KINDS OF MARKET

by • 23/08/2011 • B.com part 2 Business CommunicationComments (0)594

MARKET DEFINITION

A market is a place where goods are bought and sold. It is a place where buyers and sellers meet each other directly or through agents and brokers. It bridges the gap and distance between the buyer and sellers and provides a platform for buyers to buy their desired goods and sellers to locate and find buyers.

KINDS OF MARKETS

The following are the kinds of a market/ economic market.

CAPITAL MARKET:

It is a market that deals in finances. It provides a place where capital is mobilized, offered and invested. It brings prosperity to a country. It provides lifeblood for production and industries.

It has the following types:

  • Stock market:

This market deals in long-term capital in the following forms:

  1. Share capital i.e. shares, stocks.
  2. Long term loans, bonds, debentures.
  • Money market:

This market provides short-term finances to the commercial and business concern. It is that finance which is consumed with thin one year. It is supplied in the form loans payable within one year, overdraft, letter of credit, bills of exchange, promissory notes etc. the sources of such finances are commercial banks, cooperative societies, factors.

  • Foreign exchange market:

This market deals in foreign exchange. Foreign exchange refers to that system by which commercial nations discharge their debts. This market determines the balance of payment and balance of trade of a country. Foreign exchange position will be good if balance of payment and balance of trade are favorable.

COMMODITY MARKET

Commodity market is the place where principal buyers and sellers meet to strike business deals. The business is transacted in line with prescribed set of rules. In certain markets or exchanges only members are allowed. This market deals with good and services. Good may be in the form of raw materials, semi-finished goods, finished goods, and bullion.

It has the following kinds:

  • Raw materials market:

This markets deals with the goods in raw forms like jute, cotton, silver, gold, wheat, leather. Its examples are; Karachi Cotton Exchange, New York Cotton Exchange, COMEX God Exchange, Kuala Lumpur Rubber Exchange.

  • Finished goods market:

This market deals in semi-finished and finished goods like cotton, leather, flour, rice.

  • Bullion market:

Bullion market includes gold, silver, and sovereigns. Its examples are:

Karachi Bullion Exchange

Bombay Bullion Exchange

New York Bullion Exchange

London Bullion Exchange

Hong Kong Bullion Exchange

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