Difference between Primary Market and Secondary Market- Securities market | Finance

Difference between Primary Market and Secondary Market
Securities market | Finance
BBA | BBA-BI |BBS | BHCM
Management Notes

S.No. Primary Market  Secondary Market
1.  Primary Market is also called New Issue Market (NIM). Secondary Market is also called After Issue Market.
2. Primary Market is the marketplace where the securities are issued for the first time. Secondary Market is the marketplace where the second-hand securities are traded.
3. In primary market, the securities are directly issued by the companies directly to the  investors. In secondary market, the securities are sold by or transferred from one investor(Speculator) to another.
4. The prices in the primary market are fixed and issued at par value. The prices in the secondary market vary depending with the demand and supply of the securities traded.
5. The intermediaries in primary market are investment bankers or Underwriters who are involved in selling of the securities. The intermediaries in secondary market are brokers who are involved in trading of the securities in the secondary market.
6. Primary Market provides financing to the new companies for their expansion and diversification. Since , secondary Market are not involved in transaction they  do not provide financing to the companies.
7.  In primary market, the amount received from the securities are the income of the companies. In secondary market, the amount received from the securities are the income of the investors.
8.  In case of primary market, there is no specific physical existence or location. In case of secondary market, there is some physical existence.
9.  Primary market does not help to maintain liquidity. Secondary Market helps to maintain liquidity.

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