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    Capital Market Fms

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    Prateek Chawla
    The document discusses various aspects of capital markets in India. It defines capital markets as markets for long-term securities (debt or equity) that allow businesses and governments to raise long-term funds. It notes that capital markets are different from money markets in that capital markets provide funds for over 1 year, while money markets provide funds for under 1 year. The document also outlines the key instruments in capital markets like equity shares, debentures, and hybrid instruments. It distinguishes between primary markets, where new securities are issued, and secondary markets, where existing securities are traded. Finally, it discusses the history and future potential of capital markets in India.

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    Capital Market Fms

    Uploaded by

    Prateek Chawla
    99 views22 pages
    The document discusses various aspects of capital markets in India. It defines capital markets as markets for long-term securities (debt or equity) that allow businesses and governments to raise long-term funds. It notes that capital markets are different from money markets in that capital markets provide funds for over 1 year, while money markets provide funds for under 1 year. The document also outlines the key instruments in capital markets like equity shares, debentures, and hybrid instruments. It distinguishes between primary markets, where new securities are issued, and secondary markets, where existing securities are traded. Finally, it discusses the history and future potential of capital markets in India.

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    The document discusses various aspects of capital markets in India. It defines capital markets as markets for long-term securities (debt or equity) that allow businesses and governments to raise long-term funds. It notes that capital markets are different from money markets in that capital markets provide funds for over 1 year, while money markets provide funds for under 1 year. The document also outlines the key instruments in capital markets like equity shares, debentures, and hybrid instruments. It distinguishes between primary markets, where new securities are issued, and secondary markets, where existing securities are traded. Finally, it discusses the history and future potential of capital markets in India.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    99 views22 pages

    Capital Market Fms

    Uploaded by

    Prateek Chawla
    The document discusses various aspects of capital markets in India. It defines capital markets as markets for long-term securities (debt or equity) that allow businesses and governments to raise long-term funds. It notes that capital markets are different from money markets in that capital markets provide funds for over 1 year, while money markets provide funds for under 1 year. The document also outlines the key instruments in capital markets like equity shares, debentures, and hybrid instruments. It distinguishes between primary markets, where new securities are issued, and secondary markets, where existing securities are traded. Finally, it discusses the history and future potential of capital markets in India.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 22

    GROUP MEMBERS:SHAKSHI DWIVEDI JIML-10-129 SHAYAN FAHEEM JIML-10-130 SAURABH BORA JIML-10SAURABH KUMAR TRIPATHI SAMARTH SINHA JIML-10SAURABH

    MISHRA JIML-10-128 SAURABH MISHRA JIML-10-127

    VARIOUS TYPES OF FINANCIAL MARKETS


    Financial market can be broadly divided into:Money Market Capital Market

    WHAT IS CAPITAL MARKET ?


    A capital market is market for securities (Debt or

    Equity), where business enterprises (Companies) and government can raise long term funds.

    CAPITAL MARKET IS DIFFERENT FROM MONEY MARKET

    Capital market- Money is provided for longer than a year. Money market- money is provided for short terms (up to 1 year).

    CAPITAL MARKET IS ESSENTIAL PART OF FINANCIAL SYSTEM


    Because any financial system cannot provide efficient

    growth to a country without a efficient and well regulated capital market. Capital market is heart of any financial system.

    CAPITAL MARKET INSTRUMENT


    Capital market instruments The capital market generally consists of the following long term period i.e. more than one year period, financial instruments; In the equity segment Equity shares, preference shares, convertible preference shares, non-convertible preference shares etc and in the debt segment debentures, zero coupon bonds, deep discount bonds etc.
    Hybrid instruments Hybrid instruments have both the features of equity and debenture. This kind of instrument is called as hybrid instrument. Examples are convertible debentures, warrants etc.

    CAPITAL MARKET INSTRUMENT


    Fixed rate bonds Equity Floating rate bond Convertible bonds Asset backed securities Mortgage backed securities Interest rate swaps

    TYPES OF CAPITAL MARKET

    PRIMARY MARKET
    In the primary market, securities are offered to the

    public for subscription for the purpose of raising capital or fund.

    SECONDARY MARKET
    Secondary market refer to a market where securities

    are traded after being initially offered to the public in the primary market and / or listed on the stock exchange.
    Majority of the trading is done in the secondary

    market.

    MAJOR EVENTS OF INDIAN CAPITAL MARKET


    By 1830s business in corporate stock started with East

    India Company. BSE founded in 1875. It can be said that in 1899 the stock exchange at Bombay was consolidated. Electronic Stock Exchange started in 1992. NSE founded in 1992(as a competitor of BSE). NSDL founded in 1996. NSDL National Security Depositor Limited

    CONTINUE
    In 1993 private sector entry allowed in mutual fund.
    In march 1995 NSE started a limit order book

    market, instead of open outcry. In 1992 FII(Foreign Institutional Investor) were allowed in Indian security market. Indian companies were allowed to raise GDR & FCCBS. GDR Global Depository Receipt FCCBS Foreign Currency Convertible Bond

    DIFFERENCE BETWEEN PRIMARY & SECONDARY MARKET


    In the primary market, securities are offered to public for

    subscription for the purpose of raising capital or fund. Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors.
    Secondary market could be either

    auction or dealer market. While stock exchange is the part of an auction market.

    IN

    WHAT ARE THE PRODUCTS DEALT SECONDARY MARKET ?


    Equity shares Debentures Government securities Bonds

    IMPORTANT TERMS IN THE SECONDARY MARKET


    STT Rolling Settlement Pay -in day and pay- out day Short selling Arbitration Day trading

    WHY IN 1991 INDIAN CAPITAL MARKET LIBERALIZED ?

    Because of : Increasing oil price Double digit inflation Foreign loan chances of default creates shortage of adequate capital and brought economic crisis for India.

    REGULATION OF CAPITAL MARKET


    Regulating agency oversee the capital market in their

    designated jurisdictions to ensure that investors are protected against fraud, among other duties. Indian capital market regulatory authority is SEBI- Securities and Exchange Board of India SEBI was established in 1988.

    CAPITAL MARKET AND POVERTY REDUCTION


    It works in two ways to reduce poverty.
    In short term, it can move in opposite direction but in

    long term it always works. 8-9% growth is needed in India to eliminate pervasive poverty within a generation. Singapore is an example of this. Till 1947 it was fishing village but amount & efficiency of capital market transfer it in a developed country.

    MAJOR PROBLEMS OF INDIAN CAPITAL MARKET


    Less developed debt market.
    Skittishness about IPO. Stock market is very much vulnerable to FII. Frequent scams in stock market reduced public faith. Accounting standard is not very much at par with

    international standard(e.g.- Satyam fraud by manipulating in accounts). Market liberalization has been slower in banking sector.

    HOW EFFICIENT CAPITAL MARKET CAN BE DEVELOPED


    Disclosure of relevant financial information.
    Limiting transaction cost for securities. Promoting transparency of market operation.

    Efficient and progressive regulating agency and policy.


    Better surveillance and monitoring system.

    FUTURE OF INDIAN CAPITAL MARKET


    High saving rate 25% of 1993-97 of GDP(too much

    higher than U.S & EUROPE). The share of saving invested in financial asset is still small. 3% - 1971 > 6% - 1981 > 10% - 1991 When this saving will infused in capital market instead of physical assets(like- GOLD, LAND, BUILDING etc.) Indian growth rate will be unbelievable.

    CONCLUSION

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