You are on page 1of 2

BENEFITS OF INVESTING THROUGH CAPITAL MARKETS.

The following benefits apply both to the primary and secondary markets:
1. ACCESS CAPITAL:

Private sector business and gov't can raise funds for expansion of existing
business or new projects by issuing shares or debt instruments directly to the
public.

2. DISCOVER THE VALUE OF ITS BUSINESS:

Owners of business are able to discover the price of their securities and
therefore the value of their business by listing on the RSE. This enables them to
realise the market worth of their wealth.

3. RAISING COMPANIES VISIBILITY AND STATUS:

When companies are listed on capital markets,it raises the profile of a company
through continuous media coverage which is free publicity

4. ENHANCING MANAGEMENT PRACTICES:

Capital markets are governed by CMA, this encourages the quality of management
practices.

5. FOSTER EMPLOYEE MOTIVATION:

Listed companies may easily employ executive using stock option techniques.

6. BENEFITS FROM CAPITAL MARKET INCENTIVES:

New issuers take advantage of incentives provided to listed companies. This comes
in the form of low costs and take advantages to share holders and owners of the
business.

7. USE OF SHARES AS CURRENCY:

Listed companies with known market value can use their shares as currency instead
of cash when taking over others.

8. HAVE BETTER BARGAINING POSITION WITH FINANCERS:


Increased capitalization of an issuer over time enables the issuer to raise
capital at a lower cost due to their improved rating in the market.

HOW INVESTORS ARE PROTECTED.

CMA protects the investors from fraud , dishonesty and unfair practices in the
following ways:

* CMA ensures that only competent and credible professionals are licenced to serve
the market.
* CMA supervises all members of RSE to ensure compliance with regulatory
requirements.
*CMA ensures that prospectus of issuers have adequate disclosure for decision
making.
* CMA ensures that there are periodic reports and all prices sensitive information
are released once they are available.
* National Public Education and awareness campaigns create well informed investors.

You might also like