Capital markets

A company can finance its operations through debt or equity. When it finances itself through debt, it issues bonds or debt securities on debt capital markets. When it finances itself through equity, it issues shares on equity capital markets. From an investor’s point of view, capital markets are markets on which financial securities are traded. With the help of investment banks, organisations and institutions issue or sell securities on the primary markets to raise funds. Then, existing securities are bought and sold by investors and traders in the secondary markets.