Meaning of preferential allotment of shares It is a process using which companies allots their shares to a group of people or interested companies on preferential basis. Bulk allotment of shares is done to individuals, venture capitalists or group of interested people. A company wants to raise funds to carry out different functional or operational activities. Also it may be looking for expansion or starting with new unit. Issuing securities to public at large scale is a tedious process and is time consuming as well. In order to save this time and raise funds in an efficient manner companies opt for preferential allotment of shares. To do so less paper work is required and thus companies can raise funds in less time. Both private and public companies can make such allotment but more rules and regulations are applicable to public companies. Meaning of private placement In common language we can say that private placement is a funding event in which securities are sold ...
What is the meaning of bear market and how to identify it ? A bear market refers to a period of months or years during which prices of some listed securities are consistently falling. The condition of bear market is just opposite of bull market , in which prices of securities rise on consistent basis.The terms bull and bear are used to describe the present behavior of stock market, i.e whether the value of stocks are appreciating or depreciating.In bear market there is lack of confidence in the market, often people wait here for bulls to drive the prices up again. How a bear market works is discussed below : To identify this having a good knowledge of current market conditions is must. Often when market is bearish at least 80% of all stocks price start falling or major decline in the indexes can be witnessed. There are several factors which causes such movements in the market like economic cycles, individual sentiments of traders and investors . A wea...