Capital Market: Capital market is a market in which long term
securities like shares, debentures and other financial instruments are traded
or exchanged. It is used mainly for chennelising savings of various sectors and
common people in the productive uses, otherwise the savings of the people would
have been diverted to unproductive channels. Thus the capital market
accelerated the savings-investment process by providing the savers with an
investment opportunity and the entrepreneurs with the capital required by them
to finance their business operations. Capital market is a wide term used to
comprise all operations in the new issues and stock market. New issues made by
the companies constitute the prime market, while the existing securities
relates to the secondary market. In Bangladesh
Primary market: It is the market for
new issue securities. This is done through initial public offering (IPO) after
obtaining permission from Security & Exchange Commission (SEC) and the
involvement of intermediaries such as broker, merchant bankers and other
financial institutions.
Secondary market: It is the market
for trading existing securities after they have been created in the primary
market. Shares, Bonds, Mutual funds are trading in DSE and CSE are called
secondary market. It consists of the followings:
·
The public who are buyers
and sellers of securities
·
Brokers (members of DSE
and CSE)
· The Stock exchanges where
the trading takes place
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