WHAT ARE PRIMARY AND SECONDARY MARKETS AND FINANCIAL SECURITIES

WHAT ARE PRIMARY AND SECONDARY MARKETS

  • Primary market: This is the market for new long terms capital. The primary market is the market where the securities are sold for the first time.

 Therefore it is also New Issue Market (NIM). In a primary issue, the securities are issued by the company directly to investors. The company receives the money and issue new security certificates to the investors.

The primary issues are used by companies for the purpose of settling up new business or for expanding or modernizing the existing business.

meaning of economics

         The primary market performs the crucial functions of facilitating capital formation in the economy. Borrowers in the new issue market may be raising capital for converting private capital into public capital. This is known as “going public”.

Methods of issuing securities in the primary market are:

Initial offering

  • Rights issue (for existing companies)
  • Preferential issue.
  • Secondary market: The secondary market is the financial market for trading of securities that have already been issued in an initial private or public offering. In other words, secondary market can be refer to as 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 on a stock exchange investors and speculators can easily trade on the exchange, as market makers provide bids and offers in the new stock.

What is security in financial market?  

Meaning of security: Securities are financial instruments which are traded on the stock exchange market.

FEATURES OF NIGERIAN SECURITY LAW

The security law No. 76 of the year 2002 defines security as follows:

  1. Transferable and tradable company’s shares.
  2. Bonds issued by companies, the government and official public institution.
  3. Certificates of deport of securities issued by financial services companies.
  4. Investment units issued by mutual funds.
  5. Equity option bonds
  6. Spot contracts and forward contracts.
  7. Buying and selling options.
  8. Any other local or foreign securities that are internationally recognized and accepted by the Board of JSC
  1. economic tools for nation building
  2. budgeting
  3. factors affecting the expansion of industries
  4. mineral resources and the mining industries
  5. demand and supply
  6. types of demand curve and used
  7. advertising industry
  8. factors of production
  9. entrepreneur
  10. joint stock company
  11. public enterprises
  12. private enterprises
  13. limited liability companies
  14. migration
  15. population
  16. market concept
  17. money market
  18. shares
  19. how companies raises funds for expansion
  20.  


38.
39. PROCESSES IN COCOA CULTIVATION
HOLING AND LINING
40. YAM
41. LAND PREPARATION FOR YAM
42. DEPT OF PLANTING
43. SPACING OF YAM
44. PLANTING DEPT OF YAM
45. STORAGE OF YAM
46. STAKING OF YAM
47. HARVESTING OF YAM
48. COWPEA
JUTE
49. FORAGE CROP AND PASTURE
50. FORAGE GRASSES
51. SILAGE
52. PASTURE
53. TYPES OF PASTURE
COMMON GRASSES AND LEGUMES
54. GRASSES
55. LEGUMES
56. ESTABLISHMENT OF PASTURES
57. 201. FORAGE PRESERVATION
58. HAY SILAGE
59. FORESTRY IMPORTANCE OF FORESTRY 206. FOREST MANAGEMENT FOREST REGULATION DEFORESTATION AFFORESTATION
60. DISEASES AND PESTS OF CROPS
61. MAIZE SMUT
62. RICE BLAST
63. MAIZE RUST
64. LEAF SPOT OF GROUNDNUT
65. COW-PEA MOSAIC
66. COCOA BLACK POD DISEASE

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Financial securities are shares, debentures, bonds and shares

Types of securities

What are the various types of security?

Securities are classified into four. So these are

  1. Debentures
  2. Shares
  3. Stocks
  4. Bonds

Haven seen the types of securities lets us look at them in more detail below

  • Debentures: These are loans for long term nature. Debenture represents the document, which acknowledges the indebtedness of a company. They are secured on the assets of the company. In addition to raising capital by the issue of shares of debenture. It has a fixed rate of interest

  • Bonds: Bonds are securities issued by the government as a way of raising fund from the stock exchange bonds are fixed interest investment securities issued for long-term duration and they have coupon rate. Bonds have date of redemption. At redemption, the issuer pays the nominal value of the bond to the holder.
  • Shares: Shares may be defined as the unit of capital of a company allocated to individuals. It is the interest of the shareholders in a company measured by a sum of money. They are issued by quoted companies and are traded on the stock exchange market. It can be grouped into ordinary shares and preference shares.

  • Stock: Stock may be defined as a collection of shares into a bundle or consolidated shares. Stocks are usually quoted per 6 100 nominal value but fraction may be bought or sold.

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