Capital market is a marketplace where buyers and sellers involve in trade of financial securities like bonds, stocks, etc. The buying or selling is undertaken by participants such as individuals and institutions.
Capital market consists of Primary Market and Secondary Market.
Primary markets deal with trade of new issues of stocks and other securities
- Primary market issued new securities on an exchange.
- Primary market is facilitated by underwriting groups, which consist of investment banks.
- The investors have the first chance to participate in issuing new securities.
Secondary market deals with the exchange of existing or previously-issued securities.
- Secondary market is where investors purchase securities or assets from other investor that is among themselves.
- Bulk of exchanges take place each day.