TYPES OF
CAPITAL
MARKETS
CAPITAL MARKETS
• are platforms that facilitate the buying
and selling of financial securities such as
stocks, bonds, and derivatives.
1.Public equity Market
- Most well known type of capital market, often referred to as the
stock market.
2. Private Equity Market
- Involves privately negotiated investments in companies that are
not publicly traded. Private equity investments provide capital to
companies in exchange for an ownership stake, which can be sold or taken
public in the future.
3. Debt Market
- Enable the buying and selling of debt of instruments like bonds,
notes, and loans. Governments, municipalities, and corporations issue
bonds to raise money for various purposes, including infrastructure
projects, expansion plans, or debts refinancing.
4. Foreign Exchange Market
- Also known as the Forex Market, it deals with the exchange of
different national currencies. Enables individuals, businesses, and financial
institutions to convert one currency into another, facilitating international
trade and investment.
5. Derivatives Market
- Are financial contracts that derive their value from an underlying
asset or financial instrument. Includes products like options, futures, swaps
and forwards.
6. Commodities Market
- Involves trading of physical goods such as gold, oil, agricultural
products, and other raw materials.
7. Real Estate Market
- Properties and land are bought, sold, or leased. It enables individuals
and institutions to generate income through rent and property appreciation.
TYPES OF
CAPITAL
MARKETS IN THE
PHILIPPINES
STOCK MARKET
• The Philippine Stock
Exchange(PSE) is the primary
platform for trading stocks and
equity-related securities.
• Investors can buy and sell
stocks, which represent
ownership stakes in publicly
listed companies.
BOND MARKET(FIXED- • The bond market in the
INCOME MARKET) Philippines facilitates the
issuance and trading of debt
securities.
• Government bonds, corporate
bonds, and other fixed-income
instruments are traded on this
market.
• Used to raised funds for
various projects, and they pay
periodic interest to
bondholders.
MONEY MARKET
• Is where short-term debt
securities and financial
instruments are traded.
• Includes instruments like
Treasury Bills(T-bills),
commercial paper, and
certificates of deposit.
• Provides platform for
government and corporations
to manage their short-term
DERIVATIVES MARKET
• The Philippine Dealing and
Exchange Corporation(PDEx)
operates the derivatives
market.
• Used for hedging risk,
speculation, and portfolio
management.
ALTERNATIVE
INVESTMENT MARKET
• Includes investment options
outside of traditional stocks
and bonds.
• Offer diversification and
income opportunities.
FOREIGN EXCHANGE
MARKET(FOREX
MARKET)
• The forex market is where
currencies are traded.
• The Bangko Sentral ng Pilipinas
(BSP) oversees the foreign
exchange market and sets
exchange rate policies.
COMMODITY MARKET
• While not as prominent as
other markets, the Philippines
has some commodity trading
activities, primarily in
agricultural products.
PRIVATE EQUITY
AND VENTURE
CAPITAL
• Provide funding to start-ups
and businesses in exchange for
equity.
• These investors often play a
crucial role in nurturing
entrepreneurial activity and
innovation.
CRYPTOCURRENCY
MARKET
• Bitcoin and Etherium have
gained popularity as
alternative investments.
• Investors can buy,sell, and
trade cryptocurrencies on
these platforms , which
operate 24/7.
SOCIAL IMPACT
INVESTING
• Focuses on investments that
generate both financial
returns and positive social or
environmental outcomes.
• Social impact bonds,
microfinance, and
investments in projects
addressing issues like
poverty, healthcare, and
education fall under this
category.
REAL ESTATE
INVESTMENT
TRUSTS(REITs)
• Allow investors to invest in
income-generating real estate
properties, such as malls and
office buildings, without
directly owning the properties.
SUSTAINABILITY
AND GREEN
FINANCE
• Green bonds, for example, are
issued to fund environmentally
friendly projects, such as
renewable energy initiatives
and climate change mitigation
efforts.
ISLAMIC FINANCE
• Adheres to Islamic principles,
including prohibititions
interest(usury) and unethical
investments.
ONLINE AND
MOBILE TRADING
PLATFORMS
• Technological advancements
have led to the proliferation of
online and mobile trading
platforms, making it easier for
retail investors to participate
in capital markets.
PRIMARY • refers to the
financial markets
MARKETS where new
securities are issued
and sold for the first
time.
PURPOSE
• Is to provide a means for
companies to raise funds
for expansion, debt,
repayment, or other
corporate purposes.
• It plays a crucial role in fostering capital
formation.
• Contributes to price discovery in the
financial market.
1. DECISION TO RAISE
CAPITAL.
PROCESS OF 2. SELECTION OF
PRIMARY INVESTMENT BANKS.
3. PREPARATION OF
OFFERINGS OFFERING DOCUMENTS.
4. DUE DILIGENCE.
5. PRICING AND
ALLOCATION.
6. MARKETING AND
ROADSHOWS.
7.BOOK BUILDING AND
STABILIZATION.
8. REGULATORY APPROVALS
AND LISTING.
TYPES OF PRIMARY
OFFERINGS
Initial Public Seasoned Private
Offerings(IPOs) Equity
Offerings
Placements
(SEOs)
Debts
Issuances
PRIMARY MARKETS
IN THE PHILIPPINES
• are crucial for capital formation
and econimic development.
SECONDARY • known as
MARKET aftermarket or stock
exchange.
Aspects of Secondary Markets
PURPOSE AND IMPORTANCE
• Is to provide liquidity by facilitating the trading of already
issued financial instruments among market participants.
PARTICIPANTS
• Includes individual retail investors, institutional investors
like mutual funds, pension funds, and hedge funds, as
well as market makers and authorized dealers who
provide liquidity on the trading platform.
EXCHANGES AND PLATFORMS
• Secondary Markets operate through various
exchanges and trading platforms worldwide.
MARKET STRUCTURE
• Can have different market structures based on how the
trading is conducted.
PRICE DISCOVERY
• By bringing together a range of buyers and sellers, these
markets help determine the fair market value of financial
instruments.
MARKET EFFECIENCY
• Liquidity provided by these markets enables investors to
buy and sell securities without significant price impact,
fostering fair pricing and reducing bid-ask spreads.
REGULATION AND INVESTOR PROTECTION
• Are subject to regulations to ensure fair trading
practices, information dissemination, and investor
protection.
MARKET VOTALITY
• Can experience periods of votality due to several factors,
such as economic conditions, geopolitical events,
changes in interest rates, corporate earnings
SECONDARY MARKET VARIOUS FUNCTIONS IN
THE FINANCIAL SYSTEM
1.PRICE 2. LIQUIDITY 3. RISK
DISCOVER PROVISION MANAGEMEN
Y T
4. CAPITAL 5. MARKET 6. INVESTOR
FORMATION EFFECIENCY PROTECTION
TYPES OF SECONDARY MARKET
1.STOCK 2. BOND 3.COMMODIT
EXCHANGES MARKETS Y
EXCHANGES
4.DERIVATIVE 5. FOREIGN
S MARKET EXCHANGE
FUNCTIONS OF
SECONDARY MARKET
2. PRICE 3. RISK
1.LIQUIDIT DETERMINATIO MANAGEME
Y N NT
4. CAPITAL 5. MARKET
FORMATIO EFFECIENC
N Y
SECONDARY
MARKETS IN THE
PHILIPPINES
• ensures fair trading practices
and protects investor interest.
THANK
YOU!!
Reporter: Panganoron, Judy R.
Navales. Ric Mark
Stephen N.
Orcullo, Jerald A.
