Capital Markets for Tomorrow
Nikhil Sunil Patil
affiliation not provided to SSRN
January 7, 2010
AES PGDBM Conference 2010
A capital market is a market for securities (debt or equity), where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year. The capital market includes the stock market (equity securities) and the bond market (debt). Capital markets may be classified as primary markets and secondary markets. In primary markets, new stock or bond issues are sold to investors via a mechanism known as underwriting. In the secondary markets, existing securities are sold and bought among investors or traders, usually on a securities exchange, over-the-counter, or elsewhere.
Capital Markets of today are driven by many factors like the economic growth, interest rates, forex, foreign investments and many more, but one of the most important factor that would drive tomorrow’s Capital Market is the environment.
Capital markets that include companies attuned to environmental issues in future would create permanent and powerful incentives for them to improve their environmental performance, while also ensuring better returns for investors.
In future: •Capital Market would ensure that the financial implications of environmental opportunities and risk are properly understood by financial institutions, investors and issuers and are appropriately reflected in the world’s capital markets, •The capital markets will play a transforming role in addressing climate change, enabling the transition from a fossil-fuel based economy to a post-carbon economy, •For investors, it would represent a unique opportunity to participate in a fundamental market transformation of today to tomorrow.
Number of Pages in PDF File: 19
Keywords: Capital Markets, Environment, Opportunities
JEL Classification: D6, G18, L16, L6, L7, M14, M41, R48working papers series
Date posted: January 8, 2010
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