The capital market refers to that part of the financial system that raises money from shares, bonds, and other investments. Again, new stocks and bonds need to be created, and they are sold in the primary capital markets while investors trade in the secondary markets.
Kavan Choksi Singapore – Traders should be financially informed to execute smart investments
Kavan Choksi Singapore says that one should be aware of the world news that impact the stock market as this step will make the trader make savvy investment choices. He says that though local news is important, it is crucial for one to be aware of global news as well. For instance, the recent win of the right-wing coalition government in Italy will have an impact not only on the nation but also across the world.
Financial analysts believe that the recent win of the far right-wing party member coalition gives one the view that Italy is all set to get a stable government now. However, some political and financial analysts have an illusion that key differences between the coalition’s member parties might be a matter of concern as they have different leadership styles.
The primary market
When the company sells new stocks to the public for the first time, they are first introduced to the primary markets. Here, the transaction is conducted between the company and the buyer. The market also is known as the new issues market, and in most cases, this new issue of stocks takes the form of a public offering (IPO). When the investors buy securities in the capital market, the company that offers the stocks hires an underwriting firm to review it to create a prospectus that outlines the price and the other details of the securities that will be issued to the public.
The secondary market
The secondary market is the place where the securities trade among investors after the company has sold its first stocks in the primary market. This market is popularly known as the stock exchange, and some of the best examples of the stock exchange are Nasdaq, The New York Stock Exchange, The London Stock Exchange, and others. The secondary market is targeted at small and big investors, though the former has an opportunity to trade shares in the secondary markets. Anyone can buy securities in secondary market so long as they can pay the asking price for each share.
Kavan Choksi Singapore states the fundamental difference between the primary and the secondary markets is in the former there is a transaction taking place between the company and the trader whereas in the latter the trade is conducted between two investors. The above can be best explained with an example, for instance when Amazon released stocks into the market, they were sold to the buyer via an IPO. However, if an investor wants to buy Amazon shares, he will go to the stock exchange or the secondary market and purchase them from an investor who holds Amazon stock and not the company itself.