The participants in the equities capital market include investors, speculators, market makers, underwriters, and brokers. These participants are key to supporting the primary and secondary capital markets (Strumeyer, 2017). The primary market allows companies to issue and sell their shares to the public when they first enter the stock market. Primary participants here include investors, market makers, and brokers (Strumeyer, 2017). The former seek to purchase shares of the emerging company as a means of investing into its growth and future. The latter two represent companies and individuals interested in a short-term investment, with the hopes of profiting once the company begins an explosive growth.
In secondary markets, the situation is slightly different. Here, investors are selling stock they already own. Brokers, and speculators play a larger role here, as well as underwriters, who cover the risks associated with transactions on the secondary market. In both cases, company equity is taken into consideration (Bogle, 2017). Companies issue equities as a means of attracting additional money for growth and development.
To see how various participants work in a market, we could review the company named AT&T. Its CEO is John T. Stankey, and he has been its CEO since 2020. The company is present at both primary and secondary markets, having entered the former in 1984 (Ben-Ahmed et al., 2022). Ever since, it has remained a major part of the US and international stock markets, though it has been experiencing a fall ever since 2020 at the very least, likely due to COVID-19 and associated problems (Ben-Ahmed et al., 2022). Its investors are suffering from their asset depreciation, and underwriters may have to cover the company should they have had insurance against such depreciation (Bogle, 2017). Brokers and speculators, on the other hand, may seek to benefit from purchasing the company stocks in shorts, thus turning their depreciation to their own advantage.
References
Ben-Ahmed, K., Ayadi, I., & Hamad, S. B. (2022). COVID-19 impact on digital companies stock return: A dynamic data analysis. Finance Research Letters, 46, 102340.
Bogle, J. C. (2017). The little book of common sense investing: the only way to guarantee your fair share of stock market returns. John Wiley & Sons.
Strumeyer, G. (2017). The capital markets: evolution of the financial ecosystem. John Wiley & Sons.