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Vincent Konadu Tawiah

ROLE OF CAPITAL MARKET

2014
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INTRODUCTION

 Financial market
 Types of financial market
 Forex market
 Capital market
 Money market
 Credit market
 Derivative market

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CAPITAL MARKET
 Is a financial market where investment instruments
like bonds and equities are bought and sold.

 Capital market primary role is to connect investors


who have surplus funds to companies who are running
deficit or need the funds

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TYPES CAPITAL MARKET

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PRIMARY MARKET
Capital instrument such as shares and bond are sold to
the public for the first time. (IPO)

Is mainly concerned with new issues so is a called NEW


ISSUE MARKET

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SECONDARY MARKET
Is that market in which the buying and selling of the
previously issued securities is done

It create liquidity in securities.

Also called stock exchange market

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PLAYERS OF CAPITAL MARKET
 INVESTORS: usually individuals or group of people
who buy or invest their surplus fund

 COMPANIES OR INDUSTRIES; they seek surplus fund


from investors

 ECONOMY/ GOVERNMENT; referee or regulator of


the market

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WHAT IS TRADED
 Equity instruments

 Insurance instruments

 Bond instruments

 Hybrid instrument

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ROLE OF CAPITAL MARKET
INVESTORS
 Reduction in risk through diversification;
various platform for investment

 Liquidity; easy to convert investment to cash

 Information dissemination

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COMPANY OR INDUSTRY
 Source of finance

 Continuous availability of fund

 Measure of performance

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ECONOMY
 Mobilization of savings

 Capital formation

 Allocation of resources among companies

 Collection of information; SENSEX NIFTY index

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WRAP UP
 A country with strong capital market like our INDIA will

continue to experience high growth in industrialization

through effective capital formation which will eventually

result in speedy economic growth and development.

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REFERENCE
 www.slideshare.net/tejasvibhosale/capital-market-ppt
 www.authorstream/presentation
 www.iepf.gov.in/IEPF/Role.html

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