Daily Prelims Notes 11 June 2024

Daily Prelims Notes

11 June 2024

1. Wild horse species return to Kazakh steppes

Sub: Environment

Sec: Species in news

Context:

• After a long flight from Prague, the release of three Przewalski horses into the Kazakh steppe- the native habitat of this endangered species.

About the project:

Organizations Involved:

• The project is run by the Prague and Berlin zoos.
• The Association for the Conservation of Biodiversity in Kazakhstan (Albert Salemgareyev) is also involved.

Objective:

• The aim is to preserve the Przewalski horse, an endangered species with a common ancestry with modern domestic horses but genetically different.

First Release:

• The first three horses, named Zorro, Ypsilonka, and Zeta II, arrived earlier in the month.
• Four more horses arrived from Berlin and were released in the afternoon.
• Initial observation will take place in the Golden Steppe nature reserve.

Przewalski horses:

• Also called the takhi, Mongolian wild horse or Dzungarian horse, is a rare and endangered horse originally native to the steppes of Central Asia.
• It is named after the Russian geographer and explorer Nikolay Przhevalsky.
• Once extinct in the wild, since the 1990s it has been reintroduced to its native habitat in Mongolia in the Khustain Nuruu National Park, Takhin Tal Nature Reserve, and Khomiin Tal, as well as several other locales in Central Asia and Eastern Europe.
• The Przewalski’s horse is stockily built, smaller, and shorter than its domesticated relatives.
• They have a dun coat with pangaré features and often have dark primitive markings.
• Przewalski horses are one of the world’s last breeds of wild horses.
• They can withstand harsh winters, like those in Kazakhstan where temperatures can drop below -30°C.
• There are now 2,000 Przewalski horses worldwide, mainly in China, Mongolia, France, Russia, and the Chernobyl exclusion zone.
• The Chernobyl population was introduced in 1998 and has grown to 210.

Other horse breeds:

• American mustang and the Australian brumby.
• Both are feral horses descended from domesticated animals.

Other Conservation Efforts in Kazakhstan:

• The Saiga antelope, another endangered species, has seen its population grow to about two million due to conservation efforts by Kazakh authorities and NGOs.
• Saiga antelope:
  • The saiga antelope is a species of antelope which during antiquity inhabited a vast area of the Eurasian steppe, spanning the foothills of the Carpathian Mountains in the northwest and Caucasus in the southwest into Mongolia in the northeast and Dzungaria in the southeast.
  • Today, the dominant subspecies (S. t. tatarica) only occurs in Kalmykia and Astrakhan Oblast of Russia and in the Ural, Ustyurt and Betpak-Dala regions of Kazakhstan.
  • It is regionally extinct in Romania, Ukraine, Moldova, China and southwestern Mongolia.
  • The Mongolian subspecies (S. t. mongolica) occurs only in western Mongolia.

Kazakh steppe:

• The Kazakh Steppe, also called the Great Dala, is a vast region of open grassland in Central Asia, covering areas in northern Kazakhstan and adjacent areas of Russia.
• It lies east of the Pontic–Caspian steppe and west of the Emin Valley steppe, with which it forms the central and western part of the Eurasian steppe.
• The Kazakh Steppe is an ecoregion of the temperate grasslands, savannas, and shrublands biome in the Palearctic realm.
• The steppe extends from the east of the Caspian Depression and north of the Aral Sea, all the way to the Altai Mountains.
• It is the largest dry steppe region on earth.
• The region has a cold semi-arid, continental climate.

Source: TH

2. Understand the Indian Ocean and you’ll understand much about Earth

Sub: Geography

Sec: Oceanography

Context:

• On World Oceans Day (June 8), the Indian Ocean is highlighted for its rapid warming and significant influence on global oceanic systems.
• Understanding the Indian Ocean is crucial for comprehending the Earth’s overall oceanic response to greenhouse gases and global warming.

