Share Holding
Share Holding is a very common phenomenon in the share market . It means maintaining ownership over a share on a long-term basis.
Shares are certificates which represents ownership rights of the holder in a company.
Share market is the market for securities where organized issuance and trading of shares takes place either through exchanges or over-the-counter in electronic or physical form. It plays an important role in channelizing capital from the investors to the business houses which consequently leads to the availability of funds for business expansion.
Basically, Share Market can be divided into two parts :-
• Primary Market
It is the market where new issues of securities are offered to the investors.
• Secondary Market
An investor of a secondary market buys a security from another participant of the same and not from any issuing corporation (as in case of Primary Market ).
The span of time a share is hold by a person or a corporation is known as the Holding Period of the share .
A person who buys a share and takes delivery of the same for appreciation of its value is called the holder of the Share .
Share Holding basically involves the process of taking delivery of a share.
Taking delivery of a share means buying share(s) of a company and not selling it in the same day. This process gives a ownership right to the holder of the share.
Analysts who give tips or advice to the general investors for buying or selling shares many-a-times advice their clients to hold a share .
This can mean that :-
• The analyst is not sure about the prospect of a share in the near future but not as much negative about it at the same time.
• The analyst is sure about the fundamental strength of the small-cap, mid-cap, bad performing stock. He is sure about the bouncing back of the share and hence advices his clients to buy cheap and hold on to it for long-term to profit from it.
Share Holding can be done by any investor right from a person to a corporation to a FII. When a corporation buys a large chunk of share of another company to have a voting right in :-
• the decision making power of the company
• election of the Board of Directors of the company
• controlling the management of the company
Share holding pattern of a company generally involves :-
• Promoters’ Holding
- • i. Promoters
- Domestic Promoters
- Foreign Promoters
- • ii. Persons acting in concert with the Promoters
• Holding of the Non-Promoters
i. Institutional Investors
- Banks
- Financial Institutions (both government and non-government)
- Insurance Companies (both government and non-government)
- Mutual Funds
- Foreign Institutional Investors
ii. Others
- Corporate bodies (Private)
- Residents of the countrywide
- Non Residents of the country
- Any Other
- Trusts
- Foreign Companies
- Custodians to Global depository receipts
- Foreign Nationals
Share holding is less risky than the intra day trading because the time period one gets between buying and selling is much more in the former than the later. It is appropriate for those busy people who could not devote all the time towards the share market.
Add comment May 20th, 2008
