1. SHARE MARKET
The trend of share market is increasing throughout the world. It's one of the best platform to make a good enough money as a side income for all of the people. It's one of the trending topic throughout the world at present. We can see people around you talking about the share market everywhere and every time.
So you may have got curious about the trending topic share market and you may probably want to enter into the share market and make a good sum of money. It doesn't matter who you are and from which background you are from.
Even the students who are studying at present can earn a good income from it and even help your parents in financial support. So first of all , let's talk about what is share and and what are it's types? And the beginner's guide to enter into it.
A. SHARE
A share is a document that acknowledges the ownership of a company to the limit of the amount contributed. So, the share is defined as an interest in the company reflecting the ownership thereof and entitling to receive profit proportionately.
The share capital of a company is divided into a fixed number of units, and each such unit is called a share. Therefore, a share can be defined as a unit of share capital reflecting the extent of interest of a shareholder.
TYPES OF SHARE
The type of share can be divided into the following two categories:
1. EQUITY SHARE
Equity shares are also called ordinary shares. These shares have no preferential rights in the payment of dividend or repayment of capital. The amount of dividend on such shares is not fixed.
The dividend on these shares is paid from profits only after paying interest on debentures and dividends on the preference share capital. Similarly, equity shareholders are paid only after the payment of all debts and preference share capital at the time of winding-up of the company.
2. RIGHT SHARE
The shares entitling to be subscribed by the existing shareholders of the company are called right shares. These are additional equity or common shares offered by a company to its shareholders to subscribe within a specified period at a specified price. These shares are not offered for public subscription.
3. PREFERENCE SHARES
Preference shares are those shares that are entitled to certain privileges. The dividend on preference share is paid at a fixed rate. The dividend on such shares is paid before any dividend is paid to equity shareholder.
Similarly, at the time of winding-up the company, the preference capital is repaid before such a repayment is made to the equity shareholders. Preference shareholders do not have any voting rights.
SHARE MARKET TYPES:
There are two main types of market in share market and they can be categorized as the followings:
1. PRIMARY MARKET
Primary market is the first initial market for every beginners in the share market. Different companies offer the IPO(Initial Public Offering) to the public in different times. Mostly the price per unit share in IPO is Rs. 100 but sometimes company issues the share with premium of 10 to 20 percent and it becomes 110 to 120 rupees.
If the share applied for the company gets alloted almost everybody will get the 10 units of share. In this market, the investment done by you is just the 1000 rupees, so it is guranteed that you will get maximum profit within in the certain period of time. So its one of the best market for every beginner who are willing to invest in sharemarket as a beginner.
2. SECONDARY MARKET
The main game played in share market is in the secondary market. In this market, the companies are listed by the NEPSE and every buying and selling of the stocks is done over here. Everyday huge amount of transaction is done in this market.
This market is not suitable for the people who are just the beginners in the market. A lot of effort and deep study is essential to enter into this market . Even the share you get at the primary market should be sold over here and for that you should make the broker account which helps in managing the buy and sell of the stock.
You should go for the fundamental and technical analysis of the company so that you may not risk your investment. So the trader who can perform fundamental and technical analysis earn huge amount of profit from it. So this market is very risky if you don't have proper knowledge about the company. So it's not recommended for the beginners who just entered into the market.
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