Indian Ocean- Home to Deadly Storms:

• Known for dramatic monsoon winds and heavy rains, crucial for over a billion people in terms of water supply, fisheries, food, and energy.
• Experiences rapid warming in summer, especially in the Arabian Sea, Bay of Bengal, and southern tropical regions.
• The region faces pre-monsoon cyclones, which, though fewer in number compared to the Pacific and Atlantic, are deadly due to rapid intensification and impact on developing countries in South Asia, East Africa, and West Asia.
• Unique Geographical Configuration:
  • Northern boundary closed by the Asian landmass with small connections to the Persian Gulf and the Red Sea.
  • Southern boundary features oceanic tunnels connecting it to the Pacific and Southern Oceans.
    • Indonesian Throughflow: Transports significant water and heat from the Pacific into the eastern Indian Ocean, affecting circulation, temperature, and salinity.
    • Southern Ocean Connection: Allows colder, saltier waters to flow into the Indian Ocean below 1 km depth, mixing with Pacific waters and exiting southwards.
• Marine Life and Tourism:
  • Supports diverse fisheries including anchovies, mackerel, sardines, and tuna.
  • Attracts tourists for its dolphins, occasional whale sightings, popular beaches, and coral reefs from Lakshadweep to the Andaman-Nicobar Islands and Reunion Island.
• Role in Global Warming:
  • Despite heat from underwater tunnels, heavily influenced by atmospheric circulation from the Pacific.
  • Gains and must shed heat via waters moving south, with global warming adding extra heat from the Pacific and less cold water from the Southern Ocean.
  • Fastest warming ocean, affecting heat waves, extreme rain, corals, and fisheries.
  • Influences wind circulation, affecting the Pacific Ocean’s heat absorption and thus global warming control.
  • Helps accelerate heat sinking in the North Atlantic, modulating global warming.
• Historical Impact on Human Evolution:
  • Three million years ago, the northward drift of Australia and New Guinea separated the Indian and Pacific Oceans, changing East Africa’s climate from rainforest to savannah.
  • Hypothesized to have influenced human ancestors to develop bipedal movement for more efficient travel across distances.

Key facts about the Indian Ocean:

• Third-largest of the world’s five oceanic divisions, covering approx. 20% of the water on Earth’s surface.
• Bounded by Asia to the north, Africa to the west and Australia to the east.
• To the south, it is bounded by the Southern Ocean, or Antarctica, depending on the definition in use.
• Along its core, the Indian Ocean has large marginal, or regional seas, such as the Andaman Sea, the Arabian Sea, the Bay of Bengal, and the Laccadive Sea.
• It is named after India, which protrudes into it, and has been known by its current name since at least 1515.
• Previously, it was called the Eastern Ocean.
• It has an average depth of 3,741 m. All of the Indian Ocean is in the Eastern Hemisphere.
• Deepest point in the Indian Ocean: Sunda trench (Java trench)

Source: TH

3. What is happening in the French territory of New Caledonia?

Sub: IR

Sec: Places in news

New Caledonia’s Electoral Reform and Independence Movement:

• Current Situation:
  • On June 3, the Socialist Kanak National Liberation Front (FLNKS) of New Caledonia called for French President Emmanuel Macron to abandon plans to modify the electoral reform.
  • Widespread protests and riots erupted due to the French parliament’s decision to amend the voters’ list, allowing citizens born or living in the territory for at least 10 years to vote.
  • The indigenous Kanak community opposed the amendment, claiming it dilutes their electoral power and undermines their efforts towards decolonisation.
• Demographic Breakdown:
  • Kanaks make up 43% of New Caledonia‘s 145,000 population.
  • Europeans (French loyalists), Wallisians, and Futunians comprise 37%.
• Historical Context:
  • Kanaks are the original inhabitants; France took control in 1853.
  • Post-World War II, Kanaks were granted French citizenship.
  • Increased migration from France in the 1960s made Kanaks a minority.
  • The independence movement, led by FLNKS, emerged in 1984 due to deteriorating socio-economic status and lack of political involvement.
  • Tensions between Kanaks and loyalists from 1984 to 1988 ended with the Matignon Agreements in 1988 and the Nouméa Accord in 1998, transferring powers from Paris to local authorities and allowing three referendums on independence.

