The document provides an overview of financial markets including definitions, key concepts, objectives, functions, classifications, participants and regulatory environment. Specifically, it defines financial markets as any marketplace where trading of securities occurs, and notes they are vital to capitalist economies [1]. It then discusses money markets, capital/securities markets, foreign exchange markets and derivatives markets in detail. [2] The functions of financial markets are also summarized as facilitating credit creation and allocation, serving as intermediaries for savings mobilization, and assisting balanced economic growth. [3]
The document provides an overview of financial markets including definitions, key concepts, objectives, functions, classifications, participants and regulatory environment. Specifically, it defines financial markets as any marketplace where trading of securities occurs, and notes they are vital to capitalist economies [1]. It then discusses money markets, capital/securities markets, foreign exchange markets and derivatives markets in detail. [2] The functions of financial markets are also summarized as facilitating credit creation and allocation, serving as intermediaries for savings mobilization, and assisting balanced economic growth. [3]
The document provides an overview of financial markets including definitions, key concepts, objectives, functions, classifications, participants and regulatory environment. Specifically, it defines financial markets as any marketplace where trading of securities occurs, and notes they are vital to capitalist economies [1]. It then discusses money markets, capital/securities markets, foreign exchange markets and derivatives markets in detail. [2] The functions of financial markets are also summarized as facilitating credit creation and allocation, serving as intermediaries for savings mobilization, and assisting balanced economic growth. [3]
The document provides an overview of financial markets including definitions, key concepts, objectives, functions, classifications, participants and regulatory environment. Specifically, it defines financial markets as any marketplace where trading of securities occurs, and notes they are vital to capitalist economies [1]. It then discusses money markets, capital/securities markets, foreign exchange markets and derivatives markets in detail. [2] The functions of financial markets are also summarized as facilitating credit creation and allocation, serving as intermediaries for savings mobilization, and assisting balanced economic growth. [3]
Classifications, Capital Market, Role of Capital Market, Functions, Capital Market Instruments, Recents Trends, Money Market, Money Market Instruments Financial Market-Meaning
Financial markets refer broadly to any
marketplace where the trading of securities occurs, including the stock market, bond market, forex market, and derivatives market, among others. Financial markets are vital to the smooth operation of capitalist economies FMI Unit -1 Financial Market 2 Financial Market- Meaning Finance is the integral part of Modern Business. Financial Markets refer to the institutional arrangements for dealing in financial assets and credit instruments of different types such as currency, Cheque, bank deposits, bills, etc.
FMI Unit -1 Financial Market 3
Financial Market - Facilitates □ The raising of Capital (In the capital markets) □ The transfer of risk (In the derivatives Market) □ International Trade (In the Currency Markets)
FMI Unit -1 Financial Market 4
Identify the Personality!!
FMI Unit -1 FINANCIAL MARKET 5
Harry Markowitz • Harry Markowitz won a Nobel Prize in Economics and became known as the father of Modern Portfolio Theory (MPT) in the years following the publication of his seminal 1952 paper, Portfolio Selection.
FMI Unit -1 FINANCIAL MARKET 6
Identify the personality !!
FMI Unit -1 Financial Market 7
Warren Edward Buffett • He (Born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway.
FMI Unit -1 FINANCIAL MARKET 8
Identify the personality !!
FMI Unit -1 Financial Market 9
Harshad Shantilal Mehta • He was an Indian stockbroker. Mehta's involvement in the 1992 Indian securities scam made him infamous as a market manipulator.
FMI Unit -1 FINANCIAL MARKET 10
Identify the personality !!
FMI Unit -1 FINANCIAL MARKET 11
Economist Benjamin Graham
• He is best known for his book The
Intelligent Investor, is lauded as a top guru of finance and investment. Most importantly, investors should look for price-value discrepancies when the market price of a stock is less than its intrinsic value.
Unit -1 FINANCIAL MARKET 12
Financial Market - Features □ Large Volume of Transactions □ Various Segments □ Instant Arbitrage □ Volatility □ Dominated by Financial Intermediaries □ Negative Externalities □ Integration with worldwide financial markets Financial Market 13 Financial Market - Functions □ To facilitate creation and allocation of credit and liquidity □ To serve as intermediaries for mobilization of savings □ To assist the process of balanced economic growth □ To provide financial convenience □ To cater the various credits needs of the business houses
Financial Market 15 1.Money Market • The term money market refers to the institutional arrangements facilitating, borrowing and lending of short term funds. The Money markets brings together the lenders who have surplus short-term investible funds and borrowers.
Financial Market 16 2.Capital/Securities Market
• The term ‘Capital Market’ refers to the institutional arrangements for
facilitating borrowing and lending of long-term funds • (i)Primary Market Shares and Debentures (ii)Secondary Market Stock Market
Financial Market 17 3.Foreign Exchange Market • The FX market is the largest and most liquid financial market in th world and includes trading between large banks, central banks, currency speculators, corporations, governments and other institutions.
Financial Market 18 4.Derivative Market
• The derivative Market is defined as the market where exchange of
derivatives takes place. Derivatives are one type of securities whose price is derived from the underlying assets and values. Such as stocks, bonds, currencies, interest rates, commodities and market indices.
Financial Market 19 Participants in Financial Markets □ Individuals □ Firms or Corporates □ Government □ Regulators □ Market Intermediaries (Share Brokers, Depositors, Credit-rating agencies, Mutual Funds etc..)
Financial Market 20 Regulatory Environment □ Ministry of Finance □ Reserve Bank of India □ SEBI
Financial Market 21 Financial Regulators- Functions □ To enforce applicable Laws □ To prevent cases of market manipulation □ To ensure competence of providers of financial services □ To protect clients □ To maintain confidence in financial system □ To reduce violations under laws
Financial Market 22 Securities Market
A securities market is a system of
interconnection between all participants (professional and nonprofessional) that provides effective conditions: to attract new capital by means of issuing new security (securitization of debt) to transfer real asset into financial asset. Financial Market 23 Securities Market 1. Primary Market/ New Issue Market The primary market is where securities are created. It's in this market that firms sell or float new stocks and bonds to the public for the first time.
Financial Market 24 Primary Market – Features □ Primary Market Concerns new issue long-term capital □ Securities are sold for the first time □ It is also know as New Issue Market(NIM) □ Securities are issues directly to investors □ Securities certificates also issues to investors □ Securities are issued by companies for setting new business and expanding/modernizing existing business
Financial Market 25 Primary Market – Features Cont □ It facilitates capital formation in economy □ Funds generated in this market are utilized for the purchase of fixed asset □ It doesn’t include long term loans from financial institutions □ It is the process of going public (i.e) Converting private capital into public capital.
Financial Market 26 Methods of Floating New Issues □ Public Issue(IPO) □ Rights Issue □ Private Placement □ Preferential Allotment
