What are the types of capital markets? Explain briefly any three features for each of those markets.
What are the types of capital markets? Explain briefly any three features for each of those markets.
Capital markets include primary and secondary markets. The features of primary markets are :
(i) These markets focus on issuing new securities by companies to investors through intermediaries.
(ii) The companies use primary markets for setting up new ventures or for business expansions or for modernisation plans.
(iii) These markets perform the crucial function of facilitating capital formation causing a direct flow of money from savings to investment.
Features of secondary markets are :
(i) Secondary markets are where already existing securities are traded after being initially offered in public through the primary market.
(ii) Secondary markets can exist in fixed locations as stock exchanges like BSE, NSE, etc. or dealer market like OTCEI.
(iii) It indirectly promotes capital formation by providing liquidity to individual investors and companies in the market.
Capital markets include primary and secondary markets. The features of primary markets are :
(i) These markets focus on issuing new securities by companies to investors through intermediaries.
(ii) The companies use primary markets for setting up new ventures or for business expansions or for modernisation plans.
(iii) These markets perform the crucial function of facilitating capital formation causing a direct flow of money from savings to investment.
Features of secondary markets are :
(i) Secondary markets are where already existing securities are traded after being initially offered in public through the primary market.
(ii) Secondary markets can exist in fixed locations as stock exchanges like BSE, NSE, etc. or dealer market like OTCEI.
(iii) It indirectly promotes capital formation by providing liquidity to individual investors and companies in the market.
