FEATURES OF DEVELOPED CAPITAL MARKET

Introduction

Capital markets plays an vital role in the economy. This is the main financial security to the country. Capital market is the backbone of the country’s economy. Heart of economic growth is in the capital market. How the regulation of capital market was done I.e. mainly responsible for the development of industrial and commercial sectors.

Capital market

  1. It is the source that maintains the relation between a supplier and buyer. Savings and investments are directed between the people who have capital and who needs the capital or in the market where buyers and sellers involved in buying [or] selling i.e. trading of financial securities like stocks, bods, e.t.c. in this transactions, there can be an individual [or] an institution. This capital market is introduced for the first tie in India through Bombay stock exchange. Capital market has a history of 200 years i.e. 2 centuries.

Functions

Capital markets regulates for better and efficiency transactions. It helps in economic growth of stabilizing stock prizes and capital market get together the people [or] institution requires capital and those who having excess capital and do transactions accordingly to develop the industrial and commercial sectors. And it make securities i.e easier for investors and industries.

Classification of capital market

Capital market is classified into the nature of securities traded i.e bond market and stock market and also classified into two categories they are primary and secondary markets, primary market deals with new issues of stocks and other securities secondary market deals with trade in existing securities.

Nature of capital market

Price

Price of securities is established through demand and supply.

Securities market

It deals capital market through securities like debentures, shares e.t.c

Location

Capital market is not specified to do transactions [or] business, although it is true that some parts of market are concentrated in well known center like stock exchanges e.t.c. it’s impact in over all economy. Wherever the users and suppliers of capital are get together and do business.

Market for financial assets

Long term financial assets, it provides transactions platform.

Participants

There are so many players in capital market they are individuals, government, banks corporate sectors and other financial institutions.

Characteristics of capital market

In our country, business deals can arrange funds through various sources. Short term funds can be arranged by taking debts and longterm loans can be arranged by issued securities [or] by reserving loan from financial institutions. In this capital market, must investments are made directly.

Existence of financial institutions and security markets in the structure of capital market

So many financial institutions like [IFCI] industrial finance corporation of India, IDBI [industrial development bank of India], SFC [State financial corporations], LIC [life insurance corporation of India, e.t.c. it is available in long term and short term finance in structure of capital market of India.

Following types of capital market are in capital market structure and deal in securities

  • Corporate security market
  • Government security market

Growth in mutual funds,  interdependence of money and capital market, so many types of instruments : in capital market of our country preference shares, equity shares, debentures, innovative debt, instruments, bonds, zero interest bonds, convertible rate bonds, forward contracts, convertible instruments, futures, e.t.c, in adequate investors services.

Scope of market : scope of market is wider in capital market immediately on.

Transactions in open markets : it influences prices and quantity produced in longer term instruments.

Debt and equity instruments : debt and equity instruments are traded in capotal markets are longer term is maturity.

Supply of new funds : it comes from the some sector although it is directed within the markets through financial institutions.

Under the portent of capital markets : both are discussed and open markets are widely used

Demand for capital market instruments : this demand in capital market instruments dividend into 5 categories they are households, business, individuals, financial corporations [or] central government [or] local government and foreign government.

Features of capital market in India

Presence of intermediaries

with the help of intermediaries capital market is operating, intermediaries are brokers, merchant brokers, under writers, collection bankers, sub brokers e.t.c. these intermediaries are important in capital markets.

Capital markets are regulated by government rules and regulations

However, it is regulated by rules, regulations and policies. For example NSE and BSE are regulated by SEBI, government body.

Determinant of rate of capital formation

It mobilizes the funds in the economy and this capital formation net addition to the existing stock of economy’s capital.

Connects savers and entrepreneurial borrowers

Capital market links the savers and borrowers of funds. So, from servers to entrepreneurial borrowers get money.

Foreign investors

Foreign investors means both individual and institutions, and also non resident Indians can also invest in Indian securities market.

Variety of investors

Capital market has so many variety types of investors. It comprises both individuals and institutional investors like LIC, mutual funds, and e.t.c.

Over the counter market

These are financial instruments like stocks traded directly between two parties and currencies.

Deals in medium and long term investments

Capital market helps in raising the long term funds. It corporates, financial instruments, industrial organisations, and get access to long term funds from both foreign and domestic markets.

Provides liquidity

Capital market instruments are liquid. Investors can get a cash through selling the securities when they needed.

Deals in markets and non market securities

Capital markets trades in both marketable and non marketable securities. Marketable securities can be transferred. For examples, debentures, shares, e.t.c and non marketable securities that cannot be transferred. For example, loans, form deposits and advances.

In capital markets, there are 2 entities they are one who needs capital and supplies capital. Entities with surplus capital are retail and institutional investors.

REFERENCES

https://indianmoney.com/articles/features-of-capital-market

https://byjus.com/free-ias-prep/capital-markets/

https://www.bbalectures.com/capital-market-characteristics-and-instruments/

https://www.brainkart.com/article/Characteristics-of-Capital-Market_40747/

 

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at secondinnings.hr@gmail.com

In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

 

 

 

 

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Create a website or blog at WordPress.com

Up ↑

%d bloggers like this: