Primary Market: A market that issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors. For example, An investor buys 1000 Shares from Standard Charter Bank at the rate of Rs. 100.
The primary market is designed for the new issues
Secondary Market: A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves. The national exchange like Nepal Stock Exchange(NEPSE) is Secondary Market. For example, An investor buys 1000 Shares from next investor at the rate of Rs. 500.The secondary market is meant for the trade of existing issues. Stocks and bonds are the two basic capital market instruments used in both the primary and secondary markets.
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