CAPITAL

MARKET
Presented by:
Sneha J Chouhan (B111207)

CAPITA
L

MARKE
T

Thus,
Capital Market is a place where
money is exchanged between people
who have excess of it, to those who
are in deficit.

EXAMPLE

ACE Textiles PVT.

Ltd.

Mr.
Ace

Wants to
expand
business

Makes a Business Deal with

GUCCI brand to export textile
cloth to their manufacturing unit

Where can he get the money from?

1. From Banks
Mr. Ace can approach banks, but
it will not prove to be a healthy
option because:
-Bank will charge him High rate
of interest.
- Lending of loans is a very
tedious task. Bank first
scrutinizes the papers/
documents, verifies them.
- Very time Consuming Process.
Thus, this idea is not an effective

2. Can Go Public and

get listed on the stock
companies.

Meaning of Capital Market

Capital Market is the part of financial
system which is concerned with raising
capital funds by dealing in Shares, Bonds,
and other long-term investments.
The market where Investment instruments
like bonds, equities and mortgages are
traded is known as the capital market.

The different types of financial instruments that

are traded in the capital markets are:
1. equity instruments
2. credit market instruments,
3. insurance instruments,
4. foreign exchange instruments,
5. hybrid instruments.

Significance ,Role or functions of

Capital Market

Mobilization of Savings
Capital Formation
Provision of Investment Avenue
Speed up Economic Growth and
Development
Proper Regulation of Funds
Service Provision

MAJOR SUPPLIERS OF FUNDS

IN THE CAPITAL MARKET
1. COMMERCIAL BANKS.
2. INSURANCE
COMPANIES.
3. BUSINESS
CORPORATIONS.
4. RETREMENT FUNDS.

MAJOR BORROWERS IN THE

CAPITAL MARKET
1. TREASURY
DEPARTMENTS.
2. CORPORATIONS.
3. SECURITIES
DEALERS.

Types of capital market

There are two types of capital market:
Primary market,
Secondary market

Primary Market
It

is that market in which shares,

debentures and other securities
are sold for the first time for
collecting long-term capital.
This market is concerned with
new issues. Therefore, the
primary market is also called
NEW ISSUE MARKET.

Secondary Market
The

secondary market is
that market in which the
buying and selling of the
previously issued
securities is done.

CAPITAL MARKET
INVESTMENT
Capital market investmenttakes
place through thebond marketand
thestock market.
The capital market is basically the
financial pool in which different
companies as well as the
government can raise long term
funds.

Capital market investments in

the stock market
The stock market is basically the trading
groundcapital market investmentin the
following:
i) Companys stocks
ii) Derivatives
iii) Other securities
The capital market investments in the
stock market take place by:
1) Small individual stock
investors
2) Large hedge fund traders.

STOCK EXCHANGE
COMPANIES
If an individual has some financial security
and he wills to sell it, he can approach the
Stock Exchange Companies which will
help him to sell or purchase his security
by the means of a Broker.
There are 23 stock exchanges in India.
In India we have Bombay stock exchange ,
National stock exchange and the rest 21
are Regional stock exchanges.

STOCK EXCHANGE
PLATFORM

There are three types of exchange

platforms in India:
1. Domestic Exchanges;
2. Regulatory Based.
3. International Exchanges;

Domestic Exchanges
Indian equities are traded on
three major national
exchanges:
1. MCX Stock Exchange Limited
(MCX-SX),
2. Bombay Stock Exchange
Limited (BSE) and
3. National Stock Exchange of
India Limited (NSE).

MCX Stock Exchange

MCX Stock Exchange Limited
(Multi Commodity Exchange),
Indias new stock exchange, is
recognized by the Securities and
Exchange Board of India (SEBI)
and RBI.
It is located at Andheri, Mumbai.
In line with global best practices
and regulatory requirements.
The Exchange received
permissions to deal in Interest
Rate Derivatives, Equity, Futures
and Options on Equity and
Wholesale Debt segments.
Mr. Joseph Massey, MD & CEO
Benchmark Index:SX40

Bombay Stock Exchange(BSE)

Called as Bombay Share Bazaar in

Hindi.
Located onDalal Street,Mumbai.
It is the10th largest stock exchange in
the world bymarket capitalisation. It is
Asias first Stock Exchange and one of
Indias leading exchange groups .
BSE provides an efficient and
transparent market for trading in equity,
debt instruments, derivatives, mutual
funds. It also has a platform for trading
in equities of small-and-medium
enterprises (SME).
Around 5000 companies are listed on
BSE making it world's No. 1 exchange in
terms of listed members
Mr. Ashish Chauhan is the MD & CEO
of BSE
Indexes: BSE SENSEX, BSE Small Cap,

