Capital Market
The capital market plays an important role in mobilising the savings and diverting them in productive investment. It is a medium of transferring the financial resources from surplus and wasteful areas to deficit and productive areas meaning transfer of money or capital from those who have surplus money to those who are in need of investment thus increasing the productivity and prosperity of the country.
It deals in long-term loans. It supplies industry with fixed and working capital and finances medium-term and long-term borrowings of the central, state and local governments. The common instruments used in capital market are shares, debentures, bonds, mutual funds, public deposits etc. The funds which flow into the capital market come from individuals who have savings to invest, the merchant banks, the commercial banks and non-bank financial intermediaries, such as insurance companies, finance houses, unit trusts, investment trusts, venture capital, leasing finance, mutual funds, building societies, etc.
The capital market functions through the stock exchange. A stock exchange is a market which facilitates buying and selling of shares, stocks, bonds, securities and debentures. It is not only a market for old securities and shares but also for new issues of shares and securities. In fact, the capital market is related to the supply and demand for new capital, and the stock exchange facilitates such transactions.
Funds flow into the capital market from individuals and financial intermediaries which are absorbed by commerce, industry and government. It thus facilitates the movement of stream of capital to be used more productively and profitability to increases the national income. It prides incentives to savers in the form of interest, dividend or bonus and transfers funds to investors, thus leading to capital formation.
The capital market encourages economic growth by leading to the development of commerce and industry through the private and public sector. In an underdeveloped country where capital is scarce, the absence of a developed capital market is a greater hindrance to capital formation and economic growth.
Indian Business News
Sunday April 18, 2021
Around 80 per cent of India’s corporate profits come from the top 20 companies. Most of these blue chips in financial services, IT, oil & gas, FMCG and capital goods will continue to do well. So, it makes sense to remain invested. But since valuations are high, the broader market is likely to outperform, going forward.
Saturday April 17, 2021
Debt-ridden Coffee Day Enterprises Ltd (CDEL) on Saturday said trading in its shares would be resumed at BSE and NSE from April 26
Saturday April 17, 2021
The Treasury report also said the COVID-19 crisis was likely to continue to affect current account positions over the next year
Saturday April 17, 2021
Clean Nordic power available for Nordic mining set to dwindle; electricity needed to mine Bitcoin surged 66-fold since 2015
Saturday April 17, 2021
Glenmark Pharmaceuticals on Saturday said its wholly-owned arm Glenmark Life Sciences has filed paperwork to go public
Saturday April 17, 2021
NFT stands for non-fungible token
Saturday April 17, 2021
As short-term rates continued to approach negative levels, expectations are growing that the Fed may soon lift the rate it charges for the loans to nonbanks at its reverse repo window, currently at 0%, as well as the interest it pays banks for excess reserves (IOER), which is 0.10%.
Saturday April 17, 2021
Saturday April 17, 2021
The investment made by switching from one plan of ELSS to other plan of ELSS is treated as fresh investments for tax purposes.
Saturday April 17, 2021
What are Dynamic Asset Allocation Funds and why have they been gaining traction recently?
Friday April 16, 2021
There were allegations of preferential access to Tick-By-Tick (TBT) data feed being given by the exchange to certain trading members, following which Sebi probed the matter
Friday April 16, 2021
Fortis Healthcare on Friday said its subsidiary, EHIRCL, received the notice on April 15, 2021
Friday April 16, 2021
A strong recovery in the rupee, which zoomed 58 paise, and a bullish trend in global equities supported the bourses on Friday, traders said
Friday April 16, 2021
The latest numbers from both countries show consumer spending boosting the recovery from the pandemic
Friday April 16, 2021
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