• Independence Referendums:
  • Referendums in 2018 and 2020 favoured remaining with France.
  • In 2021, Kanaks requested to postpone the third referendum due to COVID-19, but France refused, leading to a low turnout and 96% voting against independence, further infuriating the Kanaks.
• Reasons for Kanak Independence:
  • Post-WWII migration led to “settler colonialism,” widening social inequalities.
  • Indigenous Kanaks remained labourers in the mining sector, while non-indigenous people benefited economically and politically.
  • Despite France’s promises, the 2019 census showed a 32.5% poverty rate among Kanaks, compared to 9% among non-Kanaks.
  • The vote to alter the electoral composition is seen as a move to end Kanak’s independence.
• French Objectives:
  • Achieving tactical peace to avoid violence and protect overseas French citizens, maintaining Macron’s party reputation.
  • Integration is crucial for France’s Indo-Pacific strategy, as its overseas territories make it the second largest Exclusive Economic Zone (EEZ).
  • New Caledonia represents a strategic position for France in the Indo-Pacific, particularly against China, making integration necessary despite Kanak’s demands for independence.

New Caledonia:

• New Caledonia is a sui generis collectivity of overseas France in the southwest Pacific Ocean, south of Vanuatu, about 1,210 km (750 mi) east of Australia, and 17,000 km (11,000 mi) from Metropolitan France. 
• Capital- Nouméa.
• The archipelago, part of the Melanesia subregion, includes the main island of Grande Terre, the Loyalty Islands, the Chesterfield Islands, the Belep archipelago, the Isle of Pines, and a few remote islets.
• The Chesterfield Islands are in the Coral Sea.

4. ISRO’s Aditya-L1 Solar Mission Captures Sun’s Dynamic Activities

Sub: Science and tech

Sec: Space sector

The Indian Space Research Organisation (ISRO) has released a series of images and observations from its Aditya-L1 mission, India’s first solar mission, highlighting significant solar activities. These observations were made by various payloads onboard the mission, particularly during a solar storm that occurred from May 8 to May 15.

Key Highlights:

Solar Activities Captured:

• The sun’s active region AR13664 experienced several X-class and M-class solar flares, accompanied by coronal mass ejections (CMEs) on May 8 and 9.
• The Solar Ultra Violet Imaging Telescope (SUIT) and Visible Emission Line Coronagraph (VELC) payloads, which were initially in baking and calibration modes, started capturing images from May 14.

Released Images and Observations:

• ISRO released six images on June 10, taken by the SUIT payload at different wavelengths on May 17.
• These images are crucial for studying solar flares, energy distribution, sunspots, space weather prediction, and UV radiation monitoring across a wide wavelength range. They also contribute to the study of long-term solar variations.

Scientific and Practical Implications:

• Understanding Solar Phenomena:
  • The captured images and data help scientists understand solar flares, energy distribution in the sun’s atmosphere, and the dynamics of sunspots. This knowledge is vital for predicting space weather, which can impact satellite operations, communications, and power grids on Earth.
• Space Weather Prediction:
  • By studying the interactions of solar flares and CMEs with the Earth’s magnetic field, researchers can improve models for space weather forecasting. This can enhance the preparedness for solar storms that might affect technological infrastructure.
• Long-Term Solar Monitoring:
  • Continuous monitoring and analysis of the sun’s activity over time will contribute to understanding long-term solar variations.
  • This information is crucial for understanding the sun’s influence on Earth’s climate and space environment.
• Technological Advancements:
  • The successful deployment and operation of the SUIT, VELC, SoLEXS, HEL1OS, ASPEX, and MAG payloads demonstrate India’s growing capabilities in space technology and solar research.

The data collected by Aditya-L1’s payloads during the solar storm in May provide valuable insights into solar phenomena and reinforce the importance of continuous solar observation for scientific and practical applications.

Aditya-L1 Mission

About:

• The ADITYA-L1 mission is dedicated to studying the Sun and will fly approximately 1.5 million kilometers from Earth to the Lagrange point 1 (L1), one of the five favorable spots for observing the Sun.
• The mission is expected to be launched using a Polar Satellite Launch Vehicle (PSLV) rocket.
• It will provide regular images and updates on the Sun’s surface phenomena and space weather.

Features:

• ADITYA-L1 will carry seven different payloads capable of studying various phenomena on the Sun across the electromagnetic spectrum and solar wind. These payloads include:
  • Visible Emission Line Coronagraph (VELC)
  • Solar Ultraviolet Imaging Telescope (SUIT)
  • Solar Low Energy X-ray Spectrometer (SoLEXS)
  • Aditya Solar wind Particle Experiment (ASPEX)
  • High Energy L1 Orbiting X-ray Spectrometer (HEL1OS)
  • Plasma Analyser Package for Aditya (PAPA)
  • Advanced Tri-axial High-Resolution Digital Magnetometers

Lagrange Points:

• “L1” refers to the Lagrange point 1. Lagrange points are specific points in space where the gravitational forces of two large bodies, such as the Sun and the Earth, balance the centrifugal force felt by a smaller body.
• Lagrange points can be used by spacecraft to reduce fuel consumption needed to remain in position.

