Professional Documents
Culture Documents
Financial Market
Money Market
Capital Market
Forex Market
Credit Market
Capital Market is market of securities (Debt or Equity), where business enterprises (Companies) and government can raise long term funds
Mobilize the Savings Incentives to savings & facilitates capital formation An avenue for investors Movement of stream of command over capital to highest yield Quantitative & Qualitative directions to flow of funds Important source for technological upgradation
Government Securities
Industrial Securities
Development Financial Institution Industrial Finance Corp Industrial Credit & Investment Corp
Financial Intermediaries
Primary Market
Secondary Market
State Financial Corp Industrial Development Bank Industrial Investment Bank Unit Trust of India
Others
Capital Market
Capital Instruments
Hybrid Instruments
Primary Secondary
Secondary Market
Fixed rated bonds Equity Floating rate bonds Convertible bonds Asset backed Securities Mortgage backed securities Interest rate swaps
1830s started by East India Company BSE founded in 1875 1899 BSE consolidated Electronic trading 1992 NSDL in 1996 1993 Private sector entry Mutual Fund
1995 NSE started limit order instead open outcry 1992 FIIS allowed to invest 1992 Indain companies allowed to raise GDR FCCBS
1947 - 1991 Very much controlled market and restricted by Indian Government
Since Independence India followed Democratic Socialism 1951-56 3.6% 1961-66 2.5% 1970-99 5.0% 2000-11 6.7% 1991 Onwards liberalised economic policy 8th plan 1992-97 6.7%GR ans then remained constant
Sr. No
As on 31st Dec
1946
1961
1971
1980
1985
1991
1995
2010
14
20
22
22
1125
1203
1599
2265
4344
6229
8593
13281
971
1292
2675
6750
25302
11279
478121
2973300
Works in 2 way Poverty reduction Short term opposite direction but long term it works 8-9% growth needed in India to eliminate pervasive poverty within a generation Singapore. Till 1947 was fishing village but amount & efficiency
Direct financial resources by private sectors into the areas where the productivity is highest
Reduce Poverty
Investment in High productive sectors by private player Government has more money for social sectors that helps to reduce poverty
Less developed Debt Market Skittishness of IPO Stock Market Vulnerable to FIIs Frequent Scams Reduce public faith Accounting standard not at par with international Standard eg: Satyam Market liberalization in Banking sector
Disclosures of relevant financial information Limiting transaction cost for securities Promoting transparency Effective & progressive regulating agency/policy Better surveillance & monitoring systems
Increase in High Savings rate of 25% to 35% from 1993 2011 of GDP Share of saving invested in financial assets is still small
When the remaining part of savings (Gold, Silver, Land, Building) will be infused in capital Market. India Growth rate will be unbelievable