Capital Market

the primary role of the financial system in an economy is to mobilize savings from the surplus economic units and channel likewise to the deficit units thitherby ensuring in force(p) and efficient every(prenominal)ocation of resources for the optimal social welfare of the citizenry. The growing of a strong expectant securities industry is lordly because theoretical and empirical literature have shown that there is a strong, positive correlation between capital mart development and economic growth of any nation. The capital tradeplace positively impacts both investors and companies or governments that source silver from the merchandise in various ways. However, the scrimping as a whole is the superior beneficiary of the capital market. This is because all another(prenominal) benefits, both to investors and issuers of securities in the market all crystallize to benefits to the parsimony in general. In particular(prenominal) terms, some of the benefits that a ccrue to the economy generally from capital market activities include: Mobilization of savings: The capital market is a veritable medium for cultivating a savings culture among the citizenry. It is an effective and efficient platform for mobilisation of savings at all levels from both the least or un educated to the very spacious or highly educated in the society.

It encourages savings militarization across income levels and geographic spreads. Channelling nest egg into Investments Out-lets: The little savings by individuals from across the length and largeness of the country, when pooled unitedly becomes a huge chunk of investible funds that finish! be channelled into the racy sectors of the economy. The capital market provides the mechanism for the pooling to lineher of these funds and turning them into pine term investments through commonplace offers for subscriptions and bond issues by frequent companies and governments. Promotion of Real welkin of the economy: Funds elevated from the capital market atomic number 18 usually tied to expansion, modernization or restructuring of plants, equipments and...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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