Capital Market is one of the most confronted sectors of the financial services industry. The dynamics of the changing global industry, including new regulations and business models have laid impact on the performance of the capital market and its instruments. Capital markets basically focus on wealth management and are engaged in cash management, asset management, protection, credit, retirement and estate planning, fixed income, equities and financial and credit derivatives.
Indeed, capital market firms target customers with a range of products as solutions to individual wealth management needs. Apart from managing wealth products, capital market plays an important role by contributing to the growth of the country’s economy.
- Provides several avenues for investment opportunities that encourage a thrift culture beneficial in increasing country’s savings and investment ratios that are essential for rapid industrialization.
- In order to enhance economic productivity it encourages the participation of private sector in productive investments by promoting public-private sector partnerships.
- Improves the efficiency of capital allocation through competitive pricing mechanism for better utilization of scarce resources for increased economic growth.
- It encourages equity capital investment and infrastructure development while complementing its effort in financing essential socio-economic development, through raising long-term project based capital.
- It helps in diffusing stresses on the banking system by matching long-term investments with long-term capital.
Imarticus Financial Analyst Program is one of the leading corporate finance and banking courses in Mumbai.
April has been a lackluster month for the Sensex as Tuesday saw it’s fifth day of unabated decline- 210 points. That makes it 1400 points in five days. The Nifty ‘s face was of course similar breaching the 8,400 level for the first time this month. Yet our factory output numbers are up and our inflation is softening. So what’s the problem?
Everyone seems to have their own theories, a mixture of global macroeconomic indicators combined with Micro trends such as Japan’s Daichi sell off of Sun Pharma and weak IT earnings. Here’s our list:
- Global woes: The Greek tragedy will most certainly reach its climax soon; the default seems inevitable. And that leads to panic and in any financial panic attack, emerging markets seem to suffer the most as global investors consolidate. One fifth of our exports are to Europe, so we the ensuing impact is not minimal. Then there’s China, who is slated to grow at its slowest pace in a decade. FII’s have already turned net sellers selling cash shares worth Rs 650 crore on Friday and Rs 1,500 crore on Monday. MAT has also played it’s part. Notices have been issued to several asset managers asking them to pay a Minimum Alternate Tax or MAT on capital gains made during previous years. The government says tax dues worth Rs 40,000 crore are pending.
- Earnings: We at the Imarticus Financial Analyst Program have saying that the sun has been setting on the IT industry for a while now. IT companies continue to disappoint markets with insipid earnings. HCL Tech, India’s fourth largest outsourcer, saw a fall of 10 per cent after it missed profit estimates for quarter ending March 2015. TCS also reported a fall in revenues resulting in an IT sell off. Then there is poor industrial demand and woes of unseasonal rain. Economic Times has estimated a sales growth as low as 0.7 for Q4.
- Banking, rates and the slow credit off take- RBI is taking its time to cut interest rates and banks have been slow in lowering lending rates. Companies are not taking loans. Current Bank rate is 8.5% and CRR is 4%.
Interested in why the Sensex is falling and how it affects M&A. Well learn more by joining the Imarticus Financial Analyst Program- a leading Investment Banking course in Mumbai. Click here for more details. New program commences soon.
– By IFAP Student