Key Information about Capital Marketing
The capital market is the market in which all existing facilities and institutional arrangements are developed for borrowing and lending medium and long term funds. In simple term, the capital market is a market for raising and advancing money capital for investment purposes. Normally the private sector industries, agriculture and also the government have a large demand for long term funds, and in addition to that capital markets are also utilized for the economic development of the country. The state and the central government uses the support of capital market for developing infrastructure facilities such as transport, power, irrigation, communications etc. along with the development of basic industries. In a capital market, the supply of assets originates from several sources such as individual savers, corporate reserve funds, different banks, insurance agencies, specific money-related organizations and furthermore the Government.
Constituents of Capital Market
We can see the capital market is necessary for the growth and development of public and corporate enterprises of a country. Mainly the capital market is made up of borrowers, who need funds and the financial services who supply funds in the market. The capital market always offers an adequate amount of funds to any industry and business house at a reasonable rate which is required to result in high perspective yield and to make the borrowing worthwhile.
Capital Market Types
Mainly the Indian capital market is divided into two types they are:
- The guilt edged market
- The industrial securities market
- The Guilt Edged Market
This market is supported by the Reserve Bank of India for promoting semi-government and government securities. In the guilt-edged market, the value of securities are always stable, so this capital market fund is very much demanded by banks and other financial institutions.
- The Industrial Securities Market
The industrial securities market mainly deals with the shares and debentures of old and new companies. This part of the capital market is again divided into new issues of the market and stock exchange which is also known as the old capital market. The new issues market is one which raises new capital by selling shares, debentures, and cryptocurrency issued by companies. But while trading the cryptocurrencies one should first read Bitcoin Loophole full review. The stock exchange system mainly refers to the marketing set up of securities already issued by companies.
The capital market is again divided into two types
- Primary Market: it is a kind of new issue market which issue shares and debentures of various non-government public limited companies and they also raise new capital for government companies and issues public sector bond also.
- Secondary Market: it is a capital market comprised of stock exchange or industrial security market. Secondary market is engaged in buying and selling of industrial securities.