Today's Capital Market


By
Rajul Bhardwaj
BCA, Msc(Math), MBA
Sr. Lecturer & HOD
Doon Institute of Management & Research
Shyampur, Rishikesh, Dehradun (U.A.)
 


For coordinating the demand and supply of capital funds, an organized and well-capital market is highly essential for industrial growth of the country. The demand side for long-term funds may be in a variety of forms, such as risk capital through issue of equity shares and borrowed capital through issue of bonds and debentures. The supply side is represented by so many individual and institutional investors. The paper reviews emerging trends in primary market and secondary market, SEBI and capital market development, globalization of stock exchanges and future prospects of Indian capital market.

The capital market in pre independence era was not much popular due to the philosophy of mixed economy. But at the same Bombay Stock Exchange came into picture in 1875, which was the symbol of the capital market. The BSE dominated in the share market of the country till 1991. It is found that in the Indian capital market had certain deficiencies like lack of transparency, physical settlement, a variety of manipulative practices, institutional deficiencies and insider trading. A high level committee in the financial system under the chairmanship of Shri M. Narsimhan was set up in 1991, which made far-reaching recommendation for banking sector and non-banking sector to improve their operational efficiency of the capital market. Thus, the capital market reforms were initiated in 1991.

With the globalization and the electronic age, the stock market has changed. Nearly 100% of all transactions are executed through electronic media on line trading system. More and more brokers and sub brokers are getting into the Internet trading system. The SEBI has allowed e-trading and brokers are rushing to the web-sites and trading through web-sites. On the Internet, one is able to trade instantly and transparently from any part of the world. Trade is confirmed via the internet in no times and by this method, the investors come to know immediately the trade member, time, rates at which the trade takes place. There are availabilities of the quicker settlements and collections. The web site on the basis of investor's portfolio can give the investor information on company results, report cards, company analysis and the performance of the company. As the country opened foreign operations, many more Indian companies got listed on foreign stock markets of London, New York and Nasdaq, etc. The regional stock exchanges and local trading became gradually redundant in the context of global trading. As a result of it, many positive steps have been taken by the SEBI towards the emerging trends of capital market. Therefore, the Indian capital market is heading towards better efficiency and profitability of the securities.
 


Rajul Bhardwaj
BCA, Msc(Math), MBA
Sr. Lecturer & HOD
Doon Institute of Management & Research
Shyampur, Rishikesh, Dehradun (U.A.)
 

Source: E-mail June 19, 2005

 

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