This Powerpoint point presentation is based on the topic of Financial Markets. Which includes various types of markets, their features, financial institutions etc.

1. Submitted To: Submitted By:
Mrs. Meenakshi Arya Ananya
(P.G.T, B.S.T) 24(XII-C1)
BUSINESS PROJECT
(SESSION 2018-19)

2. PROJECT ON
FINANCIAL
MARKETS

3. PREFACE
It is to Certify that Miss Ananya of Class
XII(C1) Commerce of L.R.S DAV Sr. Sec. School,
Abohar has completed her project under my
supervision and guidance . She has taken
utmost sincerity, and taken proper care.
I Certify that her project is upto my
expectation and the given guidelines by C.B.S.E.
Teacher’s Signature

4. ACKNOWLEDGEMENT
I am very thankful to my Business
Management Teacher, Mrs. Meenakshi Arya
who helped me in analyzing the “Financial
Markets”. It made my topic more clear, and
enhanced and helped me to realize the
importance of my topic.
ANANYA
Student’s Signature

5. I N D E X
 DEFINITION OF PROJECT
 STEPS OF MAKING PROJECT
 IMPORTANCE OF PROJECT
 TYPES OF PROJECT
 INTRODUCTION OF
FINANCIAL MARKETS
 FUNCTIONS
 TYPES OF FINANCIAL
MARKETS
 MONEY MARKET
INSTRUMENTS
 CALL MONEY
 TREASURY BILLS
 COMMERCIAL BILLS
 COMMERCIAL PAPERS
 CERTIFICATE OF DEPOSIT
 PRIMARY v/s SECONDARY
MARKETS
 METHODS OF FLOATING
NEW ISSUES
 STOCK EXCHANGE
 FUNCTIONS OF STOCK
EXCHNAGE
 SEBI
 OBJECTIVES OF SEBI
 FUNCTIONS OF SEBI

6. WHAT IS PROJECT?
A Project is an individual or collaborative
enterprise, possibly involving research or
design, that is carefully planned, usually
by the project assigned team, to achieve a
particular aim.

7. STEPS OF MAKING PROJECT
Initiation
Planning & Design
Execution
Monitoring & Controlling
Closing

8. IMPORTANCE OF PROJECT
• Project management is important because it ensures the Right
People do Right things, at the right time. it ensures proper
project process is followed throughout the project lifecycle.
• Project management is important because it ensures what is
being delivered, is right, and will deliver real value against the
business opportunity.
• Project management is important because it brings leadership
and direction to projects.
• Project management is important because it learns from the
successes and failures of the past.
• Project management is important because it ensures there’s a
proper plan for executing on strategic goals.
• Project management is important because it ensures proper
expectations are set around what can be delivered, by when, and
for how much.

9. TYPES OF PROJECT
BASED ON CONTENT BASED ON PARTICIPATING
ORGANISATIONS
BASED ON COMPLEXITY
Construction Projects Internal Projects Simple Projects
IT Projects Departmental Projects Complex Projects
Product Development
Projects
Cross unit Projects Mega Projects
R&D Projects External Projects
Organization Development
Projects
Cultural Projects
Logistics Projects
Marketing Projects
Community Projects
Basically there are Three Major Types of Projects, these are as below

10. INTRODUCTION
A financial market is a market for the creation and exchange of
financial assets.
Creation of financial assets takes place when a company issues
new shares and debentures. Exchange of financial assets
implies purchase and sale of existing shares, debentures and
bonds.
A financial market helps to link the household(savers) and
business firms(investors) by mobilising funds between them.
In doing so it performs the ‘allocation function’.
Allocation function of financial market refers to allocating or
directing funds available for investment into their most
productive investment opportunity. The process by which
allocation of funds is done is called “financial intermediation”.

11. FUNCTIONS OF FINANCIAL MARKET
• (1) Mobilization of Savings and their Channelization into more Productive Uses:
Financial market facilitates the transfer of saving from savers to investors. It gives
savers the choice of different investment and thus helps to channelize surplus
funds into the most productive use.
• (2) Facilitates Price Discovery:
in the financial market, the households are suppliers of funds and business firms
represent the demand. The interaction between them helps to establish a price for
the financial asset which is being traded in market.
• (3) Provides Liquidity to Financial Assets:
Financial market facilitate easy purchase and sale of financial asset. In doing so, they
provide liquidity to financial assets so that they can be easily converted into cash
whenever required.
• (4) Reduces the Cost of Transactions:
Financial market provide valuable information about securities being traded in the
market and thus help to save time, effort and money of both the buyers and sellers
of a financial market.

