A share market or a stock market is a place where investors and traders buy and sell stocks of listed companies. Some companies also sell shares directly to raise money for their needs.
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Types of Share Markets
Generally there are two types of share markets, primary and secondary. There is also another market called Grey Market, a term used for private equity deals.
1. Primary Markets
Primary Markets are those where companies sell their share themselves either though an IPO, FPO or OFS. The buyers can be fund houses, high net worth investors, portfolio managers or retail investors.
Some examples of primary markets are National Stock Exchange (India), Shanghai Stock Exchange (China), New York Stock Exchange (USA). These also act as secondary markets as traders and investors are allowed to buy and sell stocks here with each other.
2. Secondary Markets
Secondary Markets are those where both the buyers and sellers are people who have not issued those shares. A secondary market is important because it provides a commonplace for shareholders to buy or sell shares after they have accumulated them through an IPO, FPO or OFS.
3. Grey Markets
Another commonly used term for private equity dealings are Grey Markets. They are called so because most of the deals in the grey market are often hidden from the eyes of the retail investors.
Names of Popular Share Markets
1. NSE, India
The National Stock exchange is one of the largest stock exchanges in the world, with a net market size of $3.55 Trillion as of 24 Aug 2023. It was established in the year 1994 in Mumbai.
2. BSE, India
Formerly known as the Bombay Stock Exchange, BSE is one of the largest stock exchange in the world with a Marketcap of all its companies more than $3.5 Trillion as of 24 Aug 2023. It is headquartered at the Dalal Street, Mumbai and was established in the year 1875 by the cotton trader Premchand Jain.
3. Shanghai Stock Exchange, China
The Shanghai Stock Exchange is a Chinese stock market based in Shanghai, China. It was established in the year 1842 by the Treaty of Nanking between the British and Qing Dynasty’s Imperial China.
4. New York Stock Exchange, USA
The New York Stock Exchange, in the USA, is the largest stock exchange in the world with a combined market cap of more than $27 Trillion as on 24 Aug 2023.
It is also one of the oldest stock exchanges established in the year of 1792.