Investments

Understanding the Investment Jargon with KSL

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Investing in the stock market can be a daunting task, especially for beginners who are unfamiliar with the terminology commonly used in the financial world. Among the plethora of terms, “Sensex,” “Nifty,” and “DEMAT” are frequently encountered but often misunderstood.

Today, we’ll look at the meanings behind these investment jargon.

Sensex:

The Sensex, short for the Sensitive Index, is a benchmark index of the Bombay Stock Exchange (BSE). It comprises the 30 largest and most actively traded stocks on the BSE, representing various sectors of the Indian economy. Essentially, the Sensex reflects the overall performance of these blue-chip companies and serves as a barometer for the Indian stock market’s health and direction.

Nifty:

Nifty, formally known as the Nifty 50, is the benchmark index of the National Stock Exchange of India (NSE). Similar to the Sensex, Nifty comprises 50 actively traded stocks representing various sectors of the Indian economy. It provides investors with insights into the overall performance of the Indian equity market and serves as a crucial indicator for market trends and sentiments.

DEMAT Account:

DEMAT, short for Dematerialized, refers to the conversion of physical share certificates into electronic form. A DEMAT account, therefore, is an electronic repository where investors can hold and trade securities such as stocks, bonds, mutual funds, and exchange-traded funds (ETFs) in electronic format. It eliminates the need for physical share certificates and streamlines the process of buying, selling, and holding securities. It is a mandate if one wants to trade on SENSEX or NIFTY.

In brevity, understanding investment jargon like Sensex, Nifty, and DEMAT is essential for understanding the intricacies of the stock market. While Sensex and Nifty serve as key indicators of market performance, DEMAT accounts play a crucial role in facilitating efficient and secure trading of securities. By making use of the power of DEMAT accounts, investors can unlock opportunities for wealth creation and achieve their financial goals with confidence.

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Investor Awareness

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange’s Frequently Asked Questions (FAQs) issued vide BSE notice no. 20200731-7 dated July 31, 2020 and 20200831-45 dated August 31, 2020 and NSE circular no. NSE/INSP/45191 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020 other guidelines issued from time to time in this regard.

5. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.

Attention Investors

Prevent Unauthorized Transactions in your trading and/or demat account – Update your
Mobile Number and / or email IDs with your Stock Broker and / or Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from CDSL on the same day / information of your transactions directly from Exchange on your mobile/email at the end of the day………………….issued in the interest of investors.

“KYC is one time exercise while dealing in securities markets – once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.”

No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor’s account.”