Part 6: Primary Market

Part 6: Primary Market

I. The concept, function 1. The concept of primary market The primary market is the place where the first sale of newly issued securities. The primary market is also known as a market or market level issue. 2. The function of the market ...

I. Conceptually, the function

1. Concept capThi primary market is the primary place where the first sale of newly issued securities. The primary market is also known as a market or market level issue.

2. The function of the primary market capThi primary schools perform the most important function of the stock market, which is raising capital for investment.

 The primary market has likely collected every capital of every small and big savings households, both capable of attracting huge funds from abroad, the temporarily idle funds from businesses, the financial institutions, the government made a huge capital financing for the economy, but other methods can not be done.

 Thus, the primary market to create an environment for businesses called capital to expand business, help solve state budget deficit through issuing bonds, have more capital to build infrastructure. It also directly improve the lives of consumers by helping them choose ding time for their shopping better.

II. The method of issuing khoanCo 2 methods to issue securities on the primary market. It is separate issue and released to the public.

 1. Private placement

Private placement is a process in which securities are sold within a certain number of people (usually for investors and organizations), with the conditions (mass release) limit.

 The release of individual common stock subject to the Companies Act. Securities issued under this method is not subject transactions in stock exchanges.

2. Released to the public

Released to the public is the process in which securities are sold widely to the public, for a large number of investors, in the total amount released to win a certain percentage for the small investor and the volume issue must reach a certain level. Companies that issue securities to the public are called public company.

 There is a difference between issuing shares and bonds to the public:

* Issue of shares to the public is done in one of two forms:

- Released initial public (IPO) is the release of the company's shares were first sold widely to the investing public.

- Offering primary (primary distribution): the issuance of additional shares of a public company for the broad public investment.

* Bonds to the public is done with a single form, which is the primary offer (primary distribution).

The issuance of securities to the public must be governed by laws and securities authorities must be state licensed securities. Companies that issue securities to the public must make a reporting regime, public disclosure and supervised by separate provisions of securities laws.

 in Vietnam, the issuance of securities to the public for listed securities trading centers must comply with the provisions of Decree 48/1998/ND-CP dated 11/07/1998 of the Government securities and the stock market. This Decree provides for the issuance of securities to the public for listed trading market focus Securities Commission must be licensed unless the issuance of government bonds. The securities will be issued after the public will be delisted from the stock exchanges.

 The purpose of the distinction between the two forms of release (released separately and released to the public such as to take measures to protect the investing public, especially the small investors do not know much about securities field. For this purpose, to be issued to the public, the issuer is the company doing high-quality, production and business activities effectively meet the conditions due to the state management agency securities (State Securities Commission) regulations.

Part 1: Summary of Stock

Part 2: Introduction to stocks

Part 3: Introduction to Bonds

Part 4: Stock may convert

Part 5: Derivatives

Part 6: Primary Market

Part 7: First Issue of securities to the public (IPO)

Section 8: Process initial issuance of securities to the public

Section 9: Underwriting