The Sharemarket

What is a Sharemarket?
The sharemarket comprises of 2 main markets:
  1. Primary - The first is a primary market where companies or the government issues shares in order to raise capital to expand operations or to carry out other objectives. They take on a wide range of shareholders and raise investment capital by issuing an investment statement (known as a prospectus), through a broker. The broker who organises the capital raising is known as the organising broker or the underwriting broker.

  2. Secondary – The second is a secondary market, which is a central market provided by the stock exchange and here investors are able to trade in shares or securities in the normal way.

Functions of a Sharemarket
A sharemarket (also known as a stockmarket) has 2 main functions:

  1. It enables people to invest in a company.
  2. It provides a means for people to buy and sell shares between themselves as shareholders and investors.

1. Invest in Companies<...

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