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PRIMARY MARKETS
THE PRIMARY IS THAT PART OF THE CAPITAL MARKETS THAT DEALS WITH THE ISSUANCE OF NEW SECURITIES. COMPANIES, GOVERNMENTS OR PUBLIC SECTOR
FEATURES
T THIS IS THE MARKET FOR NEW LONG TERM CAPITAL. THE PRIMARY MARKET IS THE MARKET WHERE THE SECURITIES ARE SOLD FOR THE FIRST TIME. THEREFORE IT IS ALSO CALLED NEW ISSUE MARKET (NIM). T IN A PRIMARY ISSUE, THE SECURITIES ARE ISSUED BY THE COMPANY DIRECTLY TO INVESTORS. T THE COMPANY RECEIVES THE MONEY AND ISSUE NEW SECURITY CERTIFICATES TO THE
CONTDu. TTHE PRIMARY MARKET PERFORMS THE CRUCIAL FUNCTION OF FACILITATING CAPITAL FORMATION IN THE ECONOMY. TIT FACILITATES TRANSFER OF FUNDS FROM SAVERS TO ENTREPRENEURS.
THE ISSUE OF SECURITIES BY COMPANIES CAN TAKE PLACE IN ANY OF THE FOLLOWING METHODS 1. INITIAL PUBLIC OFFER 2. FURTHER ISSUE OF CAPITAL 3. RIGHTS ISSUE 4. PRIVATE PLACEMENT 5. OFFER FOR SALE
SECONDARY MARKET
IT IS ALSO KNOWN AS THE STOCK MARKET OR STOCK EXCHANGE. IT IS THE MARKET FOR PURCHASE AND SALE OF EXISTING SECURITIES. IT HELPS EXISTING INVESTORS TO DISINVEST AND FRESH INVESTORS TO ENTER THE
FEATURES
T IT DEALS WITH PREVIOUSLY ISSUED SECURITIES. T THE MARKET IS NOT THE PLACE OF ORIGIN OF SECURITY. T SECURITIES ARE NOT ISSUED DIRECTLY BY THE COMPANIES TO INVESTORS. T SECURITIES ARE SOLD BY EXISTING INVESTORS TO
CONTDu
T IT PROVIDES LIQUIDITY TO THE INVESTMENT AND ENHANCE THE MARKETABILITY OF SECURITIES. T IT MERELY TRANSFERS EXISTING SECURITIES BETWEEN BUYERS AND SELLERS. T THEY DO NOT DIRECTLY
PRIMARY MARKET NEW ISSUE OF SECURITIES ARE DEALT IN THE MARKET SECURITIES ARE EXCHANGED BETWEEN COMPANY AND INVESTOR PROMOTES CAPITAL FORMATION DIRECTLY
SECONDARY MARKET EXISTING SECURITIES ARE DEALT WITH IN THE MARKET SECURITIES ARE EXCHANGED BETWEEN INVESTORS. PROMOTES CAPITAL FORMATION
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