L1 Point:

• L1 is one of the five Lagrange points in the Sun-Earth system. Of the five, three are unstable (L1, L2, and L3) and two are stable (L4 and L5).
• The unstable Lagrange points (L1, L2, and L3) lie along the line connecting the two large masses.
• The stable Lagrange points (L4 and L5) form the apex of two equilateral triangles that have the large masses at their vertices. L4 leads the orbit of Earth, and L5 follows.
• The L1 point of the Earth-Sun system provides an uninterrupted view of the sun and is currently home to the Solar and Heliospheric Observatory Satellite.

The Aditya-L1 mission will be crucial for advancing our understanding of the Sun and improving our ability to predict and mitigate the impacts of solar activities on Earth.

About SUIT:

• SUIT aims to study the Sun’s ultraviolet (UV) emissions and capture high-resolution images of the Sun’s atmosphere, known as the corona, in various UV wavelengths.
• It will operate in the far and near ultraviolet regions, covering wavelengths of 200-400 nanometers.
• SUIT will observe the hotter and more dynamic regions of the Sun’s atmosphere, such as the transition region and the corona.

Significance:

• The Sun is challenging to study due to its high emissions and radiation.
• SUIT will enable scientists to unravel the secrets of the Sun and its impact on Earth and other planets.
• It will measure UV radiation hazardous to human health, such as that which can cause skin cancer.
• SUIT will monitor the Sun’s activity and provide early warnings of potential solar flares and coronal mass ejections (CMEs), which can affect satellites, communication systems, power grids, and human health on Earth.

What is VELC?

The Visible Emission Line Coronagraph (VELC) is the largest payload on the Aditya-L1 mission. It is an internally occulted solar coronagraph capable of simultaneous imaging, spectroscopy, and spectro-polarimetry close to the solar limb.

The VELC includes:

• Coronagraph: Blocks direct sunlight to observe the corona.
• Spectrograph: Analyzes light to identify elements and measure various physical conditions.
• Polarimetry Module: Measures the polarization of light to study magnetic fields.
• Detectors and Auxiliary Optics: Capture and process images and data.

VELC is built by the Indian Institute of Astrophysics (IIA) at its CREST (Centre for Research and Education in Science and Technology) campus in Hosakote, Karnataka.

Purpose:

• Observe the Solar Corona: The tenuous outermost layer of the solar atmosphere.
• Analyze Coronal Conditions: Temperature, plasma velocity, and density.
• Study Coronal Mass Ejections (CMEs): Large expulsions of plasma and magnetic fields.
• Examine Solar Wind: The continuous flow of charged particles from the sun.

Coronal Mass Ejections (CMEs)

What are CMEs – Large expulsions of plasma and magnetic fields from the Sun’s corona.

Composition: Particle radiation (mostly protons and electrons) and strong magnetic fields.

Speed: CMEs travel at very high speeds, often hundreds of kilometers per second.

Impact: CMEs can create shocks that ripple through the solar system and potentially disrupt satellites, communication systems, and power grids on Earth.

The Aditya-L1 mission, equipped with VELC and other payloads, aims to provide unprecedented insights into solar phenomena such as CMEs, thereby enhancing our understanding of the Sun’s impact on space weather and terrestrial technologies.

5. India Welcomes Expansion of BRICS: Egypt, Iran, UAE, Saudi Arabia, and Ethiopia Join the Group

Sub: IR

Sec: Groupings

India has expressed strong support for the recent expansion of the BRICS group, which now includes Egypt, Iran, UAE, Saudi Arabia, and Ethiopia.

This significant development was marked by a key meeting of the BRICS Foreign Ministers held in Nizhny Novgorod, Russia.

Key Highlights of the Meeting:

1. India’s Commitment to Multilateralism:

• The ministers reiterated their commitment to multilateralism and upholding international law, emphasizing the importance of the United Nations (UN) Charter.
• They supported a comprehensive reform of the UN, including its Security Council, to make it more democratic, representative, effective, and efficient.

