FINANCIAL MARKETS (business finance).pptx

Brief

1. Financial markets 2.4

2. market Refers to the place where the sellers and buyers of goods or services meet. Major business happening is the selling-buying activity in which exchange occurs. The exchange process indicates that the seller and buyer agree on the exchange price. 2

3. financial MARKET Refers to the place where selling-buying activity occurs to trade equity securities such as bonds and stocks, notes and mortgages. The selling-buying transaction happening in the financial market is called trading activity . 3

4. Types of financial markets

5. Capital market A financial market where stocks and bonds are issued for medium and long-term periods. The capital stock market treats the securities having a period of three to five years as medium-term and those having a period of more than five years as long-term. In the Philippines, the capital market is the Philippine Stock Exchange (PSE) created in 1994 from the two defunct capital markets-the Manila Stock Exchange and Makati Stock Exchange. 5

6. Money market When the financial securities being traded have a period of less than one year. This type of financial security is called short-term security . If short-term securities are not intended to be held for more than one year, they are also referred to as trading securities . The term highly liquid or readily marketable implies that there are available sellers and buyers of financial securities. 6

7. Primary market Where the corporation can issue new shares of stock. The trading of financial securities in a primary market happens between the issuing corporation and the investors or investment banks. The proceeds of the trading go to the issuing corporation. 7

8. Secondary market Where financial securities are traded between or among investors. There is no insurance of new shares from the corporation. The secondary market, therefore, exists after the corporation has issued new shares to investors in the primary market. The exchange process indicates that the seller and buyer agree on the exchange price. 8

9. Public market Financial securities of publicly listed corporations are traded following a standardized contract agreement and procedures. A corporation is classified as publicly listed when its shares are available for sale to the public. Trading in the public market immediately starts during the day once the market has been officially opened. Investors are properly informed during the trading time of the current price of the stocks and bonds and other related information necessary for trading. 9

10. THANK YOU 10