CAPITAL MARKET

Presentation by:- Eesha Mehta

 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 one 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
 WHAT IS FINANCIAL SYSTEM? 

   A financial system or financial sector

functions as an intermediary and facilitates
the flow of funds from the areas of surplus to
the areas of deficit. 
 TYPES OF FINANCIAL MARKET 

 Money Market- The money market ifs a

wholesale debt market for low-risk, highly-
liquid, short-term instrument.  Funds are
available in this market for periods ranging
from a single day up to a year.  This market is
dominated mostly by government, banks and
financial institutions. 
 CONTD..
  Capital Market -  The capital market is
designed to finance the long-term
investments.  The transactions taking place in
this market will be for periods over a year.

 Forex Market - The Forex market deals with

the multicurrency requirements, which are
met by the exchange of currencies. 
 CONTD..

 Credit Market- Credit market is a place where

banks, FIs and NBFCs purvey short, medium
and long-term loans to corporate and
individuals.
 CAPITAL MARKET INSTRUMENT

 In the equity segment Equity shares,

preference shares, convertible preference
shares, non-convertible preference shares etc

 Debt segment: debentures, zero coupon

bonds, deep discount bonds etc.
 CONTD..
 Hybrid Instruments: Hybrid instruments have
both the features of equity and debenture.
This kind of instruments is called as hybrid
instruments. Examples are convertible
debentures, warrants etc.
 TYPES OF CAPITAL MARKET

 Primary market

 Secondary market
 CONTD..
 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
 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.
 FIRST WAY TO REDUCE POVERTY :

Direct financial resources by private sectors into

the areas where their productivity is highest .
Faster economic growth. More employment,
income reduce poverty
SECOND WAY TO REDUCE POVERTY :

 Due to investment in high productive sectors

by private player, government for has more
money for social sectors that helps to reduce
poverty
 THANK YOU

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