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Statistics Explained

Glossary:Primary market

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A primary market is a financial market where new issues (initial public offerings) of stocks (shares) and bonds (fixed interest financial assets) are sold, and where the proceeds go to the issuer.

After buying in the primary market, the new share or bond owners can sell them in the secondary market. This is the market where shares and bonds are bought and sold between the time they were issued at first and before they mature (their end date). Many shares and bonds are sold and bought several times by different investors before they mature. The existence of a liquid (easy to be turned into cash) secondary market can encourage people to buy new issues in the primary market, as it means that it is much more likely that they will be able to sell them easily if they want to.

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