Proceed to any of the brokerage firm with a copy of CID; Fill up an 1. application form; 2. order slip; and 3. clients agreement form; Deposit money as advised by the broker in one of the commercial bank; The broker will then place order at the exchange trading floor; The order will remain in the RSEBL system till it gets a matching sell order i.e at same price; and The trades were executed on every Tuesdays and Fridays depending on the matching order.
PROCEDURES FOR SELLERS Same procedures will be followed like that of the buyers except; and Instead of money, the seller must surrender the trade confirmation issued by the previous executing broker.
AFTER TRADING Ownership shall be changed to the buyers name automatically within t+3, i.e. trade date plus three working days; Buyer must get the Trade Confirmation within t+3; Seller must get the sale proceeds of the shares within t+3; All trades must be settled within t+3; and The change of ownership with the respective companies will be done by the exchange accordingly;
Trading Cycle BROKER - Creates Client Account - Accepts Orders with Money for Buy & Shares for sell EXCHANGE - Pooling of Orders - Matching of Orders - Trading COMPANY Dividends BANKS DEPOSITORY Book Entry Register of shareholders at CD Clearing & Settlement CUSTODIAN CLIENT
WHAT ELSE DO I BENEFIT BEING AN INVESTOR? is entitled to receive any dividends; have bonus; can participate in rights issues; and As owners of the company, Shareholders can also participate in decision making process during the AGM through voting rights. WHAT IS A DIVIDEND? A dividend is a part of a companys profit after tax distributed to shareholders.
UPDATING THE MAILING ADDRESSES: A shareholder must update his mailing address whenever he move from one place to place. Lost of Trade Confirmation: Write an application to the Central Depository. The CD will issue a Balance Confirmation.
WHAT IS A RIGHTS ISSUE? A rights issue is an invitation from a company to its existing shareholders to purchase additional shares proportionate to their existing holding in the company. WHAT IS A BONUS ISSUE? A bonus issue is a process where money from a companys reserves is converted into issued capital, which is then disturbed to shareholders as new shares, in proportion to their original holdings.
RISKS & REWARDS IN SHARE INVESTMENT Both Risks and Rewards; Remember value can fall as well as rise. Risks are correlated with probability of returns. Different securities carries different risk - return profiles. Therefore invest with knowledge.
NON-COMMERCIAL TRANSACTIONS It is a change of ownership in shares without any monetary transactions like gifts and inheritance within the immediately family members; This is done directly by the Exchange and instructs the companies and the brokers by the Exchange;
1. Original trade confirmation for endorsements; 2. CID copy of the transferee; 3. Court affidavit verifying that the transferor and the transferee are within the immediate family members; and 4. Transfer fee calculated at 1% of number of shares times the face value of shares. DOCUMENTS REQUIRED FOR NON COMMERCIAL TRANSACTIONS:
For any further information or queries please contact us at: Royal Securities Exchange of Bhutan Ltd. Post Box # 742 Thimphu Fax #:323849 Phone #s:324296/323994/323995 E-mail :email@example.com@druknet.bt Website : www.rsebl.org.bt