PRIMARY MARKET

At times, we tune our radio and/or our TV stations only to hear adverts of some companies selling shares. In our newspapers, the adverts are in print. Even in the websites of such company, the information about the shares being sold is being written; alongside with the opening and closing date of the offer all those activities are known as the primary market.
Primary market therefore is the place where new shares are offered for subscription by a company to the investing public. These shares are offered in units to the investing public when the company is about to raise money either for branch expansion and/or diversification to other sectors of business.
The shares of these companies are bought in banks used as issuing houses , stockbrokers or directly from the company and the money is paid in the required banks of the company in full on application. A share certificate is being issued to the investor within some months (three months or more) after the completion of the offer stating clearly that he/she is a share holder of that company and the units of shares being held.
The total number of shares a company offers to the investing public can be undersubscribed: investors only bought part of it. Or it may be oversubscribed; investors bought more than required and in this case, some of the funds are returned to the investor or absorbed by the company as stated in the prospectus.
Ipo
This is known as “initial public offer”. It is the first time a company is coming to the primary market to raise fund. The company might not have been listed in the Nigerian Stock Exchange (NSE). But listed after the completion of the offer. Or, the company has been listed but sourcing fund for the first time from the public.
po

This is known as “public offer”. It is a means a company source fund from the public by offering for subscription subsequent numbers of shares at a particular price. The company must have done IPO before doing this. This being the case, the share certificate arrives earlier than the IPO.
Right issue
This is a kind of “public offer” done by a company if there is need to inject another capital into the company. This offer is beneficial only to the existing shareholders of the company.
Issuing houses
The issuing house of a stock sells the stock of the company, buys the largest share and/or markets the shares of the company.etc.
Benefits of primary market:
The benefit a person gets from the primary market is according to the type of investor he/she is. But the major benefits of a primary market investor are:
• You do not pay a brokerage fee when buying from the primary market. But if necessary, it is little.
• You buy at a discounted rate to the current market price on the floor of the exchange.
• You are being issued a certificate some months after the completion of the offer.
• Your shares can be deposited into your CSCS account if the CSCS number was included
• You can sell if you wish
Note: the investors can buy only the stock of a company currently on primary market activity and not the stock he/she intends buying.

Secondary market
On like the primary market, the secondary market is a place where existing number of shares of a company listed on the Nigerian stock exchange are traded (bought or sold) on daily basis. These stocks active or not change hands daily by investors.
In this market, there is no limit to what you buy. You buy the stock of a company either selling in the primary market or not in this market (secondary market) as you wish. The shares bought or sold are done through a stock broker. Remember, you will be charged a commission for each transaction.
When you buy shares of a company in the secondary market through a stockbroker, you are first issued a receipt stating amount deposited, then followed by a bought contract note and finally your CSCS print out. You must have opened a CSCS account with your stockbroker because it is where all shares bought by you through your stockbroker is deposited
Capital requirement
Each stock broking firm has its own requirements/standard of operation. Some tell you to make an initial deposit of some amount of money to qualify while some does not. It varies. But generally, to become a share holder in the secondary market, one must process at least 100units of the company’s shares.
Example:
o if a share sells at N50
o Minimum number of units 100
o Value of 100 units N5000
I.e. you must be able to buy at least 100 units of it at $50 per share. Remember you pay a commission.
Scarcity
Scarcity in the secondary market refers to much capital chasing few stocks. i.e., the supply of the company’s shares was lesser than the demand. This being the case, the stock is referred as scarce. The stock must also be good since investors scramble to have them.
Some listed securities
The securities listed on the secondary market are same as those on the Nigerian stock exchange. The number increases gradually because companies get listed.
Benefits
 You can buy at any time
 You can sell at any time
 You can sell part of it and reserve others
 You decide on what company to invest in. etc.