WHICH IS SECONDARY MARKET?
The secondary market is the market for shares that are already listed in the exchange and are held by shareholders.
Companies source for funds by selling their shares to investors through the primary market. The Stock Exchange makes it possible for investors to trade in the shares already issued.
Purchase and sale of shares in the secondary market have no effect on the issued share capital of the company.

SHARES, STOCKS, EQUITIES,
Shares, stocks, equities or ordinary shares are all synonymous definitions of shares of a company. When you buy shares of a company, you become a part owner of that company proportionate to the amount of money you invested. Being a part owner or shareholder means that you share in the profits of the company.

DIVIDEND
Dividend is a slice or proportion of profit paid to the shareholders. Dividend is not a fixed amount but it varies from company to company and from year to year. The dividend a company declares each year depends on the profit made by the company and the recommendations of the Directors of the company. The directors recommend the proportion of profit to be kept in reserve for future expansion and modernization and they recommend the portion of profit the company pay out to it shareholders. Dividends must be approved by shareholders at a general meeting.

BONUS/SCRIP ISSUE
This is the issuance of shares by a company to its shareholders in proportion to their existing holdings. This is done by capitalizing existing reserves of the company, which already belong to the shareholders, and it is merely the formal recognition of the increase in the capital invested by those shareholders through the ploughing back of previous profits.

DEBENTURES
Debentures, like bonds, have agreed interest rates (which could be fixed or floating) and a set maturity date. Debentures are debt securities issued by companies to long time obligations Debenture holders are creditors to these companies.

RIGHTS ISSUE
Rights issues are exclusive to existing shareholders only. When a company wants to raise additional funds it gives existing shareholders the opportunity ahead of others, to buy new shares in proportion to their holdings usually at a concession price. Existing shareholders are sent Right circulars stating the number of shares provisionally allotted to them and the opportunity to apply for additional shares. Rights, ordinarily have a market value of their own and are actively traded in most cases, they must be exercised within a relatively short period. Failure to exercise or sell rights may result in actual loss to the holder CONTINUE >>