GLOBAL

FINANCIA
L
MARKETS

WHAT IS A GLOBAL FINANCIAL

MARKET?
In terms of investing and capital flow, a global
market is the main driving force behind
international finance and trade.
Micro and macroeconomic scale
Concepts such as futures, swaps and options are
a centralized concern.
Impacting the success of investments in different
markets (Global economy)

FINANCIAL WEALTH

Trading of financial securities, derivatives, and other

financial contracts takes place in two settings:
formal financial exchanges and
more loosely organized over-the-counter (OTC)
markets.

WHAT IS A GLOBAL FINANCIAL

MARKET?

It can be seen as a wide set of rules

and institutions where assets are
traded between agents in surplus
and agents in deficit and where
institutions lay down the rules.

The financial market comprises

the marketsstrictu sensu
the institutions which work in them with
different aims and functions
as well as direct/indirect policies
orientated to making the market the
place where the exchange between
surplus and deficit units is carried out as
efficiently as possible.

At a very basic level,

the global financial
market links savers to
investors across
national boundaries
by offering investors
a vast array of
investment products
across a dazzling
variety of financial
markets. We can
think of the financial
market as consisting
of the capital
markets, commodities
markets, and
derivatives markets

CAPITAL MARKET
STOCK
is essentially an equity (or ownership) claim on the cash flows and
assets of a company.
BOND
is a debt security that represents a fixed-income claim on the cash
flows and assets of a company.
MUTUAL FUNDS
are pools of cash collected from investors and invested in
diversified baskets of traded securities. The securities include
stocks, bonds, and other money market instruments.
EXCHANGE-TRADED FUND
provide many of the same benefits as mutual funds. An ETF tracks
an index, a commodity, or a basket of assets like an index
(mutual) fund, but unlike a mutual fund, it trades on an exchange
like an individual stock.

COMMODITIES MARKET
offers investors the opportunity to invest
in physical commodities. As such, they
provide investors with diversification
opportunities that go beyond those
provided by the capital markets.

DERIVATIVES MARKET
involves trade in derivative contracts. As the
name suggests, these are financial contracts
whose value is driven by the value of some
other asset or security. Commonly used
derivatives are forwards, futures, options,
and swap contracts.

HOW GLOBAL FINANCIAL MARKET HELP ECONOMIC

GROWTH

Creates money and facilitates its flow

Facilitates specialization and trade
Facilitates global risk management for
individuals and companies
Mobilizes resources and creates new
resources by encouraging innovation
Obtains information for the evaluation of
businesses and individuals and allocates
capital
Increases the set of opportunities available to
companies, entrepreneurs, and individuals