The document discusses capital markets and their instruments. It defines capital markets as dealing with medium to long term funds through securities like stocks and bonds. Capital markets have two main functions: raising long term funds for organizations and mobilizing savings. They help speed economic growth and ensure continuous availability of funds. Capital market instruments include equity, debt, insurance, and hybrid instruments. Equity instruments provide ownership, while debt instruments are borrowed funds that must be repaid with interest. Well-regulated capital markets are important for trade and economic development.

1. NISHU AGGARWAL
ARJUN BHALLA
ROHAN TYAGI
FOREIGN CAPITAL
MARKET AND ITS
INSTRUMENTS

2. Capital market is the segment of
financial market that dealing with
effective channeling of medium to long
term funds from surplus to deficit unit.
Normally the process of transfer this
channeling is through documents or
certificates: thus is showing evidence of
investment.
WHAT IS CAPITAL MARKET?

3. PRIMARY ROLE
 Raise long term funds for government, banks and corporation.
 Funds is regulated by the performance of stocks and bonds
market within capital market
 Mobilization of saving
 Speed up economic growth
 Continuous availability of funds
 Proper regulation of funds
ROLE OF CAPITAL MARKET

4.  Every capital market in this world is regulated by financial
regulators and their respective government bonds.
 The purpose of such regulation is to protect investors from
fraud and deception.
 Financial regulatory boards are also charged with minimizing
financial losses
REGULATION OF CAPITAL MARKET

5.  Capital market has two segment
 Capital market deals with long term securities.
 Capital market helps in capital formation
 Capital market perform trade off function
 Capital market helps in creating liquidity
NATURE OF CAPITAL MARKET

6. PRIMARY MARKET
SECONDARY MARKET
TYPES OF CAPITAL MARKET

7.  The primary market deals with newly issued securities
 Role of primary market
Organization
Underwriting
Distribution
 Primary market is only related to new issues
 It has no particular place.
PRIMARY MARKET

8.  It is also called after market and it is the financial market in
which previously issued financial instrument such as stock,
bonds, options are brought and sold.
 Main function is securities are sold and transferred from one
investor to another
 It is important that secondary market should be highly
liquidated
SECONDARY MARKET

9. THE INFLUENCE OF CAPITAL MARKET ON INTERNATIONAL TRADE
 Capital market investment is no longer limited to the
boundaries of one nation.
 Today corporation and individual are able, under same
regulation , to invest in capital market of any country in the
world.
 It has caused development to the business of international
trade
CAPITAL MARKET INSTRUMENTS

10. EQUITY INSTRUMENTS
DEBT INSTRUMENTS
INSURACE INSTRUMENTS
HYBRID INSTRUMENTS
TYPES OF CAPITAL INSTRUMENTS

11.  Equity is used in accounting in several ways. In capital market
equity is used as source of finance.
 when company wants to issues some funds company can raise
common stock and preferences shares
 Main type of equity are
1.) common stock
2.) preferences shares
EQUITY INSTRUMENTS

12.  It is used by the government or organization to generate funds
for long term duration.
 The relation between person who invest in debt instruments is
of lender and borrower
 This gives no ownership rights
 A person receives fixed rate of interest on debt instruments
 debt instruments are a way for markets and participants to
easily transfer the owner ship of debt obligation from one
party to another party
DEBT INSTRUMENTS

13.  DEBENTURES
 BONDS
 GOVERNMENT BONDS
 CONVERTIABLE BONDS
 CORPORATE BONDS
 LOAN
 MORTGAGES
TYPES

14.  A financial instruments that combines two or more different
financial instruments
 Most common type of hybrid security is
Convertible bonds : they have features of an ordinary bond but
is heavily influenced by the price movement of stocks into
which it is convertible.
The owner of convertible bonds have the right to convert bonds
to share in the issuing company or cash of equal value.
Issuing convertible bond is the best way for a company to
minimize the negative investor interpretation of its corporate
action.
HYBRID INSTRUMENTS

15.  Is a financial instruments whose value is driven by the
insurance loss events. Those such instruments are linked to
property losses.
 Insurance companies are in the business of assuming risk for
individual and institutions.
 They manage those risk by diversifying over a large number of
policies and geographic regions
INSURANCE INSTRUMENTS

16.  The lack of advance and vibrant capital market can lead to
under utilization of financial resources. The developed capital
market also provide access to the foreign capital for domestic
capital industry.
 Therefore, capital market definitely plays a constructive role in
overall development of an economy.
CONCLUSION