Basics
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TOOLS FOR MANAGING LIQUIDITY IN THE MONEY MARKET
There are five main tools for managing liquidity in the money market and they are:
(A) RESERVE REQUIREMENTS
(B) INTEREST RATES
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LIQUIDITY MANAGEMENT
Effective liquidity management will enable an organisation to derive maximum benefits at minimal cost. Effective cash optimisation is critical to all organizations, especially in a tough economy. Cash is the lifeblood of organisations. An organisation having a proper set of liquidity management policies and procedures will improve profits, reduce the risk of corporate failure
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FINANCIAL SYSTEM
A financial system plays a vital role in the economic growth of a country. It intermediates with with the flow of funds between those who save a part of their income to those who invest in productive assets. It mobilizes and usefully allocate scarce resources of a country.
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MONEY MARKET AND CAPITAL MARKET
1. Often, financial institutions actively involved in the capital market and are also in the capital market. 2. Funds raised in the money market are used to provide liquidity for longer-term investment and redemption of funds raised in the capital market
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MONEY MARKET
A money market is a market for short term debt instruments (maturity below one year). It is highly liquid market wherein securities are bought and sold in large denominations, to reduce transaction costs. Call money market, certificate of deposits, commercial paper, and treasury bills are the major instruments/segments of the money market.
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FINANCIAL MARKETS
Financial markets are an important components of the financial system. A financial market is a mechanism for the exchange trading of financial products under a policy framework. The participants in the financial markets are the borrowers (issuers of securities), lenders (buyers of securities), and financial intermediaries. Financial markets comprises two distinct types of markets:
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ANNUAL REPORT
An annual report is a formal financial statement issued yearly by a corporate. The annual report shows assets, liabilities, revenues, expenses and earnings – how the company stood at the close of the business year, how it fared profit-wise during the year, as well as other information of interest to shareholders. Companies publish annual reports and send abridged versions to shareholders free of cost. A detailed annual report is sent on request.
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INITIAL PUBLIC OFFER
An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuer’s securities. The sale of securities can be either through book building or through normal public issue.
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BSE CAPITAL GOODS INDEX
Consumer goods index is a part of the BSE sectoral Indices. To track the performance of companies dealing with the consumer goods it was necessary to list them in a new index named CG Index. CG Index comprises the companies occupying 90% market capitalization in the field of consumer goods.
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SGX NIFTY
SGX NIFTY stands for Singapore Exchange Nifty. The Indian Stock market i.e. Sensex and Nifty 50 is indirectly related to the SGX Nifty along with the other Indices around the world. Another point is that both India as well as Singapore is in same continent which co-relates the whole thing.
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Capital Market Scams
The post- economic liberalization era witnessed scams with cyclical regularity in the Indian Capital market. The series of scams in the capital market may lead someone to believe that scams and liberalization are correlated phenomena. The most infamous scam, known as the 1992 securities was master-minded by Harshad Mehta and other bull operators
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CREDIT RATING
The system of rating got institutionalized following the Great Depression in 1933, when the US Controller of Currency enacted a rule that banks could only purchase securities, which have minimum investment rating.
The need of credit rating is different for different parties depending on the benefits it offers to the various parties utilizing these services, viz., [...] -
VENTURE CAPITAL
Definition: Venture Capital means, providing seed, start up and first stage financing and funding the expansion of companies that have already demonstrated their business potential but do not have access to the public securities markets or to credit oriented institutional funding sources.
Venture Capitalists also provide management/leveraged buyout financing. The processis of investing of risk capital [...] -
GLOBAL INDICES
US MARKETS : DOW JONES, INDUSTRIAL AVERAGE, NASDAQ, DOW FUTURES, NASDAQ FUTURES
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MAJOR STOCK EXCHANGES OF THE WORLD
Johannesburg Securities Exchange, NASDAQ, São Paulo Stock Exchange, Toronto Stock Exchange, NYSE Euronext, Australian Securities , Bombay Stock Exchange, Hong Kong Stock Exchange, Korea Exchange, National Stock Exchange of India, Shanghai Stock Exchange
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INDIAN STOCK EXCHANGES
The stock markets are affected by practically anything, especially in India. Mr. Armstrong an authority of market says, “The wind that play upon stock exchanges are as varying and inconsistent as those that blow upon the ocean are. They are frequently just as disturbing”. Basically two sets of factors affect the stock exchanges, one is [...]
