Meaning

The capital market is a vital part of the financial system, focused on providing long-term funding. Here's a breakdown of its meaning:

Long-term financing: Unlike the money market, which deals with short-term debt, the capital market facilitates the trading of long-term debt and equity instruments. This means instruments with maturities of more than one year. Bringing together buyers and sellers: It's a platform where those who have capital (investors) meet those who need capital (businesses, governments). Key components: The capital market primarily consists of: Stock market: Where shares of ownership (equities) in companies are bought and sold. Bond market: Where debt securities (bonds) are traded. Purpose: It enables businesses to raise funds for expansion, research, and development. It allows governments to finance public projects. It provides investors with opportunities to grow their wealth. In essence, the capital market channels savings and investments into long-term productive uses, contributing to economic growth.