FINANCIAL MARKETS

WHAT IS INVESTMENT?

Money we earn is partly spent and rest saved for meeting future expenses. Instead of keeping the savings idle we like to use savings in order to get return on it in the future. This is called Investment.

WHY INVEST?
Earn Return on idle resources
Generate sum of money for specified goal in life Make provision for uncertain future To meet the cost of inflation

WHERE TO INVEST:
Introduction to Financial Market

In economics, a financial market is a mechanism that allows people to easily buy & sell(trade)financial securities (such as stocks & bonds) or commodities(such as precious metals or agricultural goods).

There are both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded). Markets work by placing many interested buyers and sellers, including households, firms, and government agencies, in one "place", thus making it easier for them to find each other.

THE FINANCIAL MARKET COMPRISES OF

Capital market Money Market Commodity Market

FINANCIAL MARKET
Derivatives Market
Foreign Exchange Market

1.) CAPITAL MARKET

A capital market is a market for securities, where business enterprises (companies) and governments can raise longterm funds.
Securities are of two types, 1. EQUITY----Stock Market 2. DEBT----- Government bonds

CAPITAL MARKET

PRIMARY

SECONDARY

SOLD DIRECTLY TO NEW ISSUERS VIA UNDERWRITING.

SECONDHAND SECURITIES ARE TRADED.

2.) MONEY MARKET

As money became a commodity, the money market became a component of the financial markets

It provides liquidity funding for the global financial system.

3.) COMMODITY
Commodity markets are markets where raw or primary products are exchanged.

MARKET

These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.

4.) DERIVATIVES MARKET

A derivative instrument is a contract between two parties that specifies conditions (especially the dates, resulting values of the underlying variables, and notional amounts) under which payments are to be made between the parties.

5.) FOREIGN EXCHANGE MARKET

The market in which participants are able to buy, sell, exchange and speculate on currencies.

SEBI
1998- SEBI was established
1992-it was upgraded to a fully autonomous body

Functions of SEBI
Regulation of stock exchanges n subsidiaries Registration n regulation of the working of intermediaries Registration n regulation of CIS Promotion n regulation of self regulatory organisations Prohibition of fraudulent n unfair trade practices Investor education n training of intermediaries Prohibition of insider trading Inspection n inquiries Regulating substantial acquisition of shares n takeover of companies.

OPTIONS FOR RETAIL INVESTOR

EQUITY MUTUAL FUNDS FIXED DEPOSITS WITH BANKS GOLD

REAL ESTATE INSURANCE

EQUITY
A stock or any other security representing an ownership interest. Stocks are equity because they represent ownership in a company.

MUTUAL FUNDS
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

FIXED DEPOSITS

TERM DEPOSIT

LOW-RISK INVESTORS

GOLD INVESTMENTS
Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or harbor against economic, political, or social fiat currency. The gold market is subject to speculation as are other markets, especially through the use of futures contracts and derivatives.

Physical Gold in the form of bars and coins

REAL ESTATE
Financial instrument that invests primarily in the real estate such as offices, apartments, shopping centres, hotels etc.

Attractive investment opportunity when the stock market is falling. Tend to pay high returns(often as high as 10%)

INSURANCE
A promise of compensation for specific potential future losses in exchange for a periodic payment. Now it is considered as a investment tool also: ULIPs Traditional Plans

CONCLUSION
Summary Savings v/s investment Your take

CREDITS
1.FATEMA CHHATRIWALA- Roll No.7 2.DIVAY JAIN Roll No. 3.SHAGUN KALRA- Roll No.17 4.TWINKLE KESWANI- Roll No.20 5.NISHIT GAGLANI-Roll No.