Master of Economics and Business Bissenova R.A.

Kyzylorda State University Korkyt Ata, Kazakhstan

The infrastructure of the Financial Market

and its constitutive elements in Kazakhstan

Financial Market - a system of redistribution mechanisms of capital between lenders and borrowers through intermediaries in the form of supply and demand for capital.

The main functions of the Financial Market:

- Regulatory - is the regulation of the market, whether by public authorities, and by the self-regulatory organizations

- Information, which implies ensuring equal and adequate access to information for all participants in the financial market

- Distributing - converting of financial market instruments provides an overflow of funds from one economic sector to another;

- Commercial, implying that the transactions carried out in the financial market brings income to all participants of the transaction;

- Pricing - the price of the financial instruments in the market formed under the influence of supply and demand in conditions of free competition

Buyers and sellers in the Financial Markets:

- Households (individuals);

- Business entities regardless of their form of ownership;

- State governments

Factors contributing the function of the Financial Market:

• To minimize the role of government in the redistribution of financial resources;

• Complete independence of economic entities under all forms of ownership in order to promote competition and limiting monopolies;

• Ceasing the Use of Loan Fund of the Central Bank of the country to finance the budget deficit;

• Constant increase cash income from businesses and the public, which may be invested in securities.

According to the established order of the Republic of Kazakhstan in financial reporting by public regulation, the structure of the financial market of Kazakhstan is presented in Figure 1.

Figure 1. The structure of the financial market of Kazakhstan

Money Market - a market in the circulation of cash and serves a short-term means of payment (bills, checks, etc.).

Credit Market - the market of short-term and long-term bank loans.

The Securities Market - a market that is issued, the securities, as well as their substitutes (certificates, coupons, etc.)

Foreign Exchange Market - a market in which goods are objects that have a monetary value:

• foreign currency;

• securities;

• precious metals.

The subjects are the foreign exchange market, stock exchanges, exporters and importers, financial and investment institutions, governmental organizations.

The Gold Market - is the sphere of economic relations associated with the purchase and sale of gold, both for savings and replenish the gold reserves of the country, and for the organization of business and consumer industrial production.

Capital Markets, in turn is divided into the money market and the market equity securities. This division expresses the nature of the relationship between purchasers of goods (financial instruments) sold in this market, and issuers of financial instruments.

On the capital market traded long-term financial instruments, provided the conditions of maturity, repayment and payment.

Individual securities and their substitutes (certificates, coupons, etc.) are produced, traded and consumed in the securities market. For most world economists it is characterized by the inclusion of the financial market structure to the insurance market, pension and mortgage markets.

Insurance, Pension and Mortgage markets - are the emerging markets with its financial instruments and institutions - savings institutions operating on a contractual basis.

Need for the provision of Mortgage Markets in the capital markets, which is characteristic for developed countries, due to a number of circumstances. Firstly, mortgage loans are always provided with real guarantee in the form of land or buildings. Secondly, mortgage loans are not standard parameters and therefore it is difficult to implement in the secondary market. Thirdly, - mortgage markets is strictly regulated by special government agencies in contrast to other long-term capital markets in developed countries.

Literature

1. Искаков У.М. Рузиева Э. Бохаев Д.Т. Финансовые рынки и посредники. Алматы-Экономика ,2005.

2. Международные валютно-кредитные и финансовые отношения: Учебник / Под ред. Л.Н.Красавиной.-Москва

3. «О Национальном банке РК» Закон РК от 30.03.1995 г.

4. «О банках и банковской деятельности в РК» Закон РК от 31.08.1995 г.