Financial Market of BD

1. COMPANY
LOGO
1

2. Company LOGO
FINANCIAL MARKET
of Bangladesh

3. COMPANY
LOGO
3
 Prepared by :Prepared by :
 Name: Hafez Ahammed SumonName: Hafez Ahammed Sumon
 ID: 13102029 (01836005696)ID: 13102029 (01836005696)
 Section: cSection: c
 Program: BBAProgram: BBA
Prepared for :Prepared for :
FacFaculty : Sekih Ali Zulfikarulty : Sekih Ali Zulfikar
Faculty of Finance (IUBAT)Faculty of Finance (IUBAT)
College of Business Administration-CBA.College of Business Administration-CBA.
FIN – 403(Management Financial Institutions )FIN – 403(Management Financial Institutions )

4. COMPANY
LOGOContents
Financial market (Introduction)1
Relationship Between Lenders & Borrowers2
Capital Market3
Money Market4
Differences Between Capital & Money Market5
4
Foreign Exchange & Repo Market6

5. COMPANY
LOGOFinancial Market
Any marketplace where buyers and sellers participate in the
trade of financial securities, commodities, and other fungible
items of value at low transaction costs and at prices that
reflect supply and demand. Securities include stocks and
bonds, and commodities include precious metals or
agricultural goods.
There are both general markets (where many commodities are
traded) and specialized markets (where only one commodity is
traded).
In finance, financial markets facilitate:
 The raising of capital (in the capital markets)
 The transfer of risk (in the derivatives markets)
 Price discovery
 Global transactions with integration of financial markets
 The transfer of liquidity (in the money markets)
 International trade (in the currency markets)
5

6. COMPANY
LOGOSecurities
Typically a borrower issues a receipt to the lender promising to payTypically a borrower issues a receipt to the lender promising to pay
back the capital. These receipts are securities which may be freelyback the capital. These receipts are securities which may be freely
bought or sold. In return for lending money to the borrower, thebought or sold. In return for lending money to the borrower, the
lender will expect some compensation in the form of interest orlender will expect some compensation in the form of interest or
dividends. This return on investment is a necessary part of marketsdividends. This return on investment is a necessary part of markets
to ensure that funds are supplied to them.to ensure that funds are supplied to them.
6

7. COMPANY
LOGO
Relationship Between Lenders and
Borrowers
Lenders
Financial
Intermediary
Financial
Markets
Borrowers
•Individual
•Companies
•Banks
•Insurance
Companies
•Pension
Funds
•Mutual
Funds
•Interbank
•Stock
•Exchange
•Money Market
•Bond Market
•Foreign
Exchange
•Individuals
•Companies
•Central
Government
•Municipalities
•Public
Corporations
7

8. COMPANY
LOGOFinancial Market Chart
8

9. COMPANY
LOGODiagram
CAPITAL
MARKET
FINANCIAL
MARKET
MONEY
MARKET
Foreign
Exchange
market
9

10. COMPANY
LOGO
Generally a market in which individuals and institutions trade financial
securities. Organizations/institutions in the public and private sectors also often
sell securities on the capital markets in order to raise funds.
Or, Capital market is a market for financial assets which have a long or
indefinite maturity. Unlike money market instruments the capital market
instruments become mature for the period above one year.
The Capital Market of Bangladesh consists of two part. They are-
1.Primary Market: The Primary Market is a place where new shares and bonds
are offered.
2.Secondary Market: Secondary market is a place where existing shares and
debentures are treaded.
Capital Mark
10

11. COMPANY
LOGO
11
Structure of Capital Market:

12. COMPANY
LOGOInstrument of Capital Market
1
STOCKS
The market in
which shares are
issued and traded
either through
exchanges or over-
the-counter markets.
Also known as the
equity market.
2
BONDS
The environment in
which the issuance
and trading of debt
securities occurs. The
bond market primarily
includes government-
issued securities and
corporate debt
securities.
3
DEBENTURES
A certificate issued by
a corporation with the
purpose of creating a
debt. Debentures are
generally unsecured
by assets and are
interest bearing
securities.
4
TREASURY
BILLS
A short-term
obligation that is not
interest-bearing (it is
purchased at a
discount); can be
traded on a discount
basis for 91 days
5
FOREIGN
EXCHANGE
The market in which
participants are able
to buy, sell,
exchange and
speculate on
currencies.
6
FIXED
DEPOSITS
FDs are the
deposits that are
repayable on fixed
maturity date along
with the principal
and agreed interest
rate for the period.12

13. COMPANY
LOGORole Of Capital Market
1. Mobilization of Savings : Capital market is an important source for
mobilizing idle savings from the economy. It mobilizes funds from people for
further investments in the productive channels of an economy.
2. Capital Formation : Capital market helps in capital formation. Capital
formation is net addition to the existing stock of capital in the economy.
3. Provision of Investment Avenue : Capital market raises resources for
longer periods of time. Thus it provides an investment avenue for people
who wish to invest resources for a long period of time.
4. Speed up Economic Growth and Development : Capital market
enhances production and productivity in the national economy by generation
of employment and development of infrastructure.
5. Service Provision : As an important financial set up capital market
provides various types of services. It includes long term and medium term
loans to industry, underwriting services, consultancy services, export
finance, etc. These services help the manufacturing sector in a large
spectrum.
13

14. COMPANY
LOGOMoney Market
 The organization for the lending of short-term fund,
through the use of such instruments as commercial bills of
exchange, short-term government securities and bankers
acceptance.
Money Market
14

15. COMPANY
LOGO
Functions of Money Market
1. transfer of large sums of money
2. transfer from parties with surplus funds to parties with a
deficit.
3. allow governments to raise funds
4. help to implement monetary policy
5. determine short-term interest rates
6. Medium to control creation of Credit
 Financial institutes of Money Market:
15

16. COMPANY
LOGOCharacteristics of a Developed Money Market
16
Usefulness of a Developed Money Market:

17. COMPANY
LOGOStructure of Money Market
17
Recent innovations in the Money Market:
91 days T- bill, 182 days T- bill,364 days T- bill, 2 years T-bond, 5 years T-bond, 10 years T-
bond, And 20 years T-bond.

18. COMPANY
LOGOMoney Market Instruments
Certificates of DepositBill rediscounting
Commercial
Paper
Inter-bank participation
certificates
Treasury
Bills
Inter-bank term
money
Instru
ments
18

19. COMPANY
LOGO
19
Differences Between Money Market and Capital
Market:
1. Maturity Period
2. Credit Instruments
3. Institutions
4. Risk
5. Market Regulation
6. Relation with Central Bank

20. COMPANY
LOGO
Foreign Exchange Market
The foreign exchange market (or currency market) is a global
decentralized market for the trading of currencies. In terms of volume of
trading, it is by far the largest market in the world. The main participants
in this market are the larger international banks.
20
The Repo Market
Repo is a money market instrument which helps in collateralized
short-term borrowing and lending through sale/purchase operations
in debt instrument. Under a repo transaction, securities are sold by
their holder to an investor with an agreement to purchase them at a
predetermined rate and date.

21. COMPANY
LOGO
Any questions that have raised in your mind?
We present our gratitude to everyone
for listening…..
21

22. Company LOGO