Download Security Analysis and Portfolio Management

INVESTMENT MANAGEMENT
UNIT-2
SECURITIES MARKETS
FINANCIAL MARKET
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
V.Prabakaran, AP/MBA - Securities Market
A place where individuals are involved in
any kind of financial transaction refers to
financial market. Financial market is a
platform where buyers and sellers are involved in
sale and purchase of financial products like
shares, mutual funds, bonds and so on.
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CONT…
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Financial markets can be found in nearly every
nation in the world. Some are very small, with
only a few participants, while others - like the
New York Stock Exchange (NYSE) and the forex
markets - trade trillions of dollars daily.
 Investors have access to a large number of
financial markets and exchanges representing a
vast array of financial products. Some of these
markets have always been open to private
investors; others remained the exclusive domain
of major international banks and financial
professionals until the very end of the twentieth
century.

V.Prabakaran, AP/MBA - Securities Market
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CAPITAL MARKET
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
V.Prabakaran, AP/MBA - Securities Market
A market where individuals invest for a longer
duration i.e. more than a year is called as capital
market. In a capital market various financial
institutions raise money from individuals and
invest it for a longer period.
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SEGMENTS OF FINANCIAL MARKET
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Primary Market: Primary Market is a form of
capital market where various companies issue
new stock, shares and bonds to investors in the
form of IPO’s (Initial Public Offering). Primary
Market is a form of market where stocks and
securities are issued for the first time by
organizations.
 Secondary Market: Secondary market is a form
of capital market where stocks and securities
which have been previously issued are bought
and sold.
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V.Prabakaran, AP/MBA - Securities Market
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•
Primary Market :
•
Market mechanism for the buying and selling of new
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issues of securities.
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Why?
–
To provide fresh inflow of capital for investment.
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For sale of new securities.
Secondary Market :
–
•
V.Prabakaran, AP/MBA - Securities Market
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Where already Listed securities are traded in the stock exchanges.
Why?
–
Adjust the risk and return trade off.
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–
Meet the investors liquidity needs.
Secondary Market
Meaning
The place where fresh issue
of shares is made
The place where
formerly issued
securities are traded
Also termed as
New Issue Market
After Market
Type of Purchasing
Direct
Indirect
Number of times a
security can be sold
Only once
Multiple times
Buying and Selling
between
Company and Investors
Investors
Who will gain the amount
on the sale of shares?
Company
Investors
Intermediary
Underwriters
Brokers
Price
Prices are determined by the
management with due
compliance with SEBI
requirement for new issue of
securities.
Prices are determined
by forces of demand
and supply of the
market and keeps on
fluctuating.
V.Prabakaran, AP/MBA - Securities Market
Primary Market
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Basis of comparison
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V.Prabakaran, AP/MBA - Securities Market
THANKS…
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