CAPITAL

MARKET
3rd sem MBA
‘B’ Section
Presented By: Nayana HY
Abhishek MR
Meaning

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 were investment instrument like bonds,

equity and mortgages are traded is known as the
capital market.
TYPES OF FINANCIAL INSTRUMENTS
TRADED IN CAPITAL MARKETS

1.Equity Shares

2.Preference Shares

3.Bonds , Debentures
ROLE AND FUNCTION OF CAPITAL
MARKET
Mobilization of savings

Capital formation

Provision of investment avenue

Speed up economic growth and development

Service provision
SUPPLIERS OF FUNDS IN THE
CAPITAL MARKET

o Commercial banks

o Insurance companies

o business corporation

o Retirement funds
TYPES OF CAPITAL MARKET

There are two types of capital market:

Primary market,

Secondary market
 A)PRIMARY MARKET

It is that market in which shares , dentures 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
METHODS OF RAISING LONG TERM CAPITAL:

 PRIVATE PLACEMENT
 RIGHTS ISSUE
 PREFERENTIAL ISSUE
 PUBLIC ISSUE(IPO/FPO)
 B)SECONDARY MARKET
 The secondary market is that market in which the
buying and selling of the previously issued
securities is done.
 EQUITY
MARKETS

DERIVATIVES
CASH(SPOT)
MARKET

FUTURES OPTIONS
CAPITAL MARKET INVESTMENT

Capital market investment takes place through the

bond market and the stock market.
The capital market is basically financial pool in
which different companies as well as government
can rise long term funds.
CAPITAL MARKET INVESTMENT IN
THE STOCK MARKET
Stock market is basically the trading ground capital
market investment in the following :
1. company’s stock
2. derivatives
3. other securities

The capital market investment in the stock market take

place by
1. small individual stock investors
2. large hedge fund traders
STOCK EXCHANGE PLATFORM

There are three types of exchange platforms in India :

1. Domestic exchanges
2. Regulatory based
3. International exchanges
DOMESTIC EXCHANGE

Indian equities are traded on three major exchange

1.Metropolitan Stock Exchange of India limited
(MSE-SX)
2.Bombay Stock Exchange (BSE)
3.National Stock Exchange (NSE)
1)THE METROPOLITAN STOCK EXCHANGE OF
INDIA LTD

 India’s eighth stock exchange recognised by SEBI.

 It is located in Mumbai, founded in 2008. CEO- Mr.Udai Kumar.
 The exchange received permission to deal in Interest Rate
Futures(IRF),capital market, futures and options and debt market
segments.
 Its current shareholders include Indian public and private sector
banks, investors and domestic financial institutions.
 Benchmark index :SX40
2)BOMBAY STOCK EXCHANGE (BSE)
Called as “Bombay share bazaar” in Hindi
Located on Dalal street, Mumbai, established on 10th july 1875.
It is the 10th largest stock exchange in the world by market
capitalization. It is Asia's first stock exchange.
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)
Mr. Ashish Chauhan is the MD & CEO of BSE
Indices: BSE SENSEX, BSE small cap, BSE mid-cap, BSE 500.
The trading platform called the BOLT- BSE’s Online Trading.
 3)NATIONAL STOCK EXCHANGE (NSE)

 NSE is called as “Rashtriya share bazaar” in Hindi and is located in

Mumbai
 It is the 11th largest stock exchange in the world .
 NSE is the mutually owned by the set of leading financial
instructions, banks, insurance companies and other financial
intermediaries in India
 The NSE’s key index is the S&P CNX nifty, know as the NSE
NIFTY 50 (national stock exchange fifty), an index of fifty major
stocks weighted by market capitalization.
 Chitra Ramakrishna is the MD and CEO of NSE.
 The trading platform called the NEAT- National Exchange for
Automated Trading.
 REGULATORY AUTHORITIES

 Regulatory authorities is the one which is under the

government surveillance.
 They are:
1. SEBI (securities exchange board of India)
2. RBI (reserve bank of India)
3. Ministry of Finance.
1)SECURITIES AND EXCHANGE
BOARD OF INDIA
 SEBI Act 1992.
 SEBI protect the interests of investors in securities and promotes
and regulating the Indian securities markets.
 The board helps in making registration and regulate the
companies.
 Foreign Portfolio Investors must register to participate.
 SEBI conducts inspection and thus prohibits fraudulent practices.
 Ajay tyagi is the present chairman of SEBI
2)RESERVE BANK OF INDIA (RBI)

 RBI Act 1934.

 Implementing monetary and credit policies.
 Working towards the development of Indian financial system.
 Regulates financial markets and system through different
legislations.
 It regulates the foreign exchange markets through the Foreign
Exchange Management Act 1999.
3) THE MINISTRY OF FINANCE

 To formulate the policies related to the orderly growth

and development of the securities markets(i.e share,
debt and derivatives).
 Protecting the interest of the investors.
 Building regulatory and market institutions.
 Strengthening investor protection mechanism.
INTERNATIONAL EXCHANGES
Due to increasing globalization, there is a rising
completion amongst various countries to keep their market
stable
Therefore, it is important to keep track of international
financial markets for better perspectives and intelligent
investment
 A)NASDAQ

 NASDAQ is an American exchange. “NASDAQ” stands for

(NATIONAL ASSOCIATION OF SECURITIES DEALERS
AUTOMATED QUOTATIONS )
 It is located in the new York city, new York, USA.
 The NASDAQ is an electronic exchange where stock are traded
through an automated network. It is where most technology
stocks are traded
 E.g. Facebook =FB
Microsoft =MSFT
Dell computers=DELL
Cisco=CSCO
 B)LONDON STOCK EXCHANGE

 The LANDON STOCK EXCHANGE is a stock exchange

located in the city of London in the united kingdom.
 It is the 4th largest stock exchange in the world
 Deals in equity, derivatives etc.
 Xavier rolet(CEO)
 Indices: FTSE 100 index
FTSE 250 index
FTSE 350 index
FTSE smallcap index
FTSE all-share index
C)FRANKFURT STOCK EXCHANGE
 It is the situated in Frankfurt, German
 It is owned and operated by deutsche borse.
 The Frankfurt stock exchange has over 90 percent of turn over in
the German market and a big share in the European market.
 The exchange has a few well known trading indices , 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. Price
are taken from the electronic xetra trading system of the Frankfurt
stock exchange