Which market do companies use to raise fresh capital from investors?
In the primary market the issuer sells new securities and receives the money. The secondary market provides trading and liquidity in existing securities.
The concept: Securities and the securities market
Securities are transferable financial claims: evidence of a debt owed by the issuer, or of ownership in a company. Issuers (companies, financial institutions, government) raise money at a cost; investors turn savings into financial assets that earn a return. A secondary market lets investors sell to others without affecting the issuer, so a long-term security becomes, in effect, a short-term one for the investor. The market creates liquidity and channels savings into investment. The financial market has investors (providers of funds), borrowers (seekers of funds), intermediaries and regulators.