1. From Banks
Mr. Ace can approach banks, but it will
not prove to be a healthy option because:
-Bank will charge him High rate of
- Lending of loans is a very tedious task.
Bank first scrutinizes the papers/
documents, verifies them.
- Very time Consuming Process.
Thus, this idea is not an effective one.
2. Can Go Public and
get listed on the
Meaning of Capital Market
• 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 where Investment instruments
like bonds, equities and mortgages are
traded is known as the capital market.
• The different types of financial instruments that
are traded in the capital markets are:
1. equity instruments
2. credit market instruments,
3. insurance instruments,
4. foreign exchange instruments,
5. hybrid instruments.
Significance ,Role or functions of
• Mobilization of Savings
• Capital Formation
• Provision of Investment Avenue
• Speed up Economic Growth and Development
• Proper Regulation of Funds
• Service Provision
MAJOR SUPPLIERS OF FUNDS
IN THE CAPITAL MARKET
1. COMMERCIAL BANKS.
2. INSURANCE COMPANIES.
3. BUSINESS CORPORATIONS.
4. RETREMENT FUNDS.
MAJOR BORROWERS IN THE CAPITAL
1. TREASURY DEPARTMENTS.
3. SECURITIES DEALERS.
Types of capital market
There are two types of capital market:
It is that market in which shares,
debentures and other securities are sold
for the first time for collecting long-term
This market is concerned with new
issues. Therefore, the primary market is
also called NEW ISSUE MARKET.
CAPITAL MARKET INVESTMENT
Capital market investment takes place through
the bond market and the stock market.
The capital market is basically the financial
pool in which different companies as well as
the government can raise long term funds.
Capital market investments in the
The stock market is basically the trading
ground capital market investment in the
i) Company’s stocks
iii) Other securities
The capital market investments in the stock
market take place by:
1) Small individual stock investors
2) Large hedge fund traders.
STOCK EXCHANGE COMPANIES
• If an individual has some financial security and
he wills to sell it, he can approach the Stock
Exchange Companies which will help him to
sell or purchase his security by the means of a
• There are 23 stock exchanges in India.
• In India we have Bombay stock exchange ,
National stock exchange and the rest 21 are
Regional stock exchanges.
STOCK EXCHANGE PLATFORM
• There are three types of exchange platforms in
1. Domestic Exchanges;
2. Regulatory Based.
3. International Exchanges;
• Indian equities are traded on three
major national exchanges:
1. MCX Stock Exchange Limited (MCX-
2. Bombay Stock Exchange Limited
3. National Stock Exchange of India
MCX Stock Exchange
• MCX Stock Exchange Limited
(Multi Commodity Exchange),
India’s new stock exchange, is
recognized by the Securities and
Exchange Board of India (SEBI) and
• It is located at Andheri, Mumbai.
• In line with global best practices
and regulatory requirements.
• The Exchange received
permissions to deal in Interest
Rate Derivatives, Equity, Futures
and Options on Equity and
Wholesale Debt segments.
• Mr. Joseph Massey, MD & CEO
• Benchmark Index: SX40
Bombay Stock Exchange (BSE)
• Called as “Bombay Share Bazaar ” in Hindi.
• Located on Dalal Street, Mumbai.
• It is the 10th largest stock exchange in the world
by market capitalisation. It is Asia’s first Stock
Exchange and one of India’s leading 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).
• Around 5000 companies are listed on BSE making
it world's No. 1 exchange in terms of listed
• Mr. Ashish Chauhan is the MD & CEO of BSE
• Indexes: BSE SENSEX, BSE Small Cap, BSE Mid-Cap,
National Stock Exchange (NSE)
• NSE is called as “Rashtriya Share
Bazaar” in hindi & is Located in
• It is the 11th largest stock
exchange in the world.
• NSE is mutually owned by a set of
leading financial institutions, banks,
insurance companies and other
financial intermediaries in India.
• The NSE's key index is the S&P CNX
Nifty, known as the
NSE NIFTY (National Stock Exchange
Fifty), an index of fifty major stocks
weighted by market capitalisation.
• Chitra Ramakrishna is the Managing
Director and CEO of National Stock
Exchange of India (NSE).
• Regulatory authority is the one which is under
the government surveillance.
• A few Stock Exchange companies follow the
rules which are laid down by the government
1) SEBI:- (Securities Exchange Board of India)
2) RBI:- (Reserve Bank of India)
Securities and Exchange Board
• SEBI protects the interests of
investors in securities and
promotes the development
of the securities market.
• The board helps in making
registration and regulate the
• SEBI conducts inspection and
thus prohibits fraudulent
• Upendra Kumar Sinha is the
Chairman of SEBI.
• RBI is the appex bank of India.
• RBI is also known as the banker’s bank.
- Maintains price stability .
- Provides cost effective banking services to the
- Give the public adequate quantity of supplies
of currency notes and coins in good quality.
- Formulate implements and monitor the
- Manage the Foreign Exchange.
- Issue new currency and coins and
exchange/destroy currency and coins not fit
• Due to increasing globalization, There is a rising
competition amongst various countries to keep their
• Therefore, it is important to keep track of international
financial markets for better perspective and intelligent
• NASDAQ, is an American stock exchange.
"NASDAQ" stands for National
Association of Securities Dealers
• It is located in the New York city, New
• The NASDAQ is an electronic exchange
where stocks 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.
• The London Stock Exchange is a stock
exchange located in the City of
London in the United Kingdom.
• It is the fourth-largest stock exchange
in the world.
• Deals in Equity, Derivaties etc.
• Xavier Rolet, (CEO).
• IndexesFTSE 100 Index
FTSE 250 Index
FTSE 350 Index
FTSE SmallCap Index
FTSE All-Share Index
Frankfurt Stock Exchange
• It is situated in Frankfurt, Germany.
• It is owned and operated by Deutsche
• The Frankfurt Stock Exchange has over
90 percent of turnover in the German
market and a big share in the European
• The exchange has a few well-known
trading indices of the exchange, such as
DAX, DAXplus, CDAX, DivDAX, LDAX,
MDAX, SDAX, TecDAX, VDAX, and
• DAX is a blue-chip stock market index
consisting of the 30 major German
companies trading on the Frankfurt
Stock Exchange. Prices are taken from
the electronic Xetra trading system of
the Frankfurt Stock Exchange.
• The lack of an advanced and vibrant capital
market can lead to underutilization of
financial resources. The developed capital
market also provides access to the foreign
capital for domestic industry. Thus capital
market definitely plays a constructive role in
the over all development of an economy.