capital market developments

1. CAPITAL MARKET
recent developments and
innovations
By
T. JAGASEESH
(12NA1E0008)

2. FINANCIAL MARKETS
Capital
Markets
Commodity
Markets
Money
Markets
Derivatives
Markets
Insurance
Markets
Foreign
Exchange
Markets
Government Securities
Market

3. CAPITAL MARKET
• A capital market is a market for securities
(both debt and equity), where business
enterprises (companies) and governments can
raise long-term funds. It is defined as a market
in which money is lent for periods longer than
a year.

5. • Capital markets consist of the primary market
and the secondary market. The primary
markets are where new stock and bonds
issues are sold (via underwriting) to investors.
The secondary markets are where existing
securities are sold and bought from one
investor or trader to another, usually on a
securities exchange, over the counter, or
elsewhere.

6. Factors Responsible for Growth of
Indian Capital Market
• Growth of Stock Exchange
• Growth of Financial Institution
• Growth of Mutual Fund
• Growth of Merchant Bank Service
• Development of Venture Capital Funds
• Development of Credit Rating Agency
• Setting up SEBI
• National securities Clearing Corporations
• Corporate Governance

7. 'Healthy' Capital Markets
• The idea of a 'healthy capital market' supposes two
purposes:
• There should be an adequate supply of sound, long-term
investment vehicles, fairly and reasonably priced, that
would allow people to prudently accumulate adequate
reserves for old age, education, a start in life for the next
generation, and emergency needs.
• The allocation of capital should be consistent with the
survival of society over the long term.
• The goals of issuers of securities should be consistent with
those of investors, and the aims of both and the allocation
of capital should be directed towards the survival and
improvement of society over the long-term.

8. Recent changes and innovations
• NSE pioneered commencement of Internet
Trading in February 2000, which led to the wide
popularization of the NSE in the broker
community.
• The creation of Asset Backed Securities, reducing
the amount of equity needed for working capital
and reducing the cost of financing;
• The abolition of fixed commissions, intensifying
competition among brokers;

9. recent changes
• The development of scripless trading and
book entry settlement, reducing back office
paperwork and transaction costs.
• Capital market insurance solutions are a
recent financial innovation such that they
offer a promising means of funding protection
for even the largest potential catastrophes.

10. • Unit-Linked Insurance Plans (ULIP) – the capital
market-linked insurance products are the new
best selling instruments in the insurance market
• Prepaid Card is a very important and one of the
most successful innovations in financial
services.These cards are popular because using
these cards, consumers can pay bills, make
purchases and get cash from ATM networks.

11. • NSE also conducts online examination and
award certifications, under its programmes of
NSE's Certification in Financial Markets
(NCFM). Currently, certifications are available
in 9 modules, covering different sectors of
financial and capital markets

12. Developments
• RBI launched the electronic order matching
system for trading in government securities on its
Negotiated Trading System
• SEBI in 2006, has allowed MFs to float Gold
Exchange Traded Fund schemes which have been
are permitted to invest primarily in Gold and
Gold related instruments, which have been
defined as such instruments having gold as
underlying, as are specified by SEBI from time to
time.

13. • . The Securities Contracts (Regulation)
Amendment Bill, 2003, to facilitate the
process of demutualisation and
corporatisation of stock exchanges
• Guidelines for Private Placement of debt by
listed companies-to regulate the private
placement of debt by listed companies

14. • SEBI introduces Commitees for IPO issues
regarding the mismanagement of funds.
• to keep a track regards the usage of funds
• Since 1998-2005, 238 IPO issues existed.

15. • Anchor investors-come under QIB-
• CONDITIONS:
• min investment- 10 crore or 1 billion
• Out of 60%,18% is allocated to them
• Adani issue- 6 anchors investors

16. THANK YOU