Career Opportunities in Capital Market
Vijay Prakash Srivastava
For a common man banks are the most familiar financial institutions which are used to deposit and withdraw money and to avail loans .Banks branches are widely spread and offer their services to both rich and poor. When it comes to careers, these banks, both public and private, have offered employment to thousands of young people. Banking is considered to be a good career option in our country.
Banks deal into money. Along with banks there are other institutions also involved in the business of money and finances. Such institutions come under the ambit of capital market which keeps expanding with economic growth. There are different financial instruments traded in this capital market. These include bonds, equity shares, debentures, call money, derivatives, commodity indices, futures and options etc. Explanation for these terms can be easily found in books on financial management and of course on internet.
Capital market consists of primary capital markets and secondary capital markets. Primary capital markets deal with trade of fresh issues of stocks and other securities, whereas secondary capital market deals with the exchange of existing or previously issued securities. On business related TV channels you might have come across the strip showing running prices of stocks. Many of these stocks were first offered to investors 50-60 years ago and are still being traded albeit for a different price. The price of such securities depends on market sentiments, state of the economy, demand, quality of the company management and future prospects. This example is given to highlight the long term and dynamic nature of capital markets.
The primary capital market grows on the strength of secondary capital market.
Capital market is a market where buyers and sellers come together to trade financial securities like bonds, stocks, etc. These days most of such trade is done electronically/on line. This market has both institutional and individual buyers. Capital markets come within the financial sector.
A healthy and growing Capital Market attracts both domestic and foreign investment which is necessary for the growth of economy. Governments usually don’t interfere in such markets but regulating it becomes necessary to protect the interests of investors and curb unfair trade practices. Ministry of Finance, Reserve Bank of India, Securities and Exchange Board of India keep a watch on the capital markets. Then there are specific regulators for particular businesses.
The pre budget economic survey released on 29th January 2018 promises the country’s Gross Domestic Product (GDP) growth rate to be 7.5 percent during the financial year of 2018-19.Thus we can be sure that our economy shall be buoyant and so shall be the capital markets.
Except for general positions like customer service associates etc. all other job roles in capital market require specific knowledge and study. A simple graduation may help you to get a bank job but such is not the case with capital markets. Here you need specific qualifications.
The following qualifications can help you make a good career in capital market-
Postgraduation in Commerce: Commerce has always been a popular subject of study for students of 10+2 onwards. Masters degree in Commerce (M.Com) can be pursued at most of the universities and colleges offering postgraduate courses spread all across the country.
Masters in Business Administration with specialization in Finance: Importance of MBA qualification is known to every aspirant of a corporate job. Few universities have named their business courses as Masters in Management Studies (MMS). Two years full time Postgraduate Diploma in Management as offered by Indian Institute of Management (Ahmedabad/ Bengaluru/ Kolkata/Indore/ Lucknow/ Shillong/Rohtak/ Kashipur/ Tiruchirapalli and at few other centres) is a much sought after course. Finance is one of the main specializations offered in business management courses. Also available are courses like Masters in Financial Management in which specialization is already defined. Admission to management courses are made through Common Aptitude Test (CAT), Management Aptitude Test (MAT), AIMS Test for Management Admissions (ATMA) etc. Some institutes like Manipal Academy of Higher Learning, a deemed university, conduct their own entrance tests.
Narsee Monjee Institute of Management Studies (NMIMS) at Mumbai offers MBA in Capital Markets. Institute of Technology & Management (ITM), Navi Mumbai conducts a Postgraduate Diploma in Financial Markets. There may be few more such courses.
Make sure that the business course you choose has the approval of All India Council for Technical Education (AICTE)/Universities Grants Commission (UGC).
Chartered Accountancy: This is a well known course administered by the Institute of Chartered Accountants of India (ICAI).
Cost & Management Accountancy: The Institute of Cost Accountants of India offers this course which to some extent is similar to a course in Chartered Accountancy.
Company Secretary: Institute of Company Secretaries of India (ICSI) conducts this course.
Chartered Financial Analyst: The course has an international identity. It is run globally by the CFA Institute based in the United States of America. It means that one can do this course in India without leaving the country.
CIMA Certified Professional: Chartered Institute of Management Accountants is a body of professionals with origin in United Kingdom. It offers Certificate in Business Accounting and Certification as Chartered Management Global Accountant which can be completed in India.
All the above courses (Chartered accountancy and below) are offered usually under self study mode with facility of contact classes.
Higher qualifications in Economics, Data Analytics etc. may also come handy for jobs in capital market. Those with background in information technology are also in demand as use of technology is on rise and technological innovations are taking place everywhere including capital markets.
