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Executive Summary...................................................................................................................2

Background of Financial Market...............................................................................................3

Capital Allocation within the Domestic Economy.....................................................................4

Capital Allocation within International Markets........................................................................5

Ability to Share International Capital Allocation...................................................................6

Evaluation of Emerging Economy.............................................................................................7

Growth Prospects of Indian Economy...................................................................................7

Internal factors...................................................................................................................8

Challenges Faced by Indian Capital Market............................................................................10



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Executive Summary

This paper is based on ZEUS consultant which is considering expanding its business

operations in order to increase their overall profitability and attract new clients. For this

purpose, a proposal is prepared in which money and capital markets and its impact on interest

rates and exchange rates have been analysed in emerging market. In order to choose the

emerging market, the capital market of India has been selected. The overall internal analysis

of Indian Capital Market has been conducted and a conclusion is drawn in which the overall

opinion is proposed.

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Background of Financial Market

All the capital sectors in the world are based on the individual capital market situated

in each nation. The capital markets of each nation situated in Asia together form the capital

market of Asia, likewise, all the capital markets of the nations of the world together develop

the international capital market. The major operations which are dealt by the capital markets

are trading of capital bonds or stock, commodities (food grains or valuable metal), and other

valuable and exchangeable items at lesser transaction expense and market efficient prices.

Capital markets can be determined as international or domestic. The international capital

market operates as major instruments for enhancing the liquidity (Gros and Lannoo, 2005).

The capital markets can categories into 6 major types:

1. Commodity markets

2. Derivatives market: Futures Markets

3. Money Market

4. Capital Markets: Bonds Markets and Stock Markets

5. Insurance Markets

6. Foreign Exchange Markets (Stiglitz and Ocampo, 2008)

The capital markets contribute significantly in developing the international economy

because it assists the organizations to increase the capital in the market, facilitate the

exposure transfer in the markets of derivatives, and it assist the global trade in currency sector

to grow. The internal stock markets form a significant part of an intentional capital market

(Stiglitz and Ocampo, 2008).

Capital Allocation within the Domestic Economy

The allocation of capital function in the domestic economy means to provide the

guidance of flow direction thus realizing the rational function of allocation. There are

powerful optional, evaluate, and supervisory mechanism in the domestic capital market and

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the primary investors in this market are determined as a rational economic entity are always

determined as a transparent motive of profit (Eliot, 2016).

Thereby, it can increase the flow of capital to the highest sectors of the domestic

Market which provides greater benefits, and reflect the optimization of resources allocation

function. The last function in the domestic capital market is the right of property, which

means it restricts the property rights of investors’ and work function as intermediary trading

of property rights. The right of property function is determined as the capital market function,

in which it contributes a major role in the mechanism of recognition of property for the

enterprises through the process of transforming the enterprise operational mechanism,

providing the accommodation to the enterprises funds, increasing the information of real-

estate trade rights and offering agent services the property right (Eliot, 2016).

The domestic capital market plays a significant role to prompt development of an

economy and a crucial substitute source of strategic finance which is provided by the

domestic capital market for strategic productive investments. The domestic capital market

contributes equity capital and infrastructure capital to enhance the benefits of socio-culture,

which includes energy, roads, public transport, and telecommunication etc. more

opportunities for investment are provided the domestic capital market that promotes

individuals saving their resourcing for investing, the investment ratios and domestic savings

are enhanced that is crucial for the purpose of instant industrialization. The most crucial

component which capital market proposed is the greater opportunity for the company to trade

their capital assets such as shares which can enhance both their social benefit and their own

benefit (Erjie, 2015).

The domestic capital market enhances the capital allocation efficiency by assuring

that only those projects which are determined as successful should be selected. These projects

will enhance the effectiveness of local institutions and optimize the ability of local industries

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to compete internationally, given the existing momentum towards the international

integration. The result will be enhancing in local productivity which will distribute into the

advancement in exports and enable the country to optimize and develop economically.

Capital Allocation within International Markets

A capital allocation International market is an essential aspect of International Capital

Market practices. It entails all affiliated management practices, set up of long-term

relationships, and creation of customers’ satisfaction. To maintain customers’ satisfaction,

International Capital Market designates reliable operations for every customer’s needs (Erjie,


Through capital allocation from the customer’s capital allocation base, International

Capital Market improve their performance by removing useless capital allocation stage of the

chain level, multiplying the capital allocation flow and sharing capital allocation with clients

mutually. As proposed by Loo et al. (2013), successful business relationships are the most

attainable advantage since they cover unhealthy competitions in the market.

On the other hand, the expansion of mass customization as well as the personalized

service reveals the emerging tendency in business. Hence, this expansion impacts the

management relationship with the customers within the International Capital Market (Hirst

and Wallace, 1974).

However, good relationships with Capital Allocation in Capital Market, such as

customers and the rest of stakeholders are required for successful enforcement of

International Capital Market systems. Direct organizational relationship with customers

enables an organization to separate its products from competitors and at the same time

maintain customers’ loyalty (Hirst and Wallace, 1974).

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Ability to Share International Capital Allocation

The capital to share capital allocation in a market assumes two forms: quantity and

quality. The two aspects are important in most of International Capital Market practices.

International Capital Market studies conventionally treated these practices as an independent

development (Hirst and Wallace, 1974).

The quantity of capital allocation refers to the degrees which are important to the

information that is communicated from one supply partner to the other. In such a business

operation, information flows strategically to the concerned parties which include logistics

department, supply desk, and customers’ relation department (Mensah, 2000).

This analysis reveals that the success of a logical supply of goods and services in a

company is incurred due to the management of the up-to-date capital allocation of a market at

every point within the Capital Allocation in Capital Market. By assuming that such capital

allocation is ever available in the company’s capital allocation bases, the organization stands

a better position when it comes to competition with other International Capital Market.

Malling (1998) also reveals that information sharing among the partners reflect

critical reporting information. Indeed, sharing information can bring customers and suppliers

together by developing and maintaining elements of Capital Allocation in Capital Market

including quality and cost of goods and services. The quality of information is based on its

accuracy, timeliness, and adequacy to the stakeholders of the organization’s marketing

practices. This behaviour helps to minimize the supply and demand uncertainty in the

company’s main operations. Acquiring the best management outcomes for the Capital

Allocation in Capital Market demands that the information shared must be correct (Mensah,


From an empirical study by Crisostomo (2008a), the impacts of mutual

communications were demonstrated within and outside the organization and are based on the

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number of beneficiaries in the chain, mode of transformation of information, and the time

information is shared. Therefore, companies must treat information as a strategic resource

and make timely notifications through minimal delays and interruptions.

Moreover, Thanasankit (1999) considers sharing information as a major building

block that strengthens the relationship between government and capital institutions. Velcu

(2005) also reveals that good partnership in an organization helps stakeholders to act as one

entity since everybody appreciates the needs of end customers, therefore acting promptly. The

study conducted by Crisostomo (2008b) considers appropriate and efficient utilization of

information by all relevant groups as the distinguishing element in a company. Similarly,

empirical findings by Velcu (2005) indicate that simplified material flow such as streamlining

the smooth execution of information within the Capital Allocation in Capital Market is most

important for the efficacy of the Capital Allocation in Capital Market (Baker, 2012).

Evaluation of Emerging Economy

Growth Prospects of Indian Economy

In the recent past, India has undergone rapid changes that have come to be known as

the major economy of the Central Asia initiative. Majority of the country have capitalized

upon the fast-paced nature of the globalized fiscal transactions and are slowly gaining market

entry in the foreign investment market. However, not all of these countries have succeeded;

some like Bangladesh have fallen victims to such speculations. India continues to seek their

footage on the international capital market stage as they are striving to come up with

knowledge-based major economies mainly depended on their capital market. The current

established major and economic reforms that are currently underway in the Indian Capital

Market have tried to enhance the local and international Indian politics. This, in turn, has

much helped in increasing the India region's bargaining power (Chan, 2006).

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The capital market has dramatically shaped the major economy of the Indian States.

Several changes in the have occurred both, locally in internationally that particularly in the

on-going global economic crisis. In the recent past, entire mutual arrangements have dictated

the means through which India was forming their labour relations and capital market

economies in the past, but that is not the case currently. Other factors that in the past have

shaped the Indian politics include the modern banking initiatives, the sovereign wealth funds

and state of autonomy of majority of India (Chan, 2006).

Internal factors

The year 2011 marked the turning around of the Indian economy. At large, the Indian

economy is characterized by three main sets of advancements; the initial factor shows that

India is actively engaged in rapid economic growths that are fostering massive development,

thus giving its economy a harp growth (Usselman, 2002). This provides the much-anticipated

funds for the development of the country's infrastructure and purchase of military equipment

that has helped in maintaining the major stability that has been wanting in these areas. The

herculean growth is another factor that has dramatically shaped the major situation of the

India, globalization, and integration of the Indian economy into the global economy has

helped in the stabilization of more successful than others except for Bangladesh (Chan,


The rate at which the dynamic of the Indian economy is changing requires a concise

comprehension of the current major situation in this region, the external and internal affecting

influencing and affecting the area as well as the implications of the present economic and

security trends and trade policies. Majority of India have both the internal and external

dimensions. The domestic include its ethnic divisions and the ideological concepts. Another

internal limiting factor that has played a significant role in defining the legislative history of

India is the issue of who is the leader of the Democratic Party. Over an extended period, there

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have been disagreements of which country is superior among the rest of India. Majority of the

Arab leaders have been overzealous in their desires to be acknowledged as the official leaders

of the entire Indian region and the Muslim community. This factor has its branches in the

tribal traditions of the Indian region, thus considered an internal threat to the major viability

in the Indian region. Territorial boundaries among member states are another critical internal

factor affecting the major stability of the Indian region.

India positioned as nineteenth in the category of highest capita GDP on the globe in

comparison to the moderate development nations in revenues. Similarly, in the theory of

investment effort, it positions ninety-two out of ninety-eight countries. The nation uses just

40% of its investment capacity (Usselman, 2002). Studies embraced over the most recent

quarter that the global monetary fund has discovered genuine lacks of both an auxiliary and

managerial nature in India’s present earning framework. Fundamentally, the framework has a

narrowed tax base that is dependent on traditions obligations on imports and a couple of other

taxes and expenses on a global exchange, which represent well more than thirty-3% of

Recurrent Revenue (Usselman, 2002).

Because of various concessions, the investment system viably catches just a little part

of the general budget. Also, the framework basically covers products to the virtual prohibition

of administrations, with the last account to 60% to 70% of family unit consumptions. On the

other hand, the framework yields moderately little earnings with respect to the span of the

capital institutions. It likewise creates earning streams that tend to develop more gradually

than the capital institutions. This is because the utilization of products tends to fall as an offer

of aggregate utilization, as expectations for everyday comforts enhancement (Schmink and

Wood, 1984).

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Challenges Faced by Indian Capital Market
Capital Market operations are confronting various difficulties. These difficulties have

been categorized into five distinct origins. The capital market operations decreases the Cost,

Security, Mergers & Acquisitions, Regulatory Consistency, and Development of Revenue.

These factors are additionally connected to adequacy and proficiency of an administration

part. They have additionally contended that expansion with an aim to get proficiency and

impressions, whereas concerns about security have been expanded to a more prominent

degree (Feldman, 2001).

The essential purpose of this point is client character and it is unknown at these new

access focus. The secrecy is in charge of expanding frauds and deceitful which is the real

security concern. Novell gives system and equipment of administration framework which

expand effectiveness in Barter Capital Market operations segment. A manual procedure

prompt expense of consistency, administrative and consistence savagery, and reputation risk

of corporate (Feldman, 2001).

As a measure of proficiency income development which can be estimated as a

capacity of magnificence. Acquisition and Merger are the emergency circumstances factors

which impact the Barter capital institution area through recouping misfortunes for three

months and are normally taken from Barter Capital Market operations technology’s trends as

indicated in the study during the period of 2006 (Steiner, 2013).

Novell has built up a framework which is cautious towards operational perfection and

additionally effectiveness is measured through administrative consistency and security as a

component of Barter capital institution. In the greater part of nations that can be named

progress capital institutions, international capital manages an expanding offer of the Capital

Market operations segment. This analysis depends on a comparative evaluation of

productivity of international possessed and local claimed capital institutions. It has been

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noted that productivity of saves capital institutions with outside proprietorship is greater than

the proficiency of local capital institutions (Steiner, 2013).

Capital market trade policies, for example, the stochastic boondocks approach, utilize

econometric apparatuses to appraise the proficiency. Outskirts have been utilized for the

evaluation as it gives area to arbitrary blunders. Various factors utilized as a part of Indian

personnel and premium costs, the price of work, investment origins, and so forth. While

considering the cost productivity, international possession has affected emphatically on the

capital institutions of nations with change economies. The explanation for it is that

international capital institutions have better know how of the functioning and better

governance of corporate transactions. This analysis has left an area for additional contemplate

on the beginning of points of interest of an international possessed bank (Kumar, 2016).

It has contended that internationalization builds rivalry in the segment of Capital

Market operations and impacts effectiveness (Sarkar, 2007). However, an evaluation has been

led demonstrating bigger yet inefficient capital institutions of India. Arrangement producers

ought to guarantee that contestants have a fantastic administration and will exchange

innovation and aptitudes. This finding is predictable with a passage and develops principles

while considering exchange a restraining format and further determines rents of capital

institutions (Kumar, 2016).

The key finding from the evaluation of India is that absence of rivalry has negatively

influenced effective and becomes helpless (Chhaochharia, 2008). Another unordinary thing

can be inferred that outside passage basically does not make advertisers more aggressive or

effective. The market just ends up plainly aggressive when it is now thought with nearby or

international capital institutions. Another article discusses those client effectiveness

enhancements with more prominent self-administration use. If there is an occurrence of self-

administration input cost, then Barter capital institution is diminished. This issue precisely

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reflects the worry in the company efficiency writing that spotlights on strategies for

explaining multifaceted profitability of companies, given that it is additionally estimated as a

leftover idea (Siegel, 2014).

Conceivable clarifications for the contrasting productivity scores for the majors and

provincial capital institutions involve enhancement, innovative change, authoritative

rebuilding, diverse client bases, and the impacts of the globalization of services associated

with currency transactions (Pathak, 2010). This evaluation additionally inferred that

productivity of real capital institutions is expanding. Their profitability has likewise expanded

a considerable measure through the application of provincial capital institutions. If these

capital institutions experience unforeseeable circumstances, then their effectiveness will be

diminishing, and this will negatively impact on their benefits provided to the stakeholders.

This diminished efficiency is specifically corresponding to Capital Market operations

efficiency in Indian capital institutions. This pattern can be utilized as a part of an evaluation

to check the unmistakable components and their impacts on India capital segment (Viney,


Another analysis of Xue identified with client proficiency demonstrates self-benefit

through the boom of the Internet as it has a huge influence on individual administration

(Patrick and Tachi, 1986). Hence, it spares benefit conveyance costs and enhances client

effectiveness. In spite of customary way of thinking, it was discovered that no organization

can expands the levels of self-benefit harm client connections. In this way, Internet or Virtual

Capital Market operations services involve incentives to the viability and profitability of

Barter Capital Market operations services (Viney, 2011).

In the wake of perusing all articles, it can be presumed that proficiency is an

exceptionally wider term and taking care of all factors will make it more complex. In this

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manner, in order to get the more precise outcome, it is important to waitlist couple of factors

(Moore, 2012).


From the above analysis, for the purpose of expansion, India will result in a feasible

country which will enhance the business operations of ZEUS Consultant and help the

company in getting new clients. Furthermore, by launching the business operations in India,

ZEUS Consultant will be able to generate the highest return on investment. It can be

concluded that according to the latest review conducted by the famous United States Capital

Company, India is able to maintain its growth above eight percent during the period of 2020.

It is also estimated that India will surpass superpowers in the near future.

The labour market policy in India will be gradually deregulated with the span of time

and bring about significant changes in the domain of training and education. Therefore, as an

intern, it is advisable for the company to invest in India to attain a higher return on the


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