What is a Sharemarket?
The sharemarket comprises of 2 main markets:
- 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.
- 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:
- It enables people to invest in a company.
- 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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