Professional Documents
Culture Documents
LEARNING OBJECTIVES
2
Explain
CAPITAL MARKETS
3
Capital
1.
2.
3.
Semi-Strong Form of
Efficiency
The
10
Attributes of a Perfect
Capital Market
1.
2.
3.
4.
5.
6.
No entry Barriers.
Large Number of Buyers and Sellers.
Divisibility of financial assets.
Absence of transaction costs.
No tax differences.
Free Trading.
11
Three significant
imperfections of Capital
Tax asymmetries
markets
Information
asymmetries
Transaction costs
12
CAPITAL MARKETS IN
INDIA
Primary
market
Secondary market
13
PRIMARY CAPITAL
MARKET IN INDIA
Primary
Financial Instruments
14
Equity
Ordinary shares
Preference shares
Debentures
Convertible debentures
Warrants
Cumulative convertible preference shares (CCPS)
Derivative securities
Borrowings from financial institutions
15
Private Placement
16
Instead
17
Euro Issues
18
Companies
Euro
Government Securities
19
Both
Companies
In
21
22
Cont
23
5.
6.
7.
24
SECONDARY MARKETS IN
INDIA
Secondary
Stock
25
market by:
27
Secondary Market:
Selected Indicators
28
Government Securities
Market
The
Derivatives Market
29
Dematerialization
Trading
Rolling
settlement
Circuit breaker
of shares
32
UTIs
33
Broad categories of
Mutual Funds
Closed-ended
mutual funds
Open-ended fund
34
funds
Growth funds
Balanced funds
Tax saving funds
Sector-based funds
Simplicity
Diversification
Professional management
Affordability
Flexibility
36
Drawbacks of Mutual
Funds
High
Index Fund
37
38
Advantages: Index
Funds
Less expenses
Low research cost
Regular follow-up
Hedge Fund
40
Positive
returns
Risk reduction
Wide choices
High returns
Ideal investment
Better diversification