(一级市场)The Structure of Financial Markets培训教材.pptVIP

Unit 11 The Structure of Financial Markets;A. What is the primary market? The primary market deals with the selling of new securities when they are first introduced by the issuing corporation (IPOs).;B. Investment banks are the intermediation of the financial market and help the issuing company to issue the stock to the public. They advise corporations in the design of the security-what type of security it should be (common stock, preferred stock or bond). If it is a bond, what rate of interest it should bear, what its maturity and provision should be, etc. e.g. stock (wholesaler) stock issuing company investment bank public fund fund This process is called underwriting, in this case, that the investment bank buys the securities from the issuing company and then sells them to the public, making its profits like other merchant on the spread（差幅） between its buying and selling prices. Because the investment bank assumes a substantial measure of risk in an underwriting operation, large issues of new securities usually will be syndicated among several investment banks. ;C. Private Placement of Securities (私募） Private placement means the issuers of the securities sell them directly to investors, without the underwriting services of an investment bank. e.g. stock issuing corporation public funds Note: Bypass the intermediation of an investment bank, there are some benefits, such as underwriting cost-saving, compliance of the terms of securities with the needs of the buyer, etc.;III. The Secondary Market(二级市场）;A. Function of the secondary market: Since many of the initial buyers of securities will eventually want to resell them, there is also the secondary market for previously i