CAPITAL MARKETS PRESENTED BY ANWAR MISBAH SOUBRA, Phd.

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Presentation transcript:

CAPITAL MARKETS PRESENTED BY ANWAR MISBAH SOUBRA, Phd.

FINANCIAL MARKETS THE PLACE WHERE FINANCIAL CLAIMS AND SERVICES ARE TRADED. THE PLACE WHERE FINANCIAL CLAIMS AND SERVICES ARE TRADED. THE MEETING PLACE AMONG BUYERS AND SELLERS. THE MEETING PLACE AMONG BUYERS AND SELLERS.

MONEY MARKET THE FINANCIAL INSTITUTION WHERE MONEY IS CHANNELED FROM EXCESS LIQUIDITY ENTITIES TO ENTITIES SHORT IN LIQUIDITY ON A SHORT TERM BASIS. THE FINANCIAL INSTITUTION WHERE MONEY IS CHANNELED FROM EXCESS LIQUIDITY ENTITIES TO ENTITIES SHORT IN LIQUIDITY ON A SHORT TERM BASIS.

CAPITAL MARKET THE INSTITIUTION WHERE LONG TERM FINANCING AND CHANNELING OF FUNDS IS CONCLUDED. THE INSTITIUTION WHERE LONG TERM FINANCING AND CHANNELING OF FUNDS IS CONCLUDED.

MONEY WHAT ARE THE FUNCTIONS OF MONEY? WHAT ARE THE FUNCTIONS OF MONEY?

FUNCTIONS OF MONEY 1. STANDARD OF VALUE FOR GOODS AND SERVICES. 2. MEDIUM OF EXCHANGE. 3. STORE OF VALUE.

MONEY ITSELF IS NOT A COMMODITY AND CANNOT BE BOUGHT OR SOLD.

MAJOR SUPPLIERS OF FUNDS IN THE CAPITAL MARKET. 1. COMMERCIAL BANKS. 2. INSURANCE COMPANIES. 3. BUSINESS CORPORATIONS. 4. RETREMENT FUNDS.

MAJOR BORROWERS IN THE CAPITAL MARKET. MAJOR BORROWERS IN THE CAPITAL MARKET. 1. TREASURY DEPARTMENTS. 2. CORPORATIONS. 3. SECURITIES DEALERS.

CAPITAL MARKET INSTRUMENTS 1. STOCKS. 2. CORPORATE BONDS. 3. MORTGAGES. 4. GOVERNMENT NOTES AND BONDS. 5. MUNICIPAL BONDS. 6. CONSUMER LOANS.

FINANCIAL MARKETS PRIMARY MARKET SECONDARY MARKET MONEY MARKET CAPITAL MARKET

MARKET TYPES 1.SPOT MARKET: FINANCIAL SERVICES ARE TRADED WITH IMMEDIATE DELIVERY. 2.FUTURE MARKET: FUTURE DELIVERY TRADING. (1) 3.FORWARD MARKET: FUTURE DELIVERY TRADING. (2) 4.OPTION MARKET: EXERCISE THE RIGHT TO BUY OR SELL IN EXCHANGE FOR AN OPTION PRICE.

ASSETS TRADED SECURITIES.METALS.COMMODITIES.CURRENCIES.INDEXES.

COMMON CHARACTERISTICS 1.CREDIT. 2.SPECULATION. 3.SHORT SALE.

SHARIA VIEW

SHARIA DISCUSSIONS: SPECULATION VS. INVESTMENT. SPECULATION VS. INVESTMENT. SHARES: REPRESENT ASSETS AND LIABILITIES (DEBTS). SHARES: REPRESENT ASSETS AND LIABILITIES (DEBTS). MARGIN PURCHASES AND LOANS. MARGIN PURCHASES AND LOANS. COMMON STOCKS: NON-VOTING (MUDARABA), WARRANTS. COMMON STOCKS: NON-VOTING (MUDARABA), WARRANTS. PREFERRED STOCKS: GUARANTEE THE PRINCIPAL, FIXED RETURN, CUMULATIVE, CALLABLE, CONVERTIBLE. PREFERRED STOCKS: GUARANTEE THE PRINCIPAL, FIXED RETURN, CUMULATIVE, CALLABLE, CONVERTIBLE.

SHORT SELLING: SELLING WHAT IS NOT OWNED. OWNING WHAT CANNOT BE BORROWED. MORE THAN ONE SALE IN ONE CONTRACT. SHORT SELLING: SELLING WHAT IS NOT OWNED. OWNING WHAT CANNOT BE BORROWED. MORE THAN ONE SALE IN ONE CONTRACT. OPTIONS: PROTECTED INVESTMENT. GAMBLING OR A CONTINGENT CONTRACT WITH DOWN PAYMENT? OPTIONS: PROTECTED INVESTMENT. GAMBLING OR A CONTINGENT CONTRACT WITH DOWN PAYMENT? INDEX TRADING. INDEX TRADING.

FUTURE TRADING VS. DELIVERY. FUTURE TRADING VS. DELIVERY. 97% NON DELIVERY CONTRACTS. 97% NON DELIVERY CONTRACTS. CURRENCIES, PRECIOUS METALS. CURRENCIES, PRECIOUS METALS.

REVISIT AND REASSURE THE REAL OBJECTIVE OF THE CAPITAL MARKET: CHANNEL SURPLUS LIQUIDITY TO REAL INVESTMENT WITH AN ECONOMIC VALUE ADDED.