The capital market, also called Stock market, it's a type of financial market through which medium and long-term funds or means of financing are offered and demanded.
Market that captures the savings of individuals or entities and uses them to finance the projects of others
The main purpose of this type of market is to act as an intermediary, channeling new resources and saving investors, so that issuers can then carry out financing and investment operations in their companies.
This type of market is used as a means to channel the savings of individuals and entities, and then those resources received are used to finance different projects that other people or entities have.
On the other hand, the capital market is used to transfer resources from sectors that are not very productive to others that are much more productive.
Currently these markets are managed and executed through electronic platforms that are easy to access from various entities, and even access is possible for the general public, not only for experts and players in this market.
Actors involved in this market
Different institutions of the financial system participate in the capital market, which act as regulators and also complement the operations carried out within the market, the most important of which are: the stock market (They provide the operation that financial operations demand from the supervision and registration carried out by the movements of the bidders and demanders and also provide qualified information regarding prices and the financial and economic situation of the companies), issuing entities (These are institutions that place shares with the mission of obtaining resources from investors; they can be public limited companies, the government, credit institutions or entities dependent on the state but decentralized), brokers or brokerage houses (They deal with the purchase and sale of shares and the management of third-party investment) and investors (It can be individuals, foreign investors, institutional investors, among others).
We must emphasize that the stock market is a private entity that offers a safe and legal context for carrying out financial activities, basically because it is regulated by commercial law and the state.
Classes of capital markets
There are different types of capital markets depending on: what is traded in them (stock markets: variable income instruments and fixed income instruments and the long-term credit market: bank loans and credits); structure (organized and unorganized markets); and of assets (primary market: the asset is issued only once and is interchangeable between issuer and buyer and secondary market: assets are exchanged between different buyers, to print liquidity and attribute a value to them).
Regulation
The state, throughout the world, aims to regulate these markets through various measures such as the establishment of taxes or limits on the volumes that are traded, the mission is to regulate the flow of entry and exit into the account. capital of a country.
And this measure is usually accompanied by exchange controls that attempt to restrict the freedom to acquire and sell foreign currency at the exchange rate set by the market.
Now, it is worth noting that in order to apply these measures, it is essential to analyze the situation and the context of the nation, since in some cases they can be counterproductive to the desired effects.
Electronic and physical operation in the great capitals of the world
The benefits of new technologies allow this activity to be carried out online, without the need to be in situ, however, there is a long history of working in this type of markets that is centralized in the main financial centers of the world, such is the case from London, New York, through the famous Wall Street that has produced so much cloth to cut even in the seventh art that it finds it a super attractive place to be the setting for many films of great notoriety, and in the eastern world the powerful Hong Kong.
On the opposite side are the money markets, which are those that offer and demand short-term funds.