National Stock Exchange (NSE)

NSE is called as Rashtriya Share
Bazaar in hindi & is Located in
Mumbai.
It is the11th largest stock exchangein
the world.
NSE is mutually owned by a set of
leading financial institutions, banks,
insurance companies and other
financial intermediaries in India.
The NSE's key index is theS&P CNX
Nifty, known as the NSENIFTY
(National Stock Exchange Fifty), an
index of fifty major stocks weighted by
market capitalisation.
Chitra Ramakrishnais the Managing
Director and CEO ofNational Stock
Exchange of India (NSE).

Other 21 Regional Stock Exchanges in

India

Bombay Stock Exchange

National Stock Exchange
Ahmedabad Stock Exchange
Bangalore Stock Exchange
Bhubaneshwar Stock
Exchange
Calcutta Stock Exchange
Cochin Stock Exchange
Coimbatore Stock Exchange
Delhi Stock Exchange
Guwahati Stock Exchange
Hyderabad Stock Exchange
Jaipur Stock Exchange
Ludhiana Stock Exchange

Madhya Pradesh Stock

Exchange
Madras Stock Exchange
Magadh Stock Exchange
Mangalore Stock
Exchange
Meerut Stock Exchange
OTC Exchange Of India
Pune Stock Exchange
Saurashtra Kutch Stock
Exchange
Uttar Pradesh Stock
Exchange
Vadodara Stock Exchange

REGULATORY
AUTHORITY
Regulatory authority is the one which
is under the government
surveillance.
A few Stock Exchange companies
follow the rules which are laid down
by the government of India.
Example:
1) SEBI:- (Securities Exchange Board
of India)
2) RBI:- (Reserve Bank of India)

Securities and Exchange

Board of India
SEBIprotects the interests
of investors in securities and
promotes the development
of the securities market.
The board helps in making
registration and regulate the
functioning.
SEBI conducts inspection
and thus prohibits fraudulent
practices.
Upendra Kumar Sinha is the
Chairman of SEBI.

RBI
RBIis the appex bank of India.
RBI is also known as the bankers bank.

Maintains price stability .

- Provides cost effective banking services to

the Public.
- Give the public adequate quantity of supplies
of currency notes and coins in good quality.
- Formulate implements and monitor the
monetary policy.
- Manage the Foreign Exchange.
- Issue new currency and coins and
exchange/destroy currency and coins not fit
for circulation.

International Exchanges
Due to increasing globalization, There is a
rising competition amongst various countries
to keep their market stable.
Therefore, it is important to keep track of
international financial markets for better
perspective and intelligent investment.

 NASDAQ, is an American stock

exchange. "NASDAQ" stands
forNational Association of
Securities Dealers Automated
Quotations.
It is located in the New York city,
New York, USA.
The NASDAQ is an electronic
exchange where stocks are
traded through an automated
network. It is where most
technology stocks are traded.
e.g. Facebook= FB
Microsoft = MSFT,

 TheLondon Stock
Exchangeis astock
exchangelocated in theCity of
Londonin the United Kingdom.
It is thefourth-largest stock
exchange in the world.
Deals in Equity, Derivaties etc.
Xavier Rolet,(CEO).
IndexesFTSE 100 Index
FTSE 250 Index
FTSE 350 Index
FTSE SmallCap Index
FTSE All-Share Index

Frankfurt Stock Exchange

It is situated in Frankfurt, Germany.
It is owned and operated by Deutsche
Brse.
The Frankfurt Stock Exchange has
over 90 percent of turnover in the
German market and a big share in the
European market.
The exchange has a few well-known
trading indices of the exchange, such
as DAX, DAXplus, CDAX, DivDAX,
LDAX, MDAX, SDAX, TecDAX, VDAX,
and EuroStoxx 50.
DAX is a blue-chip stock market index
consisting of the 30 major German
companies trading on the Frankfurt
Stock Exchange. Prices are taken from
the electronic Xetra trading system of
the Frankfurt Stock Exchange.

Various NEWS Channels which telecast

the Stock Prices on television.

CONCLUSIO
N

The lack of an advanced and vibrant

capital market can lead to
underutilization of financial
resources. The developed capital
market also provides access to the
foreign capital for domestic industry.
Thus capital market definitely plays a
constructive role in the over all
development of an economy.