Determine the functions of new issue market, Finance Basics

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Determine the Functions of New Issue Market

The key function of new issue market is to facilitate transfer resources from savers to the users. Savers are individuals, insurance company, commercial banks etc. the users are public limited companies and government. New  issue  market  plays  a significant role  in  mobilizing  the  funds  from  the  savers  and transferring them to borrowers for production purposes, a vital requisite of economic growth. The key function of new issue market can be divided into three service functions:

(1) Origination

(2) Underwriting

(3) Distribution

 


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