Following are few of the institutes offering distinct valuable courses for entry to the Capital Markets:
Bombay Stock Exchange (BSE) jointly with Mumbai University conducts Masters in Global Financial Markets and Masters in Financial Technology. BSE Institute has many short term programmes also as listed on their website.
National Institute of Securities Market (NISM) was established in the year 2006 by SEBI, the securities market regulator for the country. It has its main campus at Patalganga near Mumbai. It conducts full time programmes leading to Postgraduate Diploma in Management (Securities Markets), Postgraduate Programme in Securities Markets, Postgraduate Diploma in Quantitative Finance. Part time programmes include Certificate in Treasury Management, Certificate in Securities Law, Postgraduate Diploma in Financial Engineering and Risk Management. The Institute also conducts a number of Short term and certification programmes.
Credit Rating Information System of India Limited, now CRISIL, offers a two years work-cum-study programme to develop finance professionals. This is known as CRISIL Certified Analyst Programme.
As a qualified professional you have varied career opportunities in Capital Markets. Some of the areas you may consider to work in, are described below:
Equity Markets: There are broking houses which carry trade in equities for self and on behalf of their clients. They need equity analysts to evaluate performance and potential of stocks/shares. Based on this analysis decision regarding sale/purchase of shares is taken and recommendations to clients are also made.
Mutual Funds: Mutual Funds collect money from individuals and other entities for investing in stocks, bonds and debt instruments etc. They offer variety of schemes as per customer preferences and their risk appetite. There are a large number of mutual fund operators in our country whose workforce consists mainly of equity analysts and fund managers. Unit Trust of India is a leading mutual fund company of our country. List of other mutual funds can be accessed from the website of Association of Mutual Funds in India.
Wealth Management: High net worth individuals, companies and trusts etc. appoint wealth managers to seek considered advice and take care of their investments. It is common for industrialists, big film, stars, sportspersons etc. to engage wealth management professionals.
Investment Banking: This is a lucrative area and is equally challenging. Investment Banking is different from common banking services. Investment banks work as financial intermediaries specializing in large and complex financial transactions such as underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and acquisitions, and acting as financial advisor for institutional clients. Barclays, Bank of America, Merrill Lynch, Goldman Sachs, Deutsche Bank, JP Morgan, Morgan Stanley, Credit Suisse, Citibank and Lazard are well known global names in Investment Banking. Kotak Investment Banking is among leading Indian operators. Some investment banks specialize in particular industry sectors.
Merchant Banking: Few roles are common for investment bankers and merchant bankers. Merchant banking involves managing issues of initial public offering and rights issue of equities, bonds etc., raising finance for clients, restructuring and rehabilitation of business/industry, project management services, portfolio management etc. SBI Capital, ICICI Securities Limited, IDBI Capital Markets, Tata Capital Markets Limited, J M Financials, Bajaj Capital, Yes Bank Limited, Edelweiss Capital are among top merchant bankers in India.
Rating agencies: Many of the financial instruments like debentures, fixed deposits offered by companies, bonds etc. need to carry their rating by a recognized rating agency. This rating is a kind of risk profiling of the instrument and an indication how good or bad is the instrument from risk’s point of view. CRISIL, CARE, ICRA are the leading rating agencies operating in our country. Moody’s, Standard & Poor’s, Fitch Ratings are few of the reputed global rating agencies.
Audit: Regulatory guidelines have been in existence for financial transactions and companies have to report the findings of audit and compliance thereon. There are various firms which engage people for audit of their clients. These include Indian as well as global firms.
Taxation: Both individuals and companies are required to ensure that tax on earnings and other transactions are paid as per law of the land. With introduction of Goods and Services Tax (GST), tax structure and accounting etc. have been rationalized. Taxation can be one area for a specialized career in capital markets.
Consulting firms: With your knowledge of capital markets and its operations, you may join a consulting company. There are home grown consulting firms as well as global ones. These firms may be offering their services in multiple disciplines like financial restructuring, taxation, audit etc. Deloitte, Ernest & Young, Price Waterhouse are counted among biggest consulting firms operating globally. Such firms have better opportunities for experienced professionals.
Academics and Media: Career opportunities can also be explored in teaching, training and in media.Teaching jobs may be available at Universities, commerce and management colleges etc. Media related careers can be found with leading business/financial dailies and with business news channels.
If you want to work on your own, you may choose to be a sub broker or an independent consultant in the area of your choice. It is advisable to gain some practical work experience before you launch yourself.
Traits for success
To do well in your capital market career you should develop affinity with numbers, eye for detail and analytical ability. You should work on ethical principles with high regard for compliance of laws, rules and regulations.
This article makes mention of many institutes offering programmes useful for making a career in capital market and places where related opportunities are available. Details about these can be had from their websites.
The Author is Mumbai based Counsellor. E mail : firstname.lastname@example.org