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What is a Stock Exchange?
A Stock Exchange is simply a marketplace where securities such as shares or bonds are bought and sold.
What is a Share?
A share is the unit of ownership of a company's capital that entitles the holder to certain proportion of the profits.
What is a Bond?
Bond is a debt instrument issued by Government/Companues for a period for more than one year with the purpose of raising funds from the investors. Generally, the Bond is a promise to repay the principal amount along with the interest (coupon) on a specified date (Maturity).
What are the benefits of owning shares?
There are three main benefits of share ownership:
1. The shareholder benefits from the growth in the value of his/her shares over time due to increase in the prices known as 'Capital Appreciation'.
2. The shareholder can receive income from the profits of the company from time to time and paid by the company as 'Dividend'.
3. The shareholder gets the opportunity to participate in the continuing development of the companies in which they invest through their right to vote in the Annual General Meeting.
Who is a broker?
A broker is a member of the RSEB licensed by the Royal Monetary Authority of Bhutan to buy or sell securities on behalf of his/her clients on an agreed commission.
Am I eligible to buy shares?
An individual can buy shares if he/she is:
1. More than 18 years of age
2. Of sound mind and not declared otherwise by a court in Bhutan
3. Is not insolvent and has not been declared so by a court in Bhutan
4. A citizen of Bhutan
What and when are the trading days?
Trading day means the day for buying and selling of securities and RSEB's trading days are on Monday, Wednesday and Friday.
How to buy and sell shares in the Secondary Market?
Any purchase or sell of shares through the Stock Exchange needs to be routed through the brokers registered with the Exchange. The buying/selling process begins when the client places an order with a broker for a specified number shares in a company after signing up a Client Agreement Form, Know Your Client Form and Order Form. The buyer then deposits the money in the brokers account which is further deposited in favor of the seller by the broker minus the commission. The ownership of the shares are transferred to the buyer's name. The settlement cycle is carried out in two working days (T+2).
What is a dividend?
A dividend is a proportionate distribution of earning (profits) of a company to its shareholders. The rate of the dividend varies with the company's performace. Dividends are usually paid annually or on interim basis.
What are the rights and responsbilities as a shareholder of a company?
1. Attend the Annual General Meetings of the company,
2. Voting rights on every resolution placed before the general meeting.
3. Right to entitlements to share benefits of the profit of the company which is declared in the form of dividends,bonus, etc.
4. Right to sue for wrongful acts.