FINANCIAL

MARKET
Financial Market
■ Market place; trading of securities occurs,
including the stick market, bond market, forex
market and derivatives market.
■ Philippines has a capitalist economies and
FINANCIAL MARKET is vital to countries with
capitalist economies.
■ Provides an avenue for sale and purchase of assets
such as stock, bond, forex, commodities and
derivatives.
TYPES OF FINANCIAL
MARKETS
 Stock Market
■ Trades shares of ownership
of public companies. Each
shares comes with price
and investors.
■ Investors makes money if
stock is doing well in the
market.
 BLUE CHIPS RED CHIPS

■ Blue chips are companies • Red chips are

that compose the companies that is
Philippine Stock highly volatile.
Exchange Index. They
• Example: mining
have a proven track
record and daily trades
are in high volume (for
liquidity).
Bond Market
■ Offers opportunities for companies and government to secure
money to finance a project or investment.
■ Company return the amount of the bond plus interest.
Commodities Markets
■ Traders and investors buy and sell natural resources ranging
from corn, oil, meat to gold.
■ Created because price of resources is unpredictable.
■ Not usually present in the Philippines.
Derivatives Market
■ The derivatives market is the financial market
for derivatives, financial instruments like futures
contracts or options, which are derived from
other forms of assets.
■ The market can be divided into two, that for
exchange-traded derivatives and that for over-
the-counter derivatives.
 FUNCTIONS OF
FINANCIAL MARKETS
Functions
■ Puts savings into more productive use.
■ Determine the prices of securities.
■ Makes financial assets liquid.
■ Lowers the cost of transactions.
IMPORTANCE OF
FINANCIAL
MARKETS
Importance
■ Provide a place where participants like investors and
debtors, regardless of their size will receive fair and
proper treatment.
■ Provide individuals, companies, and government
organizations with assets to capital.
■ Financial markets help lower the unemployment rate
beaus of the many job opportunities it offers.