2. Objectives and Future Goals:

• The expanded BRICS group aims to enhance international cooperation to maintain peace and security, advance sustainable development, and promote democracy and human rights.
• This expansion is expected to bolster BRICS’ role in addressing global challenges and fostering a more inclusive international system.

Significance of the Expansion: 

• Geopolitical Impact:
  • The inclusion of Egypt, Iran, UAE, Saudi Arabia, and Ethiopia brings significant geopolitical weight to BRICS, as these countries have substantial economic and political influence in their respective regions.
  • This move could potentially shift the balance of power in international relations, offering a counterweight to Western-dominated global institutions.
• Economic and Developmental Cooperation:
  • The expanded BRICS group aims to enhance economic cooperation among member countries, focusing on sustainable development and addressing global challenges such as climate change and poverty.
  • New members bring diverse economic strengths and resources, which can contribute to more robust and comprehensive collaboration.
• Strategic Alliances:
  • The expansion strengthens strategic alliances among member countries, enabling them to collaborate on key issues such as trade, investment, technology transfer, and cultural exchanges.
  • This can lead to more effective collective action in international forums and negotiations.

Conclusion:

The recent expansion of BRICS, warmly welcomed by India, , signifies a major step towards enhancing the group’s global influence and cooperation. By including Egypt, Iran, UAE, Saudi Arabia, and Ethiopia, BRICS aims to foster a more democratic, representative, and efficient international systemreinforcing its commitment to multilateralism and sustainable development. This strategic move has the potential to reshape global geopolitics and economic cooperation, positioning BRICS as a formidable force in the international arena.

6. The U.S. Challenges Global Confidence in the Dollar

Sub: Economy

Sec: External Sector

The United States has recently undertaken several actions that some argue could undermine the global dominance of the dollar as the world’s reserve currency.

This includes high-profile legal cases, an increasing use of sanctions, and accumulating significant debt. Despite these concerns, the global financial community struggles to find a credible alternative to the dollar.

Key Concerns and Actions

• Legal System and Rule of Law:
• The conviction of former President Donald Trump and subsequent criticisms of the U.S. legal system have raised questions about the country’s rule of law.
• Concerns about the possible weakening of U.S. institutions, including the Federal Reserve, could undermine trust in the dollar.
• Sanctions and Foreign Policy:
• The U.S. has increased the use of sanctions as a foreign policy tool, leading to a perception that American financial policy could destabilize global trust in the dollar.
• National Debt:
• The U.S. continues to accrue massive amounts of debt, compelling international investors to fund these excesses despite concerns about long-term stability.

Global Perspectives

• Asia’s Search for Alternatives:
  • Asian financial leaders are actively seeking ways to reduce their reliance on the U.S. dollar and enhance non-dollar trade flows.
  • However, efforts to establish alternative systems have been slow and largely ineffective due to geopolitical tensions and the relative unattractiveness of other options.
• Central Banks’ Strategy:
  • Despite geopolitical tensions, central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the need for liquidity and the lack of viable alternatives.

Dollar’s Dominance: Why It Persists

• Economic and Institutional Strength:
  • The U.S. economy’s size, the depth of its financial markets, and the strength of its institutions underpin the dollar’s global role.
  • Democratic principles and a belief in the rule of law continue to support confidence in the dollar.
• Relative Stability:
  • Even with its flaws, the U.S. legal and financial system remains more independent and reliable than many other countries, making it the preferred choice for global investors.

Conclusion

The United States is pushing the boundaries of global financial norms, which could potentially undermine confidence in the dollar. However, due to the lack of credible alternatives, the dollar remains the dominant global currency. Investors and financial leaders continue to monitor the situation closely, balancing concerns about U.S. policies with the recognition that, for now, the dollar remains the most reliable option in a turbulent global financial landscape.

Reserve currency?

A reserve currency is a foreign currency or precious metal that is held in large quantities; it may be held by a country’s government, central bank, or other monetary authority. It is used for participating in the global economy, such as through international transactions or investments.

• A reserve currency reduces exchange rate risk since there’s no need for a country to exchange its currency for the reserve currency to do trade.
• Reserve currency helps facilitate global transactions, including investments and international debt obligations.
• A large percentage of commodities are priced in the reserve currency, causing countries to hold this currency to pay for these goods.

Before the mid-20th century, reserves were mostly gold and silver. Modern reserves are generally made up of strong foreign currencies. Many of them are specifically designated as reserve currencies by the International Monetary Fund (IMF).

Starting in the mid-20th century, the U.S. dollar was set as the international reserve currency. Backed by the safest of all paper assets, U.S. Treasuries, the US dollar is still the most redeemable currency for facilitating world commerce. 

The U.S. dollar isn’t the only reserve currency designated by the IMF and other global organizations. The euro, Chinese renminbi, Japanese yen, and British pound sterling are all popular as reserve currencies.

Characteristics: 

• Availability– has the depth and liquidity to allow for reliable and efficient international transactions.
• Acceptability-can be freely and easily exchanged for other currencies.
• Stability–held by many monetary authorities and institutions, in significant amounts.

Factors that make a currency useful as a reserve currency:

• The size of the economy in the country where that currency comes from
• International integration of that economy.
• How open its financial markets are
• The currency’s convertibility
• Whether it is used as a regional or international currency peg
• Domestic macroeconomic policies

America Plus 1

The term “America Plus 1” refers to a strategic approach where countries, particularly in Asia, aim to reduce their dependence on the United States by diversifying their economic, political, and security engagements. This strategy is born out of concerns about over-reliance on the U.S. and the desire to hedge against potential uncertainties in U.S. policies and international relations.

Key Aspects of “America Plus 1”

• Economic Diversification:
• Trade Partnerships: Countries are seeking to strengthen trade relationships with other major economies, such as the European Union, Japan, China, and regional blocs like ASEAN.
• Investment: Attracting foreign direct investment from multiple sources to reduce reliance on American capital.
• Political and Diplomatic Engagements:
• Multilateral Organizations: Increasing participation in regional and international organizations to build stronger multilateral ties.
• Bilateral Relationships: Deepening bilateral ties with other major powers to balance U.S. influence.
• Security and Defense:
• Defense Alliances: Forming or strengthening defense alliances and partnerships with other countries.
• Military Procurement: Diversifying sources of military equipment and technology to avoid over-dependence on American suppliers.

The “America Plus 1” strategy reflects a pragmatic approach by countries seeking to balance their dependence on the United States by expanding their global engagements. This diversification effort aims to ensure economic stability, political autonomy, and security resilience in an increasingly multipolar world.

7. SEBI’s New Directive: Auditors Must Certify Use of Pre-IPO Funds

Sub: Economy

Sec: Capital market

The Securities and Exchange Board of India (SEBI) has issued a new directive requiring auditor-certified disclosures on the utilization of pre-IPO funds.

This move aims to ensure transparency and accountability in the use of funds raised before a company’s initial public offering (IPO).

Key Provisions

• Auditor Certification: Companies must provide certified disclosures about how pre-IPO proceeds are used in relation to the objectives stated in the IPO issue.
• General Corporate Purposes (GCP): If the disclosures are not made, the funds will be adjusted towards the GCP portion of the IPO.
• GCP Limitation: Companies can allocate a maximum of 25% of IPO proceeds to GCP. This rule potentially limits the flexibility of managing pre-IPO funds.

Implications for Companies

• Reduced Flexibility: Companies may face restrictions in managing their pre-IPO proceeds. For example, if a company raises 20% of its total IPO proceeds through a pre-IPO, its GCP allocation will significantly decrease. For a ₹100 crore issue with ₹20 crore raised pre-IPO, the GCP portion would reduce to ₹5 crore from ₹25 crore.
• Need for Clarity: Companies seek clarity on whether certified pre-IPO utilization allows flexibility in fund usage or if pre-IPO funds must strictly adhere to the objects stated in the IPO offer document.

Conclusion

SEBI’s directive aims to bring greater transparency and control over the utilization of pre-IPO funds. While the move is intended to safeguard investor interests and ensure proper use of funds, it also imposes stricter guidelines that may limit corporate flexibility. The industry awaits further clarification to understand the full implications of these regulations.

IPO

• IPO is the selling of securities to the public in the primary market.
• Primary market deals with new securities being issued for the first time. It is also known as the new issues market.
• It is different from secondary market where existing securities are bought and sold. It is also known as the stock market or stock exchange.
• It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public.
• It is generally used by new and medium-sized firms that are looking for funds to grow and expand their business.