secondary market.pptx

7/27/2019 secondary market.pptx

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By

Nandhini

Narayana Swamy

Pallavi


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According to Pyle,

Security exchanges are market

places where securities that have been

listed thereon may be bought & sold for

either investment or speculation


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Secondary market deals in previously issued

securities.

This market is not the place of the origin of thesecurity.

Securities are not issued directly by the company

to investors.

Securities are sold by the existing investors toanother investors.


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The intending buyer & seller can

buy & sell securities through

brokers.

It transfer existing securitiesbetween buyers & sellers.

Secondary market do not directly

contribute to capital formation.


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It helps in the capital formation of

the country.It maintains active trading.

It increases liquidity of assets.

It also helps in price recovery

process.


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Equity shares

Preference shares

Debentures & bonds

Government securities


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Ensure liquidity of capital:The stock exchanges provide place where

shares and stock are converted into cash .

Continuous market for securities:

The stock exchanges provide a ready

market securities Evaluation of securities :

The investor can evaluate the worth oftheir holdings from the prices quoted atdifferent for those securities

Mobilizing surplus savings:The exchanges provide a ready market for

various securities. The investor do not have anydifficulty in investing their savings by purchasingshares, bonds etc


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Helpful in raising new capital:

The new and existing concerns need

capital for their activities. The new concernsraise capital for the first time and

existing un its increase their capital for

expansion and diversification purposes

Safety in dealings:

The dealings at stock exchanges are

governed by well defined rules and regulations

of securities contract act 1956

Listing of securities:

Only listed securities can be purchased at

stock exchanges


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1) Stock broker:A stock broker is a qualified and

regulated professional who buys and sells

shares and other securities through market

makers on behalf of investors.


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Commission broker

Jobber

Floor Broker Taraniwalla

Budliwalla

Arbitrageur

Security Dealer


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Financial intermediaries in the secondary

market facilitate financial transactions of

both individual and corporate customers in

financial marketsVarious financial intermediaries are:

Commercial banks

Developmental financial institutions

Insurance company

Mutual fund

Non banking financial institutions


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Bringing suppliers anddemanders of funds together

Transformation of funds


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Individual investors make implicit

forecast or assumptions without elaboratereports because they have no need to

communicate beyond the purchase or

sale order to their brokers.


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secondary market.pptx

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