Structure of Philippine Financial Market Essay Sample

In economic sciences. a fiscal market is a mechanism that allows people to easy purchase and sell fiscal securities. trade goods. and other fungible points of value at low dealing costs and at monetary values that reflect the efficient market hypothesis.

Fiscal markets have evolved significantly over several hundred old ages and are undergoing changeless invention to better liquidness.

Both general markets and specialised markets exist. Markets work by puting many interested Sellerss in one “place” . therefore doing them easier to happen for prospective purchasers. An economic system which relies chiefly on interactions between purchasers and Sellerss to apportion resources is known as a market economic system in contrast either to a bid economic system or to a non-market economic system that is based. such as a gift economic system.

Fiscal markets facilitate:

* The elevation of capital
* The transportation of hazard
* International trade

They are used to fit those who want capital to those who have it. Typically a borrower issues a reception to the loaner assuring to pay back the capital. These grosss are securities which may be freely bought or sold. In return for imparting money to the borrower. the loaner will anticipate some compensation in the signifier of involvement or dividends.

Fiscal markets could intend:

1. organisations that facilitate the trade in fiscal merchandises. i. e. Stock exchanges facilitate the trade in stocks. bonds and warrants.

2. the coming together of purchasers and Sellerss to merchandise fiscal merchandises. i. e. stocks and portions are traded between purchasers and Sellerss in a figure of
ways including: the usage of stock exchanges ; straight between purchasers and Sellerss etc.

In academe. pupils of finance will utilize both significances but pupils of economic sciences will merely utilize the 2nd significance. Fiscal markets can be domestic or they can be international.

Types of fiscal markets

The fiscal markets can be divided into different subtypes:

1. Capital markets which consist of:
* Stock markets. which provide funding through the issue of portions or common stock. and enable the subsequent trading thereof. * Chemical bond markets. which provide funding through the issue of Bonds. and enable the subsequent trading thereof. 2. Commodity markets. which facilitate the trading of trade goods. 3. Money markets. which provide short term debt funding and investing. 4. Derived functions markets. which provide instruments for the direction of fiscal hazard. *Futures markets. which provide standardised forward contracts for trading merchandises at some future day of the month ; see besides frontward market. 5. Insurance markets. which facilitate the redistribution of assorted hazards. 6. Foreign exchange markets. which facilitate the trading of foreign exchange.

The capital markets consist of primary markets and secondary markets. Newly formed ( issued ) securities are bought or sold in primary markets. Secondary markets allow investors to sell securities that they hold or purchase bing securities.