A company decides to go public to raise substantial amounts of capital by offering ownership interests in the company to the public at large. The first time going to public is called Initial Public Offering. Mostly securities offered in IPO include shares, bonds, Notes, limited partnership Units, and other types of investments in the company.
The highlights of an IPO may be:
Secondary market can refer to the market for any kind of used goods. The market that exists in a new security just after the new issue is often referred to as the aftermarket. Once a newly issued stock is listed in a Stock Exchange, investors and speculators can easily trade in the exchange, as market makers provide bids and offers in the new stock. Liquidity is the main benefit of the secondary market. Secondary market is vital to an efficient and modern capital market. Fundamentally, secondary markets mesh the investor’s preference for liquidity.
A Stock Exchange or share market is a corporation or mutual organization which provides “trading” facilities for stock brokers and traders, to trade stocks and other securities. Stock Exchange also provides facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a Stock Exchange include: shares issued by companies, unit trusts and other pooled investment products and bonds.
Main features of Stock Exchange include: