CAPITAL MARKET

CAPITAL MARKET
 Thus,
Capital Market is a place where money is
exchanged between people who have excess
of it, to those who are in deficit.
ACE Textiles PVT. Ltd.
Mr. Ace

Wants to
expand
business
 Makes a Business Deal with GUCCI
brand to export textile cloth to their
manufacturing unit
Where can he get the money from?
1. From Banks

Mr. Ace can approach banks, but it will

not prove to be a healthy option because:

-Bank will charge him High rate of

interest.

- Lending of loans is a very tedious task.

Bank first scrutinizes the papers/
documents, verifies them.

- Very time Consuming Process.

Thus, this idea is not an effective one.
2. Can Go Public and
get listed on the
stock companies.
 Meaning of Capital Market
Capital Market is the part of financial
system which is concerned with raising
capital funds by dealing in Shares, Bonds,
and other long-term investments.
The market where Investment instruments
like bonds, equities and mortgages are
traded is known as the capital market.
 The different types of financial instruments that
are traded in the capital markets are:
1. equity instruments
2. credit market instruments,
3. insurance instruments,
4. foreign exchange instruments,
5. hybrid instruments.
 Significance ,Role or functions of
Capital Market
Mobilization of Savings
Capital Formation
Provision of Investment Avenue
Speed up Economic Growth and Development
Proper Regulation of Funds
Service Provision
MAJOR SUPPLIERS OF FUNDS
IN THE CAPITAL MARKET
1. COMMERCIAL BANKS.

2. INSURANCE COMPANIES.

3. BUSINESS CORPORATIONS.

4. RETREMENT FUNDS.
MAJOR BORROWERS IN THE CAPITAL
MARKET
1. TREASURY DEPARTMENTS.
2. CORPORATIONS.
3. SECURITIES DEALERS.
 Types of capital market
There are two types of capital market:
Primary market,
Secondary market
 Primary Market
Itis that market in which shares,
debentures and other securities are sold
for the first time for collecting long-term
capital.
This market is concerned with new
issues. Therefore, the primary market is
also called NEW ISSUE MARKET.
 Secondary Market

The secondary market is that

market in which the buying and
selling of the previously issued
securities is done.
 CAPITAL MARKET INVESTMENT
Capital market investment takes place through
the bond market and the stock market.
The capital market is basically the financial
pool in which different companies as well as
the government can raise long term funds.
 Capital market investments in the
stock market
The stock market is basically the trading
ground capital market investment in the
following:
i) Companys stocks
ii) Derivatives
iii) Other securities
The capital market investments in the stock
market take place by:
1) Small individual stock investors
2) Large hedge fund traders.
 STOCK EXCHANGE COMPANIES
If an individual has some financial security and
he wills to sell it, he can approach the Stock
Exchange Companies which will help him to
sell or purchase his security by the means of a
Broker.
There are 23 stock exchanges in India.
In India we have Bombay stock exchange ,
National stock exchange and the rest 21 are
Regional stock exchanges.
 STOCK EXCHANGE PLATFORM
There are three types of exchange platforms in
India:
1. Domestic Exchanges;
2. Regulatory Based.
3. International Exchanges;
 Domestic Exchanges
Indian equities are traded on three
major national exchanges:
1. MCX Stock Exchange Limited (MCX-
SX),
2. Bombay Stock Exchange Limited
(BSE) and
3. National Stock Exchange of India
Limited (NSE).
 MCX Stock Exchange
MCX Stock Exchange Limited
(Multi Commodity Exchange),
Indias new stock exchange, is
recognized by the Securities and
Exchange Board of India (SEBI) and
RBI.
It is located at Andheri, Mumbai.
In line with global best practices
and regulatory requirements.
The Exchange received
permissions to deal in Interest
Rate Derivatives, Equity, Futures
and Options on Equity and
Wholesale Debt segments.
Mr. Joseph Massey, MD & CEO
Benchmark Index: SX40
 Bombay Stock Exchange (BSE)
Called as Bombay Share Bazaar in Hindi.
Located on Dalal Street, Mumbai.
It is the 10th largest stock exchange in the world
by market capitalisation. It is Asias first Stock
Exchange and one of Indias leading exchange
groups .
BSE provides an efficient and transparent market
for trading in equity, debt instruments, derivatives,
mutual funds. It also has a platform for trading in
equities of small-and-medium enterprises (SME).
Around 5000 companies are listed on BSE making
it world's No. 1 exchange in terms of listed
members
Mr. Ashish Chauhan is the MD & CEO of BSE
Indexes: BSE SENSEX, BSE Small Cap, BSE Mid-Cap,
BSE 500
 National Stock Exchange (NSE)
NSE is called as Rashtriya Share
Bazaar in hindi & is Located in
Mumbai.
It is the 11th largest stock
exchange in the world.
NSE is mutually owned by a set of
leading financial institutions, banks,
insurance companies and other
financial intermediaries in India.
The NSE's key index is the S&P CNX
Nifty, known as the
NSE NIFTY (National Stock Exchange
Fifty), an index of fifty major stocks
weighted by market capitalisation.
Chitra Ramakrishna is the Managing
Director and CEO of National Stock
Exchange of India (NSE).
 Other 21 Regional Stock Exchanges in India
Bombay Stock Exchange
National Stock Exchange
Ahmedabad Stock Exchange
Bangalore Stock Exchange
Bhubaneshwar Stock Exchange
Calcutta Stock Exchange
Cochin Stock Exchange
Coimbatore Stock Exchange
Delhi Stock Exchange
Guwahati Stock Exchange
Hyderabad Stock Exchange
Jaipur Stock Exchange
Ludhiana Stock Exchange
Madhya Pradesh Stock
Exchange
Madras Stock Exchange
Magadh Stock Exchange
Mangalore Stock Exchange
Meerut Stock Exchange
OTC Exchange Of India
Pune Stock Exchange
Saurashtra Kutch Stock
Exchange
Uttar Pradesh Stock Exchange
Vadodara Stock Exchange
 REGULATORY AUTHORITY
Regulatory authority is the one which is under
the government surveillance.
A few Stock Exchange companies follow the
rules which are laid down by the government
of India.
Example:
1) SEBI:- (Securities Exchange Board of India)
2) RBI:- (Reserve Bank of India)
 Securities and Exchange Board
of India
SEBI protects the interests of
investors in securities and
promotes the development
of the securities market.
The board helps in making
registration and regulate the
functioning.
SEBI conducts inspection and
thus prohibits fraudulent
practices.
Upendra Kumar Sinha is the
Chairman of SEBI.
 RBI
RBI is the appex bank of India.
RBI is also known as the bankers bank.

- Maintains price stability .

- Provides cost effective banking services to the

Public.

- Give the public adequate quantity of supplies

of currency notes and coins in good quality.

- Formulate implements and monitor the

monetary policy.
- Manage the Foreign Exchange.

- Issue new currency and coins and

exchange/destroy currency and coins not fit
for circulation.
 International Exchanges
Due to increasing globalization, There is a rising
competition amongst various countries to keep their
market stable.
Therefore, it is important to keep track of international
financial markets for better perspective and intelligent
investment.
 NASDAQ, is an American stock exchange.
"NASDAQ" stands for National
Association of Securities Dealers
Automated Quotations.
It is located in the New York city, New
York, USA.
The NASDAQ is an electronic exchange
where stocks are traded through an
automated network. It is where most
technology stocks are traded.
e.g. Facebook= FB
Microsoft = MSFT,
Dell Computers = DELL,
Cisco = CSCO.
 The London Stock Exchange is a stock
exchange located in the City of
London in the United Kingdom.
It is the fourth-largest stock exchange
in the world.
Deals in Equity, Derivaties etc.
Xavier Rolet, (CEO).
IndexesFTSE 100 Index
FTSE 250 Index
FTSE 350 Index
FTSE SmallCap Index
FTSE All-Share Index
 Frankfurt Stock Exchange
It is situated in Frankfurt, Germany.
It is owned and operated by Deutsche
Brse.
The Frankfurt Stock Exchange has over
90 percent of turnover in the German
market and a big share in the European
market.
The exchange has a few well-known
trading indices of the exchange, such as
DAX, DAXplus, CDAX, DivDAX, LDAX,
MDAX, SDAX, TecDAX, VDAX, and
EuroStoxx 50.
DAX is a blue-chip stock market index
consisting of the 30 major German
companies trading on the Frankfurt
Stock Exchange. Prices are taken from
the electronic Xetra trading system of
the Frankfurt Stock Exchange.
 CONCLUSION
The lack of an advanced and vibrant capital
market can lead to underutilization of
financial resources. The developed capital
market also provides access to the foreign
capital for domestic industry. Thus capital
market definitely plays a constructive role in
the over all development of an economy.