12. TYPES OF FINANCIAL MARKET

13. BASIS FOR COMPARISON MONEY MARKET CAPITAL MARKET
Meaning A segment of the financial market
where lending and borrowing of
short term securities are done.
A section of financial market
where long term securities are
issued and traded.
Nature of Market Informal Formal
Financial instruments Treasury Bills, Commercial Papers,
Certificate of Deposit, Trade
Credit etc.
Shares, Debentures, Bonds,
Retained Earnings, Asset
Securitization, Euro Issues etc.
Institutions Central bank, Commercial bank,
non-financial institutions, bill
brokers, acceptance houses, and
so on.
Commercial banks, Stock
exchange, non-banking
institutions like insurance
companies etc.
Risk Factor Low Comparatively High
Liquidity High Low
Purpose To fulfill short term credit needs
of the business.
To fulfill long term credit needs
of the business.
Time Horizon Within a year More than a year
Merit Increases liquidity of funds in the
economy.
Mobilization of Savings in the
economy.
Return on Investment Less Comparatively High

14. MONEY MARKET INSTRUMENTS
Call
money
Treasury
bill
Commercial
bill
Commercial
paper
Certificate
of deposit

15. • It is a method by which commercial banks borrow from
each other to be able to maintain cash balance, called
cash reserve ratio(CRR),as required by the reserve bank
of India.
• Call money is a short term finance repayable on
demand, with a maturity period of one day to 15 days.
The interest rate paid on call money loans is known as
the call rate. It is highly fluctuating rate that changes
from day to day and sometimes even from hour to
hour.
CALL MONEY

16. • A Treasury bill is an instrument issued by
RBI(in the form of promissory note) on
behalf of the central government to meet
its short-term requirements of funds.
• It is highly liquid, has assured returns and
negligible risk of default.
• They are available for a minimum
amount of Rs. 25000 and in multiples
thereof.
• Treasury bills are also known as “Zero
Coupon Bonds” since they do not pay any
interest but the issue price is less than the
redemption value. This difference is the
interest receivable on them.
TREASURY BILLS

17. • A commercial bill is a bill of exchange
used to finance the working capital
requirements of business firms. It is a
short-term, negotiable and self-
liquidating instrument.
• When goods are sold on credit, the seller
draws a bill of exchange and the buyer
accepts it. On being accepted, the bill
becomes a marketable instrument and is
called a trade bill. A trade bill can be
discounted with the bank if the seller
needs funds before the date of maturity
of the bill. When a trade bill is accepted
by a commercial bank, it is known as a
commercial bill.
COMMERCIAL BILLS

18. • Commercial paper is an instrument
issued by a large and creditworthy
companies to raise short-term funds
at lower rates of interest than the
market rates.
• It is an unsecured, negotiable
promissory note, having maturity
period of 15 days to one year.
• It is sold at a discounted and
redeemed at par.
• The purpose of issue of a commercial
paper is to provide short-term funds
for seasonal and working capital
needs, e.g: bridge financing.
COMMERCIAL PAPERS

19. • Certificate of Deposit are
short-term, unsecured,
negotiable instruments, issued
by commercial banks or
development financial
institutions to individual,
corporation and companies.
• They are issued during periods
growth of banks is slow but
the demand for credit is high.
• These help to mobilise a large
amount of money for short
periods.
CERTIFICATE OF DEPOSIT

20. PRIMARY MARKET v/s SECONDARY MARKET

21. METHODS OF FLOATING NEW ISSUES IN THE PRIMARY
MARKET
 Offer through prospectus/Initial Public Offer (IPO): This is the most popular method of raising funds by
public companies in the primary market. Under this method, a company invites subscription from the
public through issue of prospectus. A prospectus makes a direct appeal to investors to raise capital
through an advertisement in newspaper. The contents of the prospectus must be according to the
provisions of the Company Act and SEBI guidelines. The issue must be listed on at least one stock
exchange.
 Offer for sale: under this method, securities are not issued directly to the public but are offered for sale
through intermediaries like issuing houses or stock brokers. In this case, a company sells the entire lot of
securities at an agreed price to the intermediaries who in turn, resell them to the investing public.
 Private placement: it is the allotment of securities by a company to institutional investors and some
selected individuals. It helps to raise capital more quickly than a public issue. Sometimes company
cannot afford a public issue and choose to use private placement.
 Right issue: this is a privilege given to the existing shareholders to subscribe to a new issue of shares
according to the terms and conditions of the company. The shareholders are offered the “right” to buy
new shares in proportion to the number of shares they already hold.
 e-IPOs: it refers to issuing securities through the online system of stock exchange. A company proposing
to issue capital to the public through this method has to enter into an agreement with the stock
exchange.
 SEBI registered brokers are appointed for the purpose of accepting applications and placing orders with
the company. The company also appoints a registrar to the issue having electronic connectivity with
stock exchange.

