This is a financial promotion by Retail Book Limited (FRN 994238). Values can fall as well as rise. This information is not investment advice. It is intended for UK retail investors.
Investing is no longer just for big institutions. Increasingly, retail investors are taking control of their own financial future and providing valuable funding to businesses listed on UK markets. Recent regulatory change is transforming individual investor access, making primary markets more important now than ever. You should be aware that outcomes vary and investing is not right for everyone.
Explaining Primary Markets
Primary markets are where new shares or bonds are sold for the first time. When a company lists on the stock market through an Initial Public Offering (IPO), or raises new funds through a follow-on or bond issue, it’s using the primary market. This is different from the secondary market, where investors buy and sell existing shares between themselves.
For retail investors, primary markets offer a unique set of opportunities, providing greater choice and the potential for better returns. Any potential benefits should be weighed against the possibility of loss and the specific risks for each offer.
Wider Investment Universe
Access to new issues may broaden choice and help diversification; however, new listings and bond issues can be volatile and may not be suitable for all investors. Yields and prices can change and there is no guarantee of income or capital return.
Better Returns
Primary markets provide the potential for wealth creation, given the potential for higher long-term returns of investment versus savings products, although this is not guaranteed. Follow-ons are also typically launched at a discount to the prevailing share price, providing a favourable entry point, although the share price can fall below the launch price after the event, read more about the benefits and risk of follow-ons here.
The benefits of primary markets go beyond individual investors. When more people take part in primary market fundraisings, it makes the whole financial system more robust and inclusive. Companies get access to a wider pool of capital, which helps them innovate, grow, and deliver their strategic objectives.
For too long, retail investors have been excluded from primary markets but recent changes herald exciting change. New rules are making it easier for retail investors to take part in IPOs and fundraises which is good for investors and companies alike.
Key Risks
| Risk | Description |
|---|---|
| Capital at risk | The value of investments can fall as well as rise and you may not get back the amount invested. |
| Price volatility and liquidity | Newly listed shares and some bonds can be volatile and may be hard to sell at the desired time or price. |
| No guarantee of allocation | You may apply but receive a smaller allocation or none at all. |
| Dilution | Follow on fundraises may dilute existing shareholders’ ownership. |
| Pricing uncertainty | The final price may differ from indications. |
| Bond specific risks | Issuer credit risk, interest rate risk and potential loss on default. |
| Tax treatment | Depends on individual circumstances and may change. |
Next Steps
Primary markets offer a new set of opportunities for retail investors to diversify their investments, support businesses they believe in, and generate better returns.
Individuals should register with their investment platform or the RetailBook Notification Service to hear about new offers and take advantage of educational resources to build foundational knowledge around primary markets. Remember, some offers are time-limited, so be sure to act swiftly when you receive a notification. Investing always carries risks, and it’s important to do your research and consider your own financial situation.
This is a financial promotion prepared and communicated by Retail Book Limited. It is provided for general information only and is not intended to be investment advice. Investment values can go down as well as up, and you may get back less than you invest. Past performance is not a reliable indicator of future results.
Retail Book Limited (“RetailBook”), a limited company registered in England and Wales (company no. 14087330) with its registered office at 10 Queen Street Place, London, United Kingdom, EC4R 1AG. RetailBook is authorised and regulated by the Financial Conduct Authority (FRN 994238).
