Role of Capital Markets in Economic Development
Explore the meaning, characteristics, and role of capital markets in mobilizing savings, facilitating investments, and boosting economic growth. Learn how this market acts as a link between borrowers and lenders, enabling valuation of financial securities and hedging risks.
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Presentation Transcript
Dr. Deepa Soni Assistant Professor Department of Economics MLSU(UCSSH) UDAIPUR
Meaning of Capital Market Capital market is a market which deals with the purchase and sell of medium term and long-term (more than a year) financial securities like bonds , stocks etc . Capital Market constitutes all long-term borrowings from banks, financial institutions and foreign markets and raising capital by issuing various securities such as shares, debentures, bonds etc. Thus, the participants are individuals and institutions.
Characteristics of capital Market It deals with the medium and long term Investment. It mobilizes the savings and serves as a link between borrowers and lenders. It is helpful in capital formation (as funds are especially for purchase of fixed Assets). It includes both primary and secondary market Role of Intermediaries like brokers, Merchants. Transparency and timely information. It is primarily operated and regulated under the Government Authority i.e. Securities and Exchange board of India. It deals with variety of instrument like Bonds, Debentures, shares etc.
Role/Functions of Capital Market Mobilisationof Savings/resources for investments. Modernization and Rehabilitation of Industries It facilitate buying and selling of securities(simplified transaction procedure and transaction cost with low settlement time). Boost Economic Growth and Development Enabling wider participation. It enables valuation and determining the prices of financial securities i.e Bonds and Debts. Hedge the Risks of securities.
