primäärimarkkinoilta

Primäärimarkkinat, or primary markets, are financial markets where newly issued securities are sold for the first time. This is where companies and governments raise capital by issuing stocks, bonds, or other financial instruments directly to investors. The primary market facilitates the initial offering of these securities, acting as a crucial link between issuers and investors.

When a company decides to go public through an initial public offering (IPO), it enters the primary market. In this process, the company sells its shares to the public for the first time, and the proceeds from this sale go directly to the company. Similarly, when a government needs to finance its operations or projects, it issues bonds in the primary market, selling them to investors.

The primary market is distinct from the secondary market, where already existing securities are traded between investors. For example, the stock exchange where shares are bought and sold after their initial offering operates as a secondary market. The primary market’s role is solely focused on the issuance and sale of new securities, enabling entities to access funding for growth, expansion, or debt management. Investment banks often play a significant role in the primary market, underwriting the issuance of securities and helping issuers navigate the complex process of bringing new financial instruments to market.