Comparative Analysis of Capital Market
EXECUTIVE SUMMARY
A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year. Capital markets may be classified as primary markets and secondary markets. In primary markets, new stock or bond issues are sold to investors via a mechanism known as underwriting. In the secondary markets, existing securities are sold and bought among investors or traders, usually on a securities exchange, over-the-counter, or elsewhere.
The capital market is important to a country’s economic and social system. It plays the crucial roles of capital raising for public and private sectors, promoting balance and stability in the financial system, decreasing dependency on the banking sector, driving the economy forward and creating jobs, as well as being an alternative method for savings. A strong capital market will lessen the impact of economic fluctuations which can be compounded by the fast-flowing nature of capital.
Indian securities markets have undergone many changes during the last decade. Exponential growth in trading volumes is pushing existing trading systems and processes to capacity and increasing settlement risk. With Indian market moving to a T+3 rolling settlement cycles in line with global markets, SEBI is continuing its efforts to increase the efficiency and transparency in Indian markets. This would result in lowering of trade costs and make Indian markets a more attractive destination for global investors. Indeed it has been SEBI endeavor to make the Indian markets, one of the most competitive and efficient markets of the world. The move from a 5 day settlement period to a three day period requires firms to streamline trading processes by way of a foolproof, faster, cost effective and universally acceptable mode of communication among market participants. With changes happening in rapid succession,
A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year. Capital markets may be classified as primary markets and secondary markets. In primary markets, new stock or bond issues are sold to investors via a mechanism known as underwriting. In the secondary markets, existing securities are sold and bought among investors or traders, usually on a securities exchange, over-the-counter, or elsewhere.
The capital market is important to a country’s economic and social system. It plays the crucial roles of capital raising for public and private sectors, promoting balance and stability in the financial system, decreasing dependency on the banking sector, driving the economy forward and creating jobs, as well as being an alternative method for savings. A strong capital market will lessen the impact of economic fluctuations which can be compounded by the fast-flowing nature of capital.
Indian securities markets have undergone many changes during the last decade. Exponential growth in trading volumes is pushing existing trading systems and processes to capacity and increasing settlement risk. With Indian market moving to a T+3 rolling settlement cycles in line with global markets, SEBI is continuing its efforts to increase the efficiency and transparency in Indian markets. This would result in lowering of trade costs and make Indian markets a more attractive destination for global investors. Indeed it has been SEBI endeavor to make the Indian markets, one of the most competitive and efficient markets of the world. The move from a 5 day settlement period to a three day period requires firms to streamline trading processes by way of a foolproof, faster, cost effective and universally acceptable mode of communication among market participants. With changes happening in rapid succession,