Functions of the Financial Markets

Functions of the Financial Markets or Institutions in Economy

1. Allocation of financial resources to the mainly productive units. Savings are moved to economic units such have alternative investments' channels. There is connection between sellers and buyers.

2. Distribution of savings to original investment.

3. Completing real output in the economy through mobilizing capital for investment.

4. Enable companies to create long term and short term investments and raise liquidity of shares.

5. Provision to individuals of investment advice via financial experts.

6. Enables companies to increase long term and short term capital or funds

7. Because of pricing of securities as like N.S.E. index shares shows changes in share prices.

8. Provide investment chances. Savers can hold financial instrument for investment completed.