Participants in secondary market, Financial Management

PARTICIPANTS IN THE SECONDARY MARKET

The players in the secondary capital market include:

  • Individual Investors (Public).
  • Companies.
  • Mutual funds.
  • Financial Institutions.
  • Foreign Institutional Investors.
  • Individual Investors (Public)

 

The general investing public plays a notable role in the stock market. Popularly referred to as small investors, they are investing traditionally in tax savings schemes. Mutual funds are very popular among small investors. Even among the mutual fund schemes, debt related schemes garner several times more funds than equity related schemes.

Companies

Most of the companies having surplus funds will invest in the money markets. Generally, inter-corporate deposits and commercial papers are favored by these companies. But for long-term needs, companies tap capital markets. These companies, which have made investments using their surplus funds are required to disclose the same in their annual reports. Generally, companies are not regular players in the capital market. Some finance/investment companies offering portfolio management services to clients or companies with stock market operations as their main objective, however, are regular players in the secondary market.

Mutual Funds

Mutual Funds pool funds from investors and invest them in well-diversified portfolios. Fund managers and investment consultants select the of companies for investment for maximizing returns on investments. All the mutual funds in the country are regulated in accordance with the provisions laid down by the government. Mutual Funds are the single largest player category in the stock market.

Financial Institutions

Generally, financial institutions partake in the share capital of various companies. By their active buying and selling of securities from the secondary market, the financial and investment institutions maintain a balance in the market.
Foreign Institutional Investors

Foreign Institutional Investors (FIIs) means institutional investors (mutual funds or equity firms) maintained and controlled from outside the country. Generally, FIIs pick up stocks keeping an eye on long-term gains. The presence of FIIs in the stock markets has been a big boost to the market sentiments. Usually, the orders from FIIs are large blocks of shares which cannot be picked up from the trading rings alone. Such purchases are effected by off-market deals. Block transactions arranged by brokers between FIIs and large shareholders like government financial institutions are termed as off-market deals. They have to take prior permission from the authorities concerned in the countries where they want to invest.

 

Posted Date: 9/10/2012 5:39:14 AM | Location : United States







Related Discussions:- Participants in secondary market, Assignment Help, Ask Question on Participants in secondary market, Get Answer, Expert's Help, Participants in secondary market Discussions

Write discussion on Participants in secondary market
Your posts are moderated
Related Questions
I need assistance with 4 questions. How do I know someone can help me and have some idea of what it would cost before submitting the information? Also, how fast is the turnaround

The personnel department of a firm is entrusted with the responsibility of recruitment, training and placement of the staff for the firm. The department is also required to critica

Define the term- Cash purchases     Shareholders of the target company are bought out completely and have no further stake in business. This is good if predator shareholders want

Profit Maximisation Decision Criterion According to this approach, actions which increase profits must be undertaken and those that decrease profits are to be avoided. In speci

Source documents of an accounting system: Source documents are those documents that identify the particular transaction that is being recorded.  They act as an internal control

Historical Inflation and Stock Value Experience The experimental evidence denies the status of stocks as a good hedge against inflation. A study conducted by Ibbotson and Brins

I need your assistance on how to group the relevant data so as to help me in the data analysis

The following treasury issues can be included for the construction of the curve: On-the-run treasury issues. On-the-run treasury issues and sele

Distinguish between Lease and Hire Purchase. What are the circumstances in which each of the system of financing is better than other?

Market mechanism: Market mechanism is a term from economics denoting to the use of money exchanged by sellers and buyers with an open and understood system of time and value t