types of securities in capital market
The securities market is an element of the capital market, which serves as the most important source of long-term investment resources for governments, corporations and banks.
The origin and circulation of capital, presented in securities (shares, bonds, promissory notes, etc.) closely connected with the functioning of the market of real estate assets, which is understood as the market for the purchase and sale of material resources. With the advent of the securities or of the stock of assets, is a bifurcation of the capital: on the one hand, there is a real capital represented by production facilities, on the other - its reflection in the securities.
The emergence of this kind of capital is connected with the development of needs in attracting a growing volume of credit resources for the expansion of commercial and manufacturing activities. The stock market is beginning to develop on the basis of the capital, as the purchase of securities - is the transfer of part of the money capital of the loan. The security acquires the form of the credit of the document, in accordance with which the holder acquires the right to a regular income, as presented in the the form of interest or dividends in the given loan capital.
types of securities in capital market: the security (the property title) keeps to its owner the right of ownership to the given loan capital and, in addition, gives the right to its increase at the expense of interest or dividend.
Security represents a cash document, certifying, firstly, the right of ownership (or loan relationships) and, secondly, defines the relationship between the person who has issued the document, and their owner. Securities provide for the payment of income in the form of dividends or interest, as well as the possibility of transfer of funds and other rights arising from these documents, to the other parties. The most common types of securities are shares and bonds.
Share - a security, which testifies to the introduction of a share in the capital of a joint stock company and gives its owner the following rights: to receive income, which is called a dividend; voice in the conduct of the Affairs of the joint-stock company; to receive part of the property upon its liquidation; to receive information about production and financial condition; the pre-emptive acquisition of new issues of shares.
The next most important form of securities - bonds. They entitle their holder annually receive a fixed income, but does not provide the right to vote in the adoption of managerial decisions. The bond is issued (emitted) for a limited period of time, for example 3, 6 and 12 months. Its cost is more than offset by the expiration of this period. Bonds may issue a state, city, enterprise, various funds, etc. Income on bonds is usually called payments "coupons", as the holder of a note at the specified intervals cuts the bonds of such coupon and send it by mail of the organization that issues the bond, to receive interest due.
To the other common types of securities are also certificates of Deposit, savings certificates, cheques and promissory notes, as well as government securities.
Government securities are debt obligations of the government. They differ in dates of issue, maturity, size of the interest rate.
At the present time in most countries traded state securities of several types. The first is the Treasury bills. The term of their maturity, as a rule, the 91st day. The second - Treasury bills with a maturity of up to 10 years. The third - Treasury bonds with a maturity of 10 to 30 years. These types of securities are issued for the crediting of the public debt: short-term, medium-term and long-term. Accordingly, different and interest payments on them.
