A capital market is a financial market in which long-term debt or equity-backed securities are bought and sold. Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments.
Capital markets are composed of primary and secondary markets. The most common capital markets are the stock market and the bond market.
Capital markets seek to improve transactional efficiencies. These markets bring those who hold capital and those seeking capital together and provide a place where entities can exchange securities.
Equities
Equity investing generally refers to the buying and holding of shares of a company on a stock market by individuals and firms in anticipation of income from dividends and capital gains.
Debt Instruments
A debt instrument is a documented tool used by entities to raise capital, promising to repay lenders or investors as per contractual terms.
Preference Share
Preference shares are company shares that entitle holders to receive profits before ordinary shareholders, providing priority in dividend payments.
