The Capital Market – The Future It Creates For All

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the capital market
the capital market
The Capital Market[/caption]

For every economy to survive there is need to anchor its economic growth on an effective and efficient financial sector which helps it coordinate domestic savings as well as raise money for capital projects that will invariably lead to economic development. 

Firms and individuals are not left out as everyone must join hands to move a nation forward. The constructions of roads, hospital, bridges, schools etcetera, are not the exclusive preserve of the government alone. This is where the capital market comes in to play a pivotal role in the growth and development of every economy. Investing in the capital market is vital for creating wealth. This is because every individual, firm or government have an objective which it tends to achieve and the only to bring this to pass is by first investing. Simply put; the capital market is a market for securities where government, firms and individuals come to raise medium and long-term funds. This means that every stakeholder in the capital market can utilize the securities provided on this platform to pool funds for economic development projects. Some of these securities issued by the capital market include stocks and shares issued by firms, Treasury and Municipal Bonds from government, and Corporate Bonds and debentures. Investing in the capital market is not without its benefits. Some of these benefits are outlined below;
  • Helps to imbibe the culture of saving (even in small amounts).
  • A source of wealth creation 
  • A instrument to be used as collateral for loans
  • Can be easily converted to cash
  • A stable and steady source of income
Thus, we can see that no matter what form of security we tend to invest in, there are always benefits awaiting us. 
economic growth
economic growth
Economic growth[/caption]
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Report shows that the capital market has a nexus with economic growth and development because of certain economic policies which emanates therein. This acts as the major role of the capital market in the economy. It will however be pertinent to discuss others roles the capital market play in sustaining development that will benefit us all in the future. So here are some of these roles;
  • The capital market helps to connect both providers and users of capital. Here, funding for long-term developmental projects are made available through the issuing of treasury bonds or other securities.
  • The capital market also helps to boost the average per capita GDP of an economy with the investment policies provided in the capital market.
  • The capital market creates a form of financial inclusion which it does through the introduction of new products and service fashioned in a way so as to whet the appetite of investors who are prone to take risk.
  • The capital market acts as asset managers on behalf of prospective client while allocating funds and helping the clients make some investment decisions.
  • The capital market also offer financial and investment advice as part of its policy to help investors manage their risks. 
From the look of things, it will therefore be save to say that the capital market can really benefit all and sundry. This is evident in the investments by multinationals in their host countries in building infrastructures for the benefit of all. 

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