The capital market is huge that covers the wider side of the topics. In this blog, you will come across a general overview of the key players and their particular roles in eh capital market. It consists of two kinds of the market: primary and secondary. Let’s dive into the discussion of these two markets:
Difference between Primary And Secondary Market
There are four prime players in the primary market: institutions, corporations, investment banks, and public accounting firms. Corporations that look for the growth of their businesses issue equity or debt to an institution in exchange for their capital investment. Investment banks are recruited to match corporation and institution-based risk profiles. Last but not least, public accounting firms are associated with the activities like preparation, review, and auditing of financial statements, M&A, capital raising, tax work, and consulting on accounting systems.
Therefore, public accounting firms in the primary market deal with preparing, reviewing, and auditing financial statements to make sure a fair representation of their financial performance. Whereas the issuance of new shares and bonds occurs in the primary market but the sale and trade of previously issued securities take place in the secondary market. Buyers and sellers connect in a transaction on an exchange; investment banks assist the process through equity research coverage. It enhances the market liquidity through the ability to freely sell and trade securities.
Four key players in the primary market
Below we are mentioning the four key players and the roles in the primary market that includes a corporation, institution, investment banks, and public accounting firm.
Corporation behaves as the operating business that needs capital to increase and run their operations. These corporations fluctuate in size, industry, and geographical location. Careers at a corporation include investor relations, corporate development, and financial planning & analysis.
Institutions are comprised of fund managers, retail investors, and institutional investors. The role of these investment managers is to provide capital to a corporation that requires the money to operate its business. Examples of buy-side firms include KKR, The Carlyle Group, Bridgewater Associate, and Blackstone.
Investment Banks (Sell Side)
Investment banks facilitate dealing between institutions and corporations. The job of an investment bank is to link institutional investors with corporations, investment styles and based on risk & return expectation. My career in investment bank includes valuation analysis and financial modeling. Some of the noticeable examples are HSBC, Goldman Sachs, and Morgan Stanley.
Public Accounting Firm
It can engage in different roles in the primary market. The roles include auditing financial statements, financial reporting, taxes, and capital raising, and so on. Some of the examples include PwC, KPMG, Deloitte, and Grant Thornton.
Therefore when it comes to the secondary market three are four key players: buyers & sellers, and investment banks. Looking for more amazing content like this then give a visit https://blog.objectual.pk/