What economic advantages are created by the existence of: (i) Primary markets. (ii) Secondary markets (iii) Portfolio management firms

(i) Primary Markets.
- Raising Capital Business
- mobilizing savings
- Government can raise capital (sell bonus)
- Open market operators (control excess liquidity)
- Vehicle for Foreign Direct Investment

(ii) Secondary Markets.
- Investment improvement for companies and small investors.
- Barometer for Healthy of economy and companies ( as whole)
- Privatization of parastatals and giving local citizens a chance for ownership of
multi-national companies.
- Realize investments (by disposal in small quantities due to separation of
ownership and control.
- Improves corporate governance
- Diversification of investments hence reduction of risk
- Liquidity of securities improved.

(iii) Portfolio management firms.
(i) Diversification
(ii) Professional advice
(iii) Watchdog for share under/over valuation
(iv) Enhances market efficiency through information

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marto answered the question on February 7, 2019 at 09:11