22. The stock exchange is an institution which provides a
platform for buying and selling of existing
securities. As a market, the stock exchange
facilitates the exchange of a security (shares,
debentures, etc) into money and vice versa.
According to securities contracts(regulation) Act 1956,
“Stock Exchange means any body of individuals,
whether incorporated or not, constituted for the
purpose of assisting, regulating or controlling the
business of buying and selling or dealing in
securities.”
STOCK EXCHANGE

23. FUNCTIONS OF STOCK EXCHANGE
 Pricing of Securities: The stock market helps to value the securities on the basis of
demand and supply factors. The securities of profitable and growth oriented companies are
valued higher as there is more demand for such securities. The valuation of securities is
useful for investors, government and creditors. The investors can know the value of their
investment, the creditors can value the creditworthiness and government can impose taxes
on value of securities.
 Safety of Transactions: In stock market only the listed securities are traded and stock
exchange authorities include the companies names in the trade list only after verifying the
soundness of company. The companies which are listed they also have to operate within the
strict rules and regulations. This ensures safety of dealing through stock exchange.
 Contributes to Economic Growth: In stock exchange securities of various companies are
bought and sold. This process of disinvestment and reinvestment helps to invest in most
productive investment proposal and this leads to capital formation and economic growth.
 Spreading of Equity Cult: Stock exchange encourages people to invest in ownership
securities by regulating new issues, better trading practices and by educating public about
investment.
 Providing Scope for Speculation: To ensure liquidity and demand of supply of securities the
stock exchange permits healthy speculation of securities.

24. SEBI
The Securities and Exchange Board of India (SEBI) was
established by the government of india on 12
April,1988 as an interim administrative body to
promote orderly and healthy growth of securities
market and for investor protection from trading
malpractices, e.g price rigging, insider trading , etc.
Price rigging- Making manipulations with the sole
objective of inflating or depressing the market price of
securities.
Insider trading- The insiders to a company (Directors,
Promoters, etc) using inside information(eg bonus
issue) to make personal profits.

25. OBJECTIVES OF SEBI
 Protection :To guide, educate, and to protect the rights and interests of the
investors.
 Competitive and Professional:
To make the intermediaries like merchant bankers, brokers etc. competitive
and professional by regulating their activities and developing a code of
conduct.
 Prevention of Malpractices:
To prevent trading malpractices.
 Balancing:
To establish a balance between statutory regulation and self regulation by
the securities industry.
 Orderly Functioning:
To promote orderly functioning of stock exchange and securities industry by
regulating them.

26. FUNCTIONS OF SEBI
REGULATORY FUNCTIONS
These functions are performed by SEBI to regulate the business in stock exchange. To regulate the
activities of stock exchange following functions are performed:
(i) SEBI has framed rules and regulations and a code of conduct to regulate the intermediaries such as
merchant bankers, brokers, underwriters, etc.
(ii) These intermediaries have been brought under the regulatory purview and private placement has
been made more restrictive.
(iii) SEBI registers and regulates the working of stock brokers, sub-brokers, share transfer agents,
trustees, merchant bankers and all those who are associated with stock exchange in any manner.
(iv) SEBI registers and regulates the working of mutual funds etc.
(v) SEBI regulates takeover of the companies.
(vi) SEBI conducts inquiries and audit of stock exchanges
PROTECTIVE FUNCTIONS
I. it prohibits fraudulent and unfair trade practices in securities market, e.g.- price rigging, making
misleading statements in prospectus, manipulations, etc.
II. It controls insider trading and imposes penalties for such practices.
III. It undertakes steps for investors protection
IV. It promotes fair practices and code of conduct in securities market.
DEVELOPMENT FUNCTIONS
I. it trains intermediaries of the securities market.
II. It conducts research and publishes information useful to all market participants
III. It undertakes measures to develop the capital markets by adapting a flexible approach.