Money and Capital Market Analysis: Finance Presentation Report

This presentation provides an overview of money and capital markets, differentiating between primary and secondary markets. It explains how primary markets, exemplified by IPOs, facilitate the creation of new securities and raise funds for businesses, while secondary markets enable the trading of existing securities, offering liquidity. The analysis highlights the significance of both markets for economic growth, investment, and price discovery. The presentation emphasizes the roles of intermediaries, the multiple selling of securities in secondary markets, and the overall importance of these markets for financial system development. The conclusion stresses the critical roles of primary and secondary markets in finance, especially for long-term growth and investment, and underscores the importance of understanding how these markets function for navigating capital markets effectively.

MONEY AND CAPITAL MARKET
ANALYSIS
NAME OF THE STUDENT:

INTRODUCTION
 Financial market is where all the new securities are
issued to public daily of different products and services
of finance that are tailored according to the requirement
of each person from all the income brackets
 Financial products are bought and sold in the capital
market, and are again classified into Primary and
Secondary market (Pilbeam, 2018).
 Primary and secondary markets are parts of Capital
market

DIFFERENCE BETWEEN PRIMARY AND SECONDARY
MARKETS
 Primary markets are the markets where the
securities are created.
 IPO (Initial Public Offering) is one of the
examples of primary markets
 The securities are first offered in primary
market to the common public for the
subscription where a firm gains money from the
investors and then the investors get the final
securities (Ehrhardt & Brigham, 2016)
 These investors are listed on the stock
exchange for trading

PRIMARY MARKETS
 Primary market transactions is related to creating the new financial asset
 For instance, the government of a country issues the Treasury bonds or raising of new
funds
 Primary market gives avenues for trading the new securities to investors
 The primary market helps to supply the funds to budding enterprises and at the same
time, also to the existing firms for diversification and expansion (Agarwal, 2017)
 In the primary market, the securities can be sold only once but in the secondary market,
they can be sold many times
 In the primary markets, it does not provide liquidity for the stocks

SECONDARY MARKETS The secondary markets are often referred
to as stock market
 Within secondary market, the prevailing
corporate debentures, treasury bills, bonds,
shares, commercial papers etc. are traded
among the different investors
 Secondary market transactions are related
to the transferring and sales of the
prevailing financial assets
 Secondary market does not provide any
funding to the enterprises (Bryan, Rafferty

SECONDARY MARKETS
 Secondary markets provides liquidity of the stocks.
 Ownership of the current securities if exchanges in Secondary markets in between
the investors, where the firms is not involved.
 In secondary markets, the securities are sold multiple times (Kidwell et al., 2016)
 The brokers acts as intermediaries in secondary markets

IMPORTANCE OF PRIMARY AND SECONDARY MARKETS
TO BE WELL-DEVELOPED WITHIN THE FINANCIAL
SYSTEM
 Primary market transactions helps in providing funds for the business
development and this further helps in ensuring economic growth.
 The investors are likely to purchase the primary market securities of they become
aware of the fact that there is a deep and liquid secondary market in which they
are able to sell their bought securities in the future whenever necessary (Wilson,
Wright & Kacer, 2018)
 The secondary transactions provide the price discovery in which the securities
would be sold at the present value of market.

CONCLUSION
 Both primary and secondary markets play an important role in finance.
 They are critical to finance, particularly for its long term growth and investment
 Knowing how these two markets work is the key to understanding how the bonds,
stocks and the other securities trade
 In absence of them, the capital markets would be even harder for navigating and
would have been very less profitable
 Selling of stock and subsequent trading after this initial public offering take place
on the secondary markets

REFERENCES:
 Agrawal, G. (2017). Global Financial Markets Integration: A Comparative Study Between Developed
and Emerging Economies. In International Business Strategy (pp. 277-299). Palgrave Macmillan,
London.
 Bryan, D., Rafferty, M., & Wigan, D. (2017). Capital unchained: finance, intangible assets and the
double life of capital in the offshore world. Review of International Political Economy, 24(1), 56-86.
 Ehrhardt, M. C., & Brigham, E. F. (2016). Corporate finance: A focused approach. Cengage learning.
 Kidwell, D. S., Blackwell, D. W., Sias, R. W., & Whidbee, D. A. (2016). Financial institutions, markets,
and money. John Wiley & Sons.
 Pilbeam, K. (2018). Finance & financial markets. Macmillan International Higher Education.
 Wilson, N., Wright, M., & Kacer, M. (2018). The equity gap and knowledge-based firms. Journal of
Corporate Finance, 50, 626-649.

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