Bond Markets
Bond markets are larger in value and size than the equity market. However, it is less well known than the equity market. The amount of global bond market in general is around USD 100 trillions. The largest issuers of bond are the government followed by financial corporations. Domestic bond market accounts for 70% of the total bond market while the remainder is the international bond market. The domestic bonds are issued by governments and companies while the international bonds are issued by the companies, governments and supranational agencies such as world bank. Trading in international bonds is predominantly happens in European market.
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MTF(Multilateral Trading Facilities)
MTF is also known as multilateral trading facilities. It is a system that arises due to the development of technology and communication networks. The system is known for its matching engine or crossing networks which operated by an investment firm or other market operator. It brings together multiple parties which are interested in buying and selling financial instruments such as shares, bonds and derivatives. Stock Exchange in The World
US Stock Exchange Market There are two most popular US stock exchange market which are NYSE and NASDAQ NYSE is also known as New York Stock Exchange and it is the largest stock exchange in the world. The domestic market capitalization is around USD 22 trillion. The second largest stock market exchange is NASDAQ in America with a domestic market capitalization is around USD 10 trillion. Japan Exchange Group The third largest stock exchange in the world is the Tokyo Stock Exchange which is part of the Japan Exchange Group and has a domestic market capitalization of over USD 6 trillion. Shanghai Stock Exchange Shanghai Stock Exchange is the fourth largest in the world with domestic market capitalization around USD 5 trillion. European Stock Exchange London Stock Exchange ( domestic capitalization of over USD 4 trillion), SIX Swiss Exchange and Deutsche Borse are considered as the largest stock exchange in Europe. Shenzen Stock Exchange Shenzen Stock Exchange is the 8th largest stock exchange with a domestic capitalization of around USD 3 trillion. Middle East Stock Exchange Tadawul is the largest Saudi Stock Exchange with a domestic market capitalization of around USD 2.5 billion. Equity Market
Equity market facilitate the shares trading in quoted companies. The global market capitalization is the total value of the shares quoted on the world stock exchange. The global market capitalization was approximately over USD 84 trillions at the end of 2018. Based on the data provided by the World Federation of Exchanges. The Retail Financial Services Sector
The retail financial services sector provides services in the form of retail banking which includes current accounts, deposit accounts, credit cards and lending. Insurance services may cover the range of life assurance and protection solutions for area such as critical illness cover, medical insurance, motor insurance, property insurance, mortgage protection and income protection. Financial planning and advice services cover in assisting individual to understand and plan for their financial future. Pensions may include the investment accounts designed to capture savings during a working life of a person and provide benefits on retirement. Investment services ranging from execution only stockbroking, wealth management service and private banking. The Wholesale Financial Services Sector
The wholesale activity of the financial services sector includes equity markets, bond markets, foreign exchange, derivatives and insurance markets. Equity markets involve the trading of the quoted shares. Bond markets involve the trading of the corporate, supranational or government debt Foreign exchange involves the trading of the currencies Derivatives involve the trading of the swaps, options, future and forwards Insurance markets involve the corporate insurance, professional indemnity, reinsurance, captive insurance and risk sharing insurance. Other activities in wholesale sector include fund management, investment banking and custodian banking Fund management includes managing the investment portfolio of collective investment schemes, insurance funds and pension funds. Custodian banking provides services for the asset managers such as the safekeeping of the assets, settlements, administration of the underlying investments and corporate actions. Investment banking is a banking service tailored to organization such as mergers and acquisition, fixed income trading, private equity and equity trading. Payment Systems
The existence of the payment systems and banking services operated by the financial services sector provide the mechanism for the money to be managed, transmitted and received quickly, safely and reliably. Access to the payment systems is an important part of the financial service sectors for individuals. Risk
The financial services sector also allows risk to be managed efficiently and effectively using sophisticated derivatives or insurance. These will lead to better coping with global uncertainties such as the changing value of the currencies or extreme weather conditions or major accidents. Investment Chain
Based on investment chain, the savers and borrowers are brought together. Savers will finance the businesses. Businesses may offer opportunities for saver to take part in the growth of the business. This may result in the potential returns. The efficiency of the investment chain is crucial in allocating the uninvested capital to businesses for their own growth. This may lead to an increase in the productivity. The Role of Financial Sector
The financial service sector links the organization needing capital and those with capital for investment. A start up or growing company is an organization which requires capital. The capital can be provided by the pensioners who save for their retirement in a pension fund. Financial services sector play the part of channeling the money invested to those organization that need it. Besides that, financial services sector also provide payment, execution, advisory and management services. The roles provided by the financial services sector may include investment chain, risk and payment system. |
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