In which market are securities issued to raise capital for the issuer?

The primary market is where securities are issued for the first time, allowing entities such as companies or governments to raise capital by selling stocks or bonds directly to investors. This is a crucial step in the capital formation process, as it enables the issuer to obtain necessary funds for various purposes, such as business expansion, operational costs, or project financing.

In the primary market, the transactions are usually facilitated through underwriting firms that help determine the price of the securities and promote them to potential investors. Once these securities are sold, they can then enter the secondary market, where they are traded among investors, thus separating the initial capital-raising process from subsequent trading activities. The primary market plays an essential role in providing issuers with the financial resources they need to grow and operate effectively.