Primary market is the market where company issues securities or bonds first time. This market is also called the new issues market. i.e, Initial Public Offering (IPO) is a public offering where the company decides to sell stocks to the public for the first time.
Characteristics of Primary Market
- The issuing company receive money and provides security certificates to the investors.
- The Primary market plays important roles to formulate capitals to the economy.
- The Company gets investment in huge quantity.
- .The primary market helps the company to create their goodwill.
- Price of securities doesn’t fluctuate in the primary market.
- The Primary Market helps company to connect with big investors.
Secondary Market is market where sellers and buyers deal in already issued shares or debentures. Secondary market is also know as the market where buyers buy the stocks from others investors not from directly company.
Characteristics of Secondary Market
- Secondary Market provides Liquidity to the investors, that investors can sell their share any time.
- Secondary Market has Lower transaction costs due to the their high volume of transactions.
- Secondary Market Encourages New Investment.
- Secondary Market also performs the important function of price discovery.
- The secondary market quickly adjusts the price to any shares.
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