Merchant Bank

Topics: Stock market, Stock exchange, Stock Pages: 60 (17443 words) Published: March 26, 2011

1.1 Introduction

Capital markets are market for trading long-term financial securities, including ordinary shares, long-term debt securities such as debentures, unsecured loan stock and convertible bonds. Government bonds and other public sector securities such as Treasury bills and stocks are also traded on capital markets.

The main strength of merchant banking is not provision of finance but providing the whole range of inputs of innovative financial services, technical and managerial knowledge, competence and expert advice on legal and industrial matters needed by the user of funds for establishing a new business unit. Merchant banks play an important role in mobilizing small savings and channeling them to productive investment.

Since our capital market is not as efficient as others, yet it tries at best to create a strong, fair, efficient and effective market. Apart from they facilitate merchant bank so that they can help as possible as to organize such a valuable capital market mechanism.

1.2 Rationale of the study

The rationality of our study on capital market as well as its right hand merchant bank is to know and understand how they do their operation locally and globally. We, the students of Finance and Banking department should know top to bottom of the capital market. To study on this vital topic our motivation was our respected teachers and potential members of capital market and merchant banks who helps us to show the right way of finding our study topics and materials on which we can analyze.

1.3 Objective of the study

Some days ago, entire world faced a financial crisis. Analysts said it was horrible for world economy and the only reason was capital market operation. In advanced country, we see that they about all deals with capital market with some fictitious assets. They may overcome that problem because they know very much about capital market. If this type of problem would occur in our country, it was a financial disaster for our country where being a poor country we get some effect according to that crisis. For this reasons I do believe that we should know about the main premise of the capital market and its most important part, which does a lot of task in favor of capital market. The objective of study about capital market and merchant bank is simply a procedure of knowing how they can help to make strong financial market. The ultimate goal is to know about:

How merchant banks play vital role in economic development.
The procedures, by which capital market deal their business. Products of Capital market.
Beneficiary persons of capital market.
Problems, which are now, exist in capital market and try to find out the way where our sound capital market can run its own business. The relationship between capital market and merchant banks.
Products of merchant banks.
Advantages of merchant banks in favor of capital market and their clients. Some problems which a merchant bank is facing now.
Function of a merchant bank.
Right of merchant bank to its clients as well as its superior capital market. Prospect of capital market and merchant banking operation in coming future. The technical instrument, which are used in doing their business. The complex rules and regulation, which they have to follow. The protection mechanism, which they should maintain are not appropriate. Overall investor’s advantages from capital market and also from merchant bank.

1.4 Scope of the study

At the time of study we realize that our scope of doing some research work as well as analyze on capital market is so spread though our country has not develop yet. There is a huge research gap in our country as well.

1.5 Methodology of the study

This paper is worked for calculating market capitalization through merchant banking operation which helps to economic development of our country. To collect data and research things we follow the two vital concepts of collecting data that are, (i)...
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