Business Communication-I THE MARKET Lecture No. 10

The Market 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 (dealers).

The Market It bridges the gap and distance between the buyers and sellers and provides a platform for buyers to buy their desired goods and sellers to locate and find buyers.

Foreign Exchange Market THE MARKET CAPITAL MARKET COMMODITY MARKET Stock Market Money Market Foreign Exchange Market Raw Material Market Finished Goods Market Bullion Market

Nature of Markets

Ready Market Future Market A market may be a ready market where goods are bought and sold for ready delivery / spot delivery without speculation (assumption).   Future Market A market may be a speculative market where goods are bought and sold for future delivery with a view to gaining through speculation. Such a market is known as a futures market. The examples are stock exchanges, cotton exchange, bullion exchange, etc.

Kinds of Market a). Commodity Market b). Capital Market The following are the kinds of a Market / Economic Market:   a). Commodity Market b). Capital Market

COMMODITY MARKET: The first and the well-known type of a market are a Commodity Market. As the term itself explanatory (clarifying), it deals in commodity that may be used for direct consumption or to be utilized for production, e.g., rice, wheat, oil-seeds, cotton, leather, gold and silver etc. The Commodity Market organized in Pakistan may be sub-dividend into the following:

i) Raw Material Market is a market dealing in raw produced, e. g i) Raw Material Market is a market dealing in raw produced, e.g., wheat, cotton, iron, etc. Such market or exchanges are in Karachi Cotton Exchange, Faisalabad Rubber Exchange etc.

cotton, cotton yarn, leather, sugar, flour, etc.  ii) Manufacturing & Finished Goods Market is a market to deals in semi-finished goods /finished goods/manufactured and partially manufactured goods, e.g., cotton, cotton yarn, leather, sugar, flour, etc.

iii) Bullion Market is a market to sell precious metals, e. g  iii) Bullion Market is a market to sell precious metals, e.g., gold, silver, etc. Karachi Bullion Exchange, London bullion Exchange etc.

CAPITAL MARKET

Capital Market may be sub-divided into the following: The second important type of market is capital market. Capital is the life blood of an industry. It is required to start a new business or to expand the old ones. Capital Market helps to get finance. It is the market of home currency, foreign exchange and stocks and shares. Capital Market may be sub-divided into the following:

i) Money Market: This market provides short-term finances to the commercial and business concerns. It is that finance which is consumed within one year. It is supplied in form loans payable with in one year, overdraft, letter of credit, bill of exchange, promissory notes etc. the sources if such finances are commercial banks, co-operative societies, and factors.

ii) 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.

iii) Stock & Shares Market: This market deals in long-term capital in the following forms: Share Capital i.e. shares, stocks Long term loans, bonds, debentures (A bond for acknowledging a debt). It is an organized market for buying for investments. It facilitates free movement of stocks and shares from an industry or reign to another, e.g., Karachi Stock Exchange, Lahore Stock Exchange etc.

Stock & Share Market

Stock & Share Market