1. Investment Management
UNIT-2
SECURITIES MARKETS

2. Types of Financial Market
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Stock Markets: Stock Market is a type of Capital market which deals with the issuance and trading of shares and stocks at a certain price.
Bond Markets: Bond Market is a form of capital market where buyers and sellers are involved in the trading of bonds.
Commodity Market: A market which facilitates the sale and purchase of raw goods is called a commodity market.
Commodity market like any other market includes a buyer and a seller. In such a market buyer purchases raw products like rice, wheat, grain, cattle and so on from the seller at a mutually agreed rate.
V.Prabakaran, AP/MBA - Securities Market

3. Cont…
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Money Market: As the name suggests, money market involves individuals who deal with the lending and borrowing of money for a short time frame.
Derivatives Market: The market which deals with the trading of contracts which are derived from any other asset is called as derivative market.
Future Market: Future market is a type of financial market which deals with the trading of financial instruments at a specific rate where in the delivery takes place in future.
V.Prabakaran, AP/MBA - Securities Market

4. Cont…
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Insurance Market: Insurance market deals with the trading of insurance products. Insurance companies pay a certain amount to the immediate family members of owner of the policy in case of his untimely death.
Foreign Exchange Market: Foreign exchange market is a globally operating market dealing in the sale and purchase of foreign currencies.
Private Market: Private market is a form of market where transaction of financial products takes place between two parties directly.
Mortgage Market: A type of market where various financial organizations are involved in providing loans to individuals on various residential and commercial properties for a specific duration is called a mortgage market. The payment is made to the individual concerned on submitting certain necessary documents and fulfilling certain basic criteria.
V.Prabakaran, AP/MBA - Securities Market

5. Participants in financial Market
RETAIL INVESTOR: Individual investors who buy and sell securities for their personal account, and not for another company or organization. Also known as an "individual investor" or "small investor".
COMPANIES: The surplus funds generated from business operations are majorly invested in money market instruments, commercial bills and stocks of other companies.
GOVERNMENT: Authorized dealers basically look after the demand-supply operations in financial market. Also works to fill in the gap between the demand and supply of funds.
MUTUAL FUNDS: Acquire funds mainly from the general public and invest them in money market, commercial bills and shares. Mutual fund is also principle participant in financial market.
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V.Prabakaran, AP/MBA - Securities Market

6. Participants in financial Market
BANKS: Largest provider of funds to business houses and corporates through accepting deposits.
INSURANCE COMPANIES: Issue contracts to individuals or firms with a promise to refund them in future in case of any event and thereby invest these funds in debt, equities, properties, etc.
FINANCE COMPANIES: Engages in short to medium term financing for businesses by collecting funds by issuing debentures and borrowing from general public.
MERCHANT BANKS: Funded by short term borrowings; lend mainly to corporations for foreign currency and commercial bills financing.
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V.Prabakaran, AP/MBA - Securities Market

7. Cont… Stock Brokers Sub Brokers Share Transfer Agents
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Stock Brokers
Sub Brokers
Share Transfer Agents
Bankers to an Issue
Trustees of a Trust Deed
Registrars to an Issue
Merchant Bankers
Underwriters
Portfolio Managers
Investment Advisers
V.Prabakaran, AP/MBA - Securities Market

8. Cont… Clearing Houses Depository Custodians Credit Rating Agencies
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Clearing Houses
Depository
Custodians
Credit Rating Agencies
Foreign Institutional Investors
V.Prabakaran, AP/MBA - Securities Market

9. Clearing Houses
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As clearing house give guarantee for all the transactions and acts as counterparty for all the transactions it will never have open positions in the market.
It ensures that all parties adhere to the system and procedures so that various parties in the market can do trading smoothly which in turn leads to more confidence of the players on the markets and hence it increases liquidity in the market.
It ensures a proper risk management system in place by stipulating that margin is maintained which is of two types – initial and maintenance margin and hence accounting is done for all the gains and losses on daily basis and hence chances of default are reduced considerably.
It ensures that delivery of the underlying asset is consistent in terms of quality, quantity, size etc… so that there is no confusion among parties, in other words all contracts are standardized.
V.Prabakaran, AP/MBA - Securities Market

10. 6/1/2018
Thanks…
V.Prabakaran, AP/MBA - Securities Market