(954) 606-9010

An Interactive Talk about the Capital Markets

Share Button

With the evolution of financial marketing and investment, the lending and borrowing business has welcomed the emergence of new markets that facilitate and benefit selling and buying financial equities and instruments.

Capital markets play a vital role in the productive and effective functioning of an economy, because needless to say, capital is the essence of all business activity and profitability.

What are Capital Markets?

Capital Markets refer to a wide range of markets that facilitate, benefit and encourage the buying and selling of equities, debts and financial instruments. The role of these markets is to regulate the flow of savings and investments between capital suppliers, for instance, personal investors, or retail investors, and the institutions that require capital, such as the government, start-up companies and large corporations.

Capital markets consist of:

1.Primary Markets:

These markets are responsible for selling new stocks and bond issues. Companies are allowed to directly issue their stocks and bonds to investors, corporations and other interested parties.

In primary markets, companies enjoy the opportunity to raise capital without having to publically declare they are selling their stocks and weakening their financial position in the market.

2.Secondary Markets:

As the company progresses it can sell hold public offerings for its stocks to generate a greater amount of ready cash, and chose a selected institutions or investment banks for the trade.

Secondary markets are responsible for regulating the selling and buying of existing securities. Here is where all the investment banks, firms and private investors head out to resell their equities and debt securities.

The trading takes place at the stock market, also referred to as the bond market, for instance, the NASDAQ, or the New York Stock Exchange. All transactions take place through the computerized trading systems.

Even though these transactions rarely prove to be profitable for the sellers, they get to retain their stake in the company by holding equity.


The Capital markets deal in two broad categories of financial investments, these are:

1.Equity Securities

These are what we commonly refer to as stocks, and are issued for mid-term and long-term periods, usually over a year or more.

2.Debt Securities

These are widely known as bonds, and are issued annually and semi-annually, over a period of a year of more.


Who controls the capital markets?

The capital markets are managed and regulated by financial regulators, for instance, the Securities and Exchange Commission in the US.

It is very hard to limit the capital markets to a geographic location, as despite the existence of capital markets in economies all over the globe, nearly all of the trading transactions that take place in these markets are recorded on the computerized electronic trading systems.

There are certain markets which welcome everyone in the public, however, others have strict admission criteria, rules and regulations.

Who are the most likely to benefit from the capital markets?

Anyone and everyone, from private investors to investment banks and large corporations, can benefit from the capital markets provided they have the expertise required to master the game of financial investment.

Capital markets attract:

  • Individual and personal investors
  • Pension fund investors
  • Mutual fund investors
  • Governments
  • Corporations and companies
  • Banks
  • Financial Institutions
  • Municipalities

And many more

All the various kinds of sellers and buyers in the capital markets have their own profit and financial recovery motives, and they issue their debts through bonds, for instance, the government will issue a government bond, however, it will not be able to issue its equity in the form of stocks.

The sellers aim to avail the largest amount while incurring the lowest expenses, while the buyers want the greatest ROIs and the lowest financial risks.

Why are Capital Markets important for a flourishing and productive economy?

Capital markets are responsible from moving the savings of people who are seeking investment to the corporations and businesses looking to raise capital to increase their economic productivity and business activity. Therefore, it would not be an exaggeration to state that capital markets are crucial and essential for the smooth and productive functioning of the modern world economy.

Also, since equities and debt securities reveal the financial might and strength of all the markets around the globe, capital markets play an important role in channelling these equities and debts. These capital markets help governments, investment banks and businesses access huge amounts of capital and sell their debts in the form bonds. These bonds sold at the capital markets also help finance huge welfare projects, for instance, hospitals, roads, schools and sports centres.

If the capital markets did not exist and the dealings of stocks and bonds did not take place, entrepreneurs and geniuses would have very few opportunities to raise capital to give their dreams a reality, without having to scrape and save away their entire life or burry themselves knee deep in debts.

Healthy and progressive capital markets provide entrepreneurs, organisations and corporations the required capital and financial assistance that they need to build up a successful business and attain profitability. When they have the capital they need, businesses can finance growth, expansions, market takeovers and market penetrations.

These markets also help diminishing the expenditures of business activity by providing a global economic platform for availing a reliable capital investment or a secure way to liquidate your business.

Capital markets provide a platform for lenders and borrowers to come together, and make mutually beneficial, efficient and fruitful investments by channelling their energies towards the right resources and working towards improving and regulating the world’s economy.

Individuals who are going through a severe financial crisis, need urgent capital or want to start their dream business are provided funds and capital by the countless investment opportunities provided by the capital markets.

These reliable markets have emerged as the most reliable, secure and simplest way to obtain funding and capital with reduced expenses and lower risks.

Do you have an idea that you want to turn into reality, but lack the sufficient capital?

Well, guess what?

The capital market helps turn dreams into reality countless time, each day!