What is a Capital Market
A capital market is a financial system where long-term debt or equity-backed securities are bought and sold. It provides a platform for businesses and governments to raise long-term funds and for investors to invest in instruments like shares and bonds.
Think of it as the financial bridge between savers (investors) and borrowers (companies and governments).
Key Functions:
- Mobilization of savings for productive use.
- Facilitation of trading in financial securities.
- Price discovery and transparency
- Efficient capital allocation