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Tuesday, 20 September 2011

Capital Market – An Approach

Capital markets are a catalyst in promoting a nation’s economy and apparently play a crucial role in channelizing and mobilizing funds to establishments. It predominantly reinforces a holistic transformation of the economy into a more dynamic, innovative and competitive marketplace. An imperative segment of every financial market, capital market is a hub for financial assets that have a long or an indefinite maturity. The best aspect of capital markets is that government and corporate sector can reap the long term investment benefits for ambitious projects. Capital market is segregated into primary and secondary market. Primary market is precisely a market for new shares and secondary market denotes the market where existing securities are traded. Overall capital market institutes essentially offer rupee loans, foreign exchange loans, consultancy services and underwriting.
Let’s look at the gamut of functions that capital markets by and large offer, to know a detailed outlook of the avenue:
• Capital markets help in mobilizing the savings that are put idle in economy. The inert monetary resources are invested productively in other channels that require attention.
• Capital formation is yet another fruitful venture of capital markets. Mobilized savings are invested in various avenues like agriculture and industry that further helps in enhancing capital formation.
• It assures the development and growth of the economy. Capital market takes care of the financial requirements of the business enterprises. This leads to effective research and development and increase of production and productivity of the economy.
• Capital markets help in focusing on proper allocation of funds into the right channels so that proper regulation of funds can take place. The funds are routed in the perfect format.
• The huge spectrum of services that capital markets offer are loans to industry, underwriting services, consultancy services, export finance and the like.
• Funds are constantly flowing in capital markets for a long term basis. Being a liquid market, capital markets offer continuous availability of funds to enterprises as well as government.
However some of the elements that need to be watched out are also as follows:
• Risks of business like the stock market crashes can be harmful.
• Risks are also involved for people who decide to pursue investment options in capital markets.
• There is a lot of pressure to deliver goods for businesses are accountable for their performances, which can cause havoc in the scenario sometimes.
• If people fail to meet the deadlines or targets, there is a scope of the early exit as well.
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Tuesday, 30 August 2011

Corporate Finance - Did you know these Small Business Finance Tips?

Just in case you thought corporate finance decisions are limited to over the top business enterprises and big shot entrepreneurs, you need to revise your perception!
Small businesses and start-ups need corporate finance advice tips as well in order to channelize and manage their business finances. It’s imperative for small business owners to understand the importance of routing their finances into the right avenues and using the money for effective business operations. Small business corporate finance must be handled professionally to reap profitable results and revenue streams.
Let’s steer our attention to some of the most practiced and well researched tips to engineer your funds optimally. Well, for building a business isn’t all about a great idea that strikes the chord but also how the corporate finance segments are being managed most competently. As a small business owner, there are multiple and on-going expenses that you must take care of to keep the business open and maintain your credit.
Here’s how you can do that quite well:
• Small corporate finance should be steered in the right direction through the process called bookmarking. Did you just whisper in your mind, oh-that’s-so-archaic? Well, just to update you, bookmarking is one of the most reliable and on-going techniques corporate houses are still adhering to. In order to manage your finance well, keep registering all the invoices processed as well as the expenses incurred. This will help you keep a track of what’s going out and flowing in. Keeps you balanced.
• The biggest bluff a small corporate finance management team can do is exaggerating about their earnings. While you work with investors, banks, financial leaders, you must give them a clear picture of your earnings, for that would enable them to build a trust on your repayment ability.
• Irrespective of where your cash flows in from and goes out to, you must have everything lodged legally as well. The terms of all your financial agreement must be written down on a contract. So when the money is circulated, both the parties involved in transactions would have a clear picture of the money flow. All the terms pertaining to financial transactions should be listed down legally once mutually decided.
• Being a we-accept-only-cash business might take you away from your customers. It’s often not feasible for customers to be handy with cash, in such cases you must have a credit card processing system to reduce paperwork and hassle.

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Friday, 12 August 2011

Merchant Banking – A Synopsis


Merchant banking is primarily a financial institution that works towards offering services and advice to corporate houses and wealthy individuals pertaining to finance and fiscal avenues. It focuses on providing services related to commercial banking needs, long term company loans, stock underwriting across all professions. It’s predominantly conversely used with investment banking, however there are slight differences between the two concepts.
A merchant account is an account where money is accumulated by a bank from credit card buyers and disburses to the merchant.
Investment banks are more inclined towards facilitating mergers and acquisitions through share sales and, research and financial consulting. Merchant Banking was initiated in the Middle East in Italy and was conceptualized by grain merchants. In the present era, merchant banks are oriented towards activities like credit syndication, portfolio management, mergers and acquisitions counselling and acceptance credit. Merchant banks invest their own funds in client companies and offer fee based advisory services to big corporations and wealthy professionals and individuals.
Now if we take merchant banking on the international level and analyse the prospects, global merchant banking operations offer individual and corporate investors with the exposure to participate on a world map to get an access to international investment opportunities and channelize co investment opportunities. In the banking sector, merchant banking is the most evolving concept. Merchant banks majorly deal with commercial services on a large scale or with small enterprise. The merchant accounts have transformed the way people do banking and made online transactions easier and quick.
Let’s look at some of the benefits of merchant banking:
  • Account management is one of the many significant services that merchant banking offers. This opportunity helps and allows customers to manage their accounts quite well and with utmost transparency.
  • Credit cards payment has become quite easy and faster than the archaic times. Merchant banking has made credit transactions also very swift and channelized. The payments mode from Merchant banking has improved.
  • When you are doing an online credit card transaction through merchant banking, merchant banks let you have total security with all your details. The owner of the account will have full access and authority over the accounts and details and privacy are safeguarded and concealed.
  • Merchant banking is cheaper than online pay services, is convenient and has high transaction limit.
So now we have a ready synopsis of almost everything essential that you would want to know about merchant banks and merchant banking. Stay tuned for more such updates related to merchant banking and other finance avenues. 
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