Dematerialization and Rematerialization in Stock Investment
Dematerialization is the conversion of a share certificate from its physical form to an electronic form for the same share number that was credited to your dematerialization account that you opened through a participant deposit. Dematerialization is a process by which the company retrieves physical share certificates from an investor and credits an equivalent amount of securities in electronic form to the depository. Depository is an organization where a shareholder’s securities are held in electronic form.
Rematerialization is a process by which a shareholder can convert his interest back into physical form of a share certificate. Benefits of dematerialization for investors: a safe and convenient way to hold securities. The deposit system reduces the risks related to the possession of physical certificates, for example, loss, theft, mutilation, forgery, etc. It guarantees the settlement of transfers and reduces the delay in the registration of shares. It guarantees faster communication with investors. Ensures faster payment of stock sales. Provides more acceptability and liquidity of securities.
Market correction is a process by which stockbrokers attempt to correct the value of overpriced stocks. The stock market responds to both fundamental news and rumors. These two factors can drive the stock price to an overvalued or undervalued level. When the market is severely overvalued, there will be trouble, especially for those who have borrowed money to buy stocks. Overvalued stocks are stocks that have peaked for a period; They either enter a resting phase or, in most cases, begin to decline.
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