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Understanding the Equity Market: Key Characteristics and Organization

This guide provides an overview of the equity market, highlighting its fundamental characteristics, such as ownership interest and limited liability. It explains the organization of the equity market, detailing primary and secondary market functions, including initial public offerings (IPOs), private placements, and the role of trading in maintaining liquidity. Additionally, it addresses how investors can apply for shares through various methods. This comprehensive introduction is essential for anyone looking to understand equity investments and the market's operational structure.

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Understanding the Equity Market: Key Characteristics and Organization

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  1. By: Elson Equity Market

  2. Equity Market

  3. Introduction to Equity Market • General Characteristics of Equity • Represents Ownership Interest • Permanent Source of Long-Term Capital • No Maturity Date • Ownership Risk • Investment Returns Depends on Stock Market Prices

  4. Introduction to Equity Market • Shareholders Entitlement • Residual Interest • Limited Liability • Control Via Voting Rights

  5. Introduction to Equity Market • Definition of Market

  6. Introduction to Equity Market • Characteristics of a Good Market 1) Information is TIMELY and ACCURATE 2) Transaction cost should be LOW 3) Information Efficiency 4) High Degree of Liquidity a) Marketability (Breadth) b) Price Continuity (Depth)

  7. Organisation of Equity Market

  8. Organisation of Equity Market • Primary Market • Purpose: For companies to raise capital • Method of raising new Equity Capital • IPO • Private Placement • Rights Issue • Bonus Issue

  9. Organisation of Equity Market

  10. Organisation of Equity Market • Method of Offering • Fixed Price Method • Private Placement • Book Building • Preferential Allotment

  11. Organisation of Equity Market • Secondary Market • Purpose: Trading, Provides Liquidity to Shareholders • In Singapore • SGX Main Board • SGX Catalist • Differences between Exchange-Traded Marketand OTC Market

  12. Applying for IPO Shares • Application forms with Cashier’s Order • ESA • Online application through Internet

  13. Any Questions?

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