Markkinarahoitus

Markkinarahoitus, often translated as market financing, refers to the process of a company or government entity raising capital by selling financial instruments, such as stocks or bonds, to investors in the public markets. This is distinct from private financing, where capital is raised through direct negotiations with a limited number of investors, such as venture capitalists or private equity firms.

The primary mechanisms of market financing include the issuance of equity securities (stocks) and debt securities (bonds). When a company issues stock, it sells ownership stakes to investors. When it issues bonds, it borrows money from investors, promising to repay the principal with interest over a specified period. These transactions typically occur through organized exchanges like stock markets or bond markets, or over-the-counter (OTC) markets.

Market financing plays a crucial role in the economy by facilitating the flow of capital from savers to businesses and governments. It allows companies to fund expansion, research and development, acquisitions, and other strategic initiatives. For governments, it enables the financing of public projects and the management of national debt. Investors, in turn, can participate in the growth of companies and earn returns on their capital. The availability and cost of market financing are influenced by various economic factors, including interest rates, investor sentiment, and the overall health of the economy.