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Global financial market


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description of instruments, structure and types of global financial market.

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Global financial market

  1. 1. Presented by:- Meenakshi Chhangani
  2. 2.  Broad term describing any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivative s.  Financial markets are typically defined by having transparent pricing, basic regulations on trading, costs and fees and market forces determining the prices of securities that trade.
  3. 3. 1) Mobilisation of Savings and their Channelization into more Productive Uses: Financial market gives impetus to the savings of the people. This market takes the uselessly lying finance in the form of cash to places where it is really needed.
  4. 4.  Facilitates Price Discovery: The price of any goods or services is determined by the forces of demand and supply. Like goods and services, the investors also try to discover the price of their securities.The financial market is helpful to the investors in giving them proper price.
  5. 5. (3) Provides Liquidity to Financial Assets:  It means that the investors can invest their money, whenever they desire, in securities through the medium of financial market.  They can also convert their investment into money whenever they so desire.
  6. 6.  (4) Reduces the Cost ofTransactions: The financial market makes available every type of information without spending any money. In this way, the financial market reduces the cost of transactions.
  7. 7.  Free flow of international capital  High market power at home  Flexibility in financing both current account deficit and recycling current account surplus  rapid spreading of technology advancement in mode of payments.  Increased methods of measuring market risk exposures.
  8. 8.  Facilitates smooth consumption by borrowing or diversifying abroad  Broad ownership also increases issuer’s products  There is a brokers and dealers benefit as they can broader their product line  Large scope of business and ownership all over the globe
  9. 9.  Risk in electronic trading as it includes chances of forgery  Coordination problems between principal and agent  Explanation of the monetary policy can be misunderstood  Risk in structural changes in economic environment due to monetary policies all over the world
  10. 10.  Financial systems risks and advances  Hedge fund industry  Strengthening market and institutional resilience  Sovereign wealth funds
  11. 11.  Continued growth of global financial assets  Depth of financial markets  Regulation of International Securities Market  Raise in the level of foreign investment
  12. 12. International money market Global financial market Global foreign exchange market International capital market
  13. 13.  The market in which participants from around the world are able to buy, sell, exchange and speculate on different currencies. International currency markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, retail forex brokers and investors.
  14. 14. (i) Existence of Central Bank, (ii) Highly organized commercial Banking System (iii) Existence of sub-markets (iv) Healthy competition in sub-markets (v) Integrated structure of money market (vi) Availability of proper credit instruments. (vii) Adequacy and Elasticity of funds (viii) International attraction (ix) Uniformity of interest rates (x) Stability of prices and (xi) Highly developed Industrial system
  15. 15. Instruments 1. • Eurocurrency 2. • Euro credits 3. • Euro certificate of deposits 4. • Banker’s acceptance 5. • Floating rate notes 6. • Euro commercial papers
  16. 16.  Capital markets are markets for buying and selling equity and debt instruments.  Capital markets channel savings and investment between suppliers of capital such as retail investors and institutional investors, and users of capital like businesses, government and individual.  Consists of primary and secondary market.
  17. 17. International capital market International equity market International bond market Euro currency market Euro credit market Foreign bond market Eurobond market
  18. 18. EQUITY  American depository receipts [ADR]  Global depository receipts [GDR] BOND  International bank loans  Euro notes market  Euro bonds