CAPITAL MARKET
This is a financial market for trading in long-term financial assets. It is a market for long-term loans and investments. It consists of people and organization who wish to lend out money or to borrow on a long-term basis. Financial institutions which operate in the capital market are:-
(1) Development bank
(2) Insurance companies
(3) Investment banks
(4) Mortgage bank
(5) The stock exchange
This is a financial market for trading in long-term financial assets. It is a market for long-term loans and investments. It consists of people and organization who wish to lend out money or to borrow on a long-term basis. Financial institutions which operate in the capital market are:-
(1) Development bank
(2) Insurance companies
(3) Investment banks
(4) Mortgage bank
(5) The stock exchange
Instruments used in the money market
(1) Shares
(2) Development stocks
(3) Government bonds
(4) Company bonds
(1) Shares
(2) Development stocks
(3) Government bonds
(4) Company bonds
Functions or advantages of capital market
(1) Provision of capital for permanent long-term investments in industry and commerce
(2) Provision of long-term investment opportunities for people and organization
(3) Provision of managerial, technical and financial advice to investors
(1) Provision of capital for permanent long-term investments in industry and commerce
(2) Provision of long-term investment opportunities for people and organization
(3) Provision of managerial, technical and financial advice to investors
OTHER AGENCIES THAT CAN ACCESS CAPITAL MARKET
Second-Tier Securities Market:- it was established in April 1985 to encourage small and medium-scale enterprises to avail themselves of the resources of the stock market by making listing requirements and conditions less stringent for this category of enterprises. The aim is to increase the volume of security in the market.
Second-Tier Securities Market:- it was established in April 1985 to encourage small and medium-scale enterprises to avail themselves of the resources of the stock market by making listing requirements and conditions less stringent for this category of enterprises. The aim is to increase the volume of security in the market.
THE STOCK EXCHANGE MARKET
The stock exchange market is a market which deals with the buying and selling of long term financial asset (securities) such as stock and shares e.g. The Nigerian Stock Exchange (formerly the Lagos Stock Exchange) was established in 1960.
The stock exchange market is a market which deals with the buying and selling of long term financial asset (securities) such as stock and shares e.g. The Nigerian Stock Exchange (formerly the Lagos Stock Exchange) was established in 1960.
DEALERS IN THE STOCK EXCHANGE
On the stock exchange, there are two main dealers: The stock Brokers and The Jobbers.The brokers deal directly with the public. They act as their agents who buy and sell securities on their behalf and offer them advice. They charge a commission for their functions.The Jobber is the main dealer at the stock exchange. He does not deal directly with the public but with brokers. The broker requests the jobber for his price for a particular security. He quotes two prices- a high price for selling and a lower price for buying. His profit is known as ‘the jobber turn’ i.e. the difference between his selling and buying price
FUNCTIONS OF THE STOCK EXCHANGEOn the stock exchange, there are two main dealers: The stock Brokers and The Jobbers.The brokers deal directly with the public. They act as their agents who buy and sell securities on their behalf and offer them advice. They charge a commission for their functions.The Jobber is the main dealer at the stock exchange. He does not deal directly with the public but with brokers. The broker requests the jobber for his price for a particular security. He quotes two prices- a high price for selling and a lower price for buying. His profit is known as ‘the jobber turn’ i.e. the difference between his selling and buying price
(1) Raising of long term capital investment
(2) Easy marketing of long term securities
(3) Protection of the public against fraud
(4) Offering investment opportunities
(5) It acts as a barometer for measuring the economic performance
(6) Stabilization of prices of securities
