FINANCIAL MARKETS
Financial markets can be refer to as
those canters and arrangement which
facilitate buying and selling of financial assets claims and services.
CLASSIFICATION OF FINANCIAL MARKETS:
1. Capital market
2. Money market
Capital market: capital market refers to the trade / market for long term and medium term
funds which provides capital to commercial undertaking, corporate sectors and
government undertaking.
Money market: money
market is a market which deals with short term funds. And provides funds for working
capital.
FEATURES OF CAPITAL MARKETS:
1. It deals with both medium and long
term finance
2. It deals with equity shares,
debentures, bonds, government securities.
3. The huge capital is collected by the
company which can be utilize to purchase fixed assets such as land and
building, plant and machinery, furniture.
4. The capital market helps members like
join stock company, individual investors, other intermediaries.
TYPES OF CAPITAL MARKET:
1. PRIMARY MARKET
2. SECONDARY MARKET
Primary market is an important part of capital market which deals with new
issue of security.
FEATURES OF PRIMARY MARKET:
1. It is a market where securities are
sold for first time therefore it is called new issue market
2. The security are issued by company
and government
3. The securities are issue directly
from the company to the investor
4. In India primary market is regulated
by both SEBI and RBI
PRIMARY MARKET INSTRUMENT:
1. Equity shares
2. Preference shares
3. Debentures / bonds
4. Commercial paper
5. Certificate of deposit
6. Global depository receipt / American
Secondary market is a market where existing security are traded is refer to
as secondary markets / stock market. In stock market purchase and sale of
securities whether of government / semi government and also
shares and debentures issue by Joint Stock Company are offered.
FUNCTION OF SECONDARY MARKET:
1. Liquidity and marketability of
security
2. Safety of funds
3. Supply of long term
4. Flow of funds to profitable project
5. Motivation for improved performance
by the company
6. Promotion of investment opportunities
7. Availability of business information
8. Other services
NATIONAL STOCK EXCHANGE:-
NSC was establishing in the year
1991.
NSE is India leading stock exchange
covering various cities and towards across the country.
The NSE has brought into above unpatrolled
transparency and efficiency from a safety and market integrity.
Purpose of NSE is to improve the
financial wellbeing at people
BOMBAY STOCK EXCHANGE:-
It was established in 1875.
It is Asia’s first stock exchange and
one of India’s leading exchange groups over the past years BSE has facilitate
the growth of Indian corporate structure
by providing it an efficient capital platform.
