Sunday, October 4, 2009

Getting Started - How to buy Shares in Colombo Stock Exchange

Before this article you can read my previous post here..
Are you still confused with how to get started “investing” in Stock Exchange? We will try to explain you the process you should follow as simple as possible. But still you need to put some hard work to learn basics till you get familiarize with the process.
Steps: Individual Investors (Domestic)
Step 1:
Normally four (4) forms namely CDS 1, CDS 1 (A) CDS 1 (B) & broker’s form has to be obtained through the broker or downloaded.
Step 2: All four forms have to be filled by the client.
Step 3: A signed copy of the National Identity Card or Passport should be enclosed with the form and submit to the broker. Also relevant utility bills should be attached as proof of residency. Then they will take care of it and will inform you.

How do you purchase shares?
There are two ways to purchase shares ..

  • From a new issue of shares (Primary Market),The primary market is the market for new shares or debenture issues. Simply purchasing directly from the issuer (company). In a primary issue, the company offering the share/debenture issue publishes a document known as the prospectus. It is an invitation to the general public to buy shares or debentures of that company.
  • On the Secondary Market through a stock broker.A market in which an investor could either buy or sell shares, debentures and Government Securities from or to another investor, subsequent to the original issuance in the primary market.
Is CDS safe?Almost yes, since CDS has taken measures to ensure the security of your shares. The company has back up facilities and procedures that would ensure business continuity in the event of anything happening either to the computer system or its usual premises. more at: Colombo Stock Exchange (Website: http://www.cse.lk/)
Good Trading!

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