Capital markets are a type of financial markets. It, further, comprises of two important components: It is an effective booster for Small and Medium Enterprises where raising of capital is a primary concern. The small investors who were not interested to buy securities from the market are now showing preference in favour of shares and debentures.
The other major economic benefit generated by development of the Capital Markets is improved allocation of Risk. Information Technology led to paradigm shift and revolutionized the structure and functioning of Capital Markets by reducing information asymmetry and assisting faster settlements of transactions.
For a speedy economic development adequate capital formation is necessary. The existence of such an institution encourages people to invest in productive channels.
Primary markets deal with newly issued stocks and securities whereas secondary market deals with already issued ones. In fact, capital markets are the most popularly followed financial markets. Such funds are primarily utilized for long-term purposes such as starting a new project or modification of an old project.
A well-developed money market is essential for a modern economy.
In this way, it facilitates and promotes the process of economic growth in the country. Rolling Settlement Rolling settlement is an important measure to enhance the efficiency and integrity of the securities market. Financial Markets are typically defined by having transparent pricing, basic regulations on trading, costs and fees and market forces determining the prices of securities that trade.
NSE has introduced inter-regional clearing facilities. The acceptance houses and discount markets help in financing foreign trade. Secondary Market The secondary market, primarily consisting of stock exchange provides a forum for buy-sell of already issued securities.
Buy Back Of Shares Sincecompanies are allowed to buy back of shares. With the development of capital, market, the banking and non-banking institutions provide facilities, which encourage people to save more. With the development of financial institutions, capital becomes more mobile, interest rate falls and investment increases.
Buoyed by internal economic factors and foreign capital flows, Indian markets are globally competitive, even in terms of pricing, efficiency and liquidity.
US sub prime crisis: The financial crisis facing the Wall Street is the worst since the Great Depression and will have a major impact on the US and global economy.5/5(1). Indian Capital Market. History of Indian Capital Markets sgtraslochi.comsram The history of the Indian capital markets and the stock market, in particular can be traced back to when the American Civil War began.
The opening of the Suez Canal during the s led to a tremendous increase in exports to the United Kingdom and United States.
Indian Capital markets are a type of financial markets. It is a market for buying and selling financial securities. It acts a conduit in the. Taking into account the role in the market economy, the capital market occupies an important place, through their specific mechanisms, succeeding to give its contribution to the economic.
Capital Market plays a crucial and effective role in the economic development of a nation. It provides the financial resources needed for the long term and sustainable development of the different sectors of the economy.
The researchers have presented Introduction and investment, Role of investment in economic development of the nation, Developments in the Indian capital markets, SEBI and the regulation of securities markets, Report of the committee under the chairmanship of Justice D.P. Wadhwa with an aim to know the role of capital market in India.Role of capital market in indian economy