Primary Market

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====== Primary Market ======

Part of the [[en:capital-market|capital market]] where new [[financial instruments]] are sold and bought. An instrument can be sold only once in the primary market. Funds raised in the primary market go directly to the issuer (the government or a corporation).

When a company issues stocks in the capital market for the first time, the sale is called initial public offering ([[en:ipo|IPO]]).

Once issued, the instruments sold on the primary market can be traded again on the [[en:secondary-market|secondary market]].

===== Function of the Primary Market =====

The primary market serves as a way to facilitate [[capital formation]] in the economy. [[Capital goods]] are those good that have the capacity to increase the supply of [[consumption goods]] in the future. 

Many companies issue instruments on the primary market to carry out new investments. Also, many investments are done with the expectation of obtaining a profit by issuing stocks in the primary market.

===== See also: =====

[[en:ipo|IPO]]\\
[[secondary market]]

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