Capital Market
Table of Contents:
Definition of Capital Market
The capital market refers to a financial market where long-term debt and equity securities are bought and sold, enabling businesses, governments, and individuals to raise capital for investment and growth.
It consists of primary and secondary markets, with the primary market facilitating the issuance of new securities through initial public offerings (IPOs) and bond offerings. In contrast, the secondary market involves the trading of existing securities among investors.
The capital market plays a critical role in channeling funds from savers to borrowers, promoting investment in productive projects, and fostering economic development.
What is Capital Market?
The capital market is a financial marketplace that facilitates the buying and selling of long-term financial instruments, such as stocks, bonds, and other securities.
It serves as a means for businesses and governments to raise capital from investors to finance various projects and initiatives.
The capital market provides an avenue for investors to deploy their savings into instruments that offer potential returns on investment over an extended period. These instruments allow individuals and institutions to participate in the ownership of companies (through equities) or lend money to entities (through bonds), thereby contributing to economic growth and wealth creation.
The capital market's liquidity, transparency, and regulation make it a vital component of the